AMENDED AND RESTATED
CERTIFICATE OF DETERMINATION
of
SERIES A PREFERRED STOCK
of
DELTAPOINT, INC.
(Pursuant to Section 401 of the
California Corporations Code)
Jeffrey F. Ait and Donald B. Witmer certify that:
A. They are the Chief Executive Officer and Secretary, respectively,
of DeltaPoint, Inc., a California corporation.
B. The number of authorized shares of Series A Preferred Stock is
two thousand five hundred (2,500), none of which has been issued.
C. The board of directors duly adopted the following resolutions:
WHEREAS, the Amended and Restated Articles of Incorporation
authorize the Preferred Stock (the "Preferred Stock") of this corporation to
be issued in series and authorize the board of directors (the "Board") to
determine the rights, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series of Preferred Stock and to fix the
number of shares and designation of any such series; and
WHEREAS, the Company adopted a Certificate of Determination of
Series A Preferred Stock (the "Original Certificate"), which was filed with
the Secretary of State of the State of California on March 13, 1997; and
WHEREAS, the Company has not issued any shares of Series A
Preferred Stock created by the Original Certificate; and
WHEREAS, the Company desires to amend and restate the Original
Certificate.
RESOLVED, that the Original Certificate shall be amended and
restated in its entirety as set forth below;
RESOLVED, that the initial series of Preferred Stock shall be
designated Series A Preferred Stock (the "Series A Preferred");
RESOLVED FURTHER, that the number of shares constituting Series A
Preferred shall be two thousand five hundred (2,500); and
RESOLVED FURTHER, that the Board hereby fixes and determines the
rights, preferences, privileges and restrictions relating to the Series A
Preferred as follows:
1. DIVIDEND RIGHTS OF SERIES A PREFERRED. Subject to the rights of
additional series of Preferred Stock that may be designated by the Board from
time to time, the holder of each share of Series A Preferred shall be
entitled to receive, out of funds legally available for the purpose,
cumulative dividends at an annual rate of $90.00 per share, as adjusted to
reflect stock dividends (except stock dividends paid with respect to Series A
Preferred), stock splits, combinations, recapitalizations or the like after
the date upon which shares of Series A Preferred were first issued (the
"Initial Series A Issue Date"). Such dividends shall be paid in quarterly
installments beginning on the date three months after the Initial Series A
Issue Date. Such dividends shall be paid in cash or, at this corporation's
election, in shares of this corporation's common stock (the "Common Stock"),
which Common Stock shall be valued at 80% of the average of the Fair Market
Value thereof (as defined in Subsection 3(a)(ii) below) for the five business
days prior to the business day on which such dividends are payable. Whenever
this Certificate of Determination requires or permits the payment of
dividends, including accrued dividends, with respect to the Series A
Preferred, such dividends shall be payable in cash or, at the election of
this corporation, in shares of Common Stock. Shares of Common Stock shall be
valued at 80% of the average of the Fair Market Value thereof (as defined in
Subsection 3(a)(ii) below) for the five business days prior to the business
day on which such dividends are payable. The holder of each share of Series
A Preferred shall be entitled to receive the dividend prior and in preference
to any declaration and payment of any dividend (payable other than in stock
of this corporation) on the Common Stock.
2. LIQUIDATION PREFERENCE.
(a) Subject to the rights of additional series of Preferred Stock
that may be designated by the Board from time to time, in the event of any
liquidation, dissolution or winding up of this corporation, either
voluntarily or involuntarily, the holders of the Series A Preferred shall be
entitled to receive, prior and in preference to any distribution of any of
the assets of this corporation to the holders of the Common Stock, an amount
per share equal to $1,000 plus any accrued but unpaid dividends for each
share of Series A Preferred then held by them, such amounts being adjusted to
reflect stock dividends (except stock dividends paid with respect to Series A
Preferred), stock splits, combinations, recapitalizations or the like after
the Initial Series A Issue Date. After payment to the holders of the Series A
Preferred of the amounts set forth in this Section 2, the entire remaining
assets and funds of this corporation legally available for distribution, if
any, shall be distributed among the holders of the Common Stock in proportion
to the shares of Common Stock then held by them. If, upon the occurrence of
such event, the assets thus distributed among the holders of the Series A
Preferred shall be insufficient to permit the payment to such holders of the
full aforesaid preferential amount, then the entire assets and funds
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of this corporation legally available for distribution shall be distributed
among the holders of the Series A Preferred in proportion to the number of
shares of Series A Preferred then held by them.
(b) (i) For purposes of this Section 2, a liquidation,
dissolution or winding up of this corporation shall, unless holders of a
majority of the then outstanding shares of Preferred Stock elect otherwise,
be deemed to be occasioned by, or to include, (A) the acquisition of this
corporation by another entity by means of any transaction or series of
related transactions (including, without limitation, any reorganization,
merger or consolidation but, excluding any merger effected exclusively for
the purpose of changing the domicile of this corporation) that results in the
transfer of fifty percent (50%) or more of the outstanding voting power of
this corporation; or (B) a sale of all or substantially all of the assets of
this corporation.
(ii) In any of such events, if the consideration received by
this corporation is other than cash, its value will be deemed its fair market
value. Any securities to be delivered to the holders of the Series A
Preferred or Common Stock, as the case may be, shall be valued as follows:
(1) If traded on a securities exchange or through the
Nasdaq National Market, the value shall be deemed to be the average of
the closing prices of the securities on such exchange over the thirty-
day period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter, the value
shall be deemed to be the average of the closing bid or sale prices
(whichever is applicable) over the thirty-day period ending three (3)
days prior to the closing; and
(3) If there is no active public market, the value
shall be the fair market value thereof, as mutually determined by this
corporation and the holders of at least a majority of the then
outstanding shares of Series A Preferred.
(iii) In the event the requirements of this Subsection 2(b)
are not complied with, this corporation shall forthwith either:
(1) cause such closing to be postponed until such time
as the requirements of this Section 2 have been complied with; or
(2) cancel such transaction, in which event the
respective rights, preferences and privileges of the holders of the
Series A Preferred shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date of
the first notice referred to in Subsection 2(b)(iv) below.
(iv) This corporation shall give each holder of record of
Series A Preferred written notice of such impending transaction not later
than twenty (20) days prior to the
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stockholders' meeting called to approve such transaction, or twenty (20) days
prior to the closing of such transaction, whichever is earlier, and shall
also notify such holders in writing of the final approval of such
transaction. The first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Section 2,
and this corporation shall thereafter give such holders prompt notice of any
material changes. The transaction shall in no event take place sooner than
twenty (20) days after this corporation has given the first notice provided
for herein or sooner than ten (10) days after this corporation has given
notice of any material changes provided for herein; provided, however, that
such periods may be shortened upon this corporation's receipt of written
consent of the holders of at least a majority of the then outstanding shares
of Series A Preferred entitled to such notice rights or similar notice rights.
3. CONVERSION. The holders of the Series A Preferred shall have
conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT.
(i) Each share of Series A Preferred 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 this corporation or any transfer agent for
the Series A Preferred, into the number of fully paid and nonassessable
shares of Common Stock as is determined by dividing $1,000 by the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
The "Conversion Price" shall be equal to the lower of (i) 80% (as adjusted
pursuant to this Subsection 3(a)(i), the "Discount Percentage") of the
average of the Fair Market Value of a share of the Common Stock for the five
business days prior to the business day (A) if conversion occurs pursuant to
this Subsection 3(a), on which a holder of shares of Series A Preferred gives
written notice to convert such shares pursuant to Subsection 3(c)(i) or (B)
if conversion occurs pursuant to Subsection 3(b), on which such conversion is
effective; or (ii) $3.50.
(ii) The Fair Market Value of the Common Stock shall be
determined as follows:
(1) If traded on a securities exchange or through the
Nasdaq National Market, the closing sale price of the securities on
such exchange (or, if the Common Stock is traded on the Nasdaq
National Market, the closing sale price as reported by such market);
(2) If traded on the Nasdaq SmallCap Market, the closing
bid price as reported by such market;
(3) If actively traded over-the-counter, the value shall
be deemed to be the closing bid or sale prices (whichever is
applicable); and
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(4) If there is no active public market, the value
shall be the fair market value thereof, as mutually determined by this
corporation and the holders of at least a majority of the then
outstanding shares of Series A Preferred.
(b) AUTOMATIC CONVERSION. Each share of Series A Preferred shall be
automatically converted into shares of Common Stock at the Conversion Price in
effect at the time upon the earlier to occur of: (i) the acquisition of this
corporation by another entity by means of any transaction or series of related
transactions (including, without limitation, any reorganization, merger or
consolidation but, excluding any merger effected exclusively for the purpose of
changing the domicile of this corporation) that results in the transfer of fifty
percent (50%) or more of the outstanding voting power of this corporation, or a
sale of all or substantially all of the assets of this corporation; or (ii) the
second anniversary of the Original Series A Issue Date.
(c) MECHANICS OF CONVERSION.
(i) CONVERSION PURSUANT TO SECTION 3(a). Before any holder
of Series A Preferred shall be entitled to convert the same into shares of
Common Stock, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of this corporation or of any transfer
agent for the Series A Preferred, and shall give written notice to this
corporation at such office that he elects to convert the same, and shall
state therein the name or names which he wishes the certificate or
certificates for shares of Common Stock to be issued. This corporation shall,
as soon as practicable thereafter, issue and deliver at such office to each
holder of Series A Preferred, or to his nominee or nominees, a certificate or
certificates for the number of shares of Common Stock to which he shall be
entitled. 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
Series A Preferred 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.
(ii) CONVERSION PURSUANT TO SECTION 3(b). If shares of
Series A Preferred are automatically converted, written notice shall be
delivered to the holder of such shares of Series A Preferred at the address
last shown on the records of this corporation for such holder or given by
such holder to this corporation for the purpose of notice or, if no such
address appears or is given, at the place where the principal executive
office of this corporation is located, notifying such holder of the
conversion to be effected, specifying the date on which such conversion is
expected to occur, the number of shares of Series A Preferred to be converted
and calling upon such holder to surrender to Company, in the manner and at
the place designated, the certificate or certificates therefor. Upon such
conversion of the shares of Series A Preferred, holders shall surrender the
certificate or certificates therefor, duly endorsed, at the office of this
corporation or of any transfer agent for the Series A Preferred, and shall
state therein the name or names which he wishes the certificate or
certificates for shares of Common Stock to be issued. This corporation shall,
as soon as practicable thereafter, issue and deliver at such office to each
holder of Series A Preferred, or to his nominee or nominees, a certificate or
5
certificates for the number of shares of Common Stock to which he shall be
entitled. Any conversion of Series A Preferred pursuant to Section 3(b) shall
be deemed to have been made immediately prior to the closing of the issuance
and sale of shares as described in Section 3(b).
(iii) FRACTIONAL SHARES. No fractional shares shall be
issued upon conversion of the Series A Preferred. In lieu of Company issuing
any fractional shares to holders upon the conversion of the Series A
Preferred, Company shall pay to such holders an amount equal to the product
obtained by multiplying the Conversion Price by the fraction of a share not
issued pursuant to the previous sentence.
(d) ADJUSTMENT OF CONVERSION RATE. The number of shares of Common
Stock into which the Series A Preferred may be converted shall be subject to
adjustment from time to time as follows:
(i) ADJUSTMENTS FOR STOCK SPLITS AND SUBDIVISIONS. In the
event Company should at any time or from time to time after the date of
issuance hereof fix a record date for the effectuation of a split or
subdivision of the outstanding shares of Common Stock or the determination of
holders of Common Stock entitled to receive a dividend or other distribution
payable in additional shares of Common Stock or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock (hereinafter referred to as
"Common Stock Equivalents") without payment of any consideration by such
holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price shall be appropriately decreased so that the number of
shares of Common Stock issuable upon conversion of the Series A Preferred
shall be increased in proportion to such increase of outstanding shares;
provided, however, that no increase shall be made for stock dividends paid
with respect to Series A Preferred.
(ii) ADJUSTMENTS FOR REVERSE STOCK SPLITS. If the number of
shares of Common Stock outstanding at any time after the date hereof is
decreased by a combination of the outstanding shares of Common Stock, then,
following the record date of such combination, the Conversion Price shall be
appropriately increased so that the number of shares of Common Stock issuable
on conversion hereof shall be decreased in proportion to such decrease in
outstanding shares.
(e) NO IMPAIRMENT. Except for taking the actions contemplated by
Section 6 below upon obtaining the vote or consent set forth therein, this
corporation will not, by amendment of its Amended and Restated 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 this corporation, but it will
at all times in good faith assist in the carrying out of all of the
provisions of this Section 3 and in the taking of all
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such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred against
impairment.
(f) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Conversion Price of the Series A Preferred
pursuant to this Section 3, this corporation, at its expense, shall promptly
compute such adjustment or readjustment in accordance with the terms hereof
and prepare and furnish to each holder of such Series A Preferred a
certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. This
corporation shall, upon the written request at any time of any holder of
Series A Preferred, furnish or cause to be furnished to such holder a like
certificate setting forth (A) such adjustment and readjustment, (B) the
Conversion Price at the time in effect, and (C) 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 a share of Series A Preferred.
(g) NOTICES OF RECORD DATE. In the event of any taking by this
corporation of the record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, this corporation
shall mail to each holder of Series A Preferred, at least twenty (20) days
prior to the date specified herein, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend or distribution.
(h) RESERVATION OF STOCK. This 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 Series A Preferred such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
shares of Series A Preferred; 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 the then outstanding shares of the Series A Preferred, this
corporation will take such corporate action as may be necessary, in the
opinion of its counsel, to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purpose.
(i) NOTICES. Any notice required by the provisions of this
Section 3 to be given to the holders of shares of Series A Preferred shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his or her address appearing on the
books of this corporation.
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4. REDEMPTION. At any time and from time to time, this corporation
may, at its option, redeem all or part of the Series A Preferred at a
redemption price per share of $1,200 plus any accrued but unpaid dividends
(such amounts being adjusted to reflect stock dividends (except dividends
with respect to Series A Preferred), stock splits, combinations,
recapitalizations or the like after the Initial Series A Issue Date);
provided, however, that such redemption is effected within 15 days after
notice of redemption is provided to the holders of Series A Preferred. If
less than all of the Series A Preferred is to be redeemed, the amount of
shares to be redeemed from the holders shall be at the discretion of the
Board of Directors.
5. VOTING MATTERS. Except as otherwise required by law, shares of
Series A Preferred shall not be entitled to vote.
6. COVENANT. In addition to any other rights provided by law, so long
as any Series A 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 then outstanding shares of all
series of Preferred Stock voting together as a single class:
(a) alter or change the rights, preferences or privileges of the
shares of the Series A Preferred;
(b) increase or decrease the authorized number of shares of the
Series A Preferred; or
(c) authorize or create any new class of shares or additional
series of Preferred Stock having rights, preferences or privileges prior to
shares of the Series A Preferred.
7. 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.
8. CONSENT FOR CERTAIN REPURCHASES OF COMMON STOCK DEEMED TO BE
DISTRIBUTIONS. Each holder of Series A Preferred shall be deemed to have
consented, for purposes of Section 502, 503 and 506 of the California
Corporations Code, to distributions made by this corporation in connection
with the repurchase of shares of Common Stock issued to or held by employees
or consultants upon termination of their employment or services or pursuant
to agreements providing for the right of said repurchase between this
corporation and such persons.
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IN WITNESS WHEREOF, the undersigned have executed this Amended and
Restated Certificate of Determination of Series A Preferred Stock as of April
30, 1997.
/s/ Jeffrey F. Ait
----------------------------------------
Jeffrey F. Ait, Chief Executive Officer
/s/ Donald B. Witmer
----------------------------------------
Donald B. Witmer, Secretary
The undersigned further declare under penalty of perjury under the
laws of the State of California that the undersigned has read the foregoing
certificate and knows the contents thereof and that the same is true of the
undersigned's own knowledge.
Dated: April 30, 1997
/s/ Jeffrey F. Ait
----------------------------------------
Jeffrey F. Ait
/s/ Donald B. Witmer
----------------------------------------
Donald B. Witmer