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EXHIBIT 3.1
[STATE OF CALIFORNIA LETTERHEAD]
CORPORATION DIVISION
I, Bill Jones, Secretary of the State of California, hereby certify:
That the annexed transcript has been compared with the corporate record
on file in this office, of which it purports to be a copy, and that same is
full, true and correct.
IN WITNESS WHEREOF, I execute this
certificate and affix the Great
Seal of the State of California this
August 8, 1995
/s/ Bill Jones
Secretary of State
[THE SEAL OF THE STATE OF CALIFORNIA]
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AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
RASTER GRAPHICS, INC.
RAK KUMAR and JAMES R. BUCKLEY certify that:
1. They are the President and Secretary, respectively, of RASTER
GRAPHICS, INC., a California corporation.
2. The Articles of Incorporation of this corporation are amended and
restated to read in their entirety as follows:
"I.
The name of this corporation is Raster Graphics, Inc.
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.
III.
(a) This corporation is authorized to issue two classes of shares,
designated "Preferred Stock" and "Common Stock," respectively. The total number
of shares which this corporation shall have authority to issue is Seventy
Million One Hundred-Fifty Thousand (70,150,000), none of which has any par
value. The number of shares of Preferred Stock authorized to be issued is Thirty
Million One Hundred-Fifty Thousand (30,150,000), and the number of shares of
Common Stock authorized to be issued is Forty Million (40,000,000). The
Preferred Stock shall be issued in three series. The first series of Preferred
Stock shall be designated Series A Preferred Stock (the "Series A Preferred")
and shall consist of One Million Six Hundred Thousand (1,600,000) shares with
the rights, preferences, privileges and restrictions set forth in paragraph (b)
below. The second series of Preferred Stock shall be designated Series B
Preferred Stock (the "Series B Preferred") and shall consist of Five Million Two
Hundred-Fifty Thousand (5,250,000) shares with the rights, preferences,
privileges and restrictions set forth in paragraph (b) below. The third series
of Preferred Stock shall be designated Series C Preferred Stock (the "Series C
Preferred") and shall consist of Twenty-Three Million Three Hundred Thousand
(23,300,000) shares with the rights, preferences, privileges and restrictions
set forth in paragraph (b) below.
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(b) A statement of the rights, preferences, privileges and restrictions
granted to or imposed on the Series A Preferred, Series B Preferred and Series C
Preferred and the holders thereof is as follows:
(1) Dividends.
(aa)(i) The holders of outstanding Series C Preferred shall be
entitled to receive in any fiscal year, when and as declared by the Board of
Directors, out of any assets at the time legally available therefor, dividends
in cash at the rate of $0.03 per share of Series C Preferred, per annum, before
any cash dividend is paid on Series A Preferred, Series B Preferred or Common
Stock. After payment to the holders of Series C Preferred of the amounts as
aforesaid, the holders of outstanding Series A and Series B Preferred shall be
entitled to receive in any fiscal year, when and as declared by the Board of
Directors, out of any assets at the time legally available therefor, dividends
in cash at the rate of $0.04 and $0.04 per share of Series A and Series B
Preferred, respectively, per annum, before any cash dividend is paid on Common
Stock. Such dividend or distribution may be payable annually or otherwise as the
Board of Directors may from time to time determine. Dividends or distributions
may be declared and paid upon shares of Series A Preferred or Series B Preferred
in any fiscal year of the corporation only if dividends shall have been paid on
or declared and set apart upon all shares of Series C Preferred at the annual
rate as aforesaid. Dividends or distributions may be declared and paid upon
shares of Series A Preferred or Series B Preferred in any fiscal year of the
corporation only if dividends shall have been paid on or declared and set apart
upon all shares of Preferred Stock at such annual rates. The right to such
dividends on shares of Preferred Stock shall not be cumulative and no right
shall accrue to holders of shares of Preferred Stock by reason of the fact that
dividends on such shares are not declared in any prior year, nor shall any
undeclared or unpaid dividend bear or accrue interest.
(ii) In the event this corporation shall determine, after
payment of dividends to holders of Preferred Stock at the annual rates set forth
above, to pay cash dividends to the holders of Common Stock, such dividends may
be paid to holders of Common Stock only if equal dividends are also paid to
holders of Preferred Stock (based upon the number of shares of Common Stock into
which such shares of Preferred Stock are then convertible) at the same time. The
right to such dividends on shares of Common Stock and Preferred Stock shall not
be cumulative and no rights shall accrue to holders of shares of Common Stock
and Preferred Stock by reason of the fact that dividends on such shares are not
declared in any prior year, nor shall any undeclared or unpaid dividends bear or
accrue interest.
(bb) In the event this corporation shall declare a distribution
payable in securities of other persons, evidences of indebtedness issued by this
corporation or other persons, assets (excluding cash dividends) or options or
rights to purchase any such securities or evidences of indebtedness, then, in
each such case the holders of the Preferred Stock shall be entitled to a
proportionate share of any such distribution as though the holders of the
Preferred Stock were the holders of the number of shares of Common Stock of the
corporation into which their respective shares of Preferred Stock are
convertible as of the record date fixed for the determination of the holders of
Common Stock of the corporation entitled to receive such distribution.
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(2) Voting Rights.
(aa) Each holder of shares of Preferred Stock shall be entitled
to the number of votes equal to the number of shares of Common Stock into which
such shares of Preferred Stock could be converted on the record date for the
vote or consent of shareholders and shall have voting rights and powers equal to
the voting rights and powers of the Common Stock. The holder of each share of
Preferred Stock shall be entitled to notice of any shareholders' meeting in
accordance with the Bylaws of the corporation and, except as provided in
paragraph (bb) below, shall vote with holders of the Common Stock upon any
matter submitted to a vote of shareholders, except those matters required by law
to be submitted to a class vote. Fractional votes by the holders of Preferred
Stock shall not, however, be permitted and any fractional voting rights
resulting from the above formula (after aggregating all shares into which shares
of Preferred Stock held by each holder could be converted) shall be rounded to
the nearest whole number.
(bb) The holders of shares of Series C Preferred shall be
entitled, voting as a separate class, to elect two members of the Board of
Directors of this corporation. The holders of shares of Series A Preferred and
Series B Preferred shall be entitled, voting as a single class, to elect two
members of the Board of Directors of this corporation. The holders of shares of
Common Stock shall be entitled, voting as a separate class, to elect two members
of the Board of Directors of this corporation. The holders of shares of
Preferred Stock and Common Stock shall be entitled, voting as a single class, to
elect the remaining directors of this corporation. In the case of any vacancy in
the office of a director elected by the holders of a particular class or series
of stock, the vacancy may be filled only by the vote of the holders of such
class or series of stock. Any director who shall have been elected by the
holders of a particular class or series of stock may be removed without cause
by, and only by, the applicable vote of the holders of shares of such class or
series of stock. The provisions of this paragraph (2)(bb) shall expire and be of
no further force or effect immediately upon conversion of the outstanding shares
of Preferred Stock pursuant to the provisions of paragraph (3)(aa)(ii) below.
(3) Conversion. The holders of the Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(aa) Right to Convert.
(i) Each share of Preferred Stock shall be convertible, at
the option of the holder thereof, at any time after the date of issuance of such
share at the office of the corporation or any transfer agent for the Preferred
Stock, into that number of fully-paid and non-assessable shares of Common Stock
that is equal, in the case of Series A Preferred, to $0.50 divided by the
Conversion Price for such series (as hereinafter defined) , in the case of
Series B Preferred, to $0.50 divided by the Conversion Price for such series (as
hereinafter defined) and, in the case of Series C Preferred, to $0.50 divided by
the Conversion Price for such series (as hereinafter defined). The Conversion
Prices for the Series A, Series B and Series C
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Preferred shall initially be $0.50, $0.50 and $0.50, respectively, subject to
adjustment as provided herein. (The number of shares of Common Stock into which
each share of Series A, Series B or Series C Preferred may be converted is
hereinafter referred to as the "Conversion Rate" for each such series.) Upon any
decrease or increase in the Conversion Price or the Conversion Rate for a
series, as described in this Section (b)(3), the Conversion Rate or Conversion
Price for such series, as the case may be, shall be appropriately increased or
decreased.
(ii) Each share of Preferred Stock shall automatically be
converted into shares of Common Stock at the then effective Conversion Rate for
such share immediately upon the consummation of the corporation's sale of Common
Stock pursuant to a registration statement under the Securities Act of 1933, as
amended, pursuant to an underwritten firm commitment public offering, provided
that the price per share is not less than $1.50 (net of underwriter commissions
and expenses and subject to appropriate adjustment for all stock splits,
dividends, subdivisions, combinations, recapitalizations and the like) and the
gross aggregate offering price is not less than $10,000,000.
(bb) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of 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 fair
market value of such fractional shares as determined by the Board of Directors
of the corporation. Before any holder of Preferred Stock shall be entitled to
convert the same into full shares of Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
corporation or of any transfer agent for the Preferred Stock, and shall give
written notice to the corporation at such office that he elects to convert the
same; provided, however, that in the event of an automatic conversion pursuant
to paragraph (b)(3)(aa)(ii) above, the outstanding shares of Preferred Stock
shall be converted automatically without any further action by the holders of
such shares and whether or not the certificates representing such shares are
surrendered to the corporation or its transfer agent; provided further, however,
that the corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such automatic conversion unless either the
certificates evidencing such shares of Preferred Stock are delivered to the
corporation or its transfer agent as provided above, or the holder notifies the
corporation or its transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the corporation to
indemnify the corporation from any loss incurred by it in connection with such
certificates.
The corporation shall, as soon as practicable after such delivery, or
after such agreement and indemnification, issue and deliver at such office to
such holder of Preferred Stock, a certificate or certificates for the number of
shares of Common Stock to which he shall be entitled as aforesaid and a check
payable to the holder in the amount of any cash amounts payable as the result of
a conversion into fractional shares of Common Stock, plus any declared and
unpaid dividends on the converted Preferred Stock. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date; provided, however, that if
the conversion is in connection with an underwritten offer of securities
registered pursuant to the Securities Act of 1933, as amended, the conversion
may, at the option of any holder tendering Preferred Stock for
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conversion, be conditioned upon the closing of the sale of securities pursuant
to such offering, in which event the person(s) entitled to receive the Common
Stock issuable upon such conversion of the Preferred Stock shall not be deemed
to have converted such Preferred Stock until immediately prior to the closing of
the sale of such securities.
(cc) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definitions. For purposes of this paragraph
(3)(cc), the following definitions shall apply:
(1) "Options" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(2) "Original Issue Date" shall mean, with respect to
a particular series of Preferred Stock, the first date on which the first share
of such series of Preferred Stock was first issued.
(3) "Convertible Securities" shall mean any evidences
of indebtedness, shares or other securities (other than the shares of Preferred
Stock) convertible into or exchangeable for Common Stock.
(4) "Additional Shares of Common" shall mean all
shares of Common Stock issued (or, pursuant to paragraph (3)(cc)(iii), deemed to
be issued) by the corporation after the Original Issue Date of a particular
series of Preferred Stock, other than shares of Common Stock issued or issuable:
(A) upon conversion of shares of Preferred Stock;
(B) to officers, directors and employees of, or
consultants to, the corporation pursuant to stock grants, option plans, purchase
plans or other employee stock incentive programs or arrangements approved by the
Board of Directors or upon exercise of options or warrants granted to such
parties pursuant to any such plan or arrangement;
(C) as a dividend or distribution on Preferred
Stock or pursuant to any event for which adjustment is made pursuant to
paragraph (3)(cc)(vi), (vii) or (viii) hereof;
(D) to lenders in connection with any loan or
lease financing transaction pursuant to arrangements approved by the Board of
Directors or upon exercise of options or warrants granted to such parties
pursuant to any such arrangement;
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(E) upon exercise of warrants for the purchase of
an aggregate of 622,220 shares of Common Stock at an exercise price of $0.30 per
share issued by the corporation on November 28, 1988 and March 30, 1989 in
connection with consulting services provided to the corporation by the holders
of such warrants;
(F) upon exercise of warrants for the purchase of
up to an aggregate of 806,547 shares of Common Stock at an exercise price of
$0.30 per share issued by the corporation on December 19, 1989 and March 6, 1990
in connection with the sale and issuance of the corporation's Series B Preferred
to certain investors; and
(G) to persons or entities in connection with any
corporate partnership or reorganizations approved by the Board of Directors, or
upon exercise of options or warrants granted to such parties pursuant to any
such transaction.
(ii) No Adjustment of Conversion Price. No adjustment in
the Conversion Price of a particular share of Preferred Stock shall be made in
respect of the issuance of Additional Shares of Common unless the consideration
per share for an Additional Share of Common issued or deemed to be issued by the
corporation is less than the Conversion Price in effect on the date of, and
immediately prior to such issue, for such share of Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common.
(1) Options and Convertible Securities. In the event
the corporation at any time or from time to time after the Original Issue Date
of a particular series of Preferred Stock shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of any
class of securities entitled to receive any such Options or Convertible
Securities, then the maximum number of shares (as set forth in the instrument
relating thereto without regard to any provisions contained therein for a
subsequent adjustment of such number) of Common Stock issuable upon the exercise
of such Options or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities or exercise of such
Options, shall be deemed to be Additional Shares of Common issued as of the time
of such issue or, in case such a record date shall have been fixed, as of the
close of business on such record date, provided that Additional Shares of Common
shall not be deemed to have been issued unless the consideration per share
(determined pursuant to paragraph (3)(cc)(v) hereof) of such Additional Shares
of Common would be less than the Conversion Price of such series of Preferred
Stock in effect on the date of and immediately prior to such issue, or such
record date, as the case may be, and provided further that in any such case in
which Additional Shares of Common are deemed to be issued:
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(A) no further adjustment in the Conversion Price
of such series of Preferred Stock shall be made upon the subsequent issue of
Convertible Securities or shares of Common Stock upon the exercise of such
Options or conversion or exchange of such Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price of such series of Preferred Stock computed upon
the original issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon any such
increase or decrease becoming effective, be recomputed to reflect such increase
or decrease insofar as it affects such Options or the rights of conversion or
exchange under such Convertible Securities;
(C) no readjustment pursuant to clause (B) above
shall have the effect of increasing the Conversion Price of such series of
Preferred Stock to an amount which exceeds the lower of (i) the Conversion Price
of such series of Preferred Stock on the original adjustment date, or (ii) the
Conversion Price of such series of Preferred Stock that would have resulted from
any issuance of Additional Shares of Common between the original adjustment date
and such readjustment date;
(D) upon the expiration of any such Options or
any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, the Conversion Prices computed upon the original
issue thereof (or upon the occurrence of a record date with respect thereto) and
any subsequent adjustments based thereon shall, upon such expiration, be
recomputed as if:
(a) in the case of Convertible Securities or
Options for Common Stock, the only Additional Shares of Common issued were the
shares of Common Stock, if any, actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
corporation for the issue of such exercised Options plus the consideration
actually received by the corporation upon such exercise or for the issue of all
such Convertible Securities which were actually converted or exchanged, plus the
additional consideration, if any, actually received by the corporation upon such
conversion or exchange, and
(b) in the case of Options for Convertible
Securities, only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the corporation for the Additional Shares of Common
deemed to have been then issued was the consideration actually received by the
corporation for the issue of such exercised Options, plus the consideration
deemed to have been received by the corporation (determined pursuant to
paragraph (3)(cc)(v)) upon the issue of the Convertible Securities with respect
to which such Options were actually exercised;
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(E) in the case of any Options which expire by
their terms not more than 30 days after the date of issue thereof, no adjustment
of the Conversion Prices shall be made until the expiration or exercise of all
such Options issued on the same date, whereupon such adjustment shall be made in
the same manner provided in clause (C) above; and
(F) if such record date shall have been fixed and
such Options or Convertible Securities are not issued on the date fixed
therefor, the adjustment previously made in the Conversion Prices which became
effective on such record date shall be canceled as of the close of business on
such record date, and thereafter the Conversion Prices shall be adjusted
pursuant to this paragraph (3)(cc)(iii) as of the actual date of their issuance.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common. In the event this corporation shall issue
Additional Shares of Common (including Additional Shares of Common deemed to be
issued pursuant to paragraph (3)(cc)(iii)) without consideration or for a
consideration per share less than the Conversion Price for a particular series
of Preferred Stock in effect on the date of and immediately prior to such issue,
then and in such event, such Conversion Price 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 the corporation for the
total number of Additional Shares of Common so issued would purchase at such
Conversion Price; 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 so issued; and provided further that, for the
purposes of this paragraph (3)(cc)(iv), all shares of Common Stock issuable upon
exercise, conversion or exchange of outstanding Options or Convertible
Securities, as the case may be, shall be deemed to be outstanding, and
immediately after any Additional Shares of Common are deemed issued pursuant to
paragraph (3)(cc)(iii), such Additional Shares of Common shall be deemed to be
outstanding.
(v) Determination of Consideration. For purposes of this
subsection (b)(3)(cc), the consideration received by the corporation for the
issue of any Additional Shares of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be computed
at the aggregate amount of cash received by the corporation excluding amounts
paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the Board; and
(C) in the event Additional Shares of Common are
issued together with other shares or securities or other assets of the
corporation for
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consideration which covers both, be the proportion of such consideration so
received, computed as provided in clauses (A) and (B) above, as determined in
good faith by the Board.
(2) Options and Convertible Securities. The
consideration per share received by the corporation for Additional Shares of
Common deemed to have been issued pursuant to paragraph (3)(cc)(iii)(1),
relating to Options and Convertible Securities, shall be determined by dividing
(x) the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by
(y) the maximum number of shares of Common Stock
(as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(vi) Adjustments for Stock Dividends and for Subdivisions
or Combinations of Common. In the event that this corporation at any time or
from time to time after the Original Issue Date of a particular series of
Preferred Stock shall declare or pay, without consideration, any dividend on the
Common Stock payable in Common Stock or in any right to acquire Common Stock for
no consideration, or if the outstanding shares of Common Stock shall be
subdivided (by stock split, reclassification or otherwise than by payment of a
dividend in Common Stock or in any right to acquire Common Stock) into a greater
number of shares of Common Stock, the Conversion Prices in effect immediately
prior to such event shall, concurrently with the effectiveness of such event, be
proportionately decreased. In the event the outstanding shares of Common Stock
shall be combined or consolidated (by reclassification or otherwise) into a
lesser number of shares of Common Stock, the Conversion Prices in effect
immediately prior to such event shall, concurrently with the effectiveness of
such event, be proportionately increased.
(vii) Adjustments for Other Distributions. In the event
the corporation at any time or from time to time makes or fixes a record date
for the determination of holders of Common Stock entitled to receive any
distribution payable in securities of other persons, evidences of indebtedness
issued by this corporation or other persons, assets (excluding cash dividends)
or options or rights not otherwise referred to in subsection (b)(3)(cc)(vi),
then and in each such event provision shall be made so that the holders of
Preferred Stock shall be entitled to receive a proportionate share of any such
distribution as though they were holders of the number of shares of Common Stock
of this corporation into which their shares of Preferred
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Stock are convertible as of the record date fixed for the determination of the
holders of Common Stock of this corporation entitled to receive such
distribution.
(viii) Adjustments for Reclassification, Exchange and
Substitution. If the Common Stock issuable upon conversion of the Preferred
Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for above), the Conversion Prices then in effect shall, concurrently
with the effectiveness of such reorganization or reclassification, be
proportionately adjusted such that the Preferred Stock shall be convertible
into, in lieu of the number of shares of Common Stock which the holders would
otherwise have been entitled to receive, a number of shares of such other class
or classes of stock equivalent to the number of shares of Common Stock that
would have been subject to receipt by the holders upon conversion of the
Preferred Stock immediately before that change.
(dd) No Impairment. The corporation will not, by amendment of
its Articles of Incorporation or through any reorganization, transfer of assets,
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 (b)(3)
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 Preferred Stock against
impairment.
(ee) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of any Conversion Price pursuant to this Section
(b)(3), the corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
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
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Prices at the time in effect, and (iii) the number of shares of
Common Stock and the amount, if any, of other property which at the time would
be received upon the conversion of Preferred Stock.
(ff) Notices of Record Date. In the event that this corporation
shall propose at any time:
(i) to declare any dividend or distribution upon its
Common Stock, whether in cash, property, stock or other securities, whether or
not a regular cash dividend and whether or not out of earnings or earned
surplus;
(ii) to offer for subscription pro rata to the holders of
any class or series of its stock any additional shares of stock of any class or
series or other rights;
(iii) to effect any reclassification or recapitalization
of its Common Stock outstanding involving a change in the Common Stock; or
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(iv) to merge with or into any other corporation, or
sell, lease or convey all or substantially all its property or business, or to
liquidate, dissolve or wind up;
then, in connection with each such event, this corporation shall send to the
holders of the Preferred Stock:
(1) at least 20 days' prior written notice of the
date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (iii) and (iv) above; and
(2) in the case of the matters referred to in (iii)
and (iv) above, at least 20 days' prior written notice of the date when the same
shall take place (and specifying the date on which the holders of Common Stock
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon the occurrence of such event).
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holders of Preferred Stock at the address for each
such holder as shown on the books of this corporation.
(gg) Reservation of Stock Issuable Upon Conversion. The
corporation 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
conversion of the shares of the Preferred Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all then outstanding shares of the Preferred Stock; and if at any time the
number of authorized but unissued shares of Common Stock shall not be sufficient
to effect the conversion of all then outstanding shares of the Preferred Stock,
the corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
(4) Liquidation Preference. In the event of any liquidation,
dissolution or winding up of the corporation, either voluntary or involuntary,
distributions to the shareholders of the corporation shall be made in the
following manner:
(aa) The holders of the Series C Preferred shall be
entitled to receive, prior and in preference to any distribution of any of the
assets or surplus funds of the corporation to the holders of the Series A
Preferred, Series B Preferred or Common Stock by reason of their ownership of
such stock, the amount of Fifty Cents ($0.50) per share for each share of Series
C Preferred then held by them (appropriately adjusted in each case for any
combinations, or stock distributions or dividends with respect to such shares)
plus, in addition, an amount equal to all declared but unpaid dividends, if any,
on the shares of Series C Preferred then held by them. If, upon the occurrence
of such event, the assets and property legally available to be distributed among
the holders of the Series C Preferred shall be insufficient to permit the
payment to such holders of the full preferential amount aforesaid, then the
entire assets and property of the
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corporation legally available for distribution shall be distributed ratably
among the holders of the Series C Preferred Stock pro rata based on the number
of shares of Series C Preferred then held.
(bb) After payment has been made to the holders of the
Series C Preferred of the full preferential amounts to which they shall be
entitled, if any, as aforesaid, the holders of the Series A Preferred and Series
B Preferred shall be entitled to receive, out of the remaining assets (up to a
maximum of $3,360,000), prior and in preference to any distribution of any of
the assets or surplus funds of the corporation to the holders of the Common
Stock by reason of their ownership of such stock:
(i) for each share of Series A Preferred then held by
them the amount per share equal to $560,000 divided by the number of shares of
Series A Preferred then outstanding; and
(ii) for each share of Series B Preferred then held by
them the amount per share equal to $2,800,000 divided by the number of shares of
Series B Preferred then outstanding,
plus, in addition, an amount equal to all declared but unpaid dividends, if any,
on the respective shares of Series A Preferred and Series B Preferred then held
by them. If, upon the occurrence of such event, the assets and property legally
available to be distributed among the holders of the Series A Preferred and
Series B Preferred shall be insufficient to permit the payment to such holders
of the full preferential amount aforesaid, then the entire remaining assets and
property of the corporation legally available for distribution shall be
distributed ratably among the holders of the Series A Preferred and Series B
Preferred as follows: (1) as among the series of Series A Preferred and Series B
Preferred, one-sixth (1/6) of the remaining assets and property of the
corporation legally available for distribution shall be distributed to holders
of Series A Preferred and five-sixths (5/6) of the remaining assets and property
of the corporation legally available for distribution shall be distributed to
holders of Series B Preferred, and (2) as among the holders of Series A
Preferred and Series B Preferred Stock of any one series, the aggregate amount
of assets and property available for distribution to such holders in accordance
with subparagraph (1) herein shall be distributed among such holders pro rata
based on the number of shares then held; and, no amount shall be paid or set
apart for payment on any series of Series A Preferred or Series B Preferred
unless, at the same time, amounts in proportion to the respective preferential
amounts to which the other series of Preferred Stock are entitled (in accordance
with subparagraph (1) herein) shall be paid or set apart for payment.
(cc) After payment has been made to the holders of the
Series A Preferred, Series B Preferred and Series C Preferred of the full
preferential amounts to which they shall be entitled, if any, as aforesaid, the
holders of the Series A Preferred, Series B Preferred and Series C Preferred
shall be entitled to receive, out of the remaining assets (up to a maximum of
$6,750,000), prior and in preference to any distribution of any of the assets or
surplus funds of the corporation to the holders of the Common Stock by reason of
their ownership of such stock:
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(i) For each share of Series C Preferred then held by
them the amount per share equal to the Series C Incremental Amount (as
hereinafter defined) divided by the number of shares of Series C Preferred then
outstanding. For purposes of Section (b)(4), the "Series C Incremental Amount"
shall equal $6,750,000 (or, if lesser, the entire remaining assets and property
of the corporation legally available for distribution after giving effect to the
provisions of paragraphs (b)(4)(aa) and (b)(4)(bb)) multiplied by a fraction,
the numerator of which shall be the number of shares of Common Stock issuable
upon conversion of the then outstanding Series C Preferred and the denominator
of which shall be the sum of the number of shares of Common Stock then
outstanding plus the number of shares of Common Stock issuable upon conversion
of the then outstanding Preferred Stock;
(ii) For each share of Series A Preferred then held
by them the amount per share equal to $6,750,000 (or, if lesser, the entire
remaining assets and property of the corporation legally available for
distribution after giving effect to the provisions of paragraphs (b)(4)(aa) and
(b)(4)(bb)) less the Series C Incremental Amount , with such result multiplied
by a fraction of one-sixth (1/6) (such product hereinafter referred to as the
"Series A Residual Amount"), and then divided by the number of shares of Series
A Preferred then outstanding; provided, that the maximum Series A Residual
Amount distributable to the holders of Series A Preferred Stock pursuant to this
paragraph shall not exceed $0.50 multiplied by the number of shares of Series A
Preferred then held and any Series A Residual Amount in excess of such maximum
(the "Series A Excess Amount") shall be distributed to holders of Series B
Preferred as provided in, and subject to the conditions of, paragraph
(4)(cc)(iii); and
(iii) For each share of Series B Preferred then held
by them the amount per share equal to $6,750,000 (or, if lesser, the entire
remaining assets and property of the corporation legally available for
distribution after giving effect to the provisions of paragraphs (b)(4)(aa) and
(b)(4)(bb)) less the Series C Incremental Amount, with such result multiplied by
a fraction of five-sixths (5/6), with the resulting product added to the Series
A Excess Amount (if any) and such sum then divided by the number of shares of
Series B Preferred then outstanding; provided, that the maximum amount
distributable to the holders of Series B Preferred Stock pursuant to this
paragraph shall not exceed $2.50 multiplied by the number of shares of Series B
Preferred then held;
and no amount shall be paid or set apart for payment on any series of Series A
Preferred, Series B Preferred or Series C Preferred unless, at the same time,
amounts in proportion to the respective preferential amounts to which the other
series of Preferred Stock are entitled as aforesaid shall be paid or set apart
for payment.
(dd) After payment has been made to the holders of the
Preferred Stock of the full preferential amounts to which they shall be
entitled, if any, as aforesaid, any remaining proceeds shall be distributed
ratably to the holders of the Common Stock and Preferred Stock based upon the
number of shares of Common Stock then held (with each share of Preferred Stock
being treated as that number of shares of Common Stock into which such share of
Preferred Stock is at that time convertible).
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(ee) For purposes of this Section (b)(4), a merger of the
corporation with or into any other corporation or corporations, or the merger of
any other corporation or corporations into the corporation, in which merger the
shareholders of the corporation receive distributions in cash or securities of
another corporation or corporations as a result of such merger (unless the
shareholders of this corporation hold more than a majority of the voting equity
securities of the surviving corporation), or a sale, conveyance or disposition
of all or substantially all of the assets of this corporation shall be treated
as a liquidation, dissolution or winding up of the corporation.
(ff) Notwithstanding Sections 4(aa), 4(bb), 4(cc), and
4(dd), as authorized by Section 402.5(c) of the California Corporations Code,
the provisions of Sections 502 and 503 of the California Corporations Code shall
not apply with respect to repurchases by the corporation of shares of Common
issued to or held by employees, directors or consultants of the corporation or
its subsidiaries upon termination of their employment or services pursuant to
agreements providing for the right of such repurchase between the corporation
and such persons.
(5) Covenants.
(aa) In addition to any other rights provided by law, so
long as any Series A Preferred or Series B Preferred shall be outstanding, this
corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority (determined on the basis of
assumed conversion of all Preferred Stock into Common Stock) of the outstanding
shares of Series A Preferred and Series B Preferred, voting as a class:
(i) amend or repeal any provision of, or add any
provision to, this corporation's Articles of Incorporation or Bylaws if such
action would materially and adversely alter or change the rights, preferences,
privileges or restrictions of any outstanding Series A Preferred or Series B
Preferred;
(ii) authorize or issue shares of any class of stock
having any preference or priority as to dividends, voting rights, liquidation
preferences or assets superior to or on a parity with any such preference or
priority of the Series A Preferred or Series B Preferred or authorize or issue
shares of stock of any class or any bonds, debentures, notes or other
obligations convertible into or exchangeable for, or having option rights to
purchase, any shares of stock of this corporation having any preference or
priority as to dividends, voting rights, liquidation preferences or assets
superior to or on a parity with any such preference or priority of the Series A
Preferred or Series B Preferred;
(iii) reclassify any shares of Common Stock into
shares having any preference or priority as to dividends, voting rights,
liquidation preferences or assets superior to or on a parity with any such
preference or priority of the Series A Preferred or Series B Preferred;
(iv) pay or declare any dividend on any shares of
Common Stock (except dividends payable solely in shares of Common Stock) while
any Series A Preferred
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or Series B Preferred remains outstanding or apply any of its assets to the
redemption, retirement, purchase or acquisition, directly or indirectly, through
subsidiaries or otherwise, of any shares of Common Stock, except from officers,
directors, employees or consultants of the corporation upon termination of the
employment or consulting relationship between the corporation and such persons
pursuant to the terms of restrictive stock agreements providing for such
repurchase of such shares of Common Stock between the corporation and such
persons;
(v) merge with or into any other corporation (other
than a wholly-owned subsidiary of this corporation) resulting in the exchange of
50% of the outstanding shares of this corporation for securities issued, or
caused to be issued, by the acquiring corporation or its subsidiary, or sell or
otherwise transfer in a single transaction or a series of related transactions
all or substantially all assets of this corporation; or
(vi) increase the authorized number of shares of
Series A Preferred or Series B Preferred.
(bb) In addition to any other rights provided by law, so
long as any Series C Preferred shall be outstanding, this corporation shall not,
without first obtaining the affirmative vote or written consent of the holders
of not less than a majority of the outstanding shares of Series C Preferred,
voting separately as a class:
(i) amend or repeal any provision of, or add any
provision to, this corporation's Articles of Incorporation or Bylaws if such
action would materially and adversely alter or change the rights, preferences,
privileges or restrictions of any outstanding Series C Preferred;
(ii) authorize or issue shares of any class of stock
having any preference or priority as to dividends, voting rights, liquidation
preferences or assets superior to or on a parity with any such preference or
priority of the Series C Preferred or authorize or issue shares of stock of any
class or any bonds, debentures, notes or other obligations convertible into or
exchangeable for, or having option rights to purchase, any shares of stock of
this corporation having any preference or priority as to dividends, voting
rights, liquidation preferences or assets superior to or on a parity with any
such preference or priority of the Series C Preferred;
(iii) reclassify any shares of Common Stock into
shares having any preference or priority as to dividends, voting rights,
liquidation preferences or assets superior to or on a parity with any such
preference or priority of the Series C Preferred;
(iv) pay or declare any dividend on any shares of
Common Stock (except dividends payable solely in shares of Common Stock) while
any Series C Preferred remains outstanding or apply any of its assets to the
redemption, retirement, purchase or acquisition, directly or indirectly, through
subsidiaries or otherwise, of any shares of Common Stock, except from officers,
directors, employees or consultants of the corporation upon termination of the
employment or consulting relationship between the corporation and such
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persons pursuant to the terms of restrictive stock agreements providing for such
repurchase of such shares of Common Stock between the corporation and such
persons;
(v) merge with or into any other corporation (other
than a wholly-owned subsidiary of this corporation) resulting in the exchange of
50% of the outstanding shares of this corporation for securities issued, or
caused to be issued, by the acquiring corporation or its subsidiary, or sell or
otherwise transfer in a single transaction or a series of related transactions
all or substantially all assets of this corporation;
(vi) increase the authorized number of shares of
Series C Preferred;
(vii) do any act or thing which would result in
taxation of the holders of shares of Series C Preferred under Section 305 of the
Internal Revenue Code of 1986, as amended (or any successor provision); or
(viii) amend the Bylaws of the corporation to increase
the number of authorized number of directors to more than seven (7).
(6) Residual Rights. All rights accruing to the
outstanding shares of this corporation not expressly provided for to the
contrary herein shall be vested in the Common Stock.
IV.
(a) Limitation of Directors' Liability. The liability of the directors
of this corporation for monetary damages shall be limited to the fullest extent
permissible under California law.
(b) Indemnification of Directors and Officers. This corporation is
authorized to indemnify the directors and officers of the corporation to the
fullest extent permissible under California law.
(c) Repeal or Modification. Any repeal of modification of the foregoing
provisions of this Article IV shall not adversely affect any right of
indemnification or limitation of liability of an agent of this corporation
relating to acts or omissions occurring prior to such repeal or modification."
4. The foregoing amendment and restatement of Articles of
Incorporation has been duly approved by the Board of Directors.
5. The foregoing amendment and restatement of Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Sections 902 and 903 of the Corporations Code. The total number
of outstanding shares of each class of stock entitled to
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vote with respect to the foregoing amendment was 1,007,601 shares of Common
Stock, 1,600,000 shares of Series A Preferred Stock, 5,120,000 shares of Series
B Preferred Stock, and 20,526,856 shares of Series C 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 outstanding
shares of Common Stock and more than 50% of the outstanding shares of each of
the Series A, Series B and Series C Preferred Stock.
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IN WITNESS WHEREOF, the undersigned have executed this certificate this
2nd day of August, 1995.
/s/ RAK KUMAR
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RAK KUMAR, President
/s/ JAMES R. BUCKLEY
-----------------------------------
JAMES R. BUCKLEY, Secretary
The undersigned declare under penalty or perjury that the matters set
forth in the foregoing certificate are true of their own knowledge. Executed at
San Jose, California on August 2, 1995.
/s/ RAK KUMAR
-----------------------------------
RAK KUMAR, President
/s/ JAMES R. BUCKLEY
-----------------------------------
JAMES R. BUCKLEY, Secretary
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