RESTATED AND AMENDED
ARTICLES OF INCORPORATION
OF
U.S. ELECTRICAR, INC.
The undersigned, Roy Kusumoto and John J. Micek, III, do hereby certify
as follows:
1. They are the President and Secretary, respectively, of U.S.
Electricar, Inc., a California corporation (this or the "Corporation").
2. The Articles of Incorporation of this Corporation are amended and
restated in their entirety to read as follows:
"I
The name of this Corporation is U.S. Electricar, 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 corporation
business or the practice of a profession permitted to be incorporated by the
California Corporations Code.
III
This Corporation is authorized to issue two classes of shares of stock,
to be designated Common Stock and Preferred Stock, respectively. This
Corporation is authorized to issue Three Hundred Million (300,000,000) shares of
Common Stock and Thirty-five Million (35,000,000) shares of Preferred Stock. The
Preferred Stock authorized by these Articles of Incorporation shall be issued
from time to time in one or more series. The Preferred Stock shall be comprised
of two series comprising an aggregate of Thirty-five Million (35,000,000)
shares, of which Thirty Million (30,000,000) shares shall be designated "Series
A Convertible Preferred Stock" (also referred to as "Series A Stock" or "Series
A Preferred Stock") and Five Million (5,000,000) shares shall be designated
"Series B Convertible Preferred Stock" (also referred to as "Series B Stock" or
"Series B Preferred Stock").
The rights, preferences, privileges and restrictions of the Series A
Stock and Series B Stock and of the holders thereof shall be as follows:
(a) DIVIDENDS.
(1) Series A Stock Right to Cash Dividends. Each holder of
outstanding shares of Series A Stock shall be entitled to receive, when and if
declared by the Board of Directors and out of any assets legally available
therefor, non-cumulative dividends in cash in an amount equal to 6% of $0.60 per
share of Series A Preferred Stock per annum (the "Series A Preferential
Dividend"), payable in cash during each fiscal year of this Corporation and in
preference to any declaration or payment (payable other than in Common Stock) to
the Common Stock (but not without the holders of Series B Stock first receiving
the Series B Preferential Dividend (as defined below), as adjusted pursuant to
Article III (a)(3) below).
(2) Series B Stock Right to Cash Dividends. Each holder of
outstanding shares of Series B Stock shall be entitled to receive, when and if
declared by the Board of Directors and out of any assets at the time legally
available therefor, non-cumulative dividends in cash in an amount equal to 7% of
$2.00 per share of Series B Preferred Stock per annum (the "Series B
Preferential Dividend"), payable in cash during each fiscal year of this
Corporation and in preference to any declaration or payment (payable other than
in Common Stock) to the Common Stock and Series A Stock, as adjusted pursuant to
Article III (a)(3) below).
(3) Partial Cash Payment. If the Board of Directors shall
declare a dividend on the Series A Stock or Series B Stock and the amount
available for payment thereof is insufficient to permit the payment of the full
preferential amounts required to be paid to the holders of outstanding shares of
Series A Stock and/or Series B Stock, then the amount available for such
dividend payments shall be distributed ratably first among the holders of shares
of Series B Stock according to the number of issued and outstanding shares of
Series B Stock held by each such holder until each such holder has received its
Series B Preferential Dividend in full, then the amount available for such
dividend payments shall be distributed ratably among the holders of shares of
Series A Stock according to the number of issued and outstanding shares of
Series A Stock held by each such holder until each such holder has received its
Series A Preferential Dividend in full. After payment in full during any fiscal
year of all Series B Preferential Dividends and all Series A Preferential
Dividends, each holder of Common Stock (other than those holders whose Common
Stock was converted from Preferred Stock during such fiscal year after receiving
their Series A or Series B Preferential Dividend, as the case may be) shall be
entitled to receive, when and if declared by the Board of Directors and out of
any funds legally available therefor, non-cumulative dividends in an amount
equal to the as-converted per share amount paid to the Series A Preferred Stock,
payable in cash during each fiscal year of the Corporation.
(4) Dividends After Payment of Preferential Dividends.
After the holders of record of the Common Stock, Series A Stock and Series B
Stock have been paid their Preferential Dividends in full, then the holders of
record of Series A Stock, Series B Stock and Common Stock shall share ratably in
any additional dividends during such fiscal year on an as converted basis (i.e,
the number of shares of Common Stock which would be outstanding if the Series A
Stock and Series B Stock were converted to Common Stock).
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(5) Payment Other Than Cash. Except as provided in
subsection (7) below, if the Corporation shall declare a distribution payable in
securities of other persons, evidences of indebtedness issued by the Corporation
or other persons, assets (excluding cash dividends) or options or rights to
purchase any such securities or evidences of indebtedness, then, in each such
case, the holders of Series A Preferred Stock and Series B Preferred Stock shall
be entitled to a proportionate share of any such distribution as though the
holders of Series A Preferred Stock and Series B Preferred Stock were the
holders of the number of shares of Common Stock of the Corporation into which
their respective shares of Series A Preferred Stock and Series B Preferred Stock
are convertible as of the record date fixed for the determination of the holders
of Common Stock of the Corporation who are entitled to receive such
distribution.
(6) Series B Stock Right to Stock Dividend. Until and
unless the Series B Stock has been registered under the Securities Act of 1933,
as amended, the holders of the Series B Stock shall be entitled to receive
common stock dividends in preference to any stock dividend on the Series A
Preferred Stock and Common Stock (the "Series B Stock Dividend Preference") at
the "monetary equivalent" rate of 7% of $2.00 per share per annum issuable on
the first and second anniversary dates (each a "Record Date") following the date
these Restated and Amended Articles have been filed with the California
Secretary of State (the "Filing Date"). The "value" of each share of Common
Stock so issued as a stock dividend for purposes of calculating the "monetary
equivalent" rate of each such share dividend shall be determined by taking the
greater of (i) the "Fair Market Value" of the Company's Common Stock determined
on the applicable Record Date and (ii) the "Original Conversion Price" (as
defined below). "Fair Market Value" shall be the average price of all of the
mean prices between the high bid and low ask closing prices of the Company's
publicly traded stock as listed and traded on the NASDAQ electronic bulletin
board, or other listed exchange, during the ten (10) trading days immediately
preceding the Record Date. Any fractional stock dividends shall be issued in
cash based on their cash equivalent value. For example, if the Fair Market Value
is $1.00 on the first Record Date and the Original Conversion Price is still
$0.30, then if a holder owned 100 shares of Series B Stock, he would receive
$7.00 worth of Common Stock, or seven shares of Common Stock.
(7) Dividend Adjustment. The Series A Preferential
Dividend and Series B Preferential Dividend amounts and the Series B Stock
Dividend Preference shall be appropriately adjusted for any stock dividends,
combinations and splits.
(b) PREFERENCE ON LIQUIDATION.
(1) Preference Price. In the event of any liquidation,
dissolution or winding up of this Corporation, whether voluntary or involuntary,
the holders of the outstanding shares of Series A Stock and Series B Stock shall
simultaneously be entitled to be paid out of the assets of this Corporation
available for distribution to its shareholders, whether from capital, surplus
funds or earnings, before any payment is made in respect of the shares of Common
Stock or other equity security of this
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Corporation of a lesser priority than the Series A Stock and Series B Stock in
an amount equal to (i) $0.60 per share in the case of the Series A Stock, plus
all declared and unpaid dividends thereon (the "Series A Liquidation Preference
Price"); and (ii) $2.00 per share in the case of the Series B Stock together
with an amount equal to the greater of (A) seven percent (7%) of such $2.00
compounded annually at the rate of 7%, for each year (or fraction thereof) after
the Filing Date less the amount, if any, of any cash dividends actually paid to
the Series B Stock through the date of liquidation, or (B) any declared and
unpaid dividends thereon (the "Series B Liquidation Preference Price"). After
payment of the Preference Prices to the holders of Series A Stock and Series B
Stock, the holders of Common Stock shall be paid an amount per share equal to
the per share Series A Liquidation Preference Price paid to the holders of
Series A Preferred Stock. After payment therefor to the holders of the Common
Stock, the remaining assets of the Corporation shall be distributed to the
holders of shares of Common Stock, Series A Preferred Stock and Series B
Preferred Stock in an equal amount per share as if all Series A Preferred Stock
and Series B Preferred Stock had been converted into Common Stock as of the date
of such liquidation.
(2) Partial Payment. If, upon any liquidation, dissolution
or winding up of this Corporation, whether voluntary or involuntary, the assets
of this Corporation available for distribution to its shareholders shall be
insufficient to pay the full Preference Prices required to be paid to the
holders of the outstanding shares of Series A Stock and the holders of the
outstanding shares of Series B Stock, then all of the assets of this Corporation
legally available for distribution to the holders of equity securities shall be
distributed ratably first among the holders of the outstanding shares of Series
B Stock based upon their Preference Price until payment in full of the
Preference Price on all Series B Stock, then ratably among the holders of the
outstanding shares of Series A Stock until payment in full of their Preference
Price and then ratably among the holders of the outstanding shares of Common
Stock in an amount per share equal to the per share Series A Liquidation
Preference Price until payment in full of such Preference Price.
(3) Certain Transactions. The sale, transfer or other
conveyance of all or substantially all of the assets of this Corporation or a
sale, transfer or other conveyance of a majority of the outstanding voting
securities of this Corporation (on a fully-diluted basis) in any transaction or
related series of transactions, whether by merger or consolidation or otherwise,
shall not be deemed to be a liquidation, dissolution or winding up of this
Corporation, as those terms are used in this Section.
(4) Consent to Certain Distributions. Each holder of
outstanding shares of Series A Stock and each holder of outstanding shares of
Series B Stock shall, by virtue of its acceptance of a stock certificate
evidencing such shares, be treated as having consented, for purposes of Sections
502, 503, and 506 of the California Corporations Code, to distributions made by
this Corporation for the repurchase of shares of Common Stock from directors or
employees of, or consultants or advisers to, this Corporation upon the
termination of employment by, or service to, this Corporation or any subsidiary
of this Corporation or otherwise.
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(5) Appraisal. If any of the assets of the Corporation are
to be distributed other than in cash under this Section (b), then the Board of
Directors of the Corporation shall promptly engage independent competent
appraisers to determine the value of the assets to be distributed to the holders
of Series A Preferred Stock and the holders of Series B Preferred Stock. The
Corporation shall, upon receipt of such appraisers' valuation, give prompt
written notice of the appraisers' valuation to each holder of Series A Preferred
Stock, Series B Preferred Stock and Common Stock of the Corporation, but in no
event later than at least twenty (20) days prior to the transaction in question.
(6) Liquidation Adjustment. Notwithstanding the foregoing,
the amount to be paid for each share of Series A Preferred Stock, Series B
Preferred Stock and Common Stock upon liquidation shall be appropriately
adjusted for any combination(s), stock split(s), stock distribution(s) or
dividend(s) with respect to such shares.
(c) VOTING.
(1) Generally. Except as otherwise required by law or
expressly provided herein, each share of Series A Preferred Stock and each share
of Series B Preferred Stock shall be entitled to vote on all matters submitted
or required to be submitted to a vote of the shareholders of the Corporation and
shall be entitled to the number of votes equal to the number of full shares of
Common Stock into which such shares of Series A Preferred Stock and Series B
Preferred Stock are convertible pursuant to the provisions hereof, at the record
date for the determination of shareholders entitled to vote on such matters or,
if no such record date is established, at the date such vote is taken or any
written consent of shareholders is solicited. In each such case, except as
otherwise required by law or expressly provided herein, the holders of shares of
Series A Preferred Stock, Series B Preferred Stock and Common Stock shall vote
together and not as separate classes.
(2) Special Voting Rights for the Election of Directors.
Each time the shareholders of the Corporation meet, or act by written consent in
lieu of a meeting, for the purpose of electing Directors, until such time that
fifty percent (50%) of the Series B Preferred Stock shares originally issued and
outstanding have been redeemed by the Company or converted into Common Stock,
the holders of the Corporation's Series B Preferred Stock shall be entitled,
voting as a separate class, to elect two, and only two, members of the
Corporation's Board of Directors. The holders of the Corporation's Series A
Preferred Stock and the holders of the Common Stock shall be entitled, voting
together on an as converted basis as one class, to elect all of the remaining
authorized members of the Board of Directors.
(3) Removals or Resignations. Any vacancy created on the
Corporation's Board of Directors shall be filled by a successor Director who
shall be elected in a manner by which his or her predecessor was elected as
provided above, except that vacancies filled other than at shareholder meetings
may be filled by the
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Board of Directors. Any Director who has been elected to the Corporation's Board
of Directors as provided above may be removed during his term of office in
accordance with the California Corporations Code, and any vacancy thereby
created shall be filled as provided in this subparagraph.
(4) Authorized Number of Directors. Until such time that
fifty percent (50%) of the Series B Preferred Stock shares originally issued and
outstanding have been redeemed by the Company or converted into Common Stock,
the authorized number of directors of this Corporation shall not exceed eleven
(11) without the consent of the holders of a majority of the outstanding shares
of Series B Preferred Stock.
(d) CONVERSION. The holders of the outstanding shares of Series A
Stock and Series B Stock shall have the following conversion rights (the
"Conversion Rights"):
(1) Right to Convert. Each share of Series A Stock and
Series B 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 this
Corporation or any transfer agent for the Corporation's shares into that number
of shares of Common Stock which is equal to the quotient obtained by dividing
(A) $0.60 for each share of Series A Stock and $2.00 for each share of Series B
Stock by (B) the "Series A Conversion Price" and "Series B Conversion Price,"
respectively, (as such terms are hereinafter defined) in effect immediately
prior to the time of such conversion. The initial price at which shares of
Common Stock shall be deliverable upon conversion of shares of Series A Stock
shall be $0.60 (as adjusted from time to time as herein provided, the "Series A
Conversion Price"). The initial price at which shares of Common Stock shall be
deliverable upon conversion of shares of Series B Stock shall be $0.30 (as
adjusted from time to time as herein provided, the "Series B Conversion Price").
(2) Mechanics of Conversion. Each holder of outstanding
shares of Series A Stock and Series B Stock who desires to convert the same into
shares of Common Stock shall surrender the certificate or certificates therefor,
duly endorsed, at the office of this Corporation or of any transfer agent for
the Corporation's shares and shall give written notice to this Corporation at
such office that such holder elects to convert the same and shall state therein
the number of shares of Series A Stock or Series B Stock being converted.
Thereupon, this Corporation shall issue and deliver at such office to such
holder a certificate or certificates for the number of shares of Common Stock to
which such holder is entitled and shall promptly pay all declared but unpaid
dividends on the shares being converted. Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the certificate or certificates representing the shares to be
converted, and the person entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record
holder of such shares of Common Stock on such date.
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(3) Adjustment for Stock Splits and Combinations. If this
Corporation at any time or from time to time after the Filing Date effects a
division of the outstanding shares of Common Stock, the Series A Conversion
Price and the Series B Conversion Price shall be proportionately decreased and,
conversely, if this Corporation at any time, or from time to time, after the
Filing Date combines the outstanding shares of Common Stock, the Series A
Conversion Price and the Series B Conversion Price shall be proportionately
increased. Any adjustment under this Section (d)(3) shall be effective on the
close of business on the date such division or combination becomes effective.
(4) Adjustment for Certain Dividends and Distributions. If
this Corporation at any time or from time to time after the Filing Date pays or
fixes a record date for the determination of holders of shares of Common Stock
entitled to receive a dividend or other distribution in the form of shares of
Common Stock, or rights or options for the purchase of, or securities
convertible into, Common Stock, then in each such event the Series A Conversion
Price and the Series B Conversion Price shall be decreased, as of the time of
such payment or, in the event a record date is fixed, as of the close of
business on such record date, by multiplying the Series A Conversion Price and
the Series B Conversion Price by a fraction (i) the numerator of which shall be
the total number of shares of Common Stock outstanding immediately prior to the
time of such payment or the close of business on such record date and (ii) the
denominator of which shall be (A) the total number of shares of Common Stock
outstanding immediately prior to the time of such payment or the close of
business on such record date plus (B) the number of shares of Common Stock
issuable in payment of such dividend or distribution or upon exercise of such
option or right of conversion; provided, however, that if a record date is fixed
and such dividend is not fully paid or such other distribution is not fully made
on the date fixed therefor, the Series A Conversion Price and the Series B
Conversion Price shall not be decreased as of the close of business on such
record date as hereinabove provided as to the portion not fully paid or
distributed and thereafter the Series A Conversion Price and the Series B
Conversion Price shall be decreased pursuant to this Section (4) as of the date
or dates of actual payment of such dividend or distribution.
(5) Adjustments for Other Dividends and Distributions. If
this Corporation at any time or from time to time after the Filing Date pays, or
fixes a record date for the determination of holders of shares of Common Stock
entitled to receive, a dividend or other distribution in the form of securities
of this Corporation other than shares of Common Stock or rights or options for
the purchase of, or securities convertible into, Common Stock, then in each such
event provision shall be made so that the holders of the outstanding shares of
Series A Stock and the holders of the outstanding shares of Series B Stock shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of this Corporation which
they would have received had their respective shares of Series A Stock and
Series B Stock been converted into shares of Common Stock on the date of such
event and had such holders thereafter, from the date of such event to and
including the actual date of conversion of their shares, retained
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such securities, subject to all other adjustments called for during such period
under this Section (d) with respect to the rights of the holders of the
outstanding shares of Series A Stock and the holders of the outstanding shares
of Series B Stock.
(6) Adjustment for Reclassification, Exchange and
Substitution. If, at any time or from time to time after the Filing Date, the
number of shares of Common Stock issuable upon conversion of the shares of
Series A Stock and Series B Stock is changed into the same or a different number
of shares of any other class or classes of stock or other securities, whether by
recapitalization, reclassification or otherwise (other than a recapitalization,
division or combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section (d)),
then, in any such event, each holder of outstanding shares of Series A Stock and
each holder of outstanding shares of Series B Stock shall have the right
thereafter to convert such shares of Series A Stock and Series B Stock into the
same kind and amount of stock and other securities receivable upon such
recapitalization, reclassification or other change, as the maximum number of
shares of Common Stock into which such shares of Series A Stock and Series B
Stock could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided
herein.
(7) Reorganizations, Mergers, Consolidations or Sales of
Assets. If, at any time or from time to time after the Filing Date, there is a
capital reorganization of the Common Stock (other than a recapitalization,
division, combination, reclassification or exchange of shares provided for
elsewhere in this Section (d)) or a merger or consolidation of this Corporation
into or with another corporation or a sale of all or substantially all of this
Corporation's properties and assets to any other person, then, as a part of such
capital reorganization, merger, consolidation or sale, provision shall be made
so that the holders of the outstanding shares of Series A Stock and the holders
of the outstanding shares of Series B Stock shall thereafter receive upon
conversion thereof the number of shares of stock or other securities or property
of this Corporation, or of the successor corporation resulting from such merger
or consolidation or sale, to which a holder of the number of shares of Common
Stock into which their shares of Series A Stock and Series B Stock were
convertible 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 (d) with respect to the rights
of the holders of the outstanding shares of Series A Stock and Series B Stock
after the capital reorganization, merger, consolidation, or sale to the end that
the provisions of this Section (d) (including adjustment of the Series A
Conversion Price and Series B Conversion Price and the number of shares into
which the shares of Series A Stock and Series B Stock may be converted) shall be
applicable after that event and be as nearly equivalent to such Conversion
Prices and number of shares as may be practicable.
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(8) Annual Adjustment to Series B Conversion Price. On the
second, third, fourth and fifth anniversary dates after the Filing Date, the
Series B Conversion price shall be adjusted to $0.45, $0.60, $0.75 and $1.00,
respectively (as adjusted from time to time herein under this Section (d)).
(9) Automatic Conversion.
(i) Each outstanding share of Series A Stock shall
automatically be converted into shares of Common Stock at the then effective
Conversion price for the Series A Preferred Stock upon (a) the consummation of
the sale of the Corporation's Common Stock in an underwritten public offering
registered under the Securities Act of 1933, as amended (the "Securities Act");
or (b) the registration of the underlying Common Stock of the holders' Series A
Preferred Stock under the Securities Act; or (c) a merger or consolidation with
or into another corporation or a sale of more than fifty percent (50%) of the
outstanding voting securities of this Corporation or a sale of all or
substantially all of the Corporation's properties and assets.
(ii) Each outstanding share of Series B Stock shall
automatically be converted into shares of Common Sock at the then effective
Conversion Price upon (a) the closing of an underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, covering the offering and sale of shares of Common Stock for
the account of the Corporation (other than a registration statement effected
solely to implement an employee benefit plan, a transaction in which Rule 145 of
the Securities and Exchange Commission is applicable or any other form or type
of registration in which the shares of Common Stock issuable upon conversion of
the shares of Series B Stock cannot be included pursuant to the Securities and
Exchange Commission rules or practices) resulting in aggregate proceeds to the
Corporation (before the payment of underwriting discounts and commissions and
the expense of the offering) in excess of $10,000,000 and at a per share price
of at least two times the original Conversion Price of the Series B Stock
(appropriately adjusted for subdivisions, combinations and stock dividends); or
(b) a merger or consolidation with or into another corporation or a sale of the
shares of Common Stock of the Corporation or a sale of all or substantially all
of the Corporation's properties and assets in which the aggregate gross cash
proceeds received by the Corporation is at least $10,000,000 in cash or
marketable securities.
(iii) Upon the occurrence of an event specified in
either Section (9)(i) or (9)(ii) above, the outstanding shares of Series A Stock
and/or Series B Stock, as the case may be, shall be converted into outstanding
shares of Common Stock, whether or not the certificates representing such shares
are surrendered to the Corporation or its transfer agent. Upon the automatic
conversion of the outstanding shares of Series A Stock and/or Series B Stock,
the Corporation shall notify the holders of the outstanding shares of Series A
Stock and the holders of outstanding shares of Series B Stock, as applicable,
and thereafter such holders shall surrender the certificates representing such
shares at the office of the Corporation or any transfer
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agent for the shares. Thereupon there shall be issued and delivered to such
holder, promptly at such office and in its name as shown on such surrendered
certificate or certificates, a certificate or certificates for the number of
shares of Common Stock into which the surrendered shares of Series A Stock or
Series B Stock of such holder were convertible on the date on which such
automatic conversion occurred, and the Corporation shall promptly pay in cash
all declared but unpaid dividends on the shares of Series A Stock and Series B
Stock so converted.
(10) Fractional Shares. No fractional shares of Common
Stock shall be issued upon conversion of the shares of Series A Stock or Series
B Stock. In lieu of any fractional share to which the holder of such shares
would otherwise be entitled, the Corporation shall pay cash equal to the product
of (i) such fraction multiplied by (ii) the fair market value of one share of
the Common Stock on the date of conversion, as determined in good faith by a
disinterested majority of the Board of Directors.
(11) Reservation of Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of Series A Stock and Series B Stock, such number of
shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series A Stock and Series B Stock. 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 Series
A Stock and Series B Stock, the Corporation shall take such action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
(12) Notices. Any notice required by the provisions of
this Section (d) to be given to a holder of shares of Series A Stock or Series B
Stock shall be in writing and, if by personal delivery (including courier or
Federal Express), shall be deemed to have been validly served, given or
delivered upon actual delivery and if mailed, shall be deemed to have been
validly served, given or delivered three (3) business days after deposit in the
United States mails, as registered or certified mail, with proper postage
prepaid and addressed to the party or parties to be notified, at the addresses
appearing on the books of the Corporation (or such other address(es) as a party
may designate for itself by like notice) or pursuant to written agreements
between the parties.
(13) No Dilution or Impairment. The Corporation shall not
amend its Articles of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action for the purpose of avoiding or seeking
to avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in carrying out all such action as may be reasonably necessary or
appropriate in order to protect the rights of the holders of the
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shares of Series A Stock and the holders of the shares of the Series B Stock
against dilution (as contemplated herein) or other impairment of their rights.
(e) NO RE-ISSUANCE. No share or shares of Series A Stock or Series
B Stock acquired by the Corporation by reason of redemption, purchase or
otherwise shall be reissued, and all such shares shall be cancelled, retired and
eliminated from the shares which the Corporation shall be authorized to issue.
(f) RESTRICTIONS AND LIMITATIONS.
(1) Series B Protective Covenants. In addition to any
other rights provided by law, so long as any shares of Series B Stock shall be
outstanding, the Corporation shall not, without first obtaining the affirmative
vote or written consent of the holders of a majority of the outstanding shares
of Series B Preferred Stock:
(a) alter or change the rights, preferences or
privileges of the Series B Preferred Stock;
(b) increase the authorized number of shares of Series
Preferred B Stock;
(c) increase the authorized number of shares of
Preferred Stock; or
(d) create any new class or series of shares having
preference over or being on a parity with the Series B Stock.
IV
(a) LIMITATION OF DIRECTORS' LIABILITY. The liability of the
directors of this Corporation for monetary damages shall be eliminated to the
fullest extend permissible under California law.
(b) INDEMNIFICATION OF CORPORATE AGENTS. This Corporation is
authorized to provide indemnification of agents (as defined in Section 317 of
the California Corporations Code) through bylaw provisions, agreements with
agents, vote of shareholders or disinterested directors or otherwise, in excess
of the indemnification otherwise permitted by Section 317 of the California
Corporations Code, subject only to the applicable limits set forth in Section
204 of the California Corporations Code with respect to actions for breach of
duty to this Corporation and its shareholders.
(c) REPEAL OR MODIFICATION. Any repeal or modification of the
foregoing provisions of this Article IV shall not adversely affect any right of
indemnification or limitation of liability of an agent of this Corporation
relating to acts or omissions occurring prior to such repeal or modification."
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3. The foregoing Restated and Amended Articles of Incorporation have
been duly approved and adopted by the Board of Directors of the Corporation.
4. The foregoing Restated and Amended Articles of Incorporation have
been duly approved by the required vote of shareholders in accordance with
Sections 902 and 903 of the California Corporations Code. The total number of
shares outstanding is 60,713,083 shares of Common Stock and 5,283,140 shares of
Series A Preferred Stock. The number of shares voting in favor of the amendment
equaled or exceed the vote required. The percentage vote required was more than
50% of each class of the outstanding shares.
Each of the undersigned declares under penalty of perjury under the
laws of the State of California that the matters set forth herein are true and
correct of his own knowledge.
Date: February 23, 1996 __/s/ Roy Y. Kusumoto___________
ROY Y. KUSUMOTO, President
__/s/ John J. Micek III__________
JOHN J. MICEK, III, Secretary
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