STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 07/14/1999
991287979 - 2889367
SECOND AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
DIRECT HIT TECHNOLOGIES, INC.
Direct Hit Technologies, Inc., a corporation organized and existing
under the laws of the State of Delaware, hereby certifies as follows:
1. The name of the corporation is Direct Hit Technologies, Inc.
2. The date of filing of its original Certificate of Incorporation with
the Secretary of State of the State of Delaware was April 27, 1998.
3. The date of filing of its First Amended and Restated Certificate of
Incorporation with the Secretary of State of the State of Delaware was
November 12, 1998.
4. This Second Amended and Restated Certificate of Incorporation restates
and integrates and further amends the Certificate of Incorporation of this
Corporation as herein set forth in full:
ARTICLE I
NAME
The name of the corporation (hereinafter called the "Corporation")
is Direct Hit Technologies, Inc.
ARTICLE II
REGISTERED OFFICE
The address of the registered office of the Corporation in the State
of Delaware is 15 East North Street, City of Dover, County of Kent, and the
name of the registered agent of the Corporation in the State of Delaware at
such address is the Incorporating Services, Ltd.
ARTICLE III
PURPOSES
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be ordered under the General Corporation Law
of the State of Delaware.
ARTICLE IV
CAPITAL STOCK
1. AUTHORIZED STOCK. The Corporation is authorized to issue two classes
of shares to be designated respectively "Preferred Stock" par value $0.001
per share and "Common Stock," par value $0.001 per share. The total number of
shares of Preferred Stock authorized is 10,942,678. The total number of
shares of Common Stock authorized is 35,000,000. The shares of Preferred
Stock authorized by this Certificate of Incorporation may be issued from time
to time in one or more series.
Effective upon filing this Second Amended and Restated Certificate of
Incorporation, each outstanding share of Common Stock and each outstanding
share of Preferred Stock shall be split into three (3) shares of Common
Stock, $0.001 par value per share, and three (3) shares of Preferred Stock,
$0.001 par value per share, respectively. All references to the number of
shares of Common Stock and Preferred Stock herein shall be on a post-split
basis, unless otherwise indicated.
2. PREFERRED STOCK. The Preferred Stock may be divided into such number
of series as the Board of Directors may determine. The Board of Directors is
authorized to determine and alter the rights, preferences, privileges and
restrictions granted to and imposed upon any wholly unissued series of
Preferred Stock, and to fix the number of shares of any series of Preferred
Stock and the designation of any such series of Preferred Stock. The Board of
Directors, within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series, may increase or decrease (but not below the number
of shares of such series then outstanding) the number of shares of any series
subsequent to the issue of shares of that series. The first series of
Preferred Stock shall be comprised of 5,187,501 shares designated as "Series
A Preferred Stock." The second series of Preferred Stock shall be comprised
of 1,323,912 shares designated as "Series B Preferred Stock." The third
series of Preferred Stock shall be comprised of 4,431,265 shares designated
as "Series C Preferred Stock." The relative rights, preferences, restrictions
and other matters relating to the Series A Preferred Stock, the Series B
Preferred Stock and the Series C Preferred Stock (collectively, the
"Preferred Stock") are as follows:
(a) DIVIDENDS. The holders of outstanding Preferred Stock shall be
entitled to receive in any fiscal year, when as and if declared by the Board
of Directors, out of any assets at the time legally available therefor,
non-cumulative dividends in cash at the rate equal to $0.0213, $0.121 and
$0.4748 per share of Series A Preferred Stock, Series B Preferred Stock and
Series C
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Preferred Stock, respectively, as adjusted for any consolidations,
combinations, stock distributions, stock dividends, stock splits or similar
events (collectively a "Recapitalization Event"), per annum. The right to
dividends on Preferred Stock shall not be cumulative, unless otherwise
declared to be cumulative by the Board of Directors, and no right shall
accrue to holders of Preferred Stock by reason of the fact that distributions
on said shares are not declared in any prior year, nor shall any undeclared
or unpaid distribution bear or accrue interest. No dividend will be paid on
the Common Stock, and no share of Common Stock will be repurchased by the
Corporation except for purchases of unvested shares repurchased from former
employees at their original purchase price.
(b) PREFERENCE ON LIQUIDATION.
(1) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the assets and funds of the
Corporation available for distribution to stockholders shall be distributed
as follows:
(i) The holders of Series C Preferred Stock shall be
entitled to receive out of the assets of the Corporation available for
distribution to its stockholders before any payment shall be made in respect
of the Corporation's Series A Preferred Stock, Series B Preferred Stock or
Common Stock, the amount of (A) $8.90265 per share of Series C Preferred
Stock (as adjusted for any Recapitalization Event) if the consideration
received in a liquidation is $2.99 per fully diluted share of Common Stock or
less, (B) $10.386425 per share of Series C Preferred Stock (as adjusted for
any Recapitalization Event) if the consideration received in a liquidation is
between $3.00 and $8.96 per fully diluted share of Common Stock, (C) $11.8702
per share of Series C Preferred Stock (as adjusted for any Recapitalization
Event) if the consideration received in a liquidation is between $8.97 and
$11.96 per fully diluted share of Common Stock, or (D) $5.9351 per share of
Series C Preferred Stock (as adjusted for any Recapitalization Event) if the
consideration received in a liquidation is over $11.96 per fully diluted
share of Common Stock, plus all declared or accrued and unpaid dividends
thereon to the date fixed for such distributions. If upon liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay
the holders of the Series C Preferred Stock the full amounts to which they
respectively shall be entitled, the holders of the Series C Preferred Stock
shall share ratably in any distribution of assets according to the respective
amounts which would be payable in respect of the shares held by them upon
such distribution if all amounts payable on or with respect to said shares
were paid in full.
(ii) After setting apart or paying in full the
preferential amounts due to the holders of Series C Preferred Stock the
holders of Series B Preferred Stock and Series A Preferred Stock shall be
entitled to receive out of the assets of the Corporation available for
distribution to its stockholders, before any payment shall be made in respect
of the Corporation's Common Stock, the amount of (A) $0.2667 per share of
Series A Preferred Stock (the "Original Series A Issue Price") and $1.51067
per share of Series B Preferred Stock (the "Original Series B Issue Price")
(each as adjusted for any Recapitalization Event), and (B) all declared or
accrued and unpaid dividends thereon to the date fixed for such distribution.
If, after setting apart or
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paying in full the preferential amounts due the holders of Series C Preferred
Stock as set forth in Section 2(b)(1)(i) above, upon liquidation, dissolution
or winding up of the Corporation, the assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders of
the Series A and Series B Preferred Stock the full amounts to which they
respectively shall be entitled, the holders of the Series A and Series B
Preferred Stock shall share ratably in any distribution of assets according
to the respective amounts which would be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect
to said shares were paid in full.
(iii) After setting apart or paying in full the
preferential amounts due the holders of Preferred Stock as set forth in
Sections 2(b)(1)(i) and (ii) above, the remaining assets of the Corporation
available for distribution to its stockholders, if any, shall be distributed
ratably to the holders of Common Stock, Series A Preferred Stock and Series B
Preferred Stock then held by them, with each share of Series A Preferred
Stock and Series B Preferred Stock treated as the number of shares of Common
Stock into which such shares of Series A Preferred Stock and Series B
Preferred Stock are then convertible (which includes amounts paid pursuant to
paragraph 2(b)(1)(ii) above and as adjusted for any Recapitalization Event
with respect to such shares), PROVIDED, THAT a holder of Series A Preferred
Stock or Series B Preferred Stock shall cease to participate from a
distribution pursuant to this paragraph 2(b)(1)(iii) after April 27, 2001.
The merger or consolidation of the Corporation into or with another
corporation, entity or person, or the issuance by the Corporation of voting
securities to another corporation, entity or person, in either case pursuant
to which the stockholders of this Corporation shall own less than fifty
percent (50%) of the voting securities of the surviving or other corporation,
entity or person, or the sale, transfer or other disposition (but not
including a transfer or disposition by pledge or mortgage to a bona fide
lender) of all or substantially all of the assets of the Corporation, shall
be deemed to be a liquidation, dissolution or winding up of the Corporation
as those terms are used in this Section 2(b). Any of the foregoing events
deemed to constitute a liquidation, dissolution or winding up of the
Corporation shall be deemed to so constitute such an event whether
accomplished in a single transaction or a series of transactions.
(2) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the Corporation shall, within
ten (10) days after the date the Board of Directors approves such action, or
twenty (20) days prior to any stockholders' meeting called to approve such
action, or twenty (20) days after the commencement of any involuntary
proceeding whichever is earlier, give each holder of shares of Preferred
Stock written notice of the proposed action. Such written notice shall
describe the material terms and conditions of such proposed action, including
a description of the stock, cash and property to be received by the holders
of shares of Preferred Stock upon consummation of the proposed action and the
date of delivery thereof If any material change in the facts set forth in the
initial notice shall occur, the Corporation shall promptly give written
notice to each holder of shares of Preferred Stock of such material change.
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(3) The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation before
the expiration of thirty (30) days after the mailing of the initial written
notice or ten (10) days after the mailing of any subsequent written notice,
whichever is later; PROVIDED, THAT any such thirty (30) day or ten (10) day
period may be shortened upon the written consent of the holders of a majority
of the outstanding shares of Preferred Stock.
(4) In the event of any voluntary or involuntary liquidation
dissolution or winding up of the Corporation which will involve the
distribution of assets other than cash, the Corporation shall promptly engage
competent independent appraisers to determine the value of the assets to be
distributed to the holders of shares of Preferred Stock and the holders of
shares of Common Stock (it being understood that with respect to the
valuation of securities, the Corporation shall engage such appraiser as shall
be approved by the holders of a majority of shares of the Corporation's
outstanding Preferred Stock). The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each holder of shares of
Preferred Stock of the appraiser's valuation.
(c) VOTING. Except as otherwise required by law or as set forth
herein, the shares of Preferred Stock shall be voted on an equal basis with
the shares of the Corporation's Common Stock at any annual or special meeting
of stockholders of the Corporation, or may act by written consent in the same
manner as the Corporation's Common Stock, upon the following basis: each
holder of shares of Preferred Stock shall be entitled to such number of votes
for the Preferred Stock held by him on the record date fixed for such
meeting, or on the effective date of such written consent as shall be equal
to the number of shares of the Corporation's Common Stock into which all of
his shares of Preferred Stock are convertible immediately after the close of
business on the record date fixed for such meeting or the effective date of
such written consent.
(d) CONVERSION RIGHTS. The holders of Preferred Stock shall have
conversion rights as follows:
(1) OPTIONAL CONVERSION. Each share of Preferred Stock all 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 such number of fully paid and
nonassessable shares of Common Stock of the Corporation as it is then
convertible in accordance with the terms hereof. The number of shares of
Common Stock into which each share of Preferred Stock may be converted shall
be determined by dividing $0.2667 for the Series A Preferred Stock, $1.51067
for the Series B Preferred Stock and $5.9351 per share of the Series C
Preferred Stock by the appropriate Conversion Price in effect at the time of
conversion. The Series A Conversion Price, Series B Conversion Price and
Series C Conversion Price initially shall be $0.2667, $1.51067 and $5.9351,
respectively, subject to adjustment as hereinafter provided.
(2) AUTOMATIC CONVERSION. Each share of Preferred Stock shall
automatically be converted into shares of Common Stock, at the then effective
Conversion Price,
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upon the earlier of (i) the time the written consent or agreement to such
conversion is obtained by both (A) the holders of at least seventy-five
percent (75%) of the then outstanding Series C Preferred Stock and (B) the
holders of at least fifty percent (50%) of the then outstanding Series A and
Series B Preferred Stock or (ii) the closing of a firm commitment
underwritten public offering pursuant to an effective registration statement
on Form S-1 (or a successor form) under the Securities Act of 1933, as
amended, covering the offer and sale of Common Stock for the account of the
Corporation to the public at an offering price of at least $11.8702 per share
(as adjusted for any Recapitalization Event) that values the Corporation at
not less than $253 million and results in gross proceeds to the Corporation
of at least $20 million. In the event of such a public offering, the
person(s) entitled to receive the Common Stock issuable upon such conversion
of Preferred Stock shall not be deemed to have converted such Preferred Stock
until immediately prior to the closing of such public offering at which time
the 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 arc surrendered to the Corporation or its transfer
agent; PROVIDED, HOWEVER, that the Corporation shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon such
conversion unless certificates evidencing such shares of Preferred Stock
being converted are either delivered to the Corporation or its transfer
agent, as hereinafter provided, or the holder notifies the Corporation or any
transfer agent, as hereinafter provided, 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 therewith.
(3) The holder of any shares of Preferred Stock may exercise the
conversion rights by delivering to the Corporation during regular business
hours, at the office of any transfer agent of the Corporation for the
Preferred Stock, or at the principal office of the Corporation or at such
other place as may be designated by the Corporation, the certificate or
certificates for the shares to be converted, duly endorsed for transfer to
the Corporation (if required by it), accompanied or preceded by written notice
stating that the holder elects to convert such shares into shares of Common
Stock. Conversion shall be deemed to have been effected on the date when such
delivery is made (the "Conversion Date"). As promptly as practicable
thereafter, the Corporation shall issue and deliver to or upon the written
order of such holder, at such office or other place designated by the
Corporation, a certificate or certificates for the number of full shares of
Common Stock to which such holder is entitled. The holder shall be deemed to
have become a stockholder of record of Conversion Stock on the applicable
Conversion Date unless the transfer books of the Corporation are closed on
the date, in which event it shall be deemed to have become a stockholder of
record on the next succeeding date on which the transfer books are open, but
the Conversion Price shall be that in effect on the Conversion Date. Upon
conversion of only a portion of the number of shares of Preferred Stock
represented by a certificate surrendered for conversion, the Corporation
shall issue and deliver to or upon the written order of the holder of the
certificate so surrendered for conversion, at the expense of the Corporation,
a new certificate covering the number of shares of Preferred Stock
representing the unconverted portion of the certificate so surrendered.
(4) The Corporation shall pay any and all issue and other taxes
that may be payable in respect of any issue or delivery of shares of Common
Stock on conversion of
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Preferred Stock pursuant hereto. The Corporation shall not, however, be
required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that in which the Preferred Stock so converted were registered, and no
such issue or delivery shall be made unless and until the person requesting
such issue has paid to the Corporation the amount of any such tax, or has
established, to the satisfaction of the Corporation that such tax has been
paid.
(5) The Corporation shall at all times reserve and keep available,
out of its authorized but unissued Common Stock, solely for the purpose of
effecting the conversion of the Preferred Stock, the full number of shares of
Common Stock deliverable upon the conversion of all Preferred Stock from time
to time outstanding. The Corporation shall from time to time (subject to
obtaining necessary board and stockholder approval), in accordance with the
laws of the State of Delaware, increase the authorized amount of its Common
Stock if at any time the authorized number of shares of its Common Stock
remaining unissued shall not be sufficient to permit the conversion of all of
the shares of Preferred Stock at the time outstanding.
(6) If any shares of Common Stock to be reserved for the purpose of
conversion of Shares of Preferred Stock require registration or listing with,
or approval of, any governmental authority, stock exchange or other
regulatory body under any federal or state law or regulation or otherwise,
before such shares may be validly issued or delivered upon conversion, the
Corporation will in good faith and as expeditiously as possible endeavor to
secure such registration, listing or approval, as the case may be.
(7) All shares of Common Stock which may be issued upon conversion
of the sales of Preferred Stock will upon issuance by the Corporation be
validly issued, fully paid and non-assessable and free from all taxes, liens
and charges with respect to the issuance thereof.
(8) In case:
(i) the Corporation shall take a record of the holders of its
capital stock for the purpose of entitling them to receive a dividend payable
in cash or otherwise, or any other distribution, payable in cash of
otherwise, or to subscribe for or purchase any shares of stock of any class
or to receive any other rights; or
(ii) of any capital reorganization of the Corporation,
reclassification of the capital stock of the Corporation (other than a
subdivision or combination of its outstanding shares of common stock),
consolidation or merger of the Corporation with or into another corporation,
the issuance of a controlling block of voting securities to a third party (or
a group of third parties acting in concert with respect thereto) or
conveyance of all or substantially all of the assets of the Corporation to
another corporation; or
(iii) of the voluntary or involuntary dissolution, liquidation
or winding up of the Corporation;
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then, and in any such case, the Corporation shall cause to be mailed to the
transfer agent for the Preferred Stock, and to the holders of record of the
outstanding Preferred Stock at the address of record of such stockholder as
set forth on the Corporation's books, at least thirty (30) days prior to the
date hereinafter specified, a notice stating the material terms of the
proposed transaction and the date on which (x) a record is to be taken for
the purpose of such dividend, distribution or rights, or (y) such
reclassification, reorganization, consolidation, merger, conveyance,
dissolution. liquidation or winding up is to take place and the date, if any
is to be fixed. as of which holders of capital stock of record shall be
entitled to exchange their shares of capital stock for securities or other
property deliverable upon such reclassification, reorganization,
consolidation, merger, conveyance, dissolution, liquidation or winding up.
(e) ADJUSTMENT OF CONVERSION PRICE. The Conversion Price for any
series of Preferred Stock from time to time in effect shall be subject to
adjustment from time to time as follows:
(1) In case the Corporation shall at any time subdivide the
outstanding shares of Common Stock, or shall issue a stock dividend on its
outstanding Common Stock. the Conversion Price in effect immediately prior to
such subdivision or the issuance of such dividend shall be proportionately
decreased, and in case the Corporation shall at any time combine the
outstanding shares of Common Stock, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased,
effective, at the close of business on the date of such subdivision, dividend
or combination, as the case may be.
(2) Upon the issuance by the Corporation of Equity Securities
(as defined below) at a consideration per share less than the Conversion
Price of such series of Preferred Stock in effect immediately prior to the
time of such issue or sale other than an issuance of stock or securities
pursuant to Section 2(e)(1) above or the issuance of shoes of Common Stock
upon conversion of any shares of Preferred Stock, then forthwith upon such
issue or sale, such Conversion Price shall be reduced to a price (calculated
to the nearest hundredth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the number of
shares of Common Stock deemed outstanding immediately prior to such issue or
sale multiplied by the Conversion Price in effect immediately prior to such
adjustment, (y) the number of shares of Common Stock issuable upon conversion
or exchange of any obligations or of any securities of the Corporation deemed
outstanding immediately prior to such issue or sale multiplied by the
Conversion Price in effect immediately prior to such adjustment, and (z) an
amount equal to the aggregate "consideration actually received" by the
Corporation upon such issue or sale; by
(ii) the sum of the number of shares of Common Stock
deemed outstanding immediately after such issue or sale and the number of
shares of Common Stock issuable upon conversion or exchange of any
obligations or of any securities of the Corporation deemed outstanding
immediately after such issue or sale.
For purposes of this Section 2(e)(2), the following provisions shall
be applicable:
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(A) The term "Equity Securities" as used in this
Section 2(e)(2) shall mean any shares of Common Stock, or any obligation. any
share of stock or other security of the Corporation convertible into or
exchangeable for Common Stock except for (i) up to 2,487,501 shares of Common
Stock or options to purchase Common Stock in the aggregate (as adjusted for
any Recapitalization Event) issued or granted to officers, directors,
employees or consultants of the Corporation and its subsidiaries pursuant to
any stock plans heretofore approved by the Corporation's Board of Directors
or (ii) shares issued in conjunction with an equipment lease financing, debt
financing, licensing or acquisition transaction that is unanimously approved
by all members of the Board of Directors.
(B) In the case of an issue or sale for cash of
shares of Common Stock, the "consideration actually received" by the
Corporation therefor shall be deemed to be the amount of cash received,
before deducting therefrom any commissions or expenses paid by the
Corporation.
(C) In case of the issuance (otherwise than upon
conversion or exchange of obligations or shares of stock of the Corporation)
of additional shares of Common Stock for a consideration other than cash or a
consideration partly other dm cash, the amount of the consideration other
than cash received by the Corporation for such shares shall be deemed to be
the value of such consideration as determined in good faith by the Board of
Directors.
(D) In case of the issuance by the Corporation in
any manner of any rights to subscribe for or to purchase shares of Common
Stock. or any options for the purchase of shares of Common Stock or stock
convertible into Common Stock all shares of Common Stock or stock convertible
into Common Stock to which the holders of such rights or options shall be
entitled to subscribe for or purchase pursuant to such rights or options
shall be deemed "outstanding" as of the date of the offering of such rights
or the granting of such options, as the case may be, and the minimum
aggregate consideration named in such rights or options for the shares of
Common Stock or stock convertible into Common Stock covered thereby, plus the
consideration, if any, received by the Corporation for such rights or
options, shall be deemed to be the "consideration actually received" by the
Corporation (as of the date of the offering of such rights or the granting of
such options, as the case may be) for the issuance of such shares.
(E) In case of the issuance or issuances by the
Corporation in any manner of any obligations or of any shares of stock of the
Corporation that shall be convertible into or exchangeable for Common Stock,
all shares of Common Stock issuable upon the conversion or exchange of such
obligations or shares shall be deemed issued as of the date such obligations
or shares are issued, and the amount of the "consideration actually received"
by the Corporation for such additional shares of Common Stock shall be deemed
to be the total of (x) the amount of consideration received by the
Corporation upon the issuance of such obligations or shares. as the case may
be, plus (y) the minimum aggregate consideration, if any, other than such
obligations or shares, receivable by the Corporation upon such conversion or
exchange, except in adjustment of dividends.
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(F) The amount of the "consideration actually
received" by the Corporation upon the issuance of any rights or options
referred to in subsection (D) above or upon the issuance of any obligations
or shares which are convertible or exchangeable as described in subsection
(E) above, and the amount of the consideration, if any, other than such
obligations or shares so convertible or exchangeable, receivable by the
Corporation upon the exercise, conversion or exchange thereof shall be
determined in the same manner provided in subsections (B) and (c) above with
respect to the consideration received by the Corporation in case of the
issuance of additional shares of Common Stock, provided, however, that if
such obligations or shares of stock so convertible or exchangeable are issued
in payment or satisfaction of any dividend upon any stock of the Corporation
other than Common Stock, the amount of the "consideration actually received"
by the Corporation upon the original issuance of such obligations or shares
or stock so convertible or exchangeable shall be deemed to be the value of
such obligations or shares of stock, as of the date of the adoption of the
resolution deciding such dividend, as determined by the Board of Directors at
or as of that date. On the expiration of any rights or options referred to in
subsection (D), or the termination of any right of conversion or exchange
referred to in subsection (E), or any change in the number of shams of Common
Stock deliverable upon exercise of such options or rights or upon conversion
of or exchange of such convertible or exchangeable securities, the Conversion
Price then in effect shall forthwith be readjusted to such Conversion Price
as would have obtained had the adjustments made upon the issuance of such
option, right or convertible or exchangeable securities been made upon the
basis of the delivery of only the number of shares of Common Stock actually
delivered or to be delivered upon the exercise of such rights or options or
upon the conversion or exchange of such securities.
(G) 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 or options or rights
not referred to in this Section 2(e)(2), then, in each such case, the holders
of the Preferred Stock shall be entitled to the distributions provided for in
Section 2(a) above, and no adjustment to the Conversion Price provided for in
this Section 2(e) shall be applicable.
(3) Subject to the right of the Corporation to amend this
Certificate of Incorporation upon obtaining necessary approvals required by
this Certificate of Incorporation and applicable law, this Corporation will
not, by amendment of its Certificate 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 will at all times in good faith assist in
the carrying out of all the provisions of this Section 2(e) 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 Preferred Stock against impairment.
(4) Upon the occurrence of each adjustment or
readjustment of any Conversion Price pursuant to this Section 2(e), this
Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the thereof, and shall prepare and
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furnish to each holder of Preferred Stock affected thereby 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 any series of Preferred
Stock, furnish or cause to be furnished to such holder a like certificate
setting forth (A) such adjustment or readjustment, (B) the Conversion Price
of such series 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 his shares.
(f) STATUS OF CONVERTED STOCK. In the event any shares of
Preferred Stock shall be converted pursuant to Section 2(e) above or
otherwise acquired by the Corporation, the shares so converted shall be
cancelled and shall not be issuable by the Corporation, and the Certificate
of Incorporation of this Corporation shall be appropriately amended to effect
the corresponding reduction in the Corporation's authorized capital stock.
(g) PROTECTIVE PROVISIONS. So long as any shares of Preferred
Stock are outstanding, the Corporation shall not, without first obtaining the
approval by vote or written consent, in the manner provided by law, of (i)
the holders of at least a majority of the total number of shares of Series A
and Series B Preferred Stock outstanding. voting together as a class, and
(it) at least a majority of the total number of shares of Series C Preferred
Stock outstanding, voting separately as a class:
(1) amend the Articles of Incorporation or Bylaws in a
manner that would alter or change any of the powers, preferences, privileges
or rights of the Preferred Stock;
(2) increase or decrease the authorized number of shares
of Preferred Stock;
(3) amend the provisions of this Section 2(g);
(4) liquidate or wind up the Corporation;
(5) undertake or effect any consolidation or merger of
the Corporation with or into another corporation (except into or with a
wholly-owned subsidiary) or any acquisition by or the conveyance of all or
substantially all of the assets of the Corporation to another person or
effectuate any transaction or series of related transactions which results in
the Corporation's shareholders immediately prior to such transaction not
holding at least fifty percent (50%) of the voting power of the surviving or
continuing entity (a "Reorganization Event"); PROVIDED, HOWEVER, that the
consent of the holders of Preferred Stock shall not be required for the
Corporation to take any of the actions set forth in this Section 2(g)(5) if
the value of consideration to be received by a holder of any shares of Series
C Preferred Stock equals or exceeds $8.90265 per share (as adjusted for any
Recapitalization Event) pursuant to the consummation of such transaction; or
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(6) authorize or issue any other equity security senior
to or on a parity with the Preferred Stock as to dividend and redemption
rights or liquidation preferences.
(h) SERIES B PREFERRED STOCK PREFERENCE. So long as any shares
of Series B Preferred Stock are outstanding, the Corporation shall not,
without first obtaining the approval by vote or written consent, in the
manner provided by law, of the holders of at least a majority of the total
number of shares of Series B Preferred Stock outstanding, voting together as
a class, undertaken or effect any Reorganization Event in which the value of
the consideration to be received per share of Series B Preferred Stock in
such action is less than one hundred and fifty percent (150%) of the Original
Series B Issue Price.
(i) RESIDUAL RIGHTS. All rights accruing to the outstanding
shares of the Corporation not expressly provided for to the contrary herein
shall be vested in the Common Stock.
ARTICLE V
BYLAWS
In furtherance and not in limitation of the powers conferred by
statute and except as provided herein, the Board of Directors shall have the
power to adopt, amend, repeal or otherwise alter the bylaws without any
action on the part of the stockholders; PROVIDED, HOWEVER, that any bylaws
made by the Board of Directors and any and all powers conferred by any of
said bylaws may be amended, altered or repealed by the stockholders.
ARTICLE VI
INDEMNIFICATION OF DIRECTORS
A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived
an improper personal benefits.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a
director, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Delaware General
Corporation Law, as so amended.
Any repeal or modification of the foregoing provisions of this
Article SIXTH by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at
the time of such repeal or modification.
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ARTICLE VII
ELECTION OF DIRECTORS
The election of directors need not be by written ballot unless the
bylaws of the Corporation shall so provide.
4. This Second Amended and Restated Certificate of Incorporation was
duly adopted by written consent of the stockholders in accordance with the
applicable provisions of Sections 242 and 245 of the General Corporation Law
of the State of Delaware.
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IN WITNESS WHEREOF, Direct Hit Technologies, Inc. has caused this
Certificate to be signed by Michael Cassidy, its President, this 13th day of
July, 1999.
DIRECT HIT TECHNOLOGIES, INC.
By: /s/ Michael Cassidy
-----------------------------
Michael Cassidy, President
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