EXHIBIT 3.1
SEVENTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF TALEO CORPORATION
a Delaware corporation
Taleo Corporation, a corporation organized and existing under the laws of
the State of Delaware (the "CORPORATION"), hereby certifies as follows:
A. The name of the Corporation is Taleo Corporation. The Corporation was
originally incorporated under the name of Recruitsoft.com Inc. The Corporation's
original Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware on May 25, 1999.
B. Pursuant to Sections 242 and 245 of the General Corporation Law of the
State of Delaware (the "DGCL"), this Seventh Amended and Restated Certificate of
Incorporation restates, integrates and further amends the provisions of the
Corporation's Amended and Restated Certificate of Incorporation.
C. This Seventh Amended and Restated Certificate of Incorporation has been
duly approved by the Board of Directors of the Corporation in accordance with
Sections 242 and 245 of the DGCL.
D. This Seventh Amended and Restated Certificate of Incorporation has been
duly approved by the written consent of the stockholders of the Corporation in
accordance with Sections 228, 242 and 245 of the DGCL.
E. The text of the Amended and Restated Certificate of Incorporation of
the Corporation is hereby amended and restated to read as set forth in Exhibit A
attached hereto.
IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated
Certificate of Incorporation to be executed by the undersigned officer,
thereunto duly authorized, on April 22, 2005.
TALEO CORPORATION
By: /s/ Jean Lavigueur
-----------------------------
Jean Lavigueur
Chief Financial Officer
EXHIBIT A
ARTICLE I
The name of this corporation is Taleo Corporation (the "Corporation").
ARTICLE II
The address of the Corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle, 19801. The name of its registered agent at
such address is The Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
Immediately upon the filing of this Seventh Amended and Restated
Certificate of Incorporation, each six (6) outstanding shares of the
Corporation's Common Stock will be exchanged and combined, automatically and
without further action, into one (1) share of Common Stock. Such combination
shall be effected on a certificate-by-certificate basis, and any fractional
shares resulting from such combination shall be rounded down to the nearest
whole share, and each holder shall receive from the Corporation the cash value
of such fractional shares in lieu of such fractional shares.
A. Classes of Stock. This Corporation is authorized to issue two classes
of stock, to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares which the Corporation is authorized to issue is three
hundred fifty-three million, seven hundred sixty-three thousand, four hundred
fifty-eight (353,763,458) shares. Two hundred seventy-four million, two hundred
twenty-nine thousand, seven hundred sixty-two (274,229,762) shares shall be
Common Stock, par value $0.00001 per share, and seventy nine million, five
hundred thirty-three thousand, six hundred ninety-six (79,533,696) shares shall
be Preferred Stock, par value $0.00001 per share. Of the authorized shares of
Common Stock, a total of two hundred fifty million (250,000,000) shares are
designated Class A Common Stock ("Class A Common Stock") and a total of
twenty-four million, two hundred twenty-nine thousand, seven hundred sixty-two
(24,229,762) shares are designated Class B Common Stock ("Class B Common
Stock"). Of the authorized shares of Preferred Stock, a total of six million,
three hundred fifty thousand, four hundred (6,350,400) shares shall be
designated Series A Preferred Stock ("Series A Preferred Stock"), seven million,
one hundred thirty two thousand, four hundred forty one (7,132,441) shares shall
be designated Series B Preferred Stock ("Series B Preferred Stock"), fifty-two
million, one hundred twelfth thousand, nine hundred thirty-one (52,112,931)
shares shall be designated Series C Preferred Stock ("Series C Preferred Stock")
and thirteen
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million, nine hundred thirty-seven, nine hundred twenty-four (13,937,924) shares
shall be designated Series D Preferred Stock ("Series D Preferred Stock").
Subject to the rights of stockholders set forth herein, the Board of
Directors is further authorized to decrease (but not below the number of shares
of any such Series then outstanding) the number of shares of any series, the
number of which was fixed by it, subsequent to the issue of shares of such
Series then outstanding, subject to the powers, preferences and rights, and the
qualifications, limitations and restrictions thereof stated in the resolution of
the Board of Directors originally fixing the number of shares of such series. If
the number of shares of any Series is so decreased, then the shares constituting
such decrease shall resume the status which they had prior to the adoption of
the resolution originally fixing the number of shares of such series.
B. Rights, Preferences, Privileges and Restrictions of Class A Common
Stock. The rights, preferences, privileges and restrictions granted to and
imposed on the Class A Common Stock are as set forth below in this Article
IV(B).
(1) Dividend Rights. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Class A Common Stock shall be entitled to receive, when and
as declared by the Board of Directors, out of any assets of the Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors pari passu with the rights of holders of Series A
Preferred Stock at the time outstanding. Such dividends shall not be cumulative.
(2) Liquidation Rights. Upon the liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation shall be distributed as
provided in Section 2 of Article IV(D) hereof.
(3) Redemption. The Class A Common Stock is not redeemable.
(4) Voting Rights. The holder of each share of Class A Common Stock
shall have the right to one (1) vote for each share of Class A Common Stock held
by such holder, shall be entitled to notice of any stockholder meeting in
accordance with the Bylaws of this Corporation, and shall be entitled to vote
upon such matters and in such manner as is otherwise provided herein or as may
be provided by law. The number of authorized shares of Common Stock may be
increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of this corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law.
(5) Residual Rights. All rights accruing to the outstanding shares
of the Corporation not expressly provided for to the contrary herein shall be
vested in the Class A Common Stock.
C. Rights, Preferences, Privileges and Restrictions of Class B Common
Stock. The rights, preferences, privileges and restrictions granted to and
imposed on the Class B Common Stock are as set forth below in this Article
IV(C).
(1) Redemption. The Class B Common Stock shall be redeemable by the
Corporation, for a sum of $0.00001 per share, upon and simultaneously with the
issuance by the Corporation of Class A Common Stock or Series A Preferred Stock
to a holder of Class B Common Stock in exchange for Class A preferred
exchangeable shares or Class B preferred exchangeable shares of the share
capital of 9090-5415 Quebec, Inc., a company incorporated under the laws of the
Province of Quebec (Canada), on the basis of one (1) share of Class B Common
Stock to be redeemed for each share of Class A Common Stock or Series A
Preferred Stock to be issued.
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(2) Voting Rights. Each holder of shares of Class B Common Stock
shall be entitled to notice of any stockholder meeting in accordance with the
Bylaws of the Corporation, shall be entitled to one vote for each share of Class
B Common Stock held by such holder, shall have voting rights and powers equal to
the voting rights and powers of the holders of Class A Common Stock, and shall
vote together as a single class with holders of Class A Common Stock and all
series of Preferred Stock on all matters except as expressly required by law or
as set forth in this Certificate of Incorporation. The holders of Class B Common
Stock shall have no separate class or series vote on any matter except as
expressly required by law. The number of authorized shares of Common Stock may
be increased or decreased (but not below the number of shares thereof then
outstanding) by the affirmative vote of the holders of a majority of the stock
of this corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law.
(3) No Other Rights. Except as expressly set forth above, holders of
Class B Common Stock shall not be entitled to any rights, economic or otherwise,
as a result of their ownership of Class B Common Stock, including but not
limited to any rights as to dividends, payment upon liquidation, dissolution or
winding up of the Corporation or any other economic benefits.
D. Rights, Preferences, Privileges and Restrictions of Series A Preferred
Stock. The rights, preferences, privileges and restrictions granted to and
imposed on the Series A Preferred Stock are as set forth below in this Article
IV(D).
(1) Dividend Rights. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Series A Preferred Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of the Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors pari passu with the rights of holders of Class A
Common Stock at the time outstanding. Such dividends shall not be cumulative.
In the event that the Corporation shall have declared but unpaid dividends
outstanding immediately prior to, and in the event of, a conversion of Series A
Preferred Stock (as provided in Section D(3) hereof), the Corporation shall, at
the option of each holder, pay in cash to each holder of Series A Preferred
Stock subject to conversion the full amount of any such dividends or allow such
dividends to be converted into Class A Common Stock in accordance with, and
pursuant to the terms specified in, Section D(3) hereof.
(2) Liquidation Preference.
a. Primary Distribution. Subject to the prior rights of the
holders of Series B Preferred Stock set forth in Article IV(E), Series C
Preferred Stock in Article IV(F) and Series D Preferred Stock in Article IV(G),
in the event of any liquidation, dissolution or winding up of this Corporation,
either voluntary or involuntary, the holders of Series A Preferred Stock shall
be entitled to receive, prior and in preference to any distribution of any of
the assets or surplus funds of this Corporation to the holders of Common Stock
by reason of their ownership thereof, an amount as set forth below in Section
D(2)(b) (as adjusted in each case for any stock dividends, combinations or
splits with respect to such shares), plus in each case an amount equal to all
declared but unpaid dividends on such shares.
b. Should the total value of the cash and assets after taking
into account the rights of senior securities (based on the fair market value of
such assets) available to be distributed by the Corporation to the holders of
Series A Preferred Stock and Class A Common Stock pursuant to Section D(2)(a)
(the "Distribution") be less than twenty million dollars, in Canadian funds,
(CDN $20,000,000), the holders of the Series A Preferred Stock shall receive, in
preference and priority to the holders of Class A Common Stock, by way of
distribution of cash and assets, in the same proportion of cash and assets as in
the
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Distribution, an aggregate amount determined in accordance with the schedule
below (the "Reserved Amount"):
DISTRIBUTION (RANGE) RESERVED AMOUNT
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CDN$0 to 100% of Distribution
CDN$1,999,999
CDN$2,000,000 to CDN$2,000,000
CDN$9,999,999
CDN$10,000,000 to CDN$1,600,000
CDN$12,499,999
CDN$12,500,000 to CDN$1,200,000
CDN$14,999,999
CDN$15,000,000 to CDN$800,000
CDN$17,499,999
CDN$17,500,000 to CDN$400,000
CDN$19,999,999
and thereafter, the holders of the Series A Preferred Stock shall receive,
pari passu with the holders of the Class A Common Stock, the balance of the
Distribution (less the Reserved Amount), if any, pro rata based on the number of
shares of Common Stock held by each such holder (assuming full conversion of all
Series A Preferred Stock), or should the total value of the Distribution be
twenty million dollars, in Canadian funds, (CDN$20,000,000) or more, the holders
of the Series A Preferred Stock shall receive, pari passu with the holders of
the Class A Common Stock, the full amount of the Distribution pro rata based on
the number of shares of Common Stock held by each such holder (assuming full
conversion of all Series A Preferred Stock).
c. Definition of Liquidation Event; Notice.
(i) For purposes of this Section D(2), a liquidation,
dissolution or winding up of this Corporation shall be deemed to be occasioned
by, and to include, (A) any distribution of the assets of the Corporation among
shareholders for the purpose of winding-up its affairs; or (B) a sale of all or
substantially all of the assets of the Corporation in one or a series of
transactions (including, for purposes of this section, intellectual property
rights which, in the aggregate, constitute substantially all of the
Corporation's material assets; or (C) any transaction or series of related
transactions (including, without limitation, any reorganization, merger,
consolidation or other business combination) that results in the transfer of 50%
or more of the outstanding voting power of the Corporation, provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of this Corporation's
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incorporation or to create a holding company that will be owned in substantially
the same proportions and pursuant to substantially the same terms by the persons
who held this Corporation's securities immediately prior to such transaction.
(ii) In any of such events, if the consideration received by
the Corporation is other than cash, its value will be deemed its fair market
value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or other
similar restrictions on free marketability shall be valued as follows: (1) if
traded on a securities exchange or through the Nasdaq National Market, the value
shall be deemed to be the average of the closing prices of the securities on
such exchange over the thirty day period ending three days prior to the closing;
(2) if actively traded over-the-counter, the value shall be deemed to be the
average of the closing bid or sale prices (whichever is applicable) over the
thirty day period ending three days prior to the closing; and (3) 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 of the Corporation.
(B) Securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder's status as an affiliate or former affiliate) shall be
valued in such a manner as to make an appropriate discount from the market value
determined as above in paragraph (A) (1), (2) or (3) to reflect the approximate
fair market value thereof, as determined in good faith by the Board of Directors
of the Corporation.
(iii) In the event the requirements of this Section D(2) are
not complied with, this Corporation shall forthwith either:
(A) cause such closing to be postponed until such time
as the requirements of this Section D(2) have been complied with; or
(B) cancel such transaction, in which event the rights,
preferences and privileges of the holders of Series A Preferred Stock shall
revert to and be the same as such rights, preferences and privileges existing
immediately prior to the date of the first notice referred to in Section
D(2)(c)(iv) hereof.
(iv) The Corporation shall give each holder of record of
Series A Preferred Stock written notice of any such impending transaction not
later than ten (10) days prior to the stockholder meeting called to approve such
transaction, or twenty (20) days prior to the closing of such transaction
whichever notice date is earlier, and shall also notify such holders in writing
of the final approval of such transaction. The first of such notices shall
describe the material terms and conditions of the impending transaction, the
provisions of this Section D(2), and the amounts anticipated to be distributed
to holders of each outstanding series and class of capital stock of the
Corporation, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of Series A
Preferred Stock that are entitled to such notice rights or similar notice rights
and that represent at least a majority of the voting power of all then
outstanding shares of such Series A Preferred Stock (on an as-converted basis).
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(3) Conversion. The holders of Series A Preferred Stock shall have
conversion rights set forth in Article IV(E)(3).
(4) Voting Rights. Each holder of shares of Series A Preferred Stock
shall be entitled to notice of any stockholder meeting in accordance with the
Bylaws of the Corporation, shall be entitled to a number of votes equal to the
number of shares of Class A Common Stock into which the shares of Series A
Preferred Stock held by such holder could then be converted, shall have voting
rights and powers equal to the voting rights and powers of the holders of Class
A Common Stock, and shall vote together as a single class with holders of Class
A Common Stock, Class B Common Stock, Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock except as expressly required by law
or as set forth in this Certificate of Incorporation. Fractional votes shall not
be permitted, and any fractional voting rights resulting from the right of any
holder of Series A Preferred Stock to vote on an as converted basis (after
aggregating the shares into which all shares of Series A Preferred Stock held
such holder could be converted) shall be rounded to the nearest whole number
(with one-half being rounded upward). The holders of Series A Preferred Stock
shall have no separate class or series vote on any matter except as expressly
required by law.
(5) Status of Converted Series A Preferred Stock. In the event any
shares of Series A Preferred Stock shall be converted pursuant to Section D(3),
the shares so converted shall be canceled and shall not thereafter be issuable
by the Corporation. The Certificate of Incorporation of this Corporation shall
be appropriately amended to effect the corresponding reduction in the
Corporation's authorized capital stock.
E. Rights, Preferences and Restrictions of Series B Preferred Stock. The
rights, preferences, privileges and restrictions granted to and imposed on the
Series B Preferred Stock are as set forth below in this Article IV(E).
(1) Dividends. The holders of the Series B Preferred Stock shall be
entitled to receive, out of any funds legally available therefor, prior and in
preference to any declaration or payment of any dividend (payable other than in
Common Stock or other securities and rights convertible into or entitling the
holder thereof to receive, directly or indirectly, additional shares of Common
Stock) on the Common Stock, the Series A Preferred Stock or any other class or
series of Common Stock or Preferred Stock that is not expressly senior to or
pari passu in right of payment to the Series B Preferred Stock (collectively,
"Series B Junior Stock"), when and as declared by the Board of Directors,
dividends at a rate of $0.0973 per share per annum (as adjusted for any stock
dividends, combinations or splits with respect to such shares). The right to
such dividends on the Series B Preferred Stock shall not be cumulative, and no
right shall accrue to holders of Series B Preferred Stock by reason of the fact
that dividends on such shares are not declared or paid in any prior year.
In addition, the holders of the Series B Preferred Stock shall share pro
rata with holders of Common Stock on the basis of the number of shares of Common
Stock which each holder would be entitled to receive upon conversion of such
holder's Series B Preferred Stock as of the record date for the dividend or
distribution, in all other dividends or distributions, if any, that the Board of
Directors may declare from time to time with respect to the Common Stock.
In the event that the Corporation shall have declared but unpaid dividends
outstanding immediately prior to, and in the event of, a conversion of Series B
Preferred Stock (as provided in Section E(3) hereof), the Corporation shall, at
the option of each holder, pay in cash to each holder of Series B Preferred
Stock subject to conversion the full amount of any such dividends or allow such
dividends to be converted into Class A Common Stock in accordance with, and
pursuant to the terms specified in, Section E(3) hereof.
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(2) Liquidation Preference.
a. Subject to the prior rights of the holders of Series C
Preferred Stock set forth in Article IV(F) and the holders of Series D Preferred
Stock set out in Article IV(G), in the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, 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 or surplus funds of the
Corporation to the holders of the Series B Junior Stock by reason of their
ownership thereof, the amount of $1.40 per share for each share of Series B
Preferred Stock then held by them (as adjusted for any subdivisions,
combinations or stock dividends with respect to such shares), and, in addition,
an amount equal to all declared but unpaid dividends on the Series B Preferred
Stock. If, upon occurrence of such event the assets and funds legally available
to be distributed among the holders of the Series B Preferred Stock shall be
insufficient to permit the payment to such holders of the full preferential
amount, then the entire assets and funds of the Corporation legally available
for such distribution shall be distributed ratably among the holders of the
Series B Preferred Stock in proportion to the respective amounts which would be
payable in respect of the shares then held by them upon such distribution if all
amounts on or with respect to such shares of Series B Preferred Stock were paid
in full.
b. Upon completion of the distribution required by Sections
G(2)(a), F(3)(a) and E(2)(a) the holders of the Series A Preferred Stock and
Class A Common Stock of the Corporation shall receive all of the remaining
assets of the Corporation as provided in Section 2 of Article IV(D).
c. (i) For purposes of this Section E(2), a liquidation,
dissolution or winding up of the Corporation shall be deemed to be occasioned
by, and to include, (A) any distribution of the assets of the Corporation among
shareholders for the purpose of winding-up its affairs, (B) a sale of all or
substantially all of the assets of the Corporation in one or a series of
transactions (including, for purposes of this section, intellectual property
rights which, in the aggregate, constitute substantially all of the
Corporation's material assets), or (C) any transaction or series of related
transactions (including, without limitation, any reorganization, merger,
consolidation or other business combination) that results in the transfer of 50%
or more of the outstanding voting power of the Corporation, provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of this Corporation's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held this Corporation's securities immediately prior to such
transaction.
(ii) In any of such events, if the consideration received
by the Corporation is other than cash, its value will be deemed its fair market
value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or other
similar restrictions on free marketability shall be valued as follows: (1) if
traded on a securities exchange or through the Nasdaq National Market, the value
shall be deemed to be the average of the closing prices of the securities on
such exchange over the thirty day period ending three days prior to the closing;
(2) if actively traded over-the-counter, the value shall be deemed to be the
average of the closing bid or sale prices (whichever is applicable) over the
thirty day period ending three days prior to the closing; and (3) 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 of the Corporation.
(B) Securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a stockholder's status as an affiliate or former affiliate) shall be
valued in such a manner as to make an appropriate discount from the market value
determined as above in paragraph (A) (1), (2) or (3) to reflect the approximate
fair market value thereof, as determined in good faith by the Board of Directors
of the Corporation.
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(iii) The Corporation shall give each holder of record of
Series B Preferred Stock written notice of any such impending transaction not
later than ten (10) days prior to the stockholder meeting called to approve such
transaction, or twenty (20) days prior to the closing of such transaction
whichever notice date is earlier, and shall also notify such holders in writing
of the final approval of such transaction. The first of such notices shall
describe the material terms and conditions of the impending transaction, the
provisions of this Section E(2), and the amounts anticipated to be distributed
to holders of each outstanding series and class of capital stock of the
Corporation, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of Series B
Preferred Stock that are entitled to such notice rights or similar notice rights
and that represent at least a majority of the voting power of all then
outstanding shares of such Series B Preferred Stock (on an as-converted basis).
(3) Conversion. The holders of the Series A Preferred Stock and
Series B Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
a. Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any time into such
number of fully paid and nonassessable shares of Class A Common Stock, as is
determined by dividing CDN$0.3149 by the then applicable Series A Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The price at which shares of Class A Common Stock shall be deliverable upon
conversion of the Series A Preferred Stock (the "Series A Conversion Price")
shall initially be CDN$0.3149 per share of Class A Common Stock. Such initial
Series A Conversion Price shall be subject to adjustment as hereinafter
provided. Each share of Series B Preferred Stock shall be convertible, at the
option of the holder thereof, at any time into such number of fully paid and
nonassessable shares of Class A Common Stock, as is determined by dividing
$1.40204 by the then applicable Series B Conversion Price, determined as
hereinafter provided, in effect at the time of conversion. The price at which
shares of Class A Common Stock shall be deliverable upon conversion of the
Series B Preferred Stock (the "Series B Conversion Price") shall initially be
$1.40204 per share of Class A Common Stock. Such initial Series B Conversion
Price shall be subject to adjustment as hereinafter provided.
b. Automatic Conversion. Each share of Series A Preferred
Stock and Series B Preferred Stock shall automatically be converted into shares
of Class A Common Stock at the then effective Series A Conversion Price or
Series B Conversion Price, as applicable, immediately upon the effectiveness of
a firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock for the account of the Corporation to the
public in which the aggregate net proceeds to the Company equal or exceed
$25,000,000. The holders of at least a majority of the then outstanding shares
of Series B Preferred Stock, voting together as a single class at a duly held
meeting or by written consent or other agreement, may at any time elect to
convert all Series B Preferred Stock into Class A Common Stock. The holders of
at least a majority of the then outstanding shares of Series A Preferred Stock,
voting together as a single class at a duly held meeting or by written consent
or other agreement, may at any time elect to convert all Series A Preferred
Stock into Class A Common Stock.
c. Mechanics of Conversion. Before any holder of Series A
Preferred Stock or Series B Preferred Stock shall be entitled to convert the
same into full shares of Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series A Preferred Stock or Series B Preferred Stock, and
shall give written notice to the
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Corporation at such office that he elects to convert the same. Such notice shall
also state whether the holder elects to receive declared but unpaid dividends on
the Series A Preferred Stock or Series B Preferred Stock proposed to be
converted in cash, or to convert such dividends into shares of Common Stock at
their fair market value as determined by the Board of Directors. The Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder of Series A Preferred Stock or Series B Preferred Stock, a
certificate or certificates for the number of shares of Common Stock to which he
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 a fractional
share of Common Stock, and any declared but unpaid dividends on the converted
Series A Preferred Stock or Series B Preferred Stock which the holder elected to
receive in cash. 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
Series A Preferred Stock or Series B 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. If the conversion is in
connection with an underwritten public offering of securities registered
pursuant to the Securities Act of 1933, as amended, the conversion shall be
conditioned upon the closing of such public offering, in which event the
person(s) entitled to receive the Common Stock issuable upon such conversion of
the Series A Preferred Stock or Series B Preferred Stock shall not be deemed to
have converted such Series A Preferred Stock or Series B Preferred Stock until
immediately prior to such closing.
If only part of the Series A Preferred Stock or Series B Preferred Stock
represented by the surrendered certificate or certificates is converted, the
holder shall have the right to receive a new certificate for the shares of
Series A Preferred Stock or Series B Preferred Stock represented by the original
certificate or certificates which were not converted. All shares issued by the
Corporation pursuant to the conversion of Series A Preferred Stock or Series B
Preferred Stock into Common Stock, as set out above, shall be fully paid and
non-assessable.
d. Adjustments to Conversion Price.
(i) Special Definitions. For purposes of this Section E(3),
the following definitions shall apply:
(A) "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.
(B) "Series B Original Issue Date" shall mean the date
on which the first share of Series B Preferred Stock is issued.
(C) "Convertible Securities" shall mean any evidences of
indebtedness, shares (other than Common Stock, Series A Preferred Stock, Series
B Preferred Stock and Series D Preferred Stock) or other securities convertible
into or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Section E(3)(d)(iii), deemed to
be issued) by the Corporation after the Series B Original Issue Date, other than
shares of Common Stock issued or issuable:
i) upon conversion of shares of the Preferred
Stock;
ii) to officers, directors or employees of, or
consultants to, the Corporation pursuant to a stock grant, option plan or
purchase plan or other employee stock incentive program (collectively, the
"Plans") up to a maximum of 24,997,618 shares in the aggregate, pursuant to a
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warrant to Beauchesne, Ostiguy & Simard Inc. in an amount of 15,500 shares,
pursuant to the Series D Preferred Stock Plan up to a maximum of 1,238,926
shares in the aggregate, pursuant to warrants to Comdisco, Inc./Comdisco
Ventures, Inc. in an aggregate amount of 587,976 shares pursuant, to a warrant
to Comerica Incorporated in an amount of 92,496 shares and pursuant, to a
warrant to Planet Enlightenment Corp. in an amount of 10,000 shares (in each
case as adjusted for any stock dividends, combinations or splits with respect to
such shares after the Series A Original Issue Date or Series B Original Issue
Date, as applicable);
iii) as a dividend or distribution on Series A
Preferred Stock or Series B Preferred Stock; and
iv) by way of dividend or other distribution on
shares of Common Stock excluded from the definition of Additional Shares of
Common Stock by the foregoing clauses (i), (ii) or (iii).
(ii) No Adjustment of Conversion Price. No adjustment in the
Series A Conversion Price or Series B Conversion Price shall be made in respect
of the issuance of Additional Shares of Common Stock unless the consideration
per share for an Additional Share of Common Stock issued or deemed to be issued
by the Corporation is less than the Series A Conversion Price or Series B
Conversion Price, as applicable, in effect on the date of, and immediately prior
to such issue, for such share of Series A Preferred Stock or Series B Preferred
Stock.
(iii) Deemed Issue of Additional Shares of Common Stock.
(A) Options and Convertible Securities. Except as
provided in Section E(3)(d)(i)(D) above, in the event the Corporation at any
time or from time to time after the Series B Original Issue Date 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 and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed, as
of the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section E(3)(d)(v) hereof) of such Additional
Shares of Common Stock would be less than the Series A Conversion Price or
Series B Conversion Price, as applicable, in effect on the date of and
immediately prior to such issue, or such record date, as the case may be, and
provided further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
i) no further adjustment in the Series A
Conversion Price or the Series B Conversion Price, as applicable, shall be made
upon the subsequent issue of Convertible Securities or shares of Common Stock
upon the exercise of such Options or conversion or exchange of such Convertible
Securities;
ii) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Series A Conversion Price or the Series B Conversion Price, as
applicable, computed upon the original issue thereof (or upon the occurrence of
a record date with respect thereto), and any
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subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
iii) 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 Series A Conversion Price or the Series B
Conversion Price, as applicable, shall, upon such expiration, be recomputed as
if:
1) in the case of Convertible Securities
or Options for Common Stock, the only Additional Shares of Common Stock issued
were 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 all such Options, whether or not exercised, 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, and
2) 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
Stock deemed to have been then issued was the consideration actually received by
the Corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the Corporation upon the
issue of the Convertible Securities with respect to which such Options were
actually exercised; and
iv) no readjustment pursuant to this clause (A)
shall have the effect of increasing with respect to Series A Preferred Stock,
the Series A Conversion Price to an amount which exceeds the lower of (i) the
Series A Conversion Price on the original adjustment date, or (ii) the Series A
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date
or, with respect to the Series B Preferred Stock, the Series B Conversion Price
to an amount which exceeds the lower of (i) the Series B Conversion Price on the
original adjustment date, or (ii) the Series B Conversion Price that would have
resulted from any issuance of Additional Shares of Common Stock between the
original adjustment date and such readjustment date.
(B) Stock Dividends. In the event the Corporation, at
any time or from time to time after the Series B Original Issue Date, shall
declare or pay any dividend on the Common Stock payable in Common Stock or
Convertible Securities, then Additional Shares of Common Stock shall be deemed
to have been issued immediately after the close of business on the record date
for the determination of holders of any class of securities entitled to receive
such dividend (and the number of shares issuable with respect to Convertible
Securities shall be determined in the same manner provided in clause (A) above).
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event this Corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section E(3)(d)(iii)) without consideration or
for a consideration per share less than the Series A Conversion Price and/or the
Series B Conversion Price, as applicable, in effect on the date of and
immediately prior to such issue, then and in such event, such Series A
Conversion Price and/or Series B Conversion Price shall be reduced, concurrently
with such issue, to a price (calculated to the nearest hundredth of a cent)
determined by multiplying such Series A Conversion Price and/or Series B
Conversion Price, as applicable, by a fraction, the numerator of which shall
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be the number of shares of Common Stock outstanding immediately prior to such
issue plus the number of shares of Common Stock which the aggregate
consideration received by the Corporation for the total number of Additional
Shares of Common Stock so issued would purchase at the Series A Conversion Price
and/or Series B Conversion Price, as applicable, in effect on the date
immediately prior to such issue; 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 Stock (including shares
deemed to be issued pursuant to this section) so issued; and provided further
that, for the purposes of this Section E(3)(d)(iv), all shares of Common Stock
issuable upon conversion of all outstanding Series A Preferred Stock or Series B
Preferred Stock and all outstanding Convertible Securities, and upon exercise of
all outstanding Options bearing an exercise price which is lower than the price
at which Additional Shares of Common Stock were issued (or deemed to be issued),
shall be deemed to be outstanding, and immediately after any Additional Shares
of Common Stock are deemed issued pursuant to Section E(3)(d)(iii), such
Additional Shares of Common Stock shall be deemed to be outstanding.
(v) Determination of Consideration. For purposes of this
Section E(3)(d), the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
i) insofar as it consists of cash, be computed
at the aggregate amount of cash received by the Corporation excluding amounts
paid or payable for accrued interest or accrued dividends;
ii) insofar as it consists of property other
than cash, be computed at the fair value thereof at the time of such issue, as
determined by the Board of Directors in the good faith exercise of its
reasonable business judgment; and
iii) in the event Additional Shares of Common
Stock are issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (i) and (ii) above,
as determined by the Board of Directors in the good faith exercise of its
reasonable business judgment.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section E(3)(d)(iii)(A),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
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.
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(C) Stock Dividends. Any Additional Shares of Common
Stock deemed to have been issued relating to stock dividends shall be deemed to
have been issued for no consideration.
(vi) Adjustments for Subdivisions, Combinations, or
Consolidations of Common Stock. In the event the number of shares of Common
Stock outstanding at any time after the Series A Original Issue Date or Series B
Original Issue Date, as applicable, shall be subdivided, combined or
consolidated, by reclassification or otherwise, into a greater or lesser number
of shares of Common Stock, then the Conversion Price for the Series A Preferred
Stock and Series B Preferred Stock in effect immediately prior to such
subdivision, combination or consolidation shall, concurrently with the
effectiveness of such subdivision, combination or consolidation, be
proportionately increased or decreased, as applicable.
e. Other Distributions. In the event this Corporation shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this Corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in Section E(3)(d)(iii), then,
in each such case, the holders of Series A Preferred Stock or Series B Preferred
Stock shall be entitled to a proportionate share of any such distribution as
though they were the holders of the number of shares of Common Stock of the
Corporation into which their shares of Series A Preferred Stock or Series B
Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
f. Recapitalizations. If at any time or from time to time there
shall be a recapitalization of the Common Stock or a business combination,
merger or consolidation of this Corporation with or into another entity (other
than a subdivision, combination, merger, consolidation or sale of assets
transaction provided for elsewhere in this Seventh Amended and Restated
Certificate of Incorporation), provision shall be made so that the holders of
Series A Preferred Stock or Series B Preferred Stock shall thereafter be
entitled to receive upon conversion of the Series A Preferred Stock or Series B
Preferred Stock the number of shares of stock or other securities or property of
the Corporation or otherwise to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization, business
combination, merger, consolidation or sale of assets transaction. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section E(3) with respect to the rights of the holders of the Series A
Preferred Stock or Series B Preferred Stock after the recapitalization to the
end that the provisions of this Section E(3) (including adjustment of the
applicable Conversion Price then in effect and the number of shares issuable
upon conversion of the Series A Preferred Stock or Series B Preferred Stock)
shall be applicable after that event as nearly equivalent as may be practicable.
g. No Impairment. This Corporation will not, without the
appropriate vote of the stockholders under the General Corporation Law or
Sections E(5) and F(6), by amendment of its Certificate of Incorporation or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by this Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Section E(3)
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of Series A Preferred Stock or
Series B Preferred Stock against impairment.
h. No Fractional Shares and Certificate as to Adjustments.
(i) No fractional shares shall be issued upon the conversion
of any share or shares of Series A Preferred Stock or Series B Preferred Stock.
In lieu of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction multiplied by
the fair
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market value of the Class A Common Stock as determined in good faith by the
Board of Directors. Whether or not fractional shares are issuable upon such
conversion shall be determined on the basis of the total number of shares of
Series A Preferred Stock or Series B Preferred Stock the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment
of the Series A Conversion Price or Series B Conversion Price pursuant to this
Section E(3), this Corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock or Series B Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. This Corporation
shall, upon the written request at any time of any holder of Series A Preferred
Stock or Series B Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (A) such adjustment and readjustment,
(B) the Series A Conversion Price and Series B Conversion Price at the time in
effect, and (C) 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 a
share of Series A Preferred Stock or Series B Preferred Stock.
(iii) Reservation of Stock Issuable Upon Conversion. This
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Class A Common Stock, solely for the purpose of effecting
the conversion of the shares of Series A Preferred Stock or Series B Preferred
Stock such number of shares of Class A Common Stock as shall from time to time
be sufficient to effect the conversion of all outstanding shares of Series A
Preferred Stock or Series B Preferred Stock; and if at any time the number of
authorized but unissued shares of Class A Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of Series A Preferred
Stock or Series B Preferred Stock, in addition to such other remedies as shall
be available to the holder of such Series A Preferred Stock or Series B
Preferred Stock, this Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Class A Common Stock to such number of shares as shall be sufficient
for such purposes, including, without limitation, engaging in best efforts to
obtain the requisite stockholder approval of any necessary amendment to this
Seventh Amended and Restated Certificate of Incorporation.
(iv) Notices. Any notice required by the provisions of this
Section E(3) to be given to the holders of shares of Series A Preferred Stock or
Series B Preferred Stock shall be deemed given if deposited in the United States
registered or certified mail, postage prepaid, return receipt requested and
addressed to each holder of record at his address appearing on the books of this
Corporation.
(4) Voting Rights. The holder of each share of Series B Preferred
Stock shall have the right to one vote for each share of Class A Common Stock
into which such share of Series B Preferred Stock could then be converted, and
with respect to such vote, such holder shall have full voting rights and powers
equal to the voting rights and powers of the holders of Class A Common Stock,
shall be entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the Bylaws of this Corporation, and
shall be entitled to vote together as a single class with holders of Class A
Common Stock, Class B Common Stock, Series A Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock with respect to any question upon which
holders of Class A Common Stock have the right to vote, unless otherwise
prohibited by law. Fractional votes shall not be permitted and any fractional
voting rights available on an as-converted basis (after aggregating all shares
into which shares of Series B Preferred Stock held by each holder could be
converted) shall be rounded to the nearest whole number (with one-half being
rounded upward).
(5) Protective Provisions of Series A Preferred Stock and Series B
Preferred Stock. The Corporation shall not without first obtaining the approval
(by vote or written consent, as provided by law) of
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the holders of two-thirds (2/3) of the outstanding shares of Series A Preferred
Stock and Series B Preferred Stock that are entitled to vote with respect to the
following matters:
a. alter or change the rights, preferences or privileges of
the shares of Series B Preferred Stock, Class A Common Stock, Class B Common
Stock or Series A Preferred Stock so as to adversely affect the shares of Series
A Preferred Stock and Series B Preferred Stock, including by merger,
consolidation, reorganization or otherwise;
b. increase or decrease (other than by redemption or
conversion) the total number of authorized shares of Class A Common Stock, Class
B Common Stock, Series A Preferred Stock or Series B Preferred Stock, including
by merger, consolidation, reorganization or otherwise;
c. create (by new authorization, reclassification,
recapitalization or otherwise) any class or series of stock or any other
securities convertible into equity securities of this Corporation having a
preference over, or being on a parity with, the rights, preferences or
privileges of the Series A Preferred Stock or Series B Preferred Stock,
including by merger, consolidation, reorganization or otherwise;
d. redeem, purchase or otherwise acquire (or pay into or
set aside for a sinking fund for such purpose) any share or shares of any series
of the Company's Preferred Stock or Common Stock other than as provided in
Article IV(C)(1) or Article VI(F)(1); provided, however, that this restriction
shall not apply to the repurchase of shares of Common Stock from employees,
officers, directors, consultants or other persons performing services for the
Corporation or any subsidiary pursuant to agreements under which the Corporation
has the option to repurchase such shares at cost upon the occurrence of certain
events, such as the termination of employment, provided that such repurchase has
been approved by unanimous agreement of the Board of Directors;
e. effect a reclassification or recapitalization of the
outstanding capital stock of the Corporation in which any capital stock has any
preference or priority as to dividends or assets senior to or on parity with the
preferences of the Series A Preferred Stock or the Series B Preferred Stock,
including by merger, consolidation, reorganization or otherwise;
f. increase the number of authorized directors to more than
seven directors; or
g. declare or effect the payment of a dividend on any share
or shares of Class A Common Stock.
(6) Status of Converted Series B Preferred Stock. In the event any
shares of Series B Preferred Stock shall be converted pursuant to Section E(3)
hereof, the shares so converted shall be canceled and shall not thereafter be
issuable by the Corporation. The Certificate of Incorporation of this
Corporation shall be appropriately amended to effect the corresponding reduction
in the Corporation's authorized capital stock.
F. Rights, Preferences and Restrictions of Series C Preferred Stock.
The rights, preferences, privileges and restrictions granted to and imposed on
the Series C Preferred Stock are as set forth below in this Article IV(F).
(1) Redemption. At the written request of the holders of a majority
of the outstanding shares of Series C Preferred Stock delivered to the
Corporation no earlier than 90 days prior to October 25, 2008 and no later than
10 days prior to October 25, 2008, the Corporation shall redeem, from sources of
funds legally available therefor, the Series C Preferred Stock in three equal
annual installments on each of October
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25, 2008, October 25, 2009 and October 25, 2010 ("Series C Redemption Dates").
On each Series C Redemption Date, the Corporation shall redeem the Series C
Preferred Stock to be redeemed on such date pro rata from each holder of Series
C Preferred Stock based on the number of shares of Series C Preferred Stock held
by each such holder. The Corporation shall effect such redemptions on the
applicable Series C Redemption Dates by paying cash in exchange for the Series C
Preferred Stock to be redeemed in a sum equal to $0.4907 per share (as adjusted
for any stock dividends, combinations or splits with respect to such shares)
(the "Series C Redemption Price") plus all accrued and unpaid dividends on the
shares to be redeemed. Any shares of Series C Preferred Stock not redeemed at
the specified Series C Redemption Dates under this Section F(1) shall continue
to accrue dividends until redeemed. A majority of the holders of the Series C
Preferred Stock may elect to waive or defer one or more redemption payments with
respect to all holders of the Series C Preferred Stock.
(2) Dividends. The holders of the Series C Preferred Stock shall be
entitled to receive, out of any funds legally available therefor, pari passu
with the Series D Preferred Stock and prior and in preference to any declaration
or payment of any dividend (payable other than in Common Stock or other
securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock) on the
Common Stock, the Series A Preferred Stock and Series B Preferred Stock or any
other class or series of Common Stock or Preferred Stock that is not expressly
senior to or pari passu in right of payment to the Series C Preferred Stock
(collectively, "Series C Junior Stock"), dividends compounded annually at the
rate per annum of $0.039256 per share (as adjusted for any subdivisions,
combinations or stock dividends with respect to such shares). The right to such
dividends on the Series C Preferred Stock shall be cumulative and shall accrue
whether or not declared by the Board of Directors and whether or not there are
profits or surplus available therefor.
In addition, the holders of the Series C Preferred Stock shall share pro
rata with holders of Common Stock on the basis of the number of shares of Common
Stock which each holder would be entitled to receive upon conversion of such
holder's Series C Preferred Stock as of the record date for the dividend or
distribution, in all other dividends or distributions, if any, that the Board of
Directors may declare from time to time with respect to the Common Stock.
In the event that the Corporation shall have accrued but unpaid dividends
outstanding immediately prior to, and in the event of, a conversion of Series C
Preferred Stock (as provided in Section F(4) hereof), the Corporation shall, at
the option of each holder, pay in cash to each holder of Series C Preferred
Stock subject to conversion the full amount of any such dividends or allow such
dividends to be converted into Class A Common Stock in accordance with, and
pursuant to the terms specified in, Section F(4) hereof; provided, however, that
so long as any loans are outstanding under the Credit Facility (as defined
below), no holder of Series C Preferred Stock may elect to have such dividends
paid in cash. "Credit Facility" shall mean the Credit and Guaranty Agreement,
dated as of April 25, 2005, among the Corporation, the lenders from time to time
parties thereto, and Goldman Sachs Specialty Lending Group, L.P., as
Administrative Agent, as it may be amended or extended from time to time,
together with the documents executed in connection therewith.
(3) Liquidation Preference.
a. In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntary or involuntary, the holders of the
Series C Preferred Stock shall be entitled to receive, pari passu with the
Series D Preferred Stock and prior and in preference to any distribution of any
of the assets or surplus funds of the Corporation to the holders of the Series C
Junior Stock by reason of their ownership thereof, the greater of (i) the amount
that would be payable to each holder of the Series C Preferred Stock in respect
of the Common Stock issuable upon conversion of such holder's shares of Series C
Preferred Stock if all outstanding shares of Series C Preferred Stock were
converted into Common Stock immediately prior to
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such event in accordance with Section F(4), or (ii) the sum of (x) $0.4907 (as
adjusted for any subdivisions, combinations or stock dividends with respect to
such shares) per share of the Series C Preferred Stock, and (y) any accrued and
unpaid dividends on such shares. If, upon the occurrence of such event the
assets and funds legally available to be distributed among the holders of the
Series C Preferred Stock shall be insufficient to permit the payment to such
holders of the full preferential amount, then the entire assets and funds of the
Corporation legally available for such distribution shall be distributed ratably
among the holders of the Series C Preferred Stock and Series D Preferred Stock
in proportion to the respective amounts which would be payable in respect of the
shares then held by them upon such distribution if all amounts on or with
respect to such shares of Series C Preferred Stock and Series D Preferred Stock
were paid in full.
b. Upon completion of the distribution required by Sections
G(2)(a) and F(3)(a) the holders of the Series A Preferred Stock, Series B
Preferred Stock and Class A Common Stock of the Corporation shall receive all of
the remaining assets of the Corporation as provided in Section E(2)(a) and
Section 2 of Article IV(D).
c. (i) For purposes of this Section F(3), unless the
holders of a majority of the Series C Preferred Stock elect otherwise, a
liquidation, dissolution or winding up of the Corporation shall be deemed to be
occasioned by, and to include, (A) any distribution of the assets of the
Corporation among shareholders for the purpose of winding-up its affairs, (B) a
sale of all or substantially all of the assets of the Corporation in one or a
series of transactions (including, for purposes of this section, intellectual
property rights which, in the aggregate, constitute substantially all of the
Corporation's material assets), or (C) any transaction or series of related
transactions (including, without limitation, any reorganization, merger,
consolidation or other business combination) that results in the transfer of 50%
or more of the outstanding voting power of the Corporation, provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of this Corporation's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held this Corporation's securities immediately prior to such
transaction.
(ii) In any of such events, if the consideration
received by the Corporation is other than cash, its value will be deemed its
fair market value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or
other similar restrictions on free marketability shall be valued as follows: (1)
if traded on a securities exchange or through the Nasdaq National Market, the
value shall be deemed to be the average of the closing prices of the securities
on such exchange over the thirty day period ending three days prior to the
closing; (2) if actively traded over-the-counter, the value shall be deemed to
be the average of the closing bid or sale prices (whichever is applicable) over
the thirty day period ending three days prior to the closing; and (3) 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 of the Corporation.
(B) Securities subject to investment letter or
other restrictions on free marketability (other than restrictions arising solely
by virtue of a stockholder's status as an affiliate or former affiliate) shall
be valued in such a manner as to make an appropriate discount from the market
value determined as above in paragraph (A) (1), (2) or (3) to reflect the
approximate fair market value thereof, as determined in good faith by the Board
of Directors of the Corporation.
(iii)The Corporation shall give each holder of record of
Series C Preferred Stock written notice of any such impending transaction not
later than ten (10) days prior to the stockholder meeting called to approve such
transaction, or twenty (20) days prior to the closing of such transaction
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whichever notice date is earlier, and shall also notify such holders in writing
of the final approval of such transaction. The first of such notices shall
describe the material terms and conditions of the impending transaction, the
provisions of this Section F(3), and the amounts anticipated to be distributed
to holders of each outstanding series and class of capital stock of the
Corporation, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of Series C
Preferred Stock that are entitled to such notice rights or similar notice rights
and that represent at least a majority of the voting power of all then
outstanding shares of such Series C Preferred Stock (on an as-converted basis).
(4) Conversion. The holders of the Series C Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
a. Right to Convert. Each share of Series C Preferred Stock
shall be convertible, at the option of the holder thereof, at any time into such
number of fully paid and nonassessable shares of Class A Common Stock as is
determined by dividing $0.4907 by the then applicable Series C Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. The
price at which shares of Class A Common Stock shall be deliverable upon
conversion of the Series C Preferred Stock (the "Series C Conversion Price")
shall initially be $0.4907 per share of Class A Common Stock. Such Series C
Conversion Price shall be subject to adjustment as hereinafter provided.
b. Automatic Conversion. Each share of Series C Preferred
Stock shall automatically be converted into shares of Class A Common Stock at
the then effective Series C Conversion Price immediately upon the effectiveness
of a firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended, covering
the offer and sale of Common Stock for the account of the Corporation to the
public in which the per share price is equal to or greater than $1.4721 (as
adjusted for any subdivisions, combinations or stock dividends with respect to
the Common Stock after the Series C Original Issue Date) and the aggregate net
proceeds to the Company equal or exceed $25,000,000 (a "Qualified Public
Offering"). The holders of at least a majority of the then outstanding shares of
Series C Preferred Stock, voting together as a single class at a duly held
meeting or by written consent or other agreement, may at any time elect to
convert all Series C Preferred Stock into Class A Common Stock.
c. Mechanics of Conversion. Before any holder of Series C
Preferred Stock shall be entitled to convert the same into full shares of Class
A Common Stock, he shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the
Series C Preferred Stock, and shall give written notice to the Corporation at
such office that he elects to convert the same. Such notice shall also state
whether the holder elects to receive accrued but unpaid dividends on the Series
C Preferred Stock proposed to be converted in cash, or to convert such dividends
into shares of Class A Common Stock at their fair market value as determined by
the Board of Directors. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series C
Preferred Stock, a certificate or certificates for the number of shares of Class
A Common Stock to which he 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 a fractional share of Class A Common Stock, and any accrued but
unpaid dividends on the converted Series C Preferred Stock which the holder
elected to receive in cash. 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 Series C Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Class A Common Stock on such date. If the conversion is in
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connection with an underwritten public offering of securities registered
pursuant to the Securities Act of 1933, as amended, the conversion shall be
conditioned upon the closing of such public offering, in which event the
person(s) entitled to receive the Class A Common Stock issuable upon such
conversion of the Series C Preferred Stock shall not be deemed to have converted
such Series C Preferred Stock until immediately prior to such closing.
If only part of the Series C Preferred Stock represented by the
surrendered certificate or certificates is converted, the holder shall have the
right to receive a new certificate for the shares of Series C Preferred Stock
represented by the original certificate or certificates which were not
converted. All shares issued by the Corporation pursuant to the conversion of
Series C Preferred Stock into Class A Common Stock, as set out above, shall be
fully paid and non-assessable.
d. Adjustments to Conversion Price.
(i) Special Definitions. For purposes of this Section
F(4), the following definitions shall apply:
(A) "Options" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(B) "Series C Original Issue Date" shall mean the
date on which the first share of Series C Preferred Stock is issued.
(C) "Convertible Securities" shall mean any
evidences of indebtedness, shares (other than Series D Preferred Stock) or other
securities convertible into or exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued (or, pursuant to Section F(4)(d)(iii), deemed
to be issued) by the Corporation after the Series C Original Issue Date, other
than shares of Common Stock issued or issuable:
i) upon conversion of shares of Preferred
Stock;
ii) to officers, directors or employees
of, or consultants to, the Corporation pursuant to a stock grant, option plan or
purchase plan or other employee stock incentive program (collectively, the
"Plans") up to a maximum of 24,997,618 shares in the aggregate, pursuant to a
warrant to Beauchesne, Ostiguy & Simard Inc. in an amount of 15,500 shares,
pursuant to the Series D Preferred Stock Plan up to a maximum of 1,238,926
shares in the aggregate, pursuant to warrants to Comdisco, Inc./Comdisco
Ventures, Inc. in an aggregate amount of 587,976 shares, pursuant to a warrant
to Comerica Incorporated in an amount of 92,496 shares, and pursuant to a
warrant to Planet Enlightenment Corp. in an amount of 10,000 shares (in each
case as adjusted for any stock dividends, combinations or splits with respect to
such shares after the Series C Original Issue Date);
iii) as a dividend or distribution on
Series C Preferred Stock (in accordance with the provisions hereof).
(ii) No Adjustment of Conversion Price. No adjustment
in the Series C Conversion Price shall be made in respect of the issuance of
Additional Shares of Common Stock unless the consideration per share for an
Additional Share of Common Stock issued or deemed to be issued by the
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Corporation is less than the Series C Conversion Price in effect on the date of,
and immediately prior to such issue.
(iii) Deemed Issue of Additional Shares of Common Stock.
(A) Options and Convertible Securities. In the
event the Corporation at any time or from time to time after the Series C
Original Issue Date 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 and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date, provided that in
any such case in which Additional Shares of Common Stock are deemed to be
issued:
i) no further adjustment in the Series C
Conversion Price shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;
ii) if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the Corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Series C Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
iii) 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 Series C Conversion Price
shall, upon such expiration, be recomputed as if:
1) in the case of Convertible
Securities or Options for Common Stock, the only Additional Shares of Common
Stock issued were 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 all such Options, whether
or not exercised, 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, and
2) 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 Stock deemed to have been then issued was the consideration actually
received by the Corporation for the issue of all such Options, whether or not
exercised, plus the consideration deemed to have been received by the
Corporation upon the issue of the Convertible Securities with respect to which
such Options were actually exercised; and
iv) no readjustment pursuant to this
clause (A) shall have the effect of increasing the Series C Conversion Price to
an amount which exceeds the lower of (i) the
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Series C Conversion Price on the original adjustment date, or (ii) the Series C
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date.
(B) Stock Dividends. In the event the Corporation,
at any time or from time to time after the Series C Original Issue Date, shall
declare or pay any dividend payable in Common Stock or Convertible Securities,
then Additional Shares of Common Stock shall be deemed to have been issued
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend (and the
number of shares issuable with respect to Convertible Securities shall be
determined in the same manner provided in clause (A) above).
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event this Corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section F(4)(d)(iii)) without consideration or
for a consideration per share less than the Series C Conversion Price in effect
on the date of and immediately prior to such issue, then and in such event, such
Series C Conversion Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest hundredth of a cent) determined by multiplying
such Series C 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 of Common Stock which the aggregate consideration
received by the Corporation for the total number of Additional Shares of Common
Stock so issued would purchase at the Series C Conversion Price in effect on the
date immediately prior to such issue; 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 Stock so issued (including
for purposes of this Section F(4)(d)(iv) any increase in the number of Shares of
Common Stock issuable upon conversion of any Series of Preferred Stock that
results from such issuance of Additional Shares of Common Stock) provided that,
for the purposes of this Section F(4)(d)(iv), all shares of Common Stock
issuable upon conversion of all outstanding Preferred Stock and all outstanding
Convertible Securities, and upon exercise of all outstanding Options bearing an
exercise price which is lower than the price at which Additional Shares of
Common Stock were issued (or deemed to be issued), shall be deemed to be
outstanding, and immediately after any Additional Shares of Common Stock are
deemed issued pursuant to Section F(4)(d)(iii), such Additional Shares of Common
Stock shall be deemed to be outstanding.
(v) Determination of Consideration. For purposes of
this Section F(4)(d), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration shall:
i) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Corporation excluding
amounts paid or payable for accrued interest or accrued dividends;
ii) insofar as it consists of property
other than cash, be computed at the fair value thereof at the time of such
issue, as determined by the Board of Directors in the good faith exercise of its
reasonable business judgment; and
iii) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the proportion of
such consideration so received, computed as provided in clauses (i) and (ii)
above, as determined in the good faith exercise of its reasonable business
judgment by the Board of Directors.
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(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section F(4)(d)(iii)(A),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
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.
(C) Stock Dividends. Any Additional Shares of
Common Stock deemed to have been issued relating to stock dividends shall be
deemed to have been issued for no consideration.
(vi) Adjustments for Subdivisions, Combinations, or
Consolidations of Common Stock. In the event the number of shares of Common
Stock outstanding at any time after the Series C Original Issue Date shall be
subdivided, combined or consolidated, by reclassification or otherwise, into a
greater or lesser number of shares of Common Stock, then the Series C Conversion
Price in effect immediately prior to such subdivision, combination or
consolidation shall, concurrently with the effectiveness of such subdivision,
combination or consolidation, be proportionately decreased or increased, as
applicable.
e. Other Distributions. In the event this Corporation shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this Corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in Section F(4)(d)(iii), then,
in each such case, the holders of Series C Preferred Stock shall be entitled to
a proportionate share of any such distribution as though they were the holders
of the number of shares of Common Stock of the Corporation into which their
shares of Series C Preferred Stock are convertible as of the record date fixed
for the determination of the holders of Common Stock of the Corporation entitled
to receive such distribution.
f. Recapitalizations. If at any time or from time to time
there shall be a recapitalization of the Common Stock or a business combination,
merger or consolidation of this Corporation with or into another entity (other
than a subdivision, combination, merger, consolidation or sale of assets
transaction provided for elsewhere in this Seventh Amended and Restated
Certificate of Incorporation), provision shall be made so that the holders of
Series C Preferred Stock shall thereafter be entitled to receive upon conversion
of the Series C Preferred Stock the number of shares of stock or other
securities or property of the Corporation or otherwise to which a holder of
Common Stock deliverable upon conversion would have been entitled on such
recapitalization, business combination, merger, consolidation or sale of assets
transaction. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section F(4) with respect to the rights of
the holders of the Series C Preferred Stock thereafter to the end that the
provisions of this Section F(4) (including adjustment of the Series C Conversion
Price then in effect and the number of shares issuable upon conversion of the
Series C Preferred Stock) shall be applicable after that event as nearly
equivalent as may be practicable.
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g. No Impairment. This Corporation will not, without the
appropriate vote of the stockholders under the General Corporation Law or
Sections E(5) and F(6), by amendment of its Certificate of Incorporation or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by this Corporation, but will at all times in
good faith assist in the carrying out of all the provisions of this Section F(4)
and in the taking of all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of Series C Preferred Stock
against impairment.
h. No Fractional Shares and Certificate as to Adjustments.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of Series C 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 fair market
value of the Class A Common Stock as determined in good faith by the Board of
Directors. Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of shares of Series C
Preferred Stock the holder is at the time converting into Common Stock and the
number of shares of Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Series C Conversion Price pursuant to this Section F(4),
this Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series C Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. This Corporation shall, upon the written request at any
time of any holder of Series C Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (A) such adjustment and
readjustment, (B) the Series C Conversion Price at the time in effect, and (C)
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 a share of Series C
Preferred Stock.
(iii) Reservation of Stock Issuable Upon Conversion.
This 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 Series C Preferred Stock such number
of shares of Class A Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series C 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 Series C Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Series C Preferred Stock, this 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 purposes, including, without limitation,
engaging in best efforts to obtain the requisite stockholder approval of any
necessary amendment to this Seventh Amended and Restated Certificate of
Incorporation.
(iv) Notices. Any notice required by the provisions of
this Section F(4) to be given to the holders of shares of Series C Preferred
Stock shall be deemed given if deposited in the United States registered or
certified mail, postage prepaid, return receipt requested and addressed to each
holder of record at his address appearing on the books of this Corporation.
(5) Voting Rights. The holder of each share of Series C Preferred
Stock shall have the right to one vote for each share of Class A Common Stock
into which such share of Series C Preferred Stock could then be converted, and
with respect to such vote, such holder shall have full voting rights and powers
equal to
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the voting rights and powers of the holders of Class A Common Stock, shall be
entitled, notwithstanding any provision hereof, to notice of any stockholders'
meeting in accordance with the Bylaws of this Corporation, and shall be entitled
to vote together as a single class with holders of Class A Common Stock, Class B
Common Stock, Series A Preferred Stock, Series B Preferred Stock and Series D
Preferred Stock with respect to any question upon which holders of Class A
Common Stock have the right to vote, unless otherwise prohibited by law.
Fractional votes shall not be permitted and any fractional voting rights
available on an as-converted basis (after aggregating all shares into which
shares of Series C Preferred Stock held by each holder could be converted) shall
be rounded to the nearest whole number (with one-half being rounded upward).
(6) Protective Provisions of Series C Preferred Stock. So long as at
least ten percent (10%) of the Series C Preferred Stock remain outstanding, the
Corporation shall not without first obtaining the approval (by vote or written
consent, as provided by law) of the holders of a majority of the outstanding
shares of Series C Preferred Stock:
a. alter or change the rights, preferences or privileges of
the shares of the Series C Preferred Stock, including by merger, consolidation,
reorganization or otherwise;
b. increase or decrease (other than by redemption or
conversion) the total number of authorized shares of Series C Preferred Stock,
including by merger, consolidation, reorganization or otherwise;
c. create (by new authorization, reclassification,
recapitalization or otherwise) any class or series of stock or any other
securities convertible into equity securities of this Corporation having a
preference over, or being on a parity with, the rights, preferences or
privileges of the Series C Preferred Stock, including by merger, consolidation,
reorganization or otherwise;
d. redeem, purchase or otherwise acquire (or pay into or
set aside for a sinking fund for such purpose) any share or shares of any series
of Preferred Stock or Common Stock other than as provided in Article IV(C)(1)
and Section F(1) above; provided, however, that this restriction shall not apply
to the repurchase of shares of Common Stock from employees, officers, directors,
consultants or other persons performing services for the Corporation or any
subsidiary pursuant to agreements under which the Corporation has the option to
repurchase such shares at cost upon the occurrence of certain events, such as
the termination of employment, provided that such repurchase has been approved
by unanimous agreement of the Board of Directors;
e. amend the Certificate of Incorporation or the Bylaws of
the Corporation, including by merger, consolidation, reorganization or
otherwise;
f. effect any acquisition of or investment in another
person or entity involving consideration in excess of $1,000,000, other than in
the ordinary course of business;
g. effect a sale, transfer or other disposition of assets,
excluding sales of inventory and other sales in the ordinary course of business,
in any transaction or series of related transactions involving consideration in
excess of the lesser of (x) $1,000,000 or (y) 25% of the fair market value of
the Corporation's consolidated assets;
h. effect any transaction with senior management of the
Corporation or any other affiliates, except for any arms-length employment
arrangements;
i. effect any debt or lease transaction involving in excess
of $3,000,000.
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(7) Status of Converted Series C Preferred Stock. In the event any
shares of Series C Preferred Stock shall be converted pursuant to Section F(4)
hereof, the shares so converted shall be canceled and shall not be issuable by
the Corporation. The Certificate of Incorporation of this Corporation shall be
appropriately amended to effect the corresponding reduction in the Corporation's
authorized capital stock.
G. Rights, Preferences and Restrictions of Series D Preferred Stock. The
rights, preferences, privileges and restrictions granted to and imposed on the
Series D Preferred Stock are as set forth below in this Article IV(G).
(1) Dividends. The holders of the Series D Preferred Stock shall be
entitled to receive, out of any funds legally available therefor, pari passu
with the Series C Preferred Stock and prior and in preference to any declaration
or payment of any dividend (payable other than in Common Stock or other
securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock) on the
Common Stock, the Series A Preferred Stock and Series B Preferred Stock or any
other class or series of Common Stock or Preferred Stock that is not expressly
senior to or pari passu in right of payment to the Series D Preferred Stock
(collectively, "Series D Junior Stock"), dividends compounded annually at the
rate per annum of $0.039256 per share (as adjusted for any subdivisions,
combinations or stock dividends with respect to such shares). The right to such
dividends on the Series D Preferred Stock shall be cumulative and shall accrue
whether or not declared by the Board of Directors and whether or not there are
profits or surplus available therefor.
In addition, the holders of the Series D Preferred Stock shall share pro
rata with holders of Common Stock on the basis of the number of shares of Common
Stock which each holder would be entitled to receive upon conversion of such
holder's Series D Preferred Stock as of the record date for the dividend or
distribution, in all other dividends or distributions, if any, that the Board of
Directors may declare from time to time with respect to the Common Stock.
In the event that the Corporation shall have accrued but unpaid dividends
outstanding immediately prior to, and in the event of, a conversion of Series D
Preferred Stock (as provided in Section G(3) hereof), the Corporation shall, at
the option of each holder, pay in cash to each holder of Series D Preferred
Stock subject to conversion the full amount of any such dividends or allow such
dividends to be converted into Class A Common Stock in accordance with, and
pursuant to the terms specified in, Section G(3) hereof.
(2) Liquidation Preference.
a. 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 shall be entitled to receive, pari passu with the
Series C Preferred Stock and prior and in preference to any distribution of any
of the assets or surplus funds of the Corporation to the holders of the Series D
Junior Stock by reason of their ownership thereof, the greater of (i) the amount
that would be payable to each holder of the Series D Preferred Stock in respect
of the Common Stock issuable upon conversion of such holder's shares of Series D
Preferred Stock if all outstanding shares of Series D Preferred Stock were
converted into Common Stock immediately prior to such event in accordance with
Section G(3), or (ii) the sum of (x) $0.4907 (as adjusted for any subdivisions,
combinations or stock dividends with respect to such shares) per share of the
Series D Preferred Stock, and (y) any accrued and unpaid dividends on such
shares. If, upon occurrence of such event the assets and funds legally available
to be distributed among the holders of the Series D Preferred Stock shall be
insufficient to permit the payment to such holders of the full preferential
amount, then the entire assets and funds of the Corporation legally available
for such distribution shall be distributed ratably among the holders of the
Series C Preferred Stock and Series D Preferred Stock in proportion to the
respective amounts which would be
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payable in respect of the shares then held by them upon such distribution if all
amounts on or with respect to such shares of Series C Preferred Stock and Series
D Preferred Stock were paid in full.
b. Upon completion of the distribution required by Section
F(3)(a) and G(2)(a) the holders of the Series A Preferred Stock, Series B
Preferred Stock and Class A Common Stock of the Corporation shall receive all of
the remaining assets of the Corporation as provided in Section E(2)(a) and
Section 2 of Article IV(D).
c. (i) For purposes of this Section G(2), unless the
holders of a majority of the Series D Preferred Stock elect otherwise, a
liquidation, dissolution or winding up of the Corporation shall be deemed to be
occasioned by, and to include, (A) any distribution of the assets of the
Corporation among shareholders for the purpose of winding-up its affairs, (B) a
sale of all or substantially all of the assets of the Corporation in one or a
series of transactions (including, for purposes of this section, intellectual
property rights which, in the aggregate, constitute substantially all of the
Corporation's material assets), or (C) any transaction or series of related
transactions (including, without limitation, any reorganization, merger,
consolidation or other business combination) that results in the transfer of 50%
or more of the outstanding voting power of the Corporation, provided, however,
that a transaction shall not constitute a Liquidation Event if its sole purpose
is to change the state of this Corporation's incorporation or to create a
holding company that will be owned in substantially the same proportions by the
persons who held this Corporation's securities immediately prior to such
transaction.
(ii) In any of such events, if the consideration
received by the Corporation is other than cash, its value will be deemed its
fair market value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or
other similar restrictions on free marketability shall be valued as follows: (1)
if traded on a securities exchange or through the Nasdaq National Market, the
value shall be deemed to be the average of the closing prices of the securities
on such exchange over the thirty day period ending three days prior to the
closing; (2) if actively traded over-the-counter, the value shall be deemed to
be the average of the closing bid or sale prices (whichever is applicable) over
the thirty day period ending three days prior to the closing; and (3) 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 of the Corporation.
(B) Securities subject to investment letter or
other restrictions on free marketability (other than restrictions arising solely
by virtue of a stockholder's status as an affiliate or former affiliate) shall
be valued in such a manner as to make an appropriate discount from the market
value determined as above in paragraph (A) (1), (2) or (3) to reflect the
approximate fair market value thereof, as determined in good faith by the Board
of Directors of the Corporation.
(iii)The Corporation shall give each holder of record of
Series D Preferred Stock written notice of any such impending transaction not
later than ten (10) days prior to the stockholder meeting called to approve such
transaction, or twenty (20) days prior to the closing of such transaction
whichever notice date is earlier, and shall also notify such holders in writing
of the final approval of such transaction. The first of such notices shall
describe the material terms and conditions of the impending transaction, the
provisions of this Section G(2), and the amounts anticipated to be distributed
to holders of each outstanding series and class of capital stock of the
Corporation, and the Corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however,
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that such periods may be shortened upon the written consent of the holders of
Series D Preferred Stock that are entitled to such notice rights or similar
notice rights and that represent at least a majority of the voting power of all
then outstanding shares of such Series D Preferred Stock (on an as-converted
basis).
(3) Conversion. The holders of the Series D Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
a. Right to Convert. Each share of Series D Preferred Stock
shall be convertible, at the option of the holder thereof, at any time into such
number of fully paid and nonassessable shares of Class A Common Stock as is
determined by dividing $0.4907 by the then applicable Series D Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. The
price at which shares of Class A Common Stock shall be deliverable upon
conversion of the Series D Preferred Stock (the "Series D Conversion Price")
shall initially be $0.4907 per share of Class A Common Stock. Such Series D
Conversion Price shall be subject to adjustment as hereinafter provided.
Notwithstanding anything herein to the contrary, to the extent the
Corporation issues shares of Class A Common Stock pursuant to that certain
warrant issued to FMR Corp. (the "Warrant"), then the Conversion Price of the
Series D Preferred Stock shall be reduced, with effect from the Series D
Original Issue Date (defined below), to an amount equal to the product of (i)
$0.4907 multiplied by (ii) the quotient obtained by dividing (A) 123,892,670 by
(B) the sum of (x) 123,892,670 plus (y) the total aggregate number of shares of
Class A Common Stock issued upon exercise of the Warrant (aggregating any prior
partial exercises of the Warrant with the most recent exercise) (such adjusted
Conversion Price to be the "Deemed Series D Conversion Price"), and in addition,
any other adjustment of the Series D Conversion Price resulting from the
operation of any other provision of this Section G(3) shall, upon each exercise
of the Warrant, be recalculated or adjusted to reflect such deemed prior
adjustment of the Series D Conversion Price to the Deemed Series D Conversion
Price pursuant to this paragraph.
b. Automatic Conversion. Each share of Series D Preferred
Stock shall automatically be converted into shares of Class A Common Stock at
the then effective Series D Conversion Price immediately upon the effectiveness
of a Qualified Public Offering. The holders of at least a majority of the then
outstanding shares of Series D Preferred Stock, voting together as a single
class at a duly held meeting or by written consent or other agreement, may at
any time elect to convert all Series D Preferred Stock into Class A Common
Stock.
c. Mechanics of Conversion. Before any holder of Series D
Preferred Stock shall be entitled to convert the same into full shares of Class
A Common Stock, he shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the
Series D Preferred Stock, and shall give written notice to the Corporation at
such office that he elects to convert the same. Such notice shall also state
whether the holder elects to receive accrued but unpaid dividends on the Series
D Preferred Stock proposed to be converted in cash, or to convert such dividends
into shares of Class A Common Stock at their fair market value as determined by
the Board of Directors. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series D
Preferred Stock, a certificate or certificates for the number of shares of Class
A Common Stock to which he 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 a fractional share of Class A Common Stock, and any accrued but
unpaid dividends on the converted Series D Preferred Stock which the holder
elected to receive in cash. 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 Series D Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Class A Common Stock on such date. If the conversion is in
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connection with an underwritten public offering of securities registered
pursuant to the Securities Act of 1933, as amended, the conversion shall be
conditioned upon the closing of such public offering, in which event the
person(s) entitled to receive the Class A Common Stock issuable upon such
conversion of the Series D Preferred Stock shall not be deemed to have converted
such Series D Preferred Stock until immediately prior to such closing.
If only part of the Series D Preferred Stock represented by the
surrendered certificate or certificates is converted, the holder shall have the
right to receive a new certificate for the shares of Series D Preferred Stock
represented by the original certificate or certificates which were not
converted. All shares issued by the Corporation pursuant to the conversion of
Series D Preferred Stock into Class A Common Stock, as set out above, shall be
fully paid and non-assessable.
d. Adjustments to Conversion Price.
(i) Special Definitions. For purposes of this Section
G(4), the following definitions shall apply:
(A) "Options" shall mean rights, options or
warrants to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(B) "Series D Original Issue Date" shall mean the
date on which the first share of Series D Preferred Stock is issued.
(C) "Convertible Securities" shall mean any
evidences of indebtedness, shares or other securities convertible into or
exchangeable for Common Stock.
(D) "Additional Shares of Common Stock" shall mean
all shares of Common Stock issued (or, pursuant to Section G(3)(d)(iii), deemed
to be issued) by the Corporation after the Series D Original Issue Date, other
than shares of Common Stock issued or issuable:
i) upon conversion of shares of Preferred
Stock;
ii) to officers, directors or employees
of, or consultants to, the Corporation pursuant to a stock grant, option plan or
purchase plan or other employee stock incentive program (collectively, the
"Plans") up to a maximum of 24,997,618 shares in the aggregate, pursuant to a
warrant to Beauchesne, Ostiguy & Simard Inc. in an amount of 15,500 shares,
pursuant to the Series D Preferred Stock Plan up to a maximum of 1,238,926
shares in the aggregate, pursuant to warrants to Comdisco, Inc./Comdisco
Ventures, Inc. in an aggregate amount of 587,976 shares, pursuant to a warrant
to Comerica Incorporated in an amount of 92,496 shares, and pursuant to a
warrant to Planet Enlightenment Corp. in an amount of 10,000 shares (in each
case as adjusted for any stock dividends, combinations or splits with respect to
such shares after the Series D Original Issue Date);
iii) as a dividend or distribution on
Series D Preferred Stock (in accordance with the provisions hereof).
(ii) No Adjustment of Conversion Price. No adjustment
in the Series D Conversion Price shall be made in respect of the issuance of
Additional Shares of Common Stock unless the consideration per share for an
Additional Share of Common Stock issued or deemed to be issued by the
Corporation is less than the Series D Conversion Price in effect on the date of,
and immediately prior to such issue.
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(iii) Deemed Issue of Additional Shares of Common Stock.
(A) Options and Convertible Securities. In the
event the Corporation at any time or from time to time after the Series D
Original Issue Date 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 and Options therefor, the conversion or exchange of such
Convertible Securities, shall be deemed to be Additional Shares of Common Stock
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date, provided that in
any such case in which Additional Shares of Common Stock are deemed to be
issued:
i) no further adjustment in the Series D
Conversion Price shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;
ii) if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the Corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Series D Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
iii) 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 Series D Conversion Price shall, upon such
expiration, be recomputed as if:
1) in the case of Convertible
Securities or Options for Common Stock, the only Additional Shares of Common
Stock issued were 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 all such Options, whether
or not exercised, 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, and
2) 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 Stock deemed to have been then issued was the consideration actually
received by the Corporation for the issue of all such Options, whether or not
exercised, plus the consideration deemed to have been received by the
Corporation upon the issue of the Convertible Securities with respect to which
such Options were actually exercised; and
iv) no readjustment pursuant to this clause
(A) shall have the effect of increasing the Series D Conversion Price to an
amount which exceeds the lower of (i) the Series D Conversion Price on the
original adjustment date, or (ii) the Series D Conversion Price that would have
resulted from any issuance of Additional Shares of Common Stock between the
original adjustment date and such readjustment date.
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(B) Stock Dividends. In the event the
Corporation, at any time or from time to time after the Series D Original Issue
Date, shall declare or pay any dividend payable in Common Stock or Convertible
Securities, then Additional Shares of Common Stock shall be deemed to have been
issued immediately after the close of business on the record date for the
determination of holders of any class of securities entitled to receive such
dividend (and the number of shares issuable with respect to Convertible
Securities shall be determined in the same manner provided in clause (A) above).
(iv) Adjustment of Conversion Price Upon Issuance
of Additional Shares of Common Stock. In the event this Corporation shall issue
Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section G(3)(d)(iii)) without consideration or
for a consideration per share less than the Series D Conversion Price in effect
on the date of and immediately prior to such issue, then and in such event, such
Series D Conversion Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest hundredth of a cent) determined by multiplying
such Series D 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 of Common Stock which the aggregate consideration
received by the Corporation for the total number of Additional Shares of Common
Stock so issued would purchase at the Series D Conversion Price in effect on the
date immediately prior to such issue; 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 Stock so issued (including
for purposes of this Section G(4)(d)(iv) any increase in the number of Shares of
Common Stock issuable upon conversion of any Series of Preferred Stock that
results from such issuance of Additional Shares of Common Stock) provided that,
for the purposes of this Section G(3)(d)(iv), all shares of Common Stock
issuable upon conversion of all outstanding Preferred Stock and all outstanding
Convertible Securities, and upon exercise of all outstanding Options bearing an
exercise price which is lower than the price at which Additional Shares of
Common Stock were issued (or deemed to be issued), shall be deemed to be
outstanding, and immediately after any Additional Shares of Common Stock are
deemed issued pursuant to Section G(3)(d)(iii), such Additional Shares of Common
Stock shall be deemed to be outstanding.
(v) Determination of Consideration. For purposes
of this Section G(3)(d), the consideration received by the Corporation for the
issue of any Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property: Such consideration
shall:
i) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Corporation excluding
amounts paid or payable for accrued interest or accrued dividends;
ii) insofar as it consists of property
other than cash, be computed at the fair value thereof at the time of such
issue, as determined by the Board of Directors in the good faith exercise of its
reasonable business judgment; and
iii) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other assets
of the Corporation for consideration which covers both, be the proportion of
such consideration so received, computed as provided in clauses (i) and (ii)
above, as determined in the good faith exercise of its reasonable business
judgment by the Board of Directors.
(B) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section G(3)(d)(iii)(A),
relating to Options and Convertible Securities, shall be determined by dividing
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(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.
(C) Stock Dividends. Any Additional Shares
of Common Stock deemed to have been issued relating to stock dividends shall be
deemed to have been issued for no consideration.
(vi) Adjustments for Subdivisions, Combinations,
or Consolidations of Common Stock. In the event the number of shares of Common
Stock outstanding at any time after the Series D Original Issue Date shall be
subdivided, combined or consolidated, by reclassification or otherwise, into a
greater or lesser number of shares of Common Stock, then the Series D Conversion
Price in effect immediately prior to such subdivision, combination or
consolidation shall, concurrently with the effectiveness of such subdivision,
combination or consolidation, be proportionately decreased or increased, as
applicable.
e. Other Distributions. In the event this Corporation
shall declare a distribution payable in securities of other persons, evidences
of indebtedness issued by this Corporation or other persons, assets (excluding
cash dividends) or options or rights not referred to in Section G(3)(d)(iii),
then, in each such case, the holders of Series D Preferred Stock shall be
entitled to a proportionate share of any such distribution as though they were
the holders of the number of shares of Common Stock of the Corporation into
which their shares of Series D Preferred Stock are convertible as of the record
date fixed for the determination of the holders of Common Stock of the
Corporation entitled to receive such distribution.
f. Recapitalizations. If at any time or from time to
time there shall be a recapitalization of the Common Stock or a business
combination, merger or consolidation of this Corporation with or into another
entity (other than a subdivision, combination, merger, consolidation or sale of
assets transaction provided for elsewhere in this Seventh Amended and Restated
Certificate of Incorporation), provision shall be made so that the holders of
Series D Preferred Stock shall thereafter be entitled to receive upon conversion
of the Series D Preferred Stock the number of shares of stock or other
securities or property of the Corporation or otherwise to which a holder of
Common Stock deliverable upon conversion would have been entitled on such
recapitalization, business combination, merger, consolidation or sale of assets
transaction. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section G(3) with respect to the rights of
the holders of the Series D Preferred Stock thereafter to the end that the
provisions of this Section G(3) (including adjustment of the Series D Conversion
Price then in effect and the number of shares issuable upon conversion of the
Series D Preferred Stock) shall be applicable after that event as nearly
equivalent as may be practicable.
g. No Impairment. This Corporation will not, without the
appropriate vote of the stockholders under the General Corporation Law or
Sections E(5) and F(6), by amendment of its Certificate of Incorporation or
through any reorganization, recapitalization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the
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observance or performance of any of the terms to be observed or performed
hereunder by this Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section G(3) and in the taking of all
such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of Series D Preferred Stock against impairment.
h. No Fractional Shares and Certificate as to
Adjustments.
(i) No fractional shares shall be issued upon the
conversion of any share or shares of Series D 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 fair market
value of the Class A Common Stock as determined in good faith by the Board of
Directors. Whether or not fractional shares are issuable upon such conversion
shall be determined on the basis of the total number of shares of Series D
Preferred Stock the holder is at the time converting into Common Stock and the
number of shares of Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or
readjustment of the Series D Conversion Price pursuant to this Section G(3),
this Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series D Preferred Stock a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. This Corporation shall, upon the written request at any
time of any holder of Series D Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (A) such adjustment and
readjustment, (B) the Series D Conversion Price at the time in effect, and (C)
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 a share of Series D
Preferred Stock.
(iii) Reservation of Stock Issuable Upon
Conversion. This 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 Series D Preferred Stock such number
of shares of Class A Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series D 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 Series D Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Series D Preferred Stock, this 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 purposes, including, without limitation,
engaging in best efforts to obtain the requisite stockholder approval of any
necessary amendment to this Seventh Amended and Restated Certificate of
Incorporation.
(iv) Notices. Any notice required by the
provisions of this Section G(3) to be given to the holders of shares of Series D
Preferred Stock shall be deemed given if deposited in the United States
registered or certified mail, postage prepaid, return receipt requested and
addressed to each holder of record at his address appearing on the books of this
Corporation.
(4) Voting Rights. The holder of each share of Series D
Preferred Stock shall have the right to one vote for each share of Class A
Common Stock into which such share of Series D Preferred Stock could then be
converted, and with respect to such vote, such holder shall have full voting
rights and powers equal to the voting rights and powers of the holders of Class
A Common Stock, shall be entitled, notwithstanding any provision hereof, to
notice of any stockholders' meeting in accordance with the Bylaws of this
Corporation, and shall be entitled to vote together as a single class with
holders of Class A Common Stock, Class B Common Stock, Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock with respect
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to any question upon which holders of Class A Common Stock have the right to
vote, unless otherwise prohibited by law. Fractional votes shall not be
permitted and any fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series D Preferred Stock held
by each holder could be converted) shall be rounded to the nearest whole number
(with one-half being rounded upward).
(5) Status of Converted Series D Preferred Stock. In the event
any shares of Series D Preferred Stock shall be converted pursuant to Section
G(3) hereof, the shares so converted shall be canceled and shall not be issuable
by the Corporation. The Certificate of Incorporation of this Corporation shall
be appropriately amended to effect the corresponding reduction in the
Corporation's authorized capital stock.
ARTICLE V
Except as otherwise provided in this Seventh Amended and Restated
Certificate of Incorporation, in furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to make,
repeal, alter, amend and rescind any or all of the Bylaws of the Corporation.
ARTICLE VI
ARTICLE VI
Subject to Article IV(E)(5), the number of directors of the Corporation
shall be fixed from time to time by, or in the manner provided in, the Bylaws or
amendment thereof duly adopted by the Board of Directors or by the stockholders.
To the maximum extent permitted from time to time under the law of the
State of Delaware, this Corporation renounces any interest or expectancy of the
Corporation in, or being offered an opportunity to participate in, business
opportunities that are from time to time presented to the director elected by
each of Bain Capital Venture Fund, L.P., Telesystem Software Ventures Limited
Partnership and Communicade Investments Ltd. (the "Bain Director," the "Telsoft
Director," and the "Communicade Director," respectively). No amendment or repeal
of this Article VI shall apply to or have any effect on the liability or alleged
liability of any Bain Director, Telsoft Director or Communicade Director for or
with respect to any opportunities of which such Bain Director, Telsoft Director
or Communicade Director become aware prior to such amendment or repeal.
ARTICLE VII
Elections of directors need not be by written ballot unless the Bylaws of
the Corporation shall so provide.
ARTICLE VIII
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 of applicable law) outside the
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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 IX
To the fullest extent permitted by the General Corporation Law of
Delaware, as the same may be amended from time to time, a director of the
Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director. If
the General Corporation Law of Delaware is hereafter amended to authorize, with
or without the approval of a corporation's stockholders, further limitations of
the liability of the corporation's directors for breach of fiduciary duty, then
a director of the Corporation shall not be liable for any such breach to the
fullest extent permitted by the General Corporation Law of Delaware as so
amended.
Any repeal or modification of the foregoing provisions of this Article IX,
by amendment of this Article IX or by operation of law, shall not adversely
affect any right or protection of a director of the Corporation with respect to
any acts or omissions of such director occurring prior to such repeal or
modification.
ARTICLE X
To the fullest extent permitted by applicable law, the Corporation is
authorized to provide indemnification of (and advancement of expenses to)
directors, officers, employees and other agents of the Corporation (and any
other persons to which Delaware law permits the Corporation to provide
indemnification), through Bylaw provisions, agreements with any such director,
officer, employee or other agent or other person, vote of stockholders or
disinterested directors, or otherwise, in excess of the indemnification and
advancement otherwise permitted by Section 145 of the Delaware General
Corporation Law, subject only to limits created by applicable Delaware law
(statutory or nonstatutory), with respect to actions for breach of duty to a
corporation, its stockholders and others.
Any repeal or modification of any of the foregoing provisions of this
Article X, by amendment of this Article X or by operation of law, shall not
adversely affect any right or protection of a director, officer, employee or
other agent or other person existing at the time of, or increase the liability
of any director of the Corporation with respect to any acts or omissions of such
director, officer or agent occurring prior to such repeal or modification.
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ARTICLE XI
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Seventh Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, subject to
the rights of stockholders herein.
ARTICLE XII
The Corporation shall have perpetual existence.
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