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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 28, 1999
E-SYNC NETWORKS, INC.
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-2401 06-0625999
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(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
542 WESTPORT AVENUE, NORWALK, CT 06851
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (203) 853-7400
WILTEK, INC.
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(FORMER NAME)
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ITEM 5. OTHER EVENTS.
As described in the Press Release attached hereto as Exhibit 99,
effective as of the open of business on July 28, 1999, Wiltek, Inc., a
Connecticut corporation ("Wiltek"), was merged with and into its wholly-owned
subsidiary, E-Sync Networks, Inc., a Delaware corporation ("E-Sync"), pursuant
to an Agreement and Plan of Merger dated as of July 15, 1999, by and between
Wiltek and E-Sync (the "Merger Agreement").
Pursuant to the terms of the Merger Agreement, E-Sync is the surviving
corporation (the "Surviving Corporation"). Pursuant to the Merger Agreement,
each share of Wiltek common stock, no par value per share, was converted into
one fully paid and nonassessable share of common stock of the Surviving
Corporation, $.01 par value per share, and each share of Wiltek Series A
preferred stock, no par value per share, was converted into one fully paid and
nonassessable share of the Surviving Corporation Series A Preferred Stock, $.01
par value per share.
The Certificate of Incorporation of E-Sync (attached hereto as Exhibit
3(i)) has become the Certificate of Incorporation of the Surviving Corporation,
and the By-laws of E-Sync (attached hereto as Exhibit 3(ii)) have become the
By-laws of the Surviving Corporation.
ITEM 7. EXHIBITS.
Exhibit 3(i) Certificate of Incorporation of E-Sync Networks, Inc.
Exhibit 3(ii) Certificate of Designations, Preferences and Rights of
Preferred Stock of E-Sync Networks, Inc.
Exhibit 3(iii) By-laws of E-Sync Networks, Inc.
Exhibit 99 Press Release.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
E-SYNC NETWORKS, INC.
By: /s/ John C. Maxwell, III
--------------------------
Name: John C. Maxwell, III
Title: Chairman and Chief
Executive Officer
Dated: July 28, 1999
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Exhibit 3(i)
CERTIFICATE OF INCORPORATION
OF
E-SYNC NETWORKS, INC.
(Under Section 102 of the Delaware General Corporation Law)
* * * *
FIRST: The name of the corporation is E-Sync Networks, Inc.
SECOND: The purpose of the corporation is to engage in any lawful
act or activity for which corporations may be formed under the General
Corporation Law of the State of Delaware (the "G.C.L.").
THIRD: (a) The total number of shares of all classes of capital
stock which the corporation shall have authority to issue is Sixty Million
(60,000,000) of which Ten Million (10,000,000) shares shall be Preferred Stock,
par value $0.01 per share, and Fifty Million (50,000,000) shares shall be Common
Stock, par value $0.01 per share.
(b) The Board of Directors of the corporation is
authorized to provide for the issuance of the shares of Preferred Stock in
series, by filing a certificate pursuant to the applicable law of the State of
Delaware to establish from time to time the number of shares to be included in
each such series, and to fix the designation, powers, preferences and rights of
the shares of each such series and the qualifications, limitations and
restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination of the following:
(i) The number of shares constituting that series and the
distinctive designation of that series;
(ii) The dividend rate of the shares of that series,
whether dividends shall be cumulative, and, if so, from which date or dates, and
the relative rights of priority, if any, of payment of dividends of that series;
(iii) Whether that series shall have voting rights, in
addition to the voting rights provided by law, and, if so, the terms of such
voting rights;
(iv) Whether that series shall have conversion privileges,
and, if so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors shall
determine;
(v) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be
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redeemable, and the amount per share payable in case of redemption, which amount
may vary under different conditions and at different redemption dates;
(vi) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund;
(vii) The rights of the shares of that series in the event
of voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment of shares
of that series; and
(viii) Any other relative rights, preferences and
limitations of that series.
FOURTH: The address of the registered office of the corporation in the
State of Delaware is located at 1013 Centre Road, City of Wilmington, County of
New Castle, Delaware 19805, and the name of the registered agent of the
corporation at such address is Corporation Service Company.
FIFTH: In addition to any affirmative vote required by law, by this
Certificate of Incorporation or by any instrument establishing one or more
series of Preferred Stock, unless recommended to the shareholders by the Board
of Directors: (i) any merger or consolidation of the corporation; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition (in one
transaction or a series of transactions) of all or substantially all of the
assets of the Corporation; or (iii) any amendment of this Article FIFTH of this
Certificate of Incorporation shall require the affirmative vote of the holders
of at least 75 percent of the then-outstanding shares of the stock having voting
rights, voting together as a single class. Such affirmative vote shall be
required notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote.
SIXTH: The Board of Directors shall have the power to make, alter or
repeal the By-laws of the corporation.
SEVENTH: The election of the Board of Directors need not be by written
ballot unless the By-laws so provide.
EIGHTH: Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
Section291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under
Section279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this corporation, as the case
may be, and also on this corporation.
NINTH: The corporation shall indemnify, and advance expenses, to the
fullest extent
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permitted by Section 145 of the G.C.L. as amended from time to time to each
person that such section grants the corporation the power to indemnify and
advance expenses to.
TENTH: No director of the corporation shall be personally liable to
the corporation or any of its stockholders for monetary damages for breach of
fiduciary duty as a director; provided, however, that the foregoing clause shall
not apply to any liability of a director (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 which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of Title 8 of the G.C.L., or (iv) for
any transaction from which the director derived an improper personal benefit. If
the G.C.L. is amended to authorize corporate 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 G.C.L., as so amended. The provisions of this paragraph are not
intended to, and shall not, limit, supersede or modify any other defense
available to a director under applicable law. Any repeal or modification of the
foregoing paragraph by the stockholders of the corporation shall not adversely
affect any right or protection of a director of the corporation existing at the
time of such repeal or modification.
/s/David I. Albin
--------------------
David I. Albin, Esq.
Sole Incorporator
Dated: July 9, 1999
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Exhibit 3(ii)
CERTIFICATE OF DESIGNATIONS, PREFERENCES
AND RIGHTS OF PREFERRED STOCK
OF
E-SYNC NETWORKS, INC.
* * *
E-Sync Networks, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That, pursuant to authority conferred upon the Board of Directors by
the Certificate of Incorporation of said corporation, and pursuant to the
provisions of Section 151 of Title 8 of the Delaware Code of 1953, said Board of
Directors adopted a resolution by the unanimous written consent of its members,
filed with the minutes of the Board, providing for the issuance of a series of a
new series of preferred stock designated as "Senior Convertible Series A
Preferred Stock", which resolution is as follows:
RESOLVED that, pursuant to the authority vested in the Board
of Directors of E-Sync Networks, Inc., a Delaware corporation (the "Company") in
accordance with the provisions of the Certificate of Incorporation of the
Company (the "Certificate of Incorporation"), a series of the class of
authorized Senior Convertible Series A Preferred Stock, par value $0.01 per
share, of the Company, is hereby created and that the designation and number of
shares thereof and the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such series, and the
qualifications, limitations and restrictions thereof are as follows:
Section 1. Designation and Number.
(a) The shares of such series shall be designated as "Senior
Convertible Series A Preferred Stock" (the "Series A Stock"). The number of
shares initially constituting the Series A Stock shall be 1,000,000, which
number may be decreased (but not increased) by the Board of Directors without a
vote of stockholders; provided, however, that such number may not be decreased
below the number of then outstanding shares of Series A Stock.
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(b) The Series A Stock shall, with respect to dividend rights and
rights upon liquidation, dissolution or winding up, rank prior to all other
classes and series of capital stock of the Company now or hereafter authorized
(except as may be authorized pursuant to Section 3(b)) including, without
limitation, the Common Stock.
(c) Capitalized terms used herein and not otherwise defined shall have
the meanings set forth in Section 9.
Section 2. Dividends and Distributions.
In the event that the Company shall declare a dividend or make any
other distribution (including, without limitation, in cash, in capital stock
(which shall include, without limitation, any options, warrants or other rights
to acquire capital stock) of the Company or other property or assets) to holders
of Common Stock, then the Board of Directors shall declare, and the holder of
each share of Series A Stock shall be entitled to receive, a dividend or
distribution in an amount equal to the amount of such dividend or distribution
received by a holder of the number of shares of Common Stock for which such
share of Series A Stock is convertible on the record date for such dividend or
distribution. Any such amount shall be paid to the holders of shares of Series A
Stock at the same time such dividend or distribution is made to holders of
Common Stock.
Section 3. Voting Rights.
In addition to any voting rights provided by law or in the Securities
Purchase Agreement, the holders of shares of Series A Stock shall have the
following voting rights:
(a) So long as the Series A Stock is outstanding, each share of Series
A Stock shall entitle the holder thereof to vote, in person or by proxy, at a
special or annual meeting of stockholders, on each of the matters entitled to be
voted on by holders of Common Stock, voting together as a single class with
other shares entitled to vote thereon. With respect to any such vote, each share
of Series A Stock shall entitle the holder thereof to cast that number of votes
per share as is equal to the number of votes that such holder would be entitled
to cast had such holder converted its shares of Series A Stock into Common Stock
on the record date for determining the stockholders of the Company eligible to
vote on any such matters.
(b) Unless the consent or approval of a greater number of shares shall
then be required by law, the affirmative vote of the holders of at least a
majority of the outstanding shares of Series A Stock, voting separately as a
single class, in person or by proxy, at a special or annual meeting of
stockholders called for the purpose, shall be necessary to (i) authorize,
increase the authorized number of shares of, or issue (including
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on conversion or exchange of any convertible or exchangeable securities or by
reclassification), any shares of any class or classes of Senior Stock or Parity
Stock, (ii) authorize, adopt or approve an amendment to the Certificate of
Incorporation that would increase or decrease the par value of the shares of
Series A Stock, or alter or change the powers, preferences or special rights of
the shares of Series A Stock, other Parity Stock or Senior Stock, (iii) amend,
alter or repeal the Certificate of Incorporation so as to affect the shares of
Series A Stock adversely, including, without limitation, by granting any voting
right to any holder of notes, bonds, debentures or other debt obligations of the
Company, (iv) authorize or issue any security convertible into, exchangeable for
or evidencing the right to purchase or otherwise receive any shares of any
classor classes of Senior Stock or Parity Stock, or (v) effect an Extraordinary
Event.
(c) If on any date (i) the Company shall have failed to satisfy its
obligation to convert shares of Series A Stock pursuant to Section 7, or (ii) a
breach of Article 8 of the Securities Purchase Agreement shall have occurred and
be continuing for a period of at least 30 days, then the number of directors
constituting the Board of Directors shall, without further action, be increased
by one and the holders of shares of Series A Stock shall have, in addition to
the other voting rights set forth herein, the exclusive right, voting separately
as a single class, to elect a director of the Company to fill such newly created
directorship, by written consent as provided herein, or at a special meeting of
such holders called as provided herein. Any such additional director shall
continue as a director (subject to reelection or removal as provided in Section
3(d)(ii)) and the holders of Series A Stock shall have such additional voting
rights until such time as (A) any conversion obligation provided in Section 7
that has become due shall have been satisfied or (B) there shall exist no breach
of Article 8 of the Stock Purchase Agreement, as the case may be, at which time
such additional director shall cease to be a director and such additional voting
rights of the holders of Series A Stock shall terminate subject to revesting in
the event of each and every subsequent event of the character indicated above,
provided that the conditions set forth in the proviso above shall not have
occurred. Notwithstanding anything to the contrary contained herein, in the
event the Company shall have breached Section 8.9 of the Securities Purchase
Agreement, all references to the right of the holders of shares of Series A
Stock to elect one director to the Board of Directors of the Company shall
instead refer to the right of such holders to elect that number of directors
that shall constitute a majority of such Board of Directors.
(d) (i) The right of holders of shares of Series A Stock to take any
action as provided in Section 3(c) may be exercised at any annual meeting of
stockholders or at a special meeting of holders of shares of Series A Stock held
for such purpose as hereinafter provided or at any adjournment thereof, or by
the written consent, delivered to the Secretary of the Company, of the holders
of the minimum number of shares required to take such action, which shall be a
majority of the outstanding shares of Series A Stock unless otherwise required
by law.
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So long as such right to vote continues (and unless such right has been
exercised by written consent of the minimum number of shares required to take
such action), the President of the Company may call, and upon the written
request of holders of record of at least 5% of the outstanding shares of Series
A Stock, addressed to the Secretary of the Company at the principal office of
the Company, shall call, a special meeting of the holders of shares entitled to
vote as provided herein. Such meeting shall be held within 30 days after
delivery of such request to the Secretary, at the place and upon the notice
provided by law and in the by-laws of the Company for the holding of meetings of
stockholders.
(ii) At each meeting of stockholders at which the holders of
shares of Series A Stock shall have the right, voting separately as a single
class, to elect one director of the Company as provided in Section 3(c) (or, in
the case of a breach of Section 8.9 of the Securities Purchase Agreement, the
number of directors that shall constitute a majority of the Board of Directors)
or to take any action, the presence in person or by proxy of the holders of
record of one-third of the total number of shares of Series A Stock then
outstanding and entitled to vote on the matter shall be necessary and sufficient
to constitute a quorum. At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of
Series A Stock shall not prevent the election of directors other than those to
be elected by the holders of shares of Series A Stock, and the absence of a
quorum of the holders of shares of any other class or series of capital stock
shall not prevent the election of directors to be elected by the holders of
shares of Series A Stock, or the taking of any action as provided in this
Section 3; and
(B) in the absence of a quorum of the holders of shares of
Series A Stock, a majority of the holders of such shares present in person or by
proxy shall have the power to adjourn the meeting as to the actions to be taken
by the holders of shares of Series A Stock from time to time and place to place
without notice other than announcement at the meeting until a quorum shall be
present.
For taking of any action as provided in Section 3(b) or Section 3(c) by
the holders of shares of Series A Stock, each such holder shall have one vote
for each share of such stock standing in his name on the transfer books of the
Company as of any record date fixed for such purpose or, if no such date be
fixed, at the close of business on the Business Day next preceding the day on
which notice is given, or if notice is waived, at the close of business on the
Business Day next preceding the day on which the meeting is held.
Each director elected by the holders of shares of Series A
Stock as provided in Section 3(c) shall, unless his or her term shall expire
earlier in accordance with the provisions thereof, hold office until the annual
meeting of stockholders next succeeding
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his election or until his or her successor, if any, is elected and qualified.
If any director so elected by the holders of Series A Stock shall cease
to serve as a director before his or her term shall expire (except by reason of
the termination of the voting rights accorded to the holders of Series A Stock
in accordance with Section 3(c)), the holders of the Series A Stock then
outstanding and entitled to vote for such director may, by written consent as
provided herein, or at a special meeting of such holders called as provided
herein, elect a successor to hold office for the unexpired term of the director
whose place shall be vacant.
Any director elected by the holders of shares of Series A Stock voting
separately as a single class may be removed from office with or without cause by
the vote or written consent of the holders of at least a majority of the
outstanding shares of Series A Stock, at the time of removal. A special meeting
of the holders of shares of Series A Stock may be called in accordance with the
procedures set forth in Section 3(c)(i).
Section 4. Certain Restrictions.
(a) Whenever the Company shall not have converted shares of
Series A Stock at a time required by Section 7, at such time and thereafter
until all conversion obligations provided in Section 7 that have come due shall
have been satisfied, the Company shall not: (A) declare or pay dividends, or
make any other distributions, on any shares of Junior Stock, or (B) declare or
pay dividends, or make any other distributions, on any shares of Parity Stock,
except dividends or distributions paid ratably on the Series A Stock and all
Parity Stock on which dividends are payable or in arrears, in proportion to the
total amounts to which the holders of all shares of the Series A Stock and such
Parity Stock are then entitled.
(b) Whenever the Company shall not have converted shares of
Series A Stock at a time required by Section 7, at such time and thereafter
until all conversion obligations provided in Section 7 that have come due shall
have been satisfied, the Company shall not redeem, purchase or otherwise acquire
for consideration, or require the conversion of, any shares of Junior Stock or
Parity Stock.
(c) The Company shall not permit any Subsidiary of the
Company, or cause any other Person, to purchase or otherwise acquire for
consideration any shares of capital stock of the Company unless the Company
could, pursuant to Section 4(b), purchase such shares at such time and in such
manner.
Section 5. Reacquired Shares.
Any shares of Series A Stock converted, exchanged, redeemed, purchased
or otherwise acquired by the Company or any of its Subsidiaries or other
Affiliates in any manner whatsoever shall be retired and canceled promptly after
the acquisition thereof.
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All such shares of Series A Stock shall upon their cancellation become
authorized but unissued shares of Series A Stock, no par value, of the Company
and, upon the filing of an appropriate certificate with the Secretary of State
of the State of Connecticut, may be reissued as part of another series of
preferred stock, no par value per share, of the Company subject to the
conditions or restrictions on issuance set forth herein, but in any event may
not be reissued as shares of Series A Stock or other Parity Stock unless all of
the shares of Series A Stock issued on the Issue Date shall have already been
redeemed, converted or exchanged.
Section 6. Liquidation, Dissolution or Winding Up.
(a) If the Company shall commence a voluntary case under the United
States bankruptcy laws or any applicable bankruptcy, insolvency or similar lawof
any other country, or consent to the entry of an order for relief in an
involuntary case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or make an
assignment for the benefit of its creditors, or admit in writing its inability
to pay its debts generally as they become due, or if a decree or order for
relief in respect of the Company shall be entered by a court having jurisdiction
in the premises in an involuntary case under the United States bankruptcy laws
or any applicable bankruptcy, insolvency or similar law of any other country, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or other similar official) of the Company or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and on
account of any such event the Company shall liquidate, dissolve or wind up, or
if the Company shall otherwise liquidate, dissolve or wind up, no distribution
shall be made (i) to the holders of shares of Junior Stock unless, prior
thereto, the holders of shares of Series A Stock, subject to Section 7, shall
have received the Liquidation Preference, plus all accrued and unpaid dividends,
to the date of distribution, with respect to each share, or (ii) to the holders
of shares of Parity Stock, except distributions made ratably on the Series A
Stock and all other Parity Stock in proportion to the total amounts to which the
holders of all shares of the Series A Stock and other Parity Stock are entitled
upon such liquidation, dissolution or winding up.
(b) Neither the consolidation or merger of the Company with or
into any other Person nor the sale or other distribution to another Person of
all or substantially all the assets, property or business of the Company shall
be deemed to be a liquidation, dissolution or winding up of the Company for
purposes of this Section 6.
Section 7. Conversion.
(a) Any holder of Series A Stock shall have the right, at its
option, at any time and from time to time, to convert, subject to the terms and
provisions of this Section 7, any or all of such holder's shares of Series A
Stock into such number of fully paid and
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non-assessable shares of Common Stock as is equal, subject to Section 7(g), to
the product of the number of shares of Series A Stock being so converted
multiplied by the quotient of (i) Liquidation Preference divided by the (ii)
Conversion Price (as defined below) then in effect. The "Conversion Price" shall
be $1.20 per share, subject to adjustment as set forth in Section 7(d). Such
conversion right shall be exercised by the surrender of the shares of Series A
Stock to be converted (the "Shares") to the Company at any time during usual
business hours at its principal place of business to be maintained by it,
accompanied by written notice that the holder elects to convert such Shares and
specifying the name or names (with address) in which a certificate or
certificates for shares of Common Stock are to be issued and (if so required by
the Company) by a written instrument or instruments of transfer in form
reasonably satisfactory to the Company duly executed by the holder or its duly
authorized legal representative and transfer tax stamps or funds therefor, if
required pursuant to Section 7(k).
All Shares surrendered for conversion shall be delivered to the Company for
cancellation and canceled by it and no Shares shall be issued in lieu thereof.
(b) As promptly as practicable after the surrender, as herein
provided, of any Shares for conversion pursuant to Section 7(a), the Company
shall deliver to or upon the written order of the holder of the Shares so
surrendered a certificate or certificates representing the number of fully paid
and non-assessable shares of Common Stock into which such Shares may be or have
been converted in accordance with the provisions of this Section 7. Subject to
the following provisions of this Section 7, such conversion shall be deemed to
have been made immediately prior to the close of business on the date that such
Shares shall have been surrendered in satisfactory form for conversion, and the
Person or Persons entitled to receive the Common Stock deliverable upon
conversion of such Shares shall be treated for all purposes as having become the
record holder or holders of such Common Stock at such appropriate time, and such
conversion shall be at the Conversion Price in effect at such time; provided,
however, that no surrender shall be effective to constitute the Person or
Persons entitled to receive the Common Stock deliverable upon such conversion as
the record holder or holders of such Common Stock while the share transfer books
of the Company shall be closed (but not for any period in excess of five days),
but such surrender shall be effective to constitute the Person or Persons
entitled to receive such Common Stock as the record holder or holders thereof
for all purposes immediately prior to the close of business on the next
preceding day on which such share transfer books are open, and such conversion
shall be deemed to have been made at, and shall be made at the Conversion Price
in effect at, such time on such next preceding day. If the last day for the
exercise of the conversion right shall not be a Business Day, then such
conversion right may be exercised on the next preceding Business Day.
(c) Upon (i) the third anniversary of the Issue Date, each
outstanding share of Series A Stock, or (ii) if earlier, the transfer of any
shares of Series A Stock by an Initial Holder to any Person other than an
Affiliate of such Initial Holder, such shares
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of Series A Stock, shall automatically, with no further action required to be
taken by the Company or the holder thereof, be converted into such number of
fully paid and non-assessable shares of Common Stock as is equal to the product
of the number of shares of Series A Stock being so converted, multiplied by the
quotient of (i) the Liquidation Preference divided by (ii) the Conversion Price
then in effect. Immediately thereafter, each holder of Series A Stock subject to
such conversion, shall be deemed to be the holder of record of the Common Stock
issuable upon conversion of such holder's Series A Stock, notwithstanding that
the share register of the Company shall then be closed or that certificates
representing such Common Stock shall not then be actually delivered to such
Person. Upon notice from the Company, each holder of Series A Stock so converted
shall promptly surrender to the Company, at any where the Company shall maintain
a transfer agent for its Series A Stock and Common Stock, certificates
representing the shares so converted, duly endorsed in blank or accompanied by
proper instruments of transfer. On the date of such automatic conversion, all
rights with respect to the shares of Series A Stock so converted, including the
rights, if any, to receive notices and vote, will terminate, except only the
rights of holders thereof to (A) receive certificates for the number of shares
of Common Stock into which such shares of Series A Stock have been converted,
(B) be paid any declared but unpaid dividends thereon and (C) exercise the
rights to which they are entitled as holders of Common Stock.
(d) The Conversion Price shall be subject to adjustment as follows:
(i) In case the Company shall at any time or from time to time
(A) pay a dividend or make any other distribution (other than a dividend or
distribution paid or made to holders of shares of Series A Stock in the manner
provided in Section 2) on the outstanding shares of any of its Common Stock in
capital stock (which, for purposes of this Section 7(d) shall include, without
limitation, any dividends or distributions in the form of options, warrants or
other rights to acquire capital stock) of the Company or any Subsidiary or
Affiliate thereof, (B) subdivide the outstanding shares of any of its Common
Stock into a larger number of shares, (C) combine the outstanding shares of any
of its Common Stock into a smaller number of shares, or (D) issue any shares of
its capital stock in a reclassification of any of its Common Stock, then, and in
each such case, the Conversion Price in effect immediately prior to such event
shall be adjusted (and any other appropriate actions shall be taken by the
Company) so that the holder of any share of Series A Stock thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Common Stock or other securities of the Company that such holder would have
owned or would have been entitled to receive upon or by reason of any of the
events described above, had such share of Series A Stock been converted
immediately prior to the occurrence of such event. An adjustment made pursuant
to this Section 7(d)(i) shall become effective retroactively (A) in the case of
any such dividend or distribution, to a date immediately following the close of
business on the record date for the determination of holders of any of its
Common Stock entitled to receive such dividend or distribution or (B) in the
case of any such subdivision, combination or
<PAGE> 9
reclassification, to the close of business on the day upon which such corporate
action becomes effective.
(ii) In case the Company shall at any time or from time to
time distribute to any holder of shares of its Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the resulting or surviving corporation and the Common Stock is not
changed or exchanged) cash, evidences of indebtedness of the Company or another
issuer, securities of the Company or another issuer or other assets (excluding
(A) dividends or distributions paid or made to holders of shares of Series A
Stock in the manner provided in Section 2 and (B) dividends payable in shares of
Common Stock for which adjustment is made under Section 7(d)(i)) or rights or
warrants to subscribe for or purchase securities of the Company (excluding those
in respect of which adjustments in the Conversion Price is made pursuant to
Section 7(d)(i), then, and in each such case, the Conversion Price then in
effect shall be adjusted by dividing the Conversion Price in effect immediately
prior to the date of such distribution by a fraction (x) the numerator of which
shall be the Current Market Price of the Common Stock on the record date
referred to below and (y) the denominator of which shall be such Current Market
Price of the Common Stock less the then fair market value (as determined in good
faith by the Board of Directors of the Company, in the case of any such
distribution other than a distribution of cash, based on an opinion of a
nationally recognized investment banking firm unaffiliated with either the
Company or the holders of the Series A Stock, chosen by the Company (which shall
bear the expense thereof) and reasonably acceptable to a majority of the holders
of the Series A Stock, a certified resolution with respect to which shall be
mailed to the holders of the Series A Stock) of the portion of the cash,
evidences of indebtedness, securities or other assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock (but
such denominator not to be less than one); provided, however, that no adjustment
shall be made with respect to any distribution of rights to purchase securities
of the Company if the holder of shares of Series A Stock would otherwise be
entitled to receive such rights upon conversion at any time of shares of Series
A Stock into Common Stock unless such rights are subsequently redeemed by the
Company, in which case such redemption shall be treated for purposes of this
Section 7(d)(ii) as a dividend on the Common Stock. Such adjustment shall be
made whenever any such distribution is made and shall become effective
retroactively to a date immediately following the close of business on the
record date for the determination of stockholders entitled to receive such
distribution.
(iii) In case the Company at any time or from time to time
shall take any action affecting its Common Stock which could have a dilutive
effect on the number of shares of Common Stock that may be issued upon
conversion of the Series A Stock, other than an action described in any of
Section 7(d)(i), 7(d)(ii) or Section 7(h), or an action which would have the
same dilutive effect on the Series A Stock as on the Common Stock, then, and in
each such case, the Conversion Price shall be adjusted in
<PAGE> 10
such manner and at such time as the Board of Directors of the Company in good
faith determines to be equitable in the circumstances (such determination to be
evidenced in a resolution, a certified copy of which shall be mailed to the
holders of the Series A Stock).
(iv) In the event that any convertible or exchangeable
securities, options, warrants or other rights, the issuance of which shall have
given rise to an adjustment pursuant to this Section 7(d) ("Convertible
Securities"), shall have expired or terminated without the exercise thereof
and/or if there shall have been an increase, with the passage of time or
otherwise, in the price payable upon the exercise or conversion thereof or a
decrease in the number of shares of Common Stock issuable upon the exercise or
conversion thereof, then the Conversion Price hereunder shall be readjusted (but
to no greater extent then originally adjusted) on the basis of (A) eliminating
from the computation of the Conversion Price as of the time of the issuance of
the Convertible Securities any shares of Common Stock corresponding to such
Convertible Securities as shall have expired or terminated, (B) treating the
additional shares of Common Stock, if any, actually issued or issuable pursuant
to the previous exercise of such Convertible Securities as having been issued
for the consideration actually received and receivable therefor and (C) treating
any of such Convertible Securities which remain outstanding as being subject to
exercise or conversion on the basis of such exercise or conversion price as
shall be in effect at such time.
(e) If the Company shall take a record of the holders of any of its
Common Stock for the purpose of entitling them to receive a dividend or other
distribution, and shall thereafter and before the distribution to stockholders
thereof legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment in the Conversion Price then in
effect shall be required by reason of the taking of such record.
(f) Upon any increase or decrease in the Conversion Price, then, and in
each such case, the Company promptly shall deliver to each registered holder of
Series A Stock at least ten Business Days prior to effecting any of the
foregoing transactions a certificate, signed by the President or a
Vice-President and by the Treasurer or an Assistant Treasurer or the Secretary
or an Assistant Secretary of the Company, setting forth in reasonable detail the
event requiring the adjustment and the method by which such adjustment was
calculated and specifying the increased or decreased Conversion Price then in
effect following such adjustment.
(g) No fractional shares or scrip representing fractional shares shall
be issued upon the conversion of any shares of Series A Stock. If more than one
share of Series A Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock issuable upon conversion
thereof shall be computed on the basis of the aggregate number of the shares of
Series A Stock so surrendered. If the conversion of any share or shares of
Series A Stock results in a
<PAGE> 11
fraction, an amount equal to such fraction multiplied by the Current Market
Price of the Common Stock on the Business Day preceding the day of conversion
shall be paid to such holder in cash by the Company.
(h) In case of any capital reorganization or reclassification or other
change of outstanding shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value), or in
case of any consolidation or merger of the Company with or into another Person
(other than a consolidation or merger in which the Company is the resulting or
surviving Person and which does not result in any reclassification or change of
outstanding Common Stock), or in case of any sale or other disposition to
another Person of all or substantially all of the assets of the Company (any of
the foregoing, a "Transaction"), the Company, or such successor or purchasing
Person, as the case may be, shall execute and deliver to each holder of Series A
Stock at least ten Business Days prior to effecting any of the foregoing
Transactions a certificate that the holder of each share of Series A Stock then
outstanding shall have the right thereafter to convert such share of Series A
Stock into the kind and amount of shares of stock or other securities (of the
Company or another issuer) or property or cash receivable upon such Transaction
by a holder of the number of shares of Common Stock into which such share of
Series A Stock could have been converted immediately prior to such Transaction.
Such certificate shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Section
7. If, in the case of any such Transaction, the stock, other securities, cash or
property receivable thereupon by a holder of Common Stock includes shares of
stock or other securities of a Person other than the successor or purchasing
Person and other than the Company, which controls or is controlled by the
successor or purchasing Person or which, in connection with such Transaction,
issues stock, securities, other property or cash to holders of Common Stock,
then such certificate also shall be executed by such Person, and such Person
shall, in such certificate, specifically acknowledge the obligations of such
successor or purchasing Person and acknowledge its obligations to issue such
stock, securities, other property or cash to the holders of Series A Stock upon
conversion of the shares of Series A Stock as provided above. The provisions of
this Section 7(h) and any equivalent thereof in any such certificate similarly
shall apply to successive Transactions.
(i) In case at any time or from time to time:
(A) the Company shall declare a dividend (or any other
distribution) on its Common Stock;
(B) the Company shall authorize the granting to the holders of
its Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights or warrants;
<PAGE> 12
(C) there shall be any reclassification of the Common Stock;
or
(D) there shall be an Extraordinary Event; then the Company
shall mail to each holder of shares of Series A Stock at such holder's address
as it appears on the transfer books of the Company, as promptly as possible but
in any event at least ten days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants 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 or rights are to be determined, or
(y) the date on which such reclassification or Extraordinary Event is expected
to become effective; provided that in the case of any event to which Section
7(h) applies, the Company shall give at least ten days' prior written notice as
aforesaid. Such notice also shall specify the date as of which it is expected
that holders of Common Stock of record shall be entitled to exchange their
Common Stock for shares of stock or other securities or property or cash
deliverable upon such reclassification or Extraordinary Event.
(j) The Company shall at all times reserve and keep available for
issuance upon the conversion of the Series A Stock, such number of its
authorized but unissued shares of Common Stock as will from time to time be
sufficient to permit the conversion of all outstanding shares of Series A Stock,
and shall take all action required to increase the authorized number of shares
of Common Stock if at any time there shall be insufficient authorized but
unissued shares of Common Stock to permit such reservation or to permit the
conversion of all outstanding shares of Series A Stock.
(k) The issuance or delivery of certificates for Common Stock upon the
conversion of shares of Series A Stock shall be made without charge to the
converting holder of shares of Series A Stock for such certificates or for any
tax in respect of the issuance or delivery of such certificates or the
securities represented thereby, and such certificates shall be issued or
delivered in the respective names of, or in such names as may be directed by,
the holders of the shares of Series A Stock converted; provided, however, that
the Company shall not be required to pay any tax which may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate in
a name other than that of the holder of the shares of Series A Stock converted,
and the Company shall not be required to issue or deliver such certificate
unless or until the Person or Persons requesting the issuance or delivery
thereof shall have paid to the Company the amount of such tax or shall have
established to the reasonable satisfaction of the Company that such tax has been
paid.
Section 8. Certain Remedies.
Any registered holder of Series A Stock shall be entitled to an
injunction or
<PAGE> 13
injunctions to prevent breaches of the provisions of this Certificate of
Amendment and to enforce specifically the terms and provisions of this
Certificate of Amendment in any court of the United States or any state thereof
having jurisdiction, this being in addition to any other remedy to which such
holder may be entitled at law or equity.
Section 9. Definitions.
For the purposes of this Certificate of Designations, Rights and
Preferences, the following terms shall have the meanings indicated:
"Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the City of New York are authorized or
required by law or executive order to close.
"Common Stock" of the Company shall mean the Common Stock, no par
value, and any other common stock of the Company issued from time to time.
"Conversion Price" shall have the meaning given it in Section 7 hereof.
"Current Market Price" per share shall mean, on any date specified
herein for the determination thereof, (a) the average daily Market Price of the
Common Stock for those days during the period of 30 days, ending on such date,
on which the national securities exchanges were open for trading, and (b) if the
Common Stock is not then listed or admitted to trading on any national
securities exchange or quoted in the over-counter market, the Market Price on
such date.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Securities and Exchange Commission
thereunder.
"Extraordinary Event" means (i) the voluntary or involuntary
liquidation, dissolution or winding up of the Company, (ii) the voluntary sale,
conveyance, exchange or transfer to another Person of all or substantially all
of the assets of the Company and its Subsidiaries or (iii) the merger or
consolidation of the Company with one or more other Persons.
"Fair Market Value" shall mean the amount which a willing buyer, under
no compulsion to buy, would pay a willing seller, under no compulsion to sell,
in an arm's-length transaction.
"Initial Holder" shall mean Commercial Electronics Capital Partnership,
L.P. and
<PAGE> 14
Commercial Electronics, L.L.C. or any other Person to whom shares of Series A
Stock are issued pursuant to and in accordance with the terms of the Securities
Purchase Agreement.
"Issue Date" shall mean the first date on which shares of Series A
Stock are issued.
"Junior Stock" shall mean any capital stock of the Company ranking
junior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Stock.
"Liquidation Preference" with respect to a share of Series A Stock
shall mean $3.00.
"Market Price" shall mean, per share of Common Stock, on any date
specified herein: (a) the closing price per share of the Common Stock on such
date published in such date is published in The Wall Street Journal, the average
of the closing bid and asked prices on such date, as officially reported on the
principal national securities exchange on which the Common Stock is then listed
or admitted to trading; or (b) if the Common Stock is not then listed or
admitted to trading on any national securities exchange but is designated as a
national market system security by the NASD, the last trading price of the
Common Stock on such date; or (c) if there shall have been no trading on such
date or if the Common Stock is not so designated, the average of the reported
closing bid and asked prices of the Common Stock, on such date as shown by
NASDAQ and reported by any member firm of the New York Stock Exchange selected
by the Company; or (d) if none of (a), (b) or (c) is applicable, the Fair Market
Value per share determined in good faith by the Board of Directors of the
Company based on an opinion of a nationally recognized investment banking firm
unaffiliated with either the Company or the holders of the Series A Stock,
chosen by the Company (who shall bear the expense thereof) and acceptable to the
holders of at least a majority in interest of the Series A Stock.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"NASDAQ" shall mean the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotations System.
"Parity Stock" shall mean any capital stock of the Company, including
the Series A Stock, ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Stock.
"Person" shall mean any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, government (or an agency or political subdivision thereof) or other
entity of any kind, and
<PAGE> 15
shall include any successor (by merger or otherwise) of such entity.
"Securities Purchase Agreement" shall mean the Securities Purchase
Agreement, dated as of January , 1999, by and between the Company, Commercial
Electronics Capital Partnership, L.P. and Commercial Electronics, L.L.C., as the
same may be amended from time to time.
"Senior Stock" shall mean any capital stock of the Company ranking
senior (either as to dividends or upon liquidation, dissolution or winding up)
to the Series A Stock.
"Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities or
equity interest, or rights to profits, is owned, directly or indirectly, by such
Person.
<PAGE> 16
IN WITNESS WHEREOF, said corporation has caused this Certificate to be
signed by John C. Maxwell, III, its Chairman, this ____ day of July, 1999.
E-SYNC NETWORKS, INC.
By:____________________________
John C. Maxwell, III
<PAGE> 1
Exhibit 3(iii)
BY-LAWS
OF
E-SYNC NETWORKS, INC.
(A DELAWARE CORPORATION)
ARTICLE I
IDENTIFICATION AND OFFICES
SECTION 1. NAME. The name of the Corporation is E-Sync Networks, Inc.
SECTION 2. SEAL. Upon the seal of the Corporation shall appear the name
of the Corporation and the state and year of incorporation, and the words
"Corporate Seal."
SECTION 3. OTHER OFFICES. The Corporation shall maintain a registered
office in the State of Delaware. The Corporation may have an office or offices
at such other place or places, within or without the State of Delaware, as the
Board of Directors may from time to time determine or as the activities of the
Corporation may require.
ARTICLE II
STOCKHOLDERS' MEETINGS
SECTION 1. PLACE OF MEETINGS. Meetings of the stockholders of the
Corporation shall be held at the principal office of the Corporation, or at such
other place within or without the State of Delaware as may be fixed by the Board
of Directors and stated in the notice of meeting or in a duly executed waiver of
notice thereof.
SECTION 2. ANNUAL MEETING. An annual meeting of the stockholders for the
election of directors and the transaction of such other business as may properly
come before the meeting shall be held each year on such date in the first six
months of the Corporation's fiscal year as shall be designated by the Board of
Directors, or in the absence of such designation, on the first Tuesday of the
seventh month of the fiscal year, if not a legal holiday, and if a legal
holiday, then on the next succeeding business day, or on such other date as
shall be fixed by the Board of Directors.
SECTION 3. SPECIAL MEETING. Special meetings of the stockholders may be
called by the Board of Directors, the Chairman or the President, or as otherwise
provided by law.
SECTION 4. NOTICE. A notice in writing, of each meeting of stockholders,
stating the place, day and hour of the meeting, shall be given as required by
law.
SECTION 5. CONSENT. Any action which, under any provision of the General
Corporation Law of the State of Delaware, may be taken at a meeting of
stockholders, may be taken without a meeting if consent in writing, setting
forth the action so taken or to be taken, is signed by the holders of
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<PAGE> 2
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting, or by their duly
authorized attorneys, and filed with the Secretary of the Corporation as part of
the corporate records. Prompt notice of the taking of any such action shall be
given to those stockholders who did not consent in writing.
SECTION 6. QUORUM. Except as otherwise specifically provided by these
By-laws, the Corporation's Certificate of Incorporation or by applicable law, at
any meeting of the stockholders the holders of a majority of the shares entitled
to vote, present in person or represented by proxy, shall constitute a quorum.
The affirmative vote, at a meeting of stockholders duly held and at which a
quorum is present, of a majority of the voting power of the shares represented
at such meeting which are entitled to vote on the subject matter shall be the
act of the stockholders, except with respect to the election of directors or as
is otherwise specially provided by a By-law, by the Certificate of Incorporation
or by law. Directors shall be elected by a plurality of the shares present in
person or represented by proxy at the meeting and entitled to vote on the
election of directors. The holders of a majority of the voting power of the
shares entitled to vote represented at a meeting may adjourn such meeting from
time to time.
SECTION 7. VOTING. Except as otherwise provided by law or the
certificate of incorporation and subject to the provisions of Section 2 of
Article V of these by-laws, each outstanding share of common stock shall be
entitled to one vote on each matter submitted to a vote at a meeting of
stockholders.
SECTION 8. PROXIES. Every person entitled to vote or execute consents,
waivers or releases in respect of shares of stock may do so in person or by one
or more agents authorized by a written dated proxy executed by him. A
photographic or similar reproduction of a proxy or a telegram, cablegram,
wireless or similar transmission of a proxy sent by such person is a sufficient
writing. No proxy shall be valid after eleven months from its date of execution
unless it specifies the length of time for which it is to continue in force or
limits its use to a particular meeting not yet held.
SECTION 9. WAVIER OF NOTICE. Notice of any stockholders meeting may be
waived, in writing, by any shareholder, either before or after the time stated
therein and, if any shareholder entitled to vote is present at a stockholders
meeting and does not protest, prior to or at the commencement of the meeting,
the lack of receipt of proper notice, such shareholder shall be deemed to have
waived notice of such meeting.
SECTION 10. ADVANCE NOTICE OF STOCKHOLDER'S PROPOSALS. At any annual or
special meeting of stockholders, proposals by stockholders shall be considered
only if advance notice thereof has been timely given as provided herein. Notice
of any proposal to be presented by any stockholder at any meeting of
stockholders shall be given to the Secretary of the Corporation not less than 60
nor more than 90 days prior to the date of the meeting; provided, however, that
if the date of the meeting is first publicly announced or disclosed less than 70
days prior to the date of the meeting, such notice shall be given not more than
ten days after such date is first so announced or disclosed. No additional
public announcement or disclosure of the date of any annual meeting of
stockholders need be made if the Corporation shall have previously disclosed, in
these by-laws or otherwise, that the annual meeting in each year is to be held
on a determinable date, unless and until the Board determines to hold the
meeting on a different date. Any stockholder who gives notice of any such
proposal shall deliver therewith the text of the proposal to be presented and a
brief written statement of the reasons why such stockholder favors the proposal
and setting forth such stockholder's name and address, the class and number of
all shares of each class of stock of the Corporation beneficially owned by such
stockholder and any material
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<PAGE> 3
interest of such stockholder in the proposal (other than as a stockholder). The
Chairman of the meeting shall, if the facts warrant, determine and declare
whether such notice has not been duly given and if he should so determine he
shall so declare to the meeting and direct that the proposal not be considered.
SECTION 11. ADVANCE NOTICE OF STOCKHOLDER'S NOMINEES. Only persons who
are nominated in accordance with the procedures set forth in this Section 11
shall be eligible for election as directors. Nominations of persons for election
to the Board of Directors of the Corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by any
stockholder of the Corporation entitled to vote for the election of Directors at
the meeting who complies with the notice procedures set forth in this Section
11. Such nominations, other than those made by or at the direction of the Board
of Directors, shall be made pursuant to timely notice in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the meeting;
provided, however, that in the event that less than 70 days notice or prior
public disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be so received not later than the
close a business on the tenth day following the day on which such notice of the
date of the meeting was mailed or such public disclosure was made. Such
stockholder's notice shall set forth (a) as to each person who the stockholder
proposes to nominate for election or reelection as a director, (i) the name,
age, business address and residence address of such person, (ii) the principal
occupation or employment of such person, (iii) the class and number of shares of
the Corporation which are beneficially owned by such person, and (iv) any other
information relating to such person that is required to be disclosed in
solicitations of proxies for election of directors, or is otherwise required, in
each case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including without limitation such person's written consent to being
named in the proxy statement as a nominee and to serving as a director if
elected); and (b) as to the stockholder giving the notice (i) the name and
address, as they appear in the Corporation's books, of such stockholder and (ii)
the class and number of shares of the Corporation which are beneficially owned
by such stockholder. At the request of the Board of Directors any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in
the stockholder's notice of nomination which pertains to the nominee. No person
shall be eligible for election as a director of the Corporation unless nominated
in accordance with the procedure set forth in this Section 11. The Chairman of
the meeting shall, if the facts warrant, determine and declare to the meeting
the nomination was not made in accordance with procedures described by the
By-Laws, and if he should so determine, he shall so declare to the meeting and
the defective nomination shall be disregarded.
ARTICLE III
DIRECTORS
SECTION 1. POWERS, NUMBER AND TERM. The property, business and affairs
of this Corporation shall be controlled, managed and conducted by a Board of
Directors of not less than three nor more than eleven directors, who shall hold
office until the next annual meeting and until their successors shall be elected
and shall have qualified. The number of directors within such maximum and
minimum shall be the number fixed by resolution of the stockholders or
directors, or in the absence thereof, shall be the number of directors elected
at the preceding annual meeting of stockholders plus the number, if any, elected
since such meeting to fill a vacancy created by an increase in the size of the
Board. The number of directors fixed as aforesaid may from time to time be
increased or decreased in the same manner; provided, however, that no reduction
in the number of directorships shall remove any director in office or shorten
his term. Directors need not be residents of the State of Delaware or
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<PAGE> 4
stockholders of the Corporation.
SECTION 2. QUORUM. At all meetings of the Board of Directors, the
presence of a majority of the directors shall be required to constitute a
quorum, but in the absence of a quorum a lessor number may adjourn any meeting
from time to time until a quorum is present. The act of a majority of the
directors present at a meeting at which a quorum is present at the time of the
act shall be the act of the Board of Directors, unless the act of a greater
number is required by law or by these By-laws. A director may participate at a
meeting of the Board of Directors by means of a conference telephone or similar
communications equipment, provided such equipment enables all directors at a
meeting to hear one another.
SECTION 3. MEETINGS. Regular or special meetings of the Board of
Directors may be held within or without the State of Delaware. Meetings of the
Board of Directors may be called at any time by the Chairman or the President,
and it shall be the duty of the President to call such meetings whenever
requested in writing so to do by a majority of the Board of Directors. A regular
meeting of the Board of Directors may be held without call immediately after and
at the same place as the annual meeting of the stockholders or any special
meeting of the stockholders at which a Board of Directors is elected. The Board
of Directors may fix fees of directors, including reasonable allowance for
expenses actually incurred in connection with their duties.
SECTION 4. NOTICE AND PURPOSE OF MEETING. At least two days' written or
oral notice shall be given of all such meetings to every member of the Board of
Directors. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting unless required by these by laws.
Said notice may be waived by a written waiver signed by all of the directors who
receive no such notice of meeting. Attendance by a director at a meeting,
without protesting, prior to or at the commencement of the meeting, the lack of
proper notice, shall be deemed to be a waiver by such director of notice of such
meeting.
SECTION 5. CONSENT. If all the directors (or all members of a committee
thereof) severally or collectively consent in writing to any action to be taken
by the Corporation, such action shall be as valid corporate action as though it
had been authorized at a meeting of the Board of Directors (or such committee).
The Secretary shall file such consent with the minutes of the meetings of the
Board of Directors.
SECTION 6. VACANCIES. If a vacancy is created by an increase in the
number of directorships, it shall be filled for the unexpired term by the
concurring vote of directors holding a majority of the number of directorships
of the Board of Directors immediately prior to the vote of the increase. Subject
to the provisions of any applicable By-laws adopted by stockholders, any other
vacancy may be filled for the unexpired term by the concurring vote of a
majority of the remaining directors in office, though such remaining directors
are less than a quorum, though the number of directors at the meeting is less
than a quorum and though such majority is less than a quorum.
SECTION 7. COMMITTEES. The Board of Directors, by resolution adopted by
the affirmative vote of directors holding a majority of the directorships at a
meeting at which a quorum is present, may designate two or more directors to
constitute an Executive or other committee or committees, which committees shall
have such powers of the Board of Directors in the management of the property and
affairs of the Corporation as shall be provided in such resolutions, except,
however, the power to declare dividends, to issue stock, or to recommend to
stockholders any action requiring stockholders' approval.
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<PAGE> 5
A majority of the members of any such committee shall fix the time and place of
its meetings and shall determine its action, unless the Board of Directors shall
provide otherwise. Each committee shall keep minutes of its proceedings and
shall report the same to the Board of Directors as and when required.
ARTICLE IV
OFFICERS
SECTION 1. GENERAL. A president, a secretary and when deemed necessary
by the Board of Directors, a Chairman of the Board of Directors, a chief
executive officer, a chief operating officer, one or more vice presidents, a
treasurer and such other officers shall be elected by the Board of Directors to
hold office until their respective successors are duly elected and qualified or
until their earlier death or resignation or removal in the manner hereinafter
provided. Any two or more offices may be held by the same person. In all cases
where the duties of any officer, agent or employee are not expressly prescribed
by these by-laws or by the Board of Directors, such officer, agent or employee
shall obey the orders and instructions of the President.
SECTION 2. CHAIRMAN. The Chairman shall, when present, preside at all
meetings of the stockholders and Board of Directors and shall have such
additional powers and shall perform such further duties and have such other
responsibilities (including, without limitation, those of the Chief Executive
Officer), as may from time to time be assigned or delegated to him by the Board
of Directors or the Executive Committee.
SECTION 3. PRESIDENT. The President shall have general direction of the
operations of the Corporation, subject to the control of the Board of Directors,
the Executive Committee and (if applicable) the Chief Executive Officer of the
Corporation. He shall, in the absence of the Chairman, preside at all meetings
of the stockholders and the Board of Directors and shall have such additional
powers and shall perform such further duties and have such other
responsibilities as may from time to time be assigned or delegated to him by the
Board of Directors, the Executive Committee and/or (if applicable) the Chief
Executive Officer of the Corporation. He shall also have authority, unless
otherwise directed by the Board of Directors, to attend in person or by
substitute appointed by him, or to execute on behalf of the Corporation written
instruments appointing a proxy or proxies to represent the Corporation at all
meetings of the stockholders of any corporation in which the Corporation shall
hold any stock, and, at all such meetings and otherwise, may vote the stock so
held by the Corporation and may execute written consents and other instruments
with respect to such stock and may exercise any and all rights and powers
incident to the ownership thereof, subject, however, to the instructions, if
any, of the Board of Directors, the Executive Committee and the Chief Executive
Officer.
SECTION 4. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate
either the Chairman or the President as the Chief Executive Officer of the
Corporation. The Chief Executive Officer shall have direct charge of the
business and affairs of the Corporation, subject to the control of the Board of
Directors and the Executive Committee.
SECTION 5. CHIEF OPERATING OFFICER. The Chief Operating Officer, if
elected, shall have such responsibilities as shall be given by the Board of
Directors, the Executive Committee and the Chief Executive Officer (if any).
SECTION 6. VICE PRESIDENTS. Vice Presidents, when elected, shall have
such powers and perform such duties as the President or the Board may from time
to time assign and shall perform such
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other duties as may be prescribed by these By-laws. At the request of the
President, or in case of his absence or inability to act, any Vice President so
appointed shall perform the duties of the President and, when so acting, shall
have all the powers of, and be subject to all the restrictions upon, the
President.
SECTION 7. SECRETARY. The Secretary shall have charge of the seal of
the Corporation and of the stock ledger and transfer books. He shall attend all
meetings of stockholders and shall record all proceedings of such meetings in a
book or books which shall be the property of the Corporation. Except as
otherwise provided in these By-laws, he shall give or cause to be given notice
of all meetings of the Board of Directors and stockholders and shall perform
such other duties as are incident to the office of Secretary or as are assigned
by the Board of Directors.
SECTION 8. ASSISTANT SECRETARY. If one shall be elected, the Assistant
Secretary shall have such powers and perform such duties as the President,
Secretary or the Board may from time to time assign and shall perform such other
duties as may be prescribed by these By-laws. At the request of the Secretary,
or in case of his absence or inability to act, the Assistant Secretary shall
perform the duties of the Secretary and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Secretary.
SECTION 9. TREASURER. If one shall be elected, the Treasurer shall keep
correct and complete records of accounting showing accurately at all times the
financial condition of the Corporation. The Treasurer shall also act as legal
custodian of all moneys, notes, securities, and other valuables that may from
time to time come into the possession of the Corporation, and shall promptly
deposit all funds of the Corporation coming into his hands in the bank or other
depository designated by the Board of Directors and shall keep this bank account
in the name of the Corporation. Whenever requested by the Board of Directors,
the Treasurer shall furnish a statement of the financial condition of the
Corporation and shall perform such other duties as the By-laws may provide and
the Board of Directors may assign.
SECTION 10. ASSISTANT TREASURER. If one shall be elected, the Assistant
Treasurer shall have such powers and perform such duties as the President,
Treasurer or Board may from time to time assign and shall perform such other
duties as may be prescribed by these By-laws. At the request of the Treasurer,
or in case of his absence or inability to act, the Assistant Treasurer shall
perform the duties of the Treasurer and, when so acting, shall have all the
powers of, and be subject to all the restrictions upon, the Treasurer.
SECTION 11. OTHER OFFICERS. Such other officers as are appointed shall
exercise such duties and have such powers as the Board of Directors may assign.
SECTION 12. TRANSFER OF AUTHORITY. In case of the absence of any officer
of the Corporation or for any other reason that the Board of Directors may deem
sufficient, the Board of Directors may transfer the powers or duties of that
officer to any other officer or to any director or employee of the Corporation,
provided that a majority of the entire Board of Directors approves.
SECTION 13. RESIGNATION AND REMOVAL. Any officer may resign or be
removed at any time. An officer who intends to resign shall give written notice
to the Board of Directors in care of the President or the Secretary. Removal of
an officer, with or without cause, may be effected by the Board of Directors.
SECTION 14. VACANCIES. A vacancy occurring in any office may be filled
for the unexpired portion of the term of office by the Board of Directors.
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ARTICLE V
STOCK
SECTION 1. CERTIFICATES, FORM AND TRANSFERS. Each stockholder, upon
payment in full for his stock, shall be entitled to a certificate certifying the
number of shares owned by him in the Corporation. Such certificates may be under
seal, or facsimile seal, of the Corporation and shall be signed by the President
or Vice President and by the Secretary or an Assistant Secretary or the
Treasurer or an Assistant Treasurer except that such signature may be facsimile.
If any officer who has signed or whose facsimile signature has been used on any
such certificate ceases to serve the Corporation as an officer in the capacity
as to which his signature was so used before such certificate has been delivered
by the Corporation, the certificate may, nevertheless, be adopted by the
Corporation and be issued and delivered as though such officer has not ceased to
hold such office.
Each certificate representing shares shall set forth upon the face
thereof as at the time of the issue: (1) the name of the Corporation; (2) a
statement that the Corporation is organized under the laws of the State of
Delaware; (3) the name of the person to whom issued; (4) the number, class and
designation of series, if any, of shares which such certificate represents; and
(5) the par value of each share represented by such certificate or a statement
that the shares are without par value.
Transfers of shares of the stock of the Corporation shall be made only
on the books of the Corporation by assignment in writing by the registered
holder thereof, by his legal representatives, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, or with its transfer agent, if any, and on surrender of the
certificate or certificates for such shares and the payment of all taxes
thereon. The Corporation and its transfer agents and registrars, if any, shall
be entitled to treat the holder of record of any share or shares of stock as the
absolute owner thereof for all purposes except as otherwise expressly provided
by the laws of the State of Delaware. The Board may, from time to time, make
such additional rules and regulations as it may deem expedient, not inconsistent
with these by-laws, concerning the issue, transfer, and registration of
certificates for shares of stock of the Corporation.
SECTION 2. CONSIDERATION AND PAYMENT. The capital stock may be issued
for such consideration as may be fixed from time to time by the Board of
Directors in accordance with applicable law.
SECTION 3. CLOSING OF TRANSFER BOOKS AND RECORD DATES. For the purpose
of determining the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or entitled to receive payment or
any dividend, or for any other proper purpose, the Board of Directors may
provide that the stock transfer books shall be closed for a stated period but
such period shall not exceed, in any case, seventy days. If the stock transfer
books are closed for the purpose of determining stockholders entitled to notice
of or to vote at a meeting of stockholders, such books shall be closed for at
least ten full days immediately preceding the date of such meeting. In lieu of
closing the stock transfer books, the Board of Directors by resolution may fix a
date as the record date for any such determination of stockholders, such date in
any case to be not earlier than the date such action is taken by the Board of
Directors and not more than seventy days, and, in case of a meeting of
stockholders, no less than ten full days, immediately preceding the date of
which the particular event, requiring such determination of stockholders, is to
occur.
When a determination of stockholders entitled to vote at any meeting of
stockholders has been
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made as provided in this section, such determination shall apply to any
adjournment thereof.
SECTION 4. LOST, STOLEN OR DESTROYED CERTIFICATES. No certificate for
shares of stock in the Corporation shall be issued in place of any certificate
alleged to have been lost, destroyed or stolen, except on receipt of an
affidavit as to such loss, destruction or theft and on delivery to the
Corporation, if the Board of Directors shall so require, of a bond or indemnity
in such amount, upon such terms and secured by such surety, as the Board of
Directors may in its discretion require.
ARTICLE VI
DIVIDENDS AND RESERVES
SECTION 1. DIVIDENDS. Subject to any limitations or conditions contained
in the Certificate of Incorporation, dividends may be declared by a resolution
duly adopted by the Board of Directors and may be paid in cash, property or in
shares of the capital stock of the Corporation.
SECTION 2. RESERVES. Before payment of any dividend, the Board of
Directors may set aside out of any funds available for dividends such sum or
sums as the Board, in its absolute discretion, may determine as a reserve or
reserves to meet contingencies, to equalize dividends, to repair or maintain
property or to serve other purposes conducive to the interests of the
Corporation.
ARTICLE VII
AMENDMENTS
Except as otherwise provided by law, the certificate of incorporation or
these By-laws, these Bylaws may be altered, amended or repealed by the
affirmative vote of the holders of a majority of the voting power of the shares
entitled to vote thereon or by the affirmative vote of directors holding a
majority of the directorships. Any notice of a meeting of stockholders or the
Board of Directors at which these By-laws are to be adopted, amended or repealed
shall include notice of such proposed action. No provision of these By-laws
prescribing the vote required to amend these by-laws or any thereof shall be
amended by a lesser vote. Any By-law adopted by the stockholders, if it shall so
state, may not be altered, amended or repealed by the directors. This Article
VII may not be altered, amended or repealed by the directors.
ARTICLE VIII
FISCAL YEAR
SECTION 1. The fiscal year of the Corporation shall be determined by
resolution of the Board of Directors.
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Press Contacts: Peter Cincogrono Diane Ugolik
E-Sync Networks, Inc. Sterling Hager, Inc.
203.853.7400 617.926.6665
[email protected] [email protected]
Wiltek, Inc. Merges into E-Sync Networks, Inc.
--Global Leader in Web-Based Business-Business Solutions, a
Premier Managed E-Business Service Provider --
Norwalk, CT -- July 28, 1999 -- Effective as of the open of business on July 28,
1999, Wiltek, Inc., a Connecticut corporation, was merged with and into its
wholly-owned subsidiary, E-Sync Networks, Inc., a Delaware corporation, pursuant
to an Agreement and Plan of Merger dated as of July 15, 1999, by and between
Wiltek, Inc. and E-Sync Networks, Inc. As of July 28, 1999, shares of common
stock of E-Sync Networks, Inc. will be traded on the OTC Bulletin Board under
the symbol ESNI.
"Wiltek's established assets further support E-Sync Networks' mission to provide
FORTUNE 1000 companies cutting edge technologies that leverage key business
partnerships online," states John Maxwell, Chairman and CEO of E-Sync Networks.
"Wiltek's secure messaging products solidify E-Sync Networks' solutions
offerings to managed business-to-business communications."
For over 20 years, Wiltek specialized in providing messaging integration,
directory synchronization and consulting services to companies that required
message connectivity between disparate email platforms. Wiltek's offerings
included TotalMail, hosted secure email solutions; fax management services
including application-to-fax, secure email-to-fax; fax to email connectivity;
standards-based directory synchronization and message switching.
ABOUT E-SYNC NETWORKS, INC.
Headquartered in Norwalk, Connecticut, E-Sync Networks, Inc. (OTC:ESNI) is a
leading Managed E-business Service Provider (MESP) offering the consulting
expertise, superior technology, and high-performance hosting capabilities to
link business partners on the Web. The Company has an extensive Fortune 1000
client base, including Ford(TM), IBM(TM), Pepsi(TM), Traveler's Insurance, ESPN,
and Dun & Bradstreet, and has offices throughout the US and Europe. E-Sync
Networks is affiliated with Commercial Electronics Capital Partnership, LP
(www.cellc.com), an exclusive partner of TRW, Inc. (NYSE: TRW), established
solely to create independent businesses founded on TRW technologies in markets
outside of TRW's strategic interests. More information can be found on the
Internet at www.e-syncnet.com.
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