Exhibit 3.1
FIFTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF MAINCONTROL, INC.,
a Delaware Corporation
MainControl, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the provisions of the General Corporation Law of
the State of Delaware (the "Delaware General Corporation Law"), DOES HEREBY
CERTIFY THAT:
FIRST: The name of the Corporation is MainControl, Inc. and the
Corporation was originally incorporated on January 5, 1996 pursuant to the
Delaware General Corporation Law.
SECOND: The following resolutions amending and restating the
Corporation's Fourth Amended and Restated Certificate of Incorporation were
approved by the Board of Directors of the Corporation by unanimous written
action in lieu of a meeting, and were duly adopted by the stockholders of the
Corporation in accordance with the provisions of Sections 242 and 245 of the
Delaware General Corporation Law by written consent of stockholders given in
accordance with Section 228 of the Delaware General Corporation Law, with
written notice given to stockholders who did not consent in writing:
NOW, THEREFORE, BE IT RESOLVED, that the Fourth Amended and Restated
Certificate of Incorporation of the Corporation be amended and restated in its
entirety as follows:
ARTICLE I
The name of this Corporation is MainControl, Inc.
ARTICLE II
The address of the registered office of this Corporation in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the Delaware General Corporation Law.
ARTICLE IV
A. Classes of Stock. This Corporation is authorized to issue two
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classes of stock to be designated, respectively, "Common Stock" and "Preferred
Stock." The total number of shares that this Corporation is authorized to issue
is fifty million (50,000,000) shares. Thirty million (30,000,000) shares shall
be Common Stock, par value $.001 per share, and twenty million (20,000,000)
shares shall be Preferred Stock, par value $.001 per share.
B. Rights, Preferences and Restrictions of Preferred Stock. The
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Preferred Stock authorized by this Fifth Amended and Restated Certificate of
Incorporation may be issued from time to time in one or more series. The
rights, preferences, privileges, and restrictions granted to and imposed on the
Series A Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock and the Series D Preferred Stock which series shall consist of 6,300,000
shares, 2,688,172 shares, 3,689,065 shares and 3,505,481 shares, respectively,
are as set forth below in this Article IV(B). The Board of Directors is hereby
authorized to fix or alter the rights, preferences, privileges and restrictions
granted to or imposed upon additional series of Preferred Stock, and the number
of shares constituting any such series and the designation thereof, or of any of
them. Subject to compliance with applicable protective voting rights that have
been or may be granted to the Preferred Stock or series thereof in Certificates
of Designation or this Corporation's Certificate of Incorporation ("Protective
Provisions"), but notwithstanding any other rights of the Preferred Stock or any
series thereof, the rights, privileges, preferences and restrictions of any such
additional series may be subordinated to, pari passu with (including, without
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limitation, inclusion in provisions with respect to dividends, liquidation and
acquisition preferences, redemption and/or approval of matters by vote or
written consent), or senior to any of those of any present or future class or
series of Preferred or Common Stock. Subject to compliance with applicable
Protective Provisions, the Board of Directors is also authorized to increase or
decrease the number of shares of any series (other than the Series A Preferred
Stock, the Series B Preferred Stock, the Series C Preferred Stock and the Series
D Preferred Stock), prior or subsequent to the issue of that series, but not
below the number of shares of such series then outstanding. In case the number
of shares of any series shall be so decreased, the shares constituting such
decrease shall resume the status that they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
1. Dividend Provisions. The holders of shares of Series A Preferred
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Stock, Series B Preferred Stock, the Series C Preferred Stock and the Series D
Preferred Stock shall be entitled to receive dividends, out of any assets
legally available therefor, pari passu with each other 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,
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directly or indirectly, additional shares of Common Stock of this Corporation)
on the Common Stock of this Corporation, at the rate of 8% of the Original Issue
Price (as defined below) per share per annum, payable when, as and if declared
by the Board of Directors. No dividend may be paid on the Series A Preferred
Stock without paying a proportionate dividend on the Series B Preferred Stock,
the Series C Preferred Stock and the Series D Preferred Stock, no dividend may
be paid on the Series B Preferred Stock without paying a proportionate dividend
on the Series A Preferred Stock, the Series C Preferred Stock and the Series D
Preferred Stock, no dividend may be paid on the Series C Preferred Stock without
paying a proportionate dividend on the Series A Preferred Stock, the Series B
Preferred Stock and the Series D Preferred Stock, and no dividend may be paid on
the Series D Preferred Stock without paying a proportionate dividend on the
Series A Preferred Stock, the Series B Preferred Stock and the Series C Stock.
Such dividends shall not be cumulative. The initial Original Issue Price of
Series A Preferred Stock shall be $1.00 per share, the initial Original Issuance
Price of Series B Preferred Stock shall be $3.72 per share, the initial Original
Issue Price of Series C Preferred Stock shall be $3.795 per share and the
initial Original Issue Price of Series D Preferred Stock shall be $5.0635 per
share. The Original Issue Price for the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred Stock and the Series D Preferred Stock
shall be proportionately adjusted for any stock dividends, combinations or
splits with respect to such shares. Declared but unpaid dividends with respect
to a share of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock shall, upon conversion of such share
to Common Stock, be paid to the extent assets are legally available therefor
either in cash or in Common Stock (valued at the fair market value on the date
of payment as determined by the Board of Directors of this Corporation). To the
extent assets and funds are not legally available for declared but unpaid
dividend amounts, then the assets and funds of this Corporation legally
available for distribution shall be distributed ratably among the holders of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock in proportion to the dividend amount each such holder
is otherwise entitled to receive. Any amounts for which assets are not legally
available shall be paid promptly as assets become legally available therefor.
2. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up of this
Corporation, either voluntary or involuntary (a "Liquidation Event"), the
holders of Series D Preferred Stock shall be entitled to receive prior and in
preference to any distribution of any of the assets of this Corporation to the
holders of any other stock ranking on liquidation junior to the Series D
Preferred Stock (including, without limitation, the Series A Preferred Stock,
the Series B Preferred Stock, the Series C Preferred Stock and the Common Stock)
by reason of their ownership thereof, an amount per share equal to the sum of
(A) the applicable Original Issue Price for
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such share and (B) an amount equal to declared but unpaid dividends on such
shares (the "Series D Liquidation Amount"). If upon the occurrence of a
Liquidation Event, the assets and funds thus distributed among the holders of
the Series D Preferred Stock shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then the entire assets and
funds of this Corporation legally available for distribution shall be
distributed ratably among the holders of the Series D Preferred Stock in
proportion to the preferential amount each such holder is otherwise entitled to
receive.
(b) Upon the occurrence of a Liquidation Event, and after payment of
the Series D Liquidation Amount the holders of Series C Preferred Stock shall be
entitled to receive prior and in preference to any distribution of any of the
assets of this Corporation to the holders of any other stock ranking on
liquidation junior to the Series C Preferred Stock (including, without
limitation, the Series A Preferred Stock, the Series B Preferred Stock and the
Common Stock) by reason of their ownership thereof, an amount per share equal to
the sum of (A) the applicable Original Issue Price for such share and (B) an
amount equal to declared but unpaid dividends on such shares (the "Series C
Liquidation Amount"). If upon the occurrence of a Liquidation Event, the assets
and funds thus distributed among the holders of the Series C Preferred Stock
shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amounts, then the entire assets and funds of this
Corporation legally available for distribution shall be distributed ratably
among the holders of the Series C Preferred Stock in proportion to the
preferential amount each such holder is otherwise entitled to receive.
(c) Upon the occurrence of a Liquidation Event, and after payment of
the Series C Liquidation Amount, the holders of Series A Preferred Stock and
Series B Preferred Stock shall be entitled to receive, pari passu with each
other and prior and in preference to any distribution of any of the assets of
this Corporation to the holders of Common Stock by reason of their ownership
thereof, an amount per share equal to the sum of (A) the applicable Original
Issue Price for such share and (B) an amount equal to declared but unpaid
dividends on such share. If upon the occurrence of such Liquidation Event and
after payment of the Series C Liquidation Amount, the assets and funds thus
distributed among the holders of the Series A Preferred Stock and Series B
Preferred Stock shall be insufficient to permit the payment to such holders of
the full aforesaid preferential amounts, then the entire assets and funds of
this Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock and Series B Preferred Stock
in proportion to the preferential amount each such holder is otherwise entitled
to receive.
(d) Upon the completion of the distributions required by
subparagraphs (a), (b) and (c) of this Section 2, the remaining assets of this
Corporation available for distribution to stockholders shall be distributed
among
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the holders of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock and Common Stock pro rata based on the
number of shares of Common Stock held by each (assuming conversion of all such
Series A Preferred Stock, Series B Preferred Stock, the Series C Preferred Stock
and the Series D Preferred Stock at the applicable Conversion Price then in
effect for such shares.
(e) (i) For purposes of this Section 2, unless otherwise agreed by
holders of at least sixty-seven percent (67%) of the combined voting power of
the then outstanding shares of Series A Preferred Stock, Series B Preferred
Stock, the Series C Preferred Stock and the Series D Preferred Stock, voting
together, a liquidation, dissolution or winding up of this Corporation shall be
deemed to be occasioned by, or to include, (A) the acquisition of this
Corporation by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation) that results in the transfer of outstanding and/or newly issued
shares of the capital stock of the Corporation representing fifty percent (50%)
or more of the outstanding voting power of this Corporation; or (B) a sale of
all or substantially all of the assets of this Corporation. Notwithstanding the
foregoing, a liquidation, dissolution or winding up of this Corporation shall
not be deemed to be occasioned by, or to include, the sale by this Corporation
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of shares of Series A Preferred Stock pursuant to the Series A Preferred Stock
Purchase Agreement, dated on or about January 1996, by and among this
Corporation and certain investors, the Series B Preferred Stock Purchase
Agreement, dated on or about September 1997, by and among this Corporation and
certain investors, the Series C Preferred Stock Purchase Agreement, dated on or
about October 1998, by and among this Corporation and certain investors and the
Series D Preferred Stock Purchase Agreement, dated on or about January 2000, by
and among this Corporation and certain investors.
(ii) In any of such events, if the consideration received by this
Corporation is other than cash, the value of such consideration 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 covered by (B) below:
(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 quotation system over the thirty (30)
day period ending three (3) days prior to the closing;
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(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 (30) day period ending three (3) days prior to the
closing; and
(3) If there is no active public market, the value shall
be the fair market value thereof, as mutually determined by this Corporation and
the holders of at least a majority of the voting power of all then outstanding
shares of Preferred Stock.
(B) The method of valuation of 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 to make an appropriate discount from the market
value determined as above in (A) (1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by this Corporation and the holders
of at least a majority of the voting power of all then outstanding shares of
such Preferred Stock.
(iii) In the event the requirements of this subsection 2(e) 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 2 have been complied with; or
(B) cancel such transaction, in which event the rights,
preferences and privileges of the holders of the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D 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
subsection 2(e)(iv) hereof.
(iv) This Corporation shall give each holder of record of Series
A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series
D Preferred Stock written notice of such impending transaction not later than
twenty (20) days prior to the stockholders' meeting called to approve such
transaction, if any, or twenty (20) days prior to the closing of such
transaction, whichever 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 and the
provisions of this Section 2, and this 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 this Corporation has given the
first notice provided for herein or sooner than ten (10) days after this
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 Preferred Stock that are entitled to such
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notice rights or similar notice rights and that represent at least a majority of
the voting power of all then outstanding shares of such Preferred Stock.
3. Redemption.
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(a) At any time after January 1, 2002, in the case of the Series A
Preferred Stock, July 1, 2003, in the case of the Series B Preferred Stock,
October 1, 2004, in the case of the Series C Preferred Stock and December 1,
2005, in the case of the Series D Preferred Stock, but within thirty (30) days
(each a "Fifty Percent Redemption Date") after the receipt by this Corporation
of a written request from the holders of not less than sixty-seven percent (67%)
of the then outstanding Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock, respectively, that up to
fifty percent (50%) of such holders' shares of Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock,
respectively, be redeemed, and concurrently with surrender by such holders of
the certificates representing such shares, this Corporation shall, to the extent
it may lawfully do so, redeem the shares specified in such request by paying in
cash therefor a sum per share equal to the applicable Redemption Price (as
defined in subsection 3(c) below). Any redemption of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
effected pursuant to this subsection 3(a) shall be made on a pro rata basis
among the holders of the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock, respectively, in
proportion to the number of shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock,
respectively, proposed to be redeemed by such holders; any simultaneous or
overlapping redemption of each of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall be
made ratably among the holders of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock in
proportion to the amount each such holder is otherwise entitled to receive.
(b) At any time after January 1, 2004, in the case of the Series A
Preferred Stock, July 1, 2005, in the case of the Series B Preferred Stock,
October 1, 2006, in the case of the Series C Preferred Stock and December 1,
2007, in the case of the Series D Preferred Stock, but within thirty (30) days
(each a "Full Redemption Date") after the receipt by this Corporation of a
written request from the holders of not less than sixty-seven percent (67%) of
the then outstanding Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock or Series D Preferred Stock, respectively, that all, or if
less than all, a specified percentage of such holders' shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock, respectively, be redeemed, and concurrently with surrender by
such holders of certificates representing such shares, this Corporation shall,
to the extent it may lawfully do so,
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redeem the shares specified in such request by paying in cash therefor a sum per
share equal to the applicable Redemption Price (as defined in subsection 3(c)
below). Any redemption of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock effected pursuant to this
subsection 3(b) shall be made on a pro rata basis among the holders of the
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock, respectively, in proportion to the number of shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock, respectively, proposed to be redeemed by such holders;
any simultaneous or overlapping redemption of both the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
shall be made ratably among the holders of the Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock in
proportion to the amount each such holder is otherwise entitled to receive.
(c) As used herein, the term "Redemption Date" shall refer to the
applicable Fifty Percent Redemption Date or Full Redemption Date, the term
"Redemption Price" shall mean, in the case of Series A Preferred Stock, the
greater of (A) the Original Issue Price (as adjusted for any stock dividends,
combinations or splits with respect to such shares), plus all declared but
unpaid dividends on such share, and (B) the fair market value of a share of the
Series A Preferred Stock, as determined by an independent appraiser, mutually
agreed upon by this Corporation and the holders of not less than sixty-seven
percent (67%) of the then outstanding Series A Preferred Stock, plus all
declared but unpaid dividends on such share; and in the case of the Series B
Preferred Stock, the Series C Preferred Stock and Series D Preferred Stock, the
Original Issue Price (as adjusted for any stock dividends, combinations or
splits with respect to such shares), plus all declared but unpaid dividends on
such share. At least fifteen (15) but no more than thirty (30) days prior to
each Redemption Date, written notice shall be mailed, first class postage
prepaid, to each holder of record (at the close of business on the business day
next preceding the day on which notice is given) of the Preferred Stock at the
address last shown on the records of this Corporation for such holder, notifying
such holder of the redemption to be effected, specifying the type and number (if
any) of shares to be redeemed from such holder, the Redemption Date, the
Redemption Price, the place at which payment may be obtained and calling upon
such holder to surrender to this Corporation, in the manner and at the place
designated, his, her or its certificate or certificates representing the shares
(if any) to be redeemed (the "Redemption Notice"). Except as provided in
subsection (3)(d), on or after the Redemption Date, each holder of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock, as applicable, to be redeemed shall surrender to this
Corporation the certificate or certificates representing such shares, in the
manner and at the place designated in the Redemption Notice, and thereupon the
applicable Redemption Price shall be payable to the order of the person whose
name appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be canceled. In the event less than all the
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shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.
(d) From and after the Redemption Date, unless there shall have been a
default in payment of the applicable Redemption Price, all rights of the holders
of shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock, as applicable, designated for
redemption in the Redemption Notice as holders of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock
(except the right to receive the Redemption Price without interest upon
surrender of their certificate or certificates) shall cease with respect to such
shares, and such shares shall not thereafter be transferred on the books of this
Corporation or be deemed to be outstanding for any purpose whatsoever. If the
funds of this Corporation legally available for redemption of shares of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock, as applicable, on any Redemption Date are insufficient to
redeem the total number of shares of such stock to be redeemed on such date,
those funds that are legally available will be used to redeem the maximum
possible number of such shares ratably among the holders of such shares to be
redeemed such that each holder of a share of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock, as
applicable, requesting redemption receives the same percentage of the Redemption
Price. If the funds of this Corporation legally available for redemption of
shares are insufficient to redeem the total number of shares of stock to be
redeemed in any simultaneous or overlapping redemption of each of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series
D Preferred Stock, then the funds of this Corporation legally available for
redemption shall be used to redeem the maximum number of shares requested to be
redeemed ratably among the holders of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock to be
redeemed, in proportion to the amount each such holder is otherwise entitled to
receive. The shares of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock not redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein. At
any time thereafter when additional funds of this Corporation are legally
available for the redemption of shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock (or a pro
rata portion thereof), such funds will immediately be used to redeem the balance
of the shares that this Corporation has become obligated to redeem on any
Redemption Date but that it has not redeemed.
(e) On or prior to each Redemption Date, this Corporation shall
deposit the Redemption Price of all shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock, as
applicable, designated for redemption in the Redemption Notice and not yet
redeemed or converted with a bank or trust corporation having aggregate capital
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and surplus in excess of $100,000,000 as a trust fund for the benefit of the
respective holders of the shares designated for redemption and not yet redeemed,
with irrevocable instructions and authority to the bank or trust corporation to
publish the notice of redemption thereof and pay the applicable Redemption Price
to their respective holders on or after the Redemption Date, upon receipt of
notification from this Corporation that such holder has surrendered his, her or
its share certificate to this Corporation pursuant to subsection (3)(c) above.
As of the date of such deposit (even if prior to the Redemption Date), the
deposit shall constitute full payment of the shares to their holders, and from
and after the date of the deposit the shares so called for redemption shall be
redeemed and shall be deemed to be no longer outstanding, and the holders
thereof shall cease to be stockholders with respect to such shares and shall
have no rights with respect thereto except the rights to receive from the bank
or trust corporation payment of the applicable Redemption Price, without
interest, upon surrender of their certificates therefor, and the right to
convert such shares as provided in Article IV(B)(4) hereof. Such instructions
shall also provide that any moneys deposited by this Corporation pursuant to
this subsection (3)(e) for the redemption of shares thereafter converted into
shares of this Corporation's Common Stock pursuant to Article IV(B)(4) hereof
prior to the Redemption Date shall be returned to this Corporation forthwith
upon such conversion. The balance of any moneys deposited by this Corporation
pursuant to this subsection (3)(e) remaining unclaimed at the expiration of two
(2) years following each Redemption Date shall thereafter be returned to this
Corporation upon its request expressed in a resolution of its Board of
Directors.
4. Conversion. The holders of the Series A Preferred Stock, Series B
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Preferred Stock, Series C Preferred Stock and Series D Preferred Stock shall
have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock, each
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share of Series B Preferred Stock, each share of Series C Preferred Stock and
each share of Series D Preferred Stock shall be convertible, at the option of
the holder thereof, at any time after the date hereof and on or prior to the
fifth day prior to the applicable Redemption Date, if any, as may have been
fixed in any Redemption Notice with respect to the Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock,
as applicable, at the office of this Corporation or any transfer agent for such
stock, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing the applicable Original Issue Price by the
Conversion Price applicable to such share, determined as hereafter provided, in
effect on the date the certificate is surrendered for conversion. The initial
Conversion Price per share for shares of Series A Preferred Stock shall be the
initial Original Issue Price of the Series A Preferred Stock, the initial
Conversion Price per share for shares of Series B Preferred Stock shall be the
initial Original Issue Price for the Series B Preferred Stock, the initial
Conversion Price per share for shares of Series C Preferred Stock shall be the
initial
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Original Issue Price for Series C Preferred Stock, and the initial Conversion
Price per share for shares of Series D Preferred Stock shall be the initial
Original Issue Price for Series D Preferred Stock; provided, however, that the
Conversion Price shall be subject to adjustment as set forth in subsection 4(d).
(b) Automatic Conversion.
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(i) Conversion at Option of Holders. If at any time the holders
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of a majority of the Series A Preferred Stock, Series B Preferred Stock, Series
C Preferred Stock and Series D Preferred Stock then outstanding, voting together
as a single class, so request by written consent delivered to the Corporation at
its principal offices by facsimile transmission or any other customary means of
delivery, then each outstanding share of Series A Preferred Stock, each
outstanding share of Series B Preferred Stock, each outstanding share of Series
C Preferred Stock and each outstanding share of Series D Preferred Stock shall
automatically be converted into shares of Common Stock at the applicable
Conversion Price at the time in effect for the Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock,
respectively, immediately upon the date specified in such written consent.
(ii) Conversion upon Public Offering.
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(A) Each outstanding share of Series A Preferred Stock, each
outstanding share of Series B Preferred Stock, each outstanding share of Series
C Preferred Stock and each outstanding share of Series D Preferred Stock shall
automatically be converted into shares of Common Stock, at the Conversion Price
set forth in (B) below, immediately upon the the closing of an initial public
offering by the Corporation of the Common Stock, provided that the following
shall not be considered a public offering: (i) any issuance of Common Stock as
consideration for a merger, acquisition or SEC Rule 145 transaction, and (ii)
any issuance of Common Stock or rights to acquire Common Stock to existing
securityholders or to employees of the Company or its Subsidiaries on Form S-4
or Form S-8 (or any successor forms adopted by the Securities and Exchange
Commission) or otherwise, irrespective of the jurisdiction in which such public
offering is conducted, or at the latest possible time prior to such closing, if
required by the principal securities exchange or market upon which the Common
Stock will be listed or traded, the public offering price of which is not less
than $10,000,000 in the aggregate and the public offering price of the Common
Stock is no less than $7.50 per share (adjusted to reflect subsequent stock
dividends, stock splits or recapitalizations).
(B) In the event of the public offering described in
4(b)(ii)(A), the Conversion Price for each outstanding share of Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock will be the applicable Conversion Price at the time in effect
for the Series A
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Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, as adjusted
by the adjustment described in subparagraph 4(d)(v) below (i.e. the adjustment
to be made in the event of a public offering, sale or merger of the Corporation
in which the holders of the Common Stock receive at least $9.00 per share), and
Series D Preferred Stock, respectively.
(c) Mechanics of Conversion. Before any holder of Series A Preferred
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Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock shall be entitled to convert the same into shares of Common Stock, he or
she shall surrender the certificate or certificates therefor, duly endorsed, at
the office of this Corporation or of any transfer agent for the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock, as applicable, and shall give written notice to this
Corporation at its principal corporate office of the election to convert the
same and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. This Corporation
shall, as soon as practicable thereafter, issue and deliver at such office to
such holder, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. 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 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 as of such date.
If the conversion is in connection with an underwritten offering of securities
registered pursuant to the Securities Act of 1933, as amended, the conversion
may, at the option of any holder tendering Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock for
conversion, be conditioned upon the closing with the underwriters of the sale of
securities pursuant to such offering, in which event the person(s) entitled to
receive the Common Stock upon conversion of the Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock or Series D Preferred Stock shall
not be deemed to have converted such Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock until
immediately prior to the closing of such sale of securities.
(d) Conversion Price Adjustments of Preferred Stock. (i) The
-----------------------------------------------
Conversion Price of the Series A Preferred Stock, the Conversion Price of the
Series B Preferred Stock, the Conversion Price of the Series C Preferred Stock
and the Conversion Price of the Series D Preferred Stock shall be subject to
adjustment from time to time as follows:
(A) If after the date upon which any shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock are first issued (the "Purchase Date"), this Corporation shall issue any
Additional Stock (as defined below) without consideration or for a consideration
-12-
per share less than the Conversion Price of the Series A Preferred Stock, the
Conversion Price of the Series B Preferred Stock, the Conversion Price of the
Series C Preferred Stock, or the Conversion Price of the Series D Preferred
Stock in effect immediately prior to the issuance of such Additional Stock, then
the Conversion Price of the Series D Preferred Stock (in the event the
Additional Stock is issued for a consideration per share less than the
Conversion Price of the Series D Preferred Stock but greater than the Conversion
Price of the Series A Preferred Stock, the Conversion Price of the Series B
Preferred Stock and the Conversion Price of the Series C Preferred Stock), both
the Conversion Price of the Series C Preferred Stock and the Conversion Price of
the Series D Preferred Stock (in the event the Additional Stock is issued for a
consideration per share less than the Conversion Price of the Series C Preferred
Stock and the Conversion Price of the Series D Preferred Stock but greater than
the Conversion Price of the Series A Preferred Stock and the Conversion Price of
the Series B Preferred Stock), each of the Conversion Price of the Series B
Preferred Stock, the Conversion Price of the Series C Preferred Stock and the
Conversion Price of the Series D Preferred Stock (in the event the Additional
Stock is issued for a consideration per share less than the Conversion Price of
the Series B Preferred Stock, the Conversion Price of the Series C Preferred
Stock and the Conversion Price of the Series D Preferred Stock but greater than
the Conversion Price of the Series A Preferred Stock) or each of the Conversion
Price of the Series A Preferred Stock, the Conversion Price of the Series B
Preferred Stock, the Conversion Price of the Series C Preferred Stock and the
Conversion Price of the Series D Preferred Stock (in the event the Additional
Stock is issued for a consideration per share less than the Conversion Price of
each of the Series A Preferred Stock, the Series B Preferred Stock, the Series
C Preferred Stock and the Series D Preferred Stock) in effect immediately prior
to each such issuance shall forthwith (except as otherwise provided in this
clause (i)) be adjusted to a price determined by multiplying such Conversion
Price by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such issuance plus the number of
shares of Common Stock that the aggregate consideration received by this
Corporation for such issuance would purchase at such Conversion Price, and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issuance plus the number of shares of such Additional
Stock. For purposes of this subsection and the remainder of Sections 4(d)(i)
and 4(d)(ii), Common Stock shall mean any shares of Common Stock issued (or
deemed to have been issued pursuant to subsection 4(d)(i)(E)).
(B) No adjustment of the Conversion Price for the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or Series D
Preferred Stock shall be made in an amount less than one cent per share,
provided that any adjustments that are not required to be made by reason of this
sentence shall be carried forward and shall be either taken into account in any
subsequent adjustment made prior to three years from the date of the event
giving rise to the adjustment being carried forward, or shall be made at the end
of three years from
-13-
the date of the event giving rise to the adjustment being carried forward.
Except to the limited extent provided for in subsections (E)(3) and (E)(4), no
adjustment of such Conversion Price pursuant to this subsection 4(d)(i) shall
have the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash paid therefor before
deducting any reasonable discounts, commissions or other expenses allowed, paid
or incurred by this Corporation for any underwriting or otherwise in connection
with the issuance and sale thereof.
(D) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair value thereof as determined by the Board of
Directors irrespective of any accounting treatment.
(E) In the case of the issuance (whether before, on or after the
Purchase Date) of options to purchase or rights to subscribe for Common Stock,
securities by their terms convertible into or exchangeable for Common Stock, or
options to purchase or rights to subscribe for such convertible or exchangeable
securities, the following provisions shall apply for all purposes of this
subsection 4(d)(i) and subsection 4(d)(ii):
(1) The aggregate maximum number of shares of Common Stock
deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without
taking into account potential antidilution adjustments) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in subsections
4(d)(i)(C) and (d)(i)(D)), if any, received by this Corporation upon the
issuance of such options or rights plus the minimum exercise price provided in
such options or rights (without taking into account potential antidilution
adjustments) for the Common Stock covered thereby.
(2) The aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange (assuming the satisfaction of any
conditions to convertibility or exchangeability, including, without limitation,
the passage of time, but without taking into account potential antidilution
adjustments) for any such convertible or exchangeable securities or upon the
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration, if any,
-14-
received by this Corporation for any such securities and related options or
rights, plus the minimum additional consideration, if any, to be received by
this Corporation (without taking into account potential antidilution
adjustments) upon the conversion or exchange of such securities or the exercise
of any related options or rights (the consideration in each case to be
determined in the manner provided in subsections 4(d)(i)(C) and (d)(i)(D)).
(3) In the event of any change in the number of shares of
Common Stock deliverable or in the consideration payable to this Corporation
upon exercise of such options or rights or upon conversion of or in exchange for
such convertible or exchangeable securities, including, but not limited to, a
change resulting from the antidilution provisions thereof, the Conversion Price
of the Series A Preferred Stock, the Conversion Price of the Series B Preferred
Stock, the Conversion Price of the Series C Preferred Stock or the Conversion
Price of the Series D Preferred Stock, to the extent in any way affected by or
computed using such options, rights or securities, shall be recomputed to
reflect such change, but no further adjustment shall be made for the actual
issuance of Common Stock or any payment of such consideration upon the exercise
of any such options or rights or the conversion or exchange of such securities.
(4) Upon the expiration of any such options or rights, the
termination of any such rights to convert or exchange, or the expiration of any
options or rights related to such convertible or exchangeable securities, the
Conversion Price of the Series A Preferred Stock, the Conversion Price of the
Series B Preferred Stock, the Conversion Price of the Series C Preferred Stock
or the Conversion Price of the Series D Preferred Stock, to the extent in any
way affected by or computed using such options, rights or securities, or options
or rights related to such securities, shall be recomputed to reflect the
issuance of only the number of shares of Common Stock (and convertible or
exchangeable securities that remain in effect) actually issued upon the exercise
of such options or rights, upon the conversion or exchange of such securities,
or upon the exercise of the options or rights related to such securities.
(5) The number of shares of Common Stock deemed issued and
the consideration deemed paid therefor pursuant to subsections 4(d)(i)(E)(1) and
(2) shall be appropriately adjusted to reflect any change, termination or
expiration of the type described in either subsection 4(d)(i)(E)(3) or (4).
(ii) "Additional Stock" shall mean any shares of Common Stock issued
(or deemed to have been issued pursuant to subsection 4(d)(i)(E)) by this
Corporation after the Purchase Date other than:
-15-
(A) Common Stock issued pursuant to a transaction described in
subsection 4(d)(iii) hereof;
(B) Common Stock issuable or issued to employees, consultants,
directors or vendors (if in transactions with primarily non-financing purposes)
of this Corporation directly or pursuant to a stock option plan or restricted
stock plan approved by the Board of Directors and stockholders of this
Corporation;
(C) Common Stock issued upon conversion of shares of Preferred
Stock;
(D) Common Stock issued in a firm commitment underwritten public
offering;
(E) Common Stock, or securities convertible into Common Stock
issued to banks or equipment lessors, provided such issuances are for other than
primarily equity financing purposes; and
(F) Common Stock issued in connection with business combinations
or corporate partnering agreements approved by the Board of Directors.
(iii) If this Corporation shall, after the Purchase Date, fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive, directly or indirectly, additional shares of Common
Stock (hereinafter referred to as "Common Stock Equivalents") without payment of
any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including the additional shares of Common Stock
issuable upon conversion or exercise thereof), then, as of such record date (or
the date of such dividend distribution, split or subdivision if no record date
is fixed), the Conversion Price of the Series A Preferred Stock, the Conversion
Price of the Series B Preferred Stock, the Conversion Price of the Series C
Preferred Stock and the Conversion Price of the Series D Preferred Stock shall
be appropriately decreased so that the number of shares of Common Stock issuable
on conversion of each share of such series shall be increased in proportion to
such increase of the aggregate of shares of Common Stock outstanding and those
issuable with respect to such Common Stock Equivalents.
(iv) If the number of shares of Common Stock outstanding at any time
after the Purchase Date is decreased by a combination of the outstanding shares
of Common Stock, then, following the record date of such combination, the
Conversion Price for the Series A Preferred Stock, the Conversion Price of the
-16-
Series B Preferred Stock, the Conversion Price of the Series C Preferred Stock
and the Conversion Price of the Series D Preferred Stock shall be appropriately
increased so that the number of shares of Common Stock issuable on conversion of
each share of such series shall be decreased in proportion to such decrease in
outstanding shares.
(v) Upon (A) a sale by the Corporation of its Common Stock in a
transaction immediately following which its Common Stock is publicly traded, (B)
the acquisition of the Corporation by another entity by means of any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation) or (C) a sale of all or substantially
all of the assets of the Corporation; provided such event shall have occurred
prior to December 1, 2000 and the price per share received by the holders of the
Common Stock (assuming conversion of all convertible securities and exercise of
all vested options and warrants) is at least $9.00 per share (adjusted to
reflect subsequent stock dividends, stock splits or recapitalizations), then the
Conversion Price in effect for the Series C Preferred Stock shall be adjusted as
of the effective date of such event to a price determined by multiplying such
Conversion Price by 1.2069.
(e) Intentionally Left Blank.
(f) Recapitalizations. If at any time or from time to time there
-----------------
shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 4 or in Section 2), provision shall be made so that the holders of
the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock shall thereafter be entitled to receive upon
conversion thereof the number of shares of stock or other securities or property
of this Corporation or otherwise to which a holder of Common Stock deliverable
upon conversion would have been entitled on such recapitalization. In any such
case, appropriate adjustment shall be made in the application of the provisions
of this Section 4 with respect to the rights of the holders of the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock after the recapitalization to the end that the provisions of
this Section 4 (including adjustment of the Conversion Price then in effect and
the number of shares purchasable upon conversion of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock) shall be applicable after that event as nearly equivalent as
may be practicable.
(g) No Impairment. This Corporation will not, by amendment of its
-------------
Fifth Amended and Restated 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
-17-
hereunder by this Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 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 the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and 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 the Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock, and the number of shares
of Common Stock to be issued shall be rounded to the nearest whole share.
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, Series B Preferred Stock, Series C Preferred Stock or 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
Conversion Price of Series A Preferred Stock, the Conversion Price of the Series
B Preferred Stock, the Conversion Price of the Series C Preferred Stock or the
Conversion Price of the Series D Preferred Stock pursuant to this Section 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 A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock, as applicable, 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,
Series B Preferred Stock, Series C Preferred Stock or 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 Conversion Price for such series
of Preferred Stock at the time in effect, and (C) the number of shares of Common
Stock and the amount, if any, of other property that at the time would be
received upon the conversion of a share of such series of Preferred Stock.
(i) Notices of Record Date. In the event of any taking by this
----------------------
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
Corporation shall mail to each holder of Series A Preferred Stock, each holder
of Series B Preferred Stock, each holder of Series C Preferred Stock and each
holder of Series D Preferred Stock, at least twenty (20) days prior to the date
specified therein, a notice specifying the date on
-18-
which any such record is to be taken for the purpose of such dividend,
distribution or right, and the amount and character of such dividend,
distribution or right.
(j) 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 the Series A Preferred Stock, Series B Preferred Stock, the
Series C Preferred Stock and the Series D Preferred Stock, 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 A Preferred Stock, Series B
Preferred Stock, the Series C Preferred Stock and the 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 the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock, in addition to such other remedies as shall
be available to the holder of such 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 Certificate.
(k) Notices. Any notice required by the provisions of this Section 4
-------
to be given to the holders of shares of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock or Series D Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of this
Corporation.
(l) Special Mandatory Conversion.
----------------------------
(i) If (a) this Corporation consummates a financing (the
"Financing") pursuant to which the holders of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are
entitled to exercise the right of first offer (the "Right of First Offer") set
forth in Section 2.4 of the Fourth Amended and Restated Investors' Rights
Agreement, dated on or about January 2000, by and among this Corporation and
certain investors and founders, as amended from time to time (the "Rights
Agreement"); (b) the Board of Directors of this Corporation shall have
determined that holders of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock of this Corporation must
participate in the Financing (a "Mandatory Offering") and have determined the
aggregate dollar amount to be invested by all holders of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock, which amount may be more than or less than the holders' right to
participate in the Financing pursuant to the Right of First Offer contained in
the Rights Agreement; (c) this Corporation shall have delivered a notice
("Notice") to the holders of Series A Preferred Stock,
-19-
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock:
(1) stating this Corporation's bona fide intention to consummate the Financing,
(2) indicating the number of securities to be offered, (3) indicating the price
and terms upon which it proposes to offer such securities, (4) identifying the
Pro Rata Share (as defined below) of the Major Investor Portion to be invested
by each holder of Series A Preferred Stock, each holder of Series B Preferred
Stock, each holder of Series C Preferred Stock and each holder of Series D
Preferred Stock, and (5) offering each holder of Series A Preferred Stock, each
holder of Series B Preferred Stock, each holder of Series C Preferred Stock and
each holder of Series D Preferred Stock the right to purchase such holder's Pro
Rata Share of the Major Investor Portion within the time periods set forth in
the Notice; and (d) a holder (a "Non-Participating Holder") does not acquire at
least its Pro Rata Share within the time periods set forth in the Notice, then
that percentage of each Non-Participating Holder's shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock, as applicable, equal to the percentage of such Non-Participating Holder's
Pro Rata Share not acquired by such Non-Participating Holder shall automatically
and without further action on the part of such holder be converted effective
upon, subject to, and concurrently with, the consummation of the Mandatory
Offering (the "Mandatory Offering Date") into shares of Common Stock of this
Corporation at a Conversion Price equal to the applicable Original Issue Price
(as adjusted for any stock dividends, combinations or splits). For purposes of
this subsection 4(l), each holder's Pro Rata Share shall be an amount determined
by multiplying the aggregate amount to be invested by the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock or Series D Preferred
Stock, as applicable, by a fraction, the numerator of which shall be the number
of shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock, as applicable, then held by such
holder and the denominator of which shall be the total number of shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock, as applicable, then outstanding. For purposes of this
subsection 4(l), a holder of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock may at its option designate
one or more of its affiliates to acquire all or a portion of such holder's Pro
Rata Share, and so long as such holder and/or its affiliates acquires such
holder's full Pro Rata Share within the time periods set forth in the Notice,
such holder shall not be deemed a Non-Participating Holder.
(ii) The holder of any shares converted pursuant to this
subsection 4(l) shall deliver to this Corporation during regular business hours
at the office of any transfer agent of this Corporation, or at such other place
as may be designated by this Corporation, the certificate or certificates for
the shares so converted, duly endorsed or assigned in blank or to this
Corporation. As promptly as practicable thereafter, this Corporation shall issue
and deliver to such holder, at the place designated by such holder, a
certificate or certificates for the number of full shares of the Common Stock to
be issued and such holder shall be deemed to
-20-
have become a stockholder of record of Common Stock on the Mandatory Offering
Date unless the transfer books of this Corporation are closed on that date, in
which event he, she or it shall be deemed to have become a stockholder of record
of Common Stock on the next succeeding date on which the transfer books are
open.
5. Voting Rights. The holder of each share of Series A Preferred
-------------
Stock, the holder of each share of Series B Preferred Stock, the holder of each
share of Series C Preferred Stock and the holder of each share of Series D
Preferred Stock shall have the right to one vote for each share of Common Stock
into which such share of Series A Preferred Stock, Series B Preferred Stock,
Series C Preferred Stock or 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 Common Stock, and
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 with respect to any question upon which holders of
Common Stock have the right to vote. Fractional votes shall not, however, be
permitted and any fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or 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). Unless otherwise provided herein
or unless otherwise required by law, the holders of the Series A Preferred
Stock, the holders of the Series B Preferred Stock, the holders of the Series C
Preferred Stock and the holders of the Series D Preferred Stock shall vote on
all matters together with the holders of Common Stock.
6. Protective Provisions. So long as there are at least 1,000,000
---------------------
outstanding shares of Series A Preferred Stock, this Corporation shall not take
any of the following actions without first obtaining the approval (by vote or
written consent, as provided by law) of the holders of a majority of the then
outstanding shares of Series A Preferred Stock, voting separately as a series:
(a) alter or change the rights, preferences or privileges of the
shares of Series A Preferred Stock so as to affect adversely such shares;
(b) increase or decrease (other than by redemption or conversion) the
total number of authorized shares of Series A Preferred Stock; or
(c) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security having a preference over the Series A Preferred Stock with
respect to voting, dividends or upon liquidation.
In addition, so long as there are at least 1,000,000 outstanding
shares of Series B Preferred Stock, this Corporation shall not take any of the
following
-21-
actions without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of a majority of the then outstanding shares of
Series B Preferred Stock, voting separately as a series:
(a) alter or change the rights, preferences or privileges of the
shares of Series B Preferred Stock so as to affect adversely such shares;
(b) increase or decrease (other than by redemption or conversion) the
total number of authorized shares of Series B Preferred Stock; or
(c) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security having a preference over the Series B Preferred Stock with
respect to voting, dividends or upon liquidation.
In addition, so long as there are at least 1,000,000 outstanding
shares of Series C Preferred Stock, this Corporation shall not take any of the
following actions without first obtaining the approval (by vote or written
consent, as provided by law) of the holders of a majority of the then
outstanding shares of Series C Preferred Stock, voting separately as a series:
(a) alter or change the rights, preferences or privileges of the
shares of Series C Preferred Stock so as to affect adversely such shares;
(b) increase or decrease (other than by redemption or conversion) the
total number of authorized shares of Series C Preferred Stock; or
(c) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
security having a preference over the Series C Preferred Stock with respect to
voting, dividends or upon liquidation.
In addition, so long as there are at least 1,000,000 outstanding shares of
Series D Preferred Stock, this Corporation shall not take any of the following
actions without first obtaining the approval (by vote or written consent, as
provided by law) of the holders of a majority of the then outstanding shares of
Series D Preferred Stock, voting separately as a series:
(a) alter or change the rights, preferences or privileges of the
shares of Series D Preferred Stock so as to affect adversely such shares;
(b) increase or decrease (other than by redemption or conversion) the
total number of authorized shares of Series D Preferred Stock; or
-22-
(c) authorize or issue, or obligate itself to issue, any other equity
security, including any other security convertible into or exercisable for any
equity security having a preference over the Series D Preferred Stock with
respect to voting, dividends or upon liquidation.
In addition, so long as there are at least 1,000,000 outstanding
shares of Series A Preferred Stock, 1,000,000 outstanding shares of Series B
Preferred Stock, 1,000,000 outstanding shares of Series C Preferred Stock or
1,000,000 outstanding shares of Series D Preferred Stock, this Corporation shall
not take any of the following actions without first obtaining the approval (by
vote or written consent, as provided by law) of the holders of a majority of the
then outstanding shares of all such classes of which there are at least
1,000,000 outstanding shares acting together as a single class:
(a) sell, convey, or otherwise dispose of all or substantially all of
its property or business or merge into or consolidate with any other corporation
(other than a wholly-owned subsidiary corporation) or effect any transaction or
series of related transactions in which more than fifty percent (50%) of the
voting power of this Corporation is disposed of; or
(b) declare or pay any dividends on its Common Stock.
In addition, unless approved by the affirmative vote of at least
seventy-five percent (75%) of the members of the Board of Directors, so long as
there are at least 1,000,000 outstanding shares of Series A Preferred Stock,
1,000,000 outstanding shares of Series B Preferred Stock, 1,000,000 outstanding
shares of Series C Preferred Stock or 1,000,000 outstanding shares of Series D
Preferred Stock, this Corporation shall not take any of the following actions
without first obtaining the approval (by vote or written consent, as provided by
law) of the holders of a majority of the then outstanding shares of each such
class of which there are at least 1,000,000 outstanding shares acting together
as a single class:
(a) make any loans or advances to its employees or any members of
their immediate families, other than travel advances and other advances made in
the ordinary course of business or loans to employees made pursuant to
promissory notes issued for the purchase of shares under a stock option plan or
restricted stock plan approved by the Board of Directors of this Corporation;
(b) guarantee any indebtedness or obligation of any other party other
than in the ordinary course of business;
(c) create or suffer to be imposed any lien, mortgage, security
interest or other charge on or against the properties or assets of this
Corporation or any subsidiary, other than in the ordinary course of business;
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(d) acquire, or permit any subsidiary to acquire, any stock or other
securities of any corporation, partnership or entity, unless (i) all such
acquisitions of securities do not exceed in the aggregate $2,000,000 in any one
fiscal year of this Corporation and (ii) immediately following each such
acquisition, each such corporation, partnership or entity would be at least 50%
owned by this Corporation or be a subsidiary of this Corporation; or
(e) sell, transfer, or exclusively license intellectual property or
technology assets of the Corporation having a fair market value greater than
$500,000.
7. Status of Converted or Redeemed Stock. In the event any shares of
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Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or
Series D Preferred Stock shall be redeemed or converted pursuant to Section 3 or
Section 4 hereof, the shares so converted or redeemed shall be canceled and
shall not be issuable by this Corporation. The Fifth Amended and Restated
Certificate of Incorporation of this Corporation shall be appropriately amended
to effect the corresponding reduction in this Corporation's authorized capital
stock.
C. Common Stock.
------------
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 Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of this Corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.
2. Liquidation Rights. Upon a Liquidation Event, the assets of this
------------------
Corporation shall be distributed as provided in this Article IV B.2 hereof.
3. Redemption. The Common Stock is not redeemable.
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4. Voting Rights. The holder of each share of Common Stock shall
-------------
have the right to one vote, and shall be entitled to notice of any stockholders'
meeting in accordance with the bylaws of this Corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law. Except
as otherwise required by law or this Fifth Amended and Restated Certificate of
Incorporation, holders of Common Stock shall vote together with holders of the
Preferred Stock as a single class, subject to any special or preferential voting
rights of any then outstanding Preferred Stock. The number of authorized shares
of Common Stock may be increased or decreased (but not below the number of
shares then outstanding) by the affirmative vote of the holders of a majority of
the outstanding shares of capital stock of the Corporation, with each such share
being entitled to such number of votes per share as is provided in this Article
IV. This
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Corporation shall not take any action that would alter or change the powers,
preferences or special rights of the Common Stock so as to adversely affect
certain holders of Common Stock in a different manner than other holders of
Common Stock.
ARTICLE V
Except as otherwise provided in this 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 this Corporation.
ARTICLE VI
The number of directors of this Corporation shall be fixed from time
to time by a bylaw or amendment thereof duly adopted by the stockholders.
ARTICLE VII
Elections of directors need not be by written ballot unless the Bylaws
of this 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 this Corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of this Corporation.
ARTICLE IX
A director of this Corporation shall, to the full extent permitted by
the Delaware General Corporation Law as it now exists or as it may hereafter be
amended, not be liable to this Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director. Neither any amendment nor
repeal of this Article IX, nor the adoption of any provision of this Fifth
Amended and Restated Certificate of Incorporation inconsistent with this Article
IX, shall eliminate or reduce the effect of this Article IX in respect of any
matter occurring, or any cause of action, suit or claim that, but for this
Article IX, would accrue or arise, prior to such amendment, repeal or adoption
of an inconsistent provision.
ARTICLE X
This Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Fifth Amended and Restated Certificate of
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Incorporation, in the manner now or hereafter prescribed by statute, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
IN WITNESS WHEREOF, this Fifth Amended and Restated Certificate of
Incorporation has been signed by the President and Secretary of this Corporation
on January 26, 2000.
/s/ Alex Pinchev
___________________________________
Alex Pinchev
Chairman, President & CEO
/s/ David J. Piper
___________________________________
David J. Piper
Secretary
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