EXHIBIT 2.1
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FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
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This First Amendment (the "FIRST AMENDMENT") to that certain Agreement and
Plan of Merger (the "MERGER AGREEMENT"), dated as of June 20, 2005, by and among
Clinical Data, Inc., a Delaware corporation ("PARENT"), Safari Acquisition
Corporation, a Delaware corporation and wholly-owned subsidiary of Parent
("TRANSITORY SUBSIDIARY"), and Genaissance Pharmaceuticals, Inc., a Delaware
corporation (the "COMPANY"), hereby amends the Merger Agreement effective as of
this 28th day of July, 2005, as follows:
WHEREAS, pursuant to Section 1.4 of the Merger Agreement, Parent agreed to
cause its Certificate of Incorporation to be amended by the filing of a
Certificate of Designations designating a new series of its preferred stock,
$.01 par value per share, with the rights, preferences and privileges as set
forth in the Terms of Parent Series A Preferred Stock attached as Exhibit C
thereto;
WHEREAS, the parties seek to amend and restate the terms of the Parent
Preferred Stock as set forth in Exhibit C of the Merger Agreement;
NOW THEREFORE, in consideration of the covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby mutually acknowledged, the parties hereto
covenant and agree as follows:
1. All capitalized terms not otherwise defined herein shall have their
respective meanings as defined in the Merger Agreement.
2. Exhibit C of the Merger Agreement is hereby deleted in its entirety
and is replaced by Exhibit C in the form attached hereto.
3. The Merger Agreement shall remain in full force and effect pursuant to
its terms as amended hereby.
4. This First Amendment to Merger Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and
the same instrument, and each of the parties hereto may execute this
First Amendment to Agreement and Plan of Merger by signing any of such
counterparts.
* * * * *
IN WITNESS WHEREOF, Parent, Safari and Genaissance have executed this
First Amendment to Agreement and Plan of Merger as of the date first above
mentioned.
CLINICAL DATA, INC.
By: /s/ Israel M. Stein
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Name: Israel M. Stein, M.D.
Title: Director, President and Chief
Executive Officer
SAFARI ACQUISITION CORPORATION
By: /s/ Israel M. Stein
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Name: Israel M. Stein, M.D.
Title: President and Chief Executive Officer
GENAISSANCE PHARMACEUTICALS, INC.
By: /s/ Ben D. Kaplan
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Name: Ben D. Kaplan
Title: Senior Vice President and Chief
Financial Officer
EXHIBIT C
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AMENDED AND RESTATED
TERMS OF SERIES A PREFERRED STOCK
OF
CLINICAL DATA, INC.
1. Designation, Par Value and Number. A total of 484,070 shares of the
authorized but undesignated Preferred Stock of the Corporation are hereby
designated as "Series A Preferred Stock" and constituted as a series of
preferred stock, having a par value of $.01 per share (the "SERIES A PREFERRED
STOCK"). In accordance with the terms hereof, each share of Series A Preferred
Stock shall have the same relative rights as and be identical in all respects
with each other share of Series A Preferred Stock.
2. Dividends. To the extent permitted under the Delaware General
Corporation Law, the Corporation shall pay dividends to the holders of the
Series A Preferred Stock as provided in this Section 2.
(a) General. Dividends on each issued and outstanding share of Series
A Preferred Stock shall accrue at a rate of 2% per annum (subject to Section
4(c)), on the Accreted Value of such share of Series A Preferred Stock as of the
immediately preceding Dividend Payment Date (or, for the initial Dividend
Period, as of the Original Issuance Date) from and including the Original
Issuance Date of such share of Series A Preferred Stock to and including the
first to occur of (i) the date on which the Liquidation Value or the Make Whole
Redemption Price of such share of Series A Preferred Stock is paid to the holder
thereof in accordance with Section 4, or (ii) the date on which such share of
Series A Preferred Stock is converted into shares of Common in accordance with
Section 5 (in which case, any accrued dividends shall then be forfeited). Such
dividends shall accrue whether or not they have been declared and whether or not
there are profits, surplus or other funds of the Corporation legally available
for the payment of dividends, and such dividends shall be cumulative such that
all accrued and unpaid dividends shall be fully paid or declared before any
dividends may be made with respect to any Junior Securities. Dividends shall
accrue on a daily basis (computed on the basis of a 365-day year).
(b) Payment of Dividends. The Corporation shall pay, out of funds
legally available therefor, any accrued dividends in respect of each share of
Series A Preferred Stock semi-annually in arrears on January 5 and July 5 of
each year (each such date being a "DIVIDEND PAYMENT DATE" and each such
semi-annual period ending on such Dividend Payment Date being a "DIVIDEND
PERIOD"). Each such dividend shall be payable to the holders of record of shares
of Series A Preferred Stock on December 15 and June 15, respectively, as they
appear on the stock records of the Corporation at the close of business on such
record date. An amount equal to any such accrued dividends not paid with respect
to any Dividend Period shall be added to the Accreted Value of the Series A
Preferred Stock; provided, that, any such amounts shall remain as accrued and
unpaid dividends for all purposes hereunder notwithstanding such amounts being
added to the Accreted Value. Such increased Accreted Value after each Dividend
Period shall be
used for purposes of calculating dividends for succeeding Dividend Periods
(except to the extent any such accrued dividends included in the Accreted Value
are subsequently declared and paid).
(c) Distribution of Partial Dividend Payments. 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 of the outstanding shares of Series A Preferred Stock
based upon the aggregate dividends accrued and payable on such outstanding
shares of Series A Preferred Stock held by each such holder.
(d) Treatment of Accrued and Unpaid Dividends Upon Conversion. Upon
any conversion of shares of Series A Preferred Stock into Common in accordance
with Section 5, any accrued and unpaid dividends on the Series A Preferred Stock
shall be forfeited.
(e) Participation in Common Dividends. In the event that the
Corporation declares or pays a dividend or makes any cash distribution (or
distribution in kind of assets) on the Common, then the holders of the
outstanding shares of Series A Preferred Stock (based on the number of shares of
Common into which such shares of Series A Preferred Stock are convertible as of
the record date for such dividend or distribution) and the holders of the Common
shall share pro rata in such dividend or distribution.
(f) Partial Dividend Period. Dividends payable on the shares of Series
A Preferred Stock for any period less than a full Dividend Period shall be
computed on the basis of a 365-day year and the actual number of days elapsed in
the period for which such dividend is payable.
3. Voting Rights.
(a) General. The holders of the Series A Preferred Stock shall be
entitled to notice of all stockholders meetings in accordance with the Bylaws of
the Corporation, and except as otherwise required by applicable law or in this
Section 3, the holders of the Series A Preferred Stock shall be entitled to vote
on all matters submitted to the stockholders of the Corporation for a vote,
voting as a single class with the Common, with the holders of Series A Preferred
Stock entitled to one vote for each share of Series A Preferred Stock held
(without regard to the number of shares of Common into which each share of
Series A Preferred Stock would then be convertible) as of the record date for
such vote or, if no record date is specified, as of the date of such vote or
date of any written consent, as the case may be; provided, however, that
notwithstanding anything to the contrary herein, upon conversion, each share of
Common issued shall be entitled to one vote per share.
(b) Special Series A Preferred Stock Restrictions. In addition to the
voting rights contained in Section 3(a) or as otherwise required by applicable
law, so long as the original holder of the Series A Preferred Stock or its
affiliated entities own in the aggregate at least 125,000 shares of Series A
Preferred Stock (as adjusted for any stock split, stock dividend,
recapitalization or otherwise), the Corporation shall not, without the vote or
written consent of holders of 66-2/3's of the shares of Series A Preferred Stock
then outstanding (the "SUPERMAJORITY PREFERRED HOLDERS") alter or change the
rights, preferences or privileges of the Series A Preferred Stock, including any
increase in the number of authorized shares of Series A
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Preferred Stock, whether as a result of any amendment, repeal, modification or
supplement to any provision of the Certificate of Incorporation of the
Corporation, as amended, this Certificate of Designation or the Bylaws of the
Corporation, or by merger, consolidation or otherwise.
4. Liquidity Events.
(a) Significant Event. Upon any Significant Event:
(i) Each holder of Series A Preferred Stock shall be entitled to
receive for each share of Series A Preferred Stock held by such holder
immediately prior to such Significant Event, prior and in preference to any
distribution or payment made upon or with respect to any Junior Securities,
irrespective of whether such distribution or payment is made by the Corporation
or any other Person, an amount (the "LIQUIDATION VALUE") equal to either (A)(1)
the Original Issue Price of such share of Series A Preferred Stock on the date
of distribution or payment plus (2) all dividends (whether or not declared)
accrued but unpaid on such share of Series A Preferred Stock, or (B) if elected
by the vote or written consent of the Supermajority Preferred Holders, the
amount to which the holder of such share of Series A Preferred Stock would be
entitled assuming all of the shares of Series A Preferred Stock had been
converted into shares of Common in accordance with Section 5(a)(i) immediately
prior to such Significant Event (the "AS CONVERTED VALUE"). If upon any
Significant Event the assets and/or proceeds to be distributed to the holders of
the Series A Preferred Stock are insufficient to permit payment to such holders
of the aggregate amount which they are entitled to receive under Section
4(a)(i)(A), then the entire amount of assets and/or proceeds available to the
Corporation's stockholders upon such Significant Event shall be distributed pro
rata among such holders of the Series A Preferred Stock based upon the aggregate
amounts due to each such holder with respect to such shares of Series A
Preferred Stock if such assets and/or proceeds were sufficient to permit payment
in full.
(ii) With respect to any Significant Event involving the
Corporation's merger, consolidation or similar transaction, except as otherwise
consented to by the Supermajority Preferred Holders, the Corporation shall not
effect such Significant Event unless the agreement or plan of merger or
consolidation or other applicable agreement provides that the consideration
payable to the stockholders of the Corporation shall be allocated among the
holders of capital stock of the Corporation in accordance with the priorities
set forth in this Section 4(a).
(iii) After the payment and/or distribution to the holders of the
Series A Preferred Stock of the amounts set forth in Section 4(a)(i), the
holders of the Series A Preferred Stock shall not be entitled to any further
payment or distribution.
(iv) The Liquidation Value shall in all events be paid in cash
and/or securities, depending on the form of consideration payable to the
Corporation's stockholders as set forth in the applicable documents and
agreements effecting any Significant Event; provided, however, that if the
applicable Liquidation Value for the Series A Preferred Stock is payable in
connection with a merger, consolidation or sale of capital stock in which the
consideration is not cash, then the consideration (including any shares of
capital stock to be delivered by the acquiring corporation) payable to the
holders of Common and Series A Preferred Stock in connection with such
transaction shall be allocated or reallocated, as applicable, among the
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holders of Common and the Series A Preferred Stock (of all outstanding series)
in an appropriate and equitable manner to give economic effect to the priority
of distributions between the holders of Common and Preferred Stock in accordance
with this Section and the Corporation's Certificate of Incorporation, as
amended. The foregoing allocation to the holders of Series A Preferred Stock
shall apply notwithstanding that, pursuant to the terms of the Significant
Event, consideration is only allocated to the holders of Common, it being the
intention of this Section 4 that, if a Significant Event is to be treated as a
liquidation, holders of Common shall not be entitled to any payment until the
holders of outstanding Preferred Stock (of all series) have received their
applicable liquidation preference amounts or elected the benefits of the As
Converted Value under Section 4(a)(i)(B). If there is more than one form of
consideration payable in connection with the Significant Event, such
consideration shall be allocated proportionately to the holders of Preferred
Stock (of all series) and Common based on the amount to which each such holder
of each class or series is entitled.
(b) Form of Consideration. Whenever the distribution provided for in
this Section 4 shall be payable in property other than cash, the value of such
distribution shall be the Fair Market Value of such property.
(c) Mandatory Redemption Upon Certain Significant Events. If a
Significant Event occurs prior to the fifth anniversary of the Closing Date,
then, unless the Supermajority Preferred Holders elect otherwise to receive the
As Converted Value, the Corporation shall redeem each then outstanding share of
Series A Preferred Stock at a per share purchase price equal to the sum of (i)
the Accreted Value of such shares of Series A Preferred Stock on the date of
redemption, plus (ii) all dividends (whether or not declared) accrued since the
end of the previous Dividend Period on such share of Series A Preferred Stock,
plus (iii) the sum of the remaining dividends that would have accrued and/or
been payable on one share of Series A Preferred Stock pursuant to Section 2 from
the date of redemption pursuant to this Section 4(c) through the fifth
anniversary of the Closing Date had such share of Series A Preferred Stock not
been so redeemed (the sum of clauses (i), (ii) and (iii) being referred to
herein as the "MAKE-WHOLE REDEMPTION PRICE"). If the Corporation (or its
successor with respect to any Significant Event) does not have sufficient funds
legally available to redeem on any redemption date all shares of Series A
Preferred Stock, the Corporation (or its successor) shall redeem a pro rata
portion of each holder's shares of such stock out of funds legally available
therefor, based on the respective amounts which would otherwise be payable in
respect of the shares to be redeemed if the legally available funds were
sufficient to redeem all such shares, and shall redeem the remaining shares to
have been redeemed as soon as practicable after the Corporation (or its
successor) has funds legally available therefor; provided, that, with respect to
any shares of Series A Preferred Stock that were to have been redeemed and are
not, the Make-Whole Redemption Price shall be re-calculated such that with
respect to the remaining dividends determined in accordance with clause (iii) of
this Section 4(c), the dividend rate shall be increased to 10% per annum for
purposes of Section 2(a) for any shares of Series A Preferred Stock that are not
so redeemed.
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5. Conversion.
(a) Conversion Procedures.
(i) Subject to Section 5(c), at any time and from time to time, a
holder of Series A Preferred Stock shall have the right to convert any share(s)
of Series A Preferred Stock into the number of shares of Common computed by
dividing (X) the Original Issue Price by (Y) the Conversion Price then in effect
for such share of Series A Preferred Stock (such quotient being the "Ordinary
Conversion Amount"); provided, however, that after the third anniversary of the
Closing Date, any share(s) of Series A Preferred Stock shall be convertible into
a number of shares of Common computed by dividing (A) the Original Issue Price
by (B) the average Market Price for the 10 consecutive Trading Days before the
delivery to the office of the Corporation or any transfer agent of the written
notice of election to convert if such amount is greater than the Ordinary
Conversion Amount.
(ii) Each conversion of Series A Preferred Stock pursuant to
Section 5(a) shall be effected by delivery, to the office of the Corporation or
to any transfer agent for such shares, of (A) duly endorsed certificates for the
shares being converted and (B) written notice to the Corporation that the holder
elects to convert such shares. Conversion pursuant to Section 5(a) shall be
deemed to occur immediately prior to the close of business on the date the
certificates and notice are delivered. At the time any such conversion has been
effected, the rights of the holders of shares of Series A Preferred Stock so
converted shall cease with respect to such converted shares of Series A
Preferred Stock, and such holders entitled to receive Common upon conversion of
such Series A Preferred Stock shall be treated for all purposes as the record
holders of such shares of Common on the date conversion is deemed to have been
effected.
(iii) As soon as practicable after (x) a conversion has been
effected and (y) the certificate(s) representing the converted shares of Series
A Preferred Stock have been surrendered to the principal office of the
Corporation or to any transfer agent for such shares, the Corporation shall
deliver to the converting holder:
(A) a certificate or certificates representing the number of shares of
Common issuable by reason of such conversion in such name or names and
such denomination or denominations as the converting holder has
specified;
(B) a certificate representing any shares of Series A Preferred Stock which
were represented by the certificate or certificates delivered to the
Corporation or to any transfer agent in connection with such conversion
but which were not converted; and
(C) any amount payable under Section 5(a)(vi) with respect to such
conversion.
(iv) The Corporation shall not close its books on a Business Day
against the transfer of Series A Preferred Stock or of Common issued or issuable
upon conversion of Series A Preferred Stock in any manner that interferes with
the timely conversion of Series A Preferred Stock. At any time that a conversion
of shares of Series A Preferred Stock
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pursuant to this Section 5(a) has occurred, the shares of Series A Preferred
Stock so converted shall not thereafter be reissued, sold or transferred or
deemed to be issued and outstanding for any purpose and the number of shares of
Series A Preferred Stock authorized to be issued by the Corporation shall be
reduced by the number of shares of Series A Preferred Stock so converted.
(v) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Common, solely for the purpose of
issuance upon the conversion of shares of the Series A Preferred Stock, such
number of shares of Common as are issuable upon the conversion of all
outstanding Series A Preferred Stock. All shares of Common which are so issuable
shall, when issued in accordance with the terms hereof, be duly and validly
issued, fully paid and nonassessable. The Corporation shall not take any action
that would cause the number of authorized but unissued shares of Common to be
less than the number of such shares required to be reserved hereunder for
issuance upon conversion of the Series A Preferred Stock.
(vi) If any fractional interest in a share of Common would,
except for the provisions of this subparagraph, be delivered upon any conversion
of any shares of Series A Preferred Stock, the Corporation, in lieu of
delivering the fractional share therefor, may pay an amount to the holder
thereof equal to the Market Price of such fractional interest as of the date of
conversion. The determination as to the amount of any cash payment in lieu of
the issuance of fractional shares shall be based upon the total number of shares
of Series A Preferred Stock being converted at any one time by the holder
thereof, not upon each share of Series A Preferred Stock being converted at any
one time by the holder thereof.
(vii) If any holder surrenders shares of Series A Preferred Stock
for conversion after the close of business on the record date for the payment of
a dividend and prior to the opening of business on the Dividend Payment Date for
such dividend, then, notwithstanding such conversion, the dividend payable on
such Dividend Payment Date will be paid to the registered holder of such shares
on such record date.
(viii) If a holder converts shares of Series A Preferred Stock,
the Corporation shall pay any documentary, stamp or similar issue or transfer
tax due on the issue of Common upon the conversion. The holder, however, shall
pay to the Corporation the amount of any tax which is due (or shall establish to
the satisfaction of the Corporation the payment thereof or that no such payment
is due) if the shares are to be issued in a name other than the name of such
holder.
(b) Effect on Conversion Price of Certain Events. For purposes of
determining the applicable Conversion Price under Section 5, the following shall
be applicable:
(i) Subdivisions or Combinations of Common. If the Corporation at
any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common into a
greater number of shares, the Conversion Price in effect immediately prior to
such subdivision shall be reduced proportionately, and if the Corporation at any
time combines (by reverse stock split or otherwise) one or more classes of its
outstanding shares of Common into a smaller number of shares, the
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Conversion Price in effect immediately prior to such combination shall be
increased proportionately.
(ii) Recapitalization, Reorganization, Reclassification,
Consolidation, Merger or Sale. Any recapitalization, reorganization,
reclassification, consolidation, merger or similar transaction, in each case
which is effected in such a manner that the holders of Common are entitled to
receive (either directly or upon subsequent liquidation) stock, securities or
assets with respect to or in exchange for Common, and which does not otherwise
qualify as a Fundamental Change, is referred to herein as an "ORGANIC CHANGE."
Prior to the consummation of any Organic Change, the Corporation shall make
appropriate provisions to insure that each of the holders of Series A Preferred
Stock shall thereafter have the right to acquire and receive, in lieu of the
shares of Common immediately theretofore acquirable and receivable upon the
conversion of such holder's Series A Preferred Stock, such shares of stock,
securities or assets as such holder would have received in connection with such
Organic Change if such holder had converted its Series A Preferred Stock
immediately prior to such Organic Change. In each such case, the Corporation
shall also make appropriate provisions to insure that the provisions of this
Section 5(b) shall thereafter be applicable to the securities issuable upon
conversion of the Series A Preferred Stock and shall provide the holders of
Series A Preferred Stock with notice thereof.
(iii) Notices. As soon as practicable after any adjustment of the
Conversion Price, the Corporation shall give written notice thereof to all
holders of Series A Preferred Stock, setting forth in reasonable detail and
certifying the calculation of such adjustment.
(c) Mandatory Conversion. If, on or after the later of the Closing
Date or the date the shares of Common issuable upon conversion of the Series A
Preferred Stock become registered under the Securities Act of 1933, as amended,
and become eligible for trading to the public, the Market Price of the Common
exceeds $27.80 per share (as adjusted for any stock split, stock dividend,
recapitalization or otherwise on the Common) for 10 consecutive Trading Days,
the Corporation may elect, beginning on the first Business Day following such 10
Trading Day period, and at any time thereafter while any shares of Series A
Preferred Stock remain outstanding, to require the holders of all (but not less
than all) outstanding shares of Series A Preferred Stock to convert such shares
into Common pursuant to the terms of this Section 5 (a "MANDATORY CONVERSION").
In case of such election, the Corporation shall give written notice to each
holder of outstanding shares of Series A Preferred Stock. Any such conversion
shall be deemed to have been effected, without further action by any party,
immediately prior to the close of business on the fifth Business Day after the
Corporation delivers notice of its election of a Mandatory Conversion to the
holders of Series A Preferred Stock Shares. At the time any such conversion has
been effected, the rights of the holders of shares of Series A Preferred Stock
so converted shall cease with respect to such converted shares of Series A
Preferred Stock, and such holders entitled to receive Common upon conversion of
such Series A Preferred Stock shall be treated for all purposes as the record
holders of such shares of Common on the date conversion is deemed to have been
effected. The provisions of Section 5(a) shall apply to a Mandatory Conversion
under this Section 5(c).
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6. General.
(a) The Corporation shall keep at its principal office (or at the
office of its counsel) a register for the registration of Series A Preferred
Stock. Upon the surrender of any certificate representing Series A Preferred
Stock at such place, the Corporation shall, at the request of the record holder
of such certificate, execute and deliver a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares represented
by the surrendered certificate. Each such new certificate shall be registered in
such name and shall represent such number of shares as is requested by the
holder of the surrendered certificate and shall be substantially identical in
form to the surrendered certificate.
(b) Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series A Preferred Stock, and in the case of any such loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or, in the case
of any such mutilation upon surrender of such certificate, the Corporation shall
execute and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares of such class represented by such lost,
stolen, destroyed or mutilated certificate and dated the date of such lost,
stolen, destroyed or mutilated certificate.
(c) Except as otherwise expressly provided hereunder, all notices
referred to herein shall be in writing and shall be delivered by registered or
certified mail, return receipt requested and postage prepaid, by reputable
overnight courier service, charges prepaid, or by personal delivery, and shall
be deemed to have been given (i) three (3) Business Days after being sent by
registered or certified mail, (ii) one (1) Business Day after being deposited
with such an overnight courier service, and (iii) upon delivery, if by personal
delivery, if mailed or delivered (A) to the Corporation, at its principal
executive offices, or (B) to any stockholder, at such holder's address as it
appears in the stock records of the Corporation (unless otherwise indicated by
any such holder).
7. Definitions. The following terms shall have the following meanings for
purposes of this Certificate of Designation:
"ACCRETED VALUE" means, with respect to one share of Series A Preferred
Stock, $22.80, plus the amount of any dividends added to such Accreted Value in
accordance with Section 2, minus the amount of any dividends included in
Accreted Value that are subsequently declared and paid (subject to equitable
adjustments by the Board acting in good faith to reflect stock splits of shares
of Series A Preferred Stock, stock dividends in respect of shares of Series A
Preferred Stock, stock combinations of shares of Series A Preferred Stock,
recapitalizations and like occurrences).
"AS CONVERTED VALUE" is defined in Section 4(a)(i).
"BOARD" means the Board of Directors of the Corporation.
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"BUSINESS DAY" means any day except a Saturday or Sunday, or other day on
which banks in Boston, Massachusetts, are authorized or obligated by law or
executive order to close.
"CLOSING DATE" is the date of consummation of the transactions contemplated
by the Agreement and Plan of Merger by and among the Corporation, Safari
Acquisition Corp., and Genaissance Pharmaceuticals, Inc.
"COMMON" means the Corporation's Common Stock, $0.01 par value per share.
"CONVERSION PRICE" means, with respect to each share of Series A Preferred
Stock, initially $22.80 for such share, subject to adjustment from time to time
in accordance with Section 5(b).
"DIVIDEND PAYMENT DATE" is defined in Section 2(b).
"DIVIDEND PERIOD" is defined in Section 2(b).
"FAIR MARKET VALUE" means fair market value as determined in good faith by
the Board. Any securities shall be valued as follows: (i) securities not subject
to investment letter or other similar restrictions on free marketability:
(A) if traded on a securities exchange or The Nasdaq Stock
Market, the value shall be based on a formula approved in good faith
by the Board and derived from the closing prices of the securities on
such exchange or The Nasdaq Stock Market over a specified time period;
(B) if actively traded over-the-counter, the value shall be based
on a formula approved in good faith by the Board and derived from the
closing prices of the securities on such exchange or The Nasdaq Stock
Market over a specified time period; and
(C) if there is no active public market, the value shall be the
fair market value thereof, as determined in good faith by the Board;
and (ii) 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
clause (i) to reflect the approximate fair market value thereof, as determined
in good faith by the Board.
"FUNDAMENTAL CHANGE" means (i) any sale or transfer of all or substantially
all of the assets of the Corporation in any transaction or series of
transactions, or (ii) any merger or consolidation to which the Corporation is a
party, except for a merger in which (a) the Corporation is the surviving
corporation, (b) the terms, rights and preferences of the Series A Preferred
Stock are not adversely affected, (c) the Common is not converted into or
exchanged for cash, securities or other property, and (d) after giving effect to
such merger, the holders of the Corporation's outstanding capital stock
immediately prior to the merger shall continue to own the Corporation's
outstanding capital stock possessing a majority of the voting power of the
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Corporation and the voting power (under ordinary circumstances) to elect a
majority of the Board.
"JUNIOR SECURITIES" means any of the Corporation's equity securities
(whether or not currently authorized or outstanding) which by its terms is
junior to the Series A Preferred Stock (including, without limitation, the
Common).
"LIQUIDATION VALUE" is defined in Section 4(a)(i).
"MAKE-WHOLE REDEMPTION PRICE" is defined in Section 4(c).
"MANDATORY CONVERSION" is defined in Section 5(c).
"MARKET PRICE" shall mean, with respect to one share of Common and for any
Business Day: (i) if the Common is then listed on a national securities exchange
or is authorized for quotation on NASDAQ and is designated as a National Market
System or NASDAQ Small Cap Market security, the last sale price of one share of
Common, regular way, on such day on the principal stock exchange or market
system on which the Common is then listed or authorized for quotation as set
forth in the "Close" column of the "Historical Quotation" table on Yahoo!
Finance for the Corporation's stock price (or, if Yahoo! Finance is no longer
available, as set forth in the Wall Street Journal), or, if no such sale takes
place on such Business Day, the last sale price for one share of Common on the
prior Business Day as reported in such column, or (ii) if the Common is not then
listed or authorized for quotation on any national securities exchange or
designated as a National Market System or Small Cap Market security on NASDAQ
but is traded over-the-counter, the closing price for one share of Common as
reported on NASDAQ or the Electronic Bulletin Board or in the National Daily
Quotation Sheets, as applicable.
"ORGANIC CHANGE" is defined in Section 5(b)(ii).
"ORIGINAL ISSUANCE DATE" means, with respect to any share of Series A
Preferred Stock, the date on which the Corporation initially issues such share
of Series A Preferred Stock, regardless of the number of times a transfer of
such share is made on the stock records maintained by or for the Corporation and
regardless of the number of certificates which may be issued to evidence such
share.
"ORIGINAL ISSUE PRICE" means $22.80 (subject to equitable adjustments by
the Board acting in good faith to reflect stock splits of shares of Series A
Preferred Stock, stock dividends in respect of shares of Series A Preferred
Stock, stock combinations of shares of Series A Preferred Stock,
recapitalizations and like occurrences).
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"SIGNIFICANT EVENT" means (i) a liquidation, dissolution or winding up of
the Corporation, voluntary or otherwise, or (ii) a Fundamental Change.
"SUPERMAJORITY PREFERRED HOLDERS" is defined in Section 3(b).
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"TRADING DAY" shall mean a day on which the Common is authorized for
trading or for quotation on NASDAQ.
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