EXHIBIT 4.01
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
INTEGRATED SYSTEMS, INC.
Narendra K. Gupta certifies that:
1. He is the president and secretary of Integrated Systems, Inc.,
a California corporation.
2. The Articles of Incorporation of this corporation are amended
and restated to read as follows:
I. The name of this Corporation is Integrated Systems, Inc.
II. The purpose of this Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III. 1. AUTHORIZATION OF SHARES. This Corporation is authorized to
issue two classes of stock to be designated, respectively, Common Stock and
Preferred Stock, both without par value. The total number of shares of all
classes which the Corporation is authorized to issue is 30,000,000 shares. The
number of shares of Common Stock authorized is 25,000,000 shares and the number
of shares of Preferred Stock authorized is 5,000,000 shares of which 672,322
shares are presently designated as Series A Convertible Preferred Stock
("Convertible Preferred Stock"). The rights, preferences, privileges and
restrictions granted to and imposed upon the Common Stock and Convertible
Preferred Stock are set forth below in Article IV.
2. DESIGNATION OF UNISSUED SERIES OF PREFERRED STOCK. The
Preferred Stock may be divided into such number of series as the board of
directors may determine. The board of directors of the Corporation may
designate, fix the number of shares of and determine or alter the rights,
preferences, privileges and restrictions granted to or imposed upon, any series
of Preferred Stock as to which there are no outstanding shares or rights to
acquire shares (including the Convertible Preferred Stock which becomes so as a
result of conversion of all outstanding shares of such series pursuant to
Article IV, Section 5 hereof). As to any series of Preferred Stock, the number
of shares of which is authorized to be fixed by the board of directors, the
board may, within any limits and restrictions stated in the resolutions of the
board originally fixing the number of shares constituting such series, increase
or decrease (but not below the number of shares of such series then outstanding
and as to which rights to acquire shares of such series are then outstanding)
the number of shares of any such series subsequent to the issue of shares of
that series.
IV. The relative rights, preferences, privileges and restrictions
granted to or imposed upon the Common Stock and the Convertible Preferred Stock
are as follows:
1. DIVIDENDS.
(a) No dividends shall be declared and set aside for any
shares of the Convertible Preferred Stock except in the event that the Board of
Directors of the Corporation shall declare a dividend payable upon the then
outstanding shares of the Common Stock, in which event the holders of each share
of Convertible Preferred Stock shall be entitled to be paid a dividend in an
amount per share of Convertible Preferred Stock equal to the amount of the
dividend declared payable upon each outstanding share of Common Stock,
multiplied by the largest number of whole shares of Common Stock into which each
share of Convertible Preferred Stock held by each holder thereof could be
converted pursuant to the provisions of Section 5 hereof, such number determined
as of the record date for the determination of holders of Common Stock entitled
to receive such dividend.
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(b) Each holder of shares of Convertible Preferred Stock
shall be deemed to have consented (i) for purposes of Sections 502, 503, and 506
of the California Corporations Code, and (ii) with respect to the rights of each
such holder of Convertible Preferred Stock to receive distributions pursuant to
Sections 1, 2 and/or 4(h) herein, to distributions made by the Corporation in
connection with the repurchase of shares of Common Stock from employees,
officers, directors, consultants, or other persons performing services for the
Corporation or any subsidiary upon termination of their employment or services
pursuant to agreements providing for the right of repurchase.
2. LIQUIDATION, DISSOLUTION OR WINDING UP.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, holders of each
share of Convertible Preferred Stock then outstanding shall be entitled to be
paid first out of the assets of the Corporation available for distribution to
the holders of the Corporation's capital stock of all classes, whether such
assets are capital, surplus, or earnings, before any sums shall be paid or any
assets distributed among the holders of shares of Common Stock, in an amount
equal to the greater of (i) $1.4874 per share of Convertible Preferred Stock
plus all dividends thereon, if any, payable pursuant to Section 1, up to and
including the date of full payment, or (ii) the amount per share of Convertible
Preferred Stock that would have been payable had each such share, plus all
dividends thereon, if any, payable pursuant to Section 1, been converted to
Common Stock immediately prior to such event of liquidation, dissolution or
winding up pursuant to the provisions of Section 4 hereof, up to and including
the date of full payment, all such sums shall be paid before any sums shall be
paid or any assets distributed among the holders of the shares of Common Stock.
If the assets of the Corporation shall be insufficient to permit the payment in
full to the holders of the Convertible Preferred Stock of the amount thus
distributable, then the entire assets of the Corporation available for such
distribution shall be distributed ratably among the holders of the Convertible
Preferred Stock. After such payment shall have been made in full to the holders
of the Convertible Preferred Stock or funds necessary for such payment shall
have been set aside by the Corporation in trust for the account of holders of
the Convertible Preferred Stock so as to be available for such payment, holders
of the Convertible Preferred Stock shall be entitled to no further participation
in the distribution of the assets of the Corporation and shall have no further
rights of conversion, and the remaining assets available for distribution shall
be distributed ratably among the holders of the Common Stock.
(b) A consolidation or merger of the Corporation in which
the holders of all capital stock of the Corporation outstanding immediately
prior to such a consolidation or merger hold less than two-thirds of the capital
stock of the surviving entity to such consolidation or merger, or a sale of all
or substantially all of the assets of the Corporation, shall be regarded as a
liquidation, dissolution or winding up of the affairs of the Corporation within
the meaning of this Section 2; provided, however, that each holder of
Convertible Preferred Stock shall have the right to elect the benefits of the
provisions of Section 4(h) hereof in lieu of receiving payment in liquidation,
dissolution or winding up of the Corporation pursuant to this Section 2;
provided, further, that in the event a consolidation or merger of the
Corporation or sale of all or substantially all of the assets of the Corporation
in which the aggregate consideration payable to the holders of capital stock of
the Corporation is less than or equal to $2,850,000, is to be regarded as
liquidation, dissolution or winding up pursuant to the terms hereof, then
notwithstanding Section 2(a) hereof, the holders of Convertible Preferred Stock
shall be entitled to receive an amount equal to $1.4874 per share multiplied by
a fraction the numerator of which is the total amount of consideration payable
to the holders of capital stock of the Corporation and the denominator of which
is $2,850,000.
(c) Whenever the distribution provided for herein shall
be paid in property other than cash, the value of such distribution shall be the
fair market value of such property as determined in good faith by the Board of
Directors of the Corporation.
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3. VOTING POWER. Each holder of Convertible Preferred Stock
shall be entitled to that number of votes equal to the largest number of whole
shares of Common Stock into which such holder's shares of Convertible Preferred
Stock could be converted, pursuant to the provisions of Section 4 hereof (taking
into account all dividends, if any, payable pursuant to Section 1 with respect
to such Convertible Preferred Stock), at the record date for the determination
of shareholders entitled to vote on such matter or, if no such record date is
established, at the date such vote is taken or any written consent of
shareholders is solicited. Except as otherwise expressly provided in Section 6
herein or as required by law, (i) the holders of shares of Convertible Preferred
Stock and Common Stock shall be entitled to vote together as a class on all
matters and (ii) the holders of shares of Convertible Preferred Stock shall have
no rights to vote as a separate class on any corporate matters.
4. CONVERSION RIGHTS. The holders of the Convertible
Preferred Stock shall have the following conversion rights:
(a) General.
(i) Subject to and in compliance with the
provisions of this Section 4, any shares of the Convertible Preferred Stock and,
at the option of the holder, all dividends thereon, if any, payable pursuant to
Section 1, up to and including the date of conversion, may, at the option of the
holder, be converted at any time or from time to time into fully-paid and
nonassessable shares (calculated as to each conversion rounded upwards to the
largest whole share) of Common Stock. The number of shares of Common Stock to
which a holder of Convertible Preferred Stock shall be entitled upon conversion
shall be the product obtained by multiplying the "Applicable Conversion Rate"
(determined as provided in Section 4(c)) by the number of shares of Convertible
Preferred Stock being converted.
(ii) Notwithstanding the foregoing, the holders
of Convertible Preferred Stock shall have the right to convert all or any
portion of any dividends payable pursuant to Section 1 hereunder, into shares of
Common Stock at any time upon written notice to the Corporation. The number of
shares of Common Stock issuable upon any such conversion shall be the number of
shares equal to the amount of the unpaid dividends being so converted dividend
by the "Applicable Conversion Value" then in effect, (determined as provided in
Section 4(d) hereof.) Upon receipt of any such notice, the Corporation shall
promptly issue a certificate in the name of the holder of Convertible Preferred
Stock for the number of shares of Common Stock so issuable, together with a
check representing cash in lieu of any fractional share.
(b) Conversion Following Underwritten Public Offering.
(i) All outstanding shares of Convertible Preferred
Stock and, at the option of the holder, all dividends thereon, if any, payable
pursuant to Section 1, up to and including the date of conversion, shall, at the
option of the Corporation and upon ten (10) days written notice to the holders
thereof be converted automatically into the number of shares of Common Stock to
which a holder of Convertible Preferred Stock shall be entitled upon conversion
pursuant to Section 4(a) hereof without any further action by such holders and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent for the Common Stock, such conversion to be
effective only upon the closing of an underwritten public offering pursuant to
an effective registration statement under the Securities Act of 1933, as
amended, covering the offer and sale of Common Stock for the account of the
Corporation in which the Common Stock is sold at a price to the public of not
less than $5.00 per share (such per share amounts to be equitably adjusted
whenever there shall occur a stock split, combination, reclassification or other
similar event affecting the Common Stock) and in which the aggregate net
proceeds to the Corporation exceed $7,000,000.
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(ii) Upon the occurrence of the conversion
specified in Section 4(b)(i), the holders of such Convertible Preferred Stock
shall surrender the certificates representing such shares at the office of the
Corporation or of its transfer agent for the Common Stock. Thereupon, there
shall be issued and delivered to such holder a certificate or certificates for
the number of shares of Common Stock into which the shares of the Convertible
Preferred Stock surrendered were convertible on the date on which such
conversion occurred. 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 the Convertible Preferred Stock
being converted are either delivered to the Corporation or any such transfer
agent or the holder notifies the Corporation or any such transfer agent that
such certificates have been lost, stolen or destroyed and executes an agreement
satisfactory to the Corporation to indemnify the Corporation from any loss
incurred by it in connection therewith.
(c) Applicable Conversion Rate. The conversion rate
in effect at any time (the "Applicable Conversion Rate") shall be the quotient
obtained by dividing the sum of (i) $1.4874 and (ii) at the election of the
holder, an amount equal to the amount of unpaid dividends, if any, per share of
Convertible Preferred Stock, payable pursuant to Section 1, by the "Applicable
Conversion Value," calculated as, provided in Section 4(d).
(d) Applicable Conversion Value. The " Applicable
Conversion Value" in effect from time to time, except as adjusted in accordance
with Section 4(e) hereof, shall be $1.4874.
(e) Adjustments to Applicable Conversion Value. Upon
the happening of an "Extraordinary Common Stock Event" (as hereinafter defined),
the Applicable Conversion Value shall, simultaneously with the happening of such
Extraordinary Common Stock Event, be adjusted by multiplying the then effective
Applicable Conversion Value by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such
Extraordinary Common Stock Event and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after such
Extraordinary Common Stock Event, and the product so obtained shall thereafter
be the Applicable Conversion Value. The Applicable Conversion Value, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Events.
"Extraordinary Common Stock Event" shall mean (i) the
issue of additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (ii) subdivision of outstanding shares
of Common Stock into a greater number of shares of the Common Stock, or (iii)
combination of outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock.
(f) Dividends. In the event the Corporation shall make
or issue, or fix a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock or in assets (excluding cash
dividends or distributions), and the holders of Convertible Preferred Stock have
not received such dividend or distribution, then and in each such event
provision shall be made so that the holders of Convertible Preferred Stock shall
receive upon conversion thereof in addition to the number of shares of Common
Stock receivable thereupon, the number of securities or such other assets of the
Corporation that they would have received had their Convertible Preferred Stock
been converted into Common Stock on the date of such event and had they
thereafter, during the period from the date of such event to and including the
Conversion Date (as that term is hereafter defined in Section 4(j)), retained
such securities or such other assets receivable by them as aforesaid during such
period, giving application to all adjustments called for during such period
under this Section 4 with respect to the rights of the holders of the
Convertible Preferred Stock.
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(g) Recapitalization or Reclassification. If the Common
Stock issuable upon the conversion of the Convertible Preferred Stock shall be
changed into the same or different number of shares of any class or classes of
stock of the Corporation, whether by recapitalization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for elsewhere in this Section 4, or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 4), then
and in each such event the holder of each share of Convertible Preferred Stock
shall have the right thereafter to convert such share into the kind and amount
of shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change by holders of the number of
shares of Common Stock into which such share of Convertible Preferred Stock
might have been converted (taking into account all dividends payable pursuant to
Section 1 with respect to such Convertible Preferred Stock) immediately prior to
such reorganization, reclassification or change, all subject to further
adjustment as provided herein.
(h) Capital Reorganization, Merger or Sale of Assets.
If at any time or from time to time there shall be a capital reorganization of
the Common Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this Section 4) or a merger or
consolidation of the Corporation with or into another corporation, or the sale
of all or substantially all of the Corporation's properties and assets to any
other person, then, as a part of such reorganization, merger, consolidation or
sale, provision shall be made so that the holders of the Convertible Preferred
Stock shall thereafter be entitled to receive upon conversion of the Convertible
Preferred Stock, the number of shares of stock or other securities or property
of the Corporation, or of the successor corporation resulting from such merger,
consolidation or sale, to which a holder of Common Stock issuable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation, or sale. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 4 with respect to the
rights of the holders of the Convertible Preferred Stock after the
reorganization, merger, consolidation or sale to the end that the provisions of
this Section 4 (including adjustment of the Applicable Conversion Value then in
effect and the number of shares purchasable upon conversion of the Convertible
Preferred Stock) shall be applicable after that event in as nearly equivalent a
manner as may be practicable.
Each holder of Convertible Preferred Stock upon the
occurrence of a capital reorganization, merger or consolidation of the
Corporation, or the sale of all or substantially all its assets and properties
as such events are more fully set forth in the first paragraph of this Section
4(h), shall have the option of electing treatment of his Convertible Preferred
Stock under either this Section 4(h) or Section 2(b) hereof, notice of which
election shall be submitted in writing to the Corporation at its principal
offices no later than five (5) days before the effective date of such event.
(i) Accountant's Certificate as to Adjustments. In each
case of an adjustment or readjustment of the Applicable Conversion Rate, the
Corporation will furnish each holder of Convertible Preferred Stock with a
certificate, prepared by independent public accountants of recognized standing
showing such adjustment or readjustment, and stating in detail the facts upon
which such adjustment or readjustment is based.
(j) Exercise of Conversion Privilege. To exercise
his conversion privilege, a holder of Convertible Preferred Stock shall
surrender the certificate or certificates representing the shares being
converted to the Corporation at its principal office, and shall have written
notice to the Corporation at that office that such holder elects to convert such
share. Such notice shall also state the name or names (with the address or
addresses) in which the certificate or certificates for shares of Common Stock
issuable upon such conversion shall be issued. The date on which the certificate
or certificates for shares of Convertible Preferred Stock surrendered for
conversion (accompanied by proper assignment thereof) is
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received by the Corporation, shall be the "Conversion Date." As promptly as
practicable after theConversion Date, the Corporation shall issue and shall
deliver to the holder of the shares of Convertible Preferred Stock being
converted, or on its written order, such certificate or certificates as it may
request for the number of whole shares of Common Stock issuable upon the
conversion of such shares of Convertible Preferred Stock in accordance with the
provisions of this Section 4, cash in the amounts of all dividends payable
pursuant to Section 1 on such shares of Convertible Preferred Stock, up to and
including the Conversion Date, and cash, as provided in Section 4(k), in respect
of any fraction of a share of Common Stock issuable upon such conversion. Such
conversion shall be deemed to have been effected immediately prior to the close
of business on this Conversion Date, and at such time the rights of the holder
as holder of the converted shares of Convertible Preferred Stock shall cease and
the person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares of Common Stock
represented thereby.
(k) Cash in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon the conversion of shares of Convertible Preferred Stock. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of Convertible Preferred Stock, the Corporation shall pay to the
holder of the shares of Convertible Preferred Stock which were converted, a cash
adjustment in respect of such fractional shares in an amount as determined in a
reasonable manner prescribed by the Board of Directors at the close of business
on the Conversion Date. The determination as to whether or not any fractional
shares are issuable shall be based upon the total number of shares of
Convertible Preferred Stock being converted at any one time by any holder
thereof, not upon each share of Convertible Preferred Stock being converted.
(l) Partial Conversion. In the event some but not all
of the shares of Convertible Preferred Stock represented by a certificate or
certificates surrendered by a holder are converted, the Corporation shall
execute and deliver to or on the order of the holder, at the expense of the
Corporation, a new certificate representing the number of shares of Convertible
Preferred Stock which were not converted.
(m) Reservation of Common Stock. The Corporation shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Convertible Preferred Stock, 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 the Convertible Preferred Stock, and if at any time
the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the
Convertible Preferred Stock, the Corporation shall take such corporate action as
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for purpose.
5. CANCELLATION OF PREFERRED STOCK ON CONVERSION. All
certificates of the Convertible Preferred Stock surrendered for conversion shall
be appropriately canceled on the books of the Corporation, and the shares so
converted represented by such certificates shall be restored to the status of
authorized but unissued Preferred Stock of the Corporation, undesignated as to
series and subject to designation by the Board of Directors of the Corporation
pursuant to Article III, Section 2 hereof.
6. RESTRICTIONS AND LIMITATIONS.
(a) Except as expressly provided herein or as required
by law, so long as any shares of the Convertible Preferred Stock remain
outstanding, the Corporation shall not, and shall not permit any subsidiary
(which shall mean corporation or trust of which the Corporation directly or
indirectly owns at the time all of the outstanding shares of every class of such
corporation or trust other than directors' qualifying shares) without the vote
or written consent by the holders of at least 51% of the then outstanding shares
of the Convertible Preferred Stock (each share of Convertible Preferred Stock to
be entitled to one vote in each instance) to:
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(i)Redeem, purchase or otherwise acquire for value
(or pay into or set aside for a sinking fund for such purpose), any share or
shares of Convertible Preferred Stock; or
(ii) Authorize or issue, or obligate itself to
authorize or issue, any other equity security senior to or on a parity with the
Convertible Preferred Stock as to liquidation preference, conversion rights,
voting rights or otherwise.
(b) The Corporation shall not amend its Articles of
Incorporation without the approval by vote or written consent by the holders of
at least 51% of the then outstanding shares of Convertible Preferred Stock, each
share of Convertible Preferred Stock to be entitled to one vote in each
instance, if such amendment would change any of the rights, preferences,
privileges of or limitations provided for herein for the benefit of any shares
of Convertible Preferred Stock. Without limiting the generality of the last
preceding sentence, the Corporation will not amend its Articles of Incorporation
without the approval by the holders of at least 51% of the then outstanding
shares of Convertible Preferred Stock if such amendment would:
(i) Change the relative seniority rights of the
holders of Convertible Preferred Stock as to the payment of dividends in
relation to the holders of any other capital stock of the Corporation; or
(ii) Reduce the amount payable to the holders
of Convertible Preferred Stock upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, or change the relative seniority
of the liquidation preferences of the holders of Convertible Preferred Stock to
the rights upon liquidation of the holders of any other capital stock of the
Corporation or change the dividend rights of the holders of Convertible
Preferred Stock; or
(iii) Cancel or modify the conversion rights of
the holders of Convertible Preferred Stock provided for in Section 4 herein.
7. NO DILUTION OR IMPAIRMENT. The Corporation will not, by
amendment of its Articles of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of the Convertible Preferred Stock set forth
herein, but will at all times in good faith assist in the carrying out of all
terms and in the taking of all action that may be necessary or appropriate in
order to protect the rights of the holders of the Convertible Preferred Stock
against dilution or other impairment. Without limiting the generality of the
foregoing, the Corporation (a) will take all action that may be necessary or
appropriate in order that the Corporation may validly and legally issue fully
paid and nonassessable shares of stock on the conversion of Convertible
Preferred Stock from time to time outstanding; and (b) will not transfer all or
substantially all of its properties and assets to any other person (corporate or
otherwise), or consolidate with or merge into any other person or permit any
such person to consolidate with or merge into the Corporation (if the
Corporation is not the surviving person), unless such other person shall
expressly agree in writing to be bound by all the terms of the Convertible
Preferred Stock set forth herein.
8. NOTICES OF RECORD DATE. In the event of
(a) any taking by the Corporation of a record of the
holders of any class of securities for the purpose of determining the holders
thereof who are entitled to receive any dividend or other distribution, or any
right to subscribe for, purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right, or
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(b) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger, or consolidation of the Corporation, or any transfer of all or
substantially all of the assets of the Corporation to any other corporation, or
any other entity or person, or
(c) any voluntary or involuntary dissolution, liquidation
or winding up of the Corporation, then and in each such event the Corporation
shall mail or cause to be mailed to each holder of Convertible Preferred Stock a
notice specifying (i) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right and a description of such
dividend, distribution or right, (ii) the date on which any such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective, (iii)
the time, if any, that is to be fixed, as to when the holders of record of
Common Stock (or other securities) shall be entitled to exchange their shares of
Common Stock (or other securities) for securities or other property deliverable
upon such reorganization, reclassification, recapitalization, transfer,
consolidation, merger, dissolution, liquidation or winding up. Such notice shall
be mailed at least 30 days prior to the date specified in such notice on which
such dividend or other distribution or right is to be distributed or any
reorganization, reclassification, recapitalization, transfer, consolidation,
merger, dissolution, liquidation or winding up is to be consummated.
V. The liability of the directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
VI. The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) through bylaw
provisions, by agreement or otherwise, in excess of the indemnification
otherwise permitted by Section 317 of the California Corporations Code, subject
only to the limits on such excess indemnification set forth in Section 204 of
the California Corporations Code.
VII. This Corporation shall not have cumulative voting. This provision
shall become effective only when this Corporation becomes a listed corporation
within the meaning of Section 301.5 of the California Corporations Code.
3. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the Board of Directors of this
corporation.
4. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the required vote of the shareholders in
accordance with Sections 902 and 903 of the California Corporations Code. This
Corporation has two classes of shares of capital stock outstanding; and the
number of outstanding shares of Common Stock is 5,908,720 and the number of
outstanding shares of Preferred Stock is 672,322. The percentage vote required
was more than 50% of each class and of the outstanding shares. The number of
shares voting in favor of the amendment and restatement of the Articles of
Incorporation equaled or exceeded the vote required for each class of shares and
for the outstanding shares.
I further declare under penalty of perjury under the laws of the State
of California that I have read the foregoing Certificate and know the contents
thereof and that the matters set forth in this Certificate are true and correct
of my knowledge.
/s/ Naren K. Gupta
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Date: January 23, 1990 Narendra K. Gupta, President and Secretary
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STATE OF CALIFORNIA
SECRETARY OF STATE
CORPORATE DIVISION
I, BILL JONES, Secretary of State of the State of California, hereby
certify:
That the annexed transcript has been compared with the corporate record
on file in this office, of which it purports to be a copy, and that same is
full, true and correct.
IN WITNESS WHEREOF, I
execute this certificate
and affix the Great Seal of
the State of California
this February 7, 1996
/s/ Bill Jones
--------------------------------
Secretary of State
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AGREEMENT OF MERGER
OF ISI PURCHASING CORPORATION
AND
DR. DESIGN, INC.
This Agreement of Merger (this "Agreement") is entered into as of
January 26, 1996 by and between ISI Purchasing Corporation, a Delaware
corporation ("Newco") and a wholly-owned subsidiary of Integrated Systems, Inc.,
a California corporation ("Buyer"), and Dr. Design, Inc., a California
corporation (the "Company").
RECITALS
A. Buyer, Newco and Company have entered into an Agreement and Plan of
Reorganization, dated as of December 14, 1995 (the "Plan"), providing for
certain representations, warranties and agreements in connection with the
transactions contemplated hereby, in accordance with the General Corporation Law
of California (the "California Law"). All capitalized terms not herein defined
shall have the meaning ascribed to them in the Plan.
B. The Boards of Directors of Buyer, Newco and Company have determined
it to be advisable and in the respective best interests of Buyer, Newco and
Company and their respective shareholders that Newco be merged with and into
Company (the "Merger") so that Company will be the surviving corporation of the
Merger.
NOW, THEREFORE, Newco and Company hereby agree as follows:
1. THE MERGER
At the time of the filing of this Agreement (together with the
Officers' Certificates attached hereto) with the Secretary of State of the
States of California and Delaware (the "Effective Time"), Newco will be merged
with and into Company, and Company shall continue as the surviving corporation
(following the Merger, the Company is hereinafter sometimes referred to as the
"Surviving Corporation"), pursuant to the terms and conditions of this Agreement
and in accordance with applicable provisions of the laws of the States of
Delaware and California as follows:
1.1 ARTICLES OF INCORPORATION. The Articles of Incorporation of Company
immediately prior to the Effective Time, without amendment thereto, shall be the
Articles of Incorporation of the Surviving Corporation.
1.2 BYLAWS. The Bylaws of Company immediately prior to the Effective
Time, without amendment thereto, shall be the Bylaws of the Surviving
Corporation. The Bylaws of the Surviving Corporation thereafter may be amended
in accordance with their terms, the Articles of Incorporation of the Surviving
Corporation and as provided by the California Law.
1.3 CONVERSION OF SHARES. As of the Effective Time, by virtue of the
Merger and without any action on the part of any shareholder of Company, each of
the issued and outstanding shares of Company's Common Stock (the "Company
Shares") (other than any shares held by persons exercising dissenters' rights in
accordance with Chapter 13 of the California Law ("Dissenting Shares")) shall be
converted into the right to receive, subject to the provisions of Section 1.1.1
of the Plan, 0.148612 (the "Applicable Fraction") shares of fully paid and
nonassessable Buyer's Common Stock (the "Conversion Shares").
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1.4 ASSUMPTION OF OPTIONS. At the Effective Time, each option to
purchase shares of Company Common Stock (the "Company Options") that is
outstanding immediately prior to the Effective Time will, by virtue of the
Merger and without further action on the part of any holder thereof, be assumed
by Buyer and become exercisable for the number of shares of Buyer's Common Stock
that equals the number of shares of Company Common Stock subject to such Company
Option multiplied by the Applicable Fraction. The exercise price per share of
Buyer Common Stock purchasable under each such option will be equal to the
exercise price of the Company Option divided by the Applicable Fraction. All
other terms of the Company Option will remain unchanged.
1.5 FRACTIONAL SHARES. No fraction of a Conversion Share will be issued
by virtue of the Merger, but in lieu thereof each holder of Company Shares who
would otherwise be entitled to a fraction of a Conversion Share (after
aggregating all fractional Conversion Shares to be received by such holder)
shall receive from Buyer an amount of cash (rounded to the nearest whole cent)
equal to the product of (i) the price of a share of Buyer's Common Stock
determined pursuant to Section 1.1.1 of the Plan, multiplied by (ii) the
fraction of a Conversion Share to which each such holder would otherwise be
entitled.
1.6 NO FURTHER TRANSFER. At the Effective Time, the stock transfer
books of the Company shall be closed and no transfer of Company Shares shall
thereafter be made.
1.7 ESCROW. Of the aggregate number of Conversion Shares issuable by
virtue of the Merger to a shareholder, Buyer shall deposit in escrow a number of
Conversion Shares equal to ten percent (10%) of the total number of Conversion
Shares issuable by virtue of the Merger to such shareholder (the "Escrowed
Shares"), pursuant to the terms of a separate Escrow Agreement. In addition, ten
percent (10%) of the shares of Buyer's Common Stock issued upon exercise of
assumed Company Options will be deposited into escrow.
1.8 DISSENTERS' RIGHTS. Holders of Dissenting Shares who have
complied with all requirements for perfecting the rights of dissenting
shareholders as set forth in Section 1300 et. seq. of the California Law shall
be entitled to their rights under the California Law.
1.9 CANCELLATION OF SHARES OF NEWCO. At the Effetive Time, all of the
previously issued and outstanding shares of Newco Common Stock that were issued
and outstanding immediately prior to the Effective Time shall be automatically
retired and cancelled.
2. SURRENDER OF CERTIFICATES
2.1 SURRENDER AND EXCHANGE OF OUTSTANDING CERTIFICATES. As soon as
practicable after the Effective Time, each holder of a certificate or
certificates representing Company Shares issued and outstanding immediately
prior to the Effective Time (other than Dissenting Shares) shall surrender such
certificate(s) to Buyer's transfer agent. Thereupon, each such holder shall be
entitled to receive in exchange therefor the number of shares of Buyer's Common
Stock represented by such certificate(s), less the Escrowed Shares. Buyer's
transfer agent shall issue to the Company's shareholders certificates for the
shares of Buyer's Common Stock issuable to the Company's shareholders in the
Merger as soon as practicable following such surrender. Each certificate which
immediately before the Effective Time evidenced Company Shares shall, from and
after the Effective Time until such certificate is surrendered to Buyer, or its
transfer agent, be deemed, for all corporate purposes, to evidence the right to
receive the consideration described above; provided, however, that until such
certificate is so surrendered by the holder thereof, no dividend or other
distribution payable to such holder after the Effective Time shall be paid in
respect of such certificates.
3. TERMINATION AND AMENDMENT
3.1 TERMINATION. Notwithstanding the approval of this Agreement by the
shareholders of Newco and Company, this Agreement may be terminated at any time
prior to the Effective Time by the mutual written agreement of Newco and
Company, and will terminate in the event the Plan is terminated in accordance
with its terms. In the event of the termination of this Agreement as provided
above, this Agreement will forthwith become void and there will be no liability
on the part of either Buyer, Newco and Company or their respective officers and
directors, except as otherwise provided in the Plan.
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3.2 AMENDMENT. This Agreement may be amended by the parties
hereto at any time by execution of an instrument in writing signed on behalf of
each of the parties hereto.
4. MISCELLANEOUS
4.1 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement.
4.2 PLAN. The Plan and this Agreement are intended to be construed
together in order to effectuate their purposes.
4.3 ASSIGNMENT; BINDING UPON SUCCESSORS AND ASSIGNS. Neither party
hereto may assign any of its rights or obligations under this Agreement without
the prior written consent of the other party hereto. This Agreement will be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
4.4 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California
(irrespective of its choice of law principles).
4.5 FURTHER ASSIGNMENTS. After the Effective Time, Company and its
officers and directors may execute and deliver such deeds, assignments and
assurances and do all other things necessary or desirable to vest, perfect or
confirm title to Newco's property or rights in Company and otherwise to carry
out the purposes of the Plan, in the name of Newco or otherwise.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
DR. DESIGN, INC.
By: /s/ Laura Thompson By: /s/ Marco Thompson
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Laura Thompson, Secretary Marco Thompson, President
ISI PURCHASING CORPORATION
By: /s/ Narendra Gupta By: /s/ David St. Charles
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Narendra Gupta, Secretary David St. Charles, President
SIGNATURE PAGE TO AGREEMENT OF MERGER
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CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Sharon Pinto and Laura Thompson hereby certify that:
1. They are the Vice President and Secretary, respectively,
of DR. DESIGN, INC., a California corporation (the "Company").
2. The Agreement of Merger in the form attached was duly
approved by the Board of Directors of the Company.
3. The Company has three (3) authorized classes of
shares, designated as Class A Common Stock, Class B Common Stock and Preferred
Stock. There are no issued and outstanding shares of Class B Common Stock or
Preferred Stock of the Company entitled to vote on the Agreement of Merger. The
total number of issued and outstanding shares of the Class A Common Stock of the
Corporation entitled to vote on the Agreement of Merger was 2,555,720.
4. The percentage vote required for Common Stock was more
than 50% of the outstanding shares of the Common Stock.
5. The Agreement of Merger was approved by the vote of a
number of shares of Common Stock of the Company which equaled or exceeded the
vote required.
We further declare under penalty of perjury under the laws of
the State of California that the matters set forth in this Certificate are true
and correct of our own knowledge.
Executed at San Diego, California, this 25th day of January,
1996.
/s/ Sharon Pinto /s/ Laura Thompson
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Sharon Pinto, Vice President Laura Thompson, Secretary
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CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
David St. Charles and Narendra Gupta hereby certify that:
1. They are the President and Secretary, respectively,
of ISI Purchasing Corporation, a Delaware corporation ("Newco").
2. The Agreement of Merger in the form attached was
duly approved by the Board of Directors of Newco.
3. Newco has one class of shares authorized, designated
as Common Stock. The total number of issued and outstanding shares of the Common
Stock of the Corporation entitled to vote on the Agreement of Merger was 1,000.
4. The percentage vote required for Common Stock was
more than 50% of the outstanding shares of the Common Stock.
5. The Agreement of Merger was approved by the vote of a
number of shares of Common Stock of Newco which equaled or exceeded the vote
required.
6. No vote of the shareholders of Integrated Systems,
Inc., the parent corporation of Newco and the corporation whose equity
securities are being issued in the merger, is required.
We further declare under penalty of perjury under the laws of
the State of California that the matters set forth in this Certificate are true
and correct of our own knowledge.
Executed at Santa Clara, California, this 25th day of January,
1996.
/s/ David St. Charles /s/ Narendra Gupta
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David St. Charles, President Narendra Gupta, Secretary
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