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EXHIBIT 4.1
INFOCURE CORPORATION
CERTIFICATE OF DESIGNATION
OF
SERIES A CONVERTIBLE PREFERRED STOCK
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PURSUANT TO SECTION 151 OF THE
GENERAL CORPORATION LAW OF THE STATE OF DELAWARE
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InfoCure Corporation, a Delaware corporation (the "Corporation"), filed
its original Certificate of Incorporation with the Corporations Division on
November 27, 1996. Under the provisions of and subject to the requirements
Section 151(g) of the General Corporation Law of the State of Delaware (the
"DGCL"), the Corporation,
DOES HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of said corporation, and pursuant
to the provisions of Section 151 of the DGCL, the Board of Directors adopted a
resolution providing for the issuance of a series of preferred stock of said
corporation and fixing the powers, designations, voting powers, preferences, and
relative, participating, optional and other special rights, and qualifications,
limitations or restrictions thereof, which resolution setting forth such matters
is as follows:
WHEREAS, the Certificate of Incorporation of the Corporation,
as amended (the "Certificate of Incorporation"), authorizes a class of stock
designated as preferred stock (the "Preferred Stock"), comprising 2,000,000
shares, par value $0.001 per share, and provides that the Board of Directors of
the Corporation is authorized, within the limitations and restrictions stated in
the Certificate of Incorporation, to fix by resolution or resolutions, without
stockholder action, the powers, designations, voting powers, preferences and
relative participating, optional or other special rights and qualifications,
limitations and restrictions of the preferred stock, including, without
limitation the relative rights of any class of shares of preferred stock, each
series within a class, the number of shares within each class or series and the
dividend rights and terms of redemption (including sinking fund provisions and
liquidation preferences) all to the fullest extent now or hereafter permitted by
the DGCL;
WHEREAS, as of the date hereof, there are no issued and
outstanding shares of Preferred Stock and no shares of Preferred Stock will be
issued subject to the certificate of designations relating to Convertible,
Redeemable Series A Preferred Stock filed with the Secretary of State of the
State of Delaware on February 9, 1998 (the "1998 Designations");
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WHEREAS, based on the foregoing and following the cancellation
of the 1998 Designations, 2,000,000 shares of the Corporation's authorized but
unissued Preferred Stock will be eligible for designation as a new series
thereof; and
WHEREAS, it is the desire of the Board of Directors of the
Corporation, pursuant to its authority as aforesaid, to authorize and fix the
terms of the preferred stock to be designated the Series A Convertible Preferred
Stock and the number of shares constituting such preferred stock;
NOW, THEREFORE, BE IT RESOLVED, that there is hereby
authorized the Series A Convertible Preferred Stock on the terms and with the
provisions herein set forth:
FURTHER RESOLVED, that pursuant to the authority vested in the
Board of Directors of the Corporation by Article Fourth of the Certificate of
Incorporation, the Board of Directors of the Corporation (i) does hereby cancel
the 1998 Designations and any other previous rights, preferences or designations
for the Preferred Stock, (ii) does hereby provide for the issuance of a series
of preferred stock, par value $0.001 per share, of the Corporation to be
designated "Series A Convertible Preferred Stock" (the "Series A Preferred
Stock"), which shall be issued at an original issuance price of $5.44 per share
and (iii) does hereby fix and herein state and express the powers, designations,
voting powers, preferences, and relative, participating, optional and other
special rights, and qualifications, limitations or restrictions thereon, of the
Series A Preferred, as follows:
1. NUMBER OF SHARES AND DESIGNATION. 1,000,000 shares of the
preferred stock, par value $0.001 per share, of the Corporation are hereby
constituted as a series of the Preferred Stock designated as the Series A
Convertible Preferred Stock.
2. DEFINITIONS. For purposes of the Series A Preferred Stock, the
following terms shall have the meanings indicated:
"BOARD OF DIRECTORS" means the board of directors of the Corporation or
any committee authorized by such Board of Directors.
"BUSINESS DAY" means any day other than a Saturday, Sunday or a day on
which banking institutions in the City of New York are authorized or obligated
by law or executive order to close.
"CLOSING PRICE" of the Common Stock on any day means on such day the
reported last sales price for the Common Stock or, in case no sale takes place
on such day, the average of the reported closing bid and asked prices for the
Common Stock, in either case as reported on The National Market System ("The
Nasdaq National Market") of the National Association of Securities Dealers, Inc.
Automated Quotation System ("Nasdaq"), or if the Common Stock is not quoted on
The Nasdaq National Market, on the principal national securities exchange on
which the Common Stock shall then be listed or admitted for trading or, if not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and asked prices for the Common Stock on such day in the
over-the-counter market as reported by Nasdaq or, if bid and asked prices for
the Common Stock on each such date shall not have been reported by
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Nasdaq, the average of the bid and asked prices of the Common Stock for such day
as furnished by any New York Stock Exchange member firm regularly making a
market in the Common Stock selected for such purpose by the Board of Directors
or, if no such quotations are available, the Fair Market Value of the Common
Stock furnished by any New York Stock Exchange member firm selected from time to
time by the Board of Directors for that purpose.
"COMMON STOCK" means the Common Stock of the Corporation, par value
$0.001 per share.
"CONVERSION PRICE" means the conversion price per share of Common Stock
into which the Series A Preferred Stock is convertible, as such Conversion Price
may be adjusted pursuant to Section 7 hereof. The initial Conversion Price will
be $20.00.
"CONVERSION NOTICE" shall have the meaning specified in paragraph (b)
of Section 7 hereof.
"CURRENT MARKET PRICE" per share of Common Stock on any date means the
average of the daily Closing Prices for the 30 consecutive Trading Days
commencing 45 Trading Days before the date of determination.
"DIVIDEND PAYMENT DATE" shall have the meaning set forth in paragraph
(a) of Section 3 hereof.
"DIVIDEND PAYMENT RECORD DATE" shall have the meaning set forth in
paragraph (a) of Section 3 hereof.
"DIVIDEND PERIODS" means quarterly dividend periods commencing on March
31, June 30, September 30 and December 31 of each year and ending on and
including the day preceding the last day of the next succeeding Dividend Period
(other than the initial Dividend Period which shall commence on the Issue Date
and end on and include December 30, 2000).
"FAIR MARKET VALUE" means fair market value as determined in good faith
by the Board of Directors, after consultation with an investment banker of
recognized national standing, which determination shall be evidenced by a
resolution of the Board of Directors.
"ISSUE DATE" means the first date on which shares of Series A Preferred
Stock are issued.
"LAW" means any state, federal, foreign or local statute, law,
ordinance, regulation, rule, code, judgment or decree of any jurisdiction,
government or governmental agency or authority and any enforceable judicial or
administrative interpretation thereof.
"LIQUIDATION PREFERENCE" means an amount equal to $5.44 per share of
Series A Preferred Stock, subject to change in accordance with Section 3 hereof,
including, without limitation, Accumulated Dividends.
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"PERSON" means any individual, firm, partnership, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
"SECURITIES" shall have the meaning set forth in paragraph (d)(iii) of
Section 7 hereof.
"TRADING DAY" with respect to Common Stock means (i) if the Common
Stock is quoted on The Nasdaq National Market System, or any similar system of
automated dissemination of quotations or securities prices, a day on which
trades may be made on such system, (ii) if the Common Stock is listed or
admitted for trading on the New York Stock Exchange or another a national
securities exchange, a day on which the New York Stock Exchange or such other
national securities exchange is open for business, (iii) if not quoted or listed
as described in clause (i) and (ii), days on which quotations are reported by
the National Quotation Bureau Incorporated or (iv) otherwise, any Business Day.
"TRANSACTION" shall have the meaning set forth in paragraph (e) of
Section 7 hereof.
"TRANSFER AGENT" means StockTrans, Inc. or such other agent or agents
of the Corporation as may be designated by the Board of Directors as the
transfer agent for the Series A Preferred Stock.
3. DIVIDENDS.
(a) The Corporation shall pay, and the holders of the shares of
Series A Preferred Stock shall be entitled to receive, cumulative dividends from
the Issue Date at a rate of 6% per annum on the amount of the then effective
Liquidation Preference of the shares of Series A Preferred Stock. Dividends will
be payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year (each a "Dividend Payment Date"), commencing December 31, 2000,
for so long as any shares of Series A Preferred Stock are outstanding; provided,
however, that if such date is not a Business Day, then the Dividend Payment Date
shall be the next Business Day. The Corporation, in its sole discretion, may
elect to pay dividend payments on any Dividend Payment Date in either cash or
Common Stock. The Corporation will take all actions required or permitted under
the DGCL to permit the payment of dividends on the shares of Series A Preferred
Stock on the Dividend Payment Date. Dividends will accrue on a daily basis
whether or not the Corporation has earnings or profits, whether or not there are
funds legally available for the payment of such dividends and whether or not
such dividends are declared. If any dividend payable on any Dividend Payment
Date is not declared and paid in full on such Dividend Payment Date, the amount
so payable, to the extent not paid, shall automatically, without any action on
the part of the Corporation or the holders of the shares of Series A Preferred
Stock, be added to the then effective Liquidation Preference on the first
Business Day following such Dividend Payment Date. Notwithstanding anything else
contained herein, once any dividends for the preceding Dividend Period are added
to the then effective Liquidation Preference, such dividends shall no longer be
payable in cash or Common Stock and such dividends shall be deemed to have been
fully paid. Dividends on any share of Series A Preferred Stock that are payable,
and are punctually paid or duly provided for, on any Dividend Payment Date shall
be paid in arrears to the Person in whose name such share of Series A Preferred
Stock (or one or more predecessor shares of Series A Preferred Stock) is
registered at
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the close of business on the Dividend Payment Record Date. For any Dividend
Period for which the Corporation elects to pay dividends on the Series A
Preferred Stock in Common Stock, the number of shares of Common Stock payable on
each share shall be equal to the dividend due per share divided by the average
of the Closing Prices of the Common Stock on the 20 consecutive Trading Days
ending on the Trading Day immediately prior to the Dividend Payment Date for
such Dividend Period. No fractional shares of Common Stock shall be issued as
dividends on the Series A Preferred Stock, and in lieu of any fractional shares
to which the holder would otherwise be entitled, the Corporation shall pay cash
to such holder. Except as otherwise provided herein, if at any time the
Corporation pays less than the total amount of dividends then accrued with
respect to the Series A Preferred Stock, such payment shall be distributed pro
rata among the holders thereof based upon the number of shares of Series A
Preferred Stock held by each such holder.
(b) The amount of dividends payable for each full Dividend Period
for the Series A Preferred Stock shall be computed by multiplying the annual
dividend rate by the Liquidation Preference as of the first day of the Dividend
Period and dividing the product therefrom by four (rounding down to the nearest
cent). The amount of dividends payable for the initial Dividend Period on the
Series A Preferred Stock, or any other period shorter or longer than a full
Dividend Period on the Series A Preferred Stock shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. Holders of shares of
Series A Preferred Stock to be redeemed on a redemption date falling between the
close of business on a Dividend Payment Record Date and the opening of business
on the corresponding Dividend Payment Date shall, in lieu of receiving such
dividend on the Dividend Payment Date fixed therefor, receive such dividend
payment together with all other accrued and unpaid dividends on the date fixed
for redemption (unless such holder converts such shares in accordance with
Section 7 hereof). Holders of shares of Series A Preferred Stock shall not be
entitled to any dividends, whether payment in cash, property or securities, in
excess of the dividends on the Series A Preferred Stock provided for herein. No
interest, or sum of money in lieu of interest, shall be payable in respect of
any dividend payment or payments on the Series A Preferred Stock which are in
arrears.
(c) Notwithstanding any provision to the contrary contained
herein, the Corporation shall not be obligated or permitted to pay any dividends
on the Series A Preferred Stock to the extent that it is prohibited from doing
so under any agreements, documents or instruments related to any outstanding
indebtedness for borrowed money of the Corporation or any of its subsidiaries.
4. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for the holders of Common Stock or any other series or
class or classes of stock of the Corporation ranking junior to the Series A
Preferred Stock upon liquidation, dissolution or winding up, the holders of the
shares of Series A Preferred Stock shall be entitled to receive the greater of
(i) the then effective Liquidation Preference, plus an amount per share equal to
all dividends (whether or not or
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declared) accrued and unpaid thereon to the date of final distribution to such
holders, or (ii) the amount per share that would be distributed among the
holders of the Series A Preferred Stock and Common Stock pro rata based on the
number of shares of Common Stock held by each holder assuming conversion of all
shares of Series A Preferred Stock pursuant to Section 7. No payment on account
of any liquidation, dissolution or winding up of the Corporation shall be made
to the holders of any class or series of stock ranking on a parity with the
Series A Preferred Stock in respect of the distribution of assets upon
dissolution, liquidation or winding up unless there shall likewise be paid at
the same time to the holders of the Series A Preferred Stock like proportionate
amounts determined ratably in proportion to the full amounts to which the
holders of all outstanding shares of Series A Preferred Stock and the holders of
all outstanding shares of such parity stock are respectively entitled with
respect to such distribution. If, upon any liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds thereof,
distributable among the holders of the shares of Series A Preferred Stock shall
be insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other shares of stock ranking, as to liquidation, dissolution or
winding up, on a parity with the Series A Preferred Stock, then such assets, or
the proceeds thereof, shall be distributed among the holders of shares of Series
A Preferred Stock and any such other parity stock ratably in accordance with the
respective amounts which would be payable on such shares of Series A Preferred
Stock and any such other stock if all amounts payable thereof were paid in full.
For the purpose of this Certificate of Designation, (i) a consolidation or
merger of the Corporation with one or more corporations or other entities; (ii)
a sale, lease, exchange or transfer of all or any part of the Corporation
assets; (iii) a statutory share exchange or (iv) the transfer of the assets and
liabilities of the Corporation's dental operating division to a direct or
indirect wholly owned subsidiary of the Corporation ("PW") and the pro rata
distribution of 80% or more of PW's capital stock to the holders of the Common
Stock (the "Distribution") shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary.
(b) Subject to the rights of the holders of shares of any series
or class or classes of stock ranking on a parity with or senior to the Series A
Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of Series A Preferred Stock, as provided
in this Section 4, any other series or class or classes of stock ranking junior
to the Series A Preferred Stock upon liquidation, dissolution or winding up
shall, subject to the respective terms and provisions (if any) applying thereto,
be entitled to receive any and all assets remaining to be paid or distributed,
and the holders of Series A Preferred Stock shall not be entitled to share
therein.
(c) Written notice of any liquidation, dissolution or winding up
of the Corporation, stating the payment date or dates and the place or places
where the amounts distributable in such circumstances shall be payable, shall be
given by first class mail, postage prepaid, not less than 30 days prior to any
payment date stated therein, to the holders of record of the Series A Preferred
Stock at their respective addresses as the same shall appear on the stock record
books of the Corporation.
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5. REDEMPTION
(a) Subject to an earlier Conversion Notice, on [______], 2005
(the "Redemption Date"), the Corporation shall redeem all outstanding shares of
Series A Preferred Stock in cash at a price per share equal to the then
effective Liquidation Preference plus an amount equal to all accrued and unpaid
dividends (whether or not declared) to the Redemption Date. Prior to the
Redemption Date, the Corporation shall give the redemption notice as required by
Section 5(b) below.
If funds legally available for redemption pursuant to this Section 5(a)
shall be insufficient to redeem all of the outstanding shares of Series A
Preferred Stock, funds to the extent legally available shall be used for such
purpose and the Corporation shall effect such redemption pro rata according to
the number of outstanding shares of Series A Preferred Stock held by each holder
thereof. The redemption requirements provided hereby shall be continuous, so
that if such requirements cannot be fully discharged, without further action by
any holder of the Series A Preferred Stock, funds legally available shall be
applied therefor until such requirements are fulfilled.
(b) In the event the Corporation shall be required to redeem all
shares of Series A Preferred Stock pursuant to Section 5(a) above, the
Corporation shall give notice of redemption by first class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each holder of record of shares of Series A Preferred Stock, at such
holder's address as the same appears on the stock records of the Corporation.
Each such notice shall state: (i) the Redemption Date; (ii) the redemption price
and the method of calculation thereof; (iii) the place or places where
certificates for such shares are to be surrendered for payment of the redemption
price; (iv) the then current conversion price and the method of converting the
shares prior to the redemption date; and (v) that dividends on such shares shall
cease to accrue on such Redemption Date. If the Corporation shall fail to give
notice of redemption as required pursuant to this Section 5, then any holder
shall be entitled to do so.
On or after the Redemption Date, each holder of shares of Series A
Preferred Stock shall surrender a certificate or certificates representing the
number of shares of the Series A Preferred Stock to be redeemed as stated in the
redemption notice. If the redemption notice shall have been duly given, unless
the Corporation shall be in default in providing money for the payment of the
redemption price (including any accrued and unpaid dividends to (and including)
the Redemption Date), (i) dividends on the shares of the Series A Preferred
Stock to be redeemed shall cease to accrue on the Redemption Date, (ii) said
shares shall be deemed no longer outstanding, and (iii) all rights of the
holders thereof as stockholders of the Corporation (except the right to receive
from the Corporation the monies payable upon redemption without interest
thereon) shall cease on the Redemption Date, or if earlier, on the date
specified in the following sentence. The Corporation's obligation to provide
monies in accordance with the preceding sentence shall be deemed fulfilled if,
on or before the Redemption Date, the Corporation shall deposit with a bank or
trust company funds necessary for such redemption, in trust for the account of
the holders of the shares to be redeemed (and so as to be and continue to be
available therefor), with irrevocable instructions and authority to such bank or
trust company that such funds be applied to the redemption of the shares of
Series A Preferred Stock to be so redeemed.
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Any interest accumulated on such funds shall be paid to the Corporation from
time to time. Any funds so deposited and unclaimed at the end of two years from
the Redemption Date shall be released or repaid to the Corporation, after which,
subject to any applicable laws relating to escheat or unclaimed property, the
holder or holders of such shares of Series A Preferred Stock so called for
redemption shall look only to the Corporation for payment of the redemption
price.
Upon surrender in accordance with the notice of redemption of the
certificates for the shares so redeemed (properly endorsed or assigned for
transfer, if the Board of Directors shall so require and the notice of
redemption shall so state), such shares shall be redeemed by the Corporation at
the applicable redemption price aforesaid.
Notwithstanding the foregoing, if notice of redemption has been given
pursuant to this Section 5 and any holder of shares of Series A Preferred Stock
shall, prior to the close of business on (i) the Redemption Date, or (ii) if the
Corporation shall so elect and state in the notice of redemption, the Business
Day immediately before the date (which date shall be the Redemption Date or an
earlier date not less than 30 days after the date of mailing of the redemption
notice) on which the Corporation irrevocably deposits with a designated bank or
trust company as paying agent, money sufficient to pay, on the Redemption Date,
the redemption price for the shares of Series A Preferred Stock to be redeemed,
give a Conversion Notice with respect to any or all of the shares to be redeemed
held by such holder, then the conversion of such shares to be redeemed shall
become effective as provided in Section 7.
(c) Notwithstanding any provision to the contrary contained herein, the
Corporation shall not be obligated or permitted to redeem or otherwise acquire
any shares of Series A Preferred Stock to the extent that it is prohibited from
doing so under any agreements, documents or instruments related to any
outstanding indebtedness for borrowed money of the Corporation or any of its
subsidiaries.
6. SHARES TO BE RETIRED. All shares of Series A Preferred Stock
purchased, redeemed, exchanged or converted by the Corporation shall be retired
and cancelled and shall be restored to the status of authorized but unissued
shares of Preferred Stock, without designation as to series and may thereafter
be reissued.
7. CONVERSION. Holders of shares of Series A Preferred Stock
shall have the right to convert all or a portion of such shares (including
fractions of such shares) into shares of Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of shares of Series A Preferred Stock shall have the right,
at such holder's option, at any time to convert any of such shares (or fractions
thereof) into the number of fully paid and nonassessable shares of Common Stock
(calculated as to each conversion to the nearest 1/100th of a share) obtained by
dividing the aggregate then effective Liquidation Preference of the shares to be
converted by the Conversion Price and by surrender of such shares, such
surrender to be made in the manner provided in paragraph (b) of this Section 7;
provided, however, that the right to convert shares subject to a notice of
redemption pursuant to Section 5 hereof shall terminate at the close of business
on (i) the Redemption Date, or (ii) if the Corporation shall so elect and state
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in the notice of redemption, the Business Day immediately before the date (which
date shall be the Redemption Date or any earlier date not less than 30 days
after the date of mailing of the redemption notice) on which the Corporation
irrevocably deposits with a designated bank or trust company as paying agent,
money sufficient to pay, on the Redemption Date, the redemption price for the
shares of Series A Preferred Stock to be redeemed. If a part of a share of
Series A Preferred Stock is converted, then the Corporation will convert such
share into the appropriate number of shares of Common Stock (subject to
paragraph (c) of this Section 7) and issue a fractional share of Series A
Preferred Stock evidencing the remaining interest of such holder.
(b) In order to exercise the conversion right, the holder of each
share of Series A Preferred Stock (or fraction thereof) to be converted shall
give written notice to the Transfer Agent that the holder thereof elects to
convert Series A Preferred Stock or a specified portion thereof (the "Conversion
Notice"). Concurrently with, or as soon as practicable after, the delivery of
the Conversion Notice, the holder electing to convert shares of Series A
Preferred Stock shall surrender the certificate or certificates representing
such shares duly endorsed or assigned to the Corporation or in blank, at the
office of the Transfer Agent. Unless the shares issuable on conversion are to be
issued in the same name as the name in which such shares of Series A Preferred
Stock are registered, each share surrendered for conversion shall be accompanied
by instruments of transfer, in form satisfactory to the Corporation, duly
executed by the holder or such holder's duly authorized attorney and an amount
sufficient to pay any transfer or similar tax (or evidence reasonably
satisfactory to the Corporation demonstrating that such taxes have been paid or
are not required to be paid).
Holders of shares of Series A Preferred Stock at the close of business
on a Dividend Payment Record Date shall be entitled to receive the dividend
payable on such shares on the corresponding Dividend Payment Date (unless the
Redemption Date is between the close of business on such Dividend Payment Record
Date and the opening of business on the corresponding Dividend Payment Date in
which case, in lieu of receiving such dividend on the Dividend Payment Date
fixed therefor, the holder of such shares will receive such dividend payment
together with all other accrued and unpaid dividends on the Redemption Date,
unless such holder first converts such shares pursuant to the provisions of this
Section 7) notwithstanding the conversion thereof following such Dividend
Payment Record Date and prior to such Dividend Payment Date. However, shares of
Series A Preferred Stock surrendered for conversion during the period between
the close of business on any Dividend Payment Record Date and the opening of
business on the corresponding Dividend Payment Date must be accompanied by
payment of an amount equal to the Dividend Payment with respect to the period
ending on the Dividend Payment Date and the holder of such shares of Series A
Preferred Stock on a Dividend Payment Record Date who (or whose transferee)
tenders any such shares for conversion into shares of Common Stock on or prior
to the corresponding Dividend Payment Date will receive the entire dividend
payable by the Corporation on such shares of Series A Preferred Stock on such
date. Except as provided above, the Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
or for dividends on the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates for
shares of Series A Preferred Stock as aforesaid, the Corporation shall issue and
shall deliver at such office to such
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holder, or on such holder's written order, a certificate or certificates for the
number of shares of Common Stock issuable upon the conversion of such shares in
accordance with the provisions of this Section 7, and any fractional interest in
respect of a share of Common Stock arising upon such conversion shall be settled
as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the Conversion Notice shall have
been received by the Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates for shares of Common Stock
shall be issuable upon such conversion shall be deemed to have become the holder
or holders of record of the shares represented thereby at such time on such date
and such conversion shall be at the Conversion Price in effect at such time on
such date, unless the stock transfer books of the Corporation shall be closed on
that date, in which event such person or persons shall be deemed to have become
such holder or holders of record at the close of business on the next succeeding
day on which such stock transfer books are open, but such conversion shall be at
the Conversion Price in effect at the close of business on the date prior to the
date the Conversion Notice is received. All shares of Common Stock delivered
upon conversion of the Series A Preferred Stock will upon delivery be duly and
validly issued and fully paid and nonassessable.
(c) In connection with the conversion of any shares of Series A
Preferred Stock, fractions of such shares may be converted; however, no
fractional shares or scrip representing fractions of shares of Common Stock
shall be issued upon conversion of the Series A Preferred Stock. Instead of any
fractional interest in a share of Common Stock which would otherwise be
deliverable upon the conversion of a share of Series A Preferred Stock (or
fraction thereof), the Corporation shall pay to the holder of such share an
amount in cash (computed to the nearest cent) equal to the Closing Price of
Common Stock on the Trading Day immediately preceding the day of conversion
multiplied by the fraction of a share of Common Stock represented by such
fractional interest. If more than one share (or fraction thereof) shall be
surrendered for conversion at one time by the same holder, the number of full
shares of Common Stock issuable upon conversion thereof shall be computed on the
basis of the aggregate number of shares of Series A Preferred Stock so
surrendered.
(d) The Conversion Price shall be adjusted from time to time as
follows:
(i) In case the Corporation shall after the Issue Date
(A) pay a dividend or make a distribution on its
Common Stock in shares of its Common Stock, (B)
subdivide or split its outstanding Common Stock into
a greater number of shares, (C) combine its
outstanding Common Stock into a smaller number of
shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion
Price in effect immediately prior thereto shall be
adjusted so that the holder of any share of Series A
Preferred Stock thereafter surrendered for conversion
shall be entitled to receive the number of shares of
Common Stock of the Corporation which such holder
would have owned or have been entitled to receive
after the occurrence of any of the events described
above had such share been surrendered for conversion
immediately prior to the occurrence
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of such event or the record date therefor, whichever
is earlier. An adjustment made pursuant to this
subparagraph (i) shall become effective immediately
after the close of business on the record date for
determination of stockholders entitled to receive
such dividend or distribution in the case of a
dividend or distribution (except as provided in
paragraph (h) below) and shall become effective
immediately after the close of business on the
effective date in the case of a subdivision, split,
combination or reclassification. Any shares of Common
Stock issuable in payment of a dividend shall be
deemed to have been issued immediately prior to the
close of business on the record date for such
dividend for purposes of calculating the number of
outstanding shares of Common Stock under clauses (ii)
and (iii) below.
(ii) In case the Corporation shall issue after the Issue
Date rights or warrants to all holders of Common
Stock entitling them (for a period expiring within 45
days after the issuance date) to subscribe for or
purchase Common Stock at a price per share less than
the Current Market Price per share of Common Stock at
the record date for the determination of stockholders
entitled to receive such rights or warrants, then the
Conversion Price in effect immediately prior thereto
shall be adjusted to equal the price determined by
multiplying (A) the Conversion Price in effective
immediately prior to the date of issuance of such
rights or warrants by (B) a fraction, the numerator
of which shall be the sum of (1) the number of shares
of Common Stock outstanding on the date of issuance
of such rights or warrants (without giving effect to
any such issuance) and (2) the number of shares which
the aggregate proceeds from the exercise of such
rights or warrants for Common Stock would purchase at
such Current Market Price, and the denominator of
which shall be the sum of (1) the number of shares of
Common Stock outstanding on the date of issuance of
such rights or warrants (without giving effect to any
such issuance) and (2) the number of additional
shares of Common Stock that are subject to such
rights or warrants. Such adjustment shall be made
successively whenever any such rights or warrants are
issued, and shall become effective immediately after
such record date. In determining whether any rights
or warrants entitle the holders of Common Stock to
subscribe for or purchase shares of Common Stock at
less than such Current Market Price, there shall be
taken into account the Fair Market Value of any
consideration received by the Corporation upon
issuance and upon exercise of such rights or
warrants.
(iii) In case the Corporation shall pay a dividend or make
a distribution to all holders of its Common Stock
after the Issue Date of any shares of capital stock
of the Corporation or its subsidiaries (other than
Common Stock) or evidences of its indebtedness or
assets (excluding cash dividends payable solely in
cash that may from time to time be fixed by the Board
of Directors, or dividends or distributions in
connection with the liquidation,
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12
dissolution or winding up of the Corporation) or
rights or warrants to subscribe for or purchase any
of its securities or those of its subsidiaries
(excluding those referred to in subparagraph (ii)
above) (any of the foregoing being hereinafter in
this subparagraph (iii) called the "Securities"),
then in each such case, the Conversion Price shall be
adjusted so that it shall equal the price determined
by multiplying (A) the Conversion Price in effect on
the record date mentioned below by (B) a fraction,
the numerator of which shall be the Current Market
Price per share of the Common Stock on the record
date mentioned below less the then Fair Market Value
as of such record date of the portion of the capital
stock or assets or evidences of indebtedness so
distributed or of such rights or warrants applicable
to one share of Common Stock, and the denominator of
which shall be the Current Market Price per share of
the Common Stock on such record date; provided,
however, that in the event the then Fair Market Value
(as so determined) of the portion of Securities so
distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price
per share of Common Stock on the record date
mentioned above, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder
of shares of Series A Preferred Stock shall have the
right to receive the amount and kind of Securities
such holder would have received had such holder
converted each such share of Series A Preferred Stock
immediately prior to the record date for the
distribution of the Securities. Such adjustment shall
become effective immediately, except as provided in
paragraph (h) below, after the record date for the
determination of stockholders entitled to receive
such distribution.
(iv) Notwithstanding anything in subparagraphs (ii) and
(iii) above, if rights or warrants the distribution
of which results an adjustment under either of such
subparagraphs shall by their terms provide for an
increase or increases with the passage of time or
otherwise in the price payable to the Corporation
upon the exercise thereof, the Conversion Price upon
any such increase becoming effective shall forthwith
be readjusted (but to no greater extent than
originally adjusted by reason of such issuance or
sale) to reflect the same. Upon the expiration or
termination of such rights or warrants, if any such
rights or warrants shall not have been exercised,
then the Conversion Price shall forthwith be
readjusted and thereafter be the rate which it would
have been had an adjustment been made on the basis
that (A) the only rights or warrants so issued or
sold were those so exercised and they were issued or
sold for the consideration actually received by the
Corporation upon such exercise plus the
consideration, if any, actually received by the
Corporation for the granting of all such options,
rights or warrants whether or not exercised and (B)
the Corporation issued and sold a number of shares of
Common Stock equal to those actually issued upon
exercise of such rights, and such shares were issued
and sold for a consideration equal to the aggregate
exercise price in
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13
effect under the exercise rights actually exercised
at the respective dates of their exercise. For
purposes of subparagraphs (ii) and (iii), the
aggregate consideration received by the Corporation
in connection with the issuance of shares of Common
Stock or of rights or warrants shall be deemed to be
equal to the sum of the aggregate offering price
(before deduction of underwriting discounts or
commissions and expenses payable to third parties) of
all such securities plus the minimum aggregate
amount, if any, payable upon the exercise of such
rights or warrants into shares of Common Stock.
(v) In case the Corporation shall, by dividend or
otherwise, at any time distribute to all holders of
the Common Stock cash (excluding any cash that is
distributed as part of a distribution referred to in
subparagraph (iii) above or in connection with a
transaction to which paragraph (e) of this Section 7
applies) in an aggregate amount that, together with
(A) the aggregate amount of any other distributions
to all holders of the Common Stock made exclusively
in cash within the 12 months preceding the date fixed
for the determination of stockholders entitled to
such distribution and in respect of which no
Conversion Price adjustment pursuant to subparagraph
(iii) above or this subparagraph (v) has been made
previously and (B) the aggregate of any cash plus the
Fair Market Value as of such date of determination of
consideration payable in respect of any tender or
exchange offer by the Corporation or a subsidiary for
all or any portion of the Common Stock consummated
within 12 months preceding such date of determination
and in respect of which no Conversion Price
adjustment pursuant to subparagraph (vi) below has
been made previously, exceeds the greater of (A) 1%
of the product of the Current Market Price per share
of Common Stock on such date of determination
multiplied by the number of shares of Common Stock
outstanding on such date or (B) 5% of the net income
of the Corporation reported for the 12 month period
ending with the fiscal quarter next preceding such
payment, then in each such case the Conversion Price
shall be reduced so that it shall equal the price
obtained by multiplying the Conversion Price in
effect immediately prior to the close of business on
such date of determination by a fraction of which the
numerator shall be the Current Market Price per share
of Common Stock on such date less the amount of cash
to be distributed at such time applicable to one
share of Common Stock and the denominator shall be
such Current Market Price, such reduction to become
effective immediately prior to the opening of
business on the day after such 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
per share of Common Stock on the record date
mentioned above, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder
of shares of Series A Preferred Stock shall have the
right to receive the amount of cash such holder would
have
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14
received had such holder converted each such share of
Series A Preferred Stock immediately prior to the
record date for such distribution.
(vi) In case a tender or exchange offer made by the
Corporation or any subsidiary for all or any portion
of the Common Stock shall be consummated and such
tender or exchange offer shall involve an aggregate
consideration having a Fair Market Value as of the
last time (the "Expiration Time") that tenders or
exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that,
together with (A) the aggregate of the cash plus the
Fair Market Value as of the Expiration Time of the
other consideration paid in respect of any other
tender or exchange offer by the Corporation or a
subsidiary for all or any portion of the Common Stock
consummated within the 12 months preceding the
Expiration Time and in respect of which no Conversion
Price adjustment pursuant to this subparagraph (vi)
has been made previously and (B) the aggregate amount
of any distributions to all holders of the Common
Stock made exclusively in cash within the 12 months
preceding the Expiration Time and in respect of which
no Conversion Price adjustment pursuant to
subparagraphs (iii) or (v) above has been made
previously, exceeds the greater of (A) 1% of the
product of the Current Market Price per share of
Common Stock on such date of determination multiplied
by the number of shares of Common Stock outstanding
on such date or (B) 5% of the net income of the
Corporation reported for the 12 month period ending
with the fiscal quarter next preceding such payment,
then in each such case the Conversion Price shall be
reduced so that it shall equal the price obtained by
multiplying the Conversion Price in effect
immediately prior the Expiration Time by a fraction
of which the numerator shall be (x) the product of
the Current Market Price per share of Common Stock
immediately prior to the Expiration Time multiplied
by the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) at the
Expiration Time minus (y) the Fair Market Value of
the aggregate consideration payable to stockholders
upon consummation of such tender or exchange offer
and the denominator shall be the product of (A) such
Current Market Price multiplied by (B) such number of
outstanding shares at the Expiration Time minus the
number of shares accepted for payment in such tender
or exchange offer (the "Purchased Shares"), such
reduction to become effective immediately prior to
the opening of business on the day following the
Expiration Time; provided, however, that if the
number of Purchased Shares or the aggregate
consideration payable therefor have not been finally
determined by such opening of business, the
adjustment required by this subparagraph (vi) shall,
pending such final determination, be made based upon
the preliminarily announced results of such tender or
exchange offer, and, after such final determination
shall have been made, the adjustment required by this
subparagraph (vi) shall be made based
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15
upon the number of Purchased Shares and the aggregate
consideration payable therefore as so finally
determined.
(vii) No adjustment in the Conversion Price shall be
required unless such adjustment would require an
increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by
reason of this subparagraph (vii) are not required to
be made shall be carried forward and taken into
account in any subsequent adjustment; and provided,
however, that any adjustment shall be required and
shall be made in accordance with the provisions of
this Section 7 (other than this subparagraph (vii))
not later than such time as may be required in order
to preserve the tax-free nature of a distribution to
the holders of shares of Common Stock. All
calculations under this Section 7 shall be made to
the nearest cent (with $.005 being rounded upward) or
to the nearest 1/100th of a share (with .005 of a
share being rounded upward), as the case may be.
Notwithstanding anything in this paragraph (d) to the
contrary, the Corporation shall be entitled, to the
extent permitted by law, to make such reductions in
the Conversion Price, in addition to those required
by this paragraph (d), as it in its discretion shall
determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of
rights or warrants to purchase stock or securities,
or a distribution of other assets or any other
transaction which could be treated as any of the
foregoing transactions pursuant to Section 305 of the
Internal Revenue Code of 1986, as amended, hereafter
made by the Corporation to its stockholders shall not
be taxable for such stockholders.
Notwithstanding the foregoing, the Distribution will not result in a
Conversion Price adjustment.
(e) Without the vote or consent of the holders of a majority of
the then outstanding shares of Series A Preferred Stock, the Corporation may not
consolidate or merge with or into, or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its assets to, any Person (each
of the foregoing being referred to as a "Transaction") unless (i) if the
Corporation is the surviving or continuing Person, the Series A Preferred Stock
shall remain outstanding without any amendment that would adversely affect the
preferences, rights or powers of the Series A Preferred Stock, provided that the
Series A Preferred Stock will thereafter no longer be subject to conversion into
Common Stock pursuant to Section 7, but each share of Series A Preferred Stock
instead shall be convertible into the kind of shares of stock and other
securities and property receivable (including cash) upon the consummation of
such Transaction by a holder of that number of shares or fractions thereof of
Common Stock into which one share of Series A Preferred Stock was convertible
immediately prior to such Transaction with the amount of shares of stock and
other securities and property to be received determined based upon the
Conversion Price and Liquidation Preference on the date of conversion, (ii) if
the Corporation is not the surviving or continuing person, (a) the entity formed
by such consolidation or merger or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made (in any such case,
the "resulting entity") is a corporation
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16
organized and existing under the laws of any State of the United States; and (b)
the shares of Series A Preferred Stock are converted into or exchanged for and
become shares of such resulting entity, having in respect of such resulting
entity the same (or more favorable) powers, preferences and relative,
participating, optional or other special rights that the shares of Series A
Preferred Stock had immediately prior to such Transaction, provided that the
Series A Preferred Stock will thereafter no longer be subject to conversion into
Common Stock pursuant to Section 7, but instead each share of Series A Preferred
Stock shall be convertible into the kind of shares of stock and other securities
and property receivable (including cash) upon the consummation of such
Transaction by a holder of that number of shares or fractions thereof of Common
Stock into which one share of Series A Preferred Stock was convertible
immediately prior to such Transaction with the amount of shares of stock and
other securities and property to be received determined based upon the
Conversion Price and Liquidation Preference on the date of conversion; and (iii)
the Corporation shall have delivered to the Transfer Agent an Officers'
Certificate and an opinion of counsel, reasonably satisfactory in form and
content, each stating that such consolidation, merger, conveyance or transfer
complies with this Section 7 and that all conditions precedent herein provided
for relating to such transaction have been complied with. The provisions of this
paragraph (e) shall similarly apply to successive Transactions. The provisions
of this paragraph (e) shall not apply to the Distribution.
(f) If:
(i) the Corporation shall declare a dividend (or any
other distribution) on the Common Stock that would
cause an adjustment to the Conversion Price of the
Series A Preferred Stock pursuant to the terms of any
of the paragraphs above (including such an adjustment
that would occur but for the terms of the first
sentence of subparagraph (d)(vii) above); or
(ii) the Corporation shall authorize the granting to the
holders of the Common Stock of rights or warrants to
subscribe for or purchase any shares of any class or
any other rights or warrants; or
(iii) there shall be any reclassification or change of the
Common Stock (other than an event to which paragraph
(d)(i) of this Section 7 applies);
(iv) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation; or
(v) the Corporation or any subsidiary shall commence a
tender offer or exchange offer for all or a portion
of its Common Stock;
then, the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of shares of the Series A Preferred Stock at
their addresses as shown on the stock records of the Corporation, as promptly as
possible, but at least 30 days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution or granting of 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
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17
dividend, distribution or rights or warrants are to be determined or (B) the
date on which such reclassification, change, dissolution, liquidation or winding
up is expected to become effective or occur or the expiration date of any such
tender offer or exchange offer, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, dissolution, liquidation or winding up.
(g) Whenever the Conversion Price is adjusted as herein provided,
the Corporation shall promptly file with the Transfer Agent an officers'
certificate signed by the President or a Vice President and the Chief Financial
Officer or the Secretary setting forth the Conversion Price after such
adjustment, the method of calculation thereof and setting forth a brief
statement of the facts requiring such adjustment and upon which such adjustments
are based. Promptly after delivery of such certificate, the Corporation shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price, the facts requiring such adjustment and upon which
such adjustments are based and the date on which such adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to the holder of each share of Series A Preferred Stock at such holder's last
address as shown on the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7 provides
that an adjustment shall become effective immediately after a record date for an
event and the date fixed for conversion pursuant to Section 7 occurs after such
record date but before the occurrence of such event, the Corporation may defer
until the actual occurrence of such event (i) issuing to the holder of any share
of Series A Preferred Stock surrendered for conversion 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 paragraph (c) of this Section
7.
(i) For purposes of this Section 7, the number of shares of Common
Stock at any time outstanding shall not include any shares of Common Stock then
owned or held by or for the account of the Corporation or any corporation
controlled by the Corporation.
(j) There shall be no adjustment of the Conversion Price in case
of the issuance of any stock of the Corporation in a reorganization, acquisition
or other similar transaction except as specifically set forth in this Section 7.
If any action or transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section 7, only one adjustment shall
be made and such adjustment shall be the amount of adjustment which results in
the lowest Conversion Price.
(k) If the Corporation shall take any action affecting the Common
Stock, other than action described in this Section 7, which in the opinion of
the Board of Directors would materially adversely affect the conversion rights
of the holders of the shares of Series A Preferred Stock, the Conversion Price
for the Series A Preferred Stock may be adjusted, to the extent permitted by
law, in such manner, if any, and at such time, as the Board of Directors may
determine to be equitable in the circumstances.
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18
(l) The Corporation covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its issued shares of Common
Stock held in its treasury, or both, for the purpose of effecting conversion of
the Series A Preferred Stock, the full number of shares of Common Stock
deliverable upon the conversion of all outstanding shares of Series A Preferred
Stock not theretofore converted. For purposes of this paragraph (1), the number
of shares of Common Stock which shall be deliverable upon the conversion of all
outstanding shares of Series A Preferred Stock shall be computed as if at the
time of computation all such outstanding shares were held by a single holder.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value of the shares of Common Stock
deliverable upon conversion of the Series A Preferred Stock, the Corporation
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Corporation may validly and legally issue fully paid
and nonassessable shares of Common Stock at such adjusted Conversion Price.
(m) The Corporation will pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or delivery of
the shares of Series A Preferred Stock (or any other securities issued on
account of the Series A Preferred Stock pursuant hereto) or shares of Common
Stock on conversion of the Series A Preferred Stock pursuant hereto; provided,
however, that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issue or delivery of shares
of Series A Preferred Stock (or any other securities issued on account of the
Series A Preferred Stock pursuant hereto) or shares of Common Stock in a name
other than the name in which the shares of Series A Preferred Stock with respect
to which such Common Stock shares are issued were registered and the Corporation
shall not be required to make any issue or delivery unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any
such tax or has established, to the reasonable satisfaction of the Corporation,
that such tax has been paid or is not required to be paid.
(n) The Corporation shall not take any action which results in
adjustment of the number of shares of Common Stock issuable upon conversion of a
share of Series A Preferred Stock if the total number of shares of Common Stock
issuable after such action upon conversion of the Series A Preferred Stock then
outstanding, together with the total number of shares of Common Stock then
outstanding, would exceed the total number of shares of Common Stock then
authorized under the Corporation's Certificate of Incorporation. Subject to the
foregoing, the Corporation shall take all such actions as it may deem reasonable
under the circumstances to provide for the issuance of such number of shares of
Common Stock as would be necessary to allow for the conversion from time to
time, and taking into account adjustments as herein provided, of outstanding
shares of the Series A Preferred Stock in accordance with the terms and
provisions of the Corporation's Certificate of Incorporation.
8. RANKING. Any class or series of stock of the Corporation shall
be deemed to rank:
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19
(i) senior to the Series A Preferred Stock, as to
dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, if the terms
of any class or series of stock expressly provide
that such class or series rank senior to the Series A
Preferred Stock as to receipt of dividends or of
amounts distributable upon liquidation, dissolution
or winding up;
(ii) on a parity with the Series A Preferred Stock, as to
dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, whether or
not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be
different from those of the Series A Preferred Stock,
if the terms of any class or series of stock
expressly provide that such class or series rank on
parity with the Series A Preferred Stock as to
receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up;
(iii) junior to the Series A Preferred Stock, as to
dividends or as to the distribution of assets upon
liquidation, dissolution or winding up, if the terms
of any class or series of stock expressly provide
that such class or series rank junior to the Series A
Preferred Stock as to receipt of dividends or of
amounts distributable upon liquidation, dissolution
or winding up.
9. VOTING. Except as herein provided or as otherwise from time to
time required by law, each holder of shares of Series A Preferred Stock shall be
entitled to vote on all matters and shall be entitled to such number of votes as
is equal to the largest number of full shares of Common Stock into which the
shares of Series A Preferred Stock held by such holder could be converted,
pursuant to and as determined under Section 7 herein, on the record date for the
determination of stockholders entitled to vote on such matters or, if no record
date is established, on the date such vote is taken or any written consent of
stockholders is solicited. Except as required by law or otherwise expressly
provided herein, shares of Series A Preferred Stock and shares of Common Stock
shall be voted together as a single class and not as separate classes.
10. AUTOMATIC EXCHANGE. Upon consummation of the Distribution,
each outstanding share of Series A Preferred Stock will automatically be
exchanged for ten shares of PW series A convertible redeemable preferred stock
(the "PW Series A Preferred Stock"). The PW Series A Preferred Stock, in the
aggregate, will be convertible into that number of shares of the common stock of
PW, par value $0.001 per share (the "PW Common Stock"), equal to the product of
(A) the quotient from (i) the number of outstanding shares of PW Series A
Preferred Stock issued upon the exchange of the Series A Preferred Stock
pursuant to this Section 10 (the "Exchanged Shares") divided by (ii) 10,000,000,
multiplied by (B) the product of (i) 0.015 multiplied by (ii) the Fully Diluted
PW Common Stock (as defined below). Therefore, each share of PW Series A
Preferred Stock will be convertible into that number of shares of PW Common
Stock equal to the quotient from (A) the aggregate number of shares of PW Common
Stock issuable upon the conversion of all of the PW Series A Preferred Stock
derived in the previous sentence, divided by (B) the number of Exchanged Shares.
"Fully Diluted PW Common Stock" for purposes hereof shall mean all shares of PW
Common Stock outstanding immediately after the Distribution; all shares of PW
Common Stock issuable upon the exercise of options, warrants or
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20
other rights to acquire PW Common Stock outstanding immediately after the
Distribution not held by employees, officers, directors and consultants of PW,
assuming all such options, warrants or other rights to acquire PW Common Stock
are fully exercised at such time regardless of when such options, warrants or
other rights to acquire PW Common Stock are actually exercisable; and all shares
of PW Common Stock issuable upon the conversion of all PW preferred stock
(including the PW Series A Preferred Stock), assuming the conversion of all such
PW preferred stock at such time regardless of when such PW preferred stock is
actually convertible.
For each share of Series A Preferred Stock exchanged for shares of PW
Series A Preferred Stock pursuant to this Section 10, the record holder thereof
on the date of the Distribution shall receive, in lieu of receiving the dividend
normally payable on the next Dividend Payment Date fixed therefor, a dividend
payment equal to the accrued and unpaid dividends on such share of Series A
Preferred Stock to the date of the Distribution from the Corporation on the date
of the exchange.
The initial Liquidation Preference of the PW Series Preferred Stock
shall be equal to the Liquidation Preference of the Series A Preferred Stock in
effect on the date of the Distribution divided by ten. The initial Conversion
Price of the PW Series Preferred Stock shall be equal to the Conversion Price of
the Series A Preferred Stock in effect on the date of the Distribution divided
by ten. The PW Series A Preferred Stock shall otherwise have designations,
rights and preferences substantially identical to the designations, rights and
preferences set forth herein for the Series A Preferred Stock, except as
necessary to affect the foregoing.
11. RECORD HOLDERS. The Corporation and the Transfer Agent may
deem and treat the record holder of any shares of Series A Preferred Stock as
the true and lawful owner thereof for all purposes, and neither the Corporation
nor the Transfer Agent shall be affected by any notice to the contrary.
12. NOTICE. Except as may otherwise be provided for herein, all
notices referred to herein shall be in writing. The notices contemplated in
Section 7(b) shall be deemed to have been given upon receipt. In all other
cases, notices hereunder shall be deemed to have been given upon the earlier of
receipt of such notice or three business days after the mailing of such notice
if sent by registered mail (unless first class mail shall be specifically
permitted for such notice under the terms of this Certificate) with postage
prepaid, addressed: if to the Corporation, to its offices at 1765 The Exchange,
Suite 200, Atlanta, Georgia 30339 (Attention: Chief Financial Officer) or other
agent of the Corporation designated as permitted by this Certificate, or, if to
any holder of the Series A Preferred Stock, to such holder at the address of
such holder of the Series A Preferred Stock as listed in the stock record books
of the Corporation (which may include the records of any transfer agent for the
Series A Preferred Stock); or to such other address as the Corporation or
holder, as the case may be, shall have designated by notice similarly given.
13. SEC REPORTS; REPORTS BY THE CORPORATION. So long as any shares
of Series A Preferred Stock are outstanding, the Corporation shall file with the
SEC and, within 15 days after it files them with the SEC, with the Transfer
Agent and, if requested, furnish to each holder of
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21
shares of Series A Preferred Stock all annual and quarterly reports and the
information, documents, and other reports that the Corporation is required to
file with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act ("SEC
Reports"). In the event the Corporation is not required or shall cease to be
required to file SEC Reports pursuant to the Exchange Act, the Corporation will
furnish the Transfer Agent and, if requested, furnish to each holder of shares
of Series A Preferred Stock annual and quarterly financial information
substantially similar (including audited annual financial statements) to that
required to be provided in reports filed with the SEC.
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IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
the [__] day of [_____], 2000.
INFOCURE CORPORATION
By:
-------------------------------------
Fredrick L. Fine
President and Chief Executive Officer
ATTEST:
By:
---------------------------
James K. Price
Secretary
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