CERTIFICATE OF DESIGNATION
OF
SERIES D CONVERTIBLE PREFERRED STOCK
DIGITAL COURIER TECHNOLOGIES, INC.
----------------------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Digital Courier Technologies, Inc., a Delaware corporation (the
"Company") certifies that pursuant to the authority contained in ARTICLE V of
its Certificate of Incorporation, as amended (the "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
Company (the "Board of Directors") by unanimous written consent dated January
20, 2002, duly approved and adopted the following resolution which resolution
remains in full force and effect on the date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by the Certificate of Incorporation, the Board of Directors does
hereby designate, create, authorize and provide for the issue of a series of
preferred stock having no par value, and having a stated value of S 10,000 per
share, which shall be designated as Series D Convertible Preferred Stock (the
"Preferred Stock") consisting of 360 shares, having voting powers, designations,
preferences, limitations, restrictions, and relative rights as follows:
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CERTIFICATE OF DESIGNATION OF
CONVERTIBLE PREFERRED STOCK, SERIES D
OF DIGITAL COURIER TECHNOLOGIES, INC.
1. Designation, Amount, Par Value and Stated Value. The series of
preferred stock shall be designated as Convertible Preferred Stock, Series D
(the "Preferred Stock"). and the number of shares so designated shall be 360
(which shall not be subject to increase without the consent of each of the
holders of the Preferred Stock (the "Holders")). Each share of Preferred Stock,
no par value, shall have a stated value of $ 10,000 per share (the "Stated
Value").
2. Dividends. Holders of the outstanding Preferred Stock shall not be
entitled to receive any dividends in respect of the Preferred Stock.
3. Voting Rights. Except as otherwise provided herein and as otherwise
required by law, the Preferred Stock shall have no voting rights. However, so
long as any shares of Preferred Stock are outstanding. the Company shall not and
shall cause its subsidiaries not to, without the affirmative vote of the Holders
of a majority of the shares of the Preferred Stock then outstanding. (a) alter
or change adversely the absolute or relative powers, preferences or rights given
to the Preferred Stock, (b) alter or amend this Certificate of Designation, (c)
amend its Articles of Incorporation, bylaws or other charter documents so as to
affect adversely any rights of any Holders, (d) increase the authorized number
of shares of Preferred Stock, (e) sell all or substantially all of its assets,
(f) merge with or into another company or (g) enter into any agreement with
respect to the foregoing.
4. Liquidation. Upon any liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary (a "Liquidation"), the Holders shall
be entitled to receive out of the assets of the Company, whether such assets are
capital or surplus, for each share of Preferred Stock an amount equal to the
Stated Value. If the assets of the Company shall be insufficient to pay in full
all amounts due to the Holders then the entire assets to be distributed to the
Holders shall be distributed among the Holders and the holders of all of the
outstanding Common Stock of the Company ratably in accordance with the
respective amounts that would be payable on such shares if all amounts payable
thereon were paid in full. A sale, conveyance or disposition of all or
substantially all of the assets of the Company or the consummation by the
Company of a transaction or series of related transactions in which more than
50% of the voting power of the Company is disposed of, or a consolidation or
merger of the Company with or into any other company or companies shall not be
treated as a Liquidation, but instead shall be subject to the provisions of
Sections 6 and 7. The Company shall mail written notice of any such Liquidation,
not less than 45 days prior to the payment date stated therein, to each Holder.
5. Mechanics of Conversion.
(a) Holder's Delivery Requirements. Each share of Preferred Stock shall
be convertible into shares of Common Stock at the Conversion Ratio (as defined
in Section 8) at the option of the Holder in whole or in part at any time after
the Original Issue Date. The Holders shall effect conversions by surrendering to
the Company the certificate or certificates representing the shares of Preferred
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Stock to be converted, together with a copy of the form of conversion notice
attached hereto as Exhibit A (the "Conversion Notice"). Each Conversion Notice
shall specify the Holder, the number of shares of Preferred Stock to be
converted and the date on which such conversion is to be effected, which date
may not be prior to the date the Holder delivers such Conversion Notice by
facsimile (the "Conversion Date"). If no Conversion Date is specified in a
Conversion Notice, the Conversion Date shall be the date that the Conversion
Notice is deemed delivered pursuant to Section 9. Subject to Section 5(b)
hereof, each Conversion Notice, once given, shall be irrevocable. If the Holder
is converting less than all shares of Preferred Stock represented by the
certificate or certificates tendered by the Holder with the Conversion Notice,
or if a conversion hereunder cannot be effected in full for any reason, the
Company shall promptly cause to be delivered to such Holder (in the manner and
within the time set forth in Section 5(b)) a new certificate for such number of
shares of Preferred Stock as have not been converted. Shares of Preferred Stock
converted into Common Stock shall be cancelled and shall not be issuable by the
Company.
(b) Company's Response. Not later than three (3) Trading Days after any
Conversion Date, the Company will cause to be delivered to the Holder (i) a
certificate or certificates representing the number of shares of Common Stock
being acquired upon the conversion of shares of Preferred Stock and (ii) one or
more certificates representing the number of shares of Preferred Stock not
converted. Upon request of the Holder, in lieu of physical delivery of the
shares of Preferred Stock, provided the Company's transfer agent is
participating in the Depositary Trust Company ("DTC") Fast Automated Securities
Transfer ("EAST") program, upon request of the Holder and in compliance with the
provisions hereof, the Company shall use its best efforts to cause its transfer
agent to electronically transmit any certificate or certificates required to be
delivered to the Holder under this Section 5 by crediting the account of the
Holder's Prime Broker with DTC through its Deposit Withdrawal Agent Commission
system. The time period for delivery described herein shall apply to the
electronic transmittals described herein. If in the case of any Conversion
Notice such certificate or certificates are not delivered to or as directed by
the applicable Holder by the third Trading Day after the Conversion Date, the
Holder shall be entitled at any time on or before its receipt of such
certificate or certificates thereafter, to rescind such conversion by written
notice to the Company, in which event the Company shall immediately return the
certificates representing the shares of Preferred Stock for which Common Stock
was not delivered pursuant to such conversion.
(c) Liquidation Damages; etc.
(i) If the Company fails to deliver to the Holder
such certificate or certificates pursuant to this Section 5 on
or prior to the third Trading Day after the Conversion Date
(the "Delivery Date"), in addition to all other remedies that
such Holder may pursue hereunder, the Company shall pay to
such Holder in cash, as liquidated damages and not as a
penalty, $5,000 per day until such certificates are delivered.
If the Company fails to deliver to the Holder such certificate
or certificates pursuant to this Section 5 prior to the 15th
day after the Conversion Date the Company shall, at the
Holder's option, redeem from funds legally available therefor
at the time of such redemption, such number of shares of
Preferred Stock then held by such Holder, as requested by such
Holder. If such Holder opts to redeem any number of shares of
Preferred Stock pursuant to this Section 5(c)(i), then the
Company shall immediately notify all other Holders of Such
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Holder's election to redeem and, at any other Holders' option,
which shall be exercised within two business days thereof,
redeem, from funds legally available therefor at the time of
such redemption, such number of shares of Preferred Stock then
held by such other Holder, as requested by such Holder, which
redemption shall be simultaneous with other redemptions
referred to above. The redemption price shall be equal to the
sum of the number of shares of Preferred Stock then held by
such Holder multiplied by (1) the average Per Share Market
Value for the five Trading Days immediately preceding (x) the
Conversion Date or (y) the date of payment in full by the
Company of such prepayment price, whichever is greater,
multiplied by, (2) the Conversion Ratio calculated on the
Conversion Date. If the Holder has requested that the Company
redeem shares of Preferred Stock pursuant to this Section and
the Company fails for any reason to pay the redemption price
referenced above within seven days after such notice is deemed
delivered pursuant to Section 5(c)(i), the Company will pay
interest on the redemption price at a rate of 15% per annum in
cash to such Holder, accruing from such seventh day until the
redemption price and any accrued interest thereon is paid in
full. Nothing herein shall limit a Holder's right to pursue
actual damages for the Company's failure to deliver
certificates representing shares of Common Stock upon
conversion within the period specified herein (including,
without limitation, damages relating to any purchase of shares
of Common Stock by Such Holder to make delivery on a sale
effected in anticipation of receiving certificates
representing shares of Common Stock upon conversion, such
damages to be in an amount equal to (A) the aggregate amount
paid by such Holder for the shares of Common Stock so
purchased minus (B) the aggregate amount of net proceeds, if
any, received by such Holder from the sale of the shares of
Common Stock Issued by the Company pursuant to such
conversion), and such Holder shall have the right to pursue
all remedies available to it at law or in equity (including,
without limitation, a decree of specific performance and/or
injunctive relief).
(ii) In addition to any other rights available to the
Holder, if the Company fails to deliver to the Holder such
certificate or certificates pursuant to Section 5(c)(i) by the
Delivery Date and after the Delivery Date the Holder purchases
(in an open market transaction or otherwise) shares of Common
Stock to deliver to the satisfaction of a sale by such Holder
of the Underlying Shares which the Holder anticipated
receiving on the Delivery Date upon such conversion (a
"Buy-In"), then the Company shall pay in cash to the Holder
(in addition to any remedies available to or elected by the
Holder) the amount by which (A) the Holder's total purchase
price (including brokerage commissions, if any) for the shares
of Common Stock purchased for a Buy-In exceeds (B) the
aggregate Conversion Price for the number of shares of Common
Stock in the Buy-In for which such conversion was not timely
honored. For example, if the Holder purchases shares of Common
Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of S 10,000
aggregate Conversion Price for the number of shares of Common
Stock in the Buy-In, the Company shall be required to pay the
Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect
of the Buy-In.
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(d) Conversion Price. The conversion price for each share of
Preferred Stock (the "Conversion Price") in effect on any Conversion Date shall
be $.30, subject to adjustment from time to time pursuant to the provisions of
Sections 6 and 7 hereof.
(e) Restriction on Conversion by Either the Registered Owner
or the Company. Notwithstanding anything herein to the contrary, in no event
shall any Holder or the Company have the right or be required to convert shares
of Preferred Stock if as a result of such conversion the aggregate number of
shares of Common Stock beneficially owned by such Registered Owner and its
Affiliates would exceed 9.99/0 of the outstanding shares of the Common Stock
following such exercise. For purposes of this Section 5(e), beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended. The provisions of this Section 5(e) may be waived by a
Holder as to itself (and solely as to itself) upon not less than 65 days prior
written notice to the Company, and the provisions of this Section 5~e) shall
continue to apply until such 65 `h day (or later, if stated in the notice of
waiver).
(f) No Conversion Prior to May 30, 2002. Notwithstanding
anything to the contrary herein, the Holders of the Preferred Stock shall not be
entitled to convert the Preferred Stock into shares of Common Stock until after
May 30, 2002.
(e) Reservation of shares. The Company covenants that after
May 30, 2002, and at all times thereafter, it shall reserve and keep available
out of its authorized and unissued Common Stock solely for the purpose of
issuance upon conversion of the Preferred Stock and free from preemptive rights
or any other actual contingent purchase rights of persons other than the Holders
of Preferred Stock, not less than 100/0 of such number of shares of Common Stock
as shall be issuable (taking into account the adjustments of Section 6) upon the
conversion of all outstanding shares of Preferred Stock (without regard to any
limitations on conversion). The Company covenants that all shares of Common
Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued and fully paid, nonassessable and freely tradable
6. Adjustment of Conversion Price.
(a) Common Stock Dividends; Common Stock Splits: Reverse
Common Stock Splits. If the Company, at any time after the Issuance Date (a)
shall pay a stock dividend on its Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine outstanding shares
of Common Stock into a smaller number of shares, or (d) issue by
reclassification of shares of Common Stock any shares of capital stock of the
Company, then Conversion Price shall be multiplied by a fraction, the numerator
of which shall be the number of shares of Common Stock (excluding treasury
shares, if any) outstanding before such event and the denominator of which shall
be the number of shares of Common Stock outstanding after such event. Any
adjustment made pursuant to this paragraph 6(a) shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination or
re-classification.
(b) Rights: Warrants. If the Company, at any time after the
Issuance Date, shall issue rights cr warrants to all of the holders of its
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Preferred Stock entitling them to subscribe for or purchase shares of Common
Stock at a price per share less than the Per Share Market Value of Common Stock
at the record date mentioned below, the Conversion Price shall be multiplied by
a fraction, the denominator of which shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase. and the numerator of which shall be the
number of shares of Common Stock (excluding treasury shares, if any) outstanding
on the date of issuance of such rights or warrants plus the number of shares
which the aggregate offering price of the total number of shares so offered
would purchase at such Per Share Market Value. Such adjustment shall be made
whenever such rights or warrants are issued, and shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such rights or- warrants.
(c) Subscription Rights. If the Company, at any time after the
Issuance Date, shall distribute to all of the holders of Common Stock evidences
of its indebtedness or assets or rights or warrants to subscribe for or purchase
any security (excluding those referred to in paragraphs 6(a) and (b) above),
then in each such case the Conversion Price at which the Preferred Stock shall
thereafter be convertible shall be determined by multiplying the Conversion
Price in effect immediately prior to the record date fixed for determination of
shareholders entitled to receive such distribution by a fraction, the
denominator of which shall be the Per Share Market Value of Common Stock
determined as of the record date mentioned above, and the numerator of which
shall be such Per Share Market Value of the Common Stock on such record date
less the then fair market value at such record date of the portion of such
assets or evidence of indebtedness so distributed applicable to one outstanding
share of Common Stock as determined by the Board of Directors in good faith;
provided, however, that in the event of a distribution exceeding ten percent
(1090) of the net assets of the Company, such fair market value shall be
determined by a nationally recognized or major regional investment banking firm
or firm of independent certified public accountants of recognized standing (an
"Appraiser") selected in Good faith by the Holders of the Preferred Stock; and
provided, further, that the Company, after receipt of the determination by such
Appraiser shall have the right to select in good faith an additional Appraiser
meeting the same qualifications, in which case the fair market value shall be
equal to the average of the determinations by each such Appraiser. Such
adjustment shall be made whenever any such distribution is made and shall become
effective immediately after the record date mentioned above.
(d) Rounding. All calculations under this Section 6 shall be
made to the nearest cent or the nearest 1/100`h of a share, as the case may be.
(e) Notice of Adjustment. Whenever the Conversion Price is
adjusted pursuant to paragraphs 6(a), (b) or (c), the Company shall promptly
mail to the Holders a notice setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
(f) Redemption Event. In case of (A) any reclassification of
the Common Stock, (B) any Change of Control Transaction, (C) any compulsory
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share exchange pursuant to which the Common Stock is converted into other
securities, cash or property or (D) (i) the Company's notice to any Holder of
the Preferred Stock, including by way of public announcement, at any time, of
its intention, for any reason, not to comply with proper requests for the
conversion of any shares of the Preferred Stock or (ii) the Company's refusal to
honor a duly executed Conversion Notice delivered pursuant to Section 5 hereof
(clauses (A) through (D) above are referred to as a "Redemption Event"), in the
case of (A), (B) and (C), the Holders shall have the right thereafter to convert
the shares of Preferred Stock for shares of stock and other securities, cash and
property receivable upon or deemed to be held by holders of Common Stock
following such Redemption Event, and the Holders shall be entitled upon such
event to receive such amount of securities, cash or property as the shares of
the Common Stock of the Company into which the shares of Preferred Stock could
have been converted immediately prior to such Redemption Event (without taking
into account any limitations or restrictions on the convertibility of the
Securities) would have been entitled; provided, however, that in the case of a
transaction specified in (B) in which holders of the Company's Common Stock
receive cash, the Holders shall have the right to convert the shares of
Preferred Stock for such number of shares of the surviving company equal to the
amount of cash into which the shares of Preferred Stock are convertible divided
by the fair market value of the shares of the surviving company on the effective
date of the merger; provided, further, that in the case of an event specified in
(D), the Holders shall have the option to require the Company to redeem, from
funds legally available therefor at the time of such redemption, its shares of
Common Stock immediately theretofore acquirable and receivable upon the
conversion of such Holder's Preferred Stock at a price per share equal to the
product of (i) the average Per Share Market Value for the five Trading Days
immediately preceding (1) the effective date, the date of the closing, date of
occurrence or the date of the announcement, as the case may be, of the
Redemption Event triggering such redemption right or (2) the date of payment in
full by the Company of the redemption price hereunder, whichever is greater, and
(ii) the Conversion Ratio calculated on the effective date, the date of the
closing, date of occurrence or the date of the announcement, as the case may be
or, at the option of the Holder, on the date of submission of a Redemption
Notice. The entire redemption price shall be paid in cash. In the case of (A),
(B) and (C), the terms of any such Redemption Event shall include such terms so
as to continue to give to the Holders the right to receive the securities, cash
or property set forth in this Section 6(f) upon any conversion or redemption
following such Redemption Event. This provision shall similarly apply to
successive Redemption Events.
(g) Reclassification. Etc. If:
A. the Company shall declare a dividend (or any other
distribution) on its Common Stock; or
B. the Company shall declare a special nonrecurring
cash dividend on or a redemption of its Common
Stock; or
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C. the Company shall authorize the granting to the
holders of the Common Stock rights or warrants to
subscribe for or purchase any shares of capital stock
of any class or of any rights; or
D. the approval of any shareholders of the Company shall
be required in connection with any reclassification
of the Common Stock of the Company, any consolidation
or merger to which the Company is a party. any sale
or transfer of all or substantially all of the assets
of the Company, of any compulsory share of exchange
whereby the Common Stock is converted into other
securities, cash or property; or
E. the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of
the affairs of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of the conversion of the Preferred Stock, and shall cause to be
mailed to the Holders at the address specified herein, at least 20 calendar days
prior to the applicable record or effective date hereinafter specified, a notice
(provided such notice shall not include any material non-public information)
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distributions, redemption, rights or warrants are to
be determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer or share exchange; provided, however, that
the failure to mail such notice or any defect therein or in the mailing thereof
shall not affect the validity of the corporate action required to be specified
in such notice.
Notwithstanding the foregoing, in no event shall any provision in this
Section 6 cause the Conversion Price to be greater than the Conversion Price on
the Date of Issuance.
7. Major Announcement. If the Company makes a public announcement (i)
that it intends to enter into a Change of Control Transaction (as defined in
Section 8) or (ii) any person, group or entity (including the Company, but
excluding a Holder or any affiliate of a Holder) publicly announces a bona fide
tender offer, exchange offer or other transaction to purchase 509 or more of the
Common Stock (such announcement being referred to herein as a "Major
Announcement" and the date on which a Major Announcement is made, the
"Announcement Date"), then, in the event that a Holder seeks to convert shares
of Preferred Stock on or following the Announcement Date, the Conversion Price
shall, effective upon the Announcement Date and continuing through the earlier
to occur of the consummation of the proposed transaction or tender offer,
exchange offer or other transaction and the Abandonment Date (as defined below),
be equal to the lesser of (A) the Conversion Price in effect on the Trading Day
immediately preceding the Announcement Date for such Preferred Stock and (B) the
Conversion Price on such Conversion Date. "Abandonment Date" means with respect
to any proposed transaction or tender offer, exchange offer or other transaction
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for which a public announcement as contemplated by this paragraph has been made,
the date upon which the Company (in the case of clause (i) above) or the person,
group or entity (in the case of clause (ii) above) publicly announces the
termination or abandonment of the proposed transaction or tender offer, exchange
offer or another transaction which caused this paragraph to become operative.
S. Definitions. For the purposes hereof, the following terms shall have
the following meanings:
"Chance of Control Transaction" means the occurrence of any of (i) an
acquisition after the date hereof by an individual or legal entity or "group"
(as described in Section 13(d)(3) of the Exchange Act), of in excess of 5011c of
the voting securities of the Company. (ii) a replacement of more than one-half
of the members of the Company's board of directors which is not approved by a
majority of those individuals who are members of the board of directors on the
date hereof, or their duly elected successors who are directors immediately
prior to such transaction, in one or a series of related transactions, (iii) the
merger of the Company with or into another entity, unless following such
transaction, the Holders of the Company's securities continue to hold at least
5090 of such securities following such transaction, (iv) consolidation or sale
of all or substantially all of the assets of the Company in one or a series of
related transactions, or (v) the execution by the Company of an agreement to
which the Company is a party or by which it is bound, providing for any of the
events set forth above in (i), (ii), (iii) or (iv).
"Commission" means the United States Securities and Exchange
Commission, or any successor to such agency.
"Common Stock" means the Company's common stock, $.0001 par value per
share, of the Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.
"Conversion Ratio" means, at any time, a fraction, the numerator of
which is the Stated Value and the denominator of which is the Conversion Price
at such time.
"Nasdaq" means The National Market System of the Nasdaq Stock Market.
"Original Issue Date" shall mean the date of the first issuance of any
shares of the Preferred Stock regardless of the number of transfers of any
particular shares of Preferred Stock and regardless of the number of
certificates which may be issued to evidence such Preferred Stock.
"Per Share Market Value" means on any particular date (a) the closing
bid price per share of the Common Stock on such date on the Nasdaq or other
registered national stock exchange on which the Common Stock is then listed or
if there is no such price on such date, then the closing bid price on such
exchange or quotation system on the date nearest preceding such date, or (b) if
the Common Stock is not listed then on the Nasdaq or any registered national
stock exchange, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the Nasdaq or in the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date, or (c) if
the Common Stock is not then publicly traded the fair market value of a share
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of Common Stock as determined by an Appraiser selected in good faith by the
Holders of a majority in interest of the shares of the Preferred Stock;
provided, however, that the Company, after receipt of the determination by such
Appraiser, shall have the right to select in good faith an additional Appraiser,
in which case, the fair market value shall be equal to the average of the
determinations by each such Appraiser; and provided, further that all
determinations of the Per Share Market Value shall be appropriately adjusted for
any stock dividends, stock splits or other similar transactions during such
period.
"Person" means a corporation, an association, a partnership,
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
"Trading Day" means (a) a day on which the Common Stock is traded on
the Nasdaq or other registered national stock exchange on which the Common Stock
has been listed, or (b) if the Common Stock is not listed on the Nasdaq or any
registered national stock exchange, a day or which the Common Stock is traded in
the over-the-counter market, as reported by the OTC Bulletin Board. or (c) if
the Common Stock is not quoted on the OTC Bulletin Board, a day on which the
Common Stock is quoted in the over-the-counter market as reported by the
National Quotation Bureau Incorporated (or any similar organization or agency
succeeding its functions of reporting prices); provided, however, that in the
event that the Common Stock is not listed or quoted as set forth in (a), (b) and
(c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any
day which shall be a legal holiday or a day on which banking institutions in the
State of New York are authorized or required by law or other government action
to close.
"Underlying Shares" means the number of shares of Common Stock into
which the Shares are convertible in accordance with the terms hereof.
9. Notices. Except as otherwise provided in the event of conversion of
shares of Preferred Stock, all notices or other communications required
hereunder shall be in writing and shall be deemed to have been received (a) upon
hand delivery (receipt acknowledged) or delivery by telex (with correct answer
back received) telecopy or facsimile (with transmission confirmation report) at
the address or number designated below (if received by 8:00 p.m. EST where such
notice is to be received), or the first business day following such delivery (if
received after 8:00 p.m. EST where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur; and shall be regarded as properly
addressed if sent to the parties or their representatives at the addresses given
below:
To the Company: Digital Courier Technologies, Inc.
136 Heber Avenue, Suite 204
P.O. Box 8000
Park City, Utah 84060
Attn: John Hanlon
Phone: 435-655-3617
Fax: 435-655-3647
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To the Holders: Brown Simpson Partners I, Ltd.
152 West 57 `h Street, 21 `h Floor
New York, New York 10019
Attn: Peter Greene
Phone: (212) 247-8200
Fax: (212) 817-5391
with copies to: Akin, Gump, Strauss, Hauer & Feld,
L.L.P. 590 Madison Avenue
New York, New York 10022
Attn: James Kaye, Esq.
Phone: (212) 872-1000
Fax: (212) 872-1002
or such other address as any of the above may have furnished to the other
parties in writing by registered mail, return receipt requested.
10. Lost or Stolen Certificates. Upon receipt by the Company of
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any stock certificates representing Preferred Stock, and, in
the case of loss, theft or destruction, of any indemnification undertaking by
the Holder to the Company in customary form and, in the case of mutilation, upon
surrender and cancellation of such Series A Stock certificate(s), the Company
shall execute and deliver new preferred stock certificate(s) of like tenor and
date; provided, however, the Company shall not be obligated to re-issue
preferred stock certificates if the Holder contemporaneously requests the
Company to convert such Preferred Stock into Common Stock.
11. Remedies Characterized; Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Certificate of Designation shall be
cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit a Holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Certificate of
Designation. The Company covenants to each Holder of Preferred Stock that there
shall be no characterization concerning this instrument other than as expressly
provided herein. Amounts set forth or provided for herein with respect to
payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the Holder thereof and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof). The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holders of the
Preferred Stock and that the remedy at law in the event of any such breach may
be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holders of the Preferred Stock shall be
entitled, in addition to all other available remedies, to an injection
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.
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12. Specific Shall Not Limit General. No specific provision contained
in this Certificate of Designation shall limit or modify any more general
provision contained herein.
13. Failure or Indulgence Not Waiver. No failure or delay on the part
of a Holder of Preferred Stock in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
14. Fractional Shares. Upon a conversion hereunder, the Company shall
not be required to issue stock certificates representing fractions of shares of
Common Stock, but may if otherwise permitted, make a cash payment in respect of
any final fraction of a share based on the Per Share Market Value at such time.
If the Company elects not, or is unable, to make such a cash payment, the Holder
of a share of Preferred Stock shall be entitled to receive, in lieu of the final
fraction of a share, one whole share of Common Stock.
15. Payment of Tax Upon Issue of Transfer. The issuance of
certificates for shares of the Common Stock upon conversion of the Preferred
Shares shall be made without charge to the Holders thereof for any documentary
stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificate, provided that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon conversion in a name other than that of
the Holders so converted and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
16. Effect of Headings. The section headings herein are for
convenience only and shall not affect the construction hereof.
[Signature page follows]
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IN WITNESS WHEREOF Digital Courier Technologies, Inc. has caused this
Certificate to be signed by its Executive Vice President and Assistant Secretary
respectively, on this 21st day of January, 2002.
Name: /s/ John Hanlon
---------------------------
John Hanlon
Title: President and Secretary
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CERTIFICATE OF AMENDMENT
OF
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DIGITAL COURIER TECHNOLOGIES, INC.
[MAKING REVISIONS TO CHANGE NAME AND TO SET
FORTH TERMS OF REVERSE SPLIT]
Digital Courier Technologies, Inc. a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That pursuant to the recommendation of the Board of Directors of
the Company, the following resolution amending the Amended and Restated
Certificate of Incorporation of the Company has been adopted by written consent
of stockholders of the Company holding a majority of the outstanding stock
entitled to vote thereon. The resolution setting forth the amendment is as
follows:
RESOLVED, that the Company's Certificate of Incorporation be amended to
revise Article I and Article IV as attached hereto on Exhibit A.
SECOND: That this resolution has been adopted by the written consent of
the majority of shares pursuant to Section 228 of the General Corporation Law of
the State of Delaware.
THIRD: That said amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the effective date and time of said amendments shall be at
12:01 a.m., EDT, May 8, 2003.
IN WITNESS WHEREOF, the undersigned hereby affirms, under penalties of
perjury, that the foregoing instrument is the act and deed of the Company and
that the facts stated therein are true. Dated this 6th day of May, 2003.
Digital Courier Technologies, Inc..
By: /s/ Lynn J. Langford
--------------------
Lynn J. Langford
Secretary
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