EXHIBIT 10.3
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
Healthology, Inc.
* * * * *
Healthology, Inc., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
FIRST: The name of the corporation is Healthology, Inc. (the
"Corporation"). The original Certificate of Incorporation of the Corporation was
filed with the Secretary of State of the State of Delaware on February 28, 2000.
SECOND: This Amended and Restated Certificate of Incorporation (the
"Certificate") has been duly adopted in accordance with the provisions of
Sections 242 and 245 of the General Corporation Law of the State of Delaware
(the "GCL").
THIRD: This Amended and Restated Certificate of Incorporation restates,
integrates and amends the provisions of the Corporation's Certificate of
Incorporation, as follows:
ARTICLE I
The name of the corporation is Healthology, Inc.
ARTICLE II
The address of its registered office in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
ARTICLE III
The purpose of the Corporation is to engage in, carry on and conduct any
lawful act or activity for which corporations may be organized under the GCL.
ARTICLE IV
The Corporation is to have perpetual existence.
ARTICLE V
5.1 Classes of Stock. The aggregate number of shares of capital stock which
the Corporation shall have authority to issue is forty-five million
(45,000,000), consisting of (a) fifteen million (15,000,000) shares of preferred
stock, par value $.01 per share (the "Preferred Stock"), including three million
five hundred thousand (3,500,000) shares designated "Series A Convertible Voting
Preferred Stock" (the "Series A Preferred Stock") and six million two hundred
twenty five thousand (6,225,000) shares designated "Series B Convertible Voting
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Preferred Stock" (the "Series B Preferred Stock," and together with the Series A
Preferred Stock, the "Series A and B Preferred Stock") and (b) thirty million
(30,000,000) shares of common stock, par value $.01 per share (the "Common
Stock").
5.2 Additional Series of Preferred Stock.
(a) Subject to approval by holders of shares of any class or series of
Preferred Stock to the extent such approval is required by its terms, the
Board of Directors of the Corporation (the "Board of Directors") is hereby
expressly authorized, by resolution or resolutions, to provide, out of the
unissued shares of Preferred Stock, for series of Preferred Stock in
addition to the Series A and Series B Preferred Stock and each additional
series of Preferred Stock shall have such voting powers, if any,
preferences and relative, participating, optional and other special rights
and such qualifications, limitations and restrictions thereon, if any, as
may be provided in the resolution of the Board of Directors providing for
the issue of such additional Preferred Stock.
(b) The powers, preferences and relative, participating optional and
other special rights of each series of Preferred Stock, and the
qualifications, limitations or restrictions thereof, if any, may differ
from those of any and all other series at any time outstanding. All shares
of any one series of Preferred Stock shall be identical in all respects
with all other shares of such series, except that shares of any one series
issued at different times may differ as to the dates from which dividends
thereon shall be cumulative.
(c) Shares of Preferred Stock of any series that have been redeemed
(whether through the operation of a sinking fund or otherwise) or that, if
convertible or exchangeable, have been converted into or exchanged for any
other security shall have the status of authorized and unissued shares of
Preferred Stock of the same series and may be reissued as a part of the
series of which they were originally a part or may be reclassified and
reissued as part of a new series of shares of Preferred Stock to be created
by resolution or resolutions of the Board of Directors or as part of any
other series of shares of Preferred Stock, all subject to the conditions or
restrictions on issuance set forth in the resolution or resolutions adopted
by the Board of Directors providing for the issue of any series of shares
of Preferred Stock.
ARTICLE VI
6.1 Powers, Preferences and Rights of the Series A and B Preferred Stock.
The powers, preferences and rights of the Series A and B Preferred Stock and the
qualifications, limitations and restrictions thereof are as follows:
(a) Ranking. The Series A Preferred Stock and the Series B Preferred
Stock shall, with respect to dividend rights and rights on liquidation,
dissolution or winding up, be pari passu, and the Series A and B Preferred
Stock shall rank senior to all other capital stock of the Corporation.
(b) Dividends. The holders of record of shares of the Series A and B
Preferred Stock shall be entitled to receive dividends, when, as and if
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declared by the Board of Directors, out of funds legally available
therefore. Dividends on the Series A and B Preferred Stock will be
non-cumulative. No dividend shall be paid on the Common Stock or any other
series of the Corporation's Preferred Stock at a rate greater than the rate
at which the dividends are paid on the Series A and B Preferred Stock
(based on the number of shares of Common Stock into which the Series A and
B Preferred Stock are convertible on the date the dividend is declared) and
the Series A and B Preferred Stock shall be entitled to participate in any
such dividends (on the same basis). Dividends paid on the Series A and B
Preferred Stock are in preference to dividends paid on the Common Stock and
any other stock ranking junior to the Series A and B Preferred Stock as to
dividends.
(c) Liquidation Preference. (1) If: (i) the Corporation or a
third-party acquiror consummates a transaction or series of transactions in
which more than 50% of the voting power of the Corporation is disposed of
to a single person or group of affiliated persons; (ii) the Corporation
consolidates or merges with or into any other corporation or entity in a
transaction in which the Corporation is not the surviving company unless
such merger is solely for purposes of reincorporation; (iii) the
Corporation sells all or substantially all of its assets to a third party;
or (iv) a voluntary or involuntary liquidation, dissolution or winding-up
of the Corporation occurs (each of such events, a "Liquidation"), then the
holders of the Series A Preferred Stock and the Series B Preferred Stock,
at their option, will be entitled to receive in preference to the holders
of Common Stock or any other stock ranking junior to the Series A and B
Preferred Stock as to rights upon liquidation an amount (the "Liquidation
Preference") equal to $1.00 per share (subject to adjustment for the events
specified in Section 6.1(e)(4-6), below) plus any dividends declared and
unpaid on the Series A Preferred Stock and the Series B Preferred Stock,
respectively, to that date; provided, that if upon any Liquidation, the
holders of the outstanding shares of Series A Preferred Stock or Series B
Preferred Stock would receive more than the amount paid pursuant to this
Section in the event their shares were converted into Common Stock
immediately prior to such Liquidation and such shares of Common Stock
received a liquidating distribution or distributions from the Corporation,
then each holder of Series A Stock or Series B Preferred Stock shall
receive as a distribution from the Corporation in connection with such
Liquidation an amount equal to the amount that would be paid if such
holder's shares of Series A Preferred Stock or Series B Preferred Stock
were converted into Common Stock immediately prior to such Liquidation.
After setting apart or paying in full the Liquidation Preference, the
remaining assets (whether stated capital or surplus), if any, and all
consideration received by the Corporation in excess of the Liquidation
Preference, shall be distributed to the holders of record of the issued and
outstanding shares of Common Stock. If upon any Liquidation of the
Corporation, whether voluntary or involuntary, the assets to be distributed
among the holders of the Series A and B Preferred Stock shall be
insufficient to permit payment in full to the holders of the Series A and B
Preferred Stock of the Liquidation Preference, then the entire assets of
the Corporation shall be distributed ratably among such holders in
proportion to the full respective distributive amounts to which they are
entitled. Written notice of a Liquidation, stating a payment date, the
estimated amount of the Liquidation Preference, and the place where said
amounts shall be payable shall be given by mail not less than ten (10) days
prior to the payment date stated therein, to each holder of record of
Series A and B Preferred Stock at its address as shown by the records of
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the Corporation. Notwithstanding the foregoing, however, the failure of the
Corporation to give such notice, or any defect therein, shall not affect
the legality or validity of any dividend, distribution or other action or
event. Shares of Series A and B Preferred Stock shall not be entitled to be
converted into shares of Common Stock in order to participate in any
distribution, or series of distributions, as shares of Common Stock,
without first forgoing participation in the distribution, or series of
distributions, as shares of Series A Preferred Stock or Series B Preferred
Stock.
(2) In the case of a Liquidation pursuant to Section 6.1(c)(1), if the
consideration received by the Corporation is other than cash, its value
will be deemed its fair market value as mutually determined by the good
faith of the Board of Directors of the Corporation and the holders of at
least a majority of all then outstanding shares of Series A and B Preferred
Stock (exclusive of any holder who either directly or through any affiliate
is a principal party to any of the transactions set forth in subclauses
(c)(1)(i),(ii) or (iii) above of this Section 6.1). If the Board of
Directors and such holders of at least a majority of all then outstanding
shares of Series A and B Preferred Stock are unable to reach an agreement
to determine the fair market value of the Series A and B Preferred Stock,
then the fair market value will be determined by an appraiser of recognized
standing selected by such holders of the Series A and B Preferred Stock and
the Board of Directors or, if they cannot agree on an appraiser within ten
(10) days, each shall select an appraiser of recognized standing and the
two appraisers shall designate a third appraiser of recognized standing,
whose appraisal shall be determinative of such value. The cost of such
appraisal shall be shared equally by the holders of the Series A and B
Preferred Stock and the Corporation.
(d) Conversion. The holders of the Series A and B Preferred Stock
shall have the following conversion rights:
(1) Optional Conversion. Each share of Series A and B Preferred
Stock shall be convertible at any time, at the option of the holder of
record thereof, into fully paid and nonassessable shares of Common
Stock at the "Conversion Rate" (as defined in Section 6.1(d)(3) below)
then in effect upon surrender to the Corporation or its transfer agent
of the certificate or certificates representing the shares of Series A
Preferred Stock or Series B Preferred Stock to be converted, as
provided below, or if the holder notifies the Corporation or its
transfer agent that such certificate or certificates have been lost,
stolen or destroyed, upon the execution and delivery of an agreement
satisfactory to the Corporation to indemnify the Corporation from any
losses incurred by it in connection therewith (without requiring the
posting of any security).
(2) Mandatory Conversion. Each share of Series A and B Preferred
Stock shall automatically be converted into fully paid and
nonassessable shares of Common Stock at the Conversion Rate then in
effect upon the consummation by the Corporation of a public offering
of its Common Stock pursuant to a firm commitment underwriting and an
effective registration under the Securities Act of 1933, as amended,
in which the Corporation receives gross proceeds of at least
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$20,000,000 (before the deduction of underwriters' commissions and
expenses) and the Corporation has a post-initial public offering
valuation, on a pro forma basis, of at least $80,000,000 (a "Qualified
Public Offering"). Upon the consummation of a Qualified Public
Offering, the outstanding shares of Series A and B Preferred Stock
shall be converted automatically without any further action by the
holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its
transfer agent; provided, however, that the Corporation shall not be
obligated to issue certificates evidencing the shares of Common Stock
issuable upon such conversion unless certificates evidencing such
shares of the Series A and B Preferred Stock being converted are
delivered to the Corporation or its transfer agent, as provided below,
or the holder notifies the Corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation
from any losses incurred by it in connection therewith (without
requiring the posting of any security).
(3) Basis For Conversion; Converted Shares. The basis for any
conversion under this Section shall be the "Conversion Rate" in effect
at the time of conversion, which for the purposes hereof shall mean
the number of shares of Common Stock issuable with respect to each
share of Series A Preferred Stock or Series B Preferred Stock to be
converted under this Section. Initially, the Conversion Rate shall be
1:1, i.e., one share of Common Stock for each share of Series A
Preferred Stock or Series B Preferred Stock being converted. Such
Conversion Rate shall be subject to adjustment as provided below. As
used herein, the term "Conversion Price" initially shall be $1.00, but
shall be subject to adjustment as provided herein. If any fractional
interest in a share of Common Stock would be deliverable upon
conversion of Series A Preferred Stock or Series B Preferred Stock,
the Corporation shall pay in lieu of such fractional share a cash
amount equal to the Conversion Price of such fractional share
(computed to the nearest one hundredth of a share) in effect at the
close of business on the date of conversion. Any shares of Series A
Preferred Stock or Series B Preferred Stock which have been converted
shall be canceled and the certificates representing such shares so
converted shall represent the right to receive (x) such number of
shares of Common Stock into which such shares of Series A Preferred
Stock or Series B Preferred Stock are convertible, plus (y) cash
payable for any fractional share plus (z) all accrued but unpaid
dividends relating to such shares. Upon the conversion of any shares
of Series A Preferred Stock or Series B Preferred Stock as provided in
this Section 6.1, the Corporation shall promptly pay all then declared
and accrued but unpaid dividends to the holder of the stock being
converted, if any. The Board of Directors of the Corporation shall at
all times reserve a sufficient number of authorized but unissued
shares of Common Stock to be issued in satisfaction of the conversion
rights and privileges aforesaid.
(4) Mechanics of Conversion. Before any holder of shares of
Series B Preferred Stock or Series A 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, or
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deliver an appropriate indemnity agreement (without requiring the
posting of any security) at the office of the Corporation or its
transfer agent and in the case of a conversion pursuant to Section
6.1(d)(1) above, shall give written notice to the Corporation 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 Series
A Preferred Stock or Series B 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
(together with a check payable to such holder or nominee in the amount
of any cash amounts payable as a result of a conversion into
fractional shares of Common Stock and all accrued but unpaid
dividends) as aforesaid. A certificate or certificates will be issued
for the remaining shares of Series A Preferred Stock or Series B
Preferred Stock in any case in which fewer than all of the shares of
Series A Preferred Stock or Series B Preferred Stock represented by a
certificate are converted. Any 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 Series A Preferred Stock or Series B
Preferred Stock to be converted, as the case may be, or in the case of
automatic conversion, upon consummation of a Qualified Public
Offering, and the person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder or holders of such shares of Common
Stock on such date.
(e) Adjustment of Conversion Price and Conversion Rate. The number and kind
of securities issuable upon the conversion of the Series A and B Preferred
Stock, the Conversion Price and the Conversion Rate shall be subject to
adjustment from time to time in accordance with the following provisions:
(1) Certain Definitions. For purposes of this Section 6.1:
(A) The term "Additional Shares of Common Stock" shall mean all shares
of Common Stock issued, or deemed to be issued by the Corporation pursuant
to Section 6.1(e)(7) below, after the Original Issue Date (as defined
below) except shares of Common Stock issuable upon conversion of the Series
A Preferred Stock and/or the Series B Preferred Stock now or hereafter
issued by the Corporation and shares issuable pursuant to the exercise of
options or warrants outstanding on the Original Issue Date.
(B) The term "Common Stock" shall be deemed to mean the common stock,
par value $.01 per share, of the Corporation and the stock of the
Corporation of any class, or series within a class, whether now or
hereafter authorized, which has the right to participate in the
distribution of either earnings or assets of the Corporation without limit
as to the amount.
(C) The term "Convertible Securities" shall mean any evidence of
indebtedness, shares or other securities convertible into or exchangeable
for Common Stock, including the Series A and B Preferred Stock.
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(D) The term "Options" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Common Stock or Convertible
Securities except options issued pursuant to any employee stock plan issued
prior to the Original Issue Date.
(E) The term "Original Issue Date" shall mean, with respect to the
Series A Preferred Stock, the date of the initial issuance of the Series A
Preferred Stock, and with respect to the Series B Preferred Stock, the date
of the initial issuance of the Series B Preferred Stock.
(2) Reorganization; Share Exchange; Reclassification. In the event of
a reorganization, share exchange, or reclassification, other than a change
in par value, or from par value to no par value, or from no par value to
par value or a transaction described in Section 6.1(e)(3-4) below, each
share of Series A and B Preferred Stock shall, after such reorganization,
share exchange or reclassification, be convertible into the kind and number
of shares of stock or other securities or other property of the Corporation
which the holder of Series A Preferred Stock or B Preferred Stock would
have been entitled to receive if the holder had held the Common Stock
issuable upon conversion of such share of Series A Preferred Stock or
Series B Preferred Stock immediately prior to such reorganization, share
exchange, or reclassification.
(3) Merger; Consolidation. If (i) the Corporation consolidates or
merges into or with any other corporation or corporations or any other
entity or entities (excluding any merger or consolidation in which the
Corporation is the surviving corporation and which does not result in any
change in the Common Stock), (ii) in a single transaction or a series of
related transactions, the Corporation sells or transfers all or
substantially all its assets, or (iii) the Corporation engages in any
capital reorganization or any reclassification of the stock of the
Corporation (other than as a result of stock dividends, subdivisions,
split-up or combination of shares), each share of Series A and B Preferred
Stock shall, after such merger, consolidation, reorganization,
reclassification or transaction(s), be convertible into the kind and number
of shares of stock and/or other securities, cash or other property which
the holder of such share of Series A Preferred Stock or Series B Preferred
Stock would have been entitled to receive if the holder had held the Common
Stock issuable upon conversion of such share of Series A Preferred Stock or
Series B Preferred Stock immediately prior to such merger or consolidation.
(4) Subdivision or Combination of Shares. In case outstanding shares
of Common Stock shall be subdivided, the Conversion Price shall be
appropriately reduced as of the effective date of such subdivision so that
the number of shares of Common Stock issuable upon conversion of any shares
of Series A Preferred Stock or Series B Preferred Stock shall be increased
in proportion to such increase of outstanding shares. In case outstanding
shares of Common Stock shall be combined, the Conversion Price shall be
appropriately increased as of the effective date of such combination so
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that the number of shares of Common Stock issuable upon conversion of any
shares of Series A Preferred Stock or Series B Preferred Stock shall be
decreased in proportion to such decrease of outstanding shares.
(5) Stock Dividends. In case shares of Common Stock are issued as a
dividend or other distribution on the Common Stock, then the Conversion
Price shall be adjusted, as of the earliest of the date of such
declaration, payment or other distribution, to that price determined by
multiplying the Conversion Price in effect immediately prior to such
declaration, payment or other distribution by a fraction (i) the numerator
of which shall be the number of shares of Common Stock outstanding
immediately prior to the payment of such dividend or other distribution,
and (ii) the denominator of which shall be the total number of shares of
Common Stock outstanding immediately after the payment of such dividend or
other distribution. In the event that the Corporation shall declare or pay
any dividend on the Common Stock payable in any right to acquire Common
Stock for no consideration, then the Corporation shall be deemed to have
made a dividend payable in Common Stock on an amount of shares equal to the
maximum number of shares issuable upon exercise of such rights to acquire
Common Stock.
(6) Issuance of Additional Shares of Common Stock. If the Corporation
shall issue any Additional Shares of Common Stock (including Additional
Shares of Common Stock deemed to be issued pursuant to Section 6.1 (e)(7)
below), for no consideration or for a consideration per share less than the
Conversion Price in effect on the date of and immediately prior to such
issue, then in such event, the Conversion Price shall be reduced,
concurrently with such issue, to a Conversion Price equal to the quotient
obtained by dividing:
(A) an amount equal to the total number of shares of Common Stock
outstanding immediately prior to such issuance or sale plus the number of
shares of Common Stock that the aggregate consideration, if any, received
or deemed to be received by the Corporation upon such issuance or sale
would purchase at the Conversion Price prior to such dilutive issuance,
multiplied by the Conversion Price in effect immediately prior to such
issuance or sale, by
(B) the total number of shares of Common Stock outstanding immediately
after such issuance or sale.
For purposes of these formulas, all shares of Common Stock issuable upon the
exercise of outstanding Options or issuable upon the conversion (at the
Conversion Price in effect immediately before such determinations) of the Series
A and B Preferred Stock or outstanding Convertible Securities (including
Convertible Securities issued upon the exercise of outstanding Options), shall
be deemed outstanding shares of Common Stock.
(7) Deemed Issue of Additional Shares of Common Stock. In the event
the Corporation at any time or from time to time after the Original Issue
Date shall issue any Options or Convertible Securities, then the maximum
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number of shares of Common Stock issuable upon the exercise of such
Options, or, in the case of Convertible Securities and Options therefor,
the conversion or exchange of such Convertible Securities, shall be deemed
to be Additional Shares of Common Stock issued as of the time of such issue
of Options or Convertible Securities or, in case such a record date shall
have been fixed, as of the close of business on such record date, provided
that in any such case in which Additional Shares of Common stock are deemed
to be issued:
(A) no further adjustments in the Conversion Price shall be made upon
the subsequent issue of Convertible Securities or shares of Common Stock
upon the exercise of such Options or the issue of Common Stock upon the
conversion or exchange of such Convertible Securities on the original terms
therefor; and
(B) if such Options or Convertible Securities by their terms provide,
with the passage of time or otherwise, for any decrease in the
consideration payable to the Corporation, or increase in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, the Conversion Price computed upon the original issuance of such
Options or Convertible Securities (or upon the occurrence of a record date
with respect thereto), and any subsequent adjustments based thereon, upon
any such decrease or increase becoming effective, shall be recomputed to
reflect such decrease or increase if it would result in a reduction of the
Conversion Price (provided, however, that no such adjustment of the
Conversion Price shall affect Common Stock previously issued upon
conversion of the Series A Preferred Stock or the Series B Preferred
Stock).
(8) Determination of Consideration. For purposes of this Section 6,
the consideration received by the Corporation for the issue of any
Additional Shares of Common Stock shall be computed as follows:
(A) Cash and Property. Such consideration shall:
(i) insofar as it consists of cash, be the aggregate amount of
cash received by the Corporation (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 or sale thereof); and
(ii) insofar as it consists of property other than cash, be
computed at the fair value thereof at the time of the issue, as
determined in accordance with the procedures set forth in Section
6.1(c)(2).
(B) Options and Convertible Securities. The consideration per share
received by the Corporation for Additional Shares of Common Stock deemed to
have been issued pursuant to Section 6.1(e)(7) above, relating to Options
and Convertible Securities, shall be the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto)
payable to the Corporation upon the exercise of such Options or the
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conversion or exchange of such Convertible Securities including any amounts
received or receivable by the Corporation as consideration for the issue of
such Options or Convertible Securities or receivable on the exercise of
Options for Convertible Securities; provided that if in the case of Options
or Convertible Securities the minimum aggregate amount of additional
consideration cannot be ascertained, but is a function of anti-dilution or
similar protective clauses, the Corporation shall be deemed to have
received the minimum amounts of consideration without reference to such
clauses.
(9) Adjustment of Conversion Rate. Upon each adjustment of the
Conversion Price under the provisions of this Section, the Conversion Rate
shall be adjusted to an amount determined by dividing $1.00 by such
adjusted Conversion Price.
(10) Other Provisions Applicable to Adjustment Under this Section. The
following provisions will be applicable to the adjustments in Conversion
Price and Conversion Rate as provided in this Section:
(A) Treasury Shares. The number of shares of Common Stock at any time
outstanding shall not include any shares thereof then directly or
indirectly owned or held by or for the account of the Corporation. For
purposes of this Section, the sale or other disposition of any Common Stock
of the Corporation theretofore held in its treasury shall, unless otherwise
set forth herein, be deemed to be an issuance thereof.
(B) Other Action Affecting Common Stock. In case the Corporation shall
take any action affecting the outstanding number of shares of Common Stock
other than an action described in any of the foregoing Sections 6.1(e)(2-7)
hereof, inclusive, which would have an inequitable or dilutive effect on
the holders of Series A Preferred Stock or Series B Preferred Stock, the
Conversion Price shall be adjusted in such manner and at such time as the
Board of Directors of the Corporation on the advice of the Corporation's
independent public accountants may in good faith determine to be equitable
in the circumstances.
(11) Notices of Adjustments. Whenever the Conversion Rate and
Conversion Price is adjusted as herein provided, an officer of the
Corporation shall compute the adjusted Conversion Rate and Conversion Price
in accordance with the foregoing provisions and shall prepare a written
certificate setting forth such adjusted Conversion Rate and Conversion
Price and showing in detail the facts upon which such adjustment is based,
and such written instrument shall promptly be delivered to the record
holders of the Series A and B Preferred Stock.
(12) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but
unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A and B Preferred Stock, such number
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of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A and B 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 Series A and B Preferred Stock, in addition to such
other remedies as shall be available to the holder of such Series A and B
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 the Certificate of Incorporation.
(f) Put. (1) If fraud is committed by or on behalf of the Corporation in
connection with that certain Series A Preferred Sock Purchase Agreement (the
"Series A Stock Purchase Agreement"), between the Corporation and Le@p
Technology, Inc. ("Leap") (formerly known as SEAL Holdings Corporation) or the
Affiliated Agreements (as defined in the Series A Stock Purchase Agreement), as
amended, or if the Corporation fails to perform in any material respect its
obligations under the Series A Stock Purchase Agreement or the Affiliated
Agreements, as amended, to provide information or to provide pre-emptive,
tag-along or registration rights (the "Series A Rights") in accordance with the
terms of the Series A Stock Purchase Agreement and the Affiliated Agreements, as
amended, and such failure remains uncured twenty (20) days after written notice
from a holder of the Series A Preferred Stock entitled to such Series A Rights
by virtue of such agreements, then a holder of the Series A Preferred Stock may
put (the "Series A Put") its Series A Preferred Stock (or any Common Stock
acquired upon conversion thereof) to the Corporation at a price equal to the
greater of (i) the original purchase price plus any dividends declared and
unpaid or (ii) the fair market value of the Series A Preferred Stock (or any
Common Stock acquired upon conversion thereof) on the date of the Series A Put.
This right is in addition to any other remedy at law or in equity available to a
holder of the Series A Preferred Stock.
(2) If fraud is committed by or on behalf of the Corporation in connection
with that certain Series B Preferred Sock Purchase Agreement (the "Series B
Stock Purchase Agreement"), between the Corporation and Communicade, Inc.
("Communicade") or the Affiliated Agreements (as defined in the Series B Stock
Purchase Agreement) or if the Corporation fails to perform in any material
respect its obligations under the Series B Stock Purchase Agreement or the
Affiliated Agreements to provide information or to provide pre-emptive,
tag-along or registration rights (the "Series B Rights") in accordance with the
terms of the Series B Stock Purchase Agreement and the Affiliated Agreements,
and such failure remains uncured twenty (20) days after written notice from a
holder of the Series B Preferred Stock entitled to such Series B Rights, then a
holder of the Series B Preferred Stock may put (the "Series B Put") its Series B
Preferred Stock (or any Common Stock acquired upon conversion thereof) to the
Corporation at a price equal to the greater of (i) the original purchase price
plus any dividends declared and unpaid or (ii) the fair market value of the
Series B Preferred Stock (or any Common Stock acquired upon conversion thereof)
on the date of the Series B Put. This right is in addition to any other remedy
at law or in equity available to a holder of the Series B Preferred Stock.
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(3) If either the Series A Preferred Stock or the Series B Preferred (or
any Common Stock acquired upon conversion thereof) are publicly traded, the
value of the shares shall be the average closing price of such shares during the
previous five (5) trading days prior to the Series A Put or Series B Put
(collectively, a "Put"), as the case may be. If there is no public market for
the shares, the fair market value of such shares will be valued by an appraiser
of recognized standing selected by the holders of a majority of the issued and
outstanding Series A Preferred Stock or Series B Preferred Stock, as the case
may be, and the Corporation or, if they cannot agree on an appraiser within ten
(10) days, each shall select an appraiser of recognized standing and the two
appraisers shall designate a third appraiser of recognized standing, whose
appraisal shall be determinative of such value. The cost of such appraisal shall
be shared equally by the holders of Series A Preferred Stock or Series B
Preferred Stock, as the case may be, who have elected to exercise a Put, and the
Corporation. If the time for the closing of the Series A Put or Series B Put, as
the case may be, has expired but for the determination of the value of the
purchase price, then such closing shall be held on or prior to the fifth (5)
business day after such valuation shall have been made pursuant to this
subsection.
(g) Notices of Record Dates and Effective Dates. In case (i) the
Corporation shall declare a dividend (or any other distribution) on the Common
Stock payable otherwise than in shares of Common Stock; (ii) the Corporation
shall authorize the granting to the holders of Common Stock of rights to
subscribe for or purchase any shares of capital stock of any class or any other
rights; (iii) of any reorganization, share exchange or reclassification of the
capital stock of the Corporation, or of any consolidation or merger to which the
Corporation is party or of the sale, lease or exchange of all or substantially
all of the property of the Corporation; or, (iv) of the voluntary or involuntary
dissolution, liquidation or winding up of the Corporation, then the Corporation
shall cause to be mailed to the record holders of the Series A and B Preferred
Stock at least ten (10) days prior to the applicable record date or effective
date hereinafter specified, a notice stating the date on which a record is to be
taken for the purpose of such dividend, distribution or rights, or, if a record
is not to be taken, the date as of which the holders of record of Common Stock
to be entitled to such dividend, distribution or rights are to be determined or
the date on which such dividend, distribution, granting of rights,
reclassification, reorganization, share exchange, consolidation, merger, sale,
lease, exchange, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of record of
Common Stock shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such dividend, distribution,
granting of rights, reclassification, reorganization share exchange,
consolidation, liquidation, merger, sale, lease, exchange, dissolution,
liquidation or winding up.
(h) No Impairment. The Corporation will not, through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or modify or seek to
avoid or modify 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 hereof and in the taking
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of all such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of Series A and B Preferred Stock against
impairment.
(i) Voting Rights. The holders of the Series A and B Preferred Stock shall
be entitled to notice of any stockholder's meeting. In addition to any special
voting rights provided by applicable law or by contract (including, without
limitation, that certain First Amended and Restated Investor Rights Agreement
among the Corporation, Leap and Communicade (the "Investor Rights Agreement")),
the holders of shares of Series A and B Preferred Stock shall be entitled to
vote upon all matters upon which holders of the Common Stock have the right to
vote, and shall be entitled to the number of votes equal to the number of full
shares of Common Stock into which such shares of Series A Preferred Stock or
Series B Preferred Stock, respectively, could be converted pursuant to the
provisions of Section 6.1(d) hereof, at the record date for the determination of
the stockholders entitled to vote on such matters, or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited, such votes to be counted together with all other
shares of capital stock having general voting powers and not separately as a
class. Notwithstanding the foregoing, on all matters that shall come before the
stockholders of the Corporation for a vote, Communicade shall only be entitled
to vote, in its discretion, its Series B Preferred Stock (on an as-converted
basis) in an amount of up to 19% of the total issued and outstanding voting
securities of the Corporation.
(j) Protective Provisions. In addition to any other class vote that may be
required by law or this Certificate, or any other rights provided by law, so
long as any shares of Series A and B Preferred Stock are outstanding, the
approval (by vote or written consent, as provided by law) of the holders of at
least 66 2/3% of the Shares (as defined in the Investor Rights Agreement),
voting together as a class, will be required to approve:
(1) the authorization or issuance of any senior or parity security,
including without limitation additional shares of the Series A Preferred or
the Series B Preferred;
(2) the purchase, redemption or retirement of any parity or junior
security (except as contemplated by the Put (as defined below));
(3) the declaration or payment of dividends (other than stock
dividends) on any junior security;
(4) any amendment of the Certificate of Incorporation or Bylaws of the
Corporation that adversely affects the rights, preferences, privileges or
limitations of the Series A Preferred Stock or the Series B Preferred
Stock;
(5) the entry by the Corporation into any Sale Transaction (as defined
below), and
(6) any issuance of employee stock options exercisable for the
Corporation's capital stock that would result in outstanding employee stock
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options in excess of 20% of the Corporation's fully diluted equity
(calculated as of the Original Issue Date of the Series B Preferred Stock).
A "Sale Transaction" means either: (i) the Corporation or a third-party
acquiror consummates a transaction or series of transactions in which more than
50% of the voting power of the Corporation is disposed of to a single person or
group of affiliated persons; (ii) the Corporation consolidates or merges into
any other corporation or corporations in a transaction in which the Corporation
is not the surviving company; (iii) the Corporation sells all or substantially
all of its assets to a third party; or (iv) a liquidation, dissolution or
winding-up of the Corporation occurs. Notwithstanding the forgoing, the
Corporation will be permitted to enter into a Sale Transaction without the
approval of the holders of the Series A and B Preferred Stock if (i) the holders
of the Series A and B Preferred Stock receive in respect of such Sale
Transaction cash consideration (or liquid securities) equal to at least three
times the original purchase price of the Series A and B Preferred Stock (as
applicable) (plus all dividends declared and unpaid thereon), (ii) the sale is
not made to a "Competitor" of Communicade and (iii) the purchase price in the
Sale Transaction is not less than fair market value, as determined in accordance
with the appraisal procedures set forth in Section 2.1(f) of the Investors
Rights Agreement among the Corporation, Leap and Communicade. A "Competitor"
means (i) any advertising agency holding company or (ii) any advertising agency.
For purposes of the foregoing vote requirement, either Leap or Communicade
may vote Shares which are owned by any other holder of Shares pursuant to any
proxy, voting agreement or similar agreement.
(k) Series A Protections. In addition to any other vote that may be
required by law or this Certificate, or any other rights provided by law,
so long as any shares of Series A Preferred Stock are outstanding, the
Corporation shall not, without the approval (by vote or written consent, as
provided by law) of a majority of the holders of the Series A Preferred
Stock:
(1) alter or change the rights, preferences, privileges or
restrictions provided for the benefit of the Series A Preferred Stock
(whether or not such rights, preferences, privileges or restrictions
are also shared with any other series or class of stock); or
(2) enter into any contract, commitment or other agreement or
understanding which would restrict or prohibit any holder of Series A
Preferred Stock from exercising any of its respective rights under any
agreement(s) with the Corporation.
(l) Series B Protections. In addition to any other vote that may be
required by law or this Certificate, or any other rights provided by law,
so long as any shares of Series B Preferred Stock are outstanding, the
Corporation shall not, without the approval (by vote or written consent, as
provided by law) of a majority of the holders of the Series B Preferred
Stock:
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(1) alter or change the rights, preferences, privileges or
restrictions provided for the benefit of the Series B Preferred Stock
(whether or not such rights, preferences, privileges or restrictions
are also shared with any other series or class of stock); or
(2) enter into any contract, commitment or other agreement or
understanding which would restrict or prohibit any holder of Series B
Preferred Stock from exercising any of its respective rights under any
agreement(s) with the Corporation.
(m) Redemption. The Series A and B Preferred Stock are not redeemable
(except as contemplated by the Put).
6.2 Common Stock. Except as otherwise provided herein, all shares of Common
Stock issued and outstanding shall be identical, and shall entitle the holders
thereof to the same rights, powers and privileges of stockholders under the
DGCL. Each share of common stock shall entitle the holder thereof to one vote on
each matter submitted to a vote of the stockholders of the Corporation.
ARTICLE VII
The Corporation reserves the right to amend, alter, change or repeal any
provision contained in this Amended and Restated Certificate of Incorporation,
in the manner now or hereafter prescribed by statute, and all rights conferred
upon stockholders herein are granted subject to this reservation.
ARTICLE VIII
(a) The Corporation shall indemnify, to the fullest extent permitted
by the DGCL and as provided in the By-laws of the Corporation, any and all
persons whom it shall have the power to indemnify from and against any and
all expenses, liabilities and other matters.
(b) 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 involve intentional misconduct
or a knowing violation of law, (iii) under Section 174 of Title 8 of the
DGCL, or (iv) for any transaction from which the director derived any
improper personal benefit. If the DGCL is amended to authorize corporate
action further eliminating or limiting the personal liability of directors,
then the liability of directors of the Corporation shall be eliminated or
limited to the fullest extent permitted by the DGCL, as so amended. No
amendment or repeal of this Article 8 shall apply to or have any affect on
the liability or alleged liability of any director of the Corporation for
or with respect to any acts or omissions of such director occurring at the
time of or prior to such amendment or repeal.
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ARTICLE IX
Whenever a compromise or arrangement is proposed between the Corporation
and its creditors or any class of them and/or between the Corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the
Corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the provisions of
Section 291 of Title 8 of the DGCL or on the application of trustees in
dissolution of any receiver or receivers appointed for the Corporation under the
provisions of Section 279 of Title 8 of the DGCL order a meeting of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of the Corporation, as the case may be, and also on the
Corporation.
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IN WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation
has been signed by the President and attested to by the Secretary of
Healthology, Inc. as of the 21st day of July, 2000.
By: /s/ Steven M. Haimowitz, MD
-------------------------------------
Steven M. Haimowitz, MD
President and Chief Executive Officer
Attest:
By: /s/ Matthew Caleb
-----------------------
Matthew Caleb
Secretary
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