Amended And Restated Articles Of Incorporation

EXHIBIT 3.1


AMENDED AND RESTATED
ARTICLES OF INCORPORATION


Pursuant to the provisions of Article 4.07 of the Texas Business Corporation Act, ASD Systems, Inc., a Texas corporation (the "Corporation"), hereby adopts these Amended and Restated Articles of Incorporation (the "Restated Articles"), which accurately reflect the original Articles of Incorporation and all amendments thereto that are in effect to date (collectively, the "Original Articles") and as further amended by such Restated Articles as hereinafter set forth and which contain no other change in any provision thereof.


ARTICLE I


The name of the Corporation is ASD Systems, Inc.


ARTICLE II


The Original Articles are amended by these Restated Articles as follows: (a) ARTICLE FOUR is amended in its entirety to (i) eliminate the designations of two separate series of common stock and to increase the number of authorized shares of common stock from 20,000,000 to 50,000,000, (ii) to authorize up to 7,500,000 shares of a preferred stock of which 1,111,111 shares are designated Series A Preferred Stock, 1,111,111 shares are designated Series B Preferred Stock, and 3,200,000 shares are designated as Series C Preferred Stock, each such series with certain rights and preferences, and (iii) to vest in the Board of Directors the authority to issue additional shares of preferred stock in one or more series and to set the designations, rights and preferences of the preferred stock; (b) ARTICLE TEN is amended to provide that upon the closing and funding of an initial public offering, the provisions of ARTICLE TEN authorizing action of the shareholders by consent of the shareholders holding the number of shares necessary to approve such action at a meeting of the shareholders shall become null and void and of no force or effect, and from such date the shareholders may act by consent only if signed by the holder or holders of all shares entitled to vote with respect to the action that is the subject of the consent; (c) ARTICLE THIRTEEN is amended in its entirety to provide that contracts or transactions between the Corporation and one or more of its directors or officers, or any other corporation or organization in which its directors or officers are directors or officers or have a financial interest, shall not be void or voidable solely for that reason if certain conditions are met; (d) ARTICLE FOURTEEN is added to classify the Board of Directors into three (3) classes as nearly equal in number as possible, each of which, after an interim arrangement, would serve for three (3) years, with one class being elected each year, upon the closing and funding of an underwritten initial public offering by the Corporation of shares of Common stock pursuant to an effective registration statement under the Securities Act of 1933, as amended, or any comparable statement under any similar federal statute then in force; (e) ARTICLE FIFTEEN is added to provide that a special meeting of the shareholders may only be called by the President, Chief Executive Officer, or Board of Directors of the Corporation or such other person as may be authorized by the Bylaws or by the holders of not less than 25% of all shares entitled to vote at such meeting; and (f) ARTICLE SIXTEEN is added regarding adoption, revision and repeal of Bylaws.


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ARTICLE III


Each such amendment made by the Restated Articles has been effected in conformity with the provisions of the Texas Business Corporation Act and the Original Articles and each amendment made by the Restated Articles was duly adopted by the shareholders of the Corporation on August 22, 1999.


ARTICLE IV


The number of shares outstanding at the time of adoption of the Restated Articles was 10,500,000 shares of Series A Common Stock, all of which shares of Series A Common Stock were entitled to vote on the Restated Articles as so amended. The holders of at least two thirds of the shares outstanding and entitled to vote on the Restated Articles have signed a consent or consents pursuant to Article 9.10 and the Original Articles adopting the Restated Articles and any written notice required by Article 9.10 has been given.


ARTICLE V


The Original Articles are hereby superseded by the following Restated Articles, which accurately copy the entire text thereof as amended as set forth above:


ASD SYSTEMS, INC.


ARTICLE ONE


The name of the Corporation is ASD Systems, Inc.


ARTICLE TWO


The period of duration of the Corporation is perpetual.


ARTICLE THREE


The purpose for which the Corporation is organized is the transaction of any and all lawful business for which corporations may be incorporated under the Texas Business Corporation Act.


ARTICLE FOUR


The aggregate number of shares which the Corporation shall have the authority to issue is 57,500,000 shares, consisting of (i) 50,000,000 shares of Common Stock, par value $.0001 per share (the "Common Stock"), and (ii)
------------ 7,500,000 shares of Preferred Stock, par value $.0001 per share (the "Preferred
--------- Stock"). -----


Each share of the Corporation's Series A Common Stock issued and outstanding immediately prior to the taking effect of this ARTICLE FOUR is hereby changed into one share of Common Stock.


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The aggregate stated capital of the common stock issued and outstanding upon the taking effect of this ARTICLE FOUR shall be the same as the aggregate stated capital of the common stock issued and outstanding immediately prior to the taking effect of this ARTICLE FOUR.


Each certificate representing one or more shares of Series A Common Stock issued and outstanding immediately prior to the taking effect of this ARTICLE FOUR shall thereafter represent the same number of shares of Common Stock; and the Corporation shall issue to or upon the order of each holder of record, as of the close of business on the day this ARTICLE FOUR takes effect, an additional certificate or certificates representing one share of Common Stock for each share of Series A Common Stock theretofore represented by such outstanding share certificate.


The following is a statement of the designations, preferences, limitations, and relative rights, including voting rights, in respect of the classes of stock of the Corporation and of the authority with respect thereto expressly vested in the Board of Directors of the Corporation:


COMMON STOCK


A. Each share of Common Stock of the Corporation shall have identical rights and privileges in every respect. The holders of shares of Common Stock shall be entitled to vote upon all matters submitted to a vote of the shareholders of the Corporation and shall be entitled to one vote for each share of Common Stock held.


B. Subject to the prior rights and preferences, if any, applicable to shares of the Preferred Stock or any series thereof, the holders of shares of the Common Stock shall be entitled to receive such dividends (payable in cash, stock, or otherwise) when, if and as may be declared thereon by the Board of Directors at any time and from time to time out of any funds of the Corporation legally available therefor.


C. In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of the Corporation, after distribution in full of the preferential amounts, if any, to be distributed to the holders of shares of the Preferred Stock or any series thereof, the holders of shares of the Series A Preferred Stock (as defined below) and Series B Preferred Stock (as defined below) and the Common Stock shall be entitled to receive all of the remaining assets of the Corporation available for distribution to its shareholders, pro rata based on the number of shares of Common Stock held by each (assuming full conversion of such Series A Preferred Stock). A liquidation, dissolution, or winding-up of the Corporation, as such terms are used in this paragraph C shall be deemed to be occasioned by or include (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but, excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation); or (ii) a sale of all or substantially all of the assets of the Corporation; unless the Corporation's shareholders of record as constituted
------ immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Corporation's acquisition or sale or otherwise) hold at least 50% of the voting power of the surviving or acquiring entity (such acquisition or sale being referred to herein as an "Acquisition").
-----------


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PREFERRED STOCK


D. Subject to compliance with applicable rights which have been or may be granted to the Preferred Stock or series thereof in a Certificate of Designation or the Corporation's Articles of Incorporation ("Protective Provisions"), shares
--------------------- of the Preferred Stock may be issued from time to time in one or more series, the shares of each series to have such designations, preferences, limitations, and relative rights, including voting rights, as shall be stated and expressed herein or in a resolution or resolutions providing for the issue of such series adopted by the Board of Directors of the Corporation. Each such series of Preferred Stock shall be designated so as to distinguish the shares thereof from the shares of all other series and classes. The Board of Directors of the Corporation is hereby expressly authorized, subject to the limitations provided by law, to establish and designate series of the Preferred Stock, to fix the number of shares constituting each series, and to fix the designations and the preferences, limitations, and relative rights, including voting rights, of the shares of each series and the variations of the relative rights and preferences as between series, and to increase and to decrease the number of shares constituting each series, provided that the Board of Directors may not decrease the number of shares within a series to less than the number of shares within such series that are then issued. The relative powers, rights, preferences, and limitations may vary between and among series of Preferred Stock in any and all respects so long as all shares of the same series are identical in all respects, except that shares of any such series issued at different times may have different dates from which dividends thereon cumulate. Subject to applicable Protective Provisions, the authority of the Board of Directors of the Corporation with respect to each series shall include, but shall not be limited to, the authority to determine the following:


(a) The designation of such series;


(b) The number of shares initially constituting such series;


(c) The rate or rates and the times at which dividends on the shares
of such series shall be paid, the periods in respect of which dividends are
payable, the conditions upon such dividends, the relationship and
preferences, if any, of such dividends to dividends payable on any other
class or series of shares, whether or not such dividends shall be
cumulative, partially cumulative, or noncumulative, if such dividends shall
be cumulative or partially cumulative, the date or dates from and after
which, and the amounts in which, they shall accumulate, whether such
dividends shall be share dividends, cash or other dividends, or any
combination thereof, and if such dividends shall include share dividends,
whether such share dividends shall be payable in shares of the same or any
other class or series of shares of the Corporation (whether now or
hereafter authorized), or any combination thereof, and the other terms and
conditions, if any, applicable to dividends on shares of such series;


(d) Whether or not the shares of such series shall be redeemable or
subject to repurchase at the option of the Corporation or the holder
thereof or upon the happening of a specified event, if such shares shall be
redeemable, the terms and conditions of such redemption, including but not
limited to the date or dates upon or after which such shares shall be
redeemable, the amount per share which shall be payable upon such
redemption,


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which amount may vary under different conditions and at different
redemption dates, and whether such amount shall be payable in cash,
property, or rights, including securities of the Corporation or another
corporation;


(e) The rights of the holders of shares of such series (which may vary
depending upon the circumstances or nature of such liquidation,
dissolution, or winding up) in the event of the voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation and the
relationship or preference, if any, of such rights to rights of holders of
stock of any other class or series.


(f) Whether or not the shares of such series shall have voting powers
and, if such shares shall have such voting powers, the terms and conditions
thereof, including, but not limited to, the right of the holders of such
shares to vote as a separate class either alone or with the holders of
shares of one or more other classes or series of stock and the right to
have more (or less) than one vote per share; provided, however, that the
right to cumulate votes for the election of directors is expressly denied
and prohibited;


(g) Whether or not a sinking fund shall be provided for the redemption
of the shares of such series and, if such a sinking fund shall be provided,
the terms and conditions thereof;


(h) Whether or not a purchase fund shall be provided for the shares of
such series and, if such a purchase fund shall be provided, the terms and
conditions thereof;


(i) Whether or not the shares of such series, at the option of either
the Corporation or the holder or upon the happening of a specified event,
shall be convertible into stock of any other class or series and, if such
shares shall be so convertible, the terms and conditions of conversion,
including, but not limited to, any provision for the adjustment of the
conversion rate or the conversion price;


(j) Whether or not the shares of such series, at the option of either
the Corporation or the holder or upon the happening of a specified event,
shall be exchangeable for securities, indebtedness, or property of the
Corporation and, if such shares shall be so exchangeable, the terms and
conditions of exchange, including, but not limited to, any provision for
the adjustment of the exchange rate or the exchange price; and


(k) Any other preferences, limitations, and relative rights as shall
not be inconsistent with the provisions of this Article Four or the
limitations provided by law.


E. Except as otherwise required by law, in the Corporation's Articles of Incorporation, or in any resolution of the Board of Directors creating any series of Preferred Stock, the holders of shares of Preferred Stock and all series thereof who are entitled to vote shall vote together with the holders of shares of Common Stock, and not separately by class.


F. One Million One Hundred Eleven Thousand One Hundred Eleven (1,111,111) shares of authorized Preferred Stock are hereby designated as Series A Preferred Stock (the "Series A Preferred Stock"). The Series A Preferred Stock shall have
------------------------ the powers, preferences and


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rights, and the qualifications, limitations and restrictions, in respect of each class of stock of the Corporation, specified herein.


1. Dividend Rights.
---------------


(a) Subject to the rights of series of Preferred Stock which may from
time to time come into existence, the holders of shares of Series A
Preferred Stock shall be entitled to receive dividends, out of any
assets legally available therefor, prior and in preference to any
declaration or payment of any dividend (payable other than in Common
Stock or other securities and rights convertible into or entitling the
holder thereof to receive, directly or indirectly, additional shares
of Common Stock of the Corporation) on the Common Stock or Series C
Preferred Stock of the Corporation, but pari pasu with the Series B
Preferred Stock, when, as and if declared by the Board of Directors at
the rate of $0.54 per share per annum (as adjusted to reflect stock
dividends, stock splits, combinations, recapitalizations or the like
after the date upon which each share of Series A Preferred Stock was
first issued (the "Original Issue Date")) and in addition (as
-------------------
determined on a per annum basis and an as-converted basis for the
Series A Preferred Stock), an amount equal to the cash dividends paid
on any other outstanding shares of the Corporation. Such dividends
shall not be cumulative. The holders of the outstanding Series A
Preferred Stock can waive any dividend preference that such holders
shall be entitled to receive under this Section 1 upon the affirmative
vote or written consent of the holders of at least a majority of the
Series A Preferred Stock then outstanding.


(b) 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 to purchase any such securities or evidences of
indebtedness, then, in each such case the holders of the Series A
Preferred Stock shall be entitled to a proportionate share of any such
distribution as though the holders of the Series A Preferred Stock
were the holders of the number of shares of Common Stock of the
Corporation into which their shares of Series A 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.


(c) Any dividend or distribution which is declared by the Corporation
and payable with assets of the Corporation other than cash shall be
governed by the provisions of subsection (2)(c)(ii) of this Section F
of Article Four.


2. Liquidation Preference
-----------------------


(a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, subject to the rights of
series of Preferred Stock that may from time to time come into
existence, the holders of Series A Preferred Stock shall be entitled
to receive, prior and in preference to any distribution of any of the
assets of the Corporation to the holders of Common Stock by reason of
their ownership thereof, but pari pasu with the Series B


RESTATED ARTICLES OF INCORPORATION - Page 6


Preferred Stock, an amount per share equal to $5.40 per share of
Series A Preferred Stock (as adjusted for any stock dividends,
combinations or splits with respect to such shares) (the "Original
--------
Series A Issue Price"), plus all declared but unpaid dividends on such
--------------------
share. If upon the occurrence of such event, the assets and funds thus
distributed among the holders of the Series A Preferred Stock shall be
insufficient to permit the payment to such holders of the full
aforesaid preferential amount, then, subject to the rights of series
of Preferred Stock that may from time to time come into existence, the
entire assets and funds of the Corporation legally available for
distribution shall be distributed ratably among the holders of the
Series A Preferred Stock and Series B Preferred Stock in proportion to
the preferential amount each such holder is otherwise entitled to
receive.


(b) After the distribution described in subsection (a) above has been
paid, subject to the rights of series of Preferred Stock which may
from time to time come into existence, the remaining assets of the
Corporation available for distribution to shareholders shall be
distributed among the holders of Series A Preferred Stock, Series B
Preferred Stock, Series C Preferred Stock and Common Stock pro rata
based on the number of shares of Common Stock held by each (assuming
full conversion of all such Series A and Series B Preferred Stock).


(c) (i) For purposes of this Section 2, a liquidation, dissolution
or winding up of the Corporation shall be deemed to be
occasioned by, or to include an Acquisition.


(ii) In any of such events, if the consideration received by the
Corporation is other than cash, its value will be deemed its
fair market value. Any securities shall be valued as
follows:


(A) Securities not subject to investment letter or other
similar restrictions on free marketability:


(1) If traded on a securities exchange or through
NASDAQ-NMS, the value shall be deemed to be the
average of the closing prices of the securities on
such exchange over the thirty-day period ending
three (3) days prior to the closing;


(2) If actively traded over-the-counter, the value
shall be deemed to be the average of the closing
bid or sale prices (whichever is applicable) over
the thirty-day period ending three (3) days prior
to the closing; and


(3) If there is no active public market, the value
shall be the fair market value thereof, as
mutually determined by the Corporation and the
holders of at


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least a majority of the voting power of all the
then outstanding shares of Series A Preferred
Stock.


(B) The method of valuation of securities subject to
investment letter or other restrictions on free
marketability (other than restrictions arising solely
by virtue of a shareholder's status as an affiliate or
former affiliate) shall be to make an appropriate
discount from the market value determined as above in
(A) (1), (2) or (3) to reflect the approximate fair
market value thereof, as mutually determined by the
Corporation and the holders of at least a majority of
the voting power of all the then outstanding shares of
Series A Preferred Stock.


(iii) In the event the requirements of this subsection 2(c)
are not complied with, the Corporation shall forthwith
either:


(A) cause such closing to be postponed until such time as
the requirements of this Section 2 have been complied
with; or


(B) cancel such transaction, in which event the rights,
preferences and privileges of the holders of the Series
A 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(c)(iv) hereof.


(iv) The Corporation shall give each holder of record of Series A
Preferred Stock written notice of such impending transaction
not later than the date the Corporation shall give written
notice to the shareholders of the Corporation of the
shareholders meeting called to approve such transactions or
at which such transaction will be proposed for approval by
the shareholders, and shall also notify such holders in
writing of the final approval of such transaction. The
first of such notices shall describe the material terms and
conditions of the impending transaction and the provisions
of this Section 2, and the Corporation shall thereafter give
such holders prompt notice of any material changes.


3. Conversion. The holders of the Series A Preferred Stock shall have
----------
conversion rights as follows (the "Conversion Rights"):
-----------------


(a) Right to Convert. Each share of Series A Preferred Stock shall be
----------------
convertible, at the option of the holder thereof, at any time 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 Series A Issue Price (as set forth in Section 2(a) above), by
the Conversion Price (as defined below) applicable to


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such share, determined as hereafter provided, in effect on the date
the certificate is surrendered for conversion. The initial Conversion
Price per share for shares of Series A Preferred Stock ...