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Exhibit 3.1
CORRECTED
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
IASIAWORKS, INC.
(Pursuant to Sections 103, 242 and 245 of the Delaware General Corporation
Law)
The Amended and Restated Certification of Incorporation was filed in this
office on April 19,2000. The Certificate should be corrected to read as
follows:
1. In Article IV the number of shares of Common Stock that the Corporation
shall have authority to issue should be 115,000,000.
2. The numbering of the Article was incorrect and should read as reflected
below.
The entire document in its corrected form is set forth below:
Jonathan F. Beizer and Warren T. Lazarow certify that:
A. The name of this Corporation is iAsiaWorks, Inc., which was
incorporated in the State of Delaware on March 28, 2000.
B. They are the President and Secretary, respectively, of iAsiaWorks,
Inc., a Delaware corporation (the "Corporation").
C. The Certificate of Incorporation (the "Articles") of this Corporation
is amended and restated to read as follows:
ARTICLE I.
The name of this corporation is iAsiaWorks, Inc.
ARTICLE II.
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle, Delaware
19805. The name of its registered agent at such address is Corporation Service
Company.
ARTICLE III.
The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV.
This Corporation is authorized to issue two classes of shares to be
designated respectively Common Stock, $0.001 par value and Preferred Stock,
$0.001 par value. The total number of shares of Common Stock the Corporation
shall have authority to issue is 115,000,000 and the total number of shares of
Preferred Stock the Corporation shall have authority to issue is 83,100,000.
Preferred Stock shall be divided into five series.
The first series of Preferred Stock shall be designated Series A Preferred
Stock (the "Series A Preferred"), shall consist of 13,500,000 shares and shall
have the rights, preferences, privileges and restrictions set forth in this
Article III. The second series of Preferred Stock shall be designated Series Al
Preferred Stock (the "Series A1 Preferred"), shall consist of 1,010,000 shares
and shall have the rights, preferences, privileges and restrictions set forth in
this Article IV. The third series of Preferred Stock shall be designated Series
B preferred stock (the "Series B Preferred"), shall consist of 7,842,501 shares
and shall have the rights, preferences, privileges
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and restrictions set forth in this Article IV. The fourth series of Preferred
Stock shall be designated Series C Preferred Stock (the "Series C Preferred"),
shall consist of 10,000,000 shares and shall have the rights, preferences,
privileges and restrictions set forth in this Article III. The fifth series of
preferred stock shall be designated Series D Preferred Stock (the "Series D
Preferred"), shall consist of 46,100,000 shares and shall have the rights,
preferences, privileges and restrictions set forth in this Article IV.
The Corporation shall from time to time in accordance with the laws of the
State of Delaware increase the authorized amount of its Common Stock if at any
time the number of shares of Common Stock remaining unissued and available for
issuance shall not be sufficient to per unit conversion of Preferred Stock.
The relative rights, preferences, privileges and restrictions granted to or
imposed upon the respective classes of Common Stock and Preferred Stock or the
holders thereof are as follows:
Section 1. Dividends. The holders of outstanding shares of Preferred
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Stock shall be entitled to receive, when, as and if declared by the Board of
Directors out of any assets at the time legally available therefor dividends at
the rate of (i) $0.015 per annum for each share of Series A Preferred held by
them, (ii) $0.03 per annum for each share of Series A1 Preferred held by them,
(iii) $0.09 per annum for each share of Series B Preferred held by them, (iv)
$0.06 per annum for each share of Series C Preferred held by them and (v) $0.12
per annum for each share of Series D Preferred held by them, payable in
preference and priority to any payment of any dividend or other distribution on
Common Stock of the Corporation. Such dividends may be paid as and when declared
by the Board of Directors and shall not be cumulative. No dividends or other
distributions shall be made with respect to the Series C Preferred until all
declared and unpaid dividends on the Series D Preferred have been paid or set
aside for payment. No dividends or other distributions shall be made with
respect to Series B Preferred until all declared and unpaid dividends on Series
D Preferred and Series C Preferred have been paid or set apart for payment. No
dividends or other distributions shall be made with respect to Series A
Preferred or Series A-l Preferred until all declared and unpaid dividends on
Series D Preferred, Series C Preferred and Series B Preferred have been paid or
set apart for payment. No dividends or other distributions shall be made with
respect to Common Stock until all declared and unpaid dividends on Series D
Preferred, Series C Preferred, Series B Preferred, Series A Preferred and Series
A-l Preferred have been paid or set apart for payment.
For purposes of this Section 1, unless the context otherwise requires, a
"distribution" shall mean the transfer of cash or other property without
consideration whether by way of dividend or otherwise, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
issued to or held by employees, officers, directors or consultants of the
Corporation or its subsidiaries upon termination of their employment or services
pursuant to agreements providing for the right of said repurchase) for cash or
property.
As authorized by Section 402.5(c) of the California Corporations Code, the
provisions of Sections 502 and 503 of the California Corporations Code shall not
apply with respect to repurchases by the Corporation of shares of Common Stock
issued to or held by employees,
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officers, directors or consultants of the Corporation or its subsidiaries upon
termination of their employment or services pursuant to agreements providing for
the right of said repurchase.
Dividends may be paid on Common Stock as and when declared by the Board of
Directors, subject to the prior dividend rights of Preferred Stock. The
aggregate amount per share of dividends and other distributions made with
respect to Common Stock in any fiscal year shall not, however, exceed the amount
of dividends per share (on an as-converted into Common Stock basis) and other
distributions made with respect to any of the Series A Preferred, Series Al
Preferred, Series B Preferred, Series C Preferred or Series D Preferred in such
fiscal year.
Section 2. Liquidation Preference. In the event of any liquidation,
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dissolution, or winding up of the Corporation (or the deemed occurrence of such
event pursuant to subsection 2.3 below), either voluntary or involuntary,
distributions to the shareholders of the Corporation shall be made in the
following manner:
2.1 Amount of Preferred Liquidation Preference. The holders of the
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Series D Preferred shall be entitled to receive upon any liquidation,
dissolution or winding up, prior and in preference to any distribution of any of
the assets or surplus funds of the Corporation to the holders of Series C
Preferred, Series B Preferred, Series Al Preferred, Series A Preferred or Common
by reason of their ownership of such stock, an amount equal to the sum of (1)
the amount of two dollars and three cents ($2.03) per share for each share of
Series D Preferred then held by them, subject to adjustment in the event of any
stock dividend, stock split, combination, reorganization, recapitalization or
other similar event involving a change in the capital structure of the Series D
Preferred (the "Series D Original Purchase Price"); plus (2) an amount equal to
all declared but unpaid dividends on the Series D Preferred (collectively, the
"Series D Preferential Amount").
If the assets and funds thus available for distribution among the holders
of the Series D Preferred shall be insufficient to permit the full payment to
such holders of the Series D Preferential Amount, then the entire amount of the
assets and funds of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series D Preferred in such a manner
that the amount to be distributed to each holder of Series D Preferred shall
equal the amount obtained by multiplying the entire assets and funds of the
Corporation legally available for distribution hereunder by a fraction, the
numerator of which shall be the number of shares of Series D Preferred then held
by the holder and the denominator of which shall be the total then outstanding
number of shares of Series D Preferred.
After payment in full of the Series D Preferential Amount, the holders of
the Series C Preferred shall be entitled to receive, prior and in preference to
any distribution of any of the assets or surplus funds of the Corporation to the
holders of the Series B Preferred, Series A Preferred, Series Al Preferred or
Common by reason of their ownership of such stock, an amount equal to the sum of
(1) the amount of one dollar ($1.00) per share for each share of Series C
Preferred then held by them, subject to adjustment in the event of any stock
dividend, stock split, combination, reorganization, recapitalization,
reclassification or other similar event involving a change in the capital
structure of the Series C Preferred (the "Series C Original Purchase
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Price"), plus (2) an amount equal to all declared but unpaid dividends on the
Series C Preferred (collectively, the "Series C Preferential Amount").
If the assets and funds thus available for distribution among the holders
of the Series C Preferred shall be insufficient to permit the payment to such
holders of the Series C Preferential Amount, then the entire amount of the
assets and funds of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series C Preferred in such a manner
that the amount to be distributed to each holder of Series C Preferred shall
equal the amount obtained by multiplying the entire assets and funds of the
Corporation legally available for distribution hereunder by a fraction, the
numerator of which shall be the number of shares of Series C Preferred then held
by the holder and the denominator of which shall be the total then outstanding
number of shares of Series C Preferred.
After payment in full of the Series D Preferential Amount and the Series C
Preferential Amount, the holders of the Series B Preferred shall be entitled to
receive, prior and in preference to any distribution of any of the assets or
surplus funds of the Corporation to the holders of the Series A Preferred,
Series Al Preferred or Common by reason of their ownership of such stock, an
amount equal to the sum of (1) the amount of one dollar and fifty cents ($1.50)
per share for each share of Series B Preferred then held by them, subject to
adjustment in the event of any stock dividend, stock split, combination,
reorganization, recapitalization, reclassification or other similar event
involving a change in the capital structure of the Series B Preferred (the
"Series B Original Purchase Price"), plus (2) an amount equal to all declared
but unpaid dividends on the Series B Preferred (collectively, the "Series B
Preferential Amount").
If the assets and funds thus available for distribution among the holders
of the Series B Preferred shall be insufficient to permit the payment to such
holders of the Series B Preferential Amount, then the entire amount of the
assets and funds of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series B Preferred in such a manner
that the amount to be distributed to each holder of Series B Preferred shall
equal the amount obtained by multiplying the entire assets and funds of the
Corporation legally available for distribution hereunder by a fraction, the
numerator of which shall be the number of shares of Series B Preferred then held
by the holder and the denominator of which shall be the total then outstanding
number of shares of Series B Preferred.
After payment in full of the Series D Preferential Amount, the Series C
Preferential Amount and the Series B Preferential Amount, the holders of the
Series A Preferred and Series Al Preferred shall be entitled to receive, prior
and in preference to any distribution of any of the assets or surplus funds of
the Corporation to the holders of Common an amount equal to the sum of (1) the
amount of twenty-five cents ($0.25) per share for each share of Series A
Preferred then held by them and the amount of fifty cents ($0.50) per share for
each share of Series Al Preferred then held by them, subject to adjustment in
the event of any stock dividend, stock split, combination, reorganization,
recapitalization, reclassification or other similar event involving a change in
the capital structure of the Series A Preferred or Series Al Preferred (the
"Series A Original Purchase Price" and "Series A1 Original Purchase Price,"
respectively), plus (2) an amount equal to all declared but unpaid dividends on
the Series A Preferred or Series Al
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Preferred, as the case may be (collectively, the "Series A and Series Al
Preferential Amounts").
If the assets and funds thus available for distribution among the holders
of the Series A Preferred and Series A1 Preferred shall be insufficient to
permit the payment to such holders of the Series A and Series A1 Preferential
Amounts, then the entire amount of the assets and funds of the Corporation
legally available for distribution to the holders of Series A Preferred and
Series A1 Preferred shall be distributed ratably among the holders of the Series
A Preferred and Series A1 Preferred in such a manner that the amount to be
distributed to each holder of Series A Preferred and Series A1 Preferred shall
equal the amount obtained by multiplying the entire assets and funds of the
Corporation legally available for distribution to the holders of Series A
Preferred and Series A1 Preferred hereunder by a fraction, the numerator of
which shall be the sum of the products obtained by multiplying the number of
shares of Series A Preferred and Series A1 Preferred, then held by the holder by
the respective liquidation preference of such respective series of Preferred
Stock, and the denominator of which shall be sum of the products obtained by
multiplying the total then outstanding number of shares of Series A Preferred
and Series A1 Preferred by the respective liquidation preference of such
respective series of Preferred Stock.
2.2 Distribution after Payment of Preferred Liquidation Preference.
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After payment has been made to the holders of Preferred Stock of the full
preferential amounts set forth in Section 2.1 above, the entire remaining assets
and funds of the Corporation legally available for distribution, if any, shall
be distributed ratably among the holders of then outstanding Common Stock in a
manner such that the amount distributed to each holder of Common Stock shall
equal the amount obtained by multiplying the entire assets and funds of the
Corporation legally available for distribution pursuant to this Section 2.2 by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock then held by the holder, and the denominator of which shall be the
sum of the total number of shares of Common Stock then outstanding.
2.3 Deemed Liquidation. For purposes of this Section 2 and upon the
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vote and written consent of at least a majority of the holders of outstanding
shares of Preferred Stock, a merger or consolidation of the Corporation with or
into any other corporation or corporations (except where a majority of the
outstanding equity securities of the surviving corporation immediately after the
merger or consolidation (in respect of outstanding shares of capital stock of
the Corporation immediately prior to the merger or consolidation) is held by
persons who were shareholders of this Corporation immediately prior to the
merger or consolidation), or a sale or other transfer of all or substantially
all of the assets of the Corporation (or any series of related transactions
resulting in the sale or other transfer of all or substantially all of the
assets of the Corporation), shall be treated as a liquidation, dissolution or
winding up.
2.4 Value of Deemed Liquidation. In any of the events specified in
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subsection 2.3, if the consideration received by this Corporation is other than
cash, its value will be deemed its fair market value. Any securities shall be
valued as follows:
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(A) Securities not subject to investment letter or other similar
restrictions on free marketability:
(i) If traded on a securities exchange or The Nasdaq
National Market, the value shall be deemed to be the average of the closing
prices of the securities on such exchange or market over the thirty-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 or sale prices (whichever is
applicable) over the thirty-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 by the Board of Directors in
good faith.
(B) Securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a shareholder's status as an affiliate or former affiliate): the value
shall reflect an appropriate discount from the market value determined as in
subsections 2(d) (i) (A), (B) or (C) to reflect the approximate fair market
value thereof, as determined by the Board of Directors in good faith.
2.5 Consent. Each holder of an outstanding share of Preferred Stock
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shall be deemed to have consented, for purposes of Sections 502 and 503 of the
General Corporation Law of California, to distributions made by the Corporation
in connection with the repurchase of shares of Common Stock issued to or held by
employees or consultants upon termination of their employment or services
pursuant to agreements between the Corporation and such persons providing for
the Corporation's right of said repurchase.
Section 3. Voting Rights. Except as otherwise required by law, each share
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of Common Stock issued and outstanding shall have one vote and each share of
Preferred Stock issued and outstanding shall have the number of votes equal to
the number of shares of Common Stock into which such share of the Preferred
Stock could be converted at the record date for determination of the
shareholders 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
shareholders is solicited, such votes to be counted together with all other
shares of stock of the Corporation having general voting power and not
separately as a class. Holders of Common Stock and Preferred Stock shall be
entitled to notice of any shareholders' meeting in accordance with the Bylaws of
the Corporation, except as otherwise provided herein.
Section 4. Redemption. The Preferred Stock shall not be redeemable.
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Section 5. Conversion. The holders of the Series A Preferred, Series A1
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Preferred, Series B Preferred, Series C Preferred and Series D Preferred shall
have the following applicable conversion rights (the "Conversion Rights"):
5.1 Right to Convert. Each share of Series A Preferred, Series A1
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Preferred, Series B Preferred, Series C Preferred and Series D Preferred shall
be convertible, without the
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payment of any additional consideration by the holder thereof, at the option of
the holder thereof, at any time after the date of issuance of such share, at the
office of the Corporation or any transfer agent for Preferred Stock, into such
number of fully paid and nonassessable shares of Common Stock as is determined
by dividing $0.25 by the Series A Conversion Price, $0.50 by the Series A1
Conversion Price, $1.50 by the Series B Conversion Price, $1.00 by the Series C
Conversion Price and $2.03 by the Series D Conversion Price, determined in each
case as hereinafter provided, in effect at the time of conversion. Subject to
adjustment after the date of these Amended and Restated Articles as provided
herein, the price at which shares of Common Stock shall be deliverable upon
conversion of shares of Series A Preferred, without the payment of any
additional consideration by the holders thereof, shall be $0.25 per share of
Common Stock (the "Series A Conversion Price"), the price at which shares of
Common Stock shall be deliverable upon conversion of shares of Series A1
Preferred, without payment of any additional consideration by the holders
thereof, shall be $0.50 per share of Common Stock (the "Series A1 Conversion
Price"), the price at which shares of Common Stock shall be deliverable upon
conversion of shares of Series B Preferred, without payment of any additional
consideration by the holders thereof, shall be $1.06124829 per share of Common
Stock (the "Series B Conversion Price"), the price at which shares of Common
Stock shall be deliverable upon conversion of shares of Series C Preferred,
without payment of any additional consideration by the holders thereof, shall be
$1.00 per share of Common Stock (the "Series C Conversion Price"), and the price
at which shares of Common Stock shall be deliverable upon conversion of shares
of Series D Preferred, without payment of any additional consideration by the
holders thereof, shall be $2.03 per share of Common Stock (the "Series D
Conversion Price" and referred to collectively with the Series A Conversion
Price, the Series A1 Conversion Price, the Series B Conversion Price and the
Series C Conversion Price as the "Conversion Prices"). Upon conversion, all
declared but unpaid dividends on Preferred Stock shall be paid either in cash or
in shares of Common Stock of the Corporation, at the election of the
Corporation, wherein the shares of Common Stock shall be valued at the fair
market value at the time of such conversion, as determined by the Board of
Directors of the Corporation.
5.2 Automatic Conversion. Each share of Preferred Stock shall
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automatically be converted into shares of Common Stock at its then effective
Conversion Price upon the earlier of (1) the date specified by written consent
or agreement of the holders of a majority of the shares of Preferred Stock then
outstanding, or (2) the closing of a firm commitment underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Common Stock to the
public involving an aggregate offering price to the public of not less than
$20,000,000 for the account of the Corporation, at a per share offering price of
$6.50 or more (subject to adjustment in the event of any stock dividend, stock
split, combination, reorganization, recapitalization, reclassification or other
similar event involving a change in the capital structure of the Preferred
Stock) (a "Qualified Public Offering"). In the event of the automatic conversion
of Preferred Stock upon a public offering as aforesaid, the person(s) entitled
to receive Common Stock issuable upon such conversion of Preferred Stock shall
not be deemed to have converted such Preferred Stock until immediately prior to
the closing of such sale of securities.
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5.3 Mechanics of Conversion. No fractional shares of Common Stock
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shall be issued upon conversion of Preferred Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled (after aggregating all of
any fractional shares to which such holder is entitled by virtue of all
Preferred Stock held by the holder), the Corporation at its election shall
either (i) pay cash equal to such fraction multiplied by the then effective
Conversion Price, or (ii) issue one whole share of Common Stock for each
fractional share to which the holder would otherwise be entitled.
Before any holder of Preferred Stock shall be entitled to convert the same
into full shares of Common Stock pursuant to Section 5.1 above, such holder
shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for Preferred Stock, and
shall give written notice to the Corporation at such office that such holder
elects to convert the same; provided, however, that, in the event of an
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automatic conversion pursuant to Section 5.2, the outstanding shares of
Preferred Stock shall be converted automatically without any further action by
the holders of such shares and regardless of whether the certificates
representing such shares are surrendered to the Corporation or its transfer
agent, and, provided further, that the Corporation shall not be obligated to
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issue certificates evidencing the shares of Common Stock issuable upon such
automatic conversion unless the certificates evidencing such shares of Preferred
Stock are either delivered to the Corporation or its transfer agent as provided
above 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 against any loss
incurred by it in connection with such certificates. The Corporation shall, as
soon as practicable following such delivery, issue and deliver at such office to
such holder of Preferred Stock, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled as aforesaid,
together with a check, if applicable, payable to the holder in the amount of any
cash amount payable as the result of any fractional share resulting from the
conversion of Preferred Stock into Common Stock. Such conversion shall be
deemed to have been made immediately prior to the close of business on the date
of such surrender of the shares of Preferred Stock to be converted, or in the
case of automatic conversion on the date of closing of the 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.
5.4 Adjustments to Conversion Prices for Diluting Issues.
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(A) Special Definitions. For purposes of this subsection 5.4,
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the following definitions shall apply:
(1) "Option" shall mean rights, options or warrants to
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subscribe for, purchase or otherwise acquire either Common Stock or Convertible
Securities.
(2) "Convertible Securities" shall mean any evidences of
----------------------
indebtedness, shares or other securities convertible into or exchangeable for
Common Stock.
(3) "Common Stock Outstanding" shall mean, for purposes of
------------------------
Section 5 only, the number of shares of Common Stock actually issued and
outstanding on a
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given date, which shall include for the purposes hereof the aggregate number of
shares of Common Stock issuable on conversion of all outstanding shares of
Preferred Stock of the Corporation at the Conversion Price then in effect,
shares of Common Stock reserved but not actually issued in respect of
Convertible Securities other than the Preferred Stock, and shares of Common
Stock issuable upon the exercise of outstanding Options.
(4) "Current Market Price" shall mean the closing price per
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share of a security, on the business day prior to a given event, as announced by
the national exchange on which a security is listed, or, if the security is not
so listed, then the Fair Market Value thereof; provided, however, that "Current
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Market Price" shall be deemed in any case not to be less than the Conversion
Price.
(5) "Fair Market Value" shall be as reasonably determined
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in good faith by the Board of Directors of the Corporation. In the event of any
dispute between the holders of the Preferred Stock and the Corporation regarding
the determination of fair market value, at the option of holders of a majority
of the outstanding shares of any series of Preferred Stock, the Corporation
shall engage a consulting firm or investment banking firm selected by holders of
a majority of the outstanding shares of such series of Preferred Stock to
prepare an independent appraisal of fair market value. The expenses of such
appraisal shall be borne by the Corporation.
(6) "Additional Shares of Common Stock" shall mean all
---------------------------------
shares of Common Stock issued by the Corporation after the date of these Amended
and Restated Articles of Incorporation, other than shares of Common Stock issued
or issuable:
(a) upon conversion of shares of Preferred Stock or
issued in connection with a Qualified Public Offering or issued
in connection with an acquisition of a business or any assets or
properties or technology by the Company that is approved by the
affirmative vote of a majority of the Corporation's Board of
Directors, which shall include the persons designated by the
holders of a majority of the outstanding shares of Series D
Preferred;
(b) as a dividend or distribution on Preferred Stock;
(c) issued to equipment lessors or financial
institutions in accordance with plans or arrangements approved by
the Board of Directors;
(d) to directors, officers and employees of, and
consultants to, the Corporation pursuant to the Corporation's
1995 Stock Option Plan or other compensatory arrangements
approved by the Corporation's Board of Directors or in an amount
not in excess of 16,082,134 shares of Common Stock (net of
cancellations, terminations, repurchases and the like);
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(e) upon exercise of warrants of the Corporation for
Series B Preferred;
(f) upon exercise of warrants for Common Stock issued
pursuant to that certain Series C Preferred Stock and Warrant
Purchase Agreement of the Corporation; or
(g) upon exercise of warrants for Common Stock issued
in connection with the issuance of promissory notes of the
Corporation during August 1999; or
(h) pursuant to any event for which adjustment is made
pursuant to subparagraph 5.4(B)(1), (2), (3), (4) or (5) hereof.
(B) Adjustment of Conversion Prices upon Certain Events. The
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Conversion Prices shall be adjusted from time to time as follows:
(1) Adjustments for Stock Dividends, Distributions,
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Subdivisions, Combinations or Consolidation Stock. In the event the
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Corporation at any time or from time to, time after the date of these Amended
and Restated Articles shall declare or pay any dividend or make any other
distribution on Common Stock payable in Common Stock, or in the event the
outstanding shares of Common Stock shall be subdivided (by stock split or
otherwise), into a greater number of shares of Common Stock (and the shares of
each series of Preferred Stock are not so subdivided to an equivalent extent),
the Conversion Price for each series of Preferred Stock then in effect shall,
concurrently with the effectiveness of such dividend, distribution, or
subdivision, be proportionately decreased. In the event the outstanding shares
of Common Stock shall be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of Common Stock (and the shares of
each series of Preferred Stock are not so combined or consolidated to an
equivalent extent), the Conversion Price for each series of Preferred Stock then
in effect shall, concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
(2) Adjustments for Other Distributions. In the event
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that the Corporation at any time or from time to time after the date of these
Amended and Restated Articles makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive any distribution
payable in securities of the Corporation other than shares of Common Stock and
other than as otherwise adjusted in this Section 5.4, then and in each such
event provision shall be made so that the holders of Preferred Stock shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the Corporation that
they would have received had their Preferred Stock been converted into Common
Stock on the date of such event and had they thereafter, during the period from
the date of such event to and including the date of conversion, retained such
securities receivable by them as aforesaid during such period, subject to all
other adjustments called for during such period under this Section 5.4 with
respect to the rights of the holders of Preferred Stock.
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(3) Adjustments for Reclassification, Exchange and
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Substitution. If at any time or from time to time after the date of these
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Amended and Restated Articles, Common Stock issuable upon conversion of
Preferred Stock shall be changed into the same or a different number of shares
of any other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of shares
provided for above), the Conversion Prices then in effect shall, concurrently
with the effectiveness of such reorganization or reclassification, be
proportionately adjusted such that Preferred Stock shall be convertible into, in
lieu of the number of shares of Common Stock that the holders would otherwise
have been entitled to receive, a number of shares of such other class or classes
of stock equivalent to the number of shares of Common Stock that would have been
subject to receipt by the holders upon conversion of Preferred Stock immediately
before that change.
(4) Reorganization, Mergers, Consolidations, or Sales of
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Assets. Subject to Section 2 hereof, if at any time or from time to time after
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the date of these Amended and Restated Articles there shall be a capital
reorganization of Common Stock (other than a subdivision, combination,
reclassification, or exchange of shares provided for elsewhere in this Section
5) or a merger or consolidation of this Corporation with or into another
corporation, or the sale of all or substantially all of this Corporation's
properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation, or sale, provision shall be made so that
the holders of Preferred Stock shall thereafter be entitled to receive upon
conversion of the Preferred Stock held by them, the number of shares of stock or
other securities or property of this Corporation, or of the successor
corporation resulting from such merger or consolidation or sale, to which a
holder of Common Stock deliverable upon conversion would have been entitled upon
such capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5 with respect to the rights of the holders of Preferred Stock
after the reorganization, merger, consolidation, or sale to the end that the
provisions of this Section 5 (including adjustment of the Conversion Prices then
in effect and the number of shares purchasable upon conversion of Preferred
Stock) shall be applicable after that event as nearly equivalent as may be
practicable.
(5) Adjustment of Conversion Price Upon Issuance of
-----------------------------------------------
Convertible Securities or Option. In the event that at any time or from time
--------------------------------
to time after the date of these Amended and Restated Articles the Corporation
shall in any manner (whether directly or by assumption in a merger in which the
Corporation is the surviving corporation) have issued or sold Convertible
Securities or granted Options, regardless of whether the rights to exchange,
convert or exercise thereunder are immediately exercisable (other than in
issuances pursuant to which an adjustment is made under Section 5.4(B)(1), (2),
(3), or (4) or pursuant to any employee, consultant or director incentive or
benefit plan approved by the Board of Directors of the Corporation not in excess
of 16,082,134 shares or to equipment lessors or financial institutions in
accordance with plans or arrangements approved by the Board of Directors) for a
consideration having a Conversion Price on the date of such issuance, sale or
grant, less than the Conversion Price of such Convertible Securities or Options
on the date of such issuance, sale or grant, then the Conversion Price shall be
adjusted to equal the product of the Conversion Price immediately prior to such
adjustment by a fraction (A) the numerator of which shall be the
<PAGE>
Current Market Price per share of Common Stock at the date of such issuance
minus the Per Share Deficiency (as defined below) and (B) the denominator of
which shall be the Current Market Price per share of Common Stock at the date of
such issuance. The "Per Share Deficiency" shall mean (x) the Conversion Price of
such Convertible Securities or Options on the date of such issuance, sale or
grant minus the Fair Market Value of the consideration received by the Company
in respect of such issue, sale or grant divided by (y) the number of shares of
Common Stock Outstanding on the date of such issuance, sale or grant.
(6) Adjustment of Conversion Price in the Event of Pro Rata
-------------------------------------------------------
Repurchases. In the event that at any time or from time to time after the date
-----------
of these Amended and Restated Articles the Corporation or any subsidiary thereof
shall make a pro rata repurchase of shares of Common Stock, the Conversion Price
in effect immediately prior to such action shall be adjusted (but shall not be
increased) by multiplying such price by a fraction, the numerator of which shall
be (i) the product of (x) the number of shares of Common Stock Outstanding
immediately before such pro rata repurchase and (y) the Current Market Price of
the Common Stock as of the close of business on the business day immediately
preceding the first public announcement by the Corporation of the intent to
effect such pro rata repurchase minus (ii) the aggregate purchase price of the
pro rata repurchase; and the denominator of which shall be the product of (i)
the number of shares of Common Stock outstanding immediately before such pro
rata repurchase minus the number of shares of Common Stock repurchased by the
Corporation or any subsidiary thereof in such pro rata repurchase and (ii) the
Current Market Price of the Common Stock as of the close of the business day
immediately preceding the first public announcement by the Company of the intent
to effect such pro rata repurchase. Such adjustment shall become effective
immediately after the effective date of such pro rata repurchase.
(7) Adjustment of Conversion Price for Other Issuance of
----------------------------------------------------
Additional Shares of Common Stock. In the event that at any time or from time
---------------------------------
to time after the date of these Amended and Restated Articles the Corporation
shall issue Additional Shares of Common Stock (excluding Additional Shares of
Common Stock issued or deemed to be issued for which an adjustment is made under
Section 5.4(B)(1), (2), (3), (4) or (5)) for consideration in an amount per
Additional Share of Common Stock less than the Current Market Price, then the
Conversion Price shall be adjusted to equal the product obtained by multiplying
the Conversion Price immediately prior to such issuance or sale by a fraction
(A) the numerator of which shall be the number of shares of Common Stock
Outstanding immediately prior to such issuance or sale plus the number of shares
which the aggregate offering price of the total number of such Additional Shares
of Common Stock would purchase at the then Current Market Price and (B) the
denominator of which shall be the number of shares of Common Stock Outstanding
immediately after such issue or sale.
(8) Other Action Affecting Common Stock. In case at any
-----------------------------------
time or from time to time after the date of these Amended and Restated Articles
the Corporation shall take any action in respect of its Common Stock, other than
any action described in this Section 5.4, then, unless such action will not have
a materially adverse effect upon the rights of the holders of Preferred Stock,
the Conversion Price shall be adjusted in such manner as may be equitable in the
circumstances.
<PAGE>
(C) Determination of Consideration. For purposes of this
------------------------------
subsection 5.4, the consideration received by the Corporation for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(a) insofar as it consists of cash, be computed at the
aggregate amount of cash received by the Corporation excluding
amounts paid or payable for accrued interest or accrued
dividends;
(b) insofar as it consists of property other than cash,
be computed at the fair market value thereof at the time of such
issue as determined in good faith by the Board of Directors of
the Corporation; and
(c) in the event Additional Shares of Common Stock are
issued together with other shares or securities or other assets
of the Corporation for consideration that covers both, be the
proportion of such consideration so received, computed as
provided in clauses (b) and (c) above, as determined in good
faith by the Board of Directors.
5.5 No Impairment. Except as provided for in Section 6 below, the
-------------
Corporation will not, by amendment of its Articles of Incorporation or through
any reorganization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation but will at all times in good faith
assist in the carrying out of all the provisions of this Section 5 and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of Preferred Stock against impairment.
5.6 Certificate as to Adjustment. Upon the occurrence of each
----------------------------
adjustment or readjustment of the Conversion Price of any series of Preferred
Stock pursuant to this Section 5, the Corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of such series of Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based. The Corporation shall, upon the
written request at any time of any holder of Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price at the time in effect
for each series of Preferred Stock, 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 any series of Preferred Stock.
5.7 Status of Converted Stock. In case any shares of Preferred Stock
-------------------------
shall be converted pursuant to this Section 5, the shares so converted shall be
canceled, shall not be reissuable and shall cease to be a part of the authorized
capital stock of the Corporation.
5.8 Fractional Shares. In lieu of any fractional shares to which the
-----------------
holder of Preferred Stock would otherwise be entitled upon conversion after
aggregating all Preferred shares of such holder, the Corporation shall pay cash
equal to such fraction multiplied by the fair
<PAGE>
market value of one share of Common Stock as determined by the Board. The number
of whole shares issuable of each holder upon such conversion shall be determined
on the basis of the number of shares of Common Stock issuable upon conversion of
the total number of shares of Preferred Stock held by such holder at the time of
converting into Common Stock.
5.9 Reservation of Stock Issuable Upon Conversion. The Corporation
---------------------------------------------
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of Preferred Stock, such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Preferred Stock. If at any time the number of authorized
but unissued shares of Common Stock shall not be sufficient to effect the
conversion of all then-outstanding shares of Preferred Stock and other
securities convertible into shares of 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, including, without limitation,
engaging in best efforts to obtain the requisite shareholder approval of any
necessary amendment to these Amended and Restated Articles of Incorporation.
5.10 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 that is the same as cash dividends paid in
previous quarters) or other distribution, the Corporation shall mail to each
holder of Preferred Stock at least ten (10) days prior to the date specified
herein, a notice specifying the date on which any such record is to be taken for
the purpose of such dividend or distribution.
Section 6. Protective Provisions.
----------------------
6.1 Preferred Stock and Series D Preferred.
---------------------------------------
This Corporation shall not, without first obtaining the approval (by vote
or written consent, as provided by law) of (i) so long as any shares of
Preferred Stock are outstanding, the holders of more than 50% of the then
outstanding shares of Preferred Stock, voting together as a single class, and
(ii) so long as any shares of Series D Preferred are outstanding, the holders of
more than 50% of the then outstanding shares of Series D Preferred:
(A) increase or decrease the number of authorized shares of
any series of Preferred Stock;
(B) effect a merger, consolidation, or reorganization (except
where a majority of the outstanding equity securities of the surviving
corporation immediately after the merger, consolidation or reorganization is
held by persons who were shareholders of this Corporation immediately prior to
such merger, consolidation or reorganization), or effect sale of all or
substantially all of the assets of this Corporation;
(C) redeem any or all shares of any series of Preferred
Stock; or
<PAGE>
(D) amend the bylaws of this Corporation to reduce the size of
its board of directors to less than seven members.
6.2 Series D Preferred. So long as any shares of Series D
------------------
Preferred Stock are outstanding, this Corporation shall not, without first
obtaining the approval (by vote or written consent, as provided by law) of the
holders of not less than a majority of the then outstanding shares of Series D
Preferred:
(A) authorize or issue, or obligate itself to issue, any
shares of any class or series of stock (or reclassify any existing class or
series of stock) or any securities convertible into stock having any preference
or priority as to dividend, redemption, voting or conversion rights, liquidation
preferences, or otherwise, superior to or on a parity with any such preference
or priority to which the Series D Preferred is entitled hereunder;
(B) enter into material business activities not contemplated
in the original business plan presented to the holders of Series D Preferred or
in any revised business plan approved by such holders, including, without
limitation any acquisition or disposition for consideration in excess of five
million dollars ($5,000,000).
6.3 Preferred Stock. This Corporation shall not, without first
---------------
obtaining the approval (by vote or written consent, as provided by law) of the
holders of not less than a majority of the then outstanding shares of such
series of Preferred Stock, voting as a separate class, alter or change the
preferences, rights, privileges or powers of, or the restrictions provided for
the benefit of such series of Preferred Stock in these Amended and Restated
Articles so as to affect materially and adversely the shares of such series of
Preferred Stock.
ARTICLE V.
1. Limitation of Directors' Liability. The liability of the
----------------------------------
directors of the Corporation for monetary damages shall be eliminated to the
fullest extent permissible under California law.
2. Indemnification of Agents. The Corporation is authorized to
-------------------------
provide indemnification of its agents (as defined in Section 317 of General
Corporation Law of California) to the fullest extent permissible under
California law.
3. Repeal or Modification. Any repeal or modification of the
----------------------
foregoing provisions of this Article shall not adversely affect any right of
indemnification or limitation of liability of an agent of the Corporation
relating to acts or omissions occurring prior to such repeal or modification."
3. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the Board of Directors.
<PAGE>
4. The foregoing amendment and restatement of the Articles of
Incorporation has been duly approved by the required vote of shareholders in
accordance with Sections 902 and 903 of the General Corporation Law of
California. The total number of outstanding shares of Common Stock of the
Corporation is 1,000. No shares of Series A Preferred Stock are outstanding. No
shares of Series Al Preferred Stock are outstanding. No shares of Series B
Preferred Stock are outstanding. No shares of Series C Preferred Stock are
outstanding. No shares of Series D Preferred Stock are outstanding. The number
of shares voting in favor of the Amended and Restated Articles of Incorporation
equaled or exceeded the vote required. The percentage vote required was more
than 50% of the Common voting separately. As no shares of Series A, Series A1,
Series B, Series C or Series D Preferred Stock are outstanding no vote of the
preferred shareholders was necessary.
<PAGE>
The undersigned declare under penalty of perjury that the matters set forth
in the foregoing Articles are true of their own knowledge.
Executed at Palo Alto, CA on April 19, 2000.
-------------------- --
/s/ Jonathan F. Beizer
-----------------------------
Jonathan F. Beizer
President
/s/ Warren T. Lazarow
-----------------------------
Warren T. Lazarow
Secretary
