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Exhibit 4.1
PLANETCAD INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES B CONVERTIBLE PREFERRED STOCK
MAY 23, 2002
PlanetCAD Inc., a Delaware corporation (the "CORPORATION"), does hereby
certify that pursuant to the authority contained in Article IV of the
Corporation's Restated Certificate of Incorporation (its "CERTIFICATE OF
INCORPORATION") and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the Board of Directors of
the Corporation duly adopted the following resolution, which resolution
remains in full force and effect on the date hereof:
RESOLVED, that, pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of its Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and hereby is established, consisting of 1,202,463
shares, $0.01 par value per share, to be designated the "Series B Convertible
Preferred Stock" (the "SERIES B PREFERRED"); and that, subject to the
limitations provided by law and by the Certificate of Incorporation, the
voting powers, preferences and relative, participating, optional and other
special rights, and qualifications, limitations and restrictions thereof
shall be as follows:
1. CERTAIN DEFINITIONS
(a) "AVATECH MERGER" shall mean the proposed merger with Avatech
Solutions, Inc. pursuant to that certain Agreement and Plan of Merger dated May
1, 2002.
(b) "BOARD" shall mean the Board of Directors of the Corporation.
(c) "COMMON STOCK" shall mean the Common Stock, $.01 par value, of
the Corporation.
(d) "CORPORATION" shall mean PlanetCAD Inc., a Delaware corporation.
(e) "LIQUIDITY EVENT" shall mean (i) the liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, (ii) the sale of
all or substantially all of the Corporation's assets or (iii) the participation
by the Corporation in any merger or consolidation with any other entity that
results in the holders of the Common Stock immediately before such transaction
(assuming the conversion of all convertible securities and the exercise of all
outstanding options) owning less than 51% of the combined entities (assuming the
conversion of
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all convertible securities and the exercise of all outstanding options),
unless such transaction has been approved by holders of more than 50% of the
Series B Preferred; PROVIDED, HOWEVER, that under no circumstances will the
Avatech Merger be deemed a Liquidity Event.
(f) "ORIGINAL ISSUANCE DATE" for any share of the Series B Preferred
shall mean the date on which such share of the Series B Preferred was originally
issued.
(g) "ORIGINAL SERIES B ISSUANCE PRICE" shall mean $0.36 per share for
the Series B Preferred, as adjusted to reflect any stock splits, stock dividends
or other recapitalizations involving the Series B Preferred.
2. DIVIDENDS. Except as otherwise provided in SECTION 5 hereof, the
holders of Series B Preferred shall be entitled to receive, out of any funds
legally available therefor, dividends when, as and if declared by the Board,
at the rate of seven percent (7%) per annum of the Original Series B Issuance
Price, from the Original Issuance Date. Such dividends are (i) prior and in
preference to any declaration or payment of any dividend or other
distribution on Common Stock (other than a dividend payable in shares of
Common Stock) or on any other class or series of capital stock ranking junior
to the Series B Preferred with respect to dividends, (ii) PARI PASSU with any
other shares of Preferred Stock entitled to participate PARI PASSU with the
Series B Preferred with respect to dividends and (iii) subject to the rights
of any series of Preferred Stock that ranks, with respect to dividends,
senior to the Series B Preferred. Except as otherwise provided in SECTION 5
hereof, such dividends shall accrue on each share of Series B Preferred on a
daily basis from the Original Issuance Date whether or not earned or declared
and whether or not there shall be net assets or profits of the Corporation
legally available for the payment of such dividends. Such dividends shall be
cumulative, so that if such dividends with respect to any previous or current
dividend period at the rate provided for herein have not been paid on all
shares of Series B Preferred at the time outstanding, the deficiency shall be
fully paid on such shares before any distribution shall be paid on, or
declared and set apart for, Common Stock or any other class or series of
capital stock ranking junior to the Series B Preferred with respect to
dividends.
3. LIQUIDATION RIGHTS.
(a) In the event of a Liquidity Event, after payment or provision
for payment of the debts and other liabilities and obligations of the
Corporation, the holders of Series B Preferred shall be entitled to receive
for each share of Series B Preferred, prior and in preference to any
distribution of any of the assets or surplus funds of the Corporation to the
holders of Common Stock, and subject to the rights of any series of Preferred
Stock that ranks, on liquidation, senior to the Series B Preferred ("SENIOR
SECURITIES"), but PARI PASSU with any other shares of Preferred Stock under
the terms of which shall be entitled to participate PARI PASSU with the
Series B Preferred upon liquidation, by reason of their ownership thereof, an
amount equal to the Original Series B Issuance Price, plus an amount equal to
all accumulated but unpaid dividends thereon to and including the date full
payment is tendered to the Series B Preferred holders (collectively, the
"SERIES B PREFERENCE AMOUNT"). If upon the occurrence of such event the
assets and funds thus distributed among the holders of Series B Preferred and
any other shares of Preferred Stock entitled to participate PARI PASSU with
the Series B Preferred upon liquidation are insufficient to permit the
payment to such holders of their full preferential amount
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described herein, then the entire assets and funds of the Corporation legally
available for distribution, after satisfaction of the rights of any Senior
Securities, shall be distributed ratably among the holders of the then
outstanding Series B Preferred and any other shares of Preferred Stock
entitled to participate PARI PASSU with the Series B Preferred upon
liquidation, in proportion to the preferential amount that each such holder
is otherwise entitled to receive.
(b) The Corporation shall not consummate any transaction deemed to
constitute a Liquidity Event until the provisions of this SECTION 3 have been
satisfied.
4. VOTING RIGHTS. Except as otherwise expressly provided herein or as
required by Delaware law, the holders of shares of Series B Preferred shall
be entitled to vote on all matters upon which holders of Common Stock have
the right to vote, and with respect to such vote shall be entitled to notice
of any stockholders' meeting in accordance with the bylaws of the Corporation
and applicable law, and shall be entitled to a number of votes equal to the
largest number of full shares of Common Stock into which such shares of
Series B Preferred could be converted, pursuant to the provisions of SECTION
5 hereof, at the record date for the determination of stockholders entitled
to vote on such matters or, if no such record date is established, at the
date such vote is taken or any written consent of stockholders is solicited.
Except as otherwise expressly provided herein or to the extent class or
series voting is otherwise required by law or agreement, the holders of
shares of the Series B Preferred and the Common Stock shall vote together as
a single class and not as separate classes on all matters. The Series B
Preferred shall not have cumulative voting rights.
5. CONVERSION. The outstanding shares of Series B Preferred shall be
convertible into Common Stock as follows:
(a) VOLUNTARY AND AUTOMATIC CONVERSION.
(i) VOLUNTARY CONVERSION. Each share of Series B Preferred
shall be convertible, at the option of the holder thereof, at any time after
the date of issuance of such share at the office of the Corporation or any
transfer agent for the Series B Preferred, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (A) the
Original Series B Issuance Price by (B) the Series B Conversion Price (as
hereinafter defined), as of the date of conversion.
(ii) AUTOMATIC CONVERSION. Each share of Series B Preferred
shall be automatically converted into fully paid and nonassessable shares of
Common Stock, as provided herein, upon (A) the closing of the Avatech Merger
or (B) the Corporation's receipt of the written consent of the holders of not
less a majority of the then outstanding shares of Series B Preferred to the
conversion of all then outstanding Series B Preferred under this subsection.
Upon the occurrence of either such event, each share of Series B Preferred
shall be automatically converted into the number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (A) the
Original Series B Issuance Price by (B) the Series B Conversion Price (as
hereinafter defined), as of the date of conversion. In the event of
conversion upon the Avatech Merger, the person(s) entitled to receive the
Common Stock issuable upon such
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conversion of Series B Preferred shall be deemed to have converted such
Series B Preferred immediately prior to the closing of the Avatech Merger.
(iii) CONVERSION PRICE. The "SERIES B CONVERSION PRICE" for
each share of Series B Preferred shall initially be the product of one-half
multiplied by the Original Series B Issuance Price, and shall be adjusted
from time to time as provided in this SECTION 5.
(iv) NONACCRUAL OF DIVIDENDS. Notwithstanding anything to the
contrary in this Agreement, dividends that would have otherwise accrued on
each share of the Series B Preferred pursuant to SECTION 2 hereof shall not
accrue and shall not be paid to the holders of Series B Preferred upon
conversion thereof pursuant to this SECTION 5.
(b) MECHANICS OF CONVERSION.
(i) NO FRACTIONAL SHARES. No fractional shares of Common
Stock shall be issued upon conversion of shares of Series B Preferred. In
lieu of any fractional shares to which the holder would otherwise be
entitled, the holder shall be paid an amount in cash, rounded to the nearest
cent, determined by multiplying (i) the closing price per share of the Common
Stock as quoted on the American Stock Exchange on the conversion date by (ii)
the fractional interest to which such holder would otherwise be entitled.
Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Series B Preferred
the holder is at the time converting into Common Stock and the number of
shares of Common Stock issuable upon such aggregate conversion.
(ii) VOLUNTARY CONVERSION. Each holder of Series B Preferred
who elects to convert the same into shares of Common Stock shall surrender
the certificate or certificates therefor, duly endorsed, or written notice of
the loss or destruction thereof and an executed indemnity agreement
reasonably satisfactory to the Corporation, at the office of the Corporation
or any transfer agent for the Series B Preferred or Common Stock, and shall
give written notice to the Corporation at such office that such holder elects
to convert the same and shall state therein the number of shares of Series B
Preferred being converted and the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. The Corporation
shall, as soon as practicable thereafter, issue and deliver to such holder of
Series B Preferred, or to the nominee of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder is
entitled and a check payable to such holder in an amount equal to the amount,
if any, payable in lieu of the issuance of fractional shares of Common Stock.
Such conversion shall be deemed to have been made immediately prior to the
close of business on the date of such surrender of the Series B Preferred 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.
(iii) AUTOMATIC CONVERSION. Upon occurrence of any event
specified in SECTION 5(a)(ii)(A) or (B), the outstanding shares of Series B
Preferred shall be converted into Common Stock automatically without the need
for any further action by the holder of such shares and whether or not the
certificates representing such shares are surrendered to the
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Corporation or its transfer agent; PROVIDED, HOWEVER, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such conversion unless the certificates evidencing such
shares of Series B Preferred, or written notice of the loss or destruction
thereof and an executed indemnity agreement reasonably satisfactory to the
Corporation, are delivered to the Corporation or its transfer agent as
provided below. Upon the surrender of certificates representing such shares,
or such written notice and executed indemnity agreement, at the office of the
Corporation or any transfer agent for the Series B Preferred or Common Stock,
the Corporation shall, as soon as practicable thereafter, issue and deliver
to such holder of Series B Preferred, or to the nominee of such holder, a
certificate or certificates for the number of shares of Common Stock to which
such holder is entitled and a check payable to such holder in an amount equal
to the amount, if any, payable in lieu of the issuance of fractional shares
of Common Stock. All rights with respect to shares of Series B Preferred
shall forthwith terminate upon occurrence of the event specified in SECTION
5(a)(ii)(A) or (B), except only the right of the holders of such shares to
receive Common Stock and the cash payment, if any, upon surrender of their
certificates for such shares of Series B Preferred.
(c) ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
Corporation shall at any time or from time to time after the Original
Issuance Date effect a subdivision of the outstanding shares of Common Stock
into a greater number of shares of Common Stock, the applicable Series B
Conversion Price then 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 Issuance Date effect a combination of
the outstanding shares of Common Stock into a smaller number of shares of
Common Stock, the applicable Series B Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this SECTION 5(C) shall become effective at the time the
subdivision or combination becomes effective.
(d) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or from time to time after the Original
Issuance Date shall make or issue, or fix 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 Stock, then and in each
such event the applicable Series B Conversion Price then in effect shall be
decreased as of the time of such issuance or, in the event such a record date
shall have been fixed, as of the close of business on such record date, by
multiplying the applicable Series B Conversion Price then in effect by a
fraction;
(1) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time
of such issuance or at the close of business on such record date; and
(2) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time
of such issuance or at the close of business on such record date, plus the
number of shares of Common Stock issuable in payment of such dividend or
distribution;
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PROVIDED, HOWEVER, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the
date fixed therefor, the applicable Series B Conversion Price shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Series B Conversion Price shall be adjusted pursuant to this
SECTION 5(d) as of the time of actual payment of such dividends or
distributions.
(e) ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION. If
the Common Stock shall be changed into or exchanged for the same or different
number of shares of any class or classes of stock of the Corporation, whether
by capital reorganization, reclassification or otherwise (other than a
subdivision or combination of shares of Common Stock provided for in SECTION
5(c)), then and in each such event the holder of each share of Series B
Preferred shall have the right thereafter to convert such share into the kind
and amounts of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders of the
numbers of shares of Common Stock into which such shares of Series B
Preferred might have been converted immediately prior to such reorganization,
reclassification or change, all subject to further adjustment as provided
herein or with respect to such other securities or property by the terms
thereof.
(f) ISSUANCE, TRANSFER OR SALE OF SHARES BELOW CONVERSION PRICE.
(i) SPECIAL DEFINITIONS. For purposes of this SECTION 5(f),
the following definitions shall apply:
(A) "ADDITIONAL SHARES OF COMMON STOCK" shall mean all
shares of Common Stock issued (or, pursuant to SECTION 5(f)(iii) below,
deemed to be issued) by the Corporation after the Original Issuance Date,
other than:
(1) shares of Common Stock issued or issuable upon
conversion of Preferred Stock or any other Convertible Security that was
issued on or before the date hereof or upon the exercise of any Option that
was issued on or before the date hereof;
(2) shares of Common Stock issued or issuable as
compensation to employees, consultants, officers or directors of the Corporation
pursuant to any stock option, restricted stock or other equity compensation
plans or agreements, as approved by the Board;
(3) shares of Common Stock issued upon a subdivision
or combination of shares of Common Stock as provided in SECTION 5(c) above or as
a dividend as provided in SECTION 5(d) above or securities issued pursuant to a
recapitalization or other event specified in SECTION 5(e) above;
(4) shares of Common Stock issued or issuable in a
registered public offering;
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(5) shares of Common Stock or instruments
convertible or exercisable into shares of Common Stock issued to a financial
institution in connection with a credit facility or other debt financing, as
approved by the Board; and
(6) shares of Common Stock or instruments
convertible or exercisable into shares of Common Stock of the Company issued
in connection with a merger, consolidation, acquisition or similar business
combination that has been approved by at least a majority of the then
outstanding Series B Preferred shares.
(B) "CONVERTIBLE SECURITIES" shall mean any evidence of
indebtedness, shares or other securities convertible into or exchangeable for
Additional Shares of Common Stock.
(C) "OPTIONS" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire either Additional Shares of
Common Stock or Convertible Securities.
(ii) ADJUSTMENT OF SERIES B CONVERSION PRICE UPON ISSUANCE OF
ADDITIONAL SHARES OF COMMON STOCK. If the Corporation issues Additional
Shares of Common Stock before conversion or redemption of the Series B
Preferred (including Additional Shares of Common Stock deemed to be issued
pursuant to SECTION 5(f)(iii) below) for a consideration per share less than
the Series B Conversion Price of any outstanding share of Series B Preferred
in effect on the date of and immediately prior to such issuance, then, in
each such event, the Series B Conversion Price of such share then in effect
shall be reduced, concurrently with such issuance, to a price determined by
multiplying such Series B Conversion Price by a fraction, (A) the numerator
of which shall be (1) the number of shares of Common Stock outstanding
immediately prior to such issuance plus (2) 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
such Series B Conversion Price in effect immediately prior to such issuance,
and (B) the denominator of which shall be (1) the number of shares of Common
Stock outstanding immediately prior to such issuance plus (2) the number of
such Additional Shares of Common Stock so issued. For the purpose of the
above calculation, the number of shares of Common Stock outstanding
immediately prior to such issuance shall be calculated as if all shares of
Series B Preferred and any other Convertible Securities had been fully
converted into shares of Common Stock immediately prior to such issuance and
all outstanding Options had been exercised.
(iii) DEEMED ISSUANCE OF ADDITIONAL SHARES OF COMMON STOCK.
(A) OPTIONS AND CONVERTIBLE SECURITIES. If the
Corporation, at any time or from time to time after the Original Issuance
Date, issues any Options or Convertible Securities or fixes a record date for
the determination of holders of any class of securities entitled to receive
any such Options or Convertible Securities, then the Corporation shall be
deemed to have issued Additional Shares of Common Stock as of the time of
such issuance or, if such a record date has been fixed, as of the close of
business on such record date, in the amount and for the consideration per
share provided herein.
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(1) NUMBER OF ADDITIONAL SHARES. The number of
shares of Additional Shares of Common Stock deemed issued with respect to
such Options or Convertible Securities shall be 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 and/or the conversion
or exchange of such Convertible Securities.
(2) CONSIDERATION PER SHARE. The consideration per
share received by the Corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Options and Convertible Securities,
shall be determined by dividing: (1) the total amount, if any, received or
receivable by the Corporation as consideration for the issuance 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 (2) 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.
(B) ADJUSTMENTS. In any such case in which Additional
Shares of Common Stock are deemed to be issued:
(1) no further adjustment in the Series B
Conversion Price shall be made upon (a) the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or (b)
the conversion or exchange of such Convertible Securities;
(2) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any decrease
in the consideration payable to the Corporation, or increase in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange
thereof, then the Series B Conversion Price computed upon the original
issuance 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;
(3) 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, then the Series B Conversion Price computed upon the original
issuance 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;
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(4) if the conversion privilege or similar right
represented by any such Convertible Securities shall expire or be cancelled
or terminated without having been exercised, the Series B Conversion Price as
adjusted upon the original issuance of such Convertible Securities shall be
readjusted to the Series B Conversion Price that would have been in effect
had an adjustment been made on the basis that the only Additional Shares of
Common Stock deemed to be issued were the Additional Shares of Common Stock,
if any, actually issued or sold on the exercise of such conversion or similar
right with respect to such Convertible Securities, and such Additional Shares
of Common Stock, if any, were issued or sold for the consideration actually
received by the Corporation upon such exercise, plus the consideration, if
any, actually received by the Corporation, whether or not converted, for
issuing or selling the Convertible Securities; and
(5) no readjustment pursuant to clause B above
shall have the effect of increasing the Series B Conversion Price above the
Series B Conversion Price that would be in effect if such Option or
Convertible Securities had not been issued.
(iv) DETERMINATION OF CONSIDERATION. For purposes of this
SECTION 5(f), the consideration received by the Corporation for the issuance
of any Additional Shares of Common Stock shall:
(A) 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;
(B) insofar as it consists of property other than cash,
be computed at the fair value thereof at the time of such issuance, as
determined in good faith by the Board; and
(C) if Additional Shares of Common Stock are issued
together with other shares or securities or other assets of the Corporation
for consideration that covers both, be the proportion of such consideration
so received, computed as provided in clauses (A) and (B) above, as determined
in good faith by the Board.
(g) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Series B Conversion Price pursuant to this
SECTION 5, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms of this SECTION 5 and
furnish to each holder of Series B Preferred a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (i) the
consideration received or to be received by the Corporation for any
Additional Shares of Common Stock issued or sold or deemed to have been
issued or sold, (ii) the Series B Conversion Price at the time in effect for
the Series B Preferred, and (iii) the number of shares of Common Stock and
the type and amount, if any, or other property that at the time would be
received upon conversion of the Series B Preferred. Upon the written request
of any holder of Series B Preferred, the Corporation will as soon as
reasonably practicable provide to such holder a written statement of the
Series B Conversion
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Price at the time in effect for the Series B Preferred and the number of
shares of Common Stock which at the time would be received upon conversion of
the Series B Preferred.
(h) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series B 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 Series B Preferred. As a condition
precedent to the taking of any action which would cause an adjustment to the
Series B Conversion Price, 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 in order that it may validly and legally issue the shares of its
Common Stock issuable based upon such adjusted Series B Conversion Price.
(i) PAYMENT OF TAXES. The Corporation will pay all taxes and other
governmental charges (other than taxes measured by the revenue or income of
the holders of the Series B Preferred) that may be imposed in respect of the
issue or delivery of shares of Common Stock upon conversion of the shares of
Series B Preferred.
(j) MINIMUM ADJUSTMENT. No adjustment of the Series B Conversion
Price shall be made in an amount less than $.001 per share; PROVIDED,
HOWEVER, that any adjustments which are not required to be made as a result
of the operation of this subsection shall be carried forward and shall be
taken into account in any subsequent adjustment.
6. REDEMPTION RIGHTS.
(a) On or after December 31, 2002, any holder of then outstanding
shares of Series B Preferred shall have the right to require that the
Corporation redeem up to all of such holder's then outstanding shares of
Series B Preferred. The redemption price per share of Series B Preferred
shall be the sum of (i) the Original Series B Issuance Price of such share
and (ii) all accrued but unpaid dividends on such share (the "REDEMPTION
PRICE"). If a holder of such Series B Preferred elects to exercise its rights
under this SECTION 6(a), such holder shall provide notice to the Corporation
of such election in accordance with SECTION 9. The notice to the Corporation
shall specify the number of shares to be redeemed by the Corporation and
shall include the original certificate(s) representing the shares of Series B
Preferred to be redeemed. Within thirty (30) days after receipt of the
foregoing, the Corporation shall pay the appropriate redemption amount by
check or wire transfer and shall return a certificate representing the number
of shares of Series B Preferred, if any, that were not redeemed.
(b) The Corporation shall redeem at the Redemption Price all shares
of Series B Preferred, if any, that are outstanding as of December 31, 2003. The
Corporation will pay the appropriate redemption amount by check or wire transfer
within thirty (30) days after the receipt of the certificate(s) representing the
shares of Series B Preferred then outstanding.
(c) If on the date that a redemption is requested or required to be
made the funds of the Corporation legally available for the redemption of shares
of Series B Preferred are
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insufficient to redeem all of the shares of Series B Preferred to be redeemed
on such date, the holders of the shares to be redeemed shall share ratably in
any funds legally available for redemption of such shares.
(d) From and after the payment of the Redemption Price for shares
of Series B Preferred to be redeemed, all rights of the holders of Series B
Preferred with respect to such shares of Series B Preferred for which the
Redemption Price has been paid shall cease and such shares shall cease to be
outstanding, whether or not the certificate(s) representing such shares have
been received by the Corporation.
7. PROTECTIVE PROVISIONS. So long as any shares of Series B Preferred
remain outstanding, the Corporation shall not, without the vote or written
consent of the holders of at least a majority of the then outstanding shares
of Series B Preferred, voting as a single class:
(a) amend the Certificate of Incorporation or the bylaws of the
Corporation in any manner that would alter, change or repeal any of the
designations, powers, preferences and relative, participating, optional or
other special rights, and the qualifications, limitations and restrictions
thereof, of the Series B Preferred;
(b) create, authorize, issue, transfer or sell any equity security
(including without limitation any indebtedness convertible into or
exercisable for any equity security) senior to or on a parity with the Series
B Preferred as to any material terms, including without limitation dividend
rights, redemption rights or liquidation preferences; or
(c) effect any Liquidity Event.
8. NO REISSUANCE OF SERIES B PREFERRED. No share or shares of Series B
Preferred acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the Corporation shall
be authorized to issue.
9. NOTICES. Unless otherwise specified, any notice required by the
provisions of these designations shall be deemed given upon the earlier of
the following events: (a) personal delivery to the party to be notified, (b)
facsimile transmission to the party to be notified (with written or facsimile
confirmation of receipt), (c) delivery by an overnight express courier
service to the party to be notified (delivery, postage or freight charges
prepaid), or (d) on the third business day following deposit in the United
States Post Office (if sent by registered or certified mail, return receipt
requested, with delivery, postage or freight charges prepaid), addressed in
the case of notice to the holders of record of Series B Preferred to each
holder at such holder's address appearing on the books of the Corporation and
in the case of notice to the Corporation to the President at the principal
executive offices of the Corporation.
10. EXCLUSION OF OTHER RIGHTS. Except as may otherwise be required by
law, the shares of Series B Preferred shall not have any voting powers,
preferences and relative, participating, optional or other special rights,
other than those specifically set forth in this
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resolution (as such resolution may be amended from time to time) and in the
Certificate of Incorporation of the Corporation.
11. HEADINGS OF SUBDIVISIONS. The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
12. SEVERABILITY OF PROVISIONS.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Series B Preferred and
qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is held
invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other voting powers, preferences and relative,
participating, optional and other special rights of Series B Preferred and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) that can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series B Preferred and
qualifications, limitations and restrictions thereof shall, nevertheless,
remain in full force and effect, and no voting powers, preferences and
relative, participating, optional or other special rights of Series B
Preferred and qualifications, limitations and restrictions thereof herein set
forth shall be deemed dependent upon any other such voting powers,
preferences and relative, participating, optional or other special rights of
Series B Preferred and qualifications, limitations and restrictions thereof
unless so expressed herein.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this certificate is executed to be effective as of
the date first written above.
PLANETCAD INC.
By: /s/ Joy M. Godesiabois
--------------------------
Name: Joy M. Godesiabois
Title: Chief Financial Officer,
Vice President and Secretary
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