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EXHIBIT 3.1
State of Delaware
PAGE 1
Office of the Secretary of State
______________________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"CHORUM TECHNOLOGIES INC.", FILED IN THIS OFFICE ON THE FIFTH DAY OF SEPTEMBER,
A.D. 2000, AT 3 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE KENT COUNTY
RECORDER OF DEEDS.
[SEAL] /s/ Edward J. Freel
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Edward J. Freel, Secretary of State
2795030 8100 AUTHENTICATION: 0657368
001447358
DATE: 09-05-00
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RESTATED CERTIFICATE OF INCORPORATION
OF
CHORUM TECHNOLOGIES INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
Chorum Technologies Inc., a corporation organized and existing under
and by virtue of the provisions of the General Corporation Law of the State of
Delaware (the "General Corporation Law"),
DOES HEREBY CERTIFY:
FIRST: That the name of this corporation is Chorum Technologies Inc.
and that this corporation was originally incorporated pursuant to the General
Corporation Law on September 10, 1997, under the name Macro-Vision
Communications, Inc.
SECOND: That the Board of Directors duly adopted resolutions
proposing to amend and restate the Restated Certificate of Incorporation of this
corporation, declaring said amendment and restatement to be advisable and in the
best interests of this corporation and its stockholders, and authorizing the
appropriate officers of this corporation to solicit the consent of the
stockholders therefor, which resolution setting forth the proposed amendment and
restatement is as follows:
RESOLVED, that the Restated Certificate of Incorporation of this
corporation be amended and restated in its entirety as follows:
ARTICLE I
The name of this corporation is Chorum Technologies Inc.
ARTICLE II
The address of the registered office of this corporation in the State
of Delaware is 15 East North Street, in the City of Dover, 19901, County of
Kent. The name of its registered agent at such address is Incorporating
Services, Ltd.
ARTICLE III
The nature of the business or purposes to be conducted or promoted is
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of Delaware.
ARTICLE IV
A. Classes of Stock. This corporation is authorized to issue two classes
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of stock, to be designated, respectively, "Common Stock" and "Preferred Stock."
The total number of shares
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that this corporation is authorized to issue is one hundred fifty-four million
eight hundred eighty-two thousand seven hundred sixty-nine (154,882,769) shares.
One hundred million (100,000,000) shares shall be Common Stock, par value
$0.0001 per share, and fifty-four million eight hundred eighty-two thousand
seven hundred sixty-nine (54,882,769) shares shall be Preferred Stock, par value
$0.0001 per share. The first series of Preferred Stock shall be designated
"Series A Preferred Stock," consisting of eleven million one hundred sixty
thousand (11,160,000) shares. The second series of Preferred Stock shall be
designated "Series B-1 Preferred Stock," consisting of six million two hundred
twelve thousand two hundred fifty-nine (6,212,259) shares. The third series of
Preferred Stock shall be designated "Series B-2 Preferred Stock," consisting of
nine million eight hundred ten thousand five hundred ten (9,810,510) shares. The
fourth series of Preferred Stock shall be designated "Series C Preferred Stock,"
consisting of twelve million six hundred thousand (12,600,000) shares. The fifth
series of Preferred Stock shall be designated "Series D Preferred Stock,"
consisting of nine million six hundred thousand (9,600,000) shares. The sixth
series of Preferred Stock shall be designated "Series E Preferred Stock,"
consisting of five million five hundred thousand (5,500,000) shares.
B. Rights, Preferences and Restrictions of Preferred Stock. The rights,
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preferences, privileges, and restrictions granted to and imposed on the Series
A, Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock are
as set forth below in this Article IV(B). The Board of Directors is hereby
authorized to fix or alter the rights, preferences, privileges and restrictions
granted to or imposed upon additional series of Preferred Stock, and the number
of shares constituting any such series and the designation thereof, or of any of
them. Subject to compliance with applicable protective voting rights that have
been or may be granted to the Preferred Stock or series thereof in Certificates
of Designation or this corporation's Certificate of Incorporation ("Protective
Provisions") and any other rights pertaining to the Preferred Stock or any
series thereof, the rights, privileges, preferences and restrictions of any such
additional series may be subordinated to, pari passu with (including, without
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limitation, inclusion in provisions with respect to liquidation and acquisition
preferences, redemption and/or approval of matters by vote or written consent),
or senior to any of those of any present or future class or series of Preferred
or Common Stock. Subject to compliance with applicable Protective Provisions,
the Board of Directors is also authorized to increase or decrease the number of
shares of any series (other than the Series A, Series B-1, Series B-2, Series C,
Series D or Series E Preferred Stock), prior or subsequent to the issue of that
series, but not below the number of shares of such series then outstanding. In
case the number of shares of any series shall be so decreased, the shares
constituting such decrease shall resume the status that they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.
1. Dividend Provisions. Subject to the rights of any series of
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Preferred Stock that may from time to time come into existence, (i) the holders
of shares of Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall be entitled to receive dividends, out of any assets legally
available therefor, prior and in preference to any declaration or payment of any
dividend (payable other than in Common Stock or other securities and rights
convertible into or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common Stock of this corporation) on the Series
A Preferred Stock and Common Stock of this corporation, at the rate of (a)
$0.0333 per share per annum for each share of Series B-1 Preferred Stock then
held by them (the "Series B-1 Dividend"), (b) $0.05 per share per annum for each
share of Series B-2 Preferred Stock then held by them (the "Series B-2
Dividend"), (c) $0.1416
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per share per annum for each share of Series C Preferred Stock then held by them
(the "Series C Dividend"), (d) $0.4663 per share per annum for each share of
Series D Preferred Stock then held by them (the "Series D Dividend"), and (e)
$1.724 per share per annum for each share of Series E Preferred Stock then held
by them (the "Series E Dividend") or, if greater (as determined on a per annum
basis and an as converted basis for the Series B-1, Series B-2, Series C, Series
D and Series E Preferred Stock, as the case may be), an amount equal to that
paid on any other outstanding shares of this corporation, payable when, as and
if declared by the Board of Directors and (ii) after the Series B-1 Dividend,
the Series B-2 Dividend, the Series C Dividend, the Series D Dividend and the
Series E Dividend have been declared and paid, or set apart for payment, the
holders of Series A Preferred Stock shall be entitled to receive dividends, out
of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend (payable other than in Common Stock or
other securities and rights convertible into or entitling the holder thereof to
receive, directly or indirectly, additional shares of Common Stock of this
corporation) on the Common Stock of this corporation, at the rate $0.0166 per
share per annum for each share of Series A Preferred Stock then held by them or,
if greater (as determined on a per annum basis and an as converted basis for the
Series A Preferred Stock), an amount equal to that paid on any other outstanding
shares of this corporation, payable when, as and if declared by the Board of
Directors. Such dividends shall not be cumulative. Declared but unpaid dividends
with respect to a share of Series A, Series B-1, Series B-2, Series C, Series D
or Series E Preferred Stock shall, upon conversion of such share to Common
Stock, be paid to the extent assets are legally available therefor either in
cash or in Common Stock (valued at the fair market value on the date of payment
as determined by the Board of Directors of this corporation). Any amounts for
which assets are not legally available shall be paid promptly as assets become
legally available therefor.
2. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or winding up
of this corporation, either voluntary or involuntary, subject to the rights of
any series of Preferred Stock that may from time to time come into existence,
the holders of Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall be entitled to receive, prior and in preference to any distribution
of any of the assets of this corporation to the holders of Series A Preferred
Stock or Common Stock by reason of their ownership thereof, (A) in the case of
the Series B-1 Preferred Stock, an amount per share equal to the sum of (i)
$0.3333 for each outstanding share of Series B-1 Preferred Stock (the "Original
Series B-1 Issue Price") (as adjusted for any subsequent stock splits, stock
dividends, recapitalizations or the like) and (ii) an amount equal to declared
but unpaid dividends on such share; (B) in the case of the Series B-2 Preferred
Stock, an amount per share equal to the sum of (i) $0.50 for each outstanding
share of Series B-2 Preferred Stock (the "Original Series B-2 Issue Price") (as
adjusted for any subsequent stock splits, stock dividends, recapitalizations or
the like) and (ii) an amount equal to declared but unpaid dividends on such
share; (C) in the case of the Series C Preferred Stock, an amount per share
equal to the sum of (i) $1.4166 for each outstanding share of Series C Preferred
Stock (the "Original Series C Issue Price") (as adjusted for any subsequent
stock splits, stock dividends, recapitalizations or the like) and (ii) an amount
equal to declared but unpaid dividends on such share; (D) in the case of the
Series D Preferred Stock, an amount per share equal to the sum of (i) $4.663 for
each outstanding share of Series D Preferred Stock (the "Original Series D Issue
Price") (as adjusted for any subsequent stock splits, stock dividends,
recapitalizations or the like) and (ii) an amount
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equal to declared but unpaid dividends on such share, and (E) in the case of the
Series E Preferred Stock, an amount per share equal to the sum of (i) $17.24 for
each outstanding share of Series E Preferred Stock (the "Original Series E Issue
Price") (as adjusted for any subsequent stock splits, stock dividends,
recapitalizations or the like) and (ii) an amount equal to declared but unpaid
dividends on such share. If upon the occurrence of such event, the assets and
funds thus distributed among the holders of the Series B-1, Series B-2, Series
C, Series D and Series E Preferred Stock shall be insufficient to permit the
payment to such holders of the full aforesaid preferential amounts, then,
subject to the rights of series of Preferred Stock that may from time to time
come into existence, the entire assets and funds of this corporation legally
available for distribution shall be distributed ratably among the holders of the
Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock in
proportion to the preferential amount each such holder is otherwise entitled to
receive.
(b) Upon the completion of the distribution required by
subsection (a) of this Section 2 and any other distribution that may be required
with respect to series of Preferred Stock that may from time to time come into
existence, if assets remain in this corporation, the holders of the Series A
Preferred Stock of this corporation shall receive, prior and in preference to
any distribution of any assets of this corporation to the holders of Common
Stock by reason of their ownership thereof, an amount per share equal to the sum
of (i) $0.1666 for each outstanding share of Series A Preferred Stock (the
"Original Series A Issue Price") (as adjusted for any stock splits, stock
dividends, recapitalizations or the like) and (ii) an amount equal to declared
but unpaid dividends on such share. If upon the occurrence of such event, the
assets and funds thus distributed among the holders of the Series A Preferred
Stock shall be insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then, subject to the rights of series of
Preferred Stock that may from time to time come into existence, the entire
assets and funds of this corporation legally available for distribution shall be
distributed ratably among the holders of the Series A Preferred Stock in
proportion to the amount of such stock owned by each such holder.
(c) Upon the completion of the distribution required by
subsection (a) and subsection (b) of this Section 2 and any other distribution
that may be required with respect to series of Preferred Stock that may from
time to time come into existence, if assets remain in this corporation, the
holders of the Common Stock of this corporation shall receive all of the
remaining assets of this corporation pro rata based on the number of shares of
Common Stock held by each.
(d) (i) For purposes of this Section 2, unless otherwise agreed
by holders of at least sixty-seven percent (67%) of the then outstanding shares
of Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock
(voting together as a single class and not as separate series and on an as-
converted basis), a liquidation, dissolution or winding up of this corporation
shall be deemed to be occasioned by, or to include, (A) the closing of the
acquisition of this corporation by another entity by means of merger,
consolidation or other transaction or series of related transactions that
results in the transfer of fifty percent (50%) or more of the outstanding voting
power of this corporation; or (B) a sale of all or substantially all of the
assets of this corporation.
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(ii) In any of such events, if the consideration received
by this corporation is other than cash, the value of such consideration will be
deemed its fair market value. Any securities shall be valued as follows:
(A) Securities not subject to investment letter or
other similar restrictions on free marketability covered by (B) below:
(1) If traded on a securities exchange or through
the Nasdaq National Market, the value shall be deemed to be the average of the
closing prices of the securities on such quotation system over the thirty (30)
day period ending three (3) days prior to the closing;
(2) If actively traded over-the-counter, the
value shall be deemed to be the average of the closing bid or sale prices
(whichever is applicable) over the thirty (30) day period ending three (3) days
prior to the closing; and
(3) If there is no active public market, the
value shall be the fair market value thereof, as mutually determined by this
corporation and the holders of at least a majority of the voting power of all
then outstanding shares of Series B-1, Series B-2, Series C, Series D and Series
E Preferred Stock.
(B) The method of valuation of securities subject to
investment letter or other restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder's status as an affiliate
or former affiliate) shall be to make an appropriate discount from the market
value determined as above in (A) (1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by this corporation and the holders
of at least a majority of the voting power of all then outstanding shares of
such Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock.
(iii) In the event the requirements of this subsection 2(d)
are not complied with, this corporation shall forthwith either:
(A) cause such closing to be postponed until such time
as the requirements of this Section 2 have been complied with; or
(B) cancel such transaction, in which event the
rights, preferences and privileges of the holders of the Series A, Series B-1,
Series B-2, Series C, Series D and Series E Preferred Stock shall revert to and
be the same as such rights, preferences and privileges existing immediately
prior to the date of the first notice referred to in subsection 2(d)(iv) hereof.
(iv) This corporation shall give each holder of record of
Series A, Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock written notice of such impending transaction not later than twenty (20)
days prior to the stockholders' meeting called to approve such transaction, if
any, or twenty (20) days prior to the closing of such transaction, whichever is
earlier, and shall also notify such holders in writing of the final approval of
such transaction. The first of such notices shall describe the material terms
and conditions of the impending transaction and the provisions of this Section
2, and this corporation
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shall thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty (20) days after this
corporation has given the first notice provided for herein or sooner than ten
(10) days after this corporation has given notice of any material changes
provided for herein; provided, however, that such periods may be shortened upon
the written consent of the holders of Preferred Stock that are entitled to such
notice rights or similar notice rights that represent at least a majority of the
voting power of all then outstanding shares of such Preferred Stock.
3. Redemption. Neither the Series A, Series B-1, Series B-2, Series
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C, Series D or Series E Preferred Stock is redeemable.
4. Conversion. The holders of the Series A, Series B-1, Series B-2,
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Series C, Series D and Series E Preferred Stock shall have conversion rights as
follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A, Series B-1, Series
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B-2, Series C, Series D and Series E Preferred Stock shall be convertible, at
the option of the holder thereof, at any time after the date of issuance of such
share, at the office of this corporation or any transfer agent for such stock,
into such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing the Original Issue Price for such series by the
Conversion Price applicable to such share, determined as hereafter provided, in
effect on the date the certificate is surrendered for conversion. The initial
Conversion Price per share for shares of Series A Preferred Stock shall be the
Original Series A Issue Price, the initial Conversion Price per share for shares
of Series B-1 Preferred Stock shall be the Original Series B-1 Issue Price, the
initial Conversion Price per share for shares of Series B-2 Preferred Stock
shall be the Original Series B-2 Issue Price, the initial Conversion Price per
share for shares of Series C Preferred Stock shall be the Original Series C
Issue Price, the initial Conversion Price per share for shares of Series D
Preferred Stock shall be the Original Series D Issue Price and the initial
Conversion Price per share for shares of Series E Preferred Stock shall be the
Original Series E Issue Price; provided, however, that the Conversion Price for
the Series A, Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall be subject to adjustment as set forth in subsection 4(d).
(b) Automatic Conversion. Notwithstanding anything herein to the
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contrary, each share of Series A, Series B-1, Series B-2, Series C, Series D and
Series E Preferred Stock shall automatically be converted into shares of Common
Stock at the Conversion Price at the time in effect for such series immediately
upon the earlier of (i) this corporation's sale of its Common Stock in a firm
commitment underwritten public offering pursuant to a registration statement on
Form S-1 or Form SB-2 under the Securities Act of 1933, as amended, the
aggregate offering proceeds of which were not less than $20,000,000, or (ii) the
date specified by written consent or agreement of the holders of fifty-one
percent (51%) or more of the then outstanding shares of Series B-1, Series B-2,
Series C, Series D and Series E Preferred Stock (voting together as a single
class and not as separate series and on an as-converted basis).
(c) Mechanics of Conversion. Before any holder of Series A,
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Series B-1, Series B-2, Series C, Series D or Series E Preferred Stock shall be
entitled to convert the same into shares of Common Stock, he or she shall
surrender the certificate or certificates
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therefor, duly endorsed, at the office of this corporation or of any transfer
agent for the Series A, Series B-1, Series B-2, Series C, Series D or Series E
Preferred Stock, and shall give written notice to this corporation at its
principal corporate office of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. This corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A, Series
B-1, Series B-2, Series C, Series D or Series E Preferred Stock, or to the
nominee or nominees of such holder, a certificate or certificates for the number
of shares of Common Stock to which such holder shall be entitled as aforesaid.
Such conversion shall be deemed to have been made immediately prior to the close
of business on the date of such surrender of the shares of Series A, Series B-1,
Series B-2, Series C, Series D or Series E Preferred Stock to be converted, and
the person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date. If the conversion is in
connection with an underwritten offering of securities registered pursuant to
the Securities Act of 1933, as amended, the conversion may, at the option of any
holder tendering Series A, Series B-1, Series B-2, Series C, Series D or Series
E Preferred Stock for conversion, be conditioned upon the closing with the
underwriters of the sale of securities pursuant to such offering, in which event
the person(s) entitled to receive the Common Stock upon conversion of the Series
A, Series B-1, Series B-2, Series C, Series D or Series E Preferred Stock shall
not be deemed to have converted such Series A, Series B-1, Series B-2, Series C,
Series D or Series E Preferred Stock until immediately prior to the closing of
such sale of securities.
(d) Conversion Price Adjustments of Preferred Stock for Stock
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Splits and Combinations. The Conversion Price of the Series A, Series B-1,
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Series B-2, Series C, Series D and Series E Preferred Stock shall be subject to
adjustment from time to time as follows:
(i) In the event this corporation should at any time or
from time to time after the date upon which any shares of Series E Preferred
Stock were first issued (the "Purchase Date"), fix a record date for the
effectuation of a split or subdivision of the outstanding shares of Common Stock
or the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in additional shares of Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive directly or indirectly, additional shares of Common Stock (hereinafter
referred to as "Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common Stock
Equivalents (including the additional shares of Common Stock issuable upon
conversion or exercise thereof), then, as of such record date (or the date of
such dividend distribution, split or subdivision if no record date is fixed),
the Conversion Price of the Series A, Series B-1, Series B-2, Series C, Series D
and Series E Preferred Stock shall be appropriately decreased so that the number
of shares of Common Stock issuable on conversion of each share of such series
shall be increased in proportion to such increase of the aggregate of shares of
Common Stock outstanding and those issuable with respect to such Common Stock
Equivalents.
(ii) If the number of shares of Common Stock outstanding at
any time after the Purchase Date is decreased by a combination of the
outstanding shares of Common Stock, then, following the record date of such
combination, the Conversion Price for
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the Series A, Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall be appropriately increased so that the number of shares of Common
Stock issuable on conversion of each share of such series shall be decreased in
proportion to such decrease in outstanding shares.
(e) Other Distributions. In the event this corporation shall
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declare a distribution payable in securities of other persons, evidences of
indebtedness issued by this corporation or other persons, assets (excluding cash
dividends) or options or rights not referred to in subsection 4(d)(i), then, in
each such case for the purpose of this subsection 4(e), the holders of the
Series A, Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall be entitled to a proportionate share of any such distribution as
though they were the holders of the number of shares of Common Stock of this
corporation into which their shares of Series A, Series B-1, Series B-2, Series
C, Series D or Series E Preferred Stock are convertible as of the record date
fixed for the determination of the holders of Common Stock of this corporation
entitled to receive such distribution.
(f) Recapitalizations. If at any time or from time to time there
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shall be a recapitalization of the Common Stock (other than a subdivision,
combination or merger or sale of assets transaction provided for elsewhere in
this Section 4 or in Section 2) provision shall be made so that the holders of
the Series A, Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall thereafter be entitled to receive upon conversion of the Series A,
Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock the
number of shares of stock or other securities or property of this corporation or
otherwise to which a holder of Common Stock deliverable upon conversion would
have been entitled on such recapitalization. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 4
with respect to the rights of the holders of the Series A, Series B-1, Series B-
2, Series C, Series D and Series E Preferred Stock after the recapitalization to
the end that the provisions of this Section 4 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series A, Series B-1, Series B-2, Series C, Series D and
Series E Preferred Stock) shall be applicable after that event as nearly
equivalent as may be practicable.
(g) No Impairment. This corporation will not, by amendment of
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its Certificate of Incorporation or through any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by this 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, Series B-1, Series B-2, Series
C, Series D and Series E Preferred Stock against impairment.
(h) No Fractional Shares and Certificate as to Adjustments.
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(i) No fractional shares shall be issued upon the
conversion of any share or shares of the Series A, Series B-1, Series B-2,
Series C, Series D or Series E Preferred Stock, and the number of shares of
Common Stock to be issued shall be determined by rounding to the nearest whole
share (with one-half rounded upward). Such conversion shall be determined on the
basis of the total number of shares of Series A, Series B-1, Series B-2,
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Series C, Series D and Series E Preferred Stock the holder is at the time
converting into Common Stock and such rounding shall apply to the number of
shares of Common Stock issuable upon such aggregate conversion.
(ii) Upon the occurrence of each adjustment or readjustment
of the Conversion Price of the Series A, Series B-1, Series B-2, Series C,
Series D or Series E Preferred Stock pursuant to this Section 4, this
corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of Series A, Series B-1, Series B-2, Series C, Series D and Series E
Preferred Stock a certificate setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
This corporation shall, upon the written request at any time of any holder of
Series A, Series B-1, Series B-2, Series C, Series D or Series E Preferred
Stock, furnish or cause to be furnished to such holder a like certificate
setting forth (A) such adjustment and readjustment, (B) the Conversion Price for
such series of Preferred Stock at the time in effect, and (C) the number of
shares of Common Stock and the amount, if any, of other property that at the
time would be received upon the conversion of a share of Series A, Series B-1,
Series B-2, Series C, Series D and Series E Preferred Stock.
(i) Notices of Record Date. In the event of any taking by this
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corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend) or other distribution, any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right, this
corporation shall mail to each holder of Series A, Series B-1, Series B-2,
Series C, Series D and Series E Preferred Stock, at least twenty (20) days prior
to the date specified therein, a notice specifying the date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right.
(j) Reservation of Stock Issuable Upon Conversion. This
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corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series A, Series B-1, Series B-2, Series C,
Series D and Series E Preferred Stock, such number of its shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A, Series B-1, Series B-2, Series C, Series D
and Series E Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Series A, Series B-1, Series B-2, Series
C, Series D and Series E Preferred Stock, in addition to such other remedies as
shall be available to the holder of such Series A, Series B-1, Series B-2,
Series C, Series D or Series E Preferred Stock, this corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes, including, without limitation, engaging
in best efforts to obtain the requisite stockholder approval of any necessary
amendment to this Certificate of Incorporation.
(k) Notices. Any notice required by the provisions of this
-------
Section 4 to be given to the holders of shares of Series A, Series B-1,
Series B-2, Series C, Series D and Series E Preferred Stock shall be deemed
given if deposited in the United States mail, postage
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prepaid, and addressed to each holder of record at his address appearing on
the books of this corporation.
(l) Special Mandatory Conversion.
----------------------------
(i) If (a) this corporation consummates a financing (a
"Financing") pursuant to which any holders of Series B-1, Series B-2,
Series C, Series D or Series E Preferred Stock are entitled to exercise the
right of first offer (the "Right of First Offer") set forth in Section 2.4
of that certain Amended and Restated Investors' Rights Agreement, dated on
or about September 5, 2000, by and among this corporation and certain
investors and founders, as amended from time to time (the "Rights
Agreement"); (b) the Board of Directors of this corporation shall have
determined (based on a vote of the entire Board of Directors regardless of
their equity holdings) that it is in the best interests of this corporation
for the holders of Series B-1, Series B-2, Series C, Series D and Series E
Preferred Stock of this corporation to participate in the Financing (a
"Mandatory Offering") and have determined the aggregate dollar amount to be
invested by all holders of Series B-1, Series B-2, Series C, Series D and
Series E Preferred Stock (the "Aggregate Investment Amount"), which amount
may be more than or less than the holders' right to participate in the
Financing pursuant to the Right of First Offer contained in the Rights
Agreement; (c) this corporation shall have delivered a notice ("Notice") to
the holders of Series B-1, Series B-2, Series C, Series D and Series E
Preferred Stock: (1) stating this corporation's bona fide intention to
consummate the Financing, (2) indicating the number of securities to be
offered, (3) indicating the price and terms upon which it proposes to offer
such securities, (4) identifying the Pro Rata Share (as defined below) of
each holder of Series B-1, Series B-2, Series C, Series D or Series E
Preferred Stock of the Aggregate Investment Amount, and (5) offering each
holder of Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock the right to purchase such holder's Pro Rata Share of the Aggregate
Investment Amount within the time periods set forth in the Notice; and (d)
a holder (a "Non-Participating Holder") does not acquire or cause an
affiliate of such holder to acquire at least its Pro Rata Share of the
Aggregate Investment Amount within the time periods set forth in the
Notice, then that percentage of each Non-Participating Holder's shares
of Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock
equal to the percentage of such Non-Participating Holder's Pro Rata Share
of the Aggregate Investment Amount not acquired by such Non-Participating
Holder shall automatically and without further action on the part of such
holder be converted effective upon, subject to, and concurrently with, the
consummation of the Mandatory Offering (the "Mandatory Offering Date") into
shares of Common Stock of this corporation at a Conversion Price equal to
the applicable Conversion Price in effect immediately prior to the closing
of the Mandatory Offering for such series. For purposes of this subsection
4(l), each holder's Pro Rata Share of the Aggregate Investment Amount shall
be an amount determined by multiplying the Aggregate Investment Amount by a
fraction, the numerator of which shall be the number of shares of Common
Stock issuable upon conversion of the Series B-1, Series B-2, Series C,
Series D and Series E Preferred Stock then held by such holder and the
denominator of which shall be the total number of shares of Common Stock
issuable upon conversion of the Series B-1, Series B-2, Series C, Series D
and Series E Preferred Stock then outstanding. Notwithstanding anything
contained herein to the contrary, in the event that the price per share of
the securities sold in the Financing is greater than the price per share of
any other Preferred Stock previously sold by this corporation, the Board of
Directors may only declare such Financing a "Mandatory Offering" if there
is a corporate investor (as opposed to an
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institutional financial investor) participating in such Financing that
requires the existing investors to participate in the Financing as a
condition of its investment. For purposes of calculating a holder's Pro
Rata Share, the applicable number of shares of Common Stock issuable upon
conversion of the shares of Series B-1, Series B-2, Series C, Series D and
Series E Preferred Stock shall be calculated based on the number of shares
of Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock
outstanding immediately preceding the closing of the Mandatory Offering,
but assuming the conversion price that would be in effect at the completion
of the Financing of which the Mandatory Offering is a part, and further
assuming full participation in the Mandatory Offering by all holders.
(ii) The holder of any shares of Series B-1, Series B-2,
Series C, Series D or Series E Preferred Stock converted pursuant to this
subsection 4(l) shall deliver to this corporation during regular business
hours at the office of any transfer agent of this corporation for the
Series B-1, Series B-2, Series C, Series D and Series E Preferred Stock, or
at such other place as may be designated by this corporation, the
certificate or certificates for the shares so converted, duly endorsed or
assigned in blank or to this corporation. As promptly as practicable
thereafter, this corporation shall issue and deliver to such holder, at the
place designated by such holder, a certificate or certificates for the
number of full shares of the Common Stock to be issued and such holder
shall be deemed to have become a stockholder of record of Common Stock on
the Mandatory Offering Date, unless the transfer books of this corporation
are closed on that date, in which event he, she or it shall be deemed to
have become a stockholder of record of Common Stock on the next succeeding
date on which the transfer books are open.
(iii) In the event that a holder of Series B-1, Series B-2,
Series C, Series D or Series E Preferred Stock converts any Series B-1, Series
B-2, Series C, Series D or Series E Preferred Stock into Common Stock pursuant
to subsection 4(a) hereof within ninety (90) days prior to the date of closing
of a Mandatory Offering, such holder shall be deemed to have converted such
shares pursuant to this subsection 4(l).
5. Voting Rights.
-------------
(a) General Voting Rights. The holder of each share of
---------------------
Series A, Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock shall have the right to one vote for each share of Common Stock into
which such share of Series A, Series B-1, Series B-2, Series C, Series D or
Series E Preferred Stock could then be converted, and with respect to such
vote, such holder shall have full voting rights and powers equal to the
voting rights and powers of the holders of Common Stock, and shall be
entitled, notwithstanding any provision hereof, to notice of any
stockholders' meeting in accordance with the bylaws of this corporation,
and shall be entitled to vote, together with holders of Common Stock, with
respect to any question upon which holders of Common Stock have the right
to vote. Fractional votes shall not, however, be permitted and any
fractional voting rights available on an as-converted basis (after
aggregating all shares into which shares of Series A, Series B-1, Series B-
2, Series C, Series D and Series E Preferred Stock held by each holder
could be converted) shall be rounded to the nearest whole number (with one-
half being rounded upward).
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(b) Voting for the Election of Directors. The holders of
------------------------------------
shares of Series A Preferred Stock and Common Stock (voting together as a
single class and not as a separate series, and on an as-converted basis)
shall be entitled to elect one (1) director of this corporation at each
annual election of directors. As long as 1,500,000 or more of the shares
(as adjusted to reflect subsequent stock dividends, stock splits or
recapitalizations or the like) of Series B-1 Preferred Stock and/or Series
B-2 Preferred Stock originally issued remain outstanding, the holders of
such shares of Series B-1 Preferred Stock and/or Series B-2 Preferred Stock
(voting together as a single class and not as a separate series, and on an
as-converted basis) shall be entitled to elect three (3) directors of this
corporation at each annual election of directors. As long as 1,500,000 or
more of the shares (as adjusted to reflect subsequent stock dividends,
stock splits or recapitalizations or the like) of Series C Preferred Stock
originally issued remain outstanding, the holders of such shares of Series
C Preferred Stock shall be entitled to elect one (1) director of this
corporation at each annual election of directors. The holders of Series A
Preferred Stock, Series B-1 Preferred Stock, Series B-2 Preferred Stock,
Series C Preferred Stock, Series D Preferred Stock, Series E Preferred
Stock and Common Stock (voting together as a single class and not as a
separate series, and on an as-converted basis) shall be entitled to elect
any remaining directors of this corporation.
In the case of any vacancy (other than a vacancy caused by
removal) in the office of a director occurring among the directors elected
by the holders of a class or series of stock pursuant to this Section 5(b),
the remaining directors so elected by that class or series may by
affirmative vote of a majority thereof (or the remaining director so
elected if there be but one, or if there are no such directors remaining,
by the affirmative vote of the holders of a majority of the shares of that
class and/or series), elect a successor or successors to hold office for
the unexpired term of the director or directors whose place or places shall
be vacant. Any director who shall have been elected by the holders of a
class or series of stock or by any directors so elected as provided in the
immediately preceding sentence hereof may be removed during the aforesaid
term of office, either with or without cause, by, and only by, the
affirmative vote of the holders of the shares of the class or series of
stock entitled to elect such director or directors, given either at a
special meeting of such stockholders duly called for that purpose or
pursuant to a written consent of stockholders, and any vacancy thereby
created may be filled by the holders of that class or series of stock
represented at the meeting or pursuant to unanimous written consent.
6. Protective Provisions.
---------------------
(a) Subject to the rights of series of Preferred Stock
that may from time to time come into existence, so long as at least
1,005,000 shares (as adjusted to reflect subsequent stock dividends, stock
splits or recapitalizations or the like) of Series B-1, Series B-2, Series
C, Series D and/or Series E Preferred Stock remain outstanding, this
corporation shall not take any of the following actions without first
obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least fifty-one percent (51%) of the then outstanding
shares of Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock (voting together as a single class and not as separate series, and on
an as-converted basis):
(i) sell, convey, or otherwise dispose of all or
substantially all of its property or business or merge into or consolidate
with any other corporation (other than a
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wholly-owned subsidiary corporation) or effect any transaction or series of
related transactions in which more than fifty percent (50%) of the voting
power of this corporation is disposed of;
(ii) make a repurchase of any shares held by an employee or
stockholder that would cause the shares of Preferred Stock to lose their
status as "qualified small business stock" within the meaning of Section
1202 of the Internal Revenue Code of 1986, as amended;
(iii) authorize any additional shares of Series B-1, Series
B-2, Series C, Series D or Series E Preferred Stock;
(iv) declare or pay any dividends on its Common Stock or
redeem, purchase or otherwise acquire (or pay into or set aside for a
sinking fund for such purpose) any share or shares of Preferred Stock or
Common Stock; provided, however, that this restriction shall not apply to
the repurchase of shares of Common Stock or Series A Preferred Stock from
employees, officers, directors, consultants or other persons performing
services for this corporation or any subsidiary pursuant to agreements
under which this corporation has the option to repurchase such shares at
cost or at cost upon the occurrence of certain events, such as the
termination of employment; or
(v) authorize any other equity security, including any
other security convertible into or exercisable for any equity security,
having a preference over or being on a parity with, the Series B-1, Series
B-2, Series C, Series D or Series E Preferred Stock with respect to voting,
dividends, conversion or upon liquidation.
(b) In addition, subject to the rights of series of Preferred
Stock that may from time to time come into existence, so long as at least
1,005,000 shares (as adjusted to reflect subsequent stock dividends, stock
splits or recapitalizations or the like) of Series B-1, Series B-2, Series
C, Series D and/or Series E Preferred Stock remain outstanding, unless
unanimously approved by the Board of Directors of this corporation, this
corporation shall not take any of the following actions without first
obtaining the approval (by vote or written consent, as provided by law) of
the holders of at least fifty-one percent (51%) of the then outstanding
shares of Series B-1, Series B-2, Series C, Series D and Series E Preferred
Stock (voting together as a single class and not as separate series, and on
an as-converted basis):
(i) make any loans or advances to its employees or any
members of their immediate families, other than travel advances and other
advances made in the ordinary course of business or loans to employees made
pursuant to promissory notes issued for the purchase of shares under a
stock option plan or restricted stock plan approved by the Board of
Directors of this corporation;
(ii) guarantee any indebtedness or obligation of any other
party other than in the ordinary course of business;
(iii) create or suffer to be imposed any lien, mortgage,
security interest or other charge on or against all or substantially all of the
properties or assets of this corporation or any subsidiary;
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(iv) increase the size of the Board of Directors; or
(v) acquire, or permit any subsidiary to acquire, any
stock or other securities of any corporation, partnership or entity unless
immediately following such acquisition such corporation, partnership or
entity would be wholly owned by this corporation or a subsidiary of this
corporation.
(c) Furthermore, so long as any shares of a series of this
corporation's Preferred Stock remain outstanding, without first obtaining
the approval (by vote or written consent, as provided by law) of the
holders of at least sixty-seven percent (67%) of the then outstanding
shares of such series, the rights, preferences or privileges of such series
shall not be altered or changed so as to affect adversely such shares in a
manner different from other outstanding shares of this corporation's
Preferred Stock (it being understood that, without limiting the foregoing,
no series of this corporation's Preferred Stock shall have special voting
rights pursuant to this subsection 6(c) with respect to such alteration or
change because of proportional differences in dividend preferences,
liquidation preferences and conversion prices that arise out of differences
in the original issue price for such series). Notwithstanding the
foregoing, no approval pursuant to this Section 6 shall be required to
implement a conversion described in subsection 4(l) hereof.
7. Status of Converted Stock. In the event any shares of
-------------------------
Series A, Series B-1, Series B-2, Series C, Series D or Series E Preferred Stock
shall be converted pursuant to Section 4 hereof, the shares so converted shall
be canceled and shall not be issuable by this corporation. The Certificate of
Incorporation of this corporation shall be appropriately amended to effect the
corresponding reduction in this corporation's authorized capital stock.
C. Common Stock.
------------
1. Dividend Rights. Subject to the prior rights of holders
---------------
of all classes of stock at the time outstanding having prior rights as to
dividends, the holders of the Common Stock shall be entitled to receive, when
and as declared by the Board of Directors, out of any assets of this corporation
legally available therefor, such dividends as may be declared from time to time
by the Board of Directors.
2. Liquidation Rights. Upon the liquidation, dissolution or
------------------
winding up of this corporation, the assets of this corporation shall be
distributed as provided in Section 2 of Division (B) of this Article IV hereof.
3. Voting Rights. The holder of each share of Common Stock
-------------
shall have the right to one vote, and shall be entitled to notice of any
stockholders' meeting in accordance with the bylaws of this corporation, and
shall be entitled to vote upon such matters and in such manner as may be
provided by law.
ARTICLE V
Except as otherwise provided in this Certificate of
Incorporation, in furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized to make, repeal, alter,
amend and rescind any or all of the bylaws of this corporation.
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ARTICLE VI
The number of directors of this corporation shall be fixed from time
to time by a bylaw or amendment thereof duly adopted by the Board of Directors
or by the stockholders.
ARTICLE VII
Elections of directors need not be by written ballot unless the bylaws
of this corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State of
Delaware, as the bylaws may provide. The books of this corporation may be kept
(subject to any provision contained in the statutes) outside the State of
Delaware at such place or places as may be designated from time to time by the
Board of Directors or in the bylaws of this corporation.
ARTICLE IX
A director of this corporation shall, to the fullest extent permitted
by the General Corporation Law as it now exists or as it may hereafter be
amended, not be personally liable to this corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, except for
liability (i) for any breach of the director's duty of loyalty to this
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) under
Section 174 of the General Corporation Law, or (iv) for any transaction from
which the director derived any improper personal benefit. If the General
Corporation Law is amended, after approval by the stockholders of this Article,
to authorize corporation action further eliminating or limiting the personal
liability of directors, then the liability of a director of this corporation
shall be eliminated or limited to the fullest extent permitted by the General
Corporation Law, as so amended.
Any amendment, repeal or modification of this Article IX, or the
adoption of any provision of this Amended and Restated Certificate of
Incorporation inconsistent with this Article IX, by the stockholders of this
corporation shall not apply to or adversely affect any right or protection of a
director of this corporation existing at the time of such amendment, repeal,
modification or adoption.
ARTICLE X
This corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
ARTICLE XI
To the fullest extent permitted by applicable law, this corporation is
authorized to provide indemnification of (and advancement of expenses to) agents
of this corporation (and any other persons to which General Corporation Law
permits this corporation to provide
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indemnification) through bylaw provisions, agreements with such agents or other
persons, vote of stockholders or disinterested directors or otherwise, in excess
of the indemnification and advancement otherwise permitted by Section 145 of the
General Corporation Law, subject only to limits created by applicable General
Corporation Law (statutory or non-statutory), with respect to actions for breach
of duty to this corporation, its stockholders, and others.
Any amendment, repeal or modification of the foregoing provisions of
this Article XI shall not adversely affect any right or protection of a
director, officer, agent, or other person existing at the time of, or increase
the liability of any director of this corporation with respect to any acts or
omissions of such director, officer or agent occurring prior to, such amendment,
repeal or modification.
* * *
THIRD: The foregoing amendment and restatement was approved by the
holders of the requisite number of shares of said corporation in accordance with
Section 228 of the General Corporation Law.
FOURTH: That said amendment and restatement was duly adopted in
accordance with the provisions of Section 242 and 245 of the General Corporation
Law.
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IN WITNESS WHEREOF, this Restated Certificate of Incorporation has
been executed by the President and the Secretary of this corporation on this
5/th/ day of September, 2000.
/s/ Scott Grout
-------------------------
Scott Grout
President
/s/ Kent Coker
-------------------------
Kent Coker
Secretary
SIGNATURE PAGE TO CHORUM TECHNOLOGIES INC.
RESTATED CERTIFICATE OF INCORPORATION
