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Exhibit 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
TULLY'S COFFEE CORPORATION
Pursuant to the provisions of RCW 23B.10.070 of the Washington Business
Corporation Act, the undersigned adopts and submits for filing the following
Amended and Restated Articles of Incorporation of TULLY'S COFFEE CORPORATION
(the "Corporation"). The original Articles of Incorporation of the
Corporation were filed on July 16, 1992, and amended by Articles of Amendment
to the Articles of Incorporation filed on July 26, 1993, April 10, 1995, June
8, 1998 and October 23, 1998.
FIRST: The name of the Corporation is TULLY'S COFFEE CORPORATION.
SECOND: Effective upon the filing of these Amended and Restated Articles
of Incorporation with the Secretary of State of the State of Washington, the
original Articles of Incorporation of the Corporation and all amendments
thereto shall be replaced and superseded by the following Amended and
Restated Articles of Incorporation of the Corporation:
ARTICLE I. NAME
The name of the Corporation is TULLY'S COFFEE CORPORATION.
ARTICLE II. SHARES
2.1 AUTHORIZED CAPITAL.
The total number of shares which the Corporation is authorized to issue
is 150,000,000, consisting of 120,000,000 shares of Common Stock without par
value and 30,000,000 shares of Preferred Stock without par value. The Common
Stock is subject to the rights and preferences of the Preferred Stock as
hereinafter set forth.
2.2 ISSUANCE OF PREFERRED STOCK IN SERIES.
The Preferred Stock may be issued from time-to-time in one or more
series in any manner permitted by law and the provisions of these Amended and
Restated Articles of Incorporation of the Corporation, as determined from
time-to-time by the Board of Directors and stated in the resolution or
resolutions providing for the issuance thereof, prior to the issuance of
authority to fix and determine and to amend, subject to the provisions
hereof, the designation, preferences, limitations and relative rights of the
shares of any series that is wholly unissued or to be established. Unless
otherwise specifically provided in the resolution establishing any series,
the Board of Directors shall further have the authority,
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after the issuance of shares of a series whose number it has designated, to
amend the resolution establishing such series to decrease the number of
shares of that series, but not below the number of share of such series then
outstanding.
2.3 DIVIDENDS.
The holders of shares of the Preferred Stock shall be entitled to
receive dividends out of the funds of the corporation legally available
therefor at the rate and at the time or times, whether cumulative or
noncumulative, as may be provided by the Board of Directors in designating a
particular series of Preferred Stock. If such dividends on the Preferred
Stock shall be cumulative, then if dividends shall not have been paid, the
deficiency shall be fully paid or the dividends declared and set apart for
payment at such rate, but without interest on cumulative dividends, before
any dividends on the Common Stock shall be paid or declared and set apart for
payment. The holders of the Preferred Stock shall not be entitled to receive
any dividends thereon other than the dividends referred to in this Section.
2.4 REDEMPTION.
The Preferred Stock may be redeemable at such price, in such amount, and
at such time or times as may be provided by the Board of Directors in
designating a particular series of Preferred Stock. In any event, such
Preferred Stock may be repurchased by the Corporation to the extent legally
permissible.
2.5 LIQUIDATION.
In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, then, before
any distribution shall be made to the holders of the Common Stock, the
holders of the Preferred Stock at the time outstanding shall be entitled to
be paid the preferential amount or amounts per share as may be provided by
the Board of Directors in designating a particular series of Preferred Stock
and dividends accrued thereon to the date of such payment. The holders of the
Preferred Stock shall not be entitled to receive any distributive amounts
referred to in this Section, unless otherwise provided by the Board of
Directors in designating a particular series of Preferred Stock.
2.6 CONVERSION.
Shares of Preferred Stock may be convertible into Common Stock of the
Corporation upon such terms and conditions, at such rate and subject to such
adjustments as may be provided by the Board of Directors in designating a
particular series of Preferred Stock.
2.7 VOTING RIGHTS.
Holders of Preferred Stock shall have such voting rights as may be
provided by the Board of Directors in designating a particular series of
Preferred Stock.
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2.8 SERIES A PREFERRED STOCK.
The rights, preferences, privileges and restrictions granted to and
imposed on the Series A Preferred Stock, which shall consist of 17,500,000
shares are as set forth below:
a. DIVIDENDS. The holders of shares of Series A Preferred Stock
shall share ratably (on an as-if converted to Common Stock basis) with the
holders of the Corporation's Common Stock in any dividends, when and if such
dividends are declared by the Corporation's Board of Directors.
b. LIQUIDATION. In the event of any liquidation, dissolution or
winding up of the affairs of the Corporation (other than a deemed
liquidation, dissolution and winding up in connection with a Sale Transaction
as hereinafter defined), whether voluntary or involuntary, before any
distribution shall be made to the holders of the Common Stock, the holders of
the Series A Preferred Stock at the time outstanding shall be entitled to be
paid an amount per share equal to $2.50 (the "Original Series A Issue
Price"), plus all declared but unpaid dividends (the "Series A Liquidation
Preference"). If the assets and funds available for distribution to the
holders of the Series A Preferred Stock are insufficient to permit the
payment to such holders of the full Series A Liquidation Preference, then,
subject to the rights of any series of Preferred Stock which may from
time-to-time come into existence, the entire assets and funds of the
corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock in proportion to the amount
of such stock owned by each such holder. Assuming distribution of the full
Series A Liquidation Preference, the holders of the Common Stock at the time
outstanding shall be entitled to be paid an amount per share equal to $2.25,
plus all declared but unpaid dividends (the "Common Stock Liquidation
Preference"). If, after full payment of the Series A Liquidation Preference,
the assets and funds available for distribution to the holders of the Common
Stock are insufficient to permit the payment to such holders of the full
Common Stock Liquidation Preference, then the assets and funds of the
Corporation remaining after full payment of the Series A Liquidation
Preference and legally available for distribution shall be distributed
ratably among the holders of the Common Stock in proportion to the amount of
such stock owned by each such holder. Assuming distribution of the full
Series A Liquidation Preference and the full Common Stock Liquidation
Preference, subject to the rights of any series of Preferred Stock which may
from time-to-time come into existence, the remaining assets of the
Corporation available for distribution to Shareholders shall be distributed
among the holders of Series A Preferred Stock and Common Stock pro rata based
on the number of shares of Common Stock held by each (assuming, for this
purpose, full conversion of all such Series A Preferred Stock).
Any (i) acquisition of the Corporation by means of a merger,
consolidation or other form of corporate reorganization in which outstanding
shares of the Corporation are exchanged for securities or other consideration
issued, or caused to be issued, by the acquiring entity or its subsidiary
(other than a mere reincorporation transaction or a merger which will not
result in more than fifty percent (50%) of the Corporation's capital stock
outstanding immediately after the effective date of such merger being owned
of record or
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beneficially by persons other than the holders of such capital stock
immediately prior to such merger), or (ii) sale, conveyance or transfer of
all or substantially all of the assets of the Corporation (in either case, a
"Sale Transaction") shall be deemed to be a liquidation, dissolution or
winding up of the Corporation for purposes of this SECTION 2.8(b), and shall
entitle the holders of the Series A Preferred Stock to receive at the closing
of the Sale Transaction, in redemption of such Holders' Series A Preferred
Stock, in cash, securities or other property (valued at the fair market value
thereof as determined by the Board of Directors in good faith), in an amount
per share (the "Series A Sale Transaction Liquidation Preference") equal to
the Series A Liquidation Preference reduced by the amount by which the Common
Stock Transaction Amount (as hereinafter defined) exceeds $1.78 (as adjusted
for stock splits, stock dividends, and the like); provided, however, that in
no event shall the Series A Sale Transaction Liquidation Preference be less
than $1.78. For these purposes, (1) the term "Common Stock Transaction
Amount" means the amount or value of consideration payable to the Corporation
or the holders of the Corporation's outstanding equity securities with
respect to the Sale Transaction divided by the aggregate number of shares of
Common Stock then issued and outstanding and issuable on exercise or
conversion of Eligible Common Stock Equivalents, and (ii) the term "Eligible
Common Stock Equivalents" means options, warrants or other rights to acquire
Common Stock and other debt or equity securities convertible into Common
Stock which are then, or as a result of the Sale Transaction will become,
exercisable or convertible at an exercise or conversion price of $1.78 (as
adjusted for stock splits, stock dividends and the like) or less.
Each holder of Series A Preferred Stock shall have the right to elect
the benefits of Section 2.8(c)(i) or other applicable conversion provisions
in lieu of receiving payment in a liquidation, dissolution or winding up (or
deemed liquidation, dissolution or winding up) of the Corporation pursuant to
this SECTION 2.8(b).
c. CONVERSION. The holders of Series A Preferred Stock shall have
conversion rights as follows:
i. OPTIONAL CONVERSION. Subject to subsection 2.8(c)(iii),
each share of Series A Preferred Stock shall be convertible, 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 the Series A
Preferred Stock, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing the sum of $1.78 plus any declared
but unpaid dividends on such share by the Conversion Price (as defined in
subsection 2.8(c)(iv)) at the time then in effect for such share.
ii. AUTOMATIC CONVERSION. Each share of Series A Preferred
Stock shall automatically be converted into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the sum of
$1.78 plus any declared but unpaid dividends on such share by the Conversion
Price at the time then in effect for such share immediately upon the earlier
of (A) a "Qualified Public Offering" (as defined herein), or (B) the date
upon which the Corporation obtains the consent of the holders of at least
seventy-five percent (75%) of the then outstanding shares of Series A
Preferred Stock (each,
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an "Automatic Conversion Event"). For purposes of this subsection 2.8(c)(ii),
"Qualified Public Offering" shall mean the consummation of the Corporation's
first sale of its Common Stock to the public pursuant to a registration
statement on Form S-1 or Form SB-2 (or any successor form) under the
Securities Act of 1933, as amended, at an aggregate price to the public of at
least $15 million and a per share price to the public of at least $5.00 (as
adjusted for stock splits, combinations, recapitalizations and the like).
Upon the occurrence of an Automatic Conversion Event, the outstanding shares
of Series A 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, that the Corporation shall not be obligated to
issue to any such holder certificates evidencing the shares of Common Stock
issuable upon such conversion unless certificates evidencing the shares of
Series A Preferred Stock are delivered to the Corporation or its transfer
agent.
iii. MECHANICS OF OPTIONAL CONVERSION. The holder of any shares
of Series A Preferred Stock may exercise the optional conversion right
described in subsection 2.8(c)(i) by surrendering to the Corporation or any
transfer agent of the corporation the certificate or certificates for the
shares to be converted, duly endorsed, at the office of the Corporation or of
any transfer agent for the Series A Preferred Stock, accompanied by written
notice specifying the number of shares to be converted and the name or names
in which the certificate or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable thereafter, issue and
deliver at such office to such holder of Series A Preferred Stock, or to the
nominee or nominees of such holder, a certificate or certificates for the
number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of the shares of
Series A Preferred Stock 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 as of such date.
iv. CONVERSION PRICE ADJUSTMENTS OF SERIES A PREFERRED STOCK.
The conversion price per share for shares of Series A Preferred Stock (the
"Conversion Price") shall initially be $1.78, and shall be subject to
adjustment as provided below:
A. If the corporation should (I) declare a dividend or
make a distribution on its Common Stock in shares of its Common Stock, (II)
subdivide or reclassify its outstanding shares of Common Stock into a greater
number of shares, or (III) combine or reclassify its outstanding shares of
Common Stock into a smaller number of shares, the Conversion Price then in
effect at the time of the record date for such dividend or distribution or
the effective date of such subdivision, combination or reclassification shall
be proportionately adjusted so that the holder of any shares of Series A
Preferred Stock which may thereafter be surrendered for conversion or
automatically converted shall be entitled to receive the number of shares of
Common Stock which the holder would have owned or been entitled to receive
had such Series A Preferred Stock been converted prior to such date.
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Successive adjustments to the Conversion Price shall be made whenever any
event specified above shall occur.
B. (I) Upon each issuance by the Corporation of any
Additional Stock (as defined in subsection 2.8(c)(iv)(C)), after the date
upon which any shares of Series A Preferred Stock were first issued (the
"Purchase Date") without consideration or for a consideration per share less
than the Conversion Price for the Series A Preferred Stock in effect
immediately prior to the issuance of such Additional Stock, the Conversion
Price for the Series A Preferred Stock in effect immediately prior to each
such issuance shall forthwith (except as otherwise provided in subsection
2.8(c)(iv)(B)(II)) be reduced to a per share amount determined by multiplying
such Conversion Price by a fraction, the numerator of which shall be the
number of shares of Common Stock deemed outstanding (as defined in the
following sentence) immediately prior to such issuance plus the number of
shares of Common Stock which the aggregate consideration received by the
corporation for such issuance of Additional Stock would purchase at such
Conversion Price; and the denominator of which shall be the number of shares
of Common Stock deemed outstanding (as defined in the following sentence)
immediately prior to such issuance plus the number of shares of such
Additional Stock. For the purposes of the preceding sentence, all outstanding
shares of Common Stock and all shares of Common Stock issuable upon
conversion of outstanding Preferred Stock or other convertible instruments or
upon exercise of options or warrants or other rights to acquire Common Stock
or convertible securities (and the resulting securities fully converted into
shares of Common Stock, if so convertible) shall be "deemed outstanding."
(II) No adjustment of the Conversion Price for the
Series A Preferred Stock shall be made in an amount less than one cent ($.01)
per share; provided that any adjustments which are not required to be made by
reason of this sentence shall be carried forward and shall be either taken
into account in any subsequent adjustment made prior to three years from the
date of the event giving rise to the adjustment being carried forward, or
shall be made at the end of three years from the date of the event giving
rise to the adjustment being carried forward. Except to the limited extent
provided for in subsections 2.8(c)(iv)(B)(V)(c) and (d) below, no adjustment
of such Conversion Price pursuant to this subsection 2.8(c)(iv)(B) shall have
the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.
(III) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid
therefor, before deducting any reasonable discounts, commissions or other
expenses allowed, paid or incurred by the Corporation for any underwriting or
otherwise in connection with the issuance and sale thereof.
(IV) In the case of the issuance of the Common Stock
for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair value thereof as determined in
good faith by the Board of Directors. In the case of the issuance of
Additional Stock that is sold together with other securities or
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assets of the corporation for a consideration which covers both the
Additional Stock and such other securities or assets, the consideration per
share for the Additional Stock will be that portion of the total
consideration received by the Corporation which is allocated to the
Additional Stock as determined in good faith by the Board.
(V) In the case of the issuance after the Purchase
Date of options or warrants to purchase or rights to subscribe for Common
Stock, securities by their terms convertible into or exchangeable for Common
Stock or options to purchase or rights to subscribe for such convertible or
exchangeable securities (other than the issuance of any options pursuant to
the Option Plan defined in Section 2.8(c)(iv)(QIV)), such issuances shall be
deemed issuances of "Additional Stock" and the following provisions shall
apply for all purposes of this subsection 2.8(c)(iv)(B):
(a) The aggregate maximum number of shares of
Common Stock deliverable upon exercise of such options or warrants to
purchase or rights to subscribe for Common Stock shall be deemed to have been
issued at the time such options, warrants or rights were issued and for a
consideration equal to the consideration (determined in the manner provided
in subsections 2.8(c)(iv)(B)(III) and (IV), if any, received by the
Corporation upon the issuance of such options, warrants or rights plus the
minimum exercise price provided in such options, warrants or rights for the
Common Stock covered thereby.
(b) The aggregate maximum number of shares of
Common Stock deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities or upon the exercise of options or
warrants to purchase or rights to subscribe for such convertible or
exchangeable securities and subsequent conversion or exchange thereof, shall
be deemed to have been issued at the time such securities were issued or such
options, warrants or rights were issued and for a consideration equal to the
consideration, if any, received by the Corporation for any such securities
and related options, warrants or rights (excluding any cash received on
account of accrued interest or accrued dividends), plus the minimum
additional consideration, if any, to be received by the Corporation upon the
conversion or exchange of such securities or the exercise of any related
options, warrants or rights (the consideration in each case to be determined
in the manner provided in subsections 2.8(c)(iv)(B)(III) and (IV)).
(c) In the event of any change in the number of
shares of Common Stock deliverable or in the consideration payable to the
Corporation upon exercise of such options or rights or upon conversion of or
in exchange for such convertible or exchangeable securities, including, but
not limited to, a change resulting from the anti-dilution provisions thereof,
the Conversion Price of the Series A Preferred Stock, to the extent in any
way affected by or computed using such options, rights or securities, shall
be recomputed to reflect such change, but no further adjustment shall be made
for the actual issuance of Common Stock or any payment of such consideration
upon the exercise of any such options or rights or the conversion or exchange
of such securities.
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(d) Upon the expiration of any such options or
rights, the termination of any such rights to convert or exchange or the
expiration of any options or rights related to such convertible or
exchangeable securities, the Conversion Price of the Series A Preferred
Stock, to the extent in any way affected by or computed using such options,
rights or securities or options or rights related to such securities, shall
be recomputed to reflect the issuance of only the number of shares of Common
Stock (and convertible or exchangeable securities which remain in effect)
actually issued upon the exercise of such options or rights, upon the
conversion or exchange of such securities or upon the exercise of the options
or rights related to such securities.
(e) The number of shares of Common Stock deemed
issued and the consideration deemed paid therefor pursuant to subsections
2.8(c)(iv)(B)(V)(a) and (b) shall be appropriately adjusted to reflect any
change, termination or expiration of the type described in either subsection
2.8(c)(iv)(B)(V)(c) or (d).
C. "Additional Stock" shall mean any shares of Common
Stock issued (or deemed to have been issued pursuant to subsection
2.8(c)(iv)(B)(V)) by this corporation after the Purchase Date, other than:
(I) Common Stock issued pursuant to a transaction
described in subsection 2.8(c)(iv)(A) hereof;
(II) up to four hundred thousand (400,000) shares of
Common Stock (as adjusted for stock splits and the like) issued or issuable
upon exercise of options to purchase Common Stock outstanding as of August
31, 1998;
(III) warrants to purchase up to four million
(4,000,000) shares of Common Stock (as adjusted for stock splits and the
like) sold and issued as a unit with the shares of Series A Preferred Stock
and the shares of Common Stock issued or issuable upon exercise thereof; and
(IV) shares of Common Stock (as adjusted for stock
splits and the like) issued or issuable upon exercise of options to purchase
Common Stock granted or issued after August 31, 1998, pursuant to that
certain 1994 Stock Option Plan adopted October 1994, by the Corporation (the
"Option Plan") up to but not exceeding five percent (5%) of the aggregate
number of: (i) the outstanding shares of Common Stock as of the date of these
Articles of Amendment; and (ii) the outstanding shares of the Series A
Preferred Stock.
v. OTHER DISTRIBUTIONS. In the event the Corporation
shall declare a distribution to all holders of shares of its Common Stock
which is payable in (A) securities other than its Common Stock, (B) evidences
of indebtedness issued by Corporation or other persons, (C) assets (excluding
cash dividends), or (D) options or rights, then, in each such case the
holders of the Series A Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of the number
of shares of Common
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Stock of the Corporation into which their shares of Series A Preferred Stock
are convertible as of the record date fixed for the determination of the
holders of Common Stock of the Corporation entitled to receive such
distribution.
vi. RECAPITALIZATIONS.If at any time or from
time-to-time there shall be a recapitalization, reclassification or
reorganization of the Common Stock such that the Common Stock shall be
changed into the same or different number of shares of any class or series of
stock (other than a subdivision or combination transaction provided for
elsewhere in this SECTION 2.8(c)), provision shall be made so that the
holders of the Series A Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series A Preferred Stock the number of shares
of stock or other securities or property of the Corporation or otherwise, to
which a holder of Common Stock deliverable upon conversion would have been
entitled on such recapitalization, reclassification or reorganization. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this SECTION 2.8(c) with respect to the rights of the holders
of the Series A Preferred Stock after the recapitalization, reorganization or
reclassification, to the end that the provisions of this SECTION 2.8(c)
(including adjustment of the Conversion Price then in effect and the number
of shares purchasable upon conversion of the Series A Preferred Stock) shall
be applicable after that event as nearly equivalent as may be practicable.
vii. NO IMPAIRMENT. The Corporation will not, by
amendment of its Articles of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution,
issue or sale of securities or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this SECTION 2.8(c) 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 A Preferred
Stock against impairment.
viii. NO FRACTIONAL SHARES AND CERTIFICATE AS TO
ADJUSTMENTS.
A. No fractional shares shall be issued upon
conversion of the Series A Preferred Stock, and the number of shares of
Common Stock to be issued shall be rounded to the nearest whole share.
Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Series A Preferred
Stock the holder is at the time converting into Common Stock and the number
of shares of Common Stock issuable upon such aggregate conversion.
B. Upon the occurrence of each adjustment or
readjustment of the Conversion Price of Series A Preferred Stock pursuant to
this SECTION 2.8(c), the Corporation, at its expense, shall promptly compute
such adjustment or readjustment in accordance with the terms hereof and
prepare and furnish to each holder of Series A 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 Series A Preferred
Stock, furnish or
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cause to be furnished to such holder a like certificate setting forth (I)
such adjustment and readjustment, (II) the Conversion Price at the time in
effect, and (III) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the
conversion of a share of Series A Preferred Stock.
ix. NOTICES OF RECORD DATE. In the event of any
taking by the Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend) or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to
receive any other right, this corporation shall mail to each holder of Series
A Preferred Stock, at least twenty (20) days prior to the date specified
therein, a notice specifying the date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right.
x. RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of the Series A Preferred Stock such
number of its shares of Common Stock as shall from time-to-time be sufficient
to effect the conversion of all outstanding shares of the Series A Preferred
Stock; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series A Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series A Preferred
Stock, the Corporation will take such corporate action as may, in the opinion
of its counsel, be necessary to increase its authorized but unissued shares
of Common Stock to such number of shares as shall be sufficient for such
purposes.
xi. NOTICES. Any notice required by the provisions of
this SECTION 2.8(c) to be given to the holders of shares of Series A
Preferred Stock shall be deemed given if deposited in the United States mail,
postage prepaid, and addressed to each holder of record at the address
appearing on the books of the Corporation for each holder.
d. VOTING RIGHTS. Each share of Series A Preferred Stock is
entitled to cast one vote for each share of Common Stock into which such
share is then convertible on all matters submitted to a vote of the
Shareholders of the Corporation, except in connection with the election of
Directors of the Corporation, in which case all Shareholders (Preferred and
Common) may cumulate their votes and cast them all for one or more of the
Director candidates, provided, however, that so long as shares of Series A
Preferred Stock are outstanding, the Corporation shall not without first
obtaining the approval (by vote or written consent) of the holders of at
least a majority of the then outstanding shares of Series A Preferred Stock:
(i) alter or change the rights, preferences or privileges of
the shares of Series A Preferred Stock so as to affect adversely the shares;
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(ii) increase the authorized number of shares of Series A
Preferred Stock; or
(iii) create any new class or series of stock or any other
securities convertible into equity securities of the Corporation having a
preference over or being on parity with the Series A Preferred Stock with
respect to voting, dividends or upon liquidation.
ARTICLE III. REGISTERED OFFICE AND AGENT
The registered agent and registered office of the Corporation re as
follows:.
<TABLE>
<CAPTION>
Registered Agent Registered Office, Street and
Mailing Address
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<S> <C>
Washington Corporate Services, Inc. 701 Fifth Avenue
2250 Columbia Center
Seattle, Washington 98104
</TABLE>
ARTICLE IV. DIRECTORS
The number of Directors of this Corporation shall be fixed by the Bylaws
and may be increased or decreased from time-to-time in the manner specified
therein.
ARTICLE V. LIMITATION OF LIABILITY
A Director of this Corporation shall not be personally liable to this
Corporation or its Shareholders for monetary damages for conduct as a
Director, except for:
a. Acts or omissions involving intentional misconduct by the Director
or a knowing violation of law by the Director;
b. Conduct violating RCW 23B.08.310 (which involves certain
distributions by the Corporation); or
c. Any transaction from which the Director will personally
receive a benefit in money, property or services to which the
Director is not legally entitled.
If the Washington Business Corporation Act is amended to authorize
corporate action further eliminating or limiting the personal liability of
Directors, then the liability of a Director of this Corporation shall be
eliminated or limited to the fullest extent permitted by
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the Washington Business Corporation Act, as so amended. Any repeal or
modification of the foregoing paragraph by the Shareholders of this
Corporation shall not adversely affect any right or protection of a Director
of this Corporation with respect to any acts or omissions of such Director
occurring prior to such repeal or modification.
ARTICLE VI. INDEMNIFICATION
This Corporation shall indemnify and advance expenses to its Directors,
Officers, Agents and Employees, as follows:
6.1 DIRECTORS AND OFFICERS.
This Corporation shall indemnify its Directors and Officers to the full
extent permitted by the Washington Business Corporation Act now or hereafter
in force. However, such indemnity shall not apply on account of: (1) acts or
omissions of the Director or Officer finally adjudged to be intentional
misconduct or a knowing violation of law; (2) conduct of the Director finally
adjudged to be in violation of RCW 23B.08.310; or (3) any transaction with
respect to which it was finally adjudged that such Director or Officer
personally received a benefit in money, property or services to which the
Director or Officer was not legally entitled.
This Corporation shall advance expenses for such persons pursuant to the
terms set forth in the Bylaws, or in a separate Directors' Resolution or
Contract.
6.2 EMPLOYEES AND AGENTS WHO ARE NOT DIRECTORS OR OFFICERS.
This Corporation shall indemnify and advance expenses to its employees
and agents who are not Directors or Officers to the extent authorized by the
Board of Directors or the Bylaws, and consistent with the law.
6.3 IMPLEMENTATION.
The Board of Directors may take such action as is necessary to carry out
these indemnification and expense advancement provisions. The Board is
expressly empowered to adopt, approve and amend from time-to-time such
Bylaws, resolutions, contracts or further indemnification and expense
advancement arrangements as may be permitted by law, implementing these
provisions. Such Bylaws, resolutions, contracts or further arrangements shall
include, but not be limited to, implementing the manner in which
determinations as to any indemnity or advancement of expenses shall be made.
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6.4 SURVIVAL OF INDEMNIFICATION RIGHTS.
No amendment or repeal of this Article shall apply to or have any effect
on any right to indemnification provided hereunder with respect to acts or
omissions occurring prior to such amendment or repeal.
ARTICLE VII. PREEMPTIVE RIGHTS
Preemptive rights shall not exist with respect to shares of stock or
securities convertible into shares of stock of the Corporation.
ARTICLE VIII. CUMULATIVE VOTING
The Shareholders of the Corporation shall not have the right to cumulate
their votes in the election of Directors.
DATED: September ____, 1999.
TULLY'S COFFEE CORPORATION
By
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Stephen R. Griffin, Secretary
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