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Exhibit 3.4
CERTIFICATE OF DESIGNATIONS OF
SERIES B 6% CONVERTIBLE PREFERRED STOCK OF
5B TECHNOLOGIES CORPORATION
PURSUANT TO SECTION 151 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
The undersigned, Glenn Nortman, hereby certifies that:
I. I am the duly elected and acting Chief Executive Officer of 5B
Technologies Corporation, a Delaware corporation (the "CORPORATION").
II. The Certificate of Incorporation of the Corporation authorizes five
million (5,000,000) shares of preferred stock, $0.01 par value per share.
III. The following is a true and correct copy of resolutions duly adopted
by the Board of Directors of the Corporation (the "BOARD OF DIRECTORS") on
August 11, 2000 pursuant to the Certificate of Incorporation of the Corporation
and in accordance with the provisions of the General Corporation Law of the
State of Delaware.
RESOLUTIONS
WHEREAS, the Board of Directors is authorized to provide for the issuance
of the shares of preferred stock in series, and by filing a certificate pursuant
to the applicable law of the State of Delaware, to establish and issue one or
more series of preferred stock with such voting powers, full or limited, or no
voting powers, and such designations, preferences and relative, participating,
optional or other special rights, and with such qualifications, limitations or
restrictions thereon as the Board of Directors may determine.
WHEREAS, the Board of Directors desires, pursuant to its authority as
aforesaid, to designate a new series of preferred stock, set the number of
shares constituting such series and fix the rights, preferences, privileges and
restrictions of such series.
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
designates a new series of preferred stock and the number of shares constituting
such series and fixes the rights, preferences, privileges and restrictions
relating to such series as follows:
A. DESIGNATION, AMOUNT AND PAR VALUE. The series of preferred stock shall
be designated as the Series B 6% Convertible Preferred Stock (the "Series B
Preferred Stock"), and the number of shares so designated shall be three
thousand five hundred (3,500) (which shall not be subject to increase or
decrease). Each share of Series B Preferred Stock shall have a par value of
$0.01 per share and a stated value (the "Stated Value") of the Liquidation
Preference (as hereinafter defined in Section C(1)).
B. DIVIDENDS.
(1) Holders of the Series B Preferred Stock shall be entitled to
receive, out of funds legally available therefor, dividends at a rate equal to
6% (the "Dividend Rate") of the Liquidation Preference per share per annum
(subject to appropriate adjustments in the event of any stock dividend, stock
split, combination or other similar recapitalization affecting such
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shares), and no more, payable in accordance with the provisions of this
Certificate of Designations.
(2) At the election of the Corporation, each dividend on the Series
B Preferred Stock shall be paid on the Delivery Date (as defined in Subsection
G(2)(a) of this Certificate of Designations) either in shares of Common Stock of
the Corporation, $0.04 par value per share ("Common Stock"), or in cash with
respect to any shares of Series B Preferred Stock which are the subject of a
Notice of Conversion (as defined in Subsection G(2)(a) of this Certificate of
Designations). Dividends paid in shares of Common Stock shall be paid (based on
an assumed value of $1,000 per share) in full shares only, with a cash payment
equal to the value of any fractional shares. Each dividend paid in cash or
capital stock of the Corporation shall be mailed to the holders of record of the
Series B Preferred Stock as their names and addresses appear on the share
register of the Corporation or at the office of the transfer agent on the
corresponding dividend payment date. Holders of Series B Preferred Stock will
receive written notification from the Corporation or the transfer agent if a
dividend is paid in kind, which notification will specify the number of shares
of Common Stock paid as a dividend. All holders of shares of Common Stock issued
as dividends shall be entitled to all of the rights and benefits relating to
shares of Common Stock as set forth in the Corporation's Certificate of
Incorporation.
(3) Holders of the Series B Preferred Stock shall be entitled to
payment of any dividends in preference and priority to any payment of any cash
dividend on Common Stock or other class or series of capital stock ranking
junior to the Series B Preferred Stock (such stock being collectively referred
to herein as the "Junior Stock"). Dividends on the Series B Preferred Stock
shall accrue with respect to each share of the Series B Preferred Stock from the
date on which such share is issued and outstanding and thereafter shall be
deemed to accrue from day to day whether or not earned or declared and whether
or not there exists profits, surplus or other funds legally available for the
payment of dividends, and shall be cumulative so that if such dividends on the
Series B Preferred Stock shall not have been paid, or declared and set apart for
payment, the deficiency shall be fully paid or declared and set apart for
payment before any dividend shall be paid or declared or set apart for any
Junior Stock and before any purchase or acquisition of any Junior Stock is made
by the Corporation, provided, however, with respect to the one thousand shares
(1,000) of Series B Preferred Stock issued in exchange for one thousand (1,000)
shares of Series A Preferred Stock of the Corporation (the "Series A Stock"),
the dividends shall be deemed to have begun to accrue with respect to such
shares from April 17, 2000, the original issuance date of the Series A Stock. At
the earlier of: (1) the redemption or conversion of the Series B Preferred
Stock, or (2) the liquidation of the Corporation, any accrued but undeclared
dividends shall be paid to the holders of record of outstanding shares of the
Series B Preferred Stock in accordance with the provisions of this Certificate
of Designations. No accumulation of dividends on the Series B Preferred Stock
shall bear interest.
C. LIQUIDATION, DISSOLUTION OR WINDING UP.
(1) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of the
Series B Preferred Stock then outstanding shall be entitled to be paid out of
the assets of the Corporation available for distribution to its stockholders,
before any payment shall be made to the holders of Junior Stock by reason of
their ownership thereof, an amount equal to one thousand dollars ($1,000) per
share
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of Series B Preferred Stock (the "Liquidation Preference") plus any accrued but
unpaid dividends (whether or not declared). If upon any such liquidation,
dissolution or winding up of the Corporation the remaining assets of the
Corporation available for distribution to its stockholders shall be insufficient
to pay the holders of shares of the Series B Preferred Stock the full amount to
which they shall be entitled, the holders of shares of the Series B Preferred
Stock shall share ratably in any distribution of the remaining assets and funds
of the Corporation in proportion to the respective amounts which would otherwise
be payable in respect of the shares held by them upon such distribution if all
amounts payable on or with respect to such shares were paid in full.
(2) After the payment of all preferential amounts required to be
paid to the holders of the Series B Preferred Stock upon the dissolution,
liquidation, or winding up of the Corporation, all of the remaining assets and
funds of the Corporation available for distribution to its stockholders shall be
distributed ratably among the holders of the Series B Preferred Stock and the
Junior Stock, with each share of Series B Preferred Stock being deemed, for such
purpose, to be equal to the number of shares of Common Stock, including
fractions of a share, into which such share of Series B Preferred Stock is
convertible immediately prior to the close of business on the business day fixed
for such distribution.
D. VOTING.
Except as provided by law or as specifically set forth herein the
holders of Series B Preferred Stock shall not be entitled to vote on any matters
required or permitted to be submitted to the holders of Common Stock for their
approval.
E. OTHER SECURITIES. Subject to any limitations contained in this
Certificate of Designations, the Corporation's Certificate of Incorporation
and/or the Primary Documents (as defined in the Securities Purchase Agreement,
dated as of the April 17, 2000, as amended, hereinafter the "Securities Purchase
Agreement"), the Board of Directors of the Corporation reserves the right to
establish additional classes and/or series of capital stock of the Corporation
and to designate the preferences, limitations and relative rights of any such
classes and/or series; provided, however, that no such class and/or series may
have preferences, limitations and relative rights which are superior to or
senior to the preferences, limitations and relative rights granted to the
holders of the Series B Preferred Stock.
F. CAPITAL REORGANIZATION. If the Corporation shall at any time hereafter
subdivide or combine its outstanding shares of Common Stock, declare a dividend
payable in Common Stock, or in case of any capital reorganization or
reclassification of the shares of Common Stock of the Corporation, the number of
shares of the Series B Preferred Stock and the Stated Value of the Series B
Preferred Stock shall be adjusted appropriately to allow the holders of the
Series B Preferred Stock, as nearly as reasonably possible, to maintain (i) the
aggregate Stated Value of the Series B Preferred Stock, and (ii) their pro rata
interest in the Corporation and in the Common Stock upon conversion of the
Series B Preferred Stock, that each holder had prior to any such subdivision,
combination, stock dividend, reorganization or reclassification.
G. CONVERSION.
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(1) The holders of the Series B Preferred Stock shall have
conversion rights as follows (the "Series B Preferred Stock Conversion Rights"):
(a) Each share of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from
time to time, into such number of fully paid and nonassessable shares of
Common Stock as is determined by dividing $1,000, plus the amount of any
accrued and unpaid dividends the Corporation elects to pay in Common
Stock, by the Conversion Price (as defined below) in effect at the time
of conversion. The Conversion Price at which shares of Common Stock shall
be deliverable upon conversion of Series B Preferred Stock without the
payment of additional consideration by the holder thereof (the
"Conversion Price") shall be the lower of (i) nine dollars ($9.00) or
(ii) 80% of the average of the three lowest Closing Bid Prices of the
shares of Common Stock during the thirty (30) trading days immediately
preceding the Series B Preferred Stock Conversion Date (as hereinafter
defined). For purposes of this Certificate of Designations, the term
"Closing Bid Price" means, for any security as of any date, the closing
bid price on the principal securities exchange or trading market where
the Common Stock is listed or traded as reported by Bloomberg, L.P.
("Bloomberg") or, if applicable, the closing bid price of the Common
Stock in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price is
reported for the Common Stock by Bloomberg, then the average of the bid
prices of any market makers for such security as reported in the "pink
sheets" by the National Quotation Bureau, Inc. If the Closing Bid Price
of the Common Stock can not be calculated on such date on any of the
foregoing bases, the Closing Bid Price of the Common Stock on such date
shall be the fair market value as determined in good faith by the Board
of Directors of the Corporation and the holders of a majority of the
outstanding shares of Series B Preferred Stock being converted for which
the calculation of the Closing Bid Price is required in order to
determine the Conversion Price of such shares. "Trading day" shall mean
any day on which the Corporation's Common Stock is traded for any period
on the principal securities exchange or other securities market on which
the Common Stock is then being traded. If, during any period following
April 17, 2000 (such period, a "Blackout Period"), as a result of the
occurrence of any of the events set forth in Section 3(f) and 3(g) of the
Registration Rights Agreement, dated as of April 17, 2000, by and between
the Corporation and the Purchaser set forth therein (the "Registration
Rights Agreement"), the Purchaser set forth therein is not able to sell
shares of Common Stock issuable upon conversion of, or in lieu of
dividends on, shares of Series B Preferred Stock pursuant to a
registration statement filed pursuant to such agreement, the holders of
shares of Series B Preferred Stock shall have the right, for the next
three (3) trading days following any Blackout Period, to designate as the
Conversion Price any Conversion Price that would have been applicable
during such Blackout Period had such Series B Preferred Stock shareholder
delivered a Notice of Conversion with respect to any such Series B
Preferred Stock on any date during such Blackout Period.
(b) In the event that the Corporation's stock is listed on the
Nasdaq SmallCap or National Market, at any time that the number of shares
of Common Stock issued (A) upon conversion of the Series B Preferred
Stock and (B) in lieu of dividend payments on the Series B Preferred
Stock, shall equal 19.9% or more of the
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Corporation's outstanding Common Stock (a "Common Stock Redemption
Event"), the Corporation shall (x) redeem, all of the remaining shares of
Series B Preferred Stock at a price per share equal to 120% of the
Liquidation Preference per share of Series B Preferred Stock plus all
accrued but unpaid dividends on such shares of Series B Preferred Stock
or (y) call a special meeting of its stockholders for the purpose of
approving the transactions contemplated by the Securities Purchase
Agreement, including the issuance of the Series B Preferred Stock on the
terms set forth therein, together with any other approvals that shall be
required so as to cause the transactions contemplated by the Securities
Purchase Agreement to remain in compliance with the Rules and Regulations
of The Nasdaq Stock Market (including Rules 4300 and 4310 of Nasdaq's
Non-Qualitative Designation Criteria in connection with conversions of
Series B Preferred Stock; such approvals are referred to herein as the
"Required Approvals"). The Corporation shall determine within five (5)
business days following the receipt of a Notice of Conversion which of
such actions it shall take, and shall promptly furnish notice to each of
the holders of Series B Preferred Stock as to such determination,
including, if applicable, a notice of redemption. In no event shall the
Corporation issue shares of Common Stock upon conversion of, or in lieu
of dividend payments on, the Series B Preferred Stock, after the
occurrence of a Common Stock Redemption Event until the Required
Approvals, if any, are obtained. In no event may the Company issue more
than 19.9% of the Corporation's outstanding Common Stock shares of Common
Stock as a result of a conversion of Series B Preferred Stock pursuant to
this Section G.
(c) If the Corporation elects to call a special meeting of its
stockholders pursuant to Subsection G(1)(b) of this Certificate of
Designations to obtain the Required Approvals, the Corporation shall use
its best efforts to obtain such Required Approvals within forty-five (45)
days after the date of the related Common Stock Redemption Event (such
forty-five (45) day period is referred to herein as an "Approval
Period"). If the Corporation does not obtain the Required Approvals
within the Approval Period and the Corporation receives a Notice of
Conversion after the termination of the Approval Period, the Corporation
must promptly redeem, all of the remaining shares of Series B Preferred
Stock at a price per share equal to 120% of the Liquidation Preference
per share of Series B Preferred Stock plus all accrued but unpaid
dividends on such shares of Series B Preferred Stock.
(2) The Series B Preferred Stock Conversion Rights shall be
exercised as follows:
(a) The Corporation will permit each holder of Series B
Preferred Stock to exercise its right to convert the Series B Preferred
Stock by faxing an executed and completed notice of conversion (the
"Notice of Conversion") to the Corporation, and delivering within three
(3) business days thereafter, the original Notice of Conversion (and the
certificates representing the related shares of Series B Preferred Stock)
to the Corporation by hand delivery or by express courier, duly endorsed.
Each date on which a Notice of Conversion is faxed in accordance with the
provisions hereof shall be deemed a "Series B Preferred Stock Conversion
Date." The Corporation will transmit the certificates representing the
Common Stock issuable upon conversion of the Series B Preferred Stock
(together with certificates representing the related shares of
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Series B Preferred Stock not so converted and, if applicable, a check
representing any fraction of a share not converted) to such holder via
express courier as soon as practicable, but in all events no later than
(the "Delivery Date") three (3) business days after the Series B
Preferred Stock Conversion Date. For purposes of this Certificate of
Designations, such conversion of the Series B Preferred Stock shall be
deemed to have been made immediately prior to the close of business on
the Series B Preferred Stock Conversion Date.
(b) In lieu of delivering physical certificates representing
the Common Stock issuable upon the conversion of the Series B Preferred
Stock, provided that the Corporation's transfer agent is participating in
the Depository Trust Corporation ("DTC") Fast Automated Securities
Transfer program, on the written request of a holder of Series B
Preferred Stock who shall have previously instructed such holder's prime
broker to confirm such request to the Corporation's transfer agent, the
Corporation shall use its commercially reasonable efforts to cause its
transfer agent to electronically transmit such Common Stock to such
holder by crediting the account of the holder's prime broker with DTC
through its Deposit Withdrawal Agent Commission system no later than the
applicable Delivery Date.
(c) The Corporation will at all times have authorized and
reserved for the purpose of issuance a sufficient number of shares of
Common Stock to provide for the conversion of the Series B Preferred
Stock. The Corporation will use its commercially reasonable efforts at
all times to maintain a number of shares of Common Stock so reserved for
issuance that is no less than the sum of (i) two (2) times the number
that would then actually be issuable upon the conversion of five thousand
(5,000) shares of Series B Preferred Stock, and (ii) the exercise of the
Warrants (each as defined in the Securities Purchase Agreement). Before
taking any action which would cause an adjustment reducing the Conversion
Price below the established par value of the shares of Common Stock
issuable upon conversion of the Series B Preferred Stock, the Corporation
shall take any corporate action which may, in the opinion of its counsel
or in the opinion of counsel to holders of the Series B Preferred Stock,
be necessary in order that the Corporation may validly and legally issue
fully paid and nonassessable shares of Common Stock at such adjusted
Conversion Price.
(3) In the event of a liquidation of the Corporation, the Series B
Preferred Stock Conversion Rights shall terminate at the close of business on
the first full day preceding the date fixed for the payment of any amounts
distributable on liquidation to the holders of the Series B Preferred Stock.
(4) If the conversion is in connection with an underwritten offer of
securities registered pursuant to the Securities Act of 1933, as amended, the
conversion may (subject to the rules of the SEC or unless the underwriter
reasonably objects), at the option of any holder tendering Series B Preferred
Stock for conversion, be conditioned upon the closing with the underwriter of
the sale of securities pursuant to such offering, in which event the person(s)
entitled to receive the Common Stock issuable upon such conversion of the Series
B Preferred Stock shall not be deemed to have converted such Series B Preferred
Stock until immediately prior to the closing of the sale of securities.
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(5) A holder may not convert its shares of Series B Preferred Stock
or receive shares of Common Stock as payment of dividends hereunder to the
extent such conversion or receipt of such dividend payment would result in such
holder, together with any affiliate thereof, beneficially owning (as determined
in accordance with Section 13(d) of the Exchange Act (as defined below) and the
rules promulgated thereunder) in excess of 4.999% of the then issued and
outstanding shares of Common Stock, including shares issuable upon conversion
of, and payment of accrued dividends on, the shares of Series B Preferred Stock
held by such holder after application of this Section. Since such holder will
not be obligated to report to the Corporation the number of shares of Common
Stock it may hold at the time of a conversion hereunder, unless the conversion
at issue would result in the issuance of shares of Common Stock in excess of
4.999% of the then outstanding shares of Common Stock without regard to any
other shares which may be beneficially owned by such holder or an affiliate
thereof, such holder shall have the authority and obligation to determine
whether the restriction contained in this Section will limit any particular
conversion hereunder and to the extent that such holder determines that the
limitation contained in this Section applies, the determination of which portion
of the shares of Series B Preferred Stock are convertible shall be the
responsibility and obligation of such holder. If such holder has delivered a
Notice of Conversion for shares of Series B Preferred Stock that, without regard
to any other shares that such holder or its affiliates may beneficially own,
would result in the issuance in excess of the permitted amount hereunder, the
Corporation shall notify such holder of this fact and shall honor the conversion
for the maximum number of shares of Series B Preferred Stock permitted to be
converted on such Conversion Date in accordance with the periods described in
Section G and, at the option of such holder, either retain shares of Series B
Preferred Stock tendered for conversion in excess of the permitted amount
hereunder for future conversions or return such excess shares of Series B
Preferred Stock permitted to such holder. The provisions of this Section may be
waived by a holder (but only as to itself and not to any other holder) upon not
less than 61 days prior notice to the Corporation. Other holders shall be
unaffected by any such waiver.
(6) No fractional shares of Common Stock shall be issued upon
conversion of the Preferred Stock. In lieu of fractional shares, the Corporation
shall pay cash equal to such fraction multiplied by the then effective and
applicable Conversion Price.
(7) The Corporation will not, by amendment of its Certificate of
Incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed under this Certificate of Designations by the Corporation,
but will at all times in good faith assist in the carrying out of all the
provisions of this Certificate of Designations and in the taking of all such
action as may be necessary or appropriate in order to protect the Series B
Preferred Stock Conversion Rights of the holders of the Series B Preferred Stock
against impairment.
(8) In the event (a) that the Corporation declares a dividend (or
any other distribution) on its Common Stock payable in Common Stock or other
securities of the Corporation, (b) that the Corporation subdivides or combines
its outstanding shares of Common Stock, (c) of any reclassification of the
Common Stock of the Corporation (other than a subdivision or combination of its
outstanding shares of Common Stock or a stock dividend or stock distribution
thereon), (d) of any consolidation or merger of the Corporation into or with
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another corporation, (e) of the sale of all or substantially all of the assets
of the Corporation, or (f) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation, then the Corporation shall cause
to be filed at its principal office or at the office of the transfer agent of
the Series B Preferred Stock, and shall cause to be mailed to each holder of the
Series B Preferred Stock at their last address as shown on the records of the
Corporation or such transfer agent, at least ten (10) days prior to the record
date specified in (i) below or twenty (20) days before the date specified in
(ii) below, a notice stating
(i) the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined, or
(ii) the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution or winding up.
(9) All shares of Series B Preferred Stock, plus all accrued and
unpaid dividends thereon, shall without any further action on the part of the
Corporation, the holders of the Series B Preferred Stock or any other person,
automatically be converted into shares of Common Stock in accordance with the
terms of this Section G on April 17, 2003.
H. SINKING FUND. There shall be no sinking fund for the payment of
dividends, or liquidation preferences on the Series B Preferred Stock or the
redemption of any shares thereof.
I. REDEMPTION EVENTS. In case one or more of the following events, each a
redemption event, shall have occurred:
(a) if the Corporation fails to have the Registration Statement
covering the Registrable Securities (as such terms are defined in the
Registration Rights Agreement) first become effective within one hundred
fifty (150) days of the date of the Stock Purchase Agreement, at the
option of the Purchaser; or
(b) failure to deliver the shares of Common Stock required to be
delivered upon conversion of the shares of Series B Preferred Stock in
the manner and at the time required by Section 5 of the Securities
Purchase Agreement; or
(c) failure of the Corporation to have authorized the number of
shares of Common Stock issuable upon conversion of the shares of Series B
Preferred Stock or exercise of the Stock Purchase Warrants (as defined in
the Securities Purchase Agreement);
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(d) failure on the part of the Corporation to cure any material
breach in a material provisions of this Certificate of Designations or
any of its other material covenants or agreements contained in the
Securities Purchase Agreement, or to cure any material breach in a
material representation or covenant contained in the Securities Purchase
Agreement or the Registration Rights Agreement, for a period of ten (10)
days after the date on which written notice of such failure or breach
requiring the same to be remedied has been given by a registered holder
of shares of Series B Preferred Stock to the Corporation;
(e) a decree or order by a court having jurisdiction has been
entered adjudging the Corporation (or any Material Subsidiary) a bankrupt
or insolvent, or approving a petition seeking reorganization of the
Corporation (or any Material Subsidiary) under any applicable bankruptcy
law and such decree or order has continued undischarged or unstayed for a
period of sixty (60) days; or a decree or order of a court having
jurisdiction for the appointment of a receiver or liquidator or trustee
or assignee in bankruptcy or insolvency of the Corporation (or any
Material Subsidiary) or of all or substantially all of its property, or
for the winding-up or liquidation of its affairs, has been entered, and
has remained in force undischarged or unstayed for a period of sixty (60)
days;
(f) the Corporation (or any Material Subsidiary) institutes
proceedings to be adjudicated a voluntary bankrupt, or consents to the
filing of a bankruptcy proceeding against it, or files a petition or
answer or consent seeking reorganization under applicable law, or
consents to the filing of any such petition or to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of all or substantially all of its property, or makes an
assignment for the benefit of creditors, or admits in writing its
inability to pay its debts generally as they become due; or if the
Corporation (or any Material Subsidiary) shall suffer any writ of
attachment or execution or any similar process to be issued or levied
against it or any significant part of its property which is not released,
stayed, bonded or vacated within sixty (60) days after its issue or levy;
or if the Corporation (or any Material Subsidiary) takes corporate action
in furtherance of any of the aforesaid purposes or conditions; or
(g) if any default shall occur under any indenture, mortgage,
agreement, instrument or commitment evidencing or under which there is at
the time outstanding any indebtedness (excluding, non-recourse
indebtedness relating to the leasing or financing of equipment or
software) of the Corporation (or a Material Subsidiary), in excess of
$250,000, or which results in such indebtedness, in an aggregate amount
(with other defaulted indebtedness) in excess of $250,000 becoming due
and payable prior to its due date and if such indenture or instrument so
requires, the holder or holders thereof (or a trustee on their behalf)
shall have declared such indebtedness due and payable;
(h) If a final judgment which, either alone or together with other
outstanding final judgments against the Corporation and its subsidiaries,
exceeds an aggregate of $250,000 shall be rendered against the
Corporation (or any Material
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Subsidiary) and such judgment shall have continued undischarged or
unstayed for thirty (30) days after entry thereof; or
(i) If there shall occur a Change in Control of the Corporation (as
defined below). Nothing in this subsection shall limit the right of a
holder of Series B Preferred Stock to convert their shares of Series B
Preferred Stock on or prior to such Change in Control. For purposes
hereof, a "Change in Control" shall be deemed to have occurred if (A) any
person or group (as defined for purposes of Regulation 13D of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) shall
have become the beneficial owner or owners of more than 50% of the
outstanding voting stock of the Corporation; (B) there shall have
occurred a merger or consolidation in which the Corporation or an
affiliate of the Corporation is not the survivor or in which holders of
the Common Stock of the Corporation shall have become entitled to receive
cash, securities of the Corporation other than voting common stock or
securities of any other person; (C) at any time persons constituting the
Existing Board of Directors cease for any reason whatsoever to constitute
at least a majority of the members of the Board of Directors of the
Corporation; or (D) there shall have occurred a sale of all or
substantially all the assets of the Corporation. For purposes hereof, the
term "Existing Board of Directors" shall mean the persons constituting
the Board of Directors of the Corporation on April 17, 2000, together
with each new director whose election, or nomination for election by the
Corporation's stockholders is approved by a vote of the majority of the
members of the Existing Board of Directors who are in office immediately
prior to the election or nomination of such director.
then, and in each and every such case, so long as such redemption
event has not been remedied, the holders of not less than fifty-one
percent (51%) of the shares of Series B Preferred Stock then outstanding,
by notice in writing to the Corporation (the date of such notice the
"Redemption Notice Date"), may demand that the Corporation redeem, and
the Corporation shall redeem, each share of Series B Preferred Stock then
outstanding at a price per share equal to one hundred twenty-five percent
(125%) of the sum of (x) the Stated Value and (y) the aggregate accrued
and unpaid dividends on such Redemption Notice Date
For purposes of this Section I "Material Subsidiary" means any subsidiary
with respect to which the Corporation has directly or indirectly invested,
loaned, advanced or guaranteed the obligations of an aggregate amount exceeding
fifteen percent (15%) of the Corporation's gross assets, or the Corporation's
proportionate share of the assets or net income of which (based on the
subsidiary's most recent financial statements) exceed fifteen percent (15%) of
the Corporation's gross assets or net income, respectively, or the gross
revenues of which exceed fifteen percent (15%) of the gross revenues of the
Corporation based upon the most recent financial statements of such subsidiary
and the Corporation.
J. AMENDMENT. This Certificate of Designations constitutes an agreement
between the Corporation and the holders of the Series B Preferred Stock. The
Corporation shall not amend this Certificate of Designations or alter or repeal
the preferences, rights, powers or other terms of the Series B Preferred Stock
so as to affect adversely the Series B Preferred Stock, without the written
consent or affirmative vote of the holders of at least sixty-six and two-thirds
10
<PAGE>
percent (66-2/3%) of the then outstanding shares of Series B Preferred Stock,
given in writing or by vote at a meeting, consenting or voting (as the case may
be) separately as a class.
IN WITNESS WHEREOF, the Corporation., has caused its corporate seal to be
hereunto affixed and this certificate to be signed by Glenn Nortman, its Chief
Executive Officer, this 11th day of August, 2000.
5B TECHNOLOGIES CORPORATION
By:
---------------------------------------
Name: Glenn Nortman
Title: Chief Executive Officer
