CERTIFICATE OF AMENDMENT AND RESTATEMENT OF
ARTICLES OF INCORPORATION
OF
BOATRACS, INC.
Jon Gilbert and John O'Bryant hereby certify that:
1. They are the President and Secretary, respectively, of Boatracs,
Inc., a California corporation.
2. The Articles of Incorporation of this corporation, as amended to
the date of the filing of this certificate, including amendments set forth
herein but not separately filed (and including the omissions required by 910
of the Corporation Code) are amended and
restated as in Exhibit A attached hereto.
3. The foregoing amendment and restatement of Articles of
Incorporation has been duly approved by the board of directors of the
corporation.
4. The foregoing amendment and restatement of Articles of
Incorporation has been duly approved by the required vote of shareholders of
the corporation in accordance with Section 902, California orporations Code.
The total number of outstanding shares of the corporation is 18,852,508 of
common stock and 300 shares of Series A Preferred Stock. The number of shares
voting in favor of the amendment equaled or exceeded the vote required. The
percentage vote required was more than 50% of the common stock. o preferred
stock was outstanding as of the date of the vote.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this Certificate are true and
correct of our own knowledge.
Dated: July 15, 1999
Jon Gilbert, President
John O'Bryant, Secretary
Exhibit A
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
ADVANCED REMOTE COMMUNICATIONS SOLUTIONS, INC.
ARTICLE I
The name of this corporation is Advanced Remote Communications Solutions, Inc.
ARTICLE II
The purpose of this corporation is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of
California other than the banking business, the trust company business, or the
practice of a profession permitted to be incorporated by the
California Corporations Code.
ARTICLE III
This corporation is authorized to issue two classes of shares, to be designated
common and preferred. The corporation is authorized to issue 100,000,000 shares
of common stock and 1,000,000 shares of preferred stock.
ARTICLE IV
The preferred shares may be issued in any number of series, as determined by the
board of directors. The board may by resolution fix the designation and number
of shares of any such series. The board may determine, alter,or revoke the
rights, preferences, privileges, and restrictions pertaining to any wholly
unissued class or series of shares. The board may thereafter in the same manner
increase or decrease the number of shares of any such series (but not below the
number of shares of that series then outstanding).
A. The first series of Preferred Stock of this Corporation shall
be designated and known as a"Series A Preferred Stock", and the total number of
shares of such series is Three Hundred (300).
B. The powers, rights, preferences, restrictions, and other
matters relating to the Series A Preferred Stock are as follows:
1. Dividends.
(a) Priority of Dividends. No dividends shall be
declared or set aside for Corporation's common stock ("Common Stock", such
Common Stock and other junior capital stock being collectively referred to as
"Junior Stock"), unless at the same time or prior thereto all accrued and
unpaid dividends on the Series A Preferred Stock shall be declared, set aside
and paid on all the then outstanding shares of Series A Preferred Stock.
(b) Dividend Rate; Dividend Payment Dates. The holder of
the Series A Preferred Stock shall be entitled to receive when, as and if
declared by the Board of Directors ("Board"), out of funds legally available
therefor, cumulative cash dividends, in preference and priority to dividends on
any Junior Stock, that shall accrue on the Liquidation Price (as defined in
Section 2(a)) of each share of the Series A Preferred Stock at the rate per
annum of Nine Hundred Dollars ($900) per share from and including the date on
which the shares of Series A Preferred Stock were first issued ("Original Issue
Date") to and including the date on which the Liquidation Price or Redemption
Price of such share is paid in full to the holders of such shares pursuant to
Section 2 or 5, respectively. The accrued dividends will be adjusted for stock
splits, stock dividends,recapitalizations, reclassifications, reorganizations
and similar events (together referred to as "Recapitalization Events") which
affect the number of outstanding shares of the Series A Preferred Stock.
Accrued dividends on the Series A Preferred Stock shall be payable out of
funds legally available therefor commencing on January 1, 2000 and thereafter
semi-annually on July 1 and January 1 of each year (each a "Dividend
Payment Date"), to the holder of record of the Series A Preferred Stock as
of the close of business on the applicable record date. Dividends shall be
fully cumulative and shall accrue on a daily basis based on a 365-day
or 366-day year, as the case may be, without regard to the occurrence of a
Dividend Payment Date and whether or not such dividends have been declared and
whether or not there are any unrestricted funds of the Corporation
legally available for the payment of dividends. The amount of dividends
"accrued" with respect to any share of Series A Preferred Stock as of the first
Dividend Payment Date after the Original Issue Date, or as of any other
date after the Original Issue Date that is not a Dividend Payment Date, shall be
calculated on the basis of the actual number of days elapsed from and including
the Original Issue Date, in the case of the first Dividend Payment Date and any
date of determination prior to the first Dividend Payment,
or from and including the last preceding Dividend Payment Date, in the case of
any other date of determination, to and including such date of determination
which is to be made, in each case based on a year of 365 or 366 days, as the
case may be (the "Dividend Period"). Whenever the Board declares any dividend
pursuant to this Section 1, notice of the applicable record date and related
Dividend Payment Date shall be given in accordance with Section 4(n).
(c) Compounding of Dividends; Addition to Conversion Value and to
Liquidation Price. On each Dividend Payment Date, all dividends that have
accrued on each share of Series A Preferred Stock during the immediately
preceding Dividend Period shall, to the extent not paid on such Dividend Payment
Date for any reason (whether or not such unpaid dividends have been earned or
declared or there are any unrestricted funds of the Corporation legally
available for the payment of dividends), be added to the Conversion Value (as
defined in Section 4(b)) of such share effective as of such Dividend Payment
Date and shall remain a part thereof. All dividends that have accrued on each
share of Series A Preferred Stock during any Dividend Period shall, to the
extent not paid in full on the first Dividend Payment Date after the end of such
Dividend Period for any reason (whether or not such unpaid dividends have been
earned or declared or there are any unrestricted funds of the Corporation
legally available for the payment of dividends), be added to the Liquidation
Price of such share effective as of the first Dividend Payment Date after the
last day of such Dividend Period and shall remain a part thereof to and
including the date on which the Liquidation Price or Redemption Price of such
share is paid in full to the holder of such share pursuant to Sections 2 or 5,
respectively. No accrued dividends (or dividends accrued thereon) which have
been added to the Liquidation Price or Conversion Value of any Series A
Preferred Stock may be subsequently declared or, except in accordance with
Section 2 or 5, paid by the Corporation without the consent of the holders of a
majority of the shares of Series A Preferred Stock.
(d) Pro Rata Declaration and Payment of Dividends.
All dividends paid with respect to shares of the Series A Preferred Stock
pursuant to this Section 1 shall be declared and paid pro rata to all the
holders of the shares of Series A Preferred Stock outstanding as of the
applicable record date.
2. Liquidation, Dissolution or Winding Up.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, or the sale of
substantially all of its assets (each such event, a "Liquidation"),
except as provided in Section 2(b) below, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders
before payment to the holders of Junior Stock by reason of their ownership
thereof, an amount equal to (i) Ten Thousand Dollars ($10,000) per share
(subject to appropriate adjustment for any Recapitalization Events), plus
(ii) an amount equal to all dividends accrued on such share of Series A
Preferred Stock since the Original Issue Date thereof but not yet paid
(including those which, pursuant to Section 1(c),have been added to and remain
part of the Liquidation Price as of such time of determination), whether or not
such unpaid dividends have been earned or declared or there are any unrestricted
funds of the Corporation legally available for the payment of
dividends (the "Liquidation Price").
(b) After the payment of all preferential amounts
required to be paid to the holders of Series A Preferred Stock, upon the
Liquidation of the Corporation, the holders of shares of Junior Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders.
3. Voting Rights.
(a) Holders of shares of Series A Preferred Stock
shall be entitled to the number of votes equal to the number of votes to which
the number of whole shares of Common Stock into which the shares of Series
A Preferred Stock held by such holder are convertible (as adjusted from time
to time pursuant to Section 4 hereof), at each meeting of the stockholders of
the Corporation (and for purposes of written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Corporation for their action or consideration.
(b) The Corporation shall not amend, alter or repeal
the preferences, special rights or other powers of the Series A Preferred Stock
so as to affect adversely the Series A Preferred Stock, without the
written consent or affirmative vote of the holders of a majority of the then
outstanding shares of Series A Preferred Stock, given in writing or by vote at a
meeting, consenting or voting (as the case may be) separately
as a class. For this purpose, without limiting the generality of the
foregoing, the authorization or issuance of any Preferred Stock having a
preference or priority over the Series A referred Stock as to the right to
receive dividends or amounts distributable upon Liquidation of the Corporation
shall be deemed to affect adversely the Series A Preferred Stock. In addition,
the holders of the Series A Preferred Stock shall have the right to vote
on all matters requiring their vote or approval under, and in the manner set
orth in, the California General Corporation Law. Except as otherwise required
by the California General Corporation Law, any class vote pursuant
to this Section 3 shall be determined by the holders of a majority of the
Series A Preferred Stock as of the applicable record date.
(c) In addition to the matters described in Section 3(b)
above, the Corporation shall not,without the written consent or affirmative vote
of the holders of a majority of the then outstanding shares of
the Series A Preferred Stock given in writing or by vote at a meeting,
consenting or voting (as the case may be) as a separate class:
(i) purchase, sell or issue any preferred
stock ranking senior to or pari passu with the Series A Preferred (including any
increase or decrease (other than by Conversion) to the authorized
shares of Series A Preferred); or
(ii) pay dividends or make other distributions
to holders of the Corporation's Junior Stock, or repurchase or redeem any such
shares of Junior Stock, except that dividend payments to holders
of Junior Stock may be paid if (A) funds are legally available therefor and (B)
all accrued cash dividends on Series A Preferred Stock have been paid in full.
4. Conversion at the Option of a Holder. The holders of the
Series A Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred
Stock shall be convertible, at the option of the holder thereof, at any time and
from time to time, into such number of fully paid and nonassessable
shares of Common Stock as is determined by dividing (i) the Conversion Value
(as defined below) of such share determined as of such time by (ii) the
Conversion Price (as defined below) determined as of such time. In the
event of a notice of redemption of any shares of Series A Preferred Stock
pursuant to Section 5 hereof, the Conversion Rights of the shares designated for
redemption shall terminate at the close of business on the last
full day preceding the date fixed for redemption, unless the Redemption Price
is not paid in full when due, in which case the Conversion Rights for such
shares shall continue until the Redemption Price is paid in full. In
the event of a Liquidation of the Corporation, the Conversion Rights shall
terminate at the close of business on the last full day preceding the date fixed
for the payment of any amounts distributable on Liquidation to the
holders of Series A Preferred Stock.
(b) Conversion. The "Conversion Value" measured per
share of the Series A Preferred Stock
shall be:
(i) as of any time before the first Dividend
Payment Date, the sum of (A) Ten Thousand Dollars ($10,000) (subject to
appropriate adjustment in the event of any Recapitalization Events) plus
(B) an amount equal to all dividends accrued on such share of Series A Preferre
Stock since the Original Issue Date through and including such time, whether or
not such unpaid dividends have been earned or declared or there
are any unrestricted funds of the Corporation legally available for the payment
of dividends.
(ii) as of any time on or after the first
Dividend Payment Date, the sum of (a) Ten Thousand Dollars ($10,000) (subject to
appropriate adjustment in the event of any Recapitalization Events) plus
(B) an amount equal to all dividends accrued on such share of Series A Preferred
Stock since the Original Issue Date but not yet paid (including those which,
pursuant to Section 1(c), have been added to and remain part of the
Conversion Value at such time), whether or not such unpaid dividends have been
earned or declared or there are any unrestricted funds of the Corporation
legally available for the payment of dividends.
(c) Conversion Price. The conversion price at which a
share of Common Stock shall be deliverable upon conversion of Series A Preferred
Stock without the payment of additional consideration by the
holder thereof shall initially be Four Dollars ($4.00) (the "Conversion Price").
Such initial Conversion Price, and the rate at which shares of Series A
Preferred Stock may be converted into share of Common Stock, shall be
subject to adjustment as provided in this Section 4.
(d) Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the Series A Preferred Stock. In lieu
of any fractional shares to which the holder would otherwise
be entitled, the Corporation shall pay cash equal to such fraction multiplied
by the then effective Conversion Price.
(e) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred
Stock to convert shares of Series A Preferred Stock into shares of Common Stock
such holder shall surrender the certificate or certificates for
such shares of Series A Preferred Stock, at the principal office of the Company
or the office of the transfer agent for the Series A Preferred Stock, together
with written notice that such holder elects to convert all or
any number of the shares of Series A Preferred Stock represented by such
certificate or certificates. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or his or its attorney duly
authorized in writing. The date of receipt of such certificates
and notice by the Company or its transfer agent shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Series A
referred Stock a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled, together with cash in lieu of any
fraction of a share. As of the Conversion Date, the person entitled to receive
certificates of Common Stock shall be regarded for all corporate purposes as
the holder of the number of shares of Common Stock to which he or it is
entitled upon the conversion.
(ii) The Corporation shall at all times when the
Series A Preferred Stock shall be outstanding, reserve and keep available out of
its authorized but unissued stock, for the purpose of effecting
the conversion of the Series A Preferred Stock, such number of its duly
authorized shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding Series A Preferred Stock.
(iii) All shares of Series A Preferred Stock
which shall have been surrendered for conversion as herein provided shall no
longer be deemed to be outstanding and all rights with respect to such
shares, shall immediately cease and terminate on the Conversion Date, except
only the right of the holders thereof to receive shares of Common Stock in
exchange therefor, which shares of Common Stock shall be deemed to
be outstanding as of the Conversion Date. Any shares of Series A Preferred
Stock so converted shall be not be reissued as Series A Preferred Stock.
(f) Adjustment for Stock Splits and Combinations.
If the Corporation shall at any time or from time to time after the Original
Issue Date for the Series A Preferred Stock effect a subdivision of the
outstanding Common Stock, the Conversion Price then in effect immediately
before that subdivision shall be proportionately decreased. If the Corporation
shall at any time or from time to time after the Original Issue
Date for the Series A Preferred Stock combine the outstanding shares of Common
Stock, the Conversion Price then in effect immediately before the combination
shall be proportionately increased Any adjustment under this
paragraph shall become effective at the close of business on the date the
subdivision or combination becomes effective.
(g) Adjustment for Certain Dividends and Distributions.
In the event the Corporation at any time, or from time after the Original Issue
Date for the Series A Preferred Stock, shall make or issue, or
fix a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Conversion Price for
the Series A Preferred Stock then in effect shall be decreased as of the time
of such issuance or, in the event such a record date shall have been fixed, as
of the close of business on such record date, by multiplying the
Conversion Price for the Series A Preferred Stock then in effect by a fraction:
(i) the numerator of which shall be the total
number of shares of Common Stock issued and outstanding immediately prior to
the time of such issuance or the close of business on such record
date, and
(ii) the denominator of which shall be the total
number of shares of Common Stock issued and outstanding immediately prior to
the time of such issuance or the close of business on such record
dividend or distribution; provided,however, if such record date shall have been
fixed and such dividend is not fully paid or if such distribution is
not fully made on the date fixed therefor, the Conversion Price for the Series
A Preferred Stock shall be recomputed accordingly as of the close of business
on such record date and thereafter the Conversion Price for
the Series A Preferred Stock shall be adjusted pursuant to this paragraph as
of the time of actual payment of such dividends or distributions.
(h) Adjustments for Other Dividends and Distributions.
In the event the Corporation at any time or from time to time after the Origina
Issue Date for the Series A Preferred Stock shall make or issue,
or fix a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock, then and in each such
event provision shall be made so that the holders of the Series A Preferred
Stock shall receive upon conversion thereupon, the amount of securities of the
Corporation that they would have received had their Series A Preferred Stock
been converted into Common Stock on the date of such event and had thereafter,
during the period from the date of such event to and including the
conversion date, retained such securities receivable by them as aforesaid
during such period giving application to all adjustments called for during such
period, under this paragraph with respect to the rights of the holders
of the Series A Preferred Stock.
(i) Adjustment for Reclassification, Exchange, or
Substitution. If the Common Stock issuable upon the conversion of the Series A
Preferred Stock shall be changed into the same or a different number
of shares of any class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of
shares of stock dividend provided for above, or a reorganization,
merger, consolidation, or sale of assets provided for below), then and in each
such event the holder of each such share of Series A Preferred Stock shall have
the right thereafter to convert such share into the kind and amount
of shares of stock and other securities and property receivable upon such
reorganization, reclassification, or other change, by holders of the number of
shares of Common Stock into which such shares of Series A Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as provided
herein.
(j) Adjustment for Merger or Reorganization. In case
f any consolidation or merger of the Corporation with or into another
corporation, each share of Series A referred Stock shall thereafter be
convertible into the kind and amount of shares of stock or other securities
or property to which a holder of the number of shares of Common Stock of the
Corporation deliverable upon conversion of such Series A Preferred Stock
would have been entitled upon such consolidation or merger; and, in such case,
appropriate adjustment (as determined in good faith by the Board of Directors)
shall be made in the application of the provisions in this
Section 4 set forth with respect to the rights and interest thereafter of the
holders of the Series A Preferred Stock, to the end that the provisions set
forth in this Section 4 (including provisions with respect to changes in and
other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of stock
or other property thereafter deliverable upon the conversion of the Series A
Preferred Stock.
(k) In the event this Corporation at any time after the
date on which the Series A Preferred Stock is first issued, shall issue
Additional Shares of Common Stock (as defined herein) without
consideration or for a consideration per share less than the Conversion Price
of the Series A Preferred in effect on the date of and immediately prior to such
issue, then and in such event, the Conversion Price of the Series A
Preferred Stock shall be reduced, concurrently with such issue, to a price
determined by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of shares of Common Stock which
the aggregate consideration received by this Corporation for the total number
of Additional Shares of Common Stock so issued would purchase
at such Conversion Price in effect immediately prior to such issuance, and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of such Additional
Shares of Common Stock determined immediately after such issue or sale of
Additional Shares. For the purpose of the above calculation, the number of
shares of Common Stock outstanding immediately prior to such issue shall be
calculated on a fully diluted basis, as if all shares of Series A Preferred
tock had been fully converted into shares of Common Stock immediately prior to
such issuance and any outstanding warrants, options or other rights
for the purchase of shares of stock or convertible securities had been fully
exercised immediately prior to such issuance (and the resulting securities full
converted into shares of Common Stock, if so convertible) as of such
date. For purposes of this Section 4(k), "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued by this Corporation after the date
hereof, other than shares of Common Stock issued or issuable (i)
upon conversion of shares of Series A Preferred Stock, (ii) to officers,
directors or employees of, or consultants to, this Corporation pursuant to stock
option or stock purchase plans or agreements on terms approved
by the Board of Directors (iii) to joint venture partners, acquisition targets,
outside developers and equipment lessors of this Corporation, or (iv) upon
exercise of warrants issued pursuant to Article 5 hereof; provided,
however, that the number of shares of Common Stock issued pursuant to clauses
(ii) and (iii) above shall not exceed, in the aggregate 20% of the number of
shares of Common Stock outstanding,on the date hereof (net of any
repurchases of such shares or cancellations or expirations of options), subject
to adjustment for all subdivisions and combinations.
(l) No Impairment. The Corporation will not, by
amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred Stock against
impairment.
(m) Certificate as to Adjustments. Upon the occurrence
of each adjustment or readjustment of the Conversion Price pursuant to this
Section 4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of Series A Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred Stock, furnish or cause
to be furnished to such holder a similar certificate setting forth
(i) such adjustments and readjustments; (ii) the Conversion Price then in
effect; and (iii) the number of shares of Common Stock and the amount, if any,
of other property which then would be received upon the conversion of
Series A Preferred Stock.
(n) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend
(or any other distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation;
(ii) that the Corporation subdivides or combines
its outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock
of the Corporation (other than a subdivision or combination of its outstanding
shares of Common Stock or a stock dividend or stock distribution
thereon), or of any consolidation or merger of the Corporation into or with
another corporation; or
(iv) of the Liquidation of the Corporation;
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Series A Preferred Stock, and shall cause
to be mailed to the holders of the Series A Preferred Stock at
their last addresses as shown on the records of the Corporation or such transfer
agent, at least ten (10) days prior to the record date specified in (A) below
or twenty (20) days before the date specified in (B) below, a
notice stating:
(A) the record date of such dividend,
distribution, subdivision or combination, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, subdivision or combination are to
be determined, or
(B) the date on which such
reclassification, consolidation, merger, or
Liquidation is expected to become effective, and the date as of which it
is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable
upon such reclassification, consolidation, merger, or Liquidation.
5. Optional Redemption of Series A Preferred Stock.
(a) At any time, the Company may redeem the Series A
Preferred Stock out of funds legally vailable therefor, in whole, or from time
to time in part and shall be in an amount with respect to each share
of Series A Preferred Stock equal to (i) Ten Thousand Dollars ($10,000)
per share (subject to appropriate adjustment in the event of any
Recapitalization Events), plus (ii) an amountequal to all dividends accrued on
such share of Series A Preferred Stock since the Original Issue Date thereof
but not yet paid (including those which, pursuant to Section 1(c), have been
added to and remain part of the Liquidation Price as of such time of
determination), whether or not such unpaid dividends have been earned or
declared or there are any unrestricted funds of the Corporation legally
available for the payment of dividends (the "Redemption Price"). If only a part
of the Series A Preferred Stock is to be redeemed, the redemption shall
be carried out pro rata according to the number of shares of Series A Preferred
Stock held by each holder subject to the redemption. In the event of a
redemption occurring within one (1) year from the Original Issue Date,
the Redemption Price shall also include "Warrants") as follows:
1. The term of the Warrants shall be two (2) years
commencing on the date fixed for redemption and shall be exercisable in whole
or in part at any time during the term;
2. The number of shares of Common Stock
purchasable upon the exercise of the Warrants shall be calculated by multiplyin
the number of shares so redeemed times fifty (50);
3. The purchase price for each share of Common
Stock issuable upon the exercise of the Warrants shall equal a sum determined by
averaging the closing selling price of one share of Common Stock over the thirty
(30) calendar days preceding the date fixed for redemption (aa) in the over-the-
counter market, as such price is reported by the National Association of
Securities Dealers through its NASDAQ system or any successor system, or (bb)
if the Common Stock is at the time listed or admitted to trading on any stock
exchange, then as such price is officially quoted in the composite tape
of transactions on such exchange; and
4. The Warrants shall otherwise be in the form
of, and contain the provisions set forth in, attached Annex A.
(b) The Corporation shall provide each holder of Series
A Preferred Stock, with a written notice of redemption (addressed to the holde
at its address as it appears on the books of the Corporation), not
later than thirty (30) days before the date fixed for redemption. The notice
of redemption shall specify (i) the date fixed for redemption; (iii ) the
Redemption Price; (iv) the place the holders of Series A Preferred Stock
may obtain payment of the Redemption Price, upon surrender of their
certificates; and (v) the last date (determined pursuant to Section 4(a) hereof
prior to the date of redemption that the right of conversion of the
Series A Preferred Stock may be exercised. If funds of the Corporation are
legally available on the date fixed for redemption, then whether or not shares
are surrendered for payment of the Redemption Price, the shares shall
no longer be outstanding and the holders thereof shall cease to be shareholders
of the Corporation with respect to the shares redeemed on and after the date
fixed for redemption and shall be entitled to receive the Redemption
Price without interest upon the surrender of the share certificate. If less
than all the shares represented by a share certificate are to be redeemed, the
Corporation shall issue a new share certificate for the shares not
redeemed.
(c) The Redemption Price shall be paid by the Corporation
in cash to the holders of Series A Preferred Stock subject to redemption. If
on the date fixed for redemption funds of the Corporation legally available
therefor shall be insufficient to redeem all the shares of the series of Series
A Preferred Stock equired to be redeemed as provided herein, funds to the extent
legally available shall be used for such purpose, and the Corporation shall
effect such redemption pro rata according to the number of shares of Series A
PreferredStock held by each holder.
(d) If on the Redemption Date, funds of the Corporation
legally available therefor shall be insufficient to redeem all the shares of
Series A Preferred Stock required to be redeemed as provided herein,
funds to the extent legally available shall be used for such purpose and the
Corporation shall effect such redemption pro rata according to the number of
shares of Series A Preferred Stock held by each holder and the
Corporation shall make additional partial redemptions out of funds legally
available for such purpose beginning thirty (30) days after the date fixed for
redemption and each thirty (30) days thereafter until all shares of the
Series A Preferred Stock subject to redemption have been redeemed; provided
that the right to convert any such unredeemed shares of Series A Preferred Stock
shall continue to be available to the holders of Series A Preferred
Stock until the last full business day preceding any such subsequent redemption
as set forth herein.
ARTICLE V
The liability of the directors of the corporation for monetary damages shall be
eliminated to the fullest extent permissible under California law.
ARTICLE VI
The corporation is authorized to provide indemnification of agents (as defined
in Section 317 of the Corporations Code) for breach of duty to the corporation
and its stockholders through by law provisions or through agreements
with agents, or both, in excess of the indemnification otherwise permitted by
Section 317 of the Corporations Code, subject only to the applicable limits set
forth in Section 204 of the Corporations Code.
ANNEX A TO AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
ADVANCED REMOTE COMMUNICATIONS SOLUTIONS, INC.
Neither this Warrant nor the shares of Common Stock issuable hereunder have
been registered under the Securities Act of 1933, the laws of California
or the laws of any other state, and neither may be sold or otherwise
transferred without such registration or an opinion of counsel satisfactory
to the Company that an exemption therefrom is available.
No. of Shares: _______ Warrant No. ____
WARRANT
To Purchase Common Stock of
ADVANCED REMOTE COMMUNICATIONS SOLUTIONS, INC.
Expiring __________ (the "Expiration Date")
(subject to the survival of
certain provisions hereof)
Pursuant to the terms of this Warrant Agreement, ("Warrant"),
Advanced Remote Communications Solutions,
Inc., a California corporation (the "Company") for value received, hereby
grants to ________________ ("Holder")
the right to purchase at any time after the Original Issue Date and on or
before 5:00 p.m. Pacific time on the
Expiration Date, ________ shares of Common Stock of the Company, at the
Purchase Price (as hereinafter defined)
payable in lawful money of the United States of America, subject to the
provisions, limitations and restrictions
hereof. The number of shares of Common Stock purchasable hereunder and the
Purchase Price therefor are subject to adjustment as hereinafter set forth in
Section 5.
Section 1. Certain Definitions. For all purposes of this Warrant
the following terms shall have the meanings indicated:
"Basic Purchase Price" shall mean the initial purchase price per
share of Common Stock set forth in Section 2.
"Commission" shall mean the Securities and Exchange Commission
or any other Federal agency then administering the Securities Act.
"Common Stock" shall mean the shares of the Company's authorized
Common Stock, no par value, as constituted at the Original Issue Date.
"Original Issue Date" shall mean ____________.
"Purchase Price" shall mean the Basic Purchase Price or such Basic
Purchase Price as adjusted from time to time pursuant to the provisions hereof.
"Securities Act" shall mean the Securities Act of 1933, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Warrant Shares" shall mean the shares of Common Stock purchased
or purchasable by the Holder upon the exercise thereof pursuant to Section 3
thereof.
All terms in this Warrant which are not defined in Section 1 have
the meanings respectively set forth therefor elsewhere in this Warrant.
Section 2. Basic Purchase Price. The Basic Purchase Price at
which a holder may exercise this Warrant
shall be a price per share initially equal to ___________ ($___).
Section 3. Exercise of Warrant, Etc.
3.1 Procedure for Exercise of Warrant. To exercise this Warrant
in whole or in part, the Holder shall deliver to the Company at its principal
executive offices in San Diego, California (or such other place or agency
of the Company in the Continental United States as the Company may designate
by notice in writing to the Holder)(i) the Subscription Form attached hereto
completed to specify the number of shares of Common Stock as to which
such Holder is electing to exercise this Warrant, (ii) cash or a certified
or cashier's check, payable to the order of the Company, in an amount equal
to the then aggregate Purchase Price of the shares of Common Stock being
purchased and (iii) this Warrant. Upon the Company's acceptance of such
subscription (such acceptance to be acted upon and effected (provided such
election appears to be proper and issuance of shares as a result of the
election complies with applicable securities laws) within two business
days of receipt thereof), such Holder shall be deemed to be the Holder of
record of the Common Stock issuable upon such exercise, notwithstanding that
the stock transfer books of the Company shall then be closed or that
certificates representing such Common Stock shall not then be actually
delivered to such Holder, and the Company shall, as promptly as practicable,
and in any event within 5 business days thereafter, execute or cause to be
executed and deliver to such Holder a certificate or certificates
representing the aggregate number of shares of Common Stock specified
in the Subscription Form. Each stock certificate so delivered shall be in such
denomination as may be requested by the Holder and shall be registered in the
name of such Holder. If this Warrant shall have been exercised only in
part, the Company shall, at the time of delivery of the stock
certificate(s), deliver to Holder a new warrant evidencing the rights of
Holder to purchase the remaining Warrant Shares. The Company shall pay all
expenses,taxes and other charges payable in connection with the preparation,
executionand delivery of stock certificates pursuant to this Section.
3.2 Character of Warrant Shares. All shares of Common Stock
issuable upon the exercise of this Warrant shall be duly authorized, validly
issued, fully paid and non-assessable; and without limiting the generality of
the foregoing, the Company covenants and agrees that it will reserve a
sufficient number of shares of Common Stock for issuance upon exercise of this
Warrant.
Section 4. Exchange and Replacement.
(a) The Holder shall not transfer or assign this Warrant except
in full compliance with applicable
securities laws and, on request by the Company, the transferor shall
furnish to the Company an opinion of the
transferor's counsel acceptable to the Company to the effect that the
transfer is in compliance with such
securities laws. Any attempted or purported assignment or transfer of this
Warrant without compliance with the
preceding sentence shall be void. In the event of any transfer permitted
by this Section 4, the Company shall
register or shall cause its agent to register the transfer or assignment on
its warrant register upon surrender
of this Warrant, duly endorsed, or accompanied by a written instrument of
transfer duly executed by the Holder or
by the duly appointed legal representative or attorney thereof. On any
such registration of transfer, the
Company shall issue a new warrant of like tenor, in lieu of the transferred
or assigned Warrant.
(b) Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and, in case of loss, theft or
destruction, of indemnity or security
reasonably satisfactory to it, and upon surrender and cancellation of thi
Warrant, if mutilated, the Company
will make and deliver a new Warrant of like tenor, in lieu of this Warrant
This Warrant shall be promptly
canceled by the Company upon the surrender hereof in connection with any
exchange or replacement.
Section 5. Anti-Dilution Provision; Adjustment of Purchase Price.
5.1 Adjustment of Purchase Price and Number of Shares.
The number of shares of Common Stock and
Purchase Price of the Common Stock issuable upon the exercise of this
Warrant shall be subject to adjustment upon
the happening of certain events as follows:
(a) Adjustments for Dividends in Stock. If the Company
shall, while this Warrant remains
in force, declare or pay to its common stockholders a
dividend payable in any kind of shares of
stock or other securities of the Company, the Holder who
thereafter exercises the Warrant as
herein provided shall be entitled to receive in addition
to the shares of Common Stock as
provided herein, such additional shares or shares of stock
or other securities as such Holder
would have received in the form of such dividend if it
had been the shareholder of record of
such Common Stock on the record date for the determination
of common stockholders entitled to
receive such dividend, and the Purchase Price in effect
immediately prior to such distribution
shall be adjusted proportionately so that the aggregate
Purchase Price for all shares of Common
Stock or other securities covered by this Warrant
immediately after such distribution shall be
equal to the aggregate Purchase Price for the shares
of Common Stock or other securities
covered by this Warrant.
(b) Adjustments for Recapitalization. If the Company
shall, while this Warrant remains in
force, effect a recapitalization of such character that
the shares of Common Stock covered
hereby shall be changed into or become exchangeable for a
larger or smaller number of shares,
then the number of shares of Common Stock which the
Holder shall be entitled to purchase
hereunder, shall be increased or decreased, as the case
may be, in direct proportion to the
increase or decrease in the total number of shares of
Common Stock which shall in the case of
an increase in the number of shares shall be
proportionately increased, and in the case of a
decrease in the number of shares be proportionately
reduced and the Purchase Price in effect
immediately prior to such recapitalization shall be
adjusted proportionately so the aggregate
Purchase Price for all shares of Common Stock or other
securities covered by this Warrant
immediately after such recapitalization shall be equal to
the aggregate Purchase Price for the
shares of Common Stock or other securities covered by this
Warrant.
(c) Adjustment for Reorganization, Merger or Transfer.
If the Company, shall, at any time while this Warrant remains in force,
consolidate or merge with, or shall transfer or convey substantially all its
assets to any other person or entity, the Holder who thereafter exercises
the Warrant as herein provided shall be entitled to receive, upon payment
of the Purchase Price, that number of shares of stock or other securities
or property of the corporation resulting from such consolidation or merge
or transfer to which each share of Common Stock deliverable upon exercise o
this Warrant would have been entitled upon such consolidation or merger or
transfer, had the Holder exercised its right to purchase hereunder and had
such Holder been the shareholder of record at the time of consolidation, merger
or transfer.
(d) Adjustment for Stock Splits and Reverse Stock
Splits. If the Company, while this Warrant remains in force, shall subdivide
its outstanding shares of Common Stock into a greater number of shares, the
Purchase Price shall thereby be proportionately decreased and the number of
shares receivable upon exercise of this Warrant shall thereby be
proportionately increased; conversely, if at any time while this Warrant
remains in force, the outstanding number of shares of Common Stock of the
Company shall be combined into a smaller number of shares, the Purchase Price
in effect immediately prior to such combination shall be proportionately
increased and the number of shares of Common Stock receivable upon exercise
of this Warrant shall be proportionately decreased.
5.2 Notice. Upon each adjustment of the Purchase Price and upon
each change in the number of shares of Common Stock issuable upon the
exercise of this Warrant, and in the event of any change in the rights of the
Holder by reason of other events herein set forth, then and in each such
case, the Company will promptly send Holder a notice stating the adjusted
Purchase Price and the new number of shares so issuable, or specifying the
other shares of stock, securities or assets and the amount thereof
receivable as a result of such change in rights, and setting forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based.
5.3 No Fractional Shares. No fractional shares shall be issuable
upon exercise of the Warrants, and the number of shares of Common Stock to b
issued shall be rounded to the nearest whole share. If any fractional
interest in Common Stock would, except for the provisions of this Subsection
5.3, be deliverable upon exercise,
then the Company shall pay to the Holder upon exercise an amount of cash
equal to the current market value ofsuch fractional interest.
5.4 Reservation of Stock Issuable Upon Exercise. The Company
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock solely for the purpose of effecting the
exercise of this Warrant such number of its shares of Common Stock as shall
from time to time be sufficient to effect the full exercise of this Warrant;
and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the full exercise of this
Warrant, then the Company will take such corporate action as may be necessary
to increase its authorized but unissued shares of Common Stock to such
number of shares as shall be sufficient for such purpose.
Section 6. Special Agreements of the Company. The Company covenants
and agrees that:
6.1 Will Avoid Certain Actions. The Company will not, by amendment
of its Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, issue or sale of securities or otherwise,
avoid to or take any action which would have the effect of voiding the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but will at all times in good faith assist in
carrying out all of the provisions of this Warrant.
6.2 Notices of Certain Events. The Company agrees to review it
stock ledgers, stock transfer books and other corporate records periodically
(and not less often than once in each calendar quarter) in order to
determine whether the Holder is or shall have become, solely due to its
ownership of this Warrant, directly or indirectly, the beneficial owner of
more than such percentage of any class of its equity securities (as defined
in the Securities Exchange Act of 1934) as shall cause such Holder to be
required to make any filings or declarations to the Company, the Securities
and Exchange Commission, any national securities exchange or any
other party pursuant to the provisions of the Securities Exchange Act of 1934
or any comparable federal statute.
6.3 Will Bind Successors. This Warrant shall be binding upon
any corporation, person or entity succeeding to the Company by merger,
consolidation or acquisition of all or substantially all of the Company's
assets.
Section 7. Notification by the Company. in case at any time:
(1) there shall be proposed any other transaction of a type referred
to in Section 5; or
(2) there shall be proposed a voluntary or involuntary dissolution,
liquidation or winding-up of the Company; then, in any one or more of such
cases, the Company shall give written notice to the Holder of the date on
which
a) the books of the Company shall close or a record shall be taken for such
dividend, distribution, subscription rights, or other transaction, and
(b) such reorganization,
reclassification, consolidation, merger, sale,
dissolution, other transaction, liquidation or winding-up shall take
place, as the case may be. Such notice
shall also specify the date as of which the holders of Common Stock of record
shall participate in such dividend,
distribution or subscription rights, or shall be entitled to exchange
their Common Stock for, or receive in
respect of their Common Stock, securities or other property
deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, other transaction,
liquidation, or winding-up, as the
case may be. Such written notice shall be given not less than ten (10) and
not more than sixty (60) days prior
to the action in question and not less than ten (10) days and not more than
sixty (60) days prior to the record
date or the date on which the Company's transfer books are closed in respect
thereto and such notice may state
that the record date is subject to the effectiveness of a registration
statement under the Securities Act, or to
a favorable vote of stockholders, if either is required.
Section 8. Notices. Any notice or other document required or
permitted to be given or delivered to the Holder hereof shall be delivered at,
or sent by certified or registered mail to the address of the Holder as is
set forth in the stock records of the Company, or such other address as
shall have been furnished in writing to the Company by any such Holder.
Any notice or other document required or permitted to be given or delivered to
the Company shall be delivered at, or sent by certified or registered
mail to, the principal office of the Company, at 10675 Sorrento Valley Road,
Suite 200, San Diego, California 92121, Attention: President, or such
other address as shall have been furnished in writing to the Holder by the
Company.
Section 9. No Rights as Stockholder; Limitation of Liability.
This Warrant shall not entitle the Holder hereof to any of the rights of a
stockholder of the Company, except as otherwise provided herein. No
provision hereof, in the absence of affirmative action by the Holder hereof
to purchase shares of Common Stock, and no mere enumeration herein of the
rights or privileges of the Holder hereof, shall give rise to any liability
of such Holder for the Purchase Price or as a stockholder of the Company
whether such liability is asserted by the Company or by creditors of the
Company.
Section 10. Law Governing. This Warrant shall be governed by, and
construed and enforced in accordance with, the laws of the State of California.
Section 11. Miscellaneous. This Warrant and any provision hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party (or any predecessor in interest thereof) against
which enforcement of the same is sought. The headings in this Warrant are
for purposes of reference only and shall not affect the meaning or
construction of any of the provisions hereof.
Section 12. Investment Representation. The Holder by acceptance
hereof represents and warrants to the Company that this Warrant and the Common
Stock issuable upon exercise thereof are being acquired for investment
only and not with a view towards resale or further distribution. Holder
represents and warrants that Holder is familiar with the business and affairs
of the Company and has had access to all information and materials
requested by Holder concerning the Company.
Section 13. Indemnification. The Holder by acceptance hereof
agrees to indemnify, defend and hold the Company, its officers, directors,
attorneys, accountants and corporate agents ("Indemnitee") harmless against any
and all losses, claims, demands, damages, or liabilities to which
Indemnitee may become subject under the Securities Act, or any state
securities law, which arise out of or are based upon the disposition by the
Holder, or the shares of Common Stock issued upon exercise hereof, in violation
of the provisions of this Warrant.
IN WITNESS WHEREOF, Advanced Remote Communications Solutions,
Inc. has caused this Warrant to be signed by its duly authorized officer, and to
be dated as of the Original Issue Date.
ADVANCED REMOTE COMMUNICATIONS SOLUTIONS, INC.
By: _____________________________
Its: _____________________________