EXHIBIT 3.1
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ORBCOMM INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Table of Contents
Page
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ARTICLE I ............................................................... 1
ARTICLE II .............................................................. 2
ARTICLE III ............................................................. 2
A. Classes of Stock .............................................. 2
B. Rights, Preferences and Restrictions of Preferred Stock ....... 2
1. Dividends ................................................ 2
2. Liquidation Preference ................................... 3
3. Redemption ............................................... 5
4. Conversion ............................................... 9
5. Voting Rights ............................................ 17
6. Protective Provisions .................................... 19
7. Status of Converted Stock ................................ 23
C. Common Stock .................................................. 23
1. Dividend Rights .......................................... 23
2. Liquidation Rights ....................................... 23
3. Redemption ............................................... 23
4. Voting Rights ............................................ 23
5. Preferences of Common Stock .............................. 23
6. Authorization of Common Stock ............................ 24
ARTICLE IV .............................................................. 24
ARTICLE V ............................................................... 24
ARTICLE VI .............................................................. 24
ARTICLE VII ............................................................. 24
i
Third Amended and Restated Certificate of Incorporation
THIRD AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ORBCOMM INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
ORBCOMM INC., a corporation organized and existing under and by virtue of
the provisions of the General Corporation Law of the State of Delaware (the
"General Corporation Law"),
DOES HEREBY CERTIFY:
FIRST: that the name of this corporation is ORBCOMM INC. and that this
corporation was originally incorporated pursuant to the General Corporation Law
on October 16, 2003 under the name ORBCOMM INC.
SECOND: That the original Certificate of Incorporation was filed with the
Secretary of State of the State of Delaware on October 16, 2003, was amended by
the Amended and Restated Certificate of Incorporation filed with the Secretary
of State of the State of Delaware on February 17, 2004, and was further amended
by the Second Amended and Restated Certificate of Incorporation filed with the
Secretary of State of the State of Delaware on December 30, 2005.
THIRD: That the Board of Directors duly adopted resolutions proposing to
amend and restate the Second Amended and Restated Certificate of Incorporation
of this corporation, declaring said amendment and restatement to be advisable
and in the best interests of this corporation and its stockholders, and
authorizing the appropriate officers of this corporation to solicit the consent
of the stockholders therefor, which resolution setting forth the proposed
amendment and restatement is as follows:
RESOLVED, that the Certificate of Incorporation, as amended by the Second
Amended and Restated Certificate of Incorporation, of this corporation be
amended and restated in its entirety as follows:
ARTICLE I
The name of this corporation is ORBCOMM INC.
ARTICLE II
The address of the registered office of this corporation in the State of
Delaware is 2711 Centerville Road, Suite 400, Wilmington, New Castle County,
Delaware 19808 and the name of its registered agent at that address is
Corporation Service Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law.
ARTICLE IV
A. Classes of Stock. This corporation is authorized to issue two classes of
stock to be designated, respectively, "Common Stock" and "Preferred Stock." The
total number of shares that this corporation is authorized to issue is one
hundred fifty million (150,000,000) shares. One hundred five million
(105,000,000) shares shall be Common Stock, $0.001 par value per share. Forty
five million (45,000,000) shares shall be Preferred Stock, $0.001 par value per
share.
B. Rights, Preferences and Restrictions of Preferred Stock. The Preferred
Stock authorized by this Third Amended and Restated Certificate of Incorporation
may be issued from time to time in one or more series as may be determined by
the Board of Directors. The rights, preferences and restrictions granted to and
imposed on the Series A Preferred Stock, which series shall consist of up to
fifteen million (15,000,000) shares as shall be determined by the Board of
Directors (the "Series A Preferred Stock") and the rights, preferences and
restrictions granted to and imposed on the Series B Preferred Stock, which
series shall consist of up to thirty million (30,000,000) shares as shall be
determined by the Board of Directors (the "Series B Preferred Stock"), are as
set forth below in this Article III(B).
1. Dividends.
(a) This corporation shall not declare, pay or set aside any dividends
(other than dividends payable in shares of Common Stock or as provided in
the final sentence of subsection 1(c) below) on shares of Series A
Preferred Stock or Common Stock unless (i) the holders of the Series B
Preferred Stock then outstanding shall first receive, or simultaneously
receive, the Series B Liquidation Amount, including all accrued dividends
pursuant to Subsection 1(c) below or otherwise declared and unpaid, and a
dividend on each outstanding share of Series B Preferred Stock equal to the
product of (w) the per share dividend to be declared, paid or set aside for
the Common Stock, multiplied by (x) the number of shares of Common Stock
into which such shares of Series B Preferred Stock is then convertible,
plus (y) the per share dividend to be declared, paid or set aside for the
Series A Preferred (other than dividends pursuant to Subsection 1(c) below)
multiplied by the number of shares of Common Stock into which such shares
of Series B Preferred Stock
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is then convertible or (ii) the holders of at least two-thirds of the
outstanding Series B Preferred Stock (the "Supermajority Preferred
Holders") agree otherwise.
(b) Intentionally deleted.
(c) In addition to the dividends which may be paid to the holders of
Series B Preferred Stock pursuant to Subsection 1(a) above, the holders of
shares Series B Preferred Stock shall be entitled to receive, out of assets
legally available therefor, cash dividends of twelve percent (12%) per
share per annum, compounded annually. Such dividends (i) shall initially be
compounded based on the Original Series B Issue Price (as defined herein)
with respect to the Series B Preferred Stock, and (ii) shall accrue and be
cumulative from the date of issuance of each share of Series B Preferred
Stock, whether or not declared. Accrued dividends under this Subsection
1(c), together with declared and unpaid dividends under Subsection 1(a) or
otherwise, shall be payable at such times as may be determined by the Board
of Directors of this corporation (the "Board"), but shall be payable in
full in any event upon any Liquidation under Section 2 below, any
Redemption under Section 3 below, or any conversion of Series B Preferred
Stock (as the case may be) into Common Stock under Section 4 below.
Notwithstanding anything herein to the contrary, the dividends declared
upon the Series A Preferred Stock prior to the date of this Third Amended
and Restated Certificate of Incorporation which remain unpaid shall remain
payable as declared, provided that the amount of such dividends shall not
exceed the lesser of (i) the accrued and unpaid dividends thereon to the
date hereof or (ii) eight million fifty thousand dollars ($8,050,000).
2. Liquidation Preference.
(a) In the event of any Liquidation (as hereinafter defined), whether
voluntary or involuntary, holders of Series B Preferred Stock shall be
entitled, prior to and in preference to any distribution of any assets of
this corporation to the holders of Series A Preferred Stock or to the
holders of Common Stock by reason of their ownership thereof, an amount
equal to the Original Series B Issue Price (as hereinafter defined) plus
accrued or otherwise declared but unpaid dividends (the "Series B
Liquidation Amount"). The "Original Series B Issue Price" is $4.03 per
outstanding share (as adjusted for any stock dividends, combinations,
splits, recapitalization and the like following the effective date of this
Third Amended and Restated Certificate of Incorporation with respect to
such shares). If the assets of this corporation shall be insufficient to
permit the payment in full to the holders of the Series B Preferred Stock
of the amount thus distributable, then, the entire assets of this
corporation available for such distribution shall be distributed among the
holders of the Series B Preferred Stock pro rata based on the number of
shares of Series B Preferred Stock held by each.
(b) Intentionally deleted.
(c) After such payments have been made in full to the holders of the
Series B Preferred Stock, or funds necessary for such payment have been set
aside by the corporation in trust for the account of such holders so as to
be available for such payments,
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the remaining assets of this corporation available for distribution to
stockholders shall be distributed among the holders of Common Stock and
Series B Preferred Stock on a pro rata, as-converted basis.
(i) For purposes of this Section 2, unless otherwise agreed by
the Supermajority Preferred Holders, a liquidation, dissolution or winding up of
this corporation shall be deemed to be occasioned by, or to include, (i) a
liquidation, dissolution or winding up of the corporation; (ii) any transaction
or series of related transactions (including, without limitation, any
reorganization, merger or consolidation) in which the holders of a majority of
the voting securities of this corporation immediately before such transaction
(on an as converted basis) hold less than a majority of the voting securities of
the surviving corporation; or (iii) a sale of all or substantially all of the
assets of this corporation (any of which events is hereinafter referred to as a
"Liquidation").
(ii) In any Liquidation, if the consideration received by this
corporation is other than cash, its value will be deemed its fair market value.
Any securities shall be valued as follows:
(A) Securities not subject to investment letter or other similar
restrictions on free marketability:
(1) If traded on a national securities exchange or through the
NASDAQ Stock Market (or similar quotation system), the London Stock Exchange,
the Paris Bourse, the Frankfurt Stock Market, the Tokyo Stock Exchange or the
Hong Kong Stock Exchange, the value shall be deemed to be the average of the
closing prices of the securities on such exchange or system over the thirty (30)
day period ending three (3) business days prior to the closing;
(2) If actively traded over-the-counter, the value shall be
deemed to be the average of the daily closing bid or sale prices (whichever is
applicable) over the thirty (30) day period ending three (3) business days prior
to the closing; and
(3) If there is no active public market, the value shall be the
fair market value thereof, as determined by the Board and approved by the
Supermajority Preferred Holders and the holders of at least a majority of the
outstanding Common Stock (the "Majority Common Holders"); or in the event that
the Board, the Supermajority Preferred Holders and the Majority Common Holders
cannot agree on the fair market value, the value shall be the fair market value
thereof established by an investment banking firm that is mutually agreed upon
by the Board, the Supermajority Preferred Holders and the Majority Common
Holders. In the event that the Board, the Supermajority Preferred Holders and
the Majority Common Holders cannot agree on an investment banking firm, each of
the Board, the Supermajority Preferred Holders and the Majority Common Holders
shall retain an investment banking firm or appraisal firm of national prominence
and shall instruct those investment banking or appraisal firms (A) to identify,
within five (5) business days thereafter, an independent investment banking or
appraisal firm of national prominence, and (B) to instruct such investment
banking or appraisal firm to calculate, the fair
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market value of the securities. This corporation shall give the selected
investment banking or appraisal firm access to this corporation, its employees
and records in order to facilitate such calculations. The selected investment
banking or appraisal firm shall be instructed to deliver its written calculation
of the fair market value of the security in question to each of the parties
(which valuation shall be final and binding as the fair market value of the
securities thereof).
(B) The method of valuation of securities subject to investment
letter or other restrictions on free marketability (other than restrictions
arising solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined as above in (c) (ii) (A) (1), (2) and (3) to reflect the approximate
fair market value thereof, as mutually determined by the Board, the
Supermajority Preferred Holders and the Majority Common Holders.
(d) Intentionally deleted.
(e) This corporation shall give each holder of record of capital stock
written notice of any proposed transaction which may be deemed a
Liquidation not later than three (3) days prior to the stockholders'
meeting called to approve such transaction, or three (3) days prior to the
closing of such transaction, whichever is earlier, and shall also notify
such holders in writing of the final approval of such transaction. The
first of such notices shall describe the material terms and conditions of
the impending transaction and the provisions of this Section 2, and this
corporation shall thereafter give such holders prompt notice of any
material changes. The transaction shall in no event take place sooner than
three (3) days after this corporation has given the first notice provided
for herein or sooner than two (2) days after this corporation has given
notice of any material changes provided for herein; provided, however, that
such periods may be shortened upon the written consent of the Majority
Preferred Holders and, if necessary, Majority Common Holders.
3. Redemption.
(a) Mandatory Redemption.
(i) Shares of Series B Preferred Stock (except the shares of
Series B Preferred Stock held by holders of Series B Preferred Stock that
exercise the Opt Out Right (as defined below), if any) shall be redeemed by this
corporation at a price equal to the Original Series B Issue Price per share,
plus all declared and/or accrued but unpaid dividends thereon (the "Series B
Redemption Price"), in one cash installment as set forth below within sixty (60)
days after receipt by this corporation at any time on or after October 31, 2011,
from the Majority of Series B Preferred Stock (as defined below), of written
notice requesting redemption of all shares of Series B Preferred Stock (the date
of the redemption being referred to as the "Series B Redemption Date"). Within
five (5) days of the receipt of written notice from the Majority of Series B
Preferred Stock (as defined below), the Company shall provide written notice to
the other Series B Stockholders (the "Minority Series B Stockholders") of the
demand for redemption by the Majority of Series B Preferred Stock (the "Opt-Out
Redemption Notice"). The Opt-Out Redemption Notice shall be sent and deemed
delivered to the Minority Series B Stockholders in the same manner as notice of
shareholder meeting is set forth in the By-Laws of this Corporation. Each
Minority Series B Stockholder shall have the option to opt out (the "Opt
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Out Right") of the redemption by providing to the Company written notice of his
or its intention to exercise such Opt Out Right within ten (10) days after
receipt of the Opt-Out Redemption Notice. The Minority Series B Stockholders who
exercise the Opt Out Right shall forfeit any rights to cause any future
mandatory redemption under this agreement. Notwithstanding the prior four
sentences, if the PCG Entities (as defined below) hold in the aggregate less
than five million five hundred eighty-three thousand one hundred twenty-seven
(5,583,127) shares or, if the PCG Entities shall have purchased shares of Series
B Preferred Stock in a Subsequent Closing (as such term is defined in the
Convertible Note and Stock Purchase Agreement dated December 30, 2005 between,
among others, this corporation and the PCG Entities, as such agreement may be
amended (the "Purchase Agreement")) pursuant to the Purchase Agreement, eleven
million one hundred sixty-six thousand two hundred fifty-three (11,166,253)
shares (in each case, subject to adjustment of such fixed amount for any stock
splits, stock dividends, combinations, recapitalizations, and the like) of the
then outstanding Series B Preferred Stock, (A) the Minority Series B
Stockholders shall not have the Opt Out Right and this corporation shall have no
obligation to deliver the above-referenced Opt-Out Redemption Notice and (B) all
shares of Series B Preferred Stock shall be redeemed on the Series B Redemption
Date following the Company's receipt of notice requesting redemption of all
shares of Series B Preferred Stock from the Majority of Series B Preferred Stock
in accordance with the first sentence of this Subsection 3(a)(i). On the Series
B Redemption Date, the corporation shall redeem from each holder of Series B
Preferred Stock that has not exercised the Opt Out Right (if applicable) all
Series B Preferred Stock held by such holder. If this corporation does not have
sufficient funds legally available to redeem the Series B Preferred Stock on the
Series B Redemption Date, (i) the corporation shall redeem a pro rata portion of
each holder's shares of Series B Preferred Stock that has not exercised the Opt
Out Right (if applicable) out of funds legally available therefor and redeem the
remaining shares to have been redeemed as soon as practicable after the
corporation has funds legally available therefore, and (ii) the Majority of
Series B Preferred Stock shall have the option to elect a majority of the Board.
As used in this Third Amended and Restated Certificate of
Incorporation, "Majority Of Series B Preferred Stock" shall mean (i) so long as
the PCG Entities hold, in the aggregate, at least five million five hundred
eighty-three thousand one hundred twenty-seven (5,583,127) shares or, if the PCG
Entities shall have purchased shares of Series B Preferred Stock in a Subsequent
Closing pursuant to the Purchase Agreement, eleven million one hundred sixty-six
thousand two hundred fifty-three (11,166,253) shares (in each case, subject to
adjustment of such fixed amount for any stock splits, stock dividends,
combinations, recapitalizations, and the like) of the then outstanding Series B
Preferred Stock, the holders of (A) at least five million five hundred
eighty-three thousand one hundred twenty-seven (5,583,127) shares (prior to the
Subsequent Closing) including the affirmative vote of the PCG Entities or (B) at
least eleven million one hundred sixty-six thousand two hundred fifty-three
(11,166,253) shares of Series B Preferred Stock (on and after the Subsequent
Closing), in each case, including the affirmative vote of the PCG Entities (in
each case, subject to adjustment of such fixed amounts for any stock splits,
stock dividends, combination, recapitalization and the like) (it being
understood that the affirmative vote of the PCG Entities shall be deemed
obtained if the PCG Entities holding a majority of the then outstanding Series B
Preferred Stock held by all PCG Entities so provide their affirmative vote), or
(ii) if the PCG Entities do not hold, in the aggregate five million five
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hundred eighty-three thousand one hundred twenty-seven (5,583,127) shares, or if
the PCG Entities shall have purchased shares of Series B Preferred Stock in a
Subsequent Closing pursuant to the Purchase Agreement, eleven million one
hundred sixty-six thousand two hundred fifty-three (11,166,253) shares (in each
case, subject to adjustment of such fixed amount for any stock splits, stock
dividends, combinations, recapitalizations, and the like) of the then
outstanding Series B Preferred Stock, the holders of a majority of the then
outstanding shares of Series B Preferred Stock; provided, however, that if all
of the conditions to the obligations of the PCG Entities to consummate the
Subsequent Closing have been satisfied or waived and the applicable PCG
Entity(ies) breach their obligation to consummate the Subsequent Closing in
accordance with the terms of the Purchase Agreement, then clause (ii) above
shall apply following such breach until such time (if any) as such breach is
cured (it being understood that if there is a dispute between the Company and
the PCG Entities with respect to whether the PCG Entities have breached their
obligation to consummate the Subsequent Closing then clause (ii) above shall
only apply pursuant to this proviso following entry of a final, non-appealable
court order finding that the PCG Entities breached their obligation to
consummate the Subsequent Closing). "PCG Entities" means collectively PCG
Satellite Investments, LLC, CALPERS PCG Corporate Partners, LLC and any
Affiliate(s) of either of the foregoing.
(ii) Subject to the redemption of all shares of Series B
Preferred Stock and payment in full of the Series B Redemption Price having been
made to the holders of the Series B Preferred Stock (or funds necessary for such
payment having been set aside by this corporation in trust for the account of
such holders) with respect to each share of Series B Preferred Stock pursuant to
Subsection 3(a)(i) above, if applicable, shares of Series A Preferred Stock
shall be redeemed by this corporation at a price equal to the Original Series A
Issue Price per share, plus all declared but unpaid dividends thereon (the
"Series A Redemption Price"), in one cash installment as set forth below within
sixty (60) days after receipt by this corporation of written notice requesting
redemption of all shares of Series A Preferred Stock from the holders of at
least two thirds of the then outstanding shares of Series A Preferred Stock;
provided that any such written notice shall not be effective unless delivered on
or after the later of (1) February 16, 2010, (2) the date on which there is no
longer any Series B Preferred Stock outstanding or (3) the Series B Redemption
Date (the date of the redemption being referred to as the "Series A Redemption
Date"). The "Original Series A Issue Price" is $2.84 per outstanding share (as
adjusted for any stock dividends, combinations, splits, recapitalization and the
like following the effective date of this Third Amended and Restated Certificate
of Incorporation with respect to such shares). On the Series A Redemption Date,
the corporation shall redeem from each holder of Series A Preferred Stock all
Series A Preferred Stock held by such holder. If this corporation does not have
sufficient funds legally available to redeem the Series A Preferred Stock on the
Series A Redemption Date, (i) the corporation shall redeem a pro rata portion of
each holder's shares of Series A Preferred Stock out of funds legally available
therefor and to redeem the remaining shares to have been redeemed as soon as
practicable after the corporation has funds legally available therefore, and
(ii) the holders of a majority of the Series A Preferred Stock shall have the
option to elect a majority of the Board for the purpose of effecting a
redemption of the Series A Preferred Stock through a sale of this corporation,
provided that any such sale of this corporation shall be performed in an orderly
auction in a manner consistent with each director's discharge of his or her
fiduciary duties.
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(b) Redemption Notice. Written notice of the mandatory redemptions
(the "Redemption Notice") shall be mailed, postage prepaid, to each holder
of record of Series A Preferred Stock or Series B Preferred Stock, as the
case may be, at its post office address last shown on the records of this
corporation, or given by electronic communication in compliance with the
provisions of the General Corporation Law, not less than thirty (30) days
prior to the Series A Redemption Date or Series B Redemption Date, as
applicable. The Redemption Notice shall state, as to the relevant series of
Preferred Stock:
(i) the number of shares of Series A Preferred Stock or Series B
Preferred Stock held by the holder that the corporation shall redeem on the
Series A Redemption Date or Series B Redemption Date specified in the Redemption
Notice;
(ii) the Series A Redemption Date or Series B Redemption Date and
the Series A Redemption Price or Series B Redemption Price;
(iii) the date upon which the holder's right to convert such
shares terminates (as determined in accordance with Subsection 4(a)); and
(iv) that the holder is to surrender to this corporation, in the
manner and at the place designated, his certificate or certificates representing
the shares of Series A Preferred Stock or Series B Preferred Stock to be
redeemed.
(c) Surrender of Certificates; Payment. On or before the applicable
redemption date, each holder of shares of Series A Preferred Stock or
Series B Preferred Stock to be redeemed on such redemption date, unless
such holder has exercised his right to convert such shares as provided in
Subsection 4(a) hereof, shall surrender the certificate or certificates
representing such shares to this corporation, in the manner and at the
place designated in the Redemption Notice, and thereupon the redemption
price for such shares shall be payable to the order of the person whose
name appears on such certificate or certificates as the owner thereof, and
each surrendered certificate shall be canceled and retired. In the event
less than all of the shares of Series A Preferred Stock or Series B
Preferred Stock represented by a certificate are redeemed, a new
certificate representing the unredeemed shares of Series A Preferred Stock
or Series B Preferred Stock shall promptly be issued.
(d) Rights Subsequent to Redemption. If the Redemption Notice shall
have been duly given, and if on the relevant redemption date the applicable
redemption price payable upon redemption of the shares of Series A
Preferred Stock or Series B Preferred Stock, as the case may be, to be
redeemed is paid or tendered for payment, then notwithstanding that the
certificates evidencing any of the shares of Series A Preferred Stock or
Series B Preferred Stock so called for redemption shall not have been
surrendered, dividends with respect to such shares of Preferred Stock shall
cease to accrue after such redemption date and all rights with respect to
such shares shall forthwith after the relevant redemption date terminate,
except only the right of the holders to receive the applicable redemption
price without interest upon surrender of their certificate or certificates
therefor.
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(e) Redeemed or Otherwise Acquired Shares. Any shares of Series A
Preferred Stock or Series B Preferred Stock that are redeemed or otherwise
acquired by this corporation or any of its subsidiaries shall be
automatically and immediately cancelled and shall not be reissued, sold or
transferred as shares of Series A Preferred Stock or Series B Preferred
Stock. Neither this corporation nor any of its subsidiaries may exercise
any voting or other rights granted to the holders of Series A Preferred
Stock or Series B Preferred Stock.
(f) Other Redemptions or Acquisitions. Neither this corporation nor
any subsidiary shall redeem or otherwise acquire any capital stock of this
corporation prior to the complete redemption of the Series A Preferred
Stock and Series B Preferred Stock, except in accordance with
Subsection(6)(a)(xx) of Article III of this Third Amended and Restated
Certificate of Incorporation.
4. Conversion. The holders of Series A Preferred Stock and Series B
Preferred Stock shall have conversion rights as follows (the "Conversion
Rights"):
(a) Right to Convert.
(i) Each share of Series B Preferred Stock shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share, at the office of this corporation or any transfer agent for such
stock, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing the Original Series B Issue Price by the conversion
price applicable to such share, determined as hereafter provided (the "Series B
Conversion Price"), in effect on the date the certificate is surrendered for
conversion. The initial Series B Conversion Price per share shall be the
Original Series B Issue Price for such share; provided, however that the Series
B Conversion Price shall be subject to adjustment as set forth in Subsection
4(d).
(ii) Each share of Series A Preferred Stock shall be convertible,
at the option of the holder thereof, at any time after the date of issuance of
such share, at the office of this corporation or any transfer agent for such
stock, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing the Original Series A Issue Price by the conversion
price applicable to such share, determined as hereafter provided (the "Series A
Conversion Price"), in effect on the date the certificate is surrendered for
conversion. The initial Series A Conversion Price per share shall be the
Original Series A Issue Price for such share; provided, however that the Series
A Conversion Price shall be subject to adjustment as set forth in Subsection
4(d).
In the event of a notice of redemption of any shares of Series A
Preferred Stock or Series B Preferred Stock pursuant to Subsection 3 above, the
Conversion Rights of the shares designated for redemption shall terminate at the
close of business on the last full day preceding the applicable date fixed for
redemption, unless the redemption price is not paid on such redemption date, in
which case the Conversion Rights for such shares for which the redemption price
is not paid shall continue until such price is paid in full. In the event of a
Liquidation of this corporation, the Conversion Rights shall terminate at the
close of business on the last full
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day preceding the date fixed for the payment of any such amounts distributable
on such event to the holders of Series A Preferred Stock or Series B Preferred
Stock.
(b) Automatic Conversion. Each share of Series A Preferred Stock and
Series B Preferred Stock shall automatically be converted into shares of
Common Stock at the Series A Conversion Price for such Series A Preferred
Stock then in effect and the Series B Conversion Price for such Series B
Preferred Stock then in effect, immediately upon the earlier of:
(i) the closing of a public offering by this corporation of its
shares of Common Stock pursuant to an effective registration statement filed
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, in an offering with gross cash proceeds (prior to the deduction of any
fees and expenses incurred in such transaction) to the corporation of not less
than seventy five million dollars ($75,000,000), at a per share price of not
less than (1) $8.52 per share (as adjusted for any stock dividends, combinations
or splits following the effective date of this Third Amended and Restated
Certificate of Incorporation) if the public offering occurs on or before
February 28, 2007, (2) $10.00 per share (as adjusted for any stock dividends,
combinations or splits following the effective date of this Third Amended and
Restated Certificate of Incorporation) if the public offering occurs after
February 28, 2007 and on or before December 31, 2007, or (3) $12.00 per share
(as adjusted for any stock dividends, combinations or splits following the
effective date of this Third Amended and Restated Certificate of Incorporation)
if the public offering occurs on or after January 1, 2008 (any such public
offering, a "Qualified Public Offering");
(ii) the closing of a Qualified Sale (as defined herein); or
(iii) upon the vote or written consent of the Supermajority
Preferred Holders.
(c) Mechanics of Conversion. Before any holder of Series A Preferred
Stock or Series B Preferred Stock shall be entitled to convert the same
into shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this corporation or
of any transfer agent for the Series A Preferred Stock or Series B
Preferred Stock, and give written notice to this corporation at its
principal corporate office of such holder's election to convert the same,
and shall state therein the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. This corporation
shall, as soon as practicable thereafter, issue and deliver at such office
to such holder of Series A Preferred Stock or Series B Preferred Stock, or
to the nominee or nominees of such holders, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be
entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of
the shares of Series A Preferred Stock or Series B Preferred Stock to be
converted, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock as
of such date. In the event of an automatic conversion pursuant to
Subsection 4(b), the outstanding shares of Series A Preferred Stock
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and Series B Preferred Stock shall be converted automatically without
further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to this corporation
or its transfer agent, provided that the corporation shall not be obligated
to issue certificates evidencing the shares of Common Stock issuable upon
such automatic conversion unless the certificates evidencing such shares of
Series A Preferred Stock or Series B Preferred Stock are delivered to the
corporation or its transfer agent. If the conversion is in connection with
a Qualified Public Offering, the conversion may, at the option of any
holder tendering Series A Preferred Stock or Series B Preferred Stock for
conversion, be conditioned upon the closing with the underwriters of the
sale of securities pursuant to such offering, in which event the person or
persons entitled to receive the Common Stock upon conversion of Series A
Preferred Stock or Series B Preferred Stock shall not be deemed to have
converted such Series A Preferred Stock or Series B Preferred Stock until
immediately prior to the closing of such sale of securities. If the
conversion is in connection with a Qualified Sale, the conversion will be
deemed to have effect from immediately prior to the closing of the
Qualified Sale (but shall be conditioned on the closing of such Qualified
Sale occurring) such that a holder of Series B Preferred Stock or Series A
Preferred Stock shall be deemed to have transferred in the Qualified Sale
the number of shares of the Common Stock into which such shares of Series A
Preferred Stock or Series B Preferred Stock are then convertible. Upon
conversion of shares of Series A Preferred Stock or Series B Preferred
Stock pursuant to this Section 4, the corporation shall pay the holder of
such shares all declared and/or accrued but unpaid dividends on such
shares.
(d) Conversion Price Adjustments of Preferred Stock for Certain
Dilutive Issuances, Splits and Combinations. The Series A Conversion Price
and Series B Conversion Price shall be subject to adjustment from time to
time as follows:
(i) Adjustment for Certain Dilutive Issuances.
(A) Subject to Subsection 4(d)(i)(C) upon each issuance by this
corporation of any Additional Stock (as defined below) without consideration or
for a consideration per share less than the Series B Conversion Price in effect
immediately prior to the issuance of such Additional Stock (which has not been
approved by the holders of at least a Majority of the Series B Preferred Stock),
the Series B Conversion Price in effect immediately prior to such issuance shall
forthwith (except as otherwise provided in this subsection (i)) be adjusted to a
price equal to the consideration per share for which such Additional Stock is
issued.
(B) Subject to Subsection 4(d)(i)(C) below, upon each issuance by
this corporation of any Additional Stock (as defined below) without
consideration or for a consideration per share less than the Series A Conversion
Price in effect immediately prior to the issuance of such Additional Stock
(which has not been approved by holders of either a Majority of the Series B
Preferred Stock or a majority of the outstanding Series A Preferred Stock the
Series A Conversion Price in effect immediately prior to each issuance shall
forthwith (except as otherwise provided in this subsection (i)) be adjusted to a
price determined by multiplying the Series A Conversion Price by a fraction, (x)
the numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to the issuance of such Additional Stock
11
plus the number of shares of Common Stock which the aggregate consideration
received by this corporation for the total number of shares of Additional Stock
so issued would purchase at the Series A Conversion Price in effect for such
series immediately prior to such issuance, and (y) the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issuance of Additional Stock plus the number of shares of such Additional
Stock so issued. For the purpose of the above calculation, the number of shares
of Common Stock outstanding immediately prior to such issuance of Additional
Stock shall be calculated as if all shares of all series of Series B Preferred
Stock and Series A Preferred Stock had been fully converted into shares of
Common Stock immediately prior to such issuance, and any outstanding options,
warrants or other rights for the purchase of shares of stock or convertible
securities shall be treated in the manner set forth in subsection (i)(F) below.
(C) No adjustment of the Series A Conversion Price and/or Series
B Conversion Price shall be made in an amount less than one percent (1%) of the
Series A Conversion Price or Series B Conversion Price, as the case may be,
provided that any adjustments that are not required to be made by reason of this
sentence shall be carried forward and shall be either taken into account in any
subsequent adjustment made prior to three (3) years from the date of the event
giving rise to the adjustment being carried forward, or shall be made at the end
of three (3) years from the date of the event giving rise to the adjustment
being carried forward, and upon such adjustment the Series A Conversion Price or
Series B Conversion Price shall be rounded up or down to the nearest cent.
Except to the limited extent provided for in subsections (i)(F)(3) and (F)(4),
no adjustment of the Series A Conversion Price or Series B Conversion Price
pursuant to this subsection (i) shall have the effect of increasing the Series A
Conversion Price or Series B Conversion Price above the conversion price in
effect immediately prior to such adjustment.
(D) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the aggregate amount of cash paid therefor
(taking into account all of the consideration received by this corporation in
the transaction giving rise to such issuance and after proper allocation of such
consideration to the relevant Common Stock) before deducting any discounts,
commissions or other expenses allowed, paid or incurred by this corporation for
any underwriting or otherwise in connection with the issuance and sale thereof.
(E) In the case of the issuance of the Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair market value thereof as determined in the
same manner as set forth in Subsection (c)(ii) (taking into account all of the
consideration received by this corporation in the transaction giving rise to
such issuance and after proper allocation of such consideration to the relevant
Common Stock).
(F) In the case of the issuance of options to purchase or rights
to subscribe for Common Stock, securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for
such convertible or exchangeable securities, the following provisions shall
apply for all purposes of this subsection 4(d)(i) and subsection 4(d)(ii):
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(1) The aggregate maximum number of shares of Common Stock
deliverable upon exercise (whether or not then exercisable) of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options or rights were issued and for a consideration
equal to the total consideration (determined in the manner provided in
subsections 4(d)(i)(D) and 4(d)(i)(E)), if any, received by this corporation
upon the issuance of such options or rights plus the minimum exercise price
provided in such options or rights for the Common Stock covered thereby.
(2) The aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange (whether or not then convertible
or exchangeable) for any such convertible or exchangeable securities or upon the
exercise of options to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof shall be
deemed to have been issued at the time such securities were issued or such
options or rights were issued and for a consideration equal to the
consideration, if any, received by this corporation for any such securities and
related options or rights (excluding any cash received on account of accrued
interest or accrued dividends, but taking into account the total consideration
received by this corporation in the transaction giving rise to the issuance of
such securities and related options or rights), plus the minimum additional
consideration, if any, to be received by this corporation upon the conversion or
exchange of such securities or the exercise of any related options or rights
(the consideration in each case to be determined in the manner provided in
subsections 4(d)(i)(D) and 4(d)(i)(E)).
(3) In the event of any change in the number of shares of Common
Stock deliverable or in the consideration payable to this corporation upon
exercise of such options or rights or upon conversion of or in exchange for such
convertible or exchangeable securities, including, but not limited to, a change
resulting from the anti-dilution provisions thereof, the Series A Conversion
Price and Series B Conversion Price, to the extent in any way affected by or
computed using such options, rights or securities, shall be recomputed to
reflect such change unless such change is due to any stock dividend, combination
or split made following the effective date of this Third Amended and Restated
Certificate of Incorporation and a proportionate adjustment to the Series A
Conversion Price and Series B Conversion Price is being made pursuant to
subsections 4(d)(iii) or 4(d)(iv) hereof, but no further adjustment shall be
made for the actual issuance of Common Stock or any payment of such
consideration upon the exercise of any such options or rights or the conversion
or exchange of such securities.
(4) Upon the expiration of any such options or rights, the
termination of any such rights to convert or exchange or the expiration of any
options or rights related to such convertible or exchangeable securities, the
Series A Conversion Price or Series B Conversion Price, to the extent in any way
affected by or computed using such options, rights or securities, shall, if
necessary under Subsection 4(d)(i)(A) (in the case of the Series B Conversion
Price) or Subsection 4(d)(i)(B) (in the case of the Series A Conversion Price),
be recomputed to reflect the issuance of only the number of shares of Common
Stock (and convertible or exchangeable securities that remain in effect)
actually issued upon the exercise of such options or rights, upon the conversion
or exchange of such securities or upon the exercise of the options or rights
related to such securities (it being understood that the Series B Conversion
Price shall only be
13
recomputed if all such options, rights or securities giving rise to the most
recent adjustment of the Series B Conversion Price expire or are terminated).
(5) The number of shares of Common Stock deemed issued and the
consideration deemed paid therefor pursuant to subsections 4(d)(i)(F)(1) and
4(d)(i)(F)(2) shall be appropriately adjusted to reflect any change, termination
or expiration of the type described in either subsection 4(d)(i)(F)(3) or
4(d)(i)(F)(4).
(ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to subsection 4(d)(i)(B)) by this
corporation other than the following:
(A) Common Stock issued pursuant to a transaction described in
subsection 4(d)(iii) hereof;
(B) Up to an aggregate of seven million three hundred fifty-two
thousand (7,352,000) shares of Common Stock issuable or issued to employees,
independent contractors, consultants, officers or directors of this corporation
directly or pursuant to stock option plans or restricted stock agreements
approved by the Board (including any such shares issued prior to the date hereof
or issuable pursuant to options or other securities granted prior to the date
hereof), provided such issuances are for other than primarily equity financing
purposes, unless a greater number of shares is approved by the Board and a
Majority of the Series B Preferred Stock as provided in Subsection 6 hereof (the
"Permitted Employee Shares");
(C) Common Stock issued upon conversion of shares of Series A
Preferred Stock or Series B Preferred Stock or any change in the Series B
Conversion Price due to an adjustment set forth in subsection 4(d)(i)(A);
(D) shares of Common Stock issued or issuable pursuant to a bona
fide, firmly underwritten public offering of Shares of Common Stock, registered
under the Securities Act of 1933, as amended;
(E) shares of Common Stock issued in connection with a bona fide
business acquisition of or by this corporation, whether by merger,
consolidation, sale of assets, sale or exchange of stock or otherwise which has
been approved pursuant to Section 6 hereof;
(F) shares of Common Stock issued or issuable upon exercise of
warrants or other securities or rights pursuant to equipment lease financings or
bank credit arrangements, approved by the Board as provided in subsection 6
hereof, provided that the aggregate amount of stock issuances excluded from the
definition of Additional Stock pursuant to this provision shall not, when
combined with the any stock issuances in accordance with Section (G) immediately
below, exceed (x) two million three hundred thousand (2,300,000) shares or, if
the PCG Entities shall have purchased shares of Series B Preferred Stock in a
Subsequent Closing pursuant to the Purchase Agreement, two million eight hundred
thousand (2,800,000) shares at the time of issuance or (y) four million six
hundred thousand (4,6000,000) shares or, if the PCG Entities and the other
investor in the Subsequent Closing under the Purchase Agreement shall have
purchased
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shares of Series B Preferred Stock in a Subsequent Closing pursuant to the
Purchase Agreement, five million six hundred thousand (5,600,000) shares in the
aggregate; and
(G) shares of Common Stock issued or issuable to vendors or other
persons or entities pursuant to commercial arrangements approved by the Board as
provided in Section 6 hereof, provided that the aggregate amount of stock
issuances excluded from the definition of Additional Stock pursuant to this
provision shall not, when combined with any issuances in accordance with Section
(F) immediately above, exceed (x) two million three hundred thousand (2,300,000)
shares or, if the PCG Entities shall have purchased shares of Series B Preferred
Stock in a Subsequent Closing pursuant to the Purchase Agreement, two million
eight hundred thousand (2,800,000) shares at the time of issuance or (y) four
million six hundred thousand (4,6000,000) shares or, if the PCG Entities and the
other investor in the Subsequent Closing under the Purchase Agreement shall have
purchased shares of Series B Preferred Stock in a Subsequent Closing pursuant to
the Purchase Agreement, five million six hundred thousand (5,600,000) shares in
the aggregate at the time of issuance;
unless, in the case of subsections 4(d)(ii)(A) through (G) the applicable
issuance of Common Stock (or Common Stock deemed to have been issued pursuant to
subsection 4(d)(i)(B)) shall trigger a change in the number of shares which may
be purchased under any of the Company's stock purchase warrants outstanding as
of the date hereof pursuant to the anti-dilution provision(s) thereof, if any,
which shall not have been waived with respect to each such warrant (in which
case the Common Stock issued (or deemed to have been issued pursuant to
subsection 4(d)(i)(B)) shall be considered Additional Stock).
(iii) In the event this corporation should at any time or from
time to time following the effectiveness of this Third Amended and Restated
Certificate of Incorporation fix a record date for the effectuation of a split
or subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Series A
Conversion Price and Series B Conversion Price shall be appropriately decreased
so that the number of shares of Common Stock issuable on conversion of each
share of Series A Preferred Stock and Series B Preferred Stock shall be
increased in proportion to such increase of the aggregate of shares of Common
Stock outstanding and those issuable with respect to such Common Stock
Equivalents.
(iv) If the number of shares of Common Stock outstanding at any
time following the effectiveness of this Third Amended and Restated Certificate
of Incorporation is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such combination, the Series A
Conversion Price and Series B Conversion Price shall be appropriately increased
so that the number of shares of Common Stock issuable on conversion of each
share of the Series A Preferred Stock and Series B Preferred Stock shall be
15
decreased in proportion to such decrease in outstanding shares.
(e) Other Distributions. In the event this corporation shall declare a
distribution payable in securities of other persons, evidences of
indebtedness issued by this corporation or other persons, assets (excluding
cash dividends) or options or rights not referred to in subsection
(d)(iii), then, in each such case, the holders of Series A Preferred Stock
and Series B Preferred Stock shall be entitled to a proportionate share of
any such distribution as though they were the holders of the number of
shares of Common Stock of the corporation into which their shares of Series
A Preferred Stock and Series B Preferred Stock are convertible as of the
record date fixed for the determination of the holders of Common Stock of
the corporation entitled to receive such distribution. Notwithstanding the
foregoing, no distribution shall be made with respect to the Common Stock
or Series A Preferred Stock unless the entire Series B Liquidation Amount
has been paid to the holders of Series B Preferred Stock.
(f) Recapitalizations. If at any time or from time to time there shall
be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere
in this Section 4 or Section 2), provision shall be made so that the
holders of Series A Preferred Stock and Series B Preferred Stock shall
thereafter be entitled to receive upon conversion of such Series A
Preferred Stock or Series B Preferred Stock the number of shares of stock
or other securities or property of this corporation or otherwise, to which
a holder of Common Stock deliverable upon conversion would have been
entitled on such recapitalization. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 4 with
respect to the rights of the holders of Series A Preferred Stock and Series
B Preferred Stock after the recapitalization to the end that the provisions
of this Section 4 (including adjustment of the Series A Conversion Price
and Series B Conversion Price then in effect and the number of shares
purchasable upon conversion of Series A Preferred Stock and Series B
Preferred Stock) shall be applicable after that event as nearly equivalent
as is practicable.
(g) No Impairment. This corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by this corporation, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 4
and in the taking of all such action as may be necessary or appropriate in
order to protect the conversion rights of the holders of Series A Preferred
Stock and Series B Preferred Stock against impairment.
(h) No Fractional Shares and Certificate as to Adjustments.
(i) No fractional shares shall be issued upon the conversion of
any share or shares of Series A Preferred Stock or Series B Preferred Stock, and
the number of shares of Common Stock to be issued shall be rounded to the
nearest whole share.
16
(ii) Upon the occurrence of each adjustment or readjustment of
the Series A Conversion Price or Series B Conversion Price pursuant to this
Section 4, this corporation, at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and prepare and
furnish to each holder of Series A Preferred Stock or Series B Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. This corporation
shall, upon the written request at any time of any holder of Series A Preferred
Stock or Series B Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (A) such adjustment and readjustment,
(B) the Series A Conversion Price or Series B Conversion Price at the time in
effect, as the case may be, and (C) the number of shares of Common Stock and the
amount, if any, of other property which at the time would be received upon the
conversion of a share of Series A Preferred Stock or Series B Preferred Stock,
as the case may be.
(i) Notices of Record Date. In the event of any taking by this
corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right,
this corporation shall mail to each holder of Preferred Stock, at least
twenty (20) days prior to the date specified therein, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
(j) Reservation of Stock Issuable Upon Conversion. This corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series A Preferred Stock and Series B Preferred
Stock such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series A
Preferred Stock and Series B Preferred Stock; and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of Series A
Preferred Stock and Series B Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series A Preferred
Stock or Series B Preferred Stock, this corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purposes, including, without
limitation, engaging in best efforts to obtain the requisite stockholder
approval of any necessary amendment to this Third Amended and Restated
Certificate of Incorporation.
(k) Notices. Any notice required by the provisions of this Section 4
to be given to the holders of shares of Series A Preferred Stock or Series
B Preferred Stock shall be deemed given if deposited in the United States
mail, postage prepaid, and addressed to each holder of record at his
address appearing on the books of this corporation.
5. Voting Rights.
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(a) General Voting Rights. A holder of shares of Common Stock shall
have the right to one vote for each share of Common Stock. A holder of
shares of Series A Preferred Stock and/or Series B Preferred Stock shall
have the right to one vote for each share of Common Stock into which such
share of Series A Preferred Stock or Series B Preferred Stock held by such
holder could then be converted, and with respect to such vote, such holder
shall have full voting rights and powers equal to the voting rights and
powers of the holders of Common Stock, and shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders'
meeting in accordance with the Bylaws of this corporation, and shall be
entitled to vote, together with holders of Common Stock, with respect to
any question upon which holders of Common Stock have the right to vote as a
single class, unless otherwise prohibited by law or as otherwise provided
in this Third Amended and Restated Certificate of Incorporation. Fractional
votes shall not, however, be permitted and any fractional voting rights
available on an as-converted basis (after aggregating all shares into which
shares of Series A Preferred Stock or Series B Preferred Stock held by each
holder could be converted) shall be rounded to the nearest whole number
(with one-half being rounded upward).
(b) Election of Directors. This corporation's Board shall consist of
ten (10) members who shall be elected as follows: (i) for so long as shares
of the Series B Preferred Stock remain outstanding, the holders of the
Series A Preferred Stock and Series B Preferred Stock, voting as a single
class, shall be entitled to elect six (6) members of the corporation's
Board, and (ii) the holders of Common Stock, voting as a single class,
shall be entitled to elect four (4) members of the corporation's Board.
Notwithstanding the foregoing, the size of the Board shall be increased to
the extent necessary to enable the applicable holders to designate a
majority of the Board pursuant to subsections 3(a)(i) and/or 3(a)(ii) if
applicable.
(c) Definitions. For purposes of this Third Amended and Restated
Certificate of Incorporation:
(i) "Affiliate" of a person shall mean (x) any person that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the person specified or any
Affiliate of such person, and (y) each person who serves as a director, officer,
partner, or trustee of such person.
(ii) "Qualified Sale" shall mean a sale, lease, transfer or other
disposition of all or substantially all of the properties or assets of this
corporation, or a stock sale, merger or consolidation with any other corporation
or entity, or any transaction or series of related transaction (including,
without limitation, any reorganization, merger, consolidation) that results in
holders of the outstanding voting power of this corporation immediately prior to
such transaction or series of transaction owning less than a majority of the
outstanding voting securities for the election of directors of the surviving
company or entity immediately following such transactions or transaction, in
each case, in a transaction or series of related transactions which would result
in gross proceeds (in cash or Liquid Securities) to the holders of Series B
Preferred Stock (prior to the deduction of any fees and expenses incurred by
such holder in connection with such transaction and prior to any deduction for
any withholding or similar taxes
18
applicable to such holder on account of such transaction) of not less than (1)
$8.52 per share of Series B Preferred Stock or, if the Series B Preferred Stock
is automatically converted to Common Stock, Common Stock (as adjusted for any
stock dividends, combinations or splits following the effective date of this
Third Amended and Restated Certificate of Incorporation) if the Qualified Sale
occurs on or before February 28, 2007, (2) $10.00 per share of Series B
Preferred Stock or, if the Series B Preferred Stock is automatically converted
to Common Stock, Common Stock (as adjusted for any stock dividends, combinations
or splits following the effective date of this Third Amended and Restated
Certificate of Incorporation) if the Qualified Sale occurs after February 28,
2007 and on or before December 31, 2007, and (3) $12.00 per share of Series B
Preferred Stock or, if the Series B Preferred Stock is automatically converted
to Common Stock, Common Stock (as adjusted for any stock dividends, combinations
or splits following the effective date of this Third Amended and Restated
Certificate of Incorporation) if the Qualified Sale occurs on or after January
1, 2008. In the event any consideration paid to the holders of Series B
Preferred Stock in such transaction consists of Liquid Securities, such
consideration shall be valued as provided in subsection 2(c)(ii)(A) hereof.
(iii) "Liquid Securities" shall mean the voting common equity of
an issuer listed or approved for trading or quotation on any of the New York
Stock Exchange, NASDAQ Stock Market, London Stock Exchange, Frankfurt Stock
Market, Paris Bourse, Hong Kong Stock Exchange or Tokyo Stock Exchange; provided
that securities issued in a transaction (or series of related transactions)
shall not be considered Liquid Securities unless (y) the securities received by
all of the stockholders of this corporation in the applicable transaction (or
series of related transactions) do not exceed in the aggregate 20% of the
outstanding securities of the same class of the issuer after giving effect to
the proposed transaction (or series of related transactions); and (z) all of the
securities issued in connection with the transaction (or series of related
transactions) shall be freely tradeable without restrictions (whether by law,
regulation or contract) upon receipt.
(d) Removal; Vacancies. To the maximum extent allowed by the General
Corporation Law, any director who was elected by a specified series, class
or classes of shares may be removed during his or her term of office,
either for or without cause, by, and only by, the affirmative vote of the
holders of the shares of the series, class or classes of shares which
initially elected such director. Such vote may be given at a special
meeting of such shareholders duly called or by an action by written consent
for that purpose. The shareholders of the specified series or class
entitled to vote upon the election of any director from which a vacancy
arose may elect a director at any time to fill such vacancy not filled by
the directors.
6. Protective Provisions.
(a) Prior to the closing of a Qualified Public Offering or a Qualified
Sale, and for so long as any shares of Series B Preferred Stock remain
outstanding, this corporation shall not, without first obtaining the
approval (by vote or written consent, as provided by law) of the Majority
of Series B Preferred Stock (or, in the case of clauses (iv), (xix), (xxi)
or (xxii) below, the Supermajority Preferred Holders) voting as a separate
class:
19
(i) Sell, transfer, lease or otherwise dispose of all or
substantially all of the properties or assets of this corporation, or enter into
any stock sale, merger or consolidation agreement with any other corporation or
entity, or effect any transaction or series of related transactions (including,
without limitation, any reorganization, merger or consolidation) that results in
the holders of the outstanding voting power of this corporation immediately
prior to such transaction or series of transactions owning less than a majority
of the outstanding voting securities for the election of directors of the
surviving company or entity immediately following such transaction or
transactions, in any case, other than a Qualified Sale;
(ii) Permit any corporation or entity, a majority of the voting
stock or voting power of which is owned or controlled by this corporation (a
"Company Subsidiary") to (i) sell, transfer, lease of otherwise dispose of all
or substantially all of its properties or assets, or (ii) enter into any stock
sale, merger or consolidation with any other corporation or entity, or effect
any transaction or series of related transactions (including, without
limitation, any reorganization, merger or consolidation) that results in this
corporation owning less than a majority of the outstanding voting securities for
the election of directors of the surviving company or entity following such
transaction or (iii) otherwise issue equity securities (other than to this
corporation (except that this clause (iii) shall not apply to Satcom
International Group Plc or ORBCOMM Europe LLC or any of their respective
subsidiaries or successors);
(iii) Effect a voluntary reorganization (in bankruptcy or
otherwise), dissolution, liquidation or winding up of this corporation or any
Company Subsidiary;
(iv) Authorize, designate or issue any class or series of stock
or any other securities convertible into equity securities of this corporation
(including Series B Preferred Stock) having any rights, preferences or
privileges superior to, or on a parity with, the rights, preferences or
privileges of the Series B Preferred Stock (except pursuant to the Purchase
Agreement) or which will result in an adjustment to the number of shares which
may be purchased under the Company's stock purchase warrants outstanding as of
the date hereof pursuant the anti-dilution provision(s) thereof, if any, which
shall not have been waived with respect to each such warrant;
(v) Acquire (or permit any Company Subsidiary to acquire) the
assets or stock of any other business (whether by stock or asset purchase or by
merger or consolidation with or into another entity) in a transaction having a
value in excess of $5,000,000; provided, however, that any consideration other
than for cash shall be valued at fair market value as determined in good faith
by the Board;
(vi) Incur, guaranty or become liable on any indebtedness, or
permit any Company Subsidiary to incur, guaranty or become liable on any
indebtedness (other than indebtedness of Company Subsidiaries owed to this
corporation) or guarantee, or permit any Company Subsidiary to guarantee,
directly or indirectly, any indebtedness or obligations of another person, in
excess of, when taken together with any liens or encumbrances pursuant to
section (xviii) below, $5,000,000; provided that this limitation shall not apply
to trade accounts payable arising in the ordinary course of business;
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(vii) Enter any business materially different from the primary
business engaged in by this corporation as conducted as of the date of issuance
of the Series B Preferred Stock, or change materially the business activities
conducted by this corporation as of the date of issuance of the Series B
Preferred Stock;
(viii) Authorize an initial public offering of the Common Stock
other than pursuant to a Qualified Public Offering;
(ix) Issue any options, warrants or other employee incentive
equities, or permit any Company Subsidiary to issue any options, warrants or
other employee incentive equities, to any employees, directors or consultants of
this corporation other than pursuant to a stock option plan or restricted stock
agreements approved by the Board (provided such shares are issued or issuable
under a plan or restricted stock agreements with the parameters of clause (x)
below and further provided that the aggregate amount of options, warrants,
equities or other securities issued under such plans or agreements (when
combined with any such shares, options, warrants, equities or other securities
issued prior to the date hereof under such plans or agreements) do not exceed
five million nine hundred fifty thousand (5,950,000) shares of Common Stock (on
an as exercised and as converted basis) or, if the Subsequent Closing under the
Purchase Agreement occurs, seven million three hundred fifty two thousand
(7,352,000) shares of Common Stock (on as converted and as exercised basis));
(x) Amend or modify any stock option plan or restricted stock
agreement, including without limitation increasing the number of Permitted
Employee Shares to greater than seven million three hundred fifty two thousand
(7,352,000) shares of Common Stock (subject to appropriate adjustment for stock
splits, stock dividends, recapitalizations and similar events occurring after
the date of this Agreement), or amend or modify any transfer, vesting or
repurchase provisions of any restricted stock or option agreement;
(xi) Increase or decrease the number of members of the Board;
(xii) Enter into any agreement with any Affiliate of this
corporation (as such term is defined in the rules and regulations promulgated
under the Securities Act of 1933, as amended), any stockholder, officer or
director of the corporation, or any Affiliate of such persons, including without
limitation any agreement or other arrangement providing for the furnishing of
services by, rental of real or personal property from, or otherwise requiring
payments to, any such person or entity;
(xiii) Declare or pay any dividend or distribution on the Common
Stock, Series A Preferred Stock or Series B Preferred Stock, or permit a Company
Subsidiary to declare or pay any dividend on its capital stock;
(xiv) Appoint, remove or replace the Chief Executive Officer or
Chief Financial Officer of this corporation;
(xv) Approve or enter into any vendor contract in an amount that
requires expenditures by this corporation or any Company Subsidiary in excess of
$5,000,000;
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(xvi) Procurement of launch insurance by this corporation or any
Company Subsidiary;
(xvii) settlement of any litigation in excess of one million
dollars ($1,000,000) by this corporation or any Company Subsidiary;
(xviii) Grant or permit any lien or encumbrances on the Company's
or any Company Subsidiary's assets, other than (A) equipment leases having an
aggregate principal amount, when taken together with any indebtedness incurred
pursuant to section (vi) (above), of not more than five million dollars
($5,000,000); (B) liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings; (C) liens existing by operation of law in
the ordinary course of business; (D) liens on purchased property incurred in the
ordinary course of business; and (E) liens having an aggregate principal amount
individually or in the aggregate not in excess of five hundred thousand dollars
($500,000) or in favor of the Company;
(xix) Alter, amend or waive any provision of the organizational
documents, including without limitation, the Certificate of Incorporation,
Bylaws, or Operating Agreement, of this corporation or any Company Subsidiary in
a manner that adversely affects the holders of Series B Preferred Stock;
(xx) Redeem, purchase or otherwise acquire (or pay into or set
aside funds for such purpose) any share or shares of Common Stock or Series A
Preferred Stock; provided, however, that this restriction shall not apply to the
repurchase of shares of Common Stock at cost from employees, officers, directors
and other persons pursuant to agreements under which this corporation has the
option to repurchase such shares upon termination of employment or service;
(xxi) Alter or change the rights, preferences or privileges of
the shares of Series A Preferred Stock or Series B Preferred Stock so as to
affect adversely the shares of Series B Preferred Stock; or
(xxii) Effect a reclassification or recapitalization of the
outstanding capital stock of this corporation in which any capital stock has any
preference or priority as to dividends or assets senior to or on parity with the
preferences of the Series B Preferred Stock.
(b) In addition to the voting requirements set forth in Subsection
6(a) above, the affirmative vote of the Board, including approval of not
less than two of the Common Stock Directors shall be required to approve:
(i) Any of the actions described in subsection 6(a)(i) or (ii)
(only in the event of a transaction or transactions which would result in gross
cash proceeds to the holders of Series B Preferred Stock (prior to the deduction
of the fees and expenses incurred by such holder in connection with such
transaction and prior to any deduction for any withholding or similar taxes
applicable to such holder on account of such transaction) of not less than $4.03
per share of Series B Preferred Stock or, if the Series B Preferred Stock is
converted into Common Stock, Common Stock, as the case may be, excluding any
Qualified Sale or transaction pursuant to Subsection 3(a) hereof);
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(ii) Any of the actions described in subsections 6(a) (iii),
(viii) or (xi); or
(iii) Any alteration, change or amendment of the rights,
preferences or privileges of the shares of Series B Preferred Stock or Series A
Preferred Stock (whether set forth herein or in the by-laws of the corporation)
so as to affect adversely the Common Stock;
provided, however, that, in the case of Subsection (b)(i) above, such action
shall only require the approval of one of the Common Stock Directors (other than
the Common Stock Director nominated by OHB Technologies AG or its affiliates)
(in addition to the approval of the Board) where the principal business of the
acquiror is the construction and /or launch of satellites, and provided further,
however, that if three of the Common Stock Directors abstain from voting on any
action described in subsections (i) through (iii) above, such action shall only
require the approval (in addition to the approval of the Board) of the Common
Stock Director voting on such actions; and provided further, however, that if
all of the Common Stock Directors abstain from voting on any action described in
subsections (i) through (iii) above, such action shall only require the approval
of the Board and shall not require the approval of any Common Stock Director.
7. Status of Converted Stock. In the event any shares of Series A Preferred
Stock or Series B Preferred Stock shall be converted pursuant to Section 4
hereof, the shares so converted shall be canceled and shall not be issuable by
this corporation. The Third Amended and Restated Certificate of Incorporation of
this corporation shall be appropriately amended to effect the corresponding
reduction in this corporation's authorized capital stock.
C. Common Stock.
1. Dividend Rights. Subject to the prior rights of holders of Series A
Preferred Stock, Series B Preferred Stock and all other classes of stock at the
time outstanding having prior rights as to dividends, the holders of the Common
Stock shall be entitled to receive, when and as declared by the Board, out of
any assets of this corporation legally available therefor, such dividends as may
be declared from time to time by the Board.
2. Liquidation Rights. Upon the liquidation, dissolution or winding up of
the corporation, the assets of the corporation shall be distributed as provided
in Section 2.
3. Redemption. The Common Stock is not redeemable.
4. Voting Rights. The holder of each share of Common Stock shall have the
right to one vote, and shall be entitled to notice of any stockholders' meeting
in accordance with the Bylaws of this corporation, and shall be entitled to vote
upon such matters and in such manner as may be provided by law.
5. Preferences of Common Stock. All preferences, voting powers, relative,
participating, optional or other special rights and privileges, and
qualifications, limitations, or restrictions of the Common Stock are expressly
made subject to those that may be fixed with respect to any shares of Preferred
Stock.
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6. Authorization of Common Stock. The number of authorized shares of Common
Stock may be increased or decreased (but not below the sum of the number of
shares thereof then outstanding and the number of shares reserved for issuance
upon conversion or exercise (as the case may be) of convertible securities or
securities exercisable to purchase Common Stock) by the affirmative vote of the
holders of a majority of the stock of the Corporation entitled to vote,
irrespective of the provisions of Section 242(b)(2) of the General Corporation
Law of Delaware.
ARTICLE V
Except as otherwise provided in this Third Amended and Restated Certificate
of Incorporation, in furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, repeal,
alter, amend and rescind any or all of the Bylaws of this corporation.
ARTICLE VI
Elections of directors need not be by written ballot unless the Bylaws of
this corporation shall so provide.
ARTICLE VII
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of this corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the Bylaws of this corporation.
ARTICLE VIII
This corporation eliminates the personal liability of each member of its
Board of Directors to this corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, provided, however, that, to the
extent provided by applicable law, the foregoing shall not eliminate the
liability of a director (i) for any breach of such director's duty of loyalty to
this corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
(iii) under Section 174 of Title 8 of the General Corporation Law or (iv) for
any transaction from which such director derived an improper personal benefit.
This corporation shall, to the maximum extent permitted from time to time under
the General Corporation Law, indemnify and upon request shall advance expenses
to any person who is or was a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, proceeding, or claims, whether
civil, criminal, administrative, or investigative, by reason of the fact that
such person is or was or has agreed to be a director or officer of this
corporation or while a director or officer is or was serving at the request of
this corporation as a director, officer, partner, trustee, employee, or agent of
any corporation, partnership, joint venture, trust, or other enterprise,
including service with respect to employee benefit plans, against expenses
(including attorneys' fees and expenses), judgments, fines, penalties, and
amounts paid in settlement incurred in connection with the investigation,
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preparation to defend, or defense of such action, suit, proceeding, or claim;
provided, however, that the foregoing shall not require this corporation to
indemnify or advance expenses to any person in connection with any action, suit,
proceeding, claim, or counterclaim initiated by or on behalf of such person.
Such indemnification shall not be exclusive of other indemnification rights
arising under any bylaw, agreement, vote of directors or stockholders, or
otherwise and shall inure to the benefit of the heirs and legal representatives
of such person. Any repeal or modification of the foregoing provisions of this
paragraph shall not adversely affect any right or protection of a director or
officer of this corporation with respect to any acts or omissions of such
director or officer occurring prior to such repeal or modification.
FOURTH: The foregoing amendment and restatement was approved by the holders
of the requisite number of shares of said corporation in accordance with Section
228 of the General Corporation Law.
FIFTH: That said amendment and restatement was duly adopted in accordance
with the provisions of Section 242 and 245 of the General Corporation Law.
[Signature Pages To Follow]
IN WITNESS WHEREOF, this Third Amended and Restated Certificate of
Incorporation has been executed by the President of this corporation on this
30th day of December, 2005.
/s/ Jerome B. Eisenberg
------------------------------
Jerome B. Eisenberg, President
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