AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
HYPERMEDIA COMMUNICATIONS, INC.
The undersigned, Richard Landry and Kenneth Klein, hereby certify that:
1. They are the President and Chief Executive Officer, and Secretary,
respectively, of HyperMedia Communications, Inc., a California corporation (the
"Company").
2. The Articles of Incorporation of the Company are amended and
restated in full to read as set forth in Exhibit A attached hereto.
3. The Amended and Restated Articles of Incorporation of the Company
attached hereto have been duly approved by the Board of Directors of the
Company.
4. The amendments to the Amended and Restated Articles of Incorporation
of the Company attached hereto have been duly approved by the shareholders of
the Company in accordance with Sections 902 and 903 of the California
Corporations Code. The Company has two classes of shares outstanding. The total
number of outstanding shares of Common Stock is 3,200,975. The total number of
outstanding shares of Preferred Stock is 8,512,191 of which 8,064,516 shares
have been designated as Series E Preferred Stock, all of which are issued and
outstanding, 82,250 shares have been designated Series F Preferred Stock all of
which are issued and outstanding, 50,344 shares have been designated Series G
Preferred Stock, all of which are issued and outstanding, 117,000 shares have
been designated Series H Preferred Stock, all of which are issued and
outstanding, 28,800 shares have been designated Series I Preferred Stock, all of
which are issued and outstanding and 250,000 shares have been designated Series
J Preferred Stock, 169,281 shares of which are issued and outstanding. The total
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 a simple majority of the outstanding shares of Series E Preferred
Stock voting separately as a single class, a simple majority of the outstanding
shares of Series F Preferred Stock voting separately as a single class, a simple
majority of the outstanding shares of Series G Preferred Stock voting separately
as a single class, a simple majority of the outstanding shares of Series H
Preferred Stock voting separately as a single class, a simple majority of the
outstanding shares of Series I Preferred Stock voting separately as a single
class, a simple majority of the outstanding shares of Series J Preferred Stock
voting separately as a single class, a simple majority of the outstanding shares
of Preferred Stock voting separately as a single class and a simple majority of
the outstanding shares of Common Stock voting separately as a single class and a
simple majority of the outstanding shares of Preferred Stock and Common Stock
voting together as a single class.
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The undersigned further declare under penalty of perjury under the laws
of the State of California that the matters set forth in this certificate are
true and correct to their own knowledge.
DATE: June 7, 2000: /s/ Richard Landry
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Richard Landry, Chief Executive Officer
/s/ Kenneth Klein
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Kenneth Klein, Secretary
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EXHIBIT A
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
HYPERMEDIA COMMUNICATIONS, INC.
Article I
The name of this Corporation is HyperMedia Communications, Inc.
Article II
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 California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
Article III
This Corporation is authorized to issue two classes of shares 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
50,000,000, with a par value of $0.001 per share. The total number of shares of
Preferred Stock this Corporation shall have authority to issue is 20,064,516,
with a par value of $0.001 per share.
The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is authorized to fix the number of shares of any
series of Preferred Stock and to determine or alter the rights, preferences,
privileges, and restrictions granted to or imposed upon any wholly unissued
series of Preferred Stock and, within the limits and restrictions stated in any
resolution or resolutions of the Board of Directors originally fixing the number
of shares constituting any series of Preferred Stock, to decrease (but not below
the number of shares of any such series then outstanding) the number of shares
of any such series subsequent to the issue of shares of that series.
Of the Preferred Stock, 8,064,516 shares shall be designated Series E
Preferred Stock ("Series E Preferred"), 82,250 shares shall be designated Series
F Preferred Stock ("Series F Preferred"), 50,344 shares shall be designated
Series G Preferred Stock ("Series G Preferred"), 117,000 shares shall be
designated Series H Preferred Stock ("Series H Preferred"), 28,800 shares shall
be designated Series I Preferred Stock ("Series I Preferred") and 250,000 shares
shall be designated Series J Preferred Stock ("Series J Preferred").
The Corporation shall from time to time in accordance with the laws of
the State of California 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 permit conversion of the Preferred
Stock.
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The relative rights, preferences, privileges and restrictions granted
to or imposed on the respective classes of the shares of capital stock or the
holders thereof are as follows:
A. Series E Preferred.
1. Dividend Rights of Series E Preferred.
(a) The holders of the Series E Preferred shall be entitled to
receive, when and as declared by the Board of Directors, out of funds legally
available therefor, dividends at the rate of $0.0074 per share per annum, on
each outstanding share of Series E Preferred, payable in preference and priority
to any payment of any dividend on Common Stock of the Corporation for such year.
The dividends on the Series E Preferred shall be cumulative so that if all
dividends accumulated at the annual rate specified above, shall not have been
paid or declared and a sum sufficient for the payment thereof set apart, the
deficiency shall first be fully paid before any dividend or other distribution,
other than dividends payable solely in Common Stock, shall be paid or declared
and set apart for the Common Stock. If less than full dividends are paid on or
declared and set apart for payment on the Series E Preferred, then such
dividends shall be subtracted from any accumulated dividends. Any accumulation
of dividends on the Series E Preferred shall not bear interest. The Corporation
shall not be obligated to pay any accumulated but unpaid dividends on the Series
E Preferred before January 1, 2000 except for the conversion of such dividends
into shares of Common Stock pursuant to subsection (b) of this Section A.1
below.
(b) In the event that the Corporation shall have any
accumulated but unpaid dividends outstanding immediately prior to, and in the
event of, a conversion of the Series E Preferred (as provided in Section A.4
hereof), such dividends shall be converted into Common Stock at the then
effective Series E Conversion Price, as may be applicable, determined in
accordance with and pursuant to the terms specified in Section A.4 hereof.
(c) 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, 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.
2. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the Corporation, either voluntary or involuntary,
distributions to the shareholders of the Corporation shall be made in the
following manner:
(a) The holders of the Series E 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 F Preferred,
Series G Preferred, Series H Preferred, Series I Preferred and Series J
Preferred Stock and Common Stock by reason of their ownership of such stock, the
amount of $0.124 per share for each share of Series E Preferred then held by
them, and in addition, an amount equal to all accumulated but unpaid dividends
(whether or not such dividends were declared) on the Series E Preferred held by
them. If the assets and funds thus distributed among the holders of the Series E
Preferred shall be insufficient to permit the payment to such holders of the
full aforesaid
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preferential amounts, then the entire assets and funds of the Corporation
legally available for distribution shall be distributed such that each holder of
Series E Preferred shall be entitled to receive a portion of the assets and
funds so distributed equal to the ratio that the aggregate liquidation
preference of the shares of Series E Preferred held by such holder, exclusive of
cumulative dividends, bears to the aggregate preferential amount of all shares
of Series E Preferred outstanding as of the date of the distribution.
After payments have been made to the holders of the Series E
Preferred of the full amounts to which they shall be entitled as aforesaid and
to the holders of Series F Preferred, Series G Preferred, Series H Preferred,
Series I Preferred and Series J Preferred Stock of the full amounts to which
they shall be entitled as described in Section B below, the holders of the
Common Stock, Series E Preferred, Series F Preferred, Series G Preferred, Series
H Preferred, Series I Preferred and Series J Preferred Stock shall be entitled
to share ratably in the remaining assets, based on the number of shares of
Common Stock held, assuming conversion of the Series E Preferred pursuant to
Section A.4 below and conversion of the Series F Preferred, Series G Preferred,
Series H Preferred, Series I Preferred and Series J Preferred Stock pursuant to
Section B.4 below, respectively.
(b) For purposes of this Section A.2, a merger or
consolidation of the Corporation with or into any other Corporation or
Corporations, or the merger of any other Corporation or Corporations into the
Corporation, or the sale of all or substantially all of the assets of the
Corporation, or any other corporate reorganization, in which consolidation,
merger, sale of assets or reorganization the shareholders of the Corporation
receive distributions in cash or securities of another Corporation or
Corporations as a result of such consolidation, merger, sale of assets or
reorganization, shall be treated as a liquidation, dissolution or winding up of
the Corporation.
3. Voting Rights of Series E Preferred.
(a) Number of Votes. Except as otherwise required by law and
as provided in subsection (b) below, each share of Common Stock issued and
outstanding shall have one vote and each share of Series E Preferred issued and
outstanding shall have the number of votes equal to the number of shares of
Common Stock into which the Series E Preferred is convertible as adjusted from
time to time pursuant to Section A.4 hereof.
(b) Voting by Series E Preferred. The holder of each share of
Series E Preferred shall be entitled to notice of any shareholders' meeting in
accordance with the bylaws of the Corporation and shall vote with holders of the
Common Stock upon any matter submitted to a vote of shareholders, except those
matters required by law to be submitted to a class vote, and except as set forth
in Section 5.
(c) Cumulative Voting. The holders of Common Stock and Series
E Preferred shall be entitled to cumulative voting rights as to the directors to
be elected in accordance with the provisions of Section 708 of the California
Corporations Code.
4. Conversion. The holders of the Series E Preferred have conversion
rights as follows (the "Conversion Rights"):
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(a) Right to Convert. Each share of Series E Preferred shall
initially be convertible, at the option of the holder thereof, at any time after
the date of issuance of such share at the principal office of the Corporation or
any transfer agent for the Corporation's Preferred Stock, into such number of
fully paid and nonassessable shares of Common Stock as is determined by dividing
$0.124 by the Series E Conversion Price, determined as hereinafter provided, in
effect at the time of the conversion. The price at which shares of Common Stock
shall be deliverable upon conversion shall be, with respect to each share of
Series E Preferred, the price at which one share of Common Stock is initially
sold to the public pursuant to an effective registration statement under the
Securities Act of 1933, as amended, (the "Series E Conversion Price").
(b) Automatic Conversion.
(i) Each share of Series E Preferred then outstanding
shall automatically convert into shares of Common Stock, at the then effective
Series E Conversion Price at any time upon the vote of at least 75% of the
outstanding shares of Series E Preferred to convert shares of Series E Preferred
into Common Stock.
Notwithstanding any provision contained herein to the
contrary, each of the shares of Series E Preferred Stock may not, under any
circumstances, be converted into Common Stock before April 15, 1993. Between
April 15, 1993 and December 31, 1999, such shares of Series E Preferred Stock
may be converted into Common Stock at the option of the holder thereof, if,
prior to December 31, 1996, the Company's aggregate net income for any four
consecutive quarters exceeds $2,500,000. In any event, after December 31, 1999,
each of the shares of Series E Preferred Stock may be converted into Common
Stock at the option of the holder thereof.
(c) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall round up to the nearest integer.
Before any holder of Series E Preferred shall be entitled to
convert the same into full shares of Common Stock and to receive certificates
therefor, the holder shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the Corporation or of any transfer agent for the
Preferred Stock, as applicable, and shall give written notice to the Corporation
at such office that the holder elects to convert the same; provided, however,
that in the event of an automatic conversion pursuant to Section A.4(b), the
outstanding shares of Series E Preferred shall be converted automatically
without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided further, however, that the Corporation shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon such automatic conversion unless the certificates evidencing such shares of
Series E Preferred 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 from any
loss incurred by it in connection with such certificates. The Corporation shall,
as soon as practicable after such delivery, or such agreement and
indemnification in the case of a lost certificate, issue and deliver at such
office to such holder of Preferred Stock, as applicable, a
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certificate or certificates for the number of whole shares of Common Stock to
which such holder shall be entitled. 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 such affirmative vote, and the persons or
entities 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.
(d) Adjustments of Conversion Prices For Diluting Issues.
(i) Special Definitions. For purposes of this Section A.4(d),
the following definitions shall apply:
(1) "Options" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(2) "Original Issue Date" shall mean the date on
which the first share of Series E Preferred was first issued.
(3) "Convertible Securities" shall mean any evidences
of indebtedness, shares (other than the shares of Series E Preferred authorized
herein) or other securities convertible into or exchangeable for Common Stock.
(4) "Additional Shares of Common Stock" shall mean
all shares of equity securities issued (or, pursuant to Section A.4(d)(iii),
deemed to be issued) by the Corporation, other than shares of equity securities
issued or issuable at any time:
(A) upon the exercise of certain warrants to
purchase up to 229,472 shares of Common Stock;
(B) upon conversion of the shares of
Preferred Stock authorized herein into shares of Common Stock;
(C) to officers, directors and employees of,
and consultants to, the Corporation pursuant to employee benefit plans
unanimously approved by the Board of Directors; and
(D) as a dividend or distribution on the
Series E Preferred or pursuant to any event for which adjustment is made
pursuant to subparagraph (d)(vi) hereof.
(5) "Issue Price" with respect to any issuance of
Additional Shares of Common shall mean the price per share obtained by dividing
the total consideration received by the Corporation in respect of such
Additional Shares of Common, computed in accordance with Section A.4(d)(v)
hereof, by the aggregate number of shares of such Additional Shares of Common
issued, computed in accordance with Section A.4(d)(iii) hereof.
(ii) No Adjustment of Conversion Price. No adjustment in the
Series E Conversion Price shall be made hereunder in respect of the issuance of
Additional Shares of
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Common Stock unless the consideration per share for an Additional Share of
Common Stock issued or deemed to be issued by the Corporation is less than the
Series E Conversion Price, in effect on the date of, and immediately prior to
such issue.
(iii) Deemed Issue of Additional Shares of Common Stock.
(1) Options and Convertible Securities. In the event
the Corporation at any time or from time to time after the Original Issue Date
shall issue any Options or Convertible Securities or shall fix a record date for
the determination of holders of any class of securities entitled to receive any
such Options or Convertible Securities, then the maximum number of shares (as
set forth in the instrument relating thereto without regard to any provisions
contained therein for a subsequent adjustment of such number) of Common Stock
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock issued as of
the time of such issue or, in case such a record date shall have been fixed, as
of the close of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless the consideration
per share (determined pursuant to Section A.4(d)(v) hereof) of such Additional
Shares of Common Stock would be less than the Series E Conversion Price in
effect on the date of and immediately prior to such issue, or such record date,
as the case may be, and provided further that in any such case in which
Additional Shares of Common Stock are deemed to be issued:
(A) no further adjustment in the Series E
Conversion Price shall be made upon the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or
conversion or exchange of such Convertible Securities;
(B) if such Options or Convertible
Securities by their terms provide, with the passage of time or otherwise, for
any increase in the consideration payable to the Corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or
exchange thereof, the Series E Conversion Price computed upon the original issue
thereof (or upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) no readjustment pursuant to clause (B)
above shall have the effect of increasing the applicable Series E Conversion
Price to an amount which exceeds the lower of (i) the Series E Conversion Price
computed on the original adjustment date, or (ii) the Series E Conversion Price
that would have resulted from any issuance of Additional Shares of Common Stock
between the original adjustment date and such readjustment date; and
(D) in the case of any Options which expire
by their terms not more than 30 days after the date of issue thereof, no
adjustment of the Series E Conversion Price shall be made until the expiration
or exercise of all such Options.
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(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common Stock. In the event that after the Original Issue
Date, the Corporation shall issue Additional Shares of Common Stock (including
Additional Shares of Common Stock deemed to be issued pursuant to Section
A.4(d)(iii)) for a consideration per share less than the Series E Conversion
Price in effect on the date of and immediately prior to such issue, then and in
such event, the Series E Conversion Price, as the case may be, shall be reduced,
concurrently with such issue, to a price equal to such consideration per share
of the Additional Shares of Common Stock.
(v) Determination of Consideration. For purposes of
this Section A.4(d), the consideration received by the Corporation for the issue
of any Additional Shares of Common Stock shall be computed as follows:
(1) Cash and Property: Such consideration
shall:
(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 value thereof at the time of such issue, as
determined in good faith by the Board; 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 which covers both, be the proportion of such
consideration so received, computed as provided in clauses (A) and (B) above, as
determined in good faith by the Board.
(2) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common Stock deemed to have been issued pursuant to Section A.4(d)(iii),
relating to Options and Convertible Securities, shall be determined by dividing
(A) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
consideration) payable to the Corporation upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, or in the case of
Options for Convertible Securities, the exercise of such Options for Convertible
Securities and the conversion or exchange of such Convertible Securities, by
(B) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.
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(vi) Adjustments for Subdivisions, Dividends,
Combinations or Consolidation of Common Stock. In the event the outstanding
shares of Common Stock shall be subdivided (by stock split, stock dividend or
otherwise), into a greater number of shares of Common Stock, the Series E
Conversion Price then in effect shall concurrently with the effectiveness of
such 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, the Series E
Conversion Price then in effect shall, concurrently with the effectiveness of
such combination or consolidation, be proportionately increased.
(vii) Adjustments for Other Distributions. In the
event the Corporation at any time or from time to time 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 Section A.1 or this Section
A.4, then and in each such event provision shall be made so that the holders of
the Series E Preferred shall receive upon conversion thereof, in addition to the
respective number of shares of Common Stock receivable thereupon, the respective
amount of securities of the Corporation which they would have received had their
shares of Series E Preferred, as the case may be, 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 A.4 with
respect to the rights of the holders of the Series E Preferred.
(viii) Adjustments for Reclassification, Exchange and
Substitution. If the Common Stock issuable upon conversion of Series E Preferred
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, combination or consolidation of shares
provided for above), the Series E Conversion Price then in effect shall,
concurrently with the effectiveness of such reorganization or reclassification,
be proportionately adjusted such that the Series E Preferred shall be
convertible into, in lieu of the respective number of shares of Common Stock
which the holders would otherwise have been entitled to receive, a number of
shares of such other class or classes of stock equivalent to the respective
number of shares of Common Stock that would have been subject to receipt by the
holders upon conversion of the immediately before that change.
(e) No Impairment. 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 A.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
Series E Preferred set forth in this Section A.4 against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series E Conversion Price pursuant to this
Section A.4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms
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hereof and furnish to each holder of Series E Preferred 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 Series E Preferred furnish or cause
to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Series E 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
Series E Preferred.
(g) Notices of Record Date. In the event that this Corporation
shall propose at any time:
(i) to declare any dividend or distribution upon its
Common Stock, whether in cash, property, stock or other securities, whether or
not a regular cash dividend and whether or not out of earnings or earned
surplus;
(ii) to offer for subscription pro rata to the
holders of any class or series of its stock any additional shares of stock of
any class or series or other rights;
(iii) to effect any reclassification or
recapitalization of its Common Stock outstanding involving a change in the
Common Stock; or
(iv) to merge or consolidate with or into any other
Corporation, or sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up; then, in connection with each
such event, this Corporation shall send to the holders of the Series E
Preferred:
(1) at least 20 days' prior written notice
of the date on which a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
the matters referred to in (i) and (ii) above; and
(2) in the case of the matters referred to
in (iii) and (iv) above, at least 20 days' prior written notice of the date when
the same shall take place (and specifying the date on which the holders of
Common Stock shall be entitled to exchange their Common Stock for securities or
other property deliverable upon the occurrence of such event).
Each such written notice shall be delivered personally or
given by first class mail, postage prepaid, addressed to the holders of the
Series E Preferred at the address for each such holder as shown on the books of
this Corporation.
5. Covenants. In addition to any other rights provided by law, this
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority of such outstanding shares of
Series E Preferred:
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(a) authorize or issue any class or series of shares having
rights, preferences or privileges senior to or on a parity with the Series E
Preferred as to dividends, liquidation or redemption rights;
(b) amend the rights, preferences, privileges or restrictions
of the Series E Preferred;
(c) amend the Corporation's Articles of Corporation or Bylaws
to change the number of directors from five (5);
(d) effect (i) any sale of all or substantially all the assets
of the Corporation, or (ii) any merger or other reorganization of the
Corporation with or into another Corporation;
(e) repurchase or redeem any outstanding securities (except
for repurchases of unvested employee stock upon the termination of employees);
or
(f) declare any dividend on the Corporation's outstanding
Common Stock;
B. Series F Preferred, Series G Preferred, Series H Preferred, Series I
Preferred and Series J Preferred.
1. Designation. The number of shares constituting the (i) Series F
Preferred shall be 82,250, (ii) Series G Preferred shall be 50,344, (iii) Series
H Preferred shall be 117,000, (iv) Series I Preferred shall be 28,800 and (v)
Series J Preferred shall be 250,000. For purposes of this Section B, the "Series
F Initial Sales Price", "Series G Initial Sales Price" , "Series H Initial Sales
Price", "Series I Initial Sales Price", and "Series J Initial Sales Price" shall
mean the price per share at which shares of Series F Preferred, Series G
Preferred, Series H Preferred, Series I Preferred and Series J Preferred are
first sold to investors, and the "Series F Original Issue Date", "Series G
Original Issue Date", "Series H Original Issue Date", "Series I Original Issue
Date", and "Series J Original Issue Date" shall mean the date of such sale. The
Series F Preferred, Series G Preferred, Series H Preferred, Series I Preferred
and Series J Preferred shall have the rights, preferences, privileges and
restrictions granted to or imposed upon them as specified below.
2. Dividends.
(a) No dividend (payable other than in Common Stock of the
Corporation) may be paid on or declared or set apart for the Common Stock in any
one fiscal year unless a dividend at the rate of five percent (5%) of the
Initial Sales Price is paid on, or declared and set apart for, each share of
Series F Preferred, Series G Preferred, Series H Preferred, Series I Preferred
and Series J Preferred Stock. The amount of dividend shall be prorated for a
share of Series F Preferred, Series G Preferred, Series H Preferred, Series I
Preferred and Series J Preferred Stock which is not issued and outstanding for
an entire fiscal year. The dividends on the Series F Preferred, Series G
Preferred, Series H Preferred, Series I Preferred and Series J Preferred Stock
shall be paid out of any assets legally available therefor, when, as and if
declared by the Board of Directors. Dividends on the Series F Preferred, Series
G Preferred, Series H Preferred, Series I Preferred and Series J Preferred shall
not be cumulative and no rights shall accrue to the holders of the Series F
Preferred, Series G
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Preferred, Series H Preferred, Series I Preferred, nor the holders of the Series
J Preferred in the event the Corporation shall fail to declare or pay dividends
on the Series F Preferred, Series G Preferred, Series H Preferred, Series I
Preferred or Series J Preferred in the amount of five percent (5%) of the
Initial Sales Price per share per fiscal year or in any amount in any prior year
of the Corporation, whether or not the earnings of the Corporation in that
previous fiscal year were sufficient to pay such dividends in whole or in part.
In the event the Board of Directors of the Corporation declares dividends in a
fiscal year in an amount less than the aggregate of all the dividend preferences
of the Series E Preferred, the Series F Preferred, the Series G Preferred, the
Series H Preferred, the Series I Preferred and the Series J Preferred Stock,
then the entire amount of dividends declared by the Board of Directors shall be
distributed ratably among the holders of the Series E Preferred Stock, the
Series F Preferred Stock, the Series G Preferred Stock, the Series H Preferred
Stock, the Series I Preferred Stock and the Series J Preferred Stock such that
the same percentage of the annual dividend to which each series of Preferred
Stock is entitled is paid on each share of Series E Preferred Stock, Series F
Preferred Stock, Series G Preferred Stock, Series H Preferred Stock, Series I
Preferred Stock and the Series J Preferred Stock.
(b) 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, 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.
3. Liquidation Preference. In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation, after the payment to
which the holders of the Series E Preferred Stock, are entitled as set forth in
Article III.A.2 (the "Series E Distribution") has been made, no distribution
shall be made on the shares of Common Stock without first making a distribution
on the shares of Series F Preferred Stock, Series G Preferred Stock, Series H
Preferred Stock Series I Preferred Stock and Series J Preferred Stock (the
"Series F, Series G, Series H, Series I and Series J Distribution") equal to the
amount of the Initial Sales Price per share for each share of Preferred Stock,
plus all declared but unpaid dividends thereon. If upon occurrence of such
event, and after the Series E Distribution, the assets and property thus
distributed among the holders of the Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock, Series I Preferred Stock and Series J
Preferred Stock shall be insufficient to permit the payment to such holders of
their full respective preferential amounts, then the entire remaining assets and
property of the Corporation legally available for distribution shall be
distributed ratably among the holders of the Series F Preferred Stock, Series G
Preferred Stock, Series H Preferred Stock, Series I Preferred Stock and Series J
Preferred Stock such that the same percentage of the preferential amount to
which each series of Series F Preferred Stock, Series G Preferred Stock, Series
H Preferred Stock, Series I Preferred Stock and Series J Preferred Stock is
entitled is paid on each share of Series F Preferred Stock, Series G Preferred
Stock, Series H Preferred Stock, Series I Preferred Stock and Series J Preferred
Stock. A consolidation or merger of the Corporation with or into any other
corporation or corporations, other than a merger or consolidation which would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least fifty percent
(50%) of the total voting power represented by the voting securities of the
Corporation or such
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surviving entity outstanding immediately after such merger or consolidation, or
a sale of all or substantially all of the assets of the Corporation, shall be
deemed to be a liquidation, dissolution, or winding up of the Corporation.
4. Conversion. The holders of Preferred Stock shall have conversion
rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series F Preferred, Series
G Preferred, Series H Preferred, Series I Preferred and Series J Preferred Stock
shall be convertible, at any time after the date of issuance, at the option of
the holder thereof, of such share at the office of the Corporation or any
transfer agent for the Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred and Series J Preferred Stock, into that number of
fully-paid and nonassessable shares of Common Stock that is equal to the Initial
Sales Price for each respective Series of Preferred Stock divided by the
appropriate Conversion Price (as hereinafter defined) for each Series of
Preferred Stock. The Initial Sales Price shall be $3.039 per share for the
Series F Preferred, $1.992 per share for the Series G Preferred, $2.136 per
share for the Series H Preferred, $15.62 for the Series I Preferred and $12.531
per share for the Series J Preferred. The price at which shares of Common Stock
shall be deliverable upon conversion (individually the "Series F Conversion
Price", "Series G Conversion Price", "Series H Conversion Price", "Series I
Conversion Price" and "Series J Conversion Price", and collectively, the
"Conversion Prices") shall initially be $3.039 per share of Common Stock for
conversions of Series F Preferred, $1.992 per share of Common Stock for
conversions of Series G Preferred, $2.136 per share of Common Stock for
conversions of Series H Preferred, $1.562 per share of Common Stock for
conversions of Series I Preferred and $0.62655 per share of Common Stock for
conversions of Series J Preferred. Such initial Conversion Prices shall be
subject to adjustment as hereinafter provided.
(b) Automatic Conversion. All shares of Series F Preferred,
Series G Preferred, Series H Preferred, Series I Preferred and Series J
Preferred then outstanding shall automatically convert into shares of Common
Stock upon the election of at least 67% of the outstanding shares of each of the
respective Series F Preferred, Series G Preferred, Series H Preferred, Series I
Preferred and Series J Preferred (voting separately as a class) to convert
shares of the respective Series of Preferred Stock into Common Stock.
(c) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Series F Preferred, Series G Preferred,
Series H Preferred, Series I Preferred or Series J Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then fair
market value of such fractional shares as determined by the Board of Directors
of the Corporation. Before any holder of Series F Preferred, Series G Preferred,
Series H Preferred, Series I Preferred or Series J Preferred Stock shall be
entitled to convert the same into full shares of Common Stock, and to receive
certificates therefor, he shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for Series F Preferred, Series G Preferred, Series H Preferred, Series I
Preferred or Series J Preferred Stock, and shall give written notice to the
Corporation at such office that he elects to convert the same; provided,
however, that in the event of an automatic conversion pursuant to paragraph
B.4(b) above,
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the outstanding shares of Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred or Series J Preferred Stock shall be converted
automatically without any further action by the holders of such shares and
whether or not the certificates representing such shares are surrendered to the
Corporation or its transfer agent; provided further, however, that the
Corporation shall not be obligated to issue certificates evidencing the shares
of Common Stock issuable upon such automatic conversion unless either the
certificates evidencing such shares of Series F Preferred, Series G Preferred,
Series H Preferred, Series I Preferred or Series J Preferred Stock are 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 from any loss incurred by it in
connection with such certificates.
The Corporation shall, as soon as practicable after such
delivery, or after such agreement and indemnification, issue and deliver at such
office to such holder of Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred or Series J Preferred Stock a certificate or
certificates for the number of shares of Common Stock to which he shall be
entitled as aforesaid and a check payable to the holder in the amount of any
cash amounts payable as the result of a conversion into fractional shares of
Common Stock, plus any declared and unpaid dividends on the converted Series F
Preferred, Series G Preferred, Series H Preferred, Series I Preferred or Series
J Preferred 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
Series F Preferred, Series G Preferred, Series H Preferred, Series I Preferred
or Series J Preferred Stock to be converted, and the person or persons entitled
to receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on such date.
(d) Adjustments to Conversion Price for Diluting Issues.
(i) Special Definition. For purposes of this paragraph B.4(d),
"Additional Shares of Common" shall mean all shares of Common Stock issued (or,
pursuant to paragraph B.4(d)(iii), deemed to be issued) by the Corporation after
the Original Issue Date, other than shares of Common Stock issued or issuable:
(1) upon conversion of shares of Preferred Stock;
(2) to the Corporation's employees, officers,
directors and consultants as may be determined by the Corporation's Board of
Directors from time to time;
(3) as a dividend or distribution on Preferred Stock
or pursuant to any event for which adjustment is made pursuant to paragraph
B.4(e)(i) or (ii) hereof;
(4) pursuant to commercial borrowing, secured lending
or lease financing transactions approved by the Board of Directors;
(5) in any transaction, other than the issuance by
the Company of Series J Preferred, in which the issuance (or, pursuant to
paragraph 4(d)(iii), deemed issuance) by the
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Corporation of such shares of Common Stock results in net proceeds to the
Corporation of less than $500,000;
(6) upon exercise of any options or warrants
outstanding as of the Original Issue Date to purchase the Company's Common Stock
or Preferred Stock.
(ii) No Adjustment of Conversion Price. No adjustment in the
Conversion Price of a particular share of Series F Preferred, Series G
Preferred, Series H Preferred, Series I Preferred or Series J Preferred Stock
shall be made in respect of the issuance of Additional Shares of Common unless
the consideration per share for an Additional Share of Common issued or deemed
to be issued by the Corporation is less than the Conversion Price in effect on
the date of, and immediately prior to such issue, for such share of Preferred
Stock.
(iii) Deemed Issue of Additional Shares of Common. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall issue any options, warrants or convertible securities or shall fix a
record date for the determination of holders of any class of securities entitled
to receive any such options, warrants or convertible securities, then the
maximum number of shares (as set forth in the instrument relating thereto
without regard to any provisions contained therein for a subsequent adjustment
of such number) of Common Stock issuable upon the exercise of such options or
warrants or, in the case of convertible securities and options or warrants
therefor, the conversion or exchange of such convertible securities or exercise
of such options or warrants, shall be deemed to be Additional Shares of Common
issued as of the time of such issue or, in case such a record date shall have
been fixed, as of the close of business on such record date, provided that
Additional Shares of Common shall not be deemed to have been issued unless the
consideration per share (determined pursuant to paragraph 4(d)(v) hereof) of
such Additional Shares of Common would be less than the Conversion Price in
effect on the date of and immediately prior to such issue, or such record date,
as the case may be, and provided further that in any such case in which
Additional Shares of Common are deemed to be issued:
(1) no further adjustment in the Conversion Price
shall be made upon the subsequent issue of convertible securities or shares of
Common Stock upon the exercise of such options or warrants or conversion or
exchange of such convertible securities;
(2) if such options, warrants or convertible
securities by their terms provide, with the passage of time or otherwise, for
any increase or decrease in the consideration payable to the Corporation, or
increase or decrease in the number of shares of Common Stock issuable, upon the
exercise, conversion or exchange thereof, the Conversion Price computed upon the
original issue thereof (or upon the occurrence of a record date with respect
thereto), and any subsequent adjustments based thereon, shall, upon any such
increase or decrease becoming effective, be recomputed to reflect such increase
or decrease insofar as it affects such options or warrants or the rights of
conversion or exchange under such convertible securities;
(3) no readjustment pursuant to clause (2) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price on the original adjustment date,
or (ii) the Conversion Price that would have resulted from any
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issuance of Additional Shares of Common between the original adjustment date and
such readjustment date;
(4) upon the expiration of any such options or
warrants or any rights of conversion or exchange under such convertible
securities which shall not have been exercised, the Conversion Price computed
upon the original issue thereof (or upon the occurrence of a record date with
respect thereto) and any subsequent adjustments based thereon shall, upon such
expiration, be recomputed as if:
(A) in the case of convertible securities or
options or warrants for Common Stock, the only Additional Shares of Common
issued were the shares of Common Stock, if any, actually issued upon the
exercise of such options or warrants or the conversion or exchange of such
convertible securities and the consideration received therefor was the
consideration actually received by the Corporation for the issue of such
exercised options or warrants plus the consideration actually received by the
Corporation upon such exercise or for the issue of all such convertible
securities which were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Corporation upon such conversion
or exchange, and
(B) in the case of options or warrants for
convertible securities, only the convertible securities, if any, actually issued
upon the exercise thereof were issued at the time of issue of such options or
warrants, and the consideration received by the Corporation for the Additional
Shares of Common deemed to have been then issued was the consideration actually
received by the Corporation for the issue of such exercised options or warrants,
plus the consideration deemed to have been received by the Corporation
(determined pursuant to paragraph B.4(d)(v)) upon the issue of the convertible
securities with respect to which such options or warrants were actually
exercised; and
(5) if such record date shall have been fixed and
such options, warrants or convertible securities are not issued on the date
fixed therefor, the adjustment previously made in the Conversion Price which
became effective on such record date shall be canceled as of the close of
business on such record date, and thereafter the Conversion Price shall be
adjusted pursuant to this paragraph 4(d)(iii) as of the actual date of their
issuance.
(iv) Adjustment of Conversion Price Upon Issuance of
Additional Shares of Common. In the event the Corporation, on or before the
earlier of (i) the first anniversary of the final sale by the Corporation of
Series F Preferred prior to June 30, 1996, the first anniversary of the final
sale by the Corporation of Series G Preferred prior to December 31, 1996, the
first anniversary of the final sale by the Corporation of Series H Preferred and
Series I Preferred prior to June 30, 1998, and the first anniversary of the
final sale by the Company of Series J Preferred prior to August 22, 1998,
respectively and (ii) June 30, 1997 (with respect to the Series F Preferred),
December 31, 1997 (with respect to the Series G Preferred), June 30, 1999 (with
respect to the Series H Preferred and Series I Preferred), and August 22, 1999
(with respect to the Series J Preferred) (the earlier of which dates is referred
to as the "Determination Date"), issues Additional Shares of Common (including
Additional Shares of Common deemed to be issued pursuant to paragraph
B.4(d)(iii)) without consideration or for a consideration per share less than
the Conversion Price for the
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respective Series of Preferred Stock in effect on the date of and immediately
prior to such issue (a "Dilutive Issuance"), then and in such event such
Conversion Price shall be reduced, concurrently with such issue, to a price
equal to such consideration per share of the Additional Shares of Common. The
Conversion Price of the Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred and Series J Preferred Stock shall not be reduced
as a result of any Dilutive Issuance that occurs after the Determination Date.
(v) Determination of Consideration. For purposes of this
subsection 4(d), the consideration received by the Corporation for the issue of
any Additional Shares of Common shall be computed as follows:
(1) Cash and Property. Such consideration shall:
(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 value thereof at the time of such issue, as
determined in good faith by the Board of Directors; and
(c) in the event Additional Shares of Common
are issued together with other shares or securities or other assets of the
Corporation for consideration which covers both, be the proportion of such
consideration so received, computed as provided in clauses a) and b) above, as
determined in good faith by the Board of Directors.
(2) Options and Convertible Securities. The
consideration per share received by the Corporation for Additional Shares of
Common deemed to have been issued pursuant to paragraph 4(d)(iii), relating to
options, warrants and convertible securities, shall be determined by dividing
(a) the total amount, if any, received or
receivable by the Corporation as consideration for the issue of such options,
warrants or convertible securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the exercise of such options
or warrants or the conversion or exchange of such convertible securities, or in
the case of options or warrants for convertible securities, the exercise of such
options for convertible securities and the conversion or exchange of such
convertible securities by
(b) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of such number) issuable
upon the exercise of such options or warrants or the conversion or exchange of
such convertible securities.
(e) Adjustments to Conversion Rate.
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(i) Adjustments for Subdivisions, Splits, Combinations,
Consolidations, Reorganizations or Reclassifications of Common Stock. In the
event that after the date of the first issuance of the Series F Preferred,
Series G Preferred, Series H Preferred, Series I Preferred and Series J
Preferred Stock the outstanding shares of Common Stock shall be (a) subdivided
or split into a greater number of shares of Common Stock; (b) combined or
consolidated, by reclassification or otherwise, into a lesser number of shares
of Common Stock or (c) changed into a different number of shares of any other
class or classes of stock, whether by capital reorganization, reclassification
or otherwise, the holders of the shares of Preferred Stock shall receive upon
conversion, the stock and/or securities to which the holder would have been
entitled had the holder held, at the time of said split, subdivision,
combination, consolidation, reorganization or reclassification, the same number
of shares of Common Stock as the number of Series J Preferred Stock converted.
(ii) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time after the date of the first issuance of the
Series F Preferred, Series G Preferred, Series H Preferred, Series I Preferred
and Series J Preferred Stock makes, or fixes a record date for, the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in the securities of the Corporation, then the
holders of the shares of Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred and Series J Preferred Stock shall receive upon
conversion, in addition to the number of sharers of Common Stock receivable
thereupon, the stock or securities to which the holder would have been entitled
had the holder held, at the time of said dividend or other distribution, the
same number of shares of Common Stock as the number of Series F Preferred,
Series G Preferred, Series H Preferred, Series I Preferred and Series J
Preferred converted, and had they thereafter during the period from the date of
such event to and including the date of conversion, retained such stock or
securities receivable by them as aforesaid during such period, subject to all
other adjustments called for during such period under this Section B.4 with
respect to the respective rights of the holders of the Series F Preferred,
Series G Preferred, Series H Preferred, Series I Preferred and Series J
Preferred.
5. Voting Rights. Except as otherwise required by law, the holders of
Series F Preferred, Series G Preferred, Series H Preferred, Series I Preferred
and Series J Preferred Stock shall be entitled to notice of any shareholders'
meeting in accordance with the Bylaws of the Corporation and to vote together as
a single class with the holders of the Common Stock (except with respect to
those matters required by law to be submitted to a separate class or series
vote) upon the election of directors and upon any other matter submitted to
shareholders for a vote, on the following basis:
(a) Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred and Series J Preferred Stock Vote. 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 it is convertible, as adjusted
from time to time under Section 4 hereof. Fractional votes shall not, however,
be permitted and any fractional voting rights resulting from the above formula
(after aggregating all shares into which shares of Preferred Stock held by each
holder could be converted) shall be rounded to the nearest whole number (with
one-half being rounded upward).
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(b) Cumulative Voting. Notwithstanding the above, for the
election of directors each holder of Series F Preferred, Series G Preferred,
Series H Preferred, Series I Preferred and Series J Preferred, shall after
giving the notice required by Section 708 of the California Corporations Code,
as amended from time to time, be entitled to the number of votes as determined
pursuant to paragraph (a) above multiplied by the number of directors to be
elected, with each shareholder being entitled to cumulate such votes for one
candidate or to distribute such votes among the candidates as the shareholder
sees fit.
6. Covenants. In addition to any other rights provided by law, so long
as 33% of the originally issued Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred and Series J Preferred shall be outstanding
respectively, this Corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of not less than a majority
of the outstanding shares of each of the Series F Preferred, Series G Preferred,
Series H Preferred, Series I Preferred and Series J Preferred Stock voting
separately as single classes.
(a) amend or repeal any provision of, or add any provision to,
this Corporation's Articles of Incorporation if such action would materially and
adversely alter or change the preferences, rights, privileges or powers of, or
the restrictions provided for the benefit of, the Series F Preferred, Series G
Preferred, Series H Preferred, Series I Preferred and Series J Preferred Stock
authorized hereby;
(b) authorize or issue shares of any class of stock having any
preference or priority as to dividends or assets superior to any such preference
or priority of the Series F Preferred, Series G Preferred, Series H Preferred,
Series I Preferred and Series J Preferred Stock; or
(c) reclassify any shares of Common Stock into shares having
any preference or priority as to dividends or assets superior to any such
preference or priority of the Series F Preferred, Series G Preferred, Series H
Preferred, Series I Preferred and Series J Preferred Stock.
Article IV
Section 1. Limitation of Directors' Liability. The liability of the
directors of this Corporation for monetary damages shall be eliminated to the
fullest extent permissible under California law.
Section 2. Indemnification of Corporation Agents. This Corporation is
authorized to provide through bylaw provisions, agreements with its agents, vote
of shareholders or disinterested directors or otherwise; indemnification of its
agents (as defined in Section 317 of the California General Corporation Law) in
excess of the indemnification otherwise permitted by such Section 317, subject
to the limits set forth in Section 204 of the California General Corporation Law
for breach of duty to this Corporation or its shareholders.
Section 3 Repeal or Modification. Any repeal or modification of the
foregoing provisions of this Article IV by the shareholders of the Corporation
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.
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