EXHIBIT 3.1
RESTATED CERTIFICATE OF INCORPORATION
OF
GODIGITAL NETWORKS CORPORATION
GoDigital Networks Corporation, a corporation organized and existing under
the laws of the State of Delaware, hereby certifies as follows:
A. The name of the corporation is GoDigital Networks Corporation. The
corporation was originally incorporated under the same name and the original
Certificate of Incorporation of the corporation was filed with the Secretary of
State of Delaware on November 19, 1999.
B. This Restated Certificate of Incorporation has been duly adopted in
accordance with the provisions Sections 211 and 242 of the General Corporation
Law of the State of Delaware by the Board of Directors and the stockholders of
the corporation.
C. Pursuant to Section 245 of the General Corporation Law of the State of
Delaware, this Restated Certificate of Incorporation restates the provisions of
the Certificate of Incorporation of this corporation.
D. The Certificate of Incorporation is hereby restated in its entirety
to read as follows:
"ARTICLE I
NAME
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The name of this corporation is GoDigital Networks Corporation
(hereinafter, the "Company").
ARTICLE II
REGISTERED OFFICE
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The address of the Company's registered office in the State of Delaware is
1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware,
19801. The name of the registered agent at such address is The Corporation
Trust Company.
ARTICLE III
PURPOSE
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The purpose of the Company is to engage in any lawful act or activity for
which a corporation may be organized under the General Corporation Law of
Delaware.
ARTICLE IV
STOCK
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The Company is authorized to issue two classes of shares to be designated,
respectively, Common Stock ("Common") and Preferred Stock ("Preferred"). The
total number of shares of capital stock this Company shall have authority to
issue is 47,370,943. The total number of shares of Common this Company shall
have authority to issue is 40,000,000, $0.001 par value. The total number of
shares of Preferred this Company shall have authority to issue is 7,370,943,
$0.001 par value.
There shall be five series of Preferred Stock: one series designated Series
A Preferred Stock (the "Series A Preferred"), one series designated Series B
Preferred Stock (the "Series B Preferred"), one series designated Series C
Preferred Stock (the "Series C Preferred"), one series designated Series D
Preferred Stock (the "Series D Preferred") and one series designated Series E
Preferred Stock (the "Series E Preferred"). The number of shares constituting
the Series A Preferred shall be 2,678,500, the number of shares constituting the
Series B Preferred shall be 1,339,250, the number of shares constituting the
Series C Preferred shall be 1,992,476, the number of shares constituting the
Series D Preferred shall be 440,717 and the number of shares constituting the
Series E Preferred shall be 920,000.
Upon the automatic conversion of all outstanding shares of Preferred in
accordance with the provisions of Article IV, Section 4(b) of this Certificate
of Incorporation (the "Automatic Conversion Event"), the Company shall
immediately thereafter be authorized to issue two classes of stock to be
designated, respectively, Common Stock and Preferred Stock. Immediately
following
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any Automatic Conversion Event, the total number of shares of Common Stock
which the Company shall have the authority to issue shall be 100,000,000,
$0.001 par value, and the total number of shares of Preferred Stock the
Company shall have the authority to issue shall be 1,000,000, $0.001 par
value. Immediately following any Automatic Conversion Event, the Preferred
Stock may be issued from time to time in one or more series pursuant to a
resolution or resolutions providing for such issue duly adopted by the Board
of Directors (authority to do so being hereby expressly vested in the Board).
The Board of Directors is further authorized to determine or alter the rights,
preferences, privileges and restrictions granted to or imposed upon any wholly
unissued series of Preferred Stock and to fix the number of shares of any
series of Preferred Stock and the designation of any such series of Preferred
Stock. The Board of Directors, within the limits and restrictions stated in
any resolution or resolutions of the Board of Directors originally fixing the
number of shares constituting any series, may increase or decrease (but not
below the number of shares in any such series then outstanding), the number of
shares of any series subsequent to the issue of shares of that series.
Immediately following any Automatic Conversion Event, the Board of
Directors of the Company is authorized, without the further consent or approval
of the stockholders of the Company to amend and restate this Restated
Certificate of Incorporation to show the authorized classes of capital stock as
set forth in the preceding paragraph and to eliminate all references in this
Restated Certificate of Incorporation to the rights, preferences, privileges and
restrictions of the series of Preferred Stock including those set forth below
this paragraph in this Article IV (and, in connection with any such amendment
and restatement, to renumber the remaining Articles, if necessary).
The relative rights, preferences, privileges and restrictions granted to or
imposed upon the Common, the Series A Preferred, the Series B Preferred, the
Series C Preferred, the Series D Preferred and the Series E Preferred
(collectively, the "Preferred Stock") are as follows:
1. Dividends. The holders of outstanding shares of Series A Preferred,
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Series B Preferred, Series C Preferred, Series D Preferred and Series E
Preferred shall be entitled to receive in any fiscal year, when, as and if
declared by the Board of Directors, 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 of the Company) on the Common
Stock of the Company, non-cumulative dividends in cash at the rate of $0.05
per share of Series A Preferred, $0.10 per share of Series B Preferred, $0.18
per share of Series C Preferred, $.35 per share of Series D Preferred and
$0.63 per share of Series E Preferred, per annum, as adjusted for any
consolidations, combinations, stock distributions, stock dividends, stock
splits, or similar events (collectively, a "Recapitalization Event").
Dividends, if paid or declared, must be paid or set apart for payment on all
outstanding series of Preferred Stock contemporaneously, and if less than full
dividends are paid or declared and set apart for payment on all outstanding
Preferred Stock, then the same percentage of the respective dividend rate on
each outstanding series of Preferred Stock shall be paid on or declared and
set apart.
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2. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up of
the Company, either voluntary or involuntary, the holders of shares of
Preferred Stock shall be entitled to receive, on a pari passu basis, prior and
in preference to any distribution of any of the assets of the Company to the
holders of the Common Stock, by reason of their ownership thereof, an amount
equal to $1.00 for each outstanding share of Series A Preferred (the "Series A
Original Issue Price"), as adjusted for any Recapitalization Event, (ii) $2.00
for each outstanding share of Series B Preferred (the "Series B Original Issue
Price"), as adjusted for any Recapitalization Event, (iii) $3.61 for each
outstanding share of Series C Preferred (the "Series C Original Issue Price"),
as adjusted for any Recapitalization Event, (iv) $7.00 for each outstanding
share of Series D Preferred (the "Series D Original Issue Price"), as adjusted
for any Recapitalization Event, and $12.50 for each outstanding share of
Series E Preferred (the "Series E Original Issue Price"), as adjusted for any
Recapitalization Event, plus all declared but unpaid dividends, if any; such
Series A Original Issue Price, Series B Original Issue Price, Series C
Original Issue Price, Series D Original Issue Price and Series E Original
Issue Price are collectively referred to herein as the "Original Issue Price."
If upon the occurrence of such event, the assets thus distributed among the
holders of the Preferred Stock shall be insufficient to permit the payment to
such holders of the full preferential amount, then the entire assets of the
Company legally available for distribution shall be distributed to the holders
of all series of the Preferred Stock in proportion to the Original Issue Price
of the respective series of Preferred Stock held by such holders.
(b) After payment has been made to the holders of the Series A
Preferred, Series B Preferred, Series C Preferred, Series D Preferred and
Series E Preferred of the full amounts to which they shall be entitled
pursuant to Section 2(a) above, all remaining assets available for
distribution, if any, shall be distributed ratably to the holders of the
Common Stock.
(c) A consolidation or merger of the Company with or into any other
corporation or corporations in which the shareholders of the Company
immediately prior to such consolidation or merger shall own less than fifty
percent (50%) of the voting securities of the surviving corporation, or a sale
of all or substantially all of the assets of the Company, shall be deemed to
be a liquidation, dissolution or winding up within the meaning of this
Section 2.
3. Redemption. The Preferred Stock shall not be redeemable.
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4. Conversion. The holders of the Preferred Stock shall have conversion
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rights (the "Conversion Rights") as follows:
(a) Subject to subparagraph (d) of this Section 4, each share of
Preferred Stock shall be convertible, at the option of the holder thereof, at
any time after the date of issuance of such share, at the office of the
Company or any transfer agent for the Preferred Stock, into such number of
fully paid and nonassessable shares of Common Stock as is determined, in the
case of the Series A Preferred, by dividing the Series A Original Issue Price
(as defined in Section 2(a) hereof) by the
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then-effective Series A Conversion Price (as defined below), as last adjusted
and then currently in effect, in the case of the Series B Preferred, by
dividing the Series B Original Issue Price (as defined in Section 2(a) hereof)
by the then-effective Series B Conversion Price (as defined below), as last
adjusted and then currently in effect, in the case of the Series C Preferred,
by dividing the Series C Original Issue Price (as defined in Section 2(a)
hereof) by the then-effective Series C Conversion Price (as defined below), as
last adjusted and then currently in effect, in the case of the Series D
Preferred, by dividing the Series D Original Issue Price (as defined in
Section 2(a) hereof) by the then-effective Series D Conversion Price (as
defined below), as last adjusted and then currently in effect and, in the case
of the Series E Preferred, by dividing the Series E Original Issue Price (as
defined in Section 2(a) hereof) by the then-effective Series E Conversion
Price (as defined below), as last adjusted and then currently in effect. The
conversion price per share at which shares of Common Stock shall be issuable
upon conversion of shares of the Series A Preferred Stock after the date
hereof shall be $0.50 (the "Series A Conversion Price"); provided, however,
that such Series A Conversion Price shall be subject to adjustment as set
forth in subparagraph (d) of this Section 4. The Conversion Price per share at
which shares of Common Stock shall be issuable upon conversion of shares of
the Series B Preferred Stock after the date hereof shall be $1.00 (the "Series
B Conversion Price"); provided, however, that such Series B Conversion Price
shall be subject to adjustment as set forth in subparagraph (d) of this
Section 4. The Conversion Price per share at which shares of Common Stock
shall be issuable upon conversion of shares of the Series C Preferred Stock
after the date hereof shall be $1.805 (the "Series C Conversion Price");
provided, however, that such Series C Conversion Price shall be subject to
adjustment as set forth in subparagraph (d) of this Section 4. The conversion
price per share at which shares of Common Stock shall be issuable upon
conversion of shares of the Series D Preferred Stock after the date hereof
shall be $2.50 (the "Series D Conversion Price"); provided, however, that such
Series D Conversion Price shall be subject to adjustment as set forth in
subparagraph (d) of this Section 4. The conversion price per share at which
shares of Common Stock shall be issuable upon conversion of shares of the
Series E Preferred Stock shall be $6.25 (the "Series E Conversion Price");
provided, however, that such Series E Conversion Price shall be subject to
adjustment as set forth in subparagraph (d) of this Section 4. The Series A
Conversion Price, Series B Conversion Price, Series C Conversion Price, Series
D Conversion Price and Series E Conversion Price collectively shall
hereinafter be referred to as the "Conversion Price."
(b) Each share of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred and Series E Preferred shall automatically be
converted into shares of Common Stock at the then-effective Conversion Price
for such series (x) immediately upon the closing of the issuance of shares
following the effectiveness of a registration statement under the Securities
Act of 1933, as amended, (other than a registration statement relating solely
to the sale of securities to employees of the Company or a registration
relating solely to a Securities and Exchange Commission Rule 145 transaction),
pursuant to a firm commitment underwriting and covering the offer and sale of
the Company's Common Stock at a price not less than $4.00 per share for the
Series A Preferred and Series B Preferred, $7.00 per share for the Series C
Preferred and Series D Preferred and $12.50 per share for the Series E
Preferred (in each case subject to appropriate
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adjustment as provided in subparagraph (d) of this Section 4) the aggregate
proceeds to the Company of which would, at the public offering price, exceed
$10,000,000, or (y) immediately following the affirmative vote of the holders
of two-thirds (2/3) of the shares of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred, voting as a
single class on an as-converted basis, outstanding at the time of such vote.
(c) Mechanics of Conversion.
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Before any holder of Preferred Stock shall be entitled to
convert the same into shares of Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Company or of any transfer agent for the Preferred Stock, and shall give
written notice by mail, postage prepaid, to the Company at its principal
corporate office, of the election to convert the same and shall state therein
the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. The Company shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Preferred
Stock, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender
of the shares of Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such
shares of Common Stock at the close of business on such date.
(d) Adjustments to Conversion Price for Diluting Issues.
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(i) Special Definitions. For purposes of this Section 4(d),
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the following definitions shall apply:
(1) Options' shall mean rights, options or warrants to
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subscribe for, purchase or otherwise acquire either Common Stock or
Convertible Securities.
(2) 'Original Issue Date' shall mean the date on which
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the first share of the applicable series of Preferred Stock was first issued.
(3) Convertible Securities' shall mean any evidences of
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indebtedness, shares (other than the Preferred Stock) or other securities
convertible into or exchangeable for Common Stock.
(4) Additional Shares of Common Stock' shall mean all
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shares of Common Stock issued (or, pursuant to Section 4(d)(iii), deemed to be
issued) by the Company after the applicable Original Issue Date, other than
shares of Common Stock issued or issuable at any time:
(A) upon conversion of the Preferred Stock into
Common Stock;
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(B) to officers, directors, and employees of, and
consultants to, the Company pursuant to plans, arrangements or agreements
approved by the Board of Directors;
(C) as a dividend or distribution on Preferred Stock
or any event for which adjustment is made pursuant to subparagraph (d)(ii)
hereof;
(D) upon the issuance of warrants or options to
purchase shares of Common Stock or Preferred Stock convertible into shares of
Common Stock, in either case in conjunction with equipment lease transactions,
loan guarantees, commercial loans, bank financing transactions or technology
licenses approved by the Board of Directors, and the issuance of stock upon
exercise of such warrants or options or conversion of such Preferred Stock;
(E) in connection with the sale of all or
substantially all of the Company's assets or the merger or consolidation with
any other corporation in which more than fifty percent (50%) of the voting
power of the Company is disposed of;
(F) by way of dividend or other distribution on
shares of Common Stock excluded from the definition of Additional Shares of
Common Stock by the foregoing clauses (A), (B), (C), (D), (E) or this clause
(F) or on shares of Common Stock so excluded.
(ii) No Adjustment of Conversion Price. No adjustment in
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the respective Conversion Price of a particular share of Preferred Stock shall
be made in respect of the issuance of Additional Shares of Common Stock unless
the consideration per share for an Additional Share of Common Stock issued or
deemed to be issued by the Company is less than the respective Conversion
Price in effect on the date of, and immediately prior to such issue, for such
share of Preferred Stock.
(iii) Deemed Issue of Additional Shares of Common Stock.
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Except as otherwise provided in Section 4(d)(ii), in the event the Company at
any time or from time to time after the applicable 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 (as
set forth in the instrument relating thereto without regard to any anti-
dilution provisions contained therein for a subsequent adjustment of such
number) 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 Stock 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 that Additional Shares of Common Stock shall not be deemed to
have been issued with respect to the Preferred Stock unless the consideration
per share (determined pursuant to Section 4(d)(v) hereof) of such Additional
Shares of Common Stock would be less than the Conversion Price of the
applicable series of Preferred Stock in effect on the date of and
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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
Stock are deemed to be issued:
(1) no further adjustment in the Conversion Price 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;
(2) 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 Company, or decrease in the number of shares of
Common Stock issuable, upon the exercise, conversion or exchange thereof, the
Conversion Price 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;
(3) 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 respective Conversion Price 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:
(A) in the case of Convertible Securities or Options
for Common Stock, the only Additional Shares of Common Stock 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
Company for the issue of all such Options, whether or not exercised, plus the
consideration actually received by the Company upon such exercise, or for the
issue of all such Convertible Securities which were actually converted or
exchanged, plus the additional consideration, if any, actually received by the
Company upon such conversion or exchange, and
(B) 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 Company for the Additional Shares of Common
Stock deemed to have been then issued was the consideration actually received
by the Company for the issue of all such Options, whether or not exercised,
plus the consideration deemed to have been received by the Company upon the
issue of the Convertible Securities with respect to which such Options were
actually exercised;
(4) no readjustment pursuant to clause (2) or (3) above
shall have the effect of increasing the Conversion Price to an amount which
exceeds the lower of (i) the Conversion Price on the original adjustment date,
or (ii) the Conversion Price that would have
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resulted from any issuance (and any other deemed issuance) of Additional
Shares of Common Stock between the original adjustment date and such
readjustment date.
(iv) Adjustment of Conversion Price Upon Issuance of
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Additional Shares of Common Stock. In the event the Company shall issue
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Additional Shares of Common Stock (including Additional Shares of Common Stock
deemed to be issued pursuant to Section 4(d)(iii)) without consideration or
for a consideration per share less than the Series A Conversion Price, the
Series B Conversion Price, the Series C Conversion Price, the Series D
Conversion Price or the Series E Conversion Price in effect on the date of and
immediately prior to such issue, as the case may be, then, and in such event,
the Series A Conversion Price, Series B Conversion Price, the Series C
Conversion Price, the Series D Conversion Price and/or the Series E Conversion
Price, as the case may be, shall be reduced, concurrently with such issue, to
a price (calculated to the nearest cent) determined by multiplying such Series
A Conversion Price, Series B Conversion Price, Series C Conversion Price,
Series D Conversion Price or the Series E Conversion Price, as applicable, 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 Company for the
total number of Additional Shares of Common Stock so issued would purchase at
such Series A Conversion Price, Series B Conversion Price, Series C Conversion
Price, Series D Conversion Price or the Series E Conversion Price, as
applicable, 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 Stock so issued; and provided further that,
for the purposes of this Section 4(d)(iv), all shares of Common Stock issuable
upon conversion of outstanding Options, Convertible Securities and the
Preferred Stock shall be deemed to be outstanding, and immediately after any
Additional Shares of Common Stock are deemed issued pursuant to Section
4(d)(iii), such Additional Shares of Common Stock shall be deemed to be
outstanding.
(v) Determination of Consideration. For purposes of
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this Section 4(d), the consideration received by the Company for the issue of
any Additional Shares of Common Stock shall be computed as follows:
(1) Cash and Property: Such consideration shall:
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(A) insofar as it consists of cash, be
computed at the aggregate amount of cash received by the Company excluding
amounts paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property
other than cash, be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of
Common Stock are issued together with other shares or securities or other
assets of the Company for consideration
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which covers both, be the proportion of such consideration so received,
computed as provided in clauses (A) and (B) above, as determined in good faith
by the Board of Directors.
(2) Options and Convertible Securities. The
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consideration per share received by the Company for Additional Shares of
Common Stock deemed to have been issued pursuant to Section 4(d)(iii),
relating to Options and Convertible Securities, shall be determined by
dividing
(A) the total amount, if any, received or
receivable by the Company as consideration for the issue of such Options or
Convertible Securities, plus the minimum aggregate amount of additional
consideration (as set forth in the instruments relating thereto, without
regard to any anti-dilution provision contained therein for a subsequent
adjustment of such consideration) payable to the Company 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
(B) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard to any
anti-dilution provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities .
(e) Adjustments to Conversion Price for Certain Other Events.
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(i) Adjustments for Subdivisions, Combinations or Consolidation
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of Common Stock. In the event the outstanding shares of Common Stock shall be
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subdivided (by stock split, stock dividend, or otherwise), into a greater
number of shares of Common Stock, the Conversion Price then in effect shall,
concurrently with the effectiveness of such subdivision, be proportionately
decreased. In the event the outstanding shares of Common Stock shall be
combined or consolidated, by reclassification or otherwise, into a lesser
number of shares of Common Stock, the Conversion Price then in effect shall,
concurrently with the effectiveness of such combination or consolidation, be
proportionately increased.
(ii) Adjustments for Other Distributions. In the event the Company
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at any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, any distribution
payable in securities of the Company other than shares of Common Stock and
other than as otherwise adjusted in this Section 4, then and in each such
event provision shall be made so that the holders of Preferred Stock shall
receive upon conversion thereof, in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the Company which they
would have received had their respective Preferred Stock been converted into
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the date of conversion,
retained such securities receivable by
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them as aforesaid during such period, subject to all other adjustments called
for during such period under this Section 4 with respect to the rights of the
holders of the Preferred Stock.
(iii) Adjustments for Reclassification, Exchange and
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Substitution. If the Common Stock issuable upon conversion of the Preferred
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Stock shall be changed into the same or a different number of shares of any
other class or classes of stock, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination of
shares provided for above), the Conversion Price then in effect shall,
concurrently with the effectiveness of such reorganization or
reclassification, be proportionately adjusted such that the respective
Preferred Stock shall be convertible into, in lieu of the number of shares of
Common Stock which the holders would otherwise have been entitled to receive,
a number of shares of such other class or classes of stock equivalent to the
number of shares of Common Stock that would have been subject to receipt by
the holders upon conversion of the Preferred Stock immediately before that
change.
(f) No Impairment. Unless approved in accordance with Section 6(a)
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below, the Company will not, by amendment of its Articles of Incorporation or
through any reorganization, 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 Company, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 4 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 Stock against impairment.
(g) No Fractional Shares and Certificate as to Adjustments.
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(i) No fractional shares shall be issuable upon conversion; and
the number of shares of Common Stock to be issued shall be rounded down to the
nearest whole share. If any fractional interest in a share of Common Stock
would, except for the provisions of this subparagraph (g), be deliverable upon
conversion of the Preferred Stock then being converted by a shareholder, the
Company shall pay to the holders of such converted stock an amount in cash
equal to the current market value of such fractional interest, as determined
in good faith by the Board of Directors.
(ii) Upon the occurrence of each adjustment or readjustment of
the Conversion Price pursuant to this Section 4, the Company, at its expense,
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Preferred Stock a
certificate of its Chief Financial Officer setting forth such adjustment or
readjustment. The Company shall, upon the written request at any time of any
holder of Preferred Stock, furnish or cause to be furnished to such holder a
like certificate setting forth (A) such adjustment and readjustment, (B) the
Conversion Price at the time in effect, and (C) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of Preferred Stock.
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(h) Notices of Record Date. In the event of any taking by the Company
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of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend or
other distribution, any right to subscribe for, purchase or otherwise acquire
any shares of stock of any class or any other securities or property, or to
receive any other right, the Company shall mail to each holder of Preferred
Stock, at least 10 days prior to the date specified therein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend, distribution or right, and the amount and character of such
dividend, distribution or right.
(i) Reservation of Stock Issuable Upon Conversion. The Company shall
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at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of
the shares of the Preferred Stock such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to
effect the conversion of all then outstanding shares of the Preferred Stock,
the Company 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 purpose.
(j) Notices. Any notice required by the provisions of this Section 4
to be given to the holders of shares of Preferred Stock shall be deemed given
three (3) days after deposit in the United States first class, certified or
registered mail, postage prepaid, and addressed to each holder of record at
his address appearing on the books of the Company, or upon receipt if
delivered by courier.
5. Voting Rights.
-------------
(a) Except as otherwise required by law or by Section 6 hereof, the
holder of each share of Common Stock issued and outstanding shall have one
vote and the holder of each share of Preferred Stock shall be entitled to the
number of votes equal to the number of shares of Common Stock into which such
respective share of Preferred Stock could be converted at the record date for
determination of the shareholders entitled to vote on such matters, or, if no
such record date is established, at the date such vote is taken or any written
consent of shareholders is solicited, such votes to be counted together with
all other shares of stock of the Company having general voting power and not
separately as a class. Holders of Common Stock and Preferred Stock shall be
entitled to notice of any shareholders' meeting in accordance with the Bylaws
of the Company. Fractional votes by the holders of Preferred Stock shall not,
however, be permitted and any fractional voting rights shall (after
aggregating all shares into which shares of Preferred Stock held by each
holder could then be converted) be rounded to the nearest whole number.
(b) So long as 500,000 shares of Series C Preferred (as adjusted for
any Recapitalization Event) are outstanding, the holders of the Series C
Preferred, voting as a separate class, shall be entitled to elect one (1)
director. The holders of the Common Stock and the holders of the Preferred,
voting together as a single class, shall be entitled to elect all other
directors. Any
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vacancy in the Board of Directors occurring because of the death, resignation,
or removal of a director elected by the holders of the outstanding class with
voting power entitled to elect him or her shall be filled by the vote or written
consent of the holders of the outstanding class with voting power entitled to
elect him or her or, in the absence of action by such holders, by action of the
remaining directors. A director may be removed with or without cause by the
voter consent of the holders of the outstanding class with voting power entitled
to elect him or her in accordance with the California Corporations Code.
6. Covenants. In addition to any other rights provided by law, the
---------
Company shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than two-thirds (2/3) of the outstanding
shares of Preferred Stock, voting together as a class:
(a) amend or repeal any provision of, or add any provision to, the
Company's Articles of Incorporation if such action would adversely change the
preferences, rights, privileges or powers of, or the restrictions provided for
the benefit of, any Preferred Stock; or
(b) increase the number of authorized shares of Preferred Stock; or
(c) take any action that reclassifies any outstanding shares of this
Company's capital stock into capital stock having, or authorize shares of any
equity security having, any preference or priority superior to or on a parity
with any preference or priority of the Preferred Stock; or
(d) sell, convey, or otherwise dispose of all or substantially all
of its property or business or merge into or consolidate with any other
corporation (other than a wholly-owned subsidiary corporation) or effect any
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of;
(e) effect a recapitalization of the Company.
7. Status of Converted Stock. In case any shares of Preferred Stock
-------------------------
shall be converted pursuant to Section 4 hereof, the shares so converted shall
be canceled and shall not be reissuable.
ARTICLE V
EXISTENCE
---------
The Company is to have perpetual existence.
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ARTICLE VI
BOARD OF DIRECTORS
------------------
1. The management of the business and the conduct of the affairs of the
Company shall be vested in its Board of Directors. The number of directors
which constitute the whole Board of Directors of the Company shall be
designated in the Bylaws of the Company.
2. At such time as a Registration Statement regarding the sale of the
Company's Common Stock to the public is declared effective by the Securities
and Exchange Commission, the Board of Directors shall be divided into three
classes designated as Class I, Class II and Class III, respectively. Directors
shall be assigned to each class in accordance with a resolution or resolutions
adopted by the Board of Directors. At the first annual meeting of stockholders
following the date hereof, the term of office of the Class I directors shall
expire and Class I directors shall be elected for a full term of three years.
At the second annual meeting of stockholders following the date hereof, the
term of office of the Class II directors shall expire and Class II directors
shall be elected for a full term of three years. At the third annual meeting
of stockholders following the date hereof, the term of office of the Class III
directors shall expire and Class III directors shall be elected for a full
term of three years. At each succeeding annual meeting of stockholders,
directors shall be elected for a full term of three years to succeed the
directors of the class whose terms expire at such annual meeting.
3. Notwithstanding the foregoing provisions of this Article, each
director shall serve until his or her successor is duly elected and qualified
or until his or her death, resignation or removal. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.
4. Any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal, or other causes shall be filled by
either (i) the affirmative vote of the holders of a majority of the voting
power of the then-outstanding shares of voting stock of the Company entitled
to vote generally in the election of directors ("Voting Stock") voting
together as a single class; or (ii) by the affirmative vote of a majority of
the remaining directors then in office, even though less than a quorum of the
Board of Directors. Newly created directorships resulting from any increase in
the number of directors shall, unless the Board of Directors determines by
resolution that any such newly created directorship shall be filled by the
stockholders, be filled only by the affirmative vote of the directors then in
office, even though less than a quorum of the Board of Directors. Any director
elected in accordance with the preceding sentence shall hold office for the
remainder of the full term of the class of directors in which the new
directorship was created or the vacancy occurred and until such director's
successor shall have been elected and qualified.
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5. The affirmative vote of sixty-six and two-thirds percent (66-2/3%) of
the voting power of the then outstanding shares of Voting Stock, voting
together as a single class, shall be required for the adoption, amendment or
repeal of the following sections of the corporation's Bylaws by the
stockholders of this Company: 2.2 (Annual Meeting) and 2.3 (Special Meeting).
6. No action shall be taken by the stockholders of the Company except at
an annual or special meeting of the stockholders called in accordance with the
Bylaws.
7. Any director, or the entire Board of Directors, may be removed from
office at any time (i) with cause by the affirmative vote of the holders of at
least a majority of the voting power of all of the then-outstanding shares of
the Voting Stock, voting together as a single class; or (ii) without cause by
the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of all of the then-outstanding shares of
the Voting Stock.
ARTICLE VII
AMENDMENT OF CERTIFICATE OF INCORPORATION
-----------------------------------------
Notwithstanding any other provisions of this Certificate of Incorporation
or any provision of law which might otherwise permit a lesser vote or no vote,
but in addition to any affirmative vote of the holders of any particular class
or series of the Voting Stock required by law, this Certificate of Incorporation
or any Preferred Stock Designation, the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66-2/3%) of the voting power of all of
the then-outstanding shares of the Voting Stock, voting together as a single
class, shall be required to alter, amend or repeal ARTICLE VI or this ARTICLE
VII.
The Company reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, except as provided in this ARTICLE VII, and all
rights conferred upon the stockholders herein are granted subject to this right.
ARTICLE VIII
AMENDMENT OF BYLAWS
-------------------
In furtherance and not in limitation of the powers conferred by statute,
the Board of Directors is expressly authorized to make, alter, amend or repeal
the Bylaws of this Company.
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ARTICLE IX
INDEMNIFICATION
---------------
1. To the fullest extent permitted by the Delaware General Corporation
Law as the same exists or as may hereafter be amended, a director of this
Company shall be indemnified by the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director.
2. The Company shall indemnify to the fullest extent permitted by law
any person made or threatened to be made a party to an action or proceeding,
whether criminal, civil, administrative or investigative, by reason of the
fact that he, his testator or intestate is or was a director or officer of the
Company or any predecessor of the Company or serves or served at any other
enterprise as a director or officer at the request of the Company or any
predecessor to the Company and the Company may indemnify any other employee or
agent.
3. Neither any amendment nor repeal of this Article IX, nor the adoption
of any provision of this Company's Certificate of Incorporation inconsistent
with this Article IX, shall eliminate or reduce the effect of this Article IX,
in respect of any matter occurring, or any action or proceeding accruing or
arising or that, but for this Article IX, would accrue or arise, prior to such
amendment, repeal or adoption of an inconsistent provision.
ARTICLE X
MEETING OF STOCKHOLDERS
-----------------------
Meetings of stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Company may be kept
(subject to any provision contained in the statutes) outside of 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 Company.
ARTICLE XI
STOCKHOLDER NOTICES
-------------------
Advance notice of new business and stockholder nominations for the
election of directors shall be given in the manner and to the extent provided
in the Bylaws of the Company.
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ARTICLE XII
CUMULATIVE NOTING
-----------------
Until a Registration Statement regarding the sale of the Company's Common
Stock to the public is declared effective by the Securities and Exchange
Commission, stockholders shall be entitled to cumulative voting rights as set
forth in this Article XII and the Bylaws of the Company. At all elections of
directors of the Company, each holder of stock or of any class or classes or of
a series or series thereof shall be entitled to as many votes as shall equal the
number of votes which (except for this provision as to cumulative voting) such
stockholder would be entitled to cast for the election of directors with respect
to such stockholder's shares of stock multiplied by the number of directors to
be elected, and such stockholder may cast all of such votes for a single
director or may distribute them among the number of directors to be voted for,
or for any two or more of them as such stockholder may see fit. As of the date
that a Registration Statement regarding the sale of the Company's Common Stock
to the public is declared effective by the Securities and Exchange Commission,
this Article XII shall no longer be effective and may be deleted herefrom upon
any restatement of this Certificate of Incorporation."
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The undersigned certifies under penalty of perjury that the foregoing
Restated Certificate of Incorporation of GoDigital Networks Corporation is the
act and deed of this corporation and that the statements therein are true.
IN WITNESS WHEREOF, the Board of Directors of the Company has caused
this Restated Certificate of Incorporation to be signed by Dennis Haar, its
President and Chief Executive Officer, effective as of December 20, 1999.
GODIGITAL NETWORKS CORPORATION
By: /s/ DENNIS HAAR
--------------------
Dennis Haar
President and
Chief Executive Officer
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