Zeev or anyone,could someone give me an opinion on this placement? Conversion details are in section 9..is this floorless? TIA..DD
edgar-online.com
Section 9. CONVERSION.
(a) Except as provided in the next succeeding sentence, each share of
the Convertible Preferred Stock shall be convertible at any time, after the
Requisite NYSE Shareholder Approval is obtained, at the option of the Holder
thereof, into validly issued, fully paid and non-assessable shares of the
Company Common Stock ("Conversion Shares") at the Conversion Price, determined
as hereinafter provided, in effect at the time of conversion. Unless default be
made in the payment in full of the Redemption Price and any accrued and unpaid
dividends, shares of Convertible Preferred Stock called for redemption in
accordance with the terms herein shall cease to be convertible into Conversion
Shares at the close of business on the redemption date. The Conversion Price
shall be initially $5.25 per share. The number of Conversion Shares issuable
upon conversion of a share of Convertible Preferred Stock is determined by
dividing the Liquidation Price (inclusive of any accrued and unpaid dividends)
of a share of Convertible Preferred Stock by the Conversion Price in effect on
the Conversion Date (as hereinafter defined) and rounding the result to the
nearest 1/100th of a share. The Conversion Price shall be subject to adjustment
as provided below. Upon conversion, any accrued and unpaid dividends on the
Convertible Preferred Stock shall be paid to the Holder thereof in accordance
with the provisions of Section 3. If a holder converts more than one share at
the same time, the number of full shares issuable upon the conversion shall be
based upon the total number of shares converted.
(b) In order to convert shares of the Convertible Preferred Stock into
Conversion Shares, the Holder thereof shall surrender at the office of any
transfer agent for the Convertible Preferred Stock (or in the absence of any
transfer agent, the Corporation) the certificate or certificates therefor, duly
endorsed to the Corporation or in blank, and give written notice to the
Corporation at said office that he or she elects to convert such shares. Shares
of the Convertible Preferred Stock shall be deemed to have been converted
immediately prior to the close of business on the date of surrender of such
shares for conversion in accordance with the foregoing provisions (hereinafter
the "Conversion Date"), and the person or persons entitled to receive Conversion
Shares issuable upon such conversion shall be treated for all purposes as the
record holder or holders of such Conversion Shares at such time. As promptly as
practicable after the Conversion Date, the Corporation shall issue and deliver
at said office the certificate or certificates for the number of full Conversion
Shares issuable upon such conversion, together with a cash payment in lieu of
any fraction of a Conversion Share, as hereinafter provided, to the person or
persons entitled to receive the same or to the nominee or nominees of such
person or persons.
(c) The Conversion Price shall be subject to adjustment as follows:
(i) In case the Corporation shall (i) pay a dividend in shares
of any class of its Common Stock to all holders of such class, (ii) make a
distribution in shares of any class of its Common Stock to all holders of such
class, (iii) subdivide any of its outstanding Common Stock into a greater number
of shares, or (iv) combine any of its outstanding Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior thereto shall
be adjusted so that the holder of any shares of Convertible Preferred Stock
thereafter surrendered for conversion shall be entitled to receive that number
of Conversion Shares representing the percentage of all outstanding shares of
Common Stock which the Holder would have owned had such Convertible Preferred
Stock been converted immediately prior to the happening of such event and the
Conversion Price shall be adjusted accordingly. An adjustment made pursuant to
this subsection (i) shall become effective immediately after the record date in
the case of a dividend in shares or distribution and shall become effective
immediately after the effective date in the case of subdivision or combination.
(ii) In case the Corporation shall issue Equity Equivalents to
all or substantially all holders of any class of its Common Stock or to any
other person (other than the Holders) entitling such person or persons to
subscribe for, purchase or otherwise acquire shares of Common Stock (or
securities in any manner representing the right to acquire Common Stock) at a
price per share that is less than the then Current Market Price per share of
Common Stock (as determined in accordance with subsection (v) below) at the
record date for the determination of shareholders entitled to receive such
Equity Equivalents on the date of issuance thereof or, with respect to issuances
to persons other than Holders, on the issue date, as applicable, the Conversion
Price in effect immediately prior thereto shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to such record date or issue date, as applicable, by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on such record date or issue date, as applicable, plus the number of
shares which the aggregate offering price of the total number of shares of
Common Stock so offered, (or the aggregate conversion price of the convertible
securities so offered) would purchase at such Current Market Price (as defined
in subsection (iv) below), and of which the denominator shall be the number of
shares of Common Stock outstanding on such record date or issue date, as
applicable, plus the number of additional shares of Common Stock offered (or
into which the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever any Equity Equivalents are
issued, and shall become effective immediately after such record date or such
sale date, as applicable. If at the end of the period during which such Equity
Equivalents are exercisable not all such Equity Equivalents shall have been
exercised, the adjusted Conversion Price shall be readjusted to what it would
have been based upon the number of additional shares of Common Stock actually
issued (or the number of shares of Common Stock issuable upon conversion of
convertible securities actually issued).
(iii) In case the Corporation shall distribute to all or
substantially all holders of any class of Common Stock any shares of capital
stock of the Corporation (other than Common Stock), evidences of indebtedness or
other non-cash assets (including securities of any company other than the
Corporation), or shall distribute to all or substantially all holders of any
class of Common Stock rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in subsection (ii) above), then in each
such case the Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date of such distribution by a fraction of which the numerator
shall be the Current Market Price per share (as defined in subsection (iv)
below) of the Conversion Shares on the record date mentioned below less the fair
market value on such record date (as reasonably determined by the Board of
Directors, whose determination shall be conclusive evidence of such fair market
value) of the portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants applicable to one
share of Common Stock (determined on the basis of the number of shares of Common
Stock outstanding on the record date), and of which the denominator shall be the
Current Market Price per share (as defined in subsection (iv) below) of the
Conversion Shares on such record date. Such adjustment shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
Notwithstanding the foregoing, in the event that the
Corporation shall distribute rights or warrants (other than those referred to in
subsection (ii) above) ("Rights") pro rata to holders of any class of Common
Stock, the Corporation may, at its option, in lieu of making any adjustment
pursuant to this Section 9, make proper provision so that each holder of
Convertible Preferred Stock who converts such stock (or any portion thereof)
after the record date for such distribution and prior to the expiration or
redemption of the Rights shall be entitled to receive upon such conversion, in
addition to the shares of Conversion Stock issuable upon such conversion, a
number of Rights to be determined as follows: (i) if such conversion occurs on
or prior to the date for the distribution to the holders of Rights of separate
certificates evidencing such Rights (the "Distribution Date"), the same number
of Rights to which a holder of a number of shares of Common Stock equal to the
number of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights and
(ii) if such conversion occurs after the Distribution Date, the same number of
Rights to which a holder of the number of shares of Common Stock into which the
principal amount of the security so converted was convertible immediately prior
to the Distribution Date would have been entitled on the Distribution Date in
accordance with the terms and provisions of and applicable to the Rights.
(iv) For the purpose of any computation under subsections (ii)
and (iii) of this Section 9(c), the current market price (the "Current Market
Price") per Conversion Share on any date shall be deemed to be equal to the
average of the daily closing prices of the Common Stock on the NYSE or, if not
then listed or traded on the NYSE, such other exchange, market or system that
the Common Stock is then listed or traded on for the 10 trading days immediately
prior to the record date or date of issuance with respect to distributions,
issuances or other events requiring such computation under subsection (ii) or
(iii) above; provided that in the case of an underwritten public offering of
Equity Equivalents which are currently traded, the Current Market Price shall be
the closing price of the Common Stock on the issuance date, less an allowance
for a customary discount to the current market trading price which is reasonably
required to effect such offering. The closing price for each day shall be the
closing price on the NYSE or the last reported sales price or, if the Conversion
Shares are not listed or admitted to trading on the NYSE, on the principal
national securities exchange on which the Conversion Shares are listed or
admitted to trading or, if not listed or admitted to trading on any national
securities exchange, the closing sales price of the Conversion Shares as quoted
by NASDAQ or, in case no reported sale takes place, the average of the closing
bid and asked prices as quoted by NASDAQ or any comparable system or, if the
Conversion Shares are not quoted on NASDAQ or any comparable system, the closing
sales price or, in case no reported sale takes place, the average of the closing
bid and asked prices, as furnished by any two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Corporation for that purpose. If no such prices are available, the Current
Market Price per share shall be the fair value of a Conversion Share as
reasonably determined by the Board of Directors.
(v) In any case in which this Section 9 shall require that an
adjustment be made following a record date the Corporation may elect to defer
(but only until five Business Days following the mailing by the Corporation to
the holders of the notice of adjustment described in subsection (ix) below)
issuing to the Holder of any Convertible Preferred Stock converted after such
record date the Conversion Shares and other capital stock of the Corporation
issuable upon such conversion over and above the Conversion Shares and other
capital stock of the Corporation issuable upon such conversion only on the basis
of the Conversion Price prior to adjustment; and, in lieu of the shares the
issuance of which is so deferred, the Corporation shall issue or cause its
transfer agents to issue due bills or other appropriate evidence prepared by the
Corporation of the right to receive such shares. If any distribution in respect
of which an adjustment to the Conversion Price is required to be made as of the
record date therefor is not thereafter made or paid by the Corporation for any
reason, the Conversion Price shall be readjusted to the Conversion Price which
would then be in effect if such record date had not been fixed or such effective
date had not occurred.
(vi) NO ADJUSTMENT. No adjustment in the Conversion Price
shall be required unless the adjustment would require an increase or decrease of
at least 1% in the Conversion Price as last adjusted; provided, however, that
any adjustments which by reason of this subsection (vi) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 9 shall be made to the nearest
cent or to the nearest one-hundredth of a share, as the case may be.
No adjustment need be made for a transaction referred to in
paragraph (c)(i), (ii) or (iii) above if all Holders of Convertible Preferred
Stock are entitled to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction. The Corporation shall give 30 days prior notice to any transfer
agent and to the Holders of the Convertible Preferred Stock of any such
determination.
No adjustment need be made for (a) issuances of Common Stock
pursuant to a Corporation plan for reinvestment of dividends or interest, (b) a
change in the par value or a change to no par value of the Common Stock and (c)
the issuance of Common Stock to directors, officers and employees of the
Corporation and its subsidiaries pursuant to any stock-based incentive plan duly
approved by the Board of Directors or any duly authorized committee or delegee
thereof.
To the extent that the Convertible Preferred Stock becomes
convertible into the right to receive cash, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
(vii) ADJUSTMENT FOR TAX PURPOSES. The Corporation shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by other provisions of this Section 9, as it in its discretion shall
determine to be advisable in order that any stock dividends, subdivisions of
shares, distributions of rights to purchase stock or securities or distributions
of securities convertible into or exchangeable for stock hereafter made by the
Corporation to its shareholders shall not be taxable.
(viii) NOTICE OF ADJUSTMENT. Whenever the Conversion Price is
adjusted, the Corporation shall promptly mail to holders of the Convertible
Preferred Stock and to the transfer agent a notice of the adjustment briefly
stating the facts requiring the adjustment and the manner of computing it. The
certificate shall be conclusive evidence of the correctness of such adjustment. |
