15
EXHIBIT 4.1
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CERTIFICATE OF DESIGNATIONS OF
SERIES D PREFERRED STOCK
OF
CADIZ INC.
PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
CADIZ INC., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that, pursuant to (i) the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation, (ii) the
provisions of Section 151 of said General Corporation Law, and (iii) the
resolutions unanimously adopted by the Board of Directors of the
Corporation by action taken at a meeting on December 14, 2000, the Board of
Directors duly adopted resolutions providing for authorization for issuance
of 5,000 shares of the Corporation's Preferred Stock, par value $.01 per
share, designated Series D Preferred Stock, which resolutions are as
follows:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation by the Certificate of Incorporation, the
Board of Directors does authorize for issuance Five Thousand (5,000)
shares of Preferred Stock, par value $.01 per share, of the
Corporation, to be designated "Series D Preferred Stock" of the
presently authorized shares of Preferred Stock. The voting powers,
designations, preferences, and other rights of the Series D Preferred
Stock authorized hereunder and the qualifications, limitations and
restrictions of such preferences and rights are as follows:
1. RANKING. The Series D Preferred Stock shall, with respect
to the payment of dividends and upon liquidation, dissolution, or
winding up, rank (1) senior and prior to the Corporation's Common
Stock, $0.01 par value per share (the "Common Stock"), and all other
capital stock issued by the Corporation and designated as junior to
the Series D Preferred Stock (collectively herein called the "Junior
Securities"), and (2) on a parity with any other class or series of
Preferred Stock of the Corporation (the "Parity Securities").
2. DIVIDENDS. (a) The holders of outstanding shares of Series
D Preferred Stock shall be entitled to receive cumulative dividends.
Such dividends shall be payable at the option of the Corporation in
the form of either (i) cash at an annual rate, commencing immediately
following issuance, equal to seven percent (7%) of the Liquidation
Preference (as defined in Section 3 hereof); or (ii) fully paid and
nonassessable shares of Common Stock (valued, for purposes of this
Section 2 only, at the average Fair Market Value (as defined in
Section 5(g) below) of the Common Stock during the ten (10)
consecutive trading day period ending one day prior to the applicable
Dividend Payment Date, as defined below) at an annual rate, commencing
immediately following issuance, equal to nine percent (9%) of the
Liquidation Preference. If dividends are paid in Common Stock
pursuant to clause (ii) above, the Corporation shall provide holders
of the Series D Preferred Stock with not less than five (5) days
written notice prior to the applicable Dividend Payment Date. Such
dividends shall be payable semi-annually on January 15 and July 15 of
each year (each of such dates being a "Dividend Payment Date" and each
period between such dates (or the date of issue, if earlier) being a
"Dividend Period") commencing on July 15, 2001, to stockholders of
record of Series D Preferred Stock on the respective date, not
exceeding 15 days preceding such Dividend Payment Date, as shall be
fixed for this purpose by the Board or an authorized committee of the
Board ("Authorized Board Committee") in advance of payment of each
particular dividend. Dividends payable on the Series D Preferred
Stock for the initial Dividend Period and for any period less than a
full period shall be computed on the basis of the actual number of
days elapsed in a year of 365 days. All dividends paid in Common
Stock pursuant to this subparagraph (a) shall be deemed issued on the
applicable Dividend Payment Date and paid pro rata to the holders
entitled thereto. All Common Stock which may be issued as a dividend
with respect to the Series D Preferred Stock will thereupon be duly
authorized, validly issued, fully paid and nonassessable and free of
all liens and charges.
(b) Dividends on Series D Preferred Stock shall be fully
cumulative and shall accrue (whether or not accrued or declared) from
the date of issuance. All dividends on the Series D Preferred Stock
shall be declared by the Board and paid by the Corporation to the
fullest extent permitted by law. Accumulated unpaid dividends for any
past Dividend Periods may be declared by the Board (or an Authorized
Board Committee) and paid on any date fixed by the Board (or an
Authorized Board Committee). The Corporation may deduct and withhold
from dividends on Series D Preferred Stock any amounts required to be
deducted or withheld by the Corporation under applicable law. Except
as provided above, no interest or sum of money in lieu of interest
shall be payable in respect of any accumulated unpaid dividends.
(c) In no event, so long as any shares of Series D Preferred
Stock are outstanding, shall any dividend whatsoever be paid or
declared, nor shall any other distribution be made (either in cash or
property) on or in respect of, nor shall any moneys or property be
expended for the redemption, retirement, purchase or other acquisition
of, outstanding shares of Junior Securities by the Corporation, nor
shall any moneys or property be paid into or set apart, or made
available for a sinking fund for the purchase or redemption of any
shares of Junior Securities unless all dividends on all outstanding
shares of Series D Preferred Stock for all past Dividend Periods shall
have been paid in full and the full dividends thereon for the then
current Dividend Period shall have been declared and shares set apart
sufficient for the payment thereof. The provisions of the preceding
sentence shall not apply to a dividend payable in shares of stock
ranking junior to shares of Series D Preferred Stock both in respect
of the payment of dividends and in respect of all payments upon
liquidation, dissolution or winding up of the Corporation.
(d) If, after dividends on all outstanding shares of Series D
Preferred Stock for all past Dividend Periods shall have been paid in
full and the full dividends thereon for the then current Dividend
Period shall have been declared and shares set apart sufficient for
the payment thereof, in accordance with Section (c), the Board of
Directors shall declare any dividend outside the ordinary course of
business ("extraordinary dividend") out of funds legally available
therefor, then such extraordinary dividend shall be declared pro rata
on the Common Stock and the Series D Preferred Stock treating the
Series D Preferred Stock as the greatest whole number of shares of
Common Stock then issuable upon conversion of such Series D Preferred
Stock pursuant to Section 5.
3. LIQUIDATION PREFERENCE. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the affairs of
the Corporation, then, before any distribution or payment shall be
made to the holders of any Junior Securities, and subject to the
rights of creditors, the holders of Series D Preferred Stock shall be
entitled to be paid out of the assets of the Corporation in an amount
in cash equal to $1,000.00 for each share outstanding (which amount is
hereinafter referred to as the "Liquidation Preference") plus any
accrued but unpaid dividends thereon. If the assets of the
Corporation are not sufficient to pay in full the Liquidation
Preference as well as any liquidation preference to holders of Parity
Securities, then the holders of the Series D Preferred Stock and
Parity Securities shall share ratably in such distribution of assets
in accordance with the amount which would have been payable on such
distribution if the amounts to which such holders were entitled were
paid in full. Except as provided in this paragraph 3, holders of
Series D Preferred Stock shall not be entitled to any distribution in
the event of liquidation, dissolution, or winding up of the affairs of
the Corporation. For purposes of this Section 3 only, a "liquidation"
shall include: (i) a merger or consolidation involving the
Corporation as a result of which the holders of the Corporation's
equity securities do not continue to hold, associated with or in
exchange for their equity securities in the Corporation, a majority of
the outstanding voting securities of the surviving entity in such
merger or consolidation; (ii) a transaction or series of related
transactions as a result of which the holders of a majority of the
Corporation's outstanding equity securities prior to such transactions
do not continue to hold a majority of the Corporation's outstanding
equity securities; and (iii) a sale of all or substantially all of the
assets of the Corporation.
4. VOTING. In all meetings of shareholders, the holders of
shares of Series D Preferred Stock shall be entitled to that number of
votes equal to the number of shares of Common Stock issuable upon
conversion of their Series D Preferred Stock at the time the shares
are voted, and shall be entitled to vote with the Common Stock (except
where a separate class vote is required by law or by terms of this
instrument). So long as any shares of Series D Preferred Stock remain
outstanding, the Corporation shall not, without the approval of the
holders of at least a majority of the outstanding shares of Series D
Preferred Stock, voting together as a single class, authorize any
other stock having rights or preferences senior to or on a parity with
the Series D Preferred Stock.
5. CONVERSION. Each share of Series D Preferred Stock shall be
convertible into shares of Common Stock at the rate of One (1) share
of Common Stock for every $8.00 in Liquidation Preference of the
shares of Series D Preferred Stock so converted (such number of shares
of Common Stock to be received upon conversion of each share of Series
D Preferred Stock being hereinafter referred to as the "Conversion
Rate"; and the result obtained by dividing the Liquidation Preference
by the Conversion Rate, as it may be adjusted from time to time
hereunder, being referred to hereinafter as the "Conversion Price"),
both (i) at the option of the holder thereof at any time following
issuance; and (ii) at the option of the Corporation provided that: (A)
the Corporation converts all shares of Series D Preferred Stock then
outstanding and that (B) the average of the Fair Market Value (as
defined in Section 5(g) below) for the Corporation's Common Stock over
any thirty consecutive trading day period ending not more than five
(5) trading days prior to submission of notice of conversion exceeds
$12.00 (the "Mandatory Conversion Minimum"). The following provisions
shall apply after the Series D Preferred Stock becomes convertible:
(a) Any holder of shares of Series D Preferred Stock
electing to convert such shares into Common Stock shall surrender the
certificate or certificates for such shares at the office of the
Corporation (or at such other place as the Corporation may designate
by notice to the holders of shares of Series D Preferred Stock) during
regular business hours, duly endorsed to the Corporation in blank, or
accompanied by instruments of transfer to the Corporation in blank, in
form reasonably satisfactory to the Corporation and shall give written
notice to the Corporation at such office that such holder elects to
convert such shares of Series D Preferred Stock. Such written notice
shall also instruct the Corporation where to deliver the certificate
or certificates representing the Common Stock issuable upon such
conversion. The Corporation shall, as soon as reasonably practicable
after such deposit of certificates for shares of Series D Preferred
Stock, accompanied by the written notice above prescribed, issue to
the holder for whose account such shares were surrendered, or to his
nominee, a certificate or certificates representing the number of
shares of Common Stock to which such holder is entitled upon such
conversion, and shall deliver such certificate or certificates in
accordance with the instructions of the holder. Conversion shall be
deemed to have been made as of the date of surrender of certificates
for the shares of Series D Preferred Stock to be converted and the
delivery of written notice as hereinabove provided; and the person
entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such Common
Stock on such date.
(b) In the event of an election by the Corporation to
convert Series D Preferred Stock into shares into Common Stock, all,
and not less than all, of the outstanding shares of Series D Preferred
Stock shall be converted automatically on the date of such election
(the "Mandatory Conversion Date") without any further action by the
holders of such shares and whether or not the certificates
representing outstanding shares are surrendered to the Corporation or
its transfer agent. The Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such
conversion unless the certificates evidencing such shares of Series D
Preferred Stock are either delivered to the Corporation or its
transfer agent as provided below, or the holder notifies the
Corporation or its transfer agent that such certificates have been
lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by
it in connection with such certificates. The Corporation shall cause
to be mailed to each holder of Series D Preferred Stock, by overnight
courier service or by first class mail, postage prepaid, mailed not
more than ten (10) business days following the Mandatory Conversion
Date, at such holder's address as the same appears on the records of
the Corporation (the "Mandatory Conversion Notice"). Each such notice
shall specify (i) the Mandatory Conversion Date, (ii) the number of
shares to be converted, and (iii) the place or places where
certificates for such shares are to be surrendered for conversion.
Promptly following receipt of the Mandatory Conversion Notice, each
holder of Series D Preferred Stock shall surrender the certificate or
certificates for such shares at the office of the Corporation (or at
such other place as the Corporation may designate by notice to the
holders of shares of Series D Preferred Stock) during regular business
hours, duly endorsed to the Corporation in blank, or accompanied by
instruments of transfer to the Corporation in blank, in form
reasonably satisfactory to the Corporation. Such written notice shall
instruct the Corporation where to deliver the certificate or
certificates representing the Common Stock issuable upon such
conversion. The Corporation shall, as soon as reasonably practicable
following the Mandatory Conversion Date and after such deposit of
certificates for shares of Series D Preferred Stock, accompanied by
the written notice above prescribed, issue to the holder for whose
account such shares were surrendered, or to his nominee, a certificate
or certificates representing the number of shares of Common Stock to
which such holder is entitled upon such conversion, and shall deliver
such certificate or certificates in accordance with the instructions
of the holder. Conversion shall be deemed to have been made as of the
Mandatory Conversion Date irrespective of the date of surrender of
certificates for the shares of Series D Preferred Stock to be
converted and the delivery of written notice as hereinabove provided;
and the person entitled to receive the Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of
such Common Stock effective as of the Mandatory Conversion Date.
Following the Mandatory Conversion Date, all authorized shares of
Series D Preferred Stock shall resume the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
until such shares are once more designated as part of a particular
series by the Board of Directors.
(c) The Conversion Rate shall be adjusted from time to time
as follows:
(i) In case the Corporation shall (A) pay a dividend
or make a distribution on its shares of Common Stock in shares of
Common Stock, (B) subdivide or reclassify its outstanding Common Stock
in shares of Common Stock into a greater number of shares, or (C)
combine or reclassify its outstanding Common Stock into a smaller
number of shares or, (D) issue by capital reorganization or
reclassification of its shares of Common Stock or otherwise (other
than a subdivision or combination of its shares provided for above, or
a reorganization, merger, consolidation or sale of assets provided for
elsewhere in this Section 5) any shares of capital stock of the
Corporation, then the conversion right and the Conversion Rate in
effect immediately prior to such action shall be adjusted so that the
holder of any shares of the Series D Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of
shares of capital stock of the Corporation which such holder would
have owned immediately following such action had such shares of the
Series D Preferred Stock been converted immediately prior thereto. An
adjustment made pursuant to this subparagraph shall become effective
retroactively immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or
reclassification. If, as a result of an adjustment made pursuant to
this subparagraph, the holder of any shares of the Series D Preferred
Stock thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock of the
Corporation, the Board of Directors shall determine in good faith the
allocation of the adjusted Conversion Rate between or among shares of
such classes of capital stock, which allocation must be reasonably
acceptable to the holders of a majority of the shares of the Series D
Preferred Stock.
(ii) In case the Corporation shall hereafter issue
rights or warrants to all holders of its Common Stock entitling them
to subscribe for or purchase shares of Common Stock (or securities
convertible into Common Stock) at a price (or having a conversion
price per share) less than the Conversion Price on the record date
mentioned below, then the Conversion Rate shall be adjusted so that
the same shall equal the price determined by multiplying the
Conversion Rate in effect immediately prior to the record date
mentioned below by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding on the record date
mentioned below and the number of additional shares of Common Stock
which the aggregate offering price of the total number of shares of
Common Stock so offered (or the aggregate conversion price of the
convertible securities so offered) would purchase at such Conversion
Price, and the denominator of which shall be the sum of the number of
shares of Common Stock outstanding on such record date and the number
of additional shares of Common Stock offered for subscription or
purchase (or into which the convertible securities so offered are
convertible). Such adjustment shall be made successively whenever
such rights or warrants are issued and shall become effective
immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants; and to the
extent that shares of Common Stock are not delivered (or securities
convertible into Common Stock are not delivered) after the expiration
of such rights or warrants the Conversion Rate shall be readjusted to
the Conversion Price which would then be in effect had the adjustments
made upon the issuance of such rights or warrants been made upon the
basis of delivery of only the number of shares of Common Stock (or
securities convertible into Common Stock) actually delivered.
(iii) In case the Corporation shall issue shares of
its Common Stock (excluding shares issued (A) in any of the
transactions described in Subsection (i) above, (B) to the
Corporation's employees, including, without limitation, pursuant to
exercise or conversion of options or other equity securities, under a
plan or plans adopted by the Corporation's Board of Directors and
approved by its shareholders (if required), if such shares would
otherwise be included in this Subsection (iii) (but only to the extent
that the aggregate number of shares excluded by this clause (B) and
issued after the date hereof shall not exceed in the aggregate 13% of
the Company's Common Stock outstanding as of the date of this
Certificate), (C) upon exercise of convertible securities outstanding
as of the date of initial issuance of Series D Preferred Stock
(including the Series D Preferred Stock), or any convertible
securities issued subsequent to the date hereof which are convertible
into Common Stock at an exercise price equal or greater than the
Conversion Price as of the date upon which the conversion or exercise
price for such securities is fixed (notwithstanding any subsequent
adjustment of such exercise price as may be provided under the terms
of such convertible security), (D) upon the exercise of any
convertible security as to which the Conversion Rate has already been
adjusted pursuant to Subsection (iv) below, and (E) to shareholders of
any corporation which merges into the Corporation in proportion to
their stock holdings of such corporation immediately prior to such
merger, upon such merger, but only if no adjustment is required
pursuant to any other specific subsection of this Section (c) (without
regard to Subsection (vi) below) with respect to the transaction
giving rise to such rights) for a consideration per share less than
the Conversion Price, then on the date the Corporation fixes the
offering price of such additional shares, the Conversion Rate shall be
adjusted immediately thereafter so that it shall equal the price
determined by multiplying the Conversion Rate in effect immediately
prior thereto by a fraction, the numerator of which shall be the sum
of the number of shares of Common Stock outstanding immediately prior
to the issuance of such additional shares and the number of shares of
Common Stock which the aggregate consideration received (determined as
provided in Subsection (v) below) for the issuance of such additional
shares would purchase at such Conversion Price, and the denominator of
which shall be the number of shares of Common Stock outstanding
immediately after the issuance of such additional shares.
Such adjustment shall be made successively whenever
such an issuance is made.
(iv) In case the Corporation shall issue any securities
convertible into or exchangeable for its Common Stock (excluding
securities issued in transactions described in Subsection (ii) above)
for a consideration per share of Common Stock initially deliverable
upon conversion or exchange of such securities (determined as provided
in Subsection (v) below) less than the Conversion Price in effect as
of the date upon which the conversion or exercise price for such
securities is fixed, then the Conversion Rate shall be adjusted
immediately thereafter so that it shall equal the price determined by
multiplying the Conversion Rate in effect immediately prior thereto by
a fraction, the numerator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to the issuance
of such securities and the number of shares of Common Stock which the
aggregate consideration received (determined as provided in Subsection
(v) below) for such securities would purchase at such Conversion
Price, and the denominator of which shall be the sum of the number of
shares of Common Stock outstanding immediately prior to such issuance
and the maximum number of shares of Common Stock of the Corporation
deliverable upon conversion of or in exchange for such securities at
the initial conversion or exchange price or rate.
Such adjustment shall be made successively whenever
such an issuance is made.
(v) For purposes of any computation respecting
consideration received pursuant to Subsections (iii) and (iv) above,
the following shall apply:
(A) in the case of the issuance of shares of
Common Stock for cash, the consideration shall be the amount of such
cash, provided that in no case shall any deduction be made for any
commissions, discounts or other expenses incurred by the Corporation
for any underwriting of the issue or otherwise in connection
therewith:
(B) in the case of the issuance of shares of
Common Stock for a consideration in whole or in part other than cash,
the consideration other than cash shall be deemed to be the fair
market value thereof as determined in good faith by the Board of
Directors of the Corporation (irrespective of the accounting treatment
thereof) and reasonably acceptable to the holders of a majority Series
D Preferred Stock; and
(C) in the case of the issuance of securities
convertible into or exchangeable for shares of Common Stock, the
aggregate consideration received therefor shall be deemed to be the
consideration received by the Corporation for the issuance of such
securities plus the additional minimum consideration, if any, to be
received by the Corporation upon the conversion or exchange thereof
(the consideration in each case to be determined in the same manner as
provided in clauses (A) and (B) of this Subsection (v)).
(vi) No adjustment in the Conversion Rate shall be
required unless such adjustment would require an increase or decrease
of at least one cent ($0.01) in such price; provided, however, that
any adjustments which by reason of this Subsection (vi) are not
required to be made shall be carried forward and taken into account in
any subsequent adjustment required to be made hereunder. All
calculations under this Section (c) shall be made to the nearest cent.
Anything in this Section (c) to the contrary notwithstanding, the
Corporation shall be entitled, but shall not be required, to reduce
the Conversion Rate, in addition to those changes required by this
Section (c), as it, in its sole discretion, shall determine to be
advisable in order that any dividend or distribution in shares of
Common Stock, subdivision, reclassification or combination of Common
Stock, issuance of warrants to purchase Common Stock or distribution
or evidences of indebtedness or other assets (excluding cash
dividends) referred to hereinabove in this Section (c) hereafter made
by the Corporation to the holders of its Common Stock shall not result
in any tax to such holders of its Common Stock or securities
convertible into Common Stock.
(vii) In the event that at any time, as a result of
an adjustment made pursuant to Subsection (i) above, the holder of
Series D Preferred Stock thereafter shall become entitled to receive
any shares of the Corporation, other than Common Stock, thereafter the
number of such other shares so receivable upon conversion of the
holder's of Series D Preferred Stock shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Stock
contained in Subsections (i) to (vi), inclusive above. The Corporation
may retain a firm of independent certified public accountants selected
by the Board of Directors (who may be the regular accountants employed
by the Corporation) to make any computation required by Section (c),
and a certificate signed by such firm shall be conclusive evidence of
the correctness of such adjustment absent manifest error or
negligence.
(viii) Whenever an adjustment in the Conversion Rate
is required, the Corporation shall forthwith place on file with its
Secretary a statement signed by its Secretary or Treasurer or one of
its Assistant Secretaries or Assistant Treasurers, stating the
adjusted Conversion Rate determined as provided herein. Such
statement shall set forth in reasonable detail such facts as shall be
necessary to show the reason and the manner of computing such
adjustment. Such statement shall be made available at all reasonable
times for inspection by any holder of shares of Series D Preferred
Stock. Promptly after the adjustment of the Conversion Rate, the
Corporation shall mail a notice and copy of such statement to each
holder of shares of Series D Preferred Stock.
(ix) In case of any reclassification, capital
reorganization or other change of outstanding shares of Common Stock
of the Corporation, or in case of any consolidation or merger of the
Corporation with or into another entity (other than a merger with a
subsidiary in which merger the Corporation is the continuing
corporation and which does not result in any reclassification, capital
reorganization or other change of outstanding shares of Common Stock
of the class issuable upon conversion of the Series D Preferred Stock)
or in case of any sale, lease, or conveyance to another entity of all
or substantially all of the property and assets of the Corporation,
the Corporation shall, as a condition precedent to such transaction,
cause effective provisions to be made so that the holder of each share
of Series D Preferred Stock then outstanding shall have the right to
convert such shares of Series D Preferred Stock into the kind and
amount of shares of stock or other securities and property receivable
upon such reclassification, capital reorganization and other change,
consolidation, merger, sale, lease or conveyance by a holder of the
number of shares of Common Stock into which such shares of Series D
Preferred Stock might have been converted immediately prior to such
reclassification, change, consolidation, merger, sale, lease or
conveyance, subject to adjustments which shall be as nearly equivalent
as may be reasonably practicable to the adjustments provided for
hereunder. The Corporation shall not effect any such reorganization,
consolidation, merger, sale or conveyance (i) unless prior to or
simultaneously with the consummation thereof the survivor or successor
corporation (if other than the Corporation) resulting from such
reorganization, consolidation or merger or the corporation purchasing
such assets shall assume by written instrument executed and sent to
each holder of Series D Preferred Stock, the obligation to deliver to
such holder of Series D Preferred Stock such shares of stock,
securities or assets as, in accordance with the foregoing provisions,
such holder of Series D Preferred Stock may be entitled to receive,
and containing the express assumption by such successor corporation of
the due and punctual performance and observance of every provision
herein to be performed and observed by the Corporation and of all
liabilities and obligations of the Corporation hereunder, and (ii) in
which the Corporation, as opposed to another party to the
reorganization, consolidation, merger, sale or conveyance, shall be
required under any circumstances to make a cash payment at any time to
the holders of the Series D Preferred Stock. The provisions of this
subparagraph shall similarly apply to successive reclassifications,
capital reorganizations, and changes of Common Stock and to successive
reorganizations, consolidations, mergers, sales, leases or
conveyances.
(d) Any shares of Series D Preferred Stock which shall at
any time have been converted shall resume the status of authorized but
unissued shares of Preferred Stock, without designation as to series,
until such shares are once more designated as part of a particular
series by the Board of Directors. The Corporation shall reserve and
keep available out of its authorized but unissued stock, for the
purpose of effecting the conversion of the shares of the Series D
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 shares of the Series D Preferred Stock.
(e) The Corporation shall pay any and all issue or transfer
(but not income) taxes that may be payable in respect of any issuance
or delivery of shares of Common Stock on conversion of shares of
Series D Preferred Stock pursuant hereto.
(f) Before taking any action that would result in the
effective price of the shares of Common Stock issuable upon conversion
of Series D Preferred Stock being less than the then par value of the
Common Stock, the Corporation shall 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.
(g) The Corporation shall not be required to issue any
fractional shares of Common Stock upon conversion of any Series D
Preferred Stock, but in lieu thereof the Corporation may pay a cash
amount determined by multiplying the fraction of a share otherwise
issuable by the Fair Market Value of one share of Common Stock on the
date such conversion is deemed to have been made hereunder. The "Fair
Market Value" of the Common Stock as of a particular date shall mean:
(i) If the Common Stock is listed or admitted to the
unlisted trading privileges on any national or regional securities
exchange on such date, then the average of the last reported sale
prices on such exchange for the 30 consecutive business day period
ending on the last business day prior to such date;
(ii) If the Common Stock is not listed or admitted to
unlisted trading privileges as provided in subparagraph i) and sales
prices therefor in the over-the-counter market are reported by the
Nasdaq National Market System on such date, then the last reported
sales price so reported on the last business day prior to such date;
(iii) If the Common Stock is not listed or admitted
to unlisted trading privileges as provided in subparagraph i) and
sales prices therefor are not reported by the Nasdaq National Market
System as provided in subparagraph ii), and bid and asked prices
therefor in the over-the-counter market are reported by Nasdaq (or, if
not so reported, by the National Quotation Bureau Incorporated) on
such date, then the average of the closing bid and asked prices on the
last business day prior to such date; or
(iv) If the Common Stock is not listed or admitted to
unlisted trading privileges as provided in subparagraph i) and sales
prices or bid and asked prices therefor are not reported by Nasdaq (or
the National Quotation Bureau Incorporated) as provided in
subparagraphs ii) and iii) on such date, then the value as determined
in good faith by the Board.
(h) Whenever an adjustment in the Conversion Rate is
required pursuant to the term of this Section 5, the Mandatory
Conversion Minimum as in effect immediately prior to such action shall
automatically and concurrently be adjusted in proportion to the
adjustment in the Conversion Rate.
6. FRACTIONAL SHARES. The Series D Preferred Stock may be
issued as fractional shares in increments of 1/1,000 of a share
(subject to adjustment on the same basis as the Conversion Rate under
Section 5(c)). Each fractional share of Series D Preferred Stock
shall be entitled to the same rights and powers on a pro rata basis as
a whole share of Series D Preferred Stock.
7. MANDATORY REDEMPTION. (a) The Corporation shall redeem on
July 16, 2004, and not prior to said date (the "Redemption Date") all
shares of Series D Preferred Stock outstanding as of such date from
any source of funds legally available therefor.
(b) The price per share ("Redemption Price") for any
redemption of Series D Preferred Stock made pursuant to this
subsection 7 shall be an amount equal to the Liquidation Preference
for the shares so redeemed. If insufficient funds are legally
available as of the Redemption Date to redeem all the shares of Series
D Preferred Stock then due to be redeemed, but sufficient funds are
legally available as of the Redemption Date to redeem a portion of the
Preferred Stock then due to be redeemed, then the Corporation shall
effect such redemption pro rata among all holders of Preferred Stock
on an equal priority, pari passu basis, based on the Redemption Price
of such shares.
(c) On or before the Redemption Date, written notice (the
"Redemption Notice") shall be mailed by overnight courier service or
by first-class mail, postage prepaid, to each holder of record (at the
close of business on the business day next preceding the date on which
notice is given) of the Series D Preferred Stock to be redeemed, at
the address last shown on the records of the Corporation for such
holder or given by the holder to the Corporation for the purpose of
notice or, if no such address appears or is given, at the place where
the principal executive office of the Corporation is then located,
notifying such holder of the redemption to be effected, specifying the
Redemption Date, the Redemption Price, the place at which payment may
be obtained and the date on which such holder's conversion rights set
forth in Section 5 as to such shares terminate and calling upon such
holder to surrender to the Corporation, in the manner and at the place
designated, such holder's certificate or certificates representing the
shares to be redeemed. Each holder of Preferred Stock to be redeemed
shall surrender to the Corporation the certificate or certificates
representing such shares of Preferred Stock, in the manner and at the
place designated in the Redemption Notice, and thereupon the
Redemption Price of such shares shall be payable to the order of the
person whose name appears on such certificate or certificates as the
owner thereof, and each surrendered certificate shall be canceled. If
less than all the shares represented by any such certificate are
redeemed, a new certificate shall be issued representing the
unredeemed shares.
(d) From and after the Redemption Date, unless there shall
have been a default in payment of the Redemption Price, all rights of
the holders of such shares as holders of Series D Preferred Stock
(except the right to receive the Redemption Price without interest
upon surrender of their certificate or certificates) shall cease with
respect to such shares, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be
outstanding for any purpose whatsoever. Shares of Series D Preferred
Stock which are subject to redemption hereunder but which are not
redeemable on the Redemption Date due to insufficient legally
available funds shall continue to be entitled to dividends,
liquidation, conversion and all other rights, preferences, privileges
and restrictions of the Preferred Stock until such shares have been
converted or redeemed.
(e) All shares of Series D Preferred Stock that are
redeemed pursuant to this Section 7 shall resume the status of
authorized but unissued shares of Preferred Stock, without designation
as to series, until such shares are once more designated as part of a
particular series by the Board of Directors.
8. NOTICES TO HOLDERS. So long as any shares of the Series D
Preferred Stock shall be outstanding, (i) if the Corporation shall pay any
dividend or make any distribution upon the Common Stock or (ii) if the
Corporation shall offer to the holders of Common Stock for subscription or
purchase by them any share of or class of its capital stock or any other
rights or (iii) if any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation, consolidation or
merger of the Corporation with or into another entity, sale, lease, or
transfer of all or substantially all of the property and assets of the
Corporation to another entity, or voluntary or involuntary dissolution,
liquidation or winding up of the Corporation shall be effected, then in any
such case, the Corporation shall cause to be mailed by certified mail to
all holders of the Series D Preferred Stock, at least fifteen days prior
the record date specified in (x) or (y) below, as the case may be, a notice
containing a brief description of the proposed action and stating the date
on which (x) a record is to be taken for the purpose of such dividend,
distribution or offer of rights, or (y) such reclassification,
reorganization, consolidation, merger, conveyance, lease, transfer, sale
dissolution, liquidation or winding up is to take place and the date, if
any is to be fixed, as of which the holders of Common Stock or other
securities shall be entitled to receive cash or other property deliverable
upon such reclassification, reorganization, consolidation, merger,
conveyance, lease, transfer, sale, dissolution, liquidation or winding up.
RESOLVED, FURTHER, that the appropriate officers of the Corporation
are hereby authorized to execute and acknowledge the Certificate of
Designations setting forth these resolutions and to cause such certificate
to be filed and recorded, all in accordance with the requirements of
Section 151 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, CADIZ INC., has caused this Certificate to be
signed by Keith Brackpool, its Chief Executive Officer, and attested by
Stanley E. Speer, its Secretary, this 28th day of December, 2000.
CADIZ INC.
By: /S/ KEITH BRACKPOOL
Keith Brackpool,
Chief Executive Officer
ATTEST:
By: /S/ STANLEY E. SPEER
Stanley E. Speer, Secretary
