Certificate of Incorporation - WebSideStory Inc.
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WEBSIDESTORY, INC.
(Pursuant to Sections 242 and 245 of the General Corporation Law
of the State of Delaware)
WebSideStory, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware on July 13, 2000 (the
"Corporation") certifies as follows:
1. The Corporation's Amended and Restated Certificate of Incorporation
was duly adopted by the Board of Directors and sole stockholder by written
consent in accordance with Sections 242 and 245 of the General Corporation Law.
2. The Corporation's Certificate of Incorporation is amended and
restated to read in its entirety as follows:
ARTICLE I
The name of the Corporation is WebSideStory, Inc.
ARTICLE II
The address of the initial registered office of the corporation in the
State of Delaware is 1013 Centre Road, Wilmington, New Castle County, Delaware,
1980, and the name of the initial registered agent therein and in charge
thereof, upon whom process against the corporation may be served is Corporation
Service Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
ARTICLE IV
The total number of shares of capital stock which the Corporation shall
have authority to issue is Three Hundred Seventy-Six Million Seven Hundred
Eighty-Eight Thousand Eight Hundred Fifty-Eight (376,788,858) shares, par value
$0.0001667 per share, of which (a) Sixteen Million Seven Hundred Eighty-Eight
Thousand Eight Hundred Fifty-Eight (16,788,858) shares shall be preferred stock
("Preferred Stock"), consisting of Sixteen Million Seven Hundred Eighty-Eight
Thousand Seven Hundred Forty-Six (16,788,746) shares of Convertible Stock (as
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hereinafter defined) and One Hundred Twelve (112) shares of Redeemable Preferred
Stock (as hereinafter defined), and (b) Three Hundred Sixty Million
(360,000,000) shares shall be common stock ("Common Stock").
Except as otherwise restricted by these Amended and Restated Articles of
Incorporation, the Corporation is authorized to issue, from time to time, all or
any portion of the capital stock of the Corporation which may have been
authorized but not issued, to such person or persons and for such lawful
consideration as it may deem appropriate, and generally in its absolute
discretion to determine the terms and manner of any disposition of such
authorized but unissued capital stock.
The voting powers, designations, preferences, privileges and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions of each class of capital stock of the Corporation,
shall be as provided in this Article IV.
The Corporation may issue fractional shares of Convertible Stock (as
defined below), Redeemable Preferred Stock (as defined below) and Common Stock.
Fractional shares shall be entitled to dividends (on a pro rata basis), and the
holders of fractional shares shall be entitled to all rights as shareholders of
the Corporation to the extent provided herein and under applicable law in
respect to such fractional shares. Fractional shares may, but need not, be
represented by share certificates. Such shares, or fractions thereof, not
represented by share certificates ("Uncertificated Shares") shall be registered
in the stock records books of the Corporation. The Corporation at any time at
its sole option may deliver to any registered holder of such shares share
certificates to represent Uncertificated Shares previously issued (or deemed
issued) to such holder.
A. CONVERTIBLE REDEEMABLE PARTICIPATING PREFERRED STOCK.
1. Designation. A total of Sixteen Million Seven Hundred Eighty-Eight
Thousand Seven Hundred Forty-Six (16,788,746) shares of the Corporation's
Preferred Stock shall be designated as a Series known as Convertible Redeemable
Participating Preferred Stock ("Convertible Stock"). All of the preferential
amounts to be paid to the holders of the Convertible Stock as provided in this
Section A shall be paid or set apart for payment before the payment or setting
apart for payment of any amount for, or the distribution of any property of the
Corporation to, the holders of any other equity securities of the Corporation,
whether now or hereafter authorized, other than the Redeemable Preferred Stock
which shall rank senior to the Convertible Stock in connection with any event
referred to in Section A.4 or A.5.
2. Election of Directors: Voting.
(a) Election of Directors. The number of authorized directors of
the Corporation shall not be less than five (5) nor greater than nine (9) and
the exact number shall be determined by resolution of the Board of Directors of
the Corporation (the "Board of Directors"). So long as the holders of the
outstanding shares of Convertible Stock hold of record at least Four Million
(4,000,000) shares of Convertible Stock (adjusted appropriately for stock
splits, stock dividends, recapitalizations and the like with respect to the
Convertible Stock), such holders,
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voting together as a separate class, shall be entitled to elect two (2)
directors of the Corporation; provided, however, that, if the holders of the
outstanding shares of Convertible Stock hold of record less than Four Million
(4,000,000), but at least Two Million (2,000,000), shares of Convertible Stock
(adjusted appropriately for stock splits, stock dividends, recapitalizations and
the like with respect to the Convertible Stock), then such holders, voting
together as a separate class, shall be entitled to elect one (1) director of the
Corporation. If any director elected by the Convertible Stock should cease to be
a director of the Corporation for any reason, then, subject to the foregoing
restrictions, the vacancy shall only be filled by the vote or written consent of
the holders of the outstanding shares of Convertible Stock, voting together as a
separate class.
(b) Voting Generally. Each share of Convertible Stock shall be
entitled to the number of votes equal to the largest number of shares of Common
Stock (as described in Section C.1) into which such share of Convertible Stock
could be converted pursuant to Section A.6 hereof on the record date for the
vote or written consent of shareholders, if applicable, with fractional votes
for fractional shares and appropriate adjustments for stock splits, stock
dividends, recapitalizations and the like. Each holder of shares of Convertible
Stock shall be entitled to notice of any shareholders' meeting in accordance
with the by-laws of the Corporation and, except as provided in Section A.2(a)
with respect to the election of no more than two (2) directors, shall vote with
holders of the Common Stock, voting together as single class, upon all matters
submitted to a vote of shareholders, excluding those matters required to be
submitted to a class or series vote pursuant to the terms hereof (including,
without limitation, Section A.2(a) and Section A.8) or by law.
3. Dividends. The holders of Convertible Stock shall be entitled to
receive dividends out of funds legally available therefor at such times and in
such amounts as the Board of Directors may determine in its sole discretion;
provided, however, that no such dividend may be declared or paid on any shares
of Convertible Stock unless at the same time a dividend is declared or paid on
all outstanding shares of Common Stock and vice versa, with holders of
Convertible Stock and Common Stock sharing in any such dividends as if they
constituted a single class of stock and with each holder of shares of
Convertible Stock entitled to receive such dividends based on the number of
shares of Common Stock into which such shares of Convertible Stock are then
convertible in accordance with Section A.6 hereof.
4. Liquidation; Extraordinary Transaction.
(a) Liquidation Preference. Upon any liquidation, dissolution or
winding up of the Corporation and its subsidiaries, whether voluntary or
involuntary (a "Liquidation Event"), the assets of the Corporation shall be
distributed, subject to the prior payment of the Redeemable Liquidation
Preference Amount to the holder of each outstanding share of Redeemable
Preferred Stock pursuant to Section B.4 below, as follows:
(i) If the amount (the "Distribution Amount") computed by
dividing (x) the Distributable Assets (as defined below) by (y) the aggregate
number of outstanding shares of Common Stock (assuming full conversion of all
outstanding shares of Convertible Stock), is less than five (5) times the
Convertible Liquidation Preference Amount (as defined below), then:
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(A) each holder of outstanding shares of
Convertible Stock first shall be entitled to be paid out of the assets of the
Corporation available for distribution to shareholders (after the aggregate
payment of the Redeemable Liquidation Preference Amount pursuant to Section
B.4), whether such assets are capital, surplus or earnings (collectively, the
"Distributable Assets"), and before any amount shall be paid or distributed to
the holders of Common Stock or of any other stock ranking on liquidation junior
to the Convertible Stock, an amount in cash, equal to $0.9977 per share of
Convertible Stock held by such holder (adjusted appropriately for stock splits,
stock dividends, recapitalizations and the like with respect to the Convertible
Stock) (the "Convertible Liquidation Preference Amount"), plus any declared but
unpaid dividends; and
(B) the remainder of the Distributable Assets then
shall be distributed (1) first, among the holders of Convertible Stock and
Common Stock pro-rata based on the number of shares of Common Stock held by each
(assuming full conversion of all such Convertible Stock) until such time as such
holders have received four (4) times the Convertible Liquidation Preference
Amount pursuant to this Section A.4(a)(i)(B), and (2) second, ratably among the
holders of Common Stock pro-rata based on the number of shares of Common Stock
held by each.
(ii) If the Distribution Amount is greater than or equal
to five (5) times the Convertible Liquidation Preference Amount, then the
Distributable Assets shall be distributed among the holders of Convertible Stock
and Common Stock pro-rata based on the number of shares of Common Stock held by
each (assuming full conversion of all such Convertible Stock).
(b) Extraordinary Transactions.
(i) The following transactions shall be deemed
"Extraordinary Transactions" under this Article IV: (A) a merger or
consolidation of the Corporation with or into another corporation (with respect
to which less than a majority of the outstanding voting power of the surviving
or consolidated corporation is held by persons who are shareholders of the
Corporation immediately prior to such event); (B) the sale or transfer of all or
substantially all of the properties and assets of the Corporation and its
subsidiaries; (C) any purchase by any party (or group of affiliated parties) of
shares of capital stock of the Corporation (either through a negotiated stock
purchase or a tender for such shares), the effect of which is that such party
(or group of affiliated parties) that did not beneficially own a majority of the
voting power of the outstanding shares of capital stock of the Corporation
immediately prior to such purchase beneficially owns at least a majority of such
voting power immediately after such purchase; (D) the redemption or repurchase
of shares representing a majority of the voting power of the outstanding shares
of capital stock of the Corporation; or (E) of any other change of control of
50% or more of the outstanding voting power of the Corporation in a single
transaction or series of related transactions, but in all cases excluding a
public offering by the Corporation of shares of Common Stock or other
securities.
(ii) An Extraordinary Transaction shall be deemed a
Liquidation Event solely for purposes of this Section A.4. Upon the occurrence
of an Extraordinary Transaction, each of the holders of Convertible Stock shall
be entitled to receive all amounts specified in
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Section A.4(a) hereof. All amounts due to the holders of Convertible Stock
pursuant to Section A.4(a)(i)(A) above shall be payable in cash or, at the
election of the holders of not less than two-thirds of the outstanding shares of
Convertible Stock, all amounts due to the holders of Convertible Stock pursuant
to Sections A.4(a)(ii) and Section A.4(a)(i)(B) above may be payable in the same
form of consideration as is paid to the holders of Common Stock. Any securities
to be paid to the holders of Convertible Stock shall be valued as set forth in
Section A.4(d).
(c) Notice. Prior to the occurrence of any Liquidation Event or
any Extraordinary Transaction, the Corporation will furnish to each holder of
Convertible Stock notice in accordance with Section A.9 hereof, together with a
certificate prepared by the chief financial officer of the Corporation
describing in detail the facts of such Liquidation Event.
(d) Valuation of Distribution Securities. Any securities or other
consideration to be delivered to the holders of the Convertible Stock in
accordance with the terms hereof shall be valued as follows:
(i) If traded on a nationally recognized securities
exchange or inter-dealer quotation system, the value shall be deemed to be the
average of the closing prices of the securities on such exchange or system over
the thirty (30) calendar day period ending three (3) business days prior to the
closing;
(ii) If traded over-the-counter, the value shall be deemed
to be the average of the closing prices over the thirty (30) calendar day period
ending three (3) business days prior to the closing; and
(iii) If there is no active public market, the value shall
be the fair market value thereof, as mutually determined by the Corporation and
the holders of not less than two-thirds of the outstanding shares of Convertible
Stock; provided that, if the Corporation and such holders are unable to reach
agreement, then by independent appraisal by a mutually agreed to investment
banker, the fees of which shall be paid by the Corporation; provided, further,
that, if the Corporation and such holders are unable to agree mutually to such
investment banker, then by calculating the average of three appraisals conducted
by three independent investment bankers, such that (A) the Corporation shall
select and pay the fees of the first investment banker, (B) such holders shall
select and pay the fees of the second investment banker and (C) the first two
investment bankers selected shall select a third investment banker, the fees of
which shall be paid equally by the Corporation, on the one hand, and such
holders, on the other hand.
5. Redemption.
(a) On or after June 18, 2005.
(i) At any time on or after June 18, 2005, but within
ninety (90) days after the receipt by the Corporation of a written request from
the holders of not less than two-thirds of the then outstanding shares of
Convertible Stock that all or, if less than all, a specified percentage of such
holders' shares of Convertible Stock be redeemed and concurrently with surrender
by such holders of the certificates representing such shares, the Corporation
shall, to the extent it may lawfully do so, redeem in three (3) equal annual
installments (each payment
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date being referred to herein as a "Redemption Date") the shares specified in
such request by paying in cash therefor a sum equal to $0.9977 per share of
Convertible Stock (as adjusted for any stock splits, stock dividends,
recapitalizations or the like) plus all declared but unpaid dividends on such
share (the "Convertible Redemption Price"). The number of shares of Convertible
Stock that the Corporation shall be required to redeem on any one Redemption
Date shall be equal to the amount determined by dividing (i) the aggregate
number of shares of Convertible Stock outstanding immediately prior to such
Redemption Date that have been requested to be redeemed pursuant to this Section
5(a)(i) by (ii) the number of remaining Redemption Dates (including the
Redemption Date to which such calculation applies). Any redemption of
Convertible Stock effected pursuant to this Section 5(a)(i) shall be made on a
pro rata basis among the holders of the Convertible Stock in proportion to the
number of shares of Convertible Stock proposed to be redeemed by such holders.
(ii) At least fifteen (15) but no more than thirty (30)
days prior to each Redemption Date, written notice shall be mailed, first class
postage prepaid, to each holder of record (at the close of business on the
business day next preceding the day on which notice is given) of the Convertible
Stock to be redeemed, at the address last shown on the records of the
Corporation for such holder, notifying such holder of the redemption to be
effected on the applicable Redemption Date, specifying the number of shares to
be redeemed from such holder, the Redemption Date, the Convertible Redemption
Price, the place at which payment may be obtained and calling upon such holder
to surrender to the Corporation, in the manner and at the place designated, the
certificate or certificates representing the shares to be redeemed (the
"Redemption Notice"). Except as provided in Section 5(a)(iii), on or after each
Redemption Date, each holder of Convertible Stock to be redeemed on such
Redemption Date shall surrender to the Corporation the certificate or
certificates representing such shares, in the manner and at the place designated
in the Redemption Notice, and thereupon the applicable Convertible Redemption
Price of such shares shall be payable to the order or the person whose name
appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be cancelled. In the event less than all the
shares represented by any such certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares.
(iii) From and after each Redemption Date, unless there
shall have been a default in payment of the Convertible Redemption Price, all
rights of the holders of shares of Convertible Stock designated for redemption
on such Redemption Date in the Redemption Notice as holders of Convertible Stock
(except the right to receive the applicable Convertible Redemption Price without
interest upon surrender of their 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 Convertible Stock on a Redemption Date are insufficient to redeem the
total number of shares of Convertible Stock to be redeemed on such date, those
funds that are legally available will be used to redeem the maximum possible
number of such shares ratably among the holders of such shares to be redeemed
such that each holder of a share of Convertible Stock receives the same
percentage of the applicable Convertible Redemption Price. The shares of
Convertible Stock not redeemed shall remain outstanding and entitled to all the
rights and preferences provided herein. At any time thereafter when additional
funds of the Corporation are legally available for the redemption of shares of
Convertible Stock, such funds will immediately be used to redeem the balance of
the shares that
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the Corporation has become obliged to redeem on any Redemption Date but that it
has not redeemed.
(b) Purchase Date. At any time on or after June 18, 2005, upon
the election of the holders of not less than two-thirds of the outstanding
Convertible Stock to cause the Corporation to redeem Convertible Stock, each
holder of Convertible Stock shall be deemed to have elected to cause the
applicable percentage of such shares held by such holder to be so redeemed. If
at a Redemption Date shares of Convertible Stock are unable to be redeemed (as
contemplated by Section A.5(c) below), then holders of Convertible Stock shall
also be entitled to interest and dividends pursuant to Sections A.5(c) and (d)
below. The aggregate Convertible Redemption Price elected to be payable in cash
pursuant to Section A.5(a) shall be payable in cash in immediately available
funds to the respective holders on the Redemption Date (subject to Section
A.5(c)). Until the aggregate Convertible Redemption Price has been paid in cash
for all shares of Convertible Stock being redeemed or acquired: (A) no dividend
whatsoever shall be paid or declared, and no distribution shall be made, on any
capital stock of the Corporation; and (B) except as permitted by Section A.8(d)
and B.8(d), no shares of capital stock of the Corporation (other than Redeemable
Preferred Stock or Convertible Stock in accordance with this Section A.5) shall
be purchased, redeemed or acquired by the Corporation and no monies shall be
paid into or set aside or made available for a sinking fund for the purchase,
redemption or acquisition thereof.
(c) Redemption Prohibited. If, at a Redemption Date, the
Corporation is prohibited by law from redeeming all shares of Convertible Stock
for which redemption is required hereunder, then it shall redeem such shares on
a pro-rata basis among the holders of Convertible Stock in proportion to the
full respective redemption amounts to which they are entitled hereunder to the
extent possible and shall redeem the remaining shares to be redeemed as soon as
the Corporation is not prohibited by law from redeeming some or all of such
shares. Any shares of Convertible Stock not redeemed shall remain outstanding
and entitle to all of the rights and preferences provided in this Article IV.
The Corporation shall take such reasonable action as shall be necessary or
appropriate to review and promptly remove any impediment to its ability to
redeem Convertible Stock under the circumstances contemplated by this Section
A.5(c). In the event that the Corporation fails for any reason to redeem shares
for which redemption is required pursuant to this Section A.5, including,
without limitation, due to a prohibition of such redemption by law, then, during
the period from the applicable Redemption Date through the date on which such
shares are redeemed, the applicable Convertible Redemption Price and any
dividend accumulating after the Redemption Date shall bear interest at the rate
equal to the lesser of twelve percent (12%) per annum and the maximum rate
permitted by law with such interest to accrue daily in arrears and to be
compounded annually.
(d) Dividend After Redemption Date. From and after a Redemption
Date, no shares of Convertible Stock subject to redemption shall be entitled to
dividends, if any, as contemplated by Section A.3; provided, however, that in
the event that shares of Convertible Stock are unable to be redeemed and
continue to be outstanding in accordance with Section A.5(c), such shares shall
continue to be entitled to dividends and interest thereon as provided in
Sections A.3 and A.5(c) until the date on which such shares are actually
redeemed by the Corporation.
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(e) Surrender of Certificates. Upon receipt of the applicable
Convertible Redemption Price by certified check or wire transfer, each holder of
shares of Convertible Stock to be redeemed shall surrender the certificate or
certificates representing such shares to the Corporation, duly assigned or
endorsed for transfer (or accompanied by duly executed stock powers relating
thereto), or, in the event the certificate or certificates are lost, stolen or
missing, shall deliver an affidavit or agreement satisfactory to the Corporation
to indemnify the Corporation from any loss incurred by it in connection
therewith (an "Affidavit of Loss") with respect to such certificates at the
principal executive office of the Corporation or the office of the transfer
agent for the Convertible Stock or such office or offices in the continental
United States of an agent for redemption as may from time to time be designated
by notice to me holders of Convertible Stock, and each surrendered certificate
shall be canceled and retired.
6. Conversion. The holders of the Convertible Stock shall have the
following conversion rights:
(a) Conversion Upon Election of Holders. Each holder of a share
of Convertible Stock shall be entitled at any time, upon the written election of
such holder without the payment of any additional consideration, to convert such
share of Convertible Stock into the number of fully paid and nonassessable
shares of Common Stock, which results from dividing the Conversion Value (as
defined in this Section A.6(a)) per share in effect for the Convertible Stock at
the time of conversion, as the numerator, by the per share Conversion Price (as
defined in this Section A.6(a)) of the Convertible Stock, as the denominator.
The number of shares of Common Stock into which a share of a Convertible Stock
is convertible is hereinafter referred to as the "Conversion Rate." In addition,
the holders of shares of Convertible Stock shall be entitled at any time, upon
the written election of two-thirds of the outstanding shares of Convertible
Stock without the payment of any additional consideration, to cause all (but not
less than all) of the outstanding shares of Convertible Stock to be
automatically converted into shares of Common Stock at the Conversion Rate. Upon
the filing of this Amended and Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware, the "Conversion Price" per share of
Convertible Stock shall be $0.3538676, and the per share "Conversion Value" of
Convertible Stock shall be $0.9977. The Conversion Price per share of
Convertible Stock and the Conversion Rate shall be subject to adjustment
hereafter from time to time (but no adjustment shall be made to account for
issuances or other events prior to the date of the filing hereof) as provided in
Section A.7 hereof. If any share of Convertible Stock is converted at a time
when there are any declared but unpaid dividends or other amounts due on or in
respect of such shares, such declared but unpaid dividends and other amounts
shall be paid in full in cash by the Corporation in connection with such
conversion.
(b) Automatic Conversion Upon QPO. Each share of Convertible
Stock shall automatically be converted, without the payment of any additional
consideration, into shares of Common Stock as of, and in all cases subject to,
the closing of the Corporation's fist underwritten offering to the public
pursuant to an effective registration statement under the Securities Act of
1933, as amended, provided that (i) such registration statement covers the offer
and sale of Common Stock for which the aggregate proceeds attributable to sales
for the account of the Corporation, net of underwriting discounts of
commissions, exceed $20 million, (ii) the value of the Corporation immediately
prior to the offering is equal to or greater than $150,000,000, as determined by
multiplying the public offering price per share by the number of
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outstanding shares of Common Stock of the Corporation immediately prior to the
offering (assuming exercise or conversion of all outstanding securities
exercisable for or convertible into the Corporation's Common Stock), (iii) such
Common Stock is listed for trading on either the: New York Stock Exchange or the
Nasdaq National Market, and (iv) all outstanding shares of Redeemable Preferred
Stock and all declared but unpaid dividends thereon are paid in full (a "QPO" or
a "Qualified Public Offering"); provided that if a closing of a QPO occurs, all
outstanding shares of Convertible Stock shall be deemed to have been converted
into shares of Common Stock immediately prior to such closing. Any such
conversion shall be at the Conversion Rate in effect upon the closing of a QPO,
as applicable.
If the holders of shares of Convertible Stock are required to convert
the outstanding shares of Convertible Stock pursuant to this Section A.6(b) at a
time when there are any declared but unpaid dividends or other amounts due on or
in respect of such shares, such dividends and other amounts shall be paid in
full in cash by the Corporation in connection with such conversion.
(c) Procedure for Voluntary Conversion. Upon election to convert
pursuant to Section A.6(a), the relevant holder of Convertible Stock shall
surrender the certificate or certificates representing the Convertible Stock
being converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), at the principal
executive office of the Corporation or the offices of the transfer agent for the
Convertible Stock or such office or offices in the continental United States of
an agent for conversion as may from time to time be designated by notice to the
holders of the Convertible Stock by the Corporation, or shall deliver an
Affidavit of Loss with respect to such certificates. The issuance by the
Corporation of Common Stock upon a conversion of Convertible Stock pursuant to
Section A.6(a) hereof shall be effective as of the surrender of the certificate
or certificates for the Convertible Stock to be converted, duly assigned or
endorsed for transfer to the Corporation (or accompanied by duly executed stock
powers relating thereto), or as of the delivery of an Affidavit of Loss. Upon
surrender of a certificate representing Convertible Stock for conversion, or
delivery of an Affidavit of Loss, the Corporation shall issue and send by hand
delivery, by courier or by first class mail (postage prepaid) to the holder
thereof or to such holder's designee, at the address designated by such holder,
certificates for the number of shares of Common Stock to which such holder shall
be entitled upon conversion plus a cash payment in the amount of any declared
but unpaid dividends and other amounts as contemplated by Section A.6(a) in
respect of the shares of Convertible Stock. The issuance of certificates for
Common Stock upon conversion of Convertible Stock will be made without charge to
the holders of such shares for any issuance tax in respect thereof or other
costs incurred by the Corporation in connection with such conversion and the
related issuance of such stock. In the event of any public offering constituting
a QPO, the provisions of Section A.6(d) shall apply.
(d) Procedure for Automatic Conversion. As of, and in all cases
subject to, the closing of a QPO (the "Automatic Conversion Date"), all
outstanding shares of Convertible Stock shall be converted automatically into
shares of Common Stock at the Conversion Rate and without any further action by
the holders of such shares and whether or not the certificates representing such
shares of Convertible Stock are surrendered to the Corporation or its transfer
agent. On the Automatic Conversion Date, all rights with respect to the
Convertible Stock so converted shall terminate, except any of the rights of the
holders thereof upon surrender of their
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certificate or certificates therefor or delivery of an Affidavit of Loss thereof
to receive certificates for the number of shares of Common Stock into which such
Convertible Stock has been converted plus all declared but unpaid dividends and
other amounts as contemplated by Section A.6(b). Certificates surrendered for
conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Corporation, duly executed
by the registered holder or by his, her or its attorney duly authorized in
writing. Upon surrender of such certificates or Affidavit of Loss, the
Corporation shall issue and deliver to such holder, promptly (and in any event
in such time as is sufficient to enable such holder to participate in such QPO,
as applicable) at such office and in its name as shown on such surrendered
certificate or certificates, a certificate or certificates for the number of
shares of Common Stock into which the shares of the Convertible Stock
surrendered are convertible on the Automatic Conversion Date and shall pay all
declared but unpaid dividends and other amounts as contemplated by Section
A.6(b) in respect of the shares of Convertible Stock which are converted.
(e) 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 Convertible Stock, such number of its shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of Convertible Stock. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all of the then outstanding shares of Convertible Stock, the
Corporation will take such corporate action as may be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose.
(f) No Closing of Transfer Books. The Corporation shall not close
its books against the transfer of shares of Convertible Stock in any manner
which would interfere with the timely conversion of any shares of Convertible
Stock.
7. Adjustments. The Conversion Price in effect from time to time shall
be subject to adjustment from and after January 1, 2000 and regardless of
whether any shares of Convertible Stock are then issued and outstanding as
follows:
(a) Dividends and Stock Splits. If the number of shares of Common
Stock outstanding at any time after the date hereof is increased by a stock
dividend payable in shares of Common Stock or by a subdivision or split-up of
shares of Common Stock, then, on the date such payment is made or such change is
effective, the Conversion Price shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of any shares of
Convertible Stock shall be increased in proportion to such increase of
outstanding shares of Common Stock.
(b) Reverse Stock Splits. If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination or
reverse split of the outstanding shares of Common Stock, then, on the effective
date of such combination or reverse split, the Conversion Price shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of any shares of Convertible Stock shall be decreased in proportion
to such decrease in outstanding shares of Common Stock.
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(c) Sale of Common Stock. In the event the Corporation shall at
any time, or from time to time, issue, sell or exchange any shares of Common
Stock (including shares held in the Corporation's treasury, other than (i)
Thirty-One Million Six Hundred Fifty-Two Thousand Thirty (31,652,030) shares of
Common Stock (as appropriately adjusted for stock splits, stock dividends and
the like), which number shall include the shares of Common Stock issuable
pursuant to options or warrants outstanding at any time, issued to officers,
directors or employees of the Corporation upon the exercise of options or other
rights issued to such officers, directors or employees pursuant to the
Corporation's stock option plan or otherwise and (ii) shares of Common Stock
issued as consideration for acquisitions approved by a majority of the members
of the Board of Directors (collectively, the "Excluded Shares")), for a
consideration per share less than the Conversion Price in effect immediately
prior to the issuance, sale or exchange of such shares, then, and thereafter
successively upon each such issuance, sale or exchange, the Conversion Price in
effect immediately prior to the issuance, sale or exchange of such shares shall
forthwith be reduced to an amount determined by multiplying such Conversion
Price by a fraction:
(i) the numerator of which shall be (X) the number of
shares of Common Stock of all classes outstanding immediately prior to the
issuance of such additional shares of Common Stock (excluding treasury shares
but including all shares of Common Stock issuable upon conversion or exercise of
any outstanding Convertible Stock, options, warrants, rights or convertible
securities), plus (Y) the number of shares of Common Stock which the net
aggregate consideration received by the Corporation for the total number of such
additional shares of Common Stock so issued would purchase at the Conversion
Price (prior to adjustment), and
(ii) the denominator of which shall be (X) the number of
shares of Common Stock of all classes outstanding immediately prior to the
issuance of such additional shares of Common Stock (excluding treasury shares
but including all shares of Common Stock issuable upon conversion or exercise of
any outstanding Convertible Stock, options, warrants, rights or convertible
securities), plus (Y) the number of such additional shares of Common Stock so
issued.
(d) Sale of Options, Rights or Convertible Securities. In the
event the Corporation shall at any time or from time to time, issue options,
warrants or rights to subscribe for shares of Common Stock, or issue any
securities convertible into or exchangeable for shares of Common Stock (other
than any options or warrants for Excluded Shares), for a consideration per share
(determined by dividing the Net Aggregate Consideration (as determined below) by
the aggregate number of shares of Common Stock that would be issued if all such
options, warrants, rights or convertible securities were exercised or converted
to the fullest extent permitted by their terms) less than the Conversion Price
in effect immediately prior to the issuance of such options or rights or
convertible or exchangeable securities, the Conversion Price in effect
immediately prior to the issuance of such options, warrants or rights or
securities shall be reduced to an amount determined by multiplying such
Conversion Price by a fraction:
(i) the numerator of which shall be (X) the number of
shares of Common Stock of all classes outstanding immediately prior to the
issuance of such options, rights or convertible securities (excluding treasury
shares but including all shares of Common
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Stock issuable upon conversion or exercise of any outstanding Convertible Stock,
options, warrants, rights or convertible securities), plus (Y) the number of
shares of Common Stock which the total amount of consideration received by the
Corporation for the issuance of such options, warrants, rights or convertible
securities plus the minimum amount set forth in the terms of such security as
payable to the Corporation upon the exercise or conversion thereof (the "NA
Aggregate Consideration") would purchase at the Conversion Price prior to
adjustment, and
(ii) the denominator of which shall be (X) the number of
shares of Common Stock of all classes outstanding immediately prior to the
issuance of such options, warrants, rights or convertible securities (excluding
treasury shares but including all shares of Common Stock issuable upon
conversion or exercise of any outstanding Convertible Stock, options, warrants,
rights or convertible securities), plus (Y) the aggregate number of shares of
Common Stock that would be issued if all such options, warrants, rights or
convertible securities were exercised or converted.
(e) Expiration or Change in Price. If the consideration per share
provided for in any options or rights to subscribe for shares of Common Stock or
any securities exchangeable for or convertible into shares of Common Stock,
changes at any time, the Conversion Price in effect at the time of such change
shall be readjusted to the Conversion Price which would have been in effect at
such time had such options or convertible securities provided for such changed
consideration per share (determined as provided in Section A.7(d) hereof), at
the time initially granted, issued or sold; provided, that such adjustment of
the Conversion Price will be made only as and to the extent that the Conversion
Price effective upon such adjustment remains less than or equal to the
Conversion Price that would be in effect if such options, rights or securities
had not been issued. No adjustment of the Conversion Price shall be made under
this Section A.7 upon the issuance of any additional shares of Common Stock
which are issued pursuant to the exercise of any warrants, options or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any convertible securities if an adjustment shall previously
have been made upon the issuance of such warrants, options or other rights. Any
adjustment of the Conversion Price shall be disregarded if, as, and when the
rights to acquire shares of Common Stock upon exercise or conversion of the
warrants, options, rights or convertible securities which gave rise to such
adjustment expire or are canceled without having been exercised, so that the
Conversion Price effective immediately upon such cancellation or expiration
shall be equal to the Conversion Price in effect at the time of the issuance of
the expired or canceled warrants, options, rights or convertible securities,
with such additional adjustments as would have been made to that Conversion
Price had the expired or canceled warrants, options, rights or convertible
securities not been issued.
(f) Other Adjustments. In the event the Corporation shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
lawful and adequate provision shall be made so that the holders of Convertible
Stock shall receive upon conversion thereof in addition to the number of shares
of Common Stock receivable thereupon, the number of securities of the
Corporation which they would have received had their Convertible Stock been
converted into Common Stock on the date of such event and had they thereafter,
during the period from the date of such event to and including the date of
conversion, retained such securities receivable by them as aforesaid during
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such period, giving application to all adjustments called for during such period
under this Section A.7 as applied to such distributed securities.
(g) Reclassification, etc. If the Common Stock issuable upon the
conversion of the Convertible Stock shall be changed into the same or different
number of shares of any class or classes of stock, whether by reclassification
or otherwise (other than a subdivision or combination of shares or stock
dividend provided for above, or a reorganization, merger, consolidation or sale
of assets provided for elsewhere in this Section A.7), then and in each such
event the holder of each share of Convertible Stock shall have the right
thereafter to convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such reclassification or other
change, by holders of the number of shares of Common Stock into which such
shares of Convertible Stock might have been converted immediately prior to such
reclassification or change, all subject to further adjustment as provided
herein.
(h) Mergers and Other Reorganizations. Unless such transaction is
an Extraordinary Transaction, if at any time or from time to time there shall be
a capital reorganization of the Common Stock (other than a subdivision,
combination, reclassification or exchange of shares provided for elsewhere in
this Section A.7) or a merger or consolidation of the Corporation with or into
another corporation, then, as part of and as a condition to the effectiveness of
such reorganization, merger or consolidation, lawful and adequate provision
shall be made so that the holders of the Convertible Stock shall thereafter be
entitled to receive upon conversion of the Convertible Stock the number of
shares of stock or other securities or property of the Corporation, or of the
successor corporation resulting from such merger or consolidation or sale, to
which a holder of Common Stock would have been entitled in connection with such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate provisions shall be made with respect to the rights of the holders
of the Convertible Stock after the reorganization, merger, consolidation or sale
to the end that the provisions of this Section A.7 (including, without
limitation, provisions for adjustment of the applicable Conversion Price and the
number of shares purchasable upon conversion of the Convertible Stock)shall
thereafter be applicable, as nearly as may be, with respect to any shares of
stock, securities or assets to be deliverable thereafter upon the conversion of
the Convertible Stock.
(i) Certificate. Upon the occurrence of each adjustment or
readjustment pursuant to this Section A.7, the Corporation at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof. The Corporation shall, upon written request at any time of any holder of
Convertible Stock, prepare, furnish or cause to be furnished to such holder a
certificate setting forth: (i) such adjustment or readjustment, showing in
detail the facts upon which such adjustments or readjustment is based; (ii) the
Conversion Price before and after such adjustment or readjustment; 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 of such holder's shares of
Convertible Stock.
8. Covenants. So long as any shares of Convertible Stock shall be
outstanding, the Corporation shall not, without first having provided written
notice of such each holder of outstanding shares of Convertible Stock and having
obtained or written consent of the holders of not less than two-thirds of the
outstanding shares of Convertible Stock, voting as a single class,
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with each share of Convertible Stock entitling the holder thereof to one vote
per share of Convertible Stock held by such holder:
(a) amend, alter or repeal any provision of, or add any provision
to, Article IV of these Amended and Restated Articles of Incorporation, or
otherwise amend, alter or repeal any provision of, or add any provision to,
these Amended and Restated Articles of Incorporation or the Corporation's
by-laws, if such latter action would alter or change the preferences, rights,
privileges or powers of, or the restrictions provided for the benefit of, any of
the Convertible Stock;
(b) create, obligate itself to create, authorize or issue any new
class or classes of stock or new series of common stock or preferred stock or
any security convertible into or evidencing the right to purchase shares of any
new class or series of common stock or preferred stock or any new capital stock
of the Corporation having preference over or being on parity with the
Convertible Stock in any respect;
(c) declare or pay any dividends or apply any of its assets to
the redemption, retirement, purchase or other acquisition, directly or
indirectly, through subsidiaries or otherwise, except for (i) the redemption of
Convertible Stock or Redeemable Preferred Stock pursuant to and as provided in
these Amended and Restated Articles of Incorporation, and (ii) the redemption at
cost of shares of Common Stock from employees, officers or directors of, or
consultants, advisors or independent contractors to, the Corporation or any of
its subsidiaries pursuant to a stock option plan approved by the Board of
Directors or a committee thereof; or
(d) notwithstanding anything herein to the contrary, so long as
at least four million (4,000,000) shares of Convertible Stock (adjusted
appropriately for stock splits, stock dividends, recapitalizations and the like
with respect to the Convertible Stock) shall be outstanding, effect any: (i)
Liquidation Event; (ii) merger or consolidation of the Corporation with or into
another corporation (with respect to which less than a majority of the
outstanding voting power of the surviving or consolidated corporation is held by
persons who are shareholders of the Corporation immediately prior to such
event); (iii) sale or transfer of all or substantially all of the properties and
assets of the Corporation and its subsidiaries; or (iv) redemption or repurchase
of shares representing a majority of the voting power of the outstanding shares
of capital stock of the Corporation; but in all cases excluding: (x) a public
offering by the Corporation of shares of Common Stock or other securities; and
(y) any transaction pursuant to which the holders of Convertible Stock and
Redeemable Preferred Stock would receive in exchange for all shares of
Convertible Stock (including shares of Common Stock resulting from the
conversion of Convertible Stock) and Redeemable Preferred Stock then held by
them an aggregate amount equal to not less than $90 million with respect to,
such transaction that occurs before June 18, 2000, or, thereafter, an aggregate
amount equal to not less than $120 million; provided, however, that in each case
such aggregate amount thresholds shall be reduced by any amounts previously paid
by the Corporation pursuant to a redemption of any Convertible Stock or
Redeemable Preferred Stock.
Further, the Corporation shall not, by amendment of these Amended and
Restated Articles of Incorporation or through any Extraordinary Transaction or
other reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, agreement or any
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<PAGE> 15
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
shall at all times in good faith assist in the carrying out of all the
provisions of this Article IV and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the holders of the
Convertible Stock against impairment. Any successor to the Corporation shall
agree, as a condition to such succession, to carry out and observe the
obligations of the Corporation hereunder with respect to the Convertible Stock.
9. Notice.
(a) Liquidation Events, Extraordinary Transactions, Etc. In the
event (i) the Corporation establishes a record date to determine the holders of
any class of securities who are entitled to receive any dividend or other
distribution or who are entitled to vote at a meeting (or by written consent) in
connection with any of the transactions identified in clause (ii) hereof, or
(ii) any Liquidation Event (as defined in Section A.4), any Extraordinary
Transaction (as defined in Section A.4), any QPO (as defined in Section A.6) or
any other public offering becomes reasonably likely to occur, the Corporation
shall mail or cause to be mailed by first class mail (postage prepaid) to each
holder of Convertible Stock at least twenty (20) days prior to such record date
specified therein or the expected effective date of any such transaction,
whichever is earlier, a notice specifying (A) the date of such record date for
the purpose of such dividend or distribution or meeting or consent and a
description of such dividend or distribution or the action to be taken at such
meeting or by such consent, (B) the date on which any such Liquidation Event,
Extraordinary Transaction, QPO or other public offering is expected to become
effective, and (C) the date on which the books of the Corporation shall close or
a record shall be taken with respect to any such event.
(b) Waiver of Notice. The holder or holders of not less than
two-thirds of the outstanding shares of Convertible Stock may, at any time upon
written notice to the Corporation, waive any notice provisions specified herein
for the benefit of such holders, and any such waiver shall be binding upon all
holders of such securities.
(c) General. In the event that the Corporation provides any
notice, report or statement to any holder of Common Stock, the Corporation shall
at the same time provide a copy of any such notice, report or statement to each
holder of outstanding shares of Convertible Stock.
10. No Reissuance of Convertible Stock. No share or shares of
Convertible Stock acquired by the Corporation by reason of redemption, purchase,
conversion or otherwise shall be reissued, and all such shares shall be
canceled, retired and eliminated from the shares which the Corporation shall be
authorized to issue.
11. Contractual Rights of Holders. The various provisions set forth
herein for the benefit of the holders of the Convertible Stock shall be deemed
contract rights enforceable by them, including without limitation, one or more
actions for specific performance.
B. REDEEMABLE PREFERRED STOCK
1. Designation. A total of One Hundred Twelve (112) shares of the
Corporation's Preferred Stock shall be designated as a series known as
Redeemable Preferred Stock
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("Redeemable Preferred Stock"). All of the preferential amounts to be paid to
the holders of the Redeemable Preferred Stock as provided in this Section B
shall be paid or set apart for payment before the payment or setting apart for
payment of any amount for, or the distribution of any property of the
Corporation to, the holders of any other equity securities of the Corporation,
whether now or hereafter authorized.
2. Voting. The Redeemable Preferred Stock shall not be entitled to vote
on any matters except to the extent otherwise required under Delaware law.
3. Dividends. The holders of Redeemable Preferred Stock shall not be
entitled to receive dividends.
4. Liquidation; Extraordinary Transaction.
(a) Liquidation Preference. Upon any Liquidation Event, each
holder of outstanding shares of Redeemable Preferred Stock shall be entitled to
be paid out of the assets of the Corporation available for distribution to
shareholders, whether such assets are capital, surplus, or earnings, and before
any amount shall be paid or distributed to the holders of Common Stock or of any
other stock ranking on liquidation junior to the Redeemable Preferred Stock
(including the Convertible Stock), an amount in cash equal to $150,000 per share
of Redeemable Preferred Stock held by such holder (with no adjustment for any
stock split, stock dividend, recapitalization or the like with respect to any of
the Corporation's equity securities) (the "Redeemable Liquidation Preference
Amount").
(b) Extraordinary Transaction. An Extraordinary Transaction shall
be deemed a Liquidation Event. Upon the occurrence of an Extraordinary
Transaction, each of the holders of Redeemable Preferred Stock shall be entitled
to receive all amounts specified in Section B.4(a) hereof. All amounts due to
the holders of Redeemable Preferred Stock pursuant to Section B.4(a) above shall
be payable in cash or, at the election of the holders of not less than
two-thirds of the outstanding shares of Redeemable Preferred Stock, all amounts
due to the holders of Redeemable Preferred Stock pursuant to Section A.4(a)
above may be payable in the same form of consideration as is paid to the holders
of Common Stock. Any securities to be paid to the holders of Redeemable
Preferred Stock shall be valued as set forth in Section A.4(d).
5. Redemption.
(a) Redemption Events.
(i) Automatic. Immediately upon and as of, and in all
cases subject to, the closing of any offering by the Corporation of its capital
stock for sale to the public pursuant to an effective registration statement
under Section 5 of the Securities Act of 1933, as amended, the Corporation shall
redeem all (and not less than all) of the outstanding shares of Redeemable
Preferred Stock at the Redeemable Preferred Redemption Price specified in
Section B.5(a)(ii).
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(ii) On or after June 18, 2005.
(A) At any time on or after June 18, 2005, but
within ninety (90) days after the receipt by the Corporation of a written
request from the holders of not less than two-thirds of the then outstanding
Redeemable Preferred Stock that all or, if less than all, a specified percentage
of such holders shares of Redeemable Preferred Stock be redeemed and
concurrently with surrender by such holders of the certificates representing
such shares, the Corporation shall, to the extent it may lawfully do so, redeem
in three (3) annual installments (each payment date being referred to herein as
"Redemption Date") the shares specified in such request by paying in cash
therefor a sum equal to $150,000 per share of Redeemable Preferred Stock (the
"Redeemable Preferred Redemption Price"). The number of shares of Redeemable
Preferred Stock that the Corporation shall be required to redeem on any one
Redemption Date shall be equal to the amount determined by dividing (i) the
aggregate number of shares of Redeemable Preferred Stock outstanding immediately
prior to such Redemption Date that have been requested to be redeemed pursuant
to this Section B.5(a)(ii)(A) by (ii) the number of remaining Redemption Dates
(including the Redemption Date to which such calculation applies). Any
redemption of Redeemable Preferred Stock effected pursuant to this Section
B.5(a)(ii)(A) shall be made on a pro rata basis among the holders of the
Redeemable Preferred Stock in proportion to the number of shares of Redeemable
Preferred Stock proposed to be redeemed by such holders.
(B) At least fifteen (15) but no more than thirty
(30) days prior to each Redemption Date, written notice shall be mailed, first
class postage prepaid, to each holder of record (at the close of business on the
business day next preceding the day on which notice is given) of the Redeemable
Preferred Stock to be redeemed, at the address last shown on the records of the
Corporation for such holder, notifying such holder of the redemption to be
effected on the applicable Redemption Date, specifying the number of shares to
be redeemed from such holder, the Redemption Date, the Redeemable Preferred
Redemption Price, the place at which payment may be obtained and calling upon
such holder to surrender to the Corporation, in the manner and at the place
designated, the certificate or certificates representing the shares to be
redeemed (the "Redemption Notice"). Except as provided in Section B.5(a)(ii)(C),
on or after each Redemption Date, each holder of Redeemable Preferred Stock to
be redeemed on such Redemption Date shall surrender to the Corporation the
certificate or certificates representing such shares, in the manner and at the
place designated in the Redemption Notice, and thereupon the applicable
Redeemable Preferred Redemption Price of such shares shall be payable to the
order of the person whose name appears on such certificate or certificates as
the owner thereof and each surrendered certificate shall be cancelled. In the
event less than all the shares represented by any such certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares.
(C) From and after each Redemption Date, unless
there shall have been a default in payment of the Redeemable Preferred
Redemption Price, all rights of the holders of shares of Redeemable Preferred
Stock designated for redemption on such Redemption Date in the Redemption Notice
as holders of Redeemable Preferred Stock (except the right to receive the
applicable Redeemable Preferred Redemption Price without interest upon surrender
of their 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
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any purpose whatsoever. If the funds of the Corporation legally available for
redemption of shares of Redeemable Preferred Stock on a Redemption Date are
insufficient to redeem the total number of shares of Redeemable Preferred Stock
to be redeemed on such date, those funds that are legally available will be used
to redeem the maximum possible number of such shares ratably among the holders
of such shares to be redeemed such that each holder of a share of Redeemable
Preferred Stock receives the same percentage of the applicable Redeemable
Preferred Redemption Price. The shares of Redeemable Preferred Stock not
redeemed shall remain outstanding and entitled to all the rights and preferences
provided herein. At any time thereafter when additional funds of the Corporation
are legally available for the redemption of shares of Redeemable Preferred
Stock, such funds will immediately be used to redeem the balance of the shares
that the Corporation has become obliged to redeem on any Redemption Date but
that it has not redeemed.
(b) Purchase Date. At any time on or after June 18, 2005, upon
the election of the holders of not less than two-thirds of the outstanding
Redeemable Preferred Stock to cause the Corporation to redeem the Redeemable
Preferred Stock, each holder of Redeemable Preferred Stock shall be deemed to
have elected to cause the Redeemable Preferred Stock subject to such election to
be so redeemed. If at a Redemption Date shares of Convertible Stock are unable
to be redeemed (as contemplated by Section B.5(c) below) then holders of the
Redeemable Preferred Stock shall also be entitled to interest pursuant to
Section B.5(c). The aggregate Redeemable Preferred Redemption Price shall be
payable in cash in immediately available funds on the Redemption Date (subject
to Section B.5(c)). Until the aggregate Redeemable Preferred Redemption Price
has been paid in cash for all shares of Redeemable Preferred Stock being
redeemed or acquired: (A) no dividend whatsoever shall be paid or declared, and
no distribution shall be made, on any capital stock of the Corporation; and (B)
except as permitted in Section A.8(d) and B.8(d), no shares of capital stock of
the Corporation (other than Convertible Stock or the Redeemable Preferred Stock
in accordance with this Section B.5) shall be purchased, redeemed or acquired by
the Corporation and no monies shall be paid into or set aside or made available
for a sinking fund for the purchase, redemption or acquisition thereof.
(c) Redemption Prohibited. If, at a Redemption Date, the
Corporation is prohibited by law from redeeming all shares of Redeemable
Preferred Stock for which redemption is required hereunder, then it shall redeem
such shares on a pro-rata basis among the holders of Redeemable Preferred Stock
in proportion to the full respective redemption amounts to which they are
entitled hereunder to the extent possible and shall redeem the remaining shares
to be redeemed as soon as the Corporation is not prohibited by law from
redeeming some or all of such shares. Any shares of Redeemable Preferred Stock
not redeemed shall remain outstanding and entitled to all of the rights and
preferences provided in this Article IV. The Corporation shall take such
reasonable action as shall be necessary or appropriate to review and promptly
remove any impediment to its ability to redeem the Redeemable Preferred Stock
under the circumstances contemplated by this Section B.5(c). In the event that
the Corporation fails for any reason to redeem shares for which redemption is
required pursuant to this Section B.5, including, without limitation, due to a
prohibition of such redemption under law, then during the period from the
applicable Redemption Date through the date on which such shares are redeemed,
the Redeemable Preferred Redemption Price of such shares shall bear interest at
the
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rate equal to the lesser of twelve percent (12%) per annum and the maximum rate
permitted by law, with such interest to accrue daily in arrears and to be
compounded annually.
(d) Surrender of Certificates. Upon receipt of the applicable
Redeemable Preferred Redemption Price by certified check or wire transfer, each
holder of shares of Redeemable Preferred Stock to be redeemed shall surrender
the certificate or certificates representing such shares to the Corporation,
duly assigned or endorsed for transfer (or accompanied by duly executed stock
powers relating thereto), or shall deliver an Affidavit of Loss with respect to
such certificates at the principal executive office of the Corporation or the
office of the transfer agent for the Redeemable Preferred Stock or such office
or offices in the continental United States of an agent for redemption as may
from time to time be designated by notice to the holders of Redeemable Preferred
Stock, and each surrendered certificate shall be canceled and retired.
6. Covenants. So long as any shares of Redeemable Preferred Stock shall
be outstanding, the Corporation shall not, without first having provided written
notice of such proposed action to each holder of outstanding shares of
Redeemable Preferred Stock and having obtained the affirmative vote or written
consent of the holders of not less than two thirds of the outstanding shares of
Redeemable Preferred Stock, voting as a single class, with each share of
Redeemable Preferred Stock entitling the holder thereof to one vote per share of
Redeemable Preferred Stock held by such holder:
(a) amend, alter or repeal any provision of, or add any provision
to, Article IV of these Amended and Restated Articles of Incorporation, or
otherwise amend, alter or repeal any provision of, or add any provision to,
these Amended and Restated Articles of Incorporation or the Corporation's
by-laws if such latter action would alter or change the preferences, rights,
privileges or powers of, or the restrictions provided for the benefit of, any of
the Redeemable Preferred Stock;
(b) create, obligate itself to create, authorize or issue any new
class or classes of stock or new series of common stock or preferred stock or
any security convertible into or evidencing the right to purchase shares of any
new class or series of common stock or preferred stock or any new capital stock
of the Corporation having preference over or being on parity with the Redeemable
Preferred Stock in any respect; or
(c) declare or pay any dividends or apply any of its assets to
the redemption, retirement, purchase or other acquisition, directly or
indirectly, through subsidiaries or otherwise, except for (i) the redemption of
Convertible Stock or Redeemable Preferred Stock pursuant to and as provided in
these Amended and Restated Articles of Incorporation, and (ii) the redemption at
cost of shares of Common Stock from employees, officers or directors of, or
consultants, advisors or independent contractors to, the Corporation or any of
its subsidiaries pursuant to a stock option plan approved by the Board of
Directors or a committee thereof.
Further, the Corporation shall not, by amendment of these Amended and
Restated Articles of Incorporation or through any Extraordinary Transaction or
other reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities, agreement or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms
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to be observed or performed hereunder by the Corporation but shall at all times
in good faith assist in the carrying out of all the provisions of this Article
IV and in the taking of all such action as may be necessary or appropriate in
order to protect the rights of the holders of the Redeemable Preferred Stock
against impairment. Any successor to the Corporation shall agree, as a condition
to such succession, to carry out and observe the obligations of the Corporation
hereunder with respect to the Redeemable Preferred Stock.
7. Notices. In the event (i) the Corporation establishes a record date
to determine the holders of any class of securities who are entitled to receive
any dividend or other distribution 9 or who are entitled to vote at a meeting
(or by written consent)in connection with any of the transactions identified in
clause (ii) hereof, or (iii) any Liquidation Event (as defined in Section A.4),
any Extraordinary Transaction (as defined in Section A.5), any QPO (as defined
in Section A.6) or any other public offering becomes reasonably likely to occur,
the Corporation shall mail or cause to be mailed by first class mail (postage
prepaid) to each holder of Redeemable Preferred Stock at least twenty (20) days
prior to such record date specified therein or the expected effective date of
any such transaction, whichever is earlier, a notice specifying (A) the date of
such record date for the purpose of such dividend or distribution or meeting or
consent and a description of such dividend or distribution or the action to be
taken at such meeting or by such consent, (B) the date on which any such
Liquidation Event, Extraordinary Transaction, QPO or other public offering is
expected to become effective, and (C) the date on which the books of the
Corporation shall close or a record shall be taken with respect to any such
event.
In the event that the Corporation provides or is required to provide
notice to any holder of Convertible Stock and Common Stock in accordance with
the provisions of these Amended and Restated Articles of Incorporation
(including the provisions of Sections A.5(c)and A.9) and/or the Corporation's
by-laws, the Corporation shall at the same time provide a copy of any such
notice to each holder of outstanding shares of Redeemable Preferred Stock.
The holder or holders of not less than two-thirds of the outstanding
shares of Redeemable Preferred Stock may, at any time upon written notice to the
Corporation, waive any notice provisions specified herein for the benefit of
such holders, and any such waiver shall be binding upon all holders of such
securities.
8. No Reissuance of Redeemable Preferred Stock. No share or shares of
Redeemable Preferred Stock acquired by the Corporation by reason of redemption,
purchase, conversion, exchange or otherwise shall be reissued, and all such
shares shall be canceled, retired and eliminated from the shares which the
Corporation shall be authorized to issue.
9. Contractual Rights of Holders. The various provisions set forth
herein for the benefit of the holders of the Convertible Stock shall be deemed
contract rights enforceable by them, including without limitation, one or more
actions for specific performance.
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C. COMMON STOCK
1. Voting.
(a) Election of Directors. The holders of Common Stock voting as
a separate class shall be entitled to elect any directors not authorized to be
elected by the holders of Convertible Stock.
The holder of each share of Common Stock shall be entitled to one vote
for each such share as determined on the record date for the vote or consent of
shareholders. The holders of the Common Stock shall vote together with the
holders of the Convertible Stock as a single class upon any items submitted to a
vote of shareholders as long as any shares of Convertible Stock are outstanding,
except as otherwise provided herein or by law.
2. Dividends. The holders of Common Stock and Convertible Stock shall be
entitled to receive dividends out of funds legally available therefor on a pari
passu basis as if a single class at such times and in such amounts as the Board
of Directors may determine in its sole discretion, as contemplated by Section
A.3.
3. Liquidation. Upon any Liquidation Event, the holders of Common Stock
shall be entitled to share in the assets of the Corporation available for
distribution as set forth in Sections A.4(a) and B.4(a).
ARTICLE V
The following provisions are inserted for the management of the business
and the conduct of the affairs of the Corporation, and for further definition,
limitation and regulation of the powers of the Corporation and of its directors
and stockholders:
(a) The business and affairs of the Corporation shall be managed
by or under the direction of the Board of Directors. In addition to the powers
and authority expressly conferred upon them by statute or by this Certificate of
Incorporation or the Bylaws of the Corporation, the directors are hereby
empowered to exercise all such powers and do all such acts and things as may be
exercised or done by the Corporation.
(b) The directors of the Corporation need not be elected by
written ballot unless the Bylaws so provide.
(c) On and after the closing date of the first sale of the
Corporation's Common Stock pursuant to a firmly underwritten registered public
offering (the "IPO"), any action required or permitted to be taken by the
stockholders of the Corporation must be effected at a duly called annual or
special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders. Prior to such sale, unless
otherwise provided by law, any action which may otherwise be taken at any
meeting of the stockholders may be taken without a meeting and without prior
notice, if a written consent describing such actions is signed by the holders of
outstanding shares having not less than the minimum number of votes which would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted.
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(d) Special meetings of stockholders of the Corporation may be
called only (1) by the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or not there exist
any vacancies in previously authorized directorships at the time any such
resolution is presented to the Board for adoption) or (2) by the holders of not
less than ten percent (10%) of all of the shares entitled to cast votes at the
meeting.
ARTICLE VI
1. The number of directors shall initially be set at five (5) and,
thereafter, shall be fixed from time to time exclusively by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
authorized directors (whether or not there exist any vacancies in previously
authorized directorships at the time any such resolution is presented to the
Board for adoption). Upon the closing of the IPO, the directors shall be divided
into three classes with the term of office of the first class (Class I) to
expire at the first annual meeting of the stockholders following the IPO; the
term of office of the second class (Class II) to expire at the second annual
meeting of stockholders held following the IPO; the term of office of the third
class (Class III) to expire at the third annual meeting of stockholders; and
thereafter for each such term to expire at each third succeeding annual meeting
of stockholders after such election. Subject to the rights of the holders of any
series of Preferred Stock then outstanding, a vacancy resulting from the removal
of a director by the stockholders as provided in Article SIXTH, Section 3 below
may be filled at a special meeting of the stockholders held for that purpose.
All directors shall hold office until the expiration of the term for which
elected, and until their respective successors are elected, except in the case
of the death, resignation, or removal of any director.
2. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation or other cause (other than removal from office
by a vote of the stockholders) may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the next annual meeting of stockholders
at which the term of office of the class to which they have been elected
expires, and until their respective successors are elected, except in the case
of the death, resignation, or removal of any director. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.
3. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, any directors, or the entire Board of Directors, may be
removed from office at any time, with or without cause, but only by the
affirmative vote of the holders of at least a majority of the voting power of
all of the then outstanding shares of capital stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single
class. Vacancies in the Board of Directors resulting from such removal may be
filled by a majority of the directors then in office, though less than a quorum,
or by the stockholders as provided in Article SIXTH, Section 1 above. Directors
so chosen shall hold office for a term expiring at the next annual meeting of
stockholders at which the term of office of the class to which they have been
elected expires, and until their respective successors are elected, except in
the case of the death, resignation, or removal of any director.
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ARTICLE VII
The Board of Directors is expressly empowered to adopt, amend or repeal
Bylaws of the Corporation. Any adoption, amendment or repeal of Bylaws of the
Corporation by the Board of Directors shall require the approval of a majority
of the total number of authorized directors (whether or not there exist any
vacancies in previously authorized directorships at the time any resolution
providing for adoption, amendment or repeal is presented to the Board). The
stockholders shall also have power to adopt, amend or repeal the Bylaws of the
Corporation. Any adoption, amendment or repeal of Bylaws of the Corporation by
the stockholders shall require, in addition to any vote of the holders of any
class or series of stock of the Corporation required by law or by this
Certificate of Incorporation, the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66-2/3%) of the voting power of all of the
then outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class.
ARTICLE VIII
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, except for liability (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involved intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit.
If the Delaware General Corporation Law is hereafter amended to
authorize the further elimination or limitation of the liability of a director,
then the liability of a director of the Corporation shall be eliminated or
limited to the fullest extent permitted by the Delaware General Corporation Law,
as so amended.
Any repeal or modification of the foregoing provisions of this Article
EIGHTH by the stockholders of the Corporation shall not adversely affect any
right or protection of a director of the Corporation existing at the time of
such repeal or modification.
ARTICLE IX
The Corporation reserves the right to amend or repeal any provision
contained in this Certificate of Incorporation in the manner prescribed by the
laws of the State of Delaware and all rights conferred upon stockholders are
granted subject to this reservation; provided, however, that, notwithstanding
any other provision of this Certificate of Incorporation or any provision of law
which might otherwise permit a lesser vote or no vote, but in addition to any
vote of the holders of any class or series of the stock of this Corporation
required by law or by this Certificate of Incorporation, the affirmative vote of
the holders of at least 66-2/3% of the voting power of all of the then
outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to amend or repeal this Article NINTH, Article FIFTH, Article SIXTH,
Article SEVENTH or Article EIGHTH.
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IN WITNESS WHEREOF, the Corporation has caused this Restated Certificate
to be signed by a duly authorized officer on this ______ day of _______________,
2000.
WEBSIDESTORY, INC.
By:_____________________________________
Michael S. Christian, Secretary
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