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Sample Business ContractsHome: Sample Business Contracts:
CERTIFICATE OF INCORPORATION
OF
IMAGINEX, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter the "Corporation")
is Imaginex, Inc.
SECOND: The address, including street, number, city and county, of
the registered office of the Corporation in the State of Delaware is Corporation
Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
The name of the registered agent of the Corporation in the State of Delaware at
such address is The Corporation Trust Company.
THIRD: The nature of the business and the purposes to be conducted
and promoted by the Corporation, which shall be in addition to the authority of
the Corporation to conduct any lawful business, to promote any lawful purpose,
and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of Delaware, are as
follows:
To purchase, receive, take by grant, gift, devise, boquest, or otherwise,
lease, or otherwise acquire, own, hold, improve, employ, use, and otherwise deal
in and with real or personal property, or any interest therein, wherever
situated, and to sell, convey, lease, exchange, transfer, or otherwise dispose
of, or mortgage or pledge, all or any of its property and assets, or any
interest therein, wherever situated.
To engage generally in the real estate business as principal, agent,
broker, and in any lawful capacity, and generally to take, lease, purchase,
or otherwise acquire, and to own, use, hold, sell, convey, exchange, lease,
mortgage, work, clear, improve, develop, divide, and otherwise handle, manage,
operate, deal in, and dispose of real estate, real property, lands,
multiple-dwelling structures, houses, buildings, and other works, and any
interest or right therein; to take, lease, purchase, or otherwise acquire, and
to own, use, hold sell, convey, exchange, hire lease, pledge, mortgage, and
otherwise handle, and deal in and dispose of, as principal, agent, broker, and
in any lawful capacity, such personal property, chattels, chattels real, rights,
easements, privileges, chooses in action, notes, bonds, mortgages and securities
as may lawfully be acquired, held, or disposed of; and to acquire, purchase,
sell, assign, transfer, dispose of, and generally deal in and with as principal,
agent, broker, and in any lawful capacity, mortgages and other interests in
real, personal, and mixed properties; to carry on a general construction,
contracting, building, and realty management business as principal, agent,
representative, contractor, subcontractor, and in any other lawful capacity.
<PAGE> 2
To carry on a general mercantile, industrial, investing, and trading
business in all its branches; to devise, invent, manufacture, fabricate,
assemble, install, service, maintain, alter, buy, sell, import, export, license
as licensor or licensee, lease as lessor or lessee, distribute, job, enter into,
negotiate, execute, acquire, and assign contracts in respect of, acquire,
receive, grant, and assign licensing arrangements, options, franchises, and
other rights in respect of, and generally deal in and with, at wholesale and
retail, as principal, and as sales, business, special or general agent,
representative, broker, factor, merchant, distributor, jobber, advisor, and in
any other lawful capacity, goods, wares, merchandise, commodities, and
unimproved, improved, finished, processed, and other real, personal, and mixed
property of any and all kinds, together with the components, resultants, and
by-products thereof.
To apply for, register, obtain, purchase, lease, take licenses in respect
of or otherwise acquire, and to hold, own, use, operate, develop, enjoy, turn to
account, grant licenses and immunities in respect of, manufacture under and to
introduce, sell, assign, mortgage, pledge, or otherwise dispose of, and, in any
manner deal with and contract with reference to:
(a) inventions, devices, formulae, processes, and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade names,
trade symbols, and other indications of origin and ownership
granted by or recognized under the laws of the United States of
America, the District of Columbia, any state or subdivision
thereof, and any commonwealth, territory, possession, dependency,
colony, agency or instrumentality of the United States of America
and of any foreign country, and all rights connected therewith or
appertaining thereunto;
(c) franchises, licenses, grants, and concessions.
To guarantee, purchase, take, receive, subscribe for, and otherwise
acquire, own, hold, use, and otherwise employ, sell, lease, exchange, transfer,
and otherwise dispose of, mortgage, lend, pledge, and otherwise deal in and
with, securities (which term, for the purpose of this Article THIRD, includes,
without limitation of the generality thereof, any shares of stock, bonds,
debentures, notes, mortgages, other obligations, and any certificates,
receipts, or other instruments representing rights to receive, purchase, or
subscribe for the same, or representing any other rights or interests therein
or in any property or assets) of any persons, domestic and foreign firms,
associations, and corporations, and of any government or agency or
instrumentality thereof; to make payment therefor in any lawful manner, and,
while owner of any such securities, to exercise any and all rights, powers and
privileges in respect thereof, including the right to vote.
To make, enter into, perform, and carry out contracts of every kind and
description with any person, firm, association, corporation, or government or
agency or instrumentality thereof.
To acquire by purchase, exchange, or otherwise, all, or any part of, or
any interest in, the properties, assets, business, and good will of any one or
more persons, firms, associations, or
<PAGE> 3
corporations heretofore or hereafter engaged in any business for which a
corporation may now or hereafter be organized under the laws of the State of
Delaware; to pay for the same in cash, property, or its own or other securities;
to hold, operate, reorganize, liquidate, sell, or in any mannor dispose of the
whole or any part thereof, and in connection therewith, to assume or guarantee
performance of any liabilities, obligations, or contracts of such persons,
firms, associations, or corporations, and to conduct the whole or any part of
any business thus acquired.
To lend money in furtherance of its corporate purposes and to invest and
reinvest its funds from time to time to such extent, to such persons, firms,
associations, corporations, governments or agencies or instrumentalities
thereof, and on such terms and on such security, if any, as the Board of
Directors of the Corporation may determine.
To make contracts of guaranty and suretyship of all kinds and endorse or
grarantee the payment of principal, interest, or dividentds upon, and to
guarantee the performance of sinking fund or other obligations of, any
securities, and to guarantee in any way permitted by law the performance of any
of the contracts or other undertakings in which the Corporation may otherwise
be or become interested, of any person, firm, association, corporation,
government or agency or instrumentality thereof, or of any other combination,
organization, or entity whatsoever.
To borrow money without limit as to amount and at such rates of interest
as it may determine; from time to time to issue and sell its own securities,
including its shares of stock, notes, bonds, debentures, and other obligations,
in such amounts, on such terms and conditions, for such purposes and for such
prices, now or hereafter permitted by the laws of the State of Delaware and by
this Certificate of Incorporation, as the Board of Directors of the Corporation
may determine; and to secure any of its obligations by mortgage, pledge, or
other encumbrance of all of any of its property, franchises, and income.
To be a promoter or manager of other corporations of any type or kind;
and to participate with others in any corporation, partnership, limited
partnership, joint venture, or other association of any kind, or in any
transaction, undertaking, or arrangement which the Corporation would have power
to conduct by itself, whether or not such participation involves sharing or
delegation of control with or to others.
To draw, make, accept, endorse, discount, execute, and issue promissory
notes, drafts, bills of exchange, warrants, bonds, debentures, and other
negotiable or transferable instruments and evidences of indebtedness whether
secured by mortgage or otherwise, as well as to secure the same by mortgage or
otherwise, so far as may be permitted by the laws of the State of Delaware.
To purchase, receive, take, reacquire, or otherwise acquire, own and
hold, sell, lend, exchange, reissue, transfer, or otherwise dispose of, pledge,
use, cancel, and otherwise deal in and with its own shares and its other
securities from time to time to such an extent and in such manner and upon such
terms as the Board of Directors of the Corporation shall determine; provided
that the Corporation shall not use its funds or property for the purchase of its
own shares of capital stock when its capital is impaired or when such use would
cause any impairment of its capital, except to the extent permitted by law.
<PAGE> 4
To organize, as an incorporator, or cause to be organized under the laws
of the State of Delaware, or of any other State of the United States of
America, or of the District of Columbia, or of any commonwealth, territory,
colony, possession, agency, or instrumentality of the United States of America,
or of any foreign country, a corporation or corporations for the purpose of
conducting and promoting any business or purpose for which corporations may be
organized, and to dissolve, wind up, liquidate, merge, or consolidate any such
corporation or corporations or to cause the name to be dissolved, wound up,
liquidated, merged, or consolidated.
To conduct its business, promote its purposes, and carry on its
operations in any and all of its branches and maintain offices both within and
without the State of Delaware, in any and all States of the United States of
America, in the District of Columbia, and in any or all commonwealths,
territories, dependencies, colonies, possessions, agencies, or
instrumentalities of the United States of America and of foreign governments.
To promote and exercise all or any part of the foregoing purposes and
powers in any and all parts of the world, and to conduct its business in all or
any of its branches as principal, agent, broker, factor, contractor, and in any
other lawful capacity, either alone or through or in conjunction with any
corporations, associations, partnerships, firms, trustees, syndicates,
individuals, organizations, and other entities in any part of the world, to
make and perform any contracts and to do any acts and things, and to carry on
any business, and to exercise any powers and privileges suitable, convenient,
or proper for the conduct, promotion, and attainment of any of the business and
purposes herein specified or which at any time may be incidental thereto or may
appear conducive to or expedient for the accomplishment of any of such business
and purposes and which might be engaged in or carried on by a corporation
incorporated or organized under the General Corporation Law of the State of
Delaware, and to have and exercise all of the powers conferred by the laws of
the State of Delaware upon corporations incorporated or organized under the
General Corporation Law of the State of Delaware.
The foregoing provisions of this Article THIRD shall be construed both as
purposes and powers and each as an independent purpose and power. The foregoing
enumeration of specific purposes and powers shall not be held to limit or
restrict in any manner the purposes and powers of the Corporation, and the
purposes and powers herein specified shall, except when otherwise provided in
this Article THIRD, be in no wise limited or restricted by reference to, or
inference from, the terms of any provisions of this or any Article of this
Certificate of Incorporation; provided, that the Corporation shall not conduct
any business, promote any purpose, or exercise any power or privilege within or
without the State of Delaware which, under the laws thereof, the Corporation may
not lawfully conduct, promote, or exercise.
FOURTH: The Corporation shall be authorized to issue Twenty-two
Million (22,000,000) shares of capital stock with $0.01 (one penny) par value
per share, in two classes. The total amount of authorized common stock of the
Corporation is Twenty Million (20,000,000) shares having $0.01 (one penny) par
value per share. The total amount of authorized preferred stock of the
Corporation is Two Million (2,000,000) shares having $0.01 (one penny) par
value per share.
<PAGE> 5
FIFTH: The name and the mailing address of the incorporator are as
follows:
Name Mailing Address
---- ---------------
Gregory P. Cirillo, Esquire Galland, Kharasch, et al.
Canal Square
1054 Thirty-First Street, N.W.
Second Floor
Washington, D.C. 20007-4492
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of Title 8
of the Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
EIGHTH:
1. For the management of the business and for the conduct of the
affairs of the Corporation, and in further definition, limitation, and
regulation of the powers of the Corporation and of its directors and of its
stockholders or any class thereof, as the case may be, it is further provided:
a. The management of the business and the conduct of the
affairs of the Corporation shall be vested in its Board of Directors.
The number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the Bylaws.
The phrase "whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total number of
directors which the Corporation would have if there were no vacancies.
No election of directors need be by written ballot.
b. The name and address of the person who shall serve as the
initial director constituting the whole Board of Directors of the
Corporation until the first annual meeting
<PAGE> 6
Delaware at the time in force may be added or inserted in the manner and at the
time prescribed by said laws, and all rights at any time conferred upon the
stockholders of the Corporation by this Certificate of Incorporation are
granted subject to the provisions of this Article ELEVENTH.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Incorporation on this 30th day of July, 1996.
/s/ GREGORY P. CARILLO
-----------------------------
Gregory P. Carillo, Esquire
Incorporator
<PAGE> 7
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 04:00 PM 10/22/1996
960307115 - 2650098
AMENDMENT OF CERTIFICATE OF INCORPORATION
OF
IMAGINEX, INC.
BEFORE RECEIPT OF PAYMENT FOR STOCK
The undersigned, a natural person, for the purpose of amending the
Certificate of Incorporation of Imaginex, Inc. (hereinafter the "Corporation")
under the provisions and subject to the requirements of the laws of the State
of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the acts
amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the Corporation is changed to EMAGINET, INC.
SECOND: The Corporation has not received any payment for any of
its stock.
THIRD: This Amendment of the Certificate of Incorporation has
been duly adopted in accordance with the provisions of
Section 341 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Amendment of the
Certificate of Incorporation on this 8th day of October, 1996, and has
acknowledged under penalty of perjury that this instrument is the act and deed
of the Corporation and that the facts stated herein are true.
/s/ KARARAN AMJADIR
----------------------------------------
Kararan Amjadir
Initial Director (constituting the whole
Board of Directors of the Corporation)
<PAGE> 8
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
EMAGINET, INC.
Pursuant to Section 242
of the General Corporation Law of
the State of Delaware
Emaginet, Inc. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution
was duly adopted, pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth an amendment to the Certificate of
Incorporation of the Corporation and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed amendment by
written consent in accordance with Sections 228 and 242 of the General
Corporation Law of the State of Delaware, and written notice of such consent has
been given to all stockholders who have not consented in writing to said
amendment. The resolution setting forth the amendment is as follows:
RESOLVED: That Article FOURTH of the Certificate of Incorporation of the
Corporation be and hereby is deleted in its entirety and the following Article
FOURTH is inserted in lieu thereof:
<PAGE> 9
FOURTH: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is (i) 22,000,000 shares of Common
Stock, $0.01 par value per share ("Common Stock") and (ii) 2,000,000 shares of
Preferred Stock, $0.01 par value per share ("Preferred Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the
holders of the Common Stock are subject to and qualified by the rights of the
holders of the Preferred Stock of any series as may be designated by the Board
of Directors upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock are entitled to one vote
for each share held at all meetings of stockholders (and written actions in lieu
of meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote, irrespective of the provisions of Section 242(b)
(2) of the General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the
Corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive all assets of the Corporation available for distribution to
its stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of
-2-
<PAGE> 10
the Corporation as hereinafter provided. Any shares of Preferred Stock which may
be redeemed, purchased or acquired by the Corporation may be reissued except as
otherwise provided by law. Different series of Preferred Stock shall not be
construed to constitute different classes of shares for the purposes of voting
by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from time
to time to issue the Preferred Stock in one or more series, and in connection
with the creation of any such series, by resolution or resolutions providing for
the issue of the shares thereof, to determine and fix such voting powers, full
or limited, or no voting powers, and such designations, preferences and relative
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, including without limitation thereof, dividend rights,
special voting rights, conversion rights, redemption privileges and liquidation
preferences, as shall be stated and expressed in such resolutions, all to the
full extent now or hereafter permitted by the General Corporation Law of
Delaware. Without limiting the generality of the foregoing, the resolutions
providing for issuance of any series of Preferred Stock may provide that such
series shall be superior or rank equally or be junior to the Preferred Stock of
any other series to the extent permitted by law. Except as otherwise
specifically provided in this Certificate of Incorporation, no vote of the
holders of the Preferred Stock or Common Stock shall be a prerequisite to the
issuance of any shares of any series of the Preferred Stock authorized by and
complying with the conditions of this Certificate of Incorporation, the right
to have such vote being expressly waived by all present and future holders of
the capital stock of the Corporation.
C. SERIES A CONVERTIBLE PREFERRED STOCK.
One Million Five Hundred Thousand (1,500,000) shares of the authorized
and unissued Preferred Stock of the Corporation are hereby designated "Series A
Convertible Preferred Stock" (the "Series A Preferred Stock") with the
following rights, preferences, powers, privileges and restrictions,
qualifications and limitations.
1. Dividends.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, out of funds legally available therefor, dividends of
$0.225 per share per annum (subject to appropriate adjustment in the event of
any stock dividend, stock split, combination or other similar recapitalization
affecting
-3-
<PAGE> 11
such shares), payable when and as declared by the Board of Directors of the
Corporation and payable in the discretion of the Board of Directors of the
Corporation in either cash or, based on the then fair market value of the Common
Stock of the Corporation, Common Stock of the Corporation. Such dividends shall
accrue and shall be cumulative from the date of issuance of each share of Series
A Preferred Stock, whether or not declared.
(b) The Corporation shall not declare or pay any distributions
(as defined below) on shares of Common Stock until the holders of the Series A
Preferred Stock then outstanding shall have first received a distribution at the
rate specified in paragraph (a) of this Section 1.
(c) For purposes of this Section 1, unless the context requires
otherwise, "distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable other than in
Common Stock or other securities of the Corporation, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase at a price equal to the original issue price of such shares and
other than redemptions in liquidation or dissolution of the Corporation) for
cash or property, including any such transfer, purchase or redemption by a
subsidiary of this Corporation.
2. Liquidation, Dissolution or Winding Up; Certain Mergers,
Consolidations and Asset Sales.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, after and
subject to the payment in full of all amounts required to be distributed to the
holders of any other class or series of stock of the Corporation ranking on
liquidation prior and in preference to the Series A Preferred Stock
(collectively referred to as "Senior Preferred Stock"), but before any payment
shall be made to the holders of Common Stock or any other class or series of
stock ranking on liquidation junior to the Series A Preferred Stock (such Common
Stock and other stock being collectively referred to as "Junior Stock") by
reason of their ownership thereof, an amount equal to $4.50 per share (subject
to appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares), plus any
dividends declared but unpaid thereon and any accrued but unpaid
-4-
<PAGE> 12
dividends thereon. If upon any such liquidation, dissolution or winding up of
the Corporation the remaining assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders of
shares of Series A Preferred Stock the full amount to which they shall be
entitled, the holders of shares of Series A Preferred Stock and any class or
series of stock ranking on liquidation on a parity with the Series A Preferred
Stock shall share ratably in any distribution of the remaining assets and funds
of the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock, Series A Preferred Stock and
any other class or series of stock of the Corporation ranking on liquidation on
a parity with the Series A Preferred Stock, upon the dissolution, liquidation or
winding up of the Corporation, the holders of shares of Junior Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders.
(c) A consolidation or merger of the Corporation with or into
another corporation or entity, or a sale of all or substantially all of the
assets of the Corporation, shall not be regarded as a liquidation, dissolution
or winding up of the Corporation within the meaning of this Section 2.
3. Voting.
(a) Each holder of outstanding shares of Series A Preferred
Stock shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which the shares of Series A Preferred Stock held by
such holder are then convertible (as adjusted from time to time pursuant to
Section 4 hereof), at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to any and all
matters presented to the stockholders of the Corporation for their action or
consideration. Except as provided by law, by the provisions of Subsection 3(b)
below or by the provisions establishing any other series of Series Preferred
Stock, holders of Series A Preferred Stock and of any other outstanding series
of Series Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series A Preferred Stock so
as to affect adversely the Series A Preferred
-5-
<PAGE> 13
of the shareholders or until his successors are elected and qualify is
Kamran Amjadi, Three Bethesda Metro Center, Suite 700, Bethesda,
Montgomery County, Maryland 20814.
c. The incorporator of the Corporation shall have and may
exercise the rights and powers and shall perform the duties vested in or
required by him by the General Corporation Law of the State of Delaware
and by this Certificate of Incorporation and when said duties have been
performed, said incorporator shall cease to have any interest in the
Corporation.
2. After the original or other Bylaws of the Corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
Delaware, and after the Corporation has received any payment for any of its
stock, the power to adopt, amend, or repeal the Bylaws of the Corporation may
be exercised by the Board of Directors of the Corporation; provided, however,
that any provision for the classification of directors of the Corporation for
staggered terms pursuant to the provisions of subsection (d) of Section 141 of
the General Corporation Law of the State of Delaware shall be set forth in an
initial Bylaw or in a Bylaw adopted by the stockholders entitled to vote of the
Corporation unless provisions for such classification shall be set forth in
this Certificate of Incorporation.
3. Whenever the Corporation shall be authorized to issue only one
class of stock, each outstanding share shall entitle the holder thereof to
notice of and the right to vote at, any meeting of stockholders. Whenever the
Corporation shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting power under the
provisions of the Certificate of Incorporation shall entitle the holder thereof
to the right to vote at any meeting of stockholders except as the provisions of
paragraph (2) of subsection (b) of Section 242 of the General Corporation Law
of the State of Delaware shall otherwise require; provided, that no share of
any such class which is otherwise denied voting power shall entitle the
holder thereof to vote upon the increase or decrease in the number of authorized
shares of said class.
NINTH: The personal liability of the directors of the Corporation
is hereby eliminated to the fullest extent permitted by the provisions of
paragraph (7) of subsection (h) of Section 102 of the General Corporation Law
of the State of Delaware, as the same may be amended and supplemented.
TENTH: The Corporation shall, to the fullest extent permitted by
the provisions of Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities, or other matters referred to
in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any Bylaw, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee, or agent and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
ELEVENTH: From time to time any of the provisions of this Certificate
of Incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of
<PAGE> 14
Stock, without the written consent or affirmative vote of the holders of a
majority of the then outstanding shares of Series A Preferred Stock, given in
writing or by vote at a meeting, consenting or voting (as the case may be)
separately as a class. For this purpose, without limiting the generality of the
foregoing, the authorization of any shares of capital stock with preference or
priority over the Series A Preferred Stock as to the right to receive either
dividends or amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series A Preferred
Stock, and the authorization of any shares of capital stock on a parity with
Series A Preferred Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the Corporation
shall not be deemed to affect adversely the Series A Preferred Stock. The
number of authorized shares of Series A Preferred Stock may be increased or
decreased (but not below the number of shares then outstanding) by the
directors of the Corporation pursuant to Section 151 of the General Corporation
Law of Delaware or by the affirmative vote of the holders of a majority of the
then outstanding shares of the Common Stock, Series A Preferred Stock and all
other classes or series of stock of the Corporation entitled to vote thereon,
voting as a single class, irrespective of the provisions of Section 242(b)(2)
of the General Corporation Law of Delaware.
4. Optional Conversion. The holders of the Series A Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing $4.50 by the Conversion Price (as defined
below) in effect at the time of conversion. The "Conversion Price" shall
initially be $4.50. Such initial Conversion Price, and the rate at which shares
of Series A Preferred Stock may be converted into shares of Common Stock, shall
be subject to adjustment as provided below.
In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series A Preferred Stock.
(b) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred
-6-
<PAGE> 15
Stock. In lieu of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction multiplied by
the then effective Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred Stock to
convert shares of Series A Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of
Series A Preferred Stock, at the office of the transfer agent for the Series A
Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice
that such holder elects to convert all or any number of the shares of the
Series A Preferred Stock represented by such certificate or certificates. Such
notice shall state such holder's name or the names of the nominees in which such
holder wishes the certificate or certificates for shares of Common Stock to be
issued. If required by the Corporation, certificates surrendered for conversion
shall be endorsed or accompanied by a written instrument or instruments of
transfer, in form satisfactory to the Corporation, duly executed by the
registered holder or his or its attorney duly authorized in writing. The date
of receipt of such certificates and notice by the transfer agent (or by the
Corporation if the Corporation serves as its own transfer agent) shall be the
conversion date ("Conversion Date"). The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to such
holder of Series A Preferred Stock, or to his or its nominees, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall be entitled, together with cash in lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series A Preferred Stock, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding Series A Preferred Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock issuable upon conversion of the Series A
Preferred Stock, the Corporation will take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Common Stock
at such adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared but unpaid
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<PAGE> 16
dividends or any accrued but unpaid dividends on the Series A Preferred Stock
surrendered for conversion or on the Common Stock delivered upon conversion.
(iv) All shares of Series A Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall immediately cease and
terminate on the Conversion Date, except only the right of the holders thereof
to receive shares of Common Stock in exchange therefor and payment of any
dividends declared but unpaid thereon. Any shares of Series A Preferred Stock
so converted shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to time
take such appropriate action as may be necessary to reduce the authorized
Series A Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issuance or delivery of
shares of Common Stock upon conversion of shares of Series A Preferred Stock
pursuant to this Section 4. The Corporation shall not, however, be required to
pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of shares of Common Stock in a name other than that in
which the shares of Series A Preferred Stock so converted were registered, and
no such issuance or delivery shall be made unless and until the person or
entity requesting such issuance has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue
Date effect a subdivision of the outstanding Common Stock, the Conversion Price
then in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
date on which a share of Series A Preferred Stock was first issued (the
"Original Issue Date") combine the outstanding shares of Common Stock, the
Conversion Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this paragraph shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger,
-8-
<PAGE> 17
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 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 Series A Preferred Stock against
impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series A Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock, furnish or cause to be furnished
to such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of Series A Preferred Stock.
(g) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in
Common Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination
of its outstanding shares of Common Stock or a stock
dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or
with another corporation, or of the sale of all or
substantially all of the assets of the Corporation;
or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
-9-
<PAGE> 18
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Series A Preferred Stock, and shall cause to
be mailed to the holders of the Series A Preferred Stock at their last addresses
as shown on the records of the Corporation or such transfer agent, at least ten
days prior to the date specified in (A) below or twenty days before the date
specified in (B) below, a notice stating
(A) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined, or
(B) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
5. Mandatory Conversion.
(a) Upon the closing of the sale of shares of Common Stock, at
a price of at least $10.00 per share (subject to appropriate adjustment for
stock splits, stock dividends, combinations and other similar recapitalizations
affecting such shares), in a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, resulting in at least $10,000,000 of gross proceeds to the
Corporation or on the date that is immediately prior the consolidation or merger
of the Corporation with or into another corporation or entity or the sale of all
or substantially all of the assets of the Corporation (the first of such dates
to occur being the "Mandatory Conversion Date"), (i) all outstanding shares of
Series A Preferred Stock shall automatically be converted into shares of Common
Stock, at the then effective conversion rate and (ii) the number of authorized
shares of Preferred Stock shall be automatically reduced by the number of shares
of Preferred Stock that had been designated as Series A Preferred Stock, and all
provisions included under the caption "Series A Convertible Preferred Stock",
and all references to the Series A Preferred Stock, shall be deleted and shall
be of no further force or effect.
-10-
<PAGE> 19
(b) All holders of record of shares of Series A Preferred Stock
shall be given written notice of the Mandatory Conversion Date and the place
designated for mandatory conversion of all such shares of Series A Preferred
Stock pursuant to this Section 5. Such notice need not be given in advance of
the occurrence of the Mandatory Conversion Date. Such notice shall be sent by
first class or registered mail, postage prepaid, to each record holder of Series
A Preferred Stock at such holder's address last shown on the records of the
transfer agent for the Series A Preferred Stock (or the records of the
Corporation, if it serves as its own transfer agent). Upon receipt of such
notice, each holder of shares of Series A Preferred Stock shall surrender his or
its certificate or certificates for all such shares to the Corporation at the
place designated in such notice, and shall thereafter receive certificates for
the number of shares of Common Stock to which such holder is entitled pursuant
to this Section 5. On the Mandatory Conversion Date, all rights with respect to
the Series A Preferred Stock so converted, including the rights, if any, to
receive notices and vote (other than as a holder of Common Stock) will
terminate, except only the rights of the holders thereof, upon surrender of
their certificate or certificates therefor, to receive certificates for the
number of shares of Common Stock into which such Series A Preferred Stock has
been converted, and payment of any declared but unpaid dividends thereon. If so
required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
by his or its attorney duly authorized in writing. As soon as practicable after
the Mandatory Conversion Date and the surrender of the certificate or
certificates for Series A Preferred Stock, the Corporation shall cause to be
issued and delivered to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and cash as
provided in Subsection 4(b) in respect of any fraction of a share of Common
Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of Series A Preferred
Stock which are required to be surrendered for conversion in accordance with the
provisions hereof shall, from and after the Mandatory Conversion Date, be deemed
to have been retired and cancelled and the shares of Series A Preferred Stock
represented thereby converted into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. The Corporation may thereafter take such
appropriate action (without
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<PAGE> 20
the need for stockholder action) as may be necessary to reduce the authorized
Series A Preferred Stock accordingly.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its President
and attested by its Secretary this 19th day of June, 1997.
EMAGINET, INC.
By: /s/ KAMRAN AMJADI
-----------------------------
PRESIDENT
Kamran Amjadi
ATTEST:
MEHRDAD AKHAVAN
----------------------
SECRETARY
Mehrdad Akhavan
[CORPORATE SEAL]
<PAGE> 21
CORRECTED CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
EMAGINET, INC.
Pursuant to Section 103
of the General Corporation Law of
the State of Delaware
---------------------------------
Emaginet, Inc. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution
was duly adopted, pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth an amendment to the Certificate of
Incorporation of the Corporation and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed amendment by
written consent in accordance with Sections 228 and 242 of the General
Corporation Law of the State of Delaware, and written notice of such consent
has been given to all stockholders who have not consented in writing to said
amendment. The Certificate of Amendment filed on June 20, 1997 with respect to
such amendment was incorrect in setting forth the number shares of Common Stock
the Corporation shall have authority to issue and the number of Preferred
shares to be designated Series A Convertible Preferred
<PAGE> 22
Shares. Attached hereto is the corrected Certificate of Amendment in its
entirety.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Corrected Certificate of Amendment to be signed by its
President and attested by its Secretary this 29th day of August, 1997.
EMAGINET, INC.
By: /s/ KAMRAN AMJADI
-----------------------------
Kamran Amjadi, President
ATTEST:
/s/ MEHRDAD AKHAVAN
-----------------------------
Mehrdad Akhavan, Secretary
[CORPORATE SEAL]
-2-
<PAGE> 23
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
EMAGINET, INC.
Pursuant to Section 242
of the General Corporation Law of
the state of Delaware
----------------------------------
Emaginet, Inc. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution
was duly adopted, pursuant to Section 242 of the General Corporation Law
of the State of Delaware, setting forth an amendment to the Certificate of
Incorporation of the Corporation and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed amendment by
written consent in accordance with Sections 228 and 242 of the General
Corporation Law of the State of Delaware, and written notice of such consent has
been given to all stockholders who have not consented in writing to said
amendment. The resolution setting forth the amendment is as follows:
RESOLVED: That Article FOURTH of the Certificate of Incorporation of the
Corporation be and hereby is deleted in its entirety and the following Article
FOURTH is inserted in lieu thereof:
<PAGE> 24
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is (i) 20,000,000 shares of Common
Stock, $0.01 par value per share ("Common Stock") and (ii) 2,000,000 shares of
Preferred Stock, $0.01 par value per share ("Preferred Stock").
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the
holders of the Common Stock are subject to and qualified by the rights of the
holders of the Preferred Stock of any series as may be designated by the Board
of Directors upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock are entitled to one vote
for each share held at all meetings of stockholders (and written actions in
lieu of meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefor as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the
Corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive all assets of the Corporation available for distribution to
its stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of
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<PAGE> 25
the Corporation as hereinafter provided. Any shares of Preferred Stock which may
be redeemed purchased or acquired by the Corporation may be reissued except
as otherwise provided by law. Different series of Preferred Stock shall not be
construed to constitute different classes of shares for the purposes of voting
by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from time
to time to issue the Preferred Stock in one or more series, and in connection
with the creation of any such series, by resolution or resolutions providing for
the issue of the shares thereof, to determine and fix such voting powers, full
or limited, or no voting powers, and such designations, preferences and relative
participating, optional or other special rights, and qualifications,
limitations or restrictions thereof, including without limitation thereof,
dividend rights, special voting rights, conversion rights, redemption privileges
and liquidation preferences, as shall be stated and expressed in such
resolutions, all to the full extent now or hereafter permitted by the General
Corporation Law of Delaware. Without limiting the generality of the foregoing,
the resolutions providing for issuance of any series of Preferred Stock may
provide that such series shall be superior or rank equally or be junior to the
Preferred Stock of any other series to the extent permitted by law. Except as
otherwise specifically provided in this Certificate of Incorporation, no vote of
the holders of the Preferred Stock or Common Stock shall be a prerequisite to
the issuance of any shares of any series of the Preferred Stock authorized by
and complying with the conditions of this Certificate of Incorporation, the
right to have such vote being expressly waived by all present and future
holders of the capital stock of the Corporation.
C. SERIES A CONVERTIBLE PREFERRED STOCK.
One Million Seven Hundred Thousand (1,700,000) shares of the authorized
and unissued Preferred Stock of the Corporation are hereby designated "Series A
Convertible Preferred Stock" (the "Series A Preferred Stock") with the following
rights, preferences, powers, privileges and restrictions, qualifications and
limitations.
1. Dividends.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, out of funds legally available therefor, dividends of
$0.225 per share per annum (subject to appropriate adjustment in the event of
any stock dividend, stock split, combination or other similar recapitalization
affecting
-3-
<PAGE> 26
such shares), payable when and as declared by the Board of Directors of the
Corporation and payable in the discretion of the Board of Directors of the
Corporation in either cash or, based on the then fair market value of the Common
Stock of the Corporation, Common Stock of the Corporation. Such dividends shall
accrue and shall be cumulative from the date of issuance of each share of
Series A Preferred Stock, whether or not declared,
(b) The Corporation shall not declare or pay any distributions
(as defined below) on shares of Common Stock until the holders of the Series A
Preferred Stock then outstanding shall have first received a distribution at the
rate specified in paragraph (a) of this Section 1.
(c) For purposes of this Section 1, unless the context requires
otherwise, "distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable other than in
Common Stock or other securities of the Corporation, or the purchase or
redemption of shares of the Corporation (other than repurchases of Common Stock
held by employees or directors of, or consultants to, the Corporation upon
termination of their employment or services pursuant to agreements providing for
such repurchase at a price equal to the original issue price of such shares and
other than redemptions in liquidation or dissolution of the Corporation) for
cash or property, including any such transfer, purchase or redemption by a
subsidiary of this Corporation.
2. Liquidation, Dissolution or Winding Up; Certain Mergers,
Consolidations and Asset Sales.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Corporation available for distribution to its stockholders, after and
subject to the payment in full of all amounts required to be distributed to the
holders of any other class or series of stock of the Corporation ranking on
liquidation prior and in preference to the Series A Preferred Stock
(collectively referred to as "Senior Preferred Stock"), but before any payment
shall be made to the holders of Common Stock or any other class or series of
stock ranking on liquidation junior to the Series A Preferred Stock (such Common
Stock and other stock being collectively referred to as "Junior Stock") by
reason of their ownership thereof, an amount equal to $4.50 per share (subject
to appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares), plus any
dividends declared but unpaid thereon and any accrued but unpaid
-4-
<PAGE> 27
dividends thereon. If upon any such liquidation, dissolution or winding up of
the Corporation the remaining assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders of
shares of Series A Preferred Stock the full amount to which they shall be
entitled, the holders of shares of Series A Preferred Stock and any class or
series of stock ranking on liquidation on a parity with the Series A Preferred
Stock shall share ratably in any distribution of the remaining assets and funds
of the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of Senior Preferred Stock, Series A Preferred Stock and
any other class or series of stock of the Corporation ranking on liquidation on
a parity with the Series A Preferred Stock, upon the dissolution, liquidation or
winding up of the Corporation, the holders of shares of Junior Stock then
outstanding shall be entitled to receive the remaining assets and funds of the
Corporation available for distribution to its stockholders.
(c) A consolidation or merger of the Corporation with or into
another corporation or entity, or a sale of all or substantially all of the
assets of the Corporation, shall not be regarded as a liquidation, dissolution
or winding up of the Corporation within the meaning of this Section 2.
3. Voting
(a) Each holder of outstanding shares of Series A Preferred
Stock shall be entitled to the number of votes equal to the number of whole
shares of Common Stock into which the shares of Series A Preferred Stock held by
such holder are then convertible (as adjusted from time to time pursuant to
Section 4 hereof), at each meeting of stockholders of the Corporation (and
written actions of stockholders in lieu of meetings) with respect to any and all
matters presented to the stockholders of the Corporation for their action or
consideration. Except as provided by law, by the provisions of Subsection 3(b)
below or by the provisions establishing any other series of Series Preferred
Stock, holders of Series A Preferred Stock and of any other outstanding series
of Series Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series A Preferred Stock so
as to affect adversely the Series A Preferred
-5-
<PAGE> 28
Stock, without the written consent or affirmative vote of the holders of a
majority of the then outstanding shares of Series A Preferred Stock, given in
writing or by vote at a meeting, consenting or voting (as the case may be)
separately as a class. For this purpose, without limiting the generality of the
foregoing, the authorization of any shares of capital stock with preference or
priority over the Series A Preferred Stock as to the right to receive either
dividends or amounts distributable upon liquidation, dissolution or winding up
of the Corporation shall be deemed to affect adversely the Series A Preferred
Stock, and the authorization of any shares of capital stock on a parity with
Series A Preferred Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the Corporation
shall not be deemed to affect adversely the Series A Preferred Stock. The number
of authorized shares of Series A Preferred Stock may be increased or decreased
(but not below the number of shares then outstanding) by the directors of the
Corporation pursuant to Section 151 of the General Corporation Law of Delaware
or by the affirmative vote of the holders of a majority of the then outstanding
shares of the Common Stock, Series A Preferred Stock and all other classes or
series of stock of the Corporation entitled to vote thereon, voting as a single
class, irrespective of the provisions of Section 242(b) (2) of the General
Corporation Law of Delaware.
4. Optional Conversion. The holders of the Series A Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any time and from
time to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing $4.50 by the Conversion Price (as defined below) in
effect at the time of conversion. The "Conversion Price" shall initially be
$4.50. Such initial Conversion Price, and the rate at which shares of Series A
Preferred Stock may be converted into shares of Common Stock, shall be subject
to adjustment as provided below.
In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series A Preferred Stock.
(b) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred
-6-
<PAGE> 29
Stock. In lieu of any fractional shares to which the holder would otherwise be
entitled, the Corporation shall pay cash equal to such fraction multiplied by
the then effective Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred Stock to
convert shares of Series A Preferred Stock into shares of Common Stock, such
holder shall surrender the certificate or certificates for such shares of Series
A Preferred Stock, at the office of the transfer agent for the Series A
Preferred Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with written notice that
such holder elects to convert all or any number of the shares of the Series A
Preferred Stock represented by such certificate or certificates. Such notice
shall state such holder's name or the names of the nominees in which such holder
wishes the certificate or certificates for shares of Common Stock to be issued.
If required by the Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments of transfer, in
form satisfactory to the Corporation, duly executed by the registered holder or
his or its attorney duly executed by the registered holder or his or its
attorney duly authorized in writing. The date of receipt of such certificates
and notice by the transfer agent (or by the Corporation if the Corporation
serves as its own transfer agent) shall be the conversion date ("Conversion
Date"). The Corporation shall, as soon as practicable after the Conversion Date,
issue and deliver at such office to such holder of Series A Preferred Stock, or
to his or its nominees, a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled, together with cash in
lieu of any fraction of a share.
(ii) The Corporation shall at all times when the Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the Series A Preferred Stock, such number of its duly authorized shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding Series A Preferred Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then par value
of the shares of Common Stock issuable upon conversion of the Series A Preferred
Stock, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully paid and nonassessable shares of Common Stock at such
adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared but unpaid
-7-
<PAGE> 30
dividends or any accrued but unpaid dividends on the Series A Preferred Stock
surrendered for conversion or on the Common Stock delivered upon conversion.
(iv) All shares of Series A Preferred Stock which shall
have been surrendered for conversion as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
the rights, if any, to receive notices and to vote, shall immediately cease and
terminate on the Conversion Date, except only the right of the holders thereof
to receive shares of Common Stock in exchange therefor and payment of any
dividends declared but unpaid thereon. Any shares of Series A Preferred Stock so
converted shall be retired and cancelled and shall not be reissued, and the
Corporation (without the need for stockholder action) may from time to time take
such appropriate action as may be necessary to reduce the authorized Series A
Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issuance or delivery of shares
of Common Stock upon conversion of shares of Series A Preferred Stock pursuant
to this Section 4. The Corporation shall not, however, be required to pay any
tax which may be payable in respect of any transfer involved in the issuance and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Preferred Stock so converted were registered, and no such issuance
or delivery shall be made unless and until the person or entity requesting such
issuance has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been
paid.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue
Date effect a subdivision of the outstanding Common Stock, the Conversion
Price then in effect immediately before that subdivision shall be
proportionately decreased. If the Corporation shall at any time or from time to
time after the date on which a share of Series A Preferred Stock was first
issued (the "Original Issue Date") combine the outstanding shares of Common
Stock, the Conversion Price then in effect immediately before the combination
shall be proportinately increased. Any adjustment under this paragraph shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
(e) No Impairment. The Corporation will not, by amendment of
its Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger,
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dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all the provisions of this Section 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 Series A Preferred Stock against
impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series A Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such adjustment or
readjustment is based. The Corporation shall, upon the written request any time
of any holder of Series A Preferred Stock, furnish or cause to be furnished to
such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which then
would be received upon the conversion of Series A Preferred Stock.
(g) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in
Common Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination
of its outstanding shares of Common Stock or a stock
dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or
with another corporation, or of the sale of all or
substantially all of the assets of the Corporation;
or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
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<PAGE> 32
then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Series A Preferred Stock, and shall cause to
be mailed to the holders of the Series A Preferred Stock at their last
addresses as shown on the records of the Corporation or such transfer agent, at
least ten days prior to the date specified in (A) below or twenty days before
the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined, or
(B) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
5. Mandatory Conversion.
(a) Upon the closing of the sale of shares of Common Stock, at
a price of at least $10.00 per share (subject to appropriate adjustment for
stock splits, stock dividends, combinations and other similar recapitalizations
affecting such shares), in a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, resulting in at least $10,000,000 of gross proceeds to the
Corporation or on the date that is immediately prior the consolidation or merger
of the Corporation with or into another corporation or entity or the sale of all
or substantially all of the assets of the Corporation (the first of such dates
to occur being the "Mandatory Conversion Date"), (i) all outstanding shares of
Series A Preferred Stock shall automatically be converted into shares of Common
Stock, at the then effective conversion rate and (ii) the number of authorized
shares of Preferred Stock shall be automatically reduced by the number of shares
of Preferred Stock that had been designated as Series A Preferred Stock, and all
provisions included under the caption "Series A Convertible Preferred Stock",
and all references to the Series A Preferred Stock, shall be deleted and shall
be of no further force or effect.
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<PAGE> 33
(b) All holders of record of shares of Series A Preferred Stock shall be
given written notice of the Mandatory Conversion Date and the place designated
for mandatory conversion of all such shares of Series A Preferred Stock pursuant
to this Section 5. Such notice need not be given in advance of the occurrence of
the Mandatory Conversion Date. Such notice shall be sent by first class or
registered mail, postage prepaid, to each record holder of Series A Preferred
Stock at such holder's address last shown on the records of the transfer agent
for the Series A Preferred Stock (or the records of the Corporation, if it
serves as its own transfer agent). Upon receipt of such notice, each holder of
shares of Series A Preferred Stock shall surrender his or its certificate or
certificates for all such shares to the Corporation at the place designated in
such notice, and shall thereafter receive certificates for the number of shares
of Common Stock to which such holder is entitled pursuant to this Section 5. On
the Mandatory Conversion Date, all rights with respect to the Series A Preferred
Stock so converted, including the rights, if any, to receive notices and vote
(other than as a holder of Common Stock) will terminate, except only the rights
of the holders thereof, upon surrender of their certificate or certificates
therefor, to receive certificates for the number of shares of Common Stock into
which such Series A Preferred Stock has been converted, and payment of any
declared but unpaid dividends thereon. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by his or its attorney
duly authorized in writing. As soon as practicable after the Mandatory
Conversion Date and the surrender of the certificate or certificates for Series
A Preferred Stock, the Corporation shall cause to be issued and delivered to
such holder, or on his or its written order, a certificate or certificates for
the number of full shares of Common Stock issuable on such conversion in
accordance with the provisions hereof and cash as provided in Subsection 4(b)
in respect of any fraction of a share of Common Stock otherwise issuable upon
such conversion.
(c) All certificates evidencing shares of Series A Preferred Stock which
are required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the Mandatory Conversion Date, be deemed to have
been retired and cancelled and the shares of Series A Preferred Stock
represented thereby converted into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. The Corporation may thereafter take such
appropriate action (without
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<PAGE> 34
the need for stockholder action) as may be necessary to reduce the authorized
Series A Preferred Stock accordingly.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its President
and attested by its Secretary this 19th day of June, 1997.
EMAGINET, INC.
By: /s/ KAMRAN AMJADI
-----------------
Kamran Amjadi, President
ATTEST:
/s/ MEHRDAD AKHAVAN
-------------------
Mehrdad Akhavan, Secretary
[Corporate Seal]
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<PAGE> 35
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
EMAGINET, INC.
PURSUANT TO SECTION 242
OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
Emaginet, Inc. (hereinafter called the "Corporation"), organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, does hereby certify as follows:
At a meeting of the Board of Directors of the Corporation a resolution
was duly adopted, pursuant to Section 242 of the General Corporation Law of the
State of Delaware, setting forth an amendment to the Certificate of
Incorporation of the corporation and declaring said amendment to be advisable.
The stockholders of the Corporation duly approved said proposed amendment by
written consent in accordance with Sections 228 and 242 of the General
Corporation Law of the State of Delaware, and written notice of such consent has
been given to all stockholders who have not consented in writing to said
amendment. The resolution setting forth the amendment is as follows:
RESOLVED: That Article FOURTH of the Certificate of Incorporation of the
Corporation be and hereby is deleted in its entirety and the following Article
FOURTH is inserted in lieu thereof:
FOURTH: The total number of shares of all classes of stock which
the Corporation shall have authority to issue is (i) 20,000,000 shares of Common
Stock, $0.01 par value per share ("Common Stock") and (ii) 5,000,000 shares of
Preferred Stock, $0.01 par value per share ("Preferred Stock").
<PAGE> 36
The following is a statement of the designations and the powers,
privileges and rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation.
A. COMMON STOCK.
1. General. The voting, dividend and liquidation rights of the holders
of the Common Stock are subject to and qualified by the rights of the holders of
the Preferred Stock of any series as may be designated by the Board of Directors
upon any issuance of the Preferred Stock of any series.
2. Voting. The holders of the Common Stock are entitled to one vote
for each share held at all meetings of stockholders (and written actions in lieu
of meetings). There shall be no cumulative voting.
The number of authorized shares of Common Stock may be increased
or decreased (but not below the number of shares thereof then outstanding) by
the affirmative vote of the holders of a majority of the stock of the
Corporation entitled to vote, irrespective of the provisions of Section
242(b)(2) of the General Corporation Law of Delaware.
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<PAGE> 37
3. Dividends. Dividends may be declared and paid on the Common Stock
from funds lawfully available therefore as and when determined by the Board of
Directors and subject to any preferential dividend rights of any then
outstanding Preferred Stock.
4. Liquidation. Upon the dissolution or liquidation of the
Corporation, whether voluntary or involuntary, holders of Common Stock will be
entitled to receive all assets of the Corporation available for distribution to
its stockholders, subject to any preferential rights of any then outstanding
Preferred Stock.
B. PREFERRED STOCK.
Preferred Stock may be issued from time to time in one or more series,
each of such series to have such terms as stated or expressed herein and in the
resolution or resolutions providing for the issue of such series adopted by the
Board of Directors of the Corporation as hereinafter provided. Any shares of
Preferred Stock which may be redeemed, purchased or acquired by the Corporation
may be reissued except as otherwise provided by law. Different series of
Preferred Stock shall not be construed to constitute different classes of
shares for the purposes of voting by classes unless expressly provided.
Authority is hereby expressly granted to the Board of Directors from time
to time to issue the Preferred Stock in one or more series, and in connection
with the creation of any such series, by resolution or resolutions providing
for the issue of the shares thereof, to determine and fix such
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<PAGE> 38
voting powers, full or limited, or no voting powers, and such designations,
preferences and relative participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, including without
limitation thereof, dividend rights, special voting rights, conversion rights,
redemption privileges and liquidation preferences, as shall be stated and
expressed in such resolutions, all to the full extent now or hereafter
permitted by the General Corporation Law of Delaware. Without limiting the
generality of the foregoing, the resolutions providing for issuance of any
series of Preferred Stock may provide that such series shall be superior or
rank equally or be junior to the Preferred Stock of any other series to the
extent permitted by law. Except as otherwise specifically provided in this
Certificate of Incorporation, no vote of the holders of the Preferred Stock or
Common Stock shall be a prerequisite to the issuance of any shares of any
series of the Preferred Stock authorized by and complying with the conditions of
this Certificate of Incorporation, the right to have such vote being expressly
waived by all present and future holders of the capital stock of the
Corporation.
C. SERIES A CONVERTIBLE PREFERRED STOCK.
Two Million (2,000,000) shares of the authorized and unissued Preferred
Stock of the Corporation are hereby designated "Series A Convertible Preferred
Stock" (the "Series A Preferred Stock") and Three Million (3,000,000) shares of
the authorized and unissued Preferred Stock of the Corporation are hereby
designated "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock") with the following rights, preferences, powers, privileges and
restrictions, qualifications and limitations.
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<PAGE> 39
1. Dividends.
(a) The holders of shares of Series A Preferred Stock shall be
entitled to receive, out of funds legally available therefor, dividends of
$0.225 per share per annum (subject to appropriate adjustment in the event of
any stock dividend, stock split, combination or other similar recapitalization
affecting such shares), payable when and as declared by the Board of Directors
of the Corporation and payable in the discretion of the Board of Directors of
the Corporation in either cash or, based on the then fair market value of the
Common Stock of the Corporation, Common Stock of the Corporation. Such
dividends shall accrue and shall be cumulative from the date of issuance of
each share of Series A Preferred Stock, whether or not declared.
(b) The Corporation shall not declare or pay any distributions
(as defined below) on any shares junior in dividend rights until the holders of
the Series A Preferred Stock then outstanding shall have first received the
preferential dividend at the rate specified in paragraph (a) of this Section 1.
(c) For purposes of this Section 1, unless the context requires
otherwise, "distribution" shall mean (i) the transfer of cash or property
without consideration, whether by way of dividend or otherwise, excluding a
dividend payable in Common Stock or in other junior securities of the
Corporation, or (ii) the purchase or redemption of shares of the Corporation or
subsidiary of the Corporation (excluding repurchases of Common Stock held by
employees or
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<PAGE> 40
directors of, or consultants to, the Corporation upon termination of their
employment or services pursuant to agreements providing for such repurchase at
a price equal to the original issue price of such shares) and excluding
redemptions in liquidation or dissolution or winding up of the Corporation or
subsidiary.
(d) The holders of shares of Class B Preferred Stock shall not
be entitled to receive any predetermined or preferential amount of dividends as
the holders of Class A Preferred Stock shall be entitled, but shall be entitled
to participate equally (based on the amount of Common Stock they would receive
if they were to convert their Preferred Stock holding to a Common Stock
holding) in any dividends that may be declared and paid on the Common Stock
from funds lawfully available therefore as and when determined by the Board of
Directors and subject to any preferential payment.
2. Liquidation, Dissolution or Winding Up: Certain Mergers,
Consolidations and Asset Sales.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the respective holders of shares
of Series A Preferred Stock then outstanding shall first be entitled to be paid
out of the assets of the Corporation available for distribution to its
stockholders, after and subject to the payment in full of all amounts required
to be distributed to the holders of any other class or series of stock of the
Corporation ranking on liquidation prior and in preference to the Series A
Preferred Stock (referred to as "Senior
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<PAGE> 41
Preferred Stock"), but before any payment shall be made to the holders of Series
B Preferred Stock or Common Stock or any other class or series of stock ranking
on liquidation junior to the Series A Preferred Stock (such Common Stock and
other stock being collectively referred to as "Junior Stock") by reason of their
ownership thereof, an amount equal to $4.50 per share for Series A Preferred
Stock (subject to appropriate adjustment in the event of any stock dividend,
stock split, combination or other similar recapitalization affecting such
shares), plus any dividends declared but unpaid thereon and any accrued but
unpaid dividends thereon. If upon any such liquidation, dissolution or winding
up of the Corporation the remaining assets of the Corporation available for
distribution to its stockholders shall be insufficient to pay the holders of
shares of Series A Preferred Stock the full amount to which they shall be
entitled, the holders of shares of Series A Preferred Stock and any class or
series of stock ranking on liquidation on a parity with the Series A Preferred
Stock shall share ratably in any distribution of the remaining assets and funds
of the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
(b) After the payment of all preferential amounts required to
be paid to the holders of Series A Preferred Stock and any other class or series
of stock of the Corporation ranking on liquidation on a parity with the Series A
Preferred Stock, upon the dissolution, liquidation or winding up of the
Corporation, the holders of shares of Series B Preferred Stock then outstanding
shall then be entitled to receive before any distribution or payment is made
upon any stock ranking in liquidation junior to the Series B Preferred Stock
including, but not limited to
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<PAGE> 42
the Common Stock, $6.OO per share for Series B Preferred Stock (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares), plus any
dividends declared but unpaid thereon. If upon any such liquidation, dissolution
or winding up of the Corporation the remaining assets of the Corporation
available for distribution to its stockholders shall be insufficient to pay the
holders of shares of Series B Preferred Stock the full amount to which they
shall be entitled, the holders of shares of Series B Preferred Stock and any
class or series of stock ranking on liquidation on a parity with the Series B
Preferred Stock shall share ratably in any distribution of the remaining assets
and funds of the Corporation in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were paid
in full.
(c) After the payment of all preferential amounts required to
be paid to the holders of Series A Preferred Stock and Series B Preferred Stock
and any other class or series of stock of the Corporation ranking on liquidation
on a parity with the Series A Preferred Stock and Series B Preferred Stock, upon
the dissolution, liquidation or winding up of the Corporation, the holders of
shares of Common Stock then outstanding shall then be entitled to receive the
remaining assets and funds of the Corporation available for distribution to its
stockholders. Holders of Series A Preferred Stock and Series B Preferred Stock
shall not be entitled to any more distributions than their preferential amounts.
(d) A consolidation or merger of the Corporation with or into
another corporation or entity, or a sale of all or substantially all of the
assets of the Corporation, shall not
8
<PAGE> 43
be regarded as a liquidation, dissolution or winding up of the Corporation
within the meaning of this Section 2.
3. Voting.
(a) Each holder of outstanding shares of Series A Preferred
Stock or Series B Preferred Stock shall be entitled to the number of votes equal
to the number of whole shares of Common Stock into which the shares of Series A
Preferred Stock or Series B Preferred Stock held by such holder are then
convertible (as adjusted from time to time pursuant to Section 4 hereof), at
each meeting of stockholders of the Corporation (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Corporation for their action or consideration. Except
as provided by law, by the provisions of Subsection 3(b) below or by the
provisions establishing any other series of Series Preferred Stock, holders of
Series A Preferred Stock or Series B Preferred Stock and of any other
outstanding series of Series Preferred Stock shall vote together with the
holders of Common Stock as a single class.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series A Preferred Stock or
Series B Preferred Stock so as to affect adversely the Series A Preferred Stock
or Series B Preferred Stock, without the written consent or affirmative vote of
the holders of a majority of the then outstanding shares of Series A Preferred
Stock or Series B Preferred Stock, given in writing or by vote at a meeting,
consenting
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<PAGE> 44
or voting (as the case may be) separately as a class. For this purpose, without
limiting the generality of the foregoing, the authorization of any shares of
capital stock with preference or priority over the Series A Preferred Stock or
Series B Preferred Stock as to the right to receive either dividends or amounts
distributable upon liquidation, dissolution or winding up of the Corporation
shall be deemed to affect adversely the Series A Preferred Stock or Series B
Preferred Stock, and the authorization of any shares of capital stock on a
parity with Series A Preferred Stock or Series B Preferred Stock as to the right
to receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation shall not be deemed to affect
adversely the Series A Preferred Stock or Series B Preferred Stock. The number
of authorized shares of Series A Preferred Stock or Series B Preferred Stock may
be increased or decreased (but not below the number of shares then outstanding)
by the directors of the Corporation pursuant to Section 151 of the General
Corporation Law of Delaware or by the affirmative vote of the holders of a
majority of the then outstanding shares of the Common Stock, Series A Preferred
Stock or Series B Preferred Stock and all other classes or series of stock of
the Corporation entitled to vote thereon, voting as a single class, irrespective
of the provisions of Section 242(b)(2) of the General Corporation Law of
Delaware.
4. Optional Conversion. The holders of the Series A Preferred Stock
or Series B Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock or
Series B Preferred Stock shall be convertible, at the option of the holder
thereof, at any time and from time
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<PAGE> 45
to time, and without the payment of additional consideration by the holder
thereof, into such number of fully paid and nonassessable shares of Common
Stock as is determined by dividing $4.50 with respect to the Series A Preferred
Stock and $6.00 with respect to the Series B Preferred Stock by the Conversion
Price (as defined below) in effect at the time of conversion. The "Conversion
Price" shall initially be $4.50 for the Series A Preferred Stock and $6.00 for
the Series B Preferred Stock. Such initial Conversion Price, and the rate at
which shares of Series A Preferred Stock or Series B Preferred Stock may be
converted into shares of Common Stock, shall be subject to adjustment as
provided below.
In the event of a liquidation of the Corporation, the Conversion Rights
shall terminate at the close of business on the first full day preceding the
date fixed for the payment of any amounts distributable on liquidation to the
holders of Series A Preferred Stock or Series B Preferred Stock.
(b) Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Series A Preferred Stock or Series B
Preferred Stock. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then effective Conversion Price.
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<PAGE> 46
(c) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred Stock or
Series B Preferred Stock to convert shares of Series A Preferred Stock or Series
B Preferred Stock into shares of Common Stock, such holder shall surrender the
certificate or certificates for such shares of Series A Preferred Stock or
Series B Preferred Stock at the office of the transfer agent for the Series A
Preferred Stock or Series B Preferred Stock (or at the principal office of the
Corporation if the Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any number of the
shares of the Series A Preferred Stock or Series B Preferred Stock represented
by such certificate or certificates. Such notice shall state such holder's name
or the names of the nominees in which such holder wishes the certificate or
certificates for shares of Common Stock to be issued. If required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or his
or its attorney duly authorized in writing. The date of receipt of such
certificates and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the conversion date
("Conversion Date"). The Corporation shall, as soon as practicable after the
Conversion Date, issue and deliver at such office to such holder of Series A
Preferred Stock or Series B Preferred Stock, or to his or its nominees, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled, together with cash in lieu of any fraction of a
share.
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<PAGE> 47
(ii) The Corporation shall at all times when the Series A
Preferred Stock or Series B Preferred Stock shall be outstanding, reserve and
keep available out of its authorized but unissued stock, for the purpose of
effecting the conversion of the Series A Preferred Stock or Series B Preferred
Stock, such number of its duly authorized shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all outstanding Series A
Preferred Stock or Series B Preferred Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock issuable upon conversion of the Series A
Preferred Stock or Series B Preferred Stock, the Corporation will take any
corporate action which may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared but unpaid dividends or any
accrued but unpaid dividends on the Series A Preferred Stock or Series B
Preferred Stock surrendered for conversion or on the Common Stock delivered upon
conversion.
(iv) All shares of Series A Preferred Stock or Series B
Preferred Stock which shall have been surrendered for conversion as herein
provided shall no longer be deemed to be outstanding and all rights with
respect to such shares, including the rights, if any, to receive notices and to
vote, shall immediately cease and terminate on the Conversion Date, except only
the right of the holders thereof to receive shares of Common Stock in exchange
therefor and
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<PAGE> 48
payment of any dividends declared but unpaid thereon. Any shares of Series A
Preferred Stock or Series B Preferred Stock so converted shall be retired and
cancelled and shall not be reissued, and the Corporation (without the need for
stockholder action) may from time to time take such appropriate action as may
be necessary to reduce the authorized Series A Preferred Stock or Series B
Preferred Stock accordingly.
(v) The Corporation shall pay any and all issue and
other taxes that may be payable in respect of any issuance or delivery of shares
of Common Stock upon conversion of shares of Series A Preferred Stock or Series
B Preferred Stock pursuant to this Section 4. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of shares of Common Stock in a
name other than that in which the shares of Series A Preferred Stock or Series B
Preferred Stock so converted were registered, and no such issuance or delivery
shall be made unless and until the person or entity requesting such issuance has
paid to the Corporation the amount of any such tax or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Common Stock, the Conversion Price then
in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
date on which a share of Series A Preferred Stock or Series B Preferred Stock
was first issued (the "Original Issue Date") combine the outstanding shares of
Common Stock, the Conversion Price
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<PAGE> 49
then in effect immediately before the combination shall be proportionately
increased. Any adjustment under this paragraph shall become effective at the
close of business on the date the subdivision or combination becomes effective.
(e) No Impairment. The Corporation will not, by amendment of
its Certificate 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 Corporation, 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
Series A Preferred Stock or Series B Preferred Stock against impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series A Preferred Stock or Series B Preferred Stock a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which each
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred Stock or Series B
Preferred Stock, furnish or cause to be furnished to such holder a similar
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Price then in effect, and (iii) the number of shares of Common Stock
and the amount,
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<PAGE> 50
if any, of other property which then would be received upon the conversion of
Series A Preferred Stock or Series B Preferred Stock.
(g) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in
Common Stock or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination
of its outstanding shares of Common Stock or a stock
dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or
with another corporation, or of the sale of all or
substantially all of the assets of the Corporation;
or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
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then the Corporation shall cause to be filed at its principal office or at the
office of the transfer agent of the Series A Preferred Stock or Series B
Preferred Stock, and shall cause to be mailed to the holders of the Series A
Preferred Stock or Series B Preferred Stock, at their last addresses as shown
on the records of the Corporation, or such transfer agent, at least ten days
prior to the date specified in (A) below or twenty days before the date
specified in (B) below, a notice stating
(A) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined, or
(B) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it
is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution
or winding up.
17
<PAGE> 52
5. Mandatory Conversion
(a) Upon the closing of the sale of shares of Common Stock, at
a price of at least $10.00 per share (subject to appropriate adjustment for
stock splits, stock dividends, combinations and other similar recapitalizations
affecting such shares), in a firm commitment underwritten public offering
pursuant to an effective registration statement under the Securities Act of
1933, as amended, resulting in at least $10,000,000 of gross proceeds to the
Corporation or on the date that is immediately prior the consolidation or merger
of the Corporation with or into another corporation or entity or the sale of all
or substantially all of the assets of the Corporation (the first of such dates
to occur being the "Mandatory Conversion Date"), (i) all outstanding shares of
Series A Preferred Stock and Series B Preferred Stock shall automatically be
converted into shares of Common Stock, at the then effective conversion rate and
(ii) the number of authorized shares of Preferred Stock shall be automatically
reduced by the number of shares of Preferred Stock that had been designated as
Series A Preferred Stock or Series B Preferred Stock, and all provisions
included under the caption "Series A Convertible Preferred Stock" or "Series B
Convertible Preferred Stock" and all references to the Series A Preferred Stock
or Series B Preferred Stock, shall be deleted and shall be of no further force
or effect.
(b) All holders of record of shares of Series A Preferred Stock
and Series B Preferred Stock shall be given written notice of the Mandatory
Conversion Date and the place designated for mandatory conversion of all such
shares of Series A Preferred Stock and Series B Preferred Stock pursuant to this
Section 5. Such notice need not be given in advance of
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<PAGE> 53
the occurrence of the Mandatory Conversion Date. Such notice shall be sent by
first class or registered mail, postage prepaid, to each record holder of Series
A Preferred Stock and Series B Preferred Stock at such holder's address last
shown on the records of the transfer agent for the Series A Preferred Stock or
Series B Preferred Stock (or the records of the Corporation, if it serves as its
own transfer agent). Upon receipt of such notice, each holder of shares of
Series A Preferred Stock or Series B Preferred Stock shall surrender his or its
certificate or certificates for all such shares to the Corporation at the place
designated in such notice, and shall thereafter receive certificates for the
number of shares of Common Stock to which such holder is entitled pursuant to
this Section 5. On the Mandatory Conversion Date, all rights with respect to the
Series A Preferred Stock or Series B Preferred Stock so converted, including the
rights, if any, to receive notices and vote (other than as a holder of Common
Stock) will terminate, except only the rights of the holders thereof, upon
surrender of their certificate or certificates therefor, to receive certificates
for the number of shares of Common Stock into which such Series A Preferred
Stock or Series B Preferred Stock has been converted, and payment of any
declared but unpaid dividends thereon. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by his or its attorney
duly authorized in writing. As soon as practicable after the Mandatory
Conversion Date and the surrender of the certificate or certificates for Series
A Preferred Stock or Series B Preferred Stock, the Corporation shall cause to be
issued and delivered to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and cash as
provided in Subsection
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<PAGE> 54
4(b) in respect of any fraction of a share of Common Stock otherwise issuable
upon such conversion.
(c) All certificates evidencing shares of Series A Preferred
Stock or Series B Preferred Stock which are required to be surrendered for
conversion in accordance with the provisions hereof shall, from and after the
Mandatory Conversion Date, be deemed to have been retired and cancelled and the
shares of Series A Preferred Stock or Series B Preferred Stock represented
thereby converted into Common Stock for all purposes, notwithstanding the
failure of the holder or holders thereof to surrender such certificates on or
prior to such date. The Corporation may thereafter take such appropriate action
(without the need for stockholder action) as may be necessary to reduce the
authorized Series A Preferred Stock or Series B Preferred Stock accordingly.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its President
and attested by its Secretary this 3rd day of February, 1999.
EMAGINET, INC.
By: /s/ KAMRAN AMJADI
------------------------
Kamran Amjadi
President
20
<PAGE> 55
ATTEST:
/s/ MEHRDAD AKHAVAN
------------------------
Mehrdad Akhavan
Secretary
[Corporate Seal]
21
<PAGE> 56
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
EMAGINET, INC.
PURSUANT TO SECTION 242
OF THE GENERAL CORPORATION LAW OF
THE STATE OF DELAWARE
Emaginet, a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the Certificate of Incorporation of Emaginet, Inc. be
amended by changing the First Article thereof so that, as amended, said Article
shall be and read as follows:
"The name of the corporation shall be e-centives, Inc."
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
affixed hereto and this Certificate of Amendment to be signed by its President
and attested by its Secretary this 11th day of March, 1999.
EMAGINET, INC.
BY: /s/ KAMRAN AMJADI
------------------------
Kamran Amjadi
President
ATTEST:
/s/MEHRDAD AKHAVAN
-------------------
Mehrdad Akhavan
Secretary
[Corporate Seal]
<PAGE> 57
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 01/24/2000
001036051 - 2650098
CERTIFICATE OF AMENDMENT
OF
AMENDED CERTIFICATE OF INCORPORATION
OF
E-CENTIVES, INC.
It is hereby certified that:
FIRST: The name of the corporation is e-centives, Inc. (the
"Corporation"), and the Corporation is organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "DGCL").
SECOND: The Board of Directors of the Corporation, for the
purpose of taking action without a meeting p |
