Certificate of Incorporation - Ciphergen Biosystems Inc.
CERTIFICATE OF INCORPORATION
OF CIPHERGEN BIOSYSTEMS, INC.
ARTICLE I
The name of the corporation is Ciphergen Biosystems, Inc.
ARTICLE II
The address of the corporation's registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, County of New Castle,
City of Willmington, Delaware, 19801. The name of its registered agent at such
address is The Corporation Trust Company.
ARTICLE III
The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
ARTICLE IV
This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares which the corporation is authorized to issue is 92,253,644 shares. The
total number of shares of Common Stock the corporation shall have authority to
issue is 60,000,000 shares, par value $0.001 per share. The total number of
shares of Preferred Stock the corporation shall have authority to issue is
32,253,644, par value $0.001 per share, 3,054,400 of which shall be designated
as Series A Preferred Stock (the "Series A Preferred"), 7,265,457 of which shall
be designated as Series B Preferred Stock (the "Series B Preferred"), 3,013,119
of which shall be designated as Series C Preferred Stock (the "Series C
Preferred"), 6,920,668 of which shall be designated as Series D Preferred Stock
(the "Series D Preferred") and 12,000,000 of which shall be designated as Series
E Preferred Stock (the "Series E Preferred") with the rights, preferences,
privileges and restrictions specified herein.
The Series A Preferred, the Series B Preferred, the Series C Preferred,
the Series D Preferred and the Series E Preferred are hereinafter collectively
referred to as the "Preferred Stock." The Preferred Stock may be issued from
time to time in one or more series in accordance with the laws of the State of
Delaware. Except as provided in this Article IV, the Board of Directors is
hereby authorized to determine and alter the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued series of Preferred
Stock, and to fix the number of shares of any such series of Preferred Stock and
the designation of any such series of Preferred Stock. The Board of Directors,
within the limits and restrictions stated in this Article IV or in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any series, may increase or decrease (but not below the
number of
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shares of such series then outstanding) the number of shares of any
series subsequent to the issuance of shares of that series.
The rights, preferences, privileges, and restrictions granted to and
imposed on the Preferred Stock is set forth below.
SECTION 1. DIVIDEND RIGHTS OF PREFERRED STOCK.
(a) The holders of the then outstanding shares of the Series
A Preferred, the Series B Preferred, the Series C Preferred, the Series D
Preferred and the Series E Preferred shall be entitled to receive dividends at
the rate of $0.04 per share per annum, $0.08 per share per annum, $0.12 per
share per annum, $0.16 per share per annum, and $0.22 per share per annum,
respectively, when, as and if declared by the Board of Directors out of any
funds legally available therefor, prior and in preference to any declaration or
payment of any dividend on the Common Stock of this corporation ("Common Stock")
payable other than in Common Stock or other securities and rights convertible
into or entitling the holder thereof to receive, directly or indirectly,
additional shares of Common Stock. Such dividends shall not be cumulative.
SECTION 2. LIQUIDATION PREFERENCE.
(a) In the event of any liquidation, dissolution or winding
up of the corporation, either voluntary or involuntary, the holders of the
Preferred Stock shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the corporation to the
holders of the Common Stock by reason of their ownership thereof, the sum of (i)
$0.50 per share for each share of the Series A Preferred, $1.00 per share for
each share of the Series B Preferred, $1.50 per share for each share of the
Series C Preferred, $2.00 per share for each share of the Series D Preferred and
$2.75 per share for each share of the Series E Preferred then held by them and
(ii) an amount equal to all declared but unpaid dividends on the Preferred Stock
then held by them. If, upon the occurrence of such event, the assets and funds
available for such distribution among the holders of the Preferred Stock shall
be insufficient to permit the payment to such holders of the full aforesaid
preferential amount, then the entire assets and funds of the corporation legally
available for distribution shall be distributed ratably among the holders of the
Preferred Stock in proportion to the preferential amount each such holder would
have been entitled to receive pursuant to this Section 2 if such distribution
had been sufficient to permit the full payment of such preferential amount.
(b) Upon the completion of the distribution provided for in
paragraph 2(a), all of the assets remaining in the corporation shall be
distributed pro rata among the holders of the Preferred Stock and Common Stock
based on the number of shares of Common Stock held by each such holder (assuming
conversion of the Preferred Stock into the number of shares of Common Stock into
which the Preferred Stock could then be converted under this Certificate) until
the holders of the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series D Preferred and the Series E Preferred shall have received
an aggregate amount from the distributions provided for under paragraph (a) of
this Section 2 and this paragraph (b) equal to $1.00, $2.00, $3.00, $4.00 and
$5.50 per share, respectively, plus an amount equal to all declared but unpaid
dividends on the Preferred Stock then held by them.
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(c) Upon completion of the distribution provided for in
paragraphs 2(a) and 2(b), all of the assets remaining in the corporation, if
any, shall be distributed to the holders of Common Stock pro rata based on the
number of shares of Common Stock held by each such holder.
(d) For purposes of this Section 2, a merger or
consolidation of the corporation with or into any other corporation or
corporations, or the merger of any other corporation or corporations into this
corporation, in which consolidation or merger the shareholders of this
corporation receive distributions in cash or securities of another corporation
or corporations as a result of such consolidation or merger or a sale of all or
substantially all of the assets of this corporation, shall be treated as a
liquidation, dissolution or winding up of this corporation.
SECTION 3. CONVERSION. The holders of the Preferred Stock shall have
conversion rights as follows (the "Conversion Rights"):
(a) RIGHT TO CONVERT. Each share of Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of the corporation or any transfer agent
for such Preferred Stock. Each share of Preferred Stock shall be convertible
into the number of shares of Common Stock which results from dividing the
"Conversion Price" per share in effect for such series of Preferred Stock at the
time of conversion into the "Conversion Value" per share of such series of
Preferred Stock. The number of shares of Common Stock into which each series of
Preferred Stock is convertible is hereinafter collectively referred to as the
"Conversion Rate" for such series. The initial Conversion Price per share of (i)
Series A Preferred shall be $0.50, (ii) Series B Preferred shall be $1.00, (iii)
Series C Preferred shall $1.50, (iv) Series D Preferred shall be $2.00 and (v)
Series E Preferred shall be $2.75. The Conversion Value per share of (i) Series
A Preferred shall be $0.50, (ii) Series B Preferred shall be $1.00, (iii) Series
C Preferred shall be $1.50, (iv) Series D Preferred shall be $2.00 and (v)
Series E Preferred shall be $2.75. The Conversion Price of each series of
Preferred Stock shall be subject to adjustment as hereinafter provided.
(b) AUTOMATIC CONVERSION. Each share of Preferred Stock
shall automatically be converted into shares of Common Stock at the then
effective Conversion Rate in the event of either (i) the closing of a firm
commitment underwritten public offering pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Act"), covering the
offer and sale of Common Stock (whether for the account of the corporation or
for the account of one or more shareholders of the corporation) of the
corporation to the public at an aggregate offering price of not less than
$10,000,000 and at a public offering price (prior to underwriters' discounts and
expenses) equal to or exceeding $5.50 per share of Common Stock (as adjusted for
any stock dividends, combinations or splits with respect to such shares) or (ii)
the written consent of holders of more than 66 2/3% of the then outstanding
shares of the Preferred Stock voting as a class. In the event of the automatic
conversion of the Preferred Stock upon a public offering as aforesaid, the
conversion of the Preferred Stock shall be deemed to have occurred automatically
at the closing of such public offering.
(c) MECHANICS OF CONVERSION. No fractional shares of Common
Stock shall be issued upon conversion of Preferred Stock. In lieu of any
fractional shares to which the holder
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would otherwise be entitled, the corporation shall pay cash equal to such
fraction multiplied by the fair market value of a share of Common Stock. Before
any holder of Preferred Stock shall be entitled to convert the same into full
shares of Common Stock, it shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the corporation or of any transfer
agent for the Preferred Stock, and shall give written notice to the corporation
at such office that it elects to convert the same (except that no such written
notice of election to convert shall be necessary in the event of an automatic
conversion pursuant to Section 3(b)). The corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Preferred Stock a certificate or certificates, registered in such names as
specified by the holder, for the number of shares of Common Stock to which such
holder shall be entitled as aforesaid and a check payable to the holder in the
amount of any cash amounts payable as the result of a conversion into fractional
shares of Common Stock, and any accrued and unpaid dividends on the converted
Preferred Stock. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the shares of
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date (except that in the event of an automatic conversion pursuant to
clause (i) of Section 3(b) such conversion shall be deemed to have been made
immediately prior to the closing of the offering referred to in such clause. If
the conversion is in connection with an underwritten offer of securities
registered pursuant to the Act, the conversion may, at the option of any holder
tendering Preferred Stock for conversion, be conditioned upon the closing with
the underwriter of the sale of securities pursuant to such offering, in which
event the person(s) entitled to receive the Common Stock issuable upon such
conversion of the Preferred Stock shall not be deemed to have converted such
Preferred Stock until immediately prior to the closing of such sale of
securities.
(d) ADJUSTMENTS TO CONVERSION PRICE FOR DILUTING ISSUES.
(i) SPECIAL DEFINITIONS. For purposes of this
Section 3(d), the following definitions shall apply:
(1) "Options" shall mean rights, options
or warrants to subscribe for, purchase or otherwise acquire either Common
Stock or Convertible Securities.
(2) "Original Issue Date" shall mean
March 3, 2000.
(3) "Convertible Securities" shall mean
any evidences of indebtedness, shares (other than Common Stock) or other
securities convertible into or exchangeable for Common Stock.
(4) "Additional Shares of Common Stock"
shall mean all shares of Common Stock issued (or, pursuant to Section
3(d)(iii), deemed to be issued) by the corporation after the Original Issue
Date, other than shares of Common Stock issued or issuable or deemed to be
issued:
(A) upon conversion of shares of
Preferred Stock;
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(B) as a result of an adjustment made
pursuant to Sections 3(d)(iv), (vi) or (vii);
(C) to directors, officers or employees of,
or consultants to, the corporation pursuant to a stock incentive program or
another director, officer, employee or consultant agreement or an option or
purchase plan approved by the Board of Directors of the Company and not
exceeding an aggregate of 2,610,389 shares of Common Stock;
(D) to third parties in connection with
technology licensing, corporate partnering, equipment leasing, corporate
borrowing or similar transactions approved by the Board of Directors;
(E) as a dividend or distribution on
Preferred Stock;
(F) for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination; or
(G) by way of dividend or other distribution
on shares of Common Stock excluded from the definition of Additional Shares of
Common Stock by the foregoing clauses (A), (B), (C), (D), (E) or (F) or this
clause (G) and on shares of Common Stock so excluded.
(ii) NO ADJUSTMENT OF CONVERSION PRICE
(1) SERIES A CONVERSION PRICE. No adjustment in the
Series A Conversion Price of a particular share of the Series A Preferred shall
be made in respect of the issuance of Additional Shares of Common Stock unless
the consideration per share (determined pursuant to Section 3(d)(v) hereof) for
an Additional Share of Common Stock issued or deemed to be issued by the
corporation is less than the Series A Conversion Price in effect on the date of,
and immediately prior to such issue, for such share of the Series A Preferred.
(2) SERIES B CONVERSION PRICE. No adjustment in the
Series B Conversion Price of a particular share of the Series B Preferred shall
be made in respect of the issuance of Additional Shares of Common Stock unless
the consideration per share (determined pursuant to Section 3(d)(v) hereof) for
an Additional Share of Common Stock issued or deemed to be issued by the
corporation is less than the Series B Conversion Price in effect on the date of,
and immediately prior to such issue, for such share of the Series B Preferred.
(3) SERIES C CONVERSION PRICE. No adjustment in the
Series C Conversion Price of a particular share of the Series C Preferred shall
be made in respect of the issuance of Additional Shares of Common Stock unless
the consideration per share (determined pursuant to Section 3(d)(v) hereof) for
an Additional Share of Common Stock issued or deemed to be issued by the
corporation is less than the Series C Conversion Price in effect on the date of,
and immediately prior to such issue, for such share of the Series C Preferred.
(4) SERIES D CONVERSION PRICE. No adjustment in the
Series D Conversion Price of a particular share of the Series D Preferred shall
be made in respect of the
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issuance of Additional Shares of Common Stock unless the consideration per share
(determined pursuant to Section 3(d)(v) hereof) for an Additional Share of
Common Stock issued or deemed to be issued by the corporation is less than the
Series D conversion price in effect on the date of, and immediately prior to
such issue, for such share of the Series D Preferred.
(5) SERIES E CONVERSION PRICE. No adjustment in the
Series E Conversion Price of a particular share of the Series E Preferred shall
be made in respect of the issuance of Additional Shares of Common Stock unless
the consideration per share (determined pursuant to Section 3(d)(v) hereof) for
an additional Share of Common Stock issued or deemed to be issued by the
corporation is less than the Series E conversion price in effect on the date of,
and immediately prior to such issue, for such share of the Series E Preferred.
(iii) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK.
(1) OPTIONS AND CONVERTIBLE SECURITIES. In the event
the corporation at any time or from time to time after the Original Issue Date
shall issue any Options or Convertible Securities or shall fix a record date for
the determination of holders of any class of securities entitled to receive any
such Options or Convertible Securities, then the maximum number of shares (as
set forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock the time of
such issue or, in case such a record date shall have been fixed, as of the close
of business on such record date, provided that in any such case in which
Additional Shares of Common Stock are deemed to be issued;
(A) no further adjustment in the Series A
Conversion Price, the Series B Conversion Price, the Series C Conversion Price,
the Series D Conversion Price or the Series E Conversion Price shall be made
upon the subsequent issue of Convertible Securities or shares of Common Stock
upon the exercise of such Options or conversion or exchange of such Convertible
Securities;
(B) if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, any adjustment of the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion Price, the Series D Conversion Price
or the Series E Conversion Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto), and any subsequent
adjustments based thereon, shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities; and
(C) upon the expiration of any such Options
or any rights of conversion or exchange under such Convertible Securities which
shall not have been exercised, any adjustments of the Series A Conversion Price,
the Series B Conversion Price, the Series C Conversion Price, the Series D
Conversion Price or the Series E Conversion Price
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computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall,
upon such expiration, be recomputed as if:
(i) in the case of Convertible Securities or
Options for Common Stock the only Additional Shares of Common Stock issued were
the shares of Common Stock, if any, actually issued upon the exercise of such
Options or the conversion or exchange of such Convertible Securities and the
consideration received therefor was the consideration actually received by the
corporation for the issue of all such Options, whether or not exercised, plus
the consideration actually received by the corporation upon such exercise, or
for the issue of all such Convertible Securities which were actually converted
or exchanged, plus the additional consideration, if any, actually received by
the corporation upon such conversion or exchange, and
(ii) in the case of Options for Convertible
Securities only the Convertible Securities, if any, actually issued upon the
exercise thereof were issued at the time of issue of such Options, and the
consideration received by the corporation for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received by
the corporation for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the corporation upon the
issue of the Convertible Securities with respect to which such Options were
actually exercised; and
(D) (i) no readjustment pursuant to clause (B) or
(C) above shall have the effect of increasing the Series A Conversion Price to
an amount which exceeds the lower of (i) the Series A Conversion Price on the
original adjustment date prior to the original adjustment, or (ii) the Series A
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date.
(ii) no readjustment pursuant to clause (B)
or (C) above shall have the effect of increasing the Series B Conversion Price
to an amount which exceeds the lower of (i) the Series B Conversion Price on the
original adjustment date prior to the original adjustment, or (ii) the Series B
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date.
(iii) no readjustment pursuant to clause (B) or (C) above shall have the effect
of increasing the Series C Conversion Price to an amount which exceeds the lower
of (i) the Series C Conversion Price on the original adjustment date prior to
the original adjustment, or (ii) the Series C Conversion Price that would have
resulted from any issuance of Additional Shares of Common Stock between the
original adjustment date and such readjustment date.
(iv) no readjustment pursuant to clause (B)
or (C) above shall have the effect of increasing the Series D Conversion Price
to an amount which exceeds the lower of (i) the Series D Conversion Price on the
original adjustment date prior to the original adjustment, or (ii) the Series D
Conversion Price that would have resulted from any
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issuance of Additional Shares of Common Stock between the original adjustment
date and such readjustment date.
(v) no readjustment pursuant to clause (B)
or (C) above shall have the effect of increasing the Series E Conversion Price
to an amount which exceeds the lower of (i) the Series E Conversion Price on the
original adjustment date prior to the original adjustment, or (ii) the Series E
Conversion Price that would have resulted from any issuance of Additional Shares
of Common Stock between the original adjustment date and such readjustment date.
(2) STOCK DIVIDENDS AND SUBDIVISIONS. In the event that the
corporation at any time or from time to time after the Original Issue Date shall
declare or pay any dividend on the Common Stock payable in Common Stock, or
effect a subdivision of the outstanding shares of Common Stock into a greater
number of shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), then and in any such event, Additional
Shares of Common Stock shall not be deemed to have been issued, but rather the
provisions of Section 3(d)(vi) below shall apply.
(iv) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF ADDITIONAL
SHARES OF COMMON STOCK
(1) SERIES A CONVERSION PRICE. In the event this corporation
shall issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 3(d)(iii)) without
consideration or for a consideration per share less than the Series A Conversion
Price in effect on the date of and immediately prior to such issue, then and in
such event, such Series A Conversion Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Series A Conversion Price by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate
consideration received by the corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Series A Conversion
Price and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued; provided, however, that for the purposes of
this Section 3(d)(iv)(1), all shares of Common Stock issuable upon conversion of
outstanding Preferred Stock shall be deemed to be outstanding, and immediately
after any Additional Shares of Common Stock are deemed issued pursuant to
Section 3(d)(iii), such Additional Shares of Common Stock shall be deemed to be
outstanding.
(2) SERIES B CONVERSION PRICE. In the event this corporation
shall issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 3(d)(iii)) without
consideration or for a consideration per share less than the Series B Conversion
Price in effect on the date of and immediately prior to such issue, then and in
such event, such Series B Conversion Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Series B Conversion Price by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate
consideration received by the corporation for
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the total number of Additional Shares of Common Stock so issued would purchase
at such Series B Conversion Price and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue
plus the number of such Additional Shares of Common Stock so issued; provided,
however, that for the purposes of this Section 3(d)(iv)(2), all shares of Common
Stock issuable upon conversion of outstanding Preferred Stock shall be deemed to
be outstanding, and immediately after any Additional Shares of Common Stock are
deemed issued pursuant to Section 3(d)(iii), such Additional Shares of Common
Stock shall be deemed to be outstanding.
(3) SERIES C CONVERSION PRICE. In the event this corporation
shall issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 3(d)(iii)) without
consideration or for a consideration per share less than the Series C Conversion
Price in effect on the date of and immediately prior to such issue, then and in
such event, such Series C Conversion Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Series C Conversion Price by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate
consideration received by the corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Series C Conversion
Price and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued; provided, however, that for the purposes of
this Section 3(d)(iv)(3), all shares of Common Stock issuable upon conversion of
outstanding Preferred Stock shall be deemed to be outstanding, and immediately
after any Additional Shares of Common Stock are deemed issued pursuant to
Section (3)(d)(iii), such Additional Shares of Common Stock shall be deemed to
be outstanding.
(4) SERIES D CONVERSION PRICE. In the event this corporation
shall issue Additional Shares of Common Stock (including Additional Shares of
Common Stock deemed to be issued pursuant to Section 3(d)(iii)) without
consideration or for a consideration per share less than the Series D Conversion
Price in effect on the date of and immediately prior to such issue, then and in
such event, such Series D Conversion Price shall be reduced, concurrently with
such issue, to a price (calculated to the nearest cent) determined by
multiplying such Series D Conversion Price by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issue plus the number of shares of Common Stock which the aggregate
consideration received by the corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Series D Conversion
Price and the denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number of such Additional
Shares of Common Stock so issued; provided, however, that for the purposes of
this Section 3(d)(iv)(4), all shares of Common Stock issuable upon conversion of
outstanding Preferred Stock shall be deemed to be outstanding, and immediately
after any Additional Shares of Common Stock are deemed issued pursuant to
Section 3(d)(iii), such Additional Shares of Common Stock shall be deemed to be
outstanding.
(5) SERIES E CONVERSION PRICE. In the event this corporation
shall issue Additional Shares of Common Stock (including Additional Shares of
Common Stock
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deemed to be issued pursuant to Section 3(d)(iii)) without consideration or for
a consideration per share less than the Series E Conversion Price in effect on
the date of and immediately prior to such issue, then and in such event, such
Series E Conversion Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined by multiplying such Series E
Conversion Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such issue plus the
number of shares of Common Stock which the aggregate consideration received by
the corporation for the total number of Additional Shares of Common Stock so
issued would purchase at such Series E Conversion Price and the denominator of
which shall be the number of shares of Common Stock outstanding immediately
prior to such issue plus the number of such Additional Shares of Common Stock so
issued; provided, however, that for the purposes of this Section 3(d)(iv)(2),
all shares of Common Stock issuable upon conversion of outstanding Preferred
Stock shall be deemed to be outstanding, and immediately after any Additional
Shares of Common Stock are deemed issued pursuant to Section 3(d)(iii), such
Additional Shares of Common Stock shall be deemed to be outstanding.
(v) DETERMINATION OF CONSIDERATION.
For purposes of Section 3(d), the consideration received by the corporation for
the issue of any Additional Shares of Common Stock shall be computed as follows:
(1) CASH AND PROPERTY: Such consideration shall:
(A) insofar as it consists of cash, be computed at
the aggregate amount of cash received by the corporation excluding amounts paid
or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other than
cash, be computed at the fair value thereof at the time of such issue, as
determined in good faith by the corporation's Board of Directors; and
(C) in the event Additional Shares of Common Stock
are issued together with other shares or securities or other assets of the
corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board.
(2) OPTIONS AND CONVERTIBLE SECURITIES. The consideration
per share received by the corporation for Additional Shares of Common Stock
deemed to have been issued pursuant to Section 3(d)(iii)(1), relating to Options
and Convertible Securities, shall be determined by dividing:
(i) the total amount, if any, received or
receivable by the corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for
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Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities by
(ii) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
(vi) ADJUSTMENTS FOR SUBDIVISIONS, DIVIDENDS, COMBINATIONS OR
CONSOLIDATIONS OF COMMON STOCK.
(1) In the event the outstanding shares of Common
Stock shall be combined or consolidated, by reclassification or otherwise, into
a lesser number of shares of Common Stock, the Series A Conversion Price, the
Series B Conversion Price, the Series C Conversion Price, the Series D
Conversion Price, and the Series E Conversion Price in effect immediately prior
to such combination or consolidation shall, concurrently with the effectiveness
of such combination or consolidation, be proportionately increased.
(2) In the event the corporation shall declare or
pay any dividend on the Common Stock payable in Common Stock or in the event the
outstanding shares of Common Stock shall be subdivided, by reclassification or
otherwise than by payment of a dividend in Common Stock, into a greater number
of shares of Common Stock, the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion Price, the Series D Conversion Price
and the Series E Conversion Price in effect immediately prior to such dividend
or subdivision shall be proportionately decreased:
(A) in the case of any such dividend,
immediately after the close of business on the record date for the determination
of holders of any class of securities entitled to receive such dividend, or
(B) in the case of any such subdivision, at
the close of business on the date immediately prior to the date upon which such
corporate action becomes effective.
If such record date shall have been fixed and such dividend shall not
have been fully paid on the date fixed therefor, the adjustment previously made
in the Series A Conversion Price, the Series B Conversion Price, the Series C
Conversion Price, the Series D Conversion Price and the Series E Conversion
Price which became effective on such record date shall be canceled as of the
close of business on such record date, and thereafter the Series A Conversion
Price, the Series B Conversion Price, the Series C Conversion Price, the Series
D Conversion Price and the Series E Conversion Price shall be adjusted as of the
time of actual payment of such dividend.
(vii) ADJUSTMENTS FOR OTHER RECLASSIFICATIONS, DIVIDENDS AND
DISTRIBUTIONS. If there occurs any capital reorganization or any
reclassification of the capital stock of the corporation (other than a
subdivision, dividend, combination, consolidation or other transaction provided
for in Section 1 or Section 3(d)(vi)), each share of the Preferred Stock shall
thereafter be convertible into the same kind and amounts of securities or other
assets, or both, that were issuable or distributable to the holders of shares of
outstanding Common Stock of the
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corporation upon such reorganization or reclassification, in respect of that
number of shares of Common Stock into which such shares of the Preferred Stock
might have been converted immediately prior to such reorganization or
reclassification, and in any such case, appropriate adjustments (as determined
by the Board of Directors) shall be made in the application of the provisions
herein set forth with respect to the rights and interests thereafter of the
holders of the Preferred Stock to the end that the provisions of these
certificates shall thereafter be applicable, as nearly as reasonably may be, in
relation to any securities or other assets thereafter deliverable upon the
conversion of the Preferred Stock.
(e) NO IMPAIRMENT. The corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the corporation but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 3 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Preferred Stock against impairment.
(f) CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Series A Conversion Price, the Series B
Conversion Price, the Series C Conversion Price, the Series D Conversion Price
or the Series E Conversion Price pursuant to this Section 3, the corporation at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to each holder of such Preferred Stock a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The corporation
shall, upon the written request at any time of any holder of Preferred Stock,
furnish or cause to be furnished to such holder a like certificate setting forth
(i) such adjustments and readjustments, (ii) the Series A Conversion Price, the
Series B Conversion Price, the Series C Conversion Price, the Series D
Conversion Price or the Series E Conversion Price, as applicable, at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the conversion such
Preferred Stock.
(g) NOTICES OF RECORD DATE. In the event that this corporation shall
propose at any time:
(i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities, whether or not a
regular cash dividend and whether or not out of earnings or earned surplus;
(ii) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of any class or
series or other rights;
(iii) to effect any reclassification or recapitalization of
its Common Stock outstanding involving a change in the Common Stock; or
(iv) to consolidate or merge with or into any other
corporation or other entity or person, or any other corporate reorganization, in
which the shareholders of the Company immediately prior to such consolidation,
merger or reorganization, own less than fifty
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percent (50%) of the Company's voting power immediately after such
consolidation, merger or reorganization, or any transaction or series of related
transactions to which the Company is a party in which in excess of fifty percent
(50%) of the Company's voting power is transferred; or
(v) to sell, lease or convey all or substantially all its
property or business, or to liquidate, dissolve or wind up; then, in connection
with each such event, this corporation shall send to the holders of the
Preferred Stock:
(1) at least 10 days' prior written notice of the
date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
shares shall be entitled thereto) or for determining rights to vote in respect
of the matters referred to in (iii) and (iv) above; and
(2) in the case of the matters referred to in (iii),
(iv) and (v) above, at least 10 days' prior written notice of the date when the
same shall take place (and specifying, if practicable, or estimating the date on
which the holders of Common shares shall be entitled to exchange their Common
shares for securities or other property deliverable upon the occurrence of such
event).
Each such written notice shall be given by first class mail, postage
prepaid, addressed to the holders of Preferred Stock at the address for each
such holder as shown on the books of this corporation.
(h) COMMON STOCK RESERVED. 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 Preferred Stock, such number of shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares of the
Preferred Stock, and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Preferred Stock, the corporation shall 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.
SECTION 4. VOTING RIGHTS.
(a) Except as otherwise required by law or hereunder, each
share of Common Stock issued and outstanding shall have one vote, each share of
the Preferred Stock issued and outstanding shall have the number of votes equal
to the number of Common Stock into which such share of the Preferred Stock is
convertible as adjusted from time to time pursuant to Section 3 hereof, and the
Common Stock and the Preferred Stock shall vote together as a single class.
Fractional votes by the holders of Preferred Stock shall not, however, be
permitted and any fractional voting rights resulting from the above formula
(after aggregating all shares into which shares of Preferred Stock held by each
holder could be converted) shall be rounded to the nearest whole number.
(b) Notwithstanding Section 4(a), the holders of the Series
A Preferred voting together as a single class shall be entitled to elect two (2)
directors, the holders of the Series B Preferred voting together as a single
class shall be entitled to elect two (2) directors, the holders
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of the Series D Preferred voting together as a single class shall be entitled to
elect one (1) director, the holders of the Series E Preferred voting together as
a single class shall be entitled to elect one (1) director, and all remaining
directors shall be elected by the holders of the Common Stock and the Preferred
Stock voting together as a single class.
SECTION 5. COVENANTS.
(a) SERIES A PREFERRED. In addition to any other rights
provided by law, this corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of a majority of all
outstanding shares of the Series A Preferred voting as a class, take any action
that:
(i) materially and adversely alters or changes the
rights, preferences and privileges of the Series A Preferred; or
(ii) increases the authorized number of shares of the
Series A Preferred beyond the number initially authorized.
(b) SERIES B PREFERRED. In addition to any other rights
provided by law, this corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of a majority of all
outstanding shares of the Series B Preferred voting as a class, take any action
that:
(i) materially and adversely alters or changes the
rights, preferences and privileges of the Series B Preferred; or
(ii) increases the authorized number of shares of the
Series B Preferred beyond the number initially authorized.
(c) SERIES C PREFERRED. In addition to any other rights
provided by law, this corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of a majority of all
outstanding shares of the Series C Preferred voting as a class, take any action
that:
(i) materially and adversely alters or changes the
rights, preferences and privileges of the Series C Preferred; or
(ii) increases the authorized number of shares of the
Series C Preferred beyond the number initially authorized.
(d) SERIES D PREFERRED. In addition to any other rights
provided by law, this corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of a majority of all
outstanding shares of the Series D Preferred voting as a class, take any action
that:
(i) materially and adversely alters or changes the
rights, preferences and privileges of the Series D Preferred; or
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(ii) increases the authorized number of shares of the
Series D Preferred beyond the number initially authorized.
(e) SERIES E PREFERRED. In addition to any other rights
provided by law, this corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of a majority of all
outstanding shares of the Series E Preferred voting as a class, take any action
that:
(i) materially and adversely alters or changes
the rights, preferences and privileges of the Series E Preferred; or
(ii) increases the authorized number of shares of the
Series E Preferred beyond the number initially authorized.
(f) PREFERRED STOCK. In addition to any other rights
provided by law, this corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of more than sixty-six and
two-thirds percent (66 2/3%) of all outstanding shares of the Preferred Stock
voting together as a single class, take any action that:
(i) creates any new class or series of stock or any
other securities convertible into equity securities of the corporation having a
preference over, or being on a parity with, the Series A Preferred, the Series B
Preferred, the Series C Preferred, the Series D Preferred or the Series E
Preferred with respect to voting rights, liquidation or redemption preferences
or dividends; or
(ii) results in any merger, consolidation or
reorganization of the corporation or any transaction in which the shareholders
of the Company immediately prior to such merger, consolidation or
reorganization, own less than fifty percent (50%) of the Company's voting power
immediately after such consolidation, merger or reorganization, or any
transaction or series of related transactions to which the Company is a party in
which in excess of fifty percent (50%) of the Company's voting power is
transferred.
SECTION 6. RESIDUAL RIGHTS. All rights accruing to the outstanding
shares of this corporation not expressly provided for to the contrary herein
shall be vested in the Common Stock.
ARTICLE V
The corporation is to have perpetual existence.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Bylaws of the Corporation.
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ARTICLE VIII
The election of directors need not be by written ballot unless the
Bylaws of the corporation shall so provide.
ARTICLE IX
To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or as may hereafter be amended, a director of the corporation
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. The corporation
shall indemnify to the fullest extent permitted by the law, any person made or
threatened to be made a party, to any action or proceeding, whether criminal,
civil, administrative or investigative, by reason of the fact the he or she, or
his or her testator or intestate, is or was a director or officer of the
corporation or any predecessor of the corporation, or serves or served at any
other enterprise as a director or officer at the request of the corporation or
any predecessor to the corporation. Neither any amendment nor repeal of this
Article, nor the adoption of any provision of this Certificate of Incorporation
inconsistent with this Article, shall eliminate or reduce the effect of this
Article in respect of any matter occurring, or any cause of action, suit or
claim that, but for this Article, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
ARTICLE X
The name and address of the incorporator are:
Richard L. Picheny
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
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I, THE UNDERSIGNED, being the incorporator hereinbefore named, for the purpose
of forming a corporation pursuant to the General Corporation Law of the State of
Delaware, do make this certificate, hereby declaring and certifying, under
penalties of perjury, that this is my act and deed and the facts herein stated
are true, and accordingly have hereunto set my hand this 23rd day of May, 2000.
/s/ Richard L. Picheny
----------------------------
Richard L. Picheny, Incorporator
17.