Dividends on Preferred Stock Clause Samples

Dividends on Preferred Stock. Dividends on Preferred Stock includes the allocation of the proceeds received to the warrants issued and beneficial conversion features of our Preferred Stock issued during the respective periods. During 2001, $12.8 million was recorded with the issuance of our Series A Preferred Stock, $1.5 million for the Series B Preferred Stock and $1.9 million for the Series C Preferred Stock. During 2002, $3.2 million was recorded with the issuance of $4.0 million of our Series C Preferred Stock and $6.4 million was recorded with the issuance of our Series D Convertible Preferred Stock. Additionally, stated dividends were accrued from each date of issuance through conversion on the Series A and Series B Preferred Stock. Dividends accrued on the Series A Preferred Stock were paid in-kind with common shares at the time of conversion during 2001. Dividends were accrued on the Series B Preferred stock through conversion on September 30, 2002. The Series C Preferred Stock did not provide for stated dividends. The Series D Convertible Preferred Stock accrues dividends at 8% per annum and increases to 12% on January 1, 2004. COMPARISON OF 2001 TO 2000 Revenues. Our revenues are comprised of revenues for subscriptions to our services, implementation revenues and certain revenues for Web-hosting services. We are no longer providing Web-Hosting services. The following table sets forth for the periods indicated the components of revenue included in our consolidated statements of operations:

Dividends on Preferred Stock. Dividends on Preferred Stock includes the allocation of the proceeds received to the warrants issued and beneficial conversion features of the Series A Preferred Stock of $12.8 million, $1.5 million for the Series B Preferred Stock and $1.9 million for the Series C Preferred Stock. Additionally, dividends of $0.4 million were accrued from each date of issuance through conversion or December 31, 2001. Dividends accrued on the Series A and Series B Preferred Stock were paid in-kind with common shares at the time of conversion during 2001. The Series C Preferred Stock does not provide for stated dividends. We will continue to accrue dividends through the date that that the Series B Preferred Stock is converted into common stock. LIQUIDITY AND CAPITAL RESOURCES Our principal potential sources of liquidity are cash on hand, cash generated from operations and cash provided from financing activities. As of December 31, 2002, we had cash, cash equivalents and short-term investments of $0.6 million. During 2002, we used $9.4 million in operating activities reflecting a net loss of $8.1 million. Cash used in operating activities also reflects: a) $1.8 million of depreciation and amortization; b) $0.7 million of non-cash stock compensation; c) $1.6 million for the non-cash extraordinary gain on extinguishment of debt; d) $0.4 million for the non-cash termination of lease obligation; and e) $1.8 million in cash used in other working capital changes. During 2001, we used $18.3 million in operating activities, comprised principally of a net loss of $24.5 million. Cash used in operating activities also reflects $2.2 million for non-cash stock compensation and interest expense for the conversion feature of the Hewlett-Packard note, $2.1 million of depreciation and amortization, $2.9 million in non-cash extraordinary expense for warrants issued to Hewlett-Packard in connection with the modification of the existing convertible note in April 2000, $2.3 million of non-cash extraordinary gain related to the extinguishment of the convertible note with Hewlett-Packard in November 2001 and a $1.3 million increase in cash provided by other working capital changes. During 2000, we used $26.8 million in operating activities, comprised principally of a net loss of $39.1 million. Cash used in operating activities also reflects $7.2 million for non-cash stock compensation and interest expense for the conversion feature of the Hewlett-Packard note, $2.1 million of depreciation and amort...

Dividends on Preferred Stock. Each individual Principal Shareholder covenants and agrees that he will at no time accept or elect to receive a cash dividend on shares of preferred stock of the Parent held by him on or after the date of this Agreement.

Dividends on Preferred Stock. The method of declaring and paying dividends on the Preferred Stock shall be as set forth in Section 2 of the Certificate of Designations.

Dividends on Preferred Stock. Perry shall make, to the maximum extent permitted thereunder, all dividend payments on the Series B Preferred Stock or the Series C Preferred Stock, as the case may be, through the issuance of additional Series D Preferred Stock rather than in cash.

Dividends on Preferred Stock. (i) Notwithstanding that the Preferred Stock Amendments shall not yet have been approved by the holders of Common Stock at the Shareholder Meeting, ▇▇▇▇▇▇▇ agrees that dividends shall accrue and be paid on the Series D Preferred Stock and the Series E Preferred Stock at the reduced rate of 4% (rather than 10%) per annum from the Effective Time through the date of the Amendment Filings (the “Provisional Dividend Period”), and, except as expressly provided in Section 2(e)(iii) below, ▇▇▇▇▇▇▇ hereby waives all right to receive a full 10% dividend on the Series D Preferred Stock and the Series E Preferred Stock during the Provisional Dividend Period. (ii) If the Preferred Stock Amendments are approved at the Shareholder Meeting by the necessary vote of the holders of Common Stock, then no additional dividends shall accrue or be paid on the Series D Preferred Stock or the Series E Preferred Stock with respect to the Provisional Dividend Period. (iii) If the Preferred Stock Amendments are not approved at the Shareholder Meeting by the necessary vote of the holders of Common Stock, then the rate at which dividends shall accrue and be paid on the Series D Preferred Stock and the Series E Preferred Stock shall immediately revert to the previous rate of 10% per annum. In such case, the Company shall, within sixty days after the date of the Shareholder Meeting, pay to ▇▇▇▇▇▇▇, in a lump sum, a supplemental dividend on the Series D Preferred Stock and the Series E Preferred Stock at the rate of 6% per annum for the number of days in the Provisional Dividend Period.

Dividends on Preferred Stock. 16 7.8. Return of Certain Initial Sylvan Shares.......................... 17 7.9. Excess Value of Sylvan Shares.................................... 17 7.10. Observer Rights................................................. 17 8. Affirmative Covenants of the Investor................................... 17

Dividends on Preferred Stock. The Company covenants and agrees ---------------------------- that, during each Accrual Year commencing on or after November 7, 1998, the Company will, if funds are legally available therefor, declare and pay to each holder of Preferred Stock the annual dividend accrued during such Accrual Year and described in Section 1.1 of Paragraph 2 of Article Five of the Articles of Incorporation of the Company, as in effect from time to time; provided, however, -------- ------- that the Company shall have no obligation to declare and pay any annual dividend accrued during any such Accrual Year and described in Section 1.1(a) of Paragraph 2 of Article Five if: (i) after giving effect to the payment of such dividend, the Company's aggregate amount of available cash and available borrowing capacity under revolving loans contained in the Senior Credit Facilities is less than $10,000,000; or (ii) on November 6 during any year specified in the table below, Consolidated EBITDA (as defined in the applicable Senior Credit Facility) of the Company for the period of four fiscal quarters of the Company most recently ended is less than the product of (A) the Consolidated EBITDA of the Company required by any Senior Credit Facility for such period of four fiscal quarters multiplied by (B) the percentage specified opposite such year in such ---------- -- table:

Dividends on Preferred Stock. Permit any certificate of designation of the Company with respect to Disqualified Stock to provide that dividends shall be paid or accrued unless such dividends are otherwise permitted to be paid or accrued pursuant to this Agreement.