{"id":41417,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/articles-of-incorporation-salon-internet-inc.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"articles-of-incorporation-salon-internet-inc","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/articles-of-incorporation-salon-internet-inc.html","title":{"rendered":"Articles of Incorporation &#8211; Salon Internet Inc."},"content":{"rendered":"<pre>\n                             AMENDED AND RESTATED\n                           ARTICLES OF INCORPORATION\n\n                                      OF\n\n                             SALON INTERNET, INC.\n          Michael O'Donnell and David Talbot certify that:\n\n          1.  They are the President and Secretary, respectively, of Salon\nInternet, Inc., a California corporation.\n\n          2.  The Articles of Incorporation of the corporation are amended and\nrestated in their entirety, to read as follows:\n\n\n                                   ARTICLE I\n\n          The name of the corporation is Salon Internet, Inc.\n\n                                  ARTICLE II\n\n          The purpose of the Corporation is to engage in any lawful act or\nactivity for which a corporation may be organized under the General Corporation\nLaw of California other than the banking business, the trust company business or\nthe practice of a profession permitted to be incorporated by the California\nCorporations Code.\n\n \n                                  ARTICLE III\n\n          The Corporation is authorized to issue two classes of shares to be\ndesignated respectively 'Preferred' and 'Common.'  The total number of Preferred\nshares authorized is 16,217,500 and the total number of Common shares authorized\nis 25,000,000.\n\n          The Preferred shares authorized by these Articles of Incorporation may\nbe issued from time to time in one or more series.  The first series of\nPreferred shares shall be designated Series A Preferred Stock and shall be\ncomprised of 5,017,500 shares.  The second series of Preferred shares shall be\ndesignated Series B Preferred Stock and shall be comprised of 2,200,000 shares.\nThe third series of Preferred shares shall be designated Series C Preferred\nStock and shall be comprised of 9,000,000 shares.\n\n          Each share of Series C Preferred Stock issued and outstanding as of\nthe date of filing of these Amended and Restated Articles of Incorporation is\nhereby converted into 1.35567 shares of Series C Preferred Stock.  No fractional\nshares shall be issued as a result of such stock split,\n\n                                       1\n\n \nprovided, however, that the number of shares to be received by a shareholder as\na result of such stock split shall be rounded to the nearest whole share, and\nthe number of full shares of Series C Preferred Stock to be issued upon\nconversion of a shareholder's previously outstanding Series C Preferred Stock\nshall be computed on the basis of the aggregate number of shares of the Series C\nPreferred Stock held by such shareholder prior to the date of filing of these\nAmended and Restated Articles of Incorporation.\n\n          Relative rights, preferences, privileges and restrictions granted to\nor imposed upon the Series A Preferred Stock, Series B Preferred Stock and\nSeries C Preferred Stock (collectively, the 'Preferred Stock')  and the Common\nStock are as follows:\n\n               1.  Dividends.\n                   --------- \n\n                   (a) The holders of outstanding Series A, Series B and Series\nC Preferred Stock shall be entitled to receive in any fiscal year, when and as\ndeclared by the Board of Directors, out of any assets at the time legally\navailable therefor, distributions (as defined below) at the rate per annum of\n$0.08 per share of Series A Preferred Stock, $0.126 per share of Series B\nPreferred Stock and $0.155 per share of Series C Preferred Stock, respectively,\npayable in preference and priority to any payment of any dividend on Common\nStock. Each share of Preferred Stock shall rank on a parity with every other\nPreferred share which may be issued in the future, irrespective of series, with\nregard to distributions at the respective rates fixed for such series. No\ndistributions shall be declared or paid or set apart for payment on the\nPreferred shares of any series unless at the time a distribution shall also be\ndeclared or paid or set apart for payment, as the case may be, on the Preferred\nshares of each other series then outstanding at the respective fixed rates for\nsuch series. The right to such distributions on Series A, Series B and Series C\nPreferred Stock shall not be cumulative and no right shall accrue to holders of\nPreferred Stock by reason of the fact that distributions on said shares are not\ndeclared in any prior year, nor shall any undeclared or unpaid distribution bear\nor accrue interest. After distributions shall have been paid to or declared and\nset apart upon the Preferred Stock at the respective rate for each series, for\nany one fiscal year of the Corporation, if the Board of Directors elects to\ndeclare additional distributions out of any assets legally available therefor,\nsuch additional distributions shall be declared on all shares of Preferred Stock\nand Common Stock, with the amount of such distribution for each share of\nPreferred Stock equal to the amount of such distribution for one share of Common\nStock multiplied by the number of shares of Common Stock into which such share\nof Preferred Stock is convertible as of the record date fixed for declaration of\nsuch distribution.\n\n               (b) For purposes of this Section 1, unless the context otherwise\nrequires, 'distribution' shall mean the transfer of cash or other property\nwithout consideration, whether by way of dividend or otherwise, payable other\nthan in Common Stock, or the purchase or redemption of shares of the Corporation\n(other than pursuant to a liquidation, dissolution or winding up of the\nCorporation pursuant to Section 2 below, other than pursuant to the\nCorporation's Third Amended and Restated Rights Agreement dated on or about the\neffective date of this filing (the 'Rights Agreement'), and other than\nrepurchases of Common Stock held\n\n                                       2\n\n \nby employees or consultants of the Corporation upon termination of their\nemployment or services pursuant to agreements providing for such repurchase) for\ncash or other property, including any such transfer, purchase or redemption by a\nsubsidiary of the Corporation.\n\n          Each holder of shares of Preferred Stock shall be deemed to have\nconsented, for purposes of Sections 503 and 506 of the General Corporation Law\nof the State of California, to distributions made by the Corporation in\nconnection with the repurchase of shares (i) of Common Stock issued to or held\nby employees, officers, directors or consultants upon termination of their\nemployment or services pursuant to agreements providing for such repurchase and\n(ii) pursuant to the Rights Agreement.\n\n               2.  Preference on Liquidation.\n                   ------------------------- \n\n                   (a) In the event of any voluntary or involuntary liquidation,\ndissolution or winding up of the Corporation the assets and surplus funds of the\nCorporation available for distribution to shareholders shall be distributed as\nfollows:\n\n                       (i)   First, the holders of shares of the Series C\nPreferred Stock then outstanding shall be entitled to receive, prior and in\npreference to any distribution of any of the assets or surplus funds of the\nCorporation to the holders of Series A and Series B Preferred Stock and Common\nStock by reason of their ownership of such stock, an amount for each share of\nSeries C Preferred Stock then held by them equal to the sum of (a) $1.94 and (b)\nthe aggregate amount of all declared but unpaid dividends per share, if any, on\nthe shares of Series C Preferred Stock, in each case appropriately adjusted for\nany stock combinations, consolidations, stock distributions, reclassifications,\nstock dividends, stock splits or the like with respect to such shares\n(hereinafter such amounts shall be referred as the 'Series C Liquidation\nPreference Amounts'). If upon occurrence of such event of liquidation,\ndissolution or winding up, the assets and property legally available to be\ndistributed among the holders of the Series C Preferred Stock shall be\ninsufficient to permit the payment to such holders of the full preferential\namount aforesaid, then the entire assets and property of the Corporation legally\navailable for distribution shall be distributed ratably among the holders of the\nSeries C Preferred Stock in proportion to their preferential amounts described\nabove;\n\n                       (ii)  Second, the holders of shares of the Series A and\nSeries B Preferred Stock then outstanding shall be entitled to receive, prior\nand in preference to any distribution of any of the assets or surplus funds of\nthe Corporation to the holders of Common Stock by reason of their ownership of\nsuch stock, an amount for each share of Series A and Series B Preferred Stock\nthen held by them equal to the sum of (a) $1.00 for each share of Series A\nPreferred Stock, (b) $1.58 for each share of Series B Preferred Stock and (c)\nthe aggregate amount of all declared but unpaid dividends per share, if any, on\nthe shares of Series A and Series B Preferred Stock, in each case appropriately\nadjusted for any stock combinations, consolidations, stock distributions,\nreclassifications, stock dividends, stock splits or the like with respect to\nsuch shares (hereinafter such amounts shall be referred as the 'Series A and B\nLiquidation Preference Amounts').\n\n                                       3\n\n \n          If upon occurrence of such event of liquidation, dissolution or\nwinding up, the assets and property legally available to be distributed among\nthe holders of the Series A and Series B Preferred Stock shall be insufficient\nto permit the payment to such holders of the full preferential amount aforesaid,\nthen the entire assets and property of the Corporation legally available for\ndistribution shall be distributed ratably among the holders of the Series A and\nSeries B Preferred Stock in proportion to their preferential amounts described\nabove.\n\n                       (iii) After the distributions described in subsections\n2(a)(i) and (ii) have been paid, all remaining assets available for\ndistribution, if any, shall be distributed ratably among the holders of Common\nStock and Preferred Stock on an as-converted basis.\n\n                   (b) The merger or consolidation of the Corporation into or\nwith another corporation or a transaction or series of related transactions\npursuant to which merger, consolidation or transaction or series of transactions\nthe shareholders of the Corporation immediately prior to such merger,\nconsolidation, transaction or series of transactions do not own a majority of\nthe outstanding stock or at least 50% of the voting control of the surviving\ncorporation following such merger, consolidation transaction or series of\ntransactions, or the sale, transfer, lease or other conveyance of all or\nsubstantially all of the assets of the Corporation, shall be deemed to be a\nliquidation, dissolution or winding up of the Corporation as those terms are\nused in this Section 2; and in any such case the liquidation preference which\nthe holders of Preferred Stock shall be entitled to receive shall be computed in\nthe same manner as if the Corporation's available assets were actually being\ndistributed to shareholders (even though holders of Common Stock and other\nclasses or series of Preferred Stock which may be issued in the future are not\nor may not be entitled to receive any actual distribution upon such deemed\nliquidation or dissolution), and the value of the Corporation's assets for\npurposes of computing the amount of such liquidation preference shall be deemed\nto be (i) the fair market value of all consideration proposed to be paid or\nexchanged for all of the Corporation's outstanding capital stock upon any such\nmerger or consolidation, or (ii) the fair market value of all consideration\nproposed to be paid to the Corporation upon any sale, transfer, or other\nconveyance of all or substantially all of the assets of the Corporation, as\napplicable.\n\n                   (c) Notwithstanding subsections 2(a) and (b), the holders of\nPreferred Stock shall have no priority or preference with respect to\ndistributions made by the Corporation in connection with the repurchase of\nshares of capital stock pursuant to the Rights Agreement or Common Stock issued\nto or held by employees, directors or consultants upon termination of their\nemployment or services pursuant to agreements providing for the right of said\nrepurchase between the Corporation and such persons.\n\n               3.  Voting Rights. In connection with any vote or consent\n                   -------------\nrequirement hereunder, and except as otherwise required by law, the holder of\neach share of the Preferred Stock shall be entitled to the number of votes equal\nto the number of shares of Common Stock into which such share of Preferred Stock\ncould be converted on the record date for the vote or consent of shareholders\nand shall have voting rights and powers equal to the voting rights and powers of\nthe Common Stock. As long as more than an aggregate of 500,000 shares of Series\nA Preferred Stock (appropriately adjusted for stock combinations,\nconsolidations, stock distributions, reclassifications, stock dividends, stock\nsplits and the like) are outstanding, the holders of the Series A\n\n                                       4\n\n \nPreferred Stock, voting as a single class, shall have the right to elect one\nmember of the Board of Directors of the Corporation. As long as more than an\naggregate of 500,000 shares of Series B Preferred Stock (appropriately adjusted\nfor stock combinations, consolidations, stock distributions, reclassifications,\nstock dividends, stock splits and the like) are outstanding, the holders of the\nSeries B Preferred Stock, voting as a single class, shall have the right to\nelect one member of the Board of Directors of the Corporation. As long as more\nthan an aggregate of 500,000 shares of Series C Preferred Stock (appropriately\nadjusted for stock combinations, consolidations, stock distributions,\nreclassifications, stock dividends, stock splits and the like) are outstanding,\nthe holders of the Series C Preferred Stock, voting as a single class, shall\nhave the right to elect one member of the Board of Directors of the Corporation.\nThe holders of the Common Stock, voting as a single class, shall have the right\nto elect two members of the Board of Directors of the Corporation. The holders\nof Common Stock and Preferred Stock, voting as a single class, shall have the\nright to elect the remaining members of the Board of Directors. The holders of\nthe Preferred Stock shall vote with holders of the Common Stock upon any other\nmatter submitted to a vote of shareholders, except those matters required by law\nor these articles to be submitted to a class or series vote.\n\n          4.   Conversion Rights.\n               ----------------- \n\n               (a) Optional Conversion; Conversion Rate; Conversion Price.  Each\n                   ------------------------------------------------------       \nshare of Preferred Stock shall be convertible, at the option of the holder\nthereof, into shares of Common Stock at any time after the issuance of such\nshare.  The number of shares of Common Stock into which each share of Series A,\nSeries B and Series C Preferred Stock may be converted shall be determined by\ndividing $1.00, $1.58 and $1.94 respectively, by a price, hereinafter referred\nto as the 'Conversion Price,' in effect for such series of Preferred Stock at\nthe time of the conversion.  The Conversion Price per share of Series A\nPreferred Stock initially shall be $1.00, the Conversion Price per share of\nSeries B Preferred Stock initially shall be $1.58, and the Conversion Price per\nshare of Series C Preferred Stock initially shall be $1.94, each subject to\nadjustment as provided in Section 5 below.\n\n               (b) Automatic Conversion.\n                   -------------------- \n\n                   (i)  Conversion of Preferred Shares. Each share of a given\nseries of Preferred Stock shall automatically be converted into fully paid and\nnonassessable shares of Common Stock of the Corporation at the Conversion Price\nthen in effect for such series of Preferred Stock (subject to adjustment\npursuant to Section 5 below) at any time during the Conversion Period\nimmediately (as defined below) upon the earlier to occur of:\n\n                        (A) the closing of a sale of the Corporation's\nsecurities in an underwritten registered public offering on the NASDAQ National\nMarket with proceeds to the Corporation of at least Twenty Million Dollars\n($20,000,000) and an offering price per share to the public equal to or greater\nthan Five Dollars and Eighty-Two Cents ($5.82), appropriately\n\n                                       5\n\n \nadjusted for stock dividends, stock splits, stock combinations,\nrecapitalizations, reclassifications, exchanges and the like ('Initial Public\nOffering');\n\n                        (B) the date on which the holders of two-thirds of the\nthen outstanding shares of all series of Preferred Stock (determined on an as-\nconverted basis) consent in writing to such conversion; provided, that no shares\nof Series C Preferred Stock shall convert pursuant to this Section 4(b)(i)(B)\nunless holders of two-thirds of the then outstanding Series C Preferred Stock\nconsent in writing to such conversion, and provided, further, that all shares of\nSeries C Preferred Stock shall convert pursuant to this Section 4(b)(i)(B) if\nholders of two-thirds of the then outstanding Series C Preferred Stock consent\nin writing to such conversion; or\n\n                        (C) at such time as there are outstanding less than an\naggregate of 500,000 shares of Series A Preferred Stock, 180,000 shares of\nSeries B Preferred Stock or 750,000 shares of Series C Preferred Stock,\nappropriately adjusted for stock combinations, consolidations, stock\ndistributions, reclassifications, stock dividends, stock splits and the like.\n\n               (c) Conversion Mechanics. The holder of any shares of Preferred\n                   --------------------\nStock may exercise the conversion rights as to such shares or any part thereof\nby delivering to the Corporation during regular business hours, at the office of\nany transfer agent of the Corporation for the Preferred Stock, or at the\nprincipal office of the Corporation or at such other place as may be designated\nby the Corporation, the certificate or certificates for the shares to be\nconverted, duly endorsed for transfer to the Corporation (if required by it),\naccompanied by written notice stating that the holder elects to convert such\nshares. Except as set forth above, conversion shall be deemed to have been\neffected on the date when such delivery is made, and such date is referred to\nherein as the 'Conversion Date.' As promptly as practicable thereafter the\nCorporation shall issue and deliver to or upon the written order of such holder,\nat such office or other place designated by the Corporation, a certificate or\ncertificates for the number of full shares of Common Stock to which such holder\nis entitled and a check for cash with respect to any fractional interest in a\nshare of Common Stock as provided in subsection 4(d) below. The holder shall be\ndeemed to have become a shareholder of record for the Common Stock on the\napplicable Conversion Date unless the transfer books of the Corporation are\nclosed on the date, in which event such holder shall be deemed to have become a\nshareholder of record for the Common Stock on the next succeeding date on which\nthe transfer books are open. Upon conversion of only a portion of the number of\nshares of Series A, Series B or Series C Preferred Stock, as the case may be,\nrepresented by a certificate surrendered for conversion, the Corporation shall\nissue and deliver to or upon the written order of the holder of the certificate\nso surrendered for conversion, at the expense of the Corporation, a new\ncertificate for the number of shares of Series A, Series B or Series C Preferred\nStock representing the unconverted portion of the certificate so surrendered.\n\n               (d) No Fractional Shares. No fractional shares of Common Stock or\n                   --------------------\nscrip shall be issued upon conversion of shares of Preferred Stock. If more than\none share of\n\n                                       6\n\n \nPreferred Stock shall be surrendered for conversion at any one time by the same\nholder, the number of full shares of Common Stock issuable upon conversion\nthereof shall be computed on the basis of the aggregate number of shares of\nPreferred Stock so surrendered. Instead of any fractional shares of Common Stock\nwhich would otherwise be issuable upon conversion of any shares of Preferred\nStock, the Corporation shall pay a cash adjustment in respect of such fractional\ninterest equal to the fair market value of such fractional interest as\ndetermined in good faith by the Corporation's Board of Directors.\n\n               (e) Taxes.  The Corporation shall pay any and all issue and other\n                   -----                                                        \ntaxes that may be payable in respect of any issue or delivery of shares of\nCommon Stock on conversion pursuant hereto of Preferred Stock.  The Corporation\nshall not, however, be required to pay any tax which may be payable in respect\nof any transfer involved in the issue and delivery of shares of Common Stock in\na name other than that in which the Preferred Stock so converted were\nregistered, and no such issue or delivery shall be made unless and until the\nperson requesting such issue has paid to the Corporation the amount of any such\ntax, or has established, to the satisfaction of the Corporation, that such tax\nhas been paid.\n\n               (f) Share Reserve. The Corporation shall at all times reserve and\n                   -------------\nkeep available, out of its authorized but unissued Common Stock, solely for the\npurpose of effecting the conversion of the Preferred Stock, the full number of\nshares of Common Stock deliverable upon the conversion of all Preferred Stock\nfrom time to time outstanding. The Corporation shall from time to time (subject\nto obtaining necessary director and shareholder approval), in accordance with\nthe laws of the State of California, increase the authorized amount of its\nCommon Stock if at any time the authorized number of shares of its Common Stock\nremaining unissued shall not be sufficient to permit the conversion of all of\nthe shares of Preferred Stock at the time outstanding.\n\n               (g) Registration or Listing.  If any shares of Common Stock to be\n                   -----------------------                                      \nreserved for the purpose of conversion of shares of Preferred Stock require\nregistration or listing with, or approval of, any governmental authority, stock\nexchange or other regulatory body under any federal or state law or regulation\nor otherwise, before such shares may be validly issued or delivered upon\nconversion, the Corporation will in good faith and as expeditiously as possible\nendeavor to secure such registration, listing or approval, as the case may be.\n\n               (h) Status Upon Issuance. All shares of Common Stock which may be\n                   -------------------- \nissued upon conversion of the shares of Preferred Stock will upon issuance by\nthe Corporation be validly issued, fully paid and non-assessable and free from\nall taxes, liens and charges created by the Corporation with respect to the\nissuance thereof.\n\n          5.   Adjustments.  The number of shares of Common Stock to be issued\n               -----------                                                    \nupon conversion of the Preferred Stock shall be subject to adjustment from time\nto time as follows:\n\n               (a) Stock Splits, Dividends and Combinations. In case the\n                   ----------------------------------------\nCorporation shall at any time subdivide the outstanding Common Stock, or shall\nissue a stock\n\n                                       7\n\n \ndividend on its outstanding Common Stock, the number of shares of Common Stock\nissuable upon conversion of the Preferred Stock immediately prior to each such\nsubdivision or issuance of such stock dividend shall be proportionately\nincreased (with appropriate adjustments in the applicable Conversion Price) and\nin case the Corporation shall at any time combine the outstanding Common Stock,\nthe number of shares of Common Stock issuable upon conversion of the Preferred\nStock immediately prior to each such combination shall be proportionately\ndecreased (with appropriate adjustments in the applicable Conversion Price),\neffective at the close of business on the date of each such subdivision, stock\ndividend or combination, as the case may be.\n\n               (b) Capital Reorganizations. In case of any capital\n                   -----------------------\nreorganization (other than in connection with a merger or other reorganization\nin which the Corporation is not the continuing or surviving entity) or any\nreclassification of the Common Stock of the Corporation, the Preferred Stock\nshall thereafter be convertible into the number of shares of stock or other\nsecurities or property to which a holder of the number of shares of Common Stock\nof the Corporation deliverable upon conversion of the shares of Preferred Stock\nimmediately prior to each such reorganization or recapitalization would have\nbeen entitled upon such reorganization, or reclassification; and, in any such\ncase, appropriate adjustment (as determined by the Board of Directors) shall be\nmade in the application of the provisions herein set forth with respect to the\nrights and interests thereafter of the holders of Preferred Stock, to the end\nthat the provisions set forth herein shall thereafter be applicable, as nearly\nas reasonably may be, in relation to any share of stock or other property\nthereafter deliverable upon the conversion.\n\n               (c) Noncash Dividends, Stock Purchase Rights, Capital\n                   -------------------------------------------------\nReorganizations and Dissolutions. In case:\n--------------------------------\n\n                   (i)    the Corporation shall take a record of the holders of\nits Common Stock for the purpose of entitling them to receive a dividend, or any\nother distribution, payable otherwise than in cash; or\n\n                   (ii)   the Corporation shall take a record of the holders of\nits Common Stock for the purpose of entitling them to subscribe for or purchase\nany shares of stock of any class or to receive any other rights; or\n\n                   (iii)  of any capital reorganization of the Corporation,\nreclassification of the capital stock of the Corporation (other than a\nsubdivision or combination of its outstanding shares of Common Stock),\nconsolidation or merger of the Corporation with or into another corporation or\nconveyance of all or substantially all of the assets of the Corporation to\nanother corporation; or\n\n                   (iv)   of the voluntary or involuntary dissolution,\nliquidation or winding up of the Corporation;\n\n                                       8\n\n \nthen, and in any such case, the Corporation shall cause to be mailed to the\ntransfer agent for Preferred Stock, and to the holders of record of the\noutstanding Preferred Stock, at least ten days prior to the date hereinafter\nspecified, a notice stating the date on which (x) a record is to be taken for\nthe purpose of such dividend, distribution or rights, or (y) such\nreclassification, reorganization, consolidation, merger, conveyance,\ndissolution, liquidation or winding up is to take place and the date, if any is\nto be fixed, as of which holders of Common Stock of record shall be entitled to\nexchange their shares of Common Stock for securities or other property\ndeliverable upon such reclassification, reorganization, consolidation, merger,\nconveyance, dissolution, liquidation or winding up.\n\n               (d) Other Issuances.  Upon the issuance by the Corporation of any\n                   ---------------                                              \nEquity Securities (as defined below) for consideration per share of Common Stock\nissued or issuable upon exchange, exercise or conversion of such Equity\nSecurities of less than the Conversion Price of the Series C Preferred Stock\nthen in effect, then the Conversion Price for the Series C Preferred Stock shall\nbe reduced to equal the consideration per share of Common Stock issued or\nissuable upon exchange, exercise or conversion of such Equity Securities\nreceived by the Corporation for such Equity Securities. Upon the issuance by the\nCorporation, on or after the effective date of these Amended and Restated\nArticles of Incorporation, of Equity Securities for a consideration per share of\nCommon Stock issued or issuable upon exchange, exercise or conversion of such\nEquity Securities of less than the Conversion Price of the Series B Preferred\nStock in effect immediately prior to the time of such issue or sale, then\nforthwith upon such issue or sale, the Conversion Price of Series B Preferred\nStock shall be reduced to equal the consideration per share of Common Stock\nissuable upon exchange, exercise or conversion of such Equity Securities\nreceived by the Corporation for such Equity Securities.  Upon the issuance by\nthe Corporation, on or after the effective date of these Amended and Restated\nArticles of Incorporation, of Equity Securities for a consideration per share of\nCommon Stock issued or issuable upon exchange, exercise or conversion of such\nEquity Securities of less than the Conversion Price of the Series A Preferred\nStock in effect immediately prior to the time of such issue or sale, then\nforthwith upon such issue or sale, the Conversion Price of Series A Preferred\nStock shall be reduced to equal the consideration per share of Common Stock\nissuable upon exchange, exercise or conversion of such Equity Securities\nreceived by the Corporation for such Equity Securities.\n\n          For purposes of this subsection 5(d) the following provisions will be\napplicable:\n\n                        (A) In the case of an issue or sale for cash of shares\nof Common Stock, the 'consideration per share' received by the Corporation\ntherefor shall be deemed to be the amount of cash received, before deducting\ntherefrom any commissions or expenses paid by the Corporation.\n\n                        (B) In case of the issuance (otherwise than upon\nconversion or exchange of obligations or shares of stock of the Corporation) of\nadditional shares of Common Stock for a consideration other than cash or a\nconsideration partly other than cash, the amount of the consideration other than\ncash received by the Corporation for such shares shall\n\n                                       9\n\n \nbe deemed to be the fair market value of such consideration as determined in\ngood faith by the Board of Directors.\n\n                        (C) In case of the issuance by the Corporation in any\nmanner of any rights to subscribe for or to purchase shares of Common Stock, or\nany options for the purchase of shares of Common Stock or stock convertible into\nCommon Stock, all shares of Common Stock or stock convertible into Common Stock\nto which the holders of such rights or options shall be entitled to subscribe\nfor or purchase pursuant to such rights or options shall be deemed 'outstanding'\nas of the date of the offering of such rights or the granting of such options,\nas the case may be, and the minimum aggregate consideration named in such rights\nor options for the shares of Common Stock or stock convertible into Common Stock\ncovered thereby, plus the consideration, if any, received by the Corporation for\nsuch rights or options, shall be deemed to be the 'consideration per share'\nreceived by the Corporation (as of the date of the offering of such rights or\nthe granting of such options, as the case may be) for the issuance of such\nshares.\n\n                        (D) In case of the issuance or issuances by the\nCorporation in any manner of any obligations or of any shares of stock of the\nCorporation that shall be convertible into or exchangeable for Common Stock, all\nshares of Common Stock issuable upon the conversion or exchange of such\nobligations or shares shall be deemed issued as of the date such obligations or\nshares are issued, and the amount of the 'consideration per share' received by\nthe Corporation for such additional shares of Common Stock shall be deemed to be\nthe total of (X) the amount of consideration received by the Corporation upon\nthe issuance of such obligations or shares, as the case may be, plus (Y) the\nminimum aggregate consideration, if any, other than such obligations or shares,\nreceivable by the Corporation upon such conversion or exchange, except in\nadjustment of dividends.\n\n                        (E) The amount of the 'consideration per share' received\nby the Corporation upon the issuance of any rights or options referred to in\nsubsection (C) above or upon the issuance of any obligations or shares which are\nconvertible or exchangeable as described in subsection (D) above, and the amount\nof the consideration, if any, other than such obligations or shares so\nconvertible or exchangeable, receivable by the Corporation upon the exercise,\nconversion or exchange thereof shall be determined in the same manner provided\nin subsections (A) and (B) above with respect to the consideration received by\nthe Corporation in case of the issuance of additional shares of Common Stock;\nprovided, however, that if such obligations or shares of stock so convertible or\nexchangeable are issued in payment or satisfaction of any dividend upon any\nstock of the Corporation other than Common Stock, the amount of the\n'consideration per share' received by the Corporation upon the original issuance\nof such obligations or shares or stock so convertible or exchangeable shall be\ndeemed to be the value of such obligations or shares of stock, as of the date of\nthe adoption of the resolution declaring such dividend, as determined by the\nBoard of Directors at or as of that date. On the expiration of any rights or\noptions referred to in subsection (C), or the termination of any right of\nconversion or exchange referred to in subsection (D), or any change in the\nnumber of shares of Common Stock deliverable upon exercise of such options or\nrights or upon conversion of or exchange of such convertible or exchangeable\nsecurities, the Conversion Price then in effect shall\n\n                                       10\n\n \nforthwith be readjusted to such Conversion Price as would have obtained had the\nadjustments made upon the issuance of such options, rights or convertible or\nexchangeable securities been made upon the basis of the delivery of only the\nnumber of shares of common stock actually delivered or to be delivered upon the\nexercise of such rights or options or upon the conversion or exchange of such\nsecurities.\n\n                        (F) Anything herein to the contrary notwithstanding, the\nCorporation shall not be required to make any adjustment of a Conversion Price\nas a result of the issuance after the effective date of these Amended and\nRestated Articles of Incorporation, (x) of shares of Common Stock (or any\noptions, warrants or rights to purchase such shares) to officers, directors,\nemployees or consultants of the Corporation or its subsidiaries pursuant to\nstock option or stock purchase plans or agreements or other employee benefit\nplans and any shares of Common Stock issued upon exercise or conversion pursuant\nto such plans or agreements, or (y) up to 500,000 shares of Common Stock (or any\noptions, warrants or rights to purchase such shares), appropriately adjusted for\nany stock combinations, consolidations, stock distributions, reclassifications,\nstock dividends, stock splits or the like, which have been approved by the Board\nof Directors in connection with an equipment leasing or other financing\narrangements with banks or other financial institutions, or (z) of shares\nissuable upon conversion or exercise of securities which are outstanding as of\nthe date of these Amended and Restated Articles.\n\n                        (G) In the event the Corporation shall declare a\ndistribution payable in securities of other persons, evidences of indebtedness\nissued by the Corporation or other persons or options or rights not referred to\nin this Section 5, then, in each such case, the holders of the Series A, Series\nB and Series C Preferred Stock shall be entitled to the distributions at the\nrate provided for in Section 1 above before any distribution shall be made to\nthe holders of the Common Stock, and no adjustment to the Conversion Prices\nprovided for in this Section 5 shall be applicable\n\n                        (H) For purposes of this Section 5, 'Equity Securities'\nshall mean any securities having voting rights in the election of the Board of\nDirectors not contingent upon default, or any securities evidencing an ownership\ninterest in the Company, or any securities convertible into or exercisable for\nany shares of the foregoing, or any agreement or commitment to issue any of the\nforegoing.\n\n               (e) Protection of Conversion Rights. The Corporation will not, by\n                   -------------------------------\namendment of its Articles of Incorporation or through any reorganization,\ntransfer of assets, consolidation, merger, dissolution, issue or sale of\nsecurities or any other voluntary action, avoid or seek to avoid the observance\nor performance of any of the terms to be observed or performed hereunder by the\nCorporation, but will at all times in good faith assist in the carrying out of\nall the provisions of this Section 5 and in the taking of all such action as may\nbe necessary or appropriate in order to protect the conversion rights of the\nholders of the Series A, Series B and Series C Preferred Stock against\nimpairment.\n\n                                       11\n\n \n               (f) Certificate of Adjustment. Upon the occurrence of each\n                   ------------------------- \nadjustment or readjustment of a Conversion Price pursuant to this Section 5, the\nCorporation at its expense shall promptly compute such adjustment or\nreadjustment in accordance with the terms hereof, and prepare and furnish to\neach holder of Preferred Stock affected thereby a certificate setting forth such\nadjustment or readjustment and showing in detail the facts upon which such\nadjustment or readjustment is based. The Corporation shall, upon the written\nrequest at any time of any holder of Preferred Stock, furnish or cause to be\nfurnished to such holder a like certificate setting forth (A) such adjustment or\nreadjustment, (B) the Conversion Price at the time in effect for the Series A,\nSeries B and Series C Preferred Stock as the case may be, and (C) the number of\nshares of Common Stock and the amount, if any, of other property which at the\ntime would be received upon the conversion of his shares.\n\n          6.   Changes Affecting the Preferred Stock.  So long as any shares of\n               -------------------------------------                           \nSeries A, Series B or Series C Preferred Stock are outstanding, the Corporation\nshall not, without first obtaining the approval by vote or written consent, in\nthe manner provided by law, of the holders of at least a two-thirds of the total\nnumber of shares of Preferred Stock then outstanding, voting together as a\nsingle class, (i) alter or change any or all of the rights, preferences,\nprivileges and restrictions granted to or imposed upon the Series A, Series B or\nSeries C Preferred Stock; or (ii) increase or decrease the authorized number of\nshares of Series A, Series B or Series C Preferred Stock or Common Stock; or\n(iii) create any new class or series of shares of preferred stock senior to or\non a par with the Series A, Series B or Series C Preferred Stock as to voting\nrights, dividends, anti-dilution protection or a distribution of assets of the\nCorporation in liquidation; or (iv) sell, lease, convey, exchange, license,\ntransfer or otherwise dispose of all or substantially all of its assets (other\nthan for the purposes of securing payment of any contract or obligation); or (v)\neffect any merger or consolidation with or into any other corporation such that\nthe shareholders of the Corporation do not own the majority of the outstanding\nstock following such merger or consolidation except into or with a wholly-owned\nsubsidiary; or (vi) amend the provisions of this Section 6.\n\n\n                                  ARTICLE IV\n\n     The liability of the directors of the Corporation for monetary damages\nshall be eliminated to the fullest extent permissible under California law.\n\n     The Corporation is authorized to provide indemnification of agents (as\ndefined in Section 317 of the California Corporations Code) for breach of duty\nto the Corporation and its shareholders through bylaw provisions or through\nagreements with the agents, or both, in excess of the indemnification otherwise\npermitted by Section 317 of the California Corporations Code, subject to the\nlimits on such excess indemnification set forth in Section 204 of the California\nCorporations Code.\n\n     Any amendment, repeal or modification of any provision of this Article IV\nshall not adversely affect any right or protection of a director or officers of\nthe Corporation existing at the time of such amendment, repeal or modification.\n\n                                       12\n\n \n          1.   The foregoing Amendment and Restatement of Articles of\nIncorporation has been duly approved by the board of directors.\n\n          2.   The foregoing Amendment and Restatement of Articles of\nIncorporation has been duly approved by the required vote of shareholders in\naccordance with Sections 902 and 903 of the California Corporations Code.  The\ntotal number of outstanding shares of Common Stock is 859,998.  The total number\nof outstanding shares of Series A Preferred Stock is 5,000,000.  The total\nnumber of outstanding shares of Series B Preferred Stock is 1,898,733.  The\ntotal number of outstanding shares of Series C Preferred Stock is 2,015,210.\nThere are no outstanding shares of Series A-1 Preferred Stock, Series B-1\nPreferred Stock and Series C-1 Preferred Stock.  The number of shares voting in\nfavor of the amendment equaled or exceeded the vote required, such required vote\nbeing a majority of the outstanding shares of Common Stock and two-thirds of the\noutstanding shares of each of the Series A, Series B and Series C Preferred\nStock.\n\n                 [REST OF THIS PAGE INTENTIONALLY LEFT BLANK]\n\n                                       13\n\n \n     The undersigned each declares under penalty of perjury that the\nmatters set forth in the foregoing certificate are true of his own knowledge.\n\n     Executed at San Francisco, California, on April 7, 1999.\n\n \n                                    \/s\/ Michael O'Donnell\n                                    ------------------------------------\n                                    Michael O'Donnell, President\n\n\n \n                                    \/s\/ David Talbot\n                                    ------------------------------------\n                                    David Talbot, Secretary\n\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[8749],"corporate_contracts_industries":[9468],"corporate_contracts_types":[9573,9575],"class_list":["post-41417","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-salon-media-group-inc","corporate_contracts_industries-media__other","corporate_contracts_types-formation","corporate_contracts_types-formation__incorporation"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41417","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41417"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41417"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41417"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41417"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}