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EXHIBIT 3.3
CERTIFICATE OF DESIGNATION OF VOTING POWER,
DESIGNATION PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS
OF
SERIES H 6.5% CONVERTIBLE PREFERRED STOCK DUE 2009
OF
INTERVU INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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InterVU Inc., a Delaware corporation (the "Company"), certifies
that pursuant to the authority contained in ARTICLE FOURTH of its Amended and
Restated 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 at a meeting duly called and held on December 19, 1999, 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 one series of
Series H Preferred Stock having a par value of $.001 per share, which shall be
designated as Series H 6.5% Convertible Redeemable Preferred Stock due 2009 (the
"Series H Preferred Stock") consisting of 50,000 shares, and each share of
Series H Preferred Stock shall have the following voting powers, preferences and
relative, participating, optional and other special rights, and qualifications,
limitations and restrictions thereof as follows:
1. CERTAIN DEFINITIONS.
Unless the context otherwise requires, the terms defined in this
paragraph 1 shall have, for all purposes of this resolution, the meanings herein
specified (with terms defined in the singular having comparable meanings when
used in the plural).
AFFILIATE: The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person means the
power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
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securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
APPLICABLE REDEMPTION PRICE: The term "Applicable Redemption Price"
means a price per share equal to one hundred percent (100%) of the Liquidation
Preference thereof, together with accumulated and unpaid dividends, if any
(including an amount in cash equal to a prorated dividend for any partial
dividend period) to the date of redemption.
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in San Diego, California are authorized or obligated by law or
executive order to close or be closed.
CLOSING PRICE: The term "Closing Price" shall have the meaning specified
in Section 7(e)(7).
COMMISSION: The term "Commission" shall mean the Securities and Exchange
Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of any class
of the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 7(f), however, shares issuable on
conversion of Series H Preferred Stock shall include only shares of the class
designated as common stock of the Company at the date of this Certificate of
Designation or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
COMPANY: The term "Company" shall mean InterVU Inc., a Delaware
corporation, having its principal office at 6815 Flanders Drive, San Diego,
California 92121 and shall include its successors and assigns.
CONVERSION PRICE: The term "Conversion Price" shall mean $90.00, as
adjusted from time to time by Section 7(e).
CONVERTIBLE SECURITY: The term "Convertible Security" shall be any
security that, by its terms, is convertible into Common Stock at the option of
the holder thereof.
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EXCHANGE ACT: The term "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder,
as in effect from time to time.
FUNDAMENTAL CHANGE: The term Fundamental Change shall have the meaning
specified in Section 7(f).
LIQUIDATION PREFERENCE: The term "Liquidation Preference" shall mean
$1,000 per share of Series H Preferred Stock.
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, a limited liability corporation, an individual, a joint venture, a
joint stock company, a trust, an unincorporated organization or a government or
an agency or a political subdivision thereof.
SECURITIES ACT: The term "Securities Act" shall mean the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder.
SENIOR SECURITIES: The term "Senior Securities" means any security
issued by the Company that is prior in right to the Series H Preferred Stock
with respect to dividends, distributions or liquidation preference.
SERIES H PREFERRED STOCK: The term "Series H Preferred Stock" shall mean
the Company's Series H 6.5% Convertible Preferred Stock due 2009.
SHARE REGISTER: The term "Share register" shall have the meaning
specified in Section 2(e).
TRADING DAY: The term "Trading Day" shall have the meaning specified in
Section 7(e)(7)(e).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning specified
in Section 7(e)(4).
2. ISSUE, DESIGNATION AND FORM
(a) The Series H Preferred Stock shall be designated as "Series H 6.5%
Convertible Series H Preferred Stock due 2009."
(b) The certificates evidencing shares of Series H Preferred Stock shall
be substantially in the form set forth in Exhibit A, which is incorporated in
and made a part of this Certificate of Designation. Any of certificates may have
such letters, numbers or other marks of identification and such notations,
legends and endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Certificate of Designation, or as may
be required to comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange or automated
quotation system on which the Series H Preferred Stock may be listed, or to
conform to usage.
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(c) The Series H Preferred Stock shall be issuable in registered form in
whole or fractional shares. Every certificate evidencing Series H Preferred
Stock shall be dated the date of its execution.
(d) The certificates evidencing shares of Series H Preferred Stock shall
be signed in the name and on behalf of the Company by the facsimile signature of
its Chairperson or Vice-Chairperson of the Board of Directors, President, any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and by the facsimile
signature of its Secretary or any of its Assistant Secretaries or Treasurer or
any of its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise).
(e) The Company shall maintain a register (the "Share register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of shares of Series H Preferred Stock and of
transfers of shares of Series H Preferred Stock. The Share register shall be in
written form or in any form capable of being converted into written form within
a reasonably prompt period of time. Upon surrender for registration of transfer
of any shares of Series H Preferred Stock to the Company, and satisfaction of
the requirements for such transfer set forth in this Section 2(e), the Company
shall execute one or more new certificates evidencing shares of Series H
Preferred Stock of any authorized denominations and of a like aggregate
Liquidation Preference and bearing such restrictive legends as may be required
by this Certificate of Designation.
(f) Shares of Series H Preferred Stock may be exchanged for other shares
of Series H Preferred Stock of any authorized denominations and of a like
aggregate Liquidation Preference, upon surrender of the Series H Preferred Stock
to be exchanged at any such office or agency maintained by the Company for such
purposes. Whenever any shares of Series H Preferred Stock are so surrendered for
exchange, the Company shall execute the shares of Series H Preferred Stock which
the holder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding. All certificates evidencing Series H
Preferred Stock presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company) be duly
endorsed, or be accompanied by a written instrument or instruments of transfer
in form satisfactory to the Company. No service charge shall be made for any
registration of transfer or exchange of shares of Series H Preferred Stock, but
the Company may require payment of a sum sufficient to cover any tax, assessment
or other governmental charge that may be imposed in connection with any
registration of transfer or exchange of such shares. The Company shall not be
required to exchange or register a transfer of any shares of Series H Preferred
Stock (a) called for redemption pursuant to Section 6; (b) surrendered for
conversion pursuant to Section 7; or (c) during the period of time from a Record
Date until the next succeeding Dividend Payment Date.
(g) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any certificate evidencing shares of Series H Preferred Stock (and all
securities issued in exchange therefor or substitution thereof, other than
Common Stock, if any, issued upon conversion thereof, which shall bear the
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legend set forth in Section 2(h), if applicable) shall bear a legend in
substantially the following form, unless such Series H Preferred Stock has been
sold pursuant to a registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the time of such
transfer), or unless otherwise agreed by the Company in writing:
THE SERIES H PREFERRED STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD UNLESS SUCH STOCK HAS BEEN REGISTERED UNDER THE
SECURITIES ACT, OR SOLD PURSUANT TO AN APPLICABLE EXEMPTION AND THE
HOLDER PROVIDES TO INTERVU INC. A LEGAL OPINION FROM LEGAL COUNSEL
REASONABLY ACCEPTABLE TO INTERVU INC. THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
Any Series H Preferred Stock (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired in
accordance with their terms or as to the conditions for removal of the foregoing
legend set forth therein have been satisfied may, upon surrender of such Series
H Preferred Stock for exchange to the Company in accordance with the provisions
of this Section 2(g), be exchanged for a new Series H Preferred Stock, of like
tenor and Liquidation Preference.
(h) Until the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
any stock certificate representing Common Stock issued upon conversion of such
Series H Preferred Stock shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or such Common Stock has
been issued upon conversion of shares of Series H Preferred Stock that have been
transferred pursuant to a registration statement that has been declared
effective under the Securities Act or unless otherwise agreed by the Company in
writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD UNLESS
SUCH STOCK HAS BEEN REGISTERED UNDER THE SECURITIES ACT, OR SOLD
PURSUANT TO AN APPLICABLE EXEMPTION AND THE HOLDER PROVIDES TO INTERVU
INC. A LEGAL OPINION FROM LEGAL COUNSEL REASONABLY ACCEPTABLE TO INTERVU
INC. THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the foregoing legend set
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forth therein have been satisfied may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance with the
procedures of the transfer agent for the Common Stock, be exchanged for a new
certificate or certificates for a like number of shares of Common Stock, which
shall not bear the restrictive legend required by this Section 2(h).
(i) In case any certificate representing shares of Series H Preferred
Stock shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute a new certificate representing shares of Series H
Preferred Stock, bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated certificate, or in lieu of and in
substitution for the certificate so destroyed, lost or stolen. In every case the
applicant for a substituted certificate shall furnish to the Company, such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Company, evidence to their satisfaction of the
destruction, loss or theft of such certificate and of the ownership thereof.
(j) Following receipt by the Company of satisfactory security or
indemnity and evidence, as described in the preceding paragraph, the Company
shall issue such substituted certificate and make available for delivery such
certificate. Upon the issuance of any substituted certificate, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any certificate which has been called for redemption or has
been tendered for redemption (and not withdrawn) or is about to be converted
into Common Stock shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute certificate, pay or authorize the
payment of or convert or authorize the conversion of the same (without surrender
thereof except in the case of a mutilated certificate), as the case may be, if
the applicant for such payment or conversion shall furnish to the Company such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in case of destruction, loss or theft, evidence satisfactory
to the Company of the destruction, loss or theft of such certificate and of the
ownership thereof.
(k) All certificates representing shares of Series H Preferred Stock
surrendered for the purpose of payment, redemption, conversion, exchange or
registration of transfer, shall, if surrendered to the Company or any paying
agent or any Stock registrar or any conversion agent, be surrendered to the
Company and promptly canceled by it, and no Series H Preferred Stock shall be
issued in lieu thereof except as expressly permitted by any of the provisions of
this Certificate of Designation.
(l) The Company in issuing the Series H Preferred Stock may use "CUSIP"
numbers, and may use "CUSIP" numbers in notices of redemption as a convenience
to holders.
3. RANKING.
The Series H Preferred Stock shall rank, with respect to dividend
distributions and distributions upon the liquidation, winding-up and dissolution
of the Company, (i) senior to all
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classes of common stock of the Company and to each other class of capital stock
of the Company outstanding on the date hereof (collectively referred to with the
common stock of the Company as "Junior Securities"); and (ii) on a parity with
any additional shares of Series H Preferred Stock issued by the Company in the
future and any other class of capital stock or series of Series H Preferred
Stock issued by the Company in the future, the terms of which expressly provide
that such class or series will rank on a parity with the Series H Preferred
Stock as to dividend distributions and distributions upon the liquidation,
winding-up and dissolution of the Company (collectively referred to as "Parity
Securities"). The Company shall not issue any shares of Senior Securities or
Parity Securities (other than additional shares of Series H Preferred Stock)
without the consent of holders of at least sixty-six and two thirds percent (66
2/3%) of the outstanding shares of Series H Preferred Stock.
4. DIVIDENDS.
(a) The holders of shares of the Series H Preferred Stock (other
than shares as to which conversion is deemed effective pursuant to Section 7 and
as to which all accrued dividends have been paid) shall be entitled to receive,
when, as and if dividends are declared by the Board of Directors out of funds of
the Company legally available therefor, cumulative preferential dividends from
the December 19, 1999 accumulating at the rate of six and one-half percent
(6.5%) of the Liquidation Preference per share per annum, payable quarterly in
arrears on each January 1, April 1, July 1 or October 1 of each year or, if any
such date is not a Business Day, on the next succeeding Business Day (each, a
"Dividend Payment Date"), to the holders of record of such shares of Series H
Preferred Stock as of the next preceding December 15, March 15, June 15 or
September 15 (each, a "Record Date"). Dividends may be paid, at the Company's
option, to any holder of Series H Preferred Stock (i) in cash, (ii) by the
issuance of a number of shares of Common Stock equal to the aggregate cash
amount payable divided by the Current Market Price; or (iii) by the issuance of
additional shares of Series H Preferred Stock having an aggregate Liquidation
Preference (rounded to the nearest $1,000.00) equal to the amount of such
dividends payable on all shares of Series H Preferred Stock held by such holder.
The issuance of such additional shares of Series H Preferred Stock shall
constitute "payment" of the related dividend for all purposes of this
Certificate of Designation. The first dividend payment on the Series H Preferred
Stock shall be payable on April 1, 2000 (except with respect to shares of Series
H Preferred Stock converted prior to such date, if any). Dividends payable on
the Series H Preferred Stock will be computed on the basis of a 360-day year
consisting of twelve 30-day months and will be deemed to accumulate on a daily
basis on the Liquidation Preference of the Series H Preferred Stock.
(b) Dividends on the Series H Preferred Stock shall accrue
whether or not the Company has earnings or profits, whether or not there are
funds legally available for the payment of such dividends and whether or not
dividends are declared. Dividends will accumulate to the extent they are not
paid on the Dividend Payment Date for the period to which they relate.
(c) No dividend whatsoever shall be declared or paid upon, or
any sum set apart for the payment of dividends upon, any outstanding share of
the Series H Preferred Stock with respect to any dividend period unless all
dividends for all preceding dividend periods have been declared and paid, or
declared and a sufficient sum set apart for the payment of such dividend, upon
all outstanding shares of Series H Preferred Stock. Unless full cumulative
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dividends on all outstanding shares of Series H Preferred Stock for all past
dividend periods shall have been declared and paid, or declared and a sufficient
sum for the payment thereof set apart, then: (i) no cash dividend (other than a
dividend payable solely in shares of any Junior Securities) shall be declared or
paid upon, or any sum set apart for the payment of dividends upon, any shares of
Junior Securities; (ii) no other distribution shall be declared or made upon, or
any sum set apart for the payment of any distribution upon, any shares of Junior
Securities, other than a distribution consisting solely of Junior Securities;
and (iii) no monies shall be paid into or set apart or made available for a
sinking or other like fund for the purchase, redemption or other acquisition or
retirement for value of any shares of Junior Securities by the Company or any of
its Subsidiaries, except in the ordinary course of the Company's business.
Holders of the Series H Preferred Stock will not be entitled to any dividends,
whether payable in cash, property or stock, in excess of the full cumulative
dividends as herein described.
5. LIQUIDATION RIGHTS.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Company or reduction or decrease in its capital stock
resulting in a distribution of assets to the holders of any class or series of
the Company's capital stock (other than shares of Senior Securities), each
holder of shares of the Series H Preferred Stock will be entitled to payment out
of the assets of the Company available for distribution of an amount equal to
the Liquidation Preference per share of Series H Preferred Stock held by such
holder, if any, to the date fixed for liquidation, dissolution, winding-up or
reduction or decrease in capital stock, before any distribution is made on any
Junior Securities, including, without limitation, Common Stock of the Company.
After payment in full of the Liquidation Preference and all accumulated
dividends, if any, to which holders of Series H Preferred Stock are entitled,
such holders will not be entitled to any further participation in any
distribution of assets of the Company. If, upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the amounts payable with
respect to the Series H Preferred Stock and all other Parity Securities are not
paid in full, the holders of the Series H Preferred Stock and the Parity
Securities will share equally and ratably in any distribution of assets of the
Company in proportion to the full Liquidation Preference and accumulated and
unpaid dividends, if any, to which each is entitled. However, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Company nor the consolidation or merger of the Company with or
into one or more Persons will be deemed to be a voluntary or involuntary
liquidation, dissolution or winding-up of the Company or reduction or decrease
in capital stock, unless such sale, conveyance, exchange or transfer shall be in
connection with a liquidation, dissolution or winding-up of the business of the
Company or reduction or decrease in capital stock.
6. REDEMPTION BY THE COMPANY.
(a) On December 19, 2009 (the "Mandatory Redemption Date"), the
Company shall be required to redeem (subject to the legal availability of funds
therefor) all outstanding shares of Series H Preferred Stock at a price in cash
equal to the Liquidation Preference thereof, plus accumulated and unpaid
dividends (including an amount in cash equal to a prorated dividend for any
partial dividend period) to the date of redemption. The Company
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shall not be required to make sinking fund payments with respect to the Series H
Preferred Stock.
(b) Except as set forth below, the Series H Preferred Stock may
not be redeemed at the option of the Company prior to December 19, 2009. Each
share of Series H Preferred Stock will be subject to redemption at any time on
or after December 19, 2001, at the option of the Company at the Applicable
Redemption Price, if,(i) the arithmetic average of the Closing Price (determined
as set forth in Section 7(e)(7)) during the twenty-five Trading Days immediately
prior to the date notice of redemption is sent in accordance with Section 6(c)
represents a multiple of 2.5 or greater, times the Conversion Price and (ii) on
the date immediately prior to the date notice of redemption is sent in
accordance with Section 6(c), the Closing Price is equal to or greater than a
multiple of 2.5 times the Conversion Price.
(c) In case of redemption of less than all of the shares of
Series H Preferred Stock at the time outstanding, the shares to be redeemed
shall be selected pro rata or by lot as determined by the Company in its sole
discretion.
(d) Notice of any redemption shall be sent by or on behalf of
the Company not less than 30 nor more than 60 days prior to the date specified
for redemption in such notice (including the Mandatory Redemption Date, the
"Redemption Date"), by first class mail, postage prepaid, to all holders of
record of the Series H Preferred Stock at their last addresses as they shall
appear on the books of the Company; provided, however, that no failure to give
such notice or any defect therein or in the mailing thereof shall affect the
validity of the proceedings for the redemption of any shares of Series H
Preferred Stock except as to the holder to whom the Company has failed to give
notice or except as to the holder to whom notice was defective. Such notice
shall state: (i) the Redemption Date; (ii) the Applicable Redemption Price;
(iii) the number of shares of Series H Preferred Stock to be redeemed and, if
less than all shares held by such holder are to be redeemed, the number of such
shares to be redeemed; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the Applicable Redemption Price; and
(v) that dividends on the shares to be redeemed will cease to accumulate on the
Redemption Date. Upon the mailing of any such notice of redemption, the Company
shall become obligated to redeem at the time of redemption specified thereon all
shares called for redemption.
(e) If notice has been mailed in accordance with Section 6(d)
above and provided that on or before the Redemption Date specified in such
notice, all funds necessary for such redemption shall have been set aside by the
Company, separate and apart from its other funds in trust for the pro rata
benefit of the holders of the shares so called for redemption, so as to be, and
to continue to be available therefor, then, from and after the Redemption Date,
dividends on the shares of the Series H Preferred Stock so called for redemption
shall cease to accumulate, and said shares shall no longer be deemed to be
outstanding and shall not have the status of shares of Series H Preferred Stock,
and all rights of the holders thereof as stockholders of the Company (except the
right to receive from the Company the Applicable Redemption Price) shall cease.
Upon surrender, in accordance with said notice, of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the Company
shall so require and the notice shall so state), such shares shall be redeemed
by the Company at the Applicable Redemption Price. In case fewer than all the
shares represented by any such certificate are
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redeemed, a new certificate or certificates shall be issued representing the
unredeemed shares without cost to the holder thereof.
(f) No Series H Preferred Stock may be redeemed except with
funds legally available for the purpose.
(g) All shares of Series H Preferred Stock redeemed pursuant to
this Section 7 shall be restored to the status of authorized and unissued shares
of Series H Preferred Stock, without designation as to series and may thereafter
be reissued as shares of any series of preferred stock other than shares of
Series H Preferred Stock.
7. CONVERSION
(a) Subject to and upon compliance with the provisions of this
Certificate of Designation, the holder of any Series H Preferred Stock shall
have the right, at its option, at any time after the date of this Certificate of
Designation to convert any shares of Series H Preferred Stock into that number
of fully paid and non-assessable shares of Common Stock (as such shares shall
then be constituted) obtained by dividing the aggregate Liquidation Preference
on the shares of Series H Preferred Stock to be converted (plus, in the event
such shares are converted on a date other than a Dividend Payment Date, accrued
and unpaid dividends on such Series H Preferred Stock through the date such
Series H Preferred Stock is deemed to be converted in accordance with this
Section 7, unless the Company shall elect to pay such accrued and unpaid
dividend in cash as set forth in Section 4(a) above) by the Conversion Price in
effect at such time, by surrender of the certificate evidencing such shares of
Series H Preferred Stock so to be converted in the manner provided. A holder of
Series H Preferred Stock is not entitled to any rights of a holder of Common
Stock until such holder has converted shares of Series H Preferred Stock to
Common Stock, and only to the extent such shares of Series H Preferred Stock are
deemed to have been converted to Common Stock under this Section 7.
(b) In order to exercise the conversion privilege with respect to any
shares of Series H Preferred Stock, the holder of shares to be converted shall
surrender such shares, duly endorsed, at an office or agency maintained by the
Company for such purposes, and shall give written notice of conversion in the
form provided on the certificate evidencing Series H Preferred Stock (or such
other notice which is acceptable to the Company) to the office or agency that
the holder elects to convert shares of Series H Preferred Stock. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 7(g). Each share of Series H Preferred Stock
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Series H Preferred
Stock, be duly endorsed by, or be accompanied by instruments of transfer in form
satisfactory to the Company duly executed by, the holder or his duly authorized
attorney. As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the holder (as if such transfer were a transfer of the Series H
Preferred Stock), the Company shall issue and shall deliver to such holder at
the office or agency maintained by the Company for such purpose, a certificate
or certificates for the number of full shares of Common Stock to be issued by
the
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Company upon the conversion of shares of Series H Preferred Stock in accordance
with the provisions of this Section 7 and a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 7(c), and, if the Company elects to pay
accrued and unpaid dividends on such shares in cash pursuant to Section 4(a), a
check or cash in respect of such amounts. In case any Series H Preferred Stock
shall be surrendered for partial conversion, the Company shall execute and
deliver to the holder of the Series H Preferred Stock so surrendered, without
charge to him, a new certificate evidencing the unconverted shares of Series H
Preferred Stock evidenced by the surrendered certificate.
Each conversion shall be deemed to have been effected as to any such
Series H Preferred Stock on the date on which the requirements set forth above
in this Section 7(b) have been satisfied as to such Series H Preferred Stock,
and the Person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the Person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Series H Preferred Stock shall be surrendered.
(c) No fractional shares of Common Stock or scrip representing
fractional shares shall be issued upon conversion of Series H Preferred Stock.
If any fractional share of stock would be issuable upon the conversion of any
share or shares of Series H Preferred Stock, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of such shares. The current market price of a share of Common Stock
shall be the Closing Price on the last Business Day immediately preceding the
day on which the Series H Preferred Stock is deemed to have been converted.
(d) The conversion price applicable to the Series H Preferred Stock
shall be $90.00 (herein called the "Conversion Price"), subject to adjustment as
provided in this Section 7.
(e) The Conversion Price shall be adjusted from time to time by the
Company as follows:
(1) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 7(e)(1) is declared but not so paid or made,
the Conversion Price shall
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again be adjusted to the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(2) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction, the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares which the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and the denominator shall
be the number of shares of Common Stock outstanding on the date fixed for
determination of stockholders entitled to receive such rights and warrants plus
the total number of additional shares of Common Stock offered for subscription
or purchase. Such adjustment shall be successively made whenever any such rights
and warrants are issued, and shall become effective immediately after the
opening of business on the day following the date fixed for determination of
stockholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered after the expiration of such rights or
warrants, the Conversion Price shall be readjusted to the Conversion Price which
would then be in effect had the adjustments made upon the issuance of such
rights or warrants been made on the basis of delivery of only the number of
shares of Common Stock actually delivered. In the event that such rights or
warrants are not so issued, the Conversion Price shall again be adjusted to be
the Conversion Price which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Current Market Price, and in determining the aggregate offering price of such
shares of Common Stock, there shall be taken into account any consideration
received by the Company for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of Directors.
(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and
conversely, in case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such combination
becomes effective shall be proportionately increased, such reduction or
increase, as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision or
combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock shares of any class of capital
stock of the Company (other than any
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dividends or distributions to which Section 7(e)(1) applies) or evidences of its
indebtedness or assets (including securities, but excluding any rights or
warrants referred to in Section 7(e)(2), and excluding any dividend or
distribution (x) paid exclusively in cash or (y) referred to in Section 7(e)(1)
(any of the foregoing hereinafter in this Section 7(e)(4) called the
"Securities")), then, in each such case (unless the Company elects to reserve
such Securities for distribution to the holders upon the conversion of the
shares of Series H Preferred Stock so that any such holder converting shares
will receive upon such conversion, in addition to the shares of Common Stock to
which such holder is entitled, the amount and kind of such Securities which such
holder would have received if such holder had converted its shares of Series H
Preferred Stock into Common Stock immediately prior to the record date (as
defined in Section 7(e)(7) for such distribution of the Securities)), the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect on the record date with
respect to such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of the Common Stock on such record date less the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors) on
the record date of the portion of the Securities so distributed applicable to
one share of Common Stock and the denominator shall be the Current Market Price
per share of the Common Stock, such reduction to become effective immediately
prior to the opening of business on the day following such record date;
provided, however, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder shall have the right to
receive upon conversion the amount of Securities such holder would have received
had such holder converted each share of Series H Preferred Stock on the record
date. In the event that such dividend or distribution is not so paid or made,
the Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been declared.
If the Board of Directors determines the fair market value of any distribution
for purposes of this Section 7(e)(4) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price of
the Common Stock.
In the event that the Company implements a stockholders' rights plan
("Rights Plan"), such Rights Plan must provide that, subject to customary
exceptions, upon conversion of the shares of Series H Preferred Stock the
Holders will receive, in addition to the Common Stock issuable upon conversion,
such rights whether or not such rights have separated from the Common Stock at
the time of such conversion. Notwithstanding the foregoing, if the Company
implements a Rights Plan prior to the conversion of the Series H Preferred Stock
and terminates such Rights Plan prior to the conversion of the Series H
Preferred Stock, the Holders will not be entitled to receive any rights under
the Rights Plan at the time of such conversion.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of
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Common Stock, shall be deemed not to have been distributed for purposes of this
Section 7(e) (and no adjustment to the Conversion Price under this Section 7(e)
will be required) until the occurrence of the earliest Trigger Event, whereupon
such rights and warrants shall be deemed to have been distributed and an
appropriate adjustment (if any is required) to the Conversion Price shall be
made under this Section 7(e)(4). If any such right or warrant, including any
such existing rights or warrants distributed prior to the date of this
Certificate of Designation, are subject to events, upon the occurrence of which
such rights or warrants become exercisable to purchase different securities,
evidences of indebtedness or other assets, then the date of the occurrence of
any and each such event shall be deemed to be the date of distribution and
record date with respect to new rights or warrants with such rights (and a
termination or expiration of the existing rights or warrants without exercise by
any of the holders thereof). In addition, in the event of any distribution (or
deemed distribution) of rights or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Conversion Price under this Section 7(e) was made, (1) in the
case of any such rights or warrants which shall all have been redeemed or
repurchased without exercise by any holders thereof, the Conversion Price shall
be readjusted upon such final redemption or repurchase to give effect to such
distribution or Trigger Event, as the case may be, as though it were a cash
distribution, equal to the per share redemption or repurchase price received by
a holder or holders of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all holders
of Common Stock as of the date of such redemption or repurchase, and (2) in the
case of such rights or warrants which shall have expired or been terminated
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
For purposes of this Section 7(e)(4) and Sections 7(e)(1) and 7(e)(2),
any dividend or distribution to which this Section 7(e)(4) is applicable that
also includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 7(e)(4) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
7(e)(1) and (2) with respect to such dividend or distribution shall then be
made), except (A) the record date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 7(e)(1) and (2) and (B) any shares
of Common Stock included in such dividend or distribution shall not be deemed
"outstanding at the close of business on the date fixed for such determination"
within the meaning of Section 7(1).
(5) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock, or to all holders of any series
of preferred stock or other equity security with respect to which dividends are
payable, cash (excluding any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price shall be reduced so
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that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the close of business on such record date
by a fraction, the numerator of which shall be the Current Market Price of the
Common Stock on the record date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock and the
denominator shall be such Current Market Price of the Common Stock, such
reduction to be effective immediately prior to the opening of business on the
day following the record date; provided, however, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on the record date,
in lieu of the foregoing adjustment, adequate provision shall be made so that
each holder shall have the right to receive upon conversion the amount of cash
such holder would have received had such holder converted each share of Series H
Preferred Stock on the record date. In the event that such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
(6) In case the Company shall issue additional shares of Common
Stock or Convertible Securities, issued for no consideration or for a
consideration per share less than the Conversion Price (determined on an "as
converted" basis in the case of a Convertible Security) (other than shares of
Common Stock issued or issuable (i) upon conversion or exercise of warrants or
other convertible securities outstanding as of December 19, 1999; (ii) pursuant
to stock incentive, stock purchase or option plans approved by the Company's
Board of Directors; (iii) pursuant to a bona fide, firm commitment underwritten
public offering; and (iv) in connection with acquisitions and strategic
alliances) then and in such event, the Conversion Price for the Series H
Preferred Stock shall be reduced, concurrently with such issue, 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 issue plus the
number of shares of Common Stock which the aggregate consideration received by
the Company for the total number of additional shares of Common Stock so issued
would purchase at such Conversion Price in effect immediately prior to such
issuance, and the denominator shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such additional
shares of Common Stock so issued. For the purpose of the above calculation, the
number of shares of Common Stock outstanding immediately prior to such issue
shall be calculated on a fully diluted basis, as if all shares of Series H
Preferred Stock and all convertible securities had been fully converted into
shares of Common Stock immediately prior to such issuance and any outstanding
warrants, options or other rights for the purchase of shares of stock or
convertible securities had been fully exercised immediately prior to such
issuance (and the resulting securities fully converted into shares of Common
Stock, if so convertible) as of such date.
(7) For purposes of this Section 7(e), the following terms shall
have the meaning indicated:
a. "Closing Price" with respect to any securities
on any day shall mean the closing sale price
regular way on such day or, in case no such sale
takes place on such day, the average of the
reported closing bid and asked prices, regular
way, in each case on the NASDAQ National Market
("NNM"), or, if such security is not
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listed or admitted to trading on NNM, on the
principal national security exchange or
quotation system on which such security is
quoted or listed or admitted to trading, or, if
not quoted or listed or admitted to trading on
any national securities exchange or quotation
system, the average of the closing bid and asked
prices of such security on the over-the-counter
market on the day in question as reported by the
National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or
if not so available, in such manner as furnished
by any National Association of Securities
Dealers firm selected from time to time by the
Board of Directors for that purpose, or a price
determined in good faith by the Board of
Directors or, to the extent permitted by
applicable law, a duly authorized committee
thereof, whose determination shall be
conclusive.
b. "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common
Stock for the ten consecutive Trading Days
immediately prior to the date in question;
provided, however, that (1) if the "ex" date (as
hereinafter defined) for any event that requires
an adjustment to the Conversion Price pursuant
to Section 7(e)(1), (2), (3), (4), (5) or (6)
occurs during such twenty-five consecutive
Trading Days, the Closing Price for each Trading
Day prior to the "ex" date for such other event
shall be adjusted by multiplying such Closing
Price by the same fraction by which the
Conversion Price is so required to be adjusted
as a result of such other event, or (2) if the
"ex" date for any event that requires an
adjustment to the Conversion Price pursuant to
Section 7(e)(1), (2), (3), (4), (5) or (6)
occurs on or after the "ex" date for the
issuance or distribution requiring such
computation and prior to the day in question,
the Closing Price for each Trading Day on and
after the "ex" date for such other event shall
be adjusted by multiplying such Closing Price by
the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted
as a result of such other event. For purposes of
any computation under Section 7(e)(5), the
Current Market Price of the Common Stock on any
date shall be deemed to be the average of the
daily Closing Prices per share of Common Stock
for such day and the next two succeeding Trading
Days. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any
issuance or distribution, means the first date
on which the Common Stock trades regular way on
the relevant exchange or in the relevant market
from which the Closing Price was obtained
without the right to receive such issuance or
distribution, and (2) when used with respect to
any subdivision or combination of shares of
Common Stock, means the first date on which the
Common Stock trades regular way on such exchange
or in such market after the time at which such
subdivision or combination becomes effective.
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c. "fair market value" shall mean the amount which
a willing buyer would pay a willing seller in an
arm's length transaction.
d. "record date" shall mean, with respect to any
dividend, distribution or other transaction or
event in which the holders of Common Stock have
the right to receive any cash, securities or
other property or in which the Common Stock (or
other applicable security) is exchanged for or
converted into any combination of cash,
securities or other property, the date fixed for
determination of stockholders entitled to
receive such cash, securities or other property
(whether such date is fixed by the Board of
Directors or by statute, contract or otherwise).
e. "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on
the New York Stock Exchange or another national
security exchange, a day on which the New York
Stock Exchange or another national security
exchange is open for business or (y) if the
applicable security is quoted on the NNM, a day
on which trades may be made on thereon or (z) if
the applicable security is not so listed,
admitted for trading or quoted, any day other
than a Saturday or Sunday or a day on which
banking institutions in the State of California
are authorized or obligated by law or executive
order to close.
(8) To the extent permitted by applicable law, the Company from
time to time may reduce the Conversion Price by any amount for any period of
time if the period is at least twenty (20) days, the reduction is irrevocable
during the period and the Board of Directors shall have made a determination
that such reduction would be in the best interests of the Company, which
determination shall be conclusive. Whenever the Conversion Price is reduced
pursuant to the preceding sentence, the Company shall mail to holders of record
of the Series H Preferred Stock a notice of the reduction at least fifteen (15)
days prior to the date the reduced Conversion Price takes effect, and such
notice shall state the reduced Conversion Price and the period during which it
will be in effect.
(9) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any adjustments which by
reason of this Section 7(e)(9) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 7 shall be made by the Company and shall be made to the
nearest cent or to the nearest one-hundredth (1/100) of a share, as the case may
be. No adjustment need be made for rights to purchase Common Stock pursuant to a
Company plan for reinvestment of dividends or interest. To the extent shares of
Series H Preferred Stock become convertible into cash, assets, property or
securities (other than capital stock of the Company), no adjustment need be made
thereafter as to the cash, assets, property or such securities. Interest will
not accrue on the cash.
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(10) Whenever the Conversion Price is adjusted as herein
provided, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to each holder of Series H Preferred Stock at
his last address appearing on the Share register, within twenty (20) days after
the effectiveness thereof. Failure to deliver such notice shall not affect the
legality or validity of any such adjustment.
(11) In any case in which this Section 7(e) provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Series H Preferred Stock converted after such record date and
before the occurrence of such event the additional shares of Common Stock
issuable upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash in
lieu of any fraction pursuant to Section 7(c).
(12) For purposes of this Section 7(e), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
(f) If any of the following events occur, namely (i) any
reclassification or change of the outstanding shares of Common Stock (other than
a subdivision or combination to which Section 7(e)(3) applies), (ii) any
consolidation, merger or combination of the Company with another corporation as
a result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for such Common Stock, or (iii) any sale or conveyance of the
properties and assets of the Company as, or substantially as, an entirety to any
other corporation as a result of which holders of Common Stock shall be entitled
to receive stock, securities or other property or assets (including cash) with
respect to or in exchange for such Common Stock (any such event described in
(i), (ii) or (iii) above, a "Fundamental Change"), then the Company or the
successor or purchasing corporation, as the case may be, shall have the option
to amend this Certificate of Designation to provide that such shares of Series H
Preferred Stock shall be convertible into the kind and amount of shares of stock
and other securities or property or assets (including cash) receivable upon such
Fundamental Change by a holder of a number of shares of Common Stock issuable
upon conversion of such shares of Series H Preferred Stock (assuming, for such
purposes, a sufficient number of authorized shares of Common Stock available to
convert all such shares of Series H Preferred Stock) immediately prior to such
Fundamental Change assuming such holder of Common Stock did not exercise his
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon such Fundamental Change (provided that, if the
kind or amount of securities, cash or other property receivable upon such
Fundamental Change is not the same for each share of Common Stock in respect of
which such rights of election shall not have been exercised ("nonelecting
share")), then for the purposes of this Section 7(f), the kind and amount of
securities, cash or other property receivable upon such Fundamental Change for
each non-electing share shall be deemed to be the kind and amount so
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receivable per share by a plurality of the non-electing shares. Such amendment
shall provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section. The Company shall
cause notice of the amendment of this Certificate of Designation to be mailed to
each holder of Series H Preferred Stock, at its address appearing on the Share
register, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of such amendment. The
above provisions of this Section shall similarly apply to successive Fundamental
Changes. If the Company or the successor or purchasing corporation, as the case
may be, does not choose to amend the Certificate of Designation as described
above immediately prior to the effective time of any such Fundamental Change,
and any holder of the Series H Preferred Stock does not otherwise exercise its
right to convert its Series H Preferred Stock pursuant to Section 7(a), then
upon a Fundamental Change, the outstanding shares of Series H Preferred Stock
shall be cancelled and the holders thereof shall be entitled to receive,
following the effective date of the Fundamental Change and upon surrender of
their certificates representing shares of Series H Preferred Stock, the
aggregate Liquidation Preference thereof, together with any accrued but unpaid
dividends thereon, paid in the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
Fundamental Change by the holders of Common Stock. For purposes of the preceding
sentence, the holder of each share of Series H Preferred Stock will receive an
aggregate amount of shares of stock and other securities or property or assets
(including cash) having a fair market value equal to the Liquidation Preference
of the share of Series H Preferred Stock immediately prior to such Fundamental
Change together with any accrued but unpaid dividends thereon; provided,
however, that a holder of Series H Preferred Stock immediately prior to such
Fundamental Change may elect, conditioned upon the closing of the Fundamental
Change, by notice to the Company at least ten (10) days prior to the effective
date of such Fundamental Change, to receive in lieu of the Liquidation
Preference the kind and amount of shares of stock and other securities or
property or assets (including cash) receivable upon such Fundamental Change by
the holder of (x) one share of Common Stock multiplied by (y) the number of
shares of Common Stock issuable upon conversion of the shares of Series H
Preferred Stock immediately prior to such Fundamental Change; and provided
further that, if the kind or amount of securities, cash or other property
receivable upon such Fundamental Change is not the same for each share of Common
Stock, then for the purposes of this Section 7(f), the kind and amount of
securities, cash or other property receivable upon such Fundamental Change for
each share of Common Stock shall be deemed to be the kind and amount so
receivable per share by a plurality of the shares of Common Stock. For purposes
of the preceding sentence, the fair market value of stock and other securities
payable to the holders of the Company's capital stock upon a Fundamental Change
shall be determined, with respect to any securities to be issued, by reference
to their average closing sales prices, if available, for the ten trading days
immediately preceding such Fundamental Change. The value of all other securities
and property shall be determined by the Board of Directors in the exercise of
its good faith discretion. If this Section 7(f) applies to any event or
occurrence, Section 7(e) shall not apply.
(g) The issuance of stock certificates on conversions of shares of
Series H Preferred Stock shall be made without charge to the converting holder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of stock in any name other than that
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of the holder of any share of Series H Preferred Stock converted, and the
Company shall not be required to issue or deliver any such stock certificate
unless and 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.
(h) The Company shall provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient shares of
Common Stock to provide for the conversion of the shares of Series H Preferred
Stock from time to time as such are presented for conversion. Before taking any
action which would cause an adjustment reducing the Conversion Price below the
then par value, if any, of the shares of Common Stock issuable upon conversion
of the Series H Preferred Stock, the Company will take all corporate action
which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue shares of such Common Stock at such adjusted
Conversion Price. The Company covenants that all shares of Common Stock which
may be issued upon conversion of Series H Preferred Stock will upon issuance be
fully paid and non-assessable by the Company and free from all taxes, liens and
charges with respect to the issuance thereof, other than those created by or
imposed upon the holders through no action of the Company.
(i) In case:
(1) the Company shall declare a dividend (or any other
distribution) on its Common Stock that would require an adjustment in
the Conversion Price pursuant to Section 7(e); or
(2) the Company shall authorize the granting to the holders of
all or substantially all of its Common Stock of rights or warrants to
subscribe for or purchase any share of any class or any other rights or
warrants; or
(3) of any reclassification or reorganization of the Common
Stock of the Company (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from par value to
no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which
approval of any stockholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company;
the Company shall cause to be mailed to each holder of Series H Preferred Stock
at his address appearing on the Share register provided for in Section 2(e) of
this Certificate of Designation, as promptly as possible but in any event at
least fifteen (15) days prior to the applicable date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution or 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, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
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dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
8. CONSOLIDATION; MERGER; SALE OF ASSETS. Nothing contained in this
Certificate of Designation shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance or lease (or successive sales, conveyances or
leases) of all or substantially all of the property of the Company, to any other
corporation (whether or not affiliated with the Company), authorized to acquire
and operate the same and which shall be organized under the laws of the United
States of America, any state thereof or the District of Columbia.
9. VOTING RIGHTS. Except as otherwise provided in this Certificate of
Designation or as required by law, the holders of record of shares of the Series
H Preferred Stock shall have no voting rights.
10. AMENDMENT.
(a) The Company shall not, without the affirmative vote or
consent of the holders of at least sixty-six and two-thirds percent (66 2/3%) of
the outstanding Liquidation Preference of Series H Preferred Stock then
outstanding (with shares held by the Company or any of its Affiliates not being
considered to be outstanding for this purpose) voting or consenting as the case
may be, as one class, amend or otherwise alter this Certificate of Designation
(including the provisions of this Section 10) in any manner that adversely
affects the specified rights, preferences, privileges or voting rights of
holders of Series H Preferred Stock.
(b) The Company in its sole discretion may without the vote or
consent of any holders of the Series H Preferred Stock amend or supplement this
Certificate of Designation:
(i) to cure any ambiguity, defect or inconsistency;
(ii) to provide for uncertificated Series H Preferred
Stock in addition to or in place of certificated Series H
Preferred Stock;
(iii) to make any change that would provide any
additional rights or benefits to the holders of the Series H
Preferred Stock or that does not adversely affect the legal
rights under this Certificate of Designation of any such holder;
or
(iv) to make any amendment required by Section 7(f) or
8.
Except as set forth above, the creation, authorization or
issuance of, or the increase or decrease in the authorized amount of, capital
stock of any class, including any Series H Preferred Stock, shall not require
the consent of the holders of the Series H Preferred Stock and shall not be
deemed to affect adversely the rights, preferences, privileges, special rights
or voting rights of holders of shares of Series H Preferred Stock.
11. EXCLUSION OF OTHER RIGHTS.
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Except as may otherwise be required by law, the shares of Series
H Preferred Stock shall not have any voting powers, preferences and relative,
participating, optional or other special rights, other than those specifically
set forth in this Certificate of Designation (as amended from time to time) and
in the Certificate of Incorporation. The shares of Series H Preferred Stock
shall have no preemptive or subscription rights
12. PROVISION FOR FINANCIAL INFORMATION.
The Company will, within 15 days after filing with the
Commission the annual and quarterly reports that the Company is required to file
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act,
transmit by mail to all holders, as their names and addresses appear in the
Share register, without cost to such holders copies of such annual and quarterly
reports. Documents publicly available on the Securities and Exchange
Commission's EDGAR system shall be deemed delivered to the holders for purposes
of this Section 12.
13. HEADINGS OF SUBDIVISIONS.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
14. SEVERABILITY OF PROVISIONS.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Series H Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Series H Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series H Preferred Stock and
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series H Preferred Stock and
qualifications, limitations and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series H Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed herein.
15. TRANSFER OF PREFERRED SHARES. A holder of Series H Preferred Stock
may assign some or all of its rights hereunder or the Series H Preferred Stock
held by such holder (a) with the written consent of the Company, or (b) without
the consent of the Company, provided (i) that such holder assigns either (x) all
of its rights hereunder and all shares of Series H Preferred Stock held by such
holder to only one assignee or (y) at least 10,000 shares of Series H Preferred
Stock (along with the rights hereunder relating to such shares of Series H
Preferred Stock) to each assignee and (ii) such holder does not assign any
shares of Series H Preferred Stock to a competitor of the Company (as determined
by the Company in its reasonable discretion).
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IN WITNESS WHEREOF, the Company has caused this certificate to
be duly executed by Kevin Sagara, Vice President of the Company, and by Kenneth
L. Ruggiero, Secretary of the Company, this 22nd day of December, 1999.
INTERVU INC.
By: KEVIN SAGARA
---------------------------------
Name: Kevin Sagara
Title: Vice President
ATTEST:
By: KENNETH L. RUGGIERO
---------------------------------
Name: Kenneth L. Ruggiero
Title: Secretary
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