exv4w13



 





Exhibit 4.13



THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i) EFFECTIVE REGISTRATION
STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE, REASONABLY SATISFACTORY
TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF NO-ACTION LETTERS FROM
THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH THE PROVISIONS OF
SECTION 7 OF THIS WARRANT.




COMSCORE NETWORKS, INC.




WARRANT TO PURCHASE 240,000 SHARES

OF SERIES E PREFERRED STOCK




     THIS CERTIFIES THAT, for value received, Heller Financial Leasing, Inc., a GE Capital company,
and its assignees are entitled to subscribe for and purchase 240,000 shares of the fully paid and
nonassessable Series E Preferred Stock (as adjusted pursuant to Section 4 hereof, the “Shares”) of
COMSCORE NETWORKS, INC., a Delaware corporation (the “Company”), at the price of $0.50 per share
(such price and such other price as shall result, from time to time, from the adjustments specified
in Section 4 hereof is herein referred to as the “Warrant Price”), subject to the provisions and
upon the terms and conditions hereinafter set forth. As used herein, (a) the term “Series
Preferred” shall mean the Company’s presently authorized Series E Preferred Stock, and any stock
into or for which such Series E Preferred Stock may hereafter be converted or exchanged, and after
the automatic conversion of the Series E Preferred Stock to Common Stock shall mean the Company’s
Common Stock, (b) the term “Date of Grant” shall mean December 19, 2003, and (c) the term “Other
Warrants” shall mean any other warrants issued by the Company in connection with the transaction
with respect to which this Warrant was issued, and any warrant issued upon transfer or partial
exercise of or in lieu of this Warrant. The term “Warrant” as used herein shall be deemed to
include Other Warrants unless the context clearly requires otherwise.



     1. Term. The purchase right represented by this Warrant is exercisable, in whole or
in part, at any time and from time to time from the Date of Grant through the later of (i) ten (10)
years after the Date of Grant or (ii) five (5) years after the closing of the Company’s initial
public offering of its Common Stock (“IPO”) effected pursuant to a Registration Statement on Form
S-l (or its successor) filed under the Securities Act of 1933, as amended (the “Act”); provided,
however, if the underwriter of an initial public offering of the Company’s stock provides the
holder of this Warrant reasonable prior written notice, requesting such holder to exercise its
option to purchase Shares, the holder shall within a reasonable period of time either exercise its
rights under this warrant or waive its right to exercise.



     Notwithstanding the term of this Warrant fixed pursuant to the above paragraph, the right to
purchase Series Preferred as granted herein shall expire, if not previously exercised, immediately
upon the closing of a sale, conveyance, disposal or encumbrance of all or substantially all of the
Company’s property or business or the Company’s merger into or consolidation with any other






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corporation or any other transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of the Company is disposed of (a “Merger”), provided that the
term “Merger” shall not apply to a merger effected exclusively for the purpose of changing the
domicile of the company.




     The Company shall provide the holder of this Warrant with at least twenty (20) days’ written
notice prior to closing thereof of the terms and conditions of a Merger. However, if the Company
fails to deliver such written notice, then notwithstanding anything to the contrary in this
Warrant, the rights to purchase the Company’s Series Preferred shall not expire until the Company
complies with such notice provisions. If such closing does not take place, the Company shall
promptly notify the holder of the Warrant that such proposed transaction has been terminated, and
the holder of the Warrant may rescind any exercise of its purchase rights promptly after such
notice of termination of the proposed transaction if the exercise of the Warrant has occurred after
the Company notified the holder that the Merger was proposed. In the event of such rescission, the
Warrant will continue to be exercisable on the same terms and conditions contained herein.



     2. Method of Exercise; Payment; Issuance of New Warrant. Subject to Section 1 hereof,
the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or
in part and from time to time, at the election of the holder hereof, by (a) the surrender of this
Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit A-1 duly
completed and executed) at the principal office of the Company and by the payment to the Company,
by certified or bank check, or by wire transfer to an account designated by the Company (a “Wire
Transfer”) of an amount equal to the then applicable Warrant Price multiplied by the number of
Shares then being purchased; or (b) exercise of the “net issuance” right provided for in Section
10.1 hereof. The person or persons in whose name(s) any certificate(s) representing shares of
Series Preferred shall be issuable upon exercise of this Warrant shall be deemed to have become the
holder(s) of record of, and shall be treated for all purposes as the record holder(s) of, the
shares represented thereby (and such shares shall be deemed to have been issued) immediately prior
to the close of business on the date or dates upon which this Warrant is exercised. In the event
of any exercise of the rights represented by this Warrant, certificates for the shares of stock so
purchased shall be delivered to the holder hereof as soon as possible and in any event within
thirty (30) days after such exercise and, unless this Warrant has been fully exercised or expired,
a new Warrant representing the portion of the Shares, if any, with respect to which this Warrant
shall not then have been exercised shall also be issued to the holder hereof as soon as possible
and in any event within such thirty-day period; provided, however, at such time as the Company is
subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, if
requested by the holder of this Warrant, the Company shall use its best efforts to cause its
transfer agent to deliver the certificate representing Shares issued upon exercise of this Warrant
to a broker or other person (as directed by the holder exercising this Warrant) within the time
period required to settle any trade made by the holder after exercise of this Warrant.



     3. Stock Fully Paid; Reservation of Shares. All Shares that may be issued upon the
exercise of the rights represented by this Warrant will, upon issuance pursuant to the terms and
conditions herein, be fully paid and nonassessable, and free from all preemptive rights and taxes,






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liens and charges with respect to the issue thereof, other than preemptive rights to which all
holders of Series Preferred are subject pursuant to the Rights Agreement (as defined below).
During the period within which the rights represented by this Warrant may be exercised, the Company
will at all times have authorized, and reserved for the purpose of the issue upon exercise of the
purchase rights evidenced by this Warrant, a sufficient number of shares of its Series Preferred to
provide for the exercise of the rights represented by this Warrant and a sufficient number of
shares of its Common Stock to provide for the conversion of the Series Preferred into Common Stock.




     4. Adjustment of Warrant Price and Number of Shares. The number and kind of
securities purchasable upon the exercise of this Warrant and the Warrant Price shall be subject to
adjustment from time to time upon the occurrence of certain events, as follows:



          (a) Reclassification. In case of any reclassification or change of securities of the
class issuable upon exercise of this Warrant (other than a change in par value, or from par value
to no par value, or from no par value to par value, or as a result of a subdivision or
combination), the Company, or such successor corporation, shall duly execute and deliver to the
holder of this Warrant a new Warrant (in form and substance satisfactory to the holder of this
Warrant), or the Company shall make appropriate provision without the issuance of a new Warrant, so
that the holder of this Warrant shall have the right to receive upon exercise of this Warrant, at a
total purchase price not to exceed that payable upon the exercise of the unexercised portion of
this Warrant, and in lieu of the shares of Series Preferred theretofore issuable upon exercise of
this Warrant, the kind and amount of shares of stock, other securities, money and property
receivable upon such reclassification or change, by a holder of the number of shares of Series
Preferred then purchasable under this Warrant. Any new Warrant shall provide for adjustments that
shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section
4 The provisions of this Section 4(a) shall similarly apply to successive rectifications and
changes.




          (b) Subdivision or Combination of Shares. If the Company at any time while this
Warrant remains outstanding and unexpired shall subdivide or combine its outstanding shares of
Series Preferred, the Warrant Price shall be proportionately decreased and the number of Shares
issuable hereunder shall be proportionately increased in the case of a subdivision and the Warrant
Price shall be proportionately increased and the number of Shares issuable hereunder shall be
proportionately decreased in the case of a combination.




          (c) Stock Dividends and Other Distributions. If the Company at any time while this
Warrant is outstanding and unexpired shall (i) pay a dividend with respect to Series Preferred
payable in Series Preferred, then the Warrant Price shall be adjusted, from and after the date of
determination of shareholders entitled to receive such dividend or distribution, to that price
determined by multiplying the Warrant Price in effect immediately prior to such date of
determination by a fraction (A) the numerator of which shall be the total number of shares of
Series Preferred outstanding immediately prior to such dividend or distribution, and (B) the
denominator of which shall be the total number of shares of Series Preferred outstanding
immediately after such dividend or distribution; or (ii) make any other distribution with respect
to Series Preferred (except any distribution specifically provided for in Sections 4(a) and 4(b)),
then, in each such case, provision shall be made by the Company such that the holder of this
Warrant shall receive upon







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exercise of this Warrant a proportionate share of any such dividend or distribution as though it
were the holder of the Series Preferred (or Common Stock issuable upon conversion thereof) as of
the record date fixed for the determination of the shareholders of the Company entitled to receive
such dividend or distribution.




          (d) Adjustment of Number of Shares. Upon each adjustment in the Warrant Price, the
number of Shares of Series Preferred purchasable hereunder shall be adjusted, to the nearest whole
share, to the product obtained by multiplying the number of Shares purchasable immediately prior to
such adjustment in the Warrant Price by a fraction, the numerator of which shall be the Warrant
Price immediately prior to such adjustment and the denominator of which shall be the Warrant Price
immediately thereafter.




          (e) Antidilution Rights. The other antidilution rights applicable to the Shares of
Series Preferred purchasable hereunder are set forth in the Company’s Certificate of Incorporation,
as amended through the Date of Grant, a true and complete copy of which is attached hereto as
Exhibit B (the “Charter”). Such antidilution rights shall not be restated, amended, modified or
waived in any manner that is adverse to the holder hereof without such holder’s prior written
consent, unless such amendment, modification or waiver affects such holder in the same manner as it
affects other holders of only the Series Preferred. The Company shall promptly provide the holder
hereof with any restatement, amendment, modification or waiver of the Charter promptly after the
same has been made.




     5. Notice of Adjustments. Whenever the Warrant Price or the number of Shares
purchasable hereunder shall be adjusted pursuant to Section 4 hereof, the Company shall make a
certificate signed by its chief financial officer setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such adjustment was
calculated, and the Warrant Price and the number of Shares purchasable hereunder after giving
effect to such adjustment, and shall cause copies of such certificate to be mailed (without regard
to Section 14 hereof, by first class mail, postage prepaid) to the holder of this Warrant. In
addition, whenever the conversion price or conversion ratio of the Series Preferred shall be
adjusted, the Company shall make a certificate signed by its chief financial officer setting forth,
in reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method
by which such adjustment was calculated, and the conversion price or ratio of the Series Preferred
after giving effect to such adjustment, and shall cause copies of such certificate to be mailed
(without regard to Section 14 hereof, by first class mail, postage prepaid) to the holder of this
Warrant.



     6. Fractional Shares. No fractional shares of Series Preferred will be issued in
connection with any exercise hereunder, but in lieu of such fractional shares the Company shall
make a cash payment therefor based on the fair market value of the Series Preferred on the date of
exercise as reasonably determined in good faith by the Company’s Board of Directors.



     7. Compliance with Act; Disposition of Warrant or Shares of Series Preferred.



          (a) Compliance with Act. The holder of this Warrant, by acceptance hereof, agrees
that this Warrant, and the shares of Series Preferred to be issued upon exercise hereof and any







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Common Stock issued upon conversion thereof are being acquired for investment and that such holder
will not offer, sell or otherwise dispose of this Warrant, or any shares of Series Preferred to be
issued upon exercise hereof or any Common Stock issued upon conversion thereof except under
circumstances which will not result in a violation of the Act or any applicable state securities
laws. Upon exercise of this Warrant, unless the Shares being acquired are registered under the Act
and any applicable state securities laws or an exemption from such registration is available, the
holder hereof shall confirm in writing that the shares of Series Preferred so purchased (and any
shares of Common Stock issued upon conversion thereof) are being acquired for investment and not
with a view toward distribution or resale in violation of the Act and shall confirm such other
matters related thereto as may be reasonably requested by the Company. This Warrant and all shares
of Series Preferred issued upon exercise of this Warrant and all shares of Common Stock issued upon
conversion thereof (unless registered under the Act and any applicable state securities laws) shall
be stamped or imprinted with a legend in substantially the following form:



“THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. NO SALE OR DISPOSITION MAY BE EFFECTED WITHOUT (i)
EFFECTIVE REGISTRATION STATEMENTS RELATED THERETO, (ii) AN OPINION OF COUNSEL OR OTHER EVIDENCE,
REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATIONS ARE NOT REQUIRED, (iii) RECEIPT OF
NO-ACTION LETTERS FROM THE APPROPRIATE GOVERNMENTAL AUTHORITIES, OR (iv) OTHERWISE COMPLYING WITH
THE PROVISIONS OF SECTION 7 OF THE WARRANT UNDER WHICH THESE SECURITIES WERE ISSUED, DIRECTLY OR
INDIRECTLY.”




     Said legend shall be removed by the Company, upon the request of a holder, at such time as the
restrictions on the transfer of the applicable security shall have terminated. In addition, in
connection with the issuance of this Warrant, the holder specifically represents to the Company by
acceptance of this Warrant as follows:



               (1) The holder is aware of the Company’s business affairs and financial condition, and has
acquired information about the Company sufficient to reach an informed and knowledgeable decision
to acquire this Warrant. The holder is acquiring this Warrant for its own account for investment
purposes only and not with a view to, or for the resale in connection with, any “distribution”
thereof in violation of the Act.



               (2) The holder understands that this Warrant has not been registered under the Act in reliance
upon a specific exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of the holder’s investment intent as expressed herein.



               (3) The holder further understands that this Warrant must be held indefinitely unless
subsequently registered under the Act and qualified under any applicable state securities laws, or
unless exemptions from registration and qualification are otherwise available. The holder is aware
of the provisions of Rule 144, promulgated under the Act.



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               (4) The holder is an “accredited investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Act.



          (b) Disposition of Warrant or Shares. With respect to any offer, sale or other
disposition of this Warrant or any shares of Series Preferred acquired pursuant to the exercise of
this Warrant prior to registration of such Warrant or shares, the holder hereof agrees to give
written notice to the Company prior thereto, describing briefly the manner thereof, together with a
written opinion of such holder’s counsel, or other evidence, if reasonably satisfactory to the
Company, to the effect that such offer, sale or other disposition may be effected without
registration or qualification (under the Act as then in effect or any federal or state securities
law then in effect) of this Warrant or such shares of Series Preferred or Common Stock and
indicating whether or not under the Act certificates for this Warrant or such shares of Series
Preferred to be sold or otherwise disposed of require any restrictive legend as to applicable
restrictions on transferability in order to ensure compliance with such law. Upon receiving such
written notice and reasonably satisfactory opinion or other evidence, the Company, as promptly as
practicable but no later than fifteen (15) days after receipt of the written notice, shall notify
such holder that such holder may sell or otherwise dispose of this Warrant or such shares of Series
Preferred or Common Stock, all in accordance with the terms of the notice delivered to the Company.
If a determination has been made pursuant to this Section 7(b) that the opinion of counsel for the
holder or other evidence is not reasonably satisfactory to the Company, the Company shall so notify
the holder promptly with details thereof after such determination has been made. Notwithstanding
the foregoing, this Warrant or such shares of Series Preferred or Common Stock may, as to such
federal laws, be offered, sold or otherwise disposed of in accordance with Rule 144 or 144A under
the Act, provided that the Company shall have been furnished with such information as the Company
may reasonably request to provide a reasonable assurance that the provisions of Rule 144 or 144A
have been satisfied. Each certificate representing this Warrant or the shares of Series Preferred
thus transferred (except a transfer pursuant to Rule 144 or 144A) shall bear a legend as to the
applicable restrictions on transferability in order to ensure compliance with such laws, unless in
the aforesaid opinion of counsel for the holder, such legend is not required in order to ensure
compliance with such laws. The Company may issue stop transfer instructions to its transfer agent
in connection with such restrictions.




          (c) Applicability of Restrictions. Neither any restrictions of any legend described
in this Warrant nor the requirements of Section 7(b) above shall apply to any transfer of, or grant
of a security interest in, this Warrant (or the Series Preferred or Common Stock obtainable upon
exercise thereof) or any part hereof (i) to a partner of the holder if the holder is a partnership
or to a member of the holder if the holder is a limited liability company, (ii) to a partnership of
which the holder is a partner or to a limited liability company of which the holder is a member, or
(iii) to any affiliate of the holder if the holder is a corporation; provided,
however, in any such transfer, if applicable, the transferee shall on the Company’s request
agree in writing to be bound by the terms of this Warrant as if an original holder hereof.




     8. Rights as Shareholders. No holder of this Warrant, as such, shall be entitled to
vote or receive dividends or be deemed the holder of Series Preferred or any other securities of
the Company which may at any time be issuable upon the exercise hereof for any purpose, nor shall
anything contained herein be construed to confer upon the holder of this Warrant, as such, any of
the






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rights of a shareholder of the Company or any right to vote for the election of directors or upon
any matter submitted to shareholders at any meeting thereof, or to receive notice of meetings, or
to receive dividends or subscription rights or otherwise until this Warrant shall have been
exercised and the Shares purchasable upon the exercise hereof shall have become deliverable, as
provided herein.




     9. Registration Rights. The Company grants registration rights to the holder of this
Warrant for any Common Stock of the Company obtained upon conversion of the Series Preferred,
comparable to the registration rights granted to the investors in that certain Fourth Amended and
Restated Investor Rights Agreement dated as of August 1, 2001 (the “Rights Agreement”), with the
following exceptions and clarifications:



               (1) The holder will have not have the right to demand registration, but can otherwise
participate in any registration demanded by other holders of at least a majority of the Registrable
Securities (as defined in the Rights Agreement).



               (2) The holder will be subject to the same provisions regarding indemnification as contained
in the Rights Agreement.



               (3) The registration rights are freely assignable by the holder of this Warrant in connection
with a permitted transfer, in accordance with Section 7 above, of this Warrant or the Shares.



     10. Additional Rights.



     10.1 Right to Convert Warrant into Stock: Net Issuance.



          (a) Right to Convert. In addition to and without limiting the rights of the holder
under the terms of this Warrant, the holder shall have the right to convert this Warrant or any
portion thereof (the “Conversion Right”) into shares of Series Preferred as provided in this
Section 10.1 at any time or from time to time during the term of this Warrant. Upon exercise of
the Conversion Right with respect to a particular number of shares subject to this Warrant (the
“Converted Warrant Shares”), the Company shall deliver to the holder (without payment by the holder
of any exercise price or any cash or other consideration) that number of shares of fully paid and
nonassessable Series Preferred as is determined according to the following formula:




	 	 	 	 	 	 	 	 	 
	 

	 	X
	 	=
	 	 B – A 
 

     Y
	 	 






	 	 	 	 	 
	Where:

	 	X =
	 	the number of shares of Series Preferred that shall be issued to holder
	 
	 	 	 	 
	 

	 	Y =
	 	the fair market value of one share of Series Preferred
	 
	 	 	 	 
	 

	 	A =
	 	the aggregate Warrant Price of the specified number of
Converted Warrant Shares immediately prior to the exercise of the Conversion
Right (i.e., the number of Converted Warrant Shares multiplied by the Warrant
Price)






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	 	B =
	 	the aggregate fair market value of the specified number
of Converted Warrant Shares (i.e., the number of Converted Warrant Shares
multiplied by the fair market value of one Converted Warrant Share)






     No fractional shares shall be issuable upon exercise of the Conversion Right, and, if the
number of shares to be issued determined in accordance with the foregoing formula is other than a
whole number, the Company shall pay to the holder an amount in cash equal to the fair market value
of the resulting fractional share on the Conversion Date (as hereinafter defined). For purposes of
Section 10 of this Warrant, shares issued pursuant to the Conversion Right shall be treated as if
they were issued upon the exercise of this Warrant.



          (b) Method of Exercise. The Conversion Right may be exercised by the holder by the
surrender of this Warrant at the principal office of the Company together with a written statement
(which may be in the form of Exhibit A-l) specifying that the holder thereby intends to exercise
the Conversion Right and indicating the number of shares subject to this Warrant which are being
surrendered (referred to in Section 10.1 (a) hereof as the Converted Warrant Shares) in exercise of
the Conversion Right. Such conversion shall be effective upon receipt by the Company of this
Warrant together with the aforesaid written statement, or on such later date as is specified
therein (the “Conversion Date”), and, at the election of the holder hereof, may be made contingent
upon the closing of the sale of the Company’s Common Stock to the public in a public offering
pursuant to a Registration Statement under the Act (a “Public Offering”). Certificates for the
shares issuable upon exercise of the Conversion Right and, if applicable, a new warrant evidencing
the balance of the shares remaining subject to this Warrant, shall be issued as of the Conversion
Date and shall be delivered to the holder within thirty (30) days following the Conversion Date.




          (c) Determination of Fair Market Value. For purposes of this Section 10.1, “fair
market value” of a share of Series Preferred (or Common Stock if the Series Preferred has been
automatically converted into Common Stock) as of a particular date (the “Determination Date”) shall
mean:




               (i) If the Conversion Right is exercised in connection with and contingent upon a Public
Offering, and if the Company’s Registration Statement relating to such Public Offering
(“Registration Statement”) has been declared effective by the Securities and Exchange Commission,
then the initial “Price to Public” specified in the final prospectus with respect to such offering.



               (ii) If the Conversion Right is not exercised in connection with and contingent upon a Public
Offering, then as follows:



          (A) If traded on a securities exchange, the fair market value of the Common Stock shall be
deemed to be the average of the closing prices of the Common Stock on such exchange over the five
trading days immediately prior to the Determination Date, and the fair market value of the Series
Preferred shall be deemed to be such fair market value of the Common Stock multiplied by the number
of shares of Common Stock into which each share of Series Preferred is then convertible;







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          (B) If traded on the Nasdaq Stock Market or other over-the-counter system, the fair market
value of the Common Stock shall be deemed to be the average of the closing bid prices of the Common
Stock over the five trading days immediately prior to the Determination Date, and the fair market
value of the Series Preferred shall be deemed to be such fair market value of the Common Stock
multiplied by the number of shares of Common Stock into which each share of Series Preferred is
then convertible; and




          (C) If there is no public market for the Common Stock, then fair market value shall be
reasonably determined by the board of directors of the Company.



In making a determination under clauses (A) or (B) above, if on the Determination Date, five
trading days had not passed since the IPO, then the fair market value of the Common Stock shall be
the average closing prices or closing bid prices, as applicable, for the shorter period beginning
on and including the date of the IPO and ending on the trading day prior to the Determination Date
(or if such period includes only one trading day the closing price or closing bid price, as
applicable, for such trading day). If closing prices or closing bid prices are no longer reported
by a securities exchange or other trading system, the closing price or closing bid price shall be
that which is reported by such securities exchange or other trading system at 4:00 p.m. New York
City time on the applicable trading day.




     10.2 Exercise Prior to Expiration. To the extent this Warrant is not previously
exercised as to all of the Shares subject hereto, and if the fair market value of one share of the
Series Preferred is greater than the Warrant Price then in effect, this Warrant shall be deemed
automatically exercised pursuant to Section 10.1 above (even if not surrendered) immediately before
its expiration. For purposes of such automatic exercise, the fair market value of one share of the
Series Preferred upon such expiration shall be determined pursuant to Section 10.1(c). To the
extent this Warrant or any portion thereof is deemed automatically exercised pursuant to this
Section 10.2, the Company agrees to promptly notify the holder hereof of the number of Shares, if
any, the holder hereof is to receive by reason of such automatic exercise.



     11. Representations and Warranties. The Company represents and warrants to the holder
of this Warrant as follows:



          (a) This Warrant has been duly authorized and executed by the Company and is a valid and
binding obligation of the Company enforceable in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the relief of debtors and the rules of
law or principles at equity governing specific performance, injunctive relief and other equitable
remedies,




          (b) The Shares have been duly authorized and reserved for issuance by the Company and, when
issued in accordance with the terms hereof, will be validly issued, fully paid and nonassessable
and free from preemptive rights.




          (c) The rights, preferences, privileges and restrictions granted to or imposed upon the Series
Preferred and the holders thereof are as set forth in the Charter, and on the Date of Grant,







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each share of the Series Preferred represented by this Warrant is convertible into one share of
Common Stock.




          (d) The shares of Common Stock issuable upon conversion of the Shares have been duly
authorized and reserved for issuance by the Company and, when issued in accordance with the terms
of the Charter will be validly issued, fully paid and nonassessable.




          (e) The execution and delivery of this Warrant are not, and the issuance of the Shares upon
exercise of this Warrant in accordance with the terms hereof will not be, inconsistent with the
Company’s Charter or by-laws, do not and will not contravene any law, governmental rule or
regulation, judgment or order applicable to the Company, and do not and will not conflict with or
contravene any provision of, or constitute a default under, any indenture, mortgage, contract or
other instrument of which the Company is a party or by which it is bound or require the consent or
approval of, the giving of notice to, the registration or filing with or the taking of any action
in respect of or by, any Federal, state or local government authority or agency or other person,
except for the filing of notices pursuant to federal and state securities laws, which filings will
be effected by the time required thereby.




          (f) There are no actions, suits, audits, investigations or proceedings pending or, to the
knowledge of the Company, threatened against the Company in any court or before any governmental
commission, board or authority which, if adversely determined, could have a material adverse effect
on the ability of the Company to perform its obligations under this Warrant.




          (g) The number of shares of Common Stock of the Company outstanding on the date hereof, on a
fully diluted basis (assuming the conversion of all outstanding convertible securities and the
exercise of all outstanding options and warrants), does not exceed 117,000,000 shares.




     12. Market Stand-Off Provision. The holder of this Warrant agrees to be bound by the
“Market Stand-Off” provision in section 1(l) of the Rights Agreement.



     13. Modification and Waiver. This Warrant and any provision hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the party against which
enforcement of the same is sought.



     14. Notices. Any notice, request, communication or other document required or
permitted to be given or delivered to the holder hereof or the Company shall be delivered, or shall
be sent by certified or registered mail, postage prepaid, to each such holder at its address as
shown on the books of the Company or to the Company at the address indicated therefor on the
signature page of this Warrant.



     15. Lost Warrants or Stock Certificates. The Company covenants to the holder hereof
that, upon receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate and, in the case of any such
loss, theft or destruction, upon receipt of an indemnity reasonably satisfactory to the Company, or
in the case of any such mutilation upon surrender and cancellation of such Warrant or stock
certificate, the






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Company will make and deliver a new Warrant or stock certificate, of like tenor, in lieu of the
lost, stolen, destroyed or mutilated Warrant or stock certificate.




     16. Descriptive Headings. The descriptive headings of the various Sections of this
Warrant are inserted for convenience only and do not constitute a part of this Warrant. The
language in this Warrant shall be construed as to its fair meaning without regard to which party
drafted this Warrant.



     17. Governing Law. This Warrant shall be construed and enforced in accordance with,
and the rights of the parties shall be governed by, the laws of the State of Delaware.



     18. Survival of Representations, Warranties and Agreements. All representations and
warranties of the Company and the holder hereof contained herein shall survive the Date of Grant,
the exercise or conversion of this Warrant (or any part hereof) or the termination or expiration of
rights hereunder. All agreements of the Company and the holder hereof contained herein shall
survive indefinitely until, by their respective terms, they are no longer operative.



     19. Remedies. In case any one or more of the covenants and agreements contained in
this Warrant shall have been breached, the holders hereof (in the case of a breach by the Company),
or the Company (in the case of a breach by a holder), may proceed to protect and enforce their or
its rights either by suit in equity and/or by action at law, including, but not limited to, an
action for damages as a result of any such breach and/or an action for specific performance of any
such covenant or agreement contained in this Warrant.



     20. No Impairment of Rights. The Company will not, by amendment of its Charter or
through any other means, avoid or seek to avoid the observance or performance of any of the terms
of this Warrant, but will at all times in good faith assist in the carrying out of all such terms
and in the taking of all such action as may be necessary or appropriate in order to protect the
rights of the holder of this Warrant against impairment.



     21. Severability. The invalidity or unenforceability of any provision of this Warrant
in any jurisdiction shall not affect the validity or enforceability of such provision in any other
jurisdiction, or affect any other provision of this Warrant, which shall remain in full force and
effect.



     22. Recovery of Litigation Costs. If any legal action or other proceeding is brought
for the enforcement of this Warrant, or because of an alleged dispute, breach, default, or
misrepresentation in connection with any of the provisions of this Warrant, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys’ fees and other costs
incurred in that action or proceeding, in addition to any other relief to which it or they may be
entitled.



     23. Entire Agreement; Modification. This Warrant constitutes the entire agreement
between the parties pertaining to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and undertakings of the parties, whether oral or
written, with respect to such subject matter.






- 11 -









 








     The Company has caused this Warrant to be duly executed and delivered as of the Date of Grant
specified above.



	 	 	 	 	 	 	 
	 	 	COMSCORE NETWORKS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ Sheri L. Huston
 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Title
	 	/s/ CFO
 

	 	 
	 
	 	 	 	 	 	 
	 	 	Address:	 	 
	 
	 	 	 	 	 	 
	 	 	11465 Sunset Hills Road

Suite 200

Reston, VA 20190	 	 






- 12 -









 





EXHIBIT A-1




NOTICE OF EXERCISE




To: COMSCORE NETWORKS, INC. (the “Company”)




     1. The undersigned hereby:




	 	o	 	 elects to purchase ___shares of [Series E Preferred Stock] [Common
Stock] of the Company pursuant to the terms of the attached Warrant, and
tenders herewith payment of the purchase price of such shares in full, or
	 
	 	o	 	 elects to exercise its net issuance rights pursuant to Section 10.1 of the
attached Warrant with respect to ___Shares of [Series E Preferred
Stock] [Common Stock].





     2. Please issue a certificate or certificates representing ___shares in the name of the
undersigned or in such other name or names as are specified below:



	 	 	 	 	 
	 
	 	 	 	 
	 

	 	 

(Name)
	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

(Address)
	 	 






     3 The undersigned represents that the aforesaid shares are being acquired for the account of
the undersigned for investment and not with a view to, or for resale in connection with, the
distribution thereof and that the undersigned has no present intention of distributing or reselling
such shares, all except as in compliance with applicable securities laws.



	 	 	 	 	 
	 	 	 	 	 
	 

	 	 

(Signature)
	 	 






	 	 	 
	 

(Date)

	 	 







 









 




EXHIBIT B




CHARTER




 









 





SEVENTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF COMSCORE NETWORKS, INC.

a Delaware corporation

(Originally incorporated on August 18, 1999)




     comScore Networks, Inc., a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify that:



     1. The name of the Corporation is comScore Networks, Inc., originally incorporated as
comScore, inc. The original Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on August 18, 1999.



     2. The amendment and restatement herein set forth has been duly approved by the Board of
Directors of the Corporation and by the stockholders of the Corporation pursuant to Sections 141,
228 and 242 of the General Corporation Law of the State of Delaware (“Delaware Law”). Approval of
this amendment and restatement was approved by a written consent signed by the stockholders of the
corporation pursuant to Section 228 of the Delaware Law.



     3. The restatement herein set forth has been duly adopted pursuant to Section 245 of the
Delaware Law. This Amended and Restated Certificate of Incorporation restates and integrates and
amends the provisions of the corporation’s Certificate of Incorporation.



     4. The text of the Certificate of Incorporation is hereby amended and restated to read in its
entirety as follows:



ARTICLE I




     The name of the Corporation is comScore Networks, Inc.



ARTICLE II




     The address of the registered office of the Corporation in the State of Delaware is
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle,
Delaware 19081. The name of its registered agent at such address is The Corporation Trust Company.



ARTICLE III




     The nature of the business or purposes to be conducted or promoted is to engage in any lawful
act or activity for which corporations may be organized under the General Corporation Law of
Delaware.



 









 





ARTICLE IV




     A. Classes of Stock. This 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 One Hundred Ninety Eight Million, Six Hundred
Seventy Three Thousand Two Hundred and Twenty Four (198,673,224) shares. One Hundred Twenty Five
Million (125,000,000) shares shall be Common Stock, par value $0.001 per share, and Seventy Three
Million, Six Hundred Seventy Three Thousand Two Hundred and Twenty Four (73,673,224) shares shall
be Preferred Stock, par value $0.001 per share, of which Nine Million One Hundred Eighty Seven
Thousand Five Hundred (9,187,500) shares, par value $0.001 per share, shall be designated “Series A
Preferred,” Three Million Five Hundred Thirty Five Thousand Four Hundred Eighty Six (3,535,486)
shares, par value $0.001 per share, shall be designated “Series B Preferred,” Thirteen Million
Three Hundred Fifty Five Thousand Fifty Two (13,355,052) shares, par value $0.001 per share, shall
be designated “Series C Preferred,” Three Hundred Fifty Seven Thousand One Hundred Forty Four
(357,144) shares, par value $0.001 per share, shall be designated “Series C-1 Preferred,” Twenty
Two Million Two Hundred Thirty Eight Thousand Forty Two (22,238,042) shares, par value $0.001 per
share, shall be designated “Series D Preferred” and Twenty Five Million (25,000,000) shares, par
value $0.001 per share, shall be designated “Series E Preferred.”



     The Board of Directors is further authorized to decrease (but not below the number of shares
of any such series then outstanding) the number of shares of any series. If the number of shares
of any series is so decreased, then the shares constituting such decrease shall resume the status
which they had prior to the adoption of the resolution originally fixing the number of shares of
such series.



     B. Rights, Preferences, Privileges and Restrictions of Preferred Stock. The rights,
preferences, privileges and restrictions granted to and imposed on the Series A Preferred, the
Series B Preferred, the Series C Preferred, the Series C-1 Preferred, the Series D Preferred and
the Series E Preferred (collectively, the “Preferred”) are as set forth below in this Article
IV(B).



          1. Dividend Provisions. The holders of shares of Series E Preferred shall be entitled
to receive dividends, out of any assets legally available therefore, prior and in preference to any
declaration or payment of any dividend (payable other than in Common Stock) on any other class of
capital stock of this Corporation, at the rate of eight percent (8%) of the Original Series E Issue
Price (as defined below, and as adjusted for any stock dividends, stock distributions,
combinations, consolidations or splits with respect to such shares) per share per annum. Following
the payment of any dividends to the holders of shares of Series E Preferred, the holders of shares
of Series D Preferred shall be entitled to receive dividends, out of any assets legally available
therefor, prior and in preference to any declaration or payment of any dividend (payable other than
in Common Stock) on any other class or series of capital stock of this Corporation, other than the
Series E Preferred, at the rate of eight percent (8%) of the Original Series D Issue Price (as
defined below, and as adjusted for any stock dividends, stock distributions, combinations,
consolidations or splits with respect to such shares) per share per annum. Following the payment
of any dividends to the holders of shares of Series E Preferred and Series D Preferred, the holders
of shares of Preferred (other than the Series E Preferred and the Series D Preferred) shall be
entitled to receive dividends, out of any assets legally available therefor, prior and in
preference to any declaration or payment of any dividend




-2-









 







(payable other than in Common Stock) on the Common Stock of this Corporation, at the rate of
eight percent (8%) of such series’ respective Original Issue Price (as defined below, and as
adjusted for any stock dividends, stock distributions, combinations, consolidations or splits with
respect to such shares) per share per annum. Such dividends shall not be cumulative and shall be
paid only when, if and as declared by the Board of Directors of the Corporation. No dividend shall
be paid on shares of a series of Preferred (other than the Series E Preferred and the Series D
Preferred) in any fiscal year unless the holders of shares of each other series of Preferred (other
than the Series E Preferred and the Series D Preferred) participate in such dividend, pro rata
among the holders thereof based upon the full dividend amount to which they are entitled. No
dividend shall be paid on shares of Common Stock in any fiscal year unless (i) the aforementioned
noncumulative preferential dividends of the Preferred shall have been paid in full and (ii) the
holders of Preferred participate in any such dividend on the Common Stock on a pro rata basis in
proportion to the number of shares of Common Stock held of record by each such holder of Preferred
(assuming the conversion of all Preferred into Common Stock).




          2. Liquidation Preference.




               a. Deemed Pre-Carveout Distribution. The amounts to be distributed to the holders of
capital stock of the Corporation in the event of a Liquidation Event (as defined below) are subject
to the proportional adjustment of amounts to be distributed to the holders of Preferred pursuant to
Section 2(c) in order to satisfy the obligations of the Corporation pursuant to the Plan (as
defined in Section 2(b)). For purposes of calculation of these amounts, the holders of capital
stock of the Corporation shall be deemed to be entitled to receive amounts as set forth below in
this Section 2(a) (the amounts that holders of Preferred shall be deemed to be entitled to the
“Deemed Preferred Amounts”):



                    (i) Primary Distribution. In the event of any Liquidation Event, each holder of
Series E Preferred shall be deemed to be entitled to receive, prior and in preference to any
distribution of any of the assets of the Corporation to the holders of any other class of capital
stock of this Corporation by reason of their ownership thereof, including the Series A Preferred,
the Series B Preferred, the Series C Preferred, the Series C-1 Preferred, the Series D Preferred
and the Common Stock, an amount equal to the product of (1) 1.63 and (2) the sum of (A) $0.50 (the
“Original Series E Issue Price”) for each share of Series E Preferred held of record by such holder
(as adjusted for any stock dividends, stock distributions, combinations, consolidation, or splits
with respect to such shares) and (B) all declared but unpaid dividends on such shares.



                    (ii) Secondary Distribution. In the event of any Liquidation Event, after the deemed
payment in full of the amounts under Section 2(a)(i) and subject to the Cap (as defined and as set
forth in Section 9), prior and in preference to any distribution of any of the assets of the
Corporation to the holders of the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series C-1 Preferred and the Common Stock (by reason of their ownership thereof),
each holder of Series D Preferred shall be deemed to be entitled to receive an amount equal to the
product of (A) the Adjustment Factor (as defined in Section 9) and (B) the sum of (1) $0.8996 (the
“Original Series D Issue Price”) for each share of Series D Preferred held of record by such holder
(as adjusted for any stock dividends, stock distributions, combinations, consolidation, or splits
with respect to such shares), (2) all declared but unpaid dividends on such shares and (3) an
amount equal



-3-









 







to 25 percent (which amount shall be pro-rated for any partial year and computed with respect
to any share from the date such share was first issued) of the Original Series D Issue Price
compounded annually in respect of each share of the Series D Preferred held of record by such
holder (the “Liquidation Increment”) (as adjusted for any stock dividend, stock distributions,
combinations, consolidations or splits with respect to such shares); provided,
however, that in no event shall any holder of Series D Preferred be deemed to be entitled
to receive an amount per share in excess of 2.5 times the Original Series D Issue Price (as
adjusted for any stock dividends, stock distributions, combinations, consolidations, or splits with
respect to such shares) pursuant to this Section 2(a)(ii) (the sum per share of (1), (2) and (3),
as may be limited by the proviso, the “Pre-Cap Series D Return”).



                    (iii) Tertiary Distribution. In the event of any Liquidation Event, after the deemed
payment in full of the amounts under Section 2(a)(i)-2(a)(ii) and subject to the Cap, prior and in
preference to any distribution of any of the assets of the Corporation to the holders of the Common
Stock (by reason of their ownership thereof):



                         (A) each holder of Series A Preferred shall be deemed to be entitled to receive an amount
equal to the product of (1) the Adjustment Factor and (2) the sum of (x) $1.00 (the “Original
Series A Issue Price”) for each share of Series A Preferred held of record by such holder (as
adjusted for any stock dividends, stock distributions, combinations, consolidations or splits with
respect to such shares) and (y) all declared but unpaid dividends on such shares (the sum per share
of x and y, the “Pre-Cap Series A Return”);



                         (B) each holder of Series B Preferred shall be deemed to be entitled to receive an amount
equal to the product of (1) the Adjustment Factor and (2) the sum of (x) $4.90 (the “Original
Series B Issue Price”) for each share of Series B Preferred held of record by such holder (as
adjusted for any stock dividends, stock distributions, combinations, consolidations or splits with
respect to such shares) and (y) all declared but unpaid dividends on such shares (the sum per share
of x and y, the “Pre-Cap Series B Return”);



                         (C) each holder of Series C Preferred shall be deemed to be entitled to receive an amount
equal to the product of (1) the Adjustment Factor and (2) the sum of (x) $2.2692 (the “Original
Series C Issue Price”) for each share of Series C Preferred held of record by such holder (as
adjusted for any stock dividends, stock distributions, combinations, consolidations or splits with
respect to such shares) and (y) all declared but unpaid dividends on such shares (the sum per share
of x and y, the “Pre-Cap Series C Return”); and



                         (D) each holder of Series C-1 Preferred shall be deemed to be entitled to receive an amount
equal to the product of (1) the Adjustment Factor and (2) the sum of (x) $1.40 (the “Original
Series C-1 Issue Price”) for each share of Series C-1 Preferred held of record by such holder (as
adjusted for any stock dividends, stock distributions, combinations, consolidations or splits with
respect to such shares) and (y) all declared but unpaid dividends on such shares (the sum of x and
y, the “Pre-Cap Series C-1 Return”).



     The Pre-Cap Series A Return, the Pre-Cap Series B Return, the Pre-Cap Series C Return, the
Pre-Cap Series C-1 Return and the Pre-Cap Series D Return are each “Pre-Cap Returns.” For the



-4-









 







avoidance of doubt, the maximum amount that may actually be distributed pursuant to Section
2(a)(ii)-(iii) shall be the Cap.



                    (iv) Priority. If upon the occurrence of any Liquidation Event, the assets and funds
of the Corporation legally available for distribution pursuant to Section 2(a)(i)-2(a)(iii) shall
be insufficient to permit the payment of the full aforesaid deemed preferential amounts, then the
entire assets and funds of the Corporation legally available for distribution shall be deemed to be
distributed first to the holders of the Series E Preferred as set forth in Section 2(a)(i), then to
the holders of the Series D Preferred as set forth in Section 2(a)(ii) and thereafter among the
holders of the Series A Preferred, Series B Preferred, Series C Preferred and Series C-1 Preferred
(ratably in proportion to the preferential amount each such holder is otherwise entitled to
receive) as set forth in Section 2(a)(iii). To the extent the assets and funds of the Corporation
legally available for distribution shall be insufficient to permit the deemed payment in full of
the amounts under Section 2(a)(i)-2(a)(iii) for any given series of Preferred, the assets and funds
of the Corporation legally available for distribution shall be deemed to be distributed amongst the
holders of such series ratably in proportion to the preferential amount each holder is otherwise
entitled to receive.



                    (v) Quaternary (Fourth) Distribution. Subject to Section 2(a)(vi), upon the
completion of the distribution required by Section 2(a)(i)-2(a)(iii), the remaining assets of the
Corporation available for distribution to stockholders shall be deemed to be distributed among the
holders of Preferred and Common Stock of record on a pro rata basis in proportion to the number of
shares of Common Stock held of record by each (assuming for the purposes hereof conversion of all
Preferred into Common Stock).



                    (vi) Maximum Liquidation Amount. No Preferred holder shall actually receive, pursuant
to the operation of Section 2(a)(i)-2(a)(v), with respect to any series of Preferred held by such
holder, an amount greater than the Maximum Liquidation Amount (as defined below) applicable to such
series. Once holders of a series of Preferred have received, pursuant to the operation of Section
2(a)(i)-2(a)(v) with respect to such series of Preferred, the Maximum Liquidation Amount applicable
to such series, then the entire remaining assets and funds of the Corporation legally available for
distribution, if any, shall be distributed among the remaining holders of Preferred (other than any
series of Preferred the holders of which have received their Maximum Liquidation Amount) and Common
Stock of record in accordance with Section 2(a)(i)-2(a)(v). Following such time as all holders of
Preferred have received, pursuant to the operation of Section 2(a)(i)-2(a)(v), the Maximum
Liquidation Amount (as defined below) for their respective shares of Preferred, then the entire
remaining assets and funds of the Corporation legally available for distribution, if any, shall be
distributed ratably among the holders of Common Stock in a manner such that the amount distributed
to each holder of Common Stock shall equal the result obtained by multiplying the entire remaining
assets and funds of the Corporation legally available for distribution hereunder by a fraction, the
numerator of which shall be the number of shares of Common Stock then held by such holder, and the
denominator of which shall be the total number of shares of Common Stock then outstanding. For
purposes of this Section 2(a)(vi), the “Maximum Liquidation Amount” for each share of Series A
Preferred, Series B Preferred, Series C Preferred, Series C-1 Preferred and Series D Preferred
shall mean 2.5 times the Original Issue Price with respect to such series of Preferred, and the
“Maximum Liquidation Amount” for each share of Series E Preferred



-5-









 







shall mean 5 times the Original Series E Issue Price, each as adjusted in the manner
contemplated by clauses (i) and (ii) of Section 3(d) hereof.



                    (vii) Conversion Benefit. Notwithstanding anything in this Section 2(a) to the
contrary, if a holder of Preferred would receive a greater liquidation amount than such holder
would be entitled to receive pursuant to subsection 2(a)(i)-2(a)(vi) by converting such shares of
Preferred into shares of Common Stock, then such holder shall not receive any amounts under
subsection 2(a)(i)-2(a)(vi), but shall be treated for purposes of this Section 2 as though they had
converted into shares of Common Stock, whether or not such holders had elected to so convert.



               b. Incentive Plan. In the event of any Liquidation Event (as defined below) the
assets of this Corporation and the proceeds of such transaction shall first be distributed to
satisfy the obligations (if any) under that certain comScore Networks, Inc. Incentive Plan dated
August 1, 2003 as approved by the Board of Directors and holders of capital stock of the
Corporation and as amended from time to time (the “Plan”).



               c. Actual Post-Carveout Distribution. In the event of any Liquidation Event, after
giving effect to Section 2(b), the assets of this Corporation and the proceeds of such transaction
shall be distributed to the holders of capital stock of the Corporation in the following order and
priority:



                    (i) the holders of the Series E Preferred shall receive an amount equal to the product of (x)
the Discounted Preferred Percentage and (y) the amount that the holders of the Series E Preferred
are deemed to receive under Section 2(a)(i);



                    (ii) the holders of the Series D Preferred shall receive an amount equal to the product of (x)
the Discounted Preferred Percentage and (y) the amount that the holders of the Series D Preferred
are deemed to receive under Section 2(a)(ii);



                    (iii) the holders of the Series A Preferred, Series B Preferred, Series C Preferred and Series
C-1 Preferred shall receive an amount equal to the product of (x) the Discounted Preferred
Percentage and (y) the amount that the holders of such Preferred are deemed to receive under
Section 2(a)(iii);



                    (iv) the holders of the Series E Preferred shall receive an amount equal to the product of (x)
the Recapture Preferred Percentage and (y) the amount that the holders of the Series E Preferred
are deemed to receive under Section 2(a)(i);



                    (v) the holders of the Series D Preferred shall receive an amount equal to the product of (x)
the Recapture Preferred Percentage and (y) the amount that the holders of the Series D Preferred
are deemed to receive under Section 2(a)(ii);



                    (vi) the holders of the Series A Preferred, Series B Preferred, Series C Preferred and Series
C-1 Preferred shall receive an amount equal to the product of (x) the Recapture Preferred
Percentage and (y) the amount that the holders of such Preferred are deemed to receive under
Section 2(a)(iii); and



-6-









 





                    (vii) the remaining proceeds will be distributed to the holders of Preferred and Common Stock
in accordance with Section 2(a)(v)-(vii).


For purposes of this Section 2(c), the “Discounted Preferred Percentage” shall mean the difference
obtained by subtracting (i) the aggregate percentage of the Liquidation Proceeds (as defined in the
Plan) actually received by all Participants (as defined in the Plan) as Participants under the
Plan, and not as holders of capital stock pursuant to Section 2(a)(v) from (ii) 1, and the
“Recapture Preferred Percentage” shall mean the difference obtained by subtracting (i) the
Discounted Preferred Percentage from (ii) 1. If the assets and funds of the Corporation legally
available for distribution are insufficient to permit the payment of the full preferential amount
under any of Section 2(c)(i)-(vii), then the assets and funds shall be distributed ratably among
such holders under such subsection in proportion to the preferential amount each such holder is
otherwise entitled to receive under such subsection.




               d. Definition of Liquidation Event; Notice.



                    (i) Each of the following events, whether voluntary or involuntary, shall be deemed to be a
“Liquidation Event” within the meaning of this Section 2: (A) a liquidation, dissolution or
winding up of the Corporation; (B) a consolidation or merger of the Corporation with or into any
other corporation or corporations (or entity or entities) (unless the Corporation’s stockholders of
record as constituted immediately prior to such transaction will, immediately after such
transaction, hold (solely in respect of their equity interests in the Corporation before the
transaction) at least a majority of the voting power of the surviving or successor entity to the
business and assets of the corporation); (C) a sale, conveyance or disposition of all or
substantially all of the assets of the Corporation (other than a pledge of assets or grant of
security interest therein to a commercial lender or similar entity in connection with commercial
lending or similar transactions) (unless the Corporation’s stockholders of record as constituted
immediately prior to such transaction will, immediately after such transaction, hold (solely in
respect of their equity interests in the Corporation before the transaction)at least a majority of
the voting power of the surviving entity or successor to the business and assets of the
Corporation); (D) any sale, transfer or issuance or series of sales, transfers or issuances of
shares of the Corporation’s capital stock by the Corporation or the existing holders thereof to new
holders, as a result of which the holders of the Corporation’s outstanding capital stock possessing
the voting power to elect a majority of the Corporation’s Board of Directors immediately prior to
such sale, transfer or issuance cease to own the requisite amount of the Corporation’s outstanding
capital stock to possess the voting power to elect a majority of the Corporation’s Board of
Directors; or (E) the effectuation of a transaction or series of related transactions in which at
least a majority of the Corporation’s then outstanding voting power is transferred to another
entity; provided that, an Automatic Recapitalization pursuant to Section 8 shall not
constitute a Liquidation Event.



                    (ii) In any of such events, if the consideration received by the Corporation is other than
cash, its value will be deemed its fair market value. Any securities shall be valued as follows:



                         (A) Securities not subject to an exchange ratio specified in a definitive merger or
acquisition agreement, or to any investment letter or other similar restrictions on



-7-









 







free marketability shall be valued as follows: (1) if traded on a securities exchange or
through The Nasdaq National Market, the value shall be deemed to be the average of the closing
prices of the securities on such exchange over the ten (10) trading day period ending three (3)
days prior to the closing; (2) if actively traded over-the-counter, the value shall be deemed to be
the average of the closing bid or sale prices (whichever is applicable) over the thirty (30) day
period ending three (3) days prior to the closing; and (3) if there is no active public market, the
value shall be the fair market value thereof, as determined in good faith by the Board of Directors
of the Corporation.



                         (B) Securities subject to an exchange ratio specified in a definitive merger or acquisition
agreement or to any investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder’s status as an affiliate or former
affiliate) shall be valued in such a manner as to make an appropriate discount from the market
value determined as above in (A)(1), (2) or (3) to reflect the approximate fair market value
thereof, as determined in good faith by the Board of Directors of the Corporation.



                    (iii) The Corporation shall give each holder of record of Preferred written notice of any such
impending transaction not later than twenty (20) days prior to the earlier of the stockholder
meeting called to approve such transaction or the closing of such transaction, and shall also
notify such holders in writing of the final approval of such transaction. The first of such
notices shall describe the material terms and conditions of the impending transaction, the
provisions of this Section 2, and the amounts anticipated to be distributed to holders of each
outstanding class of capital stock of the Corporation pursuant to this Section 2, and the
Corporation shall thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty (20) days after the Corporation has
given the first notice provided for herein or sooner than ten (10) days after the Corporation has
given notice of any material changes provided for herein; provided, however, that
such periods may be shortened upon the written consent of the holders of each series of Preferred
that are entitled to such notice rights or similar notice rights and that represent at least a
majority of the voting power of the then outstanding shares of such series of Preferred.



                    (iv) In the event the requirements of subsection 2(d)(iii) are not complied with, this
Corporation shall forthwith either:



                         (A) cause such closing to be postponed until such time as the requirements of subsection
2(d)(iii) have been complied with; or



                         (B) cancel such transaction, in which event the rights, preferences and privileges of the
holders of the Preferred shall revert to and be the same as such rights, preferences and privileges
existing immediately prior to the date of the first notice referred to in subsection 2(d)(iii).



          3. Conversion. The holders of Preferred shall have conversion rights as follows (the
“Conversion Rights”):




               a. Right to Convert. Each share of Preferred 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 this



-8-









 







Corporation or any transfer agent for such stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing (i) in the case of the Series A
Preferred, the Original Series A Issue Price in respect of such share by the Series A Conversion
Price (as defined below) applicable to such share, determined as hereafter provided, in effect on
the date the certificate is surrendered for conversion, (ii) in the case of the Series B Preferred,
the Original Series B Issue Price in respect of such share by the Series B Conversion Price (as
defined below) applicable to such share, determined as hereafter provided, in effect on the date
the certificate is surrendered for conversion, (iii) in the case of the Series C Preferred, the
Original Series C Issue Price in respect of such share by the Series C Conversion Price (as defined
below) applicable to such share, determined as hereafter provided, in effect on the date the
certificate is surrendered for conversion, (iv) in the case of the Series C-1 Preferred, the
Original Series C-1 Issue Price in respect of such share by the Series C-1 Conversion Price
applicable to such share, determined as hereafter provided, in effect on the date the certificate
is surrendered for conversion, (v) in the case of the Series D Preferred, the Original Series D
Issue Price in respect of such share by the Series D Conversion Price (as defined below) applicable
to such share, determined as hereinafter provided, in effect on the date the certificate is
surrendered for conversion (the result of this calculation, the “Series D Conversion Rate”) and
(vi) in the case of the Series E Preferred, the Original Series E Issue Price in respect of such
share by the Series E Conversion Price (as defined below) applicable to such share, determined as
hereinafter provided, in effect on the date the certificate is surrendered for conversion.
Assuming the issuance of 24,005,548 shares of Series E Preferred at a per share price of $0.50, at
the close of business on the date such issuance is completed, the Series A Conversion Price per
share shall be $0.86; the Series B Conversion Price per share shall be $2.47, the Series C
Conversion Price per share shall be $1.50, the Series C-1 Conversion price per share shall be
$1.18, the Series D Conversion Price per share shall be $0.80 and the Series E Conversion Price per
share shall be the Original Series E Issue Price; provided, however, that in each
case such Conversion Price shall be subject to adjustment as set forth below (the Series A
Conversion Price, the Series B Conversion Price, the Series C Conversion Price, the Series C-1
Conversion Price, the Series D Conversion Price and the Series E Conversion Price are individually
or collectively referred to herein as the “Conversion Price”).



               b. Automatic Conversion. Each share of Preferred shall automatically be converted
into shares of Common Stock at the Conversion Price at the time in effect for such Preferred
immediately upon the earlier of (i) except as provided below in the last sentence of subsection
3(c), the Corporation’s sale of its Common Stock in an underwritten public offering pursuant to a
Registration Statement under the Securities Act of 1933, as amended (the “Securities Act”),
conducted by a nationally-recognized, reputable underwriter in which (x) the per share public
offering price as shown on the cover page of the final prospectus relating to such offering (prior
to underwriter discounts, commissions, concessions and expenses) (the “Prospectus Price”) is equal
to or exceeds $2.50 (as adjusted for any stock dividend, stock distributions, combinations,
consolidations or splits with respect to such shares) and (y) the gross proceeds to the Corporation
are in excess of $25,000,000 (a “Qualified IPO”) or (ii) the date specified by written consent or
agreement of the holders of at least (A) a majority of the voting power of the then outstanding
shares of Series A Preferred, Series B Preferred, Series C Preferred, Series C-1 Preferred and
Series D Preferred, voting together as a single class and (B) a majority of the voting power of the
then outstanding Series E Preferred, voting separately as a class. If a Financing Event (as
defined in Section 8) occurs, the outstanding shares of Preferred and Common Stock shall be
converted,



-9-









 







exchanged or redeemed in accordance with the terms of Section 8 and Section 3(c). Each of the
events referred to in Sections 2(b)(i) and 2(b)(ii) and a Financing Event are referred to herein as
an “Automatic Conversion Event.”



               c. Mechanics of Conversion. Before any holder of Preferred shall be entitled to
convert the same into shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this Corporation or of any transfer agent
for the Preferred, and shall give written notice to this 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; provided,
however, that on the date of an Automatic Conversion Event, the outstanding shares of
Preferred shall be converted automatically without any further action by the holders of such shares
and whether or not the certificates representing such shares are surrendered to the Corporation or
its transfer agent; provided further, however, that the Corporation shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable upon such Automatic
Conversion Event unless either the certificates evidencing such shares of Preferred are delivered
to the Corporation or its transfer agent as provided above, or the holder notifies the Corporation
or its transfer agent that such certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Corporation to indemnify the Corporation from any loss incurred by it
in connection with such certificates. On the date of the occurrence of an Automatic Conversion
Event, each holder of record of shares of Preferred shall be deemed to be a holder of record of the
Common Stock issuable upon such conversion, notwithstanding that the certificates representing such
shares of Preferred shall not have been surrendered at the office of the Corporation, that notice
from the Corporation shall not have been received by such holder, or that the certificate
evidencing such shares of Common Stock shall not then be delivered to such holder. This
Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such
holder of Preferred, 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 Preferred 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 offering of securities registered pursuant to the Securities
Act, the conversion, unless otherwise designated by the holder, will be conditioned upon the
closing with the underwriters of the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the Common Stock upon conversion of the Preferred shall not be
deemed to have converted such Preferred until immediately prior to the closing of such sale of
securities.



               d. Conversion Price Adjustments of Preferred Stock for Certain Splits, Dividends and
Combinations. The Conversion Price of the Preferred shall be subject to adjustment from time
to time as follows:



                    (i) In the event that the Corporation should at any time or from time to time after the date
upon which the first shares of Series E Preferred were issued (such date being the “Series E
Original Issue Date”) fix a record date for the effectuation of a split or subdivision of the
outstanding shares of Common Stock or for the determination of the outstanding



-10-









 







shares of Common Stock entitled to receive a dividend or other distribution payable in
additional shares of Common Stock without payment of any consideration by such holder for the
additional shares of Common Stock, 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 such series
of Preferred 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 of the
aggregate of shares of Common Stock outstanding.



                    (ii) In the event that the Corporation should at any time or from time to time after the
Series E Original Issue Date fix a record date for the effectuation of a combination or reverse
stock split of the outstanding shares of Common Stock, then, as of such record date (or the date of
such combination or reverse stock split if no record date is fixed), the Conversion Price of such
series of Preferred 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 the aggregate shares of Common Stock outstanding.



               e. Other Distributions. In the event that the Corporation shall at any time or from
time to time after the Series E Original Issue Date declare a distribution payable in securities of
other persons, evidences of indebtedness issued by this Corporation or other persons, assets
(excluding cash dividends) or options or rights not referred to in Section 3(d)(i), then, in each
such case for the purpose of this Section 3(e), the holders of the Preferred 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 Preferred 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.



               f. Recapitalizations. If at any time or from time to time after the Series E Original
Issue Date there shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in this Section 3 or
Section 2 or a recapitalization pursuant to Section 8), provision shall be made so that the holders
of the Preferred shall thereafter be entitled to receive upon conversion of the Preferred the
number of shares of stock or other securities or property of the Corporation or otherwise, which a
holder of Common Stock deliverable upon conversion immediately prior to such recapitalization would
have been entitled to receive on such recapitalization. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 3 with respect to the rights of
the holders of the Preferred after the recapitalization to the extent that the provisions of this
Section 3 (including adjustment of the applicable Conversion Price then in effect and the number of
shares purchasable upon conversion of the Preferred) shall be applicable after that event as nearly
equivalently as may be practicable.



               g. Adjustments to Conversion Price for Dilutive Issues.



                    (i) Special Definitions. For purposes of this Section 3(g), the following definitions
shall apply:



-11-









 





                         (A) “Additional Shares of Common” shall mean all shares of Common Stock issued (or,
pursuant to Section 3(g)(iii), deemed to be issued) by the Corporation after the Series E Original
Issue Date, other than shares of Common Stock issued, issuable or, pursuant to Section 3(g)(iii)
herein, deemed to be issued:



                              (1) upon conversion of shares of the Preferred;



                              (2) to officers, directors or employees of, or consultants, contractors and advisors to, the
Corporation pursuant to a stock grant, option plan or purchase plan or other stock incentive
program or arrangement approved by the Compensation Committee of the Board of Directors (or, in the
absence of such a committee, then by the Board of Directors) for employees, officers, directors or
consultants, contractors or advisors of the Corporation;



                              (3) as a dividend or distribution on the Preferred;



                              (4) in connection with any transaction for which adjustment is made pursuant to Sections
3(d)(i), 3(d)(ii), 3(e) or 3(f) hereof;



                              (5) to financial institutions, lessors or landlords in connection with commercial credit
arrangements, debt financings, equipment lease financings, real property leases or similar
transactions undertaken other than for equity financing purposes, or to other providers of goods,
services, technology, distribution channels or marketing opportunities to the Corporation, pursuant
to (i) instruments that are outstanding on the Series E Original Issue Date or (ii) arrangements
approved by the Board of Directors, but not to exceed an aggregate of 1,275,000 shares of Common
Stock issued, issuable or deemed to be issued (net of cancellations of unexercised options and
repurchase of shares at cost upon termination of any relationship with the Corporation, as adjusted
for stock splits, combinations, recapitalizations and the like and excluding any shares of Common
Stock issued or issuable to DoubleClick, Inc. (“DoubleClick”) (or an affiliate, successor or
designee thereof) in connection with a Master Alliance Agreement between Doubleclick and the
Corporation) for arrangements approved by the Board of Directors;



                              (6) in connection with a Qualified IPO; or



                              (7) in connection with an acquisition by the Corporation, whether by merger, consolidation or
purchase of assets, provided that such acquisition has been approved by a majority of the Board of
Directors, which majority must include at least three of the five directors elected pursuant to
Section 5(f) of this Article.



                         (B) “Convertible Securities” shall mean stock or other securities convertible into or
exchangeable for Common Stock.



                         (C) “Options” shall mean rights, options or warrants to subscribe for, purchase or
otherwise acquire either Common Stock or Convertible Securities.



                    (ii) No Adjustment of Conversion Price. No adjustment in the Conversion Price of a
series of Preferred shall be made in respect of the issuance of Additional



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Shares of Common unless the consideration per share for an Additional Share of Common issued
or deemed to be issued by the Corporation is less then the Conversion Price of the Series E
Preferred in effect on the date of, and immediately prior to, such issue.



                    (iii) Options and Convertible Securities. In the event that the Corporation at any
time or from time to time after the Series E Original Issue Date shall issue any Options or
Convertible Securities or shall fix a record date for the determination of holders of any class of
securities entitled to receive any such Options or Convertible Securities, then the maximum number
of shares of Common Stock issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible Securities, shall
be deemed to be Additional Shares of Common issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record date;
provided, however, that, with respect to any series of Preferred, Additional Shares
of Common shall not be deemed to have been issued unless the consideration per share (determined
pursuant to Section 4(g)(v) hereof) of such Additional Shares of Common would be less than the
Conversion Price of the Series E Preferred in effect on the date of and immediately prior to such
issue, or such record date, as the case may be, and provided, further, that in any
such case in which Additional Shares of Common are deemed to be issued:



                         (A) no further adjustment in the applicable Conversion Price of a series of Preferred shall be
made upon the subsequent issue of Convertible Securities or shares of Common Stock upon the
exercise of such Options or conversion or exchange of such Convertible Securities, in each case,
pursuant to their respective terms;



                         (B) if such Options or Convertible Securities by their terms provide, with the passage of time
or otherwise, for any increase in the consideration payable to the Corporation, or decrease in the
number of shares of Common Stock issuable, upon the exercise, conversion or exchange thereof, the
applicable Conversion Price of a series of Preferred computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto), and any subsequent adjustments based
thereon, shall, upon any such increase or decrease becoming effective, be recomputed to reflect
such increase or decrease insofar as it affects such Options or the rights of conversion or
exchange under such Convertible Securities;



                         (C) upon the expiration of any such Options or any rights of conversion or exchange under such
Convertible Securities which shall not have been exercised, the applicable Conversion Price of a
series of Preferred computed upon the original issue thereof (or upon the occurrence of a record
date with respect thereto), and any subsequent adjustments based thereon, shall, upon such
expiration, be recomputed as if:



                              (1) in the case of Convertible Securities or Options for Common Stock, the only Additional
Shares of Common issued were shares of Common Stock, if any, actually issued upon the exercise of
such Options or the conversion or exchange of such Convertible Securities and the consideration
received therefor was the consideration actually received by the Corporation for the issue of all
such Options, whether or not exercised, plus the consideration actually received by the Corporation
upon such exercise, or for the issue of all such



-13-









 







Convertible Securities which were actually converted or exchanged, plus the additional
consideration, if any, actually received by the Corporation upon such conversion or exchange, and



                              (2) in the case of Options for Convertible Securities, only the Convertible Securities, if
any, actually issued upon the exercise thereof were issued at the time of issue of such Options,
and the consideration received by the Corporation for the Additional Shares of Common deemed to
have been then issued was the consideration actually received by the Corporation for the issue of
all such Options, whether or not exercised, plus the consideration deemed to have been received by
the Corporation upon the issue of the Convertible Securities with respect to which such Options
were actually exercised; and



                         (D) no readjustment pursuant to clauses (1) or (2) above shall have the effect of increasing
the Conversion Price for a series of Preferred to an amount which exceeds the lower of (i) (u) in
the case of the Series A Preferred, the Original Series A Issue Price, (v) in the case of the
Series B Preferred, the Original Series B Issue Price, (w) in the case of the Series C Preferred,
the Original Series C Issue Price, (x) in the case of the Series C-1 Preferred, the Original Series
C-1 Issue Price, (y) in the case of the Series D Preferred, the Original Series D Issue Price and
(z) in the case of the Series E Preferred, the Original Series E Issue Price, or (ii) the
applicable Conversion Price that would have resulted from other issuances of Additional Shares of
Common after the Original Issue Date for such Series.



                    (iv) Adjustment of Conversion Price Upon Issuance of Additional Shares of Common. In
the event that this Corporation shall issue Additional Shares of Common (including Additional
Shares of Common deemed to be issued pursuant to Section 3(g)(iii)) without consideration or for a
consideration per share less than the Conversion Price for the Series E Preferred in effect on the
date of and immediately prior to such issue, then and in each such event each Conversion Price
shall be reduced, concurrently with such issue, to a price (calculated to the nearest cent)
determined by multiplying (A) with respect to the Series E Preferred, the Conversion Price for the
Series E Preferred theretofore in effect by a fraction, the numerator of which shall be the number
of shares of Common Stock outstanding immediately prior to such issue plus the number of shares of
Common Stock which the aggregate consideration received by the Corporation for the total number of
Additional Shares of Common so issued would purchase at the Conversion Price for the Series E
Preferred in effect immediately prior to such issue, and the denominator of which shall be the
number of shares of Common Stock outstanding immediately prior to such issue plus the number of
such Additional Shares of Common so issued and sold (such fraction, the “Proportional Series E
Conversion Price Adjustment”) and (B) with respect to the Series A Preferred, Series B Preferred,
Series C Preferred, Series C-1 Preferred and Series D Preferred, the applicable Conversion Price
for such series theretofore in effect by the Proportional Series E Conversion Price Adjustment;
provided, however, that, for the purposes of this Section 3(g)(iv), all shares of
Common Stock issuable upon exercise, conversion or exchange of outstanding Options or Convertible
Securities, as the case may be, shall be deemed to be outstanding, and immediately after any
Additional Shares of Common are deemed issued pursuant to Section 3(g)(iii), such Additional Shares
of Common shall be deemed to be outstanding.



-14-









 





                    (v) Determination of Consideration. For purposes of this Section 3(g), the
consideration received by the Corporation for the issue of any Additional Shares of Common shall be
computed as follows:



                         (A) Cash and Property. Such consideration shall:



                              (1) insofar as it consists of cash, be computed at the aggregate amount of cash received by
the Corporation excluding amounts paid or payable for accrued interest or accrued dividends;



                              (2) insofar as it consists of property other than cash, be computed at the fair market value
thereof at the time of such issue, as determined in good faith by the Board of Directors; and



                              (3) in the event Additional Shares of Common are issued together with other shares or
securities or other assets of the Corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in clauses (1) and (2) above, as
determined in good faith by the Board of Directors.



                         (B) Options and Convertible Securities. The consideration per share received by the
Corporation for Additional Shares of Common deemed to have been issued pursuant to Section
3(g)(iii), relating to Options and Convertible Securities, shall be determined by dividing:



                              (1) the total amount, if any, received or receivable by the Corporation as consideration for
the issue of such Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon the exercise of such Options or the
conversion or exchange of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the conversion or exchange
of such Convertible Securities, by



                              (2) the maximum number of shares of Common Stock issuable upon the exercise of such Options or
the conversion or exchange of such Convertible Securities, as determined in Section 3(g)(iii)
hereof.



               h. No Impairment. Without obtaining the applicable approvals set forth in Section 5,
the Corporation will not, by amendment of its Certificate 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 3 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 Preferred against impairment.




-15-










 





               i. No Fractional Shares; Certificate as to Adjustment.



                    (i) Except in accordance with the terms of Section 8, no fractional shares shall be issued
upon the conversion of any share or shares of the Preferred, and the aggregate number of shares of
Common Stock to be issued to particular holders of Preferred shall be rounded down to the nearest
whole share, and the Corporation shall pay in cash the fair value of any fractional shares as of
the time when entitlement to receive such fractions is determined. Whether or not fractional
shares are issuable upon such conversion shall be determined on the basis of the total number of
shares of Preferred 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 applicable Conversion Price
of Preferred pursuant to this Section 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 such Preferred a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon
the reasonable written request at any time of any holder of Preferred, furnish or cause to be
furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B)
the applicable Conversion Price for the Preferred 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 Preferred held by such holder.



               j. Notices of Record Date. In the event of any taking by the Corporation of a record
date for determining the holders of any class of securities 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 Preferred, at least twenty
(20) days prior to the record date specified therein, a notice specifying the record date for the
purpose of such dividend, distribution or right, and the amount and character of such dividend,
distribution or right.



               k. Reservation of Stock Issuable Upon Conversion. This 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 then outstanding shares of the Preferred, 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 Preferred; 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 Preferred, in addition to such other remedies as shall be available to
the holder of such Preferred, 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, including without limitation
engaging in best efforts to obtain the requisite Board of Directors and stockholder approval of any
necessary amendment to this Sixth Amended and Restated Certificate of Incorporation.



               l. Notices. All notices and other communications required by the provisions of this
Seventh Amended and Restated Certificate of Incorporation shall be in writing, shall be
effective when given, and shall in any event be deemed to be given upon receipt or, if
earlier, (a) five



-16-









 




(5) business days after deposit with the U.S. Postal Service or other applicable
postal service, if delivered by first class mail, postage prepaid, (b) upon delivery, if delivered
by hand, (c) one (1) business day after the business day of deposit with Federal Express or similar
overnight courier, freight prepaid or (d) one (1) business day after the business day of facsimile
transmission (with written confirmation).




          4. Redemption.




               a. Preferred Redemption. Each share of Preferred shall be redeemable on or after
August 1, 2008, to the extent the shares of Preferred have not been redeemed prior to such date and
to the extent requested by any holder thereof.



               b. Redemption Price. The redemption price per share (the “Redemption Price”) shall
be:



                    (i) in the case of the Series A Preferred, the product of (A) the Pre-Cap Series A Return and
(B) the Adjustment Factor;



                    (ii) in the case of the Series B Preferred, the product of (A) the Pre-Cap Series B Return and
(B) the Adjustment Factor;



                    (iii) in the case of the Series C Preferred, the product of (A) the Pre-Cap Series C Return
and (B) the Adjustment Factor;



                    (iv) in the case of the Series C-1 Preferred, the product of (A) the Pre-Cap Series C-1 Return
and (B) the Adjustment Factor;



                    (v) in the case of the Series D Preferred, the product of (A) the Pre-Cap Series D Return and
(B) the Adjustment Factor; and



                    (vi) in the case of the Series E Preferred, the product of (1) 1.63 and (2) the sum of (A) the
Original Series E Issue Price and (B) all declared and unpaid dividends on such shares (as adjusted
for any stock dividends, stock distributions, combinations, consolidation, or splits with respect
to such shares).



               c. Priority. In the event insufficient funds are available to redeem all shares of
Preferred entitled and electing to be redeemed pursuant to the preceding Section 4(b), this
Corporation shall (i) first apply funds to the redemption of the Series E Preferred, (ii) after the
full redemption of all shares of the Series E Preferred, next apply funds to the redemption of the
Series D Preferred, then (iii) after the full redemption of all shares of the Series E Preferred
and the Series D Preferred, next effect such redemption pro rata among the holders of the Preferred
(other than the Series E Preferred and the Series D Preferred) based upon the aggregate Redemption
Price of the shares held by such holder for which redemption has been requested. To the extent the
assets and funds of the Corporation legally available for distribution shall be insufficient to
fully redeem a series, the assets and funds of the Corporation legally available for redemption
shall be applied to redeem the holders of such series ratably in proportion to the redemption amount each holder
is otherwise entitled to receive.



-17-









 





               d. Notice of Redemption. Not later than June 1, 2008, the Corporation shall give
written notice to each holder of Preferred that such holder may elect to have its shares of
Preferred redeemed by the Corporation in accordance with the terms of this Section 4 by providing
written notice to the Corporation between August 1, 2008 and September 1, 2008. Such notice will
further state that if such holder does not give the Corporation notice of redemption prior to
September 1, 2008, such holder shall be deemed to have waived its right to have its Preferred
redeemed. Before any holder of Preferred shall be entitled to redeem the same, such holder shall
give written notice to this Corporation at its principal corporate office not earlier than August
1, 2008 and not later than September 1, 2008, of the election to redeem the same and shall state
therein the number of shares of Preferred to be redeemed, the date fixed for such redemption (the
“Redemption Date”), which date shall be not less than 40 nor more than 45 days after the
date of such notice, and, in the event less than all of such holder’s shares of Preferred are to be
redeemed, the name or names in which the certificate or certificates representing the shares not to
be redeemed are to be issued (the “Redemption Notice”). Within three (3) days of its
receipt of a Redemption Notice, the Corporation shall deliver a copy of the Redemption Notice to
all other holders of Preferred. On or before the Redemption Date, the related holder of Preferred
shall surrender the certificate or certificates therefor, duly endorsed, at the office of this
Corporation or of any transfer agent for the Preferred. If less than all the shares represented by
a share certificate are to be redeemed, the Corporation shall issue a new certificate or
certificate representing the shares not redeemed. Upon proper notice and surrender, the redeeming
holder shall be entitled to receive payment of the applicable Redemption Price for such shares in
cash, by wire transfer or by bank-certified check on the Redemption Date. Notwithstanding the
foregoing, in no event shall any redemption occur of any shares of Series A Preferred, Series B
Preferred, Series C Preferred, Series C-1 Preferred and Series D Preferred unless and until the
holders of the Series E Preferred shall have redeemed or waived the right to redeem all shares of
the Series E Preferred (which right will be deemed to be waived by a holder if such holder does not
give the Corporation notice of redemption pursuant to this Section 4(c) before September 1, 2008,
provided that the Corporation provided such holder with the notice set forth in the first two
sentences of this Section 4(d)). Further, in no event shall any redemption occur of any shares of
Series A Preferred, Series B Preferred, Series C Preferred and Series C-1 Preferred unless and
until the holders of the Series D Preferred shall have redeemed or waived the right to redeem all
shares of the Series D Preferred (which right will be deemed to be waived by a holder if such
holder does not give the Corporation notice of redemption pursuant to this Section 4(c) before
September 1, 2008, provided that the Corporation provided such holder with the notice set forth in
the first two sentences of this Section 4(d)).



               e. Status of Redeemed Preferred. From and after the Redemption Date for any shares of
Preferred, all dividends on such shares shall cease to accrue (to the extent applicable) and all
rights of holders of such shares shall cease.



          5. Voting Rights.




               a. General Voting Rights. Each holder of shares of Preferred shall be entitled to a
number of votes equal to the number of shares of Common Stock into which the shares
of Preferred held by such holder could be converted, shall have voting rights and powers equal
to the voting rights and powers of the holders of Common Stock (except otherwise expressly provided



-18-









 




herein or as required by law) and shall be entitled to notice of any stockholder meeting in
accordance with the Bylaws of the Corporation. Except as provided by law, this Corporation’s
Seventh Amended and Restated Certificate of Incorporation or the provisions establishing any
outstanding series of Preferred Stock, holders of shares of Preferred shall vote together with the
holders of all outstanding shares of Common Stock as a single class.




               b. Required Class Vote. In addition to any other rights provided by law, for so long
as at least Seven Hundred Fifty Thousand (750,000) shares of Preferred (as adjusted for any stock
dividends, stock distributions, combinations, consolidations or splits with respect to such shares)
shall be outstanding, this Corporation shall not, without first obtaining the affirmative vote or
written consent of each of the holders of not less than sixty percent (60%) of the voting power of
the then outstanding shares of Preferred, voting as a single class, on an as-converted basis:



                    (i) except as set forth in Sections 1, 2, 4 and 8, and subject to Sections 5(c) and 5(d),
purchase, redeem or set aside any sums for the purchase or redemption of, or pay any dividend or
make any distribution on, any shares of capital stock, except for dividends or other distributions
payable on the Common Stock solely in the form of additional shares of Common Stock and except for
the purchase of shares of Common Stock from employees, consultants or service providers or former
employees, consultants or service providers of the Corporation who acquired such shares directly
from the Corporation, if each such purchase is made pursuant to contractual rights held by the
Corporation under agreements entered into with persons in connection with their employment with or
provision of services to the Corporation or pursuant to employee benefit plans;



                    (ii) authorize a Liquidation Event;



                    (iii) subject to Sections 5(c) and 5(d), authorize any action (including without limitation
the amendment or repeal of any provision of, or the addition of any provision to, this
Corporation’s Certificate of Incorporation or Bylaws), if such action would materially alter or
change the preferences, rights, privileges or powers of, or the restrictions provided for the
benefit of, any series of Preferred;



                    (iv) subject to Sections 5(c) and 5(d), increase or decrease the total number of authorized
shares of the Preferred (or any such series thereof); or



                    (v) subject to Sections 5(c) and 5(d), authorize shares of any series or class of capital
stock or any other security convertible into or exchangeable for shares of any series or class of
capital stock which is senior to or on parity with any series of Preferred.



               c. Special Series D Vote. For so long as at least Seven Hundred Fifty Thousand
(750,000) shares (as adjusted for any stock dividends, stock distributions, combinations,
consolidations or splits with respect to such shares) of the Series D Preferred shall be
outstanding, notwithstanding Section 5(b), without first obtaining the affirmative vote or written
consent of the holders of not less than a two-thirds (2/3) supermajority of the voting power of the then
outstanding shares of Series D Preferred, the Corporation shall not:



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                    (i) declare or pay a dividend on any shares of its capital stock (including, without
limitation, the Series E Preferred);



                    (ii) increase the total number of authorized shares of the Series D Preferred;



                    (iii) authorize any action (including, without limitation, the amendment or repeal of any
provision of, or the addition of any provision to, this Corporation’s Certificate of Incorporation
or Bylaws), if such action would materially alter or change the preferences, rights, privileges or
powers of, or the restrictions provided for the benefit of, the Series D Preferred, unless such
vote is taken (A) in connection with the creation or amendment of one or more management carveout,
incentive or bonus pools or similar arrangements so long as (x) such pools or arrangements are
approved by the Corporation’s Board of Directors and the holders of a majority of Preferred Stock
(on an as-converted to Common Stock basis) and (y) are payable based on the occurrence of a
Liquidation Event or in the good faith judgment of the Board of Directors are otherwise necessary
for the retention of management, or (B) in connection with any action taken to approve (1) a
convertible debt bridge financing in contemplation of an equity financing or an equity financing of
the Corporation that is approved by the Corporation’s Board of Directors, or (2) any Liquidation
Event (provided that, with respect to (B), such action does not affect the Series D Preferred
disproportionately relative to the other series of Preferred). For purposes of determining whether
an action affects the Series D Preferred disproportionately relative to the other series of
Preferred for purposes of Section 5(c)(iii)(B), the liquidation preference of the Series D
Preferred at any time of measurement shall include the accretion resulting from the Liquidation
Increment (subject to the cap set forth in the proviso to Section 2(a)(ii)), compounded annually
from the issue date (which amount shall be pro-rated for any partial year)). For avoidance of
doubt, the creation of a class or series of security having rights, preferences or privileges pari
passu with or prior to the shares of any class of security of the Corporation shall not be deemed
to affect the Series D Preferred disproportionately relative to the other series of Preferred or to
materially alter or change the preferences, rights, privileges or powers of, or the restrictions
provided for the benefit of the Series D Preferred;



                    (iv) notwithstanding anything contained in Section 5(c)(iii)(B), reduce the liquidation
preference per share of the Series D Preferred below the Original Series D Issue Price (as adjusted
for any stock dividends, stock distributions, combinations, consolidations or splits with respect
to such shares); or



                    (v) notwithstanding anything contained in Section 5(c)(iii)(B), convert shares of Series D
Preferred into Common Stock in connection with transactions described in Section 5(c)(iii)(B)
(except in connection with a voluntary conversion in accordance with Section 3(a)), unless the
Series D Conversion Rate (as defined in Section 3(a)) with respect to the shares of Series D
Preferred that are required to be converted shall be increased by an amount equal to 1.25 times the
Series D Conversion Rate otherwise in effect per year, compounded annually from the Series D
Original Issue Date through the date of such conversion (which amount shall be pro-rated for any
partial year) (provided that the Series D Conversion Rate shall not be adjusted as a result of this
Section 5(c)(iii) to a number more the 2.5 times the Series D Conversion Rate otherwise in effect).
For the avoidance of doubt, no adjustment to the conversion rates or Conversion Prices of any
shares



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of any series of Preferred other than the Series D Preferred, or any antidilution adjustment
to any series of Preferred other than the Series D Preferred, shall occur as a result of this
Section 5(c)(iii) and (3) an Automatic Recapitalization pursuant to Section 8 shall not require a
supermajority vote of the Series D Preferred.



               d. Special Series E Vote. For so long as at least Seven Hundred Fifty Thousand
(750,000) shares (as adjusted for any stock dividends, stock distributions, combinations,
consolidations or splits with respect to such shares) of the Series E Preferred shall be
outstanding, notwithstanding Section 5(b) or 5(c), without first obtaining the affirmative vote or
written consent of the holders of not less than a majority of the voting power of the then
outstanding shares of Series E Preferred, the Corporation shall not:



                    (i) except as provided in Section 4, purchase, redeem or set aside any sums for the purchase
or redemption of, or pay any dividend or make any distribution on, any shares of capital stock,
except for dividends or other distributions payable on the Common Stock solely in the form of
additional shares of Common Stock and except for the purchase of shares of Common Stock from
employees, consultants or service providers or former employees, consultants or service providers
of the Corporation who acquired such shares directly from the Corporation, if each such purchase is
made pursuant to contractual rights held by the Corporation under agreements entered into with
persons in connection with their employment with or provision of services to the Corporation or
pursuant to employee benefit plans, provided that, to the extent holders of Series E
Preferred approve a purchase, redemption, payment of dividends or other distribution in respect of
Series E Preferred, such holders shall not be entitled to vote to approve any purchase, redemption,
dividend or distribution on any other series of stock;



                    (ii) authorize any action (including without limitation the amendment or repeal of any
provision of, or the addition of any provision to, this Corporation’s Certificate of Incorporation
or Bylaws), if such action would materially alter or change the preferences, rights, privileges or
powers of, or the restrictions provided for the benefit of, the Series E Preferred. For the
avoidance of doubt, the authorization of shares which are senior to or on parity with the Series E
Preferred in accordance with the terms of Section 5(d) (iii) shall not be deemed to materially
alter or change the preferences, rights, privileges or powers of, or the restrictions provided for
the benefit of the Series E Preferred



                    (iii) authorize shares of any series or class of capital stock or any other security
convertible into or exchangeable for shares of any series or class of capital stock which is senior
to or on parity with the Series E Preferred, unless such shares shall have preferences, rights,
privileges, powers, restrictions and other terms set forth in this Amended and Restated Certificate
of Incorporation, including with respect to dividends, liquidation, conversion, redemption and
voting, which are no more favorable to such new series than the terms of the Series E Preferred,
except that such shares may be senior to the Series E Preferred with respect to priorities on
dividend, liquidation and redemption; or



                    (iv) increase the total number of authorized shares of the Series E Preferred.



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               e. Board Size. The authorized number of directors of the Corporation’s Board of
Directors shall be determined as set forth in the Bylaws of the Corporation.



               f. Board of Directors Election. For so long as at least One Million (1,000,000)
shares of Series A Preferred (as adjusted for any stock dividends, stock distributions,
combinations, consolidations or splits with respect to such shares) remain outstanding, the holders
of the Series A Preferred, voting together as a separate class, shall be entitled to elect two (2)
directors of the Corporation. For so long as at least One Million (1,000,000) shares of Series C
Preferred (as adjusted for any stock dividends, stock distributions, combinations, consolidations
or splits with respect to such shares) remain outstanding, the holders of the Series C Preferred,
voting together as a separate class, shall be entitled to elect one (1) director of the
Corporation. For so long as at least Seven Hundred Fifty Thousand (750,000) shares of Series D
Preferred (as adjusted for any stock dividends, stock distributions, combinations, consolidations
or splits with respect to such shares) remain outstanding, the holders of the Series D Preferred
voting together as a separate class, shall be entitled to elect one (1) director of the
Corporation. For so long as at least One Million (1,000,000) shares of Series E Preferred (as
adjusted for any stock dividends, stock distributions, combinations, consolidations or splits with
respect to such shares) remain outstanding, the holders of the Series E Preferred, voting together
as a separate class, shall be entitled to elect one (1) director of the Corporation. The holders
of a majority of the Preferred and the Common Stock, voting together as a single class (with the
Preferred voting on an as-converted basis), shall be entitled to elect the remaining number of
directors authorized, if any.



          6. Status of Converted or Exchanged Preferred. In the event any shares of Preferred
shall be converted pursuant to Section 3 or exchanged for another series of Preferred pursuant to a
transaction authorized by a majority of the Board of Directors, the shares so converted or
exchanged shall be canceled and shall not thereafter be issuable by the Corporation.




          7. Common Stock.




               a. Dividend Rights. Subject to the prior rights of holders of all classes of stock
at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall
be entitled to receive, when, if and as declared by the Board of Directors, out of any assets of
the Corporation legally available therefor, such dividends as may be declared from time to time by
the Board of Directors.



               b. Liquidation Rights. Upon a Liquidation Event, the assets of the Corporation shall
be distributed as provided in Section 2 of Article IV(B) hereof.



               c. Voting Rights. Each holder of Common Stock shall be entitled to one (1) vote for
each share of Common Stock held, shall be entitled to notice of any stockholder meeting in
accordance with the Bylaws of the Corporation, and shall be entitled to vote upon such matters and
in such manner as is otherwise provided herein or as may be provided by law. Except as provided by
law, this Corporation’s Seventh Amended and Restated Certificate of Incorporation or the provisions
establishing any outstanding series of Preferred, holders of shares of Common Stock shall vote
together with the holders of all outstanding shares of Preferred.



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               d. Increase or Decrease in Authorized Shares. The number of authorized shares of
Common Stock may be increased or decreased (but not below the number of shares of Common Stock then
outstanding) by an affirmative vote of the holders of a majority of the outstanding shares of
capital stock of the Corporation, on an as-converted to Common Stock basis, irrespective of Section
242(b)(2) of the Delaware General Corporation Law.



          8. Automatic Recapitalization.




               a. Financing Event. In connection with, and effective upon (i) the Corporation’s sale
of its Common Stock in an underwritten public offering pursuant to a Registration Statement under
the Securities Act other than a Qualified IPO or (ii) a sale of equity securities by the
Corporation in which the Corporation receives gross proceeds of at least $5 million from a third
party investor (i.e., an entity or person who is not a current stockholder or affiliated with a
current stockholder) (a “Third Party Investor”)(each, a “Financing Event”), the holders of at least
sixty percent (60%) of the then outstanding Preferred, voting together as a single class on an
as-if converted basis (the “Proposing Holders”), may effectuate a recapitalization of the capital
stock of the Corporation as set forth in this Section 8 (an “Automatic Recapitalization”). No
holder of Common Stock shall be entitled to vote with respect to an Automatic Recapitalization
under this Section 8, and Common Stock is redeemable as provided in this Section 8.



               b. Recapitalization. If the Proposing Holders elect to effect an Automatic
Recapitalization of the Corporation under this Section 8, the following shall take place:



                    (i) Prior to the consummation of such Financing Event, all Preferred Stock held by each
stockholder shall be converted into, and all Common Stock held by each stockholder shall be
exchanged for, the number of new shares of Common Stock (if any) such that the percentage of the
total number of shares of Common Stock (on a fully-diluted basis) (such total, the “Recap
Post-Money Fully Diluted Total”) such stockholder shall hold immediately prior to such Financing
Event is equal to the percentage determined by dividing (A) the net economic proceeds such
stockholder would have received with respect to such stockholder’s equity interest in the
Corporation if the Corporation had been liquidated immediately after such Financing Event (assuming
that the existing Preferred Stock had not been converted into and the existing Common Stock
exchanged for new Common Stock under this Section 8, and new securities were issued to the new
stockholders in connection with the Financing Event) for an amount equal to the fully diluted
post-money valuation established by such Financing Event (the “Post-Money Value”), by (B)
the net economic proceeds all existing stockholders of the Corporation (i.e., stockholders other
than any new investor(s) in connection with such Financing Event) would have received with respect
to their existing equity interest in the Corporation (i.e. not with respect to their participation,
if any, in the Financing Event) if the Corporation had been liquidated immediately after such
Financing Event (assuming that the existing Preferred Stock had not been converted into, and the
existing Common Stock exchanged for, new Common Stock under this Section 8) for an amount equal to
the Post-Money Value. For purposes of determining the net economic proceeds a stockholder would
receive if the Corporation had been liquidated immediately after such Financing Event, any security
to be issued in connection with such Financing Event shall be deemed to be senior to all existing
classes of capital stock with respect to its liquidation preference. The Recap Post-Money Fully
Diluted Total shall have been proposed in writing in the form of a pro-forma capitalization table
provided by



-23-









 




the underwriters of the public offering referenced in Section 8(a) above or the
Proposing Holders. If the number of shares to be received by any holder of Preferred or Common
Stock pursuant to this section 8(b)(i) would result in the issuance of a fractional share,
notwithstanding Section 3(i) hereof, the Company shall issue such holder such fractional share.




                    (ii) If any holder of Preferred Stock would not be entitled to receive any new shares of
Common Stock under Section 8(b)(i), all the shares of Preferred Stock held by such stockholder
shall be immediately redeemed at par value in accordance with Sections 154 and 160(a) of Delaware
Law. Only after any and all shares of Preferred Stock have been redeemed, (A) the Corporation may
redeem the shares of Common Stock held by any stockholder who is not entitled to receive any shares
of Common Stock under Section 8(b)(i), and (B) all such shares of Common Stock shall be redeemed at
par value, both (A) and (B) in accordance with Sections 154 and 160(a) of Delaware Law. Upon any
redemption under this Section 8(b)(ii), any shares redeemed shall be retired and the capital of the
Corporation adjusted in accordance with Sections 243 and 244 of Delaware Law. For the avoidance of
doubt and ignoring for this purpose only any proceeds distributable under the Plan or any shares of
Common Stock issuable under Section 8(b)(iii), the number of shares of Common Stock that each
stockholder shall hold after application of this Section 8(b)(i)-(ii) shall be a number of shares
such that if the Corporation were to be liquidated immediately after an Automatic Recapitalization
and the consummation of the Financing Event for a price equal to the Post-Money Value, such
stockholder would receive the identical amount of economic proceeds that such stockholder would
have received had the Automatic Recapitalization not been effectuated (i.e., the Preferred Stock
had not been converted or redeemed and Common Stock had not been exchanged or redeemed pursuant to
Section 8) and the Corporation had been liquidated at a price equal to the Post-Money Value.



                    (iii) After all Preferred and Common Stock have been converted, exchanged or redeemed in
accordance with Sections 8(b)(i) and 8(b)(ii) and prior to the consummation of the Financing Event,
the Plan shall be terminated. After giving effect to Section 8(b)(i)-(ii), the Participants in the
aggregate may hold shares of Common Stock or securities convertible or exercisable into Common
Stock (the “Management Common”), which represent less than ten (10%) of the total number of shares
of Common Stock (on a fully-diluted basis) prior to giving effect to the Financing Event (such
total, the “Recap Pre-Money Fully Diluted Total”). In such event, in consideration for the
Participants’ agreement to terminate the Corporation’s obligations under the Plan, the Corporation
shall issue to the Participants an additional number of shares of Common Stock (the “Plan Shares”),
such that the sum of the Management Common and the Plan Shares held by all Participants in the
aggregate equals ten percent (10%) of the Recap Pre-Money Fully Diluted Total. The Plan Shares
shall be allocated in accordance with the manner in which proceeds are allocated to Participants
under the Plan and shall be subject to adjustment pursuant to the terms thereof, including Section
5.2 thereof. If the number of shares to be received by any Participant would result in the
issuance of a fractional share, notwithstanding Section 3(i) hereof, the Company shall issue such
Participant such fractional share.



                    (iv) All instruments exercisable or convertible into shares of capital stock of the
Corporation shall be convertible or exercisable into the number of shares of Common Stock, if any,
that such instrument would have received in an Automatic Recapitalization under this Section 8



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had such instrument been exercised or converted immediately prior to such Automatic Recapitalization.




               c. Appraisal. Any holder or group of holders of at least 4,000,000 shares of
Preferred (as adjusted for any stock splits, stock dividends, stock distributions, combinations,
consolidation, or splits with respect to such shares) (each, a “Major Holder”) shall have the right
to request an independent appraisal of the Post-Money Value in the event of an Automatic
Recapitalization, as set forth by the procedures below:



                    (i) The Proposing Holders shall, no later than twenty (20) days prior to the consummation of
an Automatic Recapitalization, provide notice to all Major Holders (the “Recapitalization Notice”).
This Recapitalization Notice shall contain the terms and conditions of the proposed Automatic
Recapitalization, including the Post-Money Value.



                    (ii) Any Major Holder may, within five (5) business days of receiving a Recapitalization
Notice, give written notice to the Corporation and the Proposing Holders that such Holder objects
to the calculation of the Post-Money Value or the pro-forma capitalization of the Corporation (the
"Notice of Objection”). If any Major Holder delivers a Notice of Objection , the Automatic
Recapitalization may not be consummated until the Appraiser (as defined below) delivers the
Appraisal (as defined below).



                    (iii) Within ten (10) days of receiving a Notice of Objection, the Board of Directors of the
Corporation shall designate a third party to conduct an independent determination of the Post-Money
Value (the “Appraisal”). By a majority vote, the Board of Directors shall select a
nationally-recognized, reputable investment bank or financial advisory firm (the “Appraiser”) to
conduct the Appraisal. The Major Holder requesting such Appraisal shall pay such Appraiser’s
expenses and fees.



                    (iv) Within twenty (20) days of being designated by the Board, the Appraiser shall deliver the
Appraisal, which shall be final and binding upon all parties.



          9. Adjustment Factor for Liquidation Preference and Redemption.




               a. Assumed Return. For the purposes of calculation of the adjustment factor used in
connection with calculations under Sections 2 and 4, in the event of any Liquidation Event or
redemption, assuming the absence of any such adjustment factor, each holder of Series A Preferred
shall be assumed to be entitled to receive an amount per share for each share of Series A Preferred
held of record by such holder equal to their respective Pre-Cap Series A Return, each holder of
Series B Preferred shall be assumed to be entitled to receive an amount per share for each share of
Series B Preferred held of record by such holder equal to their respective Pre-Cap Series B Return,
each holder of Series C Preferred shall be assumed to be entitled to receive an amount per share
for each share of Series C Preferred held of record by such holder equal to their respective
Pre-Cap Series C Return, each holder of Series C-1 Preferred shall be assumed to be entitled to
receive an
amount per share for each share of Series C-1 Preferred held of record by such holder equal to
their respective Pre-Cap Series C-1 Return and each holder of Series D Preferred shall be assumed
to be entitled to receive an amount per share for each share of Series D Preferred held of record
by such



-25-









 




holder equal to their respective Pre-Cap Series D Return. The aggregate amount assumed to
be distributable to all holders of the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series C-1 Preferred and the Series D Preferred under Sections 2(a)(ii)-2(a)(iii) or
Section 4 is the sum of (i) the product of (A) the Pre-Cap Series A Return and (B) the number of
shares of Series A Preferred outstanding, (ii) the product of (A) the Pre-Cap Series B Return and
(B) the number of shares of Series B Preferred outstanding, (iii) the product of (A) the Pre-Cap
Series C Return and (B) the number of shares of Series C Preferred outstanding, (iv) the product of
(A) the Pre-Cap Series C-1 Return and (B) the number of shares of Series C-1 Preferred outstanding
and (v) the product of (A) the Pre-Cap Series D Return and (B) the number of shares of Series D
Preferred outstanding (the “Total Aggregate Pre-Cap Return.”).




               b. Adjustment Factor. The maximum aggregate liquidation preference or redemption
price which may actually be distributed pursuant to Section 2(a)(ii)-2(a)(iii) or Section 4 to all
holders of the Series A Preferred, the Series B Preferred, the Series C Preferred, the Series C-1
Preferred and the Series D Preferred is $88,392,465 (the “Cap”). The adjustment factor applicable
to the aggregate Pre-Cap Return of each holder of the Series A Preferred, the Series B Preferred,
the Series C Preferred, the Series C-1 Preferred and the Series D Preferred is the quotient
obtained by dividing (x) the Cap by (y) the Total Aggregate Pre-Cap Return (the “Adjustment
Factor”).



ARTICLE V




     The Corporation is to have perpetual existence.



ARTICLE VI




     Except as otherwise provided in this Amended and Restated Certificate of Incorporation, the
Board of Directors may make, repeal, alter, amend or rescind any or all of the Bylaws of the
Corporation.



ARTICLE VII




     Elections of directors at an annual or special meeting need not be by written ballot unless a
stockholder demands election by written ballot at the meeting and before voting begins or unless
the Bylaws of the Corporation shall so provide.



ARTICLE VIII




     Meetings of stockholders may be held within or without the State of Delaware, as the Bylaws
may provide. The books of the Corporation may be kept (subject to any provision contained in the
statutes) outside the State of Delaware at such place or places as may be designated from time to
time by the Board of Directors or in the Bylaws of the Corporation.



ARTICLE IX




     Subject to the provisions of Article IV, the Corporation may amend, alter, change or repeal
any provision contained in this Amended and Restated Certificate of Incorporation, in the manner



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now or hereafter prescribed by statute. All rights conferred on stockholders herein are granted
subject to this reservation.




     Notwithstanding the foregoing first paragraph of this Article IX, except as permitted under
Section 5(c): (i) no amendment, modification or waiver shall be binding or effective which changes
or alters the preferences, rights, privileges or powers of, or the restrictions provided for the
benefit of, the Series D Preferred, without the prior written consent of the holders of the
requisite percentage in interest of the Series D Preferred outstanding at the time such action is
taken (as set forth in Section 5(c)); and (ii) except in connection with a Liquidation Event, no
change in the preferences, rights, privileges or powers of, or the restrictions provided for the
benefit of, the Series D Preferred may be accomplished by merger, consolidation or otherwise of the
Corporation with another corporation unless the Corporation has obtained the prior written consent
of the holders of two-thirds of the Series D Preferred then outstanding.



     Notwithstanding the foregoing first paragraph of this Article IX: (i) no amendment,
modification or waiver shall be binding or effective which changes or alters the preferences,
rights, privileges or powers of, or the restrictions provided for the benefit of, the Series E
Preferred, without the prior written consent of the holders of a majority of the Series E Preferred
outstanding at the time such action is taken; and (ii) except in connection with a Liquidation
Event, no change in the preferences, rights, privileges or powers of, or the restrictions provided
for the benefit of, the Series E Preferred may be accomplished by merger, consolidation or
otherwise of the Corporation with another corporation unless the Corporation has obtained the prior
written consent of the holders of a majority of the Series E Preferred then outstanding.



ARTICLE X




     To the fullest extent permitted by the General Corporation Law of Delaware, as the same may be
amended from time to time, a director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.
If the General Corporation Law of Delaware is hereafter amended to authorize, with or without the
approval of a corporation’s stockholders, further reductions in the liability of the corporations
directors for breach of fiduciary duty, then a director of the Corporation shall not be liable for
any such breach to the fullest extent permitted by the General Corporation Law of Delaware as so
amended.



     Any repeal or modification of the foregoing provisions of this Article X, by amendment of this
Article X or by operation of law, shall not adversely affect any right or protection of a director
of the Corporation with respect to any acts or omissions of such director occurring prior to such
repeal or modification.



ARTICLE XI




     To the fullest extent permitted by applicable law, the Corporation is authorized to provide
indemnification of (and advancement of expenses to) directors, officers, employees and other agents



-27-









 




of the Corporation (and any other persons to which Delaware law permits the Corporation to provide
indemnification), through Bylaw provisions, agreements with any such director, officer, employee or
other agent or other person, vote of stockholders or disinterested directors, or otherwise, in
excess of the indemnification and advancement otherwise permitted by Section 145 of the Delaware
General Corporation Law, subject only to limits created by applicable Delaware law (statutory or
nonstatutory), with respect to actions for breach of duty to a corporation, its stockholders and
others.




     Any repeal or modification of any of the foregoing provisions of this Article XI, by amendment
of this Article XI or by operation of law, shall not adversely affect any right or protection of a
director, officer, employee or other agent or other person existing at the time of, or increase the
liability of any director of the Corporation with respect to any acts or omissions of such
director, officer or agent occurring prior to such repeal or modification.



* * *



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     IN WITNESS WHEREOF, the undersigned has executed this certificate on August 1, 2003.



	 	 	 	 	 
	 	COMSCORE NETWORKS, INC.

 	 
	 	By:  	/s/ Magid Abraham
 	 
	 	 	Magid Abraham, 	 
	 	 	President and Chief Executive Officer 	 
	 




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