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Exhibit 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WEBHELP.COM INC.
WEBHELP.COM INC., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY as follows:
The Corporation was originally incorporated under the name "Blue Sky
Ventures Inc."
The original certificate of incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on May 27, 1999, and
amended and restated on December 29, 1999. By written action of the sole
Director of said Corporation in lieu of a meeting, a resolution was duly adopted
pursuant to Sections 141(f), 242 and 245 of the General Corporation Law setting
forth an Amended and Restated Certificate of Incorporation of the Corporation
and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed
amendment by written consent in accordance with Sections 228(a), 242 and 245 of
the General Corporation Law of the State of Delaware, and written notice of such
consent has been given or will be given to all stockholders who have not
consented in writing to said amendment. The resolution setting forth the Amended
and Restated Certificate of Incorporation is as follows:
RESOLVED: That the Board of Directors hereby deems it advisable and in
the best interest of the Corporation that the Certificate of Incorporation of
the Corporation , as amended, be hereby amended and restated in its entirety so
that the same shall read as follows:
FIRST. The name of the Corporation is: Webhelp.com Inc.
SECOND. The address of its registered office in the State of Delaware
is 1220 North Market Street, Suite 606, in the City of Wilmington, County of New
Castle, Delaware 19801. The name of its registered agent at such address is
Registered Agents, LTD.
THIRD. The nature of the business or purposes to be conducted or
promoted by the Corporation is as follows:
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To engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of Delaware.
FOURTH. The total number of shares of all classes of stock which the
Corporation shall have authority to issue is (i) Sixty Five Million (65,000,000)
shares of Common Stock, $0.01 par value per share ("Common Stock"), and (ii)
Twenty Million (20,000,000) shares of Preferred Stock, $0.01 par value per share
("Preferred Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. GENERAL. The voting, dividend and liquidation rights of the holders
of the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any Series As may be designated by the Board of Directors
upon any issuance of the Preferred Stock of any series.
2. VOTING. The holders of the Common Stock are entitled to one vote for
each share held at all meetings of stockholders (and written actions in lieu of
meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased or
decreased (but not below the number of shares thereof then outstanding or
reserved) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote.
3. DIVIDENDS. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. LIQUIDATION. Upon the dissolution or liquidation of the Corporation,
whether voluntary or involuntary, holders of Common Stock will be entitled to
receive all assets of the Corporation available for distribution to its
stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such Series Adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be
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reissued except as otherwise provided by law or by the terms of any series of
Preferred Stock. Different series of Preferred Stock shall not be construed to
constitute different classes of shares for the purposes of voting by classes
unless expressly provided by the terms of such series.
Authority is hereby expressly granted to the Board of Directors from
time to time to issue the Preferred Stock in one or more series, and in
connection with the creation of any such series, by resolution or resolutions
providing for the issue of the shares thereof, to determine and fix such
designations, powers, preferences, rights, qualifications, limitations or
restrictions including, without limitation, voting powers, full or limited, or
no voting powers, relative participating, optional or other special rights,
dividend rights, special voting rights, conversion rights, redemption privileges
and liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by the General
Corporation Law of Delaware. Without limiting the generality of the foregoing,
the resolutions providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be junior to the
Preferred Stock of any other series to the extent permitted by law. Except as
otherwise specifically provided in this Certificate of Incorporation, no vote of
the holders of the Preferred Stock or Common Stock shall be a prerequisite to
the issuance of any shares of any series of the Preferred Stock authorized by
and complying with the conditions of this Certificate of Incorporation, the
right to have such vote being expressly waived by all present and future holders
of the capital stock of the Corporation.
C. SERIES A CONVERTIBLE PREFERRED STOCK.
Fifteen Million (15,000,000) shares of the authorized and unissued
Preferred Stock of the Corporation are hereby designated "Series A Convertible
Preferred Stock" (the "Series A Preferred Stock") with the following rights,
preferences, powers, privileges and restrictions, qualifications and
limitations.
1. DIVIDENDS. The Corporation shall not declare or pay any cash
dividends on shares of Common Stock or Series B Preferred Stock until the
holders of the Series A Preferred Stock then outstanding shall have first
received, or simultaneously receive, a cash dividend on each outstanding
share of Series A Preferred Stock in an amount at least equal to the product
of (i) the per share amount, if any, of the dividends or other distributions
to be declared, paid or set aside for the Common Stock or the Series B
Preferred Stock, whichever is greater, multiplied by (ii) the number of
shares of Common Stock into which such share of Series A Preferred Stock is
then convertible.
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2. LIQUIDATION, DISSOLUTION OR WINDING UP; CERTAIN MERGERS,
CONSOLIDATIONS AND ASSET SALES.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series
A Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to the holders of Series
A Preferred Stock, but before any payment shall be made to the holders of
Common Stock or any other class or series of stock ranking on liquidation
junior to the Series A Preferred Stock (such Common Stock and other stock
being collectively referred to as "Junior Stock") by reason of their
ownership thereof, an amount equal to $1.28 per share (subject to appropriate
adjustment in the event of any stock dividend, stock split, combination or
other similar recapitalization affecting such shares), plus any declared but
unpaid dividends on such shares of Series A Preferred Stock. If upon any such
liquidation, dissolution or winding up of the Corporation the remaining
assets of the Corporation available for distribution to the holders of Series
A Preferred Stock shall be insufficient to pay the holders of shares of
Series A Preferred Stock the full amount to which they shall be entitled
hereunder, the holders of shares of Series A Preferred Stock and any class or
series of stock ranking on liquidation on a parity with the Series A
Preferred 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 of the shares held by them upon
such distribution if all amounts payable on or with respect to such shares
were paid in full.
(b) After the payment of all preferential amounts required to be
paid to the holders of Series A Preferred Stock and any other class or series
of stock of the Corporation ranking on liquidation on a parity with the
Series A Preferred Stock, upon the dissolution, liquidation or winding up of
the Corporation, the remaining assets and funds of the Corporation available
for distribution to its stockholders shall be distributed among the holders
of shares of Common Stock and any other class or series of stock entitled to
participate in liquidation distributions with the holders of Common Stock in
accordance with the terms thereof.
(c) Any merger or consolidation of the Corporation or a subsidiary
of the Corporation into or with another corporation (except one in which the
holders of capital stock of the Corporation immediately prior to such merger
or consolidation continue to hold at least a majority of the voting power of
the capital stock of the surviving or acquiring corporation), or sale of all
or substantially all the assets of the Corporation, shall be deemed to be a
liquidation of the Corporation for purposes of this SECTION 2, and the
agreement or plan of merger or consolidation with respect to such merger,
consolidation or sale shall provide that the consideration payable to the
stockholders of the Corporation (in the case of a merger or consolidation),
or consideration payable to the Corporation, together with all other
available assets of the Corporation (in the case of an asset sale), shall be
distributed to the holders of capital stock of the Corporation in each case
in accordance with SUBSECTIONS 2(a) and 2(b) above in consideration for the
purchase (in the case of a merger or consolidation) or redemption (in the
case of an asset sale) of their shares of Series A Preferred Stock.
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The amount deemed distributed to the holders of Series A Preferred Stock upon
any such merger, consolidation or sale shall be the cash or the value of the
property, rights or securities distributed to such holders by the Corporation or
the acquiring person, firm or other entity. The value of such property, rights
or other securities shall be determined in good faith by the Board of Directors
of the Corporation.
3. VOTING.
(a) Each holder of outstanding shares of Series A Preferred Stock
shall be entitled to the number of votes equal to the number of whole shares
of Common Stock into which the shares of Series A Preferred Stock held by
such holder are then convertible (as adjusted from time to time pursuant to
SECTION 4 hereof), at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to any and
all matters presented to the stockholders of the Corporation for their action
or consideration. Except as provided by law, by the provisions of SUBSECTION
3(b) below or by the provisions establishing any other series of Preferred
Stock, holders of Series A Preferred Stock and of any other outstanding
series of Preferred Stock shall vote together with the holders of Common
Stock as a single class.
(b) At any time that any shares of Series A Preferred Stock are
outstanding, the Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series A Preferred Stock
so as to affect adversely the Series A Preferred Stock, without the written
consent or affirmative vote of the holders of a majority of the then
outstanding shares of Series A Preferred Stock, given in writing or by vote
at a meeting, consenting or voting (as the case may be) separately as a
class. For this purpose, without limiting the generality of the foregoing,
the authorization of any shares of capital stock with preference or priority
over, or on parity with the Series A Preferred Stock as to the right to
receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation, other than the Series B
Preferred Stock, shall be deemed to affect adversely the Series A Preferred
Stock. The number of authorized shares of Series A Preferred Stock may be
increased or decreased (but not below the number of shares then outstanding)
by the directors of the Corporation pursuant to Section 151 of the General
Corporation Law of Delaware or by the affirmative vote of the holders of a
majority of the then outstanding shares of the Common Stock, Series A
Preferred Stock and all other classes or series of stock of the Corporation
entitled to vote thereon, voting as a single class.
4. OPTIONAL CONVERSION. The holders of the Series A Preferred Stock
shall have conversion rights as follows (referred to hereinafter as their
"Conversion Rights", or the "Conversion Rights of the Series A Preferred
Stock"):
(a) RIGHT TO CONVERT. Each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the
holder thereof, into such number of fully paid and nonassessable shares
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of Common Stock as is determined by dividing $0.53 by the Series A Conversion
Price (as defined below) in effect at the time of conversion. The "Series A
Conversion Price" shall initially be equal to $0.53. Such initial Series A
Conversion Price, and the rate at which shares of Series A Preferred Stock may
be converted into shares of Common Stock, shall be subject to adjustment as
provided below.
In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series A Preferred Stock.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock shall
be issued upon conversion of the Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Series A Conversion Price.
(c) MECHANICS OF CONVERSION.
(i) In order for a holder of Series A Preferred Stock to
convert shares of Series A Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of
Series A Preferred Stock, at the office of the transfer agent for the Series
A Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice
that such holder elects to convert all or any number of the shares of the
Series A Preferred Stock represented by such certificate or certificates.
Such notice shall state such holder's name or the names of the nominees in
which such holder wishes the certificate or certificates for shares of Common
Stock to be issued. 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
executed by the registered holder or his or its attorney duly authorized in
writing. The date of receipt of such certificates and notice by the transfer
agent (or by the Corporation if the Corporation serves as its own transfer
agent) shall be the conversion date ("Conversion Date"), and the shares of
Common Stock issuable upon conversion of the shares represented by such
certificate shall be deemed to be outstanding of record as of such date. The
Corporation shall, as soon as practicable after the Conversion Date, issue
and deliver at such office to such holder of Series A Preferred Stock, or to
his or its nominees, a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled, together with cash in
lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series A Preferred Stock, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding Series A Preferred Stock, plus shares issuable
on exercise of warrants and Series B Preferred Stock.
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Before taking any action which would cause an adjustment reducing the Series A
Conversion Price below the then par value of the shares of Common Stock issuable
upon conversion of the Series A 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 of Common Stock at such adjusted Series A Conversion Price.
(iii) Upon any such conversion, no adjustment to the Series A
Conversion Price shall be made for any accrued but unpaid dividends on the
Series A Preferred Stock surrendered for conversion or on the Common Stock
delivered upon conversion.
(iv) All shares of Series A Preferred Stock which shall have
been surrendered for conversion as herein provided shall no longer be deemed
to be outstanding and all rights with respect to such shares, including,
without limitation, the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Conversion Date, except only the right
of the holders thereof to receive shares of Common Stock in exchange therefor
and payment of any accrued but unpaid dividends. Any shares of Series A
Preferred Stock so converted shall be retired and cancelled and shall not be
reissued, and the Corporation (without stockholder action) may from time to
time take such appropriate action as may be necessary to reduce the
authorized number of shares of Series A Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and other
taxes that may be payable in respect of any issuance or delivery of shares of
Common Stock upon conversion of shares of Series A Preferred Stock pursuant
to this SECTION 4. The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issuance
and delivery of shares of Common Stock in a name other than that in which the
shares of Series A Preferred Stock so converted were registered, and no such
issuance or delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Corporation the amount of any such
tax or has established, to the satisfaction of the Corporation, that such tax
has been paid.
(d) ADJUSTMENTS TO SERIES A CONVERSION PRICE FOR DILUTING ISSUES:
(i) SPECIAL DEFINITIONS. For purposes of this SECTION 4, the
following definitions shall apply:
(A) "OPTION" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.
(B) "SERIES A ORIGINAL ISSUE DATE" shall mean the date on
which a share of Series A Preferred Stock was first issued.
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(C) "CONVERTIBLE SECURITIES" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly convertible
into or exchangeable for Common Stock, but excluding Options.
(D) "ADDITIONAL SHARES OF COMMON STOCK" shall mean all
shares of Common Stock issued (or, pursuant to SUBSECTION 4(d)(iii) below,
deemed to be issued) by the Corporation after the Series A Original Issue
Date, other than:
(I) shares of Common Stock issued or issuable
upon conversion or exchange of any
Convertible Securities or exercise of any
Options outstanding on the Series A Original
Issue Date;
(II) shares of Common Stock issued or issuable as
a dividend or distribution on Series A
Preferred Stock and the Common Stock;
(III) shares of Common Stock issued or issuable
by reason of a dividend, stock split,
split-up or other distribution on shares
of Common Stock that is covered by
SUBSECTION 4(e) or 4(f) below;
(IV) shares of Common Stock (or Options with
respect thereto) (subject in either case to
appropriate adjustment in the event of any
stock dividend, stock split, combination or
other similar recapitalization affecting
such shares or Options), issued or issuable
to employees or directors of, or consultants
to, the Corporation pursuant to a plan or
arrangement approved by the Board of
Directors of the Corporation and by a
majority of the members of the Board of
Directors who are not employees of the
Corporation or any of its subsidiaries
(provided that any Options for such shares
that expire or terminate unexercised shall
not be counted toward such maximum number);
(V) shares of Common Stock issued prior to
December 31, 1999 in connection with the
acquisition of businesses, payment for
services or licensing of assets;
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(VI) shares of Common Stock issued upon
conversion of any shares of Series A
Preferred Stock; or
(VII) the Series B Preferred Stock or shares of
Common Stock issued upon conversion of the
Series B Preferred Stock.
(ii) NO ADJUSTMENT OF SERIES A CONVERSION PRICE. No adjustment
in the Series A Conversion Price or in the number of shares of Common Stock
into which the Series A Preferred Stock is convertible shall be made: (a)
unless the consideration per share (determined pursuant to SUBSECTION
4(d)(v)) for an Additional Share of Common Stock issued or deemed to be
issued by the Corporation is less than the applicable Series A Conversion
Price in effect immediately prior to the issue of such Additional Shares, or
(b) if prior to such issuance, the Corporation receives written notice from
the holders of at least 75% of the then outstanding shares of Series A
Preferred Stock agreeing that no such adjustment shall be made as the result
of the issuance of Additional Shares of Common Stock.
(iii) ISSUE OF SECURITIES DEEMED ISSUE OF ADDITIONAL SHARES OF
COMMON STOCK. If the Corporation at any time or from time to time after the
Series A Original Issue Date shall issue any Options (excluding Options
covered by SUBSECTION 4(d)(i)(D)(IV) above) or Convertible Securities
(excluding the Series B Preferred Stock) or shall fix a record date for the
determination of holders of any class of securities entitled to receive any
such Options or Convertible Securities, then the maximum number of shares of
Common Stock (as set forth in the instrument relating thereto without regard
to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or, in the case of
Convertible Securities and Options therefor, the conversion or exchange of
such Convertible Securities, shall be deemed to be Additional Shares of
Common Stock issued as of the time of such issue or, in case such a record
date shall have been fixed, as of the close of business on such record date,
provided that Additional Shares of Common Stock shall not be deemed to have
been issued unless the consideration per share (determined pursuant to
SUBSECTION 4(d)(V) hereof) of such Additional Shares of Common Stock would be
less than the applicable Series A Conversion Price in effect on the date of
and immediately prior to such issue, or such record date, as the case may be,
and provided further that in any such case in which Additional Shares of
Common Stock are deemed to be issued:
(A) No further adjustment in the Series A Conversion
Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;
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(B) If such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, then upon the
exercise, conversion or exchange thereof, the Series A Conversion Price
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed
to reflect such increase or decrease insofar as it affects such Options or
the rights of conversion or exchange under such Convertible Securities;
(C) Upon the expiration or termination of any such
unexercised Option, the Series A Conversion Price shall be recomputed, and
the Additional Shares of Common Stock deemed issued as the result of the
original issue of such Option shall not be deemed issued for the purposes of
such recomputation or any subsequent adjustment of the Series A Conversion
Price;
(D) In the event of any change in the number of shares of
Common Stock issuable upon the exercise, conversion or exchange of any such
Option or Convertible Security, other than a change resulting from the
anti-dilution provisions thereof, the Series A Conversion Price then in
effect shall forthwith be readjusted to such Series A Conversion Price as
would have obtained had the adjustment which was made upon the issuance of
such Option or Convertible Security not exercised, converted or exchanged
prior to such change been made upon the basis of such change.
In the event the Corporation, after the Series A Original Issue Date,
amends the terms of any such Options or Convertible Securities that were
outstanding on the Series A Original Issue Date then such Options or Convertible
Securities, as so amended, shall be deemed to have been issued after the Series
A Original Issue Date and the provisions of this SUBSECTION 4(d)(iii) shall
apply.
(iv) ADJUSTMENT OF SERIES A CONVERSION PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In the event the Corporation shall at any
time after the Series A Original Issue Date issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued
pursuant to SUBSECTION 4(d)(iii), but excluding any shares of Common Stock
issued upon conversion of any shares of Series B Preferred Stock), without
consideration or for a consideration per share less than the applicable
Series A Conversion Price in effect immediately prior to such issue, then and
in such event, such Series A Conversion Price shall be reduced, concurrently
with such issue, to a price (calculated to the nearest cent) determined by
multiplying such Series A Conversion Price by a fraction, (A) the numerator
of which shall be (1) the number of shares of Common Stock outstanding
immediately prior to such issue plus (2) the number of shares of Common Stock
which the aggregate consideration received or to be received by the
Corporation for the total number of Additional Shares of Common Stock so
issued would purchase at such Series A Conversion Price; and (B) the
denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such
Additional Shares of Common Stock so issued; PROVIDED THAT, (i) for
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the purpose of this SUBSECTION 4(d)(iv), all shares of Common Stock issuable
upon conversion or exchange of Convertible Securities outstanding immediately
prior to such issue shall be deemed to be outstanding, and (ii) the number of
shares of Common Stock deemed issuable upon conversion or exchange of such
outstanding Convertible Securities shall not give effect to any adjustments to
the conversion or exchange price or conversion or exchange rate of any
Convertible Securities resulting from the issuance of Additional Shares of
Common Stock that is the subject of this calculation.
(v) DETERMINATION OF CONSIDERATION. For purposes of this
SUBSECTION 4(d), the consideration received by the Corporation for the issue
of any Additional Shares of Common Stock shall be computed as follows:
(A) CASH AND PROPERTY: Such consideration shall:
(I) insofar as it consists of cash, be computed
at the aggregate of cash received by the
Corporation, excluding amounts paid or
payable for accrued interest or accrued
dividends;
(II) insofar as it consists of property other
than cash, be computed at the fair market
value thereof at the time of such issue, as
determined in good faith by the Board of
Directors; and
(III) in the event Additional Shares of Common
Stock are issued together with other shares
or securities or other assets of the
Corporation for consideration which covers
both, be the proportion of such
consideration so received, computed as
provided in CLAUSES (I) and (II) above, as
determined in good faith by the Board of
Directors.
(B) OPTIONS AND CONVERTIBLE SECURITIES. The consideration
per share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to SUBSECTION 4(d)(iii), relating to
Options and Convertible Securities, shall be determined by dividing (x) the
total amount, if any, received or receivable by the Corporation as
consideration for the issue of such Options or Convertible Securities, plus
the minimum aggregate amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such consideration) payable to the
Corporation upon the exercise of such Options or the conversion or exchange
of such Convertible
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Securities, or in the case of Options for Convertible Securities, the
exercise of such Options for Convertible Securities and the conversion or
exchange of such Convertible Securities, by (y) the maximum number of shares
of Common Stock (as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
(vi) MULTIPLE CLOSING DATES. In the event the Corporation
shall issue on more than one date Additional Shares of Common Stock which are
comprised of shares of the same series or class of Preferred Stock, and such
issuance dates occur within a period of no more than 120 days, then, upon the
final such issuance, the Series A Conversion Price shall be adjusted to give
effect to all such issuances as if they occurred on the date of the final
such issuance (and without giving effect to any adjustments as a result of
such prior issuances within such period).
(e) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation shall at any time or from time to time after the Series A
Original Issue Date effect a subdivision of the outstanding Common Stock, the
Series A Conversion Price then in effect immediately before that subdivision
shall be proportionately decreased. If the Corporation shall at any time or
from time to time after the Series A Original Issue Date combine the
outstanding shares of Common Stock, the Series A Conversion Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(f) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time, or from time to time after the Series A
Original Issue Date shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event the Series A Conversion Price then in effect immediately
before such event shall be decreased as of the time of such issuance or, in
the event such a record date shall have been fixed, as of the close of
business on such record date, by multiplying the Series A Conversion Price
then in effect by a fraction:
(1) the numerator of which shall be the total number
of shares of Common Stock actually 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 Common Stock actually 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 Common Stock issuable in payment of such
dividend or distribution;
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provided, however, if such record date shall
have been fixed and such dividend is not fully
paid or if such distribution is not fully made
on the date fixed therefor, the Series A
Conversion Price shall be recomputed
accordingly as of the close of business on such
record date and thereafter the Series A
Conversion Price shall be adjusted pursuant to
this paragraph as of the time of actual payment
of such dividends or distributions; and
provided further, however, that no such
adjustment shall be made if the holders of
Series A Preferred Stock simultaneously receive
(i) a dividend or other distribution of shares
of Common Stock in a number equal to the number
of shares of Common Stock as they would have
received if all outstanding shares of Series A
Preferred Stock had been converted into Common
Stock on the date of such event or (ii) a
dividend or other distribution of shares of
Series A Preferred Stock which are convertible,
as of the date of such event, into such number
of shares of Common Stock as is equal to the
number of additional shares of Common Stock as
would be issued pursuant to the preceding
CLAUSE (1).
(g) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or from time to time after the Series A
Original Issue Date shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation (other than
shares of Common Stock) or in cash or other property (other than cash out of
earnings or earned surplus, determined in accordance with generally accepted
accounting principles), then and in each such event provision shall be made
so that the holders of the Series A Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation that they
would have received had the Series A Preferred Stock been converted into
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the conversion date,
retained such securities receivable by them as aforesaid during such period,
giving application to all adjustments called for during such period under
this paragraph with respect to the rights of the holders of the Series A
Preferred Stock; and provided further, however, that no such adjustment shall
be made if the holders of Series A Preferred Stock simultaneously receive a
dividend or other distribution of such securities in an amount equal to the
amount of such securities as they would have received if all outstanding
shares of Series A Preferred Stock had been converted into Common Stock on
the date of such event.
(h) ADJUSTMENT FOR MERGER OR REORGANIZATION, ETC. Subject to the
provisions of SUBSECTION 2(c), if there shall occur any reorganization,
recapitalization, consolidation or merger involving the Corporation in which
the Common Stock is converted into or exchanged for securities, cash or other
property (other than a transaction covered by PARAGRAPHS (d), (e), (f) or (g)
of this SECTION 4), then, following any such reorganization,
recapitalization, consolidation or merger, each share of Series A Preferred
Stock shall be convertible into the kind and amount of securities, cash or
other property which a holder of the number of shares of Common Stock of the
Corporation issuable upon conversion of one share of Series A Preferred Stock
immediately prior to such reorganization, recapitalization, consolidation or
merger would have been entitled to receive pursuant to such transaction; and,
in such case, appropriate adjustment (as determined in good faith by the
Board of
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Directors) shall be made in the application of the provisions in this SECTION 4
set forth with respect to the rights and interest thereafter of the holders of
the Series A Preferred Stock, to the end that the provisions set forth in this
SECTION 4 (including provisions with respect to changes in and other adjustments
of the Series A 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 Series A Preferred Stock.
(i) NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out
of all the provisions of this SECTION 4 and in the taking of all such action
as may be necessary or appropriate in order to protect the Conversion Rights
of the holders of the Series A Preferred Stock against impairment.
(j) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Series A Conversion Price pursuant to this
SECTION 4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof. The
Corporation shall, upon the written request at any time of any holder of
Series A Preferred Stock, furnish or cause to be furnished to such holder a
certificate setting forth (i) the Series A Conversion Price then in effect,
(ii) the number of shares of Common Stock and the amount, if any, of other
securities, cash or property which then would be received upon the conversion
of Series A Preferred Stock, and (iii) the adjustments or readjustments to
date showing in reasonable detail the facts upon which such adjustments or
readjustments were based.
(k) NOTICE OF RECORD DATE. In the event:
(i) the Corporation shall take a record of the
holders of its Common Stock (or other stock
or securities at the time issuable upon
conversion of the Series A Preferred Stock)
for the purpose of entitling or enabling
them to receive any dividend or other
distribution, or to receive any right to
subscribe for a purchase any shares of
stock of any class or any other securities,
or to receive any other right; or
(ii) of any capital reorganization of the
Corporation, any reclassification of the
Common Stock of the Corporation, any
consolidation or merger of the Corporation
with or into another corporation (other
than a consolidation or merger in which the
Corporation is the surviving entity and its
Common Stock is not converted into or
exchanged for any other securities or
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property), or any transfer of all or
substantially all of the assets of the
Corporation; or
(iii) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Corporation,
then, and in each such case, the Corporation
will mail or cause to be mailed to the holders
of the Series A Preferred Stock a notice
specifying, as the case may be, (i) the record
date for such dividend, distribution or right,
and the amount and character of such dividend,
distribution or right, or (ii) the effective
date on which such reorganization,
reclassification, consolidation, merger,
transfer, dissolution, liquidation or
winding-up is to take place, and the time, if
any is to be fixed, as of which the holders of
record of Common Stock (or such other stock or
securities at the time issuable upon the
conversion of the Series A Preferred Stock)
shall be entitled to exchange their shares of
Common Stock (or such other stock or
securities) for securities or other property
deliverable upon such reorganization,
reclassification, consolidation, merger,
transfer, dissolution, liquidation or
winding-up. Such notice shall be mailed at
least 10 days prior to the record date or
effective date for the event specified in such
notice.
5. MANDATORY CONVERSION.
(a) Upon the closing of the sale of shares of Common Stock in an
initial public offering pursuant to an effective registration statement under
the Securities Act of 1933, as amended, resulting in at least $25.0 million
of gross proceeds (net of underwriting discounts and commissions) to the
Corporation (a "Qualified Public Offering"), the outstanding shares of Series
A Preferred Stock shall automatically be converted into such number of shares
of fully paid and nonassessable shares of Common Stock as is determined by
dividing $0.53 by the Series A Conversion Price in effect immediately prior
to such conversion. The date of the conversion of the shares of Series A
Preferred Stock pursuant to this SECTION 5 shall be the "Mandatory Conversion
Date."
(b) All holders of record of shares of Series A Preferred Stock
shall be given written notice of the Mandatory Conversion Date and the place
designated for mandatory conversion of all such shares of Series A Preferred
Stock pursuant to this SECTION 5. Such notice need not be given in advance of
the occurrence of the Mandatory Conversion Date. Such notice shall be sent by
first class or registered mail, postage prepaid, to each record holder of
Series A Preferred Stock at such holder's address last shown on the records
of the transfer agent for the Series A Preferred Stock (or the records of the
Corporation, if it serves as its own transfer agent). Upon receipt of such
notice, each holder of shares of Series A Preferred Stock shall surrender his
or its certificate or certificates for all such shares to the Corporation at
the place designated in such notice, and shall thereafter receive
certificates for the number of shares of Common Stock to which such holder is
entitled pursuant to this SECTION 5. On the Mandatory Conversion Date, all
outstanding shares of Series A Preferred Stock shall be deemed to have been
converted into shares of Common Stock, which shall be deemed to be
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outstanding of record, and all rights with respect to the Series A Preferred
Stock so converted, including the rights, if any, to receive notices and vote
(other than as a holder of Common Stock) 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 A Preferred Stock has been converted, and payment of any
accrued but unpaid dividends thereon. 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 or its attorney
duly authorized in writing. As soon as practicable after the Mandatory
Conversion Date and the surrender of the certificate or certificates for Series
A Preferred Stock, 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 and issuable on such conversion in
accordance with the provisions hereof and cash as provided in SUBSECTION 4(b) in
respect of any fraction of a share of Common Stock and otherwise issuable upon
such conversion.
(c) All certificates evidencing shares of Series A Preferred
Stock which are required to be surrendered for conversion in accordance with
the provisions hereof shall, from and after the Mandatory Conversion Date, be
deemed to have been retired and cancelled and the shares of Series A
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. Such converted Series A
Preferred Stock may not be reissued, and the Corporation may thereafter take
such appropriate action (without the need for stockholder action) as may be
necessary to reduce the authorized number of shares of Series A Preferred
Stock accordingly.
D. SERIES B CONVERTIBLE PREFERRED STOCK.
Three Million Six Hundred Seventy One Thousand Three Hundred Twenty
Nine (3,671,329) shares of the authorized and unissued Preferred Stock of the
Corporation are hereby designated "Series B Convertible Preferred Stock" (the
"Series B Preferred Stock") with the following rights, preferences, powers,
privileges and restrictions, qualifications and limitations.
1. DIVIDENDS. The Corporation shall not declare or pay any cash
dividends on shares of Common Stock or Series A Preferred Stock until the
holders of the Series B Preferred Stock then outstanding shall have first
received, or simultaneously receive, a cash dividend on each outstanding share
of Series B Preferred Stock in an amount at least equal to the product of (i)
the per share amount, if any, of the dividends or other distributions to be
declared, paid or set aside for the Common Stock or the Series A Preferred
Stock, whichever is greater, multiplied by (ii) the number of shares of Common
Stock into which such share of Series B Preferred Stock is then convertible.
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2. LIQUIDATION, DISSOLUTION OR WINDING UP; CERTAIN MERGERS,
CONSOLIDATIONS AND ASSET SALES.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series
B Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its stockholders, but
before any payment shall be made to the holders of Common Stock or any other
class or series of stock ranking on liquidation junior to the Series B
Preferred Stock (such Common Stock and other stock being collectively
referred to as "Junior Stock") by reason of their ownership thereof, an
amount equal to$19.73 per share (subject to appropriate adjustment in the
event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares), plus any declared but unpaid
dividends on such shares of Series B Preferred Stock. If upon any such
liquidation, dissolution or winding up of the Corporation the remaining
assets of the Corporation available for distribution to its stockholders
shall be insufficient to pay the holders of shares of Series B Preferred
Stock the full amount to which they shall be entitled hereunder, the holders
of shares of Series B Preferred Stock and any class or series of stock
ranking on liquidation on a parity with the Series B Preferred 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 of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
(b) After the payment of all preferential amounts required to be
paid to the holders of Series B Preferred Stock and any other class or series
of stock of the Corporation ranking on liquidation on a parity with the
Series B Preferred Stock, upon the dissolution, liquidation or winding up of
the Corporation, the remaining assets and funds of the Corporation available
for distribution to its stockholders shall be distributed among the holders
of shares of Common Stock and any other class or series of stock entitled to
participate in liquidation distributions with the holders of Common Stock in
accordance with the terms thereof.
(c) Any merger or consolidation of the Corporation or a
subsidiary of the Corporation into or with another corporation (except one in
which the holders of capital stock of the Corporation immediately prior to
such merger or consolidation continue to hold at least a majority of the
voting power of the capital stock of the surviving or acquiring corporation),
or sale of all or substantially all the assets of the Corporation, shall be
deemed to be a liquidation of the Corporation for purposes of this SECTION 2,
and the agreement or plan of merger or consolidation with respect to such
merger, consolidation or sale shall provide that the consideration payable to
the stockholders of the Corporation (in the case of a merger or
consolidation), or consideration payable to the Corporation, together with
all other available assets of the Corporation (in the case of an asset sale),
shall be distributed to the holders of capital stock of the Corporation in
each case in accordance with SUBSECTIONS 2(a) and 2(b) above in consideration
for the purchase (in the case of a merger or consolidation) or redemption (in
the case of an asset sale) of their shares of Series B Preferred Stock. The
amount deemed distributed to the holders of Series B Preferred Stock upon any
such merger, consolidation or sale shall be the cash or the value of the
property, rights or securities distributed to such holders by the Corporation
or the acquiring person, firm or other entity. The value of such
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property, rights or other securities shall be determined in good faith by the
Board of Directors of the Corporation.
(d) Prior to the consummation of a Qualified Public Offering, the
Corporation may not consummate any sale or merger of the Corporation, sale of
substantially all of its business or assets or similar disposition of the
Corporation, in which the holders of the Series B Preferred Stock do not
receive net proceeds of at least $300 million.
3. VOTING.
(a) Each holder of outstanding shares of Series B Preferred Stock
shall be entitled to the number of votes equal to the number of whole shares
of Common Stock into which the shares of Series B Preferred Stock held by
such holder are then convertible (as adjusted from time to time pursuant to
SECTION 4 hereof), at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to any and
all matters presented to the stockholders of the Corporation for their action
or consideration. Except as provided by law, by the provisions of SUBSECTION
3(b) below or by the provisions establishing any other series of Preferred
Stock, holders of Series B Preferred Stock and of any other outstanding
series of Preferred Stock shall vote together with the holders of Common
Stock as a single class. Notwithstanding the foregoing, in the case of any
holder of Series B Preferred Stock who is subject to the provisions of the
Bank Holding Company Act of 1956, as amended, or the rules and regulations
promulgated thereunder (a "Regulated Entity"), any shares of Series B
Preferred Stock held by such Regulated Entity, together with any shares of
Common Stock issued to such Regulated Entity upon conversion of shares of
Series B Preferred Stock, in excess of 4.99% of the total voting power of the
Corporation on a fully-diluted and as-converted basis shall be non-voting
securities, until such shares are transferred by such Regulated Entity or
until such shares may be treated as voting securities under applicable law.
(b) At any time that any shares of Series B Preferred Stock are
outstanding, the Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series B Preferred Stock
so as to affect adversely the Series B Preferred Stock, without the written
consent or affirmative vote of the holders of a majority of the then
outstanding shares of Series B Preferred Stock, given in writing or by vote
at a meeting, consenting or voting (as the case may be) separately as a
class. For this purpose, without limiting the generality of the foregoing,
the authorization of any shares of capital stock with preference or priority
over, or on parity with the Series B Preferred Stock as to the right to
receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation shall be deemed to affect
adversely the Series B Preferred Stock. The number of authorized shares of
Series B Preferred Stock may be increased or decreased (but not below the
number of shares then outstanding) by the directors of the Corporation
pursuant to Section 151 of the General Corporation Law of Delaware or by the
affirmative vote of the holders of a majority of the then outstanding shares
of the Common Stock, Series B Preferred Stock and all other classes or series
of stock of the Corporation entitled to vote thereon, voting as a single
class.
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<PAGE>
4. OPTIONAL CONVERSION. The holders of the Series B Preferred
Stock shall have conversion rights as follows (referred to hereinafter as their
"Conversion Rights", or the "Conversion Rights of the Series B Preferred
Stock"):
(a) RIGHT TO CONVERT. Each share of Series B Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and
from time to time, and without the payment of additional consideration by the
holder thereof, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $8.17 by the Series B Conversion
Price (as defined below) in effect at the time of conversion. The "Series B
Conversion Price" shall initially be equal to $8.17. Such initial Series B
Conversion Price, and the rate at which shares of Series B Preferred Stock
may be converted into shares of Common Stock, shall be subject to adjustment
as provided below.
In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series B Preferred Stock.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock shall
be issued upon conversion of the Series B Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then
effective Series B Conversion Price.
(c) MECHANICS OF CONVERSION.
(i) In order for a holder of Series B Preferred Stock to
convert shares of Series B Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of
Series B Preferred Stock, at the office of the transfer agent for the Series
B Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice
that such holder elects to convert all or any number of the shares of the
Series B Preferred Stock represented by such certificate or certificates.
Such notice shall state such holder's name or the names of the nominees in
which such holder wishes the certificate or certificates for shares of Common
Stock to be issued. 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
executed by the registered holder or his or its attorney duly authorized in
writing. The date of receipt of such certificates and notice by the transfer
agent (or by the Corporation if the Corporation serves as its own transfer
agent) shall be the conversion date ("Conversion Date"), and the shares of
Common Stock issuable upon conversion of the shares represented by such
certificate shall be deemed to be outstanding of record as of such date. The
Corporation shall, as soon as practicable after the Conversion Date, issue
and deliver at such office to such holder of Series B Preferred Stock, or to
his or its nominees, a certificate or certificates for the
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number of shares of Common Stock to which such holder shall be entitled,
together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Series B
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series B 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 B Preferred Stock, plus shares issuable
on exercise of warrants and the Series A Preferred Stock. Before taking any
action which would cause an adjustment reducing the Series B Conversion Price
below the then par value of the shares of Common Stock issuable upon
conversion of the Series B 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 of Common Stock at such adjusted Series B Conversion
Price.
(iii) Upon any such conversion, no adjustment to the Series B
Conversion Price shall be made for any accrued but unpaid dividends on the
Series B Preferred Stock surrendered for conversion or on the Common Stock
delivered upon conversion.
(iv) All shares of Series B 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,
without limitation, the rights, if any, to receive notices and to vote, shall
immediately cease and terminate on the Conversion Date, except only the right
of the holders thereof to receive shares of Common Stock in exchange therefor
and payment of any accrued but unpaid dividends. Any shares of Series B
Preferred Stock so converted shall be retired and cancelled and shall not be
reissued, and the Corporation (without stockholder action) may from time to
time take such appropriate action as may be necessary to reduce the
authorized number of shares of Series B Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and other
taxes that may be payable in respect of any issuance or delivery of shares of
Common Stock upon conversion of shares of Series B Preferred Stock pursuant
to this SECTION 4. The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issuance
and delivery of shares of Common Stock in a name other than that in which the
shares of Series B Preferred Stock so converted were registered, and no such
issuance or delivery shall be made unless and until the person or entity
requesting such issuance has paid to the Corporation the amount of any such
tax or has established, to the satisfaction of the Corporation, that such tax
has been paid.
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(d) ADJUSTMENTS TO SERIES B CONVERSION PRICE FOR DILUTING ISSUES:
(i) SPECIAL DEFINITIONS. For purposes of this SECTION 4, the
following definitions shall apply:
(A) "OPTION" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities.
(B) "SERIES B ORIGINAL ISSUE DATE" shall mean the date
on which a share of Series B Preferred Stock was first issued.
(C) "CONVERTIBLE SECURITIES" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly convertible
into or exchangeable for Common Stock, but excluding Options.
(D) "ADDITIONAL SHARES OF COMMON STOCK" shall mean all
shares of Common Stock issued (or, pursuant to SUBSECTION 4(d)(iii) below,
deemed to be issued) by the Corporation after the Series B Original Issue
Date, other than:
(I) shares of Common Stock issued or issuable upon
conversion or exchange of any Convertible
Securities or exercise of any Options
outstanding on the Series B Original Issue Date;
(II) shares of Common Stock issued or issuable as a
dividend or distribution on Series B Preferred
Stock, Series B Preferred Stock and the Common
Stock;
(III) shares of Common Stock issued or issuable by
reason of a dividend, stock split, split-up or
other distribution on shares of Common Stock
that is covered by SUBSECTION 4(e) or 4(f) below;
(IV) shares of Common Stock (or Options with respect
thereto) (subject in either case to appropriate
adjustment in the event of any stock dividend,
stock split, combination or other similar
recapitalization affecting such shares or
Options), issued or issuable to employees or
directors of, or consultants to, the Corporation
pursuant to a plan or arrangement approved by
the Board of Directors of the Corporation and by a
majority of the members of the Board of Directors
who are not employees of the Corporation or any
of its subsidiaries (provided that any Options
for such shares that expire or terminate
unexercised shall not be counted toward such
maximum number);
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(V) shares of Common Stock issued prior to December
31, 1999 in connection with the acquisition of
businesses, payment for services or licensing of
assets; or
(VI) shares of Common Stock issued upon conversion of
any shares of Series B Preferred Stock.
(ii) NO ADJUSTMENT OF SERIES B CONVERSION PRICE. No
adjustment in the Series B Conversion Price or in the number of shares of
Common Stock into which the Series B Preferred Stock is convertible shall be
made: (a) unless the consideration per share (determined pursuant to
SUBSECTION 4(d)(v)) for an Additional Share of Common Stock issued or deemed
to be issued by the Corporation is less than the applicable Series B
Conversion Price in effect immediately prior to the issue of such Additional
Shares, or (b) if prior to such issuance, the Corporation receives written
notice from the holders of at least 75% of the then outstanding shares of
Series B Preferred Stock agreeing that no such adjustment shall be made as
the result of the issuance of Additional Shares of Common Stock.
(iii) ISSUE OF SECURITIES DEEMED ISSUE OF ADDITIONAL SHARES
OF COMMON STOCK. If the Corporation at any time or from time to time after
the Series B Original Issue Date shall issue any Options (excluding Options
covered by SUBSECTION 4(d)(i)(D)(IV) above) or Convertible Securities or
shall fix a record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible Securities,
then the maximum number of shares of Common Stock (as set forth in the
instrument relating thereto without regard to any provision contained therein
for a subsequent adjustment of such number) issuable upon the exercise of
such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed to
be Additional Shares of Common Stock issued as of the time of such issue or,
in case such a record date shall have been fixed, as of the close of business
on such record date, provided that Additional Shares of Common Stock shall
not be deemed to have been issued unless the consideration per share
(determined pursuant to SUBSECTION 4(d)(v) hereof) of such Additional Shares
of Common Stock would be less than the applicable Series A Conversion Price
in effect on the date of and immediately prior to such issue, or such record
date, as the case may be, and provided further that in any such case in which
Additional Shares of Common Stock are deemed to be issued:
(A) No further adjustment in the Series B Conversion
Price shall be made upon the subsequent issue of Convertible Securities or
shares of Common Stock upon the exercise of such Options or conversion or
exchange of such Convertible Securities;
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(B) If such Options or Convertible Securities by their
terms provide, with the passage of time or otherwise, for any increase or
decrease in the consideration payable to the Corporation, then upon the
exercise, conversion or exchange thereof, the Series B Conversion Price
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon,
shall, upon any such increase or decrease becoming effective, be recomputed
to reflect such increase or decrease insofar as it affects such Options or
the rights of conversion or exchange under such Convertible Securities;
(C) Upon the expiration or termination of any such
unexercised Option, the Series B Conversion Price shall be recomputed, and
the Additional Shares of Common Stock deemed issued as the result of the
original issue of such Option shall not be deemed issued for the purposes of
such recomputation or any subsequent adjustment of the Series A Conversion
Price;
(D) In the event of any change in the number of shares
of Common Stock issuable upon the exercise, conversion or exchange of any
such Option or Convertible Security, other than a change resulting from the
anti-dilution provisions thereof, the Series B Conversion Price then in
effect shall forthwith be readjusted to such Series B Conversion Price as
would have obtained had the adjustment which was made upon the issuance of
such Option or Convertible Security not exercised, converted or exchanged
prior to such change been made upon the basis of such change.
In the event the Corporation, after the Series B Original Issue Date,
amends the terms of any such Options or Convertible Securities that were
outstanding on the Series B Original Issue Date then such Options or Convertible
Securities, as so amended, shall be deemed to have been issued after the Series
B Original Issue Date and the provisions of this SUBSECTION 4(d)(iii) shall
apply.
(iv) ADJUSTMENT OF SERIES B CONVERSION PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. In the event the Corporation shall at any
time after the Series B Original Issue Date issue Additional Shares of Common
Stock (including Additional Shares of Common Stock deemed to be issued
pursuant to SUBSECTION 4(d)(iii)), without consideration or for a
consideration per share less than the applicable Series B Conversion Price in
effect immediately prior to such issue, then and in such event, such Series B
Conversion Price shall be reduced, concurrently with such issue, to a price
(calculated to the nearest cent) determined by multiplying such Series B
Conversion Price by a fraction, (A) the numerator of which shall be (1) the
number of shares of Common Stock outstanding immediately prior to such issue
plus (2) the number of shares of Common Stock which the aggregate
consideration received or to be received by the Corporation for the total
number of Additional Shares of Common Stock so issued would purchase at such
Series B Conversion Price; and (B) the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue
plus the number of such Additional Shares of Common Stock so issued; PROVIDED
THAT, (i) for the purpose of this SUBSECTION 4(d)(iv), all shares of Common
Stock issuable upon conversion or exchange of Convertible Securities
outstanding immediately prior to such issue shall be deemed to be
outstanding, and (ii) the number of shares of Common Stock deemed issuable
upon conversion or exchange of such outstanding Convertible Securities shall
not give effect to any adjustments to the conversion or
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exchange price or conversion or exchange rate of any Convertible Securities
resulting from the issuance of Additional Shares of Common Stock that is the
subject of this calculation.
(v) DETERMINATION OF CONSIDERATION. For purposes of this
SUBSECTION 4(d), the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(A) CASH AND PROPERTY: Such consideration shall:
(I) insofar as it consists of cash, be computed at the
aggregate of cash received by the Corporation,
excluding amounts paid or payable for accrued
interest or accrued dividends;
(II) insofar as it consists of property other than
cash, be computed at the fair market value
thereof at the time of such issue, as determined
in good faith by the Board of Directors; and
(III) in the event Additional Shares of Common Stock
are issued together with other shares or
securities or other assets of the Corporation
for consideration which covers both, be the
proportion of such consideration so received,
computed as provided in CLAUSES (I) and (II)
above, as determined in good faith by the Board
of Directors.
(B) OPTIONS AND CONVERTIBLE SECURITIES. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to SUBSECTION 4(d)(iii),
relating to Options and Convertible Securities, shall be determined by
dividing (x) the total amount, if any, received or receivable by the
Corporation as consideration for the issue of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible Securities, or in the case
of Options for Convertible Securities, the exercise of such Options for
Convertible
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Securities and the conversion or exchange of such Convertible Securities, by
(y) the maximum number of shares of Common Stock (as set forth in the
instruments relating thereto, without regard to any provision contained
therein for a subsequent adjustment of such number) issuable upon the
exercise of such Options or the conversion or exchange of such Convertible
Securities.
(vi) MULTIPLE CLOSING DATES. In the event the Corporation
shall issue on more than one date Additional Shares of Common Stock which are
comprised of shares of the same series or class of Preferred Stock, and such
issuance dates occur within a period of no more than 120 days, then, upon the
final such issuance, the Series B Conversion Price shall be adjusted to give
effect to all such issuances as if they occurred on the date of the final
such issuance (and without giving effect to any adjustments as a result of
such prior issuances within such period).
(e) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation shall at any time or from time to time after the Series B
Original Issue Date effect a subdivision of the outstanding Common Stock, the
Series B Conversion Price then in effect immediately before that subdivision
shall be proportionately decreased. If the Corporation shall at any time or
from time to time after the Series B Original Issue Date combine the
outstanding shares of Common Stock, the Series B Conversion Price then in
effect immediately before the combination shall be proportionately increased.
Any adjustment under this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(f) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time, or from time to time after the Series B
Original Issue Date shall make or issue, or fix a record date for the
determination of holders of Common Stock or Series A Preferred Stock entitled
to receive, a dividend or other distribution payable in additional shares of
Common Stock, then and in each such event the Series B Conversion Price then
in effect immediately before such event shall be decreased as of the time of
such issuance or, in the event such a record date shall have been fixed, as
of the close of business on such record date, by multiplying the Series B
Conversion Price then in effect by a fraction:
(1) the numerator of which shall be the total number
of shares of Common Stock actually 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 Common Stock actually 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 Common Stock issuable in payment of such dividend or
distribution;
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provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Series B Conversion Price shall be recomputed accordingly as of
the close of business on such record date and thereafter the Series B Conversion
Price shall be adjusted pursuant to this paragraph as of the time of actual
payment of such dividends or distributions; and provided further, however, that
no such adjustment shall be made if the holders of Series B Preferred Stock
simultaneously receive (i) a dividend or other distribution of shares of Common
Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Series B Preferred Stock had been
converted into Common Stock on the date of such event or (ii) a dividend or
other distribution of shares of Series B Preferred Stock which are convertible,
as of the date of such event, into such number of shares of Common Stock as is
equal to the number of additional shares of Common Stock as would be issued
pursuant to the preceding CLAUSE (1).
(g) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or from time to time after the Series B
Original Issue Date shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation (other than
shares of Common Stock) or in cash or other property (other than cash out of
earnings or earned surplus, determined in accordance with generally accepted
accounting principles), then and in each such event provision shall be made
so that the holders of the Series B Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation that they
would have received had the Series B Preferred Stock been converted into
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the conversion date,
retained such securities receivable by them as aforesaid during such period,
giving application to all adjustments called for during such period under
this paragraph with respect to the rights of the holders of the Series B
Preferred Stock; and provided further, however, that no such adjustment shall
be made if the holders of Series B Preferred Stock simultaneously receive a
dividend or other distribution of such securities in an amount equal to the
amount of such securities as they would have received if all outstanding
shares of Series B Preferred Stock had been converted into Common Stock on
the date of such event.
(h) ADJUSTMENTS FOR MERGER OR REORGANIZATION, ETC. Subject to the
provisions of SUBSECTION 2(c), if there shall occur any reorganization,
recapitalization, consolidation or merger involving the Corporation in which
the Common Stock is converted into or exchanged for securities, cash or other
property (other than a transaction covered by PARAGRAPHS (d), (e), (f) or (g)
of this SECTION 4), then, following any such reorganization,
recapitalization, consolidation or merger, each share of Series B Preferred
Stock shall be convertible into the kind and amount of securities, cash or
other property which a holder of the number of shares of Common Stock of the
Corporation issuable upon conversion of one share of Series B Preferred Stock
immediately prior to such reorganization, recapitalization, consolidation or
merger would have been entitled to receive pursuant to such transaction; and,
in such case, appropriate adjustment (as determined in good faith by the
Board of
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Directors) shall be made in the application of the provisions in this SECTION 4
set forth with respect to the rights and interest thereafter of the holders of
the Series B Preferred Stock, to the end that the provisions set forth in this
SECTION 4 (including provisions with respect to changes in and other adjustments
of the Series B 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 Series B Preferred Stock.
(i) NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out
of all the provisions of this SECTION 4 and in the taking of all such action
as may be necessary or appropriate in order to protect the Conversion Rights
of the holders of the Series B Preferred Stock against impairment.
(j) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Series B Conversion Price pursuant to this
SECTION 4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof. The
Corporation shall, upon the written request at any time of any holder of
Series B Preferred Stock, furnish or cause to be furnished to such holder a
certificate setting forth (i) the Series B Conversion Price then in effect,
(ii) the number of shares of Common Stock and the amount, if any, of other
securities, cash or property which then would be received upon the conversion
of Series B Preferred Stock, and (iii) the adjustments or readjustments to
date showing in reasonable detail the facts upon which such adjustments or
readjustments were based.
(k) NOTICE OF RECORD DATE. In the event:
(i) the Corporation shall take a record of the holders of its
Common Stock (or other stock or securities at the time
issuable upon conversion of the Series B Preferred Stock)
for the purpose of entitling or enabling them to receive
any dividend or other distribution, or to receive any right
to subscribe for a purchase any shares of stock of any
class or any other securities, or to receive any other
right; or
(ii) of any capital reorganization of the Corporation, any
reclassification of the Common Stock of the Corporation,
any consolidation or merger of the Corporation with or
into another corporation (other than a consolidation or
merger in which the Corporation is the surviving entity
and its Common Stock is not converted into or exchanged
for any other securities or property), or any transfer
of all or substantially all of the assets of the
Corporation; or
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(iii) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation, then, and in each such case,
the Corporation will mail or cause to be mailed to the
holders of the Series B Preferred Stock a notice specifying,
as the case may be, (i) the record date for such dividend,
distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective
date on which such reorganization, reclassification,
consolidation, merger, transfer, dissolution, liquidation
or winding-up is to take place, and the time, if any is to
be fixed, as of which the holders of record of Common Stock
(or such other stock or securities at the time issuable
upon the conversion of the Series B Preferred Stock) shall
be entitled to exchange their shares of Common Stock (or
such other stock or securities) for securities or other
property deliverable upon such reorganization,
reclassification, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall
be mailed at least 10 days prior to the record date or
effective date for the event specified in such notice.
5. MANDATORY CONVERSION.
(a) Upon the closing of the sale of shares of Common Stock in an
initial public offering pursuant to an effective registration statement under
the Securities Act of 1933, as amended, resulting in at least $25.0 million
of gross proceeds (net of underwriting discounts and commissions) to the
Corporation (a "Qualified Public Offering"), the outstanding shares of Series
B Preferred Stock shall automatically be converted into such number of shares
of fully paid and nonassessable shares of Common Stock as is determined by
dividing $8.17 by the Series B Conversion Price in effect immediately prior
to such conversion. The date of the conversion of the shares of Series B
Preferred Stock pursuant to this SECTION 5 shall be the "Mandatory Conversion
Date."
(b) All holders of record of shares of Series B Preferred Stock
shall be given written notice of the Mandatory Conversion Date and the place
designated for mandatory conversion of all such shares of Series B Preferred
Stock pursuant to this SECTION 5. Such notice need not be given in advance of
the occurrence of the Mandatory Conversion Date. Such notice shall be sent by
first class or registered mail, postage prepaid, to each record holder of
Series B Preferred Stock at such holder's address last shown on the records
of the transfer agent for the Series B Preferred Stock (or the records of the
Corporation, if it serves as its own transfer agent). Upon receipt of such
notice, each holder of shares of Series B Preferred Stock shall surrender his
or its certificate or certificates for all such shares to the Corporation at
the place designated in such notice, and shall thereafter receive
certificates for the number of shares of Common Stock to which such holder is
entitled pursuant to this SECTION 5. On the Mandatory Conversion Date, all
outstanding shares of Series B Preferred Stock shall be deemed to have been
converted into shares of Common Stock, which shall be deemed to be
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outstanding of record, and all rights with respect to the Series B Preferred
Stock so converted, including the rights, if any, to receive notices and vote
(other than as a holder of Common Stock) 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 B Preferred Stock has been converted, and payment of any
accrued but unpaid dividends thereon. 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 or its attorney
duly authorized in writing. As soon as practicable after the Mandatory
Conversion Date and the surrender of the certificate or certificates for Series
B Preferred Stock, 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 and issuable on such conversion in
accordance with the provisions hereof and cash as provided in SUBSECTION 4(b) in
respect of any fraction of a share of Common Stock and otherwise issuable upon
such conversion.
(c) All certificates evidencing shares of Series B Preferred
Stock which are required to be surrendered for conversion in accordance with
the provisions hereof shall, from and after the Mandatory Conversion Date, be
deemed to have been retired and cancelled and the shares of Series B
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. Such converted Series B
Preferred Stock may not be reissued, and the Corporation may thereafter take
such appropriate action (without the need for stockholder action) as may be
necessary to reduce the authorized number of shares of Series B Preferred
Stock accordingly.
6. TRANSFERABILITY. Notwithstanding any other provision contained
in this Amended and Restated Certificate of Incorporation (but in addition to
and not in place of any other limitations on transfer under this Amended and
Restated Certificate of Incorporation), if a holder of Series B Preferred Stock
or Common Stock received on conversion thereof, in each case which is non-voting
stock under SECTION D3(a) above (for purposes of this SECTION 6, "Regulated
Stock"), is a Regulated Entity, such holder may transfer shares of such
Regulated Stock only under the following circumstances: (i) in a widely
distributed public offering; (ii) in a transfer pursuant to Rule 144 under the
Securities Act of 1933, as amended, or any similar rule then in force; (iii) in
a transfer constituting two percent or less (or such greater amount determined
in accordance with clause (vii) below) of the outstanding shares of the Common
Stock (assuming that the shares of Regulated Stock to be transferred were
converted into shares of Common Stock and assuming all outstanding convertible
securities of the Corporation have been converted into shares of Common Stock);
(iv) in a transfer to a person if such person already owns or has negotiated to
purchase at least a majority of the outstanding shares of Common Stock; (v) in a
transfer to the Corporation; (vi) in a transfer to an affiliate of such holder
or to any other Regulated Entity; or (vii) in any method of transfer determined
by the Regulated Entity to be permissible under the Bank Holding Company Act of
1956, as amended, and any other applicable banking regulations.
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E. WAIVER.
Any of the rights of the Series B Preferred Stock set forth herein may
be waived only by the affirmative vote of the holders of more than 75% of the
shares of Series B Preferred Stock then outstanding.
FIFTH. In furtherance of and not in limitation of powers conferred by
statute, it is further provided:
1. Election of directors need not be by written ballot.
2. The Board of Directors is expressly authorized to adopt, amend or
repeal the By-Laws of the Corporation.
SIXTH. To the fullest extent permitted by Section 145 of the General
Corporation Law, or any comparable successor law, as the same may be amended
and supplemented from time to time, the Corporation (i) may indemnify any
persons whom it shall have power to indemnify thereunder from and against any
and all of the expenses, liabilities or other matter referred to in or
covered thereby, (ii) shall indemnify each such person if he or she is or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding by reason of the fact that he or she is or was a director,
officer, employee or agent of the Corporation or because he or she was
serving the Corporation or any other legal entity in any capacity at the
request of the Corporation while a director, officer, employee or agent of
the Corporation and (iii) shall pay the expenses of such a current or former
director, officer, employee or agent incurred in connection with any such
action, suit or proceeding in advance of the final disposition of such
action, suit or proceeding. The indemnification and advancement of expenses
provided for herein shall not be deemed exclusive of any other rights to
which those entitled to indemnification or advancement or expenses may be
entitled under any by-law, agreement, contract or vote of stockholders of
disinterested directors or pursuant to the direction (however embodied) of
any court of competent jurisdiction or otherwise, both as to action in his or
her official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SEVENTH. Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of the General Corporation Law or on the application
of trustees in dissolution or of any receiver or receivers appointed for the
Corporation under the provisions of Section 279 of the General Corporation Law,
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order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be, to
be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of the Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or class
of creditors, and/or of the stockholders or class of stockholders, of the
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of the Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of the Corporation, as the case may be,
and also on the Corporation.
EIGHTH. A director of the Corporation shall not be personally liable to
the Corporation or its stockholder for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty to loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the General Corporation Law, or
(iv) for any transaction from which the director derived an improper personal
benefit. If the General Corporation Law is amended to further eliminate or limit
the personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law, as so amended. Any repeal or modification of this
Article by the stockholders of the Corporation shall be by the affirmative vote
of the holders of not less than eighty percent (80%) of the outstanding shares
of stock of the Corporation entitled to vote in the election of directors,
considered for the purposes of this Article ELEVENTH as one class, shall be
prospective only and shall not adversely affect any right or protection of any
director of the Corporation existing at the time of such repeal or modification.
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NINTH. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute and this Certificate of
Incorporation, and all rights conferred upon stockholders herein are granted
subject to this reservation.
EXECUTED on December 30, 1999.
/s/ Kerry Adler
----------------------------
Kerry Adler, President
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