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Exhibit 3.01
[Form of Restated Articles of Organization to be filed on the Effective Date]
FEDERAL IDENTIFICATION
NO. 04-2710876
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Examiner THE COMMONWEALTH OF MASSACHUSETTS
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
RESTATED ARTICLES OF ORGANIZATION
(GENERAL LAWS, CHAPTER 156B, SECTION 74)
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Name We, JOHN A. BLAESER , *President,
Approved ------------------------------------------------
and GARY E. HAROIAN , *Clerk,
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of CONCORD COMMUNICATIONS, INC. ,
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(Exact name of corporation)
located at 33 BOSTON POST ROAD WEST, MARLBORO, MA 01752 ,
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(Street address of corporation in Massachusetts)
do hereby certify that the following Restatement of the Articles of
Organization was duly adopted at a meeting held on ____________, 1997
by a vote of the directors/or:
Common Equivalent Stock shares outstanding,
shares of and Common Stock of
--- --------------------- -----------
(type, class & series, if any)
shares of Series A Preferred of shares outstanding,
--- --------------------- -----------
(type, class & series, if any)
shares of Series A-1 Preferred of shares outstanding, and
--- --------------------- -----------
(type, class & series, if any)
shares of Series B Preferred of shares outstanding,
--- ---------------------- -----------
(type, class & series, if any)
C [ ]
**being at least a majority of each type, class or series outstanding and
entitled to vote thereon: / **being at least two-thirds of each type,
class or series outstanding and entitled to vote thereon and of each type,
P [ ] class or series of stock whose rights are adversely affected thereby:
M [ ] ARTICLE I
The name of the corporation is:
R.A. [ ] Concord Communications, Inc.
ARTICLE II
The purpose of the corporation is to engage in the following business
activities:
To develop, market and support automated, software-based performance
- ---- analysis and reporting solutions for management of computer networks and in
P.C. general to carry on any and all purposes permitted to a corporation
organized under the provisions of Massachusetts General Laws, Chapter 156B.
*Delete the inapplicable words. **Delete the inapplicable clause.
NOTE: IF THE SPACE PROVIDED UNDER ANY ARTICLE OR ITEM ON THIS FORM IS
INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON OF SEPARATE 8 1/2 X 11 SHEETS
OF PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN ONE
ARTICLE MAY BE MADE ON A SINGLE SHEET SO LONG AS EACH ARTICLE REQUIRING
EACH ADDITION IS CLEARLY INDICATED.
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ARTICLE III
State the total number of shares and par value, if any, of each class of stock
which the corporation is authorized to issue.
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WITHOUT PAR VALUE WITH PAR VALUE
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TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE
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Common: Common: 50,000,000 $.01
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Preferred: Preferred: 1,000,000 $.01
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ARTICLE IV
If more than one class of stock is authorized, state a distinguishing
designation for each class. Prior to the issuance of any shares of a class, if
shares of another class are outstanding, the corporation must provide a
description of the preferences, voting powers, qualifications, and special or
relative rights or privileges of that class and of each other class of which
shares are outstanding and of each series then established within any class.
See Continuation Sheets 4.1 through 4.17 which are attached hereto and
incorporated herein by reference.
ARTICLE V
The restrictions, if any, imposed by the Articles of Organization upon the
transfer of shares of stock of any class are:
None.
ARTICLE VI
**Other lawful provisions, if any, for the conduct and regulation of the
business and affairs of the corporation, for its voluntary dissolution, or for
limiting, defining, or regulating the powers of the corporation, or of its
directors or stockholders, or of any class of stockholders:
See Continuation Sheets 6.1 through 6.7 which are attached hereto and
incorporated herein by reference.
**If there are no provisions state "None".
NOTE: THE PRECEDING SIX (6) ARTICLES ARE CONSIDERED TO BE PERMANENT AND MAY ONLY
BE CHANGED BY FILING APPROPRIATE ARTICLES OF AMENDMENT.
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CONTINUATION SHEET 4.1
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CONCORD COMMUNICATIONS, INC.
Restated Articles of Organization
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ARTICLE IV
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PREFERRED STOCK
1. NUMBER OF SHARES. The series of Preferred Stock designated and
known as "Series A Convertible Preferred Stock" shall consist of 1,965,373
shares, the series of Preferred Stock designated and known as "Series A-1
Convertible Preferred Stock" shall consist of 212,044 shares, and the series of
Preferred Stock designated and known as "Series B Convertible Preferred Stock"
shall consist of 4,479,613 shares. The Series A Convertible Preferred Stock, the
Series A-1 Convertible Preferred Stock and the Series B Convertible Preferred
Stock being referred to herein as the Preferred Stock.
2. VOTING.
2A. GENERAL. Except as may be otherwise provided in these
terms of the Preferred Stock or by law, the Preferred Stock shall vote together
with all other classes and series of stock of the Corporation as a single class
on all actions to be taken by the stockholders of the Corporation. Each share of
Preferred Stock shall entitle the holder thereof to such number of votes per
share on each such action as shall equal the number of shares of Common Stock
(including fractions of a share) into which each share of Preferred Stock is
then convertible.
2B. BOARD SIZE. The Corporation shall not, without the written
consent or affirmative vote of the holders of at least two-thirds of the then
outstanding shares of Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class, increase the
maximum number of directors constituting the Board of Directors to a number in
excess of seven (7).
2C. BOARD SEATS. The holders of the Preferred Stock, voting as
a separate class, shall be entitled to elect three (3) directors of the
Corporation. The holders of the Common Stock, voting as a separate class, shall
be entitled to elect three (3) directors of the Corporation, one of whom shall
be the chief executive officer of the Corporation. The holders of the Preferred
Stock and the Common Stock, voting together as a single class, shall be entitled
to elect any additional directors of the Corporation. Notwithstanding the
foregoing or anything else to the contrary provided in the Articles of
Organization if the Corporation fails or refuses, for any reason or for no
reason, to redeem on any Redemption Date (as defined in paragraph 8) all of the
shares of Preferred Stock required to be redeemed on such Redemption Date in
accordance with the terms and provisions of paragraph 8, the holders of the
Preferred Stock, voting as a separate series, shall be entitled to elect a
majority of the directors of the Corporation, PROVIDED, HOWEVER,
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CONTINUATION SHEET 4.2
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that at such time as the Corporation shall thereafter comply with the
requirements of paragraph 8 (notwithstanding the original failure or refusal to
redeem), the Board of Directors of the Corporation shall thereafter be elected
in accordance with the provisions of the first, second and third sentences of
this paragraph 2C, subject to any subsequent failure or refusal by the
Corporation to comply with the requirements of paragraph 8. At any meeting held
for the purpose of electing directors, the presence in person or by proxy of the
holders of a majority of the shares of Preferred Stock then outstanding shall
constitute a quorum of the Preferred Stock the election of directors to be
elected solely by the holders of the Preferred Stock or jointly by the holders
of the Preferred Stock and the Common Stock. At any meeting held for the purpose
of electing directors, the presence in person or by proxy of the holders of a
majority of the shares of Common Stock then outstanding shall constitute a
quorum of the Common Stock for the election of directors to be elected solely by
the holders of the Common or jointly by the holders of the Preferred Stock and
the Common Stock. A vacancy in any directorship elected by the holders of the
Preferred Stock shall be filled only by vote or written consent of the holders
of the Preferred Stock, a vacancy in any directorship elected by the holders of
the Common Stock shall be filled only by vote or written consent of the holders
of the Common Stock and a vacancy in the directorship elected jointly by the
holders of the Preferred Stock and the Common Stock shall be filled only by vote
or written consent of the Preferred Stock and the Common Stock as provided
above.
3. DIVIDENDS. Subject to the provisions of Section 6C hereof, the
holders of the Preferred Stock shall be entitled to receive, out of funds
legally available therefor, when and if declared by the Board of Directors,
quarterly dividends at the rate per annum of seven percent (7%) (the "Accruing
Dividends"). Accruing Dividends shall accrue from day to day, whether or not
earned or declared, and shall be cumulative.
4. LIQUIDATION. Upon any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the holders of the shares of
Preferred Stock shall first be entitled, before any distribution or payment is
made upon any stock ranking on liquidation junior to the Preferred Stock, to be
paid an amount equal to $4.08 per share with respect to the Series A and Series
A-1 Convertible Preferred Stock and $1.02 per share with respect to the Series B
Convertible Preferred Stock plus, in the case of each share, an amount equal to
the greater of (i) all Accruing Dividends unpaid thereon (whether or not
declared) and any other dividends declared but unpaid thereon, computed to the
date payment thereof is made available, or (ii) the amount which would be
payable with respect to such Preferred Stock if such Preferred Stock were
converted into Common Stock on the basis set forth in paragraph 6 hereof, such
amount payable with respect to one share of Preferred Stock being sometimes
referred to as the "Liquidation Preference Payment" and with respect to all
shares of Preferred Stock being sometimes referred to as the "Liquidation
Preference Payments". If upon such liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, the assets to be distributed
among the holders of Preferred Stock shall be insufficient to permit payment in
full to the holders of Preferred Stock of the Liquidation Preference Payments,
then the entire assets of the Corporation to be so distributed shall be
distributed ratably among the holders of Preferred Stock, so that each holder
receives that portion of the assets available for distribution as the
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CONTINUATION SHEET 4.3
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Liquidation Preference Payments with respect to such holder's Preferred Stock
bears to the aggregate Liquidation Preference Payments of all Preferred Stock
outstanding. Written notice of such liquidation, dissolution or winding up,
stating a payment date and the place where said payments shall be made, shall be
delivered in person, mailed by certified or registered mail, return receipt
requested, or sent by telecopier or telex, not less than 20 days prior to the
payment date stated therein, to the holders of record of Preferred Stock, such
notice to be addressed to each such holder at its address as shown by the
records of the Corporation. The consolidation or merger of the Corporation into
or with any other entity or entities which results in the exchange of
outstanding shares of the Corporation for securities or other consideration
issued or paid or caused to be issued or paid by any such entity or affiliate
thereof (other than a merger to reincorporate the Corporation in a different
jurisdiction), and the sale, lease, abandonment, transfer or other disposition
by the Corporation of all or substantially all its assets, shall be deemed to be
a liquidation, dissolution or winding up of the Corporation within the meaning
of the provisions of this paragraph 4. For purposes hereof, the Common Stock
shall rank on liquidation junior to the Preferred Stock.
5. RESTRICTIONS.
5 A. At any time when shares of Preferred Stock are
outstanding, except where the vote or written consent of the holders of a
greater number of shares of the Corporation is required by law or by the
Articles of Organization, and in addition to any other vote required by law or
the Articles of Organization, without the approval of the holders of at least a
majority of the then outstanding shares of Preferred Stock, given in writing or
by vote at a meeting, consenting or voting (as the case may be) separately as a
series, the Corporation will not:
(a) Create or authorize the creation of any
additional class or series of shares of stock unless the same ranks junior to
the Preferred Stock as to the distribution of assets on the liquidation,
dissolution or winding up of the Corporation, or increase the authorized amount
of the Preferred Stock or increase the authorized amount of any additional class
or series of shares of stock unless the same ranks junior to the Preferred Stock
as to the distribution of assets on the liquidation, dissolution or winding up
of the Corporation, or create or authorize any obligation or security
convertible into shares of Preferred Stock or into shares of any other class or
series of stock unless the same ranks junior to the Preferred Stock as to the
distribution of assets on the liquidation, dissolution or winding up of the
Corporation, whether any such creation, authorization or increase shall be by
means of amendment to the Articles of Organization or by merger, consolidation
or otherwise, PROVIDED, HOWEVER, that no approval of the Preferred Stock shall
be required for the creation of any series of Preferred Stock required pursuant
to the provisions of paragraph 7 hereof;
(b) Consent to any liquidation, dissolution or
winding up of the Corporation or consolidate or merge into or with any other
entity or entities or sell, lease, pledge, abandon, transfer or otherwise
dispose of all or substantially all its assets, or acquire a majority of the
stock or assets of any other corporation or entity;
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CONTINUATION SHEET 4.4
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(c) Amend, alter or repeal its Articles of
Organization or By-laws;
(d) Purchase or set aside any sums for the purchase
of, or pay any dividend or make any distribution on, any shares of stock other
than the Preferred Stock, except for dividends or other distributions payable on
the Common Stock solely in the form of additional shares of Common Stock and
except for the purchase of shares of Common Stock from former employees of the
Corporation (or other persons formerly providing services to the Corporation)
who acquired such shares directly from the Corporation, if each such purchase is
made pursuant to contractual rights held by the Corporation relating to the
termination of employment of such former employee (or other such person formerly
providing services to the Corporation) and the purchase price does not exceed
the original issue price paid by such former employee to the Corporation for
such shares;
(e) Redeem or otherwise acquire any shares of
Preferred Stock except as expressly authorized in paragraph 8 hereof or pursuant
to a purchase offer made pro rata to all holders of the shares of Preferred
Stock on the basis of the aggregate number of outstanding shares of Preferred
Stock then held by each such holder; or
(f) Register any of its shares of Common Stock
pursuant to the provisions of the Securities Act of 1933, as amended.
5B. At any time when shares of Series A Preferred Stock
are outstanding, except where the vote or written consent of the holders of a
greater number of shares of Series A Convertible Preferred Stock of the
Corporation is required by law or by the Articles of Organization, and in
addition to any other vote required by law or the Articles of Organization,
without the written consent of the holders of at least a majority in interest of
the then outstanding shares of Series A Convertible Preferred Stock given in
writing or by vote at a meeting, consenting or voting (as the case may be)
separately as a series, the Corporation will not increase the authorized number
of shares of Series A Convertible Preferred Stock or in any manner amend, alter
or change the designations or the powers, preferences or rights, privileges or
restrictions of the Series A Convertible Preferred Stock in a manner which would
affect the holders of the Series A Convertible Preferred Stock but would not
similarly affect all holders of the Preferred Stock.
5C. At any time when shares of Series A-1 Convertible
Preferred Stock are outstanding, except where the vote or written consent of the
holders of a greater number of shares of the Series A-1 Convertible Preferred
Stock of the Corporation is required by law or by the Articles of Organization,
and in addition to any other vote required by law or the Articles of
Organization, without the written consent of the holders of at least a majority
in interest of the then outstanding shares of Series A-1 Preferred Stock given
in writing or by vote at a meeting, consenting or voting (as the case may be)
separately as a series, the Corporation will not increase the authorized number
of shares of Series A-1 Convertible Preferred Stock or in any manner amend,
alter or change the designations or the powers, preferences or rights,
privileges or restrictions of the Series A-1 Convertible Preferred Stock in a
manner which would affect the
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CONTINUATION SHEET 4.5
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holders of the Series A-1 Convertible Preferred Stock but would not similarly
affect all holders of the Preferred Stock.
5.D At any time when shares of Series B Convertible Preferred
Stock are outstanding, except where the vote or written consent of the holders
of a greater number of shares of the Series B Convertible Preferred Stock of the
Corporation is required by law or by the Articles of Organization, and in
addition to any other vote required by law or the Articles of Organization,
without the written consent of the holders of at least two-thirds in interest of
the then outstanding shares of Series B Convertible Preferred Stock given in
writing or by vote at a meeting, consenting or voting (as the case may be)
separately as a series, the Corporation will not increase the authorized number
of shares of the Series B Convertible Preferred Stock or in any manner amend,
alter or change the designations or the powers, preferences or rights,
privileges or restrictions of the Series B Convertible Preferred Stock in a
manner which would affect the holders of the Series B Convertible Preferred
Stock but would not similarly affect all holders of Preferred Stock.
6. CONVERSIONS. The holders of shares of Preferred Stock shall
have the following conversion rights:
6A. RIGHT TO CONVERT. Subject to the terms and conditions of
this paragraph 6, the holder of any share or shares of Preferred Stock shall
have the right, at its option at any time, to convert any such shares of
Preferred Stock (except that upon any liquidation of the Corporation the right
of conversion shall terminate at the close of business on the business day fixed
for payment of the amount distributable on the Preferred Stock) into such number
of fully paid and nonassessable shares of Common Stock as is obtained by (i)
multiplying the number of shares of Preferred Stock so to be converted by $4.08
with respect to the Series A and A-1 Convertible Preferred Stock and by $1.02
with respect to the Series B Convertible Preferred Stock and (ii) dividing the
result by the conversion price of $2.192698374 per share with respect to the
Series A Convertible Preferred Stock, $4.08 per share with respect to the Series
A-1 Convertible Preferred Stock and $1.02 per share with respect to the Series B
Convertible Preferred Stock or, in case an adjustment of such price has taken
place pursuant to the further provisions of this paragraph 6, then by the
conversion price as last adjusted and in effect at the date any share or shares
of Preferred Stock are surrendered for conversion (such price, or such price as
last adjusted, being referred to as the "Series A Conversion Price" with respect
to the Series A Convertible Preferred Stock, the "Series A-1 Conversion Price"
with respect to the Series A-1 Convertible Preferred Stock, and the "Series B
Conversion Price" with respect to the Series B Convertible Preferred Stock, and
collectively as the "Conversion Price"). Such rights of conversion shall be
exercised by the holder thereof by giving written notice that the holder elects
to convert a stated number of shares of Preferred Stock into Common Stock and by
surrender of a certificate or certificates for the shares so to be converted to
the Corporation at its principal office (or such other office or agency of the
Corporation as the Corporation may designate by notice in writing to the holders
of the Preferred Stock) at any time during its usual business hours on the date
set forth in such notice, together with a statement of the name or names (with
address) in which the certificate or certificates for shares of Common Stock
shall be issued.
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CONTINUATION SHEET 4.6
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6B. ISSUANCE OF CERTIFICATES; TIME CONVERSION EFFECTED.
Promptly after the receipt of the written notice referred to in subparagraph 6A
and surrender of the certificate or certificates for the share or shares of
Preferred Stock to be converted, the Corporation shall issue and deliver, or
cause to be issued and delivered, to the holder, registered in such name or
names as such holder may direct, a certificate or certificates for the number of
whole shares of Common Stock issuable upon the conversion of such share or
shares of Preferred Stock. To the extent permitted by law, such conversion shall
be deemed to have been effected and the Conversion Price shall be determined as
of the close of business on the date on which such written notice shall have
been received by the Corporation and the certificate or certificates for such
share or shares shall have been surrendered as aforesaid, and at such time the
rights of the holder of such share or shares of 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 represented thereby.
6C. FRACTIONAL SHARES; DIVIDENDS; PARTIAL CONVERSION. No
fractional shares shall be issued upon conversion of Preferred Stock into Common
Stock and no payment or adjustment shall be made upon any conversion on account
of any cash dividends on the Common Stock issued upon such conversion. At the
time of each conversion, the Corporation shall pay in cash an amount equal to
all dividends, excluding Accruing Dividends, accrued and unpaid on the shares of
Preferred Stock surrendered for conversion to the date upon which such
conversion is deemed to take place as provided in subparagraph 6B. In case the
number of shares of Preferred Stock represented by the certificate or
certificates surrendered pursuant to subparagraph 6A exceeds the number of
shares converted, the Corporation shall, upon such conversion, execute and
deliver to the holder, at the expense of the Corporation, a new certificate or
certificates for the number of shares of Preferred Stock represented by the
certificate or certificates surrendered which are not to be converted. If any
fractional share of Common Stock would, except for the provisions of the first
sentence of this subparagraph 6C, be delivered upon such conversion, the
Corporation, in lieu of delivering such fractional share, shall pay to the
holder surrendering the Preferred Stock for conversion an amount in cash equal
to the current market price of such fractional share as determined in good faith
by the Board of Directors of the Corporation.
6D. ADJUSTMENT OF PRICE UPON ISSUANCE OF COMMON STOCK. Except
as provided in subparagraph 6E, if and whenever after December 28, 1995 the
Corporation shall issue or sell, or is, in accordance with subparagraphs 6D(1)
through 6D(7), deemed to have issued or sold (including the issuance or sale of
any additional shares of Series B Convertible Preferred Stock after December 28,
1995 pursuant to Section 1.03 of the Series B Convertible Preferred Stock
Purchase Agreement dated December 28, 1995), any shares of Common Stock for a
consideration per share less than the Conversion Price in effect immediately
prior to the time of such issue or sale, then, forthwith upon such issue or
sale, the Conversion Price shall be reduced to the price determined by dividing
(i) an amount equal to the sum of (a) the number of shares of Common Stock
(including shares of Common Stock issuable upon conversion of Convertible
Securities) outstanding immediately prior to such issue or sale multiplied by
the then existing Conversion Price and (b) the consideration, if any, received
by the Corporation upon
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CONTINUATION SHEET 4.7
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such issue or sale, by (ii) the total number of shares of Common Stock
(including shares of Common Stock issuable upon conversion of Convertible
Securities) outstanding immediately after such issue or sale. The Series A-1
Conversion Price shall not be subject to adjustment pursuant to this
subparagraph 6D.
For purposes of this subparagraph 6D, the following subparagraphs 6D(1)
to 6D(7) shall also be applicable:
6D(1) ISSUANCE OF RIGHTS OR OPTIONS. In case at any time the
Corporation shall in any manner grant (whether directly or by assumption
in a merger or otherwise) any warrants or other rights to subscribe for
or to purchase, or any options for the purchase of, Common Stock or any
stock or security convertible into or exchangeable for Common Stock
(such warrants, rights or options being called "Options" and such
convertible or exchangeable stock or securities being called
"Convertible Securities") whether or not such Options or the right to
convert or exchange any such Convertible Securities are immediately
exercisable, and the price per share for which Common Stock is issuable
upon the exercise of such Options or upon the conversion or exchange of
such Convertible Securities (determined by dividing (i) the total
amount, if any, received or receivable by the Corporation as
consideration for the granting of such Options, plus the minimum
aggregate amount of additional consideration payable to the Corporation
upon the exercise of all such Options, plus, in the case of such Options
which relate to Convertible Securities, the minimum aggregate amount of
additional consideration, if any, payable upon the issue or sale of such
Convertible Securities and upon the conversion or exchange thereof, by
(ii) the total maximum number of shares of Common Stock issuable upon
the exercise of such Options or upon the conversion or exchange of all
such Convertible Securities issuable upon the exercise of such Options)
shall be less than the Conversion Price in effect immediately prior to
the time of the granting of such Options, then the total maximum number
of shares of Common Stock issuable upon the exercise of such Options or
upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall
be deemed to have been issued for such price per share as of the date of
granting of such Options or the issuance of such Convertible Securities
and thereafter shall be deemed to be outstanding. Except as otherwise
provided in subparagraph 6D(3), no adjustment of the Conversion Price
shall be made upon the actual issue of such Common Stock or of such
Convertible Securities upon exercise of such Options or upon the actual
issue of such Common Stock upon conversion or exchange of such
Convertible Securities.
6D(2) ISSUANCE OF CONVERTIBLE SECURITIES. In case the
Corporation shall in any manner issue (whether directly or by assumption
in a merger or otherwise) or sell any Convertible Securities, whether or
not the rights to exchange or convert any such Convertible Securities
are immediately exercisable, and the price per share for which Common
Stock is issuable upon such conversion or exchange (determined by
dividing (i) the total amount received or receivable by the Corporation
as consideration for the issue or sale of such Convertible Securities,
plus the minimum aggregate amount of additional consideration, if
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CONTINUATION SHEET 4.8
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any, payable to the Corporation upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible
Securities) shall be less than the Conversion Price in effect
immediately prior to the time of such issue or sale, then the total
maximum number of shares of Common Stock issuable upon conversion or
exchange of all such Convertible Securities shall be deemed to have
been issued for such price per share as of the date of the issue or
sale of such Convertible Securities and thereafter shall be deemed to
be outstanding, provided that (a) except as otherwise provided in
subparagraph 6D(3), no adjustment of the Conversion Price shall be made
upon the actual issue of such Common Stock upon conversion or exchange
of such Convertible Securities and (b) if any such issue or sale of
such Convertible Securities is made upon exercise of any Options to
purchase any such Convertible Securities for which adjustments of the
Conversion Price have been or are to be made pursuant to other
provisions of this subparagraph 6D, no further adjustment of the
Conversion Price shall be made by reason of such issue or sale.
6D(3) CHANGE IN OPTION PRICE OR CONVERSION RATE. Upon the
happening of any of the following events, namely, if the purchase price
provided for in any Option referred to in subparagraph 6D(1), the
additional consideration, if any, payable upon the conversion or
exchange of any Convertible Securities referred to in subparagraph 6D(1)
or 6D(2), or the rate at which Convertible Securities referred to in
subparagraph 6D(1) or 6D(2) are convertible into or exchangeable for
Common Stock shall change at any time (including, but not limited to,
changes under or by reason of provisions designed to protect against
dilution), the Conversion Price in effect at the time of such event
shall forthwith be readjusted to the Conversion Price which would have
been in effect at such time had such Options or Convertible Securities
still outstanding provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold, but only if as a result of such
adjustment the Conversion Price then in effect hereunder is thereby
reduced; and on the termination of any such Option or any such right to
convert or exchange such Convertible Securities, the Conversion Price
then in effect hereunder shall forthwith be increased to the Conversion
Price which would have been in effect at the time of such termination
had such Option or Convertible Securities, to the extent outstanding
immediately prior to such termination, never been issued.
6D(4) STOCK DIVIDENDS. In case the Corporation shall declare a
dividend or make any other distribution upon any stock of the
Corporation payable in Common Stock (except for dividends or
distributions upon the Common Stock), Options or Convertible Securities,
any Common Stock, Options or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be deemed to
have been issued or sold without consideration.
6D(5) CONSIDERATION FOR STOCK. In case any shares of Common
Stock, Options or Convertible Securities shall be issued or sold for
cash, the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor, without deduction therefrom
of any expenses incurred or any underwriting commissions or concessions
paid
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CONTINUATION SHEET 4.9
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or allowed by the Corporation in connection therewith. In case any
shares of Common Stock, Options or Convertible Securities shall be
issued or sold for a consideration other than cash, the amount of the
consideration other than cash received by the Corporation shall be
deemed to be the fair value of such consideration as determined in good
faith by the Board of Directors of the Corporation, without deduction
of any expenses incurred or any underwriting commissions or concessions
paid or allowed by the Corporation in connection therewith. In case any
Options shall be issued in connection with the issue and sale of other
securities of the Corporation, together comprising one integral
transaction in which no specific consideration is allocated to such
Options by the parties thereto, such Options shall be deemed to have
been issued for such consideration as determined in good faith by the
Board of Directors of the Corporation.
6D(6) RECORD DATE. In case the Corporation shall take a record
of the holders of its Common Stock for the purpose of entitling them (i)
to receive a dividend or other distribution payable in Common Stock,
Options or Convertible Securities or (ii) to subscribe for or purchase
Common Stock, Options or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of
Common Stock deemed to have been issued or sold upon the declaration of
such dividend or the making of such other distribution or the date of
the granting of such right of subscription or purchase, as the case may
be.
6D(7) TREASURY SHARES. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by
or for the account of the Corporation, and the disposition of any such
shares shall be considered an issue or sale of Common Stock for the
purpose of this subparagraph 6D.
6E. CERTAIN ISSUES OF COMMON STOCK EXCEPTED. Anything herein
to the contrary notwithstanding, the Corporation shall not be required to make
any adjustment of the Conversion Price in the case of the issuance from and
after the date of filing of these terms of the Series A Convertible Preferred
Stock of (i) up to an aggregate of 3,056,787 shares (appropriately adjusted to
reflect the occurrence of any event described in subparagraph 6F) of Common
Stock to directors, officers, employees or consultants of the Corporation in
connection with their service to the Corporation, or (ii) the issuance of
securities of the Corporation solely in consideration for the acquisition
(whether by merger or otherwise) by the Corporation or any of its subsidiaries
of all or substantially all of the stock or assets of any other entity.
6F. SUBDIVISION OR COMBINATION OF COMMON STOCK. In case the
Corporation shall at any time subdivide (by any stock split, stock dividend or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased. In the case of any such subdivision, no further
adjustment shall be made pursuant to subparagraph 6D(4) by reason thereof.
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12
CONTINUATION SHEET 4.10
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6F. SUBDIVISION OR COMBINATION OF COMMON STOCK. In case the
Corporation shall at any time subdivide (by any stock split, stock dividend or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to such subdivision
shall be proportionately reduced, and, conversely, in case the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased. In the case of any such subdivision, no further
adjustment shall be made pursuant to subparagraph 6D(4) by reason thereof.
6G. REORGANIZATION OR RECLASSIFICATION. If any capital
reorganization or reclassification of the capital stock of the Corporation shall
be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Common
Stock, then, as a condition of such reorganization or reclassification, lawful
and adequate provisions shall be made whereby each holder of a share or shares
of Preferred Stock shall thereupon have the right to receive, upon the basis and
upon the terms and conditions specified herein and in lieu of the shares of
Common Stock immediately theretofore receivable upon the conversion of such
share or shares of Preferred Stock, such shares of stock, securities or assets
as may be issued or payable with respect to or in exchange for a number of
outstanding shares of such Common Stock equal to the number of shares of such
Common Stock immediately theretofore receivable upon such conversion had such
reorganization or reclassification not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and interests of
such holder to the end that the provisions hereof (including without limitation
provisions for adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as may be, in relation to any shares of stock, securities
or assets thereafter deliverable upon the exercise of such conversion rights.
6H. [Reserved].
6I. NOTICE OF ADJUSTMENT. Upon any adjustment of the
Conversion Price pursuant to which the Conversion Price shall be adjusted by an
amount equal to or greater than $.05, then and in each such case the Corporation
shall give written notice thereof, by delivery in person, certified or
registered mail, return receipt requested, telecopier or telex, addressed to
each holder of shares of Preferred Stock obtaining the benefit of such
adjustment at the address of such holder as shown on the books of the
Corporation, which notice shall state the Conversion Price resulting from such
adjustment, setting forth in reasonable detail the method upon which such
calculation is based.
6J. OTHER NOTICES. In case at any time:
(1) the Corporation shall declare any dividend upon its Common
Stock payable in cash or stock or make any other distribution to the
holders of its Common Stock;
(2) the Corporation shall offer for subscription PRO RATA to
the holders of its Common Stock any additional shares of stock of any
class or other rights;
(3) there shall be any capital reorganization or
reclassification of the capital stock of the Corporation, or a
consolidation or merger of the Corporation with or into another entity
or entities, or a sale, lease, abandonment, transfer or other
disposition of all or substantially all of the assets of the
Corporation; or
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13
CONTINUATION SHEET 4.11
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(4) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give, by delivery
in person, certified or registered mail, return receipt requested, telecopier or
telex, addressed to each holder of any shares of Preferred Stock at the address
of such holder as shown on the books of the Corporation, (a) at least 20 days'
prior written notice of the date on which the books of the Corporation shall
close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding up and (b) in the case of any such reorganization, reclassification,
consolidation, merger, disposition, dissolution, liquidation or winding up, at
least 20 days' prior written notice of the date when the same shall take place.
Such notice in accordance with the foregoing clause (a) shall also specify, in
the case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto and such notice in
accordance with the foregoing clause (b) shall also specify the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock for
securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, disposition, dissolution, liquidation
or winding up, as the case may be.
6K. STOCK TO BE RESERVED. The Corporation will at all times
reserve and keep available out of its authorized Common Stock, solely for the
purpose of issuance upon the conversion of Preferred Stock as herein provided,
such number of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of Preferred Stock. The Corporation
covenants that all shares of Common Stock which shall be so issued shall be duly
and validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting the
generality of the foregoing, the Corporation covenants that it will from time to
time take all such action as may be requisite to assure that the par value per
share of the Common Stock is at all times equal to or less than the lowest
Conversion Price in effect at the time. The Corporation will take all such
action as may be necessary to assure that all such shares of Common Stock may be
so issued without violation of any applicable law or regulation, or of any
requirement of any national securities exchange upon which the Common Stock may
be listed. The Corporation will not take any action which results in any
adjustment of the Conversion Price if the total number of shares of Common Stock
issued and issuable after such action upon conversion of the Preferred Stock
would exceed the total number of shares of Common Stock then authorized by the
Articles of Organization.
6L. NO REISSUANCE OF PREFERRED STOCK. Shares of Preferred
Stock which are converted into shares of Common Stock as provided herein shall
not be reissued.
6M. ISSUE TAX. The issuance of certificates for shares of
Common Stock upon conversion of Preferred Stock shall be made without charge to
the holders thereof for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any
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14
CONTINUATION SHEET 4.12
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certificate in a name other than that of the holder of the Preferred Stock which
is being converted.
6N. CLOSING OF BOOKS. The Corporation will at no time close
its transfer books against the transfer of any Preferred Stock or of any shares
of Common Stock issued or issuable upon the conversion of any shares of
Preferred Stock in any manner which interferes with the timely conversion of
such Preferred Stock, except as may otherwise be required to comply with
applicable securities laws.
6O. DEFINITION OF COMMON STOCK. As used in this paragraph 6,
the term "Common Stock" shall mean and include the Corporation's authorized
Common Stock, par value $.01 per share, as constituted on the date of filing of
these terms of the Preferred Stock, and shall also include any capital stock of
any class of the Corporation thereafter authorized which shall neither be
limited to a fixed sum or percentage in respect of the rights of the holders
thereof to participate in dividends nor entitled to a preference in the
distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; provided that the shares of Common
Stock receivable upon conversion of shares of Preferred Stock shall include only
shares designated as Common Stock of the Corporation on the date of filing of
this instrument, or in case of any reorganization or reclassification of the
outstanding shares thereof, the stock, securities or assets provided for in
subparagraph 6G.
6P. MANDATORY CONVERSION. (a) If at any time the Corporation
shall effect a firm commitment underwritten public offering of shares of Common
Stock in which (i) the aggregate price paid for such shares by the public shall
be at least $15,000,000 and (ii) the price paid by the public for such shares
shall be at least $8.16 per share (appropriately adjusted to reflect the
occurrence of any event described in subparagraph 6F), then effective upon the
closing of the sale of such shares by the Corporation pursuant to such public
offering, all outstanding shares of Preferred Stock shall automatically convert
to shares of Common Stock on the basis set forth in this paragraph 6. Holders of
shares of Preferred Stock so converted may deliver to the Corporation at its
principal office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to such holders) during its usual
business hours, the certificate or certificates for the shares so converted. As
promptly as practicable thereafter, the Corporation shall issue and deliver to
such holder a certificate or certificates for the number of whole shares of
Common Stock to which such holder is entitled, together with any payment in lieu
of fractional shares to which such holder may be entitled pursuant to
subparagraph 6C. Until such time as a holder of shares of Preferred Stock shall
surrender his or its certificates therefor as provided above, such certificates
shall be deemed to represent the shares of Common Stock to which such holder
shall be entitled upon the surrender thereof.
(b) Each share of Preferred Stock shall automatically be
converted into shares of Common Stock on the basis set forth in this paragraph 6
if the Corporation shall consummate a "Qualified Acquisition", as defined below,
such conversion to be deemed effective immediately prior to the consummation
thereof, PROVIDED, HOWEVER, that at least ten (10) days prior to any such
conversion hereunder, the Corporation shall notify the holders of the Preferred
Stock of any
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15
CONTINUATION SHEET 4.13
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such proposed conversion, including with such notice the terms thereof, and the
holders of not less than a majority of the outstanding Preferred Stock may elect
to cause the Corporation to redeem all of the outstanding Preferred Stock at the
applicable Redemption Price as defined in paragraph 8B upon the consummation of
such Qualified Acquisition. A "Qualified Acquisition" shall mean any merger,
consolidation or sale of substantially all of the Corporation's assets in which
the amount payable with respect to each share of the Corporation's Common Stock
(assuming for purposes of such computation the conversion, prior to such merger,
consolidation or distribution, of all outstanding shares of Preferred Stock) is
in excess of $6.12 per share (appropriately adjusted to reflect the occurrence
of any event described in subparagraph 6F).
7. SPECIAL MANDATORY CONVERSION.
7A. If any holder of shares of Series A Convertible
Preferred Stock is entitled to exercise a right of first refusal granted
pursuant to Article V of the Series B Convertible Preferred Stock Purchase
Agreement dated December 28, 1995 (the "Series B Purchase Agreement") between
the Corporation and the Purchasers listed in Schedule I attached thereto (the
"Right of First Refusal") with respect to any equity financing of the
Corporation which would result in the reduction of such holder's Conversion
Price (the "Equity Financing") and (i) the Equity Financing has been approved by
fifty-one percent (51%) in interest of the holders of shares of Preferred Stock,
(ii) the Corporation has fully complied in all respects with its contractual
obligations pursuant to such Right of First Refusal and (iii) the provisions of
such Right of First Refusal have not been waived at the request of the
Corporation by such holder, if such holder (a "Non-Participating Holder") (a)
does not exercise such holder's Right of First Refusal to acquire his Special
Proportionate Percentage (as hereinafter defined) of the Allocated Offered
Securities (as hereinafter defined) offered to the holders of the Preferred
Stock in such Equity Financing (a "Mandatory Offering"), or (b) was not entitled
to exercise a right of first refusal pursuant to Article V of the Series B
Purchase Agreement due to the failure of such holder to purchase the full amount
of any securities offered to such holder in any prior financing consummated by
the Corporation, all of such holder's shares of Preferred Stock shall
automatically and without further action on the part of such holder be converted
effective subject to and concurrently with the consummation of the Mandatory
Offering (the "Mandatory Offering Date") as follows: each share of Preferred
Stock held by such Non-Participating Holder shall be converted into one share of
one or more newly created series of Preferred Stock (having such number of
shares as the Board of Directors may by resolution fix) which such series shall
be identical in all respects to the series of Preferred Stock held by such
Non-Participating Holder, except that the Conversion Price of such series shall
be fixed immediately prior to the Mandatory Offering Date and shall be subject
to no further adjustments in a manner similar to that provided in subparagraph
6D. The Board of Directors shall take all necessary actions to designate such
new series. Upon such conversion, the shares of Preferred Stock so converted
shall be cancelled and not subject to reissuance. As used in this paragraph 7,
the following terms shall have the following respective meanings:
(1) "Allocated Offered Securities" shall mean that
portion of the gross amount of Offered Securities which has expressly been
allocated for purchase by the holders of
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CONTINUATION SHEET 4.14
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the Preferred Stock as a group, which allocation has been expressly approved by
fifty-one percent (51%) in interest of the holders of the shares of Preferred
Stock (as contemplated by clause (i) of this paragraph 7A, it being understood
that the amount of Allocated Offered Securities may be less (but in no event
greater) than the amount of Offered Securities which the Corporation is
otherwise required to offer to the holders of Preferred Stock pursuant to such
holders' Right of First Refusal; "Offered Securities" shall mean the amount of
securities which the corporation is required to offer to the Preferred
Shareholders (as defined in the Series B Purchase Agreement) pursuant to Article
V of the Series B Purchase Agreement; and
(2) "Special Proportionate Percentage" shall mean as
to a holder of Preferred Stock, that percentage figure which expresses the ratio
which (x) the number of shares of outstanding Common Stock then owned by such
holder bears to (y) the aggregate number of shares of outstanding Common Stock
then owned by all holders of shares of Preferred Stock to whom the Corporation
is required to offer the Offered Securities. For purposes solely of the
computation required for determination of the Special Proportionate Percentage,
the holders of outstanding Preferred Stock shall be treated as having converted
all such outstanding Preferred Stock into shares of Common Stock at the rate at
which such securities are convertible into Common Stock in effect at the time of
such Equity Financing, and shall be treated as having exercised all rights then
owned by them to purchase shares of Common Stock.
7B. The holder of any shares of Preferred Stock converted
pursuant to Paragraph 7A hereof, shall deliver to the Corporation during regular
business hours at the office of any transfer agent of the Corporation for the
Preferred Stock, or at such other place as may be designated by the Corporation,
the certificate or certificates for the shares so converted, duly endorsed or
assigned in blank or to the Corporation. As promptly as practicable thereafter,
the Corporation shall issue and deliver to such holder, at the place designated
by such holder, a certificate or certificates for the number of full shares of
the new series of Preferred Stock to which such holder is entitled. The person
in whose name the certificate for such new series of Preferred Stock is to be
issued shall be deemed to have become a stockholder of record on the Mandatory
Offering Date unless the transfer books of the Corporation are closed on that
date, in which event he shall be deemed to have become a stockholder of record
on the next succeeding date on which the transfer books are open.
7C. In the event that at any time the Special Mandatory
Conversion set forth in this paragraph 7 shall not be effective as to all shares
of the Preferred Stock then outstanding, the Board of Directors shall take all
necessary actions to designate one or more new series of Preferred Stock (having
such distinctive designations and number of shares as the Board of Directors may
by resolution fix) on each such subsequent occasion that (i) any Equity
Financing occurs, and (ii) any holder of Preferred Stock does not by exercise of
such holder's Right of First Refusal acquire his Special Proportionate
Percentage of the Allocated Offered Securities then so offered to the holders of
the Preferred Stock. Each share of such Non-Participating Holder's shares of
Preferred Stock shall be converted into one share of such newly-created series
of Preferred Stock concurrently with the consummation of the subject Mandatory
Offering. Each new series of Preferred Stock shall be identical in all respects,
except with respect to the
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17
CONTINUATION SHEET 4.15
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respective conversion price then in effect, to the new series of Preferred Stock
created pursuant to the provisions of Paragraph 7A. Except as otherwise required
by applicable law, any new series of Preferred Stock created pursuant to
Paragraph 7A or 7C hereof shall vote together with the series of Preferred Stock
from which it was converted on all matters as a single series.
8. REDEMPTION. The shares of Preferred Stock shall be redeemed as
follows:
8A. MANDATORY REDEMPTION. On December 28, 2000, and on each of
the next two anniversaries thereafter (the "Redemption Dates", and each a
"Redemption Date"), the Corporation shall redeem any outstanding shares of
Preferred Stock on a pro rata basis with respect to each series of Preferred
Stock according to the percentages listed below:
Percentage of Shares of
Series A Convertible
Preferred Stock then
Date of Redemption Outstanding to be Redeemed
- ------------------ --------------------------
December 28, 2000 33-1/3% of all the shares of Series A Convertible
Preferred Stock Outstanding on December 28, 2000
December 28, 2001 50% of all the shares of Series A Convertible
Preferred Stock outstanding on December 28, 2001
December 28, 2002 100% of all the shares of Series A Convertible
Preferred Stock outstanding on December 28, 2002
8B. REDEMPTION PRICE AND PAYMENT. The shares of Preferred
Stock to be redeemed on any Redemption Date shall be redeemed by paying for each
share in cash an amount equal to $4.08 per share with respect to the Series A
and Series A-1 Convertible Preferred Stock and $1.02 per share with respect to
the Series B Convertible Preferred Stock plus, in the case of each share, an
amount equal to all dividends, including Accruing Dividends, unpaid thereon,
computed to such Redemption Date, such amount being referred to as the
"Redemption Price". Such payment shall be made in full on the applicable
Redemption Date to the holders entitled thereto.
8C. REDEMPTION MECHANICS. At least 20 but not more than 30
days prior to each Redemption Date, written notice (the "Redemption Notice")
shall be given by the Corporation by delivery in person, certified or registered
mail, return receipt requested, telecopier
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18
CONTINUATION SHEET 4.16
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or telex, to each holder of record (at the close of business on the business day
next preceding the day on which the Redemption Notice is given) of shares of
Preferred Stock notifying such holder of the redemption and specifying the
Redemption Price, such Redemption Date, the number of shares of Preferred Stock
to be redeemed from such holder (computed on a pro rata basis in accordance with
the number of such shares of each series held by all holders thereof) and the
place where said Redemption Price shall be payable. The Redemption Notice shall
be addressed to each holder at his address as shown by the records of the
Corporation. From and after the close of business on a Redemption Date, unless
there shall have been a default in the payment of the Redemption Price, all
rights of holders of shares of Preferred Stock (except the right to receive the
Redemption Price) shall cease with respect to the shares to be redeemed on such
Redemption Date, and such shares shall not thereafter be transferred on the
books of the Corporation or be deemed to be outstanding for any purpose
whatsoever. If the funds of the Corporation legally available for redemption of
shares of Preferred Stock on a Redemption Date are insufficient to redeem the
total number of shares of Preferred Stock to be redeemed on such Redemption
Date, the holders of such shares shall share ratably in any funds legally
available for redemption of such shares according to the respective amounts
which would be payable to them if the full number of shares to be redeemed on
such Redemption Date were actually redeemed. The shares of Preferred Stock
required to be redeemed but not so redeemed shall remain outstanding and
entitled to all rights and preferences provided herein. At any time thereafter
when additional funds of the Corporation are legally available for the
redemption of such shares of Preferred Stock, such funds will be used, at the
end of the next succeeding fiscal quarter, to redeem the balance of such shares,
or such portion thereof for which funds are then legally available, on the basis
set forth above.
8D. REDEEMED OR OTHERWISE ACQUIRED SHARES TO BE RETIRED. Any
shares of Preferred Stock redeemed pursuant to this paragraph 8 or otherwise
acquired by the Corporation in any manner whatsoever shall be cancelled and
shall not under any circumstances be reissued; and the Corporation may from time
to time take such appropriate corporate action as may be necessary to reduce
accordingly the number of authorized shares of Preferred Stock.
9. AMENDMENTS. No provision of these terms of the Preferred Stock
may be amended, modified or waived without the written consent or affirmative
vote of the holders of at least two-thirds of the then outstanding shares of
Preferred Stock.
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19
CONTINUATION SHEET 4.17
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COMMON STOCK
1. After the requirements with respect to preferential dividends on the
Preferred Stock shall have been met and after the Corporation shall have
complied with all the requirements, if any, with respect to the setting aside of
sums as sinking funds or redemption or purchase accounts, then and not otherwise
the holders of Common Stock shall be entitled to receive such dividends as may
be declared from time to time by the Board of Directors.
2. After distribution in full of the preferential amount to be
distributed to the holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets, dissolution or winding
up of the Corporation, the holders of the Common Stock shall be entitled to
receive all the remaining assets of the Corporation, tangible or intangible, of
whatever kind available for distribution to the stockholders ratably in
proportion to the number of shares of Common Stock held by them respectively.
3. Except as may otherwise be required by law or the provisions of
these Restated Articles, or by the Board of Directors pursuant to authority
granted in these Restated Articles, each holder of Common Stock shall have one
vote in respect of each share of stock held by him in all matters voted upon by
the stockholders.
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20
CONTINUATION SHEET 6.1
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CONCORD COMMUNICATIONS, INC.
Restated Articles of Organization
---------------------------------
ARTICLE VI
----------
Other provisions for the conduct and regulation of the business and
affairs of the corporation, for its voluntary dissolution, or for limiting,
defining, or regulating the powers of the corporation, or of its directors or
stockholders, or of any class of stockholders, are as follows:
A. BOARD OF DIRECTORS.
1. NUMBER, ELECTION AND QUALIFICATION. A Board of
Directors shall be elected by the stockholders at the annual meeting. The number
of directors shall be fixed by the stockholders (except as that number may be
enlarged by the Board of Directors acting pursuant to Section 3 of this
Article), but shall be not less than three, except that whenever there shall be
only two stockholders the number of directors shall be not less than two and
whenever there shall be only one stockholder or prior to the issuance of any
stock, there shall be at least one director, and shall be not more than
thirteen. Notwithstanding the foregoing provisions, at any time that the
corporation has a class of equity securities registered under the Securities
Exchange Act of 1934, as amended, (the "Exchange Act"), then:
(i) The number of directors shall be fixed only
by vote of the Board of Directors.
(ii) The directors of the corporation shall be
classified with respect to the time for which they severally hold office, into
three classes, as nearly equal in number as possible; the term of office of
those of the first class ("Class I Directors") to continue until the first
annual meeting following the date the corporation first has a class of equity
securities registered under the Exchange Act and until their successors are duly
elected and qualified; the term of office of those of the second class ("Class
II Directors") to continue until the second annual meeting following the date
the corporation first has a class of equity securities registered under the
Exchange Act and until their successors are duly elected and qualified; and the
term of office of those of the third class ("Class III Directors") to continue
until the third annual meeting following the date the corporation first has a
class of equity securities registered under the Exchange Act and until their
successors are duly elected and qualified. At each annual meeting of the
corporation, the successors to the class of directors whose term expires at that
meeting shall be elected to hold office for a term continuing until the annual
meeting held in the third year following the year of their election and until
their successors are duly elected and qualified. If the authorized number of
directors is changed, any increase or decrease shall be apportioned among the
classes so as to maintain the number of directors in each class as nearly equal
as possible. No decrease in the number of directors constituting the Board of
Directors shall shorten the term of an incumbent director.
21
CONTINUATION SHEET 6.2
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2. VACANCIES. Vacancies and newly-created directorships,
whether resulting from an increase in the size of the Board of Directors, from
the death resignation, disqualification or removal of a director or otherwise,
shall be filled solely by the affirmative vote a majority of the remaining
directors then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the immediately preceding
sentence shall hold office for the remainder of the full term of the class of
directors in which the vacancy occurred or the new directorship was created and
until such director's successor shall have been elected and qualified.
3. ENLARGEMENT OF THE BOARD. The Board of Directors may only
be enlarged by the vote of a majority of the directors then in office.
4. TENURE. Except as otherwise provided by law, these Restated
Articles of Organization or the By-laws, directors shall hold office until the
third year following the year of their election and until their successors are
duly elected and qualified. Any director may resign by delivering his written
resignation to the corporation at its principal office or to the President,
Clerk or Secretary. Such resignation shall be effective upon receipt unless it
is specified to be effective at some other time or upon the happening of some
other event.
5. REMOVAL. Any director elected by the stockholders, or by
the Board of Directors to fill a vacancy, may be removed only for cause by a
vote of a majority of directors then in office or by the stockholders, after
reasonable notice and opportunity to be heard before the annual meeting of
stockholders at which his or her removal is considered and by the affirmative
vote of the holders of at least eighty percent (80%) of the combined voting
power of the shares of capital stock of the Corporation outstanding and entitled
to vote for the election of directors.
For purposes of the foregoing paragraph, "cause", with respect
to the removal of any director, shall mean only (1) conviction of a felony, (2)
declaration of unsound mind by order of court, (3) gross dereliction of duty,
(4) commission of an action involving moral turpitude, or (5) commission of an
action which constitutes intentional misconduct or a knowing violation of law if
such action in either event results in improper substantial personal benefit and
a material injury to the Corporation.
6. AMENDMENT. Notwithstanding any other provision of these
Restated Articles of Organization, or any provision of law which might otherwise
permit a lesser vote or no vote, the affirmative vote of the holders of at least
eighty percent (80%) of the combined voting power of the shares of capital stock
of the corporation outstanding and entitled to vote for the election of
directors shall be required to alter, amend or repeal this Article VI, Part A.
B. LIABILITY OF DIRECTORS.
The corporation eliminates the personal liability of each director to
the corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director notwithstanding any provision of law imposing such liability;
provided, however, that, to the extent provided by
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CONTINUATION SHEET 6.3
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applicable law, this provision shall not eliminate or limit the liability of a
director (i) for any breach of the director's duty of loyalty to the corporation
or its stockholders, (ii) for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii) under
Section 61 or 62 or successor provisions of the Massachusetts Business
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. This provision shall not eliminate or limit the
liability of a director of the corporation for any act or omission occurring
prior to the date on which this provision becomes effective. No amendment to or
repeal of this provision shall apply to or have any effect on the liability or
alleged liability of any director for or with respect to any acts or omissions
of such director occurring prior to such amendment or repeal.
C. INDEMNIFICATION.
1. ACTIONS, SUITS AND PROCEEDINGS. The corporation shall
indemnify each person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative, by reason of the fact that he
is or was, or has agreed to become, a director or officer of the corporation, or
is or was serving, or has agreed to serve, at the request of the corporation, as
a director or officer of, or in a similar capacity with, another organization or
in any capacity with respect to any employee benefit plan of the corporation
(all such persons being referred to hereafter as an "Indemnitee"), or by reason
of any action alleged to have been taken or omitted in such capacity, against
all expenses (including attorneys' fees), judgments and fines incurred by him or
on his behalf in connection with such action, suit or proceeding and any appeal
therefrom, unless such indemnification is prohibited by the Business
Corporation Law of the Commonwealth of Massachusetts. Notwithstanding anything
to the contrary in this Article, except as set forth in Section 5 below, the
corporation shall not indemnify an Indemnitee seeking indemnification in
connection with a proceeding (or part thereof) initiated by the Indemnitee
unless the initiation thereof was approved by the Board of Directors of the
corporation.
2. SETTLEMENTS. The right to indemnification conferred in this
Article shall include the right to be paid by the corporation for amounts paid
in settlement of any such action, suit or proceeding and any appeal therefrom,
and all expenses (including attorneys' fees) incurred in connection with such
settlement, pursuant to a consent decree or otherwise, unless and to the extent
it is determined pursuant to Section 5 below that the Indemnitee did not act in
good faith in the reasonable belief that his action was in the best interests of
the corporation or, to the extent such matter relates to service with respect to
an employee benefit plan, in the best interests of the participants or
beneficiaries of such employee benefit plan.
3. NOTIFICATION AND DEFENSE OF CLAIM. As a condition precedent
to his right to be indemnified, the Indemnitee must notify the corporation in
writing as soon as practicable of any action, suit, proceeding or investigation
involving him for which indemnity will or could be
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CONTINUATION SHEET 6.4
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sought. With respect to any action, suit, proceeding or investigation of which
the corporation is so notified, the corporation will be entitled to participate
therein at its own expense and/or to assume the defense thereof at its own
expense, with legal counsel reasonably acceptable to the Indemnitee. After
notice from the corporation to the Indemnitee of its election so to assume such
defense, the corporation shall not be liable to the Indemnitee for any legal or
other expenses subsequently incurred by the Indemnitee in connection with the
such claim, other than as provided below in this Section 3. The Indemnitee shall
have the right to employ his own counsel in connection with such claim, but the
fees and expenses of such counsel incurred after notice from the corporation of
its assumption of the defense thereof shall be at the expense of the Indemnitee
unless (i) the employment of counsel by the Indemnitee has been authorized by
the corporation, (ii) counsel to the Indemnitee shall have reasonably concluded
that there may be a conflict of interest or position on any significant issue
between the corporation and the Indemnitee in the conduct of the defense of such
action or (iii) the corporation shall not in fact have employed counsel to
assume the defense of such action, in each of which cases the fees and expenses
of counsel for the Indemnitee shall be at the expense of the corporation, except
as otherwise expressly provided by this Article. The corporation shall not be
entitled, without the consent of the Indemnitee, to assume the defense of any
claim brought by or in the right of the corporation or as to which counsel for
the Indemnitee shall have reasonably made the conclusion provided for in clause
(ii) above.
4. ADVANCE OF EXPENSES. Subject to the provisions of Section 5
below, in the event that the corporation does not assume the defense pursuant to
Section 3 of this Article of any action, suit, proceeding or investigation of
which the corporation receives notice under this Article, any expenses
(including attorneys' fees) incurred by an Indemnitee in defending a civil or
criminal action, suit, proceeding or investigation or any appeal therefrom shall
be paid by the corporation in advance of the final disposition of such matter,
PROVIDED, HOWEVER, that the payment of such expenses incurred by an Indemnitee
in advance of the final disposition of such matter shall be made only upon
receipt of an undertaking by or on behalf of the Indemnitee to repay all amounts
so advanced in the event that it shall ultimately be determined that the
Indemnitee is not entitled to be indemnified by the corporation as authorized in
this Article. Such undertaking may be accepted without reference to the
financial ability of the Indemnitee to make such repayment.
5. PROCEDURE FOR INDEMNIFICATION. In order to obtain
indemnification or advancement of expenses pursuant to Section 1, 2 or 4 of this
Article, the Indemnitee shall submit to the corporation a written request,
including in such request such documentation and information as is reasonably
available to the Indemnitee and is reasonably necessary to determine whether and
to what extent the Indemnitee is entitled to indemnification or advancement of
expenses. Any such indemnification or advancement of expenses shall be made
promptly, and in any event within sixty days after receipt by the corporation of
the written request of the Indemnitee, unless the corporation determines, by
clear and convincing evidence, within such sixty-day period that the Indemnitee
did not meet the applicable standard of conduct set forth in Section 1 or 2, as
the case may be. Such determination shall be made in each instance by (a) a
majority vote of a quorum of the directors of the corporation, (b) a majority
vote of a quorum of
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CONTINUATION SHEET 6.5
- ----------------------
the outstanding shares of stock of all classes entitled to vote for directors,
voting as a single class, which quorum shall consist of stockholders who are not
at that time parties to the action, suit or proceeding in question,
(c) independent legal counsel (who may be regular legal counsel to the
corporation), or (d) a court of competent jurisdiction.
6. REMEDIES. The right to indemnification or advances as
granted by this Article shall be enforceable by the Indemnitee in any court of
competent jurisdiction if the corporation denies such request, in whole or in
part, or if no disposition thereof is made within the sixty-day period referred
to above in Section 5. Unless otherwise provided by law, the burden of proving
that the Indemnitee is not entitled to indemnification or advancement of
expenses under this Article shall be on the corporation. Neither the failure of
the corporation to have made a determination prior to the commencement of such
action that indemnification is proper in the circumstances because the
Indemnitee has met the applicable standard of conduct, nor an actual
determination by the corporation pursuant to Section 5 that the Indemnitee has
not met such applicable standard of conduct, shall be a defense to the action or
create a presumption that the Indemnitee has not met such applicable standard of
conduct. The Indemnitee's expenses (including attorneys' fees) incurred in
connection with successfully establishing his right to indemnification, in whole
or in part, in any such proceeding shall also be indemnified by the corporation.
7. SUBSEQUENT AMENDMENT. No amendment, termination or repeal
of this Article or of the relevant provisions of Chapter 156B of the
Massachusetts General Laws or any other applicable laws shall affect or diminish
in any way the rights of any Indemnitee to indemnification under the provisions
hereof with respect to any action, suit, proceeding or investigation arising out
of or relating to any actions, transactions or facts occurring prior to the
final adoption of such amendment, termination or repeal.
8. OTHER RIGHTS. The indemnification and advancement of
expenses provided by this Article shall not be deemed exclusive of any other
rights to which an Indemnitee seeking indemnification or advancement of expenses
may be entitled under any law (common or statutory), agreement or vote of
stockholders or directors or otherwise, both as to action in his official
capacity and as to action in any other capacity while holding office for the
corporation, and shall continue as to an Indemnitee who has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of the Indemnitee. Nothing contained in this
Article shall be deemed to prohibit, and the corporation is specifically
authorized to enter into, agreements with officers and directors providing
indemnification rights and procedures different from those set forth in this
Article. In addition, the corporation may, to the extent authorized from time to
time by its Board of Directors, grant indemnification rights to other employees
or agents of the corporation or other persons serving the corporation and such
rights may be equivalent to, or greater or less than, those set forth in this
Article.
9. PARTIAL INDEMNIFICATION. If an Indemnitee is entitled under
any provision of this Article to indemnification by the corporation for some or
a portion of the expenses (including attorneys' fees), judgments, fines or
amounts paid in settlement actually and
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25
CONTINUATION SHEET 6.6
- ----------------------
reasonably incurred by him or on his behalf in connection with any action, suit,
proceeding or investigation and any appeal therefrom but not, however, for the
total amount thereof, the corporation shall nevertheless indemnify the
Indemnitee for the portion of such expenses (including attorneys' fees),
judgments, fines or amounts paid in settlement to which the Indemnitee is
entitled.
10. INSURANCE. The corporation may purchase and maintain
insurance, at its expense, to protect itself and any director, officer, employee
or agent of the corporation or another organization or employee benefit plan
against any expense, liability or loss incurred by him in any such capacity, or
arising out of his status as such, whether or not the corporation would have the
power to indemnify such person against such expense, liability or loss under
Chapter 156B of the Massachusetts General Laws.
11. MERGER OR CONSOLIDATION. If the corporation is merged into
or consolidated with another corporation and the corporation is not the
surviving corporation, the surviving corporation shall assume the obligations of
the corporation under this Article with respect to any action, suit, proceeding
or investigation arising out of or relating to any actions, transactions or
facts occurring prior to the date of such merger or consolidation.
12. SAVINGS CLAUSE. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the corporation shall nevertheless indemnify each Indemnitee as to any expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement in
connection with any action, suit, proceeding or investigation, whether civil,
criminal or administrative, including an action by or in the right of the
corporation, to the fullest extent permitted by any applicable portion of this
Article that shall not have been invalidated and to the fullest extent permitted
by applicable law.
13. SUBSEQUENT LEGISLATION. If the Massachusetts General Laws
are amended after adoption of this Article to expand further the indemnification
permitted to Indemnitees, then the corporation shall indemnify such persons to
the fullest extent permitted by the Massachusetts General Laws, as so amended.
D. LOCATION OF STOCKHOLDERS' MEETINGS.
Meetings of the stockholders of the corporation may be held anywhere in
the United States.
E. AMENDMENT OF BY-LAWS.
The directors of the corporation may make, amend or repeal the By-laws
in whole or in part, except with respect to any provision thereof which by law
or the By-laws requires action by the stockholders.
F. ISSUANCE OF SHARES.
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26
CONTINUATION SHEET 6.7
- ----------------------
The whole or any part of the authorized but unissued shares of capital
stock of the corporation may be issued at any time or from time to time by the
Board of Directors without further action by the stockholders.
G. CORPORATION AS PARTNER.
The corporation may become a partner in any business.
H. CERTAIN ACTIONS BY MAJORITY VOTE.
The corporation, by vote of a majority of the stock outstanding and
entitled to vote thereon (or if there are two or more classes of stock entitled
to vote as separate classes, then by vote of a majority of each such class of
stock outstanding) may (i) authorize any amendment to these Restated Articles of
Organization, (ii) authorize the sale, lease or exchange of all or substantially
all of the corporation's property and assets, including its goodwill and (iii)
approve a merger or consolidation of the corporation with or into any other
corporation, provided that such amendment, sale, lease, exchange, merger or
consolidation shall have been approved by the Board of Directors or by a vote of
two-thirds of the stock outstanding and entitled to vote thereon (or if there
are two or more classes of stock entitled to vote as separate classes, then by
vote of a majority of each such class of stock outstanding).
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27
ARTICLE VII
The effective date of the restated Articles of Organization of the corporation
shall be the date approved and filed by the Secretary of the Commonwealth. If a
later effective date is desired, specify such date which shall not be more than
thirty days after the date of filing.
ARTICLE VIII
THE INFORMATION CONTAINED IN ARTICLE VIII IS NOT A PERMANENT PART OF THE
ARTICLES OF ORGANIZATION.
a. The street address (post office boxes are not acceptable) of the principal
office of the corporation in Massachusetts is: 33 Boston Post Road West,
Marlboro, MA 01752
b. The name, residential address and post office address of each director and
officer of the corporation is as follows:
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
President:
Treasurer:
Clerk: SEE CONTINUATION SHEET 8.1
Directors:
c. The fiscal year (i.e., tax year) of the corporation shall end on the last
day of the month of: December
d. The name and business address of the resident agent, if any, of the
corporation is: N/A
**We further certify that the foregoing Restated Articles of Organization affect
no amendments to the Articles of Organization of the corporation as heretofore
amended, except amendments to the following articles. Briefly describe
amendments below:
SIGNED UNDER THE PENALTIES OF PERJURY, this day of , 1997,
JOHN A. BLAESER , *President,
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GARY E. HAROIAN , *Clerk.
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*Delete the inapplicable words. **If there are no amendments, state `None'.
28
CONTINUATION SHEET 8.1
NAME RESIDENTIAL ADDRESS POST OFFICE ADDRESS
PRESIDENT: John Blaeser 21 Georgetown Road 33 Boston Post Road West
Boxford, MA 01921 Suite 400
Marlboro, MA 01752
TREASURER: Gary Haroian 31 Tammer Lane 33 Boston Post Road West
Hopkinton, MA 01742 Suite 400
Marlboro, MA 01752
CLERK: Gary Haroian 31 Tammer Lane 33 Boston Post Road West
Hopkinton, MA 01742 Suite 400
Marlboro, MA 01752
DIRECTORS: John Blaeser 21 Georgetown Road 33 Boston Post Road West
Boxford, MA 01921 Suite 400
Marlboro, MA 01752
Rick Burnes 17 Pinkey Street Charles River Ventures
Boston, MA 02114 Bay Colony Corporate
Center
1000 Winter Street,
Ste. 3300
Waltham, MA 02154
Rob Wadsworth 27 Bogostow Circle Hancock Venture Partners
Millis, MA 02054 One Financial Center
44th Floor
Boston, MA 02111
Rick Bolander 1910 North Burling #A Apex Investment Partners
Chicago, IL 60614 233 South Wacker Drive
Suite 9600
Chicago, IL 60606
Deepak Kamra 75 Redwood Way Canaan Partners
Atherton, CA 94027 2884 Sand Hill Road,
Suite 115
Menlo Park, CA 94025
Rob Held 116 Bear Hill Road 116 Bear Hill Road
Bolton, MA 01740 Bolton, MA 01740
Robert Hawk 7585 S. Biscay U.S. West Multimedia Comm.
Aurora, CO 80016 9785 Maroon Circle,
Ste. 400
Englewood, CO 80112
29
THE COMMONWEALTH OF MASSACHUSETTS
RESTATED ARTICLES OF ORGANIZATION
(GENERAL LAWS, CHAPTER 156B, SECTION 74)
===============================================
I hereby approve the within Restated Articles
of Organization and, the filing fee in the
amount of $ having been paid, said
articles are deemed to have been filed with
me this day of 19__.
Effective date:
----------------------------
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILLED IN BY CORPORATION
PHOTOCOPY OF DOCUMENT TO BE SENT TO:
LOUIS J. MARETT, ESQ.
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TESTA, HURWITZ & THIBEAULT, LLP
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HIGH STREET TOWER
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125 HIGH STREET
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BOSTON, MA 02110
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TELEPHONE: (617) 248-7000
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