20160622Application.pdf

Anita Taff-Rice
iCommLaw
L547 Palos Verdes, #298
Walnut Creek, CA94S97
[phone]
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fune 18, 20L6
Ms. fean fewell, Commission Secretary
ldaho Public Utilities Commission
4T2WestWashington
Boise, lD 83702
Re: ExteNet Systems, Inc.
Dear Ms. fewell,
E NS rr- b-D t
Please find enclosed original plus seven copies of the Application for Certification on
behalf of our client, ExteNet Systems, Inc.
We are also enclosing a copy of this letter. Would you please date-stamp this and
return to us in the enclosed stamped, self-addressed envelope?
If you need any further information, please do not hesitate to contact me.
Thank you.
Sincerely,
ONr'a-ULII-DW
Inna M. Vinogradov
Counsel for ExteNet Systems, Inc.
[e-mail]
(916) 76e-L664
Application of
ExteNet Systemsr lnc.
for Registration/Certification as a Wholesale
Provider of Telecommunications Services
frTCEIVED
iii6 _lirj{ ZZ pff l: 0S
'','.,ili*;lEsro,,r
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
Case No. E, N S--fl l"-Ol
APPLICATION
ExteNet Systems, Inc. ("ExteNet" or "Applicant"), by its undersigned counsel, and
pursuant to Order No.32277 issued in Case No. GNR-T-11-01, IDAPA 31.01.01.114, and Title
62 of the ldaho Code, hereby applies to the Idaho Public Utilities Commission ("Commission")
for a Registration/Certification as a wholesale provider of telecommunications service in the
State of Idaho.
I. Name, Address and Form of Business (IDAPA 31.01.01.114.0f)
Applicant's legal name is ExteNet Systems, Inc. Applicant does not maintain a place of
business in Idaho and responsibility for Idaho operations will be handled by Applicant's current
management team from its headquarters in Lisle, Illinois.
ExteNet Systems,Inc.
3030 Warrenville Road, Ste. 340,
Lisle, IL 60532
Phone: [phone]
Fax: [phone]
ExteNet is a duly formed corporation organized and existing under the laws of the state
of Delaware. ExteNet was formed as a Delaware corporation on August 27,2004, and its fifth
amended certificate of incorporated in Delaware was filed on 0910612012. Applicant was
originally formed under the name Clearlinx Network Corporation and changed its name to
ExteNet Networks, Inc. on August 1,2006. A copy of Applicant's Certificate of Formation is
provided in Exhibit A. Applicant's certificate of authority from the Idaho Secretary of
State is provided as Exhibit B.
Applicant's registered agent for service in Idaho is:
Corporation Service Company,
12550 W. Explorer Drive, Suite 100,
Boise,ID 83713
The principal officers and key managers of Applicant are as follows:
Title Officerts Name
CEO/President Ross Manire
EVP/COO Oliver Valente
EVP/CTO Tormod Larsen
EVP, Business Development and
Stratesy
Eric Lekacz
EVP/CFO Dan Timm
Senior Vice President, General
Counsel and Corporate Secretary
Anthony Lehv
Senior Vice President, Sales and
Marketing
Andrew Chavez
Vice President, External Relations Jay Noceto
Vice President, Global Services Tim Ayers
Applicant is a wholly owned subsidiary of Odyssey Acquisition,LLC which has a 100%
membership interest in the Applicant. Odyssey Acquisition, LLC is ultimately owned by four
groups of investors: Stonepeak Communication Holdings, Inc.; Digital Bridge Small Cell
Holdings, LLC; Delta-v Capital MRH LP; Vertical Towers Holding, LLC; and ExteNet
management.
II. Contacts for Application
All correspondence and communications regarding this Application should be directed to:
Anita Taff-Rice
Inna Vinogradov
iCommLaw
1547 Palos Verdes, #298
Walnut Creek, CA 94597
415-699-7885 (tel)
925-274-0988 (fax)
[e-mail]
[e-mail]
ExteNet toll-free customer service number: [phone]
Contact for resolution of customer complaints with the Commission is:
Brian S. Kirk
Assistant General Counsel
ExteNet Systems,Inc.
3030 Wanenville Road, Ste. 340,
Lisle, IL 60532
Phone: [phone]
Fax: [phone]
bkirk@ extenetsystems. com
Mr. Kirk is also responsible for responding to Commission inquiries concerning rates and
price lists or tariffs. He is assisted in this role by other ExteNet employees who are responsible
for regulatory compliance matters.
IV. Interconnection Agreements (IDAPA 31.01.0f .114.06)
ExteNet primarily installs its own facilities in or on existing infrastructure such as
conduits and utility poles in the public rights of way. Therefore, it may not require unbundled
network elements (UNEs) purchased through an interconnection agreement ("ICA") with the
incumbent local exchange carrier ("ILEC"). Should ExteNet determine it is not feasible to install
3
its own facilities and that an ILEC has suitable facilities, ExteNet would open negotiations for an
ICA as necessary after being granted authority by the Commission. If ExteNet reaches agreement
on an ICA through negotiation or arbitration, copies of the ICA will be filed with the Commission
for its approval.
V. Compliance with Commission Rules (IDAPA 31.01.01.f 14.07)
Attached hereto is a sworn verification executed by Applicant stating that the Applicant
agrees to comply with all Idaho laws and Commission rules and regulations.
VI. Conservation of Telephone Numbers
At this time, Applicant does not have any numbering resources and does not anticipate
obtaining numbering resources for ldaho. If Applicant does obtain numbering resources for
Idaho, however, it acknowledges that it shall be subject to numbering conservation measures
including mandatory one thousand (1,000) block pooling. Attached hereto is a sworn
verification acknowledging Applicant's requirement to manage numbering resources. To the
extent Applicant has telephone number resources in Idaho, Applicant will evaluate its numbering
resources and donate to the numbering resource pool unused one thousand (1,000) number
blocks and one thousand (1,000) number blocks that have fewer than ten percent (10%) of
telephone numbers assigned. Applicant will file the necessary utilization reports with the number
administrator and semi-annually report their number resource utilization reports with the number
administrator and semi-annually report their number resource ttilization/forecast G\fRUF) data at
the one thousand (1,000) block level for each rate center within their service territory.
VII. Conclusion
WHEREFORE, ExteNet respectfully requests that pursuant to Order No.32277 issued in
Case No. GNR-T-11-01, IDAPA 31.01.01.114 and Title 62 of the ldaho Code, the Idaho Public
Utilities Commission issue RCLEC, Inc. a Registration/Certification as a wholesale provider of
telecommunications service in the State of Idaho.
iComml-aw
Anita Taff-Rice
InnaVinogradov
1547 Palos Verdes, #298
Walnut Creek, CA94597
4ts-699-7885 (tel)
925-274-0988 (far)
[e-mail]
Dated: htre 17,2016
EXHIBITS FOR APPLICATION OF EXTENET SYSTEMS, INC.
FOR REGISTRATION/CERTIFICATION AS A
WHOLESALE PROVIDER OF TELECOMMUNICATIONS SERVICES
EXHIBIT DESCRIPTION
A Articles of Organization
B Certificate of Authority Issued by the Idaho Secretary of State
Officer Verification
).
,ExteNet Systems, Inc. APPlie
.1
for CPCN
P3'GE' L
The fiist gtate
I, EeRRrEr SiIrfE ItrIilDSOR, SECREEDBY Or st.ArE Or EEE SEetrE Or
DET.AIIARE, .DO EEBEBY CERrrPr rEE ATTACEED
COPY OF gEE CERIITIC}:TE OF INCORPORAITION
1)
CoRPoRNIION!" EILED rN rErS OEFTCE ON rEE
,:,.. :
,A.D.. 2002, AE L2 O',CLOCB P,M.
XS }, IRUE .[I\ID CORREC!
Of 'lqLEjNRtMX NEBWORK
TISSIE DAY OE OCEOBER,
e. rxIrED coEr oF mrs qERrrrlcarE EAs BEEII ToRsIAsDED ro rEE
':.:
3574949 8100
020608916
,futo^'.^r+J*Zk%r;"a^**
Harriet Smidr Windsor, Secreary of Sate
AUIEENIICAIrON: 20 1{373
*.. DAIE: 10-02-02
ExteNet Sysiems, Inc. Application for CPCN
STATE OP W;LANARE ,
$,CRETARY O8 S?ATZ
DZVISToIJ Of C?,RPORArIONS
EZIEO 72:AO PN 10/07,/2002
020608976 .- 3574940
CERTIFICATE OF INCORPOR^ilTION
OF
CLEARLIM( NETWORK CORPORATION
I, tho rmdcrsigned natural lrcirsotr acting as ao incorporator of a ooryoration (tcremancr
callcd &a'"Cworettof) dcr tbc Gcncral Corpoatioo Law of fre Statc orf Hawgro(D@L'), do hcr,&y.dq &e following Clti$garc of Incorporation forthc Corporatioru
FIRST: The namc ofthc Corpordiou is ClearLinx Nefiysk Corporation
SECOIT{D: Therogist€ndofficoofthcCorporetioninthoStateofDelawarcislocateilat
Corporation Trust Ccntcr, Ul09 Oregs Sueet, in tLc City of Witnington, @uaty ofNcw Castle.
Thc ngme of.tho rggistered ageat of the Cor-eom6,on st such addreso ig:tte Coqporatiorr Tnrst
Company.
., 1
TTIIRD: The purpose for whicl t&e Corporation is orgnnized ic to cnggge in any d all
laurfiil acils and activity for which oorpor*ions. may be oEmizod under the DGCL The
Corpomtion will have perpo0nl €xist€Dca
:
FOLIRTII: Tte Corporarion shatl havo two classes of stock, Common Stoolg $0;01 pr
valuc pcr sharg and Prefcred Stoclq $0.01 par value per share. TIre total mmber of sbares ftat
the Corporatim shgll havo authotity to is$e is 1,000 sbffoc of Cornmon Sto* and 1,000 shrres
of Hqlcil Stodc Subject to ftc limitati,ms prcscribed by law od fts provisions of this
Certificarc of Incorporation, thc board of direstors of thc Corporatioa is arlhorized to issrrc th€
Pr€fcrrcd Stod( from timo to timc in ono c mmo scries, eaohof such scrics to bavo sr& voting
powtr!, fuIl or limited, or oo rrcting powc(B aad rnrch dcsigratigos, gcfcrurces aod rel*ive,
PrticiDatiqg, optional or other spooial riChtq md strch qu'lifcatious, lfunitafioos or restictions
tfrc,reof, as sball bo dacrmainoalby thotbud of directors in a regolrt'ion or resolutioas pmviding
for &c issue of such Prcfcrrod Stoclc Subjcct to thc powag prefertnccs md ti$fis of aoy
Prcftrrcd Stoot including my scrics therco{, hEviqg aoy prcfcrcncc or priority ovGr, or dgbtg
sr4€rior to, tts Comuron Sto* and cxccpt as otbcrwisc provided by larxr, the holdcrs of thc
Corrmon Sto* ghall have aod pooseos all powers aod voring and o&cr rigb pertaining to tho
stock of this Co?d*,aud eafh shrrcofCommon Sto* shallbc entitlcdto o,[cvotc,
FIFTH: The uame of the iaoorporator of the Corpordion is R. Barton llatrris, and tho
"railing addrpss of mch is 4000 Fountah PlaoE 1445 Ross Avefiue, D8lls8, Tqas
SD(TH: Directors of thc Corporation neod nor be elec'ted by unittco ballot unless tho by-
laws of tte Coqnration o&cnrrise provide-
DAIIATS 790127_1 61t53
ExteNet Systems, Inc. Application for CPCN
SE\fENfiI: Thc ilirectors of the Corpordion shall have the powcr to adopt, men( ud
rcecal theby-laws of thc Corporatiou
EIGIITII: Tbe Corpomtion shall inaemnify aoy p. oo who waq is, or b theatened to
bc madc a party to a proceeding (as Sereinaftcr d€finGd) by reason of the ftct eat hG or ehe (a) is
or was a dirctor or officer of the Coryoration or (b) vhilc a director or officer of tto
Coqporation" is.or was scrvi4g at thc rcqncst of ihc Coiforation as a dirociloq,officc, partnsr,
v@turrtr, pnroptietor, trusteer cryIoyoe, ag€aq or eimilar firnotionaryr of aoother foreign or
dornestic oolporation, parhership, jolntvcnturg soleproprietorship, tnrs! employeebwfit plan,
or othrr cnrtorprisc, to tho ftUest cxt€nt pcreittcd undcr tho DGCL, as thc same odsts or may
hereeftcr bo amcodcd. Sueh right stull bo a conkEct right aud as such shall run to tho belrefit of
any direc{or oi oficcr who is elcstcd and acccpts tho position of direo:tor or officer of the
Corrporation or elcc-ts to contiuue to seryc as a dircctor or officcr of thc Corporation while flris
Article Bighth is h e,ffsot Any repeal or amcodrneat of this Article Eighth Sall bc prospoc{ivo
only qnd shell not limit the d$ts of any sucl director or ofEccr or tho obligations of tlre
Corpor*ion with respect to any daim arising from or rclatod to ths scrrriccs of srrch diroc'tor or
ofroer in any of tho furqgpitrg calncitiee pior to ury srch rcpeat or amcodocot of lhis Article
Eighlt Such rigtt 6ha[ hshtdo fte dglt to bo paid Py the Corporation €olp€nses hcurrod in
..aefendng dny suc[ poceeding in a&runoe of its final dispoeition to the msxinrrm trtest
p€rmittd under tha DGC! as the sms exists or msy hereafter be amended" If a clnirn for
indcmnificatiou or advacement of xpenses hereud€r is not paid in futl by the Corprdion
wiftiq 6O daylc afia a udu€o claim has beea rcocivod by:60 Corporatioq 6e claimmt may at
any.timo thsrcafter briug suit qgainst tfc Corporatlon to rec,Over tbe rurpaid smourrt of the cleim,
and if successful in whole or in par! fte claimmt shall also be e,ntidodto bc pard the eirpenses of
. prosanrting suoh clain It shall be a defcoso to ary guch actiou that nrch indernnification or
aavaoccocnr of oosts of defense ue Dot p€rmfutod rmder thc DGCL, but the brurden of proving
sudl dcfnse slnll bs oa thc Corporrtion Neithcr the &ilure of tho Corporatioa (including its
board of direotors or any comrrittee thereofl, idependcat legal oounsel, orstoc&tolders) to bavc
made iu dstcrminatioa prior to fte commeoccmcnt of $roh ac-tion that indffiification o{, or
advanccracnt of oosts of defense io, thc claimant is pcroiseibls in the circrmshnccs aor im
achral'dstcrminatiotr by ftc Corporation (including its bo-ard of directors or any cournitee
thcrcofi, independent lcgal cormsel, or stoctholders) that srrch indcrruifisdion or advariccmcnt is
not pconiseible shall ba a dsfensc to the action or creatc a prosrnption tbat zuoh indcuutification
or advanccmcnt is uot peroissibla Ia tho orrcnt of thc death of ary p€rsonhaving a right of
indcrmuification rmdcr ltic &regoing lrovisions, such right shEll iourc to &c b€nefit of his or her
hdrs, exeortorq adminifiEtors, and personal rqnescntatives. The ri&fs confcrrod abovc ehall
rot bo orclusivo of my othcr rig[t that uy p€mcon nay have or hcreafter aqdre i,nder any
statutc, by-law, rrsolution of stocl&olders q {rectors, agrocmenL or othcrurisa
t-.t-
.Thc Corporatiou uay additionally indemniff any E floyco or agcot of thc Corpontion to
drc fu[cst orteat pcmitted by taw.
Ag uscd hcr,ein, the temr "proce*nkg! rneaos my thlatend pcading; or completed'
action, srit or Foceedi4g, ufrether civil,
-criminal,
a.{-inisfidivq arbitrdivq or investigativc,
61853DALtAti 790127_l
' ExteNet Syqterns, Inc. Application for CPCN
ary ry-peal iourch an aation, suiq, or prcceoding, rnd my rnquiry or investigation that muld lead
to such an astioq guit, orplocoodiry.
lNINTHI A ilir€ctor of thc Corporation Sall not be pcrsonally liablo to tho Corpcation
- or its stod$oldcE8 formonetary,l-nagBs frr breach of fdnciary drt'y as a dircctor, exccpt for
Uabitity (a) fu mybrea& of the dircctor's duty of loyalty b the Corporatioq or its stoc&holders,
(b) for acts or onissions not in geod fri& or 6at involv.e int€otionsl Eisoofl&rct or loowing, violatiou of lan, (c) under Section 174 of &e DCCI" oi (d) for any Uarsaction ftrom whi& ftc
director d€rived an improper personal benefiL Any repeal or ameodmat of this Ardclo Ninrh
shall be prospec.tivo only and drall not advcmscly affoct any limitation on the pcrsonal liability of
a diracGm of tho Corporation arising fio,m an act or ourissiou bccuning pnior to thc titnc of srrch
repeal or ameodmeoi ,In addition to Oo circumstarc in v&ich a'dircAor of the Corporafiou is
not pcrsooatty liable as set forth ir &c forugoing povisigns of this Article NiDrth, a dirtctor sball
nd Le liable to thc Corporation or ib stoc}froldeo to sr]cb firrther extent as pemitted by any law
hereaffcr enacted, inchrding without limitation any $$soqueot @€durcot to trc DGCL
L the undcrsignoq for ths inrposo of furming the Corpordion uoder thc laws of the State
ofDeleware, do make, filq md reaond &is C€rtificate of Inoorporatign md do oet:Ify that this is
my aot and dood and &at the facts statod.hffdn ane tnre ao4 acoqrdilgly, I do hmnto setmy
haod oathis lst deyofoctobor,Z@Z. 1. '
/s/ R- Bnrton ltrrris- II
R- Brton tlarriq II, Anthotized Psson
3
DAII S?90lzr_r 6lt5j
ExteNet Svstems' Inc' Appric
w hxu or e PAGE 7
'Lfu first State
T, EARRTET SMTTE WTNDSOR, SECRETARY OF STATE OF THE STATE OE
DELAWARE, DO flEREBY CERTTE| rHE ATTACEED rS A TRtE N{D CORRECT
COPY OE TEE CERTTEICATE OF NTENDMENT OF "CLEARLTNX NEITIORK
cowoRATro$" t CEANGTNG rrs NNTIE FAOM "CLE;AJi.LT,NX NETWORK
CORPORATION' TO "EXTENET SrSrEtIS, INe-", FILED IN THIS OFFICE ON
THE FIAST DAY OF AUGUST, A.D- 2005, AT 2:19 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFTCATE EAS BEEN EORWARDED TO THE
NEW CASTLE COUNTY RECORDER OF DEEDS.
i574949 8700
0607272s9
&o--r^rl J**/*%r--,*r^.--
Harriet Smith Windsor, Secretary of State
AWHENTICATION : 4 942998
DATE: 08-07-06
ExteNet Systems, Inc. Application for CPCN .!'. --.- t
CERTMICATE OF AMEhIDMENT
OF TIIE RESTATED CERTIFICATE OF INCORPORATION OF
CLEARLINX IYETWORK CORPORATION
It is hereby certificd that:
1. The narne of the corporation ftereinafter called the "Cotporation') is Clearlinx
Network Corporation.
2. The Restaled Certificate of Incorporation of the Corporation is hereby amended by
striking Article FIRST in its enttety and re,placing it with the following:
'ofhe name of the corporation is ExteNet Systems,Inc."
3. The Amendment of the Restated Certificate of Incorporation herein certified has
been duly adopted in accordance with the provisions of Sections 2?3 and ?A2 of, the General
Corporationl-aw of the Stat€ of Delaware.
IN WIINESS WIIEREOF, the Corporation has caused this Amendment to be executed by
its officer hereto duly authorized this -tta"V of July, 2006.
CLEARLIN( I\IETWORK CORPORATION
By: /s/ , ,.RossManire
Name: Ross Manire
Title: Chicf Executive Officer and President
Stata of &'lwaa*elctazy of StrteDivisiqt of Ca.rcratiotts&lirzc.ted 02:77 pfu Oe/ol/zooe
EILED 02:79 At 08/07/2006s$r 0607272s9 - 3574949 ErrE 21 l}z4ffO0ol Nl25 3 9/Vcrsiqr #:. I
ExteNet Systems, Inc. Application for CPCN
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ExteNet Systems,Inc. Application for CPCN
SECOND AMENDED AND RTSTATED CERTIHCATE OT INCORMRATION
OF
EXTENE'T SYSTIIMS, INC.
{ftrlsuert to Sections Nl and 2d5 of the
Genersl Corporation Law of the State of Dtlawarc)
ExteNet Systerns, Inc. (tle 'Coqporatiotr"), & corponation organizod and existing
under and by virtue of the provisions of the Oenoral Corporation l"aw of the Stat* of Ddawam
(the "Ceneral Coryoration l,aw*),
DOES HEXEBY CERTIF"f:
FIR$T: That the narns of tbis Corporation is Exte}{et Systerns, he, and thet &is
Corporation was originally incorporated pursuant to thc Oeneral Corpsratian X*aw on Octobrer I,
2002 under the narnc ClearUnx Netwsrk Corporation.
SECOND: That the Board of Directors of thc Corporatioa duly adopted
rcsolutions proposing to amend ard restate the Restaled Certificate of Incorporation of the
Corporation, declaring eaid amendmcnt and rcstatement to be advisable and in the best irteresls
of thc Corporation and its stockholdcn, and authorizing the appropria& officcrs of thc
Corponation to solicit the consent of thc stockholders therefor, which resolutioa setting fo*h &e
proposed amendment and restatsrrnt is as follows:
R"0SOLY$, that the Restatcd Certificate of lncorporation of the Corporation be
arrrcnded and rcstated in its entirety as follows:
ARTICLE I ,
The namc of the Corpor.ation is ExteNet Systems, Irc"
ARTICLE II
The address of the rcgistcrtd office of the Corporation in the State of Dclaware is
located at 271I Centervile Road, Suitc 4ffi, City of Wilminglon, County of Ncw Castle, 19808.
The name of its registered agent at such addrcss is Corporation Service Company.
ARTICLE III
The naturc of the business or purposes to be conducted or promoted by the
Corporation is to engagc in rny lawful acl or activity for which co{porations may bc organized
under the General Corporarion l-aw. The Corporation will have perpelual existence.
Strte of galarnre
.Srcrct rr/ of Sl.:-tgQilrisisr of Ccrrrrratians,alir/arsd 09:36 Ald a8/24/2007
sn[l 070953810 - 357$9it9 t{mg
ExteNet Systems, Inc. Application for CPCN
ARTICLT W
A. $g&orization of Stock. The Corporation is authorired to issue two classCIs
cf stosk lo k desigrrated, rcspcctively, common stock and prefentd $tock. Ths total numher of
shares that the Corporation is authorized to issue is Sixty Threc Million Seven Hundred Eleven
Thousand One Hundred Twenty (63,711,120). The total number of shares of common stock
authmized to be issued is Thirty-Five MIIion (35,000,000), par value $0.001 per sharc (the
"Common Stock"). The toral number of shares of preferred stock authorizcd to bc issued is
Twenry Eight Million $even lfundrod Eleven Thousand One Hundrcd Twenty (28,711,120), par
vslus $S.00I per sharo (the'?roferrcd Stock'"), eonristing of $evsntmn Miltion Eight Hr.r*dred
Sixty Six Thousand Six Hundred Sevenry Two (17,866,672) shares of Series A Preferr*d Stock
and Ten Million Eight Hundred Forty Four Thousand Four Hundrcd Forty Eight (10,844,448)
sharcs of Series B Prcferred Stock.
B. Rieh$, Prefercnccs and Rxricdons of Pre&frqd Stock. The rights,
prefercnces, privileges and restrictions granted to and imposed on the Prelerred Stock are as set
fbrrh below in this Article fY{B}
l. Diyide.l# Prpvisions. Ths holdens of shares of kferred $tock (on an as-
converted to Common Stock basis) shall be entitled to rcceive dividsnds, otrt of any assets
legalty availablc thcrefor, mtably with the holders of Common Stock payable when, as and if
dmlared by the Board of Directors. Such dividsnds shall not bc cumulative. Declared but unpaid
dividffids with respcct to a share of Preferred Stock shall,'upon conversion of such share to
Common Stock, be paid to the extent sssets arc legally available therefor either in cash or in
Common Stock ivalued at the fair markct value on thc date of paynrent as dstcrmined by rhe
Board of Directors of the Corporation).
2. Uouidation Prefercnce.
(a) Upon the occurence of any Liquidation Event (as defined below), cithar
yoluDtary or involuntary, the hol&rs of Preferred Stock shall be entitJed to receive, prior and in
preference to any distrjbstioo of the proceeds of such Liquidation Event (the '?roceeds") to thc
holdem of Common Stock by reason of their ownership thcreof, an amount per share equal to the
sum of thc applicable Originn! Issue P?icc (as defined bclow) for cuch series of Prefened Stcck"
together with all declrcd but unpaid dividends *n such share plus & per a&num amount for the
rumber of cornplete calende months such share has been issued and outstanding equal to five
pcrcent (5%) of the applicable Original Issue Price. If, upon the occursnce of such evsnt, the
Proceeds thus distributed among the holders of the Prcferred Stock shall b insufficient to permit
the payment to such hol&rs of the full aforesaid preferential amount& then tho entire Procceds
Iegally available for distribution shall be distributed ratably among the holden of the Prreferred
Stock in proportion to &e full prcfercntial amounr that cach such hol&r is o&erwiss cntitled to
rcorive under this subssctio* (a). For purpoacs of this Sccond Amended and Rcstated Certificate
of Incorporatimr, "Original Is$uc Price" shall rn*an $1.20 pcr rharc for e*ch share of the Series .&
keferrcd Stock (as adjusted fior any stock splits, slock dividands, cornbinations, subdivisions,
rccapitalizations or thc like with rcspcct to such series of Pnefenrd Stock) cnd $1"4754 pcr share
for cach share of the Series B Prefcrred Stock (as adjustcd for any stock splits, stock dividends,
ExteNet Systems, Inc. Application for CPCN
combinations, subdivisions, recapitalizarions or the likc with respect to such series of Prefened
Stock).
(b) Upon cornplction of the distribution required by subsection (a) of this
$ection 2, then all of the rcmaining Procceds shall be disributed among thc holders of Prefcrrsd
Stock and Common Stock pro rata bascd on the number of shares of Common Stock hcld by
each (assuming full conversiort of all such Preferred Stock).
(c) lntentionally omined
(d) Liquidation Event.
(i) For purposes of this Section ?, a "Liquidation Event" shall include
{A) the closing of thg sale, transfcr or other disposition of all or substantially all of the
Corporation'$ assots other than to a par?nt or a wholly-owncd subcidiary, (B) the consummation
of thc msrger or consolidation of the Corporation with or into anorher entity (except a merger or
consolidation in wNch the holder$ of capital stock of the Corporation immediuely prior to such
merger or consolidation continue aftcr the consummation thercof to hold at least 50% of the
voting pCIwer of thc capital stock of the Corporation or thc sunriving or acquiring entity), (C) the
clooing of an isruane or transfcr (whe&er by sale, mcrger, consolidation or othenvise), in onc
transrction sr a series of rtlated transactioas, to a Fenon (as dcfincd bclow) or group of
affiliated Persons (other than an underwritq or undenrriters of the Corporation'g swuritics and
their transfses), of the Corporation's securities if, after such closing, the holdem of tlre
Corporation's securities pnor to such transfer would hold less thm 50% of the outstanding
voting securities of the Corporation, or (D) a liquirlarron, dissolution or winding up of the
Corporatios; provided, however, &at a transaction shall not constitute a Liquidation Event if its
solc purpsc is o change the statc of the Corporation's incorporation or to create a holding
company &at rvill bc owncd in substantially the same proportions by the Pcrsons who held the
Corpration's sccuriries imrnediately pnor to such transaction. Nonrithstanding the prior
sentence, the sale of shares of thc Corporation's Preferred Stock shall not be decmed a
'fiquidation EvenL* The trearment of any particular transaclion or series of related transactions
as a Uquidation Event may be waivcd by the vote or wrinen consent of the holders of at least
sixty pcrcant {&%) of aII the ouBtanding sharcs of Prcferred Stock (voting together as a single
class on an as-convc*ed basis). For the purposs of this Sccond Amended and Restated
Certificate of Incorporation, "Person" means an individual, a corporation, a partnership, an
association, a tru$t, a limited liability compaoy or any other endty or organization, including a
goyenurent or political suMivision or any agency or instnrmentality thereof.
(ii) In any Liquidation Event, if hcecds received by the Corporation
or its stockhol&rs arp other than cash, the value of such Proc€eds will be equal to their fair
market value. Any securities includcd wilhia hoceeds shatl be valued as follows:
(A) S*urities traded on a public market and not subject to
restrictions on frree marketability covered by (B) below:
(l) If traded on a securities exchange or through the
Nasdaq Natioaal Markct, the value shall bc decmed to be thc average of the closing prices of the
ExteNet Systems, Inc. Application for CPCN
secudriss on such exchango or systom over the twenty (20) tradingday period ending three (3)
trading days pri*r to thc closing or consummation of thc Liquidation Event;
t2, If actively trad€d oycr-the-counter, the value shall
be deemcd to be thc aver€e of the closing bid or sale prices (whichever is applicable) over the
twenty (20) tr*ding-day Friod ending three (3) trading days prior to tlre clo*ing or
con$ummation of tho uquid*tion Event; and
(3) If there is no active public market, the value shall be
the tair market valuc thereof, a$ mutually dstermincd in good faith by thc Board of Dirwtors of
&e Corporation and thc hr:trden of at least ,sixty perecnt (60%) of rhe' voting power of all then
ouxranding shares of Pnefe$Ed Stock {voring oge*r*r as a single class on an s$-coRverted basis}.
(B) The method of valuation of securitics subject to restrictions
un frce marketability (othw than r*stdctions arising *olely by virnr of a stockholder's $talu$ a$
an affiliatc or former aflilian under Rule 144 of the $ecuriries Aet uf 1933, as smcnded) strall bc
to make an appropriatc discouut from the market value dctermincd as above in (A) (l), (2) or (3)
to rcflrct rhe apprcximate fair rnarket value thereof, aE mutually deaermined in good fai& by the
Boald of Directors of the Corporation a*d the holders of at least sixty porccnt (60%) of the
voring power af all then outstsding shar€$ of srrch prcfsrrcd Stock (voting together s$ & single
class cn an as-converted brcis),
(C) The foregoing nnethods for valuing non*cash consider*ion
to be distribulsd in cornemion with a Uquid*tion Evcnt chall be superseded by any
detcrmination sf such value set forth in the definitive ag"enerlts governing such'Liquidation
Event.
(iii) In ths event ihe rquimrncnts of this Section 2 arc not complied
with, the Corporation shall fo*hwith eithen
(A) cau$e the closing of such Uquidation Event to be
po$tponed until such time as the reguircments of this S*tion 2 havs been complied with; or
(B) cancel such tranmction, in rryhich event the rights,
prefcrences and privileges of the hol&rs of the Preferred Stock shall rcvert to and be the $ame as
such rights, prcfercnces and privileges existing immediately pror to the datc of the first nctice
referrcd to in subscction 2(dXiv) herrof.
(iv) The Corporation shall give each holder of rccond of Prcfened
Stock wrinen notice of each impending Uquidation Event not later than ten ( I0) days prior to the
closing or cor$unmation of spch transaction, and shall also notify such holders in writing of the
final appmval of such transacfon. The first of such notices shall dcscribe thc rnarerial terms and
conditiona of the impcoding transaction and ttre provisions of &is Section 2" and the Corpration
shall thercaftcr gtye such holdcrs prompt notice of any matsrial changes to thc teru)s of the
rra*saction. The transaction shall in no event take place sooner than ten (10) daln after the
Corporation has given rhc first notice providcd for hsrein or $oonor than trro (2) days after the
Corporation has given notice of any mfllorial changer provided for hercin; plovided, however,
that such perids may be shofiened upn thc written consent of the holders of Preferred Stock
ExteNet Systems, Inc. Application for CPCN
that (i) are *ntitled to such Bo{ee rights or similar notice rights and (ii} repre$cnt et leost $ixty
percenr (60%) of thc voting power of all then outstanding shares of the Prcfered Stock (voting
together as a singlc class on an as-converted basis)" The holders of the outstanding Preferred
Stock can waive the notice raquirements described in this subsection (iv) upon the affirmative
vote or writtsn con$ent of the holdsr$ of at leasr sixty percent (60%) of the shares of Prefarred
Stock then ourstanding (voting together as a single class on an &s-converted basis).
Notwithstanding the forcgoing, the Corporatiou shall not b0 obligated to pmvide such noticss lcl
the holders of Prcferrcd Stock so long as each of Sevin Rossn Fund YIII L.P., Center.Point
Venrure Fund III(Q), L.P., Colurnbia Capital Equity Partners m (QP), LP. and Ccntennial
Ventures YII, L.P. or their rcspcctive affiliates reuins the right to appoint a member of the
Corporation's Bod of Drcctors.
3. Intsntionally arni*ed.
4. Converpion. The Prcferred Stock shall be conve$CId into Common Stpek
as follows (the '-eonversion Rights"):
(e) Right to CoqXg*. Each sharc of Preferred Stock shall be convertible, at
the option of thc holder theroof, at any time after the datc of issuance of such share, at the officc
CIf the Corpomion or any tmrufinr agent for such stoclr" into such nurnbcr of fully paid and
non&ssessable shaps of Commor: Stock as is determincd by dividing tha Original ksue pric*
applicable to such nprjes of Prefsrred Stock by the Conversion Price {a* defined and adjusted
below) applicable to such series of Prrefentd Stock" The initial Convcrsion hice per shar6 for
the Scries A Picfflcd Stoct shaI be the Original l$sue Price applicable to such Scries A
Preferrod Stock, and the initial Convcnion Pricc per share for the Series B Prefcrrcd Stock shall
be the Original Issus Price applicable to such Series B Preferrcd Stockt provide4 bowever, that
the Conversion Prices for thc Serias A Prefcned Stock *nd Series B Prcferred Stwk shall be
*ubject to adju*trncnt as sst forth in subocction 4(d). The conversion rates for the Series A
Prefbncd Stock and Series B Prefened Stock into Cornmon Stock arc rcferrcd to hercin as the
"Conversion Rates".
(b) Automatic Cqnv,qrsion. Each sharc of Prefened Stock shalt autosratically
bc converted into shares of Common Stock at the applicable Conversion Rate at the timo in
cffoct for such series of kfenrd Slock immcdiately upor the ceilier of {i} ths Corporatim'r
sala of its Cornmon Stock in a firm commitrnent undcrwritteu public oflbrilg pursuant to a
registration $atemeltt on Forrn S-l or Form SB-2 un&r the Securities Act af 1933, as amended,
thc public offering pnce of which lvas not less than $3.m per share (as adjusted for any stock
splits, stock dividends, mmbinations, subdivisions, r*apitalizations or t}r like) and that results
in aggrcgate procccds to the Corporation, net of underwriting cxpcnses, in erccs$ of $50,000,000
{a 'Qualified fublic Offering') or (ii) the date specified by written coosent CIr agreernenl of thc
holders of at least sixty percent (ffi96) of the then outstsnding sharcs of Pmlbrsd Stock (voting
togcther as a single class on a$ as-convsfied basis).
(c) Mechanigs of Sonversion. Befars any holder of heferred Stock shall be
entitled to voluntarily convert the samc into shares of Cornmon Stock, such holder shall
surrender the certificatc or certificatx tlcrefor, duly cndorscd, at the office of the Corporation or
of any transfcr agcnl for the Preferred Stock, and shall give written notice i$ the Corporation at
ExteNet Systems, Inc. Application for CPCN
its principal corporate officc, of the election to convert the same and shall stete therein the name
or names in which the certificale or certificate.s for shres of Common Stock are to bc issued.
The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such
holder of Preferred Stock, or to the nominec or nominees of such holder, a certificate or
certi{icates for the number of shares of Common Stock to which such holder shall be entitled as
aforesaid. Such conversion shall b deemed to have been madc immediately prior to the close of
business on the date of such surrendcr of the shares of hoferred Stock to be converted" and thc
person or pcrsons entitled to receive &e shares of Comrnon Stock issuable upon such conversion
shall be trcated for all purposes as the record holder or holders of such shares of Common Stock
as of such date. If the conversioa is in connectiou with an undcrwriuen offcring of securities
registcred pursuant to the Securities Acr of 1933, as amended, as sct foah in subsection 4(bxi),
lhe conversion may, at ttrc option of any hsldcr lcndcring Prcferred Stock fot convcrsion, bc
conditioncd upon thc closing with the underrryritrrs of the sale of securitics pursuant to such
offering, in which event ths person$ *ntitld to rccsive the Common Stock upon convsmion of
the Prcfcrrcd Stock shall not be dccmCId to have convort&d such hefenrd Stock until
imrnediately prior to the closing of such salo of securities. If the conversion is in connection
wirh the pnrvi*ions of subsecdon 4{bxii} abov6, such coavemion s}rall bc deemed to have been
rnade on tb* conversion date dcssribd in t}to *t**khsld*r approval *ppmdng such converuion,
and thc Persons entided to rcceive sharcs of Comrnon Stock issuable rpon such convemion shall
be treatcd for all purposes as the record holdcrr of such sharss of Cornrnon Stock as of such date.
(d) eonversion Price Aqiuet$p[t$ of kfemd Stock for Certain Dilqtivc
Issuanees. Split$ and Csmbinations. The Conversion Piices shall be subject to adjustmcrrt from
time to tiirr as follows:
(i) Conversion Price Adju*tmcnl"
(A) If &a Corporation shall issue, on or after the datc upon
which this Second Amcndcd and Restated Certificate of lncorporation is accepted for filing by
thc Secrctary of State of the State of Delawarc (the "Filing Date"), any Additional Smck (as
defined below) without consideration or for a consideration per share Iess &an the Conversion
hice in effect irnmediately prior to the issumce of such Additional Stock with rcspcct to the
Series A kfened Stock or Series B Prefered Stock, as the case may be, then the Conversion
Price for such Series A Preferrcd Stock or Scrics B kefered Stock (as the c;$c may be) shall
forthwith (except as otherwise providad in thi* clausc (i)) be adjustcd to a price determined by
multiplying such Conver$ion Price by a fraction, the numerator of which shall bc the number of
sharcs of Comrnon Stock Outstanding (as defrned below) irnmedistcly prior to such issuance of
Additional Stock plus the numbor of sharcs of Comnron Stock that ths agglegate consideration
received by the Corporation fbr such issuance of Additional Stock would purchase at such
Conversion Price; and the dcnominator of which shall be the number of shares of Comnron Stock
Outstanding (as defined below) imncdiately prior to such issuance plus the nurnber of shares of
such Additiond Stock. For purpses of this subeertion 4(dXiXA), the term "Common Stock
Outstanding* shall mean and iaclude the follarrying: (I) ouistanding Cornmon Stock: (2)
Common Stock issuabls upon cfirversion of cutstandi:rg Prcfsned Stock; and (3) Common Stock
issuable upon conversion or cxchangc of all other outstanding securities that are convertiblc into
or cxchangcablc for Common Stock and upon cxsrsise of *ll outstanding options to purchase or
rights to subscribe for Common Stock and *uch eanv*rtible or exchangcable securitics (including
6
ExteNet Systems, Inc. Application for CPCN
Common Stock issuable upon conversion or exchangr of such conyefiible or exchangeable
securities), including without lirrritation outstanding stoclt options and stock purchase warrants,
Securities described in (l) through (3) above shall be included for the purpose of computing the
Ccrnmon Stock Outstanding irrespectivc of whelher such securities are vested or unvasted,
contingent or non-contingent, and exeicisable or not yst exercisable.No adjustment of the
Conversion Prices shall bc madc in an arnolmt less than one cent pcr sharc, provided that any
a{urtments that am not rcquircd to be madc by rcason of this sentencc shall lx carrisd forward
and either shall b,e taken into &count in any subsequent adjustment made prior to three (3) years
&om the date of the event pving rise to the adjustment being carried fonrard, or shall be made at
the end of tfues {3) years from thc duc of the cvcnt giving rise to the adusmrnt being carricd
forward. Exccp to the timited extcnt providcd for in subsoctions A(d)(ilBX3) and 4(dXiXEX4),
no adjuetrnent of such Conversion Price pursuant to this subsection a(dXi) shail hsve tbc effe{t
of lncreasing the Conversion Prjcc abone the Conversion Price in effect imxediately prior t*
such adjustment.
(C) ln thc case of the issuance of Common Stssk for eash, thc
consideration shall be deerncd to be *rc amount of cash paid therefor beforr deducting any
discounts, fecs, commiesiCI,ns or o*er expensss allowed, paid or incurred by the Corpomtion for
any rmdenvritingor otherrvise ilt connection with thc issuance artd sale thereof.
(p) In tlre cagc of the issuance of the Cornmon Stock for a
consideration in whole or in part othEr than cash, the valuc of consideration other than cash shall
be deemd to bc the fair market value thacof ss detmnin€d in good faith by the Board cf
Dircctors irrespective of any accounting &atrnent.
(E) In the casc of the issuance of options to purchase or rights
to subscribe for Commor Stock thc issuance of securities by thcir terrns convertible into or
exchangeablc for Common Stock or options to purchase or rights to subscribe for such
co*vertible or exchangrablc securities, the following provisions shall apply fror purBoses of
delermining the number of shares of Additional Stock issued and the considcration paid therefor
(l) Thc sggrsgele maximum number of rhalcs of
Commou Stock deliverablc upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitatiur, the pssage of time, but without uking into accounr
potential antidilution aduitmsnts) of such optione to purchase or righm ta subscribe for Common
StCIck shall be deemed to have been issued at thc tinrc such options or rights were issued and for
a considerarion cqual to the considenarion (determined in the manner provided in
subsections 4(dXiXC) and a(dXi)(}), if any, rcccivcd by the Corpration upon the issuancc of
such options or rights plus the minimum exeicise price pmvided in such options or rights
(without taking into account potential antidilution adju$tmants) for the Cornmo$ Saock covercd
thereby.
(2) The aggregate maxirnurn numbcr of sharcs of
Common Stock deliverable upon conversion of, or in exchange (assuming the satisfaction of any
conditions to convertibility or exchangcability, including, without limitation, the passage of timc,
but witlout taking inlo eecormt potential antidilution adjustments) for, any sueh eonvertible or
exchangeable securities or upon &e exercise of options to purchase or rights to subscribe for
ExteNet Systems, Inc. Application for CPCN
such convstible or exchangeable securities and subsequent conversion or exchange thereof shall
k deemod to have been issued at the time such securitis$ werc issued or such options or rights
were issued and for a consideration equal to the consideration, if any, received by thc
Corporation for any such sccuritiss and related options or rights (excluding any cash received on
&ccoult of accnred intercst or accrued dividends), plus the rninimum addition*l consideration, if
any, to be rcceived by the Corporation (without taking into account poteatial antidilution
adjustrnents) upon the conversion or exchange of such securities or tlle cxer*ise of any relaged
options or righu (the consideration in each case to be determined in the m&nner provided in
subsections 4(dXiXC) and 4(d[i[D)).
{3} In Lhe event of any changc in the number of shares
of Common Stock dslivcrable or in the amount of consideration payable to the Corporation upon
exercise nf such options or rights or upon conversisn of or in cxchange for such convsrtible *r
exchangeable sccwities, thc Conversion Prices of the Prcferrcd Stoclq to the extent in any way
affcckd by or computed using such options, right$ or securities, shall be recornputed to reflect
such chango, but no furthsr adjustmcnt shall be made far thc rclual issuance of Cornmsr Stock
or any payment of such consideration upon the exercise of any such options or rights or the
co*vcrsimr or cxehange of any such sccurities.
(4) Upon the expiration or termination of any such
options or rightc, or of any such rights tCI conycrt or exchange o'r of any option* or rights rulated
to such cs$vertible or exchangcable securities, the Conwrsion Prices of the Prcfered $tock, to
thc extcnt in any way affccted by or computed using such options, right$ or sccurities or option*
or rights rclated to ruch securities, sha[ be rrcoanputed ta reflest the issusnce of only the nurnber
of shares of Common Stock (and conve*ible or exchangeable securities that remain in effect)
actually issued upon the axercise of such options or rights, upon tho conversion or exchange of
such secuities or upon the exercise of the options or rights mlated to such sccurities"
(5) The rumber of shares of Additional Stock deemed
issued and the considcration decnred paid thereforc pumuanr to subsections a(dXiXEXl) anrl
4(dXiXEX2) shall be appropriatcly adjustcd to rrflect any change, termination or cxpiration of
thc type dcscribed in eithar subse*tion 4(dXiXEX3) ora(dXiXB{a).
(ii) "Additional Stock" shall mean any shares of Common Stock
issued (or decmed to have been issucd pursunnt to subsection 4{dXiXS) by the Coqporation on
or after thc Filing Date other than:
(A) Cornmon Stock or Common Stock Equivalents issu*d
pursusnt to a txansaction described in subsection a(d)(iii) hereof (or Common Stock issued upon
convsrsion of such Common Stock Equivalents);
(B) Common Stock issued to employeas, dirtclors, consultants
and other servicc providers for the primary purpose of soliciting or retaining their servicss
pursuant to plans or agr€srn€nts apprroved by the Corpor*tion's Board of Dincctor$;
un&rw ritten publi c offering;
(C) Cornmon Stock issued purruailt to a finn cornrnitment
ExteNet Systems, Inc. Application for CPCN
(D) Common Stock issued pursuanl to rhe convgrsion or
exercisc of convertible or sxercisable securities outstanding on ttre Filing Dar*;
(E) Common Stock issued cr deemed to be issued upon the
exercise of options to purchase or rights to subscribe for Common Stock outstanding on the
Filing Dete;
m Common Stock issucd s deemed to be issucd upon the
excrcise of options to puchasc or rights to subscribc for convefiible or exchangeable securities
or upon the subsequent convcrsion or exchange thersof outstanding on the Filing Datc;
(C) Common Stock issued upon conversion of Preferred Stock
or as divi&nds or distributions on the heferrcd Stock;
00 Common Stock issued in sonnection with a bona fide
business acquirition of or by the Corporatisn, whether by mcrger, consolidstisn, sale of asscts,
sale or exchange of stock or otherwise, which transactisn is approved by thc Corporation's
Board of Dircctox;
g) Csmmon Sto*k issued or deemed i*sued pursuant to
subsection 4{dXiXE) as a rcsult of a dccrease in the Conversian Price of the Prefbrrsd Stock
rcsulting fmm the operation of subaection a(dXi);
(J) Commoa Stock issucd purruant to corporare partnsring
agrsfments, joint vsnturc$ or other slratcgic transactions, provided such issuancs$ are prinarily
for purposcs other than equity financing and provided that such arrangements are appmved by
the Corporatior's Board of Drecton; or
(K) Common Stoak issurd or issuable prsuant ro any
equiprnent les$c financing or bank credit ilrangement, provided such transaction is entered into
prirnarily for purposes other than equity linancing and is approved by thc Corporation's Board of
Dirrctors.
(iii) In the event the Corporation should at any timc or fronr tinre to
tirne after the Filing Date fix a record date for thc effectuation of a split or subdivision of the
outstanding shaes of Common Stock or the dctcrmination of holders of Comrnon Stock entitled
to rcceive a dividsrd or other distribution payablc in additional sharcs of Common Stock orather
securities or rights conveitible into, u rntitling the holder thereof to receivc dirretly or
indirectly, additional shares of Common Stock (hereinafter refsncd to as *Common Stock
Equivalents") without paym;nt of any considcration by srrch holder for the additional shares of
Common Stock sr the Comrnon Stock F4uivalents {including thc additional sharcs of Common
Stock issuable Etrmn corv€rsior or exerise thcrecf), th6n, &$ of such record datc (or the date of
cffccruation or psyrnent of such split, subdivision, dividcnd or other distribution if no record
date is fixed), the Conversion Prices of the Prefcrrcd Stock shall bc approprixely decreased so
that the number of sharps of Common Stock issuable on conversion of each share of such series
shall be increased in prcporlion to such i*crcasc of rhe aggregate of the shares of Common $tock
outstanding and those issuable with respect to such Co,mrnon Stack Equivalents with the number
of shares issuable with respect to Common Stock Equivalents determincd from time to time in
ExteNet Systems, Inc. Application for CPCN
the manner pmvid€d for dremcd issuances in s*bsection (dXiXE). Notwithstanding the
forrgoing, if afrer thc fixing of such a record date the proposed split, subdivision, dividend or
orher distribution shall be rewinded or there shall bs any change in the rcsulting increase of the
ag$egate of the shares of Common Stock outstanding and thosc issuable with respect to such
Common Stock, then the Conversion Prices of the heferrcd Stock, to the extcnt in any way
affscted by or computd as a result of the fixing of such receird date, shall bc recomputed to
rcflcct the issuance of only thc shares of Cornrnon $tock and Cornmon Stosk Hquivalents, if any,
actually issued or issuable pursuant to such split, subdivision, dividend sr otlrer distribution.
(iv) If the number of shares of Common Stock ou*tanding at any time
a{lcr the Filing }atc is decrcased by n reverce stwk split or a *ombinati$n pf the outstanding
shaes of Commoa Stocls, thsn, upon the record darr of such reverse slock split or combination,
the Conversion Prices for the Preferred Strck shall be appropnakly incrcased so that thc number
of shares of Common Stock issuable on convcqlioa of cach share of *uch scries shall be
de{ree$ed in proportion to $}ch decreasc in thc outstanding shar$ of Comman Stock.
(e) Other Distibution*. tn the cvent the Corporation shall declare a
distribution payable in sccurities of other Persons, evidcnces of indebtedness issued by the
Corporation ar othcr petson$, atser {excluding cash dividends} or options w rights nnt referred
to in eubsection a(Q(iii), ihoo, in each eLEh case for the purpose of this sub$sstion 4{n}, thc
holders of the Preferred Stock shall be entitled to a proportionate sharc of any such distribution
as though rhey were the holders of the number of sharcs of Conrmon Stak of the Corporation
into which thcir shares of ?refsred Stock arc convsrtible as of the record date fixod for lhe
eteisrmination of rhe holders of Comrnan Stock of the Corp*ration entitlEd to receive such
distributio'n.
(0 Recapitalizationq. If at any time or from rime to timo there shall bc a
recapltalization of the Cornmon Stock (othcr than a subdivision, combinatio$ or merger sr sale
of assets transmtion povided for olsewhere in this Srction 4 or ia $ection 2)" provision shall b,e
made so that the holders of the Prcfened Stock shall thereaficr be entitled to rcceive upon
conversion of the Prefcrred Stock the number of sharcg of stock or other sccurities or progerty of
the Corporation or otherwisc, to which a holder of Common Stack delivemblc upon conversion
would havs been cntitlad on such recapiteliaation. In any such sess, &pprrprinte adjusbnen{ shall
be made in the application of the pmvisions of this $ection 4 with rcspect to thc rights of the
holders of the Prcferred Stock afrcr the rccapitalizailon to the end that the provisions of this
Section 4 (including adjustment of the Conversion Prices then in effect and the number of shares
purhasable upon conysrsion of thc Prefcrred Stock) shall be applicable after that evont as nearly
equivalently as may be practicable.
G) No Fractional Shals and Certificate as.to Adjustmcnts.
(i) No fractional sh&rss of Common $ttxk shall bc issued upon the
conversion of any shares of the Preferred Stock and thc aggregate number of sharcs of stock to
be issued to particular stockholders shall be roundcd down to the nearcst whole sharc. and the
Corporation shall pay in cash the fair market value of any fractional shares as of the tirne when
cntiilemcnt to rcceive such ftastions is dctermined. Slhether or nol fractional sharcs would be
issuablc upon such conversicn shall be determined on lhe baris of the total nurnber of shams of
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ExteNet Systems,Inc. Application for CPCN
keferrod Stock the holder is at the time converting into Common Stock and the number of
chaxe$ of Common Stock issuabls upon such conversion.
(ii) Upon the occunsncc of cach adjustment or readjustment of the
Cnnversion Prices of Prcferred Stock pursuant to this Scrtion 4, the Corporation, at its expense,
shall promptly compute such adjustment or rcadjustment in accordance with the terms hereof and
prcparc a*d furnish to each holdcr of fteferrod Stock a certificam se$ing forth such adjustmont
or readjustnrnt and showing in deteil the facts upon which such adjustment or readjusrrnent is
based. The Corporation shall, upon the writlen request at any time of any holdcr of Prefened
Stock, fumish or cau$o to be furnishcd to suck holdcr a likc eerti{isate settirg forth {A) such
adjustment and readjusfment, (B) the Convcrsion Price for such Prefened Stock then in effect,
and (C) the numbcr of sharcs of Common Stock and the amount, if any, of other property that at
tbe time would be rcccived upon the conversion of a sham of Prrtbmd $tock"
(h) Nctices oJ Recpd Date" Iyr the cvsnt of any taking by the Corporarion of a
rerord of the holdcrs of any class of securities fsr thc purposc of detcrnrining the holdsrs thereof
who are c.ntitled to reccivc any dividend (othcr than a cash dividend and othcr than a stock
dividend of the type de*cribEd in subsecrion 4{iii}) or oihcr di*tribution, thc eorporation shall
rnail to esch holder of klbrrcd Stock, a least ten (10) days prior to thc date specified therein, a
noticc specifying the date on which any such rccord is to be takerr for the purpose of such
dividend or distribution, and the craowt and charscter of such dividend x distribution.
(i) Rescrvatio.n of Slock Issurrble Ugon Conversion. The Corporation shall at
all tirnes rc$eryc and kecp avnilable out of its au&orized but uoissued sharEs of Conrmon Stoch
solcly for the puryose of cffecting the rcnversion of the sharcs of the Preferred Stwk, such
number of its shares of Common Stock as shall from time ta time be sufficient to effeet the
convemion of all outstanding sheros of the Prefsned Stoclq and if at my tirne the number of
au(horized but unissued sharcs of Comrnon Stock shall not be suffrcicnt !o effect the convcrsion
of all then outstanding sharcs sf thc Preferrcd Stock, in addition to such othcr r*rnedieo as thall
be available to the holdrr of such Prcferred Stock, the Corporation will take such corporate
action a$ rnay, in the opinion of its counsel, be necessary to increasc its authorized but unissucd
sheres of Common Stock lo suah nurnbe.r of thares os shall be suflisisnt for such purpose$,
including, without limitation, engaging in rcasonable best cfforts to obtain the requisitc
stockholder appmval of any sccessary amendment ts thi$ Second Amen&d and Restated
Certificat* of IncorPontion.
0) Noticcs. Any noticc requircd by &c provisions of this Scction 4 to be
given to &e holdsr$ of shaes of Ftrferred Stock shall be &emed. given if depositerd in *e Unired
States mail, postage prcpaid, and addressed to eeh holder of record at his addrsss appearing on
the books of the Corporation or if given by any other rnethod pmitted under thc Gcneral
Carporation Law.
A) lVaiver of Adiusmon! to Convsr$ion .kice. Nstwithst*nding anything
hetsin to the contrary, any reduction of the Ccnversion kie of fhe Serics A Prcfsrred Stock or
Series B Prefenrd Stock may be waive4 either prospectively or retrcactively and either
generally or in a particular instance, by the con$ent or vote of the holders of sixty perccnt (60%)
It
ExteNet Systems, Inc. Application for CPCN
of thc rhen outstanding shares of the Prefcrred Stock (voting together as a single class on an &s-
converted basis). Any such waiver shall bind all fururc holdem of share$ of the Prcferred Stock.
(l) $r*qi4*landatoryfonYP&ioq.
(i) In the event:
(A) the Corporation wishes to consumma[e fl financing that
results in the salc of any sharas of its Common Stock, or securities convertible inlo or
exchangeeble or cxercisable for any shares of its Comman Stock, or options to pumhase or rig,hts
to subscribe for such convertible or exchangeabls s€curities, at a price pr share for the Comrnon
Stock (as determincd b*low) less than the price per share of thc rnost rccent issuance of Preferred
Stock of the Corporation {on a Commoa $tock equiva}cnt basis);
(B) the Board of Director$ of the Corporation (including at
Ieast a m*jority of the dircctors elecud exclusively by the holders of Preferrcd $tock) determines
{with intcresrcd dirrctors able to votc for purposcs of this provision) in good faith &at it is in t}re
best intarxsts of the Corporation to rCIgue$t that &c holders of Prafsmd Stock of the Corporaticn
participate in sueh financing (in which case such financing will be deemed a "Mandatory
Offering") and dctermines thc aggregatc dollr smount to be invested by all hol&rs of hferred
$lock (the "Aggrcgate Inye$unenl Amount"), which aursunt may be morc than or less than any
psrticular holder's right to participate in the financing pursuant to any contractual right of fint
offer or similar right;
or prererred itocrt rr r,,,,:17 *" ti;:m':'#*'tr #f,i:,:t'jl,l"#*,,f#
Mandatory Offering, (2) iadicating the numkr and type of smurities to be offercd, (3) indicating
the pricc and tcrms upon which it proposes to offer such securities, (4) identifying the Pro Rata
Sharc (as dcfined bclow) of each hol&r of Prefcrd Stock of the Aggragate Invesmnt Arnount,
and (5) offering each holdcr of Preferred Stock the riglrt to purchase such holdEr's Pro Rala
Sharc of thc Aggrsgate Investnrcnt Amouar for no less tlran twcnty (20) calendar days after thc
giving of the Notice (or such longer time priod as may be pmvided with rcspect to ths
cortractual right cf lirst offer held by holdcrs of Preferred Stoek pursuant to Section 2.4 of the
Colporation's First Amcnded and Restated lnvestor' Rights AgreemenL dated on or around the
Filing Date, among the Corporation and &e hol&rs of Prefened Stoclq as it may bc amendcd
from time to tinre); and
(D) any hol&r of Prefened Stoek and affiliatcs of such halder
(collectively, a "Nonfuticipating Holder") does not acquire at least its Pro Rata Share of the
Aggregata Invest&ont Amount (whcthcr ffi not such Aggrrgate Investm*nt Amoxnt is rnorc than
or less than the sggregate dollar amount actually received by the Corporation from the holders in
conn@tion with the Mandatory Offering, as may be the case, for examplc, if ceirain holders do
not participate in thc Mandatory Offering) within the tirne priods sct fCIrih in rhe Notice;
(ii) then that perccntage of such Non-Participating Holder's shares of
Series A Prcferrsd Stock and that percsntsgs of such Non-Participaring Holder's sharcs of Scries
B Preferred Stock equal to thc percentage of such Non-Participating floltler's ho Rata Share of
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ExteNet Systems, Inc. Application for CPCN
the Aggregate lnvxtment Amount not acquircd by such Non-Panicipating Holdcr shall
automatically and without funhcr action on the pan of such holder be converted, effective upon,
subject to and concurrently with the consummation of the Mandatory Offering {the 'Mandatory
Oft'ering Date")" into sharcs of Common Stock of the Corporation at a Conversion kice equal to
the Original Issue Price for such Prefurred Stock (as adjusted for any stock splits, stock
dividends, combinations, subdivisions, recapitatizations or the like, but without any adjustrnent
by reas*n of eonsurnrnation of ths Mandatory Offering or for any adjustment pur$uenl to
subsection 4(dXiXA) subsequent to thc Filing Date). For purposes of this subsection 4(l), each
holdcr's Pro Rate Shan of the Aggrogate Invcstment Amount shall be an amount deteimined by
multiplying thc Aggegate Investment Amowt by a fracdon, the numerator of which shall be the
nurnber of sham of Comman Stock issuable upon cgnversion of all sharos of kfenrd Stmk
then held by s*ch holder and thc dsnominator of which shall be the total nurnber of shms of
Common Stock issurable upon conversion of the Prpfencd Stock &en outstanding. For purposes
of calculating a hol&r's Pro Rara Sharc, thc applicable nu:nber of shsres of Common Stock
issuable upn convesion of the shares of Preferred Stock shall be calculatcd ba*ed on the
nurnber of shares of hferrcd Stock outstanding immedialely following the cloeing of thc
Mandatory Offering, assuming all such holders of Prefcrrcd Stock acquire such number of sharcs
in such Mandatory Oftring as may be necassary so that thc pmvixions of this Section 40) would
not cause a convsrsion of any shares of Preferred Stock into Common Stock.
{iii) The bolder of any shses of Prefbrred Stock conyerted into
Common Stock pursuant to this subsection 4(l) shall delivcr to the Corporation during rcgular
busincss hours at rhe office of my trnnsfsr agent of the Corporation for tho &eferred Stsck, or at
such othcr place as may bc designated by the Corporation, the certificate or certificats for the
sharcs so convffted, duly endorsed or assigned in blank or to the Corporation- As promptly as
practicable thereafter, the Corporation shall issue and &liver to such holder, at the place
dcsignated by such holder, a ccrtificate or mtificales for the number of full sharee of fie
Common Stock to be issued and sr.lch hotder shall be deemd to have become a stockholder of
record of Common Smck on the Mandatory Offcring Dale, unless thc ransfer books of the
Corporation are closcd on that date, in which event such holder shall bc deemed to have become
a saockholder of record of Comrnon Stock on the ncxt succocding date on which the transfer
books are open. From and sfter the M*ndatsy Offering Datc, dte c€rtificats or certificates
representing sharcs of Preferre.d Stock convertcd pursuant to this subscction (l) shall rcprcsent
the shares of Ccmmon Stock into which such shmcs of Prefered Stwk wsrr converted.
tiir) In the evcnt that a holder of Pmfqrrcd Stock convnrts any kefened
Stock into Common Stock pursuant to subsections 4(a) or 4(b) hereof within ninety (9O) days
prior !o the date of closing of a Mandatory Offeringn such holdsr shall be deemed to havc
converted such shares pr.trsuant to this subsection 4{l}, and such holdcr shal} bc required to
transfer to the Corporation all shares of Common Stock issued upon such conversion rcsulting
from any adjusuuxrt pursuant lo subscction 4(dXiXA) *ubscguent to the FiXng Dete.
5. Yotinq Righlq.
(a) Gareral Yotirrg Biqlrts. The holder of each share of heferred Stock shell
have the right to one yote for cach share of Common Stock into which such Preferrcd Stock
could then be converted, and with rcspcct to such vote, such holder shall have full voring rights
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ExteNet Systems, Inc. Application for CPCN
and powers equal to the voring rights and powers of tlTc holderr of Com-mon Stock" and shail bc
entitle{ notwithstanding any provision hercof, to notice of any stockholderx' mecting in
accordance with &e Bylaws of ths Corporation, and shall be entitled to vote, together with
hoNdere of Common Stock, with rsspect to eny question upon which holders of Connmon Stock
havc the right to vote. Fractional votes shall not, however, be perrnined and any fractional
voting rights available on an as-converted basis (afier aggregating all shares into which shares of
Preferred Stock held by each holdnr could be convert*d) shall bc rounded to the ncarcst whole
number (with one-half being roundrd upward).
(b) Vofpg for th**Flection of DLqStoc. As long as any shale* sf Prefer"Ed
Stock mmain auxtanding, the holdsrs of such share$ of hefened Stock shall bs entitled to elect
four (4) dirsctors of the Corporafion at any elcction of dircctors. The holders of outstanding
Common Stock shall be cntitled to ooe (1) directm of the Corporation at any election of
dircctors, pruyided that such dirschr shell be the *ren-ssring chief executivo offir-rr of &e
Corporation. The holders of Prcferred Stock and Common Stock (voting together as a single
class and not as separate stries, and on an as-convertcd basis) shall be entitled to elect any
remaining dircctors of the Corporatian.
Notrrirhstanding thc provisions of Section 223(a)(l) u*d 223{a}(2) of the Ceneral Corporation
l,aw, nny vacancy, including ncwly created directo,rships resulting frnm any incrrasc in thc
authoriz*d nuruber of direclors or arnsndment of this Sccond Arnended and Restatcd Ceitificate
of Incorporarion, and vacancies clnaed by rcmoval or rcsignation of a director, rnay be filld by
a majority of the directors $gn in offie, &ough less than a quorum, or by a solc rrmaining
directsr, and thc directors so chosen shail hold offie until the ncxl annual election and until thoir
succ*sors are duly clcctcd and eha1l qualify, unlegs sooner displacedl provided" however, that
where such vrcancy ocflrrs among the directors clected by the holden of a class or series of
stock pursu&nt io a contrrchral agramenr by and among the Corporation and certcin
stockholdors of the Corporation, the holdcrs of charlrs of such class or series entitled ts elcct such
director may override the Board's action to fill such vacarcy by (i) voting for their own &signee
to fill such vacancy at I mecting of the Corporation's stockholdsrs or {ii) writtcn conssnt in
accondancc with the requircracnts of the General Corporation I"aw. Any dircctor elccted as
provided in &e immediately preceding scntance hermf may be removcd during tlre aforesaid
term of officc, either with or withoul causc, by, and only by, tlrc alhrmative vote of the hol&rs
of the shares of tho class u scries sf stock entitled m elect such dirsotor or directors, givcn eitker
at a special mectirg of such stockholders duly called for that purposc or pursuent to a written
consen{ of stockholders, and any yacancy thereby created may bc fillcd by the hslders of that
class or sries of stock rcpra"sented at the mffiting or pursuant to wrinen consent.
6. kotqg$ye Provisions. (a) So long as 8ny sharcs of Preferred Stock
remain outstanding, the Corporatioa shall not (by anrendment, mergar, consolidation or
othenriss) without first ablaining thc approval fty votc o,r writl*n con$€ilt) of the holdcru of at
Ieast sixty pcrccnt (60%) of thc thcn oustanding sharcs of Preftrred Stock (voting togcthcr as a
singleclass on an as*convcrted basis):
(i) consum.rrate a Liquidation Event;
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ExteNet Systems, Inc. Application for CPCN
(ii) alter or changs the rights, prcferenccs or privileges of the shares of
Preferred Stock $o as to affect adverscly such shales;
(iii) incrpasc or decrcasc (other than by conversion) the tota.l numbsr of
aurhorizcd sharcs of Prefened Stock or Comrnon Stock or create (by reclassification or
otherwisc) any now class of stock;
(iv) authorjze sr i$$uen or obligatc itsolf to i$sue, any equity security
(including any other sccrnity convertible into or cxercisable for any such equity security) having
a prefemrce oyer, or beirg on a parity with, any of the keferred Stock with rcspet to dividends
or payment upon liquidation, dissolution, winding up, rcdemption, voting (in all respscts) and
conver$ion;
(v) redeem, purchasc or othcrwise acquirc (or pay into or set aside for
a sinking fund for such purpose) any sharc or shares of Prefcrrcd Srock or Comrnon Stock;
provided however, that this resriction shall not apply ro the repurchasc of sharcs of Comrnon
Stock frrrn employpcs, officers, directo$, consu[mts or other psrsons perfbrrning g*rvices for
rhe Corporation or any subsidiary pursuant to egrcerncnts under which the Corpo,rafion has the
option to repurrhase such share.$ up'on tho occurcncc of certain events" su*h as the aermination
of cmploymant or servicc, or pursuant to a right of first rcfusal;
(vi) amend thc Corporation's Second Amended and Rcstated
Certificat* of Incorporation or Bylaws in a nsnnEr adveme to eny of thc Pr€fbrred $tock;
(vii) pay divi&nds on any class or series of equity securities, other than
dividends payabteon rhe Preferni Stock;
(viii) rnake any loans or advances to its employee$ or any members of
their imnrcdiate families, other than loans or advanccs in thc ordirary coursc of business or loans
to emplolces rnade pursuant to promis*ory nades ixued for the purchast of shares und*r a stock
option plan, restrictcd stock plan or similar equily incentive plan approved by the Boad of
Directors of &e Corporarion;
(ix) guaranteo, other than in &e ordinary courss of business, any
indebtodnoss or obligation of ury other parry other in excess of $1,000,000, or creatc or suffer to
be imposed any lien, mortgege, security interest or other charge on or againsl all o,r substantially
all of the prope*ics or as$cts of the Corporation or any snbsidiary or incur indebtednass in exccss
of $5,000,000, otherthan in the odinary cou$€ of business;
(x) acquirc, or permit any subsidiary to acquire, any stock or other
securities of any Pcrson unlcx immediatcly following such acquisiticn such Pemon would be
wholly owned by the Corporation or a suhidiary of the Corporation;
(xi) enter into any transactions with any officer, director or emplolne of
the Corporation or parrnt$, $pouses, siblinp or lineal dcscendants of any of the foregoing, except
for employmenL engagemenL option or benefit agrsmerts or other simila agreements entsred into
by *x Corporation in the ordinary courxc of business. or cxcspt for the pmdsirn of goods eir
ExteNet Systems, Inc. Application for CPCN
scrvices on term$ and conditions substantially similar to thcse that would be available frorn an
indcpendcnt third partyfor the provision of comparable goo* s services;
(xii) make any capital expenditures of more than $2,0O0,000 or make
materiel changes in the nature of the business cottducted by the Corloration; or
(xiii) incrra*e th* numkr of shares available fnr is*uance under the
Corpration's Second Amended arrd Restated 200a Equity Incentive Plan; or
(xiv) increase or decreax the authorieed size of the Coryoration's Board
of Directors.
7. Status .oJ Converted Stoch In the event any shares of Preferred Stcck
shall be convert*d pur$uant to Section 4 hercof, the shfires so convsrted shall bc canc*lled and
shall not be issuable by the Corporation.
C. $omrllpo $ts'ck. Thc rights, prcferences, priviieges and rEstrictions
grsnted to and irnposed on the Common Stock are &s set forth below in this Article fV(C).
l. [Xvidend Rij*rts. Subject to the prior rights of holders of a]l classes of
stock at the timc outstanding having prior rights as to dividends, the holders of lh* Comrnon
Stock shall be ertitlcd to receive, when, as and if declarcd by the Board of Dirccton, out of any
asset$ of the Corporation legally available thcrcfbr, any dividends as nray bo dcclarod fronr time
to time by the Board of Ditwtors.
2" Uquidq$on Riehts. Upon &e liquidation, dissolution or winding up of the
Corporation (including upon the occrurence of a Liquidation Evenl), the assets of thc
Corporation shall b€ distributed as pmvided in Scetion 2 of Article fV{B) heirof.
3. Yrting &igh$" The holdcr r:f each shar,e of Cornmon Stock shall have thc
right to one vote for each such share, and shall be entitled to noticc of any stocKroldcrs' meeting
in accordancc with the Bylaws of the Corporation, and shallbe entitled to vote upon such mansrs
and in such manner as may be provided by law. The number of authorized shares of Common
Stock may be increas*d or decreased (but not bslow thc number of shares thereof then
outstanding) by the affirmative vots of the holders of a r:najority of the stock of thc Corporarion
entitled to yote, irncspective of the provisions of Section 242\b)(2) of the Gencral Corporation
lxw"
ARTICLS V
Except as otherwisc provided in this Second Amcnded and Restated Certificate of
Incorporarion, in furtherance a*d ntrt in limitation of the powers conferred by statute, the Board
of Directors is cxpressly suthorized to make, repcal, alter, amend and rescind any or all of the
Bylaws of rhe Corporation.
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ExteNet Systems,Inc. Application for CPCN
ARTTCLE YI
The numbcr of directors of the Corporation shall be detennined in the manner set
forth in the Bylaws of the Corporation.
ARTICLE VII
Elections of dimctors need not be by written ballot unlers the Bylaws of thr
Corpomtion shall so provide.
ARTICLf, YIII
Meetings of stockholders may be held wi&in or without the Statc of Delaware, as
the Bylaws of th* Corpsration n:ay provide. Ths bookc of lhe Corporation may bo kept (*ubject
to a$y pluvision eontained in &c statutes) outside &e $tate of Delawars at such place or plaees
e$ may be designatrd from time ro rimt by the Board of Drectors or in the Bylaws of the
Corporation.
ARTICLB IX
A dircctor of the Corpomtion shsll not be personally li*ble &o the Coqporation or
its stmkholders for monetary damege$ for brpach of fiduciary duty as a direclor, cxc*pt fcr
tiabitity (i) for any breach of the dircctor's duty of loyalty to the Corpr':ation or its stockholfu,
(ii) for acts or omissions not in good faith or that involve intentional misconduct or a knowing
violation of law, (iii) undcr Scction 174 af thc Gencral Corporation Law, or (iv) for any
transaction fipm which the dircctor dsrivcd any improper prsonal bcnefit- If the Gcneral
Corporarion law is amended after appmval by the stockholders of this Article D( to authorize
eCIrporCIre &ction further eliminating or limiting the personal liability CIf dircctors, then the
liability of a din:ctor of the Corpcration shall be elinrinated or limitcd to the fullest extcnr
pen'nined by the Ceneral Corporation Law as so amended"
Any rcpeal or nrodification of the foregoing provisions of this Articlc D( by the
Board of Directors and stockholdars of the Corporatian shall not adversely affect any right or
protection of a director of the Corporafion existing at the time of, or incrcasi ahc liability of any
director of the Corpration with respeet to eny act$ or unixsions of sualr diirctor occurring prior
Io, $uch repeal or rnsdifica(on.
ARTICLE X
The Corporation raserve$ the right to amer:{ alter, change or rcpeal any provision
containcd in this Sccond Anrended and Rwtated Ccaificate of Incorporation, in the manner Row
or hercafter presrribed by statuto, and all rights conferred upn stockltolder* hertin are granted
rubject to this raservation.
ARTICLE xI
To rhc fullest extent permiucd by applicable law, the Corporation is authorized to
provide indcmnification of (and advancement of cxparrses to) agen* of the Corporation (and any
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ExteNet Systems,Inc. Application for CPCN
other p€rsons t$ which Oenera} Corporation lxw p*nnits the Corplration to provide
indemnification) thnrugh Bylaw proyisiCIns, agrecmcnts with such agents or other personst vote
of stockholders or disintercstrd directors or othertise, in excess of t}e indemnilication and
advanccment othenpise permitted by Section 145 of tlre General Corporation l-aw, subject only
to limits created by applicable Gcneral Corporation [,aw (sratulory or non-starutory), with
rsspect to action$ for bnsach of duty to the Corporation, its stockholders, and others.
Any amendment, rcpl or modific*tion of the foregoing provisions of this
Article XI shall not advcrsely affect any right or protection of a director, officcr, agent, or other
person existing at $e time of, or increase the liability of any director of the Corporation with
re$pect to any icts or omissions of such director, officcr or agent occurring prior to, such
amcndment, rcpcal or rnodificatior.
:}**
THIRD: The foregoing amen&rent and restatement rva$ apprcved by the hol&rs
of the requisitc number of shares of the Corporation in accordance with Section 228 af the
Gmeral Corporation [aw.
FOURTH: That this $acond Amended and Restated Certificate of Incorporation,
which ro$tetss a*d integrates and furthet arrends the provisions of ths Corpsration's Restatcd
Certificate of Ineorporation, has been duly adopted in accordance with Scetions 7AZ and 245 af
the Ceneral Corporation Law.
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ExteNet Systems,Inc. Application for CPCN
IN WITNESS WHERf,OF, thrs Second Amended and Restated Certificate of
lncorporation has bsen executcd by a duly authorized officer of the Corporation on this 24th day
of August, 2007.
/s/ Ross Manire
Ross Manirc, Presidcnt
ExteNet Systems,Inc. Application for CPCN
THIRD AMENDED AND RESTATED CDRTIFICATE OF INCORPORATION
OF
EXTENET SYSTEMS, INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
ExteNet Systems, Inc. (the "Corporation"), 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 Lau/'),
DOES HEREBY CERTIFY:
FIRST: That the name of this Corporation is ExteNet Systems, Inc. and that this
Corporation was originally incorporated pursuant to the General Corporation Law on October 1,
2002 under the name Clearlinx Network Corporation.
SECOND: That the Board of Directors of the Corporation duly adopted
resolutions proposing to amend and restate the Restated Certificate of Incorporation of the
Corporation, declaring said amendment and restatement to be advisable and in the best interests
of the Corporation and its stockholders, and authorizing the appropriate officers of the
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 lncorporation of the Corporation be
amended and restated in its entirety as follows:
ARTICLE I
The name of the Corporation is ExteNet Systems, Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is
located at27ll Centerville Road, Suite 400, City of Wilmington, County of New Castle, 19808.
The name of its registered agent at such address is Corporation Service Company.
ARTICLE trI
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law. The Corporation will have perpetual existence.
ExteNet Systems,Inc. Application for CPCN
ARTICLE TV
A. Authorization of Stock. The Corporation is authorizedto issue two classes
of stock to be designated, respectively, common stock and preferred stock. The total number of
shares that the Corporation is authorized lo issue is Eighty Six Million Six Hundred Sixty Seven
Thousand Ten (86,667,010). The total number of shares of common stock authorized to be
issued is Forty Six Million (46,000,000), par value $0.001 per share (the "Common Stock"). The
total number of shares of preferred stock authorized to be issued is Forty Million Six Hundred
Sixty Seven Thousand Ten (40,667,010), par value $0.001 per share (the "Prefered Stock"),
consisting of Seventeen Million Eight Hundred Sixty Six Thousand Six Hundred Seventy Two
(17,866,672) shares of Series A Preferred Stock, Ten Million Eight Hundred Forty Four
Thousand Four Hundred Forty Eight (10,844,448) shares of Series B Preferred Stock and Eleven
Million Nine Hundred Fifty Five Thousand Eight Hundred Ninety (11,955,890) shares of Series
C Preferred Stock.
B. Rights, Preferences and Restrictions of Preferred Stock. The rights,
preferences, privileges and restrictions granted to and imposed on the Preferred Stock are as set
forth below in this Article IV(B)
l. Dividend Provisions. The holders of shares of Preferred Stock (on an as-
converted to Common Stock basis) shall be entitled to receive dividends, out of any assets
legally available therefoq ratably with the holders of Common Stock payable wheq 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 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 the Corporation).
2. Liquidation Preference.
(a) Upon the occurrence of any Liquidation Event (as defined below), either
voluntary or involuntary, the holders of Preferred Stock shall be entitled to receive, prior and in
preference to any distribution of the proceeds of such Liquidation Event (the "Proceeds") to the
holders of Common Stock by reason of their ownership thereof, an amount per share equal to the
sum of the applicable Original Issue Price (as defined below) for such series of Preferred Stoc(
together with all declared but unpaid dividends on such share plus a per annum amount for the
number of complete calendar months such share has been issued and outstanding equal to five
percent (5%) of the applicable Original Issue Price. If, upon the occurrence of such event, the
Proceeds thus distributed among the holders of the Preferred Stock shall be insufficient to permit
the payment to such holders of the full aforesaid preferential amounts, then the entire Proceeds
legally available for distribution shall be distributed ratably among the holders of the Preferred
Stock in proportion to the fulI preferential amount that each such holder is otherwise entitled to
receive under this subsection (a). For purposes of this Third Amended and Restated Certificate
of Incorporation, "Original Issue Price" shall mean $1.20 per share for each share of the Series A
Preferred Stock (as adjusted for any stock splits, stock dividends, combinations, subdivisions,
recapitalizations or the like with respect to such series of Prefered Stock), $1,4754 per share for
each share of the Series B Preferred Stock (as adjusted for any stock splits, stock dividends,
ExteNet Systems, Inc. Application for CPCN
combinations, subdivisions, recapitahzations or the like with respect to such series of Preferred
Stock), and $l .70 per share for each share of Series C Preferred Stock (as adjusted for any stock
splits, stock dividends, combinations, subdivisions, recapitahzalions or the like with respect to
such series ofPreferred Stock).
(b) Upon completion of the distribution required by subsection (a) of this
Section 2, then all of the remaining Proceeds shall be distributed among the holders of Prefered
Stock and Common Stock pro rata based on the number of shares of Common Stock held by
each (assuming full conversion of all such Preferred Stock).
G) Notwithstanding the above, for purposes of determining the amount each
holder of shares of Preferred Stock is entitled to receive with respect to a Liquidation Event, each
such holder of shares of a series of Preferred Stock shall be deemed to have converted
(regardless of whether such holder actually converted) such holder's shares of such series into
shares of Common Stock immsdidsly prior to the Liquidation Event if, as a result of an actual
conversion, such holder would receive, in the aggregate, an amount greater than the amount that
would be distributed to such holder if such holder did not convert such series of Preferred Stock
into shares of Common Stock. If any such holder shall be deemed to have converted shares of
Preferred Stock into Common Stock pursuant to this paragraph, then such holder shall not be
entitled to receive any distribution that would otherwise be made to holders of Preferred Stock
that have not converted (or have not been deemed to have converted) into shares of Common
Stock.
(d) Liquidation Event.
(i) For purposes of this Section 2, a"Liquidation Event" shall include
(A) the closing of the sale, transfer or other disposition of all or substantially all of the
Corporation's assets other than to a parent or a wholly-owned subsidiary, @) the consummation
of the merger or consolidation of the Corporation wittr or into another entity (except a merger or
consolidation in which the holders of capital stock of the Corporation immediately prior to such
merger or consolidation continue after the consummation thereof to hold at least 50% of the
voting power of the capital stock of the Corporation or the surviving or acquiring entity), (C) the
closing of an issuance or transfer (whether by sale, merger, consolidation or otherwise), in one
transaction or a series of related transactions, to a Person (as defined below) or group of
affrliated Persons (other than an underwriter or underwriters of the Corporation's securities and
their transferees), of ttre Corporation's securities if, after such closing, the holders of the
Corporation's securities prior to such transfer would hold less lhan 50Yo of the outstanding
voting securities of the Corporation, or @) a liquidation, dissolution or winding up of the
Corporation; provided, however, that a transaction shall not constitute a Liquidation Event if its
sole purpose is to change the state of the Corporation's incorporation or to create a holding
company that will be owned in substantially the same proportions by the Persons who held the
Corporation's securities immediately prior to such transaction. Notwithstanding the prior
sentence, the sale of shares of the Corporation's Preferred Stock shall not be deemed a
"Liquidation Event." The treatment of any particular transaction or series of related transactions
as a Liquidation Event may be waived by the vote or written consent of the holders of at least
sixty percent (60%) of all the outstanding shares of Prefered Stock (voting together 4s a single
class on an as-converted basis). For the purposes of this Third Amended and Restated Certificate
Stock
ExteNet Systems, Inc. Application for CPCN
of Incorporation, "Person" means an individual, a corporation, a partnership, an association, a
trust, a limited fiability company or any other entity or organizalion, including a government or
political subdivision or any agency or instrumentality thereof.
(ii) In any Liquidation Event, if Proceeds received by the Corporation
or its stockholders are other than cash, the value of such Proceeds will be equal to their fair
market value. Any securities included within Proceeds shall be valued as follows:
(A) Securities traded on a public market and not subject to
restrictions on free marketability covered bV (B) below:
(l) 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 exchange or system over the twenty (20) trading-day period ending three (3)
trading days prior to the closing or consummation of the Liquidation Event;
(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
twenty (20) trading-day period ending three (3) trading days prior to the closing or
consummation of the Liquidation Event; and
(3) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined in good faith by the Board of Directors of
the Corporation and the holders of at least sixty percent (60%) of the voting power of all then
outstanding shares of Preferred Stock (voting together as a single class on an as-converted basis).
(B) The method of valuation of securities subject to restrictions
on free marketability (other than restrictions arising solely by virtue of a stockholder's status as
an affiliate or former affiliate under Rule 144 of the Securities Act of L933, as amended) shall be
to make an appropriate discount from the market value determined as above in (A) (D, Q) or (3)
to reflect the approximate fair market value thereof as mutually determined in good faith by the
Board of Directors of the Corporation and the holders of at least sixty percent (60%) of the
voting power of all then outstanding shares of such Preferred Stock (voting together as a single
class on an as-converted basis).
(C) The foregoing methods for valuing non-cash consideration
to be distributed in connection with a Liquidation Event shall be superseded by any
determination of such value set forth in the definitive agreements governing such Liquidation
Event.
(iii) In the event the requirements of this Section 2 are not complied
with, the Corporation shall forthwith either:
(A) cause the closing of such Liquidation Event to be
postponed until such time as the requirements of this Section Zhave been complied with; or
(B) cancel such transaction, in which event the rights,
preferences and privileges of the holders of the Preferred Stock shall revert to and be the same as
ExteNet Systems, Inc. Application for CPCN
such rights, preferences and privileges existing imms6ln1r1y prior to the date of the first notice
refered to in subsection 2(d)(iv) hereof.
(ir) The Corporation shall give each holder of record of Preferred
Stock written notice of each impending Liquidation Event not later than ten (10) days prior to the
closing or consummation of such transaction, and shall also notify such holders in writing of the
final approval of such transaction. The frst of such notices shall describe the material terms and
conditions of the impending transaction and the provisions of this Section 2, and the Corporation
shall thereafter give such holders prompt notice of any material changes to the terms of the
transaction. The transaction shall in no event take place sooner than ten (10) days after the
Corporation has given the first notice provided for herein or sooner than two (2) days after the
Corporation has given notice of any material sfianBes provided for herein; provided, however,
that such periods may be shortened upon the written consent of the holders of Preferred Stock
that (i) are entitled to such notice rights or similar notice rights and (ii) represent at least sixty
percent (60%) of the voting power of all then outstanding shares of the Preferred Stock (voting
together 6 I 5ingle class on an as-converted basis). The holders of the outstanding Preferred
Stock can waive the notice requirements described in this subsection (iv) upon the affrrmative
vote or written consent of the holders of at least sixty percerLt (60%) of the shares of Preferred
Stock then outstanding (voting together as a single class on an as-converted basis).
Notwithstanding the foregoing, the Corporation shall not be obligated to provide such notices to
the holders of Preferred Stock so long as each of Palomar Ventures III, L.P., Sevin Rosen Fund
VIII L.P., CenterPoint Venture Fund III(Q), L.P., Columbia Capital Equrty Partners III (QP),
L.P. and Centennial Ventures VII, L.P. or their respective afiiliates retains the right to appoint a
member of the Corporation's Board ofDirectors.
3. Intentionally omitted.
4. Conversion. The Preferred Stock shall be converted into Common Stock
as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Preferred Stock shall be convertible, at
the option of the holder thereof,, at any time after the date of issuance of such share, at the offrce
of the 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
applicable to such series of Preferred Stock by the Conversion Price (as defined and adjusted
below) applicable to such series of Preferred Stock. The initial Conversion Price per share for
the Series A Preferred Stock shall be the Original Issue Price applicable to such Series A
Preferred Stoclg the initial Conversion Price per share for the Series B Preferred Stock shall be
the Original Issue Price applicable to such Series B Preferred Stock, and the initial Conversion
Price per share for the Series C Prefered Stock shall be the Original Issue Price applicable to
such Series C Preferred Stock; provided, however, that the Conversion Prices for the Series A
Prefered Stock, Series B Preferred Stock and Series C Preferred Stock shall be subject to
adjustment as set forth in subsection a(d), The conversion rates for the Series A Preferred Stock,
Series B Preferred Stock and Series C Preferred Stock into Common Stock are referred to herein
as the "Conversion Rates".
ExteNet Systems,Inc. Application for CPCN
(b) Automatic Conversion. Each share of Preferred Stock shall automatically
be converted into shares of Common Stock at the applicable Conversion Rate at the time in
effect for such series of Prefered Stock immediately upon the earlier of (i) the Corporation's
sale of its Common Stock in a firm commitment underwritten public offering pursuant to a
registration statement on Form S-l or Form SB-2 under the Securities Act of 1933, as amended,
the public offering price of which was not less than $4.00 per share (as adjusted for any stock
splits, stock dividends, combinations, subdivisions, recapitalizations or the like) and that results
in aggregate proceeds to the Corporation, net of underwriting expenses, in excess of $50,000,000
(a "Qualified Public Offering") or (ii) the date specified by written consent or agreement of the
holders of at least sixty percent (60%) of the then outstanding shares of Preferred Stock (voting
together as a single class on an as-converted basis).
(c) Mechanics of Conversion. Before any holder of Preferred Stock shall be
entitled to voluntarily convert the same into shares of Common Stock, such holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or
of any transfer agent for the Prefered Stocl and shall give written notice to the 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.
The Corporation shall, as soon as practicable thereafter, issue and deliver at such oflice to such
holder of Preferred Stocl 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 ofsuch surrender ofthe shares ofPreferred 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, as set forth in subsection 4(bxi),
the conversion may, at the option of any holder tendering 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 persons entitled to receive the Common Stock upon conversion of
the Preferred Stock shall not be deemed to have converted such Preferred Stock until
imms6ia1.1y prior to the closing of such sale of securities. If the conversion is in connection
with the provisions of subsection a(b)(ii) above, such conversion shall be deemed to have been
made on the conversion date described in the stockholder approval approving zuch conversion,
and the Persons entitled to receive shares of Common Stock issuable upon such conversion shall
be treated for all purposes as the record holders of such shares of Common Stock as of such date.
(d) Conversion Price Adjustments of Preferred Stock for Certain Dilutive
Issuances. Solits and Combinations. The Conversion Prices shall be subiect to adiustment from
time to time as follows:
(1) Conversion Price Adjustment.
(A) If the Corporation shall issue, on or after the date upon
which this Third Amended and Restated Certificate of Incorporation is accepted for filing by the
Secretary of State of the State of Delaware (the "Filing Date"), any Additional Stock (as defined
below) without consideration or for a consideration per share less than the Conversion Price in
ExteNet Systems, Inc. Application for CPCN
effect immediately prior to the issuance of such Additional Stock with respect to the Series A
Preferred Stock, Series B Preferred Stock or Series C Preferred Stoc( as the case may be, then
the Conversion Price for such Series A Preferred Stoc( Series B Preferred Stock or Series C
Preferred Stock (as the case may be) shall forthwith (except as otherwise provided in this clause
(i)) be adjusted to a price determined by multiplying such Conversion Price by a fraction, the
numerator of which shall be the number of shares of Common Stock Outstanding (as defined
below) immediately prior to such issuance of Additional Stock plus the number of shares of
Common Stock that the aggregate consideration received by the Corporation for such issuance of
Additional Stock would purchase at such Conversion Price; and the denominator of which shall
be the number of shares of Common Stock Outstanding (as defined below) immediately prior to
such issuance plus the number of shares of such Additional Stock. For purposes of this
subsection 4(d)(i)(A), the term "Common Stock Outstanding" shall mean and include the
following: (1) outstanding Common Stock; (2) Common Stock issuable upon conversion of
outstanding Preferred Stock; and (3) Common Stock issuable upon conversion or exchange of all
other outstanding securities that are convertible into or sxsfuengeable for Common Stock and
upon exercise of all outstanding options to purchase or rights to subscribe for Common Stock
and such convertible or exchangeable securities (including Common Stock issuable upon
conversion or exchange of such convertible or exchangeable securities), including without
limitation outstanding stock options and stock purchase warrants. Securities described i" (1)
through (3) above shall be included for the purpose of computing the Common Stock
Outstanding irrespective of whether such securities are vested or urvested, contingent or
non-contingent, and exercisable or not yet exercisable.(B) No
adjustment of the Conversion Prices shall be made in an amount less than one cent per share,
provided that any adjustments that are not required to be made by reason ofthis sentence shall be
carried forward and either shall be taken into account in any subsequent adjustment made prior
to three (3) years from the date of the event giving rise to the adjustment being carried forward,
or shall be made at the end of three (3) years from the date of the event giving rise to the
adjustment being carried forward. Except to the limited extent provided for in subsections
4(d)(i)(EX3) and 4(dXi)(EX4), no adjustment of such Conversion Price pursuant to this
subsection 4(dXD shall have the effect of increasing the Conversion Price above the Conversion
Price in effect immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash paid therefor before deducting any
discounts, fees, commissions or other expenses allowed, paid or incurred by the Corporation for
any underwriting or otherwise in connection with the issuance and sale thereof.
(D) In the case of the issuance of the Common Stock for a
consideration in whole or in part other than cash, the value of consideration other than cash shall
be deemed to be the fair market value thereof as determined in good faith by the Board of
Directors irrespective of any accounting treatment.
(E) In the case of the issuance of options to purchase or rights
to subscribe for Common Stock the issuance of securities by their terms convertible into or
exchangeable for Common Stock or options to purchase or rights to subscribe for such
convertible or exchangeable securities, the following provisions shall apply for purposes of
determining the number of shares of Additional Stock issued and the consideration paid therefor.
ExteNet Systems,Inc. Application for CPCN
(1) The aggregate maximum number of shares of
Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitatioq the passage of time, but without taking into account
potential antidilution adjustments) of zuch options to purchase or rights to subscribe for Common
Stock shall be deemed to have been issued at the time such options or rights were issued and for
a consideration equal to the consideration (determined in tle manner provided in
subsections 4(dXiXC) and a(d)@(D)), if any, received by the Corporation upon the issuance of
such options or nghts plus the minimum exercise price provided in such options or rights
(without taking into account potential antidilution adjustments) for the Common Stock covered
thereby.
@ The aggregate maximum number of shares of
Common Stock deliverable upon conversion o{, or in exchange (assuming the satisfaction of any
conditions to convertibility or exchangeability, including, without limitation, the passage of time,
but without taking into account potential antidilution adjustments) for, any such convertible or
o(sfiangeable securities or upon the exercise of options to purchase or rights to subscribe for
such convertible or exchangeable securities and subsequent conversion or exchange thereofshall
be deemed to have been issued at the time such securities were issued or such options or rights
were issued and for a consideration equal to the consideration, if any, received by the
Corporation for any such securities and related options or rights (excluding any cash received on
account of accrued interest or accrued dividends), plus the minimum additional consideration, if
any, to be received by the Corporation (without taking into account potential antidilution
adjustments) upon the conversion or exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be determined in the manner provided in
subsections 4(dXD(C) and +(d)(i)@)).
(3) In the event of any change in the number of shares
of Common Stock deliverable or in the amount of consideration payable to the Corporation upon
exercise of such options or rights or upon conversion of or in exchange for such convertible or
exchangeable securities, the Conversion Prices of the Preferred Stock, to the extent in any way
affected by or computed using such options, rights or securities, shall be recomputed to reflect
such change, but no further adjustment shall be made for the actual issuance of Common Stock
or any payment of such consideration upon the exercise of any such options or rights or the
conversion or exchange ofany such securities.
(4) Upon the expiration or terrrination of any such
options or rights, or ofany such rights to convert or exchange or ofany options or rights related
to such convertible or exchangeable securities, the Conversion Prices of the Preferred Stock, to
the extent in any way affected by or computed using such options, rights or securities or options
or rights related to such securities, shall be recomputed to reflect the issuance of only the number
of shares of Common Stock (and convertible or exchangeable securities that remain in effect)
actually issued upon the exercise of such options or righ,ts, upon the conversion or exchange of
such securities or uponthe exercise ofthe options or rights related to such securities.
(5) The number of shares of Additional Stock deemed
issued and the consideration deemed paid therefore pursuant to subsections a(d)(i)@)(t) and
ExteNet Systems, Inc. Application for CPCN
4(dXiXEX2) shall be appropriately adjusted to reflect any change, termination or expiration of
the type described in either subsection 4(dXi)(E)(3) or a(d)(i)(E)(4).
(ii) "Additional Stock" shall mean any shares of Common Stock
issued (or deemed to have been issued pursuant to subsection a(d)(i)(E)) by the Corporation on
or after the Filing Date other than:
(A) Common Stock or Common Stock Equivalents issued
pursuant to a transaction described in subsection 4(dxiii) hereof (or Common Stock issued upon
conversion of such Common Stock Equivalents);
(B) Common Stock issued to employees, directors, consultants
and other service providers for the primary purpose of soliciting or retaining their services
pursuant to plans or agreements approved by the Corporation's Board of Directors;
(C) Common Stock issued pursuant to a firm commitment
underwritten public offering;
(D) Common Stock issued purzuant to the conversion or
exercise of convertible or exercisable securities outstanding on the Filing Date;
(E) Common Stock issued or deemed to be issued upon the
exercise of options to purchase or rights to subscribe for Common Stock outstanding on the
Filing Date;
(F) Common Stock issued or deemed to be iszued upon the
exercise of options to purchase or rights to subscribe for convertible or o(sfuangeable securities
or upon the subsequent conversion or exchange thereof outstanding on the Filing Date;
(G) Common Stock issued upon conversion of Preferred Stock
or as dividends or distributions on the Preferred Stock;
GD Common Stock iszued in connection with a bona fide
business acquisition of or by the Corporation, whether by merger, consolidation, sale of assets,
sale or exchange of stock or otherwise, which transaction is approved by the Corporation's
Board of Directors;
(D Common Stock issued or deemed issued pursuant to
subsection 4(d)(,XE) as a result of a decrease in the Conversion Price of the Preferred Stock
resulting from the operation of subsection (d)(i);
(D Common Stock issued pursuant to corporate partnering
agreements, joint ventures or other strategic transactions, provided such issuances are primarily
for purposes other than equity financing and provided that such arrangements are approved by
the Corporation's Board of Directors; or
(K) Common Stock issued or issuable pursuant to any
equipment lease financing or bank credit arrangement, provided such transaction is entered into
ExteNet Systems, Inc. Application for CPCN
primarily for purposes other than equity financing and is approved by the Corporation's Board of
Directors.
(iii) In the event the Corporation should at any time or from time to
time after the Filing Date fix a record date for the eflectuation 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 ofsuch record date (or the date of
effectuation or payment of zuch split, subdivision, dividend or other distribution if no record
date is fixed), the Conversion Prices of the Preferred Stock shall be appropriately decreased so
that the number of shares of Common Stock issuable on corversion of each share of such series
shall be increased in proportion to such increase of the aggregate of the shares of Common Stock
outstanding and those issuable with respect to such Common Stock Equivalents with the number
of shares issuable with respect to Common Stock Equivalents determined from [:me to time in
the manner provided for deemed issuances in subsection a(d)(i)(E). Notwithstanding the
foregoing, if after the fixing of such a record date the proposed split, subdivision, dividend or
other distribution shall be rescinded or there shall be any change in the resulti.g increase of the
aggregate of the shares of Common Stock outstanding and those issuable with respect to such
Common Stock, then the Conversion Prices of the Preferred Stoc\ to the extent in any way
affected by or computed as a result of the fi*ing of such record datg shall be recomputed to
reflect the issuance of only the shares of Common Stock and Common Stock Equivalents, if any,
actually issued or issuable pursuant to such split, subdivision, dividend or other distribution.
(iv) If the number of shares of Common Stock outstanding at any time
after the Filing Date is decreased by a reverse stock split or a combination of the outstanding
shares of Common Stock, then, upon the record date of such reverse stock split or combination,
the Conversion Prices for the 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 the outstanding shares of Common Stock.
(e) Other Distributions. In the event the Corporation shall declare a
distribution payable in securities of other Persons, evidences of indebtedness issued by the
Corporation or other persons, assets (excluding cash dividends) or options or rights not referred
to in subsection 4(d)(iii), then, in each such case for the purpose of this subsection 4(e), the
holders of the 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 the Corporation
into which their shares of Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to receive such
distribution.
(fl Recapitalizations. If at anv time or from time to time there 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
ExteNet Systems,Inc. Application for CPCN
made so that the holders of the Preferred Stock shall thereafter be entitled to receive upon
conversion of the Preferred Stock the number of shares of stock or other securities or property of
the Corporation or otherwise, to which a holder of Common Stock deliverable upon conversion
would have been entitled on such recapitilization. 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 Preferred Stock after the recapilaltzation to the end that the provisions of this
Section 4 (including adjustment of the Conversion Prices then in effect and the number of shares
purchasable upon conversion ofthe Preferred Stock) shall be applicable after that event as nearly
equivalently as may be practicable.
(g) No Fractional Shares and Certificate as to Adjustments.
(r) No fractional shares of Common Stock shall be issued upon the
conversion of any shares of the Preferred Stock and the aggregate number of shares of stock to
be issued to particular stockholders shall be rounded down to the nearest whole share, and the
Corporation shall pay in cash the fair market value of any fractional shares as of the time when
entitlement to receive such fractions is determined. Whether or not fractional shares would be
issuable upon such conversion shall be determined on the basis of the total number of shares of
Prefered Stock the holder is at the time converting into Common Stock and the number of
shares of Common Stock issuable upon zuch conversion.
(ir) Upon the occurrence of each adjustment or readjustment of the
Conversion Prices of Preferred Stock purzuant to this Section 4, the 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 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 Preferred
Stoclg 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 Preferred Stock then 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 Preferred Stock.
(h) Notices of Record Date. In the event of any takine by the Comoration 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 and other than a stock
dividend of the type described in subsection 4(iii) or other distribution, the Corporation shall
mail to each holder of Preferred Stock, at least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the purpose of such
dividend or distribution, and the amount and character of such dividend or distribution.
(i) Reservation of Stock Issuable Upon Conversion. The Corporation shall at
all times reserve and keep available out of its authorized but unissued shares of Common Stoclg
solely for the purpose of effecting the conversion of the shares of the Preferred Stoct such
number of its shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Preferred Stock; and if at ary time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Preferred Stock, in addition to such other remedies as shall
ExteNet Systems,Inc. Application for CPCN
be available to the holder of such Preferred Stock, the 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 reasonable best efforts to obtain the requisite
stockholder approval of any necessary amendment to this Third Amended and Restated
Certifi cate of Incorporation.
0) Notices. Any notice required by the provisions of this Section 4 to be
given to the holders of shares of Preferred Stock shall be deemed given if deposited in the United
States mail, postage prepaid, and addressed to each holder of record at his address appearing on
the books of the Corporation or if given by any other method permitted under the General
Corporation Law.
(k) Waiver of Adjustment to Conversion Price. Notwithstanding anything
herein to the contrary, any reduction of the Conversion Price of the Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock may be waived, either prospectively or
retroactively and either generally or in a particular instance, by the consent or vote of the holders
of sixty percent (60%) of the then outstanding shares of such series of Preferred Stock (voting
together as a single class on an as-converted basis). Any such waiver shall bind all future
holders ofshares ofthe Preferred Stock.
0) Special Mandatory Conversion.
(r) In the event:
(A) the Corporation wishes to consummate a financing that
results in the sale of any shares of its Common Stock, or securities convertible into or
exchangeable or exercisable for any shares of its Common Stock, or options to purchase or rights
to subscribe for such convertible or exchangeable securities, at a price per share for the Common
Stock (as determined below) less than the price per share of the most recent issuance of Preferred
Stock of the Corporation (on a Common Stock equivalent basis);
(B) the Board of Directors of the Corporation (including at
least a majority of the directors elected exclusively by the holders of Preferred Stock) determines
(with interested directors able to vote for purposes of this provision) in good faith that it is in the
best interests of the Corporation to request that the holders of Preferred Stock of the Corporation
participate in such financing (in which case such financing will be deemed a "Mandatory
Offering") and determines the aggregate dollar amount to be invested by all holders of Preferred
Stock (the "Aggregate Investment Amount"), which amount may be more than or less than any
particular holder's right to participate in the financing pursuant to any contractual right of first
offer or similar right;
(C) the Corporation delivers a notice ("Notice") to the holders
of Preferred Stock (1) stating the Corporation's bona fide intention to consummate such
Mandatory Offering, (2) indicating the number and type of securities to be offered, (3) indicating
the price and terms upon which it proposes to offer such securities, (4) identifuing the Pro Rata
Share (as defined below) of each holder of Preferred Stock of the Aggregate Investment Amount,
ExteNet Systems, Inc. Application for CPCN
and (5) offering each holder of Prefered Stock the right to purchase such holder's Pro Rata
Share of the Aggregate Investment Amount for no less than twenty (20) calendar days after the
giving of the Notice (or such longer time period as may be provided with respect to the
contractual right of frst offer held by holders of Preferred Stock purzuant to Section 2.4 of the
Corporation's Second Amended and Restated Investors' Rights Agreement, dated as of April 29,
2008, among the Corporation and the holders of Preferred Stock, as it may be amended from
time to time); and
(D) any holder of Prefered Stock and affiliates of such holder
other than the Manire Limited Partnership, Eric Lekacz or their affiliates (collectively, a
'Non-Participating Holder") does not acquire at least its Pro Rata Share of the Aggregate
Investment Amount (whether or not such Aggregate Investment Amount is more than or less
than the aggregate dollar amount actually received by the Corporation from the holders in
connection with the Mandatory Offering, as may be the case, for s)omple, if certain holders do
not participate in the Mandatory Offering) within the time periods set forth in the Notice;
(ii) then that percentage of such Non-Participating Holder's shares of
Series A Preferred Stock, that percentage of such Non-Participating Holder's shares of Series B
Preferred Stock and that percentage of such Non-Participating Holder's shares of Series C
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 the Corporation at a Conversion Price equal to
the Original Issue Price for such Preferred Stock (as adjusted for any stock splits, stock
dividends, combinations, zubdivisions, recapitalizations or the like, but without any adjustment
by reason of consummation of the Mandatory Offering or for any adjustment pursuant to
subsection 4(dXiXA) subsequent to the Filing Date), For purposes of tlis 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 all shares of Prefered 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 Preferred Stock then outstanding. 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 Preferred Stock shall be calculated based on the
number of shares of Preferred Stock outstanding immediately following the closing of the
Mandatory Offering, Nssming all such holders of Preferred Stock acquire such number of shares
in such Mandatory Offering as may be necessary so that the provisions of this Section 4(1) would
not cause a conversion of any shares of Preferred Stock into Common Stock.
(iii) The holder of any shares of Preferred Stock converted into
Common Stock pursuant to this subsection a(1) shall deliver to the Corporation during regular
business hours at the offrce of any transfer agent of the Corporation for the Preferred Stock, or at
such other place as may be designated by the Corporation, the certificate or certificates for the
shares so converted, duly endorsed or assigned in blank or to the Corporation. As promptly as
practicable thereafter, the 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
ExteNet Systems, Inc. Application for CPCN
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 the
Corporation are closed on that date, in which event such holder 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. From and after the Mandatory Offering Date, the certificate or certificates
representing shares ofPreferred Stock converted pursuant to this subsection a(1) shall represent
the shares of Common Stock into which such shares of Preferred Stock were converted.
(iv) In the event that a holder ofPreferred Stock converts any Preferred
Stock into Common Stock pursuant to subsections 4(a) or 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 purzuant to this subsection 4(l), and such holder shall be required to
transfer to the Corporation all shares of Common Stock issued upon such conversion resulting
from any adjustment pursuant to subsection +(d)(i)(A) subsequent to the Filing Date,
(") Notwithstanding anything to the contrary in this subsection 4(l),
the obligation of any holder of Preferred Stock to convert or to have automatically converted any
of its Preferred Stock into Common Stock pursuant to this subsection a(l) shall cease to be
effective and binding on (x) any Investor Group (as hereinafter defined) after such Investor
Group's cumulative investment in equity securities of the Corporation is equal to at least
Fourteen Million Dollars ($14,000,000), or (y) only for Palomar Ventures III, L.P. and its
Investor Group, after (I) with respect to each and every one of the other Investor Groups, either
(A) such other Investor Group's cumulative investment in equity securities of the Corporation is
equal to at least Fourteen Million Dollars ($14,000,000) or (B) any shares of Preferred Stock
held by such other Investor Group have been converted to Common Stock pursuant to this
subsection 4(l), and (I) Palomar Ventures III, L.P. and its Investor Group have collectively
participated at least to the extent of their full Pro Rata Share in any and all additional equity
financings of the Corporation to which the right of first offer set forth in Section 2.4 of that
certain Second Amended and Restated Investor Rights Agreement by and among the Corporation
and the other parties thereto dated as of April 29,2008 applies that occur following the Filing
Date and immediately prior to the date on which, with respect to each and every one of the other
Investor Groups, either (A) the cumulative investment in equity securities of the Corporation for
such other Investor Group is equal to at least Fourteen Million Dollars ($14,000,000) or (B) ary
shares of Preferred Stock held by such other Investor Group have been converted to Common
Stock pursuant to this subsection 4(l). For purposes of this subsection 4(l), "Investor Group"
shall mean, for each holder of Preferred Stock that is an entity, such holder of Preferred Stock
and all affiliated funds and limited partnerships under common ownership or control with such
holder.
5. Voting Nghts.
(a) General Voting Rights. The holder of each share of Preferred Stock shall
have the right to one vote for each share of Common Stock into which such 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 Stoclq and shall be
entitled, notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of the Corporation, and shall be entitled to vote, together with
ExteNet Systems, Inc. Application for CPCN
holders of Common Stock, with respect to any question upon which holders of Common Stock
have the right to vote. Fractional votes shall no! however, be permitted and any fractional
voting rights available on an as-converted basis (after aggregatng all shares into which shares of
Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole
number (with one-half being rounded upward).
(b) Voting for the Election of Directors. As long as any shares of Preferred
Stock remain outstanding, the holders of such shares of Preferred Stock shall be entitled to elect
frve (5) directors of the Corporation at any election of directors. The holders of outstanding
Common Stock shall be entitled to one (1) director of the Corporation at any election of
directors, provided that such director shall be the then-serving chief executive officer of the
Corporation. The holders of Prefered Stock and Common Stock (voting together as a single
class and not as separate series, and on an as-converted basis) shall be entitled to elect any
remaining directors of the Corporation.
Notwithstanding the provisions of Section 223(a)(l) and 223(a)(2) of the General Corporation
Law, any vacancy, including newly created directorships resulting from any increase in the
authorized number of directors or amendment of this Third Amended and Restated Certificate of
Incorporation, and vacancies created by removal or resignation of a director, may be filled by a
majority of the directors then in office, though less than a quorum, or by a sole lgpaining
director, and the directors so chosen shall hold ofEce until the next annual election and until their
successors are duly elected and shall qualify, unless sooner displaced; provided, however, that
where such vacancy occurs among the directors elected by the holders of a class or series of
stock pursuant to a contractual agreement by and among the Corporation and certain
stockholders of the Corporation, the holders of shares of such class or series entitled to elect such
director may override the Board's action to fill such vacancy by (i) voting for their own designee
to fill such vacancy at a meeting of the Corporation's stockholders or (ii) written consent in
accordance with the requirements of the General Corporation Law. Any director 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 affrmative vote of the holders
ofthe shares ofthe class or series ofstock 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 written consent.
6. Protective Provisions. (a) So long as any shares of Prefered Stock
remain outstanding, the Corporation shall not (by amendment, merger, consolidation or
otherwise) without first obtaining the approval (by vote or written consent) of the holders of at
least sixty percent (60%) of the then outstanding shares of Preferred Stock (voting together as a
single class on an as-converted basis):
(i) consummate a Liquidation Event;
(ir) alter or change the rights, preferences or privileges of the shares of
Preferred Stock so as to affect adversely such shares;
ExteNet Systems, Inc. Application for CPCN
(iii) increase or decrease (other than by conversion) the total number of
authorized shares of Preferred Stock or Common Stock or create (by reclassification or
otherwise) any new class of stock;
(1) authorize or issue, or obligate itself to issue, any equity security
(including any other security convertible into or exercisable for any such equity security) having
a preference over, or being on a parity with, any of the Preferred Stock with respect to dividends
or payment upon liquidation, dissolution, winding up, redemption, voting (in all respects) and
conversion;
(") 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 (i) the repurchase of shares of Common
Stock from employees, officers, directors, consultants or other persons performing services for
the Corporation or any subsidiary pursuant to agreements under which the Corporation has the
option to repurchase such shares upon the occurrence of certain events, such as the termination
of employment or service, or pursuant to a right of first refusal, or (ii) the repurchase of equity
securities issued by the Company to lenders in connection with debt financing approved by the
Board of Directors;
("D amend the Corporation's Third Amended and Restated Certificate
of Incorporation or Bylaws in a manner adverse to any of the Preferred Stock;
(vii) pay dividends on any class or series of equity securities, other than
dividends payable on the Preferred Stock;
(viii) make any loans or advances to its employees or any members of
their immediate families, other than loans or advances 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, restricted stock plan or similu equity incentive plan approved by the Board of
Directors of the Corporation;
(r") guarantee, other than in the ordinary course of business, ily
indebtedness or obligation of any other party other in excess of $1,000,000, or create or suffer to
be imposed any lierq mortgage, security interest or other charge on or against all or substantially
all of the properties or assets of the Corporation or any subsidiary or incur indebtedness in excess
of $5,000,000, other than in the ordinary course of business;
(*) acquire, or permit any subsidiary to acquire, any stock or other
securities of any Person unless immediately following such acquisition such Person would be
wholly owned by the Corporation or a subsidiary of the Corporation;
(*i) enter into any transactions with any officer, director or employee of
the Corporation or parents, spouses, siblings or lineal descendants of any of the foregoing, except
for employment, engagemen! option or benefit agreements or other similar agreements entered into
by the Corporation in the ordinary course of business, or except for the provision of goods or
services on terms and conditions substantially similar to those that would be available from an
independent third party for the provision of comparable goods or services;
ExteNet Systems, Inc. Application for CPCN
(*ii) make any single capital expenditure or series of related capital
expenditures which individually or in the aggregate exceed(s) $2,000,000, unless such capital
expenditures are approved by the Board of Directors, or make material changes in the nature of
the business conducted by the Corporation;
(xiiD increase the number of shares available for issuance under the
Corporation's Second Amended and Restated2004 Equity Incentive Plan; or
(xiv) increase or decrease the authorized size of the Corporation's Board
of Directors.
7. Status of Converted Stock. In the
shall be converted pursuant to Section 4 hereo{, the shares
shall not be issuable by the Corporation.
event any shares of Preferred Stock
so converted shall be cancelled and
C. Common Stock. The rights, preferences, privileges and restrictions
granted to and imposed on the Common Stock are as set forth below in this Article IV(C)
l. 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, as and if declared by the Board of Directors, out of any
assets of the Corporation legally available therefor, any 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 the
Corporation (including upon the occurrence of a Liquidation Event), the assets of the
Corporation shall be distributed as provided in Section 2 of Article IV(B) hereof.
3. Voting Rights. The holder of each share of Common Stock shall have the
right to one vote for each such share, and shall be entitled to notice of any stockholders' meeting
in accordance with the Bylaws of the Corporation, and shall be entitled to vote upon such matters
and in such manner as may be provided by law. 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 aflirmative 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.
ARTICLE V
Except as otherwise provided in this Third Amended and Restated 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 the Corporation.
ARTICLE YI
The number of directors of the Corporation shall be determined in the manner set
forth in the Bylaws of the Corporation.
ExteNet Systems, Inc. Application for CPCN
ARTICLE YII
Elections of directors need not be by written ballot unless the Bylaws of the
Corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State of Delaware, as
the Bylaws of the Corporation may provide. The books of the 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 the
Corporation.
ARTICLE D(
A director of the Corporation shall not be personally liable to the 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 the 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 (19 for any
transaction from which the director derived any improper persotral benefit. If the General
Corporation Law is amended after approval by the stockholders of this Article IX to authorize
co{porate action further eliminalfug or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law as so amended.
Any repeal or modification of the foregoing provisions of this Article IX by the
Board of Directors and stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of, or increase the liability of any
director of the Corporation with respect to any acts or omissions of such director occurring prior
to, such repeal or modification.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision
contained in this Third Amended and Restated 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, the Corporation is authorized to
provide indemnification of (and advancement of expenses to) agents of the Corporation (and any
other persons to which General Corporation Law permits the Corporation to provide
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
ExteNet Systems,Inc. Application for CPCN
to limits created by applicable General Corporation Law (statutory or non-statutory), with
respect to actions for breach of duty to the Corporatioq its stockholders, and others.
Any amendment, repeal or modification of the foregoing provisions of this
Article )tr shall not adversely affect any right or protection ofa director, officer, agent, or other
person existing at the time o[, or increase the liability of any director of the Corporation with
respect to any acts or omissions of such director, officer or agent occurring prior to, such
amendment, repeal or modification.
*r**
THIRD: The foregoing amendment and restatement was approved by the holders
of the requisite number of shares of the Corporation in accordance with Section 228 of the
General Corporation Law.
FOURTH: That this Third Amended and Restated Certificate of Incorporation,
which restates and integrates and further amends the provisions of the Corporation's Second
Amended and Restated Certificate of Incorporation, has been duly adopted in accordance with
Sections 242 and 245 of the General Corporation Law.
ExteNet Systems,Inc. Application for CPCN
IN WITNESS WHEREOF, this Third Amended and Restated Certificate of
Incorporation has been executed by a duly authorized oflicer ofthe Corporation on this zgthday
ofApril,2008.
/s/ Ross Manire
Ross Manire, President
ExteNet Systems, Inc. Applicg n for CPCN
e[oa)ore PAGE 7
'Lfu first State
r , JEFgnay w - BaLLocK, SECRETARy oF srArg oF TEE STAEE OF
DEI,AWARE I DO EEREBY CERTZW TflE ATTACEED TS A TRUE ATTD CORRECT
coPy oF TIIE RESTATED CERTTFTCATE OF ']'EXTENET SySTEMSi, rNC. " ,
FTLED rN TETS OFFTCE ON THE TWENTTETE DAY OF;rArrUARv, A-D- 2070,
AT 2:39 OTCLOCK P.IUI-
A FILED COPY OE THTS CERTTFTCATE EAS BEEN FORWEAOED TO THE
NEIT CASTLE COUNTY RECORDER OF DEEDS -
,effrey w Bullock, secretary ofStateoN:77676423574949 8700
700054379
you ,M,y verifv this certiticaxe onlineaX eorp. delaw"are. qov/auXhver, shtml.
DATE: 07-20-70
ExteNet Systems, Inc. Application for CPCN Stat€ of De.lawate
Secr.etannr of StlatleDivision of cormrationsDatirered 02:42 fr,t 07/20/20t0
ELLED 02:39 PItt 07/20/2070*v 700054379 - 3574949 ECLE
FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
EXTENET SYSTEMS,INC.
(Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware)
ExteNet Systems, inc. (the "Corporation"), a corporation organized and existing
under and by virrue of the provisions of the General Corporation Law of the State of Delaware
(the "General Corporation Law'),
DOES HBREBY CERTIFY:
FIRST: That the name of this Corporation is ExteNet Systems, Inc. and that this
Corporation was originally incorporated pursuant to the General Corporation Law on October l,
2002, under the name Clearlinx Network Corporation;
SECOND: That the Board of Directors of the Corporation (the "Board of
Directors") duly adopted resolutions proposing to amend and restate the Third Amended and
Restated Certificate of Incorporation of the Corporation, declaring said amendment and
restatement to be advisable and in the best interests of the Corporation and its stockholders, and
authorizing the appropriate officers of the Corporation to solicit the consent of the stockholders
therefor, which resolution setting forth the proposed amendment and restatement is as follows:
RESOLVED, that the Third Amended and Restated Certificate of Incorporation
of the Corporation be amended and restated in its entirety as follows:
ARTICLE I
The name of the Colporation is ExteNet Systems, Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of Delaware is
located at27ll Centerville Road, Suite 400, City of Wilmington, County of New Castle, 19808.
The name of its registered agent at such address is Corporation Service Company.
ARTICLE III
The nature of the businesses and purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations may be organiz.ed
under the General Corporation Law. The Corporation will have perpetual existence.
ARTICLE IV
A. Authorization of Stock. The Corporation is authorized to issue two classes
of stock to be designated, respectively, corlmon stock and preferred stock. The total uttmber of
shares that the Corporation is authorized to issue is Two Hundred Eight Million, Five Hrrndred
ExteNet Systems, Inc. Application for CPCN
Ten Thousand, Seven Hundred Seventy-Four (208,510,774). The total number of shares of
common stock authorized to be issued is One Hundred Eleven Million, Three Hundred Forty-
Two Thousand, Eight Hundred Eighty-Seven (l I 1,342,887), par value $0.001 per share (the
"Common Stock"). The total number of shares of preferred stock authorized to be issued is
Ninety-Seven Million, One Hundred Sixty-Seven Thousand, Eight Hundred Eighty-Seven
(97,167,887), par value $0.001 per share (the "Preferred Stock"), consisting of (i) Seventeen
Million, Eight Hundred Sixty-Six Thousand, Six Hundred Seventy-Two (17,866,672) shares of
Series A Preferred Stock, (ii) Ten Million, Eight Hundred Fofiy-Four Thousand, Four Hundred
Forty-Eight (10,844,448) shares of Series B Preferred Stock, (iii) Nineteen Million, Four
Hundred Forty-Nine Thousand, One Hundred Thirly-Three (19,449,133) shares of Series C
Preferred Stock, (iv) Forty-Four Million, Eight Hundred Nine Thousand, One Hundred Sixty-
One (44,809,161) shares of Series D Preferred Stock, and (v) Four Million, One Hundred
Ninety-Eight Thousand, Four Hundred Seventy-Three (4,198,473) shares of Series D-l Preferred
Stock.
B. Riehts. Preferences and Restrictions of Preferred Stock. The rights,
prefbrences, privileges and restrictions granted to and imposed on the Preferred Stock are as set
forth below in this Article IV(B).
l. Dividend Provisions.
(a) The holders of shares of Preferred Stock (on an as-converted to Common
Stock basis) shall be entitled to receive dividends, out of any assets legally available therefor,
ratably rvith the holders of Common Stock, 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 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 in good faith by the Board of Directors of
the Corporation).
(b) So long as any share of Series D Preferred Stock or Series D-l Prefened
Stock remains outstanding, unless all dividends declared by the Board of Directors on all
outstanding shares of Series D Preferred Stock and Series D-l Preferred Stock have been paid in
cash, the Corporation shall not declare or pay any dividends or any make any distributions
relating to, or redeem, purchase, acquire or make any liquidation payment relating to, any shares
of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Common Stock
or any other shares of capital stock of the Corporation now existing or hereafter authorized over
which the Series D Preferred Stock and Series D-l Preferred Stock has preference or priority in
the payment of dividends or in the distribution of assets on any voluntary or involuntary
Iiquidation, dissolution or winding up of the Corporation (all such capital stock, "Junior Stock").
2. Liquidation Preference. Upon the occurrence of any Liquidation Event (as
defined below), the proceeds of such Liquidation Event legally available for distribution to the
Corporation's stockholders (the "Proceeds") shall be distributed in accordance with the terms of
this subsection 2.
2
ExteNet Systems, Inc. Application for CPCN
(a) The holders of Series D Preferred Stock shall be entitled to receive, prior
and in preference to any distribution of Proceeds to the holders of Junior Stock by reason of their
ownership thereof, an amount per share equal to the greater of: (i) the sum of: (x) the applicable
Original [ssue Price (as defined below) for such share of Series D Preferred Stock; (y) an amount
computed at the rate of nine percent (9%) per annum of the Original Issue Price for such share of
Series D Preferred Stock, compounded on an annual basis from the date of issuance of such
share of Series D Preferred Stock; and (z) all declared but unpaid dividends on such share of
Series D Preferred Stock; and (ii) the amount that would be received in respect of such share of
Series D Preferred Stock if such share was converted into shares of Common Stock in
accordance with the terms of this Fourth Amended and Restated Certificate of Incorporation
immediately prior to the occurrence of such Liquidation Event. The holders of Series D- l
Prefbrred Stock shall be entitled to receive, prior and in preference to any distribution of
Proceeds to the holders of Junior Sttrck by reason of their ownership thereof, but pari passar with
distribution to the holders of the Series D Preferred Stock, an amount per share equal to the
greater of, (i) the sum of; (x) the applicable Original Issue Price for such share of Series D-l
Preferred Stock, and (y) all declared but unpaid dividends on such share of Series D- I Preferred
Stock; and (ii) the amount that would be received in respect of such share of Series D-l Preferred
Stock if such share was converted into shares of Common Stock in accordance with the terms of
this Fourth Amended and Restated Certificate of Incorporation immediately prior to the
occurrence of such Liquidation Evenl If, upon the occurrence of such Liquidation Event, the
Proceeds shall be insufficient to permit the payment to such holders of shares of Series D
Preferred Stock and Series D- I Preferred Stock of the full preference amounts described above,
then the entire Proceeds shall be distributed ratably among the holders of the shares of Series D
Preferred Stock and Series D-l Prefened Stock on a pari passu basis in proportion to the flill
preference amounts described above that each such holder is otherwise entitled to receive under
this subsection 2(a). For purposes of this Fourth Amended and Restated Certificate of
Incorporation, "Original Issue Price" shall mean $2.62 per share for each share of Series D
Preferred Stock and Series D-l Prefened Stock (as adjusted for any stock splits, stock dividends,
combinations, subdivisions, recapitalizations or the like with respect to such series of Preferred
Stock).
(b) Following the payment in full to the holders of Series D Preferred Stock
and Series D- I Preferred Stock of the amounts set forth in subsection 2(a), the holders of Series
A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock shall be entitled t<l
receive, prior and in preference to any distribution of Proceeds to the holders of Common Stock
by reason of their ownership thereof, an amount per share equal to the greater of, (i) the sum of
(x) the applicable Original Issue Price for such share of Series A Preferred Stock, Series B
Preferred Stock or Series C Preferred Stock, (y) an amount computed at the rate of five percent
(5%) per annum of the applicable Original Issue Price for such share of Series A Preferred Stock,
Series B Preferred Stock or Series C Preferred Stock, on a noncompounding basis from the
respective dates ofissuance ofsuch share ofSeries A Preferred Stock, Series B Preferred Stock
or Series C Preferred Stock, and (z) all declared but unpaid dividends on such share ofSeries A
Preferred Stock, Series B Preferred Stock or Series C Preferred Stock; and (ii) the amount that
would be received in respect ofsuch share of Series A Preferred Stock, Series B Preferred Stock
or Series C Preferred Stock if such share was converted into shares of Common Stock in
accordance with the terms of this Fourth Amended and Restated Certificate of Incorporation
immediately prior to the occurence of such Liquidation Event. If, upon the occurrence of such
ExteNet Systems, Inc. Application for CPCN
I.iquidation Event and following the payment in full to the holders of Series D Preferred Stock
and Series D-l Prefened Stock of the amounts set forth in subsection 2(a), the Proceeds shall be
insufficient to permit the payment to such holders of shares of Series A Preferred Stock, Series B
Preferred Stock and Series C Prefened Stock of the full preference amounts described above,
then the remaining Proceeds shall be distributed ratably among the holders of the shares of
Series A Prefened Stock, Series B Prefened Stock and Series C Preferred Stock on a pari passu
basis in proportion to the respective full preference amounts described above that each such
holder is otherwise entitled to receive under this subsection 2(b). For purposes of this Fourth
Amended and Restated Cenificate of Incorporation, "Original Issue Price" shall mean
(i) $l.ZO per share for each share of Series A Prefened Stock (as adjusted for any stock splits,
stock dividends, combinations, subdivisions, recapitalizations or the like with respect to such
series of Preferred Stock), (ii) $1.4754 per share for each share of the Series B Prefened Stock
(as adjusted for any stock splits, stock dividends, combinations, subdivisions, recapitalizations or
the like with respect to such series of Prefened Stock), and (iii) $1.70 per share for each share of
Series C Prefened Stock (as adjusted for any stock splits, stock dividends, combinations,
subdivisions, recapitalizations or the like with respect to such series of Preferred Stock).
(c) Upon completion of the distributions required by subsections (a) and (b)
of this subsection 2, all of the remaining Proceeds shall be distributed among the holders of
Common Stock by reason of their ownership thereof pro rata based on the number of shares of
Common Stock held by each such holder (excluding for the purposes of such distribution all of
the Preferred Stock).
(d) Liquidation Event.
(i) For purposes of this subsection 2, a "Liquidation Event" shall
mean: (A) the sale, transfer or other disposition of all or substantially all of the Corporation's
assets in one transaction or a series of related transactions (other than to a wholly-owned
subsidiary of the Corporation); (B) the merger, reorganization, consolidation or other business
combination of the Corporation with or into another entity in one transaction or a series of
related transactions (a "Business Combination") (except a Business Combination in which (i) the
holders of the issued and outstanding shares of capital stock of the Corporation immediately
prior to such Business Combination continue after the consummation thereof to hold at least fifty
percent (50%) of the voting power of the issued and outstanding shares of capital stock of the
Corporation or the surviving or acquiring entity and (ii) the rights, preferences, privileges and
restrictions granted or imposed on all of the Series of Preferred Stock as specified in this Fourth
Amended and Restated Cenificate of Incorporation (the "Existing Preferred Rights") are not
adversely affected (or the holders of shares of such Prefened Stock receive shares of capital
stock in the surviving or acquiring entity with rights, preferences, privileges and restrictions
substantially the same or more favorable than the Existing Prefened Rights)); (C) the issuance or
transfer (whether by sale, merger, consolidation or otherwise), in one transaction or a series of
related transactions, to a Person (as defined below) or group of affiliated Persons (other than an
underwriter or underwriters of the Corporation's securities) of the Corporation's issued and
outstanding shares of capital stock if, after such closing, the holders of the Corporation's issued
and outstanding shares of capital stock immediately prior to such transfer would hold less than
fifty percent (50%) of the voting power of the issued and outstanding shares of capital stock of
the Corporation; or (D) a liquidation, dissolution or winding up of the Corporation. For the
4
ExteNet Systems, Inc. Application for CPCN
purposes of this Fourth Amended and Restated Certificate of Incorporation, "Person" means an
individual, a corporation, a partnership, an association, a trust, a limited liability company or any
other entity or organization, including a government or political subdivision or any agency or
instrumental ity thereof.
(iD If any portion of the Proceeds received by the Corporation or its
stockholders in any Liquidation Event is other than cash, the value of such non-cash Proceeds
will be equal to their fair market value. Any securities comprising a portion or all of such non-
cash Proceeds shall be valued as follows:
(A) Securities traded on a public market and not subject to
restriction.s on free marketability covered by (B) below:
(l) 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 exchange or system over the twenty (20) consecutive trading-day period
ending three (3) trading days prior to the closing or consummation of the Liquidation Event;
(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
twenty (20) consecutive trading-day period ending ttree (3) trading days prior to the olosing or
consummation of the Liquidation Event; and
(3) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined in good faith by (i) the Board of Directors
of the Corporation, (ii) the holders of at least a majority of the voting power of all then
outstanding shares of Preferred Stock (voting together as a single class on an as-converted basis)
and (iii) the holders of at least a majority of all the outstanding shares of Series D Preferred
Stock and Series D-l Prefened Stock (voting together as a single class on an as-converted basis)
(a "Prefened D Majority"); provided, that if a Preferred D Majority or the holders of at least a
majority of the voting power of all then outstanding shares of Preferred Stock (voting together as
a single class on an as-converted basis) (in either case, the "Disputing Stockholders') do not
agree with the determination of fair market value proposed by the Board of Directors within
fifteen (15) days of the delivery of such proposal by the Board of Directors to the stockholders of
the Corporation, then such Disputing Stockholders or the Board of Directors shall have the right
to initiate the following fair market value determination process: the valuation shall be made by a
nationally recognized appraiser selected by the Disputing Stockholders and the Board of
Directors or, if they cannot agree on an appraiser within twenty (20) days after initiation of the
fair market value determination process, each shall select a nationally recognized appraiser
within five (5) days following the expiration of such twenty (20) day period, and the two
appraisers shall designate a third nationally recognized appraiser within ten (10) days following
the expiration of such twenty (20) day period. Such third appraiser shall complete an appraisal
of such fair market value within thirty (30) days following its designation, and its appraisal shall
be determinative of such value. The cost of such appraisal shall be shared equally by the
Disputing Stockholders, on the one hand, and the Company, on the other hand, with the portion
of the cost borne by the Disputing Stockholders being borne among them on a pro rata basis.
ExteNet Systems, Inc. Application for CPCN
(B) The method of valuation of securities subject to restrictions
on frec marketability (other than restrictions arising solely by virtue of a stockholder's stiatus as
an affiliate or former affiliate under Rule 144 of the Securities Act of 1933, as amended) shall be
to make an appropriate discount from the market value determined as above in subsections (A)
(l), (2) or (3) to reflect the approximate fair market value thereol as mutually determined in
good faith bV (i) the Board of Directors of the Corporation; (ii) the holders of at least a majority
of the voting power of all then outstanding shares of such Preferred Stock (voting together as a
single class on an as-converted basis) and (iii) a Preferred D Majority. If any Disputing
Stockholders do not agree with the determination of fair market value proposed by the Board of
Directors, then such determination may be rendered in accordance with the fair market valuation
determination process set forth in subsection (A)(3) above.
(C) The foregoing methods for valuing non-cash consideration
comprising a portion or all of the Proceeds of a Liquidation Event shall be superseded by any
determination of such value set forth in any definitive agreements governing such Liquidation
Event.
(iiD In the event the requirements of this subsection 2 are not complied
with, the Corporation shall forthwith either:
(A) cause the closing of such Liquidation Event to be
postponed until such time as the requirements of this subsection 2 have been complied with; or
(B) cancel all transactions relating to such Liquidation Event,
in which event the rights, preferences and privileges of the holders of the 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(e)(iv) hereof.
(iv) The Corporation shall give each holder of record of Preferred
Stock written notice of each impending Liquidation Event not later than ten (10) days prior to the
closing or consufirmation of such transaction, 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 subsection 2, and the
Corporation shall thereafter give such holders prompt notice of any material changes to the terms
of the transaction. The transaction shall in no event take place sooner than ten (10) days after the
Corporation has given the first notice provided for herein or sooner than two (2) days after the
Corporation has given notice of any material changes provided for herein; provided, however,
that such periods may be shortened upon the written consent of (i) the holders of Preferred Stock
that are entitled to such notice rights or similar notice rights and represent at least a majority of
the voting power of all then outstanding shares of the Preferred Stock (voting together as a single
class on an as-converted basis) and (ii) a Prefened D Majority. The holders of the outstanding
Preferred Stock can waive the notice requirements described in this subsection (iv) upon the
affirmative vote or written consent of (x) the holders of at least a majority of the shares of
Prefered Stock then outstanding (voting together as a single class on an as-converted basis) and
(y) a Prefened D Majority.
ExteNet Systems, Inc. Application for CPCN
(e) Allocation of Escrow and Continsent Consideration. lf any portion of the
Proceeds otherwise payable to the stockholders of the Corporation upon the occurrcnce of a
Liquidation Event is to be subject to escrow and/or is payable to the stockholders of the
Corporation upon the occurrence of certain contingencies (the "Contingent Payment Provisions"
and the proceeds subject thereto, "Contingent Proceeds"), the application of such Contingent
Payment Provisions shall not be permitted and shall be deemed unenforceable against the
Corporation and its stockholders to the extent such provisions restrict, limit, interfere or are
otherwise contrary to the liquidation preferences and priorities set forth in subsection 2(a)
through (c) above. Without limiting the foregoing, any Contingent Proceeds actually paid to the
stockholders of the Corporation shall be allocated among the stockholders of the Corporation asif such amounts had been included in the Proceeds payable to the stockholders of the
Corporation upon consummation of the Liquidation Event and paid to the stockholders of the
Corporation in accordance with this subsection 2.
3. Intentionallyomitted.
4. Conversion. The Preferred Stock shall be convertible into Common Stock
as follows:
(a) Risht to Convert. Each share of Preferred Stock shall be convertible, at
the option of the holder thereof, at any time after the date of issuance of such share, at the office
of the 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
applicable to such series of Preferred Stock by the Conversion Price (as defined and adjusted
below) applicable to such series of Preferred Stock (refened to herein as the "Conversion Rate"
for such series). The initial Conversion Price for the Series A Preferred Stock shall be the
Original Issue Price applicable to such Series A Preferred Stock; the initial Conversion Price for
the Series B Preferred Stock shall be the Original lssue Price applicable to such Series B
Preferred Stock; the initial Conversion Price for the Series C Preferred Stock shall be the
Original Issue Price applicable to such Series C Preferred Stock; the initial Conversion Price for
the Series D Preferred Stock shall be the Original Issue Price applicable to such Series D
Preferred Stock; and the initial Conversion Price for the Series D-l Prefened Stock shall be the
Original Issue Price applicable to such Series D-l Prefened Stock; provided, however, that the
Conversion Prices for the Series A Preferred Stock, Series B Preferred Stock, Series C Prefened
Stock, Series D Preferred Stock and Series D-l Preferred Stock shall be subject to adjustment as
set forth in subsection 4(d). The respective conversion rates for the Series A Preferred Stock,
Series B Preferred Stoch Series C Preferred Stoch Series D Preferred Stock and Series D-l
Preferred Stock into Common Stock are collectively referred to herein as the "Conversion
Rates".
(b)Automatic Conversion.
(i) Each share of Preferred Stock shall automatically be converted into
shares of Common Stock at the then-applicable Conversion Rate for such series of Preferred
Stock immediately upon the Corporation's sale of its Common Stock in a firm commitment
underwritten public offering pursuant to a registration statement on Form S-l under the
Securities Act of 1933, as amended, (x) the public offering price of which is not less than $5.25
ExteNet Systems, Inc. Application for CPCN
per sharc (as adjusted for any stock splits, stock dividends, combinations, subdivisions,
recapitalizations or the like) and (y) that results in aggrcgate proceeds to the Corporation of at
least $50,000,000 (prior to expenses and underwriting commissions) (a "Qualified IPO").
(ii) Each share of Series D Preferred Stock and Series D-l Prefened
Stock shall automatically be converted into shares of Common Stock at the then-applicable
Conversion Rate for such series of Preferred Stock upon the date specified by written consent or
agreement of the holders of at least seventy percent (70%) of the then-outstanding shares of
Series D Preferred Stock and Series D-l Preferred Stock (voting together as a single class on an
as-converted basis). Each share of Series A Preferred Stoclq Series B Preferred Stock and Series
C Preferred Stock shall automatically be converted into shares of Common Stock at the then-
applicable Conversion Rate for such series of Preferred Stock upon the date specified by written
consent or agreement of the holders of at least a majority of the then-outstanding shares of Series
A Preferred Stock, Series B Preferred Stock and Series C Prefened Stock (voting together as a
single class on an as-converted basis).
(c) Mechanics of Conversion. Before any holder of Preferred Stock shall be
entitled to exercise an optional right to convert the same into shares of Common Stock
hereunder, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Preferred Stock, and shall give written
notice to the 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. The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office to such holder of Prefbned Stoclq or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common Stock to which such
holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the shares of Preferred
Stock to be converted, and the person or persons entitled to receive the shares of Common Stock
issuable upon such conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock 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,
as set forth in subsection 4(bxi), the conversion may, at the option of any holder tendering
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 persons entitled to receive the shares
of Common Stock upon conversion of the shares of Prefened Stock shall not be deemed to have
converted such shares of Preferred Stock until immediately prior to the closing of such sale of
securities. If the conversion is in connection with the provisions of subsection 4(b)(ii) above,
such conversion shall be deemed to have been made on the conversion date described in the
written consent or agreement providing for such conversion, and the Persons entitled to receive
shares of Common Stock issuable upon such conversion shall be treated for all purposes as the
record holders of such shares of Common Stock as of such date.
(d) Conversion Price Adjustments of Preferred Stock for Certain Dilutive
Issuances. Splits and Combinations. The Conversion Prices shall be subject to adjustment from
time to time as follows:
ExteNet Systems, Inc. Application for CPCN
Conversion Price Adjustment.
(A) If the Corporation shall issue, on or aftcr the Filing Date,
any Additional Stock (as defined below) without consideration or for a consideration pcr share
less than the Conversion Price in effect immediately prior to the issuance of such Additional
Stock with respect to any of the Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series D-l Preferred Stock, as the case may be, then
the Conversion Price for such Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock, Series D Preferred Stock or Series D-l Prefened Stock (as the case may be)
shall fonhwith (except as otherwise provided in this clause (i)) be adjusted to a price determined
by multiplying such Conversion Price by a fraction, the numerator of which shall be the number
of shares of Common Stock Outstanding (as defined below) immediately prior to such issuance
of Additional Stock plus the number of shares of Common Stock that the aggregate consideration
received by the Colporation for such issuance of Additional Stock would purchase at such
Conversion Price; and the denominator of which shall be the number of shares of Common Stock
Outstanding immediately prior to such issuance plus the number of shares of such Additional
Stock. For purposes of this subsection 4(dXiXA), the term "Common Stock Outstanding" shall
mean the sum of the following: (l) outstanding Common Stock; plus (2) Common Stock issuable
upon the conversion or exchange of Convenible Securities (as defined below); plus (3) Common
Stock issuable upon exercise of all outstanding Options (as defined below) (including Common
Stock issuable upon conversion or exchange of Convertible Securities that are issuable upon
exercise of such Options). Securities described in (l) through (3) above shall be included for the
purpose of computing the Common Stock Outstanding irrespective of whether such secuities are
vested or unvested contingent or non-contingent, and exercisable or not yet exercisable. For the
purposes of this subsection 4(d), (i) "Convertible Securities" shall mean all debt instruments,
securities and shares of capital stock, in each case, issued by the Corporation and that are
convertible into or exchangeable for shares of Common Stock, and (ii) "Options" shall mean
rights, options or warrants to subscribe for, purchase or othenilise acquire either shares of
Common Stock or Convertible Securities. No adjustment of the Conversion Prices shall be made
in an amount less than one cent per share, provided that any adjustments that are not required to
be made by reason of this sentence shall be carried forward and either shall be taken into account
either in any subsequent adjustment made prior to the expiration of the three (3) year period
following the date of the event giving rise to the adjustment being carried forward, or shall be
made upon the expiration of the three (3) year period following the date of the event giving rise
to the adjustment being carried forward. Except to the limited extent provided for in subsections
4(dXiXEX3) and 4(d)(iXEX4), no adjustment of any Conversion Price pursuant to this
subsection 4(dxi) shall have the effect of increasing such Conversion Price above the
Conversion Price in effect immediately prior to such adjustment.
(C) In the case of the issuance of Common Stock for cash, the
consideration shall be deemed to be the amount of cash paid therefor before deducting any
discounts, fees, commissions or other expenses allowed, paid or incurred by the Corporation for
any underwriting or otherwise in connection with the issuance and sale thereof.
(D) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the value of consideration other than cash shall
ExteNet Systems, Inc. Application for CPCN
be deemed to be the fair market value thereof as determined in a manner consistent with
subsection 2(dXiiXA)(3) above irrespective of any accounting treatment.
(E) ln the case of the issuance of Options or Convertible
Securities, the following provisions shall apply for purposes of determining the number of shares
of Additional Stock issued and the consideration paid therefor:
(l) The aggregate maximum number of shares of
Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to
exercisability, including without limitation, the passage of time, but without taking into account
potential antidilution adjustments) of such Options shall be deemed to have been issued at the
time such Options were issued and for a consideration equal to the consideration (determined in
the manner provided in subsections 4(dXiXC) and 4(dXiXD)), if any, received by the
Corporation upon the issuance of such Options plus the minimum exercise price provided in such
Options (without taking into account potential antidilution adjustments) for the shares of
Common Stock covered thereby.
(2) The aggregate maximum number of shares of
Common Stock deliverable upon conversion of, or in exchange (assuming the satisfaction of any
conditions to convertibility or exchangeability, including, without limitation, the passage of time,
but without taking into account potential antidilution adjustments) for, any such Convertible
Securities or upon the exercise of Options to purchase such Convertible Securities and
subsequent conversion or exchange thereof shall be deemed to have been issued at the time such
Convertible Securities were issued or such Options were issued and for a consideration equal to
the consideration, if zury, received by the Corporation for any such Convertible Securities and
related Options (excluding any cash received on account of accrued interest or accrued
dividends), plus the minimum additional consideration, if any, to be received by the Corporation
(without taking into account potential antidilution adjustments) upon the conversion or exchange
of such Convertible Securities or the exercise of any related Options (the consideration in each
case to be determined in the manner provided in subsections a(d)(i)(C) and a(d)(i)(D)).
(3) ln the event of any change in the number of shares
of Common Stock deliverable or in the amount of consideration payable to the Corporation upon
exercise of such Options or upon conversion of or in exchange for such Convertible Securities,
the Conversion Prices of the Preferred Stock, to the extent in any way affected by or computed
using such Options or Convertible Securities, shall be recomputed to reflect such change, but no
further adjustment shall be made for the actual issuance of shares of Common Stock or any
payment of such consideration upon the exercise of any such Options or the conversion or
exchange of any such Convertible Securities.
(4) Upon the expiration or termination of any such
Options, or of any such rights to convert or exchange any Convertible Securities, the Conversion
Prices of the Prefened Stock, to the extent in any way affected by or computed using such
Options or Convertible Securities, shall be recomputed to reflect the issuance of only the number
of shares of Common Stock (and Convertible Securities that remain in effect) actually issued
upon the exercise of such Options or upon the conversion or exchange of such Convertible
Securities.
l0
ExteNet Systems, Inc. Application for CPCN
(5) 'Ihe number of shares of Additional Stock deemed
issued and the consideration deemed paid therefore pursuant to subsections 4(d)(i)(E)(1) and
4(dXiXEX2) shall be appropriately adjusted to reflect any change, termination or expiration of
the type described in cither subsection 4(dXiXEX3) or a(d)(iXEX4).
(ii) "Additional Stock" shall mean any shares of Common Stock or
Common Stock Equivalents (as defined below) issued (or deemed to have been issued pursuant
to subsection a(d)(i)(E)) by the Corporation on or after the Filing Date other than shares of
Common Stock or Common Stock Equivalents issued, issuable or deemed to be issued at any
time as follows (collectively, the "Excluded Securities"):
(A) Common Stock or Common Stock Equivalents issued
pursuant to a transaction described in subsection 4(dxiii) hereof (or Common Stock issued upon
conversion of such Common Stock Equivalents) assuming the adjustments contemplated therein
are applied;
(B) Common Stock or Common Stock Equivalents issued or
deemed to be issued upon conversion of shares of Series C Preferred Stock, shares of Series D
Preferred Stock and shares of Series D-l Preferred Stock that were authorized as of the Filing
Date and issued on a subsequent date pursuant to an agreement in effect on the Filing Date (the
closing date of the transactions contemplated by any such agreement being hereinafter re fe rred to
as the "Series D Issue Date");
(C) Common Stock, Options or Convertible Sectrities issued to
employees, directors, consultants and other service providers for the primary purpose of
soliciting or retaining their services pursuant to the Corporation's Second Amended and Restated
2004 Equity Incentive Plan, as amended, modified or restated from time to time (subject to
subsection 6(c)(iv) below);
(D) Common Stock issued pursuant to a firm commitment
underwri tten pub lic offeri ng;
(E) Common Stock or Convertible Securities issued upon the
exercise of any Options that are outstanding on the Filing Date;
(F) Common Stock issued pursuant to the conversion of any
Convertible Securities that are either (x) outstanding on the Filing Date or (y) issued pursuant to
the exercise of any Options that are outstanding on the Filing Date;
(G) Common Stock issued upon conversion of Preferred Stock
or as dividends or distributions on the Preferred Stock;
(H) Common Stock, Options or Convertible Securities issued as
consideration (and not as equity financing) in connection with a bona fide business acquisition of
or by the Corporation, whether by merger, consolidation, sale of assets, sale or exchange of stock
or otherwise, which transaction is approved by the Corporation's Board of Directors;
ll
ExteNet Systems, Inc. Application for CPCN
(I) Common Stock issued or deemed issued pursuant
subsection 4(d)(i)(E) as a result of any decrease in the Conversion Price of any series
Pref'erred Stock resulting from the operation of subsection 4(d)(i);
(J) Common Stock, Options or Convertible Securities issued
pursuant to corporate partnering agreements or joint ventures, provided such transaction is
entered into for purposes other than equity financing and is approved by the Corporation's Board
of Directors; or
(K) Options or Convefiible Securities issued or issuable to any
equipment lessors or institutional lenders in connection with commercial debt financing
transactions, provided such transaction is approved by the Corporation's Board of Directors.
(iii) In the event the Corporation should at any time or from time to
time after the Filing 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, including Options and Convertible Securities
(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 effectuation or payment of such split, subdivision,
dividend or other distribution if no record date is fixed), the Conversion Prices of the Prefened
Stock shall be appropriately decreased so that the number of shares of Common Stock issuable
on conversion of each share of such series of Preferred Stock shall be increased in proportion to
such increase of the aggregate of the shares of Common Stock outstanding and those issuable
with respect to such Common Stock Equivalents with the number of shares issuable with respect
to Common Stock Equivaleuts determined from time to time in the manner provided for deemed
issuances in subsection a(d)(i)(E). Notwithstanding the foregoing, if after the fixing of such a
record date the proposed split, subdivision, dividend or other distribution shall be rescinded or
there shall be any change in the resulting increase of the aggregate of the shares of Common
Stock outstanding and those issuable with respect to Common Stock Equivalents, then the
Conversion Prices of the Prefened Stock, to the extent in any way affected by or computed as a
result of the fixing of such record date, shall be recomputed to reflect the issuance of only the
shares of Common Stock and Common Stock Equivalents, if any, actually issued or issuable
pursuant to such split, subdivision, dividend or other distribution.
(iv) In the event the Corporation should at any time or from time to
time after the Filing Date fix a record date for the effectuation of a reverse stock split or
combination of the outstanding shares of Common Stock or the determination of holders of
Common Stock subject to such reverse stock split or combination, then, as of the record date (or
the date of effectuation of such reverse stock split or combination if no record date is fixed), the
Conversion Prices for the Preferred Stock shall be appropriately increased so that the number of
shares of Common Stock issuable on conversion of each share of such series of Preferred Stock
shall be decreased in proportion to such decrease in the outstanding shares of Common Stock.
Nomrithstanding the foregoing, if after the fixing of such a record date the proposed reverse
to
of
t2
ExteNet Systems, Inc. Application for CPCN
stock split or combination shall be rescinded or there shall be any change in the resulting
decrease of the aggregate of the shares of Common Stock outstanding, then the Conversion
Prices of the Preferred Stock, to the extent in any way affected by or computed as a result of the
fixing of such record date, shall be recomputed to rellect the reverse stock split or combination
of only the shares of Cornmon Stock, if any, actual split or combined pursuant to such reverse
stock split or combination.
(e) Other Distributions. In the event the Corporation shall declare a
distribution payable in securities of other Persons, evidences of indebtedness issued by the
Corporation or other persons, assets (excluding cash dividends) or options or rights not referred
to in subsection 4(d)(iii), then, in each such case for the purpose of this subsection 4(e), the
holders of the shares of 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 the
Corporation into which their shares of Preferred Stock are convertible as of the record date fixed
fbr the determination of the holders of shares of Common Stock of the Corporation entitled to
receive such distribution
(0 Recapitalizations. If at any time or from time to time there 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 subsection 4 or in subsection 2 above),
provision shall be made so that the holders of the shares of Preferred Stock shall thereafter be
entitled to receive upon conversion of such shares of Preferred Stock the number of shares of
stock or other securities or property of the Corporation or otherwise, to which a holder of sharesof 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 subsection 4 with respect to the rights of the holders of the shares of Prefered
Stock after the recapitalization to the end that the provisions of this subsection 4 (including
adjustment of the Conversion Prices then in effect and the number of shares purchasable upon
conversion of shares of Preferred Stock) shall be applicable after that event as nearly
equivalently as may be practicable.
G) No Fractional Shares and Certificate as to Adiustments.
(i) No fractional shares of Common Stock shall be issued upon the
conversion of any shares of the Preferred Stock and the aggregate number of shares of stock to
be issued to particular stockholders shall be rounded down to the nearest whole share, and the
Corporation shall pay in cash the fair market value, determined in good faith by the Board of
Directors, of any fractional shares as of the time when entitlement to receive such fractions is
determined. Whether or not fractional shares would be issuable upon such conversion shall be
determined on the basis of the total number of shares of Preferred Stock the holder is at the time
converting into shares of Common Stock and the number of shares Common Stock issuable upon
such conversion.
(ii) Upon the occurrence of each adjustment or readjustment of the
Conversion Prices of Preferred Stock pursuant to this subsection 4, the 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 shares of Preferred Stock a certificate setting
13
ExteNet Systems, Inc. Application for CPCN
forth such adjustment or readjustment and showing in detail the facts upon which such
acljustrnent or readjustment is based. The Corporation shall, upon the written request at any time
of any holder of shares of Preferred Stock, furnish or carse to be furnished to such holder a like
certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price for such
Preferred Stock then 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
Preferred Stock.
(h) Notices of Record Date. In the event of eury taking by the 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 or other distribution, the Corporation shall mail to each
holder of shares of Preferred Stock, at least ten (10) days prior to the date specified therein, a
notice specifying the date on which any such record is to be taken for the purpose of such
dividend or distribution, and the amount and character of such dividend or distibution.
(i) Reservation of Stock Issuable Upon Conversion. The 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 Preferred Stock, such
number of its shares of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Preferred Stock; and if at any time the number of
ar.rthorized but unissued shares of C<lmmon Stock shall not be sufficient to effect the conversion
of all then outstanding shares of the Preferred Stock, in addition to such other remedies as shall
be available to the holder of such Preferred Stock, the 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 reasonable best efforts to obtain the requisite
stockholder approval of any necessary amendment to this Fourth Amended and Restated
Certificate of Incorporation.
O Notices. Any notice required by the provisions of this subsection 4 to be
given to the holders of shares of Preferred Stock shall be deemed given if deposited in the United
States mail, postage prepaid, and addressed to each holder of record at his address appearing on
the books of the Corporation or if given by any other method permitted under the General
Corporation Law.
(k) Waiver of Adjustment to Conversion Price. Notwithstanding anything
herein to the contrary, (i) any reduction of the Conversion Price of the Series D Preferred Stock
or Series D-l Preferred Stock may be waived, either prospectively or retroactively and either
generally or in a particular instance, by the consent or vote of the holders of seventy percent
(70%) of the then outstanding shares of Series D Preferred Stock and Series D-l Preferred Stock
(voting together as a single class on an as-converted basis), and (ii) any reduction of the
Conversion Price of the Series A Preferred Stock, Series B Preferred Stock or Series C Preferred
Stock may be waived, either prospectively or retroactively and either generally or in a particular
instance, by the consent or vote of the holders of a majority of the then outstanding shares of the
Series A Preferred Stock, Series B Preferred Stock and Series C Preferred Stock (voting together
as a single class on an as-converted basis). Any such waiver shall bind all future holders of
shares ofsuch series ofthe Preferred Stock.
l4
ExteNet Systems, Inc. Application for CPCN
5.Votinq Riehts.
(a) General Votins Riehts. The holder of each share of Preferred Stock shall
have the right to one vote for each share of Common Stock into which such Prel'erred 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 shares of Common Stock, and
shall be entitled, notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of the Corporation, and shall be entitled to vote, together with
holders of shares of Common Stock, with respect to any question upon which holders of shares
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 Preferred Stock held by each holder could be converted) shall be rounded to the
nearest whole nurnber (with one-half being rounded upward).
(b) Votine for the Election of Directors. As long as any shares of Prefen€d
Stock remain outstanding, the holders of such shares of Preferred Stock shall be entitled to elect
five (5) directors of the Corporation at any election of directors. The holders of outstanding
Common Stock shall be entitled to one (l) director of the Corporation at any election of
directors; provided, that such director shall be the then-current chief executive offioer of the
Corporation. The holders of Preferred Stock and Common Stock (voting together as a single
class and not as separate series, and on an as-converted basis) shall be entitled to elect any
remaining directors of the Corporation.
Notwithstanding the provisions of Section 223(a)(l) and 223(a)(2) of the General Corporation
[,aw, any vacancy, including newly created directorships resulting from any increase in the
authorized number of directors or amendment of this Fourth Amended and Restated Certificate
of Incorporation, and vacancies created by removal or resignation of a director, may be filled by
a majority of the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual election and until their
successors are duly elected and shall qualify, unless sooner displaced; provided, however, that
where such vacancy occurs among the directors elected by the holders of shares of a class or
series of stock pursuant to a contractual agreement by and among the Corporation and certain
stockholders of the Corporation, the holders of such shares entitled to elect such director may
override any action taken by the directors of the Corporation to fill such vacancy by (i) voting for
their own designee to fill such vacancy at an annual or special meeting of the Corporation's
stockholders or (ii) written consent of such stockholders in accordance with the requirements of
the General Corporation Law. Any director 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 such stockholders,
and any vacancy thereby created may be filled by the holders of that class or series of stock
represented at such meeting or pursuant to such unitten consent.
l5
ExteNet Systems, Inc. Application for CPCN
6. Protective Provisions.
(a) So long as at least fifty percent (50%) of the shares of Series D Prefened
Stock and Series D-1 Preferred Stock outstanding as of the Series D lssue Date (determined as a
single class on an as-converted basis) remain outstanding, the Corporation shall not, directly or
indirectly (by amendment, merger, consolidation or otherwise) without first obtaining the
approval (by vote or written consent) of the holders of at least fifty percent (50%) of the then
outstanding shares of Series D Preferred Stock and Series D- I Preferred Stock (voting together
as a single class on an as-converted basis):
(i) issue any additional equity securities that rank senior or pari passu
to the Series D Prefened Stock or the Series D- I Preferred Stock (including, for the avoidance of
doubt. authorized but unissued equity securities or equity securities held in treasury, that rank
senior or pari passrr to the Series D Preferred Stock or the Series D-l Preferred Stock);
(ii) on or prior to December 31,2010, consummate a Liquidation
Event, if the consummation of such Liquidation Event results in a distribution of cash Proceeds
to the holders of shares of Series D Preferred Stock and Series D- I Preferred Stock in an amount
less than two and one half (2-ll2) times the Original lssue Price of such shares of Series D
Preferred Stock and Series Dl Preferred Stock;
(iii) during any calendar quarter following December 31,2010 and on
or prior to December 31,2014, consummate a Liquidation Event, if the consummation of such
Liquidation Event results in a distribution of cash Proceeds to the holders of shares of Series D
Preferred Stock and Series D-l Prefened Stock in an amount less than the multiple of the
Original lssue Price of such shares of Series D Prefened Stock and Series D-l Preferred Stock
attributable to such calendar quarter as set forth in the table below:
Calendar Quarter Multiple
January l,20ll to March 3l,20ll
April I ,2011to June 30,2011
July I ,2011to September 30, 201 I
October 1,201I to December 3 I ,2011
January 1,2012 to March 31,2012
April I ,2012 to June 30,2012
July I ,2012 to September 30,2012
October 1,2012 to December 31,2012
January 1,2013 to March 31,2013
April I ,2013 to June 30,2013
July I ,2013 to September30,2013
October 1,2013 to December3l,20l3
January 1,2014 to March 31,2014
April I ,2014 to June 30,2014
2.46875x
2.43750x
2.40625x
2.37500x
2.34375x
2.31250x
2.28125x
2.25O00x
2.21875x
2.18750x
2.15625x
2.12500x
2.09375x
2.06250x
l6
ExteNet Systems, Inc. Application for CPCN
Calendar Quarter Multiple
Jnly I ,2014 to September 30,2014
October 1,2014 to December 3l.2Al4
2.03125x
2.00000x; an<Vor
(iv) amend the Corporation's Fourth Amended and Restated Certificate
of lncorporation or Bylaws in a manner that would alter or change the powers, preferences,
privileges or rights of the shares of Series D Preferred Stock or Series D- I Preferred Stock so as
to adversely affect such shares of Series D Preferred Stock or Series D- I Preferred Stock,
including but not limited to increasing or decreasing the authorized size of the Board of Directors
in a manner that would have the effect of decreasing the proportion of the members of the Board
of Directors elected or appointed at the direction of the holders of shares of Series D Preferred
Stock and Series D-l Preferred Stock. For the avoidance of doubt, any modification or
amendment to the definition of "Liquidation Event" or "Qualified IPO" as set forth herein shall
be deemed an amendment of the Corporation's Fourth Amended and Restated Certificate of
lncorporation requiring the approval described in this subsection 6(a).
(b) So long as at least fifty percent (50%) of the shares of Series C Preferred
Stock, Scries B Preferred Stock and Series A Preferred Stock outstanding as of the Series D
lssue Date (determined as a single class on an as-converted basis) remain outstanding, the
Corporation shall not, directly or indirectly (by amendment, merger, consolidation or otherwise)
without first obtaining the approval (by vote or written consent) of the holders of at least a
majority of the then outstanding shares of Series C Preferred Stock, Series B Preferred Stock and
Series A Preferred Stock (voting together as a single class on an as-converted basis):
(i) issue any additional equity securities that rank senior or pari passu
to the Series C Preferred Stock, Series B Preferred Stock and Series A Preferred Stock
(including, for the avoidance of doubt, authorized but unissued equity securities or equity
securities held in treasury, that rank senior or pari possz to the Series C Preferred Stock, Series B
Preferred Stock and Series A Preferred Stock); or
(ii) amend the Corporation's Fourth Amended and Restated Certificate
of Incorporation or Bylaws in a manner that would alter or change the powers, preferences,
privileges or rights of the shares of Series C Preferred Stock, Series B Preferred Stock or Series
A Preferred Stock so as to adversely affect such shares of Series C Preferred Stock, Series B
Preferred Stock or Series A Preferred Stock, including but not limited to increasing or decreasing
the authorized size of the Board of Directors in a manner that would have the effect of
decreasing the proportion of the members of the Board of Directors elected or appointed at the
direction of the holders of shares of Series C Preferred Stock, Series B Preferred Stock and
Series A Preferred Stock. For the avoidance of doubt, any modification or amendment to the
definition of "Liquidation Event" or "Qualified IPO" as set forth herein shall be deemed an
amendment of the Corporation's Fourth Amended and Restated Certificate of lncorporation
requiring the approval described in this subsection 6(b).
(c) So long as at least thirty five percent (35%) of the shares of Preferred
Stock outstanding as of the Series D Issue Date (determined as a single class on an as-converted
basis) remain outstanding, the Corporation shall not (by amendment, merger, consolidation or
t7
ExteNet Systems,Inc. Application for CPCN
otherwise) without first obtaining the approval (by vote or written consent) of the holders of at
least a majority of the then outstanding shares of Preferred Stock (voting together as a single
class on an as-converted basis):
(i) increase or decrease the number of authorized shares of Common
Stock;
(ii) consurrmate a Liquidation Event, or any sale, transfer or other
disposition of operating assets of the Corporation in one transaction or a series of related
transactions (other than to a wholly-owned subsidiary of the Corporation) that represent at least
(x) twenty percent (20%) of the then-current book value of the Corporation's assets or (y) that
account for annualized revenue that represents at least twenty percent (20%) of the Corporation's
operating revenue for the most recently completed fiscal year, in each case determined in
accordance with U.S. generally accepted accounting principles;
(iii) increase or decrease the authorizedsize of the Board of Directors;
(ir) increase the number of shares available for issuance under the
Corporation's Second Amended and Restated2004 Equity Incentive Plan, as amended, modified
or restated from time to time; or
(r) 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 the Corporation
or any subsidiary or incur indebtedness for borrowed money in excess of $10,000,000 in the
aggregate.
(d) So long as at least thirty five percent (35%) of the shares of Preferred
Stock outstanding as of the Series D lssue Date (determined as a single class on an as-converted
basis) remain outstanding, the Corporation shall not (by amendment, merger, consolidation or
otherwise) without first obtaining the approval (by vote or written consent) of the holders of at
least sixty percent (60%) of the then outstanding shares of Preferred Stock (voting together as a
single class on an as-converted basis):
(i) create (by reclassification or otherwise) any new class of the
Corporation's equity securities, increase or decrease the number of authorized shares of
Preferred Stock, or amend the Corporation's Fourth Amended and Restated Certificate of
Incorporation or Bylaws in a manner that would increase or decrease the aggregate number of
authorized shares of Preferred Stock, increase or decrease the par value thereof or alter or change
the powers, preferences, privileges or rights of the shares of the Preferred Stock so as to affect
them adversely;
(ii) 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 (A) the repurchase of shares of
Common Stock from employees, officers, directors, consultants or other persons performing
services for the Corporation or any subsidiary pursuant to agreements under which the
Corporation has the option to repurchase such shares upon the occurrence of certain events, such
as the termination of employment or service, or pursuant to a right of first refusal, or (B) the
l8
ExteNet Systems, Inc. Application for CPCN
repurchasc of equity securities issued by the Corporation to lenders in connection with debt
financing approved by the Board of Directors;
(iii) declare or pay dividends on any class or series of equity securities;
or
(iv) guarantee, other than in the ordinary course of business, any
indebtedness or obligation of any other party other in excess of $1,000,000 (other than the
guarantee by the Corporation of its wholly-owned operating subsidiaries' obligations in
connection witn 1a; such subsidiaries' performance of their obligations under contracts entered
into in the ordinary course of business, or (B) such subsidiaries'performance of their obligations
with respect to indebtedness for borrowed money, where such indebtedness for borrowed money
by the Corporation and its subsidiaries is equal to or less than $50,000,000 in the aggregate, in
each case, so long as such guarantees are approved by the Corporation's Board of Directors), or
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 the Corporation or any subsidiary or incur
indebtedness lbr borrowed money in excess of $50,000,000 in the aggregate.
(e) For the avoidance of doubt, the approval rights set forth in paragraph (a),
paragraph (b), paragraph (c) or paragraph (d) of subsection 6 of this Article IV(B) shall be
interpreted and enforced without limitation to the approval rights set forth in any such other
paragraph or under any other provision of this Certificate of Incorporation.
7. Status of Converted Stock. In the event any shares of Preferred Stock
shall be converted pursuant to subsection 4 hereof, the shares so converted shall be cancelled and
shall not bc issuable by the Corporation.
C. Common Stock. The rights, preferences, privileges and restrictions
granted to and imposed on the Common Stock are as set forth below in this Article IV(C).
l. 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, as and if declared by the Board of Directors, out of any
assets of the Corporation legally available therefor, any 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 the
Corporation (including upon the occurence of a Liquidation Event), the assets of the
Corporation shall be distributed as provided in subsection 2 of Article IV(B) hereof.
3. Votins Rights. The holder of each share of Common Stock shall have the
right to one vote for each such share, and shall be entitled to notice of any stockholders' meeting
in accordance with the Bylaws of the Corporation, and shall be entitled to vote upon such matters
and in such manner as may be provided by law. 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.
t9
ExteNet Systems, Inc. Application for CPCN
ARTICLE V
Except as otherwise provided in this Fourth Amended and Restated Certificatc of
lncorporation, in furtherance and not in limitation of the powcrs conferred by statute, the Board
of Directors is expressly authorized to make, repeal, alter, amend and rescind any or all of the
Bylaws of the Corporation.
ARTICLE VI
'Ihe number of directors of the Corporation shall be determined in the manner set
forth in thc Bylaws of the Corporation.
ARTICLE VII
Elections of directors need not be by written ballot unless the Bylaws of the
Corporation shall so provide.
ARTICLE VIII
Meetings of stockholders may be held within or without the State of Delaware, as
the Bylaws of the Corporation may provide. The books of the Corporation may be kept (subject
to any provision contained in the statutes) outside the State of Delaware at such place or places
as rnay be designated from time to time by the Board of Directors or in the Bylaws of the
Corporation.
ARTICLE IX
A director of the Corporation shall not be personally liable to the 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 loyaltyto the 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 IX to authorize
coqporate action further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law as so amended.
Any repeal or modification of the foregoing provisions of this Article IX by the
Board of Directors and stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of, or increase the liability of any
director of the Corporation with respect to any acts or omissions of such director occuruing prior
to, such repeal or modification.
ARTICLE X
The Corporation reserves the right to amend, alter, change or repeal any provision
contained in this Fourth Amended and Restated Certificate of Incorporation, in the manner now
20
ExteNet Systems, Inc. Application for CPCN
or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted
subject to this reservation.
ARTICLE XI
To the fullest extent permilted by applicable law, the Coqporation is authorized to
provide indemnification of (and advancement of expenses to) agents of the Corporation (and any
other persons to which General Corporation Law permits the Corporation to provide
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 the Corporation, its stockholders, and others.
Any amendment, repeal or modification of the foregoing provisions of this
Article Xl 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 the 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 the Corporation in accordance with Section 228 of the
General Corporation Law.
FOURTH: That this Fourth Amended and Restated Certificate of lncorporation,
which restates and integrates and further amends the provisions of the Corporation's Third
Amended and Restated Certificate of Incorporation, has been duly adopted in accordance with
Sections 242 and 245 of the General Corporation Law.
2t
ExteNet Systems,Inc. Application for CPCN
IN WITNESS WHERBOF, this Fourth Amended and Restated Certificate of
Incorporation has heen executed by a duly authorized officer of the Corporation on this 20th day
of January,2010.
/s/ Ross Manire
Ross Manire, President
22
EXHIBIT B
Certificate of Authority Issued by the Idaho Secretary of State
State of ldaho
CERTIFICATE OF REGISTRATION
OF
EXTENET SYSTEMS, INC.
File Number C 209256
t, LAWERENCE DENNEY, Secretary of State of the State of ldaho, hereby
certify that an application for Foreign Registration Statement, duly executed pursuant to
the provisions of the ldaho Uniform Business Organization Code, has been received in
this office and is found to conform to !aw,
ACCORDINGLY and by virtue of the authority vested in me by law, I issue this
Certificate of Registration to transact business in this State and attach hereto a
duplicate of the application for such certificate.
Dated: March 18, 2016
d
By
FOREIGN REGISTRATION STATEMENT
Title 30, Chapter 21, ldaho Code rull ilAR
Filing fee: $100 typed, $12o not typetl
Complete and aubmit the form in tlgdlglls.
18 pil 2; Bg
'HirFaFHfits^
1. The nann of the entity is:ExteNet Systerhs, lnc.
2.
3.
The name which it shall use an ldaho is:
solect the typg ol entity you wish to registef: iEr:ar a nxnre lere c'il! il '';ou are rsqu rec lo a';'cpt ff alltrrreie nanne)
E Business Corporation
[1 Nonprofit Corporation
fl Limitod Liabllity Partnershlp
E Limited Liability company
EI GenerelPartnership
EI Ganeral Coopsrative Association
El Limited Partnershap (lncluding a limited liability limited partnorship
E:l Statutory Trust, Business Trust, or ComfiDn-law Business Trust
E othor:
4.
5.
(use "i)lhat' oo;" iIyour tcreiSn ?n:ily :.vps ts nQl !!s:eJ ab)y€. arci erler lhe:Ype here.,
Juristliction of formation: Delaware
(Ptcvlda l.re .(nnleil c;;risriirtion whpre ! ]s gxliii, lvis loilnecl)
The address of its prtnclpal office is:
3030 Warenville Road, Lisle, lL 60532
itltreel Addre-asi
il'l:triit'g .Ji'l*rs5s if c' f-.ef e r!l
6, The address of its domestic principal ofiioe (if required bythe laws of the jurlsdic{ion of formatlon) is:
(Sueel Acc{€ ssl
ilv'talling Adl'?s! r' iirtf er.nl;
7. The mailing address to which correspondence should be addressed, if difierent from item 5. is:
(AJd:essl
The name of the registerBd sgent and slreet address of rsgistered agent in ld4ho:
Gorporation Service Company, 12550 W. Explorer Drive, Suile 100, Boise, lD 83713
(:i<lnle, {ACdresS)
The name, capaclty, and rrn[ing address of at leaSt one govemor:
Ross W. Manire President-CEo 3030 Warrenville Road, Lisle, lL 60532
8.
9.
(\latne!
DanielL. Timm
(anp3ci1/i
EVP.CFO
iAJii,ass)
3030 Waronville Road, Lisle, lL 60532
{ \lat"'is }
sioneture:
Typed Name:OanietL. Timm
(Capaiilyl iAtidrsss)
->coIto(!o
oaa!oboah
ID'.TIO SECRET}.P.Y OF Sry;TE
03/l,fr/2O76 O5: 00
f,E: FREPATIT rT: 11,5? EH: 1519415
lt3 toE-ED = 1DD.D0 EER EEc ST #2
Capacity:
R v !12015
EVP.CFO C)oq=25 Lo
Delaware Page 1
The First State
r, JEFEREY W. BALLOCTC, SECREIART Or SrAm OF rW STATE OF
DELATIARE, DO frEREBt cERTrFv ,EXTENET SYSTEIiIS, rue." Z8 WLv
II'CORPORETED IINDER TTIE I,A9IS OF TT,E STETE O? DEI,AWARE A}'D TS TN GOOD
S?AIDTi'TG AND HAS A I'EGAL CORPORAIE EXTSTEA'CE ^sO TAR AS TTIE RECORDS
o7 rHrs oFFLcE SHOW, AS Or TIIE SEVENTEENTH DAy OE DIARCE, A.D. 2076.
AND T DO frEEEBY FURTESR CERTIFr TEAT IflE ANNUAT REPOa,TS NAVE
BEEN ETIED TO DATE.
AIID T DO HEREBY TTIRTETR CEF.TIEY TEAT TITE SAID "EXTENET SYSTET.TS,
INC." flAS INCORPORAIED ON rEE EIP"ST DAY OE @?OBER, A.D- 2002.
AND I M EEREBY ?URT'TER CERTT.ET THAT TTiE ERAI{CIITSE TA'{ES HA\IE
BEEN PATD TO DATE.
3574949 E300
sR# 20161711500
Auth enticati on : 202000889
You may verify this certificate online at corp.delaware.tov/authver.shtml
Date: 03-17-15
VERIFICATION
I, Daniel L. Timm, state that I am Executive Vice President and Chief Financial Officer
of ExteNet Systems,lnc.; that I am authorized to make this Verification; that I am familiar with
the contents of this Application; that the Applicant will comply with all ldaho laws and
Commission rules and regulations, including rules regarding the conservation of telephone
numbers; and that matters set forth in the filing are true and correct to the best of my knowledge,
information, and belief.
I declare under penalty of perjury that the foregoing is true and correct. Executed this 6e
day of June 2016.
Daniel L. Timm
EVP-CFO, ExteNet Systems, Inc.