Exhibit 3(i).1
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 08/27/1997
971287299-2279234
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
INFOSAFE SYSTEMS, INC.
Infosafe Systems, Inc. (the "Corporation"), a corporation organized and
existing under the General Corporation Law of the State of Delaware (the
"DGCL"), does hereby certify as follows:
1. The present name of the Corporation is Infosafe Systems, Inc. and its
original certificate of incorporation was filed with the office of the Secretary
of the State of Delaware on November 18, 1991.
2. This Amended and Restated Certificate of Incorporation was duly
adopted by the Board of Directors of the Corporation (the "Board") and by a
majority of the outstanding stock entitled to vote thereon and a majority of the
outstanding stock of each class entitled to vote thereon as a class in
accordance with Sections 228, 242 and 245 of the DGCL.
3. This Amended and Restated Certificate of Incorporation restates and
integrates and further amends the certificate of incorporation of the
Corporation, as heretofore amended (the "Certificate of Incorporation").
4. Upon the filing (the "Effective Time") of this Certificate of
Incorporation pursuant to the DGCL, the number of authorized shares of the
Corporation's Class A Common Stock shall be increased by 20,000,000 shares to an
aggregate of 40,000,000 shares.
5. The text of the Certificate of Incorporation is amended and restated
in its entirety as follows:
FIRST: The name of the corporation is
INFOSAFE SYSTEMS, INC.
SECOND: The address of the initial registered and principal office of
this corporation in this state is c/o United Corporate Services, Inc., 15 East
North Street, in the City of Dover, County of Kent, State of Delaware 19901 and
the name of the registered agent at said address is United Corporate Services,
Inc.
THIRD: The purpose of the corporation is to engage in any lawful act
or activity for which corporations may be organized under the corporation laws
of the State of Delaware.
FOURTH:
I.
a. The aggregate number of shares which the Corporation shall
have authority to issue is Fifty One Million (51,000,000) shares, consisting of
(i) Forty Million (40,000,000) shares of Class A Common Stock, $.01 par value
per share; (ii) Two Million (2,000,000) shares of Class B Common Stock, $.01 par
value per share; (iii) Two Million (2,000,000) shares of Class E-1 Common Stock,
$.01 par value per share; (iv) Two Million (2,000,000) shares of Class E-2
Common Stock, $.01 par value per share; and (v) Five Million (5,000,000) shares
of preferred stock, $.01 par value per share.
b. As of September 20, 1994 ("Reverse Split Date"), each four
shares of Class A Common Stock and Class B Common Stock then issued and
outstanding was, without any further action on the part of the Corporation or
any stockholder, automatically changed and reclassified into one share of Class
A Common Stock or Class B Common Stock, as the case may be, and from and after
the Reverse Split Date each certificate which theretofore represented any four
shares of the then issued and outstanding Class A Common Stock or Class B Common
Stock shall automatically be deemed to represent one share of Class A Common
Stock or Class B Common Stock, as the case may be (the "Reverse Stock Split").
c. No fractional shares of Common Stock shall be issued in
connection with the Reverse Stock Split and each holder of shares shall be
entitled to receive an amount equal to the fair value of any fractional
interests with respect to the shares of Common Stock.
II. Class A Common Stock, Class B Common Stock, Class E-1 and Class E-2
Common Stock.
A. General. The designations, preferences, limitations and relative
rights of the Class A Common Stock and the Class B Common Stock, the Class E-1
Common Stock and the Class E-2 Common Stock shall be in all respects identical,
except as stated in this Certificate of Incorporation or as otherwise required
by law.
B. Voting Rights.
(1) At each meeting of stockholders of the Corporation and upon
each proposal presented at such meeting, every holder of Class A Common Stock,
Class B-1 Common Stock and Class E-2 Common Stock shall be entitled to one vote
in person or by proxy for each share of Class A Common Stock, Class E-1 Common
Stock and Class E-2 Common Stock standing in his or her name on the stock
transfer records of the Corporation and every holder of Class B Common Stock
shall be entitled to six votes in person or by
proxy for each share of Class B Common Stock standing in his or her name on the
stock transfer records of the Corporation.
(2) Except as provided in this Paragraph (B) or Paragraphs (G)
and (H) of this Section II or as may be otherwise required by law, the holders
of Class A Common Stock, Class B Common Stock and Class E-1 and E-2 Common Stock
shall vote together as a single class with respect to all matters.
(3) Except as may be otherwise required by law or stated in any
Preferred Stock Designation (as defined in Section III of this Article Fourth),
the holders of Class A Common Stock, Class B Common Stock, Class E-1 Common
Stock and Class E-2 Common Stock shall have the exclusive right to vote for the
election of directors and for all other purposes, each holder of the Class A
Common Stock, Class B Common Stock, Class E-1 Common Stock and Class E-2 Common
Stock being entitled to vote as provided in this Paragraph (B) of this Section
II.
C. Dividends and Distributions. Except as provided in paragraph H, and
subject to the rights of the holders of Preferred Stock, and subject to any
other provisions of this Certificate of Incorporation, as it may be amended from
time to time, holders of Class A Common Stock, Class B Common Stock, Class E-1
Common Stock and Class E-2 Common Stock shall be entitled to receive such
dividends and other distributions in cash, in property or in shares of the
Corporation as may be declared thereon by the Board of Directors from time to
time out of assets or funds of the Corporation legally available therefor;
provided, however, that no cash, property or share dividend or distribution may
be declared or paid on the outstanding shares of either the Class A Common
Stock, the Class B Common Stock, the Class E-1 Common Stock or the Class E-2
Common Stock, unless an identical per share dividend or distribution is
simultaneously declared and paid on the outstanding shares of the other such
class of stock; provided, further, however, that a dividend of shares may be
declared and paid in Class A Common Stock to holders of Class A Common Stock,
Class B Common Stock, Class E-1 Common Stock and Class E-2 Common Stock if the
number of shares paid per share to holders of Class A Common Stock, to holders
of Class B Common Stock, to holders of Class E-1 Common Stock and to holders of
Class E-2 Common Stock shall be the same. If the Corporation shall in any manner
subdivide, combine or reclassify the outstanding shares of Class A Common Stock,
Class B Common Stock, Class E-1 Common Stock or Class E-2 Common Stock, the
outstanding shares of the other such class shall be subdivided, combined or
reclassified proportionally in the same manner and on the same basis as the
outstanding shares of Class A Common Stock, Class B Common Stock, Class E-1
Common Stock or Class E-2 Common Stock, as the case may be, have been
subdivided, combined or reclassified. A dividend in shares of Class A Common
Stock may be paid to the holders of shares of any other class of the
Corporation.
D. Common Stock Subject to Priorities of Preferred Stock. The Class A
Common Stock, Class B Common Stock, Class E-1 Common Stock and Class E-2 Common
Stock are subject to all the powers, rights, privileges, preferences and
priorities of the Preferred Stock as may be stated in this Certificate of
Incorporation and in any Preferred Stock Designation.
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E. Liquidation Rights. Upon liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, and after the holders, if
any, of the Preferred Stock of each series shall have been paid in full the
amounts to which they respectively shall be entitled, or a sum sufficient for
such payment in full shall have been set aside, the remaining net assets of the
Corporation shall be distributed pro rata on a share for share basis to the
holders of the Class A Common Stock, Class B Common Stock, Class E-1 Common
Stock and Class E-2 Common Stock, to the exclusion of the holders of the
Preferred Stock.
F. No Conversion of Class A Common Stock. The shares of Class A Common
Stock are not convertible into or exchangeable for shares of Class B Common
Stock or any other shares or securities of the Corporation.
G. Conversion of Class B Common Stock.
(1) Optional Conversion. Each record holder of Class B Common
Stock is entitled, at any time or from time to time, to convert any or all of
the shares of such holder's Class B Common Stock into shares of Class A Common
Stock at the ratio of one share of Class A Common Stock for each share of Class
B Common Stock.
(2) Optional Conversion Procedures.
(a) Each conversion of shares pursuant to Paragraph (G)(1)
of this Section II hereof shall be effected by the surrender of the certificate
or certificates representing the shares to be converted at the principal office
of the Corporation at any time during normal business hours, together with a
written notice by the holder stating the number of shares that such holder
desires to convert. Such conversion shall be deemed to have been effected as of
the close of business on the date on which such certificate or certificates have
been surrendered, and at such time, the rights of any such holder with respect
to the converted shares of such holder will cease and the person or persons in
whose name or names the certificate or certificates for shares are to be issued
upon such conversion will be deemed to have become the holder or holders of
record of such shares represented thereby.
(b) Promptly after such surrender, the Corporation will
issue and deliver in accordance with the surrendering holder's instructions the
certificate or certificates for the Class A Common Stock issuable upon such
conversion and a conversion and a certificate representing any Class B Common
Stock which was represented by the certificate or certificates delivered to the
Corporation in connection with such conversion, but which was not converted.
(3) Automatic Conversion. Each share of Class B Common Stock will
convert automatically into one share of Class A Common Stock upon the sale or
any other transfer thereof (including, without limitation, conveyance into a
trust and transfer by the operation of any will or the laws of descent and
distribution), except upon a sale or any other transfer to a person who
immediately prior to such sale or transfer is a holder of a share or shares of
Class B Common Stock.
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(4) Issuance Costs. The issuance of certificates upon conversion
of shares pursuant hereto will be made without charge to the holder or holders
of such shares for any issuance tax (except stock transfer tax) in respect
thereof or other costs incurred by the Corporation in connection therewith.
(5) Reservation of Shares. Solely for the purpose of issuance
upon conversion of such shares as herein provided, the Corporation shall at all
times reserve and keep available out of its authorized but unissued shares of
Class A Common Stock such number of shares of Class A Common Stock as are then
issuable upon the conversion of all outstanding shares of Class B Common Stock.
H. Class E Common Stock
(1) In General. The Class E-1 Common Stock and Class E-2 Common
Stock (collectively, "Class E Common Stock") shall have all of the same rights
as the Class A Common Stock and Class B Common Stock, except as specifically
provided herein. On liquidation of the Corporation, each outstanding share of
Class E Common Stock shall have the same rights as a share of Class A Common
Stock. Whenever any Class E Common Stock is outstanding, any other corporate
action, including but not limited to any declaration of dividends (whether in
cash, property or securities), distribution, repurchase, split or reverse split,
reorganization, recapitalization, merger or consolidation, shall also affect
equally all shares of Class A Common Stock, Class B Common Stock and Class E
Common Stock, except that any transaction that results or would result in the
holders of Class E Common Stock holding cash, new securities or other property
(referred to herein as the "Class E Distribution Proceeds") shall be effected in
such a fashion that the cash, new securities or other property issuable with
respect to each share of Class E Common Stock shall be held in trust by the
Corporation or by such other person as it may appoint. Such trust shall
terminate at the Determination Date (as defined below). During the period prior
to the Determination Date, the Class E Common Stock itself (in addition to the
Class E Distribution Proceeds) shall remain subject to the Escrow Conditions (as
defined below), so that the disposition of the Class E Common Stock and
corresponding Class E Distribution Proceeds shall be subject to the same Escrow
Conditions. Any earnings of the cash, new securities or other property held in
such trust shall be added to the corpus thereof, all of which shall be
distributed promptly after the Determination Date, to the holders of Class E
Common Stock as of the Determination Date, in proportion to their holdings of
Class E Common Stock, except that if none of the Escrow Conditions (as defined
below) shall have been satisfied on or before the Determination Date, then such
corpus shall revert to the Corporation.
(2) Determination Date. The Determination Date shall be the
earlier to occur of (i) the date any of the Escrow Conditions are satisfied, or
(ii) March 31, 1999.
(3) E-1 Escrow Conditions.
The Escrow Conditions for the Class E-1 Common Stock shall be
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(a) that the Corporation's "Income" (as defined below)
shall have equaled or exceeded $4,400,000 (adjusted as set forth below) for the
fiscal year ending July 31, 1996,
(b) that the Corporation's Income shall have equaled or
exceeded $6,600,000 (adjusted as set forth below) for the fiscal year ending
July 31, 1997,
(c) that the Corporation's Income shall have equaled or
exceeded $8,800,000 (adjusted as set forth below) for the fiscal year ending
July 31, 1998,
(d) that the "Market Price" (as defined below) of the
Class A Common Stock, when averaged over any 30 consecutive trading days all of
which are less than 18 months after the "Effective Date" (as defined below),
shall have equaled or exceeded $12.50 per share, or
(e) that the Market Price of the Class A Common Stock,
when averaged over any 30 consecutive trading days all of which are more than 18
and less than 36 months after the Effective Date, shall have equaled or exceeded
$16.50 per share.
(4) E-2 Escrow Conditions.
The Escrow Conditions for the Class E-2 Common Stock shall
be
(a) that the Corporation's Income shall have equaled or
exceeded $5,400,000 (adjusted as set forth below) for the fiscal year ending
July 31, 1996,
(b) that the Corporation's Income shall have equaled or
exceeded $8,100,000 (adjusted as set forth below) for the fiscal year ending
July 31, 1997,
(c) that the Corporation's Income shall have equaled or
exceeded $10,800,000 (adjusted as set forth below) for the fiscal year ending
July 31, 1998,
(d) that the Market Price of the Class A Common Stock,
when averaged over any 30 consecutive trading days all of which are less than 18
months after the Effective Date shall have equaled or exceeded $18.00 per share,
or
(e) that the Market Price of the Class A Common Stock,
when averaged over any 30 consecutive days all of which are more than 18 and
less than 36 months after the Effective Date, shall have equaled or exceeded
$22.00 per share.
(5) Definitions.
(a) "Income" shall mean the Corporation's net income
before provision for income taxes, but exclusive of any other earnings that are
classified as an extraordinary item, and exclusive of any charges to income that
may result from the release of any securities of the Corporation from an escrow
and the conversion of the Class E Common Stock into Class A Common Stock, as
stated in the Corporation's financial statements for such fiscal year upon which
independent auditors have given a report. For
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purposes of determining whether the above criteria are met at any Determination
Date, the Income amounts set forth above shall be increased at any Determination
Date by multiplying such Income amounts by a fraction, the numerator of which is
the average weighted number of shares of Common Stock outstanding over the
fiscal year for which the Escrow Condition is satisfied (including Class A and
Class E Common Stock, and treating as outstanding common stock of any class
issuable upon conversion of securities that are outstanding at the Determination
Date and which are convertible into common stock without the payment of
additional consideration ("Conversion Shares")) and the denominator of which is
the sum of (i) the number of shares of Common Stock (Class A, Class E and
Conversion Shares) which are outstanding (or, with respect to the Conversion
Shares, treated as outstanding as set forth above) at the Effective Date, plus
(ii) the number of shares of Common Stock sold under the "Registration
Statement," as defined below.
(b) The "Registration Statement" shall mean that certain
registration statement filed by the Corporation under the Securities Act of
1933, as amended, which is the first registration statement so filed by the
Corporation with the United States Securities and Exchange Commission.
(c) The "Effective Date"shall mean the date on which the
Registration Statement became effective within the meaning of Section 8 of the
Securities Act of 1933, as amended.
(d) "Market price" shall mean, in order of preferences,
(i) the last reported sales price on a consolidated transaction reporting
system, if the Class A Common Stock is listed on a national securities exchange
or is listed on the Nasdaq National Market, (ii) the high closing bid price if
such stock is otherwise quoted on the Nasdaq Stock Market, or (iii) otherwise, a
bid price for such stock determined by such means as the Corporation's Board of
Directors finds to be reasonable.
(6) Conversion.
(a) If on the Determination Date, any of the Escrow
Conditions shall have been satisfied, then each share of Class E Common Stock
shall be converted into one share of Class A Common Stock, and if on the
Determination Date none of the Escrow Conditions shall have been satisfied, then
the Class E Common Stock remaining in escrow shall be redeemed by the
Corporation at a price per share of $.0001 and canceled without further
obligation to the holder thereof. From and after the Determination Date, the
rights of the holders of Class E Common Stock shall be limited to the following:
(i) in the event that any of the Escrow Conditions were satisfied at the
Determination Date, the right to receive a certificate representing the number
of shares of Class A Common Stock into which such Class E Common Stock was
converted, and otherwise to the rights of a holder of such shares of Class A
Common Stock; or (ii) in the event that none of the Escrow Conditions were
satisfied at the Determination Date, no further right with respect to the Class
E Common Stock, which is thereby canceled, or with respect to any other property
or securities previously issued with respect thereto.
(b) Solely for the purpose of issuance upon conversion of
the Class E Common Stock as herein provided, the Corporation shall, at all
times, reserve and keep
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available out of its authorized but unissued shares of Class A Common Stock such
number of shares of Class A Common Stock as are then issuable upon the
conversion of all outstanding shares of Class E Common Stock.
(7) No Transfer. No person holding shares of Class E Common Stock
of record may transfer such shares, except by testamentary disposition or by
operation of law, and any purported transfer other than as permitted by the
preceding clause shall be ineffective, null and void.
(8) Registration. Shares of Class E Common Stock shall be
registered in the names of the beneficial owners thereof and not in "street" or
"nominee" name. For this purpose, a "beneficial owner" of any shares of Class E
Common Stock shall mean a person who, or any entity which, possesses the power,
either singly or jointly, to direct the voting or disposition of such shares.
The Corporation shall note on the certificates for shares of Class E Common
Stock the restrictions on transfer and registration.
III. Preferred Stock. The Board of Directors of the Corporation is
authorized, subject to any limitation prescribed by law, to provide for the
issuance of the shares of Preferred Stock in series, including, without
limitation, Series A Preferred Stock (as defined in Paragraph (A) of this
Section III), and any other series designated by the Board of Directors pursuant
to Paragraph (B) of this Section III.
A. Convertible Preferred Stock.
1. Designation of the 9% Series A Cumulative Convertible
Preferred Stock. The Corporation shall have authority to issue out of the
authorized but unissued shares of Preferred Stock a series of Preferred Stock to
be designated the Series A Convertible Preferred Stock (the "Series A Preferred
Stock"). The number of shares, powers, relative, participating, optional and
other special rights, and the qualifications, limitations and restrictions, if
any, of the Series A Preferred Stock shall be as set forth in this Paragraph
(A).
2. Number. The number of shares of Series A Preferred Stock
("Series A Shares") shall be 50,000.
3. Redemption. The Corporation will retire the Series A preferred
Stock by mandatory redemption ("sinking fund") as to 41,666 shares of July 30,
1994, 41,666 shares as of July 30, 1995 and 41,667 shares as of July 30, 1996
through the operation of a sinking fund calculated to retire the Series A
Preferred Stock at a price per share equal to the Original Series A Issue Price
(as defined in Paragraph (A)(4)) plus accrued dividends at the rate of 9% per
annum. The amount of any sinking fund payment in any year shall be automatically
reduced to the extent shares of Series A Preferred Stock are converted into
Class A Common Stock pursuant to the provisions of Paragraph (A)(6) prior to the
close of business on the sinking fund redemption date.
On and after the sinking fund redemption date, unless
default shall be made by the Corporation in making provisions for payment of the
redemption price, all
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rights to participate in the affairs of the Corporation as stockholders, except
the right to receive the redemption price, without interest, shall cease.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or
winding-up of the affairs of the Corporation (collectively, a "Liquidation"),
whether voluntary or involuntary, before any payment of cash or distribution of
other property shall be made to the holders of Common Stock, the holders of
Series A Preferred Stock shall be entitled to receive out of the assets of the
Corporation legally available for distribution to its stockholders, an amount
per share equal to (as such amount shall be adjusted to reflect subdivisions and
combinations of shares and stock dividends), with respect to each outstanding
share of Series A preferred Stock, $1.00 (the "Original Series A Issue Price"),
together with all declared but unpaid dividends with respect to each such share
(the "Liquidation Amount"). If the assets and funds legally available for
distribution among the holders of Preferred Stock shall be insufficient to
permit the payment to such holders of the full preferential amount, then such
assets and funds shall be distributed ratably among the holders of Preferred
Stock in proportion to the total preferential amount which each such holder is
entitled to receive.
(b) Any assets remaining after the distributions pursuant
to Paragraph (A)(4)(a) shall be distributed on a pro rata basis to the holders
of Common Stock.
(c) For purposes of this Paragraph (A)(4), a liquidation,
dissolution or winding up of the Corporation shall not be deemed to be
occasioned by, or to include, the Corporation's sale of all or substantially all
of its assets or the consolidation or merger of the Corporation with or into any
other corporation or corporations, or the effecting by the Corporation of a
transaction or series of related transactions after the Original Issue Date, as
hereinafter defined, in which more than 50% of the voting power of the
Corporation is disposed.
5. Voting Rights. Except as otherwise provided by law or this
Restated Certificate of Incorporation, the holders of Series A Preferred Stock
shall have no right to vote on any matter to be voted on by the Stockholders of
the Corporation (including any election or removal of directors of the
Corporation). The holders of each share of Series A Preferred Stock shall be
entitled to receive notice, together with the holders of each share of Common
Stock, of all stockholder meetings.
6. Conversion. The holders of Series A Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert.
(i) Optional Conversion. Each share of Series A
Preferred Stock shall be convertible at the option of the holder thereof at any
time after the date of issuance of such shares, at the office of the Corporation
or any transfer agent for Series A Preferred Stock, into fully paid and
nonassessable shares of Class A Common Stock at the rate of $1.24975 per share.
The initial Conversion Price for shares of Series A Preferred
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Stock shall be $1.24975; provided, however, that the Conversion Price shall be
subject to adjustment as set forth below.
(ii) Upon conversion of the Series A Preferred
Stock, the Class A Common Stock so issued shall be duly and validly issued,
fully paid and nonassessable shares of the Corporation.
(b) Mechanics of Conversion. No fractional shares of Class
A Common Stock shall be issued upon conversion of Series A Preferred Stock and
the number of shares issuable upon such conversion shall be calculated to the
nearest whole share. Except as provided in Paragraph (A)(6)(a)(ii), before any
holder of Series A Preferred Stock shall be entitled to convert the same into
full shares of Class A 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 Series A Preferred Stock, and shall give written notice
by mail, postage prepaid, to the Corporation at its principal corporate office,
of the election to convert the same. The Corporation shall, not later than 45
days thereafter, issue and deliver at such office to such holder of Series A
preferred Stock, a certificate or certificates for the number of shares of Class
A Common Stock to which he shall be entitled as aforesaid (after aggregating all
shares of Class A Common Stock issuable to such holder of Series A Preferred
Stock upon conversion of the number of shares of Series A Preferred Stock at the
time being converted) and a check in an amount equal to accrued but unpaid
dividends as to this date with respect to such shares converted. In addition, if
less than all of the shares represented by such certificates are surrendered for
conversion pursuant to Paragraph (A)(6)(a)(i), the Corporation shall issue and
deliver to such holder a new certificate for the balance of the shares of Series
A Preferred Stock not so converted. Except as provided in Paragraph
(A)(6)(a)(ii), such conversion shall be deemed to have been made immediately
prior to the close of business on the date of the surrender of the shares of
such Series A Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Class A Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Class A Common Stock as of such date.
(c) Adjustments to Conversion Price.
(i) Adjustments for Dividends, Distributions or
Subdivisions. In the event the Corporation shall issue additional shares of
Common Stock pursuant to a stock dividend, stock distribution or subdivision,
the Conversion Price in effect immediately prior to such stock dividend, stock
distribution or subdivision shall concurrently with such stock dividend, stock
distribution or subdivision, be proportionately decreased.
(ii) Adjustments for Combinations or
Consolidations. 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 Price in effect immediately prior to
such combination or consolidation shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
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(iii) Adjustments for Issuances of Shares at Less
than Conversion Price. In the event the Corporation shall sell additional shares
of Common Stock for a consideration per share less than the Conversion Price on
the date of the sale, the Conversion Price in effect immediately prior to such
sale shall be changed to a price determined by dividing (i) the sum of (a) the
total number of shares of Common Stock outstanding immediately prior to such
sale, multiplied by the Conversion Price in effect immediately prior to such
sale, and (b) the consideration, if any, received by the Corporation upon such
sale by (ii) the total number of shares of Common Stock outstanding immediately
after such sale.
(d) No impairment. The 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 the Corporation, but
will, at all times in good faith, assist the carrying out of all the provisions
of this Paragraph (A)(6) and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series A Preferred Stock against impairment.
(e) Reservation of Stock Issuable Upon Conversion. The
Corporation shall, at all times, reserve and keep available out of its
authorized but unissued shares of Class A Common Stock solely for the purposes
of effecting the conversion of the Series A Preferred Stock, such number of its
shares of Class A Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A Preferred Stock; and
if at any time the number of authorized but unissued shares of Class A Common
Stock shall not be sufficient to effect the conversion of all then-outstanding
shares of Series A 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 Class A Common Stock to such number of shares
of as shall be sufficient for such purposes.
(f) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to this
Paragraph (A)(6), the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of Series A Preferred stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth (i) all such
adjustments and readjustments, (ii) the Conversion Price at the time in effect,
and (iii) the number of shares of Class A Common Stock which at the time would
be received upon the conversion of such Series A Preferred Stock.
(g) Notices of Record Date. In the event that the
Corporation shall propose at any time:
(i) to declare any dividend or distribution upon
the 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; or
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(ii) to offer for subscription to the holders of
any class or series of its capital stock any additional shares of stock of any
class or series or any other rights; or
(iii) to effect any reclassification or
recapitalization; or
(iv) to merge or consolidate with or into any other
corporation, to 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, the Corporation shall send to the holders of the Series A Preferred
Stock:
(1) at least 10 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 10 days' prior written notice of the date of a
stockholders meeting at which a vote on such matters 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 and the amount of securities or other property
deliverable upon such event).
Each such written notice shall be given personally
or by first class mail, postage prepaid, addressed to the holders of Series A
Preferred Stock at the address for each such holder as shown on the books of the
Corporation.
7. Equal Rights. Each share of Series A Preferred Stock issued
and outstanding shall be identical in all respects one with the other, and no
dividends shall be paid on any shares of Series A Preferred Stock unless the
same dividend is paid on all shares of Series A Preferred Stock outstanding at
the time of such payment.
8. No Reissuance of Series A Preferred Stock. No share or shares
of Series A Preferred Stock acquired by the Corporation by reason of purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.
B. Additional Series of Preferred Stock
1. Designation of Additional Series of Preferred Stock. The Board
of Directors is hereby expressly authorized, by resolution or resolutions
thereof, to provide for, designate and issue, out of the 4,950,000 authorized
but undesignated and unissued shares of Preferred Stock, one or more series of
Preferred Stock, subject to the terms and conditions set forth herein. Before
any shares of any such series is issued, the Board of Directors shall fix, and
hereby is expressly empowered to fix, by resolution or resolutions, the
following provisions of the shares of any such series:
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(a) the designation of such series, the number of shares
to constitute such series and the stated value thereof, if different from the
par value thereof;
(b) whether the shares of such series shall have voting
rights or powers, in addition to any voting rights required by law, and, if so,
the terms of such voting rights or powers, which may be full or limited;
(c) the dividends, if any, payable on such series, whether
any such dividends shall be cumulative, and, if so, from what dates, the
conditions and dates upon which such dividends shall be payable, and the
preference or relation which such dividends shall bear to the dividends payable
on any shares of stock or any other class or any other series of this class;
(d) whether the shares of such series shall be subject to
redemption by the Corporation and, if so, the times, prices and other conditions
of such redemption;
(e) the amount or amounts payable upon shares of such
series upon, and the rights of the holders of such series in, the voluntary or
involuntary liquidation, dissolution or winding up, or upon any distribution of
the assets, of the Corporation;
(f) whether the shares of such series shall be subject to
the operation of a retirement or sinking fund and, if so, the extent to and
manner in which any such retirement or sinking fund shall be applied to the
purchase or redemption of the shares of such series for retirement or other
corporate purposes and the terms and provisions relative to the operation
thereof;
(g) whether the shares of such series shall be convertible
into, or exchangeable for, shares of stock of any other class or any other
series of this class or any other securities and, if so, the price or prices or
the rate or rates of conversion or exchange and the method, if any, of adjusting
the same, and any other terms and condition or exchange;
(h) the limitations and restrictions, if any, to be
effective while any shares of such series are outstanding upon the payment of
dividends or the making of other distributions on, and upon the purchase,
redemption or other acquisition by the Corporation of, the Common Stock or
shares of stock of any other class or any other series of this class;
(i) the conditions or restrictions, if any, to be
effective while any shares of such series are outstanding upon the creation of
indebtedness of the Corporation upon the issue of any additional stock,
including additional shares of such series or of any other series of this class
or of any other class; and
(j) any other powers, designations, preferences and
relative, participating, optional or other special rights, and any
qualifications, limitations or restrictions thereof.
The powers, designations, preferences and relative,
participating, optional or other special rights of each series of Preferred
Stock, and the qualifications, limitations or
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restrictions thereof, if any, may differ from those of any and all other series
at any time outstanding. The Board of Directors is hereby expressly authorized
from time to time to increase (but not above the total number of authorized
shares of Preferred Stock) or decrease (but not below the number of shares
thereof then outstanding) the number of shares of stock of any series of
Preferred Stock designated as any one or more series of Preferred Stock pursuant
to this Paragraph (B)(1).
FIFTH: The name and address of the incorporator are as follows:
NAME ADDRESS
---- -------
Ray A. Barr 10 Bank Street
White Plains, New York 10606
SIXTH: The following provisions are inserted for the management
of the business and the conduct of the affairs of the corporation, and for
further definition, limitation and regulation of the powers of the corporation
and of its directors and stockholders:
(1) The number of directors of the corporation shall be such as
from time to time shall be fixed by, or in the manner provided in the by-laws.
Election of directors need not be by ballot unless the by-laws so provide.
(2) The Board of Directors shall have power without the assent or
vote of the stockholders:
(a) To make, alter, amend, change, add to or repeal the
By-Laws of the corporation; to fix and vary the amount to be reserved for any
proper purpose; to authorize and cause to be executed mortgages and liens upon
all or any part of the property of the corporation; to determine the use and
disposition of any surplus or net profits; and to fix the times for the
declaration and payment of dividends.
(b) To determine from time to time whether, and to what
times and places, and under what conditions the accounts and books of the
corporation (other than the stock ledger) or any of them, shall be open to the
inspection of the stockholders.
(3) The directors in their discretion may submit any contract or
act for approval or ratification at any annual meeting of the stockholders or at
any meeting of the stockholders called for the purpose of considering any such
act or contract, and any contract or act that shall be approved or be ratified
by the vote of the holders of a majority of the stock of the corporation which
is represented in person or by proxy at such meeting and entitled to vote
thereat (provided that a lawful quorum of stockholders be there represented in
person or by proxy) shall be as valid and as binding upon the corporation and
upon all stockholders as though it had been approved or ratified by every
stockholder of the corporation, whether or not the contract or act would
otherwise be open to legal attack because of directors' interest, or for any
other reason.
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(4) In addition to the powers and authorities hereinbefore or by
statute expressly conferred upon them, the directors are hereby empowered to
exercise all such powers and do all such acts and things as may be exercised or
done by the corporation; subject, nevertheless, to the provisions of the
statutes of Delaware, of this certificate, and to any by-laws from time to time
made by the stockholders; provided, however, that no by-laws so made shall
invalidate any prior act of the directors which would have been valid if such
by-law had not been made.
SEVENTH: No director shall be liable to the corporation or any of its
stockholders for monetary damages for breach of fiduciary duty as a director,
except with respect to (1) a breach of the director's duty of loyalty to the
corporation or its stockholders, (2) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (3)
liability under Section 174 of the Delaware General Corporation Law or (4) a
transaction from which the director derived an improper personal benefit, it
being the intention of the foregoing provisions to eliminate the liability of
the corporation's directors to the corporation or its stockholders to the
fullest extent permitted by Section 102(b)(7) of the Delaware General
Corporation Law, as amended from time to time. The corporation shall indemnify
to the fullest extent permitted by Sections 102(b)(7) and 145 of the Delaware
General Corporation Law, as amended from time to time, each person that such
Section grant the corporation power to indemnify.
EIGHTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware, may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this corporation under the provisions of Section 279 Title 8 of the Delaware
Code order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths (3/4) in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to compromise or arrangement and to any
reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
NINTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Incorporation to be executed this 27th day of August, 1997.
INFOSAFE SYSTEMS, INC.
By: /s/ Arthur R. Medici
--------------------
Arthur R. Medici
President and Chief Executive Officer
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