AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF IMAGEWARE SOFTWARE, INC.
S. James Miller, Jr. and Anne Hoversten certify that:
ONE: They are the President and Secretary, respectively, of ImageWare
Software, Inc. (the "Corporation").
TWO: The Articles of Incorporation of the Corporation are amended and
restated to read as follows:
ARTICLE I
The name of the Corporation is ImageWare Systems, Inc.
ARTICLE II
The purpose of the 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
A. CLASSES OF STOCK. The Corporation is authorized to issue two
classes of stock to be designated, respectively, "Common Stock" and
"Preferred Stock." The total number of shares which the Corporation is
authorized to issue is Fifty Four Million (54,000,000) shares. Fifty Million
(50,000,000) shares shall be Common Stock and Four Million (4,000,000) shares
shall be Preferred Stock. The Common Stock shall have a par value of $.01 per
share and the Preferred Stock shall have a par value of $.01 per share. No
shares of Preferred Stock are designated as "Series A Preferred Stock". Seven
Hundred Fifty Thousand (750,000) shares of Preferred Stock are designated as
"Series B Preferred Stock"
The remaining shares of Preferred Stock may be divided into such number
of series as the Board of Directors may determine. The Board of Directors is
authorized to determine and alter the rights, preferences, privileges and
restrictions granted to and imposed upon any wholly unissued series of Preferred
Stock, and to fix the number of shares of any series of Preferred Stock and the
designation of any such series of Preferred Stock. The Board of Directors,
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, may increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of any series subsequent to the
issuance of shares of that series.
Upon amendment of this article, each outstanding share of Common Stock
of this
Corporation shall be changed into .1895734 of one share Common Stock. No
fractional shares will be issued; instead, the Corporation will pay cash in lieu
of any fractional shares equal to the fair value of such fractions of a share as
determined by the Board of Directors of the Corporation.
B. RIGHTS, PREFERENCES AND RESTRICTIONS OF SERIES B PREFERRED STOCK.
The rights, preferences, restrictions and other matters relating to the
Series B Preferred Stock are as follows (NOTE: section references within this
Article III.B. are to other sections within this Article III.B. unless
otherwise expressly provided):
1. DIVIDEND PROVISIONS. The holders of shares of Series B Preferred Stock
shall, commencing after April 30, 1996, be entitled to receive cumulative
dividends in cash, subject to the availability of, and only out of, any funds
legally available therefor, prior and in preference to any declaration or
payment of any dividend (payable other than in common stock or other
securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of common stock of the
corporation; provided, however, that such convertible securities or rights
shall not rank, as to dividend or liquidation rights, prior to or on a parity
with the Series B Preferred Stock) on the common stock or any other series of
preferred stock or series or class of any other stock of the corporation and
prior and in preference to any payment of monies to any sinking or purchase
fund on the common stock or any other series of preferred stock or series or
class of any other stock of the corporation for the redemption or repurchase
thereof, at the rate of $0.2125 per share per annum payable in equal
semiannual installments of $0.10625 per share, on the last business day of
October and April each year, with the first dividend payment commencing
October 31, 1996, and upon redemption of the Series B Preferred Stock or
conversion thereof as otherwise provided herein. Provided, that if a dividend
is paid on the Common Stock prior to April 30, 1996, then the dividends
provided herein to be paid on the Series B Preferred Stock shall commence at
April 30, 1995. Dividends for less than a full calendar semi-annual period
shall be prorated, based on the actual number of days elapsed during such
semiannual period, divided by 180 days. Declared dividends on outstanding
shares of the Series B Preferred Stock shall be paid to record holders as
they appear on the stock register of the corporation at the close of business
on the 15th day of the month containing such dividend date as may be fixed by
the board of directors in advance of such dividend date, provided that no
such record date shall be more than 30 days prior to such dividend date.
2. LIQUIDATION PREFERENCE; MERGER, CONSOLIDATION AND SALE.
(a) In the event of any liquidation, dissolution or winding
up of the Corporation, either voluntarily or involuntarily (an "Event of
Liquidation"), the holders of Series B Preferred Stock shall be entitled to
receive, prior and in preference to any distribution of any of the assets of
the Corporation to the holders of Common Stock or any other series of
Preferred Stock or series or class of any other stock of the Corporation by
reason of their ownership thereof, an amount per share equal to the sum of
(i) $2.50 for each outstanding share of Series B Preferred Stock (hereafter
referred to as the "Original Series B Preferred Stock Issue Price") and (ii)
an amount equal to accrued but unpaid dividends on such share. If upon the
occurrence of such event, the assets and funds thus distributed among the
holders of the Series B Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then, the
entire assets and funds of the Corporation legally available for distribution
shall be distributed ratably among the holders of the Series B Preferred
Stock in proportion to the amount of such stock owned by each such holder.
The Corporation shall mail to each holder of Series B Preferred Stock, at
least twenty (20) days prior to an Event of Liquidation, a notice setting
forth the date on which such Event of Liquidiation is expected to become
effective and the type and amount of anticipated proceeds per share of Common
Stock to be distributed with respect thereto and shall afford each such
holder the opportunity to convert such shares of Series B Preferred Stock
pursuant to subsection 3 (conditional upon the consummation of such Event of
Liquidation) prior to the consummation thereof.
(b) A consolidation or merger of the Corporation with or
into any other corporation or corporations, or a sale, conveyance or
disposition of all or substantially all of the assets of the Corporation or
the effectuation of an acquisition of the Corporation by another entity by
means of a transaction or series of related transactions in which more than
fifty percent (50%) of the voting power of the Corporation is disposed of
(the "Sale") , shall be deemed to be an Event of Liquidation; provided,
however, that if holders of Series B Preferred Stock are to receive more than
the preferential amounts due them under subsection 2(a) above in the Sale,
then the Sale shall not be an Event of Liquidation and all holders of Series
B Preferred Stock shall participate ratably with the holders of Common Stock
and the holders of any other series of Preferred Stock with similar rights in
proportion to the amount of shares owned by each such holder on an
as-converted basis and shall not be entitled to receive any preferential
amounts.
3. CONVERSION. THE HOLDERS OF THE SERIES B PREFERRED STOCK SHALL HAVE CONVERSION
RIGHTS AS FOLLOWS (THE "CONVERSION RIGHTS"):
(a) RIGHT TO CONVERT; AUTOMATIC CONVERSION.
(i) Subject to subsection 3(c), each share of Series
B Preferred Stock plus accrued but unpaid dividends thereon 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 B Preferred Stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing the Original
Series B Issue Price plus the aggregate amount of accrued but unpaid dividends
thereon by the Conversion Price at the time in effect for such share. The
initial Conversion Price per share for shares of Series B Preferred Stock shall
be the Original Series B Issue Price; provided however, that the Conversion
Price for the Series B Preferred Stock shall be subject to adjustment as set
forth in subsection 3(c).
(ii) Each share of Series B Preferred Stock shall
automatically convert into shares of Common Stock at the Conversion Price at the
time in effect for such Series B Preferred Stock immediately upon the initial
closing of the Corporation's sale of its Common Stock in a bona fide
underwritten public offering pursuant to a registration statement on an
appropriate form under the Securities Act of 1933, as amended (the "Public
Offering"), if the public offering price of which is not less than $6.00 per
share (adjusted to reflect subsequent stock dividends, stock splits or
recapitalizations); provided, however, if the public offering price is less than
$6.00 per share but at least $4.00 per share, then the conversion of shares of
Series B Preferred Stock into shares of Common Stock shall still be
automatically effected if the Corporation receives the written consent of the
holders of a majority of the then outstanding shares of Series B Preferred
Stock. Upon automatic conversion pursuant to this subsection 3(a)(ii), all
accrued but unpaid dividends shall be paid immediately upon the initial closing
of the Public Offering, in cash.
(b) MECHANICS OF CONVERSION. Before any holder of Series B
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed in blank, at the office of the Corporation or of any transfer agent for
the Series B Preferred Stock, and shall give written notice by mail, postage
prepaid, to the Corporation at its principal corporate office, of the election
to convert the same and shall state therein the name or names in which the
certificate or certificates for shares of Common Stock are to be issued. The
Corporation shall, as soon as practicable thereafter, issue and deliver at such
office to such holder of Series B Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled 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 B 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. If the
conversion is in connection with an underwritten offer of securities registered
pursuant to the Securities Act of 1933, as amended, the conversion may, at the
option of any holder tendering Series B Preferred Stock for conversion, be
conditioned upon the closing with the underwriter of the sale of securities
pursuant to such offering, in which event the person(s) entitled to receive the
Common Stock issuable upon such conversion of the Series B Preferred Stock shall
not be
deemed to have converted such Series B Preferred Stock until immediately prior
to the closing of such sale of securities.
(c) CONVERSION PRICE ADJUSTMENTS OF PREFERRED STOCK. The
Conversion Price of the Series B Preferred Stock shall be subject to adjustment
from time to time as follows:
(i) In the event the Corporation should at any time
or from time to time after the date of the issuance of any shares of Series B
Preferred Stock fix a record date for the effectuation of a split or subdivision
of the outstanding shares of Common Stock or the determination of holders of
Common Stock entitled to receive a dividend or other distribution payable in
additional shares of Common Stock or other securities or rights convertible
into, or entitling the holder thereof to receive directly or indirectly,
additional shares of Common Stock (hereinafter referred to as "Common Stock
Equivalents") without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents (including the
additional shares of Common Stock issuable upon conversion or exercise thereof),
then, as of such record date (or the date of such dividend distribution, split
or subdivision if no record date is fixed), the Conversion Price of the Series B
Preferred Stock shall be appropriately decreased so that the number of shares of
Common Stock issuable on conversion of each share of such series shall be
increased in proportion to such increase in the aggregate number of shares of
Common Stock outstanding and those issuable with respect to Common Stock
Equivalents or other rights or securities of the Corporation.
(ii) If the number of shares of Common stock
outstanding at any time after the date of the issuance of any shares of Series B
Preferred Stock is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such combination, the
Conversion Price for the Series B Preferred Stock shall be appropriately
increased so that the number of shares of Common Stock issuable on conversion of
each share of such series shall be decreased in proportion to such decrease in
outstanding shares.
(d) OTHER DISTRIBUTIONS. In the event the Corporation shall
declare a distribution with respect to the outstanding shares of Common Stock
payable in securities of other persons, evidences of indebtedness issued by the
Corporation or other persons, assets or options or rights not referred to in
subsection 3(c)(i), then, in each such case for the purpose of this subsection
3d., the holders of the Series B 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 Stock of the Corporation into which their shares
of Series B 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.
(e) RECAPITALIZATIONS. If at any time or from time to time
there shall be a capital reorganization of the Corporation or any
reclassification of the Common Stock or in case of the consolidation or merger
of the Corporation with any other person or entity or in case of any sale,
conveyance or disposition of all or substantially all of the assets of the
Corporation to an affiliate of the Corporation (other than a subdivision,
combination or Event of Liquidation or Sale as provided for elsewhere in
subsection 3 or subsection 2), the Corporation and the person
or entity formed by such consolidation or resulting from such capital
reorganization, reclassification of capital stock or merger, as the case may be,
shall make provision in the articles or certificate of incorporation or other
governing instruments of such person such that each share of Series B Preferred
Stock shall thereafter be convertible only into the kind and amount of shares of
stock, other securities, cash and other property receivable upon such capital
reorganization, reclassification of capital stock, consolidation, merger, sale,
conveyance or disposition, as the case may be, by a holder of the number of
shares of common Stock into which such shares of Series B Preferred Stock was
convertible immediately prior to such capital reorganization, reclassification
of capital stock, consolidation, merger, sale, conveyance or disposition. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this subsection 3 with respect to the rights of the holders of the
Series B Preferred Stock after such capital reorganization, reclassification of
capital stock, consolidation, merger, sale, conveyance or disposition to the end
that the provisions of this subsection 3 (including adjustment of the Conversion
Price then in effect and the number of shares purchasable upon conversion of the
Series B Preferred Stock) shall be applicable after that event as nearly
equivalent as may be practicable.
(f) NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS.
(i) No fractional shares shall be issued upon
conversion of the Series B Preferred Stock. If any fractional interest in shares
of Common Stock would, except for the provisions of this subsection 3(f), be
deliverable upon the conversion of any Series B Preferred Stock, the Corporation
shall, in lieu of delivering the fractional share therefore, adjust such
fractional interest by payment to the holder of such converted Series B
Preferred Stock an amount in cash equal to the current market value of such
fractional interest (computed to the nearest cent). Whether or not cash in lieu
of fractional shares are issuable upon such conversion shall be determined on
the basis of the total number of shares of Series B 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.
(ii) Upon the occurrence of each adjustment or
readjustment of the Conversion Price of Series B Preferred Stock pursuant to
this subsection 3, 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 B 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 B Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth (A) such
adjustment and readjustment, (B) the Conversion Price at the time in effect, and
(C) 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 B Preferred Stock.
(g) 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 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, the Corporation shall mail to each
holder of Series B Preferred Stock, at least 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.
(h) 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 B 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 B Preferred Stock; and if at
any time the number of authorized but unissued shares of Common Stock shall not
be sufficient to effect the conversion o f all then outstanding shares of the
Series B Preferred Stock, in addition to such other remedies as shall be
available to the holder of such Series B Preferred Stock, the Corporation will
take such corporate action as may, in the opinion of its counsel, be necessary
to increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.
(i) NOTICES. Any notice required by the provisions of this
subsection 3 to be given to the holder of shares of Series B Preferred Stock
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
the Corporation.
4. VOTING RIGHTS.
(a) The holder of each share of Series B Preferred Stock shall
have the right to one vote for each share of Common Stock into which such Series
B Preferred Stock could then be converted (with any fractional share determined
on an aggregate conversion basis being rounded to the nearest whole share), and
with respect to such vote, such holder shall have full voting rights and powers
equal to the voting rights and powers of the holders of Common Stock, and shall
be entitled, notwithstanding any provision hereof, to notice of any
shareholders, meeting in accordance with the by-laws of the Corporation, and
shall be entitled to vote, together with holders of Common Stock, with respect
to any question upon which holders of Common Stock have the right to vote.
(b) ELECTION OF DIRECTORS. Notwithstanding subsection 4(a),
so long as the Corporation is in default in the payment of any dividends due
the holders of Series B Preferred Stock, the holders of Series B Preferred
Stock, voting as a separate class, shall be entitled to elect one (1)
director of the Corporation and the holders of Series B Preferred Stock and
Common Stock, voting on an as converted basis, shall be entitled to elect the
remaining directors of the Corporation. At such time as the Corporation is no
longer in default on the payment of any dividends due the holders of Series B
Preferred Stock, the special voting provisions set forth in the preceding
sentence shall no longer be effective and the voting
provisions of Section 4(a). shall apply. The director elected by the holders
of Series B Preferred Stock shall thereupon be deemed to have resigned. At
any meeting held for the purpose of electing directors, the presence in
person or by proxy of the holders of a majority of the Series B Preferred
Stock then outstanding shall constitute a quorum of the Series B Preferred
Stock for the election of directors to be elected solely by the holders of
Series B Preferred Stock. A vacancy in any directorship elected by the
holders of Series B Preferred Stock shall be filled only by vote of the
holders of Series B Preferred Stock and a vacancy in the directorship elected
by the holders of Series B Preferred Stock and Common Stock voting together
shall be filled only by the vote of the holders of Series B Preferred Stock
and Common Stock voting together as provided above.
5. REDEMPTION.
(a) REDEMPTION BY THE CORPORATION.
(i) The Corporation shall have the right, but not the
obligation, exercisable at any time or from time to time after December 31,
2000, upon at least sixty (60) days' prior written notice to the holders of the
outstanding shares of Series B Preferred Stock to redeem all or some of the
outstanding shares of Series B Preferred Stock, pro rata, by paying a sum per
share equal to the Original Series B Issue Price (subject to adjustments as a
result of distributions, if any, made pursuant to subsection 3(d) plus an amount
equal to all accrued but unpaid dividends, if any, through the date of
redemption.
(ii) In compliance with the applicable notice period
set forth in this subsection 5(a), the Corporation shall mail, postage prepaid,
to each holder of record of Series B Preferred Stock to be redeemed, at such
holder's address last shown on the records of the Corporation, notifying such
holder of such redemption, specifying the date fixed for the redemption (the
"Redemption Date"), which shall also be the date on which such holder's
Conversion Rights as to the shares called for redemption shall terminate, and
calling upon such holder to surrender to the Corporation, and in the manner and
at the place designated, such holder's certificate or certificates representing
the shares of Series B Preferred Stock to be redeemed (such notice is
hereinafter referred to as the "Redemption Notice"), On or prior to the
Redemption Date, each holder of the Series B Preferred Stock to be redeemed
shall surrender its certificate or certificates representing such shares to the
Corporation, in the manner and at the place designated in the Redemption Notice,
and thereupon the appropriate redemption price as specified in this subsection
5(a) (the "Redemption Price") of such shares (except that such number of shares
shall be reduced by the number of shares which shall have been converted
pursuant to subsection 3 hereof between the date of notice of redemption and the
date on which Conversion Rights to such shares terminate) shall be payable to
the order of the person whose name appears on such certificate or certificates
as the owner therefor and each surrendered certificate shall be canceled. From
and after the Redemption Date, unless there shall have been a default in payment
of the Redemption Price (whether because there is no source of funds legally
available for such redemption or because such funds shall not be paid or made
available for payment), all rights of the holders of the Series B Preferred
Stock (except the right to receive the Redemption Price without interest upon
surrender of their certificate or certificates) shall cease
with respect to such shares, and such shares shall not thereafter be transferred
on the books of the Corporation or be deemed to be outstanding for any purpose
whatsoever.
(b) REDEMPTION CONSIDERATION. Amounts to be paid pursuant to
subsection 5(a) shall be paid, at the sole discretion of the Corporation, in
cash or notes or any combination of cash and notes. The notes, if issued by the
Corporation in satisfaction of the redemption of Series B Preferred Stock, shall
bear interest, payable monthly, at ten percent (10%) per annum and shall provide
for repayment of the principal amount in two equal installments on the next two
immediately succeeding anniversary dates of the date of redemption of the shares
of Series B Preferred Stock so requested to be redeemed.
(c) SURRENDER OF CERTIFICATE. Except as prohibited pursuant to
applicable California corporate law, on or after the Redemption Date, each
holder of Series B Preferred Stock to be redeemed shall surrender to this
Corporation the certificate or certificates representing such shares, and
thereupon the Redemption Price of such shares shall be payable to the order of
the person whose name appears on such certificate or certificates as the owner
thereof and each surrendered certificate shall be canceled. In the event less
than all the shares represented by any such certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares.
(d) NO DIVIDENDS AFTER REDEMPTION. From and after the
Redemption Date, unless there shall have been a default in payment of the
Redemption Price, all dividends on the Series B Preferred Stock designated for
redemption in the Redemption Notice shall cease to accrue, all rights of the
holders of such shares as holder of Series B Preferred Stock (except the right
to receive the Redemption Price without interest upon surrender of their
certificate or certificates) shall cease with respect to such shares, and such
shares shall not thereafter be transferred on the books of this Corporation or
be deemed to be outstanding for any purpose whatsoever. Subject to the rights of
series of Preferred Stock which may from time to time come into existence, if
the funds of the Corporation legally available for redemption on shares of
Series B Preferred Stock on any Redemption Date are insufficient to redeem the
total number of shares of Series B Preferred Stock to be redeemed on such date,
those funds which are legally available will be used to redeem the maximum
possible number of such shares ratably among the holders of such shares to be
redeemed. The shares of Series B Preferred Stock not redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein.
Subject to the rights of series of Preferred Stock which may from time to time
come into existence, at any time thereafter when additional funds of the Company
are legally available for the redemption of shares of Series B Preferred Stock,
such funds will immediately be used to redeem the balance of the shares which
the Company has become obligated to redeem on any Redemption Date but which it
has not redeemed; provided, however, that this Corporation shall give ten (10)
days advance written notice to each such holder of shares to be redeemed that
the Corporation at that time has funds available for the redemption of shares of
Series B Preferred Stock, and any such holder may direct that the Corporation
not redeem any or all of that holder's remaining shares previously requested by
that holder to be redeemed, and such shall not be redeemed, so long as written
notice of such direction is received by the Corporation no later than ten (10)
days after this Corporation's advance notice was given.
6. COVENANTS. SO LONG AS THE CORPORATION IS IN DEFAULT OF ANY PROVISION OF THIS
ARTICLE III.B., THE CORPORATION SHALL NOT REPURCHASE OR REDEEM ANY SHARES OF
COMMON STOCK OR ANY SHARES OF ANY SERIES OF PREFERRED STOCK OF THE CORPORATION,
EXCEPT FOR SHARES OF SERIES B PREFERRED STOCK.
7. REISSUANCE OF SERIES B PREFERRED STOCK. ANY SHARE OR SHARES OF SERIES B
PREFERRED STOCK OR OF ANY OTHER SERIES OR CLASS OF STOCK OF THE CORPORATION
ACQUIRED BY THIS CORPORATION BY REASON OF REDEMPTION, PURCHASE, CONVERSION OR
OTHERWISE SHALL BE RESTORED TO THE STATUS OF AUTHORIZED BUT UNISSUED SHARES OF
PREFERRED STOCK.
8. RESIDUAL RIGHTS. PREFERRED STOCK SHALL NOT HAVE ANY PRE-EMPTIVE RIGHTS. ALL
RIGHTS ACCRUING TO THE OUTSTANDING SHARES OF THE CORPORATION NOT EXPRESSLY
PROVIDED FOR TO THE CONTRARY HEREIN SHALL BE VESTED IN THE COMMON STOCK.
ARTICLE IV
No person acting as director of the Corporation shall be liable for
monetary damages in an action brought by or in the right of the Corporation upon
any breach by such person of his or her director's duties to the Corporation or
its shareholders except for such liability (i) for acts or omissions that
involve intentional misconduct or a knowing and culpable violation of law, (ii)
for acts or omissions that a director believes to be contrary to the best
interests of the Corporation or its shareholders or that involve the absence of
good faith on the part of the director, (iii) for any transaction from which a
director derived an improper personal benefit, (iv) for acts or omissions that
show a reckless disregard for the director's duty to the Corporation or its
shareholders in circumstances in which the director was aware, or should have
been aware, in the ordinary course of performing a director's duties, of a risk
of serious injury to the Corporation or its shareholders, (v) for acts or
omissions that constitute an unexcused pattern of inattention that amounts to an
abdication of the director's duty to the Corporation or its shareholders, (vi)
under Section 310 of the California Corporations Code, or (vii) under Section
316 of the California Corporations Code.
THREE: The foregoing Amended and Restated Articles of Incorporation
have been approved by the Board of Directors of the Corporation.
FOUR: The foregoing Amended and Restated Articles of Incorporation
was approved by the holders of the requisite number of shares of the
Corporation in accordance with Section 902 of the California General
Corporation Law. The total number of outstanding shares of the Common Stock
of the Corporation is 5,968,161 and the total number of outstanding shares of
the Series B Preferred Stock is 389,400. There are no outstanding shares of
Series A Preferred Stock. The number of shares voting in favor of the
foregoing amendment equaled or exceeded the vote required, such vote being
(i) a majority of the number of shares of Common Stock then outstanding plus
the number of shares of Common Stock into which the then outstanding Series B
Preferred Stock could have been then converted, voting together as a
class, and (ii) a majority of the number of shares of Common Stock then
outstanding, voting as a separate class.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in the foregoing certificate are true
and of our own knowledge.
Dated: November 29, 1999 /s/ S. James Miller Jr.
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S. James Miller, Jr., President
/s/ Anne Hoversten
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Anne Hoversten, Secretary