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CERTIFICATE OF DESIGNATION
OF
POWERS, PREFERENCES, RIGHTS, QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS
OF
SERIES H CONVERTIBLE PREFERRED STOCK
OF
EXABYTE CORPORATION
DESIGNATION OF SERIES H PREFERRED
1. DESIGNATION. Exabyte Corporation, a Delaware corporation (the
"Corporation"), hereby certifies that Ten Million (10,000,000) of authorized
shares of Preferred Stock are hereby designated "Series H Preferred Stock" (the
"Series H Preferred"). The rights, preferences, privileges, restrictions and
other matters relating to the Series H Preferred are as follows:
2. VOTING RIGHTS. Except as otherwise provided herein or as required by
law, the Series H Preferred shall vote with the shares of the Common Stock of
the Corporation (and not as a separate class) at any annual or special meeting
of stockholders of the Corporation, and may act by written consent in the same
manner as the Common Stock, in either case upon the following basis: each holder
of shares of Series H Preferred shall be entitled to such number of votes as
shall be equal to the whole number of shares of Common Stock into which such
holder's aggregate number of shares of Series H Preferred are convertible
(pursuant to Section 5 below) immediately after the close of business on the
record date fixed for such meeting or the effective date of such written
consent. Following the conversion of any Series H Preferred into Common Stock
pursuant to Section 5, the Common Stock so issued shall be voting Common Stock
as set forth in Article Fourth of the Restated Certificate of Incorporation, as
amended to date.
3. LIQUIDATION RIGHTS.
(a) LIQUIDATION VALUE. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, before any
distribution or payment shall be made to the holders of any Common Stock and any
other stock of the Corporation that is not by its terms expressly senior to in
right of payment to the Series H Preferred (collectively, "Junior Stock"), the
holders of Series H Preferred, PARI PASSU with the holders of any other capital
stock ("Pari Passu Stock") of the Corporation that is not Junior Stock or
expressly senior in right of payment with regards to any liquidation,
dissolution or winding up of the Corporation to the Series H Preferred, shall be
entitled to be paid out of the assets of the Corporation an amount with respect
to each then outstanding share of Series H Preferred equal to the Original
Series H Issue Price (the "Series H Liquidation Value").
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(b) PROPORTIONATE PAYMENTS. If, upon any liquidation,
dissolution or winding up, the assets of the Corporation shall be insufficient
to make payment in full to all holders of Series H Preferred and Pari Passu
Stock, then such assets shall be distributed among the holders of Series H
Preferred and Pari Passu Stock at the time outstanding, ratably in proportion to
the full amounts to which they would otherwise be respectively entitled.
(c) PARTICIPATION RIGHTS. After the payment of the full
liquidation preference of the Series H Preferred and Pari Passu Stock as set
forth in Section 3(a) above, the remaining funds and other assets of the
Corporation legally available for distribution, if any, shall be distributed pro
rata among the holders of the Common Stock, the Pari Passu Stock and the Series
H Preferred on an as-converted basis.
4. REDEMPTION RIGHTS.
(a) OPTIONAL REDEMPTIONS. Commencing on the second annual
anniversary of the Original Series H Issue Date, the Corporation shall have the
right but not the obligation to redeem some or all shares of the
then-outstanding Series H Preferred at a price per share equal to $3.00 (the
"Redemption Value"); provided, however, that the Closing Price of the Common
Stock on each of the 30 consecutive trading days prior to the date that the
Corporation delivers notice of a redemption pursuant to Section 4(c) below,
shall be greater than the Redemption Value.
(b) REDEMPTION PAYMENTS. For each share of Series H Preferred
which is to be redeemed hereunder, the Corporation shall be obligated on the
Scheduled Redemption Date (as defined below) to pay to the holder thereof (upon
surrender by such holder at the Corporation's principal office of the
certificate representing such share) an amount in cash equal to the Redemption
Value.
(c) NOTICE OF REDEMPTION. The Corporation shall mail written
notice of each redemption of Series H Preferred to each record holder thereof
not more than 60 nor less than 30 days prior to the date fixed for such purpose
(the "Scheduled Redemption Date"). The holders of Series H Preferred to be
redeemed shall in any event have the right to convert their shares into Common
Stock at any time prior to the close of business on the Scheduled Redemption
Date. In case fewer than the total number of shares represented by any
certificate are redeemed, a new certificate representing the number of
unredeemed shares shall be issued to the holder thereof without cost to such
holder within five business days after surrender of the certificate representing
the redeemed shares.
(d) DETERMINATION OF THE NUMBER OF SHARES TO BE REDEEMED. The
number of shares of Series H Preferred to be redeemed from each holder thereof
in redemptions hereunder shall be the number of shares determined by multiplying
the total number of shares of Series H Preferred to be redeemed by a fraction,
the numerator of which shall be the total number of shares of Series H Preferred
then held by such holder and the denominator of which shall be the total number
of shares of Series H Preferred then outstanding.
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5. CONVERSION RIGHTS.
The holders of the Series H Preferred shall have the following rights
with respect to the conversion of the Series H Preferred into shares of Common
Stock:
(a) OPTIONAL CONVERSION. Subject to and in compliance with the
provisions of this Section 5, any shares of Series H Preferred may, at the
option of the holder, be converted at any time into fully-paid and nonassessable
shares of Common Stock. The number of shares of Common Stock to which a holder
of Series H Preferred shall be entitled upon conversion shall be the product
obtained by multiplying the "Series H Conversion Rate" then in effect
(determined as provided in Section 5(b)) by the number of shares of Series H
Preferred being converted.
(b) SERIES H CONVERSION RATE. The conversion rate in effect at
any time for conversion of the Series H Preferred (the "Series H Conversion
Rate") shall be the quotient obtained by dividing the Original Series H Issue
Price by the "Series H Conversion Price" calculated as provided in Section 5(c).
(c) CONVERSION PRICE. The conversion price for the Series H
Preferred (the "Series H Conversion Price") shall initially be One Dollar
($1.00), as appropriately adjusted for any future stock splits, stock
combinations, stock dividends or similar transactions affecting the Series H
Preferred. Such initial Series H Conversion Price shall be adjusted from time to
time in accordance with this Section 5. All references to the Series H
Conversion Price herein shall mean the Series H Conversion Price as so adjusted.
For purposes of determining the adjusted Series H Conversion Price, the
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Corporation or any Subsidiary,
and the disposition of any shares so owned or held shall be considered an issue
or sale of Common Stock.
(d) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation shall at any time or from time to time after the Original Series H
Issue Date effect a subdivision of the outstanding Common Stock, the Series H
Conversion Price in effect immediately before that subdivision shall be
proportionately decreased. Conversely, if the Corporation shall at any time or
from time to time after the Original Series H Issue Date combine the outstanding
shares of Common Stock into a smaller number of shares, the Series H Conversion
Price in effect immediately before the combination shall be proportionately
increased. Any adjustment under this Section 5(d) shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(e) ADJUSTMENT FOR COMMON STOCK DIVIDENDS AND DISTRIBUTIONS.
If the Corporation at any time or from time to time after the Original Series H
Issue Date makes, or fixes a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common
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Stock, in each such event the Series H Conversion Price that is then in
effect shall be decreased as of the time of such issuance or, in the event
such record date is fixed, as of the close of business on such record date,
by multiplying the Series H Conversion Price then in effect by a fraction (1)
the numerator of which is the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close
of business on such record date, and (2) the denominator of which is the
total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record
date plus the number of shares of Common Stock issuable in payment of such
dividend or distribution; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not
fully made on the date fixed therefor, the Series H Conversion Price shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Series H Conversion Price shall be adjusted pursuant to this
Section 5(e) to reflect the actual payment of such dividend or distribution.
(f) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE AND
SUBSTITUTION. If at any time or from time to time after the Original Series H
Issue Date, the Common Stock issuable upon the conversion of the Series H
Preferred is changed into the same or a different number of shares of any class
or classes of stock, whether by recapitalization, reclassification or otherwise
(other than a subdivision or combination of shares or stock dividend or a
reorganization, merger, consolidation or sale of assets provided for elsewhere
in this Section 5), in any such event each holder of Series H Preferred shall
have the right thereafter to convert such stock into the kind and amount of
stock and other securities and property receivable in connection with such
recapitalization, reclassification or other change by holders of the maximum
number of shares of Common Stock into which such shares of Series H Preferred
could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustments as provided
herein or with respect to such other securities or property by the terms
thereof.
(g) REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR SALES OF
ASSETS. If at any time or from time to time after the Original Series H Issue
Date, there is a capital reorganization of the Common Stock (other than a
recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this Section 5) or, subject to
Section 6(v), in the case of any consolidation or merger of the Company with or
into another corporation or business entity (other than a consolidation or
merger (i) with a subsidiary in which the Company is the surviving corporation
or (ii) which does not result in any reclassification, capital reorganization or
other change of outstanding shares of Common Stock), as a part of such capital
reorganization, provision shall be made so that the holders of the Series H
Preferred shall thereafter be entitled to receive upon conversion of the Series
H Preferred the number of shares of stock or other securities or property of the
Corporation to which a holder of the maximum number of shares of Common Stock
deliverable upon conversion would have been entitled in connection with such
transaction, subject to adjustment in respect of such stock or securities by the
terms thereof. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 5 with respect to the rights of
the holders of Series H Preferred after the transaction to
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the end that the provisions of this Section 5 (including adjustment of the
Series H Conversion Price then in effect and the number of shares issuable
upon conversion of the Series H Preferred) shall be applicable after that
event and be as nearly equivalent as practicable. Subject to Section 6(v), in
case of a consolidation or merger, the surviving or successor corporation or
other entity shall duly execute and deliver to each Holder of the Series H
Preferred a supplement hereto acknowledging such corporation's or entity's
obligations under this Section 5(g). The foregoing provisions of this
subsection 5(g) shall similarly apply to successive reclassifications,
capital reorganizations and other changes, consolidations or merger.
(h) CERTIFICATE OF ADJUSTMENT. In each case of an adjustment
or readjustment of the Series H Conversion Price for the number of shares of
Common Stock or other securities issuable upon conversion of the Series H
Preferred, the Corporation, at its expense, shall compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to each registered holder of Series H
Preferred at the holder's address as shown in the Corporation's books. The
certificate shall set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (1) the consideration received or deemed to be received by the
Corporation for any additional shares of Common Stock issued or sold or deemed
to have been issued or sold, (2) the Series H Conversion Price at the time in
effect, (3) the number of additional shares of Common Stock issued or sold or
deemed to have been issued or sold, and (4) the type and amount, if any, of
other property which at the time would be received upon conversion of the Series
H Preferred. The Company shall provide each Holder of the Series H Preferred
with not less than 10 days prior written notice of any event, other than an
Acquisition or Asset Transfer, resulting in an adjustment under Section 5. With
respect to a proposed Acquisition or Asset Transfer, the holders of the Series H
Preferred shall be given sufficient notice of such event so that they will have
a minimum of 30 days to consider whether or not to consent to such proposed
Acquisition or Asset Transfer pursuant to Section 6.
(i) MECHANICS OF CONVERSION. Each holder of Series H Preferred
who desires to convert the same into shares of Common Stock pursuant to this
Section 5 shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or any transfer agent for the Series
H Preferred, and shall give written notice to the Corporation at such office
that such holder elects to convert the same. Such notice shall state the number
of shares of Series H Preferred being converted. Thereupon, the Corporation
shall promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled. Such conversion shall be deemed to have been made at the close of
business on the date of such surrender of the certificate representing the
shares of Series H Preferred to be converted, and the person entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder of such shares of Common Stock on such date.
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(j) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of Series H Preferred. All shares of Common
Stock (including fractions thereof) issuable upon conversion of more than one
share of Series H Preferred by a holder thereof shall be aggregated for purposes
of determination whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Corporation shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock's fair market value (as determined by the Board)
on the date of conversion.
6. PROTECTIVE PROVISIONS. In addition to any other rights provided by
law or in the Restated Certificate of Incorporation, so long as any shares of
Series H Preferred shall be outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of not
less than a majority of the outstanding shares of the Series H Preferred Stock,
which consent in each case shall not be unreasonably withheld or delayed
(provided that the Holders are given not less than 30 days to consider such
proposed actions), take any of the following actions:
(i) any amendment or change of the rights, preferences,
privileges or powers of, or the restrictions provided for the benefit of, the
Series H Preferred that adversely affects such rights, preferences, privileges
or powers of the Series H Preferred;
(ii) any action that authorizes, creates or issues shares of
any class of stock having preferences superior to the Series H Preferred;
(iii) any action that reclassifies any outstanding shares into
shares having preferences or priority as to dividends or assets senior to the
preference of the Series H Preferred Stock;
(iv) any amendment of the Company's Restated Certificate of
Incorporation that adversely affects the rights of the Series H Preferred; or
(v) any Acquisition or Asset Transfer.
7. CERTAIN DEFINITIONS.
"ACQUISITION" means any merger, consolidation, business combination,
reorganization or recapitalization of the Corporation (including, without
limitation, pursuant to a tender offer) in any single transaction or series of
related transactions in any such case in which the stockholders of the
Corporation immediately prior to such transaction own capital stock representing
less than fifty percent (50%) of the Corporation's voting power immediately
after such transaction, or any transaction or series of related transactions in
which capital stock representing in excess of fifty percent (50%) of the
Corporation's voting power is transferred.
"ASSET TRANSFER" means any sale, lease or other disposition of all or
substantially all of the assets of the Corporation.
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"CLOSING PRICE" means the closing bid price of the Common Stock on the
principal United States securities exchange or trading market on which such
security is listed or traded as reported by Nasdaq, or if the foregoing does not
apply, the last reported bid price of such security in the over-the-counter
market on the electronic bulletin board for such security.
"COMMON STOCK" means the Company's authorized common stock, $.001 par
value per share.
"ORIGINAL SERIES H ISSUE DATE" means [__________, 2001].
"ORIGINAL SERIES H ISSUE PRICE" means One Dollar ($1.00) per share.
"SUBSIDIARY" means any corporation of which the shares of outstanding
capital stock possessing the voting power (under ordinary circumstances) in
electing the board of directors are, at the time as of which any determination
is being made, owned by the Corporation either directly or indirectly through
Subsidiaries.
8. AMENDMENT AND WAIVER.
No amendment, modification or waiver of any of the terms or provisions
of the Series H Preferred shall be binding or effective without the prior
written consent of the holders of a majority of the then outstanding shares of
Series H Preferred (the "Required Holders"). Any amendment, modification or
waiver of any of the terms or provisions of the Series H Preferred by the
Required Holders, whether prospective or retroactively effective, shall be
binding upon all holders of Series H Preferred Stock.
9. GENERAL PROVISIONS.
(a) REGISTRATION OF TRANSFER. The Corporation shall keep at
its principal office a register for the registration of the Series H Preferred.
Upon the surrender of any certificate representing Series H Preferred at such
place, the Corporation shall, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the aggregate
the number of shares represented by the surrendered certificate. Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the holder of the surrendered certificate and shall be
substantially identical in form to the surrendered certificate.
(b) REPLACEMENT. Upon receipt of evidence reasonably
satisfactory to the Corporation (an affidavit of the registered holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing shares of Series H Preferred, and in the case of any
such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial
institution or other institutional investor its own agreement shall be
satisfactory), or in the case of any such mutilation upon surrender of such
certificate, the Corporation shall (at its expense) execute and deliver in lieu
of such certificate a new certificate of like kind representing the number of
shares of such class represented
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by such lost, stolen, destroyed or mutilated certificate and dated the date
of such lost, stolen, destroyed or mutilated certificate.
(c) RESERVATION OF COMMON STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series H Preferred, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Series H Preferred. If at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then-outstanding shares of the Series H Preferred,
the Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(d) NOTICES. Any notice required by the provisions of this
Certificate of Designation shall be in writing and shall be deemed effectively
given: (i) upon personal delivery to the party to be notified, (ii) when sent by
confirmed telex or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All notices to stockholders shall be addressed to each holder of record
at the address of such holder appearing on the books of the Corporation.
(e) PAYMENT OF TAXES. The Corporation will pay all taxes
(other than taxes based upon income) and other governmental charges that may be
imposed with respect to the issue or delivery of shares of Common Stock upon
conversion of shares of Series H Preferred, excluding any tax or other charge
imposed in connection with any transfer involved in the issue and delivery of
shares of Common Stock in a name other than that in which the shares of Series H
Preferred so converted were registered.
(f) NO DILUTION OR IMPAIRMENT. The Corporation shall not amend
its Restated Certificate of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation.
(g) NO REISSUANCE OF SERIES H PREFERRED. No share or shares of
Series H Preferred acquired by the Corporation by reason of redemption,
purchase, conversion or otherwise shall be reissued.
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The Corporation has caused this Certificate of Designation to be duly
executed in its corporate name on this _____ day of __________, 2001.
Exabyte Corporation
By:
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Name: Stephen F. Smith
Title: Vice President, Chief Financial
Officer, General Counsel and
Secretary
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