Exhibit 3.1
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CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF SERIES C CONVERTIBLE PREFERRED STOCK
OF
GSV, INC.
GSV, Inc. (the "Corporation"), a corporation organized and existing
under the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors of
the Corporation (the "Board") by the Certificate of Incorporation (as amended)
(the "Certificate of Incorporation") of said corporation, the Board adopted a
resolution, which resolution is as follows:
RESOLVED, that a series of the Corporation's Preferred Stock consisting of
200,000 shares of Preferred Stock, be and hereby is, designated as
"Series C Convertible Preferred Stock", par value $.001 per share (the
"Series C Preferred Stock"), and that the Series C Preferred Stock
shall have the designations, powers, preferences, rights and
qualifications, limitations and restrictions as set forth in the
Certificate of Designations, Preferences and Rights of Series C
Convertible Preferred Stock (the "Series C Certificate").
That said Series C Certificate states that the Board does hereby fix
and herein state and express such designations, powers, preferences and relative
and other special rights and qualifications, limitations and restrictions
thereof as follows.
1. Certain Definitions. Unless the context otherwise requires, the terms
defined herein shall have the meanings herein specified.
(a) Common Stock. The term "Common Stock" shall mean the Common Stock
of the Corporation, $.001 par value per share.
(b) Junior Stock. The term "Junior Stock" shall mean the Common Stock
and any class or series of stock of the Corporation, whether now or hereafter
authorized, that by the terms of the Certificate of Incorporation or of an
instrument of the Board, acting pursuant to authority granted in the Certificate
of Incorporation establishing such class or series shall be subordinated to the
Series C Preferred Stock in respect of the right to receive dividends and in
respect to the right to receive any assets upon liquidation, dissolution or
winding up of the affairs of the Corporation.
(c) Parity Stock. The term "Parity Stock" shall mean any class or series
of stock of the Corporation, whether now or hereafter authorized, that by the
terms of the Certificate of Incorporation or of an instrument of the Board,
acting pursuant to authority granted in the Certificate of Incorporation
establishing such class or series, and without violation of any provision
hereof, shall be pari passu to the Series C Preferred Stock in respect of the
right to receive dividends and in respect to the right to receive any assets
upon liquidation, dissolution or winding up of the affairs of the Corporation.
(d) Senior Stock. The term "Senior Stock" shall mean any class or series
of stock of the Corporation, whether now or hereafter authorized, that by the
terms of the Certificate of Incorporation or of an instrument of the Board,
acting pursuant to authority granted in the Certificate of Incorporation
establishing such class or series, and without violation of any provision
herein, shall be senior to the Series C Preferred Stock in respect of the right
to receive dividends and in respect to the right to receive any assets upon
liquidation, dissolution or winding up of the affairs of the Corporation. The
Series B Preferred Stock will be Senior Stock and is the only Senior Stock on
the date hereof.
(e) Series B Preferred Stock. The term "Series B Preferred Stock"
shall mean the shares of Series B Convertible Preferred Stock, $.001 par value
per share, currently outstanding.
2. Designation, Amount and Par Value. The series of preferred stock shall
be designated as the Series C Convertible Preferred Stock (the "Series C
Preferred Stock") and the number of shares so designated shall be 200,000. Each
share of Series C Preferred Stock shall have a par value of $.001 per share.
3. Voting.
(a) Except as set forth in paragraph (b) of this Section 3 and except as
to matters on which the holders of Series C Preferred Stock may otherwise
be entitled to vote as a matter of law, no holder of Series C Preferred Stock
shall be entitled to vote for any matter.
(b) Without the prior written consent of the holders of not less than a
majority of the then outstanding shares of Series C Preferred Stock, the
Corporation may not
(i) issue any additional shares of Series C Preferred Stock; or
(ii) issue any Senior Stock or Parity Stock, unless such Senior
Stock or Parity Stock, as the case may be, is to be issued in exchange for
(A) cash and/or services rendered or to be rendered from or by
one or more persons or entities who are not Affiliates of the
Corporation in an aggregate amount, in the case of cash, or value (as
determined by the Board in good faith), in the case of services, that
is equal to or greater than the aggregate liquidation preference of
such Senior Stock or Parity Stock, as the case may be, provided that
if issued in exchange for services to be rendered, such services are
to be rendered pursuant to legally binding commitments; or
(B) equity securities (including securities convertible into
equity securities) or assets of one or more businesses that are not
Affiliates of the Corporation, in either case having a value (as
determined by the Board in good faith) that is equal to or greater
than the aggregate liquidation preference of such Senior Stock or
Parity Stock, as the case may be.
For purposes hereof, an "Affiliate" of any specified person or entity
means any other person or entity directly or indirectly controlling, controlled
by or under direct or indirect common control with, such specified person or
entity.
4. Dividends. No dividends shall be payable on the Series C Preferred
Stock.
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5. Liquidation.
(a) Upon liquidation, dissolution or winding up of the Corporation (each
a "Liquidation Event"), whether voluntary or involuntary, the holders of the
Series C Preferred Stock (each, a "Holder" and collectively the "Holders") shall
be entitled, after any distribution or payment is made to any holder of Senior
Stock but before any distribution or payment is made to any holder of Common
Stock or any other Junior Stock, to be paid an amount equal to $1.00 per share
(appropriately adjusted to reflect any stock split, stock combination, stock
dividend, reclassification or like transaction), such amount payable with
respect to one share of Series C Preferred Stock being sometimes referred to as
the "Series C Liquidation Preference Payment" and with respect to all shares of
Series C Preferred Stock being sometimes referred to as the "Series C
Liquidation Preference Payments." If, upon any Liquidation Event, the net assets
of the Corporation distributable among the holders of all outstanding shares of
the Series C Preferred Stock shall be insufficient to permit the payment in full
to such Holders of all amounts to which such Holders shall be entitled upon a
Liquidation Event, then the entire net assets of the Corporation to be
distributed to the Holders shall be distributed among the Holders ratably in
proportion to the full amounts to which they would otherwise be respectively
entitled in the event of a Liquidation Event.
(b) After the distributions described in Section 5(a) above have been
paid, subject to the rights of a series of Senior Stock or Parity Stock that may
from time to time come into existence, the remaining assets of the Corporation
available for distribution to the stockholders shall be distributed among the
holders of the Junior Stock in accordance with the Certificate of Incorporation
or an instrument of the Board, acting pursuant to authority granted in the
Certificate of Incorporation.
(c) For purposes hereof, a Liquidation Event shall be deemed to include
any (x) merger or consolidation of the Corporation with or into any other entity
(other than a merger or consolidation in which shares of the Corporation's
voting securities outstanding immediately before such merger or consolidation
are converted into or constitute shares which represent 50% or more of the
voting power of the surviving entity's voting securities after such
consolidation or merger), (y) sale or disposition of all or substantially all of
the assets of the Corporation, or (z) transaction or series of related
transactions in which any person or entity or "group" (as defined under Rule
13d-5(b) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or any successor rule), acquires beneficial ownership (as determined in
accordance with Rule 13d-3 under the Exchange Act, or any successor rule) of a
controlling interest in the Corporation (for purposes of such definition, to
mean in excess of a majority of the voting power of the voting securities of the
Corporation).
6. Conversions. The holders of Series C Preferred Stock shall have the
following conversion rights:
(a) Right to Convert. Subject to the terms and conditions of this
Section 6, the Holder of any share or shares of Series C Preferred Stock shall
have the right, at its option at any time, to convert any such shares of Series
C Preferred Stock into Common Stock (except that upon any Liquidation Event of
the Corporation pursuant to Section 5, the right of conversion shall terminate
at the close of business on the business day prior to the business day fixed for
payment of the amount distributable on the Series C Preferred Stock). The date
of determination of the number of shares of Common Stock issued upon conversion
of the Series C Preferred Stock pursuant to this Section 6(a) shall be the date
(the "Conversion Date") that the Conversion Notice and the certificate or
certificates for the shares so converted is received by the Corporation.
(b) Conversion Process. To effect conversions of Series C Preferred
Stock, Holders shall deliver to the Corporation at its principal office during
its usual business hours, the certificate or
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certificates for the shares so converted, together with a duly completed and
executed Conversion Notice, in the form attached hereto as Exhibit A. As
promptly as practicable thereafter, the Corporation shall issue and deliver to
such Holder a certificate or certificates, registered in the name of such
Holder, for the number of whole shares of Common Stock to which such Holder is
entitled upon such conversion, together with any payment in lieu of fractional
shares to which such Holder may be entitled. Once delivered, a delivery of a
Conversion Notice shall be irrevocable.
(c) Conversion Rate. Subject to the terms and conditions of this Section
6, the Series C Preferred Stock shall initially convert into such number of
fully paid and non-assessable shares of Common Stock as is obtained by
multiplying the number of shares of Series C Convertible Preferred Stock to be
so converted by $1.00 per share and (ii) dividing the result by the conversion
price (which initially shall be $1.00 per share) or, in case an adjustment of
such rate has taken place pursuant to the provisions of Section 6(e), then at
the conversion rate as last adjusted and in effect at the date any share or
shares of Series C Preferred Stock are surrendered for conversion pursuant to
Section 6(a) (such rate, or such rate as last adjusted, being referred to as the
"Series C Conversion Rate").
(d) Fractional Shares. No fractional shares shall be issued upon
conversion of Series C Preferred Stock into Common Stock. If any fractional
shares of Common Stock would be delivered upon such conversion, the Corporation,
in lieu of delivering such fractional share, shall pay to the Holder
surrendering the Series C Preferred Stock for conversion an amount in cash equal
to the current fair market value of such fractional share as determined in good
faith by the Board.
(e) Adjustment of Series C Conversion Rate. (i) The Series C
Conversion Rate shall be subject to adjustment from time to time in case the
Corporation shall pay a stock dividend on its Common Stock, or shall subdivide
or combine the outstanding shares of Common Stock or Series C Preferred Stock.
On the record date for such event as determined by the Board, the Series C
Conversion Rate shall be proportionately adjusted. Upon any adjustment of the
Series C Conversion Rate, then and in each such case the Corporation shall give
written notice thereof, by first class mail, postage prepaid, to each holder of
record of Series C Preferred Stock, which notice shall state the Series C
Conversion Rate resulting from such adjustment, setting forth in reasonable
detail the method of calculation and the facts upon which such calculation is
based.
(f) Reorganization or Reclassification. Without limiting any provision
of Section 5 hereof, if any capital reorganization, reclassification,
recapitalization, consolidation, merger, sale of all or substantially all of the
Corporation's assets or other similar transaction (any such transaction being
referred to herein as an "Organic Change") shall be effected in such a way that
holders of Common Stock shall be entitled to receive stock, securities or assets
with respect to or in exchange for Common Stock, then, as a condition of such
Organic Change, lawful and adequate provisions shall be made whereby each holder
of a share or shares of Series C Preferred Stock that remains outstanding
thereafter shall thereupon have the right to receive, upon the basis and upon
the terms and conditions specified herein and in lieu of or in addition to, as
the case may be, the shares of Common Stock immediately theretofore receivable
upon the conversion of such share or shares of Series C Preferred Stock, such
shares of stock, securities or assets as may be issued or payable with respect
to or in exchange for a number of outstanding shares of such Common Stock equal
to the number of shares of such Common Stock immediately theretofore receivable
upon such conversion had such Organic Change not taken place, and appropriate
provisions shall be made with respect to the rights and interests of each Holder
to the end that the provisions hereof (including without limitation provisions
for adjustments of the Series C Conversion Rate) shall thereafter be applicable,
as nearly as may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such conversion rights.
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7. Notices. Any and all notices or other communications or deliveries to be
provided by the Holders of the Series C Preferred Stock hereunder, including,
without limitation, any Conversion Notice, shall be in writing and delivered
personally, by facsimile or sent by a nationally recognized overnight courier
service, addressed to the attention of the President of the Corporation
addressed to 191 Post Road West, Westport, CT, 06880, Facsimile No.: (203)
221-2691, Attention: President, or to such other address or facsimile number as
shall be specified in writing by the Corporation for such purpose. Any and all
notices or other communications or deliveries to be provided by the Corporation
hereunder shall be in writing and delivered personally, by facsimile or sent by
a nationally recognized overnight courier service, addressed to each Holder at
the facsimile telephone number or address of such Holder appearing on the books
of the Corporation, or if no such facsimile telephone number or address appears,
at the principal place of business of the Holder. Any notice or other
communication or deliveries hereunder shall be deemed given and effective on the
earliest of (i) the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section prior to 6:30 p.m. (New York City time) (with confirmation of
transmission), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 6:30 p.m. (New York City time) on any date
and earlier than 11:59 p.m. (New York City time) on such date (with confirmation
of transmission), (iii) upon receipt, if sent by a nationally recognized
overnight courier service, or (iv) upon actual receipt by the party to whom such
notice is required to be given.
8. Stock to be Reserved. The Corporation will at all times reserve and keep
available out of its authorized Common Stock, solely for the purpose of issuance
upon the conversion of Series C Preferred Stock as herein provided, such number
of shares of Common Stock as shall then be issuable upon the conversion of all
outstanding shares of Series C Preferred Stock.
9. Issue Tax. The issuance of certificates for shares of Common Stock upon
conversion of Series C Preferred Stock shall be made without charge to the
holders thereof for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in a
name other than that of the holder of the Series C Preferred Stock that is being
converted.
10.Status of Converted Shares. In case any shares of Series C Preferred
Stock shall be converted pursuant hereto, the shares of Series C Preferred Stock
so converted shall be canceled, shall not be re-issuable and shall cease to be
part of the authorized capital stock of the Corporation.
11.Amendments. Except where the vote or written consent of the holders of
a greater number of shares of the Corporation is required herein or by law, no
provision of this Series C Certificate may be amended, modified or waived
without the written consent or affirmative vote of the Corporation and the
holders of at least a majority of the then outstanding shares of Series C
Preferred Stock consenting or voting, as the case may be, separately as a class.
12.Lost Certificates. Upon receipt of evidence reasonably satisfactory to
the Corporation of the loss, theft, destruction or mutilation of a stock
certificate and, in the case of any such loss, theft or destruction, upon
receipt of an indemnity agreement reasonably satisfactory to the Corporation, or
in the case of any such mutilation upon surrender and cancellation of such stock
certificate, the Corporation will make and deliver a new stock certificate, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated stock
certificate at the Corporation's own expense.
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IN WITNESS WHEREOF, GSV, Inc. has caused this certificate to be signed by
an authorized officer as of November 30, 2005.
GSV, INC.
By: /s/ Gilad Gat
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Gilad Gat
President
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Exhibit A
FORM OF CONVERSION NOTICE
To: GSV, Inc.
The undersigned owner of _______ shares of Series C Convertible Preferred
Stock, $.001 par value per share (the "Series C Preferred Stock"), of GSV, Inc.
(the "Corporation") hereby irrevocably exercises the option to convert _____ of
Series C Preferred Stock, into shares of Common Stock, $.001 par value per share
of the Corporation, in accordance with the terms of the Certificate of
Designations, Preferences and Rights for the Series C Preferred Stock, and
directs that the certificate or certificates for the shares issuable and
deliverable upon the conversion be issued in the name of and delivered to the
undersigned, unless a different name has been indicated below. If shares are to
be issued in the name of a person other than the undersigned, the undersigned
will pay any transfer taxes payable with respect thereto.
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Name
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Address
Social security or other taxpayer identifying number of the registered holder
is:
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Dated: Signature:
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(Must conform in all respects
to name of Holder appearing on
face of the certificate
reflecting the shares of
Series C Preferred Stock)
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