EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
PROGRESSIVE SOFTWARE HOLDING, INC.
ARTICLE I
NAME
----
The name of the corporation is Progressive Software Holding, Inc.
(hereinafter called the "Corporation").
ARTICLE II
REGISTERED OFFICE
The address of the registered office of the Corporation in the State of
Delaware is 1209 Orange Street, City of Wilmington, County of New Castle. The
name of its registered agent at that address is The Corporation Trust Company.
ARTICLE III
PURPOSES
The purpose of the Corporation is to engage in any lawful act or activity
for which a corporation may be organized under the General Corporation Law of
the State of Delaware as set forth in Title 8 of the Delaware Code (the "GCL").
ARTICLE IV
CAPITAL SECURITIES
The Corporation shall have authority to issue a total of Six Million
(6,000,000) shares of capital stock, each having a par value of $.01 per share,
designated as follows: (i) Four Million Two Hundred Thousand (4,200,000) shares
are designated as Series A Common Stock (the "Series A Common Stock"); (ii)
Eight Hundred Thousand (800,000) shares are designated as Series B Common Stock
(the "Series B Common Stock" and, together with the Series A Common Stock,
collectively, the "Common Stock"); and (iii) One Million (1,000,000) shares
designated as Preferred Stock (the "Preferred Stock"). Subject to the terms
hereof, the Corporation is authorized to issue from time to time all or any
portion of the capital stock of the Corporation that is authorized but not
issued to such person or persons and for such lawful consideration as it may
deem appropriate.
Any and all such shares issued for which the full consideration has been
paid or delivered shall be deemed fully paid shares of capital stock, and the
holder of such shares shall not be liable for any further call or assessment or
any other payment thereon.
The voting powers, designations, preferences, privileges and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions of each class of capital stock of the Corporation
shall be as hereafter provided in this Article IV.
To the extent prohibited by Section 1123 of Title 11 of the United States
Code (the "Bankruptcy Code"), the Corporation will not issue non-voting equity
securities; provided, however, that the foregoing (i) will have no further force
and effect beyond that required under Section 1123 of the Bankruptcy Code, (ii)
will have such force and effect, if any, only for so long as such Section 1123
is in effect and applicable to the Corporation, and (iii) may be amended or
eliminated in accordance with applicable law as from time to time in effect.
A. COMMON STOCK
1. General.
(a) Definitions. The following terms are used herein with the meanings
indicated:
(i) "Credit Party" has the meaning set forth in the Credit
Agreement (the "Credit Agreement"), dated as of the Effective Date,
among the Corporation, ARK CLO 2000-1, Limited ("ARK") and the lenders
party thereto.
(ii) The "Effective Date" means the "Effective Date" set forth in
the First Amended Plan of Reorganization for Tridex Corporation and
Progressive Software, Inc., filed in the United States Bankruptcy
Court, District of Connecticut, Bridgeport Division in the case of
Tridex Corporation and Progressive Software, Inc. (Case Nos. 02-50156
and 02-50157).
(iii) A "Liquidation Event" means any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation. In no
event shall a reorganization, consolidation or merger of the
Corporation with or into one or more other entities, or a sale, lease,
exchange or other disposition of all or substantially all of the
assets of the Corporation, constitute a Liquidation Event within the
meaning of this Certificate of Incorporation.
(iv) "Obligations" has the meaning set forth in the Credit
Agreement.
(v) A "Triggering Event" means that (A) the aggregate principal
amount of Term Loans (as defined in the Credit Agreement) outstanding
under the Credit Agreement, is equal to or greater than $4,000,000,
(B) a Triggering Event of Default (as defined herein) shall have
occurred and be continuing, and (C) ARK shall have delivered a written
notice to the Corporation stating that the events stated in clauses
(A) and (B) above have occurred; provided, however, that no Triggering
Event may occur from and after the date on which the aggregate
outstanding principal amount of the Term Loans is less than
$4,000,000. The date on which the Corporation receives the written
notice referred to in clause (C) above is referred to herein as the
"Triggering Date".
(vi) A "Triggering Event of Default" means that any one or more
of the following events shall have occurred and be continuing:
(a) an Event of Default shall have occurred and be
continuing under Sections 8.1(a), 8.1(e)(i), 8.1(f), 8.1(g),
8.1(h) or 8.1(i) of the Credit Agreement;
(b) failure of any Credit Party to perform or comply with
any term or condition contained in Sections 2.2, 6.3, 6.4, 6.5,
6.6 or 6.10 of the Credit Agreement;
(c) failure of any Credit Party to prepay fully and
completely all Obligations immediately upon a failure of any
Credit Party to perform or comply with any term or condition
contained in Section 6.7 of the Credit Agreement;
(d) (i) (A) failure of any Credit Party to perform or comply
with any term or condition contained in Sections 5.2, 6.9, 6.11
or 6.12 of the Credit Agreement or (B) an Event of Default shall
have occurred and be continuing under Sections 8.1(d) or 8.1(k)
of the Credit Agreement, (ii) such default or event has a
Material Adverse Effect (as defined in the Credit Agreement) and
(iii) such default or event shall not have been remedied or
waived within 30 days after the earlier of (A) an officer of such
Credit Party becoming aware of such default or (B) receipt by
Borrowers (as defined in the Credit Agreement) of notice from
Agent (as defined in the Credit Agreement) or any Lender (as
defined in the Credit Agreement) of such default or event;
(e) (i) (A) an Event of Default shall have occurred and be
continuing under Section 8.1(c) of the Credit Agreement or (B) an
Event of Default shall have occurred and be continuing under
Section 8.1(e)(ii), which, in each case, shall have resulted in
another party declaring any Indebtedness due and payable prior to
its stated maturity and (ii) such Event of Default shall have
resulted in the Agent (as defined in the Credit Agreement) or any
Lender (as defined in the Credit Agreement) actually declaring
the Obligations due and payable prior to its stated maturity;
(f) any Credit Party shall have entered into any binding
agreement that upon consummation thereof is reasonably likely to
result in a "Change of Control" (as defined in the Credit
Agreement) and such agreement does not provide that, on or before
consummation of the transactions constituting such "Change of
Control", the Obligations shall be fully and completely prepaid;
(g) failure of any Credit Party to perform or comply with
any term or condition contained in Section 6.1 of the Credit
Agreement; provided, however, that such a default shall not be a
"Triggering Event of Default" if (i) such Indebtedness (as
defined in the Credit Agreement) is used immediately to prepay
fully and completely all Obligations or (ii) such Indebtedness
(as defined in the Credit Agreement) is expressly subordinated to
the Obligations;
(h) failure of any Credit Party to perform or comply with
any term or condition contained in Section 6.2 of the Credit
Agreement; provided, however, that such a default shall not be a
"Triggering Event of Default" if such Lien (as defined in the
Credit Agreement) is expressly junior to any and all Liens (as
defined in the Credit Agreement) in favor of Agent (as defined in
the Credit Agreement) for the benefit of Lenders (as defined in
the Credit Agreement) granted pursuant to any Credit Document;
and
(i) failure of any Credit Party to perform or comply with
any term or condition contained in Section 6.8 of the Credit
Agreement; provided, however, that such a default shall not be a
"Triggering Event of Default" if the proceeds from any such sale
is used immediately to prepay fully and completely all
Obligations.
(b) Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board
of Directors, and shall be payable as provided in Section A3 of this
Article IV.
(c) Liquidation. Upon the occurrence of a Liquidation Event, holders
of Common Stock will be entitled to receive all assets of the Corporation
available for distribution to its stockholders (which shall be shared
between the holders of the Series A Common Stock and the Series B Common
Stock as provided in Section A3 of this Article IV), subject to the rights
and preferences of any then outstanding shares of any other class of the
Corporation's capital stock that may hereafter be authorized and issued
having preferred rights upon the occurrence of a Liquidation Event senior
to the rights of holders of Common Stock.
(d) Valuation of Assets upon Liquidation. The value of any property
delivered to the holders of Common Stock pursuant to Section A1(c) above
shall be valued upon a Liquidation Event as follows:
(i) with respect to cash, such value shall be the aggregate
amount of cash received by the holders of the Common Stock, including
amounts paid or payable for accrued interest or accrued dividends;
(ii) with respect to securities which are publicly traded and
which are not subject to restrictions on sale as a result of the
circumstances under which the Corporation acquired them or as a result
of the relationship of the issuer thereof to the Corporation or any
affiliate thereof, such value shall be the last sale price on the
principal national securities exchange on which they are traded on the
business day immediately prior to the date of determination, or if no
sales occurred on such day, the highest final "bid" price on such day;
and
(iii) with respect to all other securities, property and assets,
the value determined by mutual agreement of the Corporation's board of
directors and the holders of a majority of the outstanding shares of
Common Stock, or from and after the Triggering Date, the holders of a
majority of the outstanding shares of Series B Common Stock.
(e) Voting. The holders of the Series A Common Stock and the holders
of the Series B Common Stock shall vote together as a single class on all
matters with respect to which holders of Common Stock shall have the right
to vote.
2. Classes of Common Stock. The rights and privileges of the holders of the
Series A Common Stock, including, without limitation, voting, dividend and
liquidation rights, are subject to and qualified by the rights and privileges of
the holders of Series B Common Stock as specified herein. Subject to the
provisions of Section A3 below, unless and until a Triggering Event shall occur,
(a) each share of Series A Common Stock and Series B Common Stock shall be
identical to, and shall entitle the holder to the same rights and privileges as,
all other shares of Series A Common Stock and Series B Common Stock with respect
to voting, dividends, distributions, rights in liquidation and in all other
respects; provided, that any Common Stock dividend shall be payable in shares of
the series with respect to which it is paid, and (b) each holder of shares of
Series A Common Stock and Series B Common Stock is entitled to one vote for each
share thereof held by such holder at all meetings of stockholders (and written
actions in lieu of meetings). There shall be no cumulative voting.
3. Special Rights of the Series B Common Stock.
(a) Dividends and Distributions. Effective on and after the Triggering
Date automatically, and without any action on the part of the Corporation,
the holders of the Series B Common Stock or any other person or entity and
regardless of the number of shares of Series B Common Stock which are then
outstanding: (i) the holders of all of the outstanding shares of Series A
Common Stock shall be entitled to receive, in proportion to their holdings
of Series A Common Stock, an aggregate amount equal to 67% of the total
amount of dividends and distributions which the holders of all series of
Common Stock, together as a single class, shall be entitled to receive, and
(ii) the holders of all of the outstanding shares of Series B Common Stock
shall be entitled to receive, in proportion to their holdings of Series B
Common Stock, an aggregate amount equal to 33% of the total amount of
dividends and distributions which the holders of all series of Common
Stock, together as a single class, are entitled to receive.
(b) Liquidation. Effective on and after the Triggering Date, if there
shall be a Liquidation Event, automatically, and without any action on the
part of the Corporation, the holders of the Series B Common Stock or any
other person or entity and regardless of the number of shares of Series B
Common Stock which are then outstanding: (i) the holders of all of the
outstanding shares of Series A Common Stock shall be entitled to receive,
in proportion to their holdings of Series A Common Stock, an aggregate
amount equal to 67% of the value of the assets of the Corporation available
for distribution to the holders of the Common Stock in accordance with
Section A(1)(c) hereof, and (ii) the holders of all of the outstanding
shares of Series B Common Stock shall be entitled to receive, in proportion
to their holdings of Series B Common Stock, an aggregate amount equal to
33% of the value of the assets of the Corporation available for
distribution to the holders of the Common Stock in accordance with Section
A(1)(c) hereof.
(c) Voting.
(i) Effective on and after the Triggering Date, automatically,
and without any action on the part of the Corporation, the holders of
the Series B Common Stock or any other person or entity and regardless
of the number of shares of Series B Common Stock which are then
outstanding: (A) each share of Series B Common Stock shall be entitled
to a number of votes per share of Series B Common Stock such that the
holders of all of the outstanding shares of Series B Common Stock
shall be entitled to cast a number of votes equal to 51% of the total
votes entitled to be cast by the holders of all Common Stock, and (B)
the holders of all of the outstanding shares of Series A Common Stock
shall be entitled to cast a number of votes equal to 49% of the total
votes entitled to be cast by the holders of all Common Stock, in each
case, with the holders of the Class A Common Stock and the Series B
Common Stock voting together as a single class. There shall be no
cumulative voting.
(ii) Notwithstanding the foregoing, the Corporation shall not,
without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series B Common Stock (voting together as a
separate class), take, or permit to occur, any of the following
actions:
(A) Amend, modify or waive any provision of Article IV or
Article V of this Certificate of Incorporation so as to alter the
rights, preferences, privileges, restrictions or terms of the
Series B Common Stock; or
(B) Increase the number of authorized shares of Series B
Common Stock or issue additional shares of Series B Common Stock.
(d) Elimination of Series B Common Stock. In the event that no Triggering Event
shall have occurred on or prior to such date, on the date on which the aggregate
outstanding principal amount of the Term Loans is less than $4,000,000: (i) each
share of Series B Common Stock shall automatically and without any action on the
part of the Corporation or any other party, convert to one share of Series A
Common Stock; (ii) the designation "Series B Common Stock" shall be eliminated;
and thereafter (iii) shares of stock designated as "Series A Common Stock" shall
be designated simply as "Common Stock", and each share of Common Stock shall be
identical to, and be entitled to the same rights and privileges as, all other
shares of Common Stock with respect to dividends, distributions, rights in
liquidation, voting and in all other respects.
B. PREFERRED STOCK
The board of directors of the Corporation is authorized by vote or votes,
from time to time adopted, to provide for the issuance of one or more classes of
Preferred Stock, which shall be separately identified. The board of directors
shall have the authority to divide any authorized class of Preferred Stock of
the Corporation into one or more series and to fix and state the voting powers,
designations, preferences and relative, participating, optional or other special
rights of the shares of any series so established and the qualifications,
limitations and restrictions thereof. Each such series shall be separately
designated so as to distinguish the shares thereof from the shares of all other
series and classes. All shares of the same class shall be identical except as to
the following relative rights and preferences, as to which there may be
variations between different series:
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rates or the amount of dividends to be paid on the shares
of such series, whether dividends shall be cumulative and, if so, from which
date or dates, the payment date or dates for dividends, and the participating or
other special rights, if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such series;
(d) Whether the shares of such series shall be redeemable and, if so, the
price or prices at which, and the terms and conditions on which, such shares may
be redeemed;
(e) The amount or amounts payable upon the shares of such series in the
event of voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(f) Whether the shares of such series shall be entitled to the benefit of a
sinking or retirement fund to be applied to the purchase or redemption of such
shares and if so entitled, the amount of such fund and the manner of its
application, including the price or prices at which such shares may be redeemed
or purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or of any other series of
the same or any other class or classes of stock of the Corporation, and if so
convertible or exchangeable, the conversion price or prices or the rate or rates
of exchange, and the adjustments thereof, if any, at which such conversion or
exchange may be made, and any other terms and conditions of such conversion or
exchange;
(h) The price or other consideration for which the shares of such series
shall be issued; and
(i) Whether the shares of such series which are redeemed or converted shall
have the status of authorized but unissued shares of Preferred Stock and whether
such shares may be reissued as shares of the same or any other series of stock.
Any such vote shall become effective when the Corporation files with the
Secretary of State of the State of Delaware a certificate of designations of one
or more series of Preferred Stock, setting forth a copy of such vote and the
number of shares of stock of such class or series as to which the resolution or
resolutions apply, executed and acknowledged as required by the GCL.
Each share of each series of Preferred Stock shall have the same relative
rights as and be identical in all respects with all the other shares of the same
series.
ARTICLIE V
PERPETUAL EXISTENCE
The Corporation is to have perpetual existence.
ARTICLE VI
LIMITATION ON LIABILITY; INDEMNIFICATION
To the fullest extent permitted by the GCL, no director of the Corporation
shall be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability: (i)
for any breach of the director's duty of loyalty to the Corporation or its
stockholders; (ii) for acts or omission not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under section 174 of
the GCL; or (iv) for any transaction from which the director derived an improper
personal benefit. If the GCL is amended after the effective date of this
Certificate of Incorporation 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 GCL, as so amended.
The Corporation shall, to the fullest extent permitted by the provisions of
Section 145 of the GCL, indemnify each person who it shall have power to
indemnify under said section from and against any and all of the expenses,
liabilities or other matters referred to in or covered by said section. The
indemnification provided for herein shall not be deemed exclusive of any other
rights to which each such indemnified person may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in such indemnified person's official capacity and as to action in
another capacity while serving as a director, officer, employee or agent of the
Corporation, and shall continue as to a person who has ceased to be a director,
officer, employee or agent of the Corporation, and shall inure to the benefit of
the heirs, executors and administrators of such person.
Any (i) repeal or amendment of this Article VI by the stockholders of the
Corporation or (ii) amendment to the GCL shall not adversely affect any right or
protection existing at the time of such repeal or amendment with respect to any
acts or omissions occurring before such repeal or amendment of a person serving
as a director, officer, employee or agent of the Corporation or otherwise
enjoying the benefits of this Article VI at the time of such repeal or
amendment.
ARTICLE VII
AMENDMENT
Subject to the provisions of Section IVA3(c)(ii) hereof, the Corporation
reserves the right to amend, alter, change or repeal any provisions contained in
this Certificate of Incorporation, in the manner now or hereafter prescribe by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.
ARTICLE VIII
MISCELLANEOUS
The following provisions are inserted for the management of the business
and the conduct of the affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stockholders, and are in furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware:
A. The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors.
B. The Board of Directors shall have the power to make, alter, amend,
change, add to or repeal the By-Laws of the Corporation, subject to the right of
the stockholders to make, alter, amend, change, add to or repeal the By-Laws,
provided that any such action by the stockholders shall require the affirmative
vote of the holders of at least a majority of the then outstanding shares of
capital stock entitled to vote generally in the election of directors.
C. The number of directors of the Corporation shall be as from time to time
fixed by, or in the manner provided in, the By-Laws of the Corporation. Election
of directors need not be by written ballot unless the By-Laws so provide. The
term of office of each director shall expire at the next annual meeting of
stockholders after his or her election. In accordance with the By-Laws,
directors appointed to fill vacancies created by the resignation or removal of
any director shall serve for the remainder of the term of the director who
resigned or was removed. A director may be removed only for cause by the
affirmative vote of the holders of at least a majority of the then outstanding
shares of capital stock entitled to vote generally in the election of directors.
D. In addition to the powers and authority hereinbefore or by statute
expressly conferred upon them, the directors are hereby empowered to exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, subject, nevertheless, to the provisions of the GCL, this
Certificate of Incorporation and any By-Laws adopted by the stockholders;
provided, however, that no By-Laws hereafter adopted by the stockholders shall
invalidate any prior act of the directors which would have been valid if such
By-Laws had not been adopted.
E. Meetings of stockholders may be held within or without the State of
Delaware, as the By-Laws may provide. Special meetings of stockholders must be
called by the Secretary upon the request in writing of a stockholder or
stockholders holding of record at least twenty-five percent (25%) of the issued
and outstanding Common Stock entitled to vote at such meeting.
F. The books of the Corporation may be kept (subject to any provisions
contained in the GCL) outside the State of Delaware at such places as may be
designated from time to time by the Board of Directors or in the By-Laws of the
Corporation.
The undersigned incorporator hereby acknowledges that the foregoing
Certificate of Incorporation is her free act and deed and that the facts stated
therein are true.
/s/ Margaret D. Farrell, Esq.
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Margaret D. Farrell, Esq.
Incorporator
STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE
On the 2nd day of August 2002, before me personally came Margaret D.
Farrell, Esq., known to me to be the individual described here in and who
acknowledged the foregoing instrument and swore and acknowledged that she
executed the same as her free act and deed.
/s/ Doris J. Alberg
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Notary Public
My Commission Expires:3/23/02
