ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
WORLDWIDE EQUIPMENT CORP.
Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act (the "Act"), the undersigned Corporation adopts the following
Articles of Amendment to its Articles of Incorporation:
1. The name of this Corporation is WORLDWIDE EQUIPMENT CORP., INC.,
Charter No. P93000043191 filed on June 14, 1993.
2. The Amendment to the Articles of Incorporation set forth below was
adopted by all of the Directors of the Corporation, on December 12, 1997 in the
manner prescribed by Section 607.1005 of the Act. Shareholder action was not
required.
3. Article Three of the Articles of Incorporation of the Corporation
shall be amended and restated in its entirety to read as follows:
ARTICLE THREE
AUTHORIZED SHARES
The total number of shares of capital stock which the Corporation has
the authority to issue is 26,000,000 consisting of:
(1) 25,000,000 shares, par value $0.001 per share, designated as
Common Stock (the "Common Stock"); and
(2) 1,000,000 shares, par value $0.001 per share, designated as
Series A Convertible Preferred Stock (the "Series A Preferred
Stock").
The powers, preferences, rights, qualifications, limitations, and
restrictions of the Common Stock and Series A Preferred Stock are as follows:
A. COMMON STOCK
1. Divided Rights. Subject to the rights of shares ranking senior to
the Common Stock, dividends may be paid upon the Common Stock, when and as
declared by the Board of Directors, but only out of funds legally available
therefore.
2. Rights on Liquidation and Ranking. In the event of any voluntary
liquidation, dissolution or winding up of the affairs of the Corporation, and
after the stated amounts
<PAGE>
payable in such event on shares ranking senior to the Common Stock shall have
been paid in full or provision for the payment thereof shall have been made the
remairiing net assets of the Corporation shall be distributed pro rata to the
holders of Common Stock.
3. Voting Rights. Except as otherwise provided by law or as otherwise
expressly provided herein, the holders of the Common Stock shall have the
exclusive right to vote for the election of directors and for all other
purposes.
B. SERIES A PREFERRED STOCK
1. Dividend Rights.
1.1 Subject to the rights of shares ranking senior to the
Series A Preferred Stock, dividends may be paid upon the Series A Preferred
Stock, when and as declared by the Board of Directors, but only out of funds
legally available therefore.
1.2 So long as any shares of Series A Preferred Stock are
outstanding the Corporation shall not declare, pay or set wide for payment any
dividend (other than in shares of Junior Stock (as hereinafter defined)) or
other distribution in respect of its Junior Stock, or call for redemption,
redeem, purchase or otherwise acquire for any consideration (other than shares
of its Junior Stock) any shares of its Junior Stock, any warrants, rights, calls
or options exercisable for any shares of Junior stock unless all dividends
accumulated and unpaid with respect to the Series A Preferred Stock are
simultaneously declared and paid. "Junior Stock" means Common Stock (as
hereinafter defined) or any other series of preferred stock of the Corporation
which ranks junior to or on a parity with (as determined pursuant to Paragraph
5) the Series A Preferred Stock. "Common Stock" means the common stock of the
Corporation and any shares of successor or replacement stock.
1.3 So long as any Series A Preferred Stock remain outstanding
the Corporation shall not make any compensation payments to any officer or
director thereof that exceed the compensation levels of the officers and
directors at comparable companies performing comparable services as determined
by the Corporation's Board of Directors in its reasonable business judgment.
1.4 So long as any Series A Preferred Stock remain
outstanding, the Corporation shall not pay any management or consulting fees to
an Affiliate (as hereinafter defined) thereof that exceed management or
consulting fees that are usual and customary for comparable services performed
by an unrelated party as determined by the Corporation's Board of Directors in
its reasonable business judgment. "Affiliate" means any corporation, person, or
entity controlling, controlled by or under common control with another.
1.5 Each Holder shall be entitled to participate with the
holders of Common Stock equally and ratably (on the basis of the number of
shares of Common
2
<PAGE>
Stock such Holder would then own if then converted its Series A Preferred Stock
pursuant to Paragraph 4) in any subscription rights or other similar rights to
acquire securities or property of the Corporation granted to any holders of
Common Stock.
2. Rights on Liquidation and Ranking.
2.1 In the event of the liquidation, dissolution, winding-up
or sale or other disposition of all or substantially all of the assets of the
Corporation, whether voluntary or involuntary ("Liquidation"), the Holder of a
share of Series A Preferred Stock shall be entitled to receive with respect to
such share of Series A Preferred Stock, after the satisfaction of all
distributions to holders of other series of preferred stock, if any, which are
required (at the direction of the holder thereof or otherwise) to be redeemed
prior to or in connection with the consummation of such Liquidation or which are
expressly senior in liquidation preference to the Series A Preferred Stock,
including any series of preferred stock which is mandatorily redeemable
(collectively, the "Senior Payments") but before any distribution is made to or
set aside for the holders of Common Stock or any other series of preferred stock
of the Corporation, if any, which are not then required to be redeemed or which
are junior in liquidation preference to Series A Preferred Stock, cash or any
other assets of the Corporation in an amount (or having a fair market value)
equal to Four Dollars ($4.00) per share (the "Liquidation Preference"). If,
after the satisfaction of all Senior Payments, the assets Corporation available
for distribution to Holders shall be insufficient to permit the payment in full
of the amount due the Holders pursuant to this Paragraph 2, then the entire
assets of the Corporation available for distribution to Holders after the
satisfaction of all Senior Payments shall be distributed pari passu among the
Holders and the holders of other series of preferred stock which are not junior
in liquidation preferences to the Series A Preferred Stock, if any, in
accordance with their respective liquidation preferences. The fair market value
of any assets of the Corporation and the proportion of cash and other assets
distributed by the Corporation to the Holders of the Series A Preferred Stock
shall be reasonably determined in good faith by the Board of Directors. A
consolidation or merger of the Corporation with or into any other corporation or
corporations, or a sale of all or substantially all of the assets of the
Corporation, shall, at the option of the Holders of the Series A Preferred
Stock, be deemed a liquidation, dissolution or winding up within the meaning of
this Section 2 if the shares of stock of the Corporation (along with all
derivative securities) outstanding immediately prior to such transaction
represent immediately after such transaction less than a majority of the voting
power of the surviving corporation (or of the acquirer of the Corporation's
assets in the case of a sale of assets). Such option may be exercised by the
vote or written consent of Holders of a majority of the Series A Preferred Stock
at any time within thirty (30) calendar days after written notice of the
essential terms of such transaction shall have been given to the Holders of the
Series A Preferred Stock in the manner provided by law for the giving of notice
of meetings of Shareholders. Such notice shall be given by the Corporation
immediately following determination of such essential terms.
3
<PAGE>
2.2 With regard to rights to receive distributions upon
Liquidation of the Corporation and dividends, the Series A Preferred Stock shall
rank senior to the Common Stock and any other equity securities of the
Corporation that by their terms are not made senior to or on a parity with the
Series A Preferred Stock as to such rights.
3. Voting Rights.
3.1 Except as otherwise provided by law or herein, the Holders
of the Series A Preferred Stock shall not have any voting rights.
3.2 So long as any of the shares of Series A Preferred Stock
are outstanding the Corporation will not, without the affirmative vote or
consent of the Holders of at least seventy percent (70%) of the shares of Series
A Preferred Stock at the time outstanding, given in person or by proxy, either
in writing or by a resolution adopted at a meeting called for such purpose, with
the Holders of the Series A Preferred Stock voting or consenting separately as a
class:
A. amend, alter or repeal any of the provisions
of the Corporation's Articles of
Incorporation or bylaws or the resolution
providing for the issue of the Series A
Preferred Stock or pass any shareholder
resolution, including such action effected
by merger or similar transaction in which
the Corporation is the surviving
corporation, if such amendment or resolution
would affect adversely the preferences,
special rights or powers of the Series
Preferred Stock except if such action is
otherwise permitted under the other
provisions of this Paragraph 3.2;
B. increase or decrease (other than by
redemption or conversion) the total number
of authorized shares of Series A Preferred
Stock;
C. issue any capital stock which ranks senior
to or on a parity with the Series A
Preferred Stock with respect to rights to
receive distributions upon liquidation,
dissolution, or winding up of the
Corporation or with respect to dividends; or
D. purchase or otherwise acquire for value any
Common Stock or other equity security of the
Corporation either junior or senior to or on
a parity with the shares of Series A
Preferred Stock while there exists any
arrearage in the payment of cumulative
dividends hereunder.
4
<PAGE>
3.3 In the event of an issuance by means of a stock split,
reverse split or stock dividend or other similar event or reclassification of
shares of Common Stock outstanding, the voting rights of the Series A Preferred
Stock shall be fairly and equitably (in the judgment of the Board Of Directors
of the Corporation) adjusted at the same time and in the same manner as the
adjustment is made in the rights of the Common Stock in order to maintain the
same voting rights as the Series A Preferred Stock had on the date of issuance.
3.4 Copies of all notices sent to the holders of Common Stock
shall be simultaneously sent to each Holder.
4. Conversion Rights - Common Stock.
4.1 Number of Shares of Series A Preferred Stock. The shares
of Series A Preferred Stock shall be immediately convertible in whole (but not
in part), at the option of the Holder thereof, without additional consideration
(cash or otherwise), into two (2) shares of fully paid and non-assessable shares
of Common Stock (the "Conversion Ratio"), provided, however, if the Company
includes such shares of Preferred Stock in a registration statement filed with
the Securities and exchange Commission and on the date such registration is
declared effective (the "Effective Date") the fair market value of a share of
Common Stock is less than $2.00, then the Conversion Ratio shall be adjusted so
that each share of Preferred Stock shall be convertible into such number of
shares of Common Stock as shall have an aggregate fair market value of $4.00 on
such date.
4.2 Automatic Conversion.
(A) All outstanding shares of Series A Preferred
Stock will be deemed automatically converted into such number of shares of
Common Stock as determined in accordance with paragraph 4.1 hereof upon July 1,
1999 (the "Automatic Conversion Date").
(B) On or after the date of occurrence of the
Automatic Conversion Date, each holder of record of shares of Series A Preferred
Stock will surrender such holder's certificates evidencing such holder's shares
of Series A Preferred Stock at the principal office of the Corporation or at
such other place as the Corporation will designate, and will thereupon be
entitled to receive certificates evidencing the number of shares of Common Stock
into which such shares of Series A Preferred Stock are converted. On the
Automatic Conversion Date, each holder of record of shares of Series A Preferred
Stock will be deemed to be the holder of record of the Common Stock issuable
upon such conversion, notwithstanding that the certificates representing such
shares of Series A Preferred Stock will not have been surrendered at the office
of the Corporation, that notice from the Corporation will not have been received
by any holder of record of shares of Series A Preferred Stock, or that the
certificates evidencing such share of Common Stock will not then be actually
delivered to such holder.
5
<PAGE>
4.3 Conversion Upon Reorganization. In case of any
reorganization or any reclassification of the capital stock of the Corporation
or any consolidation or merger of the Corporation with or into any other
corporation or corporations or a sale of all or substantially all of the assets
of the Corporation to any other person, and the holders of shares of Series A
Preferred Stock do not elect to treat such transaction as a liquidation,
dissolution or winding up as provided in Section 2, then, as part of such
reorganization, consolidation, merger or sale, provision shall be made so that
each share of Series A Preferred Stock shall thereafter be convertible into the
number of shares of stock or other securities or property (including cash) to
which a holder of the number of shares of Common Stock deliverable upon
conversion of such shares of Series A Preferred Stock would have been entitled
upon the record date of (or date of, if no record date is fixed such event, and
in any case, appropriate adjustment (as determined by the Board of Directors)
shall be made in the application of the provisions herein set forth with respect
to the rights and interests thereafter of the holders of the shares of Series A
Preferred Stock, to the end that the provisions set forth herein shall
thereafter be applicable, as nearly equivalent as is practicable, in relation to
any shares of stock or the securities or property (including cash) thereafter
deliverable upon the conversion of the shares of Series A Preferred Stock.
4.4 Conversion Method. Any Holder of shares of Series A
Preferred Stock may, at any time, exercise the conversion rights as to such
shares of Series A Preferred Stock by delivering to the Corporation during
regular business hours, a notice requesting conversion on a specified date and
the number of Series A Preferred Stocks that the Holder elects to convert (a
"Notice of Conversion"). The Notice of Conversion shall also state the names and
addresses of the persons to whom certificates for shares of Common Stock shall
be issued, the denominations of such certificates and reasonable delivery
instructions with respect thereto. The term Automatic Conversion Date shall mean
the date so specified in the applicable Notice of Conversion, which date may not
be mom than three (3) trading days prior to the date on which the Holder has
telecopied to the Corporation such Notice of Conversion. Promptly following each
Automatic Conversion Date, each Holder shall surrender to the Corporation the
Certificate or Certificates representing the specified portion of the total
number or shares of Series A Preferred Stock held by such Holder subject to the
Notice of Conversion, duly endorsed, at the offices of the Corporation; provided
the conversion shall be deemed effected on the Automatic Conversion Date so long
as such Certificate or Certificates are delivered to the Corporation within
three (3) business days of the date of the Notice of Conversion. The person in
whose name any certificate for shares of Common Stock is issuable upon the
conversion shall be deemed to have become the holder of record of the Common
Stock on the Automatic Conversion Date. If the stock transfer books of the
Corporation are closed on the Automatic Conversion Date, the Automatic
Conversion Date for purposes of determining record ownership shall be the net
succeeding day on which the stock transfer books are open (and the conversion
shall be deemed to have been effected immediately prior to the close of business
on that day), but in all cases the conversion shall be at the Conversion Price
in effect on the Automatic Conversion Date specified in the Notice of
Conversion. As promptly as practicable after the Automatic Conversion Date but,
in any
6
<PAGE>
event within three (3) trading days of the receipt of the Notice of Conversion,
the Corporation shall issue and deliver to such Holder, at the expense of the
Corporation and in accordance with such Holders delivery instructions, a
certificate or certificate for the number of full shares of Common Stock to
which such Holder is entitled, without any restrictive legend.
4.5 Fractional Shares of Common Stock. No fractional shares of
Common stock or scrip shall be issued upon conversion of shares of Series A
Preferred Stock. If more than one share of Series A Preferred Stock shall be
surrendered for conversion at any one time by the same Holder, the number of
full shares of Common Stock issuable upon conversion of such Series A Preferred
Stock shall be computed in accordance with Paragraph 4.1.
4.6 Taxes. All shares of Common Stock issued upon conversion
of shares of Series A Preferred Stock shall be validly issued, fully paid and
non-assessable. The corporation shall pay any and all documentary stamp or
similar issue or transfer taxes that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of Series A Preferred Stocks
pursuant hereto. The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the Series
A Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such transfer has paid to
the Corporation the amount of any such tax or has established to the
satisfaction of the Corporation that such tax has been paid or that no such tax
is payable.
4.7 Surrendered Shares of Series A Preferred Stock. All
certificates representing Series A Preferred Stock converted shall be
appropriately canceled on the books of the Corporation and the Series A
Preferred Stock so converted represented by such Certificates shall be restored
to the status of authorized but unissued Series A Preferred Stock. Promptly
following the delivery of certificates representing Series A Preferred Stock
which are not fully convened, the Corporation shall immediately reissue in the
name of the Holder an appropriate number of Series A Preferred Stock.
4.8 Available Common Stock. 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 Series A Preferred
Stock, such number of shares of Common Stock as shall from time to time be
sufficient to effect a conversion of all outstanding Series A Preferred Stock
under Paragraph 4.1, as such number may from time to time be adjusted pursuant
to Paragraph 4.3, and if at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of all
then outstanding Series A Preferred Stock, the Corporation shall promptly take
such corporate action as may, in the opinion of its counsel and subject to any
necessary approval of its shareholders, be necessary to increase its authorized
but
7
<PAGE>
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose.
4.9 Notice to Holders. In the event (i) the Corporation shall
declare a dividend or other distribution in the Common Stock other than regular
cash dividends declared in the ordinary course or dividends or other
distributions payable in Common Stock, (ii) the Common Stock is subdivided,
combined or reclassified, (iii) of a merger or consolidation, (iv) of a
Liquidation, or (v) the Corporation offers for subscription pro rata to holders
of Common Stock any additional shares of stock of any class or series or other
rights, then the Corporation shall mail to each Holder at the Holder's address
as it appears in the stock records of the Corporation promptly and in any event
at least 15 days prior to the date described in clause (a) below, a notice
stating (a) the date for the determination of holders of Common Stock entitled
to receive the distribution, subscription rights or the consideration in the
merger, consolidation or liquidation, or the date of determination as to which
shares of Common Stock will be affected by a subdivision, combination,
reclassification, and (b) a brief statement of the facts requiring such notice.
5. Ranking of Stock of the Corporation.
For Purposes of this resolution, any stock of any class or classes of
the Corporation shall be deemed to rank:
A. Prior to the Series A Preferred Stock, either as to
dividends or upon liquidation, if the holders of such class or classes shall be
entitled to the receipt of dividends or of amounts distributable upon
dissolution, liquidation or winding up of the Corporation, as the case may be,
in preference or priority to the Holders;
B. On a parity with the Series A Preferred Stock, either as to
dividends or upon liquidation, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per share or sinking and fund
provisions, if any, are different from those of the Series A Preferred Stock, if
the holders of such stock shall be entitled to the receipt of dividends or of an
amount distributable upon dissolution, liquidation or winding up of the
Corporation, as the case may be, in proportion to their respective dividend
rates or liquidation prices without preference or priority one over the other,
as between the holders of such stock and the Holders; and
C. Junior to the Series A Preferred Stock, either as to
dividends or upon liquidation, if such class shall be Common Stock or if the
Holders of the Series A Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon dissolution, liquidation, winding up
of the Corporation, as the case may be, in preference or priority to the holders
of shares of such class or classes.
4. Except as hereby amended, the Articles of Incorporation of the
Corporation remain the same.
8
<PAGE>
5. These Articles of Amendment to Articles of Incorporation of the
Corporation shall be effective as of the close of business on December ____,
1997.
IN WITNESS WHEREOF, the undersigned being a director of the corporation
has executed Articles of Amendment to Articles of Incorporation of WORLDWIDE
EQUIPMENT CORP. this _____ day of December, 1997.
WORLDWIDE EQUIPMENT CORP.
By:_______________________________
Eilat Lev, Director
9
