Certificate of Incorporation - Garage.com Inc.
CERTIFICATE OF INCORPORATION
OF
GARAGE.COM INC.
FIRST: The name of the corporation is Garage.com Inc. (the
"Corporation").
SECOND: The address of the Corporation's registered office in the State
of Delaware is 1209 Orange Street, in the City of Wilmington, County of New
Castle, Delaware 19801. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD: 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 the State of Delaware.
FOURTH:
(A) CLASSES OF STOCK. The 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 fifty six million five hundred thousand (56,500,000) shares,
each with a par value of $0.001 per share. Thirty eight million seven
hundred thousand (38,700,000) shares shall be Common Stock and seventeen
million eight hundred thousand (17,800,000) shares shall be Preferred
Stock.
(B) RIGHTS, PREFERENCES AND RESTRICTIONS OF PREFERRED STOCK. The Preferred
Stock may be divided into such number of series as the Board of
Directors may determine. The first series of Preferred Stock shall be
designated "Series A Preferred Stock" and shall consist of one million
eight hundred thousand (1,800,000) shares. The second series of
Preferred Stock shall be designated "Series B Preferred Stock" and shall
consist of seven million three hundred thousand (7,300,000) shares. The
third series of Preferred Stock shall be designated "Series C Preferred
Stock" and shall consist of four million eight hundred thousand
(4,800,000) shares. The fourth series of Preferred Stock shall be
designated "Series D Preferred Stock" and shall consist of six hundred
thousand (600,000) shares. The fifth Series of Preferred Stock shall be
designated "Series E Preferred Stock" and shall consist of three million
three hundred thousand (3,300,000) shares. The rights, preferences,
privileges, and restrictions granted to and imposed on the Series A
Preferred Stock, the Series B Preferred Stock, the Series C Preferred
Stock, the Series D Preferred Stock and the Series E Preferred Stock are
as set forth below in this Article Fourth(B).
1. DIVIDEND PROVISIONS. The holders of shares of Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock and Series E Preferred Stock shall be entitled
to receive dividends, out of any assets legally available
therefor, prior and in preference to any declaration or payment
of any dividend (payable other than in Common Stock or other
securities and rights
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convertible into or entitling the holder thereof to receive,
directly or indirectly, additional shares of Common Stock of the
Corporation) on the Common Stock of the Corporation, at the rate
of $0.02 per share per annum on each outstanding share of Series
A Preferred Stock, $0.03 per share per annum on each outstanding
share of Series B Preferred Stock, $0.15 per share per annum on
each outstanding share of Series C Preferred Stock, $0.30 per
share per annum on each outstanding share of Series D Preferred
Stock and $0.54 per share per annum on each outstanding share of
Series E Preferred Stock, payable quarterly when, as and if
declared by the Board of Directors. Such dividends shall not be
cumulative.
2. LIQUIDATION.
(a) PREFERENCE. In the event of any liquidation, dissolution
or winding up of the Corporation, either voluntary or
involuntary, the holders of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock and Series E Preferred Stock shall be
entitled to receive, prior and in preference to any
distribution of any of the assets of the Corporation to
the holders of Common Stock by reason of their ownership
thereof, (i) an amount equal to $0.3333 for each share of
Series A Preferred Stock then held by them, plus declared
but unpaid dividends, if any, (ii) an amount equal to
$0.50 for each share of Series B Preferred Stock then held
by them, plus declared but unpaid dividends, if any, (iii)
an amount equal to $2.50 for each share of Series C
Preferred Stock then held by them, plus declared but
unpaid dividends, if any, (iv) an amount equal to $5.00
for each share of Series D Preferred Stock then held by
them, plus declared but unpaid dividends, if any and (v)
an amount equal to $9.00 for each share of Series E
Preferred Stock then held by them, plus declared but
unpaid dividends, if any. If, upon the occurrence of such
event, the assets and funds thus distributed among the
holders of the Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock, Series D
Preferred Stock and Series E 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 Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock
and Series E Preferred Stock in proportion to the
preferential amount each such holder is otherwise entitled
to receive.
(b) REMAINING ASSETS. Upon a liquidation, dissolution or
winding up of the Corporation, and after payment to the
holders of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock
and Series E Preferred Stock the amounts to which they are
entitled pursuant to Section 2(a), all assets and funds of
the Corporation that remain legally available for
distribution to shareholders by reason of their ownership
of stock
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of the Corporation shall be distributed ratably among the
holders of Common Stock in proportion to the number of
shares of Common Stock held by them.
(c) CERTAIN ACQUISITIONS.
(i) DEEMED LIQUIDATION. For purposes of this Section 2,
a liquidation, dissolution or winding up of the
Corporation shall be deemed to be occasioned by, or
to include, (A) the acquisition of the Corporation
by another person or entity by means of any
transaction or series of related transactions
(including, without limitation, any reorganization,
merger or consolidation, but excluding any merger
effected exclusively for the purpose of changing
the domicile of the Corporation); or (B) a sale of
all or substantially all of the assets of the
Corporation, unless in the case of either (A) or
(B) the Corporation's shareholders of record as
constituted immediately prior to such acquisition
or sale will, immediately after such acquisition or
sale (by virtue of securities issued as
consideration for the Corporation's acquisition or
sale or otherwise) hold at least 50% of the voting
power of the surviving or acquiring entity in
approximately the same relative percentages after
such acquisition or sale as before such acquisition
or sale.
(ii) VALUATION OF CONSIDERATION. In the event of a
deemed liquidation as described in Section 2(c)(i),
if the consideration received by the Corporation is
other than cash, its value will be deemed its fair
market value. Any securities shall be valued as
follows:
(A) Securities not subject to investment letter or
other similar restrictions on free marketability:
(1) If traded on a securities exchange
or the Nasdaq National Market, the
value shall be deemed to be the
average of the closing prices of the
securities on such exchange over the
thirty-day period ending three (3)
days prior to the closing;
(2) If actively traded over-the-counter,
the value shall be deemed to be the
average of the closing bid or sale
prices (whichever is applicable)
over the thirty-day period ending
three (3) days prior to the closing;
and
(3) If there is no active public market,
the value shall be the fair market
value thereof, as determined (y) by
a recognized independent investment
banker selected by
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the Board of Directors or (z) in
good faith by the Board of
Directors, acting unanimously.
(B) The method of valuation of securities subject
to investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a shareholder's status as an affiliate
or a former affiliate) shall be to make an appropriate discount from the market
value determined as above in Section 2(c)(ii)(A) to reflect the approximate fair
market value thereof, as determined (y) by a recognized independent investment
banker selected by the Board of Directors or (z) in good faith by the Board of
Directors, acting unanimously.
(iii) NOTICE OF TRANSACTION. The Corporation shall give
each holder of record of Preferred Stock written notice of an impending
transaction involving a liquidation, dissolution or winding up of the
Corporation not later than twenty (20) days prior to the shareholders' meeting
called to approve such transaction, or twenty (20) days prior to the closing of
such transaction, whichever is earlier, and shall also notify such holders in
writing of the final approval of such transaction. The first of such notices
shall describe the material terms and conditions of the impending transaction
and the provisions of this Section 2, and the Corporation shall thereafter give
such holders prompt notice of any material changes. The transaction shall in no
event take place sooner than twenty (20) days after the Corporation has given
the first notice provided for herein or sooner than ten (10) days after the
Corporation has given notice of any material changes provided for herein;
provided, however, that such periods may be shortened upon the written consent
of the holders of Preferred Stock that are entitled to such notice rights or
similar notice rights and that represent at least a majority of the voting power
of all then outstanding shares of such Preferred Stock.
(iv) EFFECT OF NONCOMPLIANCE. In the event the
requirements of this Section 2(c) are not complied with, the Corporation shall
forthwith either cause the closing of the transaction to be postponed until such
requirements have been complied with, or cancel such transaction, in which event
the rights, preferences and privileges of the holders of the Preferred Stock
shall revert to and be the same as such rights, preferences and privileges
existing immediately prior to the date of the first notice referred to in
Section 2(c)(iii).
(3) REDEMPTION.
(a) SERIES A PREFERRED STOCK.
(i) RIGHT OF REDEMPTION AND PRICE. In the event
that the ownership of shares of Series A
Preferred Stock by any holder thereof shall,
in the opinion of counsel for such holder,
violate any law or regulation applicable to
such holder, such holder shall have the
right to require the Corporation to redeem,
to the extent the Corporation may lawfully
do so, any or all shares of Series A
Preferred Stock held by such holder. The
redemption price (the "Redemption Price")
shall be the price per share at
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which the Corporation has most recently sold
shares of its Preferred Stock multiplied by
the number of shares to be redeemed.
(ii) PROCEDURE. Such holder of Series A Preferred
Stock shall provide the Corporation with a
written notice (the "Redemption Notice") of
its intention to exercise its right of
redemption, which Redemption Notice shall
(A) include a detailed description of the
reason for such redemption; (B) fix a date
for such redemption (the "Redemption Date"),
which Redemption Date shall be no less than
thirty (30) days following receipt by the
Corporation of the Redemption Notice; (C)
specify the number of shares of Series A
Preferred Stock to be redeemed; and (D) be
accompanied by (1) such holder's certificate
or certificates representing the shares of
Series A Preferred Stock to be redeemed and
(2) an opinion of counsel to the effect that
such redemption is in accordance with the
requirements of this Section 3(a). The
Corporation shall redeem on the Redemption
Date, out of funds legally available
therefor, the number of shares of Series A
Preferred specified in the Redemption
Notice. In the event less than all the
shares represented by any such certificate
are redeemed, the Corporation shall issue a
new certificate representing the unredeemed
shares.
(iii) EFFECT OF REDEMPTION; INSUFFICIENT FUNDS.
From and after receipt of the Redemption
Notice, unless there shall have been a
default in payment of the Redemption Price,
all rights of such holder of Series A
Preferred Stock (except the right to receive
the applicable Redemption Price without
interest upon surrender of such holder's
certificate or certificates) shall cease
with respect to such shares, and such shares
shall not thereafter be transferred on the
books of the Corporation or be deemed to be
outstanding for any purpose whatsoever. If
the funds of the Corporation legally
available for redemption of shares of Series
A Preferred Stock on the Redemption Date are
insufficient to redeem the total number of
shares of Series A Preferred Stock to be
redeemed, those funds which are legally
available on the Redemption Date will be
used to redeem the maximum possible number
of such shares (if more than one holder has
exercised its right of redemption, the
shares shall be redeemed ratably among such
based upon the total Redemption Price
applicable to their shares of Series A
Preferred Stock which are to be redeemed).
The shares of Series A Preferred Stock not
redeemed shall remain outstanding and
entitled to all the rights
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and preferences provided herein. At any time
thereafter when additional funds of the
Corporation are legally available for the
redemption of shares of Series A Preferred
Stock, such funds will immediately be used
to redeem the balance of the shares which
the Corporation has become obliged to redeem
but which it has not redeemed.
(b) SERIES B PREFERRED STOCK. The Series B
Preferred Stock is not redeemable.
(c) SERIES C PREFERRED STOCK. The Series C
Preferred Stock is not redeemable.
(d) SERIES D PREFERRED STOCK. The Series D
Preferred Stock is not redeemable.
(e) SERIES E PREFERRED STOCK. The Series E
Preferred Stock is not redeemable; provided,
however, that the Corporation may redeem
shares of Series E Preferred Stock if such
redemption is advisable to comply with the
rules of any regulatory authority,
including, without limitation, the rules of
the National Association of Securities
Dealers, Inc.
4. CONVERSION. The holders of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) RIGHT TO CONVERT. Subject to Section 4(c),
each share of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred
Stock, Series D Preferred Stock and Series E
Preferred Stock shall be convertible, at the
option of the holder thereof, at any time
after the date of issuance of such share
and, with respect to the Series A Preferred
Stock, on or prior to the fifth day prior to
the Redemption Date fixed in any Redemption
Notice with respect to such holder's shares
of Series A Preferred Stock, at the office
of the Corporation or any transfer agent for
such stock, into such number of fully paid
and nonassessable shares of Common Stock as
is determined by dividing (x) (i) $0.3333 in
the case of Series A Preferred Stock, (ii)
$0.50 in the case of Series B Preferred
Stock, (iii) $2.50 in the case of Series C
Preferred Stock, (iv) $5.00 in the case of
Series D Preferred Stock or (v) $9.00 in the
case of Series E Preferred Stock by (y) the
Conversion Price applicable to such share,
determined as hereinafter provided, in
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effect on the date the certificate is
surrendered for conversion. The initial
Conversion Price per share of Series A
Preferred Stock shall be $0.3333. The
initial Conversion Price per share of Series
B Preferred Stock shall be $0.50. The
initial Conversion Price per share of Series
C Preferred Stock shall be $2.50. The
initial Conversion Price per share of Series
D Preferred Stock shall be $5.00. The
initial Conversion Price per share of Series
E Preferred Stock shall be $9.00. Such
initial Conversion Prices shall be subject
to adjustment as set forth in Section 4(d).
(b) AUTOMATIC CONVERSION.
(i) Each share of Series B Preferred
Stock shall automatically be
converted into shares of Common
Stock at the Conversion Price at the
time in effect for such share
immediately on the date specified by
written consent or agreement of the
holders of a majority of the then
outstanding shares of Series B
Preferred Stock. Each share of
Series C Preferred Stock shall
automatically be converted into
shares of Common Stock at the
Conversion Price at the time in
effect for such share immediately on
the date specified by written
consent or agreement of the holders
of a majority of the then
outstanding shares of Series C
Preferred Stock. Each share of
Series D Preferred Stock shall
automatically be converted into
shares of Common Stock at the
Conversion Price at the time in
effect for such share immediately on
the date specified by written
consent or agreement of the holders
of a majority of the then
outstanding shares of Series D
Preferred Stock. Each share of
Series E Preferred Stock shall
automatically be converted into
shares of Common Stock at the
Conversion Price at the time in
effect for such share immediately on
the date specified by written
consent or agreement of the holders
of a majority of the then
outstanding shares of Series E
Preferred Stock.
(ii) Each share of Preferred Stock shall
automatically be converted into
shares of Common Stock at the
Conversion Price at the time in
effect for such share immediately
upon the closing of the sale of the
Corporation's Common Stock in a firm
commitment, underwritten public
offering registered under the
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Securities Act of 1933, as amended,
other than a registration relating
solely to a transaction under Rule
145 under such Act (or any successor
thereto) or to an employee benefit
plan of the Corporation, at a public
offering price (prior to
underwriters' discounts and
expenses) equal to $2.00 per share
of Common Stock (as adjusted for any
stock dividends, combinations or
splits with respect to such shares)
and aggregate proceeds to the
Corporation and/or any selling
shareholders (after deduction for
underwriters' discounts and expenses
relating to the issuance, including
without limitation fees of the
Corporation's counsel) of which
exceed $10,000,000.
(c) MECHANICS OF CONVERSION. Before any holder
of Preferred Stock shall be entitled to
convert the same into shares of Common
Stock, such holder 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 its principal corporate
office, of the election to convert the same
and shall state therein the name or names in
which the certificate or certificates for
shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable
thereafter, issue and deliver at such office
to such holder of Preferred Stock, or to the
nominee or nominees of such holder, a
certificate or certificates for the number
of shares of Common Stock to which such
holder shall be entitled as aforesaid. 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 as of such date.
(d) CONVERSION PRICE ADJUSTMENTS OF PREFERRED
STOCK FOR CERTAIN DILUTIVE ISSUANCES, SPLITS
AND COMBINATIONS. The Conversion Prices of
the Series A Preferred Stock, the Series B
Preferred Stock, the Series C Preferred
Stock, the Series D Preferred Stock and the
Series E Preferred Stock shall be subject to
adjustment from time to time as follows:
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(i) DILUTIVE ISSUANCES. If the
Corporation shall issue, after the
date upon which any shares of Series
E Preferred Stock were first issued
(the "Purchase Date"), any
Additional Stock (as defined below)
without consideration or for a
consideration per share less than
the Conversion Price for any series
of Preferred Stock in effect
immediately prior to the issuance of
such Additional Stock, the
Conversion Price for such series in
effect immediately prior to each
such issuance shall automatically be
adjusted as set forth in this
Section 4(d)(i), unless otherwise
provided in this Section 4(d)(i).
(A) ADJUSTMENT FORMULA. Whenever
the Conversion Price for a
particular series is adjusted
pursuant to this Section
(4)(d)(i), the new Conversion
Price for such series shall
be determined by multiplying
the Conversion Price then in
effect for such series by a
fraction, (x) the numerator
of which shall be the number
of shares of Common Stock
outstanding immediately prior
to such issuance (the
"Outstanding Common") plus
the number of shares of
Common Stock that the
aggregate consideration
received by the Corporation
for such issuance would
purchase at such Conversion
Price; and (y) the
denominator of which shall be
the number of shares of
Outstanding Common plus the
number of shares of such
Additional Stock. For
purposes of the foregoing
calculation, the term
"Outstanding Common" shall
include shares of Common
Stock deemed issued pursuant
to Section 4(d)(i)(E) below.
(B) ADDITIONAL STOCK. "Additional
Stock" shall mean any shares
of Common Stock issued (or
deemed to have been issued
pursuant to Section
4(d)(i)(E)) by the
Corporation after the
Purchase Date other than
(1) Shares of Common Stock
issued or deemed to
have been issued
pursuant to
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a transaction
described in Section
4(d)(ii);
(2) Up to 4,000,000 shares
of Common Stock issued
or deemed to have been
issued to employees,
consultants or
directors of the
Corporation directly
or pursuant to a stock
option plan,
restricted stock plan,
stock purchase
agreement or other
stock incentive
arrangement approved
by the Board of
Directors of the
Corporation;
(3) Shares of Common Stock
issued or deemed to
have been issued to
financial institutions
or lessors in
connection with
commercial credit
arrangements,
equipment financings
or similar
transactions approved
by the Board of
Directors;
(4) Shares of Common Stock
issued or deemed to
have been issued upon
the issuance of Series
A Preferred Stock or
Series B Preferred
Stock pursuant to the
Series A and Series B
Preferred Stock
Purchase Agreement
dated as of March 11,
1998;
(5) Shares of Series C
Preferred Stock
pursuant to the Series
C Preferred Stock
Purchase Agreement
dated as of August 10,
1999;
(6) Shares of Series D
Preferred Stock
pursuant to the
Contribution Agreement
dated as of December
15, 1999;
(7) Shares of Series E
Preferred Stock
pursuant to the Series
E Preferred Stock
Purchase Agreement
dated as of January
10, 2000; and
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(8) Shares of Common Stock
issued or deemed to
have been issued upon
conversion of Series A
Preferred Stock,
Series B Preferred
Stock, Series C
Preferred Stock,
Series D Preferred
Stock or Series E
Preferred Stock.
(C) FRACTIONAL ADJUSTMENTS. No
adjustment of the Conversion
Price for the Series A
Preferred Stock, Series B
Preferred Stock, Series C
Preferred Stock, Series D
Preferred Stock or Series E
Preferred Stock shall be made
in an amount less than one
one-hundredth cent per share,
provided that any adjustments
which are not required to be
made by reason of this
sentence shall be carried
forward and shall be either
taken into account in any
subsequent adjustment made
prior to three years from the
date of the event giving rise
to the adjustment being
carried forward, or shall be
made at the end of three
years from the date of the
event giving rise to the
adjustment being carried
forward.
(D) DETERMINATION OF
CONSIDERATION. In the case of
the issuance of Common Stock
for cash, the consideration
shall be deemed to be the
amount of cash paid therefor
before deducting any
reasonable discounts,
commissions or other expenses
allowed, paid or incurred by
the Corporation for any
underwriting or otherwise in
connection with the issuance
and sale thereof. In the case
of the issuance of the Common
Stock for a consideration in
whole or in part other than
cash, the consideration other
than cash shall be deemed to
be the fair value thereof as
determined by the Board of
Directors irrespective of any
accounting treatment.
(E) DEEMED ISSUANCES. In the case
of the issuance (whether
before, on or after the
applicable Purchase Date) of
options to purchase or rights
to subscribe for Common
Stock, securities by their
terms convertible into or
exchangeable for
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Common Stock or options to
purchase or rights to
subscribe for such
convertible or exchangeable
securities, the following
provisions shall apply for
all purposes of this Section
4(d)(i):
(1) The aggregate maximum
number of shares of
Common Stock
deliverable upon
exercise (assuming the
satisfaction of any
conditions to
exercisability,
including without
limitation, the
passage of time, but
without taking into
account potential
antidilution
adjustments) of such
options to purchase or
rights to subscribe
for Common Stock shall
be deemed to have been
issued at the time
such options or rights
were issued and for a
consideration equal to
the consideration
(determined in the
manner provided in
Section 4(d)(i)(D)),
if any, received by
the Corporation upon
the issuance of such
options or rights plus
the minimum exercise
price provided in such
options or rights
(without taking into
account potential
antidilution
adjustments) for the
Common Stock covered
thereby.
(2) The aggregate maximum
number of shares of
Common Stock
deliverable upon
conversion of or in
exchange (assuming the
satisfaction of any
conditions to
convertibility or
exchangeability,
including, without
limitation, the
passage of time, but
without taking into
account potential
antidilution
adjustments) for any
such convertible or
exchangeable
securities or upon the
exercise of options to
purchase or rights to
subscribe for such
convertible or
exchangeable
securities and
subsequent conversion
or exchange thereof
shall be deemed to
have been issued at
the time such
securities were
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issued or such options
or rights were issued
and for a
consideration equal to
the consideration, if
any, received by the
Corporation for any
such securities and
related options or
rights (excluding any
cash received on
account of accrued
interest or accrued
dividends), plus the
minimum additional
consideration, if any,
to be received by the
Corporation (without
taking into account
potential antidilution
adjustments) upon the
conversion or exchange
of such securities or
the exercise of any
related options or
rights (the
consideration in each
case to be determined
in the manner provided
in Section
4(d)(i)(D)).
(3) In the event of any
change in the number
of shares of Common
Stock deliverable or
in the consideration
payable to the
Corporation upon
exercise of such
options or rights or
upon conversion of or
in exchange for such
convertible or
exchangeable
securities, including,
but not limited to, a
change resulting from
the antidilution
provisions thereof,
the Conversion Prices
of the Series A
Preferred Stock, the
Series B Preferred
Stock, the Series C
Preferred Stock, the
Series D Preferred
Stock and the Series E
Preferred Stock, to
the extent in any way
affected by or
computed using such
options, rights or
securities, shall be
recomputed to reflect
such change, but no
further adjustment
shall be made for the
actual issuance of
Common Stock or any
payment of such
consideration upon the
exercise of any such
options or rights or
the conversion or
exchange of such
securities.
(4) Upon the expiration of
any such options or
rights, the
termination of any
such rights to convert
or exchange or the
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expiration of any
options or rights
related to such
convertible or
exchangeable
securities, the
Conversion Prices of
the Series A Preferred
Stock, the Series B
Preferred Stock, the
Series C Preferred
Stock, the Series D
Preferred Stock and
the Series E Preferred
Stock, to the extent
in any way affected by
or computed using such
options, rights or
securities or options
or rights related to
such securities, shall
be recomputed, to
reflect the issuance
of only the number of
shares of Common Stock
(and convertible or
exchangeable
securities which
remain in effect)
actually issued upon
the exercise of such
options or rights,
upon the conversion or
exchange of such
securities or upon the
exercise of the
options or rights
related to such
securities.
(5) The number of shares
of Common Stock deemed
issued and the
consideration deemed
paid therefor pursuant
to Sections
4(d)(i)(E)(1) and (2)
shall be appropriately
adjusted to reflect
any change,
termination or
expiration of the type
described in either
Section 4(d)(i)(E)(3)
or (4).
(F) NO INCREASED CONVERSION PRICE.
Except to the limited extent provided for in Sections 4(d)(i)(E)(3) and
4(d)(i)(E)(4), no adjustment of such Conversion Price pursuant to this Section
4(d)(i) shall have the effect of increasing the Conversion Price above the
Conversion Price in effect immediately prior to such adjustment.
(ii) STOCK SPLITS AND DIVIDENDS. In the
event the Corporation should at any
time or from time to time after the
Purchase Date fix a record date for
the effectuation of a split or
subdivision of the outstanding
shares of Common Stock or the
determination of holders of Common
Stock entitled to receive a dividend
or other distribution payable in
additional shares of Common Stock or
other securities or rights
convertible into, or entitling the
holder thereof to receive directly
or
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<PAGE> 15
indirectly, additional shares of
Common Stock (hereinafter referred
to as "Common Stock Equivalents")
without payment of any consideration
by such holder for the additional
shares of Common Stock or the Common
Stock Equivalents (including the
additional shares of Common Stock
issuable upon conversion or exercise
thereof), then, as of such record
date (or the date of such dividend
distribution, split or subdivision
if no record date is fixed), the
Conversion Prices of the Series A
Preferred Stock, the Series B
Preferred Stock, the Series C
Preferred Stock, the Series D
Preferred Stock and the Series E
Preferred Stock shall be
appropriately decreased so that the
number of shares of Common Stock
issuable on conversion of each share
of Series A Preferred Stock, the
Series B Preferred Stock, the Series
C Preferred Stock, the Series D
Preferred Stock and the Series E
Preferred Stock shall be increased
in proportion to such increase of
the aggregate of shares of Common
Stock outstanding and those issuable
with respect to such Common Stock
Equivalents with the number of
shares issuable with respect to
Common Stock Equivalents determined
from time to time in the manner
provided for deemed issuances in
Section 4(d)(i)(E).
(iii) REVERSE STOCK SPLITS. If the number
of shares of Common Stock
outstanding at any time after the
Purchase Date is decreased by a
combination of the outstanding
shares of Common Stock, then,
following the record date of such
combination, the Conversion Prices
for the Series A Preferred Stock,
the Series B Preferred Stock, the
Series C Preferred Stock, the Series
D Preferred Stock and the Series E
Preferred Stock shall be
appropriately increased so that the
number of shares of Common Stock
issuable on conversion of each share
of such series shall be decreased in
proportion to such decrease in
outstanding shares.
(e) OTHER DISTRIBUTIONS. In the event the
Corporation shall declare a distribution
payable in securities of other persons,
evidences of indebtedness issued by the
Corporation or other persons, assets
(excluding cash dividends) or options or
rights not referred to in Section 4(d)(ii),
then, in each such case for the purpose of
this Section 4(e), the holders of Preferred
Stock
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<PAGE> 16
shall be entitled to a proportionate share
of any such distribution as though they were
the holders of the number of shares of
Common Stock of the Corporation into which
their shares of Preferred Stock are
convertible as of the record date fixed for
the determination of the holders of Common
Stock of the Corporation entitled to receive
such distribution.
(f) RECAPITALIZATIONS. If at any time or from
time to time there shall be a
recapitalization of the Common Stock (other
than a subdivision, combination or merger or
sale of assets transaction provided for
elsewhere in this Section 4 or Section 2)
provision shall be made so that the holders
of the Preferred Stock shall thereafter be
entitled to receive upon conversion of the
Preferred Stock the number of shares of
stock or other securities or property of the
Corporation or otherwise, to which a holder
of Common Stock deliverable upon conversion
would have been entitled on such
recapitalization. In any such case,
appropriate adjustment shall be made in the
application of the provisions of this
Section 4 with respect to the rights of the
holders of the Preferred Stock after the
recapitalization to the end that the
provisions of this Section 4 (including
adjustment of the Conversion Price then in
effect and the number of shares purchasable
upon conversion of the Preferred Stock)
shall be applicable after that event and be
as nearly equivalent as practicable.
(g) NO IMPAIRMENT. The Corporation will not, by
amendment of its Certificate of
Incorporation or through any reorganization,
recapitalization, 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 4 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
Preferred Stock against impairment.
(h) NO FRACTIONAL SHARES AND CERTIFICATE AS TO
ADJUSTMENTS.
(1) No fractional shares shall be issued
upon the conversion of any share or
shares of Preferred Stock or
Preferred Stock, and the number of
shares of Common Stock to be issued
shall be rounded to the nearest
whole share.
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<PAGE> 17
Whether or not fractional shares are
issuable upon such conversion shall
be determined on the basis of the
total number of shares of Preferred
Stock the holder is at the time
converting into Common Stock and the
number of shares of Common Stock
issuable upon such aggregate
conversion.
(2) Upon the occurrence of each
adjustment or readjustment of the
Conversion Price of any series of
Preferred Stock pursuant to this
Section 4, the Corporation, at its
expense, shall promptly compute such
adjustment or readjustment in
accordance with the terms hereof and
prepare and furnish to each holder
of 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 (A) such
adjustment and readjustment, (B) the
Conversion Price for each series of
Preferred Stock at the time in
effect, and (C) 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 of a share of each series
of Preferred Stock.
(i) NOTICES OF RECORD DATE. In the event of 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
(other than a cash dividend) or other
distribution, any right to subscribe for,
purchase or otherwise acquire any shares of
stock of any class or any other securities
or property, or to receive any other right,
the Corporation shall mail to each holder of
Preferred Stock, at least 20 days prior to
the date specified therein, a notice
specifying the date on which any such record
is to be taken for the purpose of such
dividend, distribution or right, and the
amount and character of such dividend,
distribution or right.
(j) 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 Preferred
Stock, such number of its shares of Common
Stock
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<PAGE> 18
as shall from time to time be sufficient to
effect the conversion of all outstanding
shares of 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 Preferred Stock,
in addition to such other remedies as shall
be available to the holder of such Preferred
Stock, 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 purposes, including,
without limitation, engaging in best efforts
to obtain the requisite shareholder approval
of any necessary amendment to these
articles.
5. VOTING RIGHTS.
(a) SERIES A PREFERRED STOCK. The Series A
Preferred Stock is nonvoting.
(b) SERIES B PREFERRED STOCK. The holder of each
share of Series B Preferred Stock shall have
the right to one vote for each share of
Common Stock into which such share of Series
B Preferred Stock could then be converted,
and with respect to such vote, such holder
shall have full voting rights and powers
equal to the voting rights and powers of the
holders of Common Stock, and shall be
entitled, notwithstanding any provision
hereof, to notice of any shareholders'
meeting in accordance with the bylaws of the
Corporation, and shall be entitled to vote,
together with holders of Common Stock, with
respect to any question upon which holders
of Common Stock have the right to vote.
Fractional votes shall not, however, be
permitted and any fractional voting rights
available on an as-converted basis (after
aggregating all shares into which shares of
Series B Preferred Stock held by each holder
could be converted) shall be rounded to the
nearest whole number (with one-half being
rounded upward).
(c) SERIES C PREFERRED STOCK. The holder of each
share of Series C Preferred Stock shall have
the right to one vote for each share of
Common Stock into which such share of Series
C Preferred Stock could then be converted,
and with respect to such vote, such holder
shall have full voting rights and powers
equal to the voting rights and powers of the
holders of Common Stock, and shall be
entitled, notwithstanding any
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<PAGE> 19
provision hereof, to notice of any
shareholders' meeting in accordance with the
bylaws of the Corporation, and shall be
entitled to vote, together with holders of
Common Stock, with respect to any question
upon which holders of Common Stock have the
right to vote. Fractional votes shall not,
however, be permitted and any fractional
voting rights available on an as-converted
basis (after aggregating all shares into
which shares of Series C Preferred Stock
held by each holder could be converted)
shall be rounded to the nearest whole number
(with one-half being rounded upward). The
holders of the Series C Preferred Stock,
voting together as a single class, shall be
entitled to elect one (1) director. In the
case of a vacancy in an office of a director
elected by the holders of Series C Preferred
Stock, the holders of Series C Preferred
Stock may elect a successor to hold office
for the unexpired term of the director whose
place shall be vacant. Any director who
shall have been elected by the holders of
Series C Preferred Stock may be removed
during the aforesaid term of office, whether
with or without cause, only with the
approval of the holders of Series C
Preferred Stock.
(d) SERIES D PREFERRED STOCK. The holder of each
share of Series D Preferred Stock shall have
the right to one vote for each share of
Common Stock into which such share of Series
D Preferred Stock could then be converted,
and with respect to such vote, such holder
shall have full voting rights and powers
equal to the voting rights and powers of the
holders of Common Stock, and shall be
entitled, notwithstanding any provision
hereof, to notice of any shareholders'
meeting in accordance with the bylaws of the
Corporation, and shall be entitled to vote,
together with holders of Common Stock, with
respect to any question upon which holders
of Common Stock have the right to vote.
Fractional votes shall not, however, be
permitted and any fractional voting rights
available on an as-converted basis (after
aggregating all shares into which shares of
Series D Preferred Stock held by each holder
could be converted) shall be rounded to the
nearest whole number (with one-half being
rounded upward).
(e) SERIES E PREFERRED STOCK. The holder of each
share of Series E Preferred Stock shall have
the right to one vote for each share of
Common Stock into which such share of Series
E Preferred Stock could then be converted,
and with respect to such vote, such holder
shall have full voting rights and powers
equal to the voting rights and powers
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<PAGE> 20
of the holders of Common Stock, and shall be
entitled, notwithstanding any provision
hereof, to notice of any shareholders'
meeting in accordance with the bylaws of the
Corporation, and shall be entitled to vote,
together with holders of Common Stock, with
respect to any question upon which holders
of Common Stock have the right to vote.
Fractional votes shall not, however, be
permitted and any fractional voting rights
available on an as-converted basis (after
aggregating all shares into which shares of
Series E Preferred Stock held by each holder
could be converted) shall be rounded to the
nearest whole number (with one-half being
rounded upward).
6. PROTECTIVE PROVISIONS. So long as any shares of a
particular series of Preferred Stock are
outstanding, the Corporation shall not, without
first obtaining the approval by vote or written
consent, in the manner provided by law, of the
holders of at least a majority of the total number
of shares of such series of Preferred Stock
outstanding, voting as a separate class, (a) alter
or change the rights, preferences, privileges or
restrictions of the shares of such series so as to
affect adversely the shares of such series; or (b)
authorize or issue, or obligate itself to issue,
any other equity security, including any other
security convertible into or exercisable for any
equity security, having a preference over, or being
pari passu with, such series with respect to
voting, dividends, redemption or upon liquidation.
7. STATUS OF REDEEMED OR CONVERTED STOCK. In the event
any shares of Preferred Stock shall be redeemed
pursuant to Section 3 hereof or converted pursuant
to Section 4 hereof, the shares so redeemed or
converted shall be canceled and shall not be
issuable by the Corporation. The Certificate of
Incorporation of the Corporation shall be
appropriately amended to effect the corresponding
reduction in the Corporation's authorized capital
stock.
8. [RESERVED]
9. NOTICES. Any notice required by the provisions of
this Article Fourth(B) to be given to the holders
of shares of Preferred Stock shall be deemed given
three (3) days after deposit in the U.S. mail,
postage prepaid, or immediately upon transmission
of a facsimile (with confirmation received), in
each case addressed to each holder of record at his
address or facsimile number appearing on the books
of the Corporation.
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<PAGE> 21
(C) COMMON STOCK.
1. DIVIDEND RIGHTS. Subject to the prior rights of
holders of all classes of stock at the time
outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled
to receive, when and as declared by the Board of
Directors, out of any assets of the Corporation
legally available therefor, such dividends as may
be declared from time to time by the Board of
Directors.
2. LIQUIDATION RIGHTS. Upon the liquidation,
dissolution or winding up of the Corporation, the
assets of the Corporation shall be distributed as
provided in Section 2 of Division (B) of this
Article Fourth.
3. REDEMPTION. The Common Stock is not redeemable.
4. VOTING RIGHTS. The holder of each share of Common
Stock shall have the right to one vote, and shall
be entitled to notice of any shareholders' meeting
in accordance with the bylaws of the Corporation,
and shall be entitled to vote upon such matters and
in such manner as may be provided by law.
5. RESIDUAL RIGHTS. All rights accruing to the
outstanding shares of the Corporation not expressly
provided for to the contrary herein shall be vested
in the Common Stock.
FIFTH: The Corporation is to have perpetual existence.
SIXTH: The election of directors need not be by written ballot unless
the Bylaws of the Corporation shall so provide.
SEVENTH: In furtherance and not in limitation of the powers conferred by
the laws of the State of Delaware, the Board of Directors is expressly
authorized to adopt, alter, amend or repeal the Bylaws of the Corporation.
EIGHTH: To the fullest extent permitted by the General Corporation Law
of the State of Delaware as the same exists or may hereafter be amended, no
director of the Corporation shall be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director.
The Corporation may indemnify to the fullest extent permitted by law any
person made or threatened to be made a party to an action or proceeding, whether
criminal, civil, administrative or investigative, by reason of the fact that he,
his testator or intestate is or was a director, officer, employee or agent of
the Corporation or any predecessor of the Corporation or serves or served at any
other enterprise as a director, officer, employee or agent at the request of the
Corporation or any predecessor to the Corporation.
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<PAGE> 22
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 action or proceeding accruing or arising or that, but
for this Article, would accrue or arise, prior to such amendment, repeal or
adoption of an inconsistent provision.
NINTH: Meetings of stockholders may be held within or without the State
of Delaware, as the Bylaws may provide. The books of the Corporation may be kept
(subject to any provision contained in the laws of the State of Delaware)
outside of the State of Delaware at such place or places as may be designated
from time to time by the Board of Directors or in the Bylaws of the Corporation.
TENTH: The number of directors which constitute the entire Board of
Directors of the Corporation shall be as specified in the Bylaws of the
Corporation. At each annual meeting of stockholders, directors of the
Corporation shall be elected to hold office until the expiration of the term of
which they are elected and until their successors have been duly elected and
qualified; except that if any such election shall not be so held, such election
shall take place at a stockholders' meeting called and held in accordance with
the General Corporation Law of Delaware.
The directors of the Corporation shall be divided into three classes as
nearly equal in size as is practicable, hereby designated Class I, Class II and
Class III. The term of office of the initial Class I directors shall expire at
the annual meeting of the stockholders held in 2001, the term of office of the
initial Class II directors shall expire at the annual meeting of the
stockholders held in 2002 and the term of office of the initial Class III
directors shall expire at the annual meeting of the stockholders held in 2003.
At each annual meeting of stockholders, each of the successors elected to
replace the directors of a Class whose term shall have expired at such annual
meeting shall be elected to hold office until the third annual meeting next
succeeding his or her election and until his or her respective successor shall
have been duly elected and qualified.
If the number of directors is hereafter changed, any newly created
directorships or decrease in directorships shall be so apportioned among the
classes as to make all classes as nearly equal in number as is practicable,
provided that no decrease in the number of directors constituting the Board of
Directors shall shorten the term of any incumbent director.
A director may be removed from office by the stockholders of the
corporation only for cause.
Vacancies occurring on the Board of Directors for any reason and newly
created directorships resulting from an increase in the authorized number of
directors may be filled only by vote of a majority of the remaining members of
the Board of Directors, although less than a quorum, at any meeting of the Board
of Directors. A person so elected by the Board of Directors to fill a vacancy or
newly created directorship shall hold office until the next election of the
Class for which such director shall have been chosen and until his or her
successor shall have been duly elected and qualified.
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<PAGE> 23
ELEVENTH: Stockholders of the corporation may not take action by written
consent in lieu of a meeting but must take any actions at a duly called annual
or special meeting.
TWELFTH: Notwithstanding any other provisions of this Amended and
Restated 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 the capital stock required by law or this Amended and
Restated Certificate of Incorporation, the affirmative vote of the holders of at
least two-thirds (2/3) of the combined voting power of all of the
then-outstanding shares of the corporation entitled to vote shall be required to
alter, amend or repeal Articles SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, ELEVENTH
and TWELFTH.
THIRTEENTH: 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 the laws of the State of Delaware, and all
rights conferred herein are granted subject to this reservation.
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