\n Daniel M. Lewin 15 Charlesden Park
\n Newtonville, MA 02460.
\n<\/c><\/s><\/caption>\n<\/table>\n SIXTH. In furtherance of and not in limitation of powers conferred by
\nstatute, it is further provided:<\/p>\n
1. Election of directors need not be by written ballot.<\/p>\n
2. The Board of Directors is expressly authorized to adopt, amend or
\nrepeal the By-Laws of the Corporation.<\/p>\n
SEVENTH. Except to the extent that the General Corporation Law of Delaware
\nprohibits the elimination or limitation of liability of directors for breaches
\nof fiduciary duty, no director of the Corporation shall be personally liable to
\nthe Corporation or its stockholders for monetary damages for any breach of
\nfiduciary duty as a director, notwithstanding any provision of law imposing such
\nliability. No amendment to or repeal of this provision shall apply to or have
\nany effect on the liability or alleged liability of any director of the
\nCorporation for or with respect to any acts or omissions of such director
\noccurring prior to such amendment.<\/p>\n
EIGHTH. 1. Actions, Suits and Proceedings Other than by or in the Right of
\nthe Corporation. The Corporation shall indemnify each person who was or is a
\nparty or is threatened to be made a party to any threatened, pending or
\ncompleted action, suit or proceeding, whether civil, criminal, administrative or
\ninvestigative (other than an action by or in the right of the Corporation), by
\nreason of the fact that he is or was, or has agreed to become, a director or
\nofficer of the Corporation, or is or was serving, or has agreed to serve, at the
\nrequest of the Corporation, as a director, officer or trustee of, or in a
\nsimilar capacity with, another corporation, partnership, joint venture, trust or
\nother enterprise (including any employee benefit plan) (all such persons being
\nreferred to hereafter as an “Indemnitee”), or by reason of any action alleged to
\nhave been taken or omitted in such capacity, against all expenses (including
\nattorneys’ fees), judgments, fines and amounts paid in settlement actually and
\nreasonably incurred by him or on his behalf in connection with such action, suit
\nor proceeding and any appeal therefrom, if he acted in good faith and in a
\nmanner he reasonably believed to be in, or not opposed to, the best interests of
\nthe Corporation, and, with respect to any criminal action or proceeding, had no
\nreasonable cause to believe his conduct was unlawful. The termination of any
\naction, suit or proceeding by judgment, order, settlement, conviction or upon a
\nplea of nolo contendere or its equivalent, shall not, of itself, create a
\npresumption that the person did not act in good faith and in a manner which he
\nreasonably believed to be in, or not opposed to,
\n 4
\nthe best interests of the Corporation, and, with respect to any criminal action
\nor proceeding, had reasonable cause to believe that his conduct was unlawful.
\nNotwithstanding anything to the contrary in this Article, except as set forth in
\nSection 7 below, the Corporation shall not indemnify an Indemnitee seeking
\nindemnification in connection with a proceeding (or part thereof) initiated by
\nthe Indemnitee unless the initiation thereof was approved by the Board of
\nDirectors of the Corporation. Notwithstanding anything to the contrary in this
\nArticle, the Corporation shall not indemnify an Indemnitee to the extent such
\nIndemnitee is reimbursed from the proceeds of insurance, and in the event the
\nCorporation makes any indemnification payments to an Indemnitee and such
\nIndemnitee is subsequently reimbursed from the proceeds of insurance, such
\nIndemnitee shall promptly refund such indemnification payments to the
\nCorporation to the extent of such insurance reimbursement.<\/p>\n
2. Actions or Suits by or in the Right of the Corporation. The Corporation
\nshall indemnify any Indemnitee who was or is a party or is threatened to be made
\na party to any threatened, pending or completed action or suit by or in the
\nright of the Corporation to procure a judgment in its favor by reason of the
\nfact that he is or was, or has agreed to become, a director or officer of the
\nCorporation, or is or was serving, or has agreed to serve, at the request of the
\nCorporation, as a director, officer or trustee of, or in a similar capacity
\nwith, another corporation, partnership, joint venture, trust or other enterprise
\n(including any employee benefit plan), or by reason of any action alleged to
\nhave been taken or omitted in such capacity, against all expenses (including
\nattorneys’ fees) and, to the extent permitted by law, amounts paid in settlement
\nactually and reasonably incurred by him or on his behalf in connection with such
\naction, suit or proceeding and any appeal therefrom, if he acted in good faith
\nand in a manner he reasonably believed to be in, or not opposed to, the best
\ninterests of the Corporation, except that no indemnification shall be made in
\nrespect of any claim, issue or matter as to which such person shall have been
\nadjudged to be liable to the Corporation unless and only to the extent that the
\nCourt of Chancery of Delaware shall determine upon application that, despite the
\nadjudication of such liability but in view of all the circumstances of the case,
\nsuch person is fairly and reasonably entitled to indemnity for such expenses
\n(including attorneys’ fees) which the Court of Chancery of Delaware shall deem
\nproper.<\/p>\n
3. Indemnification for Expenses of Successful Party. Notwithstanding the
\nother provisions of this Article, to the extent that an Indemnitee has been
\nsuccessful, on the merits or otherwise, in defense of any action, suit or
\nproceeding referred to in Sections 1 and 2 of this Article, or in defense of any
\nclaim, issue or matter therein, or on appeal from any such action, suit or
\nproceeding, he shall be indemnified against all expenses (including attorneys’
\nfees) actually and reasonably incurred by him or on his behalf in connection
\ntherewith. Without limiting the foregoing, if any action, suit or proceeding is
\ndisposed of, on the merits or otherwise (including a disposition without
\nprejudice), without (i) the disposition being adverse to the Indemnitee, (ii) an
\n 5
\nadjudication that the Indemnitee was liable to the Corporation, (iii) a plea of
\nguilty or nolo contendere by the Indemnitee, (iv) an adjudication that the
\nIndemnitee did not act in good faith and in a manner he reasonably believed to
\nbe in or not opposed to the best interests of the Corporation, and (v) with
\nrespect to any criminal proceeding, an adjudication that the Indemnitee had
\nreasonable cause to believe his conduct was unlawful, the Indemnitee shall be
\nconsidered for the purposes hereof to have been wholly successful with respect
\nthereto.<\/p>\n
4. Notification and Defense of Claim. As a condition precedent to his
\nright to be indemnified, the Indemnitee must notify the Corporation in writing
\nas soon as practicable of any action, suit, proceeding or investigation
\ninvolving him for which indemnity will or could be sought. With respect to any
\naction, suit, proceeding or investigation of which the Corporation is so
\nnotified, the Corporation will be entitled to participate therein at its own
\nexpense and\/or to assume the defense thereof at its own expense, with legal
\ncounsel reasonably acceptable to the Indemnitee. After notice from the
\nCorporation to the Indemnitee of its election so to assume such defense, the
\nCorporation shall not be liable to the Indemnitee for any legal or other
\nexpenses subsequently incurred by the Indemnitee in connection with such claim,
\nother than as provided below in this Section 4. The Indemnitee shall have the
\nright to employ his own counsel in connection with such claim, but the fees and
\nexpenses of such counsel incurred after notice from the Corporation of its
\nassumption of the defense thereof shall be at the expense of the Indemnitee
\nunless (i) the employment of counsel by the Indemnitee has been authorized by
\nthe Corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
\nthat there may be a conflict of interest or position on any significant issue
\nbetween the Corporation and the Indemnitee in the conduct of the defense of such
\naction or (iii) the Corporation shall not in fact have employed counsel to
\nassume the defense of such action, in each of which cases the fees and expenses
\nof counsel for the Indemnitee shall be at the expense of the Corporation, except
\nas otherwise expressly provided by this Article. The Corporation shall not be
\nentitled, without the consent of the Indemnitee, to assume the defense of any
\nclaim brought by or in the right of the Corporation or as to which counsel for
\nthe Indemnitee shall have reasonably made the conclusion provided for in clause
\n(ii) above.<\/p>\n
5. Advance of Expenses. Subject to the provisions of Section 6 below, in
\nthe event that the Corporation does not assume the defense pursuant to Section 4
\nof this Article of any action, suit, proceeding or investigation of which the
\nCorporation receives notice under this Article, any expenses (including
\nattorneys’ fees) incurred by an Indemnitee in defending a civil or criminal
\naction, suit, proceeding or investigation or any appeal therefrom shall be paid
\nby the Corporation in advance of the final disposition of such matter; provided,
\nhowever, that the payment of such expenses incurred by an Indemnitee in advance
\nof the final disposition of such matter shall be made only upon receipt of an
\nundertaking by or on behalf of the Indemnitee to repay all amounts so advanced
\nin the event that it shall ultimately be determined
\n 6
\nthat the Indemnitee is not entitled to be indemnified by the Corporation as
\nauthorized in this Article. Such undertaking shall be accepted without reference
\nto the financial ability of the Indemnitee to make such repayment.<\/p>\n
6. Procedure for Indemnification. In order to obtain indemnification or
\nadvancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article, the
\nIndemnitee shall submit to the Corporation a written request, including in such
\nrequest such documentation and information as is reasonably available to the
\nIndemnitee and is reasonably necessary to determine whether and to what extent
\nthe Indemnitee is entitled to indemnification or advancement of expenses. Any
\nsuch indemnification or advancement of expenses shall be made promptly, and in
\nany event within 60 days after receipt by the Corporation of the written request
\nof the Indemnitee, unless with respect to requests under Section 1, 2 or 5 the
\nCorporation determines within such 60-day period that the Indemnitee did not
\nmeet the applicable standard of conduct set forth in Section 1 or 2, as the case
\nmay be. Such determination shall be made in each instance by (a) a majority vote
\nof the directors of the Corporation consisting of persons who are not at that
\ntime parties to the action, suit or proceeding in question (“disinterested
\ndirectors”), whether or not a quorum, (b) a majority vote of a quorum of the
\noutstanding shares of stock of all classes entitled to vote for directors,
\nvoting as a single class, which quorum shall consist of stockholders who are not
\nat that time parties to the action, suit or proceeding in question, (c)
\nindependent legal counsel (who may, to the extent permitted by law, be regular
\nlegal counsel to the Corporation), or (d) a court of competent jurisdiction.<\/p>\n
7. Remedies. The right to indemnification or advances as granted by this
\nArticle shall be enforceable by the Indemnitee in any court of competent
\njurisdiction if the Corporation denies such request, in whole or in part, or if
\nno disposition thereof is made within the 60-day period referred to above in
\nSection 6. Unless otherwise required by law, the burden of proving that the
\nIndemnitee is not entitled to indemnification or advancement of expenses under
\nthis Article shall be on the Corporation. Neither the failure of the Corporation
\nto have made a determination prior to the commencement of such action that
\nindemnification is proper in the circumstances because the Indemnitee has met
\nthe applicable standard of conduct, nor an actual determination by the
\nCorporation pursuant to Section 6 that the Indemnitee has not met such
\napplicable standard of conduct, shall be a defense to the action or create a
\npresumption that the Indemnitee has not met the applicable standard of conduct.
\nThe Indemnitee’s expenses (including attorneys’ fees) incurred in connection
\nwith successfully establishing his right to indemnification, in whole or in
\npart, in any such proceeding shall also be indemnified by the Corporation.<\/p>\n
8. Subsequent Amendment. No amendment, termination or repeal of this
\nArticle or of the relevant provisions of the General Corporation Law of Delaware
\nor any other applicable laws shall affect or diminish in any way the rights of
\nany Indemnitee to indemnification under the provisions hereof with respect to
\nany action,
\n 7
\nsuit, proceeding or investigation arising out of or relating to any actions,
\ntransactions or facts occurring prior to the final adoption of such amendment,
\ntermination or repeal.<\/p>\n
9. Other Rights. The indemnification and advancement of expenses provided
\nby this Article shall not be deemed exclusive of any other rights to which an
\nIndemnitee seeking indemnification or advancement of expenses may be entitled
\nunder any law (common or statutory), agreement or vote of stockholders or
\ndisinterested directors or otherwise, both as to action in his official capacity
\nand as to action in any other capacity while holding office for the Corporation,
\nand shall continue as to an Indemnitee who has ceased to be a director or
\nofficer, and shall inure to the benefit of the estate, heirs, executors and
\nadministrators of the Indemnitee. Nothing contained in this Article shall be
\ndeemed to prohibit, and the Corporation is specifically authorized to enter
\ninto, agreements with officers and directors providing indemnification rights
\nand procedures different from those set forth in this Article. In addition, the
\nCorporation may, to the extent authorized from time to time by its Board of
\nDirectors, grant indemnification rights to other employees or agents of the
\nCorporation or other persons serving the Corporation and such rights may be
\nequivalent to, or greater or less than, those set forth in this Article.<\/p>\n
10. Partial Indemnification. If an Indemnitee is entitled under any
\nprovision of this Article to indemnification by the Corporation for some or a
\nportion of the expenses (including attorneys’ fees), judgments, fines or amounts
\npaid in settlement actually and reasonably incurred by him or on his behalf in
\nconnection with any action, suit, proceeding or investigation and any appeal
\ntherefrom but not, however, for the total amount thereof, the Corporation shall
\nnevertheless indemnify the Indemnitee for the portion of such expenses
\n(including attorneys’ fees), judgments, fines or amounts paid in settlement to
\nwhich the Indemnitee is entitled.<\/p>\n
11. Insurance. The Corporation may purchase and maintain insurance, at its
\nexpense, to protect itself and any director, officer, employee or agent of the
\nCorporation or another corporation, partnership, joint venture, trust or other
\nenterprise (including any employee benefit plan) against any expense, liability
\nor loss incurred by him in any such capacity, or arising out of his status as
\nsuch, whether or not the Corporation would have the power to indemnify such
\nperson against such expense, liability or loss under the General Corporation Law
\nof Delaware.<\/p>\n
12. Merger or Consolidation. If the Corporation is merged into or
\nconsolidated with another corporation and the Corporation is not the surviving
\ncorporation, the surviving corporation shall assume the obligations of the
\nCorporation under this Article with respect to any action, suit, proceeding or
\ninvestigation arising out of or relating to any actions, transactions or facts
\noccurring prior to the date of such merger or consolidation.
\n 8
\n 13. Savings Clause. If this Article or any portion hereof shall be
\ninvalidated on any ground by any court of competent jurisdiction, then the
\nCorporation shall nevertheless indemnify each Indemnitee as to any expenses
\n(including attorneys’ fees), judgments, fines and amounts paid in settlement in
\nconnection with any action, suit, proceeding or investigation, whether civil,
\ncriminal or administrative, including an action by or in the right of the
\nCorporation, to the fullest extent permitted by any applicable portion of this
\nArticle that shall not have been invalidated and to the fullest extent permitted
\nby applicable law.<\/p>\n
14. Definitions. Terms used herein and defined in Section 145(h) and
\nSection 145(i) of the General Corporation Law of Delaware shall have the
\nrespective meanings assigned to such terms in such Section 145(h) and Section
\n145(i).<\/p>\n
15. Subsequent Legislation. If the General Corporation Law of Delaware is
\namended after adoption of this Article to expand further the indemnification
\npermitted to Indemnitees, then the Corporation shall indemnify such persons to
\nthe fullest extent permitted by the General Corporation Law of Delaware, as so
\namended.<\/p>\n
NINTH. The Corporation reserves the right to amend, alter, change or
\nrepeal any provision contained in this Certificate of Incorporation, in the
\nmanner now or hereafter prescribed by statute and this Certificate of
\nIncorporation, and all rights conferred upon stockholders herein are granted
\nsubject to this reservation.<\/p>\n
EXECUTED as of the 20th day of August, 1998.<\/p>\n
\/s\/ Daniel M. Lewin
\n ———————————
\n Daniel M. Lewin
\n Incorporator
\n 9
\n CERTIFICATE OF AMENDMENT<\/p>\n
OF THE<\/p>\n
CERTIFICATE OF INCORPORATION<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
Pursuant to Section 242
\n of the General Corporation Law of
\n the State of Delaware<\/p>\n
Akamai Technologies, Inc. (hereinafter called the “Corporation”),
\norganized and existing under and by virtue of the General Corporation Law of the
\nState of Delaware, does hereby certify as follows:<\/p>\n
The Board of Directors of the Corporation, by unanimous written consent in
\nlieu of a meeting, duly adopted a resolution, pursuant to Sections 141(f) and
\n242 of the General Corporation Law of the State of Delaware, setting forth an
\namendment to the Certificate of Incorporation of the Corporation and declaring
\nsaid amendment to be advisable. The stockholders of the Corporation duly
\napproved said proposed amendment by written consent in accordance with Sections
\n228 and 242 of the General Corporation Law of the State of Delaware. The
\nresolution setting forth the amendment is as follows:<\/p>\n
RESOLVED: That the first paragraph of Article FOURTH of the Certificate of
\nIncorporation of the Corporation be and hereby is deleted in its entirety and
\nthat the following paragraph be inserted in lieu thereof:<\/p>\n
“FOURTH. The total number of shares of all classes of stock which
\n the Corporation shall have authority to issue is 7,000,000 shares,
\n consisting of (i) 5,000,000 shares of Common Stock, $0.01 par value per
\n share (“Common Stock”), and (ii) 2,000,000 shares of Preferred Stock,
\n $0.01 par value per share (“Preferred Stock”).”
\n 10
\n IN WITNESS WHEREOF, the Corporation has caused this Certificate of
\nAmendment to be signed by its Treasurer on this 18th day of November, 1998.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ F. Thomson Leighton
\n ————————
\n F. Thomson Leighton
\n Treasurer
\n 11
\n CERTIFICATE OF DESIGNATIONS<\/p>\n
OF<\/p>\n
SERIES A CONVERTIBLE PREFERRED STOCK<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
——————<\/p>\n
Pursuant to Section 151 of the
\n General Corporation Law of the State of Delaware<\/p>\n
——————<\/p>\n
Akamai Technologies, Inc., a Delaware corporation (the “Corporation”)
\ncertifies that pursuant to the authority contained in Article Fourth of its
\nCertificate of Incorporation and in accordance with the provisions of Section
\n151 of the General Corporation Law of the State of Delaware, the Board of
\nDirectors of the Corporation, by unanimous written consent dated as of November
\n17, 1998 duly adopted the following resolution, which resolution remains in full
\nforce and effect on the date hereof:<\/p>\n
RESOLVED, that, pursuant to the authority expressly granted to and vested
\nin the Board of Directors of the Corporation in accordance with the provisions
\nof its Certificate of Incorporation, a series of Preferred Stock of the
\nCorporation be and hereby is established, consisting of 1,100,000 shares, $.01
\npar value per share, to be designated the “Series A Convertible Preferred Stock”
\n(hereinafter, the “Series A Preferred Stock”); that the Board of Directors be
\nand hereby is authorized to issue such shares of Series A Preferred Stock from
\ntime to time and for such consideration and on such terms as the Board of
\nDirectors shall determine; and that, subject to the limitations provided by law
\nand by the Certificate of Incorporation, the voting powers, preferences and
\nrelative, participating, optional and other special rights, and qualifications,
\nlimitations and restrictions thereof shall be as set forth on Schedule I
\nattached hereto.
\n 12
\n IN WITNESS WHEREOF, the Corporation has caused this certificate to be duly
\nexecuted by an authorized officer this 23rd day of November, 1998.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Daniel Lewin
\n —————-
\n Daniel Lewin
\n President
\n 13
\n SCHEDULE I<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n DESIGNATION OF SERIES A CONVERTIBLE PREFERRED STOCK<\/p>\n
The series of Preferred Stock designated and known as “Series A
\nConvertible Preferred Stock” shall consist of 1,100,000 shares.<\/p>\n
1. Voting.<\/p>\n
1A. General. Except as may be otherwise provided in these terms of
\nthe Series A Convertible Preferred Stock, in the Certificate of Incorporation
\n(the “Certificate of Incorporation”) of Akamai Technologies, Inc. (the
\n“Corporation”) or by law, the Series A Convertible Preferred Stock shall vote
\ntogether with all other classes and series of stock of the Corporation as a
\nsingle class on all actions to be taken by the stockholders of the Corporation.
\nEach share of Series A Convertible Preferred Stock shall entitle the holder
\nthereof to such number of votes per share on each such action as shall equal the
\nnumber of shares of Common Stock (including fractions of a share) into which
\neach share of Preferred Stock is then convertible.<\/p>\n
1B. Board Size. Subject to the provisions of paragraph 1C below, the
\nCorporation shall not, without the written consent or affirmative vote of the
\nholders of at least 60% of the then outstanding shares of Series A Convertible
\nPreferred Stock, given in writing or by vote at a meeting, consenting or voting
\n(as the case may be) separately as a series, increase the maximum number of
\ndirectors constituting the Board of Directors to a number in excess of seven
\n(7).<\/p>\n
1C. Board Seats. For so long as at least 50% of the shares of Series
\nA Convertible Preferred Stock issued pursuant to the Purchase Agreement remains
\noutstanding, the holders of the Series A Convertible Preferred Stock, voting as
\na separate series, shall be entitled to elect two (2) directors of the
\nCorporation. At any meeting (or in a written consent in lieu thereof) held for
\nthe purpose of electing directors, the presence in person or by proxy (or the
\nwritten consent) of the holders of at least a majority in interest of the then
\noutstanding shares of Series A Convertible Preferred Stock shall constitute a
\nquorum of the Series A Convertible Preferred Stock for the election of directors
\nto be elected solely by the holders of the Series A Convertible Preferred Stock
\nvoting as a separate series. A vacancy in any directorship elected by the
\nholders of the Series A Convertible Preferred Stock shall be filled only by the
\naffirmative vote or written consent of the holders of at least 60% of the then
\noutstanding shares of Series A Convertible Preferred Stock. The directors to be
\nelected by the holders of the Series A Convertible Preferred Stock, voting
\nseparately as one class, pursuant to this paragraph 1C, shall serve for terms
\nextending from the date of their election and qualification until the time of
\nthe next succeeding annual meeting of stockholders and until their successors
\nhave been elected and qualified.
\n 14
\n 2. Dividends. No dividends shall be declared and set aside for any shares
\nof the Series A Convertible Preferred Stock except in the event that the Board
\nof Directors of the Corporation shall declare a dividend payable upon the then
\noutstanding shares of the Common Stock of the Corporation, in which event the
\nholders of the Series A Convertible Preferred Stock shall be entitled to the
\namount of dividends per share of Series A Convertible Preferred Stock as would
\nbe declared payable on the largest number of whole shares of Common Stock into
\nwhich each share of Series A Convertible Preferred Stock held by each holder
\nthereof could be converted pursuant to the provisions of Section 5 hereof, such
\nnumber determined as of the record date for the determination of holders of
\nCommon Stock entitled to receive such dividend. All dividends declared upon the
\nPreferred Stock shall be declared pro rata per share.<\/p>\n
3. Liquidation, Dissolution and Winding-up.<\/p>\n
3A. Liquidation. Upon any liquidation, dissolution or winding up of
\nthe Corporation (a “Liquidation Event”), whether voluntary or involuntary, the
\nholders of the shares of Series A Convertible Preferred Stock shall be paid an
\namount equal to $7.60 per share plus, in the case of each share, an amount equal
\nto dividends accrued but unpaid thereon, computed to the date payment thereof is
\nmade available, together with payment to any class of stock ranking equally with
\nthe Series A Convertible Preferred Stock, and before any payment shall be made
\nto the holders of any stock ranking on liquidation junior to the Series A
\nConvertible Preferred Stock, such amount payable with respect to one share of
\nSeries A Convertible Preferred Stock being sometimes referred to as the “Series
\nA Liquidation Preference Payment” and with respect to all shares of Series A
\nConvertible Preferred Stock being sometimes referred to as the “Series A
\nLiquidation Preference Payments”. If upon any Liquidation Event, the assets to
\nbe distributed to the holders of the Series A Convertible Preferred Stock shall
\nbe insufficient to permit payment to such stockholders of the full preferential
\namounts aforesaid, then all of the assets of the Corporation available for
\ndistribution to holders of the Series A Convertible Preferred Stock shall be
\ndistributed to such holders of the Series A Convertible Preferred Stock pro
\nrata, so that each holder receives that portion of the assets available for
\ndistribution as the number of shares of such stock held by such holder bears to
\nthe total number of shares of such stock then outstanding.<\/p>\n
3B. Upon any Liquidation Event, immediately after the holders of
\nSeries A Convertible Preferred Stock and holders of any class of stock ranking
\nequally with the Series A Convertible Preferred Stock have been paid in full
\npursuant to subsection 3A above, the remaining net assets of the Corporation
\navailable for distribution shall be distributed among the holders of the shares
\nof Common Stock.
\n 15
\n Written notice of such Liquidation Event, stating a payment date and the
\nplace where said payments shall be made, shall be given by mail, postage
\nprepaid, or by facsimile to non-U.S. residents, not less than 20 days prior to
\nthe payment date stated therein, to the holders of record of Series A
\nConvertible Preferred Stock, such notice to be addressed to each such holder at
\nits address as shown by the records of the Corporation.<\/p>\n
The (x) consolidation or merger of the Corporation into or with any other
\nentity or entities which results in the exchange of outstanding shares of the
\nCorporation for securities or other consideration issued or paid or caused to be
\nissued or paid by any such entity or affiliate thereof (except a consolidation
\nor merger into a Subsidiary or merger in which the Corporation is the surviving
\nCorporation and the holders of the Corporation’s voting stock outstanding
\nimmediately prior to the transaction constitute a majority of the holders of
\nvoting stock outstanding immediately following the transaction), (y) the sale or
\ntransfer by the Corporation of all or substantially all its assets, or (z) the
\nsale or transfer by the Corporation’s stockholders of capital stock representing
\na majority of the outstanding capital stock of the Corporation shall be deemed
\nto be a Liquidation Event within the meaning of the provisions of this paragraph
\n3 (subject to the provisions of this paragraph 3 and not the provisions of
\nparagraph 5G hereof, unless 5G is elected in the following proviso), provided,
\nhowever, that if the holders of at least 60% of the then outstanding shares of
\nSeries A Convertible Preferred Stock shall elect the benefits of the provisions
\nof paragraph 5G in lieu of receiving payment in a Liquidation Event pursuant to
\nthis paragraph 3, then all holders of shares of Series A Convertible Preferred
\nStock shall receive the benefits of the provisions of paragraph 5G in lieu of
\nreceiving payment pursuant to this Section 3. Whenever the distribution provided
\nfor in this paragraph 3 shall be payable in property other than cash, the value
\nof such distribution shall be the fair market value of such property as
\ndetermined in good faith by the Board of Directors of the Corporation.<\/p>\n
4. Restrictions. At any time when at least 50% of the shares of Series A
\nConvertible Preferred Stock issued pursuant to the Purchase Agreement (as
\ndefined in Section 8(a) below) remain outstanding, except where the vote or
\nwritten consent of the holders of a greater number of shares of the Corporation
\nis required by law or by the Certificate of Incorporation, and in addition to
\nany other vote required by law or the Certificate of Incorporation, without the
\nwritten consent of the holders of at least 60% of the then outstanding shares of
\nSeries A Convertible Preferred Stock given in writing or by vote at a meeting,
\nconsenting or voting (as the case may be) separately as a series, the
\nCorporation will not:<\/p>\n
(1) Consent to any Liquidation Event or merge or consolidate with or
\n into, or permit any Subsidiary to merge or consolidate with or into, any
\n other corporation, corporations, entity or entities (except a
\n consolidation or merger into a Subsidiary or
\n 16
\n merger in which the Corporation is the surviving corporation and the
\n holders of the Corporation’s voting stock outstanding immediately prior to
\n the transaction constitute a majority of the holders of voting stock
\n outstanding immediately following the transaction or a consolidation or
\n merger pursuant to which the aggregate consideration definitively and
\n unconditionally payable to all of the stockholders of the Corporation is
\n greater than $50 million);<\/p>\n
(2) Sell, abandon, transfer, lease or otherwise dispose of all or
\n substantially all of its properties or assets (unless the aggregate
\n consideration definitively and unconditionally payable to all of the
\n stockholders of the Corporation as a result of any such transaction is
\n greater than $50 million);<\/p>\n
(3) Amend, alter or repeal any provision of its Certificate of
\n Incorporation or By-laws in a manner adverse to holders of the Series A
\n Convertible Preferred Stock;<\/p>\n
(4) Create or authorize the creation of or issue any additional
\n class or series of shares of stock unless the same ranks junior to or on
\n parity with the Series A Convertible Preferred Stock as to dividends and
\n the distribution of assets on a Liquidation Event, or increase the
\n authorized amount of Series A Convertible Preferred Stock or increase the
\n authorized amount of any additional class or series of shares of stock
\n unless the same ranks junior to or on parity with the Series A Convertible
\n Preferred Stock as to dividends and the distribution of assets on a
\n Liquidation Event, or create or authorize any obligation or security
\n convertible into shares of Series A Convertible Preferred Stock or into
\n shares of any other class or series of stock unless the same ranks junior
\n to or on parity with the Series A Convertible Preferred Stock as to
\n dividends and the distribution of assets on a Liquidation Event, whether
\n any such creation, authorization or increase shall be by means of
\n amendment to the Certificate of Incorporation or by merger, consolidation
\n or otherwise;<\/p>\n
(5) In any manner amend, alter or change the designations or the
\n powers, preferences or rights, privileges or the restrictions of the
\n Series A Convertible Preferred Stock, provided, however, that the
\n authorization or creation of any shares of capital stock on parity with
\n Series A Convertible Preferred Stock as to dividends and the distribution
\n of assets on a Liquidation Event shall not require approval of holders of
\n Series A Convertible Preferred Stock;<\/p>\n
(6) Purchase or redeem, or set aside any sums for the purchase or
\n redemption of, or pay any dividend or make any distribution on, any shares
\n of stock ranking on parity with or junior to the Series A Convertible
\n Preferred Stock as to dividends and the distribution of assets on a
\n Liquidation Event, except for (i) dividends or other
\n 17
\n distributions payable on the Common Stock solely in the form of additional
\n shares of Common Stock or (ii) repurchases of shares of capital stock (at
\n the original purchase price therefor) from officers, employees, directors
\n or consultants of the Corporation which are subject to restrictive stock
\n purchase, right of first refusal or other agreements under which the
\n Corporation has the option to repurchase such shares upon the occurrence
\n of certain events, including termination of employment; or<\/p>\n
(7) Increase the number of Reserved Employee Shares without the
\n affirmative vote or written consent of at least two of the directors
\n elected solely by the holders of Series A Convertible Preferred Stock or
\n the affirmative vote or written consent of the holders of at least 60% of
\n the then outstanding shares of Series A Convertible Preferred Stock.<\/p>\n
5. Conversion. The holders of shares of Series A Convertible Preferred
\nStock shall have the following conversion rights:<\/p>\n
5A. Right to Convert. Subject to the terms and conditions of this
\nparagraph 5, the holder of any share or shares of Series A Convertible Preferred
\nStock shall have the right, at its option at any time, to convert any such
\nshares of Series A Convertible Preferred Stock (except that upon any Liquidation
\nEvent the right of conversion shall terminate at the close of business on the
\nbusiness day fixed for payment of the amounts distributable on the Series A
\nConvertible Preferred Stock) into such number of fully paid and nonassessable
\nshares of Common Stock as is obtained by (i) multiplying the number of shares of
\nSeries A Convertible Preferred Stock so to be converted by $7.60 and (ii)
\ndividing the result by the conversion price of $7.60 per share or in case an
\nadjustment of such price has taken place pursuant to the further provisions of
\nthis paragraph 5, then by the conversion price as last adjusted and in effect at
\nthe date any share or shares of Preferred Stock are surrendered for conversion
\n(such price, or such price as last adjusted, being referred to as the “Series A
\nConversion Price”). Such rights of conversion shall be exercised by the holder
\nthereof by giving written notice that the holder elects to convert a stated
\nnumber of shares of Series A Convertible Preferred Stock into Common Stock and
\nby surrender of a certificate or certificates for the shares so to be converted
\nto the Corporation at its principal office (or such other office or agency of
\nthe Corporation as the Corporation may designate by notice in writing to the
\nholders of the Series A Convertible Preferred Stock) at any time during its
\nusual business hours on the date set forth in such notice, together with a
\nstatement of the name or names (with address) in which the certificate or
\ncertificates for shares of Common Stock shall be issued.<\/p>\n
5B. Issuance of Certificates; Time Conversion Effected. Promptly
\nafter the receipt of the written notice referred to in paragraph 5A and
\nsurrender of the certificate or
\n 18
\ncertificates for the share or shares of Series A Convertible Preferred Stock to
\nbe converted, the Corporation shall issue and deliver, or cause to be issued and
\ndelivered, to the holder, registered in such name or names as such holder may
\ndirect, a certificate or certificates for the number of whole shares of Common
\nStock issuable upon the conversion of such share or shares of Series A
\nConvertible Preferred Stock. To the extent permitted by law, such conversion
\nshall be deemed to have been effected and the Series A Conversion Price shall be
\ndetermined as of the close of business on the date on which such written notice
\nshall have been received by the Corporation and the certificate or certificates
\nfor such share or shares shall have been surrendered as aforesaid, and at such
\ntime the rights of the holder of such share or shares of Series A Convertible
\nPreferred Stock shall cease, and the person or persons in whose name or names
\nany certificate or certificates for shares of Common Stock shall be issuable
\nupon such conversion shall be deemed to have become the holder or holders of
\nrecord of the shares represented thereby.<\/p>\n
5C. Fractional Shares; Dividends; Partial Conversion. No fractional
\nshares shall be issued upon conversion of Series A Convertible Preferred Stock
\ninto Common Stock and no payment or adjustment shall be made upon any conversion
\non account of any cash dividends on the Common Stock issued upon such
\nconversion. At the time of each conversion, the Corporation shall: (i) if cash
\nis legally available, pay in cash an amount equal to all dividends accrued and
\nunpaid on the shares of Series A Convertible Preferred Stock surrendered for
\nconversion to the date upon which such conversion is deemed to take place as
\nprovided in paragraph 5B, or (ii) if cash is not legally available, provide to
\nsuch holder a certificate representing a number of shares of Common Stock equal
\nto the quotient of all dividends accrued and unpaid on the shares of Series A
\nConvertible Preferred Stock so surrendered divided by the applicable Series A
\nConversion Price. In case the number of shares of Series A Convertible Preferred
\nStock represented by the certificate or certificates surrendered pursuant to
\nparagraph 5A exceeds the number of shares converted, the Corporation shall, upon
\nsuch conversion, execute and deliver to the holder, at the expense of the
\nCorporation, a new certificate or certificates for the number of shares of
\nSeries A Convertible Preferred Stock represented by the certificate or
\ncertificates surrendered which are not to be converted. If any fractional share
\nof Common Stock would, except for the provisions of the first sentence of this
\nparagraph 5C, be delivered upon such conversion, the Corporation, in lieu of
\ndelivering such fractional share, shall pay to the holder surrendering the
\nSeries A Convertible Preferred Stock for conversion an amount in cash equal to
\nthe current fair market value of such fractional share as determined in good
\nfaith by the Board of Directors of the Corporation, and based upon the aggregate
\nnumber of Shares of Series A Convertible Preferred Stock surrendered by any one
\nholder.<\/p>\n
5D. Adjustment of Series A Conversion Price Upon Issuance of Common
\nStock. Except as provided in paragraphs 5E and 5F, if and whenever the
\nCorporation shall
\n 19
\nissue or sell, or is, in accordance with subparagraphs 5D(1) through 5D(8),
\ndeemed to have issued or sold, any shares of Common Stock for a consideration
\nper share less than the Series A Conversion Price in effect immediately prior to
\nthe time of such issue or sale, (such number being appropriately adjusted to
\nreflect the occurrence of any event described in paragraph 5F), then, forthwith
\nupon such issue or sale, the Series A Conversion Price shall be reduced to the
\nprice determined by dividing (i) an amount equal to the sum of (a) the number of
\nshares of Common Stock outstanding immediately prior to such issue or sale
\n(assuming the conversion of the outstanding shares of Series A Convertible
\nPreferred Stock) multiplied by the then existing Series A Conversion Price and
\n(b) the consideration, if any, received by the Corporation upon such issue or
\nsale, by (ii) the total number of shares of Common Stock outstanding immediately
\nafter such issue or sale (assuming the conversion of the outstanding shares of
\nSeries A Convertible Preferred Stock).<\/p>\n
For purposes of this paragraph 5D, the following subparagraphs 5D(1)
\nto 5D(8) shall also be applicable:<\/p>\n
5D(1) Issuance of Rights or Options. In case at any time the
\n Corporation shall in any manner grant (whether directly or by assumption
\n in a merger or otherwise) any warrants or other rights to subscribe for or
\n to purchase, or any options for the purchase of, Common Stock or any stock
\n or security convertible into or exchangeable for Common Stock (such
\n warrants, rights or options being called “Options” and such convertible or
\n exchangeable stock or securities being called “Convertible Securities”)
\n whether or not such Options or the right to convert or exchange any such
\n Convertible Securities are immediately exercisable, and the price per
\n share for which Common Stock is issuable upon the exercise of such Options
\n or upon the conversion or exchange of such Convertible Securities
\n (determined by dividing (i) the total amount, if any, received or
\n receivable by the Corporation as consideration for the granting of such
\n Options, plus the minimum aggregate amount of additional consideration
\n payable to the Corporation upon the exercise of all such Options, plus, in
\n the case of such Options which relate to Convertible Securities, the
\n minimum aggregate amount of additional consideration, if any, payable upon
\n the issue or sale of all such Convertible Securities and upon the
\n conversion or exchange thereof, by (ii) the total maximum number of shares
\n of Common Stock issuable upon the exercise of such Options or upon the
\n conversion or exchange of all such Convertible Securities issuable upon
\n the exercise of such Options) shall be less than the Series A Conversion
\n Price in effect immediately prior to the time of the granting of such
\n Options, then the total maximum number of shares of Common Stock issuable
\n upon the exercise of such Options or upon conversion or exchange of the
\n total maximum amount of such Convertible Securities issuable upon the
\n exercise of such Options shall be deemed to have been issued for such
\n price per share as of the date of granting of such Options or the issuance
\n of such Convertible Securities and thereafter
\n 20
\n shall be deemed to be outstanding. Except as otherwise provided in
\n subparagraph 5D(3), no adjustment of the Series A Conversion Price shall
\n be made upon the actual issue of such Common Stock or of such Convertible
\n Securities upon exercise of such Options or upon the actual issue of such
\n Common Stock upon conversion or exchange of such Convertible Securities.<\/p>\n
5D(2) Issuance of Convertible Securities. In case the Corporation
\n shall in any manner issue (whether directly or by assumption in a merger
\n or otherwise) or sell any Convertible Securities, whether or not the
\n rights to exchange or convert any such Convertible Securities are
\n immediately exercisable, and the price per share for which Common Stock is
\n issuable upon such conversion or exchange (determined by dividing (i) the
\n total amount received or receivable by the Corporation as consideration
\n for the issue or sale of such Convertible Securities, plus the minimum
\n aggregate amount of additional consideration, if any, payable to the
\n Corporation upon the conversion or exchange of all such Convertible
\n Securities thereof, by (ii) the total maximum number of shares of Common
\n Stock issuable upon the conversion or exchange of all such Convertible
\n Securities) shall be less than the Series A Conversion Price in effect
\n immediately prior to the time of such issue or sale, then the total
\n maximum number of shares of Common Stock issuable upon conversion or
\n exchange of all such Convertible Securities shall be deemed to have been
\n issued for such price per share as of the date of the issue or sale of
\n such Convertible Securities and thereafter shall be deemed to be
\n outstanding, provided that (a) except as otherwise provided in
\n subparagraph 5D(3), no adjustment of the Series A Conversion Price shall
\n be made upon the actual issue of such Common Stock upon conversion or
\n exchange of such Convertible Securities and (b) if any such issue or sale
\n of such Convertible Securities is made upon exercise of any Options to
\n purchase any such Convertible Securities for which adjustments of the
\n Series A Conversion Price have been or are to be made pursuant to other
\n provisions of this paragraph 5D, no further adjustment of the Series A
\n Conversion Price shall be made by reason of such issue or sale.<\/p>\n
5D(3) Change in Option Price or Conversion Rate. Upon the happening
\n of any of the following events, namely, if the purchase price provided for
\n in any Option referred to in subparagraph 5D(1), the additional
\n consideration, if any, payable upon the conversion or exchange of any
\n Convertible Securities referred to in subparagraph 5D(1) or 5D(2), or the
\n rate at which Convertible Securities referred to in subparagraph 5D(1) or
\n 5D(2) are convertible into or exchangeable for Common Stock shall change
\n at any time (including, but not limited to, changes under or by reason of
\n provisions designed to protect against dilution), the Series A Conversion
\n Price in effect at the time of such event shall forthwith be readjusted to
\n the Series A Conversion Price which would have been in effect at such time
\n had such Options or Convertible Securities still outstanding
\n 21
\n provided for such changed purchase price, additional consideration or
\n conversion rate, as the case may be, at the time initially granted, issued
\n or sold; provided, however, that in no event shall the Series A Conversion
\n Price then in effect hereunder be increased; and on the expiration of any
\n such Option or the termination of any such right to convert or exchange
\n such Convertible Securities, the Series A Conversion Price then in effect
\n hereunder shall forthwith be increased to the Conversion Price which would
\n have been in effect at the time of such expiration or termination had such
\n Option or Convertible Securities, to the extent outstanding immediately
\n prior to such expiration or termination, never been issued.<\/p>\n
5D(4) Stock Dividends. In case the Corporation shall declare a
\n dividend or make any other distribution upon any stock of the Corporation
\n payable in Common Stock (except for the issue of stock dividends or
\n distributions upon the outstanding Common Stock for which adjustment is
\n made pursuant to paragraph 5F), Options or Convertible Securities, any
\n Common Stock, Options or Convertible Securities, as the case may be,
\n issuable in payment of such dividend or distribution shall be deemed to
\n have been issued or sold without consideration.<\/p>\n
5D(5) Consideration for Stock. In case any shares of Common Stock,
\n Options or Convertible Securities shall be issued or sold for cash, the
\n consideration received therefor shall be deemed to be the amount received
\n by the Corporation therefor, without deduction therefrom of any expenses
\n incurred or any underwriting commissions or concessions paid or allowed by
\n the Corporation in connection therewith. In case any shares of Common
\n Stock, Options or Convertible Securities shall be issued or sold for
\n consideration other than cash, the amount of the consideration other than
\n cash received by the Corporation shall be deemed to be the fair value of
\n such consideration as determined in good faith by the Board of Directors
\n of the Corporation, without deduction of any expenses incurred or any
\n underwriting commissions or concessions paid or allowed by the Corporation
\n in connection therewith. In case any Options shall be issued in connection
\n with the issue and sale of other securities of the Corporation, together
\n comprising one integral transaction in which no specific consideration is
\n allocated to such Options by the parties thereto, such Options shall be
\n deemed to have been issued for such consideration as determined in good
\n faith by the Board of Directors of the Corporation.<\/p>\n
5D(6) Record Date. In case the Corporation shall take a record of
\n the holders of its Common Stock for the purpose of entitling them (i) to
\n receive a dividend or other distribution payable in Common Stock, Options
\n or Convertible Securities or (ii) to subscribe for or purchase Common
\n Stock, Options or Convertible Securities, then such record date shall be
\n deemed to be the date of the issue or sale of the shares of Common
\n 22
\n Stock deemed to have been issued or sold upon the declaration of such
\n dividend or the making of such other distribution or the date of the
\n granting of such right of subscription or purchase, as the case may be.<\/p>\n
5D(7) Treasury Shares. The number of shares of Common Stock
\n outstanding at any given time shall not include shares owned or held by or
\n for the account of the Corporation, and the disposition of any such shares
\n shall be considered an issue or sale of Common Stock for the purpose of
\n this paragraph 5D.<\/p>\n
5D(8) Taxed Shares. The initial 650,000 Option Shares (as defined in
\n paragraph 8 herein and including 165,400 shares issued prior to the
\n closing of the initial issuance of the Series A Convertible Preferred
\n Stock) subject to the Plan (as defined in paragraph 8 herein) shall be
\n deemed to be “Taxed Shares”. In case at any time the Corporation shall
\n grant an award of any of the Taxed Shares or grant an option to purchase
\n any of the Taxed Shares (including options to purchase an aggregate of
\n 71,500 Taxed Shares granted prior to the date of the initial issuance of
\n Series A Convertible Preferred Stock), the Corporation shall not be
\n required to make any adjustment of the Series A Conversion Price;
\n provided, however, to the extent (i) the right of the Corporation to
\n repurchase shares (at the purchase price paid by the award recipient)
\n subject to an award of Taxed Shares terminates or does not exist and\/or
\n (ii) the Corporation issues any shares of its Common Stock upon exercise
\n of an option to purchase Taxed Shares, then such Taxed Shares shall be
\n deemed to be “Issued Taxed Shares,” and the Corporation shall adjust the
\n Series A Conversion Price as provided in paragraph 5D hereof and, that for
\n purposes of such adjustment the Corporation shall be deemed to have
\n received no consideration for the Issued Taxed Shares. Notwithstanding the
\n foregoing, if the Company shall repurchase any of the Founders’ Shares (as
\n defined in paragraph 8 herein), any such Founders’ Shares repurchased by
\n the Company shall reduce the number (on a one-for-one basis) of any Taxed
\n Shares (to the extent that such Taxed Shares have not become Issued Taxed
\n Shares), such that there shall be no adjustment to the Series A Conversion
\n Price upon issuance of the Option Shares previously designated as Taxed
\n Shares. It is the intent of this 5D(8) that notwithstanding any increase
\n in the number of Option Shares permitted by paragraph 8(c), no more than
\n an aggregate of 650,000 Option Shares (appropriately adjusted to reflect
\n an event described in paragraph 5F hereof) be deemed to be Taxed Shares;
\n and all calculations and determinations made pursuant to this 5D(8) shall
\n be made in good faith by the Corporation’s Board of Directors after
\n consultation with the Corporation’s counsel.<\/p>\n
5E. Certain Issues of Common Stock Excepted. Anything herein to the
\ncontrary notwithstanding, the Corporation shall not be required to make any
\nadjustment of the Series A Conversion Price in the case of the issuance of (i)
\nshares of Common Stock issuable
\n 23
\nupon conversion of the Series A Convertible Preferred Stock, (ii) shares of
\nCommon Stock issued or issuable as a dividend or distribution on Series A
\nConvertible Preferred Stock and (iii) Reserved Employee Shares (as defined in
\nparagraph 8 herein) (other than Taxed Shares).<\/p>\n
5F. Subdivision or Combination of Common Stock. In case the
\nCorporation shall at any time subdivide (by any stock split, stock dividend or
\notherwise) its outstanding shares of Common Stock into a greater number of
\nshares, the Series A Conversion Price in effect immediately prior to such
\nsubdivision shall be proportionately reduced, and, conversely, in case the
\noutstanding shares of Common Stock shall be combined into a smaller number of
\nshares, the Series A Conversion Price in effect immediately prior to such
\ncombination shall be proportionately increased.<\/p>\n
5G. Reorganization or Reclassification. If any capital
\nreorganization, reclassification, recapitalization, consolidation, merger, sale
\nof all or substantially all of the Corporation’s assets or other similar
\ntransaction (any such transaction being referred to herein as an “Organic
\nChange”) shall be effected in such a way that holders of Common Stock shall be
\nentitled to receive (either directly or upon subsequent liquidation) stock,
\nsecurities or assets with respect to or in exchange for Common Stock, then, as a
\ncondition of such Organic Change, lawful and adequate provisions shall be made
\nwhereby each holder of a share or shares of Series A Convertible Preferred Stock
\nshall thereupon have the right to receive, upon the basis and upon the terms and
\nconditions specified herein and in lieu of or in addition to, as the case may
\nbe, the shares of Common Stock immediately theretofore receivable upon the
\nconversion of such share or shares of Series A Convertible Preferred Stock, such
\nshares of stock, securities or assets as may be issued or payable with respect
\nto or in exchange for a number of outstanding shares of such Common Stock equal
\nto the number of shares of such Common Stock immediately theretofore receivable
\nupon such conversion had such Organic Change not taken place, and in any case of
\na reorganization or reclassification only appropriate provisions shall be made
\nwith respect to the rights and interests of such holder to the end that the
\nprovisions hereof (including without limitation provisions for adjustments of
\nthe Series A Conversion Price) shall thereafter be applicable, as nearly as may
\nbe, in relation to any shares of stock, securities or assets thereafter
\ndeliverable upon the exercise of such conversion rights.<\/p>\n
5H. Adjustment of Series A Conversion Price Upon Incurrence of
\nLoss.<\/p>\n
(1) If and whenever the Purchasers (as defined in the Purchase
\nAgreement) shall be entitled to indemnification pursuant to Section 7.13 of the
\nPurchase Agreement and to the extent the amount of Losses (as defined in the
\nPurchase Agreement) for which indemnification is provided therein is not paid in
\ncash, the Series A Conversion Price shall be adjusted such that the number of
\nshares of Common Stock issuable upon the conversion of
\n 24
\none share of Series A Convertible Preferred Stock shall be equal to the sum of
\n(A) the number of shares of Common Stock issuable upon conversion of one share
\nof Series A Convertible Preferred Stock immediately prior to the application of
\nthis Section 5H and (B) the Additional Loss Shares. For purposes of this Section
\n5H, “Additional Loss Shares” shall mean such number of shares of Common Stock as
\nis determined by dividing the Loss Amount (as determined in accordance with
\nSection 7.13(c) of the Purchase Agreement) by the product of (x) the total
\nnumber of shares of Series A Convertible Preferred Stock then outstanding times
\n(y) the Current Series A Value (as determined in accordance with Section 7.13(c)
\nof the Purchase Agreement).<\/p>\n
(2) In addition to any other notice required herein, the Corporation
\nshall provide each Purchaser with notice of any Loss promptly upon becoming
\naware of such Loss, which notice shall specify the amount of such Loss and
\nspecify in reasonable detail each individual item of Loss included in the amount
\nso stated.<\/p>\n
5I. Notice of Adjustment. Upon any adjustment of the Series A
\nConversion Price, then and in each such case the Corporation shall give written
\nnotice thereof, by first class mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, addressed to each holder of shares of
\nPreferred Stock at the address of such holder as shown on the books of the
\nCorporation, which notice shall state the Series A Conversion Price resulting
\nfrom such adjustment, setting forth in reasonable detail the method upon which
\nsuch calculation is based.<\/p>\n
5J. Other Notices. In case at any time:<\/p>\n
(1) the Corporation shall declare any dividend upon its Common Stock
\n payable in cash or stock or make any other distribution to the holders of
\n its Common Stock;<\/p>\n
(2) the Corporation shall offer for subscription pro rata to the
\n holders of its Common Stock any additional shares of stock of any class or
\n other rights;<\/p>\n
(3) there shall be any capital reorganization or reclassification of
\n the capital stock of the Corporation, or a consolidation or merger of the
\n Corporation with or into, or a sale of all or substantially all its assets
\n to, another entity or entities; or<\/p>\n
(4) there shall be a voluntary or involuntary dissolution,
\n liquidation or winding up of the Corporation;
\n 25
\nthen, in any one or more of said cases, the Corporation shall give, by first
\nclass mail, postage prepaid, or by facsimile transmission to non-U.S. residents,
\naddressed to each holder of any shares of Preferred Stock at the address of such
\nholder as shown on the books of the Corporation, (a) at least 20 days’ prior
\nwritten notice of the date on which the books of the Corporation shall close or
\na record shall be taken for such dividend, distribution or subscription rights
\nor for determining rights to vote in respect of any such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up and (b) in the case of any such reorganization, reclassification,
\nconsolidation, merger, sale, dissolution, liquidation or winding up, at least 20
\ndays’ prior written notice of the date when the same shall take place. Such
\nnotice in accordance with the foregoing clause (a) shall also specify, in the
\ncase of any such dividend, distribution or subscription rights, the date on
\nwhich the holders of Common Stock shall be entitled thereto and such notice in
\naccordance with the foregoing clause (b) shall also specify the date on which
\nthe holders of Common Stock shall be entitled to exchange their Common Stock for
\nsecurities or other property deliverable upon such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up, as the case may be.<\/p>\n
5K. Stock to be Reserved. The Corporation will at all times reserve
\nand keep available out of its authorized Common Stock, solely for the purpose of
\nissuance upon the conversion of Series A Convertible Preferred Stock as herein
\nprovided, such number of shares of Common Stock as shall then be issuable upon
\nthe conversion of all outstanding shares of Series A Convertible Preferred
\nStock. The Corporation covenants that all shares of Common Stock which shall be
\nso issued shall be duly and validly issued and fully paid and nonassessable and
\nfree from all taxes, liens and charges with respect to the issue thereof, and,
\nwithout limiting the generality of the foregoing, the Corporation covenants that
\nit will from time to time take all such action as may be requisite to assure
\nthat the par value per share of the Common Stock is at all times equal to or
\nless than the Series A Conversion Price in effect at the time. The Corporation
\nwill take all such action as may be necessary to assure that all such shares of
\nCommon Stock may be so issued without violation of any applicable law or
\nregulation, or of any requirement of any national securities exchange upon which
\nthe Common Stock may be listed.<\/p>\n
5L. No Reissuance of Series A Convertible Preferred Stock. Shares of
\nSeries A Convertible Preferred Stock which are converted into shares of Common
\nStock as provided herein shall not be reissued.<\/p>\n
5M. Issue Tax. The issuance of certificates for shares of Common
\nStock upon conversion of Series A Convertible Preferred Stock shall be made
\nwithout charge to the holders thereof for any issuance tax in respect thereof,
\nprovided that the Corporation shall not be required to pay any tax which may be
\npayable in respect of any transfer involved in the
\n 26
\nissuance and delivery of any certificate in a name other than that of the holder
\nof the Series A Convertible Preferred Stock which is being converted.<\/p>\n
5N. Closing of Books. The Corporation will at no time close its
\ntransfer books against the transfer of any Preferred Stock or of any shares of
\nCommon Stock issued or issuable upon the conversion of any shares of Preferred
\nStock in any manner which interferes with the timely conversion of such
\nPreferred Stock, except as may otherwise be required to comply with applicable
\nsecurities laws.<\/p>\n
5O. Definition of Common Stock. As used in this paragraph 5, the
\nterm “Common Stock” shall mean and include the Corporation’s authorized Common
\nStock, par value $.01 per share, as constituted on the date of filing of these
\nterms of the Preferred Stock, and shall also include any capital stock of any
\nclass of the Corporation thereafter authorized which shall neither be limited to
\na fixed sum or percentage of par value in respect of the rights of the holders
\nthereof to participate in dividends nor entitled to a preference in the
\ndistribution of assets upon the voluntary or involuntary liquidation,
\ndissolution or winding up of the Corporation; provided that the shares of Common
\nStock receivable upon conversion of shares of Series A Convertible Preferred
\nStock shall include only shares designated as Common Stock of the Corporation on
\nthe date of filing of this instrument, or in case of any reorganization or
\nreclassification of the outstanding shares thereof, the stock, securities or
\nassets provided for in subparagraph 5G.<\/p>\n
5P. Mandatory Conversion. All outstanding shares of Series A
\nConvertible Preferred Stock shall automatically convert to shares of Common
\nStock if at any time the Corporation shall effect a public offering of shares of
\nCommon Stock (any such offering, regardless of compliance with subsections (i),
\n(ii) and (iii) herein, being referred to as a “Public Offering”) provided (i)
\nthe aggregate net proceeds from such offering to the Corporation shall be at
\nleast $20,000,000; (ii) the price paid by the public for such shares shall be at
\nleast $22.80 (appropriately adjusted to reflect the occurrence of any event
\ndescribed in paragraph 5F) and (iii) the offering is a firm commitment
\nunderwritten public offering, then effective upon the closing of the sale of
\nsuch shares by the Corporation pursuant to such public offering, all outstanding
\nshares of Preferred Stock shall automatically convert to shares of Common Stock.<\/p>\n
6. Redemption. The shares of Preferred Stock shall be redeemed as follows:<\/p>\n
6A. Optional Redemption. The Corporation shall not have the right to
\ncall or redeem at any time all or any shares of Series A Convertible Preferred
\nStock. With the approval of the holders of 66% of the then outstanding shares of
\nSeries A Convertible Preferred Stock, one or more holders of shares of Series A
\nConvertible Preferred Stock may,
\n 27
\nby giving notice (the “Notice”) to the Corporation at any time after November
\n23, 2003 require the Corporation to redeem all of the outstanding Series A
\nConvertible Preferred Stock in two equal installments, with one-half of the
\nshares of Series A Convertible Preferred Stock redeemed on the First Redemption
\nDate (as defined below), and the remainder redeemed on the first anniversary of
\nthe First Redemption Date (the “Second Redemption Date”). Upon receipt of the
\nNotice, the Corporation will so notify all other persons holding Series A
\nConvertible Preferred Stock. After receipt of the Notice, the Corporation shall
\nfix the first date for redemption (the “First Redemption Date”), provided that
\nsuch First Redemption Date shall occur within sixty (60) days after receipt of
\nthe Notice. All holders of Series A Convertible Preferred Stock shall deliver to
\nthe Corporation during regular business hours, at the office of any transfer
\nagent of the Corporation for the Series A Convertible Preferred Stock, or at the
\nprincipal office of the Corporation or at such other place as may be designated
\nby the Corporation, the certificate or certificates for the Series A Convertible
\nPreferred Stock, duly endorsed for transfer to the Corporation (if required by
\nit) on or before the First Redemption Date. The First Redemption Date and the
\nSecond Redemption Date are collectively referred to as the “Redemption Dates”.<\/p>\n
6B. Redemption Price and Payment. The Series A Convertible Preferred
\nStock to be redeemed on the Redemption Dates shall be redeemed by paying for
\neach share in cash an amount equal to $7.60 per share, plus an amount equal to
\nall dividends accrued and unpaid on each such share, such amount being referred
\nto as the “Series A Redemption Price.” Such payment shall be made in full on
\neach of the Redemption Dates to the holders entitled thereto.<\/p>\n
6C. Redemption Mechanics. At least 15 but not more than 35 days
\nprior to each Redemption Date, written notice (the “Redemption Notice”) shall be
\ngiven by the Corporation by mail, postage prepaid, or by facsimile transmission
\nto non-U.S. residents, to each holder of record (at the close of business on the
\nbusiness day next preceding the day on which the Redemption Notice is given) of
\nshares of Series A Convertible Preferred Stock notifying such holder of the
\nredemption and specifying the Series A Redemption Price, the Redemption Date and
\nthe place where said Series A Redemption Price shall be payable. The Redemption
\nNotice shall be addressed to each holder at his address as shown by the records
\nof the Corporation. From and after the close of business on the Redemption Date,
\nunless there shall have been a default in the payment of the Series A Redemption
\nPrice, all rights of holders of shares of Series A Convertible Preferred Stock
\n(except the right to receive the Series A Redemption Price) shall cease with
\nrespect to such shares, and such shares shall not thereafter be transferred on
\nthe books of the Corporation or be deemed to be outstanding for any purpose
\nwhatsoever. If the funds of the Corporation legally available for redemption of
\nshares of Series A Convertible Preferred Stock on any Redemption Date are
\ninsufficient to redeem the total number of outstanding shares of Series A
\nConvertible Preferred Stock to be
\n 28
\nredeemed on such Redemption Date, the holders of shares of Series A Convertible
\nPreferred Stock shall share ratably in any funds legally available for
\nredemption of such shares according to the respective amounts which would be
\npayable with respect to the full number of shares owned by them if all such
\noutstanding shares were redeemed in full. The shares of Series A Convertible
\nPreferred Stock not redeemed shall remain outstanding and entitled to all rights
\nand preferences provided herein; provided, however, that such unredeemed shares
\nshall be entitled to receive interest accruing daily with respect to the
\napplicable Series A Redemption Price at the rate of 15% per annum, payable
\nquarterly in arrears. At any time thereafter when additional funds of the
\nCorporation are legally available for the redemption of such shares of Series A
\nConvertible Preferred Stock, such funds will be used, at the end of the next
\nsucceeding fiscal quarter, to redeem the balance of such shares, or such portion
\nthereof for which funds are then legally available, on the basis set forth
\nabove.<\/p>\n
6D. Redeemed or Otherwise Acquired Shares to be Retired. Any shares
\nof Series A Convertible Preferred Stock redeemed pursuant to this paragraph 6 or
\notherwise acquired by the Corporation in any manner whatsoever shall be canceled
\nand shall not under any circumstances be reissued; and the Corporation may from
\ntime to time take such appropriate corporate action as may be necessary to
\nreduce accordingly the number of authorized shares of Series A Convertible
\nPreferred Stock.<\/p>\n
7. Amendments. Except where the vote or written consent of the holders of
\na greater number of shares of the Corporation is required by these terms of the
\nSeries A Convertible Preferred Stock by law or by the Certificate of
\nIncorporation, no provision of these terms of the Series A Convertible Preferred
\nStock may be amended, modified or waived without the written consent or
\naffirmative vote of the holders of at least 60% of the then outstanding shares
\nof Series A Convertible Preferred Stock.<\/p>\n
8. Definitions. As used herein, the following terms shall have the
\nfollowing meanings:<\/p>\n
(a) The term “Purchase Agreement” shall mean the Series A
\nConvertible Preferred Stock Purchase Agreement dated as of November 23, 1998
\nbetween the Corporation and the Purchasers listed in Exhibit 1.01 thereto as in
\neffect on November 23, 1998.<\/p>\n
(b) The term the “Plan” shall mean the Corporation’s 1998 Stock
\nIncentive Plan.<\/p>\n
(c) The term “Reserved Employee Shares” shall mean shares of Common
\nStock reserved by the Corporation pursuant to the Plan from time to time for (i)
\nthe sale of shares of Common Stock to employees, consultants or non-employee
\ndirectors (other than representatives of the holders of Preferred Stock) of the
\nCorporation or (ii) the exercise of options to purchase Common Stock granted to
\nemployees, consultants or non-employee directors (other than
\n 29
\nrepresentatives of the holders of Preferred Stock) of the Corporation, not to
\nexceed in the aggregate 650,000 shares of Common Stock for both clauses (i) and
\n(ii) , with such number including 236,900 shares issued or subject to options
\ngranted prior to the date of the initial issuance of the Series A Convertible
\nPreferred Stock (the “Option Shares”) (appropriately adjusted to reflect an
\nevent described in paragraph 5F hereof), provided that, such number of such
\nshares subject to the Plan shall be increased by up to 839,914 additional shares
\nof Common Stock (appropriately adjusted to reflect an event described in
\nparagraph 5F hereof) (collectively, the “Founders’ Shares”) upon the repurchase
\nof such Founders’ Shares by the Company from the Founders pursuant to
\ncontractual rights held by the Company. The foregoing number of Reserved
\nEmployee Shares may be increased by the affirmative vote or written consent of
\nthe directors elected solely by the holders of Series A Convertible Preferred
\nStock or the affirmative vote or written consent of the holders of at least 60%
\nof the then outstanding shares of Series A Convertible Preferred Stock.<\/p>\n
(c) The term “Subsidiary” or “Subsidiaries” shall mean any
\ncorporation, partnership, trust or other entity of which the Corporation and\/or
\nany of its other subsidiaries directly or indirectly owns at the time a majority
\nof the outstanding shares of every class of equity security of such corporation,
\npartnership, trust or other entity.<\/p>\n
Executed: November 23, 1998 AKAMAI TECHNOLOGIES, INC.<\/p>\n
\/s\/ Daniel Lewin
\n —————-
\n Daniel Lewin
\n President
\n 30
\n CERTIFICATE OF AMENDMENT
\n OF THE
\n CERTIFICATE OF INCORPORATION
\n OF
\n AKAMAI TECHNOLOGIES, INC.<\/p>\n
Pursuant to Section 242
\n of the General Corporation Law of
\n the State of Delaware<\/p>\n
Akamai Technologies, Inc. (hereinafter called the “Corporation”),
\norganized and existing under and by virtue of the General Corporation Law of the
\nState of Delaware, does hereby certify as follows:<\/p>\n
The Board of Directors of the Corporation, by unanimous written consent in
\nlieu of a meeting, duly adopted a resolution, pursuant to Sections 141(f) and
\n242 of the General Corporation Law of the State of Delaware, setting forth an
\namendment to the Certificate of Incorporation of the Corporation and declaring
\nsaid amendment to be advisable. The stockholders of the Corporation duly
\napproved said proposed amendment by written consent in accordance with Sections
\n228 and 242 of the General Corporation Law of the State of Delaware, and written
\nnotice of such consent has been or will be given to all stockholders who have
\nnot consented in writing to said amendment. The resolution setting forth the
\namendment is as follows:<\/p>\n
RESOLVED: That the first paragraph of Article FOURTH of the Certificate of
\n Incorporation of the Corporation be and hereby is deleted in its
\n entirety and that the following paragraph be inserted in lieu
\n thereof:<\/p>\n
“FOURTH. The total number of shares of all classes of stock which
\n the Corporation shall have authority to issue is 17,000,000 shares,
\n consisting of (i) 15,000,000 shares of Common Stock, $0.01 par value per
\n share (“Common Stock”), and (ii) 2,000,000 shares of Preferred Stock,
\n $0.01 par value per share (“Preferred Stock”).”<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
\nAmendment to be signed by its President on this 26th day of January, 1999.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Daniel M. Lewin
\n ——————-
\n Daniel M. Lewin
\n President
\n 31
\n CERTIFICATE OF AMENDMENT
\n OF THE
\n CERTIFICATE OF INCORPORATION
\n OF
\n AKAMAI TECHNOLOGIES, INC.<\/p>\n
Pursuant to Section 242
\n of the General Corporation Law of
\n the State of Delaware<\/p>\n
Akamai Technologies, Inc. (hereinafter called the “Corporation”),
\norganized and existing under and by virtue of the General Corporation Law of the
\nState of Delaware, does hereby certify as follows:<\/p>\n
The Board of Directors of the Corporation, by unanimous written consent in
\nlieu of a meeting, duly adopted a resolution, pursuant to Sections 141(f) and
\n242 of the General Corporation Law of the State of Delaware, setting forth an
\namendment to the Certificate of Incorporation of the Corporation and declaring
\nsaid amendment to be advisable. The stockholders of the Corporation duly
\napproved said proposed amendment by written consent in accordance with Sections
\n228 and 242 of the General Corporation Law of the State of Delaware, and written
\nnotice of such consent has been or will be given to all stockholders who have
\nnot consented in writing to said amendment. The resolution setting forth the
\namendment is as follows:<\/p>\n
RESOLVED: That the first paragraph of Article FOURTH of the Certificate of
\n Incorporation of the Corporation be and hereby is deleted in its
\n entirety and that the following paragraph be inserted in lieu
\n thereof:<\/p>\n
“FOURTH. The total number of shares of all classes of stock which
\n the Corporation shall have authority to issue is 27,000,000 shares,
\n consisting of (i) 22,000,000 shares of Common Stock, $0.01 par value per
\n share (“Common Stock”), and (ii) 5,000,000 shares of Preferred Stock,
\n $0.01 par value per share (“Preferred Stock”).”<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
\nAmendment to be signed by its President on this 16th day of April, 1999.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Daniel M. Lewin
\n ——————-
\n Daniel M. Lewin
\n President
\n 32
\n CERTIFICATE OF DESIGNATIONS<\/p>\n
OF<\/p>\n
SERIES B CONVERTIBLE PREFERRED STOCK<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
————-<\/p>\n
Pursuant to Section 151 of the
\n General Corporation Law of the State of Delaware<\/p>\n
————-<\/p>\n
Akamai Technologies, Inc., a Delaware corporation (the “Corporation”),
\ncertifies that pursuant to the authority contained in Article Fourth of its
\nCertificate of Incorporation and in accordance with the provisions of Section
\n151 of the General Corporation Law of the State of Delaware, the Board of the
\nDirectors of the Corporation, at a meeting held on April 13, 1999, duly adopted
\nthe following resolution, which resolution remains in full force and effect on
\nthe date hereof:<\/p>\n
RESOLVED, that, pursuant to the authority expressly granted to and vested
\nin the Board of Directors of the Corporation, a series of Preferred Stock of the
\nCorporation be and hereby is established, consisting of 1,327,500 shares, $0.01
\npar value per share, to be designated “Series B Convertible Preferred Stock”
\n(hereinafter, the “Series B Preferred Stock”); that the Board of Directors be
\nand hereby is authorized to issue such shares of Series B Preferred Stock from
\ntime to time and for such consideration and on such terms as the Board of
\nDirectors shall determine; and that, subject to the limitations provided by law
\nand by the Certificate of Incorporation, the voting powers, preferences and
\nrelative, participating, optional and other special rights, and qualifications,
\nlimitations and restrictions thereof shall be as set forth on Schedule I
\nattached hereto.<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this certificate to be duly
\nexecuted by its President on this 16th day of April, 1999<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Daniel Lewin
\n —————–
\n Daniel Lewin
\n President
\n 33
\n SCHEDULE I<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n DESIGNATION OF SERIES B CONVERTIBLE PREFERRED STOCK<\/p>\n
The series of Preferred Stock designated and known as “Series B
\nConvertible Preferred Stock” shall consist of 1,327,500 shares.<\/p>\n
1. Voting.<\/p>\n
1A. General. Except as may be otherwise provided in the terms of the
\nSeries B Convertible Preferred Stock, in the Certificate of Incorporation (the
\n“Certificate of Incorporation”) of Akamai Technologies, Inc. (the “Corporation”)
\nor by law, the Series B Convertible Preferred Stock shall vote together with all
\nother classes and series of stock of the Corporation as a single class on all
\nactions to be taken by the stockholders of the Corporation. Each share of Series
\nB Convertible Preferred Stock shall entitle the holder thereof to such number of
\nvotes per share on each such action as shall equal the number of shares of
\nCommon Stock (including fractions of a share) into which each share of Series B
\nConvertible Preferred Stock is then convertible.<\/p>\n
1B. Board Size. Subject to the provisions of paragraph 1C below, the
\nCorporation shall not, without the written consent or affirmative vote of the
\nholders of at least 60% of the then outstanding shares of Series B Convertible
\nPreferred Stock, given in writing or by vote at a meeting, consenting or voting
\n(as the case may be) separately as a series, increase the maximum number of
\ndirectors constituting the Board of Directors to a number in excess of nine (9).<\/p>\n
1C. Board Seats. For so long as at least 50% of the shares of Series B
\nConvertible Preferred Stock issued pursuant to the Purchase Agreement (as
\ndefined in paragraph 9 herein) remains outstanding, the holders of the Series B
\nConvertible Preferred Stock, voting as a separate series, shall be entitled to
\nelect one (1) director of the Corporation. At any meeting (or in a written
\nconsent in lieu thereof) held for the purpose of electing directors, the
\npresence in person or by proxy (or the written consent) of the holders of at
\nleast a majority in interest of the then outstanding shares of Series B
\nConvertible Preferred Stock shall constitute a quorum of the Series B
\nConvertible Preferred Stock for the election of directors to be elected solely
\nby the holders of the Series B Convertible Preferred Stock voting as a separate
\nseries. A vacancy in any directorship elected by the holders of the Series B
\nConvertible Preferred Stock will be filled only by the affirmative vote or
\nwritten consent of the holders of at least 60% of the then outstanding shares of
\nSeries B Convertible Preferred Stock. The directors to be elected by the holders
\nof the Series B Convertible Preferred Stock, voting separately as one class,
\npursuant to this paragraph 1C, shall serve for terms extending from the date of
\ntheir election and qualification until the time of the next succeeding annual
\nmeeting of stockholders and until their successors have been elected and
\nqualified.<\/p>\n
2. Ranking. The Series B Convertible Preferred Stock shall rank, with
\nrespect to dividend distributions and distributions upon a Liquidation Event (as
\ndefined in paragraph 4A herein), senior to all classes of common stock of the
\nCompany and to each other class of capital stock or series of preferred stock
\n(including the Series A Convertible Preferred Stock of the
\n 34
\nCorporation) established before the Preferred Stock Issue Date, by the Board of
\nDirectors, pari passu with the Series C Convertible Preferred Stock of the
\nCorporation, and senior or pari passu to any other class of capital stock or
\nseries of preferred stock established after the Preferred Stock Issue Date by
\nthe Board of Directors. All classes of common stock of the Company, the Series A
\nConvertible, Preferred Stock and any other class of capital stock or series of
\npreferred stock established after the Preferred Stock Issue Date to which the
\nSeries B Convertible Preferred Stock is senior, are collectively referred to
\nherein as “Junior Securities”. The Series C Convertible Preferred Stock of the
\nCorporation and any other class of capital stock or series of preferred stock
\nestablished after the Preferred Stock Issue Date which ranks pari passu with the
\nSeries B Convertible Preferred Stock, are collectively referred to herein as
\n“Pari Passu Securities”.<\/p>\n
3. Dividends.<\/p>\n
3A. The holders of shares of the Series B Convertible Preferred Stock
\nshall be entitled to receive, when, as and if dividends are declared by the
\nBoard of Directors out of funds of the Corporation legally available therefor,
\ncumulative preferential dividends at the annual rate of 8% on the Series B
\nLiquidation Preference Payments (as defined in paragraph 4A herein); provided,
\nhowever, that any such dividends shall be declared and paid only in the event of
\n(i) a Liquidation Event pursuant to paragraph 4A hereof or (ii) a Redemption
\npursuant to paragraph 7B hereof. Holders of shares of Series B Convertible
\nPreferred Stock shall be entitled to receive the dividends provided for herein
\nin preference to and in priority over any dividends upon any of the Junior
\nSecurities.<\/p>\n
3B. Dividends on the Series B Convertible Preferred Stock shall accrue
\non a daily basis from, the Preferred Stock Issue Date and, to the extent they
\nare not paid, shall accumulate on an annual basis on each December 31, whether
\nor not the Corporation has earnings or profits, whether or not there are funds
\nlegally available for the payment of such dividends and whether or not dividends
\nare declared.<\/p>\n
4. Liquidation, Dissolution and Winding-Up.<\/p>\n
4A. Liquidation. Upon any liquidation, dissolution or winding up of the
\nCorporation (a “Liquidation Event”), whether voluntary or involuntary, the
\nholders of the shares of Series B Convertible Preferred Stock shall be paid an
\namount equal to $15.066 per share plus, in the case of each share, an amount
\nequal to dividends accrued but unpaid thereon, computed to the date payment
\nthereof is made available, together with payment to any Pari Passu Securities,
\nand before any payment shall be made to the holders of any Junior Securities,
\nsuch amount payable with respect to one share of Series B Convertible Preferred
\nStock being sometimes referred to as the “Series B Liquidation Preference
\nPayment” and with respect to all shares of Series B Convertible Preferred Stock
\nbeing sometimes referred to as the “Series B Liquidation Preference Payments”.
\nIf upon any Liquidation Event, the assets to be distributed to the holders of
\nthe Series B Convertible Preferred Stock shall be insufficient to permit payment
\nto such stockholders of the full preferential amounts aforesaid, then all of the
\nassets of the Corporation available for distribution to holders of the Series B
\nConvertible Preferred Stock shall be distributed to such holders of the Series B
\nConvertible Preferred Stock pro rata, so that each
\n 35
\nholder receives that portion of the assets available for distribution as the
\nnumber of shares of such stock held by such holder bears to the total number of
\nshares of such stock then outstanding.<\/p>\n
4B. Upon any Liquidation Event, immediately after the holders of Series
\nB Convertible Preferred Stock and holders of any Pari Passu Securities have been
\npaid in full pursuant to paragraph 4A above, the remaining net assets of the
\nCorporation available for distribution shall be distributed among the holders of
\nthe shares of Junior Securities.<\/p>\n
Written notice of such Liquidation Event, stating a payment date and the
\nplace where said payments shall be made. shall be given by mail, postage
\nprepaid, or by facsimile to non-U.S. residents not less than 20 days prior to
\nthe payment date stated therein, to the holders of record of Series B
\nConvertible Preferred Stock, such notice to be addressed to each such holder at
\nits address as shown by the records of the Corporation.<\/p>\n
The (x) consolidation or merger of the Corporation into or with any other
\nentity or entities which results in the exchange of outstanding shares of the
\nCorporation for securities or other consideration issued or paid or caused to be
\nissued or paid by any such entity or affiliate thereof (except a consolidation
\nor merger into a Subsidiary or merger in which the Corporation is the surviving
\nCorporation and the holders of the Corporation’s voting stock outstanding
\nimmediately prior to the transaction constitute a majority of the holders of
\nvoting stock outstanding immediately following the transaction), (y) sale or
\ntransfer by the Corporation of all or substantially all of its assets, or (z)
\nsale or transfer by the Corporation’s stockholders of capital stock representing
\na majority of the outstanding capital stock of the Corporation shall be deemed
\nto be a Liquidation Event within the meaning of the provisions of this paragraph
\n4 (subject to the provisions of this paragraph 4 and not the provisions of
\nparagraph 6G hereof unless paragraph 6G is elected in the following proviso);
\nprovided, however, that if the holders of at least 60% of the then outstanding
\nshares of Series B Convertible Preferred Stock shall elect the benefits of the
\nprovisions of paragraph 6G in lieu of receiving payment in a Liquidation Event
\npursuant to this paragraph 4, then all holders of shares of Series B Convertible
\nPreferred Stock shall receive the benefits of the provisions of paragraph 6G in
\nlieu of receiving payment pursuant to this paragraph 4. Whenever the
\ndistribution provided for in this paragraph 4 shall be payable in property other
\nthan cash, the value of such distribution shall be the fair market value of such
\nproperty as determined in good faith by the Board of Directors of the
\nCorporation.<\/p>\n
5. Restrictions. At any time when at least 50% of the shares of Series B
\nConvertible Preferred Stock issued pursuant to the Purchase Agreement remain
\noutstanding, except where the vote or written consent of the holders of a
\ngreater number of shares of the Corporation is required by law or by the
\nCertificate of Incorporation, and in addition to any other vote required by law
\nor the Certificate of Incorporation, without the written consent of the holders
\nof at least 60% of the then outstanding shares of Series B Convertible Preferred
\nStock given in writing or by vote at a meeting, consenting or voting (as the
\ncase may be) separately as a series, the Corporation will not:<\/p>\n
(1) Consent to any Liquidation Event or merge or consolidate with or
\ninto, or permit any Subsidiary to merge or consolidate with or into, any other
\ncorporation, corporations, entity or entities (except a consolidation or merger
\ninto a Subsidiary or merger in which the Corporation is the surviving
\ncorporation and the holders of the Corporation’s voting stock
\n 36
\noutstanding immediately prior to the transaction constitute a majority of the
\nholders of voting stock outstanding immediately following the transaction or a
\nconsolidation or merger pursuant to which the aggregate consideration definitely
\nand unconditionally payable to all of the stockholders of the Corporation is
\ngreater than $400 million);<\/p>\n
(2) Sell, abandon, transfer, lease or otherwise dispose of all or
\nsubstantially all of its properties or assets (unless the aggregate
\nconsideration definitely and unconditionally payable to all of the stockholders
\nof the Corporation is greater than $400 million);<\/p>\n
(3) Amend, alter or repeal any provision of its Certificate of
\nIncorporation or By-laws in a manner adverse to holders of the Series B
\nConvertible Preferred Stock;<\/p>\n
(4) Create or authorize the creation of or issue any additional class
\nor series of shares of stock (other than the Series C Convertible Preferred
\nStock of the Corporation) unless the same ranks junior to or on parity with the
\nSeries B Convertible Preferred Stock as to dividends and the distribution of
\nassets on a Liquidation Event, or increase the authorized amount of Series B
\nConvertible Preferred Stock or increase the authorized amount of any additional
\nclass or series of shares of stock unless the same ranks junior to or on parity
\nwith the Series B Convertible Preferred Stock as to dividends and the
\ndistribution of assets on a Liquidation Event, or create or authorize any
\nobligation or security convertible into shares of Series B Convertible Preferred
\nStock or into shares of any other class or series of stock unless the same ranks
\njunior to or on parity with the Series B Convertible Preferred Stock as to
\ndividends and the distribution of assets on a Liquidation Event, whether any
\nsuch creation, authorization or increase shall be by means of amendment to the
\nCertificate of Incorporation or by merger, consolidation or otherwise;<\/p>\n
(5) In any manner amend, alter or change the designations or the
\npowers, preferences or rights, privileges or the restrictions of the Series B
\nConvertible Preferred Stock, provided, however, that the authorization or
\ncreation of any shares of capital stock on parity with the Series B Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent shall not require approval of holders of Series B Convertible Preferred
\nStock;<\/p>\n
(6) Purchase or redeem, or set aside any sums for the purchase or
\nredemption of, or pay any dividend or make any distribution on, any Junior
\nSecurities, except for (i) dividends or other distributions payable on the
\nCommon Stock solely in the form of additional shares of Common Stock or (ii)
\nrepurchases of shares of capital stock (at the original purchase price therefor)
\nfrom officers, employees, directors or consultants of the Corporation which are
\nsubject to restrictive stock purchase, right of first refusal or other
\nagreements under which the Corporation has the option to repurchase such shares
\nupon the occurrence of certain events, including termination of employment; or<\/p>\n
(7) Increase the number of Reserved Employee Shares without the
\naffirmative vote or written consent of a majority of the directors designated
\nsolely by the holders of Series A Convertible Preferred Stock and Series B
\nConvertible Preferred Stock or the affirmative vote or written consent of the
\nholders of at least 50% of the then outstanding shares of Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock and Series C Convertible
\nPreferred Stock, voting together as a single class on a Common Stock equivalent
\nbasis.
\n 37
\n 6. Conversion. The holders of shares of Series B Convertible Preferred
\nStock shall have the following conversion rights:<\/p>\n
6A. Right to Convert. Subject to the terms and conditions of this
\nparagraph 6, the holder of any share or shares of Series B Convertible Preferred
\nStock shall have the right, at its option at any time, to convert any such
\nshares of Series B Convertible Preferred Stock (except that upon any Liquidation
\nEvent the right of conversion shall terminate at the close of business on the
\nbusiness day fixed for payment of the amounts distributable on the Series B
\nConvertible Preferred Stock) into such number of fully paid and nonassessable
\nshares of Common Stock as is obtained by (i) multiplying the number of shares of
\nSeries B Convertible Preferred Stock so to be converted by $15.066 and (ii)
\ndividing the result by the conversion price of $15.066 per share or in case an
\nadjustment of such price has taken place pursuant to the further provisions of
\nthis paragraph 6, then by the conversion price as list adjusted and in effect at
\nthe date any share or shares of Series B Convertible Preferred Stock are
\nsurrendered for conversion (such price, or such price as last adjusted, being
\nreferred to as the “Series B Conversion Price”). Such rights of conversion shall
\nbe exercised by the holder thereof by giving written notice that the holder
\nelects to convert a stated number of shares of Series B Convertible Preferred
\nStock into Common Stock and by surrender of a certificate or certificates for
\nthe shares so to be converted to the Corporation at its principal office (or
\nsuch other office or agency of the Corporation as the Corporation may designate
\nby notice in writing to the holders of the Series B Convertible Preferred Stock)
\nat any time during its usual business hours on the date set forth in such
\nnotice, together with a statement of the name or names (with address) in which
\nthe certificate or certificates for shares of Common Stock shall be issued.<\/p>\n
6B. Issuance of Certificates; Time Conversion Effected. Promptly after
\nthe receipt of the written notice referred to in paragraph 6A and surrender of
\nthe certificate or certificates for the share or shares of Series B Convertible
\nPreferred Stock to be converted, the Corporation shall issue and deliver, or
\ncause to be issued and delivered, to the holder, registered in such name or
\nnames as such holder may direct, a certificate or certificates for the number of
\nwhole shares of Common Stock issuable upon the conversion of such share or
\nshares of Series B Convertible Preferred Stock. To the extent permitted by law,
\nsuch conversion shall be deemed to have been effected and the Series B
\nConversion Price shall be determined as of the close of business on the date on
\nwhich such written notice shall have been received by the Corporation and the
\ncertificate or certificates for such share or shares shall have been surrendered
\nas aforesaid, and at such time the right of the holder of such share or shares
\nof Series B Convertible Preferred Stock shall cease, and the person or persons
\nin whose name or names any certificate or certificates for shares of Common
\nStock shall be issuable upon such conversion shall be deemed to have become the
\nholder or holders of record of the shares represented thereby.<\/p>\n
6C. Fractional Shares; Dividends; Partial Conversion. No fractional
\nshares shall be issued upon conversion of Series B Convertible Preferred Stock
\ninto Common Stock and no payment or adjustment shall be made upon any conversion
\non account of any cash dividends on the Common Stock issued upon such
\nconversion. At the time of each conversion, the Corporation shall pay in cash an
\namount equal to all dividends declared and unpaid (if any) on the shares of
\nSeries B Convertible Preferred Stock surrendered for conversion to the date upon
\nwhich such conversion is deemed to take place as provided in paragraph 6B. In
\ncase the number of shares of Series B Convertible Preferred Stock represented by
\nthe certificate or certificates
\n 38
\nsurrendered pursuant to paragraph 6A exceeds the number of shares converted, the
\nCorporation shall, upon such conversion, execute and deliver to the holder, at
\nthe expense of the Corporation, a new certificate or certificates for the number
\nof shares of Series B Convertible Preferred Stock represented by the certificate
\nor certificates surrendered which are not to be converted. If any fractional
\nshare of Common Stock would, except for the provisions of the first sentence of
\nthis paragraph 6C, be delivered upon such conversion, the Corporation, in lieu
\nof delivering such fractional share, shall pay to the holder surrendering the
\nSeries B Convertible Preferred Stock for conversion an amount in cash equal to
\nthe current fair market value of such fractional share as determined in good
\nfaith by the Board of Directors of the Corporation, and based upon the aggregate
\nnumber of shares of Series B Convertible Preferred Stock surrendered by any one
\nholder.<\/p>\n
6D. Adjustment of Series B Conversion Price Upon Issuance of Common
\nStock. Except as provided in paragraphs 6E and 6F, if and whenever the
\nCorporation shall issue or sell, or is, in accordance with subparagraphs 6D(1)
\nthrough 6D(7), deemed to have issued or sold, any shares of Common Stock for a
\nconsideration per share less than the Series B Conversion Price in effect
\nimmediately prior to the time of such issue or sale, (such number being
\nappropriately adjusted to reflect the occurrence of any event described in
\nparagraph 6F), then, forthwith upon such issue or sale, the Series B Conversion
\nPrice shall be reduced to the price determined by dividing (i) an amount equal
\nto the sum of (a) the number of shares of Common Stock outstanding immediately
\nprior to such issue or sale (assuming the conversion of the outstanding shares
\nof Series B Convertible Preferred Stock) multiplied by the then existing Series
\nB Conversion Price and (b) the consideration, if any, received by the
\nCorporation upon such issue or sale, by (ii) the total number of shares of
\nCommon Stock outstanding immediately after such issue or sale (assuming the
\nconversion of the outstanding shares of Series B Convertible Preferred Stock).<\/p>\n
For purposes of this paragraph 6D, the following subparagraphs 6D(1) to
\n6D(7) shall also be applicable:<\/p>\n
6D(1) Issuance of Rights or Options. In case at any time the
\n Corporation shall in any manner grant (whether directly or by assumption in
\n a merger or otherwise) any warrants or other rights to subscribe for or to
\n purchase, or any options for the purchase of, Common Stock or any stock or
\n security convertible into or exchangeable for Common Stock (such warrants,
\n rights or options being called “Options” and such convertible exchangeable
\n stock or securities being called “Convertible Securities”) whether or not
\n such Options or the right to convert or exchange any such Convertible
\n Securities are immediately exercisable, and the price per share for which
\n Common Stock is issuable upon the exercise of such Options or upon the
\n conversion or exchange of such Convertible Securities (determined by
\n dividing (i) the total amount, if any, received or receivable by the
\n Corporation as consideration for the granting of such Options, plus the
\n minimum aggregate amount of additional consideration payable to the
\n Corporation upon the exercise of all such Options, plus, in the case of
\n such Options which relate to Convertible Securities, the minimum aggregate
\n amount of additional consideration, if it any, payable upon the issue or
\n sale of all such Convertible Securities and upon the conversion or exchange
\n thereof, by (ii) the total maximum number of shares of Common Stock
\n issuable upon the exercise of such Options or upon the conversion or
\n exchange of
\n 39
\n all such Convertible Securities issuable upon the exercise of such Options)
\n shall be less than the Series B Conversion Price in effect immediately
\n prior to the time of the granting of such Options, then the total maximum
\n number of shares of Common Stock issuable upon the exercise of such Options
\n or upon conversion or exchange of the total maximum amount of such
\n Convertible Securities issuable upon the exercise of such Options shall be
\n deemed to have been issued for such price per share as of the date of
\n granting of such Options or the issuance of such Convertible Securities and
\n thereafter shall be deemed to be outstanding. Except as otherwise provided
\n in subparagraph 6D(3), no adjustment of the Series B Conversion Price shall
\n be made upon the actual issue of such Common Stock or of such Convertible
\n Securities upon exercise of such Options or upon the actual issue of such
\n Common Stock upon conversion or exchange of such Convertible Securities.<\/p>\n
6D(2) Issuance of Convertible Securities. In case the Corporation
\n shall in any manner issue (whether directly or by assumption in a merger or
\n otherwise) or sell any Convertible Securities, whether or not the rights to
\n exchange or convert any such Convertible Securities are immediately
\n exercisable, and the price per share for which Common Stock is issuable
\n upon such conversion or exchange (determined by dividing (i) the total
\n amount received or receivable by the Corporation as consideration for the
\n issue or sale of such Convertible Securities, plus the minimum aggregate
\n amount of additional consideration, if any, payable to the Corporation upon
\n the conversion or exchange of all such Convertible Securities thereof, by
\n (ii) the total maximum number of shares of Common Stock issuable upon the
\n conversion or exchange of all such Convertible Securities) shall be less
\n than the Series B Conversion Price in effect immediately prior to the time
\n of such issue or sale, then the total maximum number of shares of Common
\n Stock issuable upon conversion or exchange of all such Convertible
\n Securities shall be deemed to have been issued for such price per share as
\n of the date of the issue or sale of such Convertible Securities and
\n thereafter shall be deemed to be outstanding, provided that (a) except as
\n otherwise provided in subparagraph 6D(3), no adjustment of the Series B
\n Conversion Price shall be made upon the actual issue of such Common Stock
\n upon conversion or exchange of such Convertible Securities and (b) if any
\n such issue or sale of such Convertible Securities is made upon exercise of
\n any Options to purchase any such Convertible Securities for which
\n adjustments of the Series B Conversion Price have been or are to be made
\n pursuant to other provisions of this paragraph 6D, no further adjustment of
\n the Series B Conversion Price shall be made by reason of such issue or
\n sale.<\/p>\n
6D(3) Change in Option Price or Conversion Rate. Upon the happening of
\n any of the following events, namely, if the purchase price provided for in
\n any Option referred to in subparagraph 6D(1), the additional consideration,
\n if any, payable upon the conversion or exchange of any Convertible
\n Securities referred to in subparagraph 6D(1) or 6D(2), or the rate at which
\n Convertible Securities referred to in subparagraph 6D(1) or 6D(2) are
\n convertible into or exchangeable for Common Stock shall change at any time
\n (including, but not limited to, changes under or by reason of provisions
\n designed to protect against dilution), the Series B Conversion Price in
\n effect at the time of such event shall forthwith be readjusted to the
\n Series B Conversion Price which would have been in effect at such time had
\n such Options or Convertible Securities still outstanding provided for such
\n changed purchase price, additional consideration or conversion rate, as the
\n case
\n 40
\n may be, at the time initially granted, issued or sold; provided, however,
\n that in no event shall the Series B Conversion Price then in effect
\n hereunder be increased; and on the expiration of any such Option or the
\n termination of any such right to convert or exchange such Convertible
\n Securities, the Series B Conversion Price then in effect hereunder shall
\n forthwith be increased to the Conversion Price which would have been in
\n effect at the time of such expiration or termination had such Option or
\n Convertible Securities, to the extent outstanding immediately prior to such
\n expiration or termination, never been issued.<\/p>\n
6D(4) Stock Dividends. In case the Corporation shall declare a
\n dividend or make any other distribution upon any stock of the Corporation
\n payable in Common Stock (except for the issue of stock dividends or
\n distributions upon the outstanding Common Stock for which adjustment is
\n made pursuant to paragraph 6F), Options or
\n Convertible Securities, any Common Stock, Options or Convertible
\n Securities, as the case may be, issuable in payment of such dividend or
\n distribution shall be deemed to have been issued or sold without
\n consideration.<\/p>\n
6D(5) Consideration for Stock. In case any shares of Common Stock,
\n Options or Convertible Securities shall be issued or sold for cash, the
\n consideration received therefor shall be deemed to be the amount received
\n by the Corporation therefor, without deduction therefrom of any expenses
\n incurred or any underwriting commissions or concessions paid or allowed by
\n the Corporation in connection therewith. In case any shares of Common
\n Stock, Options or Convertible Securities shall be issued or sold for
\n consideration other than cash, the amount of the consideration other than
\n cash received by the Corporation shall be deemed to be the fair value of
\n such consideration as determined in good faith by the Board of Directors of
\n the Corporation, without deduction of any expenses incurred or any
\n underwriting commissions or concessions paid or allowed by the Corporation
\n in connection therewith. In case any Options shall be issued in connection
\n with the issue and sale of other securities of the Corporation, together
\n comprising one integral transaction in which no specific consideration is
\n allocated to such Options by the parties thereto, such Options shall be
\n deemed to have been issued for such consideration as determined in good
\n faith by the Board of Directors of the Corporation.<\/p>\n
6D(6) Record Date. In case the Corporation shall take a record of the
\n holders of its Common Stock for the purpose of entitling them (i) to
\n receive a dividend or other distribution payable in Common Stock, Options
\n or Convertible Securities or (ii) to subscribe for or purchase Common
\n Stock, Options or Convertible Securities, then such record date shall be
\n deemed to be the date of the issue or sale of the shares of Common Stock
\n deemed to have been issued or sold upon the declaration of such dividend or
\n the making of such other distribution or the date of the granting of such
\n right of subscription or purchase, as the case may be.<\/p>\n
6D(7) Treasury Shares. The number of shares of Common Stock
\n outstanding at any given time shall not include shares owned or held by or
\n for the account of the Corporation (or any Subsidiary), and the disposition
\n of any such shares shall be considered an issue or sale of Common Stock for
\n the purpose of this paragraph 6D.
\n 41
\n 6E. Certain Issues Excepted. Anything herein to the contrary
\nnotwithstanding, the Corporation shall not be required to make any adjustment of
\nthe Series B Conversion Price in the case of the issuance of (i) shares of
\nSeries C Convertible Preferred Stock pursuant to the Purchase Agreement, (ii)
\nshares of Common Stock issuable upon conversion of the Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock or Series C Convertible
\nPreferred Stock, (iii) shares of Common Stock issued or issuable as a dividend
\nor distribution on Series A Convertible Preferred Stock, Series B Convertible
\nPreferred Stock or Series C Convertible Preferred Stock, (iv) Reserved Employee
\nShares (as defined in paragraph 9 herein) or (v) warrant shares issued as
\ncontemplated by the Purchase Agreement or shares of Common Stock issuable upon
\nconversion of such warrant shares.<\/p>\n
6F. Subdivision or Combination of Common Stock. In case the Corporation
\nshall at any time subdivide (by any stock split, stock dividend or otherwise)
\nits outstanding shares of Common Stock into a greater number of shares, the
\nSeries B Conversion Price in effect immediately prior to such subdivision shall
\nbe proportionately reduced and, conversely, in case the outstanding shares of
\nCommon Stock shall be combined into a smaller number of shares, the Series B
\nConversion Price in effect immediately prior to such combination shall be
\nproportionately increased.<\/p>\n
6G. Reorganization or Reclassification. If any capital reorganization,
\nreclassification, recapitalization, consolidation, merger, sale of all or
\nsubstantially all of the Corporation’s assets or other similar transaction (any
\nsuch transaction being referred to herein as an “Organic Change”) shall be
\neffected in such a way that holders of Common Stock shall be entitled to receive
\n(either directly or upon subsequent liquidation) stock, securities or assets
\nwith respect to or in exchange for Common Stock, then, as a condition of such
\nOrganic Change, lawful and adequate provisions shall be made whereby each holder
\nof a share or shares of Series B Convertible Preferred Stock shall thereupon
\nhave the right to receive, upon the basis and upon the terms and conditions
\nspecified herein and in lieu of or in addition to, as the case may be, the
\nshares of Common Stock immediately theretofore receivable upon the conversion of
\nsuch share or shares of Series B Convertible Preferred Stock, such shares of
\nstock, securities or assets as may be issued or payable with respect to or in
\nexchange for a number of outstanding shares of such Common Stock equal to the
\nnumber of shares of such Common Stock immediately theretofore receivable upon
\nsuch conversion had such Organic Change not taken place, and in any case of a
\nreorganization or reclassification only appropriate provisions shall be made
\nwith respect to the rights and interests of such holder to the end that the
\nprovisions hereof (including without limitation provisions for adjustments of
\nthe Series B Conversion Price) shall thereafter be applicable, as nearly as may
\nbe, in relation to any shares of stock, securities or assets thereafter
\ndeliverable upon the exercise of such conversion rights.<\/p>\n
6H. Notice of Adjustment. Upon any adjustment of the Series B
\nConversion Price, then and in each such case the Corporation shall give written
\nnotice thereof, by first class mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, addressed to each holder of shares of Series
\nB Convertible Preferred Stock at the address of such holder as shown on the
\nbooks of the Corporation, which notice shall state the Series B Conversion Price
\nresulting from such adjustment, setting forth in reasonable detail the method
\nupon which such calculation is based.
\n 42
\n 6I. Other Notices. In case at any time:<\/p>\n
(1) the Corporation shall declare any dividend upon its Common Stock
\npayable in cash or stock or make any other distribution to the holders of its
\nCommon Stock;<\/p>\n
(2) the Corporation shall offer for subscription pro rata to the
\nholders of its Common Stock any additional shares of stock of any class or other
\nrights;<\/p>\n
(3) there shall be any capital reorganization or reclassification of
\nthe capital stock of the Corporation, or a consolidation or merger of the
\nCorporation with or into, or a sale of all or substantially all of its assets
\nto, another entity or entities; or<\/p>\n
(4) there shall be a voluntary or involuntary dissolution, liquidation
\nor winding up of the Corporation;<\/p>\n
then, in any one or more of said cases, the Corporation shall give, by first
\nclass mail, postage prepaid, or by facsimile transmission to non-U.S. residents,
\naddressed to each holder of any shares of Preferred Stock at the address of such
\nholder as shown on the books of the Corporation, (a) at least 20 days’ prior
\nwritten notice of the date on which the books of the Corporation shall close or
\na record shall be taken for such dividend, distribution or subscription rights
\nor for determining rights to vote in respect of any such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up and (b) in the case of any such reorganization, reclassification,
\nconsolidation, merger, sale, dissolution, liquidation or winding up, at least 20
\ndays’ prior written notice of the date when the same shall take place. Such
\nnotice in accordance with the foregoing clause (a) shall also specify, in the
\ncase of any such dividend, distribution or subscription rights, the date on
\nwhich the holders of Common Stock shall be entitled thereto and such notice in
\naccordance with the foregoing clause (b) shall also specify the date on which
\nthe holders of Common Stock shall be entitled to “exchange their Common Stock
\nfor securities or other property deliverable upon such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up, as the case may be.<\/p>\n
6J. Stock to be Reserved. The Corporation will at all times reserve and
\nkeep available out of its authorized Common Stock, solely for the purpose of
\nissuance upon the conversion of Series B Convertible Preferred Stock as herein
\nprovided, such number of shares of Common Stock as shall then be issuable upon
\nthe conversion of all outstanding shares of Series B Convertible Preferred
\nStock. The Corporation covenants that all shares of Common Stock which shall be
\nso issued shall be duly and validly issued and fully paid and nonassessable and
\nfree from all taxes, liens and charges with respect to the issue thereof, and,
\nwithout limiting the generality of the foregoing, the Corporation covenants that
\nit will from time to time take all such action as may be requisite to assure
\nthat the par value per share of the Common Stock is at all times equal to or
\nless than the Series B Conversion Price in effect at the time. The Corporation
\nwill take all such action as may be necessary to assure that all such shares of
\nCommon Stock may be so issued without violation of any applicable law or
\nregulation, or of any requirement of any national securities exchange upon which
\nthe Common Stock may be listed.
\n 43
\n 6K. No Reissuance of Series B Convertible Preferred Stock. Shares of
\nSeries B Convertible Preferred Stock which are converted into shares of Common
\nStock as provided herein shall not be reissued.<\/p>\n
6L. Issue Tax. The issuance of certificates for shares of Common Stock
\nupon conversion of Series B Convertible Preferred Stock shall be made without
\ncharge to the holder thereof for any issuance tax in respect thereof; provided
\nthat the Corporation shall not be required to pay any tax which may be payable
\nin respect of any transfer involved in the issuance and delivery of any
\ncertificate in a name other than that of the holder of the Series B Convertible
\nPreferred Stock which is being converted.<\/p>\n
6M. Closing of Books. The Corporation will at no time close its
\ntransfer books against the transfer of any Series B Convertible Preferred Stock
\nor of any shares of Common Stock issued or issuable upon the conversion of any
\nshares of Series B Convertible Preferred Stock in any manner which interferes
\nwith the timely conversion of such Preferred Stock, except as may otherwise be
\nrequired to comply with applicable securities laws.<\/p>\n
6N. Definition of Common Stock. As used in this paragraph 6, the term
\n“Common Stock” shall mean and include the Corporation’s authorized Common Stock,
\npar value $.01 per share, as constituted on the date of filing of these terms of
\nthe Series B Convertible Preferred Stock, and shall also include any capital
\nstock of any class of the Corporation thereafter authorized which shall neither
\nbe limited to a fixed sum or percentage of par value in respect of the rights of
\nthe holders thereof to participate in dividends nor entitled to a preference in
\nthe distribution of assets upon the voluntary or involuntary liquidation,
\ndissolution or winding up of the Corporation; provided that the shares of Common
\nStock receivable upon conversion of shares of Series B Convertible Preferred
\nStock shall include only shares designated as Common Stock of the Corporation on
\nthe date of filing of this instrument, or in case of any reorganization or
\nreclassification of the outstanding shares thereof, the stock, securities or
\nassets provided for in subparagraph 6G.<\/p>\n
6O. Mandatory Conversion. All outstanding shares of Series B
\nConvertible Preferred Stock shall automatically convert to shares of Common
\nStock if at any time the Corporation shall effect a public offering of shares of
\nCommon Stock (any such offering, regardless of compliance with subsections (i),
\n(ii) and (iii) herein, being referred to as a “Public Offering”), provided (i)
\nthe aggregate gross proceeds from such offering to the Corporation shall be at
\nleast $20,000,000; (ii) the price paid by the public for such shares shall be at
\nleast (x) 2.0 times the then Series B Conversion Price if the Public Offering
\noccurs prior to the 18 month anniversary of the Preferred Stock Issue Date or
\n(y) 3.0 times the then Series B Conversion Price if the Public Offering occurs
\non or after the 18 month anniversary of the Preferred Stock Issue Date, and
\n(iii) the offering is a firm commitment underwritten Public Offering, and such
\nautomatic conversion shall be effective upon the closing of the sale of such
\nshares by the Corporation pursuant to such Public Offering.
\n 44
\n 7. Redemption. The shares of Series B Convertible Preferred Stock shall be
\nredeemed as follows:<\/p>\n
7A. Optional Redemption. The Corporation shall not have the right to
\ncall or redeem at any time all or any shares of Series B Convertible Preferred
\nStock. With the approval of the holders of 66% of the then outstanding shares of
\nSeries B Convertible Preferred Stock, one or more holders of shares of Series B
\nConvertible Preferred Stock may, by giving notice (the “Notice”) to the
\nCorporation, require the Corporation to redeem any or all of the outstanding
\nSeries B Convertible Preferred Stock on the Redemption Date (as defined below).
\nUpon receipt of the Notice, the Corporation will so notify all other persons
\nholding Series B Convertible Preferred Stock. After receipt of the Notice, the
\nCorporation shall fix the first date for redemption, which shall be the date
\nspecified in the Notice, being any date on or after the earlier of (i) the fifth
\n(5th) anniversary of the Preferred Stock Issue Date and (ii) the date which is
\nthe day before the Corporation is due to redeem any outstanding Junior
\nSecurities (the “Redemption Date”). All holders of Series B Convertible
\nPreferred Stock shall deliver to the Corporation during regular business hours,
\nat the office of any transfer agent of the Corporation for the Series B
\nConvertible Preferred Stock, or at the principal office of the Corporation or at
\nsuch other place as may be designated by the Corporation, the certificate or
\ncertificates for the Series B Convertible Preferred Stock, duly endorsed for
\ntransfer to the Corporation (if required by it) on or before the Redemption
\nDate.<\/p>\n
7B. Redemption Price and Payment. The Series B Convertible Preferred
\nStock to be redeemed on the Redemption Date shall be redeemed by paying for each
\nshare in cash an amount equal to the Series B Redemption Price (as defined
\nbelow). For purposes of this paragraph 7B, the “Series B Redemption Price” shall
\nmean $15.066 per share, plus an amount equal to all dividends accrued and unpaid
\non each such share; provided, however, that if the Redemption Date is after the
\nfifth (5th) anniversary of the Preferred Stock Issue Date, then the “Series B
\nRedemption Price” shall mean the greater of (i) $15.066 per share, plus an
\namount equal to all dividends accrued and unpaid on each such share and (ii) the
\nFair Market Value (as defined below) of the Common Stock underlying the Series B
\nConvertible Preferred Stock. Such payment shall be made in full on the
\nRedemption Date to the holders entitled thereto. For purposes of this paragraph
\n7B, “Fair Market Value” of the Common Stock shall mean the average of the fair
\nmarket valuations of the Common Stock performed by two investment banks (the
\n“Initial Appraisers”), one of which shall be retained by the Corporation and one
\nof which shall be retained by the holders of a majority in interest of the
\nSeries B Convertible Preferred Stock. Subject to the following sentence, such
\ndetermination by the Initial Appraisers of Fair Market Value shall be final and
\nbinding on the parties. If the higher of the two valuations of the Initial
\nAppraisers is equal to or greater than 110% of the lower valuation, the
\nCorporation and holders of a majority in interest of the Series B Convertible
\nPreferred Stock shall select a third investment bank (the “Final Appraiser”),
\nwhich shall be mutually agreeable to the Corporation and the holders of a
\nmajority in interest of the Series B Convertible Preferred Stock. The fair
\nmarket value of the Common Stock as determined by the Final Appraiser shall be
\nfinal and binding on the parties. The fees and expenses of the Initial
\nAppraisers shall be paid for by the party selecting such Initial Appraiser and
\nthe fees and expenses of the Final Appraiser shall be shared by the Corporation
\nand the holders of the Series B Convertible Preferred Stock.
\n 45
\n 7C. Redemption Mechanics. At least 15 but not more than 35 days prior
\nto the Redemption Date, written notice (the “Redemption Notice”) shall be given
\nby the Corporation by mail, postage prepaid, or by facsimile transmission to
\nnon-U.S. residents, to each holder of record (at the close of business on the
\nbusiness day next preceding the day on which the Redemption Notice is given) of
\nshares of Series B Convertible Preferred Stock notifying such holder of the
\nredemption and specifying the Series B Redemption Price, the Redemption Date and
\nthe place where said Series B Redemption Price shall be payable. The Redemption
\nNotice shall be addressed to each holder at his address as shown by the records
\nof the Corporation. From and after the close of business on the Redemption Date
\nunless there shall have been a default in the payment of the Series B Redemption
\nPrice, all rights of holders of shares of Series B Convertible Preferred Stock
\n(except the right to receive the Series B Redemption Price) shall cease with
\nrespect to such shares, and such shares shall not thereafter be transferred on
\nthe books of the Corporation or be deemed to be outstanding for any purpose
\nwhatsoever. If the funds of the Corporation legally available for redemption of
\nshares of Series B Convertible Preferred Stock on the Redemption Date are
\ninsufficient to redeem the total number of outstanding shares of Series B
\nConvertible Preferred Stock to be redeemed on such Redemption Date, the holders
\nof shares of Series B Convertible Preferred Stock shall share ratably in any
\nfunds legally available for redemption of such shares according to the
\nrespective amounts which would be payable with respect to the full number of
\nshares owned by them if all such outstanding shares were redeemed in full. The
\nshares of Series B Convertible Preferred Stock not redeemed shall remain
\noutstanding and entitled to all rights and preferences provided herein;
\nprovided, however, that such unredeemed shares shall be entitled to receive
\ninterest accruing daily with respect to the applicable Series B Redemption Price
\nat the rate of 15% per annum, payable quarterly in arrears. At any time
\nthereafter when additional funds of the Corporation are legally available for
\nthe redemption of such shares of Series B Convertible Preferred Stock, such
\nfunds will be used, at the end of the next succeeding fiscal quarter, to redeem
\nthe balance of such shares, or such portion thereof for which funds are then
\nlegally available, on the basis set forth above.<\/p>\n
7D. Redeemed or Otherwise Acquired Shares to be Retired. Any shares of
\nSeries B Convertible Preferred Stock redeemed pursuant to this paragraph 7 or
\notherwise acquired by the Corporation in any manner whatsoever shall be canceled
\nand shall not under any circumstances be reissued; and the Corporation may from
\ntime to time take such appropriate corporate action as may be necessary to
\nreduce accordingly the number of authorized shares of Series B Convertible
\nPreferred Stock.<\/p>\n
8. Amendments. Except where the vote or written consent of the holders of
\na greater number of shares of the Corporation is required by these terms of the
\nSeries B Convertible Preferred Stock, by law or by the Certificate of
\nIncorporation, no provision of these terms of the Series B Convertible Preferred
\nStock may be amended, modified or waived without the written consent or
\naffirmative vote of the holders of at least 60% of the then outstanding shares
\nof Series B Convertible Preferred Stock.<\/p>\n
9. Definitions. As used herein, the following terms shall have the
\nfollowing meanings:<\/p>\n
(1) The term “Founders” shall mean F. Thomson Leighton, Daniel Lewin,
\nJonathan Seelig, Randall Kaplan, Gilbert Friesen and David Karger.
\n 46
\n (2) The term “Preferred Stock Issue Date” shall mean the date on which
\nthe Series B Convertible Preferred Stock is originally issued by the Corporation
\npursuant to the Purchase Agreement.<\/p>\n
(3) The term “Purchase Agreement” shall mean the Series B Convertible
\nPreferred Stock and Series C Convertible Preferred Stock Purchase Agreement
\ndated as of April 16, 1999 between the Corporation, Baker Communications Fund,
\nL.P. and the other purchasers named therein, as in effect on April 16, 1999.<\/p>\n
(4) The term the “Plan” shall mean the Corporation’s 1998 Stock
\nIncentive Plan.<\/p>\n
(5) The term “Reserved Employee Shares” shall mean shares of Common
\nStock reserved by the Corporation pursuant to the Plan from time to time for (i)
\nthe sale of shares of Common Stock to employees, consultants or non-employee
\ndirectors (other than representatives of the holders of Preferred Stock) of the
\nCorporation or (ii) the exercise of options to purchase Common Stock granted to
\nemployees, consultants or non-employee directors (other than representatives of
\nthe holders of Preferred Stock) of the Corporation, not to exceed in the
\naggregate 3,450,000 shares of Common Stock for both clauses (i) and (ii), with
\nsuch number including 710,700 shares issued or subject to options granted prior
\nto the date of the initial issuance of the Series A Convertible Preferred Stock
\n(the “Option Shares”) (approximately adjusted to reflect an event described in
\nparagraph 6F hereof); provided that, such number of such shares subject to the
\nPlan shall be increased by up to 2,519,742 additional shares of Common Stock
\n(appropriately adjusted to reflect an event described in paragraph 6F hereof)
\n(collectively, the “Founders’ Shares”) upon the repurchase of such Founders’
\nShares by the Corporation from the Founders pursuant to contractual rights hold
\nby the Corporation. The foregoing numbers of Reserved Employee Shares may be
\nincreased by the affirmative vote or written consent of a majority of the
\ndirectors designated solely by the holders of Series A Convertible Preferred
\nStock and Series B Convertible Preferred Stock or the affirmative vote or
\nwritten consent of the holders of at least 50% of the then outstanding shares of
\nSeries A Convertible Preferred Stock, Series B Convertible Preferred Stock and
\nSeries C Convertible Preferred Stock, voting together as a single class on a
\nCommon Stock equivalent basis.
\n 47
\n (6) The term “Subsidiary” or “Subsidiaries” shall mean any corporation,
\npartnership, trust or other entity of which the Corporation and\/or any of its
\nother subsidiaries directly or indirectly owns at the time a majority of the
\noutstanding shares of every class of equity security of such corporation,
\npartnership, trust or other entity.<\/p>\n
48<\/p>\n
CERTIFICATE OF DESIGNATIONS<\/p>\n
OF<\/p>\n
SERIES C CONVERTIBLE PREFERRED STOCK<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
————-<\/p>\n
Pursuant to Section 151 of the
\n General Corporation Law of the State of Delaware<\/p>\n
————-<\/p>\n
Akamai Technologies, Inc., a Delaware corporation (the “Corporation”),
\ncertifies that pursuant to the authority contained in Article Fourth of its
\nCertificate of Incorporation and in accordance with the provisions of Section
\n151 of the General Corporation Law of the State of Delaware, the Board of the
\nDirectors of the Corporation, at a meeting held on April 13, 1999, duly adopted
\nthe following resolution, which resolution remains in full force and effect on
\nthe date hereof:<\/p>\n
RESOLVED, that, pursuant to the authority expressly granted to and
\nvested in the Board of Directors of the Corporation, a series of Preferred Stock
\nof the Corporation be and hereby is established, consisting of 145,195 shares,
\n$0.01 par value per share, to be designated “Series C Convertible Preferred
\nStock” (hereinafter, the “Series C Preferred Stock”); that the Board of
\nDirectors be and hereby is authorized to issue such shares of Series C Preferred
\nStock from time to time and for such consideration and on such terms as the
\nBoard of Directors shall determine; and that, subject to the limitations
\nprovided by law and by the Certificate of Incorporation, the voting powers,
\npreferences and relative, participating, optional and other special rights, and
\nqualifications, limitations and restrictions thereof shall be as set forth on
\nSchedule I attached hereto.<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
\nduly executed by its President on this 16th day of April, 1999<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Daniel Lewin
\n ——————————
\n Daniel Lewin
\n President<\/p>\n
49<\/p>\n
SCHEDULE 1<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n DESIGNATION OF SERIES C CONVERTIBLE PREFERRED STOCK<\/p>\n
The series of Preferred Stock designated and known as “Series C
\nConvertible Preferred Stock” shall consist of 145,195 shares.<\/p>\n
1. Voting. Except as may be otherwise provided in these terms of the
\nSeries C Convertible Preferred Stock, in the Certificate of Incorporation (the
\n“Certificate of Incorporation”) of Akamai Technologies, Inc. (the “Corporation”)
\nor by law, the Series C Convertible Preferred Stock shall vote together with all
\nother classes and series of stock of the Corporation as a single class on all
\nactions to be taken by the stockholders of the Corporation. Each share of Series
\nC Convertible Preferred Stock shall entitle the holder thereof to such number of
\nvotes per share on each such action as shall equal the number of shares of
\nCommon Stock (including fractions of a share) into which each share of Series C
\nConvertible Preferred Stock is then convertible.<\/p>\n
2. Ranking. The Series C Convertible Preferred Stock shall rank, with
\nrespect to dividend distributions and distributions upon a Liquidation Event (as
\ndefined in paragraph 4A herein), senior to all classes of common stock of the
\nCompany and to each other class of capital stock or series of preferred stock
\n(including the Series A Convertible Preferred Stock of the Corporation)
\nestablished before the Series B Preferred Stock Issue Date, by the Board of
\nDirectors, pari passu with the Series B Convertible Preferred Stock of the
\nCorporation, and senior or pari passu to any other class of capital stock or
\nseries of preferred stock established after the Series B Preferred Stock Issue
\nDate by the Board of Directors. All classes of common stock of the Company, the
\nSeries A Convertible Preferred Stock and any other class of capital stock or
\nseries of preferred stock established after the Series B Preferred Stock Issue
\nDate to which the Series C Convertible Preferred Stock is senior, are
\ncollectively referred to herein as “Junior Securities”. The Series B Convertible
\nPreferred Stock of the Corporation and any other class of capital stock or
\nseries of preferred stock established after the Series B Preferred Stock Issue
\nDate which ranks pari passu with the Series C Convertible Preferred Stock, are
\ncollectively referred to herein as “Pari Passu Securities”.<\/p>\n
3. Dividends.<\/p>\n
3A. The holders of shares of the Series C Convertible
\nPreferred Stock shall be entitled to receive, when, as and if dividends are
\ndeclared by the Board of Directors out of funds of the Corporation legally
\navailable therefor, cumulative preferential dividends at the annual rate of 8%
\non the Series C Liquidation Preference Payments (as defined in paragraph 4A
\nherein); provided, however, that any such dividends shall be declared and paid
\nonly in the event of (i) a Liquidation Event pursuant to paragraph 4A hereof or
\n(ii) a Redemption pursuant to paragraph 7B hereof. Holders of shares of Series C
\nConvertible Preferred Stock shall be entitled to receive the dividends provided
\nfor herein in preference to and in priority over any dividends upon any of the
\nJunior Securities.<\/p>\n
3B. Dividends on the Series C Convertible Preferred Stock
\nshall accrue on a daily basis from the Series C Preferred Stock Issue Date and,
\nto the extent they are not paid, shall
\n 50<\/p>\n
accumulate on an annual basis on each December 31, whether or not the
\nCorporation has earnings or profits, whether or not there are funds legally
\navailable for the payment of such dividends and whether or not dividends are
\ndeclared.<\/p>\n
4. Liquidation, Dissolution and Winding-up.<\/p>\n
4A. Liquidation. Upon any liquidation, dissolution or winding
\nup of the Corporation (a “Liquidation Event”), whether voluntary or involuntary,
\nthe holders of the shares of Series C Convertible Preferred Stock shall be paid
\nan amount equal to $34.436 per share plus, in the case of each share, an amount
\nequal to dividends accrued but unpaid thereon, computed to the date payment
\nthereof is made available, together with payment to any Pari Passu Securities,
\nand before any payment shall be made to the holders of any Junior Securities,
\nsuch amount payable with respect to one share of Series C Convertible Preferred
\nStock being sometimes referred to as the “Series C Liquidation Preference
\nPayment” and with respect to all shares of Series C Convertible Preferred Stock
\nbeing sometimes referred to as the “Series C Liquidation Preference Payments”.
\nIf upon any Liquidation Event, the assets to be distributed to the holders of
\nthe Series C Convertible Preferred Stock shall be insufficient to permit payment
\nto such stockholders of the full preferential amounts aforesaid, then all of the
\nassets of the Corporation available for distribution to holders of the Series C
\nConvertible Preferred Stock shall be distributed to such holders of the Series C
\nConvertible Preferred Stock pro rata, so that each holder receives that portion
\nof the assets available for distribution as the number of shares of such stock
\nheld by such holder bears to the total number of shares of such stock then
\noutstanding.<\/p>\n
4B. Upon any Liquidation Event, immediately after the holders
\nof Series C Convertible Preferred Stock and holders of any Pari Passu Securities
\nhave been paid in full pursuant to paragraph 4A above, the remaining net assets
\nof the Corporation available for distribution shall be distributed among the
\nholders of the shares of Junior Securities.<\/p>\n
Written notice of such Liquidation Event, stating a payment date and
\nthe place where said payments shall be made, shall be given by mail, postage
\nprepaid, or by facsimile to non-U.S. residents, not less than 20 days prior to
\nthe payment date stated therein, to the holders of record of Series C
\nConvertible Preferred Stock, such notice to be addressed to each such holder at
\nits address as shown by the records of the Corporation.<\/p>\n
The (x) consolidation or merger of the Corporation into or with any
\nother entity or entities which results in the exchange of outstanding shares of
\nthe Corporation for securities or other consideration issued or paid or caused
\nto be issued or paid by any such entity or affiliate thereof (except a
\nconsolidation or merger into a Subsidiary or merger in which the Corporation is
\nthe surviving Corporation and the holders of the Corporation’s voting stock
\noutstanding immediately prior to the transaction constitute a majority of the
\nholders of voting stock outstanding immediately following the transaction), (y)
\nsale or transfer by the Corporation of all or substantially all of its assets,
\nor (z) sale or transfer by the Corporation’s stockholders of capital stock
\nrepresenting a majority of the outstanding capital stock of the Corporation
\nshall be deemed to be a Liquidation Event within the meaning of the provisions
\nof this paragraph 4 (subject to the provisions of this paragraph 4 and not the
\nprovisions of paragraph 6G hereof, unless paragraph 6G is elected in the
\nfollowing proviso); provided, however, that if the holders of at least 60% of
\nthe then outstanding shares of Series C Convertible Preferred Stock shall elect
\nthe
\n 51<\/p>\n
benefits of the provisions of paragraph 6G in lieu of receiving payment in a
\nLiquidation Event pursuant to this paragraph 4, then all holders of shares of
\nSeries C Convertible Preferred Stock shall receive the benefits of the
\nprovisions of paragraph 6G in lieu of receiving payment pursuant to this
\nparagraph 4. Whenever the distribution provided for in this paragraph 4 shall be
\npayable in property other than cash, the value of such distribution shall be the
\nfair market value of such property as determined in good faith by the Board of
\nDirectors of the Corporation.<\/p>\n
5. Restrictions. At any time when at least 50% of the shares of Series
\nC Convertible Preferred Stock issued pursuant to the Purchase Agreement remain
\noutstanding, except where the vote or written consent of the holders of a
\ngreater number of shares of the Corporation is required by law or by the
\nCertificate of Incorporation, and in addition to any other vote required by law
\nor the Certificate of Incorporation, without the written consent of the holders
\nof at least 60% of the then outstanding shares of Series C Convertible Preferred
\nStock given in writing or by vote at a meeting, consenting or voting (as the
\ncase may be) separately as a series, the Corporation will not:<\/p>\n
(1) Consent to any Liquidation Event or merge or consolidate
\nwith or into, or permit any Subsidiary to merge or consolidate with or into, any
\nother corporation, corporations, entity or entities (except a consolidation or
\nmerger into a Subsidiary or merger in which the Corporation is the surviving
\ncorporation and the holders of the Corporation’s voting stock outstanding
\nimmediately prior to the transaction constitute a majority of the holders of
\nvoting stock outstanding immediately following the transaction or a
\nconsolidation or merger pursuant to which the aggregate consideration definitely
\nand unconditionally payable to all of the stockholders of the Corporation is
\ngreater than $400 million);<\/p>\n
(2) Sell, abandon, transfer, lease or otherwise dispose of all
\nor substantially all of its properties or assets (unless the aggregate
\nconsideration definitely and unconditionally payable to all of the stockholders
\nof the Corporation is greater than $400 million);<\/p>\n
(3) Amend, alter or repeal any provision of its Certificate of
\nIncorporation or By-laws in a manner adverse to holders of the Series C
\nConvertible Preferred Stock;<\/p>\n
(4) Create or authorize the creation of or issue any
\nadditional class or series of shares of stock (other than the Series B
\nConvertible Preferred Stock of the Corporation) unless the same ranks junior to
\nor on parity with the Series C Convertible Preferred Stock as to dividends and
\nthe distribution of assets on a Liquidation Event, or increase the authorized
\namount of Series C Convertible Preferred Stock or increase the authorized amount
\nof any additional class or series of shares of stock unless the same ranks
\njunior to or on parity with the Series C Convertible Preferred Stock as to
\ndividends and the distribution of assets on a Liquidation Event, or create or
\nauthorize any obligation or security convertible into shares of Series C
\nConvertible Preferred Stock or into shares of any other class or series of stock
\nunless the same ranks junior to or on parity with the Series C Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent, whether any such creation, authorization or increase shall be by means of
\namendment to the Certificate of Incorporation or by merger, consolidation or
\notherwise;
\n 52<\/p>\n
(5) In any manner amend, alter or change the designations or
\nthe powers, preferences or rights, privileges or the restrictions of the Series
\nC Convertible Preferred Stock, provided, however, that the authorization or
\ncreation of any shares of capital stock on parity with the Series C Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent shall not require approval of holders of Series C Convertible Preferred
\nStock;<\/p>\n
(6) Purchase or redeem, or set aside any sums for the purchase
\nor redemption of, or pay any dividend or make any distribution on, any Junior
\nSecurities, except for (i) dividends or other distributions payable on the
\nCommon Stock solely in the form of additional shares of Common Stock or (ii)
\nrepurchases of shares of capital stock (at the original purchase price therefor)
\nfrom officers, employees, directors or consultants of the Corporation which are
\nsubject to restrictive stock purchase, right of first refusal or other
\nagreements under which the Corporation has the option to repurchase such shares
\nupon the occurrence of certain events, including termination of employment; or<\/p>\n
(7) Increase the number of Reserved Employee Shares without
\nthe affirmative vote or written consent of a majority of the directors
\ndesignated solely by the holders of Series A Convertible Preferred Stock and
\nSeries B Convertible Preferred Stock or the affirmative vote or written consent
\nof the holders of at least 50% of the then outstanding shares of Series A
\nConvertible Preferred Stock, Series B Convertible Preferred Stock and Series C
\nConvertible Preferred Stock, voting together as a single class on a Common Stock
\nequivalent basis.<\/p>\n
6. Conversion. The holders of shares of Series C Convertible Preferred
\nStock shall have the following conversion rights:<\/p>\n
6A. Right to Convert. Subject to the terms and conditions of
\nthis paragraph 6, the holder of any share or shares of Series C Convertible
\nPreferred Stock shall have the right, at its option at any time, to convert any
\nsuch shares of Series C Convertible Preferred Stock (except that upon any
\nLiquidation Event the right of conversion shall terminate at the close of
\nbusiness on the business day fixed for payment of the amounts distributable on
\nthe Series C Convertible Preferred Stock) into such number of fully paid and
\nnonassessable shares of Common Stock as is obtained by (i) multiplying the
\nnumber of shares of Series C Convertible Preferred Stock so to be converted by
\n$34.436 and (ii) dividing the result by the conversion price of $34.436 per
\nshare or in case an adjustment of such price has taken place pursuant to the
\nfurther provisions of this paragraph 6, then by the conversion price as last
\nadjusted and in effect at the date any share or shares of Series C Convertible
\nPreferred Stock are surrendered for conversion (such price, or such price as
\nlast adjusted, being referred to as the “Series C Conversion Price”). Such
\nrights of conversion shall be exercised by the holder thereof by giving written
\nnotice that the holder elects to convert a stated number of shares of Series C
\nConvertible Preferred Stock into Common Stock and by surrender of a certificate
\nor certificates for the shares so to be converted to the Corporation at its
\nprincipal office (or such other office or agency of the Corporation as the
\nCorporation may designate by notice in writing to the holders of the Series C
\nConvertible Preferred Stock) at any time during its usual business hours on the
\ndate set forth in such notice, together with a statement of the name or names
\n(with address) in which the certificate or certificates for shares of Common
\nStock shall be issued.
\n 53<\/p>\n
6B. Issuance of Certificates; Time Conversion Effected.
\nPromptly after the receipt of the written notice referred to in paragraph 6A and
\nsurrender of the certificate or certificates for the share or shares of Series C
\nConvertible Preferred Stock to be converted, the Corporation shall issue and
\ndeliver, or cause to be issued and delivered, to the holder, registered in such
\nname or names as such holder may direct, a certificate or certificates for the
\nnumber of whole shares of Common Stock issuable upon the conversion of such
\nshare or shares of Series C Convertible Preferred Stock. To the extent permitted
\nby law, such conversion shall be deemed to have been effected and the Series C
\nConversion Price shall be determined as of the close of business on the date on
\nwhich such written notice shall have been received by the Corporation and the
\ncertificate or certificates for such share or shares shall have been surrendered
\nas aforesaid, and at such time the rights of the holder or such share or shares
\nof Series C Convertible Preferred Stock shall cease, and the person or persons
\nin whose name or names any certificate or certificates for shares of Common
\nStock shall be issuable upon such conversion shall be deemed to have become the
\nholder or holders of record of the shares represented thereby.<\/p>\n
6C. Fractional Shares; Dividends; Partial Conversion. No
\nfractional shares shall be issued upon conversion of Series C Convertible
\nPreferred Stock into Common Stock and no payment or adjustment shall be made
\nupon any conversion on account of any cash dividends on the Common Stock issued
\nupon such conversion. At the time of each conversion, the Corporation shall pay
\nin cash an amount equal to all dividends declared and unpaid (if any) on the
\nshares of Series C Convertible Preferred Stock surrendered for conversion to the
\ndate upon which such conversion is deemed to take place as provided in paragraph
\n6B. In case the number of shares of Series C Convertible Preferred Stock
\nrepresented by the certificate or certificates surrendered pursuant to paragraph
\n6A exceeds the number of shares converted, the Corporation shall, upon such
\nconversion, execute and deliver to the holder, at the expense of the
\nCorporation, a new certificate or certificates for the number of shares of
\nSeries C Convertible Preferred Stock represented by the certificate or
\ncertificates surrendered which are not to be converted. If any fractional share
\nof Common Stock would, except for the provisions of the first sentence of this
\nparagraph 6C, be delivered upon such conversion, the Corporation, in lieu of
\ndelivering such fractional share, shall pay to the holder surrendering the
\nSeries C Convertible Preferred Stock for conversion an amount in cash equal to
\nthe current fair market value of such fractional share as determined in good
\nfaith by the Board of Directors of the Corporation, and based upon the aggregate
\nnumber of shares of Series C Convertible Preferred Stock surrendered by any one
\nholder.<\/p>\n
6D. Adjustment of Series C Conversion Price Upon Issuance of
\nCommon Stock. Except as provided in paragraphs 6E and 6F, if and whenever the
\nCorporation shall issue or sell, or is, in accordance with subparagraphs 6D(1)
\nthrough 6D(7), deemed to have issued or sold, any shares of Common Stock for a
\nconsideration per share less than the Series C Conversion Price in effect
\nimmediately prior to the time of such issue or sale, (such number being
\nappropriately adjusted to reflect the occurrence of any event described in
\nparagraph 6F), then, forthwith upon such issue or sale, the Series C Conversion
\nPrice shall be reduced to the price determined by dividing (i) an amount equal
\nto the sum of (a) the number of shares of Common Stock outstanding immediately
\nprior to such issue or sale (assuming the conversion of the outstanding shares
\nof Series C Convertible Preferred Stock) multiplied by the then existing Series
\nC Conversion Price and (b) the consideration, if any, received by the
\nCorporation upon such issue or sale, by (ii) the total number of shares of
\nCommon Stock outstanding immediately
\n 54<\/p>\n
after such issue or sale (assuming the conversion of the outstanding shares of
\nSeries C Convertible Preferred Stock).<\/p>\n
For purposes of this paragraph 6D, the following subparagraphs
\n6D(1) to 6D(7) shall also be applicable:<\/p>\n
6D(1) Issuance of Rights or Options. In case at any time the
\n Corporation shall in any manner grant (whether directly or by
\n assumption in a merger or otherwise) any warrants or other rights to
\n subscribe for or to purchase, or any options for the purchase of,
\n Common Stock or any stock or security convertible into or exchangeable
\n for Common Stock (such warrants, rights or options being called
\n “Options” and such convertible or exchangeable stock or securities
\n being called “Convertible Securities”) whether or not such Options or
\n the right to convert or exchange any such Convertible Securities are
\n immediately exercisable, and the price per share for which Common Stock
\n is issuable upon the exercise of such Options or upon the conversion or
\n exchange of such Convertible Securities (determined by dividing (i) the
\n total amount, if any, received or receivable by the Corporation as
\n consideration for the granting of such Options, plus the minimum
\n aggregate amount of additional consideration payable to the Corporation
\n upon the exercise of all such Options, plus, in the case of such
\n Options which relate to Convertible Securities, the minimum aggregate
\n amount of additional consideration, if any, payable upon the issue or
\n sale of all such Convertible Securities and upon the conversion or
\n exchange thereof, by (ii) the total maximum number of shares of Common
\n Stock issuable upon the exercise of such Options or upon the conversion
\n or exchange of all such Convertible Securities issuable upon the
\n exercise of such Options) shall be less than the Series C Conversion
\n Price in effect immediately prior to the time of the granting of such
\n Options, then the total maximum number of shares of Common Stock
\n issuable upon the exercise of such Options or upon conversion or
\n exchange of the total maximum amount of such Convertible Securities
\n issuable upon the exercise of such Options shall be deemed to have been
\n issued for such price per share as of the date of granting of such
\n Options or the issuance of such Convertible Securities and thereafter
\n shall be deemed to be outstanding. Except as otherwise provided in
\n subparagraph 6D(3), no adjustment of the Series C Conversion Price
\n shall be made upon the actual issue of such Common Stock or of such
\n Convertible Securities upon exercise of such Options or upon the actual
\n issue of such Common Stock upon conversion or exchange of such
\n Convertible Securities.<\/p>\n
6D(2) Issuance of Convertible Securities. In case the
\n Corporation shall in any manner issue (whether directly or by
\n assumption in a merger or otherwise) or sell any Convertible
\n Securities, whether or not the rights to exchange or convert any such
\n Convertible Securities are immediately exercisable, and the price per
\n share for which Common Stock issuable upon such conversion or exchange
\n (determined by dividing (i) the total amount received or receivable by
\n the Corporation as consideration for the issue or sale of such
\n Convertible Securities, plus the minimum aggregate amount of additional
\n consideration, if any, payable to the Corporation upon the conversion
\n or exchange of all such Convertible Securities thereof, by (ii) the
\n total maximum number of shares of Common Stock issuable upon the
\n conversion or exchange of all such Convertible Securities) shall be
\n less than the Series C Conversion Price in effect immediately prior to
\n the time of such issue or sale, then the total maximum number of
\n 55<\/p>\n
shares of Common Stock issuable upon conversion or exchange of all such
\n Convertible Securities shall be deemed to have been issued for such
\n price per share as of the date of the issue or sale of such of such
\n Convertible Securities and thereafter shall be deemed to be
\n outstanding, provided that (a) except as otherwise provided in
\n subparagraph 6D(3), no adjustment of the Series C Conversion Price
\n shall be made upon the actual issue of such Common Stock upon
\n conversion or exchange of such Convertible Securities and (b) if any
\n such issue or sale of such Convertible Securities is made upon exercise
\n or any Options to purchase any such Convertible Securities for which
\n adjustments of the Series C Conversion Price have been or are to be
\n made pursuant to other provisions of this paragraph 6D, no further
\n adjustments of the Series C Conversion Price shall be made by reason of
\n such issue or sale.<\/p>\n
6D(3) Change in Option Price of Conversion Rate. Upon the
\n happening of any of the following events, namely, if the purchase price
\n provided for in any Option referred to in subparagraph 6D(1), the
\n additional consideration, if any, payable upon the conversion or
\n exchange of any Convertible Securities referred to in subparagraph
\n 6D(1) or 6D(2), or the rate at which Convertible Securities referred to
\n in subparagraph 6D(1) or 6D(2) are convertible into or exchangeable for
\n Common Stock shall change at any time (including, but not limited to,
\n changes under or by reason if provisions designed to protect against
\n dilution), the Series C Conversion Price in effect at the time of such
\n event shall forthwith be readjusted to the Series C Conversion Price
\n which would have been in effect at such time had such Options or
\n Convertible Securities still outstanding provided for such changed
\n purchase price, additional consideration or conversion rate, as the
\n case may be, at the time initially granted, issued or sold; provided,
\n however, that in no event shall the Series C Conversion Price then in
\n effect hereunder be increased; and on the expiration of any such Option
\n or the termination of any such right to convert or exchange such
\n Convertible Securities, the Series C Conversion Price then in effect
\n hereunder shall forthwith be increased to the Conversion Price which
\n would have been in effect at the time of such expiration or termination
\n had such Option or Convertible Securities, to the extent outstanding
\n immediately prior to such expiration or termination, never been issued.<\/p>\n
6D(4) Stock Dividends. In case the Corporation shall declare a
\n dividend or make any other distribution upon any stock of the
\n Corporation payable in Common Stock (except for the issue of stock
\n dividends or distributions upon the outstanding Common Stock for which
\n adjustment is made pursuant to paragraph 6F), Options or Convertible
\n Securities, any Common Stock, Options or Convertible Securities, as the
\n case may be, issuable in payment of such dividend or distribution shall
\n be deemed to have been issued or sold without consideration.<\/p>\n
6D(5) Consideration for Stock. In case any shares of Common
\n Stock, Options or Convertible Securities shall be issued or sold for
\n cash, the consideration received therefor shall be deemed to be the
\n amount received by the Corporation therefor, without deduction
\n therefrom of any expenses incurred or any underwriting commissions or
\n concessions paid or allowed by the Corporation in connection therewith.
\n In case any shares of Common Stock, Options or Convertible Securities
\n shall be issued or sold for consideration other than cash, the amount
\n of the consideration other than cash received by the Corporation shall
\n be deemed to be the fair value of such consideration as determined in
\n good faith by
\n 56<\/p>\n
the Board of Directors of the Corporation without deduction of any
\n expenses incurred or any underwriting commissions or concessions paid
\n or allowed by the Corporation in connection therewith. In case any
\n Options shall be issued in connection with the issue and sale of other
\n securities of the Corporation, together comprising one integral
\n transaction in which no specific consideration is allocated to such
\n Options by the parties thereto, such Options shall be deemed to have
\n been issued for such consideration as determined in good faith by the
\n Board of Directors of the Corporation.<\/p>\n
6D(6) Record Date. In case the Corporation shall take a record
\n of the holders of its Common Stock for the purpose of entitling them
\n (i) to receive a dividend or other distribution payable in Common
\n Stock, Options or Convertible Securities or (ii) to subscribe for or
\n purchase Common Stock, Options or Convertible Securities, then such
\n record date shall be deemed to be the date of the issue or sale of the
\n shares of Common Stock deemed to have been issued or sold upon the
\n declaration of such dividend or the making of such other distribution
\n or the date of the granting of such right of subscription or purchase,
\n as the case may be.<\/p>\n
6D(7) Treasury Shares. The number of shares of Common Stock
\n outstanding at any given time shall not include shares owned or held by
\n or for the account of the Corporation (or any Subsidiary), and the
\n disposition of any such shares shall be considered an issue or sale of
\n Common Stock for the purpose of this paragraph 6D.<\/p>\n
6E. Certain Issues Excepted. Anything herein to the contrary
\nnotwithstanding, the Corporation shall not be required to make any adjustment
\nfor the Series C Conversion Price in the case of the issuance of (i) shares of
\nSeries B Convertible Preferred Stock pursuant to the Purchase Agreement, (ii)
\nshares of Common Stock issuable upon conversion of the Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock or Series C Convertible
\nPreferred Stock, (iii) shares of Common Stock issued or issuable as a dividend
\nor distribution on Series A Convertible Preferred Stock, Series B Convertible
\nPreferred Stock or Series C Convertible Preferred Stock, (iv) Reserved Employee
\nShares (as defined in paragraph 9 herein) or (v) warrant shares issued as
\ncontemplated by the Purchase Agreement or shares of Common Stock issuable upon
\nconversion of such warrant shares.<\/p>\n
6F. Subdivision or Combination of Common Stock. In case the
\nCorporation shall at any time subdivide (by any stock split, stock dividend or
\notherwise) its outstanding shares of Common Stock into a greater number of
\nshares, the Series C Conversion Price in effect immediately prior to such
\nsubdivision shall be proportionately reduced, and, conversely, in case the
\noutstanding shares of Common Stock shall be combined into a smaller number of
\nshares, the Series C Conversion Price in effect immediately prior to such
\ncombination shall be proportionately increased.<\/p>\n
6G. Reorganization or Reclassification. If any capital
\nreorganization, reclassification, recapitalization, consolidation, merger, sale
\nof all or substantially all of the Corporation’s assets or other similar
\ntransaction (any such transaction being referred to herein as an “Organic
\nChange”) shall be effected in such a way that holders of Common Stock shall be
\nentitled to receive (either directly or upon subsequent liquidation) stock,
\nsecurities or assets with respect to or in exchange for Common Stock, then, as a
\ncondition of such Organic Change,
\n 57<\/p>\n
lawful and adequate provisions shall be made whereby each holder of a share or
\nshares of Series C Convertible Preferred Stock shall thereupon have the right to
\nreceive, upon the basis and upon the terms and conditions specified herein and
\nin lieu of or in addition to, as the case may be, the shares of Common Stock
\nimmediately theretofore receivable upon the conversion of such share or shares
\nof Series C Convertible Preferred Stock, such shares of stock, securities or
\nassets as may be issued or payable with respect to or in exchange for a number
\nof outstanding shares of such Common Stock equal to the number of shares of such
\nCommon Stock immediately theretofore receivable upon such conversion had such
\nOrganic Change not taken place, and in any case of a reorganization or
\nreclassification only appropriate provisions shall be made with respect to the
\nrights and interests of such holder to the end that the provisions hereof
\n(including without limitation provisions for adjustments of the Series C
\nConversion Price) shall thereafter be applicable, as nearly as may be, in
\nrelation to any shares of stock, securities or assets thereafter deliverable
\nupon the exercise of such conversion rights.<\/p>\n
6H. Notice of Adjustment. Upon any adjustment of the Series C
\nConversion Price, then and in each such case the Corporation shall give written
\nnotice thereof, by first class mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, addressed to each holder of shares of Series
\nC Convertible Preferred Stock at the address of such holder as shown on the
\nbooks of the Corporation, which notice shall state the Series C Conversion Price
\nresulting from such adjustment, setting forth in reasonable detail the method
\nupon which such calculation is based.<\/p>\n
6I. Other Notices. In case at any time:<\/p>\n
(1) the Corporation shall declare any dividend upon its Common
\nStock payable in cash or stock or make any other distribution to the holders of
\nits Common Stock;<\/p>\n
(2) the Corporation shall offer for subscription pro rata to
\nthe holders of its Common Stock any additional shares of stock of any class or
\nother rights;<\/p>\n
(3) there shall be any capital reorganization or
\nreclassification of the capital stock of the Corporation, or a consolidation or
\nmerger of the Corporation with or into, or a sale of all or substantially all of
\nits assets to, another entity or entities; or<\/p>\n
(4) there shall be a voluntary or involuntary dissolution,
\nliquidation or winding up of the Corporation;<\/p>\n
then, in any one or more of said cases, the Corporation shall give, by first
\nclass mail, postage prepaid, or by facsimile transmission to non-U.S. residents,
\naddressed to each holder of any shares of Preferred Stock at the address of such
\nholder as shown on the books of the Corporation, (a) at least 20 days’ prior
\nwritten notice of the date on which the books of the Corporation shall close or
\na record shall be taken for such dividend, distribution or subscription rights
\nor for determining rights to vote in respect of any such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up and (b) in the case of any such reorganization, reclassification,
\nconsolidation, merger, sale, dissolution, liquidation or winding up, at least 20
\ndays’ prior written notice of the date when the same shall take place. Such
\nnotice in accordance with the foregoing clause (a) shall also specify, in the
\ncase of any such dividend,
\n 58<\/p>\n
distribution or subscription rights, the date on which the holders or Common
\nStock shall be entitled thereto and such notice in accordance with the foregoing
\nclause (b) shall also specify the date on which the holders of Common Stock
\nshall be entitled to exchange their Common Stock for securities or other
\nproperty deliverable upon such reorganization, reclassification, consolidation,
\nmerger, sale, dissolution, liquidation or winding up, as the case may be.<\/p>\n
6J. Stock to be Reserved. The Corporation will at all times
\nreserve and keep available out of its authorized Common Stock, solely for the
\npurpose of issuance upon the conversion of Series C Convertible Preferred Stock
\nas herein provided, such number of shares of Common Stock as shall then be
\nissuable upon the conversion of all outstanding shares of Series C Convertible
\nPreferred Stock. The Corporation covenants that all shares of Common Stock which
\nshall be so issued shall be duly and validly issued and fully paid and
\nnonassessable and free from all taxes, liens and charges with respect to the
\nissue thereof, and, without limiting the generality of the foregoing, the
\nCorporation covenants that it will from time to time take all such action as may
\nbe requisite to assure that the par value per share of the Common Stock is at
\nall times equal to or less than the Series C Conversion Price in effect at the
\ntime. The Corporation will take all such action as may be necessary to assure
\nthat all such shares of Common Stock may be so issued without violation of any
\napplicable law or regulation, or of any requirement of any national securities
\nexchange upon which the Common Stock may be listed.<\/p>\n
6K. No Reissuance of Series C Convertible Preferred Stock.
\nShares of Series C Convertible Preferred Stock which are converted into shares
\nof Common Stock as provided herein shall not be reissued.<\/p>\n
6L. Issue Tax. The issuance of certificates for shares of
\nCommon Stock upon conversion of Series C Convertible Preferred Stock shall be
\nmade without charge to the holders thereof for any issuance tax in respect
\nthereof; provided that the Corporation shall not be required to pay any tax
\nwhich may be payable in respect of any transfer involved in the issuance and
\ndelivery of any certificate in a name other than that of the holder of the
\nSeries C Convertible Preferred Stock which is being converted.<\/p>\n
6M. Closing of Books. The Corporation will at no time close
\nits transfer books against the transfer of any Series C Convertible Preferred
\nStock or of any shares of Common Stock issued or issuable upon the conversion of
\nany shares of Series C Convertible Preferred Stock in any manner which
\ninterferes with the timely conversion of such Preferred Stock, except as may
\notherwise be required to comply with applicable securities laws.<\/p>\n
6N. Definition of Common Stock. As used in this paragraph 6,
\nthe term “Common Stock” shall mean and include the Corporation’s authorized
\nCommon Stock, par value $.01 per share, as constituted on the date of filing of
\nthese terms of the Series C Convertible Preferred Stock, and shall also include
\nany capital stock of any class of the Corporation thereafter authorized which
\nshall neither be limited to a fixed sum of percentage of par value in respect of
\nthe rights of the holders thereof to participate in dividends nor entitled to a
\npreference in the distribution of assets upon the voluntary or involuntary
\nliquidation, dissolution or winding up of the Corporation; provided that the
\nshares of Common Stock receivable upon conversion of shares of Series C
\nConvertible Preferred Stock shall include only shares designated as Common Stock
\nof the Corporation on the date of filing of this instrument, or in case of any
\nreorganization or
\n 59<\/p>\n
reclassification of the outstanding shares thereof, the stock, securities or
\nassets provided for in subparagraph 6G.<\/p>\n
6O. Mandatory Conversion. All outstanding shares of Series C
\nConvertible Preferred Stock shall automatically convert to shares of Common
\nStock if at any time the Corporation shall effect a public offering of shares of
\nCommon Stock (any such offering, regardless of compliance with subsections (i),
\n(ii) and (iii) herein, being referred to as a “Public Offering”), provided (i)
\nthe aggregate gross proceeds from such offering to the Corporation shall be at
\nleast $20,000,000; (ii) the price paid by the public for such shares shall be at
\nleast (x) 2.0 times the then Series B Conversion Price if the Public Offering
\noccurs prior to the 18 month anniversary of the Series B Preferred Stock Issue
\nDate or (y) 3.0 times the then Series B Conversion Price if the Public Offering
\noccurs on or after the 18 month anniversary of the Series B Preferred Stock
\nIssue Date, and (iii) the offering is a firm commitment underwritten Public
\nOffering, and such automatic conversion shall be effective upon the closing of
\nthe sale of such shares by the Corporation pursuant to such Public Offering.<\/p>\n
7. Redemption. The shares of Series C Convertible Preferred Stock shall
\nbe redeemed as follows:<\/p>\n
7A. Optional Redemption. The Corporation shall not have the
\nright to call or redeem at any time all or any shares of Series C Convertible
\nPreferred Stock. With the approval of the holders of 66% of the then outstanding
\nshares of Series C Convertible Preferred Stock, one or more holders of shares of
\nSeries C Convertible Preferred Stock may, by giving notice (the “Notice”) to the
\nCorporation, require the Corporation to redeem any or all of the outstanding
\nSeries C Convertible Preferred Stock on the Redemption Date (as defined below).
\nUpon receipt of the Notice, the Corporation will so notify all other persons
\nholding Series C Convertible Preferred Stock. After receipt of the Notice, the
\nCorporation shall fix the first date for redemption, which shall be the date
\nspecified in the Notice, being any date on or after the earlier of (i) the fifth
\n(5th) anniversary of the Series B Preferred Stock Issue Date and (ii) the date
\nwhich is the day before the Corporation is due to redeem any outstanding Junior
\nSecurities (the “Redemption Date”). All holders of Series C Convertible
\nPreferred Stock shall delivery to the Corporation during regular business hours,
\nat the office of any transfer agent of the Corporation for the Series C
\nConvertible Preferred Stock, or at the principal office of the Corporation or at
\nsuch other place as may be designated by the Corporation, the certificate or
\ncertificates for the Series C Convertible Preferred Stock, duly endorsed for
\ntransfer to the Corporation (if required by it) on or before the Redemption
\nDate.<\/p>\n
7B. Redemption Price and Payment. The Series C Convertible
\nPreferred Stock to be redeemed on the Redemption date shall be redeemed by
\npaying for each share in cash an amount equal to the Series C Redemption Price
\n(as defined below). For purposes of this paragraph 7B the “Series C Redemption
\nPrice” shall mean $34.436 per share, plus an amount equal to all dividends
\naccrued and unpaid on each such share; provided, however, that if the Redemption
\nDate is after the fifth (5th) anniversary of the Series B Preferred Stock Issue
\nDate, then the “Series C Redemption Price” shall mean the greater of (i) $34.436
\nper share, plus an amount equal to all dividends accrued and unpaid on each such
\nshare and (ii) the Fair Market Value (as defined below) of the Common Stock
\nunderlying the Series C Convertible Preferred Stock. Such payment shall be made
\nin full on the Redemption Date to the holders entitled
\n 60<\/p>\n
thereto. For purposes of this paragraph 7B, “Fair Market Value” of the Common
\nstock shall mean the average of the fair market valuations of the Common Stock
\nperformed by two investment banks (the “Initial Appraisers”), one of which shall
\nbe retained by the Corporation and one of which shall be retained by the holders
\nof a majority in interest of the Series C Convertible Preferred Stock. Subject
\nto the following sentence, such determination by the Initial Appraisers of Fair
\nMarket Value shall be final and binding on the parties. If the higher of the two
\nvaluations of the Initial Appraisers is equal to or greater than 110% of the
\nlower valuation, the Corporation and holders of a majority in interest of the
\nSeries C Convertible Preferred Stock shall select a third investment bank (the
\n“Final Appraiser”), which shall be mutually agreeable to the Corporation and the
\nholders of a majority in interest of the Series C Convertible Preferred Stock.
\nThe fair market value of the Common Stock as determined by the Final Appraiser
\nshall be final and binding on the parties. The fees and expenses of the Initial
\nAppraisers shall be paid for by the party selecting such Initial Appraiser and
\nthe fees and expenses of the Final Appraiser shall be shared by the Corporation
\nand the holders of the Series C Convertible Preferred Stock.<\/p>\n
7C. Redemption Mechanics. At least 15 but not more than 35
\ndays prior to the Redemption Date, written notice (the “Redemption Notice”)
\nshall be given by the Corporation by mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, to each holder of record (at the close of
\nbusiness on the business day next preceding the day on which the Redemption
\nNotice is given) of shares of Series C Convertible Preferred Stock notifying
\nsuch holder of the redemption and specifying the Series C Redemption Price, the
\nRedemption Date and the place where said Series C Redemption Price shall be
\npayable. The Redemption Notice shall be addressed to each holder at his address
\nas shown by the records of the Corporation. From and after the close of business
\non the Redemption Date, unless there shall have been a default in the payment of
\nthe Series C Redemption Price, all rights of holders of shares of Series C
\nConvertible Preferred Stock (except the right to receive the Series C Redemption
\nPrice) shall cease with respect to such shares, and such shares shall not
\nthereafter be transferred on the books of the Corporation or be deemed to be
\noutstanding for any purpose whatsoever. If the funds of the Corporation legally
\navailable for redemption of shares of Series C Convertible Preferred Stock on
\nthe Redemption Date are insufficient to redeem the total number of outstanding
\nshares of Series C Convertible Preferred Stock to be redeemed on such Redemption
\nDate, the holders of shares of Series C Convertible Preferred Stock shall share
\nratably in any funds legally available for redemption of such shares according
\nto the respective amounts which would be payable with respect to the full number
\nof shares owned by them if all such outstanding shares were redeemed in full.
\nThe shares of Series C Convertible Preferred Stock not redeemed shall remain
\noutstanding and entitled to all rights and preferences provided herein;
\nprovided, however, that such unredeemed shares shall be entitled to receive
\ninterest accruing daily with respect to the applicable Series C Redemption Price
\nat the rate of 15% per annum, payable quarterly in arrears. At any time
\nthereafter when additional funds of the Corporation are legally available for
\nthe redemption of such shares of Series C Convertible Preferred Stock, such
\nfunds will be used, at the end of the next succeeding fiscal quarter, to redeem
\nthe balance of such shares, or such portion thereof for which funds are then
\nlegally available, on the basis set forth above.<\/p>\n
7D. Redeemed or Otherwise Acquired Shares to be Retired. Any
\nshares of Series C Convertible Preferred Stock redeemed pursuant to this
\nparagraph 7 or otherwise acquired by the Corporation in any manner whatsoever
\nshall be canceled and shall not under any
\n 61<\/p>\n
circumstances be reissued; and the Corporation may from time to time take such
\nappropriate corporate action as may be necessary to reduce accordingly the
\nnumber of authorized shares of Series C Convertible Preferred Stock.<\/p>\n
8. Amendments. Except where the vote or written consent of the holders
\nof a greater number of shares of the Corporation is required by these terms of
\nthe Series C Convertible Preferred Stock, by law or by the Certificate of
\nIncorporation, no provision of these terms of the Series C Convertible Preferred
\nStock may be amended, modified or waived without the written consent or
\naffirmative vote of the holders of at least 60% of the then outstanding shares
\nof Series C Convertible Preferred Stock.<\/p>\n
9. Definitions. As used herein, the following terms shall have the
\nfollowing meanings:<\/p>\n
(1) The term “Founders” shall mean F. Thornson Leighton,
\nDaniel Lewin, Jonathan Seelig, Randall Kaplan, Gilbert Friesen and David Karger.<\/p>\n
(2) The term “Purchase Agreement” shall mean the Series B
\nConvertible Preferred Stock and Series C Convertible Preferred Stock Purchase
\nAgreement dated as of April 16, 1999 between the Corporation, Baker
\nCommunications Fund, L.P. and the other purchasers named therein, as in effect
\non April 16, 1999.<\/p>\n
(3) The term the “Plan” shall mean the Corporation’s 1998
\nStock Incentive Plan.<\/p>\n
(4) The term “Reserved Employee Shares” shall mean shares of
\nCommon Stock reserved by the Corporation pursuant to the Plan from time to time
\nfor (i) the sale of shares of Common Stock to employees, consultants or
\nnon-employee directors (other than representatives of the holders of Preferred
\nStock) of the Corporation or (ii) the exercise of options to purchase Common
\nStock granted to employees, consultants or non-employee directors (other than
\nrepresentatives of the holders of Preferred Stock) of the Corporation, not to
\nexceed in the aggregate 3,450,000 shares of Common Stock for both clauses (i)
\nand (ii), with such number including 710,700 shares issued or subject to options
\ngranted prior to the date of the initial issuance of the Series A Convertible
\nPreferred Stock (the “Option Shares”) (appropriately adjusted to reflect an
\nevent described in paragraph 6F hereof); provided that, such number of such
\nshares subject to the Plan shall be increased by up to 2,519,742 additional
\nshares of Common Stock (appropriately adjusted to reflect an event described in
\nparagraph 6F hereof) (collectively, the “Founders’ Shares”) upon the repurchase
\nof such Founders’ Shares by the Corporation from the Founders pursuant to
\ncontractual rights held by the Corporation. The foregoing numbers of Reserved
\nEmployee Shares may be increased by the affirmative vote or written consent of a
\nmajority of the directors designated solely by the holders of Series A
\nConvertible Preferred Stock and Series B Convertible Preferred Stock or the
\naffirmative vote or written consent of the holders of at least 50% of the then
\noutstanding shares of Series A Convertible Preferred Stock, Series B Convertible
\nPreferred Stock and Series C Convertible Preferred Stock, voting together as a
\nsingle class on a Common Stock equivalent basis.<\/p>\n
62<\/p>\n
(5) The term “Series B Conversion Price” shall mean the
\nconversion price of the Series B Convertible Preferred Stock from time to time
\nunder the terms of the designation of the Series B Convertible Preferred Stock
\nof the Corporation.<\/p>\n
(6) The term “Series B Preferred Stock Issue Date” shall mean
\nthe date on which the Series B Convertible Preferred Stock is originally issued
\nby the Corporation pursuant to the Purchase Agreement.<\/p>\n
(7) The term “Series C Preferred Stock Issue Date” shall mean
\nthe date on which the Series C Convertible Preferred Stock is originally issued
\nby the Corporation pursuant to the Purchase Agreement.<\/p>\n
(8) The term “Subsidiary” or “Subsidiaries” shall mean any
\ncorporation, partnership, trust or other entity of which the Corporation and\/or
\nany of its other subsidiaries directly or indirectly owns at the time a majority
\nof the outstanding shares of every class of equity security of such corporation,
\npartnership, trust or other entity.<\/p>\n
63<\/p>\n
CERTIFICATE OF AMENDMENT
\n OF THE
\n CERTIFICATE OF INCORPORATION
\n OF
\n AKAMAI TECHNOLOGIES, INC.<\/p>\n
Pursuant to Section 242
\n of the General Corporation Law of
\n the State of Delaware<\/p>\n
Akamai Technologies, Inc. (hereinafter called the “Corporation”),
\norganized and existing under and by virtue of the General Corporation Law of the
\nState of Delaware, does hereby certify as follows:<\/p>\n
The Board of Directors of the Corporation, by unanimous written consent
\nin lieu of a meeting, duly adopted a resolution, pursuant to Sections 141(f) and
\n242 of the General Corporation Law of the State of Delaware, setting forth an
\namendment to the Certificate of Incorporation of the Corporation and declaring
\nsaid amendment to be advisable. The stockholders of the Corporation duly
\napproved said proposed amendment by written consent in accordance with Sections
\n228 and 242 of the General Corporation Law of the State of Delaware, and written
\nnotice of such consent has been or will be given to all stockholders who have
\nnot consented in writing to said amendment. The resolution setting forth the
\namendment is as follows:<\/p>\n
RESOLVED: That the first paragraph of Article FOURTH of the Certificate
\nof Incorporation of the Corporation be and hereby is deleted in its entirety and
\nthat the following paragraph be inserted in lieu thereof:<\/p>\n
“FOURTH. The total number of shares of all classes of stock
\n which the Corporation shall have authority to issue is 65,000,000
\n shares, consisting of (i) 60,000,000 shares of Common Stock, $0.01 par
\n value per share (“Common Stock”), and (ii) 5,000,000 shares of
\n Preferred Stock, $0.01 par value per share (“Preferred Stock”).<\/p>\n
64<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
\nAmendment to be signed by its Treasurer on this 25th day of May, 1999.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Paul Sagan
\n ———————————-
\n Paul Sagan
\n Treasurer<\/p>\n
65<\/p>\n
CERTIFICATE OF DESIGNATIONS<\/p>\n
OF<\/p>\n
SERIES D CONVERTIBLE PREFERRED STOCK<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n —————–<\/p>\n
Pursuant to Section 151 of the
\n General Corporation Law of the State of Delaware
\n —————–<\/p>\n
Akamai Technologies, Inc., a Delaware corporation (the “Corporation”),
\ncertifies that pursuant to the authority contained in Article Fourth of its
\nCertificate of Incorporation and in accordance with the provisions of Section
\n151 of the General Corporation Law of the State of Delaware, the Board of the
\nDirectors of the Corporation, at a meeting held on May 18, 1999, duly adopted
\nthe following resolution, which resolution remains in full force and effect on
\nthe date hereof:<\/p>\n
RESOLVED, that, pursuant to the authority expressly granted to and
\nvested in the Board of Directors of the Corporation, a series of Preferred Stock
\nof the Corporation be and hereby is established, consisting of 685,194 shares,
\n$0.01 par value per share, to be designated “Series D Convertible Preferred
\nStock” (hereinafter, the “Series D Preferred Stock”); that the Board of
\nDirectors be and hereby is authorized to issue such shares of Series D Preferred
\nStock from time to time and for such consideration and on such terms as the
\nBoard of Directors shall determine; and that, subject to the limitations
\nprovided by law and by the Certificate of Incorporation, the voting powers,
\npreferences and relative, participating, optional and other special rights, and
\nqualifications, limitations and restrictions thereof shall be as set forth on
\nSchedule I attached hereto.<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
\nduly executed by its President on this 21st day of June, 1999.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Paul Sagan
\n ——————————-
\n Paul Sagan
\n President<\/p>\n
66<\/p>\n
Schedule I<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n DESIGNATION OF SERIES D CONVERTIBLE PREFERRED STOCK<\/p>\n
The series of Preferred Stock designated and known as “Series D
\nConvertible Preferred Stock” shall consist of 685,194 shares.<\/p>\n
1. Voting. Except as may be otherwise provided in these terms of the
\nSeries D Convertible Preferred Stock, in the Certificate of Incorporation (the
\n“Certificate of Incorporation”) of Akamai Technologies, Inc. (the “Corporation”)
\nor by law, the Series D Convertible Preferred Stock shall vote together with all
\nother classes and series of stock of the Corporation as a single class on all
\nactions to be taken by the stockholders of the Corporation. Each share of Series
\nD Convertible Preferred Stock shall entitle the holder thereof to such number of
\nvotes per share on each such action as shall equal the number of shares of
\nCommon Stock (including fractions of a share) into which each share of Series D
\nConvertible Preferred Stock is then convertible.<\/p>\n
2. Ranking. The Series D Convertible Preferred Stock shall rank, with
\nrespect to dividend distributions and distributions upon a Liquidation Event (as
\ndefined in paragraph 4A herein), senior to all classes of common stock of the
\nCompany and to each other class of capital stock or series of preferred stock
\n(including the Series A Convertible Preferred Stock of the Corporation)
\nestablished before the Series B Preferred Stock Issue Date, by the Board of
\nDirectors, pari passu with the Series B Convertible Preferred Stock and the
\nSeries C Convertible Preferred Stock of the Corporation, and senior or pari
\npassu to any other class of capital stock or series of preferred stock
\nestablished after the Preferred Stock Issue Date by the Board of Directors. All
\nclasses of common stock of the Company, the Series A Convertible Preferred Stock
\nand any other class of capital stock or series of preferred stock established
\nafter the Preferred Stock Issue Date to which the Series D Convertible Preferred
\nStock is senior, are collectively referred to herein as “Junior Securities”. The
\nSeries B Convertible Preferred Stock and the Series C Convertible Preferred
\nStock of the Corporation and any other class of capital stock or series of
\npreferred stock established after the Preferred Stock Issue Date which ranks
\npari passu with the Series D Convertible Preferred Stock, are collectively
\nreferred to herein as “Pari Passu Securities”.<\/p>\n
3. Dividends. The holders of shares of the Series D Convertible
\nPreferred Stock shall be entitled to receive, when, as and if dividends are
\ndeclared by the Board of Directors out of funds of the Corporation legally
\navailable therefor, cumulative preferential dividends at the annual rate of 8%
\non the Series D Liquidation Preference Payments (as defined in paragraph 4A
\nherein); provided, however, that any such dividends shall only be paid, whether
\ndeclared or not, immediately upon the occurrence of (i) a Liquidation Event
\npursuant to paragraph 4.A hereof or (ii) a Redemption pursuant to paragraph 7B
\nhereof. Holders of shares of Series D Convertible Preferred Stork shall be
\nentitled to receive the dividends provided for herein in preference to and in
\npriority over any dividends upon any of the Junior Securities. Dividends on the
\nSeries D Convertible Preferred Stock shall accrue on a daily basis from the
\nPreferred Stock Issue Date and, to the extent they are not paid, shall
\naccumulate on an annual basis on each December 31, <\/p>\n
67<\/p>\n
whether or not the Corporation has earnings or profits, whether or not there are
\nfunds legally available for the payment of such dividends and whether or not
\ndividends are declared.<\/p>\n
4. Liquidation, Dissolution and Winding-up.<\/p>\n
4A. Liquidation. Upon any liquidation, dissolution or winding
\nup of the Corporation (a “Liquidation Event”), whether voluntary or involuntary,
\nthe holders of the shares of Series D Convertible Preferred Stock shall be paid
\nan amount equal to $18.243 per share plus, in the case of each share, an amount
\nequal to dividends accrued but unpaid thereon, computed to the date payment
\nthereof is made available, together with payment to any Pari Passu Securities,
\nand before any payment shall be made to the holders of any Junior Securities,
\nsuch amount payable with respect to one share of Series D Convertible Preferred
\nStock being sometimes referred to as the “Series D Liquidation Preference
\nPayment” and with respect to all shares of Series D Convertible Preferred Stock
\nbeing sometimes referred to as the “Series D Liquidation Preference Payments”.
\nIf upon any Liquidation Event, the assets to be distributed to the holders of
\nthe Series D Convertible Preferred Stock shall be insufficient to permit payment
\nto such stockholders of the full preferential amounts aforesaid, then all of the
\nassets of the Corporation available for distribution to holders of the Series D
\nConvertible Preferred Stock and Pari Passu Securities shall be distributed to
\nsuch holders of the Series D Convertible Preferred Stock and Pari Passu
\nSecurities pro rata, so that each holder receives that portion of the assets
\navailable for distribution as the number of shares of such stock held by such
\nholder bears to the total number of shares of such stock then outstanding.<\/p>\n
4B. Upon any Liquidation Event, immediately after the holders
\nof Series D Convertible Preferred Stock and holders of any Pari Passu Securities
\nhave been paid in full pursuant to paragraph 4A above, the remaining net assets
\nof the Corporation available for distribution shall be distributed among the
\nholders of the shares of Junior Securities.<\/p>\n
Written notice of such Liquidation Event, stating a payment date and
\nthe place where said payments shall be made, shall be given by mail, postage
\nprepaid, or by facsimile to non-U.S. residents, not less than 20 days prior to
\nthe payment date stated therein, to the holders of record of Series D
\nConvertible Preferred Stock, such notice to be addressed to each such holder at
\nits address as shown by the records of the Corporation.<\/p>\n
The (x) consolidation or merger of the Corporation into or with any
\nother entity or entities which results in the exchange of outstanding shares of
\nthe Corporation for securities or other consideration issued or paid or caused
\nto be issued or paid by any such entity or affiliate thereof (except a
\nconsolidation or merger into a Subsidiary or merger in which the Corporation is
\nthe surviving Corporation and the holders of the Corporation’s voting stock
\noutstanding immediately prior to the transaction constitute a majority of the
\nholders of voting stock outstanding immediately following the transaction), (y)
\nsale or transfer by the Corporation of all or substantially all of its assets,
\nor (z) sale or transfer by the Corporation’s stockholders of capital stock
\nrepresenting a majority of the outstanding capital stock of the Corporation
\nshall be deemed to be a Liquidation Event within the meaning of the provisions
\nof this paragraph 4 (subject to the provisions of this paragraph 4 and not the
\nprovisions of paragraph 6G hereof, unless paragraph 6G is elected in the
\nfollowing proviso); provided, however, that if the holders of at <\/p>\n
68<\/p>\n
least 60% of the then outstanding shares of Series D Convertible Preferred Stock
\nshall elect the benefits of the provisions of paragraph 6G in lieu of receiving
\npayment in a Liquidation Event pursuant to this paragraph 4, then all holders of
\nshares of Series D Convertible Preferred Stock shall receive the benefits of the
\nprovisions of paragraph 6G in lieu of receiving payment pursuant to this
\nparagraph 4 for the particular Organic Change (as defined in Section 6G) causing
\nthe rights of Section 6G to be available. The election of the rights under
\nSection 6G for any particular Organic Change shall not constitute an election of
\nthe rights available under Section 6G for any other Organic Change, for which
\nthe holders of Series D Convertible Preferred Stock shall have a new election
\nunder the foregoing proviso. Whenever the distribution provided for in this
\nparagraph 4 shall be payable in property other than cash, the value of such
\ndistribution shall be the fair market value of such property as determined in
\ngood faith by the Board of Directors of the Corporation.<\/p>\n
5. Restrictions. At any time when at least 50% of the shares of Series
\nD Convertible Preferred Stock issued pursuant to the Purchase Agreement remain
\noutstanding, except where the vote or written consent of the holders of a
\ngreater number of shares of the Corporation is required by law or by the
\nCertificate of Incorporation, and in addition to any other vote required by law
\nor the Certificate of Incorporation, without the written consent of the holders
\nof at least 60% of the then outstanding shares of Series D Convertible Preferred
\nStock given in writing or by vote at a meeting, consenting or voting (as the
\ncase may be) separately as a series, the Corporation will not:<\/p>\n
(1) Consent to any Liquidation Event or merge or consolidate
\nwith or into, or permit any Subsidiary to merge or consolidate with or into, any
\nother corporation, corporations, entity or entities (except a consolidation or
\nmerger into a Subsidiary or merger in which the Corporation is the surviving
\ncorporation and the holders of the Corporation’s voting stock outstanding
\nimmediately prior to the transaction constitute a majority of the holders of
\nvoting stock outstanding immediately following the transaction or a
\nconsolidation or merger pursuant to which the aggregate consideration definitely
\nand unconditionally payable to all of the stockholders of the Corporation is
\ngreater than $400 million) without the affirmative vote or written consent of
\nthe holders of at least 50% of the then outstanding shares of Series A
\nConvertible Preferred Stock, Series B Convertible Preferred Stock and Series D
\nConvertible Preferred Stock, voting together as a single class on a Common Stock
\nequivalent basis;<\/p>\n
(2) Sell, abandon, transfer, lease or otherwise dispose of all
\nor substantially all of its properties or assets (unless the aggregate
\nconsideration definitely and unconditionally payable to all of the stockholders
\nof the Corporation is greater than $400 million) without the affirmative vote or
\nwritten consent of the holders of at least 50% of the then outstanding shares of
\nSeries A Convertible Preferred Stock, Series B Convertible Preferred Stock and
\nSeries D Convertible Preferred Stock, voting together as a single class on a
\nCommon Stock equivalent basis;<\/p>\n
(3) Amend, alter or repeal any provision of its Certificate of
\nIncorporation or By-laws in a manner adverse to holders of the Series D
\nConvertible Preferred Stock;<\/p>\n
69<\/p>\n
(4) Create or authorize the creation of or issue any
\nadditional class or series of shares of stock (other than the Series C
\nConvertible Preferred Stock of the Corporation) unless the same ranks junior to
\nor on parity with the Series D Convertible Preferred Stock as to dividends and
\nthe distribution of assets on a Liquidation Event, or increase the authorized
\namount of Series D Convertible Preferred Stock or increase the authorized amount
\nof any additional class or series of shares of stock unless the same ranks
\njunior to or on parity with the Series D Convertible Preferred Stock as to
\ndividends and the distribution of assets on a Liquidation Event, or create or
\nauthorize any obligation or security convertible into shares of Series D
\nConvertible Preferred Stock or into shares of any other class or series of stock
\nunless the same ranks junior to or on parity with the Series D Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent, whether any such creation, authorization or increase shall be by means of
\namendment to the Certificate of Incorporation or by merger, consolidation or
\notherwise;<\/p>\n
(5) In any manner amend, alter or change the designations or
\nthe powers, preferences or rights, privileges or the restrictions of the Series
\nD Convertible Preferred Stock, provided, however, that the authorization or
\ncreation of any shares of capital stock on parity with the Series D Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent shall not require the approval of holders of Series D Convertible
\nPreferred Stock;<\/p>\n
(6) Purchase or redeem, or set aside any sums for the purchase
\nor redemption of, or pay any dividend or make any distribution on, any Junior
\nSecurities, except for (i) dividends or other distributions payable on the
\nCommon Stock solely in the form of additional shares of Common Stock or (ii)
\nrepurchases of shares of capital stock (at the original purchase price therefor)
\nfrom officers, employees, directors or consultants of the Corporation which are
\nsubject to restrictive stock purchase, right of first refusal or other
\nagreements under which the Corporation has the option to repurchase such shares
\nupon the occurrence of certain events, including termination of employment; or<\/p>\n
(7) Increase the number of Reserved Employee Shares without
\nthe affirmative vote or written consent of a majority of the directors
\ndesignated solely by the holders of Series A Convertible Preferred Stock and
\nSeries B Convertible Preferred Stock or the affirmative vote or written consent
\nof the holders of at least 50% of the then outstanding shares of Series A
\nConvertible Preferred Stock, Series B Convertible Preferred Stock, Series C
\nConvertible Preferred Stock and Series D Convertible Preferred Stock, voting
\ntogether as a single class on a Common Stock equivalent basis.<\/p>\n
6. Conversion. The holders of shares of Series D Convertible Preferred
\nStock shall have the following conversion rights:<\/p>\n
6A. Right to Convert. Subject to the terms and conditions of
\nthis paragraph 6, the holder of any share or shares of Series D Convertible
\nPreferred Stock shall have the right, at its option at any time, to convert any
\nsuch shares of Series D Convertible Preferred Stock (except that upon any
\nLiquidation Event the right of conversion shall terminate at the close of
\nbusiness on the business day fixed for payment of the amounts distributable on
\nthe Series D <\/p>\n
70<\/p>\n
Convertible Preferred Stock) into such number of fully paid and nonassessable
\nshares of Common Stock as is obtained by (i) multiplying the number of shares of
\nSeries D Convertible Preferred Stock so to be converted by $18.243 and (ii)
\ndividing the result by the conversion price of $6.081 per share or in case an
\nadjustment of such price has taken place pursuant to the further provisions of
\nthis paragraph 6, then by the conversion price as last adjusted and in effect at
\nthe date any share or shares of Series D Convertible Preferred Stock are
\nsurrendered for conversion (such price, or such price as last adjusted, being
\nreferred to as the “Series D Conversion Price”). Such rights of conversion shall
\nbe exercised by the holder thereof by giving written notice that the holder
\nelects to convert a stated number of shares of Series D Convertible Preferred
\nStock into Common Stock and by surrender of a certificate or certificates for
\nthe shares so to be converted to the Corporation at its principal office (or
\nsuch other office or agency of the Corporation as the Corporation may designate
\nby notice in writing to the holders of the Series D Convertible Preferred Stock)
\nat any time during its usual business hours on the date set forth in such
\nnotice, together with a statement of the name or names (with address) in which
\nthe certificate or certificates for shares of Common Stock shall be issued.<\/p>\n
6B. Issuance of Certificates; Time Conversion Effected.
\nPromptly after the receipt of the written notice referred to in paragraph 6A and
\nsurrender of the certificate or certificates for the share or shares of Series D
\nConvertible Preferred Stock to be converted, the Corporation shall issue and
\ndeliver, or cause to be issued and delivered, to the holder, registered in such
\nname or names as such holder may direct, a certificate or certificates for the
\nnumber of whole shares of Common Stock issuable upon the conversion of such
\nshare or shares of Series D Convertible Preferred Stock. To the extent permitted
\nby law, such conversion shall be deemed to have been effected and the Series D
\nConversion Price shall be determined as of the close of business on the date on
\nwhich such written notice shall have been received by the Corporation and the
\ncertificate or certificates for such share or shares shall have been surrendered
\nas aforesaid, and at such time the rights of the holder of such share or shares
\nof Series D Convertible Preferred Stock shall cease, and the person or persons
\nin whose name or names any certificate or certificates for shares of Common
\nStock shall be issuable upon such conversion shall be deemed to have become the
\nholder or holders of record of the shares represented thereby.<\/p>\n
6C. Fractional Shares; Dividends; Partial Conversion. No
\nfractional shares shall be issued upon conversion of Series D Convertible
\nPreferred Stock into Common Stock and no payment or adjustment shall be made
\nupon party conversion on account of any cash dividends on the Common Stock
\nissued upon such conversion. At the time of each conversion, the Corporation
\nshall pay in cash an amount equal to all dividends declared and unpaid (if any)
\non the shares of Series D Convertible Preferred Stock surrendered for conversion
\nto the date upon which such conversion is deemed to take place as provided in
\nparagraph 6B. In case the number of shares of Series D Convertible Preferred
\nStock represented by the certificate or certificates surrendered pursuant to
\nparagraph 6A exceeds the number of shares converted, the Corporation shall, upon
\nsuch conversion, execute and deliver to the holder, at the expense of the
\nCorporation, a new certificate or certificates for the number of shares of
\nSeries D Convertible Preferred Stock represented by the certificate or
\ncertificates surrendered which are not to be converted. If any fractional share
\nof Common Stock would, except for the provisions of the first sentence of this
\nparagraph 6C, be delivered upon such conversion, the Corporation, in lieu of
\ndelivering such fractional share, shall pay to the holder surrendering the
\nSeries D Convertible Preferred Stock
\n 71<\/p>\n
for conversion an amount in cash equal to the current fair market value of such
\nfractional share as determined in good faith by the Board of Directors of the
\nCorporation, and based upon the aggregate number of shares of Series D
\nConvertible Preferred Stock surrendered by any one holder.<\/p>\n
6D. Adjustment of Series D Conversion Price Upon Issuance of
\nCommon Stock. Except as provided in paragraphs 6E and 6F, if and whenever the
\nCorporation shall issue or sell, or is, in accordance with subparagraphs, 6D(1)
\nthrough 6D(7), deemed to have issued or sold, any shares of Common Stock for a
\nconsideration per share less than the Series D Conversion Price in effect
\nimmediately prior to the time of such issue or sale, (such number being
\nappropriately adjusted to reflect the occurrence of any event described in
\nparagraph 6F), then, forthwith upon such issue or sale, the Series D Conversion
\nPrice shall be reduced to the price determined by dividing (i) an amount equal
\nto the sum of (a) the number of shares of Common Stock outstanding immediately
\nprior to such issue or sale (assuming the conversion of the outstanding shares
\nof Series D Convertible Preferred Stock) multiplied by the then existing Series
\nD Conversion Price and (b) the consideration, if any, received by the
\nCorporation upon such issue or sale, by (ii) the total number of shares of
\nCommon Stock outstanding immediately after such issue or sale (assuming the
\nconversion of the outstanding shares of Series D Convertible Preferred Stock).<\/p>\n
For purposes of this paragraph 6D, the following subparagraphs 6D(1) to
\n6D(7) shall also be applicable:<\/p>\n
6D(1) Issuance of Rights or Options. In case at any time the
\n Corporation shall in any manner grant (whether directly or by
\n assumption in a merger or otherwise) any warrants or other rights to
\n subscribe for or to purchase, or any options for the purchase of,
\n Common Stock or any stock or security convertible into or exchangeable
\n for Common Stock (such warrants, rights or options being called
\n “Options” and such convertible or exchangeable stock or securities
\n being called “Convertible Securities”) whether or not such Options or
\n the right to convert or exchange any such Convertible Securities are
\n immediately exercisable, and the price per share for which Common Stock
\n is issuable upon the exercise of such Options or upon the conversion or
\n exchange of such Convertible Securities (determined by dividing (i) the
\n total amount, if any, received or receivable by the Corporation as
\n consideration for the granting of such Options, plus the minimum
\n aggregate amount of additional consideration payable to the Corporation
\n upon the exercise of all such Options, plus, in the case of such
\n Options which relate to Convertible Securities, the minimum aggregate
\n amount of additional consideration, if any, payable upon the issue or
\n sale of all such Convertible Securities and upon the conversion or
\n exchange thereof, by (ii) the total maximum number of shares of Common
\n Stock issuable upon the exercise of such Options or upon the conversion
\n or exchange of all such Convertible Securities issuable upon the
\n exercise of such Options) shall be less than the Series D Conversion
\n Price in effect immediately prior to the time of the granting of such
\n Options, then the total maximum number of shares of Common Stock
\n issuable upon the exercise of such Options or upon conversion or
\n exchange of the total maximum amount of such Convertible Securities
\n issuable upon the exercise of such Options shall be deemed to have been
\n issued for such price per share as of the date of granting of such
\n 72<\/p>\n
Options or the issuance of such Convertible Securities and thereafter
\n shall be deemed to be outstanding. Except as otherwise provided in
\n subparagraph 6D(3), no adjustment of the Series D Conversion Price
\n shall be made upon the actual issue of such Common Stock or of such
\n Convertible Securities upon exercise of such Options or upon the actual
\n issue of such Common Stock upon conversion or exchange of such
\n Convertible Securities.<\/p>\n
6D(2) Issuance of Convertible Securities. In case the
\n Corporation shall in any manner issue (whether directly or by
\n assumption in a merger or otherwise) or sell any Convertible
\n Securities, whether or not the rights to exchange or convert any such
\n Convertible Securities are immediately exercisable, and the price per
\n share for which Common Stock is issuable upon such conversion or
\n exchange (determined by dividing (i) the total amount received or
\n receivable by the Corporation as consideration for the issue or sale of
\n such Convertible Securities, plus the minimum aggregate amount of
\n additional consideration, if any, payable to the Corporation upon the
\n conversion or exchange of all such Convertible Securities thereof, by
\n (ii) the total maximum number of shares of Common Stock issuable upon
\n the conversion or exchange of all such Convertible Securities) shall be
\n less than the Series D Conversion Price in effect immediately prior to
\n the time of such issue or sale, then the total maximum number of shares
\n of Common Stock issuable upon conversion or exchange of all such
\n Convertible Securities shall be deemed to have been issued for such
\n price per share as of the date of the issue or sale of such Convertible
\n Securities and thereafter shall be deemed to be outstanding, provided
\n that (a) except as otherwise provided in subparagraph 6D(3), no
\n adjustment of the Series D Conversion Price shall be made upon the
\n actual issue of such Common Stock upon conversion or exchange of such
\n Convertible Securities and (b) if any such issue or sale of such
\n Convertible Securities is made upon exercise of any Options to purchase
\n any such Convertible Securities for which adjustments of the Series D
\n Conversion Price have been or are to be made pursuant to other
\n provisions of this paragraph 6D, no further adjustment of the Series D
\n Conversion Price shall be made by reason of such issue or sale.<\/p>\n
6D(3) Change in Option Price or Conversion Rate. Upon the
\n happening of any of the following events, namely, if the purchase price
\n provided for in any Option referred to in subparagraph 6D(1), the
\n additional consideration, if any, payable upon the conversion or
\n exchange of any Convertible Securities referred to in subparagraph
\n 6D(1) or 6D(2), or the rate at which Convertible Securities referred to
\n in subparagraph 6D(1) or 6D(2) are convertible into or exchangeable for
\n Common Stock shall change at any time (including, but not limited to,
\n changes under or by reason of provisions designed to protect against
\n dilution), the Series D Conversion Price in effect at the time of such
\n event shall forthwith be readjusted to the Series D Conversion Price
\n which would have been in effect at such time had such Options or
\n Convertible Securities still outstanding provided for such changed
\n purchase price, additional consideration or conversion rate, as the
\n case may be, at the time initially granted, issued or sold; provided,
\n however, that in no event shall the Series D Conversion Price then in
\n effect hereunder be increased; and on the expiration of any such Option
\n or the termination of any such right to convert or exchange such
\n Convertible Securities, the Series D Conversion Price then in effect
\n hereunder shall forthwith be increased to the Conversion Price which
\n would have been
\n 73<\/p>\n
in effect at the time of such expiration or termination had such Option
\n or Convertible Securities, to the extent outstanding immediately prior
\n to such expiration or termination, never been issued.<\/p>\n
6D(4) Stock Dividends. In case the Corporation shall declare a
\n dividend or make any other distribution upon any stock of the
\n Corporation payable in Common Stock (except for the issue of stock
\n dividends or distributions upon the outstanding Common Stock for which
\n adjustment is made pursuant to paragraph 6F), Options or Convertible
\n Securities, any Common Stock, Options or Convertible Securities, as the
\n case may be, issuable in payment of such dividend or distribution shall
\n be deemed to have been issued or sold without consideration.<\/p>\n
6D(5) Consideration for Stock. In case any shares of Common
\n Stock, Options or Convertible Securities shall be issued or sold for
\n cash, the consideration received therefor shall be deemed to be the
\n amount received by the Corporation therefor, without deduction
\n therefrom of any expenses incurred or any underwriting commissions or
\n concessions paid or allowed by the Corporation in connection therewith.
\n In case any shares of Common Stock, Options or Convertible Securities
\n shall be issued or sold for consideration other than cash, the amount
\n of the consideration other than cash received by the Corporation shall
\n be deemed to be the fair value of such consideration as determined in
\n good faith by the Board of Directors of the Corporation, without
\n deduction of any expenses incurred or any underwriting commissions or
\n concessions paid or allowed by the Corporation in connection therewith.
\n In case any Options shall be issued in connection with the issue and
\n sale of other securities of the Corporation, together comprising one
\n integral transaction in which no specific consideration is allocated to
\n such Options by the parties thereto, such Options shall be deemed to
\n have been issued for such consideration as determined in good faith by
\n the Board of Directors of the Corporation.<\/p>\n
6D(6) Record Date. In case the Corporation shall take a record
\n of the holders of its Common Stock for the purpose of entitling them
\n (i) to receive a dividend or other distribution payable in Common
\n Stock, Options or Convertible Securities or (ii) to subscribe for or
\n purchase Common Stock, Options or Convertible Securities, then such
\n record date shall be deemed to be the date of the issue or sale of the
\n shares of Common Stock deemed to have been issued or sold upon the
\n declaration of such dividend or the making of such other distribution
\n or the date of the granting of such right of subscription or purchase,
\n as the case may be.<\/p>\n
6D(7) Treasury Shares. The number of shares of Common Stock
\n outstanding at any given time shall not include shares owned or held by
\n or for the account of the Corporation (or any Subsidiary), and the
\n disposition of any such shares shall be considered an issue or sale of
\n Common Stock for the purpose of this paragraph 6D.<\/p>\n
6E. Certain Issues Excepted. Anything herein to the contrary
\nnotwithstanding, the Corporation shall not be required to make any adjustment of
\nthe Series D Conversion Price if it first obtains the written consent of the
\nholders of at least 60% of the then outstanding shares
\n 74<\/p>\n
of Series D Convertible Preferred Stock that no adjustment shall be required. In
\nno event shall the Corporation be required to make any adjustment to the Series
\nD Conversion Price in the case of the issuance of (i) shares of Series C
\nConvertible Preferred Stock pursuant to the Series B Purchase Agreement, (ii)
\nshares of Common Stock issuable upon conversion of the Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock, Series C Convertible
\nPreferred Stock or Series D Convertible Preferred Stock, (iii) shares of Common
\nStock issued or issuable as a dividend or distribution on Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock, Series C Convertible
\nPreferred Stock or Series D Convertible Preferred Stock, (iv) Reserved Employee
\nShares (as defined in paragraph 9 herein), (v) warrants issued in connection
\nwith senior subordinated notes of the Corporation as contemplated by the
\nSeries B Purchase Agreement or shares of Common Stock issuable upon conversion
\nof such warrants, or (vi) Options outstanding as of the Preferred Stock Issue
\nDate.<\/p>\n
6F. Subdivision or Combination of Common Stock. In case the
\nCorporation shall at any time subdivide (by any stock split, stock dividend or
\notherwise) its outstanding shares of Common Stock into a greater number of
\nshares, the Series D Conversion Price in effect immediately prior to such
\nsubdivision shall be proportionately reduced, and, conversely, in case the
\noutstanding shares of Common Stock shall be combined into a smaller number of
\nshares, the Series D Conversion Price in effect immediately prior to such
\ncombination shall be proportionately increased.<\/p>\n
6G. Reorganization or Reclassification. If any capital
\nreorganization, reclassification, recapitalization, consolidation, merger, sale
\nof all or substantially all of the Corporation’s assets or other similar
\ntransaction (any such transaction being referred to herein as an “Organic
\nChange”) shall be effected in such a way that holders of Common Stock shall be
\nentitled to receive (either directly or upon subsequent liquidation) stock,
\nsecurities or assets with respect to or in exchange for Common Stock, then, as a
\ncondition of such Organic Change, lawful and adequate provisions shall be made
\nwhereby each holder of a share or shares of Series D Convertible Preferred Stock
\nshall thereupon have the right to receive, upon the basis and upon the terms and
\nconditions specified herein and in lieu of or in addition to, as the case may
\nbe, the shares of Common Stock immediately theretofore receivable upon the
\nconversion of such share or shares of Series D Convertible Preferred Stock, such
\nshares of stock, securities or assets as may be issued or payable with respect
\nto or in exchange for a number of outstanding shares of such Common Stock equal
\nto the number of shares of such Common Stock immediately theretofore receivable
\nupon such conversion had such Organic Change not taken place, and in any case of
\na reorganization or reclassification only appropriate provisions shall be made
\nwith respect to the rights and Interests of such holder to the end that the
\nprovisions hereof (including without limitation provisions for adjustments of
\nthe Series D Conversion Price) shall thereafter be applicable, as nearly as may
\nbe, in relation to any shares of stock, securities or assets thereafter
\ndeliverable upon the exercise of such conversion rights.<\/p>\n
6H. Notice of Adjustment. Upon any adjustment of the Series D
\nConversion Price, then and in each such case the Corporation shall give written
\nnotice thereof, by first class mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, addressed to each holder of shares of Series
\nD Convertible Preferred Stock at the address of such holder as shown on the
\nbooks of the Corporation, which notice shall state the Series D Conversion Price
\nresulting
\n 75<\/p>\n
from such adjustment, setting forth in reasonable detail the method upon which
\nsuch calculation is based.<\/p>\n
6I. Other Notices. In case at any time:<\/p>\n
(1) the Corporation shall declare any dividend upon its Common
\nStock payable in cash or stock or make any other distribution to the holders of
\nits Common Stock;<\/p>\n
(2) the Corporation shall offer for subscription pro rata to
\nthe holders of its Common Stock any additional shares of stock of any class or
\nother rights;<\/p>\n
(3) there shall be any capital reorganization or
\nreclassification of the capital stock of the Corporation, or a consolidation or
\nmerger of the Corporation with or into, or a sale of all or substantially all of
\nits assets to, another entity or entities; or<\/p>\n
(4) there shall be a voluntary or involuntary dissolution,
\nliquidation or winding up of the Corporation;<\/p>\n
then, in any one or more of said cases, the Corporation shall give, by first
\nclass mail, postage prepaid, or by facsimile transmission to non-U.S. residents,
\naddressed to each holder of any shares of Preferred Stock at the address of such
\nholder as shown on the books of the Corporation, (a) at least 20 days’ prior
\nwritten notice of the date on which the books of the Corporation shall close or
\na record shall be taken for such dividend, distribution or subscription rights
\nor for determining rights to vote in respect of any such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up and (b) in the case of any such reorganization, reclassification,
\nconsolidation, merger, sale, dissolution, liquidation or winding up, at least 20
\ndays prior written notice of the date when the same shall take place. Such
\nnotice in accordance with the foregoing clause (a) shall also specify, in the
\ncase of arty such dividend, distribution or subscription rights, the date on
\nwhich the holders of Common Stock shall be entitled thereto and such notice in
\naccordance with the foregoing clause (b) shall also specify the date on which
\nthe holders of Common Stock shall be entitled to exchange their Common Stock for
\nsecurities or other property deliverable upon such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up, as the case may be.<\/p>\n
6J. Stock to be Reserved. The Corporation will at all times
\nreserve and keep available out of its authorized Common Stock, solely for the
\npurpose of issuance upon the conversion of Series D Convertible Preferred Stock
\nas herein provided, such number of shares of Common Stock as shall then be
\nissuable upon the conversion of all outstanding shares of Series D Convertible
\nPreferred Stock. The Corporation covenants that all shares of Common Stock which
\nshall be so issued shall be duly and validly issued and fully paid and
\nnonassessable and free from all taxes, liens and charges with respect to the
\nissue thereof, and, without limiting the generality of the foregoing, the
\nCorporation covenants that it will from time to time take all such action as may
\nbe requisite to assure that the par value per share of the Common Stock is at
\nall times equal to or less than the Series D Conversion Price in effect at the
\ntime. The Corporation will take all such action as may be necessary to assure
\nthat all such shares of
\n 76<\/p>\n
Common Stock may be so issued without violation of any applicable law or
\nregulation, or of any requirement of any national securities exchange upon which
\nthe Common Stock may be listed.<\/p>\n
6K. No Reissuance of Series D Convertible Preferred Stock.
\nShares of Series D Convertible Preferred Stock which are converted into shares
\nof Common Stock as provided herein shall not be reissued.<\/p>\n
6L. Issue Tax. The issuance of certificates for shares of
\nCommon Stock upon conversion of Series D Convertible Preferred Stock shall be
\nmade without charge to the holders thereof for any issuance tax in respect
\nthereof; provided, that the Corporation shall not be required to pay any tax
\nwhich may be payable in respect of any transfer involved in the issuance and
\ndelivery of any certificate in a name other than that of the holder of the
\nSeries D Convertible Preferred Stock which is being converted.<\/p>\n
6M. Closing of Books. The Corporation will at no time close
\nits transfer books against the transfer of any Series D Convertible Preferred
\nStock or of any shares of Common Stock issued or issuable upon the conversion of
\nany shares of Series D Convertible Preferred Stock in any manner which
\ninterferes with the timely conversion of such Preferred Stock, except as may
\notherwise be required to comply with applicable securities laws.<\/p>\n
6N. Definition of Common Stock. As used in this paragraph 6,
\nthe term “Common Stock” shall mean and include the Corporation’s authorized
\nCommon Stock, par value $.01 per share, as constituted on the date of filing of
\nthese terms of the Series D Convertible Preferred Stock, and shall also include
\nany capital stock of any class of the Corporation thereafter authorized which
\nshall neither be limited to a fixed sum or percentage of par value in respect of
\nthe rights of the holders thereof to participate in dividends nor entitled to a
\npreference in the distribution of assets upon the voluntary or involuntary
\nliquidation, dissolution or winding up of the Corporation; provided that the
\nshares of Common Stock receivable upon conversion of shares of Series D
\nConvertible Preferred Stock shall include only shares designated as Common Stock
\nof the Corporation on the date of filing of this instrument, or in case of any
\nreorganization or reclassification of the outstanding shares thereof, the stock,
\nsecurities or assets provided for in subparagraph 6G.<\/p>\n
6O. Mandatory Conversion. All outstanding shares of Series D
\nConvertible Preferred Stock shall automatically convert to shares of Common
\nStock if at any time the Corporation shall effect a public offering of shares of
\nCommon Stock (any such offering, regardless of compliance with subsections (i),
\n(ii) and (iii) herein, being referred to as a “Public Offering”), provided (i)
\nthe aggregate gross proceeds from such offering to the Corporation shall be at
\nleast $20,000,000; (ii) the price paid by the public for such shares shall be at
\nleast (x) 2.0 times the then Series B Conversion Price if the Public Offering
\noccurs prior to the 18 month anniversary of the Series B Preferred Stock Issue
\nDate or (y) 3.0 times the then Series B Conversion Price if the Public Offering
\noccurs on or after the 18 month anniversary of the Series B Preferred Stock
\nIssue Date, and (iii) the offering is a firm commitment underwritten Public
\nOffering, and such automatic conversion shall be effective upon the closing of
\nthe sale of such shares by the Corporation pursuant to such Public Offering.<\/p>\n
77<\/p>\n
7. Redemption. The shares of Series D Convertible Preferred Stock shall
\nbe redeemed as follows:<\/p>\n
7A. Operational Redemption. The Corporation shall not have the
\nright to call or redeem at any time all or any shares of Series D Convertible
\nPreferred Stock. With the approval of the holders of 66% of the then outstanding
\nshares of Series D Convertible Preferred Stock, one or more holders of shares of
\nSeries D Convertible Preferred Stock may, by giving notice (the “Notice”) to the
\nCorporation, require the Corporation to redeem any or all of the outstanding
\nSeries D Convertible Preferred Stock on the Redemption Date (as defined below).
\nUpon receipt of the Notice, the Corporation will so notify all other persons
\nholding Series D Convertible Preferred Stock. After receipt of the Notice, the
\nCorporation shall fix the first date for redemption, which shall be the date
\nspecified in the Notice, being any date on or after the earlier of (i) the fifth
\n(5th) anniversary of the Series B Preferred Stock Issue Date and (ii) the date
\nwhich is the day before the Corporation is due to redeem any outstanding Junior
\nSecurities (the “Redemption Date”). All holders of Series D Convertible
\nPreferred Stock shall deliver to the Corporation during regular business hours,
\nat the office of any transfer agent of the Corporation for the Series D
\nConvertible Preferred Stock, or at the principal office of the Corporation or at
\nsuch other place as may be designated by the Corporation, the certificate or
\ncertificates for the Series D Convertible Preferred Stock, duly endorsed for
\ntransfer to the Corporation (if required by it) on or before the Redemption
\nDate.<\/p>\n
7B. Redemption Price and Payment. The Series D Convertible
\nPreferred Stock to be redeemed on the Redemption Date shall be redeemed by
\npaying for each share in cash an amount equal to the Series D Redemption Price
\n(as defined below). For purposes of this paragraph 7B, the “Series D Redemption
\nPrice” shall mean $18.243 per share, plus an amount equal to all dividends
\naccrued and unpaid on each such share, provided, however, that if the Redemption
\nDate is after the fifth (5th) anniversary of the Series B Preferred Stock Issue
\nDate, then the “Series D Redemption Price” shall mean the greater of (i) $18.243
\nper share, plus an amount equal to all dividends accrued and unpaid on each such
\nshare and (ii) the Fair Market Value (as defined below) of the Common Stock
\nunderlying the Series D Convertible Preferred Stock. Such payment shall be made
\nin full on the Redemption Date to the holders entitled thereto. For purposes of
\nthis paragraph 7B, “Fair Market Value” of the Common Stock shall mean the
\naverage of the fair market valuations of the Common Stock performed by two
\ninvestment banks (the “Initial Appraisers”), one of which shall be retained by
\nthe Corporation and one of which shall be retained by the holders of a majority
\nin interest of the Series D Convertible Preferred Stock. Subject to the
\nfollowing sentence, such determination by the Initial Appraisers of Fair Market
\nValue shall be final and binding on the parties. If the higher of the two
\nvaluations of the Initial Appraisers is equal to or greater than 110% of the
\nlower valuation, the Corporation and holders of a majority in interest of the
\nSeries D Convertible Preferred Stock shall select a third investment bank (the
\n“Final Appraiser”), which shall be mutually agreeable to the Corporation and the
\nholders of a majority in interest of the Series D Convertible Preferred Stock.
\nThe fair market value of the Common Stock as determined by the Final Appraiser
\nshall be final and binding on the parties. The fees and expenses of the Initial
\nAppraisers shall be paid for by the party selecting such Initial Appraiser and
\nthe fees and expenses of the final Appraiser shall be shared by the Corporation
\nand the holders of the Series D Convertible Preferred Stock.
\n 78<\/p>\n
7C. Redemption Mechanics. At least 15 but not more than 35
\ndays prior to the Redemption Date, written notice (the “Redemption Notice”)
\nshall be given by the Corporation by mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, to each holder of record (at the close of
\nbusiness on the business day next preceding the day on which the Redemption
\nNotice is given) of shares of Series D Convertible Preferred Stock notifying
\nsuch holder of the redemption and specifying the Series D Redemption Price, the
\nRedemption Date and the place where said Series D Redemption Price shall be
\npayable. The Redemption Notice shall be addressed to each holder at his address
\nas shown by the records of the Corporation. From and after the close of business
\non the Redemption Date, unless there shall have been a default in the payment of
\nthe Series D Redemption Price, all rights of holders of shares of Series D
\nConvertible Preferred Stock (except the right to receive the Series D Redemption
\nPrice) shall cease with respect to such shares, and such shares shall not
\nthereafter be transferred on the books of the Corporation or be deemed to be
\noutstanding for any purpose whatsoever. If the funds of the Corporation legally
\navailable for redemption of shares of Series D Convertible Preferred Stock on
\nthe Redemption Date are insufficient to redeem the total number of outstanding
\nshares of Series D Convertible Preferred Stock to be redeemed on such Redemption
\nDate, the holders of shares of Series D Convertible Preferred Stock shall share
\nratably in any funds legally available for redemption of such shares according
\nto the respective amounts which would be payable with respect to the full number
\nof shares owned by them if all such outstanding shares were redeemed in full.
\nThe shares of Series D Convertible Preferred Stock not redeemed shall remain
\noutstanding and entitled to all rights and preferences provided herein;
\nprovided, however, that such unredeemed shares shall be entitled to receive
\ninterest accruing daily with respect to the applicable Series D Redemption Price
\nat the rate of 15% per annum, payable quarterly in arrears. At any time
\nthereafter when additional funds of the Corporation are legally available for
\nthe redemption of such shares of Series D Convertible Preferred Stock, such
\nfunds will be used, at the end of the next succeeding fiscal quarter, to redeem
\nthe balance of such shares, or such portion thereof for which funds are then
\nlegally available, on the basis set forth above.<\/p>\n
7D. Redeemed or Otherwise Acquired Shares to be Retired. Any
\nshares of Series D Convertible Preferred Stock redeemed pursuant to this
\nparagraph 7 or otherwise acquired by the Corporation in any manner whatsoever
\nshall be canceled and shall not under any circumstances be reissued; and the
\nCorporation may from time to time take such appropriate corporate action as may
\nbe necessary to reduce accordingly the number of authorized shares of Series D
\nConvertible Preferred Stock.<\/p>\n
8. Amendments. Except where the vote or written consent of the holders
\nof a different number of shares of the Corporation is required by these terms of
\nthe Series D Convertible Preferred Stock, by law or by the Certificate of
\nIncorporation, no provision of these terms of the Series D Convertible Preferred
\nStock may be amended, modified or waived without the written consent or
\naffirmative vote of the holders of at least 60% of the then outstanding shares
\nof Series D Convertible Preferred Stock.
\n 79<\/p>\n
9. Definitions. As used herein, the following terms shall have the
\nfollowing meanings:<\/p>\n
(1) The term “Founders” shall mean F. Thomson Leighton, Daniel
\nLewin, Jonathan Seelig, Randall Kaplan, Gilbert Friesen and David Karger.<\/p>\n
(2) The term “Preferred Stock Issue Date” shall mean the date
\non which the Series D Convertible Preferred Stock is originally issued by the
\nCorporation pursuant to the Purchase Agreement.<\/p>\n
(3) The term “Purchase Agreement” shall mean the Series D
\nConvertible Preferred Stock Purchase Agreement dated as of June 21, 1999 between
\nthe Corporation and Apple Computer Inc. Ltd., as in effect on June 21, 1999.<\/p>\n
(4) The term the “Plan” shall mean the Corporation’s 1998
\nStock Incentive Plan.<\/p>\n
(5) The term “Reserved Employee Shares” shall mean shares of
\nCommon Stock reserved by the Corporation pursuant to the Plan from time to time
\nfor (i) the sale of shares of Common Stock to employees, consultants or
\nnon-employee directors (other than representatives of the holders of Preferred
\nStock) of the Corporation or (ii) the exercise of options to purchase Common
\nStock granted to employees, consultants or non-employee directors (other than
\nrepresentatives of the holders of Preferred Stock) of the Corporation, not to
\nexceed in the aggregate 11,377,800 shares of Common Stock for both clauses (i)
\nand (ii), with such number including 2,132,100 shares issued or subject to
\noptions granted prior to the date of the initial issuance of the Series A
\nConvertible Preferred Stock (the “Option Shares”) (appropriately adjusted to
\nreflect an event described in paragraph 6F hereof); provided that, such number
\nof such shares subject to the Plan shall be increased by up to 7,559,226
\nadditional shares of Common Stock (appropriately adjusted to reflect an event
\ndescribed in paragraph 6F hereof) (collectively, the “Founders’ Shares”) upon
\nthe repurchase of such Founders’ Shares by the Corporation from the Founders
\npursuant to contractual rights held by the Corporation. The foregoing numbers of
\nReserved Employee Shares may be increased by the affirmative vote or written
\nconsent of a majority of the directors designated solely by the holders of
\nSeries A Convertible Preferred Stock and Series B Convertible Preferred Stock or
\nthe affirmative vote or written consent of the holders of at least 50% of the
\nthen outstanding shares of Series A Convertible Preferred Stock, Series B
\nConvertible Preferred Stock, Series C Convertible Preferred Stock and Series D
\nConvertible Preferred Stock, voting together as a single class on a Common Stock
\nequivalent basis.<\/p>\n
(6) The term “Series B Conversion Price” shall mean the
\nconversion price of the Series B Convertible Preferred Stock from time to time
\nunder the terms of the designation of the Series B Convertible Preferred Stock
\nof the Corporation.<\/p>\n
(7) The term “Series B Preferred Stock Issue Date” shall mean
\nApril 16, 1999.
\n 80<\/p>\n
(8) The term “Series B Purchase Agreement” shall mean the
\nSeries B Convertible Preferred Stock and Series C Convertible Preferred Stock
\nPurchase Agreement dated as of April 16, 1999 among the Corporation and the
\npurchasers named therein.<\/p>\n
(9) The term “Subsidiary” or “Subsidiaries” shall mean any
\ncorporation, partnership, trust or other entity of which the Corporation and\/or
\nany of its other subsidiaries directly or indirectly owns at the time a majority
\nof the outstanding shares of every class of equity security of such corporation,
\npartnership, trust or other entity.<\/p>\n
81<\/p>\n
CERTIFICATE OF DESIGNATIONS<\/p>\n
OF<\/p>\n
SERIES E CONVERTIBLE PREFERRED STOCK<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
————-<\/p>\n
Pursuant to Section 151 of the
\n General Corporation Law of the State of Delaware<\/p>\n
————-<\/p>\n
Akamai Technologies, Inc., a Delaware corporation (the “Corporation”),
\ncertifies that pursuant to the authority contained in Article Fourth of its
\nCertificate of Incorporation and in accordance with the provisions of Section
\n151 of the General Corporation Law of the State of Delaware, the Board of the
\nDirectors of the Corporation, at a meeting held on August 5, 1999, duly adopted
\nthe following resolution, which resolution remains in full force and effect on
\nthe date hereof:<\/p>\n
RESOLVED, that, pursuant to the authority expressly granted to and
\nvested in the Board of Directors of the Corporation, a series of Preferred Stock
\nof the Corporation be and hereby is established, consisting of 1,867,480 shares,
\n$0.01 par value per share, to be designated “Series E Convertible Preferred
\nStock” (hereinafter, the “Series E Preferred Stock”); that the Board of
\nDirectors be and hereby is authorized to issue such shares of Series E Preferred
\nStock from time to time and for such consideration and on such terms as the
\nBoard of Directors shall determine; and that, subject to the limitations
\nprovided by law and by the Certificate of Incorporation, the voting powers,
\npreferences and relative, participating, optional and other special rights, and
\nqualifications, limitations and restrictions thereof shall be as set forth on
\nSchedule I attached hereto.<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
\nduly executed by its President on this 6th day of August, 1999<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Paul Sagan
\n ———————————–
\n Paul Sagan
\n President<\/p>\n
82<\/p>\n
Schedule I<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n DESIGNATION OF SERIES E CONVERTIBLE PREFERRED STOCK<\/p>\n
The series of Preferred Stock designated and known as “Series E
\nConvertible Preferred Stock” shall consist of 1,867,480 shares.<\/p>\n
1. Voting. Except as may be otherwise provided in these terms of the
\nSeries E Convertible Preferred Stock, in the Certificate of Incorporation (the
\n“Certificate of Incorporation”) of Akamai Technologies, Inc. (the “Corporation”)
\nor by law, the Series E Convertible Preferred Stock shall vote together with all
\nother classes and series of stock of the Corporation as a single class on all
\nactions to be taken by the stockholders of the Corporation. Each share of Series
\nE Convertible Preferred Stock shall entitle the holder thereof to such number of
\nvotes per share on each such action as shall equal the number of shares of
\nCommon Stock (including fractions of a share) into which each share of Series E
\nConvertible Preferred Stock is then convertible.<\/p>\n
2. Ranking. The Series E Convertible Preferred Stock shall rank, with
\nrespect to dividend distributions and distributions upon a Liquidation Event (as
\ndefined in paragraph 4A herein), senior to all classes of common stock of the
\nCompany and to each other class of capital stock or series of preferred stock
\n(including the Series A Convertible Preferred Stock of the Corporation)
\nestablished before the Series B Preferred Stock Issue Date, by the Board of
\nDirectors, pari passu with the Series B Convertible Preferred Stock, the Series
\nC Convertible Preferred Stock and the Series D Convertible Preferred Stock of
\nthe Corporation, and senior or pari passu to any other class of capital stock or
\nseries of preferred stock established after the Preferred Stock Issue Date by
\nthe Board of Directors. All classes of common stock of the Company, the Series A
\nConvertible Preferred Stock and any other class of capital stock or series of
\npreferred stock established after the Preferred Stock Issue Date to which the
\nSeries E Convertible Preferred Stock is senior, are collectively referred to
\nherein as “Junior Securities”. The Series B Convertible Preferred Stock, the
\nSeries C Convertible Preferred Stock and the Series D Convertible Preferred
\nStock of the Corporation and any other class of capital stock or series of
\npreferred stock established after the Preferred Stock Issue Date which ranks
\npari passu with the Series E Convertible Preferred Stock, are collectively
\nreferred to herein as “Pari Passu Securities”.<\/p>\n
3. Dividends. The holders of shares of the Series E Convertible
\nPreferred Stock shall be entitled to receive, when, as and if dividends are
\ndeclared by the Board of Directors out of funds of the Corporation legally
\navailable therefor, cumulative preferential dividends at the annual rate of 8%
\non the Series E Liquidation Preference Payments (as defined in paragraph 4A
\nherein); provided, however, that any such dividends shall only be paid, whether
\ndeclared or not, immediately upon the occurrence of (i) a Liquidation Event
\npursuant to paragraph 4A hereof or (ii) a Redemption pursuant to paragraph 7B
\nhereof. Holders of shares of Series E Convertible Preferred Stock shall be
\nentitled to receive the dividends provided for herein in preference to and in
\npriority over any dividends upon any of the Junior Securities. Dividends on the
\nSeries E Convertible Preferred Stock shall accrue on a daily basis from the
\nPreferred Stock Issue Date and, to the extent they are not paid, shall
\naccumulate on an annual basis on each December 31,
\n 83<\/p>\n
whether or not the Corporation has earnings or profits, whether or not there are
\nfunds legally available for the payment of such dividends and whether or not
\ndividends are declared.<\/p>\n
4. Liquidation, Dissolution and Winding-up.<\/p>\n
4A. Liquidation. Upon any liquidation, dissolution or winding
\nup of the Corporation (a “Liquidation Event”), whether voluntary or involuntary,
\nthe holders of the shares of Series E Convertible Preferred Stock shall be paid
\nan amount equal to $26.239 per share plus, in the case of each share, an amount
\nequal to dividends accrued but unpaid thereon, computed to the date payment
\nthereof is made available, together with payment to any Pari Passu Securities,
\nand before any payment shall be made to the holders of any Junior Securities,
\nsuch amount payable with respect to one share of Series E Convertible Preferred
\nStock being sometimes referred to as the “Series E Liquidation Preference
\nPayment” and with respect to all shares of Series E Convertible Preferred Stock
\nbeing sometimes referred to as the “Series E Liquidation Preference Payments”.
\nIf upon any Liquidation Event, the assets to be distributed to the holders of
\nthe Series E Convertible Preferred Stock shall be insufficient to permit payment
\nto such stockholders of the full preferential amounts aforesaid, then all of the
\nassets of the Corporation available for distribution to holders of the Series E
\nConvertible Preferred Stock and Pari Passu Securities shall be distributed to
\nsuch holders of the Series E Convertible Preferred Stock and Pari Passu
\nSecurities pro rata, so that each holder receives that portion of the assets
\navailable for distribution as the number of shares of such stock held by such
\nholder bears to the total number of shares of such stock then outstanding.<\/p>\n
4B. Upon any Liquidation Event, immediately after the holders
\nof Series E Convertible Preferred Stock and holders of any Pari Passu Securities
\nhave been paid in full pursuant to paragraph 4A above, the remaining net assets
\nof the Corporation available for distribution shall be distributed among the
\nholders of the shares of Junior Securities.<\/p>\n
Written notice of such Liquidation Event, stating a payment date and
\nthe place where said payments shall be made, shall be given by mail, postage
\nprepaid, or by facsimile to non-U.S. residents, not less than 20 days prior to
\nthe payment date stated therein, to the holders of record of Series E
\nConvertible Preferred Stock, such notice to be addressed to each such holder at
\nits address as shown by the records of the Corporation.<\/p>\n
The (x) consolidation or merger of the Corporation into or with any
\nother entity or entities which results in the exchange of outstanding shares of
\nthe Corporation for securities or other consideration issued or paid or caused
\nto be issued or paid by any such entity or affiliate thereof (except a
\nconsolidation or merger into a Subsidiary or merger in which the Corporation is
\nthe surviving Corporation and the holders of the Corporation’s voting stock
\noutstanding immediately prior to the transaction constitute a majority of the
\nholders of voting stock outstanding immediately following the transaction), (y)
\nsale or transfer by the Corporation of all or substantially all of its assets,
\nor (z) sale or transfer by the Corporation’s stockholders of capital stock
\nrepresenting a majority of the outstanding capital stock of the Corporation
\nshall be deemed to be a Liquidation Event within the meaning of the provisions
\nof this paragraph 4 (subject to the provisions of this paragraph 4 and not the
\nprovisions of paragraph 6G hereof, unless paragraph 6G is elected in the
\nfollowing proviso); provided, however, that if the holders of at least 60% of
\nthe then outstanding shares of Series E Convertible Preferred Stock shall elect
\nthe benefits of the provisions of paragraph 6G in lieu of receiving payment in a
\nLiquidation Event
\n 84<\/p>\n
pursuant to this paragraph 4, then all holders of shares of Series E Convertible
\nPreferred Stock shall receive the benefits of the provisions of paragraph 6G in
\nlieu of receiving payment pursuant to this paragraph 4 for the particular
\nOrganic Change (as defined in Section 6G) causing the rights of Section 6G to be
\navailable. The election of the rights under Section 6G for any particular
\nOrganic Change shall not constitute an election of the rights available under
\nSection 6G for any other Organic Change, for which the holders of Series E
\nConvertible Preferred Stock shall have a new election under the foregoing
\nproviso. Whenever the distribution provided for in this paragraph 4 shall be
\npayable in property other than cash, the value of such distribution shall be the
\nfair market value of such property as determined in good faith by the Board of
\nDirectors of the Corporation.<\/p>\n
5. Restrictions. At any time when at least 50% of the shares of Series
\nE Convertible Preferred Stock issued pursuant to the Purchase Agreement remain
\noutstanding, except where the vote or written consent of the holders of a
\ngreater number of shares of the Corporation is required by law or by the
\nCertificate of Incorporation, and in addition to any other vote required by law
\nor the Certificate of Incorporation, without the written consent of the holders
\nof at least 60% of the then outstanding shares of Series E Convertible Preferred
\nStock given in writing or by vote at a meeting, consenting or voting (as the
\ncase may be) separately as a series, the Corporation will not:<\/p>\n
(1) Consent to any Liquidation Event or merge or consolidate
\nwith or into, or permit any Subsidiary to merge or consolidate with or into, any
\nother corporation, corporations, entity or entities (except a consolidation or
\nmerger into a Subsidiary or merger in which the Corporation is the surviving
\ncorporation and the holders of the Corporation’s voting stock outstanding
\nimmediately prior to the transaction constitute a majority of the holders of
\nvoting stock outstanding immediately following the transaction or a
\nconsolidation or merger pursuant to which the aggregate consideration definitely
\nand unconditionally payable to all of the stockholders of the Corporation is
\ngreater than $1.2 billion) without the affirmative vote or written consent of
\nthe holders of at least 50% of the then outstanding shares of Series A
\nConvertible Preferred Stock, Series B Convertible Preferred Stock, Series D
\nConvertible Preferred Stock and Series E Convertible Preferred Stock, voting
\ntogether as a single class on a Common Stock equivalent basis;<\/p>\n
(2) Sell, abandon, transfer, lease or otherwise dispose of all
\nor substantially all of its properties or assets (unless the aggregate
\nconsideration definitely and unconditionally payable to all of the stockholders
\nof the Corporation is greater than $1.2 billion) without the affirmative vote or
\nwritten consent of the holders of at least 50% of the then outstanding shares of
\nSeries A Convertible Preferred Stock, Series B Convertible Preferred Stock,
\nSeries D Convertible Preferred Stock and Series E Convertible Preferred Stock,
\nvoting together as a single class on a Common Stock equivalent basis;<\/p>\n
(3) Amend, alter or repeal any provision of its Certificate of
\nIncorporation or By-laws in a manner adverse to holders of the Series E
\nConvertible Preferred Stock;<\/p>\n
(4) Create or authorize the creation of or issue any
\nadditional class or series of shares of stock (other than the Series C
\nConvertible Preferred Stock of the Corporation) unless the same ranks junior to
\nor on parity with the Series E Convertible Preferred Stock as to dividends and
\nthe distribution of assets on a Liquidation Event, or increase the authorized
\n 85<\/p>\n
amount of Series E Convertible Preferred Stock or increase the authorized amount
\nof any additional class or series of shares of stock unless the same ranks
\njunior to or on parity with the Series E Convertible Preferred Stock as to
\ndividends and the distribution of assets on a Liquidation Event, or create or
\nauthorize any obligation or security convertible into shares of Series E
\nConvertible Preferred Stock or into shares of any other class or series of stock
\nunless the same ranks junior to or on parity with the Series E Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent, whether any such creation, authorization or increase shall be by means of
\namendment to the Certificate of Incorporation or by merger, consolidation or
\notherwise;<\/p>\n
(5) In any manner amend, alter or change the designations or
\nthe powers, preferences or rights, privileges or the restrictions of the Series
\nE Convertible Preferred Stock, provided, however, that the authorization or
\ncreation of any shares of capital stock on parity with the Series E Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent shall not require the approval of holders of Series E Convertible
\nPreferred Stock;<\/p>\n
(6) Purchase or redeem, or set aside any sums for the purchase
\nor redemption of, or pay any dividend or make any distribution on, any Junior
\nSecurities, except for (i) dividends or other distributions payable on the
\nCommon Stock solely in the form of additional shares of Common Stock or (ii)
\nrepurchases of shares of capital stock (at the original purchase price therefor)
\nfrom officers, employees, directors or consultants of the Corporation which are
\nsubject to restrictive stock purchase, right of first refusal or other
\nagreements under which the Corporation has the option to repurchase such shares
\nupon the occurrence of certain events, including termination of employment; or<\/p>\n
(7) Increase the number of Reserved Employee Shares without
\nthe affirmative vote or written consent of a majority of the directors
\ndesignated solely by the holders of Series A Convertible Preferred Stock and
\nSeries B Convertible Preferred Stock or the affirmative vote or written consent
\nof the holders of at least 50% of the then outstanding shares of Series A
\nConvertible Preferred Stock, Series B Convertible Preferred Stock, Series C
\nConvertible Preferred Stock, Series D Convertible Preferred Stock and Series E
\nConvertible Preferred Stock, voting together as a single class on a Common Stock
\nequivalent basis.<\/p>\n
6. Conversion. The holders of shares of Series E Convertible Preferred
\nStock shall have the following conversion rights:<\/p>\n
6A. Right to Convert. Subject to the terms and conditions of
\nthis paragraph 6, the holder of any share or shares of Series E Convertible
\nPreferred Stock shall have the right, at its option at any time, to convert any
\nsuch shares of Series E Convertible Preferred Stock (except that upon any
\nLiquidation Event the right of conversion shall terminate at the close of
\nbusiness on the business day fixed for payment of the amounts distributable on
\nthe Series E Convertible Preferred Stock) into such number of fully paid and
\nnonassessable shares of Common Stock as is obtained by (i) multiplying the
\nnumber of shares of Series E Convertible Preferred Stock so to be converted by
\n$26.239 and (ii) dividing the result by the conversion price of $26.239 per
\nshare or in case an adjustment of such price has taken place pursuant to the
\nfurther provisions of this paragraph 6, then by the conversion price as last
\nadjusted and in effect at the date any share or shares of Series E Convertible
\nPreferred Stock are surrendered for conversion (such
\n 86<\/p>\n
price, or such price as last adjusted, being referred to as the “Series E
\nConversion Price”). Such rights of conversion shall be exercised by the holder
\nthereof by giving written notice that the holder elects to convert a stated
\nnumber of shares of Series E Convertible Preferred Stock into Common Stock and
\nby surrender of a certificate or certificates for the shares so to be converted
\nto the Corporation at its principal office (or such other office or agency of
\nthe Corporation as the Corporation may designate by notice in writing to the
\nholders of the Series E Convertible Preferred Stock) at any time during its
\nusual business hours on the date set forth in such notice, together with a
\nstatement of the name or names (with address) in which the certificate or
\ncertificates for shares of Common Stock shall be issued.<\/p>\n
6B. Issuance of Certificates; Time Conversion Effected.
\nPromptly after the receipt of the written notice referred to in paragraph 6A and
\nsurrender of the certificate or certificates for the share or shares of Series E
\nConvertible Preferred Stock to be converted, the Corporation shall issue and
\ndeliver, or cause to be issued and delivered, to the holder, registered in such
\nname or names as such holder may direct, a certificate or certificates for the
\nnumber of whole shares of Common Stock issuable upon the conversion of such
\nshare or shares of Series E Convertible Preferred Stock. To the extent permitted
\nby law, such conversion shall be deemed to have been effected and the Series E
\nConversion Price shall be determined as of the close of business on the date on
\nwhich such written notice shall have been received by the Corporation and the
\ncertificate or certificates for such share or shares shall have been surrendered
\nas aforesaid, and at such time the rights of the holder of such share or shares
\nof Series E Convertible Preferred Stock shall cease, and the person or persons
\nin whose name or names any certificate or certificates for shares of Common
\nStock shall be issuable upon such conversion shall be deemed to have become the
\nholder or holders of record of the shares represented thereby.<\/p>\n
6C. Fractional Shares; Dividends; Partial Conversion. No
\nfractional shares shall be issued upon conversion of Series E Convertible
\nPreferred Stock into Common Stock and no payment or adjustment shall be made
\nupon any conversion on account of any cash dividends on the Common Stock issued
\nupon such conversion. At the time of each conversion, the Corporation shall pay
\nin cash an amount equal to all dividends declared and unpaid (if any) on the
\nshares of Series E Convertible Preferred Stock surrendered for conversion to the
\ndate upon which such conversion is deemed to take place as provided in paragraph
\n6B. In case the number of shares of Series E Convertible Preferred Stock
\nrepresented by the certificate or certificates surrendered pursuant to paragraph
\n6A exceeds the number of shares converted, the Corporation shall, upon such
\nconversion, execute and deliver to the holder, at the expense of the
\nCorporation, a new certificate or certificates for the number of shares of
\nSeries E Convertible Preferred Stock represented by the certificate or
\ncertificates surrendered which are not to be converted. If any fractional share
\nof Common Stock would, except for the provisions of the first sentence of this
\nparagraph 6C, be delivered upon such conversion, the Corporation, in lieu of
\ndelivering such fractional share, shall pay to the holder surrendering the
\nSeries E Convertible Preferred Stock for conversion an amount in cash equal to
\nthe current fair market value of such fractional share as determined in good
\nfaith by the Board of Directors of the Corporation, and based upon the aggregate
\nnumber of shares of Series E Convertible Preferred Stock surrendered by any one
\nholder.<\/p>\n
6D. Adjustment of Series E Conversion Price Upon Issuance of
\nCommon Stock. Except as provided in paragraphs 6E and 6F, if and whenever the
\nCorporation shall issue or sell, or is, in accordance with subparagraphs 6D(1)
\nthrough 6D(7), deemed to have issued or sold,
\n 87<\/p>\n
any shares of Common Stock for a consideration per share less than the Series E
\nConversion Price in effect immediately prior to the time of such issue or sale,
\n(such number being appropriately adjusted to reflect the occurrence of any event
\ndescribed in paragraph 6F), then, forthwith upon such issue or sale, the Series
\nE Conversion Price shall be reduced to the price determined by dividing (i) an
\namount equal to the sum of (a) the number of shares of Common Stock outstanding
\nimmediately prior to such issue or sale (assuming the conversion of the
\noutstanding shares of Series E Convertible Preferred Stock) multiplied by the
\nthen existing Series E Conversion Price and (b) the consideration, if any,
\nreceived by the Corporation upon such issue or sale, by (ii) the total number of
\nshares of Common Stock outstanding immediately after such issue or sale
\n(assuming the conversion of the outstanding shares of Series E Convertible
\nPreferred Stock).<\/p>\n
For purposes of this paragraph 6D, the following subparagraphs
\n6D(1) to 6D(7) shall also be applicable:<\/p>\n
6D(1) Issuance of Rights or Options. In case at any time the
\n Corporation shall in any manner grant (whether directly or by
\n assumption in a merger or otherwise) any warrants or other rights to
\n subscribe for or to purchase, or any options for the purchase of,
\n Common Stock or any stock or security convertible into or exchangeable
\n for Common Stock (such warrants, rights or options being called
\n “Options” and such convertible or exchangeable stock or securities
\n being called “Convertible Securities”) whether or not such Options or
\n the right to convert or exchange any such Convertible Securities are
\n immediately exercisable, and the price per share for which Common Stock
\n is issuable upon the exercise of such Options or upon the conversion or
\n exchange of such Convertible Securities (determined by dividing (i) the
\n total amount, if any, received or receivable by the Corporation as
\n consideration for the granting of such Options, plus the minimum
\n aggregate amount of additional consideration payable to the Corporation
\n upon the exercise of all such Options, plus, in the case of such
\n Options which relate to Convertible Securities, the minimum aggregate
\n amount of additional consideration, if any, payable upon the issue or
\n sale of all such Convertible Securities and upon the conversion or
\n exchange thereof, by (ii) the total maximum number of shares of Common
\n Stock issuable upon the exercise of such Options or upon the conversion
\n or exchange of all such Convertible Securities issuable upon the
\n exercise of such Options) shall be less than the Series E Conversion
\n Price in effect immediately prior to the time of the granting of such
\n Options, then the total maximum number of shares of Common Stock
\n issuable upon the exercise of such Options or upon conversion or
\n exchange of the total maximum amount of such Convertible Securities
\n issuable upon the exercise of such Options shall be deemed to have been
\n issued for such price per share as of the date of granting of such
\n Options or the issuance of such Convertible Securities and thereafter
\n shall be deemed to be outstanding. Except as otherwise provided in
\n subparagraph 6D(3), no adjustment of the Series E Conversion Price
\n shall be made upon the actual issue of such Common Stock or of such
\n Convertible Securities upon exercise of such Options or upon the actual
\n issue of such Common Stock upon conversion or exchange of such
\n Convertible Securities.<\/p>\n
6D(2) Issuance of Convertible Securities. In case the
\n Corporation shall in any manner issue (whether directly or by
\n assumption in a merger or otherwise) or sell any Convertible
\n Securities, whether or not the rights to exchange or convert any such
\n Convertible Securities are immediately exercisable, and the price per
\n share for which
\n 88<\/p>\n
Common Stock is issuable upon such conversion or exchange (determined
\n by dividing (i) the total amount received or receivable by the
\n Corporation as consideration for the issue or sale of such Convertible
\n Securities, plus the minimum aggregate amount of additional
\n consideration, if any, payable to the Corporation upon the conversion
\n or exchange of all such Convertible Securities thereof, by (ii) the
\n total maximum number of shares of Common Stock issuable upon the
\n conversion or exchange of all such Convertible Securities) shall be
\n less than the Series E Conversion Price in effect immediately prior to
\n the time of such issue or sale, then the total maximum number of shares
\n of Common Stock issuable upon conversion or exchange of all such
\n Convertible Securities shall be deemed to have been issued for such
\n price per share as of the date of the issue or sale of such Convertible
\n Securities and thereafter shall be deemed to be outstanding, provided
\n that (a) except as otherwise provided in subparagraph 6D(3), no
\n adjustment of the Series E Conversion Price shall be made upon the
\n actual issue of such Common Stock upon conversion or exchange of such
\n Convertible Securities and (b) if any such issue or sale of such
\n Convertible Securities is made upon exercise of any Options to purchase
\n any such Convertible Securities for which adjustments of the Series E
\n Conversion Price have been or are to be made pursuant to other
\n provisions of this paragraph 6D, no further adjustment of the Series E
\n Conversion Price shall be made by reason of such issue or sale.<\/p>\n
6D(3) Change in Option Price or Conversion Rate. Upon the
\n happening of any of the following events, namely, if the purchase price
\n provided for in any Option referred to in subparagraph 6D(1), the
\n additional consideration, if any, payable upon the conversion or
\n exchange of any Convertible Securities referred to in subparagraph
\n 6D(1) or 6D(2), or the rate at which Convertible Securities referred to
\n in subparagraph 6D(1) or 6D(2) are convertible into or exchangeable for
\n Common Stock shall change at any time (including, but not limited to,
\n changes under or by reason of provisions designed to protect against
\n dilution), the Series E Conversion Price in effect at the time of such
\n event shall forthwith be readjusted to the Series E Conversion Price
\n which would have been in effect at such time had such Options or
\n Convertible Securities still outstanding provided for such changed
\n purchase price, additional consideration or conversion rate, as the
\n case may be, at the time initially granted, issued or sold; provided,
\n however, that in no event shall the Series E Conversion Price then in
\n effect hereunder be increased; and on the expiration of any such Option
\n or the termination of any such right to convert or exchange such
\n Convertible Securities, the Series E Conversion Price then in effect
\n hereunder shall forthwith be increased to the Conversion Price which
\n would have been in effect at the time of such expiration or termination
\n had such Option or Convertible Securities, to the extent outstanding
\n immediately prior to such expiration or termination, never been issued.<\/p>\n
6D(4) Stock Dividends. In case the Corporation shall declare a
\n dividend or make any other distribution upon any stock of the
\n Corporation payable in Common Stock (except for the issue of stock
\n dividends or distributions upon the outstanding Common Stock for which
\n adjustment is made pursuant to paragraph 6F), Options or Convertible
\n Securities, any Common Stock, Options or Convertible Securities, as the
\n case may be, issuable in payment of such dividend or distribution shall
\n be deemed to have been issued or sold without consideration.
\n 89<\/p>\n
6D(5) Consideration for Stock. In case any shares of Common
\n Stock, Options or Convertible Securities shall be issued or sold for
\n cash, the consideration received therefor shall be deemed to be the
\n amount received by the Corporation therefor, without deduction
\n therefrom of any expenses incurred or any underwriting commissions or
\n concessions paid or allowed by the Corporation in connection therewith.
\n In case any shares of Common Stock, Options or Convertible Securities
\n shall be issued or sold for consideration other than cash, the amount
\n of the consideration other than cash received by the Corporation shall
\n be deemed to be the fair value of such consideration as determined in
\n good faith by the Board of Directors of the Corporation, without
\n deduction of any expenses incurred or any underwriting commissions or
\n concessions paid or allowed by the Corporation in connection therewith.
\n In case any Options shall be issued in connection with the issue and
\n sale of other securities of the Corporation, together comprising one
\n integral transaction in which no specific consideration is allocated to
\n such Options by the parties thereto, such Options shall be deemed to
\n have been issued for such consideration as determined in good faith by
\n the Board of Directors of the Corporation.<\/p>\n
6D(6) Record Date. In case the Corporation shall take a record
\n of the holders of its Common Stock for the purpose of entitling them
\n (i) to receive a dividend or other distribution payable in Common
\n Stock, Options or Convertible Securities or (ii) to subscribe for or
\n purchase Common Stock, Options or Convertible Securities, then such
\n record date shall be deemed to be the date of the issue or sale of the
\n shares of Common Stock deemed to have been issued or sold upon the
\n declaration of such dividend or the making of such other distribution
\n or the date of the granting of such right of subscription or purchase,
\n as the case may be.<\/p>\n
6D(7) Treasury Shares. The number of shares of Common Stock
\n outstanding at any given time shall not include shares owned or held by
\n or for the account of the Corporation (or any Subsidiary), and the
\n disposition of any such shares shall be considered an issue or sale of
\n Common Stock for the purpose of this paragraph 6D.<\/p>\n
6E. Certain Issues Excepted. Anything herein to the contrary
\nnotwithstanding, the Corporation shall not be required to make any adjustment of
\nthe Series E Conversion Price if it first obtains the written consent of the
\nholders of at least 60% of the then outstanding shares of Series E Convertible
\nPreferred Stock that no adjustment shall be required. In no event shall the
\nCorporation be required to make any adjustment to the Series E Conversion Price
\nin the case of the issuance of (i) shares of Series C Convertible Preferred
\nStock pursuant to the Series B Purchase Agreement, (ii) shares of Common Stock
\nissuable upon conversion of the Series A Convertible Preferred Stock, Series B
\nConvertible Preferred Stock, Series C Convertible Preferred Stock, Series D
\nConvertible Preferred Stock or Series E Convertible Preferred Stock, (iii)
\nshares of Common Stock issued or issuable as a dividend or distribution on
\nSeries A Convertible Preferred Stock, Series B Convertible Preferred Stock,
\nSeries C Convertible Preferred Stock, Series D Convertible Preferred Stock or
\nSeries E Convertible Preferred Stock, (iv) Reserved Employee Shares (as defined
\nin paragraph 9 herein), (v) warrants issued in connection with senior
\nsubordinated notes of the Corporation as contemplated by the Series B Purchase
\nAgreement or shares of Common Stock issuable upon conversion of such warrants,
\nor (vi) Options outstanding as of the Preferred Stock Issue Date.
\n 90<\/p>\n
6F. Subdivision or Combination of Common Stock. In case the
\nCorporation shall at any time subdivide (by any stock split, stock dividend or
\notherwise) its outstanding shares of Common Stock into a greater number of
\nshares, the Series E Conversion Price in effect immediately prior to such
\nsubdivision shall be proportionately reduced, and, conversely, in case the
\noutstanding shares of Common Stock shall be combined into a smaller number of
\nshares, the Series E Conversion Price in effect immediately prior to such
\ncombination shall be proportionately increased.<\/p>\n
6G. Reorganization or Reclassification. If any capital
\nreorganization, reclassification, recapitalization, consolidation, merger, sale
\nof all or substantially all of the Corporation’s assets or other similar
\ntransaction (any such transaction being referred to herein as an “Organic
\nChange”) shall be effected in such a way that holders of Common Stock shall be
\nentitled to receive (either directly or upon subsequent liquidation) stock,
\nsecurities or assets with respect to or in exchange for Common Stock, then, as a
\ncondition of such Organic Change, lawful and adequate provisions shall be made
\nwhereby each holder of a share or shares of Series E Convertible Preferred Stock
\nshall thereupon have the right to receive, upon the basis and upon the terms and
\nconditions specified herein and in lieu of or in addition to, as the case may
\nbe, the shares of Common Stock immediately theretofore receivable upon the
\nconversion of such share or shares of Series E Convertible Preferred Stock, such
\nshares of stock, securities or assets as may be issued or payable with respect
\nto or in exchange for a number of outstanding shares of such Common Stock equal
\nto the number of shares of such Common Stock immediately theretofore receivable
\nupon such conversion had such Organic Change not taken place, and in any case of
\na reorganization or reclassification only appropriate provisions shall be made
\nwith respect to the rights and interests of such holder to the end that the
\nprovisions hereof (including without limitation provisions for adjustments of
\nthe Series E Conversion Price) shall thereafter be applicable, as nearly as may
\nbe, in relation to any shares of stock, securities or assets thereafter
\ndeliverable upon the exercise of such conversion rights.<\/p>\n
6H. Notice of Adjustment. Upon any adjustment of the Series E
\nConversion Price, then and in each such case the Corporation shall give written
\nnotice thereof, by first class mail, postage prepaid, or by facsimile
\ntransmission to non-U.S. residents, addressed to each holder of shares of Series
\nE Convertible Preferred Stock at the address of such holder as shown on the
\nbooks of the Corporation, which notice shall state the Series E Conversion Price
\nresulting from such adjustment, setting forth in reasonable detail the method
\nupon which such calculation is based.<\/p>\n
6I. Other Notices. In case at any time:<\/p>\n
(1) the Corporation shall declare any dividend upon its Common
\nStock payable in cash or stock or make any other distribution to the holders of
\nits Common Stock;<\/p>\n
(2) the Corporation shall offer for subscription pro rata to
\nthe holders of its Common Stock any additional shares of stock of any class or
\nother rights;<\/p>\n
(3) there shall be any capital reorganization or
\nreclassification of the capital stock of the Corporation, or a consolidation or
\nmerger of the Corporation with or into, or a sale of all or substantially all of
\nits assets to, another entity or entities; or
\n 91<\/p>\n
(4) there shall be a voluntary or involuntary dissolution,
\nliquidation or winding up of the Corporation;<\/p>\n
then, in any one or more of said cases, the Corporation shall give, by first
\nclass mail, postage prepaid, or by facsimile transmission to non-U.S. residents,
\naddressed to each holder of any shares of Preferred Stock at the address of such
\nholder as shown on the books of the Corporation, (a) at least 20 days’ prior
\nwritten notice of the date on which the books of the Corporation shall close or
\na record shall be taken for such dividend, distribution or subscription rights
\nor for determining rights to vote in respect of any such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up and (b) in the case of any such reorganization, reclassification,
\nconsolidation, merger, sale, dissolution, liquidation or winding up, at least 20
\ndays’ prior written notice of the date when the same shall take place. Such
\nnotice in accordance with the foregoing clause (a) shall also specify, in the
\ncase of any such dividend, distribution or subscription rights, the date on
\nwhich the holders of Common Stock shall be entitled thereto and such notice in
\naccordance with the foregoing clause (b) shall also specify the date on which
\nthe holders of Common Stock shall be entitled to exchange their Common Stock for
\nsecurities or other property deliverable upon such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up, as the case may be.<\/p>\n
6J. Stock to be Reserved. The Corporation will at all times
\nreserve and keep available out of its authorized Common Stock, solely for the
\npurpose of issuance upon the conversion of Series E Convertible Preferred Stock
\nas herein provided, such number of shares of Common Stock as shall then be
\nissuable upon the conversion of all outstanding shares of Series E Convertible
\nPreferred Stock. The Corporation covenants that all shares of Common Stock which
\nshall be so issued shall be duly and validly issued and fully paid and
\nnonassessable and free from all taxes, liens and charges with respect to the
\nissue thereof, and, without limiting the generality of the foregoing, the
\nCorporation covenants that it will from time to time take all such action as may
\nbe requisite to assure that the par value per share of the Common Stock is at
\nall times equal to or less than the Series E Conversion Price in effect at the
\ntime. The Corporation will take all such action as may be necessary to assure
\nthat all such shares of Common Stock may be so issued without violation of any
\napplicable law or regulation, or of any requirement of any national securities
\nexchange upon which the Common Stock may be listed.<\/p>\n
6K. No Reissuance of Series E Convertible Preferred Stock.
\nShares of Series E Convertible Preferred Stock which are converted into shares
\nof Common Stock as provided herein shall not be reissued.<\/p>\n
6L. Issue Tax. The issuance of certificates for shares of
\nCommon Stock upon conversion of Series E Convertible Preferred Stock shall be
\nmade without charge to the holders thereof for any issuance tax in respect
\nthereof; provided that the Corporation shall not be required to pay any tax
\nwhich may be payable in respect of any transfer involved in the issuance and
\ndelivery of any certificate in a name other than that of the holder of the
\nSeries E Convertible Preferred Stock which is being converted.<\/p>\n
6M. Closing of Books. The Corporation will at no time close
\nits transfer books against the transfer of any Series E Convertible Preferred
\nStock or of any shares of Common Stock issued or issuable upon the conversion of
\nany shares of Series E Convertible Preferred
\n 92<\/p>\n
Stock in any manner which interferes with the timely conversion of such
\nPreferred Stock, except as may otherwise be required to comply with applicable
\nsecurities laws.<\/p>\n
6N. Definition of Common Stock. As used in this paragraph 6,
\nthe term “Common Stock” shall mean and include the Corporation’s authorized
\nCommon Stock, par value $.01 per share, as constituted on the date of filing of
\nthese terms of the Series E Convertible Preferred Stock, and shall also include
\nany capital stock of any class of the Corporation thereafter authorized which
\nshall neither be limited to a fixed sum or percentage of par value in respect of
\nthe rights of the holders thereof to participate in dividends nor entitled to a
\npreference in the distribution of assets upon the voluntary or involuntary
\nliquidation, dissolution or winding up of the Corporation; provided that the
\nshares of Common Stock receivable upon conversion of shares of Series E
\nConvertible Preferred Stock shall include only shares designated as Common Stock
\nof the Corporation on the date of filing of this instrument, or in case of any
\nreorganization or reclassification of the outstanding shares thereof, the stock,
\nsecurities or assets provided for in subparagraph 6G.<\/p>\n
6O. Mandatory Conversion. All outstanding shares of Series E
\nConvertible Preferred Stock shall automatically convert to shares of Common
\nStock if at any time the Corporation shall effect a public offering of shares of
\nCommon Stock (any such offering, regardless of compliance with subsections (i),
\n(ii) and (iii) herein, being referred to as a “Public Offering”), provided (i)
\nthe aggregate gross proceeds from such offering to the Corporation shall be at
\nleast $20,000,000, (ii) the price paid by the public for such shares shall be at
\nleast (x) 2.0 times the then Series B Conversion Price if the Public Offering
\noccurs prior to the 18 month anniversary of the Series B Preferred Stock Issue
\nDate or (y) 3.0 times the then Series B Conversion Price if the Public Offering
\noccurs on or after the 18 month anniversary of the Series B Preferred Stock
\nIssue Date and (iii) the offering is a firm commitment underwritten Public
\nOffering, and such automatic conversion shall be effective upon the closing of
\nthe sale of such shares by the Corporation pursuant to such Public Offering.<\/p>\n
93<\/p>\n
7. Redemption. The shares of Series E Convertible Preferred Stock shall
\nbe redeemed as follows:<\/p>\n
7A. Optional Redemption. The Corporation shall not have the
\nright to call or redeem at any time all or any shares of Series E Convertible
\nPreferred Stock. With the approval of the holders of 66% of the then outstanding
\nshares of Series E Convertible Preferred Stock, one or more holders of shares of
\nSeries E Convertible Preferred Stock may, by giving notice (the “Notice”) to the
\nCorporation, require the Corporation to redeem any or all of the outstanding
\nSeries E Convertible Preferred Stock on the Redemption Date (as defined below).
\nUpon receipt of the Notice, the Corporation will so notify all other persons
\nholding Series E Convertible Preferred Stock. After receipt of the Notice, the
\nCorporation shall fix the first date for redemption, which shall be the date
\nspecified in the Notice, being any date on or after the earlier of (i) the fifth
\n(5th) anniversary of the Series B Preferred Stock Issue Date and (ii) the date
\nwhich is the day before the Corporation is due to redeem any outstanding Junior
\nSecurities (the “Redemption Date”). All holders of Series E Convertible
\nPreferred Stock shall deliver to the Corporation during regular business hours,
\nat the office of any transfer agent of the Corporation for the Series E
\nConvertible Preferred Stock, or at the principal office of the Corporation or at
\nsuch other place as may be designated by the Corporation, the certificate or
\ncertificates for the Series E Convertible Preferred Stock, duly endorsed for
\ntransfer to the Corporation (if required by it) on or before the Redemption
\nDate.<\/p>\n
7B. Redemption Price and Payment. The Series E Convertible
\nPreferred Stock to be redeemed on the Redemption Date shall be redeemed by
\npaying for each share in cash an amount equal to the Series E Redemption Price
\n(as defined below). For purposes of this paragraph 7B, the “Series E Redemption
\nPrice” shall mean $26.239 per share, plus an amount equal to all dividends
\naccrued and unpaid on each such share; provided, however, that if the Redemption
\nDate is after the fifth (5th) anniversary of the Series B Preferred Stock Issue
\nDate, then the “Series E Redemption Price” shall mean the greater of (i) $26.239
\nper share, plus an amount equal to all dividends accrued and unpaid on each such
\nshare and (ii) the Fair Market Value (as defined below) of the Common Stock
\nunderlying the Series E Convertible Preferred Stock. Such payment shall be made
\nin full on the Redemption Date to the holders entitled thereto. For purposes of
\nthis paragraph 7B, “Fair Market Value” of the Common Stock shall mean the
\naverage of the fair market valuations of the Common Stock performed by two
\ninvestment banks (the “Initial Appraisers”), one of which shall be retained by
\nthe Corporation and one of which shall be retained by the holders of a majority
\nin interest of the Series E Convertible Preferred Stock. Subject to the
\nfollowing sentence, such determination by the Initial Appraisers of Fair Market
\nValue shall be final and binding on the parties. If the higher of the two
\nvaluations of the Initial Appraisers is equal to or greater than 110% of the
\nlower valuation, the Corporation and holders of a majority in interest of the
\nSeries E Convertible Preferred Stock shall select a third investment bank (the
\n“Final Appraiser”), which shall be mutually agreeable to the Corporation and the
\nholders of a majority in interest of the Series E Convertible Preferred Stock.
\nThe fair market value of the Common Stock as determined by the Final Appraiser
\nshall be final and binding on the parties. The fees and expenses of the Initial
\nAppraisers shall be paid for by the party selecting such Initial Appraiser and
\nthe fees and expenses of the Final Appraiser shall be shared by the Corporation
\nand the holders of the Series E Convertible Preferred Stock.<\/p>\n
7C. Redemption Mechanics. At least 15 but not more than 35
\ndays prior to the Redemption Date, written notice (the “Redemption Notice”)
\nshall be given by the Corporation
\n 94<\/p>\n
by mail, postage prepaid, or by facsimile transmission to non-U.S. residents, to
\neach holder of record (at the close of business on the business day next
\npreceding the day on which the Redemption Notice is given) of shares of Series E
\nConvertible Preferred Stock notifying such holder of the redemption and
\nspecifying the Series E Redemption Price, the Redemption Date and the place
\nwhere said Series E Redemption Price shall be payable. The Redemption Notice
\nshall be addressed to each holder at his address as shown by the records of the
\nCorporation. From and after the close of business on the Redemption Date, unless
\nthere shall have been a default in the payment of the Series E Redemption Price,
\nall rights of holders of shares of Series E Convertible Preferred Stock (except
\nthe right to receive the Series E Redemption Price) shall cease with respect to
\nsuch shares, and such shares shall not thereafter be transferred on the books of
\nthe Corporation or be deemed to be outstanding for any purpose whatsoever. If
\nthe funds of the Corporation legally available for redemption of shares of
\nSeries E Convertible Preferred Stock on the Redemption Date are insufficient to
\nredeem the total number of outstanding shares of Series E Convertible Preferred
\nStock to be redeemed on such Redemption Date, the holders of shares of Series E
\nConvertible Preferred Stock shall share ratably in any funds legally available
\nfor redemption of such shares according to the respective amounts which would be
\npayable with respect to the full number of shares owned by them if all such
\noutstanding shares were redeemed in full. The shares of Series E Convertible
\nPreferred Stock not redeemed shall remain outstanding and entitled to all rights
\nand preferences provided herein; provided, however, that such unredeemed shares
\nshall be entitled to receive interest accruing daily with respect to the
\napplicable Series E Redemption Price at the rate of 15% per annum, payable
\nquarterly in arrears. At any time thereafter when additional funds of the
\nCorporation are legally available for the redemption of such shares of Series E
\nConvertible Preferred Stock, such funds will be used, at the end of the next
\nsucceeding fiscal quarter, to redeem the balance of such shares, or such portion
\nthereof for which funds are then legally available, on the basis set forth
\nabove.<\/p>\n
7D. Redeemed or Otherwise Acquired Shares to be Retired. Any
\nshares of Series E Convertible Preferred Stock redeemed pursuant to this
\nparagraph 7 or otherwise acquired by the Corporation in any manner whatsoever
\nshall be canceled and shall not under any circumstances be reissued; and the
\nCorporation may from time to time take such appropriate corporate action as may
\nbe necessary to reduce accordingly the number of authorized shares of Series E
\nConvertible Preferred Stock.<\/p>\n
8. Amendments. Except where the vote or written consent of the holders
\nof a different number of shares of the Corporation is required by these terms of
\nthe Series E Convertible Preferred Stock, by law or by the Certificate of
\nIncorporation, no provision of these terms of the Series E Convertible Preferred
\nStock may be amended, modified or waived without the written consent or
\naffirmative vote of the holders of at least 60% of the then outstanding shares
\nof Series E Convertible Preferred Stock.<\/p>\n
9. Definitions. As used herein, the following terms shall have the
\nfollowing meanings:<\/p>\n
(1) The term “Founders” shall mean F. Thomson Leighton, Daniel
\nLewin, Jonathan Seelig, Randall Kaplan, Gilbert Friesen and David Karger.<\/p>\n
95<\/p>\n
(2) The term “Preferred Stock Issue Date” shall mean the date
\non which the Series E Convertible Preferred Stock is originally issued by the
\nCorporation pursuant to the Purchase Agreement.<\/p>\n
(3) The term “Purchase Agreement” shall mean the Series E
\nConvertible Preferred Stock Purchase Agreement dated as of August 6, 1999
\nbetween the Corporation and Cisco Systems, Inc., as in effect on August 6, 1999.<\/p>\n
(4) The term the “Plan” shall mean the Corporation’s 1998
\nStock Incentive Plan.<\/p>\n
(5) The term “Reserved Employee Shares” shall mean shares of
\nCommon Stock reserved by the Corporation pursuant to the Plan from time to time
\nfor (i) the sale of shares of Common Stock to employees, consultants or
\nnon-employee directors (other than representatives of the holders of Preferred
\nStock) of the Corporation or (ii) the exercise of options to purchase Common
\nStock granted to employees, consultants or non-employee directors (other than
\nrepresentatives of the holders of Preferred Stock) of the Corporation, not to
\nexceed in the aggregate 11,377,800 shares of Common Stock for both clauses (i)
\nand (ii), with such number including 2,132,100 shares issued or subject to
\noptions granted prior to the date of the initial issuance of the Series A
\nConvertible Preferred Stock (the “Option Shares”) (appropriately adjusted to
\nreflect an event described in paragraph 6F hereof); provided that, such number
\nof such shares subject to the Plan shall be increased by up to 7,559,226
\nadditional shares of Common Stock (appropriately adjusted to reflect an event
\ndescribed in paragraph 6F hereof) (collectively, the “Founders’ Shares”) upon
\nthe repurchase of such Founders’ Shares by the Corporation from the Founders
\npursuant to contractual rights held by the Corporation. The foregoing numbers of
\nReserved Employee Shares may be increased by the affirmative vote or written
\nconsent of a majority of the directors designated solely by the holders of
\nSeries A Convertible Preferred Stock and Series B Convertible Preferred Stock or
\nthe affirmative vote or written consent of the holders of at least 50% of the
\nthen outstanding shares of Series A Convertible Preferred Stock, Series B
\nConvertible Preferred Stock, Series C Convertible Preferred Stock, Series D
\nConvertible Preferred Stock and Series E Convertible Preferred Stock, voting
\ntogether as a single class on a Common Stock equivalent basis.<\/p>\n
(6) The term “Series B Conversion Price” shall mean the
\nconversion price of the Series B Convertible Preferred Stock from time to time
\nunder the terms of the designation of the Series B Convertible Preferred Stock
\nof the Corporation.<\/p>\n
(7) The term “Series B Preferred Stock Issue Date” shall mean
\nApril 16, 1999.<\/p>\n
(8) The term “Series B Purchase Agreement” shall mean the
\nSeries B Convertible Preferred Stock and Series C Convertible Preferred Stock
\nPurchase Agreement dated as of April 16, 1999 among the Corporation and the
\npurchasers named therein.
\n 96<\/p>\n
(9) The term “Subsidiary” or “Subsidiaries” shall mean any
\ncorporation, partnership, trust or other entity of which the Corporation and\/or
\nany of its other subsidiaries directly or indirectly owns at the time a majority
\nof the outstanding shares of every class of equity security of such corporation,
\npartnership, trust or other entity.<\/p>\n
97<\/p>\n
CERTIFICATE OF AMENDMENT
\n OF THE
\n CERTIFICATE OF INCORPORATION
\n OF
\n AKAMAI TECHNOLOGIES, INC.<\/p>\n
Pursuant to Section 242
\n of the General Corporation Law of
\n the State of Delaware<\/p>\n
Akamai Technologies, Inc. (hereinafter called the “Corporation”),
\norganized and existing under and by virtue of the General Corporation Law of the
\nState of Delaware, does hereby certify as follows:<\/p>\n
The Board of Directors of the Corporation, at a meeting held on August
\n5, 1999, duly adopted a resolution, pursuant to Sections 141(f) and 242 of the
\nGeneral Corporation Law of the State of Delaware, setting forth an amendment to
\nthe Certificate of Incorporation of the Corporation and declaring said amendment
\nto be advisable. The stockholders of the Corporation duly approved said proposed
\namendment by written consent in accordance with Sections 228 and 242 of the
\nGeneral Corporation Law of the State of Delaware, and written notice of such
\nconsent has been or will be given to all stockholders who have not consented in
\nwriting to said amendment. The resolution setting forth the amendment is as
\nfollows:<\/p>\n
RESOLVED: That the first paragraph of Article FOURTH of the
\n Certificate of Incorporation of the Corporation be and
\n hereby is deleted in its entirety and that the following
\n paragraph be inserted in lieu thereof:<\/p>\n
“FOURTH. The total number of shares of all classes of stock
\n which the Corporation shall have authority to issue is 310,000,000
\n shares, consisting of (i) 300,000,000 shares of Common Stock, $0.01 par
\n value per share (“Common Stock”), and (ii) 10,000,000 shares of
\n Preferred Stock, $0.01 par value per share (“Preferred Stock”).<\/p>\n
98<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
\nAmendment to be signed by its President on this 5th day of August, 1999.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ Paul Sagan
\n —————————–
\n Paul Sagan
\n President<\/p>\n
99
\n CERTIFICATE OF DESIGNATIONS<\/p>\n
OF<\/p>\n
SERIES F CONVERTIBLE PREFERRED STOCK<\/p>\n
OF<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
————<\/p>\n
Pursuant to Section 151 of the
\n General Corporation Law of the State of Delaware<\/p>\n
————<\/p>\n
Akamai Technologies, Inc., a Delaware corporation (the “Corporation”),
\ncertifies that pursuant to the authority contained in Article Fourth of its
\nCertificate of Incorporation and in accordance with the provisions of Section
\n151 of the General Corporation Law of the State of Delaware, the Board of the
\nDirectors of the Corporation, at a meeting held on September 20, 1999, duly
\nadopted the following resolution, which resolution remains in full force and
\neffect on the date hereof:<\/p>\n
RESOLVED, that, pursuant to the authority expressly granted to and vested
\nin the Board of Directors of the Corporation, a series of Preferred Stock of the
\nCorporation be and hereby is established, consisting of 985,545 shares, $0.01
\npar value per share, to be designated “Series F Convertible Preferred Stock”
\n(hereinafter, the “Series F Preferred Stock”); that the Board of Directors be
\nand hereby is authorized to issue such shares of Series F Preferred Stock from
\ntime to time and for such consideration and on such terms as the Board of
\nDirectors shall determine; and that, subject to the limitations provided by law
\nand by the Certificate of Incorporation, the voting powers, preferences and
\nrelative, participating, optional and other special rights, and qualifications,
\nlimitations and restrictions thereof shall be as set forth on Schedule I
\nattached hereto.<\/p>\n
IN WITNESS WHEREOF, the Corporation has caused this certificate to be duly
\nexecuted by its President on this 20th day of September, 1999.<\/p>\n
AKAMAI TECHNOLOGIES, INC.<\/p>\n
By: \/s\/ PAUL SAGAN
\n ———————————
\n Paul Sagan
\n President<\/p>\n
1
\n 100
\n Schedule I<\/p>\n
AKAMAI TECHNOLOGIES, INC.
\n DESIGNATION OF SERIES F CONVERTIBLE PREFERRED STOCK<\/p>\n
The series of Preferred Stock designated and known as “Series F Convertible
\nPreferred Stock” shall consist of 985,545 shares.<\/p>\n
1. Voting. Except as may be otherwise provided in these terms of the
\nSeries F Convertible Preferred Stock, in the Certificate of Incorporation (the
\n“Certificate of Incorporation”) of Akamai Technologies, Inc. (the “Corpora-
\ntion”) or by law, the Series F Convertible Preferred Stock shall vote together
\nwith all other classes and series of stock of the Corporation as a single class
\non all actions to be taken by the stockholders of the Corporation. Each share
\nof Series F Convertible Preferred Stock shall entitle the holder thereof to
\nsuch number of votes per share on each such action as shall equal the number of
\nshares of Common Stock (including fractions of a share) into which each share
\nof Series F Convertible Preferred Stock is then convertible.<\/p>\n
2. Ranking. The Series F Convertible Preferred Stock shall rank, with
\nrespect to dividend distributions and distributions upon a Liquidation Event
\n(as defined in paragraph 4A herein), senior to all classes of common stock of
\nthe Company and to each other class of capital stock or series of preferred
\nstock (including the Series A Convertible Preferred Stock of the Corporation)
\nestablished before the Series B Preferred Stock Issue Date, by the Board of
\nDirectors, pari passu with the Series B Convertible Preferred Stock, the
\nSeries C Preferred Stock, the Series D Convertible Preferred Stock and the
\nSeries E Convertible Preferred Stock of the Corporation, and senior or pari
\npassu to any other class of capital stock or series of preferred stock
\nestablished after the Preferred Stock Issue Date by the Board of Directors. All
\nclasses of common stock of the Company, the Series A Convertible Preferred
\nStock and any other class of capital stock or series of preferred stock
\nestablished after the Preferred Stock Issue Date to which the Series F
\nConvertible Preferred Stock is senior, are collectively referred to herein as
\n“Junior Securities”. The Series B Convertible Preferred Stock, the Series C
\nConvertible Preferred Stock, the Series D Convertible Preferred Stock and the
\nSeries E Convertible Preferred Stock of the Corporation and any other class of
\ncapital stock or series of preferred stock established after the Preferred
\nStock Issue Date which ranks pari passu with the Series F Convertible Preferred
\nStock, are collectively referred to herein as “Pari Passu Securities”.<\/p>\n
2
\n 101
\n 3. Dividends. The holders of shares of the Series F Convertible Preferred
\nStock shall be entitled to receive, when, as and if dividends are declared by
\nthe Board of Directors out of funds of the Corporation legally available
\ntherefor, cumulative preferential dividends at the annual rate of 8% on the
\nSeries F Liquidation Preference Payments (as defined in paragraph 4A herein);
\nprovided, however, that any such dividends shall only be paid, whether declared
\nor not, immediately upon the occurrence of (i) a Liquidation Event pursuant to
\nparagraph 4A hereof or (ii) a Redemption pursuant to paragraph 7B hereof.
\nHolders of shares of Series F Convertible Preferred Stock shall be entitled to
\nreceive the dividends provided for herein in preference to and in priority over
\nany dividends upon any of the Junior Securities. Dividends on the Series F
\nConvertible Preferred Stock shall accrue on a daily basis from the Preferred
\nStock Issue Date and, to the extent they are not paid, shall accumulate on an
\nannual basis on each December 31, whether or not the Corporation has earnings or
\nprofits, whether or not there are funds legally available for the payment of
\nsuch dividends and whether or not dividends are declared.<\/p>\n
4. Liquidation, Dissolution and Winding-up.<\/p>\n
4A. Liquidation. Upon any liquidation, dissolution or winding up of the
\nCorporation (a “Liquidation Event”), whether voluntary or involuntary, the
\nholders of the shares of Series F Convertible Preferred Stock shall be paid an
\namount equal to $15.22 per share plus, in the case if each share, an amount
\nequal to dividends accrued but unpaid thereon, computed to the date payment
\nthereof is made available, together with payment to any Pari Passu Securities,
\nand before any payment shall be made to the holders of any Junior Securities,
\nsuch amount payable with respect to one share of Series F Convertible Preferred
\nStock being sometimes referred to as the “Series F Liquidation Preference
\nPayment” and with respect to all shares of Series F Convertible Preferred Stock
\nbeing sometimes referred to as the “Series F Liquidation Preference Payments”.
\nIf upon any Liquidation Event, the assets to be distributed to the holders of
\nthe Series F Convertible Preferred Stock shall be insufficient to permit
\npayment to such stockholders of the full preferential amounts aforesaid, then
\nall of the assets of the Corporation available for distribution to holders of
\nthe Series F Convertible Preferred Stock and Pari Passu Securities shall be
\ndistributed to such holders of the Series F Convertible Preferred Stock and
\nPari Passu Securities pro rata, so that each holder receives that portion of
\nthe assets available for distribution as the number of shares of such stock
\nheld by such holder bears to the total number of shares of such stock then
\noutstanding.<\/p>\n
4B. Upon any Liquidation Event, immediately after the holders of Series
\nF Convertible Preferred Stock and holders of any Pari Passu Securities have been
\npaid in full pursuant to paragraph 4A above, the remaining net assets of the
\nCorporation available for distribution shall be distributed among the holders
\nof the shares of Junior Securities.<\/p>\n
Written notice of such Liquidation Event, stating a payment date and the
\nplace where said payments shall be made, shall be given by mail, postage
\nprepaid, or by facsimile to non-U.S. residents, not less than 20 days prior to
\nthe payment date stated therein, to the holders of record of Series F
\nConvertible Preferred Stock, such notice to be addressed to each such holder at
\nits address as shown by the records of the Corporation.<\/p>\n
The (x) consolidation or merger of the Corporation into or with any other
\nentity or entities which results in the exchange of outstanding shares of the
\nCorporation for securities or other consideration issued or paid or caused to
\nbe issued or paid by any such entity or affiliate <\/p>\n
3
\n 102
\nthereof (except a consolidation or merger into a Subsidiary or merger in which
\nthe Corporation is the surviving Corporation and the holders of the
\nCorporation’s voting stock outstanding immediately prior to the transaction
\nconstitute a majority of the holders of voting stock outstanding immediately
\nfollowing the transaction), (y) sale or transfer by the Corporation of all or
\nsubstantially all of its assets, or (z) sale or transfer by the Corporation’s
\nstockholders of capital stock representing a majority of the outstanding
\ncapital stock of the Corporation shall be deemed to be a Liquidation Event
\nwithin the meaning of the provisions of this paragraph 4 (subject to the
\nprovisions of this paragraph 4 and not the provisions of paragraph 6G hereof,
\nunless paragraph 6G is elected in the following proviso); provided, however,
\nthat if the holders of at least 60% of the then outstanding shares of Series F
\nConvertible Preferred Stock shall elect the benefits of the provisions of
\nparagraph 6G in lieu of receiving payment in a Liquidation Event pursuant to
\nthis paragraph 4, then all holders of shares of Series F Convertible Preferred
\nStock shall receive the benefits of the provisions of paragraph 6G in lieu of
\nreceiving payment pursuant to this paragraph 4 for the particular Organic
\nChange (as defined in Section 6G) causing the rights of Section 6G to be
\navailable. The election of the rights under Section 6G for any particular
\nOrganic Change shall not constitute an election of the rights available under
\nSection 6G for any other Organic Change, for which the holders of Series F
\nConvertible Preferred Stock shall have a new election under the foregoing
\nproviso. Whenever the distribution provided for in this paragraph 4 shall be
\npayable in property other than cash, the value of such distribution shall be
\nthe fair market value of such property as determined in good faith by the Board
\nof Directors of the Corporation.<\/p>\n
5. Restrictions. At any time when at least 50% of the shares of
\nSeries F Convertible Preferred Stock issued pursuant to the Purchase Agreement
\nremain outstanding, except where the vote or written consent of the holders of
\na greater number of shares of the Corporation is required by law or by the
\nCertificate of Incorporation, and in addition to any other vote required by law
\nor the Certificate of Incorporation, without the written consent of the holders
\nof at least 60% of the then outstanding shares of Series F Convertible
\nPreferred Stock given in writing or by vote at a meeting, consenting or voting
\n(as the case may be) separately as a series, the Corporation will not:<\/p>\n
(1) Consent to any Liquidation Event or merge or consolidate with
\nor into, or permit any Subsidiary to merge or consolidate with or into, any
\nother corporation, corporations, entity or entities (except a consolidation or
\nmerger into a Subsidiary or merger in which the Corporation is the surviving
\ncorporation and the holders of the Corporation’s voting stock outstanding
\nimmediately prior to the transaction constitute a majority of the holders of
\nvoting stock outstanding immediately following the transaction or a
\nconsolidation or merger pursuant to which the aggregate consideration
\ndefinitely and unconditionally payable to all of the stockholders of the
\nCorporation is greater than $1.2 billion) without the affirmative vote or
\nwritten consent of the holders of at least 50% of the then outstanding shares
\nof Series A Convertible Preferred Stock, Series B Convertible Preferred Stock,
\nSeries D Convertible Preferred Stock, Series E Convertible Preferred Stock and
\nSeries F Convertible Preferred Stock, voting together as a single class on a
\nCommon Stock equivalent basis;<\/p>\n
(2) Sell, abandon, transfer, lease or otherwise dispose of all or
\nsubstantially all of its properties or assets (unless the aggregate
\nconsideration definitely and unconditionally payable to all of the stockholders
\nof the Corporation is greater than $1.2 billion) without the affirmative vote
\nor written consent of the holders of at least 50% of the then outstanding shares<\/p>\n
4
\n 103
\nof Series A Convertible Preferred Stock, Series B Convertible Preferred Stock,
\nSeries D Convertible Preferred Stock, Series E Convertible Preferred Stock
\nand Series F Convertible Preferred Stock, voting together as a single class on a
\nCommon Stock equivalent basis;<\/p>\n
(3) Amend, alter or repeal any provision of its Certificate of
\nIncorporation or By-laws in a manner adverse to holders of the Series F
\nConvertible Preferred Stock;<\/p>\n
(4) Create or authorize the creation of or issue any additional class
\nor series of shares of stock (other than the Series C Convertible Preferred
\nStock of the Corporation) unless the same ranks junior to or on parity with the
\nSeries F Convertible Preferred Stock as to dividends and the distribution of
\nassets on a Liquidation Event, or increase the authorized amount of Series F
\nConvertible Preferred Stock or increase the authorized amount of any additional
\nclass or series of shares of stock unless the same ranks junior to or on parity
\nwith the Series F Convertible Preferred Stock as to dividends and the
\ndistribution of assets on a Liquidation Event, or create or authorize any
\nobligation or security convertible into shares of Series F Convertible Preferred
\nStock or into shares of any other class or series of stock unless the same ranks
\njunior to or on parity with the Series F Convertible Preferred Stock as to
\ndividends and the distribution of assets on a Liquidation Event, whether any
\nsuch creation, authorization or increase shall be by means of amendment to the
\nCertificate of Incorporation or by merger, consolidation or otherwise;<\/p>\n
(5) In any manner amend, alter or change the designations or the
\npowers, preferences or rights, privileges or the restrictions of the Series F
\nConvertible Preferred Stock, provided, however, that the authorization or
\ncreation of any shares of capital stock on parity with the Series F Convertible
\nPreferred Stock as to dividends and the distribution of assets on a Liquidation
\nEvent shall not require the approval of holders of Series F Convertible
\nPreferred Stock;<\/p>\n
(6) Purchase or redeem, or set aside any sums for the purchase or
\nredemption of, or pay any dividend or make any distribution on, any Junior
\nSecurities, except for (i) dividends or other distributions payable on the
\nCommon Stock solely in the form of additional shares of Common Stock or (ii)
\nrepurchases of shares of capital stock (at the original purchase price therefor)
\nfrom officers, employees, directors or consultants of the Corporation which are
\nsubject to restrictive stock purchase, right of first refusal or other
\nagreements under which the Corporation has the option to repurchase such shares
\nupon the occurrence of certain events, including termination of employment; or<\/p>\n
(7) Increase the number of Reserved Employee Shares without the
\naffirmative vote or written consent of a majority of the directors designated
\nsolely by the holders of Series A Convertible Preferred Stock and Series B
\nConvertible Preferred Stock or the affirmative vote or written consent of the
\nholders of at least 50% of the then outstanding shares of Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock, Series C Convertible
\nPreferred Stock, Series D Convertible Preferred Stock, Series E Convertible
\nPreferred Stock and Series F Convertible Preferred Stock, voting together as a
\nsingle class on a Common Stock equivalent basis.<\/p>\n
6. Conversion. The holders of shares of Series F Convertible Preferred
\nStock shall have the following conversion rights:<\/p>\n
5
\n 104<\/p>\n
6A. Right to Convert. Subject to the terms and conditions of this
\nparagraph 6, the holder of any share or shares of Series F Convertible
\nPreferred Stock shall have the right, at its option at any time, to convert any
\nsuch shares of Series F Convertible Preferred Stock (except that upon any
\nLiquidation Event the right of conversion shall terminate at the close of
\nbusiness on the business day fixed for payment of the amounts distributable on
\nthe Series F Convertible Preferred Stock) into such number of fully paid and
\nnonassessable shares of Common Stock as is obtained by (i) multiplying the
\nnumber of shares of Series F Convertible Preferred Stock so to be converted by
\n$15.22 and (ii) dividing the result by the conversion price of $15.22 per share
\nor in case an adjustment of such price has taken place pursuant to the further
\nprovisions of this paragraph 6, then by the conversion price as last adjusted
\nand in effect at the date any share or shares of Series F Convertible Preferred
\nStock are surrendered for conversion (such price, or such price as last
\nadjusted, being referred to as the “Series F Conversion Price”). Such rights of
\nconversion shall be exercised by the holder thereof by giving written notice
\nthat the holder elects to convert a stated number of shares of Series F
\nConvertible Preferred Stock into Common Stock and by surrender of a certificate
\nor certificates for the shares so to be converted to the Corporation at its
\nprincipal office (or such other office or agency of the Corporation as the
\nCorporation may designate by notice in writing to the holders of the Series F
\nConvertible Preferred Stock) at any time during its usual business hours on the
\ndate set forth in such notice, together with a statement of the name or names
\n(with address) in which the certificate or certificates for shares of Common
\nStock shall be issued.<\/p>\n
6B. Issuance of Certificates; Time Conversion Effected. Promptly after
\nthe receipt of the written notice referred to in paragraph 6A and surrender of
\nthe certificate or certificates for the share or shares of Series F Convertible
\nPreferred Stock to be converted, the Corporation shall issue and deliver, or
\ncause to be issued and delivered, to the holder, registered in such name or
\nnames as such holder may direct, a certificate or certificates for the number
\nof whole shares of Common Stock issuable upon the conversion of such share or
\nshares of Series F Convertible Preferred Stock. To the extent permitted by law,
\nsuch conversion shall be deemed to have been effected and the Series F
\nConversion Price shall be determined as of the close of business on the date
\non which such written notice shall have been received by the Corporation and
\nthe certificate or certificates for such share or shares shall have been
\nsurrendered as aforesaid, and at such time the rights of the holder of such
\nshare or shares of Series F Convertible Preferred Stock shall cease, and the
\nperson or persons in whose name or names any certificate or certificates for
\nshares of Common Stock shall be issuable upon such conversion shall be deemed
\nto have become the holder or holders of record of the shares represented
\nthereby.<\/p>\n
6C. Fractional Shares; Dividends; Partial Conversion. No fractional
\nshares shall be issued upon conversion of Series F Convertible Preferred Stock
\ninto Common Stock and no payment or adjustment shall be made upon any
\nconversion on account of any cash dividends on the Common Stock issued upon
\nsuch conversion. At the time of each conversion, the Corporation shall pay in
\ncash an amount equal to all dividends declared and unpaid (if any) on the
\nshares of Series F Convertible Preferred Stock surrendered for conversion to
\nthe date upon which such conversion is deemed to take place as provided in
\nparagraph 6B. In case the number of shares of Series F Convertible Preferred
\nStock represented by the certificate or certificates surrendered pursuant to
\nparagraph 6A exceeds the number of shares converted, the Corporation shall,
\nupon such conversion, execute and deliver to the holder, at the expense of the
\nCorporation, a new certificate or certificates for the number of shares of
\nSeries F Convertible<\/p>\n
6
\n 105
\nPreferred Stock represented by the certificate or certificates surrendered which
\nare not to be converted. If any fractional share of Common Stock would, except
\nfor the provisions of the first sentence of this paragraph 6C, be delivered upon
\nsuch conversion, the Corporation, in lieu of delivering such fractional share,
\nshall pay to the holder surrendering the Series F Convertible Preferred Stock
\nfor conversion an amount in cash equal to the current fair market value of such
\nfractional share as determined in good faith by the Board of Directors of the
\nCorporation, and based upon the aggregate number of shares of Series F
\nConvertible Preferred Stock surrendered by any one holder.<\/p>\n
6D. Adjustment of Series F Conversion Price Upon Issuance of Common
\nStock. Except as provided in paragraphs 6E and 6F, if and whenever the
\nCorporation shall issue or sell, or is, in accordance with subparagraphs 6D(1)
\nthrough 6D(7), deemed to have issued or sold, any shares of Common Stock for a
\nconsideration per share less than the Series F Conversion Price in effect
\nimmediately prior to the time of such issue or sale, (such number being
\nappropriately adjusted to reflect the occurrence of any event described in
\nparagraph 6F), then, forthwith upon such issue or sale, the Series F Conversion
\nPrice shall be reduced to the price determined by dividing (i) an amount equal
\nto the sum of (a) the number of shares of Common Stock outstanding immediately
\nprior to such issue or sale (assuming the conversion of the outstanding shares
\nof Series F Convertible Preferred Stock) multiplied by the then existing Series
\nF Conversion Price and (b) the consideration, if any, received by the
\nCorporation upon such issue or sale, by (ii) the total number of shares of
\nCommon Stock outstanding immediately after such issue or sale (assuming the
\nconversion of the outstanding shares of Series F Convertible Preferred Stock).<\/p>\n
For purposes of this paragraph 6D, the following subparagraphs 6D(1)
\nto 6D(7) shall also be applicable:<\/p>\n
6D(1) Issuance of Rights or Options. In case at any time the
\n Corporation shall in any manner grant (whether directly or by assumption in
\n a merger or otherwise) any warrants or other rights to subscribe for or to
\n purchase, or any options for the purchase of, Common Stock or any stock or
\n security convertible into or exchangeable for Common Stock (such warrants,
\n rights or options being called “Options” and such convertible or
\n exchangeable stock or securities being called “Convertible Securities”)
\n whether or not such Options or the right to convert or exchange any such
\n Convertible Securities are immediately exercisable, and the price per share
\n for which Common Stock is issuable upon the exercise of such Options or
\n upon the conversion or exchange of such Convertible Securities (determined
\n by dividing (i) the total amount, if any, received or receivable by the
\n Corporation as consideration for the granting of such Options, plus the
\n minimum aggregate amount of additional consideration payable to the
\n Corporation upon the exercise of all such Options, plus, in the case of
\n such Options which relate to Convertible Securities, the minimum aggregate
\n amount of additional consideration, if any, payable upon the issue or sale
\n of all such Convertible Securities and upon the conversion or exchange
\n thereof, by (ii) the total maximum number of shares of Common Stock
\n issuable upon the exercise of such Options or upon the conversion or
\n exchange of all such Convertible Securities issuable upon the exercise of
\n such Options) shall be less than the Series F Conversion Price in effect
\n immediately prior to the time of the granting of such Options, then the
\n total maximum number of shares of Common Stock issuable upon the exercise
\n of such Options or upon conversion <\/p>\n
7
\n 106
\nor exchange of the total maximum amount of such Convertible Securities issuable
\nupon the exercise of such Options shall be deemed to have been issued for such
\nprice per share as of the date of granting of such Options or the issuance of
\nsuch Convertible Securities and thereafter shall be deemed to be outstanding.
\nExcept as otherwise provided in subparagraph 6D(3), no adjustment of the Series
\nF Conversion Price shall be made upon the actual issue of such Common Stock or
\nof such Convertible Securities upon exercise of such Options or upon the actual
\nissue of such Common Stock upon conversion or exchange of such Convertible
\nSecurities.<\/p>\n
6D(2) Issuance of Convertible Securities. In case the Corporation shall
\nin any manner issue (whether directly or by assumption in a merger or otherwise)
\nor sell any Convertible Securities, whether or not the rights to exchange or
\nconvert any such Convertible Securities are immediately exercisable, and the
\nprice per share for which Common Stock is issuable upon such conversion or
\nexchange (determined by dividing (i) the total amount received or receivable by
\nthe Corporation as consideration for the issue or sale of such Convertible
\nSecurities, plus the minimum aggregate amount of additional consideration, if
\nany, payable to the Corporation upon the conversion or exchange of all such
\nConvertible Securities thereof, by (ii) the total maximum number of shares of
\nCommon Stock issuable upon the conversion or exchange of all such Convertible
\nSecurities) shall be less than the Series F Conversion Price in effect
\nimmediately prior to the time of such issue or sale, then the total maximum
\nnumber of shares of Common Stock issuable upon conversion or exchange of all
\nsuch Convertible Securities shall be deemed to have been issued for such price
\nper share as of the date of the issue or sale of such Convertible Securities and
\nthereafter shall be deemed to be outstanding, provided that (a) except as
\notherwise provided in subparagraph 6D(3), no adjustment of the Series F
\nConversion Price shall be made upon the actual issue of such Common Stock upon
\nconversion or exchange of such Convertible Securities and (b) if any such issue
\nor sale of such Convertible Securities is made upon exercises of any Options to
\npurchase any such Convertible Securities for which adjustments of the Series F
\nConversion Price have been or are to be made pursuant to other provisions of
\nthis paragraph 6D, no further adjustment of the Series F Conversion Price shall
\nbe made by reason of such issue or sale.<\/p>\n
6D(3) Change in Option Price or Conversion Rate. Upon the happening of any
\nof the following events, namely, if the purchase price provided for in any
\nOption referred to in subparagraph 6D(1), the additional consideration, if any,
\npayable upon the conversion or exchange of any Convertible Securities referred
\nto in subparagraph 6D(1) or 6D(2), or the rate at which Convertible Securities
\nreferred to in subparagraph 6D(1) or 6D(2) are convertible into or exchangeable
\nfor Common Stock shall change at any time (including, but not limited to,
\nchanges under or by reason of provisions designed to protect against dilution),
\nthe Series F Conversion Price in effect at the time of such event shall
\nforthwith be readjusted to the Series F Conversion Price which would have been
\nin effect at such time had such Options or Convertible Securities still
\noutstanding provided for such changed purchase price, additional consideration
\nor conversion rate, as the case may be, at the time initially granted, issued or
\nsold; provided, however, that in no event shall the Series F Conversion Price
\nthen in effect hereunder be increased; and on the expiration of any such Option
\nor the termination of any such right to convert or exchange such Convertible
\nSecurities, the Series F Conversion Price then in effect<\/p>\n
8
\n 107
\n hereunder shall forthwith be increased to the Conversion Price which would
\n have been in effect at the time of such expiration or termination had such
\n Option or Convertible Securities, to the extent outstanding immediately
\n prior to such expiration or termination, never been issued.<\/p>\n
6D(4) Stock Dividends. In case the Corporation shall declare a dividend
\n or make any other distribution upon any stock of the Corporation payable in
\n Common Stock (except for the issue of stock dividends or distributions upon
\n the outstanding Common Stock for which adjustment is made pursuant to
\n paragraph 6F), Options or Convertible Securities, any Common Stock, Options
\n or Convertible Securities, as the case may be, issuable in payment of such
\n dividend or distribution shall be deemed to have been issued or sold without
\n consideration.<\/p>\n
6D(5) Consideration for Stock. In case any shares of Common Stock,
\n Options or Convertible Securities shall be issued or sold for cash, the
\n consideration received therefor shall be deemed to be the amount received by
\n the Corporation therefor, without deduction therefrom of any expenses
\n incurred or any underwriting commissions or concessions paid or allowed by
\n the Corporation in connection therewith. In case any shares of Common Stock,
\n Options or Convertible Securities shall be issued or sold for consideration
\n other than cash, the amount of the consideration other than cash received by
\n the Corporation shall be deemed to be the fair value of such consideration
\n as determined in good faith by the Board of Directors of the Corporation,
\n without deduction of any expenses incurred or any underwriting commissions
\n or concessions paid or allowed by the Corporation in connection therewith.
\n In case any Options shall be issued in connection with the issue and sale of
\n other securities of the Corporation, together comprising one integral
\n transaction in which no specific consideration is allocated to such Options
\n by the parties thereto, such Options shall be deemed to have been issued for
\n such consideration as determined in good faith by the Board of Directors of
\n the Corporation.<\/p>\n
6D(6) Record Date. In case the Corporation shall take a record of the
\n holders of its Common Stock for the purpose of entitling them (i) to receive
\n a dividend or other distribution payable in Common Stock, Options or
\n Convertible Securities or (ii) to subscribe for or purchase Common Stock,
\n Options or Convertible Securities, then such record date shall be deemed to
\n be the date of the issue or sale of the shares of Common Stock deemed to
\n have been issued or sold upon the declaration of such dividend or the making
\n of such other distribution or the date of the granting of such right of
\n subscription or purchase, as the case may be.<\/p>\n
6D(7) Treasury Shares. The number of shares of Common Stock outstanding
\n at any given time shall not include shares owned or held by or for the
\n account of the Corporation (or any Subsidiary), and the disposition of any
\n such shares shall be considered an issue or sale of Common Stock for the
\n purpose of this paragraph 6D.<\/p>\n
6E. Certain Issues Excepted. Anything herein to the contrary
\nnotwithstanding, the Corporation shall not be required to make any adjustment of
\nthe Series F Conversion Price if it first obtains the written consent of the
\nholders of at least 60% of the then outstanding shares of Series F Convertible
\nPreferred Stock that no adjustment shall be required. In no event shall the
\nCorporation be required to make any adjustment to the Series F<\/p>\n
9
\n 108
\nConversion Price in the case of the issuance of (i) shares of Series C
\nConvertible Preferred Stock pursuant to the Series B Purchase Agreement, (ii)
\nshares of Common Stock issuable upon conversion of the Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock, Series C Convertible
\nPreferred Stock, Series D Convertible Preferred Stock, Series E Convertible
\nPreferred Stock or Series F Convertible Preferred Stock, (iii) shares of Common
\nStock issued or issuable as a dividend or distribution on Series A Convertible
\nPreferred Stock, Series B Convertible Preferred Stock, Series C Convertible
\nPreferred Stock, Series D Convertible Preferred Stock, Series E Convertible
\nPreferred Stock or Series F Convertible Preferred Stock, (iv) Reserved Employee
\nShares (as defined in paragraph 9 herein), (v) warrants issued in connection
\nwith senior subordinated notes of the Corporation as contemplated by the Series
\nB Purchase Agreement or shares of Common Stock issuable upon conversion of such
\nwarrants, or (vi) Options outstanding as of the Preferred Stock Issue Date.<\/p>\n
6F. Subdivision or Combination of Common Stock. In case the Corporation
\nshall at any time subdivide (by any stock split, stock dividend or otherwise)
\nits outstanding shares of Common Stock into a greater number of shares, the
\nSeries F Conversion Price in effect immediately prior to such subdivision shall
\nbe proportionately reduced, and, conversely, in case the outstanding shares of
\nCommon Stock shall be combined into a smaller number of shares, the Series F
\nConversion Price in effect immediately prior to such combination shall be
\nproportionately increased.<\/p>\n
6G. Reorganization or Reclassification. If any capital reorganization,
\nreclassification, recapitalization, consolidation, merger, sale of all or
\nsubstantially all of the Corporation’s assets or other similar transaction (any
\nsuch transaction being referred to herein as an “Organic Change”) shall be
\neffected in such a way that holders of Common Stock shall be entitled to
\nreceive (either directly or upon subsequent liquidation) stock, securities or
\nassets with respect to or in exchange for Common Stock, then, as a condition of
\nsuch Organic Change, lawful and adequate provisions shall be made whereby each
\nholder of a share or shares of Series F Convertible Preferred Stock shall
\nthereupon have the right to receive, upon the basis and upon the terms and
\nconditions specified herein and in lieu of or in addition to, as the case may
\nbe, the shares of Common Stock immediately theretofore receivable upon the
\nconversion of such share or shares of Series F Convertible Preferred Stock,
\nsuch shares of stock, securities or assets as may be issued or payable with
\nrespect to or in exchange for a number of outstanding shares of such Common
\nStock equal to the number of shares of such Common Stock immediately
\ntheretofore receivable upon such conversion had such Organic Change not taken
\nplace, and in any case of a reorganization or reclassification only appropriate
\nprovisions shall be made with respect to the rights and interests of such
\nholder to the end that the provisions hereof (including without limitation
\nprovisions for adjustments of the Series F Conversion Price) shall thereafter
\nbe applicable, as nearly as may be, in relation to any shares of stock,
\nsecurities or assets thereafter deliverable upon the exercise of such
\nconversion rights.<\/p>\n
6H. Notice of Adjustment. Upon any adjustment of the Series F Conversion
\nPrice, then and in each such case the Corporation shall give written notice
\nthereof, by first class mail, postage prepaid, or by facsimile transmission to
\nnon-U.S. residents, addressed to each holder of shares of Series F Convertible
\nPreferred Stock at the address of such holder as shown on the books of the
\nCorporation, which notice shall state the Series F Conversion Price resulting
\nfrom such adjustment, setting forth in reasonable detail the method upon which
\nsuch calculation is based.<\/p>\n
10
\n 109
\n 6I. Other Notices. In case at any time:<\/p>\n
(1) the Corporation shall declare any dividend upon its Common Stock
\npayable in cash or stock or make any other distribution to the holders of its
\nCommon Stock;<\/p>\n
(2) the Corporation shall offer for subscription pro rata to the holders
\nof its Common Stock any additional shares of stock of any class or other rights;<\/p>\n
(3) there shall be any capital reorganization or reclassification of the
\ncapital stock of the Corporation, or a consolidation or merger of the
\nCorporation with or into, or a sale of all or substantially all of its assets
\nto, another entity or entities; or<\/p>\n
(4) there shall be a voluntary or involuntary dissolution, liquidation or
\nwinding up of the Corporation;<\/p>\n
then, in any one or more of said cases, the Corporation shall give, by first
\nclass mail, postage prepaid, or by facsimile transmission to non-U.S.
\nresidents, addressed to each holder of any shares of Preferred Stock at the
\naddress of such holder as shown on the books of the Corporation, (a) at least
\n20 days’ prior written notice of the date on which the books of the Corporation
\nshall close or a record shall be taken for such dividend, distribution or
\nsubscription rights or for determining rights to vote in respect of any such
\nreorganization, reclassification, consolidation, merger, sale, dissolution,
\nliquidation or winding up and (b) in the case of any such reorganization,
\nreclassification, consolidation, merger, sale, dissolution, liquidation or
\nwinding up, at least 20 days’ prior written notice of the date when the same
\nshall take place. Such notice in accordance with the foregoing clause (a) shall
\nalso specify, in the case of any such dividend, distribution or subscription
\nrights, the date on which the holders of Common Stock shall be entitled thereto
\nand such notice in accordance with the foregoing clause (b) shall also specify
\nthe date on which the holders of Common Stock shall be entitled to exchange
\ntheir Common Stock for securities or other property deliverable upon such
\nreorganization, reclassification, consolidation, merger, sale, dissolution,
\nliquidation or winding up, as the case may be.<\/p>\n
6J. Stock to be Reserved. The Corporation will at all times reserve and
\nkeep available out of its authorized Common Stock, solely for the purpose of
\nissuance upon the conversion of Series F Convertible Preferred Stock as herein
\nprovided, such number of shares of Common Stock as shall then be issuable upon
\nthe conversion of all outstanding shares of Series F Convertible Preferred
\nStock. The Corporation covenants that all shares of Common Stock which shall be
\nso issued shall be duly and validly issued and fully paid and nonassessable and
\nfree from all taxes, liens and charges with respect to the issue thereof, and,
\nwithout limiting the generality of the foregoing, the Corporation covenants
\nthat it will from time to time take all such action as may be requisite to
\nassure that the par value per share of the Common Stock is at all times equal
\nto or less than the Series F Conversion Price in effect at the time. The
\nCorporation will take all such action as may be necessary to assure that all
\nsuch shares of Common Stock may be so issued without violation of any
\napplicable law or regulation, or of any requirement of any national securities
\nexchange upon which the Common Stock may be listed.<\/p>\n
6K. No Reissuance of Series F Convertible Preferred Stock. Shares of
\nSeries F Convertible Preferred Stock which are converted into shares of Common
\nStock as provided<\/p>\n
11
\n 110
\nherein shall not be reissued.<\/p>\n
6L. Issue Tax. The issuance of certificates for shares of Common Stock
\nupon conversion of Series F Convertible Preferred Stock shall be made without
\ncharge to the holders thereof for any issuance tax in respect thereof; provided
\nthat the Corporation shall not be required to pay any tax which may be payable
\nin respect of any transfer involved in the issuance and delivery of any
\ncertificate in a name other than that of the holder of the Series F Convertible
\nPreferred Stock which is being converted.<\/p>\n
6M. Closing of Books. The Corporation will at no time close its transfer
\nbooks against the transfer of any Series F Convertible Preferred Stock or of
\nany shares of Common Stock issued or issuable upon the conversion of any shares
\nof Series F Convertible Preferred Stock in any manner which interferes with the
\ntimely conversion of such Preferred Stock, except as may otherwise be required
\nto comply with applicable securities laws.<\/p>\n
6N. Definition of Common Stock. As used in this paragraph 6, the term
\n“Common Stock” shall mean and include the Corporation’s authorized Common Stock,
\npar value $.01 per share, as constituted on the date of filing of these terms
\nof the Series F Convertible Preferred Stock, and shall also include any capital
\nstock of any class of the Corporation thereafter authorized which shall neither
\nbe limited to a fixed sum or percentage of par value in respect of the rights
\nof the holders thereof to participate in dividends nor entitled to a preference
\nin the distribution of assets upon the voluntary or involuntary liquidation,
\ndissolution or winding up of the Corporation; provided that the shares of
\nCommon Stock receivable upon conversion of shares of Series F Convertible
\nPreferred Stock shall include only shares designated as Common Stock of the
\nCorporation on the date of filing of this instrument, or in case of any
\nreorganization or reclassification of the outstanding shares thereof, the
\nstock, securities or assets provided for in subparagraph 6G.<\/p>\n
6O. Mandatory Conversion. All outstanding shares of Series F Convertible
\nPreferred Stock shall automatically convert to shares of Common Stock if at any
\ntime the Corporation shall effect a public offering of shares of Common Stock
\n(any such offering, regardless of compliance with subsections (i), (ii) and
\n(iii) herein, being referred to as a “Public Offering”), provided (i) the
\naggregate gross proceeds from such offering to the Corporation shall be at least
\n$20,000,000, (ii) the price paid by the public for such shares shall be at
\nleast (x) 2.0 times the then Series B Conversion Price if the Public Offering
\noccurs prior to the 18 month anniversary of the Series B Preferred Stock Issue
\nDate or (y) 3.0 times the then Series B Conversion Price if the Public Offering
\noccurs on or after the 18 month anniversary of the Series B Preferred Stock
\nIssue Date and (iii) the offering is a firm commitment underwritten Public
\nOffering, and such automatic conversion shall be effective upon the closing of
\nthe sale of such shares by the Corporation pursuant to such Public Offering.<\/p>\n
12
\n 111
\n 7. Redemption. The shares of Series F Convertible Preferred Stock shall
\nbe redeemed as follows:<\/p>\n
7A. Optional Redemption. The Corporation shall not have the right to
\ncall or redeem at any time all or any shares of Series F Convertible Preferred
\nStock. With the approval of the holders of 66% of the then outstanding shares of
\nSeries F Convertible Preferred Stock, one or more holders of shares of Series F
\nConvertible Preferred Stock may, by giving notice (the “Notice”) to the
\nCorporation, require the Corporation to redeem any or all of the outstanding
\nSeries F Convertible Preferred Stock on the Redemption Date (as defined below).
\nUpon receipt of the Notice, the Corporation will so notify all other persons
\nholding Series F Preferred Convertible Stock. After receipt of the Notice, the
\nCorporation shall fix the first date for redemption, which shall be the date
\nspecified in the Notice, being any date on or after the earlier of (i) the fifth
\n(5th) anniversary of the Series B Preferred Stock Issue Date and (ii) the date
\nwhich is the day before the Corporation is due to redeem any outstanding Junior
\nSecurities (the “Redemption Date”). All holders of the Series F Convertible
\nPreferred Stock shall deliver to the Corporation during regular business hours,
\nat the office of any transfer agent of the Corporation for the Series F
\nConvertible Preferred Stock, or at the principal office of the Corporation or at
\nsuch other place as may be designated by the Corporation, the certificate or
\ncertificates for the Series F Convertible Preferred Stock, duly endorsed for
\ntransfer to the Corporation (if required by it) on or before the Redemption
\nDate.<\/p>\n
7B. Redemption Price and Payment. The Series F Convertible Preferred
\nStock to be redeemed on the Redemption Date shall be redeemed by paying for each
\nshare in cash an amount equal to the Series F Redemption Price (as defined
\nbelow). For purposes of this paragraph 7B, the “Series F Redemption Price” shall
\nmean $15.22 per share, plus an amount equal to all dividends accrued and unpaid
\non each such share; provided, however, that if the Redemption Date is after the
\nfifth (5th) anniversary of the Series B Preferred Stock Issue Date, then the
\n“Series F Redemption Price” shall mean the greater of (i) $15.22 per share, plus
\nan amount equal to all dividends accrued and unpaid on each such share and (ii)
\nthe Fair Market Value (as defined below) of the Common Stock underlying the
\nSeries F Convertible Preferred Stock. Such payment shall be made in full on the
\nRedemption Date to the holders entitled thereto. For purposes of this paragraph
\n7B, “Fair Market Value” of the Common Stock shall mean the average of the fair
\nmarket valuations of the Common Stock performed by two investment banks (the
\n“Initial Appraisers”), one of which shall be retained by the Corporation and one
\nof which shall be retained by the holders of a majority in interest of the
\nSeries F Convertible Preferred Stock. Subject to the following sentence, such
\ndetermination by the Initial Appraisers of Fair Market Value shall be final and
\nbinding on the parties. If the higher of the two valuations of the Initial
\nAppraisers is equal to or greater than 110% of the lower valuation, the
\nCorporation and holders of a majority in interest of the Series F Convertible
\nPreferred Stock shall select a third investment bank (the “Final Appraiser”),
\nwhich shall be mutually agreeable to the Corporation and the holders of a
\nmajority in interest of the Series F Convertible Preferred Stock. The fair
\nmarket value of the Common Stock as determined by the Final Appraiser shall be
\nfinal and binding on the parties. The fees and expenses of the Initial
\nAppraisers shall be paid for by the party selecting such Initial Appraiser and
\nthe fees and expenses of the Final Appraiser shall be shared by the Corporation
\nand the holders of the Series F Convertible Preferred Stock.<\/p>\n
7C. Redemption Mechanics. At least 15 but not more than 35 days prior
\nto the Redemption Date, written notice (the “Redemption Notice”) shall be given
\nby the <\/p>\n
13<\/p>\n
112
\nCorporation by mail, postage prepaid, or by facsimile transmission to non-U.S.
\nresidents, to each holder of record (at the close of business on the business
\nday next preceding the day on which the Redemption Notice is given) of shares
\nof Series F Convertible Preferred Stock notifying such holder of the redemption
\nand specifying the Series F Redemption Price, the Redemption Date and the place
\nwhere said Series F Redemption Price shall be payable. The Redemption Notice
\nshall be addressed to each holder at his address as shown by the records of the
\nCorporation. From and after the close of business on the Redemption Date,
\nunless there shall have been a default in the payment of the Series F
\nRedemption Price, all rights of holders of shares of Series F Convertible
\nPreferred Stock (except the right to receive the Series F Redemption Price)
\nshall cease with respect to such shares, and such shares shall not thereafter
\nbe transferred on the books of the Corporation or be deemed to be outstanding
\nfor any purpose whatsoever. If the funds of the Corporation legally available
\nfor redemption of shares of Series F Convertible Preferred Stock on the
\nRedemption Date are insufficient to redeem the total number of outstanding
\nshares of Series F Convertible Preferred Stock to be redeemed on such
\nRedemption Date, the holders of shares of Series F Convertible Preferred Stock
\nshall share ratably in any funds legally available for redemption of such
\nshares according to the respective amounts which would be payable with respect
\nto the full number of shares owned by them if all such outstanding shares were
\nredeemed in full. The shares of Series F Convertible Preferred Stock not
\nredeemed shall remain outstanding and entitled to all rights and preferences
\nprovided herein; provided, however, that such unredeemed shares shall be
\nentitled to receive interest accruing daily with respect to the applicable
\nSeries F Redemption Price at the rate of 15% per annum, payable quarterly in
\narrears. At any time thereafter when additional funds of the Corporation are
\nlegally available for the redemption of such shares of Series F Convertible
\nPreferred Stock, such funds will be used, at the end of the next succeeding
\nfiscal quarter, to redeem the balance of such shares, or such portion thereof
\nfor which funds are then legally available, on the basis set forth above.<\/p>\n
7D. Redeemed or Otherwise Acquired Shares to be Retired. Any shares
\nof Series F Convertible Preferred Stock redeemed pursuant to this paragraph 7
\nor otherwise acquired by the Corporation in any manner whatsoever shall be
\ncanceled and shall not under any circumstances be reissued; and the
\nCorporation may from time to time take such appropriate corporate action as may
\nbe necessary to reduce accordingly the number of authorized shares of Series F
\nConvertible Preferred Stock.<\/p>\n
8. Amendments. Except where the vote or written consent of the holders of
\na different number of shares of the Corporation is required by these terms of
\nthe Series F Convertible Preferred Stock, by law or by the Certificate of
\nIncorporation, no provision of these terms of the Series F Convertible
\nPreferred Stock may be amended, modified or waived without the written consent
\nor affirmative vote of the holders of at least 60% of the then outstanding
\nshares of Series F Convertible Preferred Stock.<\/p>\n
9. Definitions. As used herein, the following terms shall have the
\nfollowing meanings:<\/p>\n
(1) The term “Founders” shall mean F. Thomson Leighton, Daniel
\nLewin, Jonathan Seelig, Randall Kaplan, Gilbert Friesen and David Karger.<\/p>\n
(2) The term “Preferred Stock Issue Date” shall mean the date on
\nwhich the Series F Convertible Preferred Stock is originally issued by the
\nCorporation pursuant to the<\/p>\n
14
\n 113
\nPurchase Agreement.<\/p>\n
(3) The term “Purchase Agreement” shall mean the Series F Convertible
\nPreferred Stock Purchase Agreement dated as of September 20, 1999 between the
\nCorporation and Microsoft Corporation, as in effect on September 20, 1999.<\/p>\n
(4) The term the “Plan” shall mean the Corporation’s Second Amended
\nand Restated 1998 Stock Incentive Plan.<\/p>\n
(5) The term “Reserved Employee Shares” shall mean shares of Common
\nStock reserved by the Corporation pursuant to the Plan from time to time for (i)
\nthe sale of shares of Common Stock to employees, consultants or non-employee
\ndirectors (other than representatives of the holders of Preferred Stock) of the
\nCorporation or (ii) the exercise of options to purchase Common Stock to
\nemployees, consultants or non-employee directors (other than representatives of
\nthe holders of Preferred Stock) of the Corporation, not to exceed in the
\naggregate 28,755,600 shares of Common Stock for both clauses (i) and (ii), with
\nsuch number including 4,264,200 shares issued or subject to options granted
\nprior to the date of the initial issuance of the Series A Convertible Preferred
\nStock (the “Option Shares”) (appropriately adjusted to reflect an event
\ndescribed in paragraph 6F hereof); provided that, such number of such shares
\nsubject to the Plan shall be increased by up to 15,118,452 additional shares of
\nCommon Stock (appropriately adjusted to reflect an event described in paragraph
\n6F hereof) (collectively, the “Founders’ Shares”) upon the repurchase of such
\nFounders’ Shares by the Corporation from the Founders pursuant to contractual
\nrights held by the Corporation. The foregoing numbers of Reserved Employee
\nShares may be increased by the affirmative vote or written consent of a majority
\nof the directors designated solely by the holders of Series A Convertible
\nPreferred Stock and Series B Convertible Preferred Stock or the affirmative vote
\nor written consent of the holders of at least 50% of the then outstanding shares
\nof Series A Convertible Preferred Stock, Series B Convertible Preferred Stock,
\nSeries C Convertible Preferred Stock, Series D Convertible Preferred Stock,
\nSeries E Convertible Preferred Stock, Series F Convertible Preferred Stock,
\nvoting together as a single class on a Common Stock equivalent basis.<\/p>\n
(6) The term “Series B Conversion Price” shall mean the conversion
\nprice of the Series B Convertible Preferred Stock from time to time under the
\nterms of the designation of the Series B Convertible Preferred Stock of the
\nCorporation.<\/p>\n
(7) The term “Series B Preferred Stock Issue Date” shall mean
\nApril 16, 1999.<\/p>\n
(8) The term “series B Purchase Agreement” shall mean the Series B
\nConvertible Preferred Stock and Series C Convertible Preferred Stock Purchase
\nAgreement dated as of April 16, 1999 among the Corporation and the purchasers
\nnamed therein.<\/p>\n
(9) The term “Subsidiary” or “Subsidiaries” shall mean any
\ncorporation, partnership, trust or other entity of which the Corporation and\/or
\nany of its other subsidiaries directly or indirectly owns at the time a
\nmajority of the outstanding shares of every class of equity security of such
\ncorporation, partnership, trust or other entity.<\/p>\n
15<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6606],"corporate_contracts_industries":[],"corporate_contracts_types":[9573,9575],"class_list":["post-41585","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-akamai-technologies-inc","corporate_contracts_types-formation","corporate_contracts_types-formation__incorporation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41585"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41585"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41585"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}