EXHIBIT 3.1
CERTIFICATE OF INCORPORATION OF
NOOSH MERGER CORPORATION
The undersigned, a natural person (the "Sole Incorporator"), for the
purpose of organizing a corporation to conduct the business and promote the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware hereby certifies that:
I.
The name of this corporation is NOOSH Merger Corporation.
II.
The address of the registered office of the corporation in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, City of Wilmington,
County of New Castle, and the name of the registered agent of the corporation in
the State of Delaware at such address is the CT Corporation System.
III.
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
the State of Delaware.
IV.
A. This Corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock."
B. The total number of shares which the Corporation is authorized to issue
is sixty million two hundred thousand (60,200,000) shares, forty five million
(45,000,000) shares of which shall be Common Stock (the "Common Stock") and
fifteen million two hundred thousand (15,200,000) shares of which shall be
Preferred Stock (the "Preferred Stock"). The Preferred Stock shall have a par
value of one tenth of one cent ($0.001) per share, and the Common Stock shall
have a par value of one tenth of one cent ($0.001) per share.
C. Two million twenty three thousand seventy seven (2,023,077) of the
authorized shares of Preferred Stock are hereby designated "Series A Preferred
Stock" (the "Series A Preferred"). Four million three hundred sixty three
thousand six hundred thirty seven (4,363,637) of the authorized shares of
Preferred Stock are hereby designated "Series B Preferred Stock" (the "Series B
Preferred"). Six million eight hundred nine thousand one hundred thirty-five
(6,809,135) of the authorized shares of Preferred Stock are hereby designated
"Series C Preferred Stock" (the "Series C Preferred"). Two million (2,000,000)
of the authorized shares of Preferred Stock are hereby designated "Series D
Preferred Stock" (the "Series D Preferred").
1.
D. The rights, preferences, privileges, restrictions and other matters
relating to the Series A Preferred, Series B Preferred, Series C Preferred and
Series D Preferred (together, the "Series Preferred") are as follows:
1. Dividend Rights.
a. Holders of Series Preferred, in preference to the holders of
any other stock of the Corporation ("Junior Stock"), shall be entitled to
receive on a pro rata basis, when and as declared by the Board of Directors, but
only out of funds that are legally available therefor, cash dividends at the
rate of eight percent (8%) of the "Original Issue Price" per annum on each
outstanding share of Series Preferred (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to such
shares). The Original Issue Price of the Series A Preferred shall be Sixty-Five
Cents ($0.65) (the "Series A Original Issue Price"). The Original Issue Price of
the Series B Preferred shall be Two Dollars and Seventy-Five Cents ($2.75) (the
"Series B Original Issue Price"). The Original Issue Price of the Series C
Preferred shall be Seven Dollars and Forty-Five Cents ($7.45) (the "Series C
Original Issue Price"). The Original Issue Price of the Series D Preferred shall
be Eleven Dollars ($11.00) (the "Series D Original Issue Price"). Such dividends
shall be payable only when, as and if declared by the Board of Directors and
shall be non-cumulative.
b. So long as any shares of Series Preferred shall be
outstanding, no dividend, whether in cash or property, shall be paid or
declared, nor shall any other distribution be made, on any Junior Stock, nor
shall any shares of any Junior Stock of the Corporation be purchased, redeemed,
or otherwise acquired for value by the Corporation (except for acquisitions of
Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares upon termination of services to the
Corporation or in exercise of the Corporation's right of first refusal upon a
proposed transfer) until all dividends (set forth in Section 1a above) on the
Series Preferred shall have been paid or declared and set apart. In the event
dividends are paid on any share of Common Stock, an additional dividend shall be
paid with respect to all outstanding shares of Series Preferred in an amount
equal per share (on an as-if-converted to Common Stock basis) to the amount paid
or set aside for each share of Common Stock. The provisions of this Section 1b
shall not, however, apply to (i) a dividend payable in Common Stock, or (ii) the
acquisition of shares of any Junior Stock in exchange for shares of any other
Junior Stock.
2. Voting Rights.
a. General Rights. Except as otherwise provided herein or as
required by law, the Series Preferred shall be voted equally with the shares of
the Common Stock of the Corporation and not as a separate class, at any annual
or special meeting of stockholders of the Corporation, and may act by written
consent in the same manner as the Common Stock, in either case upon the
following basis: each holder of shares of Series Preferred shall be entitled to
such number of votes as shall be equal to the whole number of shares of Common
Stock into which such holder's aggregate number of shares of Series Preferred
are convertible (pursuant to Section 5 hereof) immediately after the close of
business on the record date fixed for such meeting or the effective date of such
written consent.
2.
b. Separate Vote of Series Preferred. For so long as at least
seven million (7,000,000) shares of Series Preferred (subject to adjustment for
any stock split, reverse stock split or other similar event affecting the Series
Preferred) remain outstanding, in addition to any other vote or consent required
herein or by law, the vote or written consent of the holders of at least
seventy-five percent of the outstanding Series Preferred (voting on an as-if-
converted basis as a single class) shall be necessary for effecting or
validating the following actions:
(i) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation or the Bylaws of the Corporation (including
any filing of a Certificate of Determination) that affects adversely the voting
powers, preferences, or other special rights or privileges, qualifications,
limitations, or restrictions of any series of the Series Preferred;
(ii) Any authorization or any designation, whether by
reclassification or otherwise, of any new class or series of stock or any other
securities convertible into equity securities of the Corporation ranking senior
to or on parity with any series of the Series Preferred in rights of redemption,
liquidation preference, voting or dividends or any increase in the authorized or
designated number of any such new class or series;
(iii) Any redemption, repurchase, payment of dividends or
other distributions with respect to Junior Stock (except for acquisitions of
Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares upon termination of services to the
Corporation or in exercise of the Corporation's right of first refusal upon a
proposed transfer);
(iv) Any action that results in the payment or declaration
of a dividend on any shares of Common Stock;
(v) Any agreement by the Company or its stockholders
regarding an Asset Transfer or Acquisition (each as defined in Section 3c);
(vi) Any increase or decrease in the authorized number of
shares of the Series A Preferred, Series B Preferred, Series C Preferred or
Series D Preferred; or
(vii) Any issuance of shares of Series D Preferred, whether
directly or indirectly, that would result in more than 1,500,000 shares of
Series D Preferred being outstanding unless such issuance of shares occurs in
connection with (a) a merger, consolidation, acquisition or similar business
combination approved by the Board of Directors, (b) any equipment leasing
arrangement, or debt financing from a bank or similar financial institution
approved by the Board of Directors, or (c) any strategic transactions involving
the Corporation and other entities, including joint ventures, manufacturing,
marketing or distribution arrangements, and technology transfer or development
arrangements approved by the Board of Directors.
c. Separate Vote of Series C Preferred. For so long as at least
three million five hundred thousand (3,500,000) shares of Series C Preferred
(subject to adjustment for any stock split, reverse stock split or other similar
event affecting the Series C Preferred) remain outstanding, in addition to any
other vote or consent required herein or by law, the vote or
3.
written consent of the holders of at least a majority of the outstanding Series
C Preferred shall be necessary for effecting or validating the following
actions:
(i) Any amendment, alteration, or repeal of any provision
of the Certificate of Incorporation or the Bylaws of the Corporation (including
any filing of a Certificate of Determination) that alters or changes the voting
powers, preferences, or other special rights or privileges, qualifications,
limitations, or restrictions of the Series C Preferred;
(ii) Any increase or decrease in the authorized number of
shares of the Series C Preferred; or
(iii) Any agreement by the Company or its stockholders
regarding an Asset Transfer or Acquisition (each as defined in Section 3c) in
which the value of the proceeds received by the Series C Preferred is an amount
per share of Series C Preferred less than the product obtained by multiplying
two by the Series C Original Issue Price (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to such
shares).
d. Election of Board of Directors. For so long as at least
three million (3,000,000) shares of Series A Preferred and Series B Preferred
remain outstanding (subject to adjustment for any stock split, reverse stock
split or similar event affecting the Series Preferred), (i) the holders of
Series A Preferred, voting as a separate class, shall be entitled to elect one
(1) member of the Company's Board of Directors at each meeting or pursuant to
each consent of the Company's stockholders for the election of directors, and to
remove from office such director and to fill any vacancy caused by the
resignation, death or removal of such director; (ii) the holders of Series B
Preferred, voting as a separate class, shall be entitled to elect one (1) member
of the Company's Board of Directors at each meeting or pursuant to each consent
of the Company's stockholders for the election of directors, and to remove from
office such director and to fill any vacancy caused by the resignation, death or
removal of such director; (iii) the holders of Common Stock, voting as a
separate class, shall be entitled to elect one (1) member of the Board of
Directors at each meeting or pursuant to each consent of the Company's
stockholders for the election of directors, and to remove from office such
director and to fill any vacancy caused by the resignation, death or removal of
such director; and (iv) the holders of Common Stock and Series Preferred, voting
together as a single class on an as-if-converted basis, shall be entitled to
elect all remaining members of the Board of Directors at each meeting or
pursuant to each consent of the Company's stockholders for the election of
directors, and to remove from office such directors and to fill any vacancy
caused by the resignation, death or removal of such directors.
3. Liquidation Rights.
a. Upon any liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary, before any distribution or
payment shall be made to the holders of any Junior Stock, (i) the holders of
Series A Preferred shall be entitled to be paid out of the assets of the
Corporation an amount per share of Series A Preferred equal to the Series A
Original Issue Price plus all declared and unpaid dividends on such shares of
Series A Preferred (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like
4.
with respect to such shares) for each share of Series A Preferred held by them,
(ii) the holders of Series B Preferred shall be entitled to be paid out of the
assets of the Corporation an amount per share of Series B Preferred equal to the
Series B Original Issue Price plus all declared and unpaid dividends on such
shares of Series B Preferred (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like with respect to such shares) for each
share of Series B Preferred held by them, (iii) the holders of Series C
Preferred shall be entitled to be paid out of the assets of the Corporation an
amount per share of Series C Preferred equal to the Series C Original Issue
Price plus all declared and unpaid dividends on such shares of Series C
Preferred (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to such shares) for each share of
Series C Preferred held by them and (iv) the holders of Series D Preferred shall
be entitled to be paid out of the assets of the Corporation an amount per share
of Series D Preferred equal to the Series D Original Issue Price plus all
declared and unpaid dividends on such shares of Series D Preferred (as adjusted
for any stock dividends, combinations, splits, recapitalizations and the like
with respect to such shares) for each share of Series D Preferred held by them.
b. After the payment of the full liquidation preference of the
Series Preferred as set forth in Section 3a above, the assets of the Corporation
legally available for distribution, if any, shall be distributed ratably to the
holders of the Common Stock.
c. The following events shall be considered a liquidation under
this Section:
(i) any consolidation or merger of the Corporation with or
into any other corporation or other entity or person, or any other corporate
reorganization, in which the stockholders of the Corporation immediately prior
to such consolidation, merger or reorganization, as a result of their ownership
of the Corporation's securities own less than 50% of the surviving corporation's
voting power immediately after such consolidation, merger or reorganization (an
"Acquisition"); or
(ii) a sale, lease or other disposition of all or
substantially all of the assets of the Corporation (an "Asset Transfer").
d. If, upon any liquidation, distribution, or winding up, the
assets of the Corporation shall be insufficient to make payment in full to all
holders of Series Preferred of the liquidation preference set forth in Section
3a, then such assets shall be distributed among the holders of Series Preferred
at the time outstanding, ratably in proportion to the full amounts to which they
would otherwise be respectively entitled.
4. Redemption.
The Series Preferred shall not be redeemable by the Corporation.
5.
5. Conversion Rights.
The holders of the Series Preferred shall have the following rights
with respect to the conversion of the Series Preferred into shares of Common
Stock (the "Conversion Rights"):
a. Optional Conversion. Subject to and in compliance with the
provisions of this Section 5, any shares of Series Preferred may, at the option
of the holder, be converted at any time into fully-paid and nonassessable shares
of Common Stock. The number of shares of Common Stock to which a holder of
Series Preferred shall be entitled upon conversion shall be the product obtained
by multiplying the "Series A Preferred Conversion Rate", "Series B Preferred
Conversion Rate", "Series C Preferred Conversion Rate", or "Series D Preferred
Conversion Rate", as applicable, then in effect (determined as provided in
Section 5b) by the number of shares of Series A Preferred, Series B Preferred,
Series C Preferred or Series D Preferred, as applicable, being converted.
b. Series Preferred Conversion Rate. The conversion rate in
effect at any time for conversion of each of the Series A Preferred (the "Series
A Preferred Conversion Rate"), the Series B Preferred (the "Series B Preferred
Conversion Rate"), the Series C Preferred (the "Series C Preferred Conversion
Rate"), and the Series D Preferred (the "Series D Preferred Conversion Rate")
shall be the quotient obtained by dividing the Series A Original Issue Price,
the Series B Original Issue Price, the Series C Original Issue Price, and Series
D Original Issue Price of the Series A Preferred, the Series B Preferred, the
Series C Preferred and Series D Preferred, respectively, by the "Series A
Preferred Conversion Price", the "Series B Preferred Conversion Price," the
"Series C Preferred Conversion Price" and the "Series D Preferred Conversion
Price," respectively, calculated as provided in Section 5c.
c. Series Preferred Conversion Price. As of the date of filing
of this Certificate of Incorporation (the "Filing Date"), the conversion price
for the Series A Preferred shall be $0.325 (the "Series A Preferred Conversion
Price"), the conversion price for the Series B Preferred shall be $1.375 (the
"Series B Preferred Conversion Price"), the conversion price for the Series C
Preferred shall be the Series C Original Issue Price (the "Series C Preferred
Conversion Price") and the conversion price for the Series D Preferred shall be
the Series D Original Issue Price (the "Series D Preferred Conversion Price").
Such Series A Preferred Conversion Price, Series B Preferred Conversion Price,
Series C Preferred Conversion Price and Series D Preferred Conversion Price
shall be adjusted from time to time in accordance with this Section 5. All
references to the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price or Series D Preferred
Conversion Price herein shall mean the Series A Preferred Conversion Price,
Series B Preferred Conversion Price, Series C Preferred Conversion Price or
Series D Preferred Conversion Price, respectively, as so adjusted after the
Filing Date.
d. Mechanics of Conversion. Each holder of Series Preferred who
desires to convert the same into shares of Common Stock pursuant to this Section
5 shall surrender the certificate or certificates therefor, duly endorsed, at
the office of the Corporation or any transfer agent for the Series Preferred,
and shall give written notice to the Corporation at such office that such holder
elects to convert the same. Such notice shall state the number of shares of
Series Preferred being converted. Thereupon, the Corporation shall promptly
issue and
6.
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 in cash or, to the extent sufficient funds are not then legally
available therefor, in Common Stock (at the Common Stock's fair market value
determined by the Board of Directors as of the date of such conversion), any
declared and unpaid dividends on the shares of Series Preferred being converted.
Such conversion shall be deemed to have been made at the close of business on
the date of such surrender of the certificates representing the shares of Series
Preferred 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.
e. Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Filing Date effect
a subdivision of the outstanding Common Stock without a corresponding
subdivision of the Series A Preferred, Series B Preferred, Series C Preferred
and Series D Preferred, the Series A Preferred Conversion Price, the Series B
Preferred Conversion Price, the Series C Preferred Conversion Price and Series D
Preferred Conversion Price in effect immediately before that subdivision shall
be proportionately decreased. Conversely, if the Corporation shall at any time
or from time to time after the Filing Date combine the outstanding shares of
Common Stock into a smaller number of shares without a corresponding combination
of the Series A Preferred, the Series B Preferred, the Series C Preferred, and
Series D Preferred, the Series A Preferred Conversion Price, the Series B
Preferred Conversion Price, the Series C Preferred Conversion Price and Series D
Preferred Conversion Price in effect immediately before the combination shall be
proportionately increased. Any adjustment under this Section 5e shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
f. Adjustment for Common Stock Dividends and Distributions. If
the Corporation at any time or from time to time after the Filing Date makes, or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in additional shares of Common
Stock, in each such event the Series A Preferred Conversion Price, Series B
Preferred Conversion Price, Series C Preferred Conversion Price and Series D
Preferred Conversion Price that is then in effect shall be decreased as of the
time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, by multiplying the Series A Preferred
Conversion Price, Series B Preferred Conversion Price, Series C Preferred
Conversion Price and Series D Preferred Conversion Price then in effect by a
fraction (i) the numerator of which is the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such issuance or
the close of business on such record date, and (ii) the denominator of which is
the total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record date
plus the number of shares of Common Stock issuable in payment of such dividend
or distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price and Series D Preferred
Conversion Price shall be recomputed accordingly as of the close of business on
such record date and thereafter the Series A Preferred Conversion Price, the
Series B Preferred Conversion Price, the Series C Preferred Conversion Price and
Series D
7.
Preferred Conversion Price shall be adjusted pursuant to this Section 5f to
reflect the actual payment of such dividend or distribution.
g. Adjustments for Other Dividends and Distributions. If the
Corporation at any time or from time to time after the Filing Date makes, or
fixes a record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution payable in securities of the
Corporation other than shares of Common Stock, in each such event provision
shall be made so that the holders of the Series Preferred shall receive upon
conversion thereof, in addition to the number of shares of Common Stock
receivable thereupon, the amount of other securities of the Corporation which
they would have received had their Series Preferred been converted into Common
Stock on the date of such event and had they thereafter, during the period from
the date of such event to and including the conversion date, retained such
securities receivable by them as aforesaid during such period, subject to all
other adjustments called for during such period under this Section 5 with
respect to the rights of the holders of the Series Preferred or with respect to
such other securities by their terms.
h. Adjustment for Reclassification, Exchange and Substitution.
If at any time or from time to time after the Filing Date, the Common Stock
issuable upon the conversion of the Series Preferred is changed into the same or
a different number of shares of any class or classes of stock, whether by
recapitalization, reclassification or otherwise (other than an Acquisition or
Asset Transfer as defined in Section 3c or a subdivision or combination of
shares or stock dividend or a reorganization, merger, consolidation or sale of
assets provided for elsewhere in this Section 5), in any such event each holder
of Series Preferred shall have the right thereafter to convert such stock into
the kind and amount of stock and other securities and property receivable upon
such recapitalization, reclassification or other change by holders of the
maximum number of shares of Common Stock into which such shares of Series
Preferred could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided herein
or with respect to such other securities or property by the terms thereof.
i. 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 an Acquisition or Asset Transfer
as defined in Section 3c or a recapitalization, subdivision, combination,
reclassification, exchange or substitution of shares provided for elsewhere in
this Section 5), as a part of such capital reorganization, provision shall be
made so that the holders of the Series Preferred shall thereafter be entitled to
receive upon conversion of the Series Preferred the number of shares of stock or
other securities or property of the Corporation to which a holder of the number
of shares of Common Stock deliverable upon conversion would have been entitled
on such capital reorganization, subject to adjustment in respect of such stock
or securities by the terms thereof. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 5 with
respect to the rights of the holders of Series Preferred after the capital
reorganization to the end that the provisions of this Section 5 (including
adjustment of each Series Preferred Conversion Price then in effect and the
number of shares issuable upon conversion of the Series Preferred) shall be
applicable after that event and be as nearly equivalent as practicable.
8.
j. Sale of Shares Below Series Preferred Conversion Price.
(i) If at any time or from time to time after the Filing
Date, the Company issues or sells, or is deemed by the express provisions of
this subsection 5j to have issued or sold, Additional Shares of Common Stock (as
defined in subsection 5j(iv) below), other than as a dividend or other
distribution on any class of stock as provided in Section 5f above, and other
than a subdivision or combination of shares of Common Stock as provided in
Section 5e above, for an Effective Price (as defined in subsection 5j(iv) below)
less than the then effective Series A Preferred Conversion Price, Series B
Preferred Conversion Price, Series C Preferred Conversion Price or Series D
Preferred Conversion Price, then and in each such case the then existing Series
A Preferred Conversion Price, Series B Preferred Conversion Price, Series C
Preferred Conversion Price or Series D Preferred Conversion Price, as the case
may be, shall be reduced, as of the opening of business on the date of such
issue or sale, to a price determined by multiplying the Series A Preferred
Conversion Price, Series B Preferred Conversion Price, Series C Preferred
Conversion Price or Series D Preferred Conversion Price, as applicable, by a
fraction (i) the numerator of which shall be (A) the number of shares of Common
Stock deemed outstanding (as defined below) immediately prior to such issue or
sale, plus (B) the number of shares of Common Stock which the aggregate
consideration received (as defined in subsection 5j(ii) by the Company for the
total number of Additional Shares of Common Stock so issued would purchase at
such Series A Preferred Conversion Price, Series B Preferred Conversion Price,
Series C Preferred Conversion Price or Series D Preferred Conversion Price, as
the case may be, and (ii) the denominator of which shall be the number of shares
of Common Stock deemed outstanding (as defined below) immediately prior to such
issue or sale plus the total number of Additional Shares of Common Stock so
issued. For the purposes of the preceding sentence, the number of shares of
Common Stock deemed to be outstanding as of a given date shall be the sum of (A)
the number of shares of Common Stock actually outstanding, (B) the number of
shares of Common Stock into which the then outstanding shares of Series
Preferred could be converted if fully converted as of the time of such issuance,
and (C) the number of shares of Common Stock which could be obtained through the
exercise or conversion of all other rights, options and convertible securities
outstanding as of the time of such issuance.
(ii) For the purpose of making any adjustment required
under this Section 5j, the consideration received by the Company for any issue
or sale of securities shall (A) to the extent it consists of cash, be computed
as the net amount of cash received by the Company after deduction of any
underwriting or similar commissions, compensation or concessions paid or allowed
by the Company in connection with such issue or sale but without deduction of
any expenses payable by the Company, (B) to the extent it consists of property
other than cash, be computed as the fair value of that property as determined in
good faith by the Board of Directors, and (C) if Additional Shares of Common
Stock, Convertible Securities (as defined in subsection 5j(iii)) or rights or
options to purchase either Additional Shares of Common Stock or Convertible
Securities are issued or sold together with other stock or securities or other
assets of the Company for a consideration which covers both, be computed as the
portion of the consideration so received that may be reasonably determined in
good faith by the Board of Directors to be allocable to such Additional Shares
of Common Stock, Convertible Securities or rights or options.
9.
(iii) For the purpose of the adjustment required under this
Section 5j, if the Company issues or sells (i) stock or other securities
convertible into, Additional Shares of Common Stock (such convertible stock or
securities being herein referred to as "Convertible Securities") or (ii) rights
or options for the purchase of Additional Shares of Common Stock or Convertible
Securities and if the Effective Price of such Additional Shares of Common Stock
is less than the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price or Series D Preferred
Conversion Price, as the case may be, in each case the Company shall be deemed
to have issued at the time of the issuance of such rights or options or
Convertible Securities the maximum number of Additional Shares of Common Stock
issuable upon exercise or conversion thereof and to have received as
consideration for the issuance of such shares an amount equal to the total
amount of the consideration, if any, received by the Company for the issuance of
such rights or options or Convertible Securities, plus, in the case of such
rights or options, the minimum amounts of consideration, if any, payable to the
Company upon the exercise of such rights or options, plus, in the case of
Convertible Securities, the minimum amounts of consideration, if any, payable to
the Company (other than by cancellation of liabilities or obligations evidenced
by such Convertible Securities) upon the conversion thereof; provided that if in
the case of Convertible Securities the minimum amounts of such consideration
cannot be ascertained, but are a function of antidilution or similar protective
clauses, the Company shall be deemed to have received the minimum amounts of
consideration without reference to such clauses; provided further that if the
minimum amount of consideration payable to the Company upon the exercise or
conversion of rights, options or Convertible Securities is reduced over time or
on the occurrence or non-occurrence of specified events other than by reason of
antidilution adjustments, the Effective Price shall be recalculated using the
figure to which such minimum amount of consideration is reduced; provided
further that if the minimum amount of consideration payable to the Company upon
the exercise or conversion of such rights, options or Convertible Securities is
subsequently increased, the Effective Price shall be again recalculated using
the increased minimum amount of consideration payable to the Company upon the
exercise or conversion of such rights, options or Convertible Securities. No
further adjustment of the Series A Preferred Conversion Price, Series B
Preferred Conversion Price, Series C Preferred Conversion Price or Series D
Preferred Conversion Price, as adjusted upon the issuance of such rights,
options or Convertible Securities, shall be made as a result of the actual
issuance of Additional Shares of Common Stock on the exercise of any such rights
or options or the conversion of any such Convertible Securities. If any such
rights or options or the conversion privilege represented by any such
Convertible Securities shall expire without having been exercised, the Series A
Preferred Conversion Price, Series B Preferred Conversion Price, Series C
Preferred Conversion Price or Series D Preferred Conversion Price as adjusted
upon the issuance of such rights, options or Convertible Securities shall be
readjusted to the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price or Series D Preferred
Conversion Price, as the case may be, which would have been in effect had an
adjustment been made on the basis that the only Additional Shares of Common
Stock so issued were the Additional Shares of Common Stock, if any, actually
issued or sold on the exercise of such rights or options or rights of conversion
of such Convertible Securities, and such Additional Shares of Common Stock, if
any, were issued or sold for the consideration actually received by the Company
upon such exercise, plus the consideration, if any, actually received by the
Company for the granting of all such rights or options, whether or not
exercised, plus the consideration received for issuing or selling the
10.
Convertible Securities actually converted, plus the consideration, if any,
actually received by the Company (other than by cancellation of liabilities or
obligations evidenced by such Convertible Securities) on the conversion of such
Convertible Securities, provided that such readjustment shall not apply to prior
conversions of Series A Preferred, Series B Preferred, Series C Preferred or
Series D Preferred.
(iv) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued by the Company or deemed to be issued pursuant to
this Section 5j, whether or not subsequently reacquired or retired by the
Company other than (A) shares of Common Stock issued or issuable upon conversion
of the Series Preferred; (B) shares of Common Stock and/or options, warrants or
other Common Stock purchase rights, and the Common Stock issued or issuable
pursuant to such options, warrants or other rights (as adjusted for any stock
dividends, combinations, splits, recapitalizations and the like) after the
Filing Date to employees, officers or directors of, or consultants or advisors
to the Company or any subsidiary pursuant to stock purchase or stock option
plans or other arrangements that are approved by the Board of Directors; (C)
shares of Common Stock issued or issuable pursuant to the exercise of options,
warrants or convertible securities outstanding as of the Filing Date, (D) shares
of Common Stock and/or options, warrants or other Common Stock purchase rights,
and the Common Stock issued or issuable pursuant to such options, warrants or
other rights issued for consideration other than cash pursuant to a merger,
consolidation, acquisition or similar business combination approved by the Board
of Directors, (E) shares of Common Stock issued or issuable pursuant to any
equipment leasing arrangement, or debt financing from a bank or similar
financial institution approved by the Board of Directors, and (F) shares of
Common Stock issued or issuable in connection with strategic transactions
involving the Corporation and other entities, including joint ventures,
manufacturing, marketing or distribution arrangements, and technology transfer
or development arrangements approved by the Board of Directors. References to
Common Stock in the subsections of this clause (iv) above shall mean all shares
of Common Stock issued by the Company or deemed to be issued pursuant to this
Section 5j. The "Effective Price" of Additional Shares of Common Stock shall
mean the quotient determined by dividing the total number of Additional Shares
of Common Stock issued or sold, or deemed to have been issued or sold by the
Company under this Section 5j, into the aggregate consideration received, or
deemed to have been received by the Company for such issue under this Section
5j, for such Additional Shares of Common Stock.
k. Certificate of Adjustment. In each case of an adjustment or
readjustment of the Series A Preferred Conversion Price, Series B Preferred
Conversion Price, Series C Preferred Conversion Price or Series D Preferred
Conversion Price for the number of shares of Common Stock or other securities
issuable upon conversion of the Series A Preferred, Series B Preferred, Series C
Preferred or Series D Preferred, if the Series A Preferred, Series B Preferred,
Series C Preferred or Series D Preferred is then convertible pursuant to this
Section 5, the Corporation, at its expense, shall compute such adjustment or
readjustment in accordance with the provisions hereof and prepare a certificate
showing such adjustment or readjustment, and shall mail such certificate, by
first class mail, postage prepaid, to each registered holder of Series A
Preferred, Series B Preferred, Series C Preferred or Series D Preferred at the
holder's address as shown in the Corporation's books. The certificate shall set
forth such adjustment or readjustment, showing in detail the facts upon which
such adjustment or readjustment is based, including a statement of (i) the
consideration received or deemed to be received by the
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Corporation for any Additional Shares of Common Stock issued or sold or deemed
to have been issued or sold, (ii) the Series A Preferred Conversion Price,
Series B Preferred Conversion Price, Series C Preferred Conversion Price or
Series D Preferred Conversion Price at the time in effect, (iii) the number of
Additional Shares of Common Stock and (iv) the type and amount, if any, of other
property which at the time would be received upon conversion of the Series A
Preferred, Series B Preferred, Series C Preferred or Series D Preferred.
l. Notices of Record Date. Upon (i) any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution, or (ii) any Acquisition (as defined in Section
3c) or other capital reorganization of the Corporation, any reclassification or
recapitalization of the capital stock of the Corporation, any merger or
consolidation of the Corporation with or into any other corporation, or any
Asset Transfer (as defined in Section 3c), or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, the Corporation shall
mail to each holder of Series Preferred at least twenty (20) days prior to the
record date specified therein a notice specifying (A) the date on which any such
record is to be taken for the purpose of such dividend or distribution and a
description of such dividend or distribution, (B) the date on which any such
Acquisition, reorganization, reclassification, transfer, consolidation, merger,
Asset Transfer, dissolution, liquidation or winding up is expected to become
effective, and (C) the date, if any, that is to be fixed as to when the holders
of record of Common Stock (or other securities) shall be entitled to exchange
their shares of Common Stock (or other securities) for securities or other
property deliverable upon such Acquisition, reorganization, reclassification,
transfer, consolidation, merger, Asset Transfer, dissolution, liquidation or
winding up.
m. Automatic Conversion.
(i) Each share of Series A Preferred, Series B Preferred,
Series C Preferred and Series D Preferred shall automatically be converted into
shares of Common Stock, based on the then-effective Series A Preferred
Conversion Price, Series B Preferred Conversion Price, Series C Preferred
Conversion Price or Series D Preferred Conversion Price, as the case may be, (a)
at any time upon the affirmative vote of the holders of at least seventy-five
percent of the outstanding shares of the Series Preferred (voting on an as-if-
converted basis as a single class), or (b) immediately upon the closing of a
firmly underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended, covering the offer and
sale of Common Stock for the account of the Corporation in which (A) the per
share price is at least $11.00 (as adjusted for any stock dividends,
combinations, splits, recapitalizations and the like), and (B) the gross cash
proceeds to the Corporation (before underwriting discounts, commissions and
fees) are at least $20,000,000. Upon such automatic conversion, any declared and
unpaid dividends shall be paid in accordance with the provisions of Section 5d.
(ii) Upon the occurrence of the event specified in
subsection (i) above, the outstanding shares of Series Preferred shall be
converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to
the Corporation or its transfer agent; provided, however, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock
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issuable upon such conversion unless the certificates evidencing such shares of
Series Preferred are either delivered to the Corporation or its transfer agent
as provided below, or the holder notifies the Corporation or its transfer agent
that such certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any
loss incurred by it in connection with such certificates. Upon the occurrence of
such automatic conversion of the Series Preferred, the holders of Series
Preferred shall surrender the certificates representing such shares at the
office of the Corporation or any transfer agent for the Series Preferred.
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 shares of Series Preferred surrendered were convertible on the date on
which such automatic conversion occurred, and any declared and unpaid dividends
shall be paid in accordance with the provisions of Section 5d.
n. Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of Series Preferred. All shares of Common Stock
(including fractions thereof) issuable upon conversion of more than one share of
Series Preferred by a holder thereof shall be aggregated for purposes of
determining whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Corporation shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock's fair market value (as determined by the Board
of Directors) on the date of conversion.
o. 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 the Series Preferred, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of the Series Preferred. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of the Series Preferred, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
p. Notices. Any notice required by the provisions of this
Section 5 shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified, (ii) when sent by confirmed telex
or facsimile if sent during normal business hours of the recipient; if not, then
on the next business day, (iii) five (5) days after having been sent by
registered or certified mail, return receipt requested, postage prepaid, or (iv)
one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All notices
shall be addressed to each holder of record at the address of such holder
appearing on the books of the Corporation.
q. Payment of Taxes. The Corporation will pay all taxes (other
than taxes based upon income) and other governmental charges that may be imposed
with respect to the issue or delivery of shares of Common Stock upon conversion
of shares of Series Preferred, excluding any tax or other charge imposed in
connection with any transfer involved in the issue
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and delivery of shares of Common Stock in a name other than that in which the
shares of Series Preferred so converted were registered.
r. No Dilution or Impairment. Without the consent of the
holders of the then outstanding Series Preferred, as required under Section 2b,
the Corporation shall not amend its Certificate of Incorporation or participate
in any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or take 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 shall 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 conversion rights of the
holders of the Series Preferred against dilution or other impairment.
6. No Reissuance of Series Preferred. No share or shares of Series
Preferred acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued; and in addition, the Certificate of
Incorporation shall be appropriately amended to effect the corresponding
reduction in the Corporation's authorized stock.
V.
For the management of the business and for the conduct of the affairs of
the corporation, and in further definition, limitation and regulation of the
powers of the corporation, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:
A. Management. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of Directors. The number
of directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions adopted by the Board of Directors.
B. Board of Directors.
1. Subject to the rights of the holders of any series of
Preferred Stock to elect additional directors under specified circumstances,
following the closing of the initial public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the "1993
Act"), covering the offer and sale of Common Stock to the public (the "Initial
Public Offering"), the directors shall be divided into three classes designated
as Class I, Class II and Class III, respectively. Directors shall be assigned to
each class in accordance with a resolution or resolutions adopted by the Board
of Directors. At the first annual meeting of stockholders following the closing
of the Initial Public Offering, the term of office of the Class I directors
shall expire and Class I directors shall be elected for a full term of three
years. At the second annual meeting of stockholders following the Initial Public
Offering, the term of office of the Class II directors shall expire and Class II
directors shall be elected for a full term of three years. At the third annual
meeting of stockholders following the Initial Public Offering, the term of
office of the Class III directors shall expire and Class III directors shall be
elected for a full term of three years. At each succeeding annual meeting of
stockholders, directors shall be
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elected for a full term of three years to succeed the directors of the class
whose terms expire at such annual meeting. During such time or times that the
corporation is subject to Section 2115(b) of the California General Corporation
Law ("CGCL"), this Section A.2.a of this Article V shall become effective and be
applicable only when the corporation is a "listed" corporation within the
meaning of Section 301.5 of the CGCL.
2. In the event that the corporation is unable to have a
classified board under applicable law, Section 301.5 of the CGCL, Section A. 2.
a. of this Article V shall not apply and all directors shall be elected at each
annual meeting of stockholders to hold office until the next annual meeting.
3. No stockholder entitled to vote at an election for
directors may cumulate votes to which such stockholder is entitled, unless, at
the time of such election, the corporation (i) is subject to Section 2115(b) of
the CGCL and (ii) is not or ceases to be a "listed" corporation under Section
301.5 of the CGCL. During this time, every stockholder entitled to vote at an
election for directors may cumulate such stockholder's votes and give one
candidate a number of votes equal to the number of directors to be elected
multiplied by the number of votes to which such stockholder's shares are
otherwise entitled, or distribute the stockholder's votes on the same principle
among as many candidates as such stockholder thinks fit. No stockholder,
however, shall be entitled to so cumulate such stockholder's votes unless (i)
the names of such candidate or candidates have been placed in nomination prior
to the voting and (ii) the stockholder has given notice at the meeting, prior to
the voting, of such stockholder's intention to cumulate such stockholder's
votes. If any stockholder has given proper notice to cumulate votes, all
stockholders may cumulate their votes for any candidates who have been properly
placed in nomination. Under cumulative voting, the candidates receiving the
highest number of votes, up to the number of directors to be elected, are
elected.
Notwithstanding the foregoing provisions of this section, each director
shall serve until his successor is duly elected and qualified or until his
death, resignation or removal. No decrease in the number of directors
constituting the Board of Directors shall shorten the term of any incumbent
director.
C. Removal of Directors
1. During such time or times that the corporation is subject
to Section 2115(b) of the CGCL, the Board of Directors or any individual
director may be removed from office at any time without cause by the affirmative
vote of the holders of at least a majority of the outstanding shares entitled to
vote on such removal; provided, however, that unless the entire Board is
removed, no individual director may be removed when the votes cast against such
director's removal, or not consenting in writing to such removal, would be
sufficient to elect that director if voted cumulatively at an election which the
same total number of votes were cast (or, if such action is taken by written
consent, all shares entitled to vote were voted) and the entire number of
directors authorized at the time of such director's most recent election were
then being elected.
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2. At any time or times that the corporation is not subject to
Section 2115(b) of the CGCL and subject to any limitations imposed by law,
Section A. 3. a. above shall no longer apply and removal shall be as provided in
Section 141(k) of the DGCL.
D. Vacancies.
1. Subject to the rights of the holders of any series of
Preferred Stock, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall,
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by the stockholders, except as
otherwise provided by law, be filled only by the affirmative vote of a majority
of the directors then in office, even though less than a quorum of the Board of
Directors, and not by the stockholders. Any director elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of
the director for which the vacancy was created or occurred and until such
director's successor shall have been elected and qualified.
2. If at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a majority
of the whole board (as constituted immediately prior to any such increase), the
Delaware Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent (10%) of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in offices as aforesaid, which election shall be governed by Section 211 of the
DGCL.
3. At any time or times that the corporation is subject to
Section 2115(b) of the CGCL, if, after the filling of any vacancy by the
directors then in office who have been elected by stockholders shall constitute
less than a majority of the directors then in office, then
a. Any holder or holders of an aggregate of five percent
(5%) or more of the total number of shares at the time outstanding having the
right to vote for those directors may call a special meeting of stockholders; or
b. The Superior Court of the proper county shall, upon
application of such stockholder or stockholders, summarily order a special
meeting of stockholders, to be held to elect the entire board, all in accordance
with Section 305(c) of the CGCL. The term of office of any director shall
terminate upon that election of a successor.
E. Bylaw Amendments. Subject to paragraph (h) of Section 43 of the
Bylaws, the Bylaws may be altered or amended or new Bylaws adopted by the
affirmative vote of at least sixty-six and two-thirds percent (66-2/3%) of the
voting power of all of the then-outstanding shares of the voting stock of the
corporation entitled to vote. The Board of Directors shall also have the power
to adopt, amend, or repeal Bylaws.
F. Ballots. The directors of the corporation need not be elected by
written ballot unless the Bylaws so provide.
16.
G. Action By Stockholders. No action shall be taken by the
stockholders of the corporation except at an annual or special meeting of
stockholders called in accordance with the Bylaws or by written consent of
stockholders in accordance with the Bylaws prior to the closing of the Initial
Public Offering and following the closing of the Initial Public Offering no
action shall be taken by the stockholders by written consent.
H. Advance Notice. Advance notice of stockholder nominations for the
election of directors and of business to be brought by stockholders before any
meeting of the stockholders of the corporation shall be given in the manner
provided in the Bylaws of the corporation.
VI.
A. The liability of the directors for monetary damages shall be
eliminated to the fullest extent under applicable law.
B. This corporation is authorized to provide indemnification of
agents (as defined in Section 317 of the CGCL) for breach of duty to the
corporation and its stockholders through bylaw provisions or through agreements
with the agents, or through shareholder resolutions, or otherwise, in excess of
the indemnification otherwise permitted by Section 317 of the CGCL, subject, at
any time or times the corporation is subject to Section 2115(b) to the limits on
such excess indemnification set forth in Section 204 of the CGCL.
C. Any repeal or modification of this Article VI shall be
prospective and shall not affect the rights under this Article VI in effect at
the time of the alleged occurrence of any act or omission to act giving rise to
liability or indemnification.
VII.
A. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, except as provided in paragraph
B. of this Article VII, and all rights conferred upon the stockholders herein
are granted subject to this reservation.
B. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the voting stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least sixty-six and two-thirds percent (66-2/3%) of the voting
power of all of the then-outstanding shares of the voting stock, voting together
as a single class, shall be required to alter, amend or repeal Articles V, VI,
and VII.
17.
VIII.
The name and the mailing address of the Sole Incorporator is as follows:
Katie McGirr
Cooley Godward LLP
Five Palo Alto Square
Palo Alto, CA 94306
In Witness Whereof, this Certificate has been subscribed this ___ day of
__________, 2000 by the undersigned who affirms that the statements made herein
are true and correct.
____________________________________________
Katie McGirr
Sole Incorporator
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