ARTICLE
V
The terms
and provisions of the Common Stock and Preferred Stock are as
follows:
1. Definitions. For
purposes of this ARTICLE V, the following definitions shall apply:
(a) “Conversion Price” shall mean
$0.66 per share for the Series A Preferred Stock, $1.25 per share for the
Series B Preferred Stock, $1.60 per share for the Series C Preferred
Stock, $1.60 per share for the Series D Preferred Stock and $1.65 per share for
the Series E Preferred Stock (in each case, subject to adjustment from time to
time for Recapitalizations as set forth elsewhere herein).
(b) “Convertible Securities” shall
mean any evidences of indebtedness, shares or other securities convertible into
or exchangeable for Common Stock.
(c) “Corporation” shall mean
Cornerstone OnDemand, Inc.
(d) “Distribution” shall mean the
transfer of cash or other property without consideration whether by way of
dividend or otherwise, other than dividends on Common Stock payable in Common
Stock, or the purchase or redemption of shares of the Corporation by the
Corporation for cash or property other than: (i) repurchases of Common
Stock issued to or held by employees, officers, directors or consultants of the
Corporation or its subsidiaries upon termination of their employment or services
pursuant to agreements providing for the right of said repurchase,
(ii) repurchases of Common Stock issued to or held by employees, officers,
directors or consultants of the Corporation or its subsidiaries pursuant to
rights of first refusal contained in agreements providing for such right,
(iii) repurchase of capital stock of the Corporation in connection with the
settlement of disputes with any stockholder, (iv) any other repurchase or
redemption of capital stock of the Corporation approved by the holders of the
Common and Preferred Stock of the Corporation voting as separate classes and (v)
the repurchase of up to $1,000,000.00 worth of shares of capital stock of the
Corporation from certain stockholders of the Corporation as approved by the
Board of Directors of the Corporation.
(e) “Liquidation Preference” shall
mean $1.00 per share for the Series A Preferred Stock, $1.25 per share for
the Series B Preferred Stock, $1.60 per share for the Series C
Preferred Stock, $1.60 per share for the Series D Preferred Stock and $1.65 per
share for the Series E Preferred Stock (in each case, subject to adjustment from
time to time for Recapitalizations as set forth elsewhere herein).
(f) “Options” shall mean rights,
options or warrants to subscribe for, purchase or otherwise acquire Common Stock
or Convertible Securities.
(g) “Original Issue Price” shall
mean $0.66 per share for the Series A Preferred Stock, $1.25 per share for
the Series B Preferred Stock, $1.60 per share for the Series C
Preferred Stock, $1.60 per share for the Series D Preferred Stock and $1.65 per
share for the Series E Preferred Stock (in each case, subject to adjustment from
time to time for Recapitalizations as set forth elsewhere herein).
(h) “Preferred Stock” shall mean
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock and Series E Preferred Stock.
(i) “Recapitalization” shall mean
any stock dividend, stock split, combination of shares, reorganization,
recapitalization, reclassification or other similar event.
2. Dividends.
(a) Preferred
Stock. In any calendar year, the holders of outstanding shares
of Preferred Stock shall be entitled to receive dividends, when, as and if
declared by the Board of Directors, out of any assets at the time legally
available therefor, payable in preference and priority to any declaration or
payment of any Distribution on Common Stock of the Corporation in such calendar
year. The right to receive dividends on shares of Preferred Stock
shall not be cumulative, and no right to dividends shall accrue to holders of
Preferred Stock by reason of the fact that dividends on said shares are not
declared or paid. Payment of any dividends to the holders of
Preferred Stock shall be made in proportion to the number of shares of Common
Stock held by them on an as-converted basis; provided, however that any
dividends shall be first paid on a pari passu as-converted basis
to the holders of Series D Preferred Stock and Series E Preferred
Stock. No Distributions shall be made with respect to the Common
Stock unless an equivalent Distribution is declared and paid upon each share of
Series D Preferred Stock and Series E Preferred Stock in an amount equal to the
amount that would be declared and paid with respect to the shares of Common
Stock then issuable upon conversion of such shares of Series D Preferred Stock
or Series E Preferred Stock, as the case may be.
(b) Common
Stock. Dividends may be paid on the Common Stock when, as and
if declared by the Board of Directors, subject to the prior dividend rights of
the Preferred Stock and to paragraph (a) above and Section 7
below.
(c) Non-Cash
Distributions. Whenever a Distribution provided for in this
Section 2 shall be payable in property other than cash, the value of such
Distribution shall be deemed to be the fair market value of such property as
determined in good faith by the Board of Directors.
(d) Consent to Certain
Distributions. As authorized by Section 402.5(c) of the
California Corporations Code, if Section 502 or Section 503 of the
California Corporations Code is applicable to a payment made by the Corporation
then such applicable section or sections shall not apply if such payment is a
payment made by the Corporation in connection with (i) repurchases of
Common Stock issued to or held by employees, officers, directors or consultants
of the Corporation or its subsidiaries upon termination of their employment or
services pursuant to agreements providing for the right of said repurchase,
(ii) repurchases of Common Stock issued to or held by employees, officers,
directors or consultants of the Corporation or its subsidiaries pursuant to
rights of first refusal contained in agreements providing for such right,
(iii) repurchases of Common Stock or Preferred Stock in connection with the
settlement of disputes with any stockholder, (iv) any other repurchase or
redemption of Common Stock or Preferred Stock approved by the holders of
Preferred Stock of the Corporation.
(e) Waiver of
Dividends. Any dividend preference any series of Preferred
Stock may be waived, in whole or in part, by the consent or vote of the holders
of the majority of the outstanding shares of such series.
3. Liquidation
Rights.
(a) Liquidation Preference of
Series D Preferred Stock and Series E Preferred Stock. In the
event of any liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary, the holders of the Series D Preferred Stock and Series
E Preferred Stock shall be entitled to receive, on a pari passu and as-converted
basis, and prior and in preference to any Distribution of any of the assets of
the Corporation to the holders of the Common Stock or any other holders of
Series A Preferred Stock, Series B Preferred Stock, or Series C Preferred Stock,
by reason of their ownership of such stock, an amount per share for each share
of Preferred Stock held by them equal to the sum of (i) the Liquidation
Preference specified for such share of Preferred Stock and (ii) all
declared but unpaid dividends (if any) on such share of Preferred
Stock. The holders of the majority of the outstanding shares of
Series D Preferred Stock may approve some lesser amount per share for each share
of Series D Preferred Stock held by them. The holders of the majority
of the outstanding shares of Series E Preferred Stock may approve some lesser
amount per share for each share of Series E Preferred Stock held by
them. If upon the liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation legally available for distribution to
the holders of the Preferred Stock are insufficient to permit the payment to
such holders of the full amounts specified in this Section 3(a), then the
entire assets of the Corporation legally available for distribution shall be
distributed with equal priority and pro rata among the holders of
the Series D Preferred Stock and Series E Preferred Stock in proportion to the
full amounts they would otherwise be entitled to receive pursuant to this
Section 3(a).
(b) Liquidation Preference of
Series A Preferred Stock. After the payment or setting aside
for payment to the holders of Series D Preferred Stock and Series E Preferred
Stock of the full amounts specified in Section 3(a) above, the holders of
the Series A Preferred Stock shall be entitled to receive, prior and in
preference to any Distribution of any of the assets of the Corporation to the
holders of the Common Stock, Series B Preferred Stock or Series C Preferred
Stock, by reason of their ownership of such stock, an amount per share for each
share of Preferred Stock held by them equal to the sum of (i) the
Liquidation Preference specified for such share of Preferred Stock and
(ii) all declared but unpaid dividends (if any) on such share of Preferred
Stock, or such lesser amount as may be approved by the holders of the majority
of the outstanding shares of Series A Preferred Stock. If, upon the liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
legally available for distribution to the holders of the Series A Preferred
Stock are insufficient to permit the payment to such holders of the full amounts
specified in this Section 3(b), then the entire remaining assets of the
Corporation legally available for distribution shall be distributed with equal
priority and pro rata
among the holders of such series of Preferred Stock in proportion to the full
amounts they would otherwise be entitled to receive pursuant to this
Section 3(b).
(c) Liquidation Preference of
Series B Preferred Stock. After the payment or setting aside
for payment to the holders of Series D Preferred Stock, Series E Preferred Stock
and Series A Preferred Stock of the full amounts specified in Sections 3(a)
and 3(b) above, respectively, the holders of the Series B Preferred Stock shall
be entitled to receive, prior and in preference to any Distribution of any of
the assets of the Corporation to the holders of the Common Stock or Series C
Preferred Stock, by reason of their ownership of such stock, an amount per share
for each share of Preferred Stock held by them equal to the sum of (i) the
Liquidation Preference specified for such share of Preferred Stock and
(ii) all declared but unpaid dividends (if any) on such share of Preferred
Stock, or such lesser amount as may be approved by the holders of the majority
of the outstanding shares of Series B Preferred Stock. If, upon the liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
legally available for distribution to the holders of the Series B Preferred
Stock are insufficient to permit the payment to such holders of the full amounts
specified in this Section 3(c), then the entire remaining assets of the
Corporation legally available for distribution shall be distributed with equal
priority and pro rata
among the holders of such series of Preferred Stock in proportion to the full
amounts they would otherwise be entitled to receive pursuant to this
Section 3(c).
(d) Liquidation Preference of
Series C Preferred Stock. After the payment or setting aside
for payment to the holders of Series D Preferred Stock, Series E Preferred
Stock, Series A Preferred Stock and Series B Preferred Stock of the full amounts
specified in Sections 3(a), 3(b) and 3(c) above, respectively, the holders
of the Series C Preferred Stock shall be entitled to receive, prior and in
preference to any Distribution of any of the assets of the Corporation to the
holders of the Common Stock, by reason of their ownership of such stock, an
amount per share for each share of Preferred Stock held by them equal to the sum
of (i) the Liquidation Preference specified for such share of Preferred
Stock and (ii) all declared but unpaid dividends (if any) on such share of
Preferred Stock, or such lesser amount as may be approved by the holders of the
majority of the outstanding shares of Series C Preferred Stock. If, upon the
liquidation, dissolution or winding up of the Corporation, the assets of the
Corporation legally available for distribution to the holders of the Series C
Preferred Stock are insufficient to permit the payment to such holders of the
full amounts specified in this Section 3(d), then the entire remaining
assets of the Corporation legally available for distribution shall be
distributed with equal priority and pro rata among the holders of
such series of Preferred Stock in proportion to the full amounts they would
otherwise be entitled to receive pursuant to this
Section 3(d).
(e) Remaining
Proceeds.
(i) Aggregate consideration up
to $150 million. After the payment to the holders of Preferred
Stock of the full amounts specified in Sections 3(a), 3(b), 3(c) and 3(d)
above, the remaining assets of the Corporation legally available for
distribution shall be distributed pro rata to holders of the
Common Stock, Series D Preferred Stock and Series E Preferred Stock of the
Corporation in proportion to the number of shares of Common Stock held by them
on an as-converted basis; provided that the total amount distributed pursuant to
Sections 3(a), 3(b), 3(c) and 3(d) above and this Section 3(e) shall not exceed
$150 million.
(ii) Aggregate consideration
greater than $150 million. Notwithstanding the foregoing, in
the event the total amount distributed pursuant to Sections
3(a), 3(b), 3(c), 3(d) and this Section 3(e) is greater than $150 million, each
holder of shares of Series D Preferred Stock or Series E Preferred Stock, as the
case may be, shall receive the greater of (A) the amount such holder would be
entitled to receive pursuant to a total distribution of $150 million under
Section 3(e)(i) above and (B) the amount such holder would receive if such
holder had converted such shares of Series D Preferred Stock or Series E
Preferred Stock, as the case may be, into shares of Common Stock immediately
prior to such distribution.
(f) Shares not Treated as Both
Preferred Stock and Common Stock in any Distribution. Shares
of Preferred Stock shall not be entitled to be converted into shares of Common
Stock in order to participate in any Distribution, or series of Distributions,
as shares of Common Stock, without first foregoing participation in the
Distribution, or series of Distributions, as shares of Preferred
Stock.
(g) Reorganization. For
purposes of this Section 3, a liquidation,
dissolution or winding up of the Corporation shall be deemed to be occasioned
by, or to include, (i) the acquisition of the Corporation by another entity
by means of a reorganization, merger or consolidation to which the Corporation
is party other than a transaction in which the holders of the voting securities
of the Corporation outstanding immediately prior to such transaction retain,
immediately after such transaction or series of transactions, as a result of
shares in the Corporation held by such holders prior to such transaction, at
least a majority of the total voting power represented by the outstanding voting
securities of the Corporation or such other surviving or resulting entity (or if
the Corporation or such other surviving or resulting entity is a wholly-owned
subsidiary immediately following such acquisition, its parent); (ii) a
sale, lease or other disposition of all or substantially all of the assets of
the Corporation and its subsidiaries taken as a whole by means of any
transaction or series of related transactions, except where such sale, lease or
other disposition is to a wholly-owned subsidiary of the Corporation; or
(iii) any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary (any such event, a “Liquidity
Event”). Subject to Section 7 below, the treatment of any
transaction or series of related transactions as a liquidation, dissolution or
winding up pursuant to clause (i) or (ii) of the preceding sentence may be
waived by the consent or vote of a majority of the outstanding Preferred Stock
(voting as a single class and on an as-converted basis).
(h) Valuation of Non-Cash
Consideration. If any assets of the Corporation distributed to
stockholders in connection with any liquidation, dissolution, or winding up of
the Corporation are other than cash, then the value of such assets shall be
their fair market value as determined in good faith by the Board of Directors,
including a majority of the Preferred Directors (as defined below), except that any
publicly-traded securities to be distributed to stockholders in a liquidation,
dissolution, or winding up of the Corporation shall be valued as
follows:
(i) If
the securities are then traded on a national securities exchange or a national
quotation system, then the value of the securities shall be deemed to be the
average of the closing prices of the securities on such exchange or system over
the ten (10) trading day period ending five (5) trading days prior to the
Distribution;
(ii) if
the securities are actively traded over-the-counter, then the value of the
securities shall be deemed to be the average of the closing bid prices of the
securities over the ten (10) trading day period ending five (5) trading days
prior to the Distribution; or
(iii) if
there is no active public market, the value shall be the fair market value
thereof, as determined in good faith by the Board of Directors.
In the
event of a merger or other acquisition of the Corporation by another entity, the
Distribution date shall be deemed to be the date such transaction
closes.
For the
purposes of this subsection 3(h), “trading day” shall mean any
day which the exchange or system on which the securities to be distributed are
traded is open and “closing
prices” or “closing bid
prices” shall be deemed to be: (i) for securities traded primarily
on the New York Stock Exchange, the American Stock Exchange or Nasdaq, the last
reported trade price or sale price, as the case may be, at 4:00 p.m., New York
time, on that day and (ii) for securities listed or traded on other
exchanges, markets and systems, the market price as of the end of the regular
hours trading period that is generally accepted as such for such exchange,
market or system. If, after the date hereof, the benchmark times
generally accepted in the securities industry for determining the market price
of a stock as of a given trading day shall change from those set forth above,
the fair market value shall be determined as of such other generally accepted
benchmark times.
4. Conversion. The
holders of the Preferred Stock shall have conversion rights as
follows:
(a) Right to
Convert. Each share of Preferred Stock shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share at the office of the Corporation or any transfer agent for the
Preferred Stock, into that number of fully-paid, nonassessable shares of Common
Stock determined by dividing the Original Issue Price for the relevant series by
the Conversion Price for such series. (The number of shares of Common
Stock into which each share of Preferred Stock of a series may be converted is
hereinafter referred to as the “Conversion Rate” for each such
series.) Upon any decrease or increase in the Conversion Price for
any series of Preferred Stock, as described in this Section 4, the Conversion Rate for such series shall be
appropriately increased or decreased.
(b) Automatic
Conversion. Each share of Preferred Stock shall automatically
be converted into fully-paid, non-assessable shares of Common Stock at the then
effective Conversion Rate for such share (i) immediately prior to the
closing of a firm commitment underwritten initial public offering pursuant to an
effective registration statement filed under the Securities Act of 1933, as
amended (the “Securities
Act”), covering the offer and sale of the Corporation’s Common Stock,
provided that the per
share price of such public offering is not less than $6.40 and the aggregate
gross proceeds to the Corporation are not less than $40 million (before
deduction of any underwriters’ commissions and expenses) (a “Qualified IPO”), or
(ii) upon the receipt by the Corporation of a written request for such
conversion from the holders of a majority of the Series D Preferred Stock and
Series E Preferred Stock then outstanding (voting together as a single class on
an as-converted basis), or, if later, the effective date for conversion
specified in such requests (each of the events referred to in (i) and (ii) are
referred to herein as an “Automatic Conversion
Event”).
(c) Mechanics of
Conversion. No fractional shares of Common Stock shall be
issued upon conversion of 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 fair market value of a
share of Common Stock as determined by the Board of Directors. For
such purpose, all shares of Preferred Stock held by each holder of Preferred
Stock shall be aggregated, and any resulting fractional share of Common Stock
shall be paid in cash. Before any holder of Preferred Stock shall be
entitled to convert the same into full shares of Common Stock, and to receive
certificates therefor, he shall either (A) surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Preferred Stock or (B) notify the Corporation or its
transfer agent that such certificates have been lost, stolen or destroyed and
execute an agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection with such certificates,
and shall give written notice to the Corporation at such office that he elects
to convert the same; provided,
however, that on the date of an Automatic Conversion Event, the
outstanding shares of Preferred Stock shall be converted automatically without
any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided
further, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such Automatic
Conversion Event unless either the certificates evidencing such shares of
Preferred Stock are delivered to the Corporation or its transfer agent as
provided above, 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. On the date
of the occurrence of an Automatic Conversion Event, each holder of record of
shares of Preferred Stock shall be deemed to be the holder of record of the
Common Stock issuable upon such conversion, notwithstanding that the
certificates representing such shares of Preferred Stock shall not have been
surrendered at the office of the Corporation, that notice from the Corporation
shall not have been received by any holder of record of shares of Preferred
Stock, or that the certificates evidencing such shares of Common Stock shall not
then be actually delivered to such holder.
The
Corporation shall, as soon as practicable after such delivery, or after such
agreement and indemnification, issue and deliver at such office to such holder
of Preferred Stock, a certificate or certificates for the number of shares of
Common Stock to which the holder shall be entitled as aforesaid and a check
payable to the holder in the amount of any cash amounts payable as the result of
a conversion into fractional shares of Common Stock, plus any declared and
unpaid dividends on the converted Preferred Stock. Such conversion
shall be deemed to have been made immediately prior to the close of business on
the date of such surrender of the shares of Preferred Stock to be converted, and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date; provided, however, that if
the conversion is in connection with an underwritten offer of securities
registered pursuant to the Securities Act or a merger, sale, financing, or
liquidation of the Corporation or other event, the conversion may, at the option
of any holder tendering Preferred Stock for conversion, be conditioned upon the
closing of such transaction or upon the occurrence of such event, in which case
the person(s) entitled to receive the Common Stock issuable upon such conversion
of the Preferred Stock shall not be deemed to have converted such Preferred
Stock until immediately prior to the closing of such transaction or the
occurrence of such event.
(d) Adjustments to Conversion
Price for Diluting Issues.
(i) Special
Definition. For purposes of this paragraph 4(d), “Additional Shares of Common”
shall mean all shares of Common Stock issued (or, pursuant to paragraph
4(d)(iii), deemed to be issued) by the Corporation after the filing of this
Amended and Restated Certificate of Incorporation, other
than issuances or deemed issuances of:
(1) an aggregate amount of up to
5,976,126 shares of Common Stock (or such greater amount as approved by the
Board of Directors and, until one year from the date hereof, the Series E
Director (as defined below)) issued or issuable to officers, directors and
employees of, or consultants to, the Corporation pursuant to stock grants,
option plans, purchase plans or other employee stock incentive programs or
arrangements approved by the Board of Directors, or upon exercise of options or
warrants granted to such parties pursuant to any such plan or
arrangement;
(2) shares of Common Stock issued
upon the exercise or conversion of Options or Convertible Securities outstanding
as of the date of the filing of this Amended and Restated Certificate of
Incorporation;
(3) shares
of Common Stock issued or issuable as a dividend or distribution on Preferred
Stock or pursuant to any event for which adjustment is made pursuant to
paragraph 4(e), 4(f) or 4(g) hereof;
(4) shares
of Common Stock issued in a registered public offering under the Securities Act
pursuant to which all outstanding shares of Preferred Stock are automatically
converted into Common Stock pursuant to an Automatic Conversion
Event;
(5) shares
of Common Stock issued or issuable pursuant to the acquisition of another
corporation by the Corporation by merger, purchase of substantially all of the
assets or other reorganization or to a joint venture agreement, provided, that such issuances
are approved by the Board of Directors;
(6) shares
of Common Stock issued or issuable to banks, equipment lessors or other
financial institutions pursuant to a debt financing or commercial leasing
transaction approved by the Board of Directors;
(7) shares
of Common Stock issued or issuable in connection with any settlement of any
action, suit, proceeding or litigation approved by the Board of
Directors;
(8) shares
of Common Stock issued or issuable in connection with sponsored research,
collaboration, technology license, development, OEM, marketing or other similar
agreements or strategic partnerships approved by the Board of Directors;
and
(9) shares
of Common Stock issued or issuable to suppliers or third party service providers
in connection with the provision of goods or services pursuant to transactions
approved by the Board of Directors.
(ii) No Adjustment of Conversion
Price. No adjustment in the Conversion Price of Series D
Preferred Stock or Series E Preferred Stock shall be made in respect of the
issuance of Additional Shares of Common unless the consideration per share (as
determined pursuant to paragraph 4(d)(v)) for an Additional Share of Common
issued or deemed to be issued by the Corporation is less than the Conversion
Price in effect on the date of, and immediately prior to such issue, for such
series of Preferred Stock.
(iii) Deemed Issue of Additional
Shares of Common. In the event the Corporation at any time or
from time to time after the date of the filing of this Amended and Restated
Certificate of Incorporation shall issue any Options 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 (as set forth in the instrument relating thereto
without regard to any provisions contained therein for a subsequent adjustment
of such number) of Common Stock issuable upon the exercise of such Options or,
in the case of Convertible Securities, the conversion or exchange of such
Convertible Securities or, in the case of Options for Convertible Securities,
the exercise of such Options and the conversion or exchange of the underlying
securities, shall be deemed to have been issued as of the time of such issue or,
in case such a record date shall have been fixed, as of the close of business on
such record date, provided that in any such
case in which shares are deemed to be issued:
(1) no
further adjustment in the Conversion Price of Series D Preferred Stock or Series
E Preferred Stock shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock in connection with the exercise of such
Options or conversion or exchange of such Convertible Securities;
(2) if
such Options or Convertible Securities by their terms provide, with the passage
of time or otherwise, for any change in the consideration payable to the
Corporation or in the number of shares of Common Stock issuable upon the
exercise, conversion or exchange thereof (other than a change pursuant to the
anti-dilution provisions of such Options or Convertible Securities such as this
Section 4(d) or pursuant to Recapitalization provisions of such Options or
Convertible Securities such as Sections 49e), 4(f) and 4(g) hereof), the
respective Conversion Prices of the Series D Preferred Stock and Series E
Preferred Stock and any subsequent adjustments based thereon shall be recomputed
to reflect such change as if such change had been in effect as of the original
issue thereof (or upon the occurrence of the record date with respect
thereto);
(3) no
readjustment pursuant to clause (2) above shall have the effect of increasing
the Conversion Price of the Series D Preferred Stock or of the Series E
Preferred Stock to an amount above the Conversion Price for such series of
Preferred Stock that would have resulted from any other issuances of Additional
Shares of Common and any other adjustments provided for herein between the
original adjustment date and such readjustment date;
(4) upon
the expiration of any such Options or any rights of conversion or exchange under
such Convertible Securities which shall not have been exercised, the respective
Conversion Prices of the Series D Preferred Stock and Series E Preferred Stock
computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto) and any subsequent adjustments based thereon shall,
upon such expiration, be recomputed as if:
(a) in
the case of Convertible Securities or Options for Common Stock, the only
Additional Shares of Common issued were the shares of Common Stock, if any,
actually issued upon the exercise of such Options or the conversion or exchange
of such Convertible Securities and the consideration received therefor was the
consideration actually received by the Corporation for the issue of such
exercised Options plus the consideration actually received by the Corporation
upon such exercise or for the issue of all such Convertible Securities which
were actually converted or exchanged, plus the additional consideration, if any,
actually received by the Corporation upon such conversion or exchange,
and
(b) in
the case of Options for Convertible Securities, only the Convertible Securities,
if any, actually issued upon the exercise thereof were issued at the time of
issue of such Options, and the consideration received by the Corporation for the
Additional Shares of Common deemed to have been then issued was the
consideration actually received by the Corporation for the issue of such
exercised Options, plus the consideration deemed to have been received by the
Corporation (determined pursuant to Section 4(d)(v)) upon the issue of the
Convertible Securities with respect to which such Options were actually
exercised; and
(5) if
such record date shall have been fixed and such Options or Convertible
Securities are not issued on the date fixed therefor, the adjustment previously
made in the Conversion Price which became effective on such record date shall be
canceled as of the close of business on such record date, and thereafter the
Conversion Price shall be adjusted pursuant to this paragraph 4(d)(iii) as
of the actual date of their issuance.
(iv)
Adjustment of
Conversion Price Upon Issuance of Additional Shares of
Common. In the event this Corporation shall issue Additional
Shares of Common (including Additional Shares of Common deemed to be issued
pursuant to paragraph 4(d)(iii)) without consideration or for a
consideration per share less than the applicable Conversion Price of the Series
D Preferred Stock in effect on the date of and immediately prior to such issue,
then, the Conversion Price of the Series D Preferred Stock shall be reduced,
concurrently with such issue, to a price (calculated to the nearest cent)
determined by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of shares which the aggregate consideration
received by the Corporation for the total number of Additional Shares of Common
so issued would purchase at such Conversion Price, and 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 so
issued. In the event this Corporation shall issue Additional Shares
of Common (including Additional Shares of Common deemed to be issued pursuant to
paragraph 4(d)(iii)) without consideration or for a consideration per share
less than the applicable Conversion Price of the Series E Preferred Stock in
effect on the date of and immediately prior to such issue, then, the Conversion
Price of the Series E Preferred Stock shall be reduced, concurrently with such
issue, to a price (calculated to the nearest cent) determined by multiplying
such Conversion Price by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such issue plus the
number of shares which the aggregate consideration received by the Corporation
for the total number of Additional Shares of Common so issued would purchase at
such Conversion Price, and 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 so issued. Notwithstanding
the foregoing, a Conversion Price shall not be reduced at such time if the
amount of such reduction would be less than $0.01, but any such amount shall be
carried forward, and a reduction will be made with respect to such amount at the
time of, and together with, any subsequent reduction which, together with such
amount and any other amounts so carried forward, equal $0.01 or more in the
aggregate. For the purposes of this subsection 4(d)(iv), all shares of Common
Stock issuable upon conversion of all outstanding shares of Preferred Stock and
the exercise and/or conversion of any other outstanding Convertible Securities
and all outstanding Options shall be deemed to be outstanding.
(v) Determination of
Consideration. For purposes of this subsection 4(d), the
consideration received by the Corporation for the issue (or deemed issue) of any
Additional Shares of Common shall be computed as follows:
(1) Cash and
Property. Such consideration shall:
(a) insofar
as it consists of cash, be computed at the aggregate amount of cash received by
the Corporation before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by the Corporation for any underwriting or
otherwise in connection with such issuance;
(b) 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
(c) in
the event Additional Shares of Common 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 (a) and (b) above, as reasonably determined in good faith by the
Board of Directors.
(2) Options and Convertible
Securities. The consideration per share received by the
Corporation for Additional Shares of Common deemed to have been issued pursuant
to paragraph 4(d)(iii) 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 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.
(e) Adjustments for Subdivisions
or Combinations of Common Stock. In the event the outstanding
shares of Common Stock shall be subdivided (by stock split, by payment of a
stock dividend or otherwise), into a greater number of shares of Common Stock,
the Conversion Price of each series of Preferred Stock in effect immediately
prior to such subdivision shall, concurrently with the effectiveness of such
subdivision, be proportionately decreased. In the event the
outstanding shares of Common Stock shall be combined (by reclassification or
otherwise) into a lesser number of shares of Common Stock, the Conversion Prices
in effect immediately prior to such combination shall, concurrently with the
effectiveness of such combination, be proportionately increased.
(f) Adjustments for Subdivisions
or Combinations of Preferred Stock. In the event the
outstanding shares of Preferred Stock or a series of Preferred Stock shall be
subdivided (by stock split, by payment of a stock dividend or otherwise), into a
greater number of shares of Preferred Stock, Original Issue Price and
Liquidation Preference of the affected series of Preferred Stock in effect
immediately prior to such subdivision shall, concurrently with the effectiveness
of such subdivision, be proportionately decreased. In the event the
outstanding shares of Preferred Stock or a series of Preferred Stock shall be
combined (by reclassification or otherwise) into a lesser number of shares of
Preferred Stock, Original Issue Price and Liquidation Preference of the affected
series of Preferred Stock in effect immediately prior to such combination shall,
concurrently with the effectiveness of such combination, be proportionately
increased.
(g) Adjustments for
Reclassification, Exchange and Substitution. Subject to
Section 3 above (“Liquidation Rights”), if the
Common Stock issuable upon conversion of the Preferred Stock shall be changed
into the same or a different number of shares of any other class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares provided for above), then, in any
such event, in lieu of the number of shares of Common Stock which the holders
would otherwise have been entitled to receive each holder of such Preferred
Stock shall have the right thereafter to convert such shares of Preferred Stock
into a number of shares of such other class or classes of stock which a holder
of the number of shares of Common Stock deliverable upon conversion of such
series of Preferred Stock immediately before that change would have been
entitled to receive in such reorganization or reclassification, all subject to
further adjustment as provided herein with respect to such other
shares.
(h) Certificate as to
Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section 4, the
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of
any holder of Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (i) such adjustments and readjustments,
(ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other property which at the
time would be received upon the conversion of Preferred Stock.
(i) Waiver of Adjustment of
Conversion Price. Notwithstanding anything herein to the
contrary, any downward adjustment of the Conversion Price of any series of
Preferred Stock may be waived by the consent or vote of the holders of the
majority of the outstanding shares of such series either before or after the
issuance causing the adjustment. Any such waiver shall bind all
future holders of shares of such series of Preferred Stock.
(j) Notices of Record
Date. In the event that this Corporation shall propose at any
time:
(i) to
declare any Distribution upon its Common Stock, whether in cash, property, stock
or other securities, whether or not a regular cash dividend and whether or not
out of earnings or earned surplus;
(ii) to
effect any reclassification or recapitalization of its Common Stock outstanding
involving a change in the Common Stock; or
(iii) to
voluntarily liquidate or dissolve or to enter into any transaction deemed to be
a liquidation, dissolution or winding up of the corporation pursuant to
Section 3(g);
then, in
connection with each such event, this Corporation shall send to the holders of
the Preferred Stock at least 10 days’ prior written notice of the date on which
a record shall be taken for such Distribution (and specifying the date on which
the holders of Common Stock shall be entitled thereto and, if applicable, the
amount and character of such Distribution) or for determining rights to vote in
respect of the matters referred to in (ii) and (iii) above.
Such
written notice shall be given by first class mail (or express courier), postage
prepaid, addressed to the holders of Preferred Stock at the address for each
such holder as shown on the books of the Corporation and shall be deemed given
on the date such notice is mailed.
The
notice provisions set forth in this section may be shortened or waived
prospectively or retrospectively by the consent or vote of the holders of a
majority of the Preferred Stock, voting as a single class and on an as-converted
basis.
(k) Reservation of Stock
Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock solely for the purpose of effecting the conversion of the shares of the
Preferred Stock, such number of its shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all then outstanding shares of
the Preferred Stock; and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of all
then outstanding shares of the Preferred Stock, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.
5. Voting.
(a) Restricted Class
Voting. Except as otherwise expressly provided herein or as
required by law, the holders of Preferred Stock and the holders of Common Stock
shall vote together and not as separate classes.
(b) No Series
Voting. Other than as provided herein or required by law,
there shall be no series voting.
(c) Preferred
Stock. Each holder of Preferred Stock shall be entitled to the
number of votes equal to the number of shares of Common Stock into which the
shares of Preferred Stock held by such holder could be converted as of the
record date. The holders of shares of the Preferred Stock shall be
entitled to vote on all matters on which the Common Stock shall be entitled to
vote. Holders of Preferred Stock shall be entitled to notice of any
stockholders’ meeting in accordance with the Bylaws of the
Corporation. Fractional votes shall not, however, be permitted and
any fractional voting rights resulting from the above formula (after aggregating
all shares into which shares of Preferred Stock held by each holder could be
converted), shall be disregarded.
(d) Election of
Directors. The authorized number of the Corporation’s Board of
Directors shall set at seven (7). The holders of the Series E
Preferred Stock, voting as a separate class, shall be entitled to elect one
member of the Corporation’s Board of Directors (the “Series E Director”) at each
meeting or pursuant to each consent of the Corporation’s stockholders for the
election of directors. The holders of Series D Preferred Stock,
voting as a separate class, shall be entitled to elect two members of the
Corporation’s Board of Directors (the “Series D Directors,” and
together with the Series E Director, the “Preferred Directors”) at each
meeting or pursuant to each consent of the Corporation’s stockholders for the
election of directors. The holders of the Series A Preferred Stock, Series B
Preferred Stock and Series C Preferred Stock, voting together as a single class
on an as-converted basis, shall be entitled to elect one member of the
Corporation’s Board of Directors at each meeting or pursuant to each consent for
the Corporation’s stockholders for the election of Directors. The
holders of Common Stock, voting as a separate class, shall be entitled to elect
one member of the Corporation’s Board of Directors at each meeting or pursuant
to each consent of the Corporation’s stockholders for the election of directors.
Any additional members of the Corporation’s Board of Directors shall be elected
by the mutual agreement of (i) the holders of a majority of the Common Stock and
(ii) the holders of a majority of the Preferred Stock, each voting as a separate
class. If a vacancy on the Board of Directors is to be filled by the
Board of Directors, only directors elected by the same class or classes of
stockholders as those who would be entitled to vote to fill such vacancy shall
vote to fill such vacancy.
(e) Adjustment in Authorized
Common Stock. The number of authorized shares of Common Stock
may be increased or decreased (but not below the number of shares of Common
Stock then outstanding) by an affirmative vote of the holders of shares of stock
of the Corporation representing a majority of the votes represented by all
outstanding shares of stock of the Corporation entitled to vote, irrespective of
the provisions of Section 242(b)(2) of the Delaware General Corporation
Law.
(f) Common
Stock. Each holder of shares of Common Stock shall be entitled
to one vote for each share thereof held.
6. Redemption of Series D
Preferred Stock and Series E Preferred Stock.
(a) Subject
to Section 6(c), at any time after May 10, 2014, (i) at the election of the
holders of at least a majority of the then outstanding shares of Series D
Preferred Stock, voting together as a single class on an as-converted basis, the
Corporation shall redeem, out of funds legally available therefor, all (but not
less than all) outstanding shares of Series D Preferred Stock which have
not been converted into Common Stock pursuant to Section 4 hereof on a date
determined by the Corporation, which shall no later than forty five (45) days
from the date the Corporation receives such election (the “Series D Redemption Date”) and (ii) at
the election of the holders of at least a majority of the then outstanding
shares of Series E Preferred Stock, voting together as a single class on an
as-converted basis, the Corporation shall redeem, out of funds legally available
therefor, all (but not less than all) outstanding shares of Series E
Preferred Stock which have not been converted into Common Stock pursuant to
Section 4 hereof, which shall no later than forty five (45) days from the
date the Corporation receives such election (the “Series E Redemption
Date”).
(b) The
Corporation shall redeem the shares of Series D Preferred Stock and/or
Series E Preferred Stock by paying in cash an amount per share equal to, as
applicable, (i) for each share of Series D Preferred Stock, the greater of (A)
the then fair market value of the Series D Preferred Stock as reasonably
determined in good faith by the Board of Directors and (B) the Original Issue
Price for such Series D Preferred Stock, plus an amount equal to all
declared and unpaid dividends thereon, whether or not earned (the “Series D Redemption Price”)
and (ii) for each share of Series E Preferred Stock, the greater of (A) the then
fair market value of the Series E Preferred Stock as reasonably determined in
good faith by the Board of Directors and (B) the Original Issue Price for such
Series E Preferred Stock, plus an amount equal to all declared and unpaid
dividends thereon, whether or not earned (the “Series E Redemption
Price”). If the funds legally available for redemption of the
Series D Preferred Stock shall be insufficient to permit the payment to
such holders of the full respective Series D Redemption Prices, the Corporation
shall effect such redemption pro rata among the holders of
the Series D Preferred Stock so that each holder of Series D Preferred
Stock shall receive a redemption payment equal to a fraction of the aggregate
amount available for redemption, the numerator of which is the number of shares
of Series D Preferred Stock held by such holder multiplied by the Series D
Redemption Price of each share of Series D Preferred Stock held by such
holder, and the denominator of which is the number of shares of Series D
Preferred Stock outstanding multiplied by the Series D Redemption Price of each
such outstanding share of Series D Preferred Stock. If the funds
legally available for redemption of the Series E Preferred Stock shall be
insufficient to permit the payment to such holders of the full respective Series
E Redemption Prices, the Corporation shall effect such redemption pro rata among the holders of
the Series E Preferred Stock so that each holder of Series E Preferred Stock
shall receive a redemption payment equal to a fraction of the aggregate amount
available for redemption, the numerator of which is the number of shares of
Series E Preferred Stock held by such holder multiplied by the Series E
Redemption Price of each share of Series E Preferred Stock held by such holder,
and the denominator of which is the number of shares of Series E Preferred Stock
outstanding multiplied by the Series E Redemption Price of each such outstanding
share of Series E Preferred Stock. If the Series D Preferred Stock
and Series E Preferred Stock are being redeemed on the same day and the funds
legally available for redemption of the Series D Preferred Stock and Series
E Preferred Stock shall be insufficient to permit the payment to such holders of
the full respective Series D Redemption Prices and Series E Redemption Prices,
the Corporation shall effect such redemption pro rata among the holders of
the Series D Preferred Stock and Series E Preferred Stock so that each
holder of Series D Preferred Stock and Series E Preferred Stock shall
receive a redemption payment equal to a fraction of the aggregate amount
available for redemption, the numerator of which is (i) the number of shares of
Series D Preferred Stock held by such holder multiplied by the Series D
Redemption Price of each share of Series D Preferred Stock plus (ii) the
number of shares of Series E Preferred Stock held by such holder multiplied
by the Series E Redemption Price of each share of Series E Preferred held
by such holder, and the denominator of which is the sum of (i) number of shares
of Series D Preferred Stock outstanding multiplied by the Series D
Redemption Price of each such outstanding share of Series D Preferred Stock
plus (ii) number of shares of Series E Preferred Stock outstanding
multiplied by the Series E Redemption Price of each such outstanding share of
Series E Preferred Stock.
(c) At
least twenty (20), but no more than thirty five (35), days prior to the Series D
Redemption Date or Series E Redemption Date, written notice shall be mailed,
first class postage prepaid, to each holder of record (at the close of business
on the business day next preceding the day on which notice is given) of the
Series D Preferred Stock and Series E Preferred Stock, at the address last shown
on the records of the Corporation for such holder, notifying such holder of the
redemption to be effected, specifying the number of shares to be redeemed from
such holder, the applicable Series D Redemption Date and/or Series E Redemption
Date, the Series D Redemption Price and/or Series E Redemption Price, the place
at which payment may be obtained and calling upon such holder to surrender to
the Corporation, in the manner and at the place designated, the holder’s
certificate or certificates representing the shares to be redeemed (the “Redemption
Notice”). If at the time of the Redemption Notice the holders
of at least a majority of the then outstanding shares of Series D Preferred
Stock or the holders of at least a majority of the then outstanding shares of
Series E Preferred Stock have not elected to redeem such holders’ Series D
Preferred Stock or Series E Preferred Stock, respectively, then, with in fifteen
(15) days following the delivery of the Redemption Notice, such holders of at
least a majority of the then outstanding shares of Series D Preferred Stock or
Series E Preferred Stock, as applicable, may elect to redeem the Series D
Preferred Stock or Series E Preferred Stock, as applicable, pursuant to Section
6(a) (a “Follow-on
Election”), and (i) in the case of the holders of at least a majority of
the Series D Preferred Stock making a Follow-on Election, the Series D
Redemption Date shall be the Series E Redemption Date, or (ii) in the case of
the holders of at least a majority of the Series E Preferred Stock making a
Follow-on Election, the Series E Redemption Date shall be the Series D
Redemption Date, such that both classes of Preferred Stock shall be redeemed
pursuant to Section 6 at the same time by the Corporation, and the Corporation
shall send a Redemption Notice to all of the holders of the class of Preferred
Stock making a Follow-on Election within three (3) days following the Follow-on
Election. Except as provided herein, on or after the Series D
Redemption Date or Series E Redemption Date each holder of Series D Preferred
Stock or Series E Preferred Stock to be redeemed shall surrender to this
Corporation the certificate or certificates representing such shares, in the
manner and at the place designated in the Redemption Notice, and thereupon the
Series D Redemption Price or Series E 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
cancelled. In the event 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 Series D Redemption Date or Series E Redemption Date, unless there
shall have been a default in payment of the applicable Series D Redemption Price
or Series E Redemption Price, as applicable,, all rights of the holders of
shares of Series D Preferred Stock or Series E Preferred Stock designated for
redemption in the Redemption Notice as holders of Series D Preferred Stock or
Series E Preferred Stock (except the right to receive the Series D Redemption
Price or Series E Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to the shares designated
for redemption on such date, and such shares shall not thereafter be transferred
on the books of the Corporation or be deemed to be outstanding for any purpose
whatsoever The shares of Preferred Stock which are not redeemed shall
remain outstanding and entitled to all the rights and preferences provided
herein. At any time thereafter when additional funds of the
Corporation are legally available for the redemption of shares of Preferred
Stock, such funds will immediately be used to redeem the balance of the shares
which the Corporation has become obliged to redeem on any Series D Redemption
Date or Series E Redemption Date, but which it has not redeemed.
(e) On
or prior to the Redemption Date and/or Series E Redemption Date, the Corporation
may deposit the Redemption Price and/or Series E Redemption Price of all shares
of Series D Preferred Stock and/or Series E Preferred Stock designated for
redemption in the Redemption Notice and not yet redeemed with a bank or trust
corporation having aggregate capital and surplus in excess of $100,000,000, as a
trust fund for the benefit of the respective holders of the shares designated
for redemption and not yet redeemed, with irrevocable instructions and authority
to the bank or trust corporation to pay the Series D Redemption Price and/or
Series E Redemption Price for such shares to their respective holders on the
Series D Redemption Date and/or Series E Redemption Date upon receipt of
notification from the Corporation that such holder has surrendered a share
certificate to the Corporation pursuant to Section 6(c)
above. As of the Series D Redemption Date and/or Series E Redemption
Date, the deposit shall constitute full payment of the shares to their holders,
and from and after the Series D Redemption Date and/or Series E Redemption Date
the shares so called for redemption shall be redeemed and shall be deemed to be
no longer outstanding, and the holders thereof shall cease to be stockholders
with respect to such shares and shall have no rights with respect thereto except
the right to receive from the bank or trust corporation payment of the Series D
Redemption Price and/or Series E Redemption Price of the shares, without
interest, upon surrender of their certificates therefor. Such
instructions shall also provide that any moneys deposited by the Corporation
pursuant to this Section 6(e) for the redemption of shares of Series D
Preferred Stock and/or Series E Preferred Stock, thereafter converted into
shares of the Corporation’s Common Stock pursuant to Section 4 hereof prior
to the Series D Redemption Date and/or Series E Redemption Date shall be
returned to the Corporation forthwith upon such conversion.
7. Amendments and
Changes.
(a) As
long as more than 4,000,000 shares of the Series D Preferred Stock and/or Series
E Preferred Stock are issued and outstanding (in each case as adjusted for stock
splits, stock dividends, reclassification and the like), the Corporation shall
not (by amendment, consolidation, merger or otherwise), without first obtaining
the approval (by vote or written consent as provided by law) of the holders of
more than 50% of the outstanding shares of the Series D Preferred Stock and
Series E Preferred Stock, voting together as a single class on an as-converted
basis:
(i) take
any action that amends, alters or changes the rights, preferences, privileges or
powers of, or restrictions provided for the benefit of any of the holders of the
Series D Preferred Stock or Series E Preferred Stock;
(ii) increase
or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Common Stock or Preferred Stock or any
series thereof;
(iii) enter
into any transaction or series of related transactions deemed to be a
liquidation, dissolution or winding up of the Corporation pursuant to
Section 3(g) above;
(iv) authorize
a merger, acquisition or sale of substantially all of the assets of the
Corporation or any of its subsidiaries (other than a merger exclusively to
effect a change of domicile of the Corporation);
(v) voluntarily
liquidate or dissolve;
(vi) increase
or decrease the size of the Board of Directors;
(vii) within
a 12-month period, acquire assets through a merger or purchase of all or
substantially all of the assets or capital stock of one or more entities for
aggregate consideration in excess of $3.0 million;
(viii) declare
or pay any Distribution with respect to the Preferred Stock (other than as set
forth in Section 6 hereof) or Common Stock of the Corporation;
(ix) increase
the number of shares authorized for issuance under any existing stock or option
plan or create any new stock or option plan;
(x) amend
this Section 7.
(b) As
long as any shares of the Series D Preferred Stock are issued and outstanding
(as adjusted for stock splits, stock dividends, reclassification and the like),
the Corporation shall not (by amendment, consolidation, merger or otherwise),
without first obtaining the approval (by vote or written consent as provided by
law) of the holders of more than 50% of the outstanding shares of the Series D
Preferred Stock:
(i) take
any action that amends, alters or changes the rights, preferences, privileges or
powers of, or restrictions provided for the benefit of the holders of the Series
D Preferred Stock in a manner that that does not similarly affect the holders of
the Series E Preferred Stock;
(ii) increase
or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series D Preferred Stock.
(c) As
long as any shares of the Series E Preferred Stock are issued and outstanding
(as adjusted for stock splits, stock dividends, reclassification and the like),
the Corporation shall not (by amendment, consolidation, merger or otherwise),
without first obtaining the approval (by vote or written consent as provided by
law) of the holders of more than 50% of the outstanding shares of the Series E
Preferred Stock:
(i) take
any action that amends, alters or changes the rights, preferences, privileges or
powers of, or restrictions provided for the benefit of the holders of the Series
E Preferred Stock in a manner that that does not similarly affect the holders of
the Series D Preferred Stock;
(ii) increase
or decrease (other than for decreases resulting from conversion of the Preferred
Stock) the authorized number of shares of Series E Preferred Stock.
8. Reissuance of Preferred
Stock. In the event that any shares of Preferred Stock shall
be converted pursuant to Section 4, redeemed pursuant to Section 6 or
otherwise repurchased by the Corporation, the shares so converted, redeemed or
repurchased shall be cancelled and shall not be issuable by this
Corporation.
9. Notices. Any
notice required by the provisions of this ARTICLE V to be given to the holders
of Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at such holder’s address
appearing on the books of the Corporation.
ARTICLE
VI
The
Corporation is to have perpetual existence.
ARTICLE
VII
Elections
of directors need not be by written ballot unless the Bylaws of the Corporation
shall so provide.
ARTICLE
VIII
Unless
otherwise set forth herein, the number of directors which constitute the Board
of Directors of the Corporation shall be designated in the Bylaws of the
Corporation.
ARTICLE
IX
In
furtherance and not in limitation of the powers conferred by statute, the Board
of Directors of the Corporation is expressly authorized to adopt, amend or
repeal the Bylaws of the Corporation.
ARTICLE
X
1. To
the fullest extent permitted by the Delaware General Corporation Law as the same
exists or as may hereafter be amended, a director of the Corporation shall not
be personally liable to the Corporation or its stockholders for monetary damages
for a breach of fiduciary duty as a director. If the Delaware General
Corporation Law is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
2. The
Corporation shall have the power to indemnify, to the extent permitted by the
Delaware General Corporation Law, as it presently exists or may hereafter be
amended from time to time, any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the
fact that he or she is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, against expenses (including attorneys’ fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by such person
in connection with any such Proceeding.
3. Neither
any amendment nor repeal of this ARTICLE X, nor the adoption of any provision of
this Corporation’s Certificate of Incorporation inconsistent with this ARTICLE
X, shall eliminate or reduce the effect of this ARTICLE X, in respect of any
matter occurring, or any action or proceeding accruing or arising or that, but
for this ARTICLE X, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
ARTICLE
XI
Meetings
of stockholders may be held within or without the State of Delaware, as the
Bylaws may provide. The books of the Corporation may be kept (subject
to any provision contained in the statutes) outside of the State of Delaware at
such place or places as may be designated from time to time by the Board of
Directors or in the Bylaws of the Corporation.
ARTICLE
XII
In the
event that any member of the Corporation’s Board of Directors who is not an
employee of the Corporation, including any member of the Board of Directors who
is also a partner or employee of an entity that is a holder of Preferred Stock
(or Common Stock issued upon conversion thereof) and that is in the business of
investing and reinvesting in other entities, or an employee of an entity that
manages such an entity (each, a “Fund”), acquires knowledge of
a potential transaction or other matter other than directly in connection with
such individual’s service as a member of the Board of Directors (including, if
applicable, in such individual’s capacity as a partner or employee of the Fund
or the manager or general partner of a Fund) that may be an opportunity of
interest for both the Corporation and such individual or Fund (a “Corporate Opportunity”), then,
provided, that such director has acted in good faith, the Corporation: (i)
renounces any interest or expectancy that such director or Fund offer an
opportunity to participate in such Corporate Opportunity to the Corporation, and
(ii) to the fullest extent permitted by law, waives any claim that such
opportunity constituted a Corporate Opportunity that should have been presented
by such director or Fund to the Corporation or any of its
affiliates.
