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AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
DOUBLETWIST, INC.
The undersigned, John Couch and Gregory C. Thayer, hereby certify that:
A. They are the duly elected and acting President and Secretary,
respectively, of DoubleTwist, Inc., a Delaware corporation.
B. The name of the Corporation has always been DoubleTwist, Inc.
The original Certificate of Incorporation was filed with the Secretary of State
of the State of Delaware on March 16, 2000.
C. Pursuant to Sections 242 and 245 of the General Corporation
Law of the State of Delaware, this Restated Certificate of Incorporation
restates and amends the provisions of the Certificate of Incorporation of the
Corporation.
D. The text of the Certificate of Incorporation is hereby amended
and restated in its entirety to read as follows:
ARTICLE I
The name of this corporation is DoubleTwist, Inc.
ARTICLE II
The address of the corporation's registered office in the State of
Delaware is The Corporation Trust Company, 1209 Orange Street, in the City of
Wilmington, County of New Castle, Zip Code 19801.
ARTICLE III
The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the Delaware
Corporations Code.
ARTICLE IV
This corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock," and "Preferred Stock". The total
number of shares of Common Stock this corporation shall have authority to issue
is 100,000,000, at $0.01 par value, and the total number of shares of Preferred
Stock this corporation shall have authority to issue is 71,447,329, at $0.01 par
value. The Preferred Stock may be issued
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from time to time in one or more series. 4,887,500 shares of Preferred Stock
shall be designated Series Al Preferred Stock (the "SERIES A1 PREFERRED");
256,834 shares of Preferred Stock shall be designated Series A Preferred Stock
(the "SERIES A Preferred"); 6,208,552 shares of Preferred Stock shall be
designated Series B Preferred Stock (the "SERIES B Preferred"); 28,094,443
shares of Preferred Stock shall be designated Series C Preferred Stock (the
"SERIES C Preferred"), 26,750,000 shares of Preferred Stock shall be designated
Series D Preferred Stock (the "SERIES D Preferred") and 5,250,000 share of
Preferred Stock shall be designated Series E Preferred Stock (the "SERIES E
PREFERRED").
ARTICLE V
The rights, preferences, privileges and restrictions granted to or
imposed upon the Common Stock and the Preferred Stock are as follows:
1. DIVIDENDS
1.1 The holders of the Series E Preferred, Series D
Preferred, Series C Preferred and Series B Preferred shall be entitled to
receive on a PARI PASSU basis, when, as and if declared by the Board of
Directors, dividends out of any assets legally available therefor, prior and in
preference to any declaration or payment of any dividend (payable other than in
Common Stock or other securities and rights convertible into or entitling a
holder thereof to receive, directly or indirectly, additional shares of Common
Stock of this corporation) on the Series A Preferred, Series A1 Preferred and
Common Stock of this corporation at the rate of $0.2241, $0.1505, $0.056 and
$0.16 per share, respectively, per annum. All dividends declared by the Board of
Directors payable on the Series E Preferred, Series D Preferred, Series C
Preferred and Series B Preferred shall not be cumulative, and no right shall
accrue to the holders of the Series E Preferred, Series D Preferred, Series C
Preferred and Series B Preferred by reason of the fact that dividends on such
shares are not declared in any prior period.
1.2 After payment to the holders of the Series E
Preferred, Series D Preferred, Series C Preferred and Series B Preferred of the
full amounts described above, the holders of the Series A Preferred shall be
entitled to receive, when, as and if declared by the Board of Directors,
dividends out of any assets legally available therefor, prior and in preference
to any declaration or payment of any dividend (payable other than in Common
Stock or other securities and rights convertible into or entitling a holder
thereof to receive, directly or indirectly, additional share of Common Stock of
this corporation) on the Series Al Preferred and Common Stock of this
corporation at the rate of $0.15 per share, per annum. All dividends payable on
the Series A Preferred shall not be cumulative, and no right shall accrue to the
holders of the Series A Preferred by reason of the fact that dividends on such
shares are not declared in any prior period.
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2. LIQUIDATION PREFERENCE. In the event of any liquidation
dissolution or winding up of the corporation, either voluntary or involuntary,
distributions to the stockholders of the corporation shall be made in the
following manner:
2.1 The holders of the Series E Preferred, Series D
Preferred, Series C Preferred and Series B Preferred shall be entitled to
receive prior and in preference to any distribution of any of the remaining
assets or surplus funds of the corporation to the holders of the Series A
Preferred, Series Al Preferred or Common Stock of the corporation, an amount
equal to $2.241, $1.505, $0.70 and $1.6105 per share (subject to adjustment),
respectively, plus an additional amount equal to any dividends declared but
unpaid on such shares for each share of the Series E Preferred, Series D
Preferred, Series C Preferred and Series B Preferred then held (respectively,
the "SERIES E PREFERENCE," "SERIES D PREFERENCE," the "SERIES C PREFERENCES" and
the "SERIES B PREFERENCE"). If the remaining assets and funds thus distributed
are insufficient to permit the payment of the full Series E Preference, Series D
Preference, Series C Preference and Series B Preference, then the entire
remaining assets and funds of the corporation legally available for distribution
shall be distributed to the holders of the Series E Preferred, Series D
Preferred, Series C Preferred and Series B Preferred in proportion to the full
preferential amount such holder is otherwise entitled to receive.
2.2 After payment or setting apart of payment of the
Series E Preference, Series D Preference, the Series C Preference and the Series
B Preference, the holders of the Series A Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the remaining
assets or surplus funds of the corporation to the holders of the Series Al
Preferred and Common Stock of the corporation, the amount of $1.50 per share
plus an additional amount equal to all declared but unpaid dividends on the
Series A Preferred (the "SERIES A PREFERENCE"). If the remaining assets and
funds thus distributed are insufficient to permit the payment of the full Series
A Preference, then the entire remaining assets and funds of the corporation
legally available for distribution shall be distributed ratably among the
holders of the Series A Preferred.
2.3 After payment or setting apart of payment of the
Series E Preference, Series D Preference, Series C Preference, the Series B
Preference and the Series A Preference, the holders of the Series Al Preferred
shall be entitled to receive, prior and in preference to any distribution of any
of the remaining assets or surplus funds of the corporation to the holders of
Common Stock of the corporation, the amount of $1.6105 per share (the "SERIES A1
PREFERENCE"). If the remaining assets and funds thus distributed are
insufficient to permit the payment of the full Series Al Preference, then the
entire remaining assets and funds of the corporation legally available for
distribution shall be distributed ratably among the holders of the Series Al
Preferred.
2.4 After payment or setting apart of payment of the
Series E Preference, Series D Preference, the Series C Preference, the Series B
Preference, the Series A Preference and the Series Al Preference, the remaining
assets of the corporation
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available for distribution to stockholders shall be distributed pro rata among
the holders of Common Stock
2.5 LIQUIDATION.
(i) Upon the written election of the
holders of a majority of the then outstanding shares of Preferred Stock, any
consolidation or merger of the corporation into or with any other entity or
entities (other than a merger to reincorporate the corporation in a different
jurisdiction) or the sale of all or substantially all the corporation's assets;
and (ii) any liquidation, dissolution or winding up of the corporation, whether
voluntary or involuntary, shall be deemed to be a liquidation, dissolution or
winding up of the corporation within the meaning of this Section 2 and the
holders shall be entitled to distributions as provided herein, provided that in
the event of a liquidation pursuant to (i) above that the holders of Preferred
Stock and Common Stock shall be paid in cash or in securities received or in a
combination thereof (which combination shall be in the same proportions as the
received in the transaction). Any securities to be delivered to the holders of
the Preferred Stock and Common Stock upon a merger, reorganization or sale of
substantially all of the assets of the corporation shall be valued as follows:
(a) Securities not subject to investment letter
or other similar restrictions on free marketability:
(i) If traded on a securities exchange
or the NASDAQ Stock Market, the value shall be deemed to be the average of the
closing prices of the securities on such exchange over the 30-day period ending
three (3) days prior to the closing;
(ii) If actively traded
over-the-counter, the value shall be deemed to be the average of the closing bid
prices over the 30-day period ending three (3) days prior to the closing; and
(iii) If there is no active public market
the value shall be the fair market value thereof, as determined, in good faith
by the board of directors of this corporation.
(b) The method of valuation of securities
subject to investment letter or other restrictions on free marketability shall
be to make an appropriate discount from the market value determined as above in
Section 2.5(a)(i), (ii) or (iii) to reflect the approximate fair market value
thereof, as determined in good faith by the board of directors of this
corporation.
Notwithstanding the foregoing, in the event of an Election Event (as
defined below), upon the written election of the holders of a majority of the
then outstanding
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shares of any Series of Preferred Stock (an "ELECTING SERIES"), the holders of
all outstanding shares of the Electing Series shall be entitled to receive in
cash from the corporation, out of funds legally available for distribution,
their respective liquidation preference(s), as set forth in Sections 2.1, 2.2
and 2.3 above. Upon receipt of the cash consideration described in the previous
sentence by the holders of shares of the Electing Series, which cash
consideration shall be delivered by the corporation as, soon as reasonably
practicable following the election, the outstanding shares of the Electing
Series shall be deemed cancelled. The following shall constitute an ELECTION
EVENT: (i) the issuance or sale, in any transaction or series of related
transactions, to any person (as defined by Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder) of
shares of Common Stock (or securities convertible into or exercisable or
exchangeable for share of Common Stock) by the corporation or any holders
thereof representing a majority of the outstanding shares of Common Stock (after
giving effect to the conversion of all shares of Preferred Stock); and (ii) the
lease, transfer or other disposition (which does not constitute a sale) by the
corporation of all or substantially all its assets, EXCLUDING (A) the grant of a
security interest to a bank by the corporation in all or substantially all of
its assets pursuant to a bona fide financing arrangement approved by the
majority of the Board of Directors of the corporation and (B) the grant of a
non-exclusive license of any form of intangible property approved by the
corporation's Board of Directors.
2.6 In the event the of requirements of this Section 2
are not complied with, the corporation shall forthwith either:
(a) cause such closing to be postponed until such time as
the of this Section 2 have been complied with, or
(b) cancel such transaction, in which event the rights,
preferences, privileges and restrictions of the holders of the Preferred Stock
shall revert to and be the same as such rights, preferences, privileges and
restrictions existing immediately prior to the date of the first notice referred
to in Section 2.7 hereof.
2.7 The corporation shall give each holder of record of
Preferred Stock written notice of such a Section 2.5 transaction not later than
twenty (20) days prior to the stockholders' meeting called to approve such
transaction, or twenty (20) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction and the provisions of
Section 2.5, and the corporation shall thereafter give such holders prompt
notice of any material changes. The transaction shall in no event take place
sooner than twenty (20) days after the corporation has given notice of any
material changes provided for herein; PROVIDED, HOWEVER, that such periods may
be shortened upon the written consent of the holders of a majority of the shares
of Preferred Stock then outstanding.
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3. VOTING RIGHTS.
3.1 GENERAL. Except as otherwise required by law or
herein, the holder of each share of Common Stock issued and outstanding shall
have one vote and the holder of each share of Preferred Stock issued and
outstanding shall be entitled to the number of votes equal to the number of
shares of Common Stock into which such share of Preferred Stock could be
converted at the record date for 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 share of the corporation having
general voting power and not separately as a class. Fractional votes by the
holders of Preferred Stock shall not, however, be permitted and any fractional
voting rights shall (after aggregating all shares into which all shares of
Preferred Stock held by each holder could be converted) be rounded to the
nearest whole number (with one-half rounded up to one).
3.2 ELECTION OF DIRECTORS. One member of the
corporation's board of directors shall be elected by the holders of Series D
Preferred, voting as a separate class. Two members of the corporation's board
of directors shall be elected by the holders of the Series C Preferred voting
as a separate class. Two members of the corporation's board of directors
shall be elected by the holders of the Series B Preferred, voting as a
separate class. Any remaining members of the corporation's board of directors
shall be elected by the holders of the Common Stock and the Preferred Stock,
voting together as a single class.
Any director who was elected by a specified series, class or classes of
shares may be removed during his or her term of office, either for or without
cause by, and only by, the affirmative vote of a majority of the holders of the
share of the series, class or classes of shares which initially elected such
director. Such vote may be given at a special meeting of such stockholders duly
called or by an action by written consent for that purpose.
Vacancies in the board of directors may be filled by a majority of the
remaining directors originally elected by the same series, class or classes of
shares who could elect an individual to fill such vacancy on the board of
directors, even if less than a quorum of the board of directors, except that a
vacancy created by the removal of a director by court order may be filled by
only the vote of a majority of the outstanding shares entitled to vote thereon
represented at a duly held meeting at which a quorum is present, or by unanimous
written consent of all shares entitled to vote thereon. Each director so elected
shall hold office until the next annual meeting of stockholders and until a
successor has been elected and qualified.
The stockholders entitled to vote upon the election of directors may
elect a director or directors at any time to fill any vacancy or vacancies not
filled by the directors.
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4. CONVERSION RIGHTS. The outstanding shares of Preferred Stock shall
be convertible into Common Stock as follows:
4.1 OPTIONAL CONVERSION.
(a) At the option of the holder thereof, each
share of Preferred Stock shall be convertible, at any time or from time to time
prior to the close of business on the business day before any date fixed for
redemption for such share, into fully-paid and nonassessable shares of Common
Stock as provided herein.
(b) Each holder of Preferred Stock who elects to
convert the same into shares of Common Stock shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the corporation or any
transfer agent for the Preferred Stock or Common Stock, and shall give written
notice to the corporation at such office that such holder elects to convert the
same and shall state therein the number of shares of Preferred Stock being
converted. Thereupon the corporation shall promptly issue and deliver at such
office to such holder a certificate or certificates for the number of shares of
Common Stock to which such holder is entitled upon such conversion and a
certificate or certificates representing those shares of Preferred Stock not
converted. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the certificate or
certificates representing the shares of Preferred Stock to be converted, and the
person entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder of such shares
of Common Stock on such date.
4.2 AUTOMATIC CONVERSION.
(a) Each share of Preferred Stock shall
automatically be converted into fully-paid and nonassessable shares of Common
Stock, as provided herein, (i) immediately prior to the closing of a firm
commitment underwritten public offering pursuant to an effective registration
statement filed under the Securities Act of 1933, as amended, covering the offer
and sale of Common Stock for the account of the corporation in which the
aggregate public offering shall (before deduction of underwriters' discounts and
commissions) equals or exceeds $15 million and the public offering price per
share of which equals or exceeds $3.00 per share (adjusted for my subsequent
stock splits, stock dividends, reclassifications or recapitalizations) or (ii)
on the date upon which the corporation obtains the consent of the holders of at
least sixty-six and two-thirds percent (66 2/3 %) of the shares of Preferred
Stock then outstanding voting as a single class.
(b) Upon the occurrence of any event specified
in subparagraph 4.2(a) above, the outstanding shares of Preferred Stock shall be
converted into Common Stock automatically without the need for any further
action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the
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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 the certificates evidencing such shares of
Preferred Stock are either delivered to the corporation or its transfer agent as
provided below, or the holder notifies the corporation or its transfer agent
that such certificates have been lost, stolen or destroyed and executes an
agreement reasonably satisfactory to the corporation to indemnify the
corporation from any loss incurred by it in connection with such certificates.
Upon the occurrence of such automatic conversion of the Preferred Stock, the
holders of Preferred Stock shall surrender the certificates representing such
shares at the office of the corporation or any transfer agent for the Preferred
Stock or Common Stock. Thereupon, there shall be issued and delivered to such
holder promptly at such office and in its name as shown on such surrendered
certificate or certificates, a certificate or certificates for the number of
shares of Common Stock into which the shares of Preferred Stock surrendered were
convertible on the date on which such automatic conversion occurred.
4.3 CONVERSION PRICE. "Original Issue Price" shall mean
$1.50 per share for the Series A Preferred, $1.6105 per share for the Series Al
Preferred, $1.6105 per share for the Series B Preferred, $0.70 per share for the
Series C Preferred, $1.505 per share for the Series D Preferred and $2.241 per
share for the Series E Preferred. Each share of Preferred Stock shall be
convertible in accordance with Section 4.1 or Section 4.2 above into the number
of shares of Common Stock which results from dividing the original Issue Price
for such series of Preferred Stock by the conversion price for such series of
Preferred Stock that is in effect at the time of conversion (the "Conversion
Price"). The initial Conversion Price for the Series A Preferred, the Series Al
Preferred, the Series B Preferred, the Series C Preferred, the Series D
Preferred and the Series E Preferred shall be $1.50, $1.6105, $1.6105, $0.70,
$1.505 and $2.241, respectively. The Conversion Price of each series of
Preferred Stock shall be subject to adjustment from time to time as provided
below.
4.4 ADJUSTMENT OF CONVERSION PRICE.
(a) If the corporation shall issue any Common
Stock, options, convertible securities (including but not limited to Preferred
Stock), warrants, convertible debt or other rights to subscribe, purchase or
otherwise acquire any Common Stock or security convertible into Common Stock,
directly or indirectly other than Excluded Stock (as defined below) ("ADDITIONAL
STOCK"), for a consideration per share less than the Conversion Price of any
series of Preferred Stock in effect immediately prior to the issuance of such
Additional Stock (excluding stock dividends, subdivisions, split-ups,
combinations, dividends or recapitalizations which are covered by Sections
4.4(c), (d), (e) and (f)), the applicable Conversion Price for such series in
effect immediately after each such issuance shall forthwith (except as provided
in this Section 4.4) be adjusted to a price equal to the quotient obtained by
dividing (X) an amount equal to the sum of (i)
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the total number of shares of Common Stock outstanding (including any shares of
Common Stock issuable upon conversion of the Preferred Stock, any shares
issuable upon exercise of outstanding options and warrants and any shares
reserved for issuance under any plans approved by the corporation's board of
directors) prior to such issuance multiplied by the applicable Conversion Price
in effect immediately prior to such issuance plus (ii) the consideration
received by the corporation upon such issuance by (Y) the total number of shares
of Common Stock outstanding (including any shares of Common Stock issuable upon
conversion of the Preferred Stock, any shares issuable upon exercise of
outstanding options and warrants and any shares reserved for issuance under any
plans approved by the corporation's board of directors) immediately prior to
such issuance plus the additional shares of Common Stock issued or issuable in
such issuance (but not including any additional shares of Common Stock deemed to
be issued as a result of any adjustment in the applicable Conversion Price
resulting from such issuance).
For purposes of any adjustment of a Conversion Price pursuant
to this clause (a), the following provisions shall be applicable:
(i) In the case of the issuance of
Common Stock for cash, the consideration shall be deemed to be the amount of
cash paid therefor after deducting any discounts or commissions paid or incurred
by the corporation in connection with the issuance and sale thereof.
(ii) In the case of the issuance of
Common Stock for consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair market value
thereof as determined in good faith by the board of directors of the
corporation; PROVIDED, HOWEVER, that if at the time of such determination such
corporation's Common Stock is traded in the over-the-counter, on a quotation
system market or on a national or regional securities exchange, such fair market
value as determined in good faith by the board of directors of the corporation
shall not exceed the aggregate "Current Market Price" (as defined below) of the
shares of Common Stock being issued.
(iii) In the case of the issuance of (1)
options to purchase or rights convertible to subscribe for Common Stock (other
than Excluded Stock), (2) securities by their terms convertible into or
exchangeable for Common Stock (other than Excluded Stock) or (3) options to
purchase or rights to subscribe or such convertible or exchangeable securities:
1) the aggregate maximum number of
control dog shares of Common Stock deliverable upon exercise of such options to
purchase or rights to subscribe for Common Stock shall be deemed to have been
owed at the time such options or rights were issued and for a consideration
equal to the consideration (determined in the manner provided in subdivisions
(i) and (ii) above), if any, received by the corporation
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upon the issuance of such options or rights plus the minimum purchase price
provided in such options or rights for the Common Stock covered thereby;
2) the aggregate maximum number of
shares of Common Stock deliverable upon conversion of or in exchange for any
such convertible or exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options or rights were
issued and for a consideration equal to the consideration received by the
corporation for any such securities and related options or rights (excluding any
cash received on account of accrued interest or accrued dividends), plus the
minimum additional consideration, if any, to be received by the corporation upon
the conversion or exchange of such securities or the exercise of any related
options or rights (the consideration in each can to be determined in the manner
provided in subdivisions (i) and (ii) above);
3) on any change in the number of
shares of Common Stock deliverable upon exercise of any such options or rights
or conversion of or exchange for such convertible or exchangeable securities, or
on any change in the minimum purchase price of such options, rights or
securities other than a change resulting from the antidilution provisions of
such options, rights or securities, the Conversion Price shall forthwith be
readjusted to such Conversion Price as would have obtained had the adjustment
made upon (x) the issuance of such options, rights or securities not exercised,
converted or exchanged prior to such change, as the case may be, been made upon
the basis of such change or (y) the options or rights related to such securities
not converted or exchanged prior to such change, as the case may be, been made
upon the basis of such change; and
4) on the expiration of any such
options or rights, the termination of any such rights to convert or exchange or
the expiration of any options or rights related to such convertible or
exchangeable securities, the Conversion Price shall forthwith be readjusted to
such Conversion Price as would have obtained had the adjustment made upon the
issuance of such options, rights, convertible or exchangeable securities or
options or rights related to such convertible or exchangeable securities, as the
case may be, been made upon the basis of the issuance of only the number of
shares of Common Stock actually issued upon the exercise of such options or
rights, upon the conversion or exchange of such convertible or securities or
upon the exercise of the options or rights related to such convertible or
exchangeable securities, as the case may be.
(b) "EXCLUDED STOCK" shall mean:
(i) all shares of the Series C
Preferred, Series D Preferred, and Series E Preferred;
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(ii) all shares of Common Stock into
which the shares of the Series A Preferred, Series Al Preferred, Series B
Preferred, Series C Preferred, Series D Preferred and Series E Preferred are
convertible;
(iii) all warrants to purchase shares of
the corporation's Common Stock or Preferred Stock outstanding on July 6th, 2000
and the shares issuable upon exercise of such warrants;
(iv) all shares of Common Stock,
warrants or options to purchase Common Stock or other securities issued to
employees, officers, directors, scientific advisors and consultants of the
corporation pursuant to any plan or arrangement approved by the board of
directors of the corporation;
(v) all securities issuable to lending
or leasing institutions pursuant to any plan or arrangement approved by the
board of directors of the corporation; and
(vi) all securities issued or issuable
to licensors or corporate partners of the corporation upon approval of the board
of directors of the corporation, if in transactions with primarily non-financing
purposes.
(c) 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 of each series of Preferred Stock shall be
appropriately decreased so that the number of shares of Common Stock issuable on
conversion of any of each series of Preferred Stock shall be increased in
proportion to such increase of outstanding shares.
(d) If the number of shares of Common Stock
outstanding at any time after the date hereof is decreased by a combination of
the outstanding shares of Common Stock, then, on the effective date of such
combination, the Conversion Price of each series of Preferred Stock shall be
appropriately increased so that the number of shares of Common Stock issuable on
conversion of any shares of each series of Preferred Stock shall be decreased in
proportion to such decrease in outstanding shares.
(e) In case the corporation shall declare a cash
dividend upon its Common Stock payable otherwise than out of retained earnings
or shall distribute to holders of its Common Stock share of its capital stock
(other than Common Stock), stock or other securities of other persons, evidences
of indebtedness issued by the corporation or other pawns, assets (excluding cash
dividends) or options or rights (excluding options to purchase and rights to
subscribe for Common Stock or other securities of the corporation convertible
into or exchangeable for Common Stock), then, in each such case, the holders of
each series of Preferred Stock shall, concurrent with the distribution
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to holders of Common Stock, receive a like distribution based upon the number of
shares of Common Stock into which such series of Preferred Stock is convertible.
(f) In case, at any time after the date hereof,
of any capital reorganization, or any reclassification of the stock of the
corporation (other than as a result of a stock dividend or subdivision, split-up
or combination of shares), or the consolidation or merger of the corporation
with or into another person or entity (other than a consolidation or merger in
which the corporation is the continuing entity and which does not result in any
change in the Common Stock or a consolidation or merger where Section 2
applies), the shares of each series of Preferred Stock shall, after such
reorganization, reclassification, consolidation, merger, sale or other
disposition be convertible into the kind and number of shares of stock or other
securities or property of the corporation or otherwise to which such holder
would have been entitled if immediately prior to such reorganization,
reclassification, consolidation, merger, sale or other disposition he had
converted his shares of Preferred Stock into Common Stock. The provisions of
this clause (f) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales or other dispositions.
(g) All calculations under this Section 4 shall
be made to the nearest tenth of a cent or to the nearest one one-hundredth
(1/100) of a share, as the case may be.
(h) The "CURRENT MARKET PRICE" at any date of
one share of Common Stock shall be the closing price of such share on the
preceding business day as reported in THE WALL STREET JOURNAL (or equivalent
recognized source of quotations); PROVIDED, HOWEVER, if the Common Stock is not
traded in such manner that the quotations referred to in this paragraph are
available for the period required hereunder, Current Market Price shall be
determined in good faith by the board of directors of the corporation, provided
further that if such shares of Common Stock are "restricted" or have other
restrictions, the Current Market Price should be appropriately decreased.
4.5 MINIMAL ADJUSTMENTS. No adjustment in the Conversion
Price need be made if such adjustment would result in a change in the Conversion
Price of less than $0.001. Any adjustment of less than $0.001 which is not made
shall be carried forward and shall be made at the time of and together with any
subsequent adjustment which, on a cumulative basis, amounts to an adjustment of
$0.001 or more in the Conversion Price.
4.6 FRACTIONAL SHARES. No fractional shares of Common
Stock shall be issued upon any conversion of Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
corporation shall pay the holder cash equal to the product of such fraction
multiplied by the Common Stock's fair market value as determined in good faith
by the board of directors as of the date of conversion.
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4.7 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
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Preferred Stock against impairment.
This provision shall not restrict the corporation's right to amend its
Certificate of Incorporation with the requisite stockholder consent.
4.8 CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to this Section
4, the corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the term hereof and prepare and furnish to each
holder of Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The corporation shall, upon written request at any time
of any holder of Preferred Stock, furnish or cause to be furnished to such
holder a like certificate setting forth (i) such adjustments and readjustments,
(ii) the Conversion Price at the time in effect and (iii) the number of shares
of Common Stock and the amount, if any, of other property which at the time
would be received upon the conversion of Preferred Stock.
4.9 NOTICES OF RECORD DATE. In the event of any taking by
the corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any share of stock of any class or
any other securities or property or to receive any other right, the corporation
shall mail to each holder of Preferred Stock at least twenty (20) days prior to
such record date, a notice specifying the date on which any such record is to be
taken for the purpose of such dividend or distribution or right, and the amount
and character of such dividend, distribution or right.
4.10 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 Preferred 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 the Preferred Stock, and if at any time the number
of authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of the Preferred Stock, the
corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purpose.
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4.11 NOTICES. Any notice required by the provisions of
this Section 4 to be given to the holder of shares of the Preferred Stock shall
be deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at his address appearing on the books of the
corporation.
4.12 STATUS OF CONVERTED PREFERRED STOCK. In case any
shares of Preferred Stock shall be converted pursuant to this Section 4, the
shares so converted shall be canceled and shall not be issuable by the
corporation.
5. PREFERRED STOCK PROTECTIVE PROVISIONS.
So long as any shares of Preferred Stock (excluding Series Al
Preferred) are outstanding this corporation shall not without first obtaining
the approval (by vote or written consent, as provided by law) of the holders of
at least a majority of the then outstanding shares of Preferred Stock (excluding
Series Al Preferred):
(a) change the rights, preferences, privileges
or restrictions of the Preferred Stock;
(b) create a new class or series of shares, or
increase the number of authorized shares of any class or series of shares,
having rights, preferences or privileges prior to or on parity with the
Preferred Stock;
(c) amend the Certificate of Incorporation or
Bylaws of the corporation such that the authorized number of directors, the
authorized number of shares, or the rights, preferences or privileges of the
Preferred Stock is changed;
(d) repurchase shares of Common Stock or Series
Al Preferred except from employees, officers, directors or consultants upon
termination of the employment or consulting relationship;
(e) sell, convey or otherwise dispose of all or
substantially all of the corporation's property or business, or merge into or
effect a reorganization with any other corporation or effect any transfer or
series of related transfers in which the stockholders of the corporation
immediately prior to the transaction possess less than 50% of the voting power
of the surviving entity (or its parent) immediately after the transaction; or
(f) undergo a reclassification or
recapitalization of any capital stock of the corporation.
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6. RESIDUAL RIGHTS. All rights accruing to the outstanding shares
of the corporation not expressly provided for to the contrary herein shall be
vested with the Common Stock.
ARTICLE VI
The following is applicable to the Common Stock:
1. DIVIDEND RIGHTS. Subject to the prior rights of holders of all
classes of stock at the time outstanding having prior rights as to dividends,
the holders of the Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of any assets of the corporation shall
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.
2. LIQUIDATION RIGHTS. Upon the liquidation, dissolution or
winding up of the corporation, the assets of the corporation shall be
distributed as provided in Section 2 of Article VI hereof.
3. REDEMPTION. The Common Stock is not redeemable.
4. VOTING RIGHTS. The holder of each share of Common Stock shall
have the right to one vote, and shall be entitled to notice of any stockholders'
meeting in accordance with the Bylaws of the corporation, and shall be entitled
to vote upon such matters and in such manner as may be provided by law.
ARTICLE VII
The corporation is to have perpetual existence.
ARTICLE VIII
In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, alter, amend or
repeal the Bylaws of the Corporation.
ARTICLE IX
The election of directors need not be by written ballot unless the
Bylaws of the corporation shall so provide.
ARTICLE X
To the fullest extent permitted by the Delaware General Corporation Law
as the same exists or as may hereafter be amended, a director of the corporation
shall not be personally liable to the corporation or its stockholders for
monetary damages for breach
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of fiduciary duty as a director. The corporation shall indemnify to the fullest
extent permitted by the law, any person made or threatened to be made a party,
to any action or proceeding, whether criminal, civil, administrative or
investigative, by reason of the fact that he or she, or his or her testator or
intestate, is or was a director or officer of the corporation or any predecessor
of the corporation, or saves or served at any other enterprise as a director or
officer at the request of the corporation or any predecessor to the corporation.
Neither any amendment nor repeal of this Article, nor the adoption of any
provision of this Certificate of Incorporation inconsistent with this Article,
shall eliminate or reduce the effect of this Article in respect of any matter
occurring, or any cause of action, suit or claim that, but for this Article,
would accrue or arise, prior to such amendment, repeal or adoption of an
inconsistent provision.
ARTICLE XI
The corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE XII
The name and mailing address of the incorporator are:
Jilliane K. Bjorkholm
650 Page Mill Road
Palo Alto, CA 94304
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The undersigned certify under penalty of perjury under the
laws of the State of Delaware that the matters set forth in this Certificate are
true and correct of our own knowledge.
Executed at Oakland, California, on July 6th, 2000.
s/ John Couch
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John Couch, President
s/ Gregory C. Thayer
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Gregory C. Thayer, Secretary
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