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CERTIFICATE OF INCORPORATION
OF
ADAYTUM SOFTWARE, INC.
To form a corporation pursuant .to the Delaware General Corporation
Law, the undersigned hereby certifies as follows:
ARTICLE 1.
The name of this corporation is Adaytum Software, Inc.
ARTICLE 2.
The purpose of this corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
ARTICLE 3.
This corporation shall have perpetual duration.
ARTICLE 4.
The registered office of this corporation in Delaware is 1209 Orange
Street, New Castle County, Wilmington, DE 19801, and the name of its registered
agent is The Corporation Trust Company.
ARTICLE 5.
A. AUTHORIZED SHARES.
The total number of shares of stock which this corporation is
authorized to issue is 70,000,000 shares, par value $.01 per share, of which
50,000,000 shares are designated as common stock and 20,000,000 shares are
undesignated preferred stock.
B. PREFERRED STOCK.
Authority is hereby expressly vested in the board of directors, subject
to the provisions of this Article 5 and to the limitations prescribed by law, to
authorize the issue front time to time of one or more series of preferred stock
and with respect to each such series to fix by resolution or resolutions adopted
by the affirmative vote of a majority of the whole board of directors providing
for the issue of such series the voting powers, full or limited, if any, of the
shares of such series and the designations, preferences and relative,
participating, optional or other special rights and the qualifications,
limitations or restrictions thereof. The authority of the board of directors
with respect to each series shall include, but not be limited to, the
determination or fixing of the following:
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(1) The number of shares constituting such series and the
designation of such series.
(2) The dividend rate of such series, the conditions and dates
upon which such dividends shall be payable, the relation which such
dividends shall bear to the dividends payable on any other class or
classes or series of this corporation's capital stock, and whether such
dividends shall be cumulative or noncumulative.
(3) Whether the shares of such series shall be subject to
redemption by this corporation at the option of either this corporation
or the holder or both or upon the happening of a specified event, and,
if made subject to any such redemption, the times or events, prices and
other terms and conditions of such redemption.
(4) The terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series.
(5) Whether or not the shares of such series shall be
convertible into, or exchangeable for, at the option of either the
holder or this corporation or upon the happening of a specified event,
shares of any other class or classes or of any other series of the same
or any other class or classes of this corporation's capital stock, and,
if provision be made for conversion or exchange, the times or events,
prices, rates, adjustments, and other terms and conditions of such
conversions or exchanges.
(6) The restrictions, if any, on the issue or reissue of any
additional preferred stock, including increases or decreases in the
number of shares of any series subsequent to the issue of shares of
that series.
(7) The rights of the holders of the shares of such series
upon the voluntary or involuntary liquidation, dissolution or winding
up of this corporation.
(8) Any right to vote with holders of shares of any other
series or class and any right to vote as a class, either generally or
as a condition to specified corporate action, in addition to any voting
powers required by law.
ARTICLE 6.
In furtherance, and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized to make, amend, alter,
change, add to or repeal bylaws of this corporation, without any action on the
part of the stockholders. The bylaws made by the directors may be amended,
altered, changed, added to or repealed by the stockholders. Any specific
provision in the bylaws regarding amendment thereof shall be controlling.
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ARTICLE 7.
A director of this corporation shall not be personally liable to this
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that this article shall not eliminate or
limit the liability of a director (a) for any breach of the director's duty of
loyalty to this corporation or its stockholders; (b) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law; (c) for the unlawful payment of dividends or unlawful stock repurchases
under Section 174 of the Delaware General Corporation Law; or (d) for any
transaction from which the director derived an improper personal benefit. This
article shall not eliminate or limit the liability of a director for any act or
omission occurring prior to the effective date of this article.
If the Delaware General Corporation Law is hereafter amended to
authorize any further limitation of the liability of a director, then the
liability of a director of this corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as
amended.
Any repeal or modification of the foregoing provisions of this article
by the stockholders of this corporation shall not adversely affect any right or
protection of a director of this corporation existing at the time of such repeal
or modification.
ARTICLE 8.
There shall be no cumulative voting by the shareholders of this
corporation.
ARTICLE 9.
The shareholders of this corporation shall not have any preemptive
rights to subscribe for or acquire securities or rights to purchase securities
of any class, kind, or series of this corporation.
ARTICLE 10.
The initial board of directors shall be comprised of:
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
Michael B. Gorman St. Paul Venture Capital
8500 Normandale, Suite 1940
Bloomington, MN 55437
John David "Guy" Haddleton 740 Mississippi River Blvd., Apt. 22E
St. Paul, MN 55116-1069
-3-
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Bernard R. Fisher Yew Tree Cottage
Milestone Avenue
Charvil on Thames
Berkshire
RG10 9TN
George Kunzle Suffolk Cottage
School Lane
Denmead
Waterlooville
Hants P07 6LY
Adrian E. Kunzle 107 West 25th Street, Apt. 55
New York, NY 10001
</TABLE>
ARTICLE 11.
The name and mailing address of the incorporator is:
Joseph W. Wirth Dorsey & Whitney LLP
220 South Sixth Street
Minneapolis, MN 55402
Dated: July 21, 1998 /s/ Joseph W. Wirth
--------------------- ------------------------
Joseph W. Wirth
Incorporator
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ADAYTUM SOFTWARE, INC.
CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATION
OF
RIGHTS AND PREFERENCES
OF
SERIES A PREFERRED STOCK, SERIES B PREFERRED STOCK,
SERIES C PREFERRED STOCK, Series D PREFERRED STOCK,
AND SERIES E PREFERRED STOCK
OF
ADAYTUM SOFTWARE, INC.
The undersigned Vice-President Finance & Administration of Adaytum
Software, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation") does hereby
certify that, pursuant to a written consent of the holders of (i) a majority
of the outstanding stock entitled to vote thereon, (ii) a majority of the
outstanding Common Stock, (iii) a majority of the outstanding Series A
Preferred Stock, (iv) a majority of the outstanding Series B Preferred Stock,
(v) a majority of the outstanding Series C Preferred Stock and (vi) a
majority of the outstanding Series D Preferred Stock, the following
Certificate of Amendment to Certificate of Designation has been adopted in
accordance with the provisions of Section 242 of the General Corporation Law
of the State of Delaware, and that such Certificate of Amendment to
Certificate of Designation has not been subsequently modified or rescinded:
RESOLVED, that pursuant to the authority granted to and vested in this
Board of Directors in accordance with the Certificate of Incorporation of the
Corporation, the rights and preferences of the four series of preferred stock
previously designated as Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock in the Certificate of
Amendment to Certificate of Designation, effective June 12, 2000 are hereby
amended and restated as set forth below.
FURTHER RESOLVED, that pursuant to the authority granted to and vested
in this Board of Directors in accordance with the Certificate of
Incorporation of the Corporation, a new series of preferred stock is hereby
created, and that the designation and amount thereof and the relative rights
and preferences of the shares of such series, are as follows:
1. SHARES AND CLASSES AUTHORIZED. One Million Five Hundred Forty-Four
Thousand (1,544,000) shares of the undesignated preferred stock, par
value $.01 per share, that
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are authorized by Article V.A of the Corporation's Certificate of
Incorporation are designated as Series A Preferred Stock (the "SERIES A
PREFERRED"), Four Million Three Hundred Fifty Thousand (4,350,000)
shares of the undesignated preferred stock, par value $.01 per share,
that are authorized by Article V.A of the Corporation's Certificate of
Incorporation are designated as Series B Preferred Stock (the "SERIES B
PREFERRED"), Two Million Seven Hundred Fifty Thousand One Hundred
(2,750,100) shares of the Corporation's undesignated preferred stock,
par value $.01 per share, that are authorized by Article V.A of the
Corporation's Certificate of Incorporation are hereby designated as
Series C Preferred Stock (the "SERIES C PREFERRED"), Two Million, Forty
Nine Thousand, Six Hundred Twenty Four (2,049,624) shares of the
Corporation's undesignated preferred stock, par value $.01 per share,
that are authorized by Article V.A of the Corporation's Certificate of
Incorporation are hereby designated as Series D Preferred Stock (the
"SERIES D Preferred") and One Million Five Hundred Ninety-Five Thousand
(1,595,000) shares of the Corporation's undesignated preferred stock,
par value $.01 per share, that are authorized by Article V.A of the
Corporation's Certificate of Incorporation are hereby designated as
Series E Preferred Stock (the "Series E Preferred") (the Series A
Preferred, the Series B Preferred, the Series C Preferred, the Series D
Preferred and the Series E Preferred being collectively referred to as
the "PREFERRED STOCK").
2. DEFINITIONS. For purposes of this Certificate of Amendment to
Certificate of Designation (this "Certificate") the following
definitions shall apply and shall be equally applicable to both the
singular and plural forms of the defined terms:
2.1 "ADDITIONAL SHARES OF COMMON STOCK" shall mean all shares of
Common Stock (including treasury shares) issued or sold (or,
pursuant to Section 7.13 and the other provisions of this
Certificate, deemed to be issued or sold) by the Corporation
after the Certificate Effective Date, other than shares of
Common Stock (i) issued or issuable upon conversion of the
Preferred Stock; (ii) issued or issuable upon exercise of the
Andersen Consulting Warrant; (iii) issued or issuable to
employees, directors or officers of, or advisors or
consultants to, the Corporation pursuant to stock option plans
or stock-based compensation plans approved by the Board (but
subject, in each case, to the restrictions in Section 3.8.E);
(iv) issued or issuable in any bona fide registered public
offering pursuant to a firm commitment underwriting authorized
by the Board; (v) issued or issuable by way of stock split or
stock dividend or similar capital modification; and (vi)
issued or issuable upon exercise of (a) a warrant of the
Corporation, dated as of June 8, 2000, issued to Silicon
Valley Bank and representing the right to purchase 51,020
shares of Common Stock at $5.86 per share, (b) that certain
warrant of the Corporation, dated as of June 8, 2000, issued
to Dyadic Systems Limited and representing the right to
purchase up to 12,500 shares of Common Stock at $4.00 per
share, (c) that certain warrant of the Corporation, dated as
of March 30, 2000, issued to Data Sales Company and
representing the right to purchase 5,674 shares of Common
Stock at $5.86 per share and (d) that certain warrant of the
Corporation, dated as of March 30,
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2000, issued to Data Sales Company and representing the right to
purchase 4,266 shares of Common Stock at $5.86 per share.
2.2 "AFFILIATE" shall mean any Person which directly or indirectly
controls, is controlled by, or is under common control with,
the indicated Person.
2.3 "ANDERSEN CONSULTING WARRANT" shall mean the warrant of the
Corporation representing the right to purchase shares of
Common Stock, which warrant was issued pursuant to the Warrant
Issuance Agreement dated as of June 8, 2000 by and between the
Corporation and Andersen Consulting LLP, as the same may be
amended from time to time.
2.4 "BOARD" shall mean the Board of Directors of the Corporation.
2.5 "CERTIFICATE EFFECTIVE DATE" shall mean September 27, 2000.
2.6 "COMBINED DIRECTOR" shall mean the director of the Corporation
elected by the holders of the Preferred Stock and the Common
Stock, voting together as a single class, pursuant to Section
3.2.A below.
2.7 "COMMON STOCK DIVIDEND" shall mean a stock dividend declared
and paid on the Common Stock that is payable in shares of
Common Stock.
2.8 CONVERSION PRICE" (i) when used in reference to the Series A
Preferred, shall have the meaning set forth in Section 7.1
below, (ii) when used in reference to the Series B Preferred,
shall have the meaning set forth in Section 7.2 below, (iii)
when used in reference to the Series C Preferred, shall have
the meaning set forth in Section 7.3 below, (iv) when used in
reference to the Series D Preferred, shall have the meaning
set forth in Section 7.4 below, and (v) when used in reference
to the Series E Preferred, shall have the meaning set forth in
Section 7.5 below.
2.9 "CONVERSION RIGHTS" shall have the meaning set forth in
Section 7 below.
2.10 "CONVERTIBLE SECURITIES" shall mean evidences of indebtedness,
shares of stock or other securities which are at any time,
directly or indirectly, convertible into or exchangeable for
Additional Shares of Common Stock.
2.11 "CORPORATION" shall mean Adaytum Software, Inc., a Delaware
corporation.
2.12 "DIVIDEND RATE" (i) when used in reference to the Series B
Preferred shall mean $0.0944 per share per annum,
appropriately adjusted for any stock split, combination or
other recapitalization affecting the Series B Preferred and
dividends on such stock payable in shares of Series B
Preferred or Common Stock which occur after the Certificate
Effective Date, (ii) when used in reference to the Series C
Preferred shall mean $0.235629 per share per annum,
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appropriately adjusted for any stock split, combination or
other recapitalization affecting the Series C Preferred and
dividends on such stock payable in shares of Series C
Preferred or Common Stock which occur after the Certificate
Effective Date, (iii) when used in reference to the Series D
Preferred shall mean $0.68408 per share per annum,
appropriately adjusted for any stock split, combination or
other recapitalization affecting the Series D Preferred and
dividends on such stock payable in shares of Series D
Preferred or Common Stock which occur after the Certificate
Effective Date, and (iv) when used in reference to the Series
E Preferred shall mean $0.5643 per share per annum,
appropriately adjusted for any stock split, combination or
other recapitalization affecting the Series E Preferred and
dividends on such stock payable in shares of Series E
Preferred or Common Stock which occur after the Certificate
Effective Date.
2.13 "EFFECTIVE PRICE" shall mean the price per share for
Additional Shares of Common Stock determined by dividing (i)
the aggregate consideration received, or deemed under Sections
7.14 and 7.15 to have been received, by the Corporation for
such Additional Shares of Common Stock by (ii) the total
number of Additional Shares of Common Stock issued or sold, or
deemed to have been issued or sold by the Corporation under
Sections 7.14 and 7.15.
2.14 "FULL RATCHET FINANCING" shall have the meaning set forth in
Section 7.14 below.
2.15 "PERSON" shall include all natural persons, corporations,
business trusts, associations, limited liability companies,
partnerships, joint ventures and other entities, governments,
agencies and political subdivisions.
2.16 "PREFERRED STOCK" shall have the meaning set forth in
Section 1 above.
2.17 "QUALIFIED PUBLIC OFFERING" shall mean the consummation of the
first underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as
amended, covering the offering and sale of Common Stock for
the account of the Corporation on a firm commitment basis in
which the aggregate gross proceeds received by the Corporation
at the public offering price equals or exceeds $20 million
(the "MINIMUM OFFERING PROCEEDS") and the public offering
price equals or exceeds $9.00 per share of Common Stock
(appropriately adjusted for subdivisions and combinations of
shares of Common Stock and dividends on Common Stock payable
in shares of Common Stock) (the "MINIMUM OFFERING PRICE"),
provided, however, that either or both of the Minimum Offering
Proceeds and the Minimum Offering Price may be reduced by the
majority vote of the aggregate number of shares of Series A
Preferred, Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred then outstanding, voting
together as a single class.
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2.18 "REDEMPTION DATE" shall have the meaning set forth in
Section 6.3 below.
2.19 "REDEMPTION NOTICE" shall have the meaning set forth in
Section 6.3 below.
2.20 "REDEMPTION PRICE", when used in reference to the Series B
Preferred, Series C Preferred, Series D Preferred or Series E
Preferred, shall have the meaning set forth in the applicable
provision of Section 6.2 below.
2.21 "SERIES A PREFERRED" shall have the meaning set forth in
Section 1 above.
2.22 "SERIES B PREFERRED" shall have the meaning set forth in
Section 1 above.
2.23 "SERIES C PREFERRED" shall have the meaning set forth in
Section 1 above.
2.24 "SERIES D PREFERRED" shall have the meaning set forth in
Section 1 above.
2.25 "SERIES E PREFERRED" shall have the meaning set forth in
Section 1 above.
2.26 "SERIES B/C PREFERRED DIRECTOR" shall have the meaning set
forth in Section 3.2.A below.
2.27 "SERIES D PREFERRED DIRECTOR" shall have the meaning set forth
in Section 3.2.A below.
2.28 "SERIES E PREFERRED DIRECTOR" shall have the meaning set forth
in Section 3.2.A below.
2.29 "SERIES B PURCHASE AGREEMENT" shall mean the Series B
Preferred Stock Purchase Agreement dated as of December 30,
1998 by and among the parties named therein, as the same may
be amended from time to time.
2.30 "SERIES C PURCHASE AGREEMENT" shall mean the Series C
Preferred Stock Purchase Agreement dated as of October 5, 1999
by and among the parties named therein, as the same may be
amended from time to time.
2.31 "SERIES D PURCHASE AGREEMENT" shall mean the Series D
Preferred Stock Purchase Agreement dated as of June 8, 2000 by
and among the parties named therein, as the same may be
amended from time to time.
2.32 "SERIES E PURCHASE AGREEMENT" shall mean the Series E
Preferred Stock Purchase Agreement dated as of September 27,
2000 by and among the parties named therein, as the same may
be amended from time to time.
3. VOTING RIGHTS.
3.1 GENERAL. At all meetings of the stockholders of the Corporation and in
the case of any actions of stockholders in lieu of a meeting, each
holder of Preferred Stock shall
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have that number of votes on all matters submitted to the
stockholders that is equal to the number of whole shares of Common
Stock into which such holder's shares of Preferred Stock are then
convertible, as provided in Section 7, at the record date for the
determination of the stockholders entitled to vote on such matters
or, if no such record date is established, at the date such vote is
taken or any written consent of such stockholders is effected. This
provision for determination of the number of votes to which each
holder of the Preferred Stock is entitled shall also apply in cases
in which the holders of the Series A Preferred, the Series B
Preferred, Series C Preferred, the Series D Preferred or the Series
E Preferred have the right to vote either separately or together
with one or more classes as a separate class, as the case may be.
Except as may be otherwise provided in this Certificate, by
agreement or by law, the holders of the Common Stock and the
holders of the Preferred Stock shall vote together as a single
class on all actions to be taken by the stockholders of the
Corporation.
3.2 ELECTION OF DIRECTORS.
A. ALLOCATION OF BOARD SEATS. The holders of (i) the
Series B Preferred and Series C Preferred, voting
together as a single and separate class, shall be
entitled to elect one (1) director of the Corporation
(the "SERIES B/C PREFERRED DIRECTOR"), (ii) the
Series D Preferred, voting as a separate class, shall
be entitled to elect one (1) director of the
Corporation (the "SERIES D PREFERRED DIRECTOR"),
(iii) the Series E Preferred, voting as a separate
class, shall be entitled to elect one (1) director of
the Corporation (the "Series E Preferred Director"),
(iv) the Common Stock, voting as a separate class,
shall be entitled to elect one (1) director of the
Corporation and (v) the Preferred Stock and the
Common Stock, voting together as a single and
separate class, shall have the right to elect one (1)
director of the Corporation (the "COMBINED
DIRECTOR"). For so long as any of the Series B
Purchase Agreement, the Series C Purchase Agreement,
the Series D Purchase Agreement or the Series E
Purchase Agreement is in effect, upon the occurrence
of an Event of Default (as defined in Section 13 of
each such Purchase Agreement) under any such Purchase
Agreement, unless such Event of Default has been
properly waived pursuant to the terms of the
applicable Purchase Agreement, the holders of the
Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred, voting together as
a single and separate class, shall have the right to
remove the Combined Director and to elect one (1) new
director in place of such Combined Director and shall
retain such rights until the earlier to occur of (A)
the date on which the Event of Default has been cured
or (B) the date of an agreement between the
Corporation and the holders of a majority of the then
outstanding shares of Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred,
voting together as a single and separate class.
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B. QUORUMS. At any meeting held for the purpose of
electing directors, (i) the presence in person or by
proxy of the holders of a majority of the aggregate
number of shares of Series B Preferred and Series C
Preferred then outstanding shall constitute a quorum
of the Series B Preferred and Series C Preferred for
the election of directors to be elected solely by the
holders of the Series B Preferred and Series C
Preferred voting together as a single and separate
class, (ii) the presence in person or by proxy of the
holders of a majority of the aggregate number of
shares of Series D Preferred then outstanding shall
constitute a quorum of the Series D Preferred for the
election of directors to be elected solely by the
holders of the Series D Preferred, (iii) the presence
in person or by proxy of the holders of a majority of
the aggregate number of shares of Series E Preferred
then outstanding shall constitute a quorum of the
Series E Preferred for the election of directors to
be elected solely by the holders of the Series E
Preferred, (iv) the presence in person or by proxy of
the holders of a majority of the aggregate number of
shares of the Common Stock then outstanding shall
constitute a quorum of the Common Stock for the
election of directors to be elected solely by the
holders of the Common Stock and (v) the presence in
person or by proxy of the holders of a majority of
the aggregate number of shares of the Common Stock
then outstanding and the presence in person or by
proxy of the holders of a majority of Preferred Stock
then outstanding shall constitute a quorum of the
Common Stock and the Preferred Stock for the election
of directors to be elected by the holders of the
Common Stock and the Preferred Stock voting together
as a single and separate class.
C. VACANCIES. A vacancy in any directorship (i) elected
by the holders of the Series B Preferred and Series C
Preferred voting together as a single and separate
class shall be filled only by vote of the holders of
the Series B Preferred and Series C Preferred as
provided above, (ii) elected by the holders of the
Series D Preferred shall be filled only by vote of
the holders of the Series D Preferred as provided
above, (iii) elected by the holders of the Series E
Preferred shall be filled only by vote of the Series
E Preferred as provided above, (iv) elected by the
holders of the Common Stock shall be filled only by
vote of the holders of the Common Stock as provided
above and (v) elected by the holders of the Common
Stock and the Preferred Stock voting together as a
single class shall be filled only by vote of the
holders of the Common Stock and the Preferred Stock
voting together as a single and separate class as
provided above.
3.3 ADDITIONAL CLASS VOTES BY THE SERIES A PREFERRED. For so long
as at least twenty percent (20%) of the aggregate number of shares
of Series A Preferred issued and outstanding as of the close of
business on December 31, 1998 are
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outstanding, the Corporation shall not, without the affirmative
vote of a majority of the then outstanding shares of Series A
Preferred (voting as a separate class) take any action that
constitutes or results in amendment or waiver of any provision of
the Corporation's Certificate of Incorporation or Bylaws if such
amendment or waiver in any way adversely affects, alters or changes
any existing rights, preferences, privileges or provisions relating
to the Series A Preferred or the holders thereof.
3.4 ADDITIONAL CLASS VOTES BY THE SERIES B PREFERRED For so long
as at least twenty percent (20%) of the aggregate number of
shares of Series B Preferred issued pursuant to the Series B
Purchase Agreement are outstanding, the Corporation shall not,
without the affirmative vote of a majority of the then
outstanding shares of Series B Preferred voting as a separate
class:
A. take any action that constitutes or results in amendment or
waiver of any provision of the Corporation's Certificate of
Incorporation or Bylaws if such amendment or waiver in any way
affects, alters or changes any existing rights, preferences,
privileges or provisions relating to the Series B Preferred or
the holders thereof; or
B. authorize or issue any new class of additional shares of capital
stock of the Corporation having priority over the Series B
Preferred or ranking in parity with the Series B Preferred
(including any additional shares of Series B Preferred) as to
the payment or distribution of assets upon the liquidation or
dissolution, voluntary or involuntary, of the Corporation.
3.5 ADDITIONAL CLASS VOTES BY THE SERIES C PREFERRED. For so long
as at least twenty percent (20%) of the aggregate number of
shares of Series C Preferred issued pursuant to the Series C
Purchase Agreement are outstanding, the Corporation shall not
without, the affirmative vote of a majority of the then
outstanding shares of Series C Preferred voting as a separate
class:
A. take any action that constitutes or results in amendment or
waiver of any provision of the Corporation's Certificate of
Incorporation or Bylaws if such amendment or waiver in any way
affects, alters or changes any existing rights, preferences,
privileges or provisions relating to the Series C Preferred or
the holders thereof; or
B. authorize or issue any new class of additional shares of capital
stock of the Corporation having priority over the Series C
Preferred or ranking in parity with the Series C Preferred
(including any other additional shares of Series C Preferred)
as to the payment or distribution of assets upon the
liquidation or dissolution, voluntary or involuntary, of the
Corporation.
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3.6 ADDITIONAL CLASS VOTES BY THE SERIES D PREFERRED. For so long
as at least twenty percent (20%) of the aggregate number of
shares of Series D Preferred issued pursuant to the Series D
Purchase Agreement are outstanding, the Corporation shall not,
without the affirmative vote of a majority of the then
outstanding shares of Series D Preferred voting as a separate
class:
A. take any action that constitutes or results in amendment
or waiver of any provision of the Corporation's Certificate
of Incorporation or Bylaws if such amendment or waiver in
any way affects, alters or changes any existing rights,
preferences, privileges or provisions relating to the
Series D Preferred or the holders thereof; or
B. authorize or issue any new class of additional shares
of capital stock of the Corporation having priority
over the Series D Preferred or ranking in parity with
the Series D Preferred (including any other additional
shares of Series D Preferred) as to the payment or
distribution of assets upon the liquidation or dissolution,
voluntary or involuntary, of the Corporation.
3.7 ADDITIONAL CLASS VOTES BY THE PREFERRED STOCK. For so long as
at least twenty percent (20%) of the aggregate number of
shares of Series B Preferred, Series C Preferred and Series D
Preferred outstanding on the Certificate Effective Date remain
outstanding, the Corporation shall not without the affirmative
vote of a majority of the then outstanding shares of the
Preferred Stock, voting together as a single and separate
class:
A. take any action that constitutes or results in amendment
or waiver of any provision of the Corporation's Certificate
of Incorporation or Bylaws if such amendment or waiver in
any way affects, alters or changes any existing rights,
preferences, privileges or provisions relating to the
Series E Preferred or the holders thereof; or
B. authorize or issue any new class of additional shares
of capital stock of the Corporation having priority
over the Series E Preferred or ranking in parity with
the Series E Preferred (including any other
additional shares of Series E Preferred) as to the
payment or distribution of assets upon the
liquidation or dissolution, voluntary or involuntary,
of the Corporation.
3.8 ADDITIONAL CLASS VOTES BY THE PREFERRED STOCK. For so long as
at least twenty percent (20%) of the aggregate number of
shares of Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred outstanding on the Certificate
Effective Date remain outstanding, the Corporation shall not
without the affirmative vote of a majority of the then
outstanding shares of the Preferred Stock, voting together as
a single and separate class:
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A. take any action that constitutes or results in the redemption
of any share(s) of Common Stock or Preferred Stock other than
redemptions pursuant to Section 6 hereof, or an isolated
redemption, repurchase or other acquisition for cash of shares
under the provisions of the Corporation's stock option,
restricted stock or other equity compensation plans or other
employee agreements; or
B. sell, lease, license (on an exclusive basis) or otherwise
dispose of all or substantially all of the assets of the
Corporation or of any subsidiary of the Corporation, or
consolidate with or merge into or permit any subsidiary of the
Corporation to consolidate with or merge into any other
corporation or entity, or permit any other corporation or
entity to consolidate or merge into the Corporation or any
subsidiary of the Corporation, or enter into or permit any
subsidiary of the Corporation to enter into a plan of exchange
with any other corporation or entity, or otherwise acquire or
permit any subsidiary of the Corporation to otherwise acquire
any other corporation or entity or enter into any other
transaction that results in the disposition of more than fifty
percent (50%) of the voting power of the Corporation; or
C. take any action constituting or resulting in a liquidation,
dissolution or winding up of the Corporation; or
D. take any action that constitutes or results in a change to the
size of the Board; or
E. take any action that constitutes or results in the number of
shares of capital stock issued or issuable to employees,
directors or officers of, or advisors or consultants to, the
Corporation pursuant to stock option plans and stock-based
compensation plans approved by the Board exceeding 4,695,000
shares (appropriately adjusted for any stock split, combination
or other recapitalization and dividends payable in shares of
capital stock); or
F. authorize a payment of a cash dividend or other distribution on
any class of capital stock.
4. DIVIDENDS.
4.1 DIVIDEND PREFERENCE. The holders of each share of Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred then
outstanding shall be entitled to receive non-cumulative dividends,
out of any funds and assets of the Corporation legally available
therefor, prior and in preference to any declaration or payment of
any dividend payable on Common Stock of the Corporation (other than a
Common Stock Dividend) or on the Series A Preferred at the
annual Dividend Rate for the Series B Preferred, Series C
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Preferred, Series D Preferred or Series E Preferred, as applicable,
if, as and when declared by the Board. No dividend or distribution
shall be declared or made to outstanding shares of any of the
Series B Preferred, Series C Preferred, Series D Preferred or
Series E Preferred unless a dividend or distribution is declared or
made to all outstanding shares of Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred.
4.2 OTHER DIVIDENDS. Except as set forth in Section 4.1 above, no
dividend or other distribution shall accrue or be paid with respect
to any shares of capital stock of the Corporation for any period,
whether before or after the Certificate Effective Date, unless and
until (i) declared by the Board and (ii) approved by the holders of
the Preferred Stock in accordance with Section 3.8.F.
4.3 NON-CASH DIVIDENDS. Whenever a dividend provided for in this
Section 4 shall be payable in property other than cash, the value
of such dividend shall be deemed to be the fair market value of
such property as determined in good faith by the Board.
4.4 PAYMENTS ON CONVERSION. If the Corporation shall have declared but
unpaid dividends with respect to any Series B Preferred, Series C
Preferred, Series D Preferred or Series E Preferred upon the
conversion of such class as provided in Section 7, then all such
declared but unpaid dividends on such converted shares shall be
canceled.
5. LIQUIDATION RIGHTS.
5.1 PREFERENCE OF SERIES E PREFERRED. In the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Series E
Preferred shall be entitled to be paid out of the assets of
the Corporation available for distribution to its
stockholders, whether such assets are capital, surplus, or
earnings, before any payment or declaration and setting apart
for payment of any amount shall be made in respect of the
Common Stock, the Series A Preferred, the Series B Preferred,
the Series C Preferred or the Series D Preferred, an amount
equal to (a) $6.27 per share of Series E Preferred held
(subject to appropriate adjustments for stock splits and other
combinations in the same manner as set forth in Sections 7.13,
7.14 and 7.15) plus (b) for each share of Series E Preferred
held, dividends thereon, if declared and unpaid, to and
including the date full payment shall be tendered to the
holders of the Series E Preferred with respect to such
liquidation, dissolution or winding up. After receiving the
full amounts aforesaid, the holders of the Series E Preferred
shall not be entitled to any further payment. If, upon any
liquidation, dissolution, or winding up of the Corporation,
whether voluntary or involuntary, the assets to be distributed
to the holders of Series E Preferred shall be insufficient to
permit the payment to such stockholders of the full
preferential amounts aforesaid, then all of the assets of
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the Corporation shall be distributed ratably to the holders of the
Series E Preferred on a pari passu basis.
5.2 PREFERENCE OF SERIES B PREFERRED, SERIES C PREFERRED AND SERIES D
PREFERRED. In the event of any liquidation, dissolution or winding
up of the Corporation, whether voluntary or involuntary, the
holders of the Series B Preferred, Series C Preferred and Series D
Preferred then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its
stockholders, whether such assets are capital, surplus, or
earnings, before any payment or declaration and setting apart for
payment of any amount shall be made in respect of the Common Stock
or the Series A Preferred, an amount equal to (a) (i) $1.18 per
share of Series B Preferred held, (ii) $ 2.9453584 per share of
Series C Preferred held and (iii) $8.551 per share of Series D
Preferred held (all amounts subject to appropriate adjustments for
stock splits and other combinations in the same manner as set forth
in Sections 7.13, 7.14 and 7.15) plus (b) for each share of Series
B Preferred, Series C Preferred and Series D Preferred held,
dividends thereon, if declared and unpaid, to and including the
date full payment shall be tendered to the holders of the Series B
Preferred, Series C Preferred and Series D Preferred with respect
to such liquidation, dissolution or winding up. After receiving the
full amounts aforesaid, the holders of the Series B Preferred,
Series C Preferred and Series D Preferred shall not be entitled to
any further payment. If, upon any liquidation, dissolution, or
winding up of the Corporation, whether voluntary or involuntary,
the assets to be distributed to the holders of Series B Preferred,
Series C Preferred and Series D Preferred shall be insufficient to
permit the payment to such stockholders of the full preferential
amounts aforesaid, then all of the assets of the Corporation shall
be distributed ratably to the holders of the Series B Preferred,
Series C Preferred and Series D Preferred on a pari passu basis.
5.3 REMAINING ASSETS. If the assets of the Corporation available for
distribution to the Corporation's stockholders exceed the aggregate
amount payable to the holders of the outstanding Series E Preferred
pursuant to Section 5.1 and to the holders of the outstanding
Series B Preferred, Series C Preferred and Series D Preferred
pursuant to Section 5.2 hereof, then after the payments required by
Sections 5.1 and 5.2 shall have been made or irrevocably set apart,
such assets shall be distributed equally, on a per share and an as
converted basis, among the holders of the Common Stock and the
outstanding Series A Preferred. If there are no shares of Series A
Preferred outstanding, such assets shall be distributed equally, on
a per share basis, among the holders of the Common Stock.
5.4 REORGANIZATION; SALE OF ASSETS. The merger, acquisition or
consolidation of the Corporation into or with any other entity or
entities which results in the exchange of outstanding shares of the
Corporation for securities or other
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consideration issued or paid or caused to be issued or paid by any
such entity or Affiliate thereof pursuant to which the stockholders
of the Corporation immediately prior to the transaction do not own
a majority of the outstanding shares of the surviving corporation
immediately after the transaction, or any sale, lease, license (on
an exclusive basis) or transfer by the Corporation of all or
substantially all its assets, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of
the provisions of this Section 5 unless this provision is waived by
the affirmative vote of at least a majority of the shares of the
Series E Preferred (voting together as a single and separate class)
and a majority of the shares of the Series A Preferred, Series B
Preferred, Series C Preferred and Series D Preferred (voting
together as a single and separate class) outstanding.
5.5 NOTICE. Written notice of such liquidation, dissolution or winding
up, stating a payment date and the place where said payments shall
be made, shall be given by mail, postage prepaid, or by telex,
facsimile or courier service to non-U.S. residents, not less than
twenty (20) days prior to the payment date stated therein, to the
holders of record of Preferred Stock, such notice to be addressed
to each such holder at its address as shown on the records of the
Corporation.
5.6 DETERMINATION OF CONSIDERATION. To the extent any distribution
pursuant to Sections 5.1, 5.2 or 5.3 consists of property other
than cash, the value thereof shall, for purposes of Sections 5.1,
5.2, or 5.3, be the fair value at the time of such distributions as
determined in good faith by the Board.
5.7 CONVERSION PRIOR TO LIQUIDATING DISTRIBUTIONS. Any holder of the
Preferred Stock may, at its option, convert all or a portion of its
shares into Common Stock upon the occurrence of an event described
in Section 5.4 and thereby receive distributions with the holders
of the Common Stock in lieu of receiving distributions with the
holders of the Preferred Stock.
6. REDEMPTION RIGHTS.
6.1 SCHEDULED REDEMPTIONS. To the extent the Corporation shall have
funds legally available for such payments, the Corporation shall
offer to redeem all shares of outstanding Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred in
three (3) equal installments within 60 days of each of December 31,
2005, December 31, 2006 and December 31, 2007 (the date on which
each such offer is made being referred to as a "scheduled
redemption date" and, individually, the "first scheduled redemption
date," the "second scheduled redemption date" and the "third
scheduled redemption date," respectively). The shares to be
redeemed shall be determined pro rata among the holders of shares
of the Series B Preferred, Series C Preferred, Series D Preferred
and Series E Preferred, respectively. The holders of shares of the
Series B Preferred, Series C Preferred, Series D Preferred and
Series E
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Preferred offered to be redeemed shall have the option on each
scheduled redemption date to either accept or reject the offer as
to the one-third of their shares covered by such offer. The
rejection on any one scheduled redemption date by a holder of
shares for which the offer of redemption has been made shall not be
deemed to be a rejection of an offer of redemption for any other
shares to be made on any future scheduled redemption date. If a
holder of Series B Preferred, Series C Preferred, Series D
Preferred or Series E Preferred rejects any offer of redemption of
any shares of Series B Preferred, Series C Preferred, Series D
Preferred or Series E Preferred, the Corporation shall not have any
further obligation to redeem the shares covered by that offer under
this Section 6.1.
If the Corporation shall fail to discharge all or any part of any
scheduled redemption obligation pursuant to this Section 6.1
because insufficient funds are legally available therefor, the
entire amount legally available for the payment of such obligation
shall be used to offer to and redeem (i) the number of shares of
Series B Preferred as is equal to the whole number obtained when
truncating the product of (A) the full number of shares of Series B
Preferred for which an offer of redemption would be required if
sufficient funds were legally available therefor, multiplied by (B)
a fraction, the numerator of which is the amount of funds legally
available to redeem the Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred and the denominator of
which is the amount of funds that would be required to redeem the
full number of shares of Series B Preferred, Series C Preferred,
Series D Preferred, and Series E Preferred if sufficient funds were
legally available therefor, (ii) the number of shares of Series C
Preferred as is equal to the whole number obtained when truncating
the product of (A) the full number of shares Series C Preferred for
which an offer of redemption would be required if sufficient funds
were legally available therefor, multiplied by (B) a fraction, the
numerator of which is the amount of funds legally available to
redeem the Series B Preferred, Series C Preferred, Series D
Preferred, and Series E Preferred and the denominator of which is
the amount of funds that would be required to redeem the full
number of shares of Series B Preferred, Series C Preferred, Series
D and Series E Preferred if sufficient funds were legally available
therefor, (iii) the number of shares of Series D Preferred as is
equal to the whole number obtained when truncating the
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product of (A) the full number of shares Series D Preferred for which
an offer of redemption would be required if sufficient funds were
legally available therefor, multiplied by (B) a fraction, the
numerator of which is the amount of funds legally available to
redeem the Series B Preferred, Series C Preferred, Series D
Preferred and Series E Preferred and the denominator of which is
the amount of funds that would be required to redeem the full
number of shares of Series B Preferred, Series C Preferred, Series
D Preferred and Series E Preferred if sufficient funds were legally
available therefor and (iv) the number of shares of Series E
Preferred as is equal to the whole number obtained when truncating
the product of (A) the full number of shares of Series E Preferred
for which an offer of redemption would be required if sufficient
funds were legally available therefor, multiplied by (B) a
fraction, the numerator of which is the amount of funds legally
available to redeem the Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred and the denominator of
which is the amount of funds that would be required to redeem the
full number of shares of Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred if sufficient funds were
legally available therefor. The shares of the holders of the Series
B Preferred, Series C Preferred, Series D Preferred and Series E
Preferred shall be redeemed ratably in proportion to the full
number of shares which they would otherwise be entitled to have
redeemed, and the balance of such mandatory redemption obligation
shall be discharged as soon as the Corporation shall have funds
legally available to permit such redemption, at which time the
Board shall promptly fix a date for such redemption and so notify
the holders of such shares in writing.
6.2 PRICE. In the case of any scheduled redemption date under Section
6.1, (i) the redemption price of the Series B Preferred (the
"SERIES B REDEMPTION PRICE") shall be an amount per share equal to
$1.18, (ii) the redemption price of the Series C Preferred shall be
an amount per share equal to $2.9453584 (the "SERIES C REDEMPTION
PRICE"), (iii) the redemption price of the Series D Preferred shall
be an amount per share equal to $8.551 (the "SERIES D REDEMPTION
Price") and (iv) the redemption price of the Series E Preferred
shall be an amount per share equal to $6.27 (the "SERIES E
REDEMPTION PRICE") plus, in each case, all declared but unpaid
dividends thereon to and including the applicable Redemption Date
(as hereinafter defined). Each of the Series B Redemption Price,
the Series C Redemption Price, the Series D Redemption Price and
the Series E Redemption Price shall be subject to adjustment as
provided in Sections 6.6 and 6.7 hereof.
6.3 REDEMPTION NOTICE. The Corporation shall, not less than thirty (30)
days or more than sixty (60) days prior to the date fixed for
redemption ("REDEMPTION DATE"), mail written notice ("REDEMPTION
NOTICE"), postage prepaid, to each holder of shares of record of
Series B Preferred, Series C Preferred, Series D Preferred or
Series E Preferred to be redeemed, at such holder's address last
shown on the records of the Corporation. The Redemption Notice
shall state:
A. the total number of shares of Series B Preferred,
Series C Preferred, Series D Preferred and Series E
Preferred which the Corporation is required to offer
to redeem;
B. the number of shares of Series B Preferred, Series C
Preferred, Series D Preferred or Series E Preferred,
as applicable, held by the holder which the
Corporation intends to offer to redeem;
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C. the Redemption Date and Redemption Price; and
D. the time, place and manner in which the holder may
elect to surrender to the Corporation the certificate
or certificates representing the shares of Series B
Preferred, Series C Preferred, Series D Preferred or
Series E Preferred, as applicable, to be redeemed.
6.4 SURRENDER OF STOCK. On or before the Redemption Date, each
holder of shares of Series B Preferred, Series C Preferred,
Series D Preferred or Series E Preferred, as applicable,
electing to redeem his, her or its shares shall surrender the
certificate or certificates representing such shares to the
Corporation, in the manner and at the place designated in the
Redemption Notice, and thereupon the Redemption Price for such
shares shall be payable to the order of the person whose name
appears on such certificate or certificates as the owner
thereof, and each surrendered certificate shall be canceled
and retired. In the event less than all of the shares
represented by such certificate are redeemed, a new
certificate shall be issued representing the unredeemed
shares.
6.5 TERMINATION OF RIGHTS. If the Redemption Notice is duly given,
and if, on or prior to the Redemption Date, a holder of the
Series B Preferred, Series C Preferred, Series D Preferred or
Series E Preferred elects to have her, his or its shares
redeemed and the Redemption Price is either paid or made
available for payment, then notwithstanding that the
certificates evidencing any of the shares of Series B
Preferred, Series C Preferred, Series D Preferred or Series E
Preferred so called for redemption have not been surrendered,
all rights with respect to such shares shall forthwith after
the Redemption Date cease and terminate, except only (i) the
right of such holder to receive the Series B Redemption Price,
the Series C Redemption Price, the Series D Redemption Price
or the Series E Redemption Price, as applicable, without
interest upon surrender of his, her, or its certificates
therefor or (ii) the right to receive Common Stock upon
exercise of the conversion rights as provided in Section 7
hereof on or prior to the Redemption Date.
6.6 ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation at any time or from time to time after the
Certificate Effective Date effects a subdivision of the
outstanding shares of Series B Preferred, Series C Preferred,
Series D Preferred or the Series E Preferred, the Series B
Redemption Price, the Series C Redemption Price, the Series D
Redemption Price or the Series E Redemption Price, as
applicable, then in effect immediately before the subdivision
shall be proportionately decreased, and conversely, if the
Corporation at any time or from time to time after the
Certificate Effective Date combines the outstanding shares of
Series B Preferred, Series C Preferred, Series D Preferred or
the Series E Preferred into a smaller number of shares, the
Series B Redemption Price, the Series C Redemption Price,
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Series D Redemption Price or the Series E Redemption Price, as
applicable, in effect immediately before the combination shall
be proportionately increased. Any adjustment under this
Section 6.6 shall become effective at the close of business on
the date the subdivision or combination becomes effective.
6.7 ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS.
A. SERIES B PREFERRED ADJUSTMENT. If the Corporation at
any time or from time to time after the Certificate
Effective Date makes or issues or fixes a record date
for the determination of holders of shares of Series
B Preferred entitled to receive a dividend or other
distribution payable in additional shares of Series B
Preferred, then and in each such event the Series B
Redemption Price then in effect shall be decreased as
of the time of such issuances or, in the event such
record date is fixed, as of the close of business on
such record date, by multiplying the Series B
Redemption Price then in effect by a fraction (1) the
numerator of which is the total number of shares of
Series B Preferred issued and outstanding immediately
prior to the time of such issuance or the close of
business on such record date, and (2) the denominator
of which shall be the total number of shares of
Series B Preferred issued and outstanding immediately
prior to the time of such issuance or the close of
business on such record date plus the number of
shares of Series B Preferred issuable in payment of
such dividend or distribution; provided, however,
that if such record date is fixed and such dividend
is not fully paid or if such distribution is not
fully made on the date fixed therefor, the Series B
Redemption Price shall be recomputed accordingly as
of the close of business on such record date and
thereafter the Series B Redemption Price shall be
adjusted pursuant to this subsection 6.7.A as of the
time of actual payment of such dividends or
distributions.
B. SERIES C PREFERRED ADJUSTMENT. If the Corporation at any time
or from time to time after the Certificate Effective Date
makes or issues or fixes a record date for the determination
of holders of shares of Series C Preferred entitled to receive
a dividend or other distribution payable in additional shares
of Series C Preferred, then and in each such event the Series
C Redemption Price then in effect shall be decreased as of the
time of such issuances or, in the event such record date is
fixed, as of the close of business on such record date, by
multiplying the Series C Redemption Price then in effect by a
fraction (1) the numerator of which is the total number of
shares of Series C Preferred issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which
shall be the total number of shares of Series C Preferred
issued and outstanding immediately prior to the time of such
issuance or the close
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of business on such record date plus the number of shares of
Series C Preferred issuable in payment of such dividend or
distribution; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the
Series C Redemption Price shall be recomputed accordingly as
of the close of business on such record date and thereafter
the Series C Redemption Price shall be adjusted pursuant to
this subsection 6.7.B as of the time of actual payment of such
dividends or distributions.
C. SERIES D PREFERRED ADJUSTMENT. If the Corporation at any time
or from time to time after the Certificate Effective Date
makes or issues or fixes a record date for the determination
of holders of shares of Series D Preferred entitled to receive
a dividend or other distribution payable in additional shares
of Series D Preferred, then and in each such event the Series
D Redemption Price then in effect shall be decreased as of the
time of such issuances or, in the event such record date is
fixed, as of the close of business on such record date, by
multiplying the Series D Redemption Price then in effect by a
fraction (1) the numerator of which is the total number of
shares of Series D Preferred issued and outstanding
immediately prior to the time of such issuance or the close of
business on such record date, and (2) the denominator of which
shall be the total number of shares of Series D Preferred
issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date plus the
number of shares of Series D Preferred issuable in payment of
such dividend or distribution; provided, however, that if such
record date is fixed and such dividend is not fully paid or if
such distribution is not fully made on the date fixed
therefor, the Series D Redemption Price shall be recomputed
accordingly as of the close of business on such record date
and thereafter the Series D Redemption Price shall be adjusted
pursuant to this subsection 6.7.C as of the time of actual
payment of such dividends or distributions.
D. SERIES E PREFERRED ADJUSTMENT. If the Corporation at any time
or from time to time after the Certificate Effective Date
makes or issues or fixes a record date for the determination
of holders of shares of Series E Preferred entitled to receive
a dividend or other distribution payable in additional shares
of Series E Preferred, then and in each such event the Series
E Redemption Price then in effect shall be decreased as of the
time of such issuances or, in the event such record date is
fixed, as of the close of business on such record date, by
multiplying the Series E Redemption Price then in effect by a
fraction (1) the numerator of which is the total number of
shares of Series E Preferred issued and outstanding
immediately prior to the time of such issuance or the close
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of business on such record date, and (2) the denominator of
which shall be the total number of shares of Series E
Preferred issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date
plus the number of shares of Series E Preferred issuable in
payment of such dividend or distribution; provided, however,
that if such record date is fixed and such dividend is not
fully paid or if such distribution is not fully made on the
date fixed therefor, the Series E Redemption Price shall be
recomputed accordingly as of the close of business on such
record date and thereafter the Series E Redemption Price shall
be adjusted pursuant to this subsection 6.7.D as of the time
of actual payment of such dividends or distributions.
6.8 OTHER REDEMPTIONS. Other than the scheduled redemptions provided for
in Section 6.1, the Corporation shall not, without (i) following
the provisions of Section 3.8.A and (ii) the prior consent of a
majority of the Board (including the affirmative vote of the Series
B/C Preferred Director, the Series D Preferred Director and the
Series E Preferred Director), purchase or set aside any sums for
the purchase of shares of Common Stock, except for the purchase of
Common Stock from former employees of the Corporation who acquired
such shares directly from the Corporation, if such purchase is
made pursuant to contractual rights relating to the termination of
employment of such former employee that were approved by a majority
of the Board.
7. CONVERSION. The holders of the Preferred Stock shall have the following
conversion rights (the "CONVERSION RIGHTS"):
7.1 OPTIONAL CONVERSION OF THE SERIES A PREFERRED. The Series A
Preferred shall be convertible, without the payment of any
additional consideration by the holder thereof and at the
option of the holder thereof, at any time after the first
issuance of shares of Series A Preferred by the Corporation,
at the office of the Corporation or any transfer agent for the
Common Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $0.62 by
the Series A Conversion Price, determined as hereinafter
provided, in effect at the time of conversion and then
multiplying such quotient by the number of shares of Series A
Preferred to be converted. The conversion price at which
shares of Common Stock shall be deliverable upon conversion
without the payment of any additional consideration by the
holder thereof (the "SERIES A CONVERSION PRICE") shall on the
Certificate Effective Date initially be $0.62 in the case of
the Series A Preferred. Such initial Series A Conversion Price
shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series A Preferred is
convertible, as hereinafter provided.
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7.2 OPTIONAL CONVERSION OF THE SERIES B PREFERRED. The Series B
Preferred shall be convertible, without the payment of any
additional consideration by the holder thereof and at the
option of the holder thereof, at any time after the first
issuance of shares of Series B Preferred by the Corporation,
at the office of the Corporation or any transfer agent for the
Common Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1.18 by
the Series B Conversion Price, determined as hereinafter
provided, in effect at the time of conversion and then
multiplying such quotient by the number of shares of Series B
Preferred to be converted. The conversion price at which
shares of Common Stock shall be deliverable upon conversion
without the payment of any additional consideration by the
holder thereof (the "SERIES B CONVERSION PRICE") shall on the
Certificate Effective Date initially be $1.18 in the case of
the Series B Preferred. Such initial Series B Conversion Price
shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series B Preferred is
convertible, as hereinafter provided.
7.3 OPTIONAL CONVERSION OF THE SERIES C PREFERRED. The Series C
Preferred shall be convertible, without the payment of any
additional consideration by the holder thereof and at the
option of the holder thereof, at any time after the first
issuance of shares of Series C Preferred by the Corporation,
at the office of the Corporation or any transfer agent for the
Common Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $2.9453584
by the Series C Conversion Price, determined as hereinafter
provided, in effect at the time of conversion and then
multiplying such quotient by the number of shares of Series C
Preferred to be converted. The conversion price at which
shares of Common Stock shall be deliverable upon conversion
without the payment of any additional consideration by the
holder thereof (the "SERIES C CONVERSION PRICE") shall on the
Certificate Effective Date initially be $2.9453584 in the case
of the Series C Preferred. Such initial Series C Conversion
Price shall be subject to adjustment, in order to adjust the
number of shares of Common Stock into which the Series C
Preferred is convertible, as hereinafter provided.
7.4 OPTIONAL CONVERSION OF THE SERIES D PREFERRED. The Series D
Preferred shall be convertible, without the payment of any
additional consideration by the holder thereof and at the
option of the holder thereof, at any time after the first
issuance of shares of Series D Preferred by the Corporation,
at the office of the Corporation or any transfer agent for the
Common Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $8.551 by
the Series D Conversion Price, determined as hereinafter
provided, in effect at the time of conversion and then
multiplying such quotient by the number of shares of Series D
Preferred to be converted. The conversion price at which
shares of Common Stock shall be deliverable upon conversion
without the payment of any additional
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consideration by the holder thereof (the "SERIES D CONVERSION
PRICE") shall on the Certificate Effective Date initially be $6.27
in the case of the Series D Preferred. Such initial Series D
Conversion Price shall be subject to adjustment, in order to adjust
the number of shares of Common Stock into which the Series D
Preferred is convertible, as hereinafter provided.
7.5 OPTIONAL CONVERSION OF THE SERIES E PREFERRED. The Series E
Preferred shall be convertible, without the payment of any
additional consideration by the holder thereof and at the
option of the holder thereof, at any time after the first
issuance of shares of Series E Preferred by the Corporation,
at the office of the Corporation or any transfer agent for the
Common Stock, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $6.27 by
the Series E Conversion Price, determined as hereinafter
provided, in effect at the time of conversion and then
multiplying such quotient by the number of shares of Series E
Preferred to be converted. The conversion price at which
shares of Common Stock shall be deliverable upon conversion
without the payment of any additional consideration by the
holder thereof (the "SERIES E CONVERSION PRICE") shall on the
Certificate Effective Date initially be $6.27 in the case of
the Series E Preferred. Such initial Series E Conversion Price
shall be subject to adjustment, in order to adjust the number
of shares of Common Stock into which the Series E Preferred is
convertible, as hereinafter provided.
7.6 AUTOMATIC CONVERSION OF THE SERIES A PREFERRED AND SERIES B
PREFERRED. If at any time (a) the Corporation shall complete a
Qualified Public Offering or (b) the holders of at least a
majority in interest of the aggregate number of outstanding
shares of Series A Preferred and Series B Preferred, voting
together as a single and separate class, shall consent in
writing to the conversion of the Series A Preferred and Series
B Preferred into shares of Common Stock, then effective upon
(i) the closing of such Qualified Public Offering or (ii) such
vote of the holders of the Series A Preferred and Series B
Preferred, as the case may be, all outstanding shares of
Series A Preferred and Series B Preferred shall automatically
convert into the number of shares of Common Stock as is
provided for in Section 7.1 or 7.2, as applicable.
7.7 AUTOMATIC CONVERSION OF THE SERIES C PREFERRED. If at any time
(a) the Corporation shall complete a Qualified Public Offering
or (b) the holders of at least a majority in interest of the
aggregate number of outstanding shares of Series C Preferred
shall consent in writing to the conversion of the Series C
Preferred, then effective upon (i) the closing of such
Qualified Public Offering or (ii) such vote of the holders of
the Series C Preferred, as the case may be, all outstanding
shares of Series C Preferred shall automatically convert into
the number of shares of Common Stock as is provided for in
Section 7.3.
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7.8 AUTOMATIC CONVERSION OF THE SERIES D PREFERRED. If at any time
(a) the Corporation shall complete a Qualified Public Offering
or (b) the holders of at least a majority in interest of the
aggregate number of outstanding shares of Series D Preferred
shall consent in writing to the conversion of the Series D
Preferred, then effective upon (i) the closing of such
Qualified Public Offering or (ii) such vote of the holders of
the Series D Preferred, as the case may be, all outstanding
shares of Series D Preferred shall automatically convert into
the number of shares of Common Stock as is provided for in
Section 7.4.
7.9 AUTOMATIC CONVERSION OF THE SERIES E PREFERRED. If at any time
(a) the Corporation shall complete a Qualified Public Offering
or (b) the holders of at least a majority in interest of the
aggregate number of outstanding shares of Series E Preferred
shall consent in writing to the conversion of the Series E
Preferred, then effective upon (i) the closing of such
Qualified Public Offering or (ii) such vote of the holders of
the Series E Preferred, as the case may be, all outstanding
shares of Series E Preferred shall automatically convert into
the number of shares of Common Stock as is provided for in
Section 7.5.
7.10 FRACTIONAL SHARES. No fractional shares of Common Stock shall
be issued upon conversion of the Preferred Stock. In lieu of
any fractional share to which any holder would otherwise be
entitled upon conversion of some or all of the Preferred Stock
owned by such holder, the Corporation shall pay cash equal to
such fraction multiplied by the then effective Conversion
Price for such series of Preferred Stock.
7.11 MECHANICS OF OPTIONAL CONVERSION. 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, endorsed or accompanied
by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the
registered holder or by such holder's attorney duly authorized
in writing, at the office of the Corporation or of any
transfer agent for the Common Stock, and shall give at least
five (5) days' prior written notice to the Corporation at such
office that such holder elects to convert the same and shall
state therein such holder's name or the name of the nominees
in which such holder wishes the certificate or certificates
for shares of Common Stock to be issued. The Corporation
shall, as soon as practicable thereafter, issue and deliver at
such office to such holder of Preferred Stock, or to such
holder's nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid, together with cash in lieu of
any fraction of a share. Such conversion shall be deemed to
have been made immediately prior to the close of business on
the date of such surrender of the certificate or certificates
representing the shares of Preferred Stock to be converted,
and the person or persons entitled to receive the shares of
Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of
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such shares of Common Stock on such date. From and after such date,
all rights of the holder with respect to the Preferred Stock so
converted shall terminate, except only the right of such holder to
receive certificates for the number of shares of Common Stock
issuable upon conversion thereof and cash for any fraction of a
share.
7.12 MECHANICS OF AUTOMATIC CONVERSION. All holders of record of
shares of Preferred Stock will be given at least twenty (20)
days' prior written notice of the anticipated date of any
automatic conversion referenced in Section 7.6, Section 7.7,
Section 7.8 or Section 7.9 and at least two (2) days' prior
written notice of the actual date of such conversion. The
Corporation shall also exercise its best efforts to provide at
least three (3) days' telephonic notice of such actual
conversion date to said holders. Each such notice shall
designate a place for automatic conversion of all of the
shares of such Preferred Stock pursuant to Section 7.6,
Section 7.7, Section 7.8 or Section 7.9, as applicable. Such
notices will be sent by mail, first class, postage prepaid to
each record holder of Preferred Stock at such holder's address
appearing on the Corporation's stock register, or by overnight
courier service in the case of the notice prior to the actual
date of conversion. From and after the date fixed for
conversion, each holder of shares of Preferred Stock shall,
following surrender of such holder's certificate or
certificates representing such shares to the Corporation at
the place designated in such notice, be entitled to receive
certificates for the number of shares of Common Stock or other
securities to which such holder is entitled. On the date fixed
for conversion, all rights with respect to the Preferred Stock
will terminate, except only (i) any rights to receive declared
but unpaid dividends with a record date preceding the date of
conversion, and (ii) the rights of the holders thereof, upon
surrender of their certificate or certificates therefor, to
receive certificates for the number of shares of Common Stock
or other securities into which such Preferred Stock has been
converted and cash for fractional shares. If so required by
the Corporation, certificates surrendered for conversion shall
be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by her,
his or its attorney duly authorized in writing. All
certificates evidencing shares of Preferred Stock which are
required to be surrendered for conversion in accordance with
the provisions hereof shall, from and after the date such
certificates are so required to be surrendered, be deemed to
have been retired and canceled and the shares of Preferred
Stock represented thereby converted into Common Stock for all
purposes, notwithstanding the failure of the holder or holders
thereof to surrender such certificates. As soon as practicable
after the date of such automatic conversion and the surrender
of the certificate or certificates for Preferred Stock as
aforesaid, the Corporation shall cause to be issued and
delivered to such holder, or to her, his or its written order,
a certificate or certificates for the number of full shares of
Common Stock or other securities issuable on such conversion
in accordance with the provisions
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hereof and cash as provided in Section 7.10 in respect of any
fraction of a share of Common Stock otherwise issuable upon such
conversion.
7.13 CERTAIN ADJUSTMENTS TO CONVERSION PRICE FOR STOCK SPLITS,
DIVIDENDS, MERGERS, REORGANIZATIONS, ETC.
A. ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS AND
COMBINATIONS OF COMMON STOCK. In the event the
outstanding shares of Common Stock shall, after the
Certificate Effective Date be further subdivided
(split), or combined (reverse split), by
reclassification or otherwise, or in the event of any
dividend or other distribution payable on the Common
Stock in shares of Common Stock, the applicable
Conversion Price in effect immediately prior to such
subdivision, combination, dividend or other
distribution shall, concurrently with the
effectiveness of such subdivision, combination,
dividend or other distribution, be proportionately
adjusted.
B. ADJUSTMENT FOR MERGER OR REORGANIZATION, ETC. In the
event of a reclassification, reorganization or
exchange (other than described in subsection 7.13.A
above) or any consolidation or merger of the
Corporation with another corporation (other than a
merger, acquisition or other reorganization as
defined in Section 5.4, which shall be considered a
liquidation pursuant to Section 5 above unless waived
pursuant to Section 5.4), each share of Preferred
Stock shall thereafter be convertible into the number
of shares of stock or other securities or property to
which a holder of the number of shares of Common
Stock of the Corporation deliverable upon conversion
of the Preferred Stock would have been entitled upon
such reclassification, reorganization, exchange,
consolidation, merger or conveyance had the
conversion occurred immediately prior to the event;
and, in any such case, appropriate adjustment (as
determined by the Board) 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 applicable Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property
thereafter deliverable upon the conversion of the
Preferred Stock.
C. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event
the Corporation, at any time or from time to time after the
Certificate Effective Date, declares or pays, or makes or fixes
a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution
(including, without limitation, any dividend or distribution of
other or additional stock or other securities
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or property by way of dividend or spin-off, recapitalization or
similar corporate rearrangement), other than a dividend payable
in Additional Shares of Common Stock, then and in each such
event, the Corporation shall pay to the holders of Preferred
Stock, on the date such dividend or other distribution is paid
to the holders of Common Stock, the securities and other
property (including cash) which they would have received had
their Preferred Stock been converted into Common Stock
immediately prior to the record date fixed in connection with
such event.
7.14 ADJUSTMENT TO CONVERSION PRICE FOR ISSUANCE OR SALE OF
ADDITIONAL SHARES OF COMMON STOCK. If, at any time or from
time to time on or after the Certificate Effective Date, the
Corporation shall issue or sell Additional Shares of Common
Stock for an Effective Price per share less than the
applicable Conversion Price of the Series A Preferred, Series
B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred, as the case may be, then in effect, then the then
applicable Conversion Price of the Series A Preferred, Series
B Preferred, Series C Preferred, Series D Preferred or Series
E Preferred, as the case may be, shall be reduced to an
adjusted Conversion Price (computed to the nearest cent, a
half cent being treated as a full cent), as of the date of
such issuance or sale, by dividing (A) the sum of (X) the
result obtained by multiplying the number of shares of Common
Stock outstanding immediately prior to such issue or sale by
the Conversion Price then in effect, and (Y) the
consideration, if any, received by the Corporation upon such
issue and sale, by (B) the number of shares of Common Stock
outstanding immediately after such issue or sale; PROVIDED,
HOWEVER, that, notwithstanding anything herein to the
contrary, from and after the Certificate Effective Date if at
any time the Corporation shall issue or sell any Additional
Shares of Common Stock (including, without limitation, any
Additional Shares of Common Stock deemed to be issued pursuant
to Section 7.15 with respect to any issuance of sale of any
Convertible Securities or rights, warrants or options to
subscribe for, purchase or otherwise acquire Additional Shares
of Common Stock or Convertible Securities) in a Full Ratchet
Financing (as defined below) for an Effective Price per share
less than the Series E Conversion Price in effect on the date
of and immediately prior to such issue or sale, then, the
Series E Conversion Price shall be reduced, concurrently with
such issuance or sale, to an adjusted Series E Conversion
Price equal to the Effective Price per share for which such
Additional Shares of Common Stock were issued or sold or
deemed to have been issued or sold. "Full Ratchet Financing"
means any financing not registered under the Securities Act of
1933, as amended, unless 40% or more of the net proceeds from
such financing is received from purchasers who are neither
then existing directors or officers of the Corporation or
holders of the Series A Preferred, Series B Preferred, Series
C Preferred or Series D Preferred or any of their respective
Affiliates. For purposes of adjusting the Conversion Price
under this
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Section 7.14, Common Stock outstanding shall include shares of
Series A Preferred, Series B Preferred, Series C Preferred,
Series D Preferred and Series E Preferred then outstanding (on
an as converted basis) but shall not include any outstanding
Convertible Securities or outstanding rights or options, except
as required by the provisions of Section 7.15.
7.15 FURTHER PROVISIONS FOR ADJUSTMENT OF CONVERSION PRICE. For the
purpose of Section 7.14 above, the following provisions shall
be applicable:
A. ISSUANCE PROVISIONS FOR ADJUSTMENT OF CONVERSION
PRICE. If, at any time after the Certificate
Effective Date, the Corporation shall issue or sell
any Convertible Securities, there shall be determined
as of the date of issuance the Effective Price per
share for which Additional Shares of Common Stock are
issuable upon the conversion or exchange thereof,
such determination to be made by dividing (X) the
total amount received or receivable by the
Corporation as consideration for the issuance or sale
of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any,
payable to the Corporation upon the conversion or
exchange thereof, by (Y) the maximum number of
Additional Shares of Common Stock issuable upon
conversion or exchange of all of such Convertible
Securities. Such issue or sale shall be deemed, for
purposes of Section 7.14, to be an issuance or sale
for cash (as of the date of issuance or sale of such
Convertible Securities) of such maximum number of
Additional Shares of Common Stock at the price per
share so determined.
If such Convertible Securities shall by their terms
provide for an increase or increases, with the
passage of time, in the amount of additional
consideration, if any, payable to the Corporation, or
in the rate of exchange, upon the conversion or
exchange thereof the adjusted Conversion Price shall,
forthwith upon any such increase becoming effective,
be readjusted to reflect the same.
If any rights of conversion or exchange evidenced by
such Convertible Securities shall expire without
having been exercised, any adjusted Conversion Price
shall forthwith be readjusted to be the adjusted
Conversion Price which would have been in effect had
an adjustment been made on the basis that the only
Additional Shares of Common Stock issued or sold were
those actually issued upon the conversion or exchange
of such Convertible Securities, and that they were
issued or sold for the consideration actually
received by the Corporation upon such conversion or
exchange, plus the consideration, if any, actually
received by the Corporation for the issuance or sale
of such Convertible Securities, whether or not
actually converted or exchanged.
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B. GRANT OF RIGHTS, WARRANTS OR OPTIONS FOR COMMON
STOCK. If, at any time after the Certificate
Effective Date, the Corporation shall grant any
rights, warrants or options to subscribe for,
purchase or otherwise acquire Additional Shares of
Common Stock, there shall be determined as of the
date of issuance the Effective Price per share for
which Additional Shares of Common Stock are issuable
upon the exercise of such rights, warrants or
options, such determination to be made by dividing
(X) the total amount, if any, received or receivable
by the Corporation as consideration for the granting
of such rights, warrants or options, plus the minimum
aggregate amount of additional consideration payable
to the Corporation upon the exercise of such rights,
warrants or options, by (Y) the maximum number of
Additional Shares of Common Stock of the Corporation
issuable upon the exercise of such rights, warrants
or options. The granting of such rights, warrants or
options shall be deemed, for purposes of Section
7.14, to be an issuance or sale for cash (as of the
date of the granting of such rights, warrants or
options) of such maximum number of Additional Shares
of Common Stock at the price per share so determined.
If such rights, warrants or options shall by their
terms provide for an increase or increases, with the
passage of time, in the amount of additional
consideration payable to the Corporation upon the
exercise thereof, the adjusted Conversion Price
shall, forthwith upon any such increase becoming
effective, be readjusted to reflect the same.
If any such rights, warrants or options shall expire
without having been exercised, any adjusted
Conversion Price shall forthwith be readjusted to be
the adjusted Conversion Price which would have been
in effect had an adjustment been made on the basis
that the only Additional Shares of Common Stock so
issued or sold were those actually issued or sold
upon the exercise of such rights, warrants or options
and that they were issued or sold for the
consideration actually received by the Corporation
upon such exercise, plus the consideration, if any,
actually received by the Corporation for the granting
of all such rights, warrants or options, whether or
not exercised.
C. GRANT OF RIGHTS, WARRANTS OR OPTIONS FOR CONVERTIBLE
SECURITIES. If, at any time after the Certificate
Effective Date, the Corporation shall grant any
rights, warrants or options to subscribe for,
purchase or otherwise acquire Convertible Securities,
there shall be determined as of the date of issuance
the Effective Price per share for which Additional
Shares of Common Stock are issuable upon the exercise
of such rights warrants or options for such
Convertible Securities, such determination to be made
by dividing (X) the total amount, if any, received or
receivable by the Corporation as consideration for the
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granting of such rights, warrants or options,
plus the minimum aggregate amount of additional
consideration payable to the Corporation upon the
exercise of such rights, warrants or options and the
conversion or exchange of such Convertible
Securities, by (Y) the maximum number of Additional
Shares of Common Stock of the Corporation issuable
upon the exercise of such rights, warrants or options
and the conversion or exchange of all of such
Convertible Securities. The granting of such rights,
warrants or options shall be deemed, for purposes of
Section 7.14, to be an issuance or sale for cash (as
of the date of the granting of such rights, warrants
or options) of such maximum number of Additional
Shares of Common Stock at the price per share so
determined.
If such rights, warrants or options shall by their
terms provide for an increase or increases, with the
passage of time, in the amount of additional
consideration payable by the Corporation upon the
exercise or the conversion or exchange thereof, or in
the rate of exchange of such Convertible Securities,
any adjusted conversion price shall, forthwith upon
any such increase becoming effective, be readjusted
to reflect the same.
If any such rights, warrants or options or any rights
of conversion or exchange shall expire without having
been exercised, the adjusted Conversion Price shall
forthwith be readjusted to be the adjusted Conversion
Price which would have been in effect had an
adjustment been made on the basis that the only
Additional Shares of Common Stock so issued or sold
were those actually issued or sold upon the exercise
of such rights, warrants or options and/or the
conversion or exchange of such Convertible Securities
and that they were issued or sold for the
consideration actually received by the Corporation
upon such exercise, conversion or exchange, plus the
consideration, if any, actually received by the
Corporation for the granting of all such rights,
warrants or options and/or the issuance of such
Convertible Securities, whether or not exercised,
converted or exchanged.
D. DETERMINATION OF CONSIDERATION. Upon any issuance or
sale for a consideration other than cash, or a
consideration part of which is other than cash, of
any Additional Shares of Common Stock or Convertible
Securities or any rights, warrants or options to
subscribe for, purchase or otherwise acquire any
Additional Shares of Common Stock or Convertible
Securities, the amount of the consideration other
than cash received by the Corporation shall be deemed
to be the fair value of such consideration as
determined in good faith by the Board. In case any
Additional Shares of Common Stock or Convertible
Securities or any rights, warrants or options to
subscribe for, purchase or otherwise
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acquire any Additional Shares of Common Stock or
Convertible Securities shall be issued or sold together
with other stock or securities or other assets of the
Corporation for a consideration which covers two or
more thereof, the consideration for the issue or sale
of such Additional Shares of Common Stock or
Convertible Securities or such rights, warrants or
options shall be deemed to be the portion of such
consideration allocated thereto in good faith by the
Board.
E. DURATION OF ADJUSTED CONVERSION PRICE. Following each
computation or readjustment of an adjusted Conversion
Price as provided above in this Section 7, the new
adjusted Conversion Price shall remain in effect
until a further computation or readjustment thereof
is required by this Section 7.
F. OTHER ACTION AFFECTING COMMON STOCK. In case, after
the Certificate Effective Date, the Corporation shall
take any action affecting its shares of Common Stock,
other than an action described above in this Section
7, which in the good faith opinion of the Board would
have a materially adverse effect upon the conversion
rights of the Preferred Stock granted herein, the
Conversion Price shall be adjusted in such manner and
at such time as the Board may in good faith determine
to be equitable in the circumstances.
G. CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of the Conversion
Price pursuant to this Section 7, the Corporation at
its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and
furnish to each holder of Preferred Stock a
certificate setting forth such adjustment or
readjustment and showing in reasonable 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: (i) such
adjustments and readjustments; (ii) the applicable
Conversion Price at the time in effect; and (iii) 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 such Preferred Stock.
7.16 NOTICES OF RECORD DATE. In the event of any taking by the
Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof
who are entitled to receive any dividend (other than a cash
dividend which is the same as cash dividends paid in previous
quarters) or other distribution, any capital reorganization of
the Corporation, any reclassification or recapitalization of
the Corporation's capital stock, any consolidation or merger
with or into another Corporation, any transfer of all or
substantially all of the assets of the Corporation or any
dissolution, liquidation
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or winding up of the Corporation, the Corporation shall mail to
each holder of Preferred Stock at least ten (10) days prior
to the date specified for the taking of a record, a notice
specifying the date on which any such record is to be taken
for the purpose of such action.
7.17 COMMON STOCK RESERVED. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such
number of shares of Common Stock as shall from time to time be
sufficient to effect conversion of the Preferred Stock. The
Corporation covenants that all shares of Common Stock which
shall be so issuable shall, upon issuance, be duly authorized,
validly issued, fully paid and nonassessable, free from
preemptive or similar rights on the part of the holders of any
shares of capital stock or securities of the Corporation or
any other person or entity, and free from all taxes, liens and
charges with respect to the issue thereof (not including any
income taxes payable by the holders of shares of Preferred
Stock being converted in respect of gains thereon). The
Corporation shall use its best efforts to take all such action
as may be necessary to ensure that such shares of Common Stock
may be so issued without violation of any applicable law or
regulation, or of any applicable requirements of the National
Association of Securities Dealers, Inc. and of any domestic
securities exchange upon which the Common Stock may be listed.
7.18 PAYMENT OF TAXES. The Corporation will pay all taxes (other
than taxes based upon income) and other governmental charges
that may be imposed with respect to the issue or delivery of
shares of Common Stock upon conversion of shares of Preferred
Stock, other than any tax or other charge imposed in
connection with any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that
in which the shares of Preferred Stock so converted were
registered.
8. STATUS OF PREFERRED STOCK UPON RETIREMENT. Shares of Preferred Stock
which are acquired or redeemed by the Corporation or converted pursuant
to Section 7 shall be retired pursuant to Delaware General Corporation
Law Section 243, or any successor provision, and returned to the status
of authorized but unissued shares of the Corporation's undesignated
preferred stock.
[****** SIGNATURE PAGE FOLLOWS ******]
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IN WITNESS WHEREOF, the undersigned has executed this Certificate on
behalf of the Corporation as of September 15, 2000 to be effective as of the
Certificate Effective Date.
ADAYTUM SOFTWARE, INC.
By: /s/ Michael H. Mehr
-------------------------------
Michael H. Mehr
Vice-President Finance
& Administration
