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EXHIBIT 3.3
FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF SERIES H PREFERRED STOCK
(Pursuant to Section 14-2-602 of the Business Corporation Code
of the State of Georgia and to Article VI(b) of the
Second Amended and Restated Articles of Incorporation
(the "Articles of Incorporation") of SynQuest, Inc.)
I, Joseph Trino, being Chief Executive Officer of SynQuest, Inc. (the
"Corporation"), a corporation organized and existing under the Business
Corporation Code of the State of Georgia, in accordance with the provisions of
Section 14-2-602 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors of
the Corporation (the "Board of Directors") by the Articles of Incorporation, the
Board of Directors on _______ __, 2000, adopted the following resolution
creating a Series of Preferred Stock designated as Series H Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the Articles
of Incorporation, the Board of Directors by this resolution creates a series of
Preferred Stock of the Corporation and that the designation and the amount
thereof and the voting powers, preferences and relative, participating,
optional, and other special rights of the shares of such series, and the
qualifications, limitations, or restrictions thereof are as follows:
1. Designation. __________ shares of the Series H Junior Convertible
Preferred Stock, $0.01 par value, shall be designated the "Series H Preferred
Stock."
2. Dividends.
(a) Subject to the rights of series of Preferred Stock
which may from time to time be created by the Board of Directors, the
holders of shares of Series H Preferred Stock shall be entitled to
receive, when and as declared, out of funds legally available therefor,
dividends which shall be payable as the Board of Directors may
determine, before any dividends shall be set apart for or paid upon the
Common Stock or any other stock ranking on liquidation junior to the
Series H Preferred Stock (such stock being referred to hereinafter
collectively as "Series H Junior Stock") in any year. All dividends
declared upon the Series H Preferred Stock shall be declared pro rata
per share.
(b) Dividends on the Series H Preferred Stock shall be
non-cumulative.
(c) For so long as the Series H Preferred Stock remains
outstanding, the Corporation shall not pay any dividend upon the Series
H Junior Stock, whether in cash
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or other property (other than shares of Series H Junior Stock), unless
an equal dividend has been declared and paid upon the Series H
Preferred Stock.
3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders
of shares of Series H Preferred Stock shall be entitled to be paid out
of the assets of the Corporation available for distribution to its
stockholders, after and subject to the payment in full of all amounts
required to be distributed to the holders of any Preferred Stock of the
Corporation ranking on liquidation prior and in preference to the
Series H Preferred Stock (such Preferred Stock being referred to
hereinafter as "Series H Senior Preferred Stock") upon such
liquidation, dissolution or winding up, but before any payment shall be
made to the holders of Series H Junior Stock, an amount equal to all
dividends thereon accrued but unpaid (subject to adjustment in the
event of any stock dividend, stock split, stock distribution or
combination with respect to such shares) (the "Liquidation
Preference").
If upon any such liquidation, dissolution or winding
up of the Corporation the remaining assets of the Corporation available
for the distribution to holders of Series H Preferred Stock and any
class or series of stock ranking on liquidation on parity with the
Series H Preferred Stock then outstanding ("Series H Parity Stock")
after payment in full of amounts required to be paid or distributed to
holders of Series H Senior Preferred Stock shall be insufficient to pay
the holders of shares of Series H Preferred Stock and Series H Parity
Stock the full amount to which they shall be entitled, the holders of
shares of Series H Preferred Stock and Series H Parity Stock shall
share ratably in any distribution of the remaining assets and funds of
the Corporation in proportion to the respective amounts which would
otherwise be payable in respect to the shares held by them upon such
distribution if all amounts payable on or with respect to said shares
were paid in full.
(b) After the payment of all preferential amounts
required to be paid to the holders of Series H Senior Preferred Stock,
Series H Preferred Stock, Series H Parity Stock and any other series of
Preferred Stock upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of Common Stock then outstanding
shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders, the holders
of shares of Common Stock sharing ratably in such assets.
(c) For purposes of this Section 3, a merger or
consolidation of the Corporation with or into any other corporation or
corporations in which the Corporation is not the surviving entity, or
the sale of all or substantially all of the assets of the Corporation,
shall be treated as a liquidation, dissolution or winding up of the
Corporation.
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4. Voting Rights.
Subject to the rights of series of Preferred Stock which may from time
to time be created by the Board of Directors, each issued and outstanding share
of Series H Preferred Stock shall be entitled to the number of votes equal to
the number of shares of Common Stock into which each such share of Series H
Preferred Stock is convertible (as adjusted from time to time pursuant to
Section 6 hereof and with any fractional shares determined on an aggregate
conversion basis being rounded to the nearest whole share), at each meeting of
stockholders of the Corporation with respect to any and all matters presented to
the stockholders of the Corporation for their action or consideration. Except as
provided by law or by the provisions establishing any other series of Preferred
Stock, holders of Series H Preferred Stock shall vote together with the holders
of Common Stock as a single class. The provisions of this Section 4 shall apply
to any action of the stockholders whether at a meeting or by written consent
without a meeting in accordance with Georgia law.
5. Optional Conversion.
Subject to the rights of series of Preferred Stock which may from time
to time be created by the Board of Directors, (i) each share of Series H
Preferred Stock may be converted at any time, at the option of the holder
thereof, in the manner hereinafter provided, into fully-paid and nonassessable
shares of Common Stock at the conversion price then in effect for Series H
Preferred Stock (the "Series H Conversion Price"); provided, however, that upon
any redemption of Series H Preferred Stock or any liquidation of the
Corporation, the right of conversion shall terminate at the close of business on
the full business day next preceding the date fixed for such redemption or for
the payment of any amounts distributable upon liquidation to the holders of the
Series H Preferred Stock.
(a) The initial conversion rate for the Series H
Preferred Stock shall be one share of Common Stock for each share of
Series H Preferred Stock surrendered for conversion, representing an
initial conversion price for Series H Preferred Stock of $_____ per
share of the Common Stock. The applicable conversion rate and Series H
Conversion Price from time to time in effect is subject to adjustment
as hereinafter provided.
(b) The Corporation shall not issue any fractional shares
of Common Stock upon conversion of Series H Preferred Stock or script
in lieu thereof (with any fractional shares being determined on an
aggregate conversion basis). If any fractional share of Common Stock
would, except for the provisions of this paragraph (b), be issuable
upon conversion of any Series H Preferred Stock, the Corporation shall
in lieu thereof pay to the person entitled thereto an amount in cash
equal to the current value of such fraction, calculated to the nearest
one-thousandth (1/1000) of a share, to be computed (I) if the Common
Stock is listed on any national securities exchange, equal to the last
sales price of the Common Stock on such exchange (or the quoted closing
bid price if there shall have been no sales) on the date of conversion,
or (II) if the Common Stock is not listed on any national security
exchange, equal to the mean between the closing bid and asked prices
for the Common Stock on the date of conversion as reported by The
Nasdaq Stock
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Market, or its successor, and if there are not such closing bid and
asked prices, on the basis of the fair market value per share of Common
Stock as determined by the Board of Directors.
(c) Whenever the conversion rate and Series H Conversion
Price are adjusted as provided in Section 6 hereof, the Corporation
shall file at each office designated for the conversion of Series H
Preferred Stock, a statement, signed by the Chairman of the Board of
Directors, the President, and any Vice President or Treasurer of the
Corporation, showing in reasonable detail the facts requiring such
adjustment and the conversion rate and Series H Conversion Price that
will be effective after such adjustment. The Corporation shall also
cause a notice setting forth any such adjustments to be sent by mail,
first class, postage prepaid, to each record holder of Series H
Preferred Stock at his or its address appearing on the stock register.
If such notice relates to an adjustment resulting from an event
referred to in paragraph 6(g), such notice shall be included as part of
the notice required to be mailed and published under the provisions of
paragraph 6(g) hereof.
(d) In order to exercise the conversion privilege, the
holder of any share of Series H Preferred Stock to be converted shall
surrender his or its certificate or certificates representing the share
of Series H Preferred Stock to the principal office of the transfer
agent for the Series H Preferred Stock (or if no transfer agent be at
the time appointed, then the Corporation at its principal office), and
shall give written notice to the Corporation at such office that the
holder elects to convert all of the shares of Series H Preferred Stock
represented by such certificates, or any portion of such shares. Such
notice shall also state the name or names (with address) in which the
certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, subject to any
restrictions on transfer relating to shares of Series H Preferred Stock
or shares of Common Stock upon conversion thereof. If 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 authorized in writing. The
date of receipt by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) of the certificates and
notice shall be the conversion date. As soon as practicable after
receipt of such notice and the surrender of the certificate or
certificates for Series H Preferred Stock as aforesaid, the Corporation
shall cause to be issued and delivered at such office to such holder,
or on his or its written order, a certificate or certificates for the
number of shares of Common Stock issuable on such conversion in
accordance with the provisions hereof and cash as provided in paragraph
(b) of this Section 5 in respect of any fractional share otherwise
issuable upon such conversion.
(e) The Corporation shall at all times when the Series H
Preferred Stock is outstanding reserve and keep available out of its
authorized but unissued stock, for the purposes of effecting the
conversion of the Series H Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series H
Preferred Stock. Before taking any action which would cause an
adjustment reducing the Series H Conversion Price below the then
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par value of the shares of Common Stock issuable upon conversion of the
Series H Preferred Stock, the Corporation will take any corporate
action which may, in the opinion of its counsel, be necessary in order
that the Corporation may validly and legally issue fully paid and
nonassessable shares at such adjusted Series H Conversion Price.
(f) Upon any such conversion, no adjustment to the
conversion rate shall be made for accrued and unpaid dividends on the
Series H Preferred Stock.
(g) All shares of Series H Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer
be deemed to be outstanding and all rights with respect to such shares,
including the rights, if any, to receive notices and to vote, shall
cease and terminate except only the right of the holder thereof to
receive shares of Common Stock, as applicable, in exchange for the
Series H Preferred Stock. Any shares of Series H Preferred Stock so
converted shall be retired and canceled and shall not be reissued, and
the Corporation may from time to time take such appropriate action as
may be necessary to reduce the authorized Series H Preferred Stock
accordingly.
6. Anti-Dilution Provisions.
(a) In order to prevent dilution of the rights granted
hereunder, the Series H Conversion Price of each share of Series H
Preferred Stock is subject to adjustment from time to time in
accordance with this paragraph 6(a). At any given time, the Series H
Conversion Price shall be that dollar (or part of a dollar) amount the
payment of which shall be sufficient at the given time to acquire one
share of the Corporation's Common Stock upon conversion of shares of
Series H Preferred Stock. Upon each adjustment of the Series H
Conversion Price pursuant to this Section 6, the registered holder of
shares of Series H Preferred Stock shall thereafter be entitled to
acquire upon exercise, at the Series H Conversion Price resulting from
such adjustment, the number of shares of the Corporation's Common Stock
obtainable by multiplying the Series H Conversion Price in effect
immediately prior to such adjustment by the number of shares of the
Corporation's Common Stock acquirable immediately prior to such
adjustment and dividing the product thereof by the Series H Conversion
Price resulting from such adjustment. For purposes of this Section 6,
the term "Number of Common Shares Deemed Outstanding" at any given time
shall mean the sum of (1) the number of shares of the Corporation's
Common Stock outstanding at such time, (2) the number of shares of the
Corporation's Common Stock issuable upon conversion of the outstanding
shares of Series B Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock, Series E Preferred Stock, Series F Preferred Stock,
Series G Preferred Stock and Series H Preferred Stock, (3) the number
of shares of the Corporation's Common Stock issuable upon the exercise
of an aggregate of 5,788,105 warrants to purchase shares issued to
Warburg, Pincus Investors, L.P. prior to the Initial Issuance Date (as
defined below), (4) the number of shares of the Corporation's Common
Stock issuable upon the exercise of ____________ options to purchase
shares issued prior to the Initial Issuance Date, (5) the number of
shares of the Corporation's Common Stock issuable upon the conversion
of outstanding subordinated promissory notes in the aggregate principal
amount of $15 million, plus accrued interest
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as of _____________, 2000, held by E.M. Warburg, Pincus & Co., (6) the
number of shares of Common Stock issuable upon the exercise of an
aggregate of 400,000 warrants to purchase shares issued on May ___,
2000, (7) the number of shares of Common Stock issued in the
Corporation's initial public offering of Common Stock, and (8) the
number of shares of the Corporation's Common Stock deemed to be
outstanding under subparagraphs 6(b)(i) to (ix), inclusive, at such
time. In the event that any series of Preferred Stock (or any other
class of the capital stock) of the Corporation existing as of the
Initial Issuance Date (as defined below) is entitled to receive
anti-dilution protection pursuant to the Corporation's Articles of
Incorporation along with the Series H Preferred Stock by virtue of the
same Triggering Transaction (as defined below), then, for purposes of
making the adjustments to the Series H Conversion Price, the
anti-dilution computations shall be made in one iteration for each such
series of Preferred Stock, first to the series (or multiple series, if
they have the same conversion price) of Preferred Stock with the lowest
conversion price then in effect through the series (or multiple series,
if they have the same conversion price) of Preferred Stock with the
highest conversion price then in effect.
(b) Except as provided in paragraph 6(c) or (f) below, if
and whenever on or after the date of initial issuance of the Series H
Preferred Stock (the "Initial Issuance Date"), the Corporation shall
issue or sell, or shall in accordance with subparagraphs (b)(1) to (9),
inclusive, be deemed to have issued or sold any shares of its Common
Stock, for a consideration per share less than the Series H Conversion
Price in effect immediately prior to such issue or sale, then upon such
issue or sale (the "Triggering Transaction"), the Series H Conversion
Price shall, subject to subparagraphs (1) to (9) of this paragraph (b),
be reduced to a price determined by dividing:
(x) an amount equal to the sum of
(a) the product derived by multiplying
the Series H Conversion Price in
effect immediately prior to such
Triggering Transaction by the
Number of Common Shares Deemed
Outstanding immediately prior to
such Triggering Transaction, plus
(b) the consideration, if any, received
by or deemed to have been received
by the Corporation upon such
Triggering Transaction, by
(y) an amount equal to the sum of
(a) the Number of Common Shares Deemed
Outstanding immediately prior to
such Triggering Transaction, plus
(b) the number of shares of Common
Stock issued (or deemed to be
issued in accordance with
subparagraphs (b)(1) to (9)) in
connection with the Triggering
Transaction.
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For purposes of determining the adjusted Series H
Conversion Price under this paragraph (b), the following subsections
(i) to (ix), inclusive, shall be applicable:
(i) In case the Corporation at any time after the Initial
Issuance Date shall in any manner grant (whether
directly or by assumption in a merger or otherwise)
any rights to subscribe for or to purchase, or any
options for the purchase of, Common Stock or any
stock or other securities convertible into or
exchangeable for Common Stock (such rights or options
being, herein called "Options" and such convertible
or exchangeable stock or securities being, herein
called "Convertible Securities"), whether or not Such
Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable
and the price per share for which the Common Stock is
issuable upon exercise, conversion or exchange
(determined by dividend, (x) the total amount, if
any, received or receivable by the Corporation as
consideration for the granting of such Options plus
the minimum aggregate amount of additional
consideration payable to the Corporation upon the
exercise of all such Options, plus, in the case of
such Options which relate to Convertible Securities,
the minimum aggregate amount of additional
consideration, if any, payable upon the issue or sale
of such Convertible Securities and upon the
conversion or exchange thereof, by (y) the total
maximum number of shares of Common Stock issuable
upon the exercise of such Options or the conversion
or exchange of such Convertible Securities) shall be
less than the Series H Conversion Price in effect
immediately prior to the time of the granting of such
Option, then the total maximum amount of Common Stock
issuable upon the exercise of such Options or in the
case of Options for Convertible Securities, upon the
conversion or exchange of such Convertible Securities
shall (as of the date of granting of such options) be
deemed to be outstanding and to have been issued and
sold by the Corporation for such price per share. No
adjustment of the Series H Conversion Price shall be
made upon the actual issue of such shares of Common
Stock or such Convertible Securities upon the
exercise of such Options, except as otherwise
provided in subparagraph (3) below.
(ii) In case the Corporation at any time after the Initial
Issuance Date shall in any manner issue (whether
directly or by assumption in a merger or otherwise)
or sell any Convertible Securities, whether or not
the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for
which Common Stock is issuable upon such conversion
or exchange (determined by dividing (x) the total
amount received or receivable by the Corporation as
consideration for the issue 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 total maximum number of shares of
Common Stock issuable upon the Conversion or exchange
of all such Convertible Securities) shall be less
than the Series H Conversion Price in effect
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immediately prior to the time of such issue or sale,
then the total maximum number of shares of Common
Stock issuable upon conversion or exchange of all
such Convertible Securities shall (as of the date of
the issue or sale of such Convertible Securities) be
deemed to be outstanding and to have been issued and
sold by the Corporation for such price per share. No
adjustment of the Series H Conversion Price shall be
made upon the actual issue of such Common Stock upon
exercise of the rights to exchange or convert under
such Convertible Securities, except as otherwise
provided in subparagraph (iii) below.
(iii) If the purchase price provided for in any Options
referred to in subparagraph (i), the additional
consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in
subparagraphs (i) or (ii), or the rate at which any
Convertible Securities referred to in subparagraph
(i) or (ii) are convertible into or exchangeable for
Common Stock shall change at any time (other than
under or by reason of provisions designed to protect
against dilution of the type set forth in paragraphs
(b) or (d)), the Series H Conversion Price in effect
at the time of such change shall forthwith be
readjusted to the Series H Conversion Price which
would have been in effect at such time had such
Options or Convertible Securities still outstanding
provided for such changed purchase price, additional
consideration or conversion rate, as the case may be,
at the time initially granted, issued or sold. If the
purchase price provided for in any Option referred to
in subparagraph (i) or the rate at which any
Convertible Securities referred to in subparagraphs
(i) or (ii) are convertible into or exchangeable for
Common Stock shall be reduced at any time under or by
reason of provisions with respect thereto designed to
protect against dilution, then in case of the
delivery of Common Stock upon the exercise of any
such Option or upon conversion or exchange of any
such Convertible Security, the Series H Conversion
Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been
obtained had such Option or Convertible Security
never been issued as to such Common Stock and had
adjustments been made upon the issuance of the shares
of Common Stock delivered as aforesaid, but only if
as a result of such adjustment the Series H
Conversion Price then in effect hereunder is hereby
reduced.
(iv) On the expiration of any Option or the termination of
any right to convert or exchange any Convertible
Securities, the Series H Conversion Price then in
effect hereunder shall forthwith be increased to the
Series H Conversion Price which would have been in
effect at the time of such expiration or termination
had such Option or Convertible Securities, to the
extent outstanding immediately prior to such
expiration or termination, never been issued.
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(v) In case any Option shall be issued in connection with
the issue or sale or other securities of the
Corporation, together comprising one integral
transaction in which no specific consideration is
allocated to such Options by the parties thereto,
such Options shall be deemed to have been issued
without consideration.
(vi) In case any shares of Common Stock, Options or
Convertible Securities shall be issued or sold or
deemed to have been issued or sold for cash, the
consideration received therefor shall be deemed to be
the amount received by the Corporation therefor. In
case any shares or Common Stock, Options or
Convertible Securities shall be issued or sold for a
consideration other than cash, the amount of the
consideration other than cash received by the
Corporation shall be the fair value of such
consideration as determined by the Corporation's
Board of Directors. In case any shares of Common
Stock, Options or Convertible Securities shall be
issued in connection with any merger in which the
Corporation is the surviving corporation, the amount
of consideration therefor shall be deemed to be the
fair value of such portion of the net assets and
business of the non-surviving corporation as shall be
attributable to such Common Stock, Options or
Convertible Securities, as the case may be, as
determined by the Board of Directors.
(vii) The number of shares of Common Stock outstanding at
any given time shall not include shares owned or held
by or for the account of the Corporation, and the
disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock for the
purpose of this paragraph 6(b).
(viii) In case the Corporation shall declare a dividend or
make any other distribution upon the stock of the
Corporation payable in Common Stock, Options, or
Convertible Securities, such issuance shall be
covered by paragraph 6(d) below.
(ix) For the purposes of this paragraph 6(b), in case the
Corporation shall take a record of the holders of its
Common Stock for the purpose of entitling them (x) to
receive a dividend or other distribution payable in
Common Stock, Options, or in Convertible Securities,
or (y) to subscribe for or purchase Common Stock,
Options, or Convertible Securities, then such record
date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such
dividend or the making of such other distribution or
the date of the granting of such right or
subscription or purchase, as the case may be.
(c) In the event the Corporation shall declare a dividend
upon the Common Stock (other than a dividend payable in Common Stock
covered by paragraph 6(d))
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payable otherwise than out of earnings or earned surplus, determined in
accordance with generally accepted accounting principles, including the
making of appropriate deductions for minority interests, if any, in
subsidiaries (herein referred to as "Liquidating Dividends"), then as
soon as possible after the conversion of any Series H Preferred Stock,
the Corporation shall pay to the person converting such Series H
Preferred Stock an amount equal to the aggregate value at the time of
such exercise of all Liquidating Dividends (including but not limited
to the Common Stock which would have been issued at the time of such
earlier exercise and all other securities which would have been issued
with respect to such Common Stock by reason of stock splits, stock
dividends, mergers or reorganizations, or for any other reason). For
the purposes of this paragraph (c), a dividend other than in cash shall
be considered payable out of earnings or earned surplus only to the
extent that such earnings or earned surplus are charged an amount equal
to the fair value of such dividend.
(d) In case the Corporation shall at any time subdivide
its outstanding shares of Common Stock into a greater number of shares,
or declare a dividend or make any other distribution upon the stock of
the Corporation payable in Common Stock, Options or Convertible
Securities, the Series H Conversion Price in effect immediately prior
to such subdivision or stock dividend shall be proportionately reduced,
and, conversely, in case the outstanding shares of Common Stock shall
be combined into a smaller number of shares, the Series H Conversion
Price in effect immediately prior to such combination shall be
proportionately increased.
(e) If any capital reorganization or reclassification of
the capital stock of the Corporation, or consolidation or merger of the
Corporation with another corporation, or the sale of all or
substantially all of its assets to another corporation shall be
effected in such a way that holders of Common Stock shall be entitled
to receive stock, securities, cash or other property with respect to or
in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger or sale, lawful
and adequate provision shall be made whereby the holders of the Series
H Preferred Stock shall have the right to acquire and receive upon
conversion of the Series H Preferred Stock, which right shall be prior
to the rights of the holders of Series H Junior Stock, such shares of
stock, securities, cash or other property issuable or payable (as part
of the reorganization, reclassification, consolidation, merger or sale)
with respect to or in exchange for such number of outstanding shares of
the Corporation's Common Stock as would have been received upon
conversion of the Series H Preferred Stock at the Series H Conversion
Price then in effect. The Corporation will not effect any such
consolidation, merger or sale, unless prior to the consummation thereof
the successor corporation (if other than the Corporation) resulting
from such consolidation or merger or the corporation purchasing such
assets shall assume by written instrument mailed or delivered to the
holders of the Series H Preferred Stock at the last address appearing
on the books of the Corporation, the obligation to deliver to each such
holder such shares of stock, securities or assets as, in accordance
with the foregoing provisions, such holder may be entitled to purchase,
if a purchase, tender or exchange offer is made to and accepted by the
holders of more than fifty percent (50%) of the outstanding shares of
Common Stock of the Corporation, the Corporation shall not effect any
consolidation,
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merger or sale with the person having made such offer or with any
Affiliate of such person, unless prior to the consummation of such
consolidation, merger or sale the holders of the Series H Preferred
Stock shall have been given a reasonable opportunity then to elect to
receive upon the conversion of the Series H Preferred Stock either the
stock, securities or assets then issuable with respect to the Common
Stock of the Corporation or the stock, securities or assets, or the
equivalent, issued to previous holders of the Common Stock in
accordance with such offer. For purposes hereof the term "Affiliate"
with respect to any given person shall mean any person controlling,
controlled by or under common control with the given person.
(f) The provisions of this Section 6 will not apply to
any Common Stock issued, issuable or deemed outstanding under
subparagraphs (b)(i) to (ix), inclusive: (i) to any person pursuant to
any stock option, stock purchase or similar plan or arrangement for the
benefit of officers, directors and employees of or consultants to the
Corporation or its subsidiaries in effect on the Initial Issuance Date
or thereafter adopted by the Board of Directors, consented to by the
holders of a majority of the then outstanding Series H Preferred Stock,
(ii) on conversion of the Series H Preferred Stock, (iii) pursuant to
the exercise of the rights of subscription as described in Section 1 of
the Amended and Restated Shareholders Agreement, dated November 16,
1997, between the Corporation and Warburg, Pincus Investors, L.P., a
Delaware limited partnership, as the same may be amended form time to
time, and (iv) upon the exercise of preemptive rights pursuant to the
Shareholders' Agreement between the Corporation and the holders of
Series H Preferred Stock.
(g) In the event that:
I. the Corporation shall declare any cash
dividend upon its Common Stock (if any shares are
outstanding), or
II. the Corporation shall declare any dividend
upon its Common Stock (if any shares are outstanding) payable
in stock or make any special dividend or other distribution to
the holders of its Common Stock (if any shares are
outstanding), or
III. the Corporation shall offer for subscription
pro rata to the holders of its Common Stock (if any shares are
outstanding) any additional shares of stock of any class or
other rights, or
IV. there shall be any capital reorganization or
reclassification of the capital stock of the Corporation,
including any subdivision or combination of its outstanding
shares of Common Stock or consolidation or merger of the
Corporation with, or sale of all or substantially all of its
assets to, another corporation, or
V. there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the Corporation;
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then, in connection with such event, the Corporation shall give to the
holders of the Series H Preferred Stock:
(1) at least twenty (20) days' prior written
notice of the date on which the books of the Corporation shall
close or a record shall be taken for such dividend,
distribution or subscription rights or for determining rights
to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up; and
(2) in the case of any such reorganization,
reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, at least twenty (20) days' prior
written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause (a) shall
also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the holders of
Common Stock shall be entitled thereto, and such notice in
accordance with the foregoing clause (b) shall also specify
the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization,
reclassification consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be. Each such
written notice shall be given by first class mail, postage
prepaid, addressed to the holders of the Series H Preferred
Stock at the address of each such holder as shown on the books
of the Corporation.
(h) If at any time or from time to time on or after the
Initial Issuance Date, the Corporation shall grant, issue or sell any
Options, Convertible Securities or rights to purchase property (the
"Purchase Rights") pro rata to the record holders of any class of
common stock of the Corporation and such grants, issuances or sales do
not result in an adjustment of the Series H Conversion Price under
paragraph (b) hereof, then each holder of Series H Preferred Stock
shall be entitled to acquire (within thirty (30) days after the later
to occur of the initial exercise date of such Purchase Rights or
receipt by such holder the notice concerning Purchase Rights to which
such holder shall be entitled under paragraph (g) and upon the terms
applicable to such Purchase Rights) either:
I. the aggregate Purchase Rights which such
holder could have acquired if it had held the number of shares
of Common Stock acquirable upon conversion of the Series H
Preferred Stock immediately before the grant, issuance or sale
of such Purchase Rights; provided that if any Purchase Rights
were distributed to holders of Common Stock without the
payment of additional consideration by such holders,
corresponding Purchase Rights shall be distributed to the
exercising holders of the Series H Preferred Stock as soon as
possible after such exercise and it shall not be necessary for
the exercising holder of the Series H Preferred Stock
specifically to request delivery of such rights; or
II. in the event that any such Purchase Rights
shall have expired or shall expire prior to the end of said
thirty-day period, the number of shares of Common Stock or the
amount of property which such holder could have acquired
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upon such exercise at the time or times at which the
Corporation granted, issued or sold such expired Purchase
Rights.
(i) If any event occurs as to which, in the opinion of
the Board of Directors, the provisions of this Section are not strictly
applicable or if strictly applicable would not fairly protect the
rights of the holders of the Series H Preferred Stock in accordance
with the essential intent and principles of such provisions, then the
Board of Directors shall make an adjustment in the application of such
provisions, in accordance with such essential intent and principles, so
as to protect such rights as aforesaid, but in no event shall any
adjustment have the effect of increasing the Series H Conversion Price
as otherwise determined pursuant to any of the provisions of this
Section except in the case of a combination of shares of a type
contemplated in paragraph (d) or the expiration of Options or
Convertible Securities as set forth in paragraph (b)(iv), and then in
no event to an amount larger than the Series H Conversion Price as
adjusted pursuant to paragraph (d) or paragraph (b)(iv), respectively.
7. Mandatory Conversion.
(a) Each share of Series H Preferred Stock shall
automatically be converted into shares of Common Stock at the Series H
Conversion Price then in effect at any time upon (i) the closing of an
underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the
offer and sale of Common Stock for the account of the Corporation to
the public generally, or (2) the written consent of the holders of a
majority of the Series H Preferred Stock then outstanding.
(b) On the date fixed for conversion, all rights with
respect to the Series H Preferred Stock so converted will terminate,
except only 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 into which such Series H Preferred
Stock has been converted. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or
accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder
or by his attorneys duly authorized in writing. All certificates
evidencing shares of Series H 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 Series H Preferred Stock represented thereby converted into Common
Stock for all purposes, notwithstanding the failure of the holder or
holders thereof to surrender such certificates on or prior to such
date. As soon as practicable after the date of such mandatory
conversion and the surrender of the certificate or certificates for
Series H Preferred Stock as aforesaid, the Corporation shall cause to
be issued and delivered to such holder or on his or its written order,
a certificate or certificates for the number of full shares of Common
Stock issuable on such conversion in accordance with the provisions
hereof and cash as provided in paragraph (b) of Section 5 in respect of
any fraction of a share of Common Stock otherwise issuable upon such
conversion.
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8. Redemption. Nothing herein contained shall prevent or restrict the
purchase by the Corporation, from time to time either at public or private sale,
of the whole or any part of the Series H Preferred Stock at such price or prices
as the Corporation may determine, subject to the provisions of applicable law.
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IN WITNESS WHEREOF, I have executed this Certificate on _______ ___,
2000.
SYNQUEST, INC.
-----------------------------------
Joseph Trino
Chief Executive Officer
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