Exhibit 3.1
CERTIFICATE OF DESIGNATION OF
SERIES "A" SPECIAL VOTING PREFERRED STOCK
OF
iJOIN SYSTEMS, INC.
(a Delaware Corporation)
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Company) is iJoin
Systems, Inc. The Company was incorporated in the State of Delaware on October
8, 1998.
2. The certificate of incorporation of the Company authorizes the issuance
of 1,000,000 shares of Preferred Stock, par value $.0001 per share, and
expressly vests in the Board of Directors of the Company the authority provided
therien to issue any or all of said shares in one or more series and by
resolution or resolutions to provide for the designation, number, full or
limited voting powers, or the denial of voting powers, preferences and relative,
particiapating, optionalk, and other special rights and the qualifications,
limitations, restrictions, and other distinguishing characteristics of each
series to be issued.
3. The Board of Directors of the Company, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Series "A" issue of Preferred Stock:
RESOLVED: That, upon and subject to the effective date of that merger
transaction contemplated by that certain Agreement and Plan of Merger, date as
of April 24, 2001, among the Company, its wholly-owned subsidiary, IJC
Acquisition Corp., and iJoin, Inc. (the "Merger Agreement"), as evidenced by the
date and time set forth on the Certificate of Merger properly executed and filed
by the constituent parties to the Merger Agreement with the Delaware Secretary
of State in accordance with Section 251 of the General Corporation Law of the
State of Delaware, two (2) of the 1,000,000 authorized shares of Preferred Stock
of the Company shall be designated Series "A" Special Voting Preferred Stock,
$.0001 par value per share, which shall possess the rights, privileges,
restrictions and conditions set forth below:
Section 1. Designation and Amount. The series of Preferred Stock designated and
known as the "Series A Special Voting Preferred Stock" (sometimes hereinafter
referred to as "Series A Voting Stock") shall have a par value of $.0001 per
share and the number of shares constituing the Series A Special Voting Preferred
Stock shall be two (2) shares.
Section 2. Rank. The Series A Preferred shall rank, in each case as to
distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary (all such distributions being referred
to collectively as "Distributions"): (i) on a parity with all of the Company's
common stock, par value $.0001 per share (the "Company Common Stock"); (ii)
junior to any other series of Preferred Stock of the Company which may hereafter
be created (unless such Preferred Stock is expressly designated as being senior
or junior to the Series A Preferred); and (ii) junior upon liquidation to any
other class or series of capital stock of the
Company hereafter created which by its terms ranks senior on liquidation to the
Series A Preferred.
Section 3. Dividends. Subject to the prior rights of the holders of any shares
ranking senior to the Series A Preferred with respect to priority in the payment
of dividends, a holder of a Series A Preferred shall be entitled to receive, and
the Company shall pay or cause to be paid, as and when declared by the board of
directors of the Company out of the assets of the Company properly applicable to
the payment of dividends, dividends in such amount and in such form as the board
of directors may from time to time determine with respect to each then
outstanding share of exchangeable stock of iJoin.com Acquisition Corporation, a
corporation organized under the laws of Canada and a wholly-owned subsidiary of
iJoin, Inc. (the "iJoin Subsidiary"), with the rights, privileges, restrictions
and conditions set forth in the Articles of Incorporation of the iJoin
Subsidiary (each, an "Exchangeable Share") owned by the holder of the shares of
Series A Preferred, as follows:
(i) in the case of a cash dividend or distribution declared by the
board of directors on the shares of Company Common Stock and any other
securities into which such shares may be changed or for which such shares
may be exchanged (whether or not the Company shall be the issuer of such
other securities) or any other consideration which may be received by the
holders of such shares of Company Common Stock pursuant to a
recapitalization, reconstruction, reorganization or reclassification of, or
amalgamation, merger, liquidation or similar transaction affecting such
shares (the "Dividend Securities"), a dividend in an amount in cash for
each Exchangeable Share equal to the Canadian Dollar Equivalent (defined
below) on the declaration date of such dividend;
(ii) in the case of a stock dividend or distribution declared by the
board of directors on the shares of Company Common Stock or other Dividend
Securities to be paid in Company Common Stock, a dividend in that number of
Exchangeable Shares for each Exchangeable Share equal to the number of
shares of Company Common Stock to be paid on each share of Company Common
Stock outstanding on the declaration date of such dividend;
(iii) in the case of a dividend or distribution declared by the board
of directors on the shares of Company Common Stock or other Dividend
Securities to be paid in property other than cash or securities of the
Company, a dividend in such type and amount of property for each
Exchangeable Share as is the same as the type and amount of property
declared as a dividend on each share of Company Common Stock outstanding on
the declaration date of such dividend; or
(iv) in the case of a dividend or distribution declared by the board
of directors on the Company Common Stock or other Dividend Securities to be
paid in securities of the Company other than Company Common Stock, a
dividend in such number of either such securities or economically
equivalent securities of the iJoin Subsidiary or the Company, as the board
of directors determines, for each Exchangeable Share equal to the number of
securities of the Company other the Company Common Stock to be paid on each
share of Company Common Stock outstanding on the declaration date of such
dividend. Such dividends shall be paid out of money, assets and property of
the iJoin Subsidiary properly
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applicable to the payment of dividends, or out of authorized but unissued
shares of the Company, in a manner consistent with Article 3.2 of the
Articles of Incorporation of the iJoin Subsidiary.
For purposes of this Certificate of Designation, "Canadian Dollar
Equivalent" means, in respect of an amount expressed in a foreign currency (the
"Foreign Currency Amount") at any date the product obtained by multiplying: (i)
the Foreign Currency Amount by (ii) the official noon spot exchange rate on such
date for such foreign currency as reported by the Bank of Canada or, in the
event such spot exchange rate is not available, such exchange rate on such date
for such foreign currency as may be deemed by the Company's board of directors
to be appropriate for such purpose.
Section 4. Liquidation affecting underlying Exchangeable Shares.
(a) Subject to paragraph (b) below, in the event of the liquidation,
dissolution or winding-up of the iJoin Subsidiary or any other distribution of
assets of the iJoin Subsidiary among its shareholders for the purpose of
winding-up its affairs, a holder of Series A Preferred shall be entitled,
subject to applicable law, to receive from the Company in respect of each
Exchangeable Share held by such holder on the effective date of any such
liquidation, dissolution or winding-up of the iJoin Subsidiary (the "Liquidation
Date") one (1) share of Company Common Stock, plus an amount equal to all
declared and unpaid dividends on each such Exchangeable Share held by such
holder on any dividend record date which occurred prior to the Liquidation Date
(the "Liquidation Amount"), in accordance with the iJoin Subsidiary's Articles
of Incorporation.
(b) In the event of and notwithstanding any proposed liquidation,
dissolution or winding-up of the iJoin Subsidiary or any other proposed
distribution of assets of the iJoin Subsidiary among its shareholders for the
purpose of winding-up its affairs, the Company may opt to purchase from all but
not less than all of the holders of Series A Preferred on the Liquidation Date
all but not less than all of the Exchangeable Shares held by each such holder by
payment pursuant hereto of an amount per share equal to the Liquidation Share
Price (as defined herein) on the last business day prior to the Liquidation Date
(the "Liquidation Call Option"). For purposes hereof, "Liquidation Share Price"
means, for each Exchangeable Share held by a holder of shares of Series A
Preferred, at any given time:
(i) the Canadian Dollar Equivalent of the average closing sales price
of shares of Company Common Stock trading for the twenty (20) consecutive
trading days ending not more than five (5) days before such Liquidation
Date, as reported by the stock exchange or quotation system on which the
greatest volume of shares of Company Common Stock traded during such twenty
(20) day period, or, if the shares of Company Common Stock are not then
listed on a stock exchange or quoted on any quotation system, then the
market price of a share of Company Common Stock as determined by the
Company's board of directors based upon the advice of such qualified
independent financial advisors as the board of directors may deem to be
appropriate, which determination by the board of directors shall be
conclusive and binding of a share of Company Common Stock on that date,
payment of which shall be satisfied in full by causing to be delivered one
(1) share of Company Common Stock, plus
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(ii) an amount equal to the full amount of all dividends and
distributions declared and unpaid on each Exchangeable Share and all
dividends and distributions declared on the share of Company Common Stock
but have not been declared on each Exchangeable Share in accordance with
Section 3 hereof, in each case with a record date prior to the Liquidation
Date, if any.
In order to exercise its Liquidation Call Option, the Company must notify
the holders of Series A Preferred and the iJoin Subsidiary of its intention to
exercise such right at least thirty (30) days before the Liquidation Date in the
case of a voluntary liquidation, dissolution or winding-up of the iJoin
Subsidiary and at least five (5) business days before the Liquidation Date in
the case of an involuntary liquidation, dissolution or winding-up of the iJoin
Subsidiary. If the Company duly exercises its Liquidation Call Option, on the
Liquidation Date the Company shall purchase, and the holders of shares of Series
A Preferred shall sell all of their respective Exchangeable Shares then
outstanding for a price per share equal to the Liquidation Share Price at such
date, in accordance herewith and in the manner provided by Article 5.6 of the
Articles of Incorporation of the iJoin Subsidiary.
Section 5. Voting Rights. Except as otherwise required by law or expressly
provided in the Company's Certificate of Incorporation, the holders of shares of
Series A Preferred shall be entitled to vote on all matters submitted to a vote
of the stockholders of the Company and shall have such number of votes equal to
the number of Exchangeable Shares (the "Exchangeable Shares") of iJoin.com
Acquisition Corporation, an Ontario corporation and subsidiary of the Company
(the "Subsidiary"), from time to time that are owned by the holder of shares of
the Series A Preferred. Except as otherwise required by law or the Company's
Certificate of Incorporation, as the same may be amended, the Series A Preferred
and the Company Common Stock shall vote together a single class (together with
such shares of Preferred Stock to which such voting rights are granted), and not
as separate classes, on all matters submitted to a vote of stockholders of the
Corporation.
Section 6. Retraction of underlying Exchangeable Shares.
(a) Subject to paragraph (b) below and the limitations set forth in
Sections 6.3 and 6.4 of the iJoin Subsidiary's Articles of Incorporation, in the
event that pursuant to Article 6 of the Articles of Incorporation of the iJoin
Subsidiary a holder of Series A Preferred delivers to the iJoin Subsidiary a
Retraction Request (as defined below) and presents for surrender at the
registered office of the iJoin Subsidiary (or at any other location as may be
specified by the iJoin Subsidiary by written notice to the holder of
Exchangeable Shares), together with such documents and instrument as may be
required to effect a transfer under applicable law and the by-laws of the iJoin
Subsidiary, certificate(s) representing that number of Exchangeable Shares held
by such holder of Series A Preferred and with respect to which such holder
desires to have the iJoin Subsidiary purchase (the "Retracted Shares"), a holder
of Series A Preferred shall be entitled, subject to applicable law, to receive
from the Company in respect of each Retracted Share held by such holder as of
the fifth (5th) business day after the date the Retraction Request is received
by the iJoin Subsidiary (the "Retraction Date") one (1) share of Company Common
Stock, plus an amount equal to all declared and unpaid dividends on each such
Exchangeable Share held by such holder on any dividend record date which
occurred prior to the Retraction
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Date (the "Retraction Amount"), in accordance with the iJoin Subsidiary's
Articles of Incorporation.
For purposes hereof, a "Retraction Request" shall mean a duly executed
statement (i) specifying that the holder desires to have all or any number
specified therein of the Exchangeable Shares represented by such certificate or
certificates purchased by the iJoin Subsidiary and (ii) acknowledging the
overriding Retraction Call Option of the Company (as defined below) to purchase
all but not less than all such Retracted Shares directly from the holder and
that the Retraction Request shall be deemed to be a revocable offer by the
holder to sell the Retracted Shares to the Company in accordance with such
Retraction Call Option, on the terms and in the manner set out in paragraph (b)
below.
(b) In the event of and notwithstanding any proposed purchase by the iJoin
Subsidiary pursuant to a Retraction Request, the Company may, in lieu of
delivery of the Retraction Amount, opt to purchase from any holder(s) of Series
A Preferred having delivered but not revoked such Retraction Requests on the
Retraction Date all but not less than all of the Retracted Shares held by such
holder(s) on payment by the Company pursuant hereto of an amount per share equal
to the Retraction Call Price (as defined herein) on the last business day prior
to the Retraction Date (the "Retraction Call Option"). For purposes hereof,
"Retraction Call Price" means, for each Retracted Share held by a holder of
shares of Series A Preferred, at any given time:
(i) the Canadian Dollar Equivalent of the average closing sales price
of shares of Company Common Stock trading for the twenty (20) consecutive
trading days ending not more than five (5) days before such Retraction
Date, as reported by the stock exchange or quotation system on which the
greatest volume of shares of Company Common Stock traded during such twenty
(20) day period, or, if the shares of Company Common Stock are not then
listed on a stock exchange or quoted on any quotation system, then the
market price of a share of Company Common Stock as determined by the
Company's board of directors based upon the advice of such qualified
independent financial advisors as the board of directors may deem to be
appropriate, which determination by the board of directors shall be
conclusive and binding of a share of Company Common Stock on that date,
payment of which shall be satisfied in full by causing to be delivered one
(1) share of Company Common Stock, plus
(ii) an amount equal to the full amount of all dividends and
distributions declared and unpaid on each Exchangeable Share and all
dividends and distributions declared on the share of Company Common Stock
but have not been declared on each Exchangeable Share in accordance with
Section 3 hereof, in each case with a record date prior to the Retraction
Date, if any.
In order to exercise the Retraction Call Option, the Company must notify
the iJoin Subsidiary in writing of its determination to do so within two (2)
business days of notification to the Company by the iJoin Subsidiary of the
receipt by the iJoin Subsidiary of the Retraction Request. If the Company
delivers such notice timely, and provided that the Retraction Request is not
revoked by the holder in the manner specified in the Articles of Incorporation
of iJoin Subsidiary, the Retraction Request shall thereupon be considered only
to be an offer by the
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holder to sell the Retracted Shares to the Company in accordance with the
Retraction Call Option. In such event, the Company shall purchase from such
holder and such holder shall sell to the Company on the Retraction Date the
Retracted Shares for the Retraction Call Price per share. For the purposes of
completing a purchase pursuant to the Retraction Call Option, the Company shall
deposit with the iJoin Subsidiary, as trustee for the retracting holder, on or
before the Retraction Date, the following:
(i) certificates representing the aggregate number of shares of
Company Common Stock deliverable in connection with the purchase and sale
of the Retracted Shares;
(ii) check(s) payable at par at any branch of the bankers of the payor
in the amount of declared and unpaid cash dividends deliverable in
connection with such purchase and sale; and
(iii) such stock or property constituting any declared and unpaid
non-cash dividends deliverable in connection with such purchase and sale;
(collectively, the "Exchangeable Share Consideration"); provided that any
such stock or property shall be duly issued as fully paid and
non-assessable, in the case of stock, and free and clear of any lien,
encumbrance, security interest or adverse claim and provided further that
such consideration shall be paid less any tax required to be deducted and
withheld therefrom and without interest.
If the Exchangeable Share Consideration has been so deposited, the closing
of the purchase and sale of the Retracted Shares pursuant to the Retraction Call
Option shall be deemed to have occurred as at the closing of business on the
Retraction Date and, for greater certainty, no redemption by the iJoin
Subsidiary of such Retracted Shares shall take place on the Retraction Date.
Delivery of such Exchangeable Share Consideration shall be deemed to be payment
of and shall satisfy and discharge all liability for the total Retraction Call
Price, unless any check included therein is not paid on due presentation.
Failure by the Company to deliver its notice to exercise its Retraction
Call Option within the two (2) business day period or otherwise comply with the
provisions of this Section 6 in respect thereto, and provided that the
Retraction Request is not revoked by the holder in the manner specified in the
Articles of Incorporation of the iJoin Subsidiary, the iJoin Subsidiary shall
redeem the Retracted Shares on the Retraction Date.
Section 7. Repurchase of underlying Exchangeable Shares.
(a) Subject to paragraph (b) below, in the event that fewer than
500,000 shares of Exchangeable Stock remain outstanding (as such number of
shares may be adjusted as deemed appropriate by the iJoin Subsidiary's board of
directors to give effect to any subdivision or consolidation over any stock
dividend on or in the respect of the Exchangeable Shares, any issue or
distribution of rights to acquire Exchangeable Shares for securities
exchangeable for or convertible into Exchangeable Shares, any issue or
distribution of other securities or rights or evidences of indebtedness or
assets, or any other reorganization or other transaction affecting the
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Exchangeable Shares), a holder of Series A Preferred shall be entitled to
receive from the Company in respect of each Exchangeable Share held by such
holder on the date of such event (the "Triggering Event Date") one (1) share of
Company Common Stock, plus an amount equal to all declared and unpaid dividends
on each such Exchangeable Share held by such holder on any dividend record date
which occurred prior to an Triggering Event Date (the "Repurchase Amount"), in
accordance with Article 7 of the iJoin Subsidiary's Articles of Incorporation.
(b) In the event of and notwithstanding the occurrence of any
triggering event under paragraph (a) above, the Company may, in lieu of delivery
of the Repurchase Amount, opt to purchase from all but not less than all of the
holders of Series A Preferred on the Triggering Event Date all but not less than
all of the Exchangeable Shares held by each such holder by payment pursuant
hereto of an amount per share equal to the Repurchase Call Price (as defined
herein) on the last business day prior to the Triggering Event Date (the
"Repurchase Call Option"). For purposes hereof, "Repurchase Call Price" means,
for each Exchangeable Share held by a holder of shares of Series A Preferred, at
any given time:
(i) the Canadian Dollar Equivalent of the average closing sales price
of shares of Company Common Stock trading for the twenty (20) consecutive
trading days ending not more than five (5) days before such Triggering
Event Date on the stock exchange or quotation system on which the greatest
volume of shares of Company Common Stock traded during such twenty (20) day
period, or, if the shares of Company Common Stock are not then listed on a
stock exchange or quoted on any quotation system, then the market price of
a share of Company Common Stock as determined by the Company's board of
directors based upon the advice of such qualified independent financial
advisors as the board of directors may deem to be appropriate, which
determination by the board of directors shall be conclusive and binding of
a share of Company Common Stock on that date, payment of which shall be
satisfied in full by causing to be delivered one (1) share of Company
Common Stock, plus
(ii) an amount equal to the full amount of all dividends and
distributions declared and unpaid on each Exchangeable Share and all
dividends and distributions declared on the share of Company Common Stock
but have not been declared on each Exchangeable Share in accordance with
Section 3 hereof, in each case with a record date prior to the Triggering
Event Date, if any.
In order to exercise its Repurchase Call Option, the Company must notify
the holders of Series A Preferred and the iJoin Subsidiary of its intention to
exercise such right at least five (5) days before the Triggering Event Date. If
the Company duly exercises its Repurchase Call Option in accordance herewith, on
the last business date prior to such Triggering Event Date, the Company will
purchase and the holders of Series A Preferred will sell all of their respective
Exchangeable Shares then outstanding for a price per share equal to the
Repurchase Call Price.
Purchase of Exchangeable Shares pursuant to the exercise of a Repurchase
Call Option shall be effected by the Company causing to be delivered to the
holders of the Exchangeable Shares to be purchased the Repurchase Call Price for
each such Exchangeable Share upon presentation and surrender at the registered
office of the iJoin Subsidiary (or any other location as may be specified by the
iJoin Subsidiary by written notice to the holders of Exchangeable Shares)
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the certificates representing such Exchangeable Shares, together with such other
documents and instruments as may be required to effect a transfer of
Exchangeable Shares under applicable law and the by-laws of the iJoin
Subsidiary. Payment of the total Repurchase Call Price for such Exchangeable
Shares shall be made by delivery to each holder of Series A Preferred, at the
address of the holder recorded in the securities register of the Company or by
holding for pick-up by the holder at the registered office of the iJoin
Subsidiary (or such other location specified by notice as aforesaid) of the
Exchangeable Share Consideration representing the total Repurchase Call Price.
Section 8. Cancellation. At such time as a share of Series A Preferred has no
votes attached to it because there are no Exchangeable Shares held by the holder
of such share of Series A Preferred, such share of Series A Preferred shall be
canceled.
Section 9. Limitations on Rights as Stockholder. Except as expressly provided
herein, the Series A Preferred shall not entitle the holders thereof to any
rights as stockholders of the Company, provided that this Section 9 shall not in
any manner alter, amend, impair, restrict or prejudice any rights of the holders
thereof (i) under the Exchange Agreement dated June 5, 2000 among iJoin, Inc.
(f/k/a iJoin.com, Inc.), the iJoin Subsidiary and such holders, or (ii) as
intended beneficiaries under that certain Support Agreement dated June 5, 2000
between iJoin, Inc. (f/k/a iJoin.com, Inc.) and the iJoin Subsidiary
(collectively, the "Exchangeable Shares Agreements"), which Exchangeable Shares
Agreements and the respective covenants and obligations of the "Parent," as such
term is used therein, were assumed, by operation of law, by the Company under
the Merger Agreement and the transactions contemplated thereunder, including,
without limitation, liability for all monies payable and property deliverable by
the Parent thereunder.
Section 10. Registration of Transfer. The Company will keep at its principal
office a register for the registration of Series A Preferred. Upon the surrender
of any certificate representing Series A Preferred at such place, the Company
will, at the written request of the record holder of such certificate, execute
and deliver (at the Company's expense) a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares represented
by the surrendered certificate. Each such new certificate will be registered in
such name and will represent such number of Shares as is requested by the holder
of the surrendered certificate.
Section 11. Replacement. Upon receipt of evidence reasonably satisfactory to the
Company of the ownership and the loss, theft, destruction or mutilation of any
certificate evidencing shares of Series A Preferred and in the case of any such
loss, theft or destruction, upon receipt of indemnity reasonably satisfactory to
the Company (provided that if the holder is a financial institution, an entity
whose securities are traded or listed on any national securities exchange or
recognized automated quotation system, or any subsidiary of the foregoing, then
the holder's own agreement will be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company will (at its expense)
execute and deliver in lieu of such certificate a new certificate of like kind
representing the number of shares represented by such lost, stolen, destroyed or
mutilated certificate and dated the date of such lost, stolen, destroyed or
mutilated certificate.
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Section 12. Amendment and Waiver. No amendment, modification or waiver will be
binding or effective with respect to any provision of Sections 1 through 13 of
this Series A Preferred without the prior unanimous written consent or
affirmative vote of the holders of not less than all of the Series A Preferred
outstanding at the time such action is taken.
Section 13. Notices. Except as otherwise expressly provided hereunder, all
notices, requests or other communications referred to herein will be in writing
and will be delivered by registered or certified mail, return receipt requested
and postage prepaid, or by reputable overnight courier service, charges prepaid,
and will be deemed to have been given when so mailed or sent (a) to the Company,
at its principal executive offices, and (b) to any holder of Series A Preferred,
at such holder's address as it appears in the stock records of the Company
(unless otherwise indicated by notice given to the Company by any such holder)
or, in the event of the address of any such holder not being so recorded, then
at the last known address of such holder. Any such notice, request or other
communication, if given by mail, shall be deemed to have been given and received
on the fifth (5th) business day following the date of mailing and, if given by
delivery, shall be deemed to have been given and received on the date of
delivery. Accidental failure or omission to give any notice, request or other
communication to one or more holders of Series A Preferred shall not invalidate
or otherwise alter or affect any action or proceeding to be taken by the Company
pursuant thereto.
FURTHER RESOLVED: That the statements contained in the foregoing resolution
creating and designating the said Series A issue of Preferred Stock and fixing
the number, powers and relative, optional, participating, and other special
rights and the qualifications, limitations, restrictions, and other
distinguishing characteristics, thereof shall, upon the effective date of said
Series, be deemed to be included in and be a part of the certificate of
incorporation of the Company pursuant to the provisions of Section 104 and 151
of the General Corporation Law of the State of Delaware.
Signed as of May 4, 2001
/s/ William H. Ragsdale
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William H. Ragsdale, Chief Executive Officer
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