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EXHIBIT 20.13
AMENDED AND RESTATED DESIGNATION OF RIGHTS, PREFERENCES AND PRIVILEGES FOR THE
SERIES A PREFERRED STOCK OF EZCONNECT, INC.
This Amended and Restated Designation of Rights, Preferences and Privileges
for the Series A Preferred Stock of EZConnect, Inc. (the "Designation")
supersedes and replaces the Designation of Rights, Preferences and Privileges
for the Series A Preferred Stock of EZConnect, Inc., dated September 14,
2000, which was filed with the Nevada Secretary of State on September 19,
2000.
We, the undersigned, Philip R. Lacerte, President, and Elliott N. Taylor,
Secretary, of EZConnect, Inc., a Nevada corporation, hereinafter referred to
as the "Corporation," hereby certify:
FIRST: The name of the Corporation is EZCONNECT, INC.
SECOND: As of the date of this Designation, no shares of the Corporation's
Series A Preferred Stock have been issued or are outstanding.
THIRD: The following resolution establishing a series of Preferred Stock
designated as the "Series A Preferred Stock" consisting of 3,000,000 shares,
$0.001 par value, was duly adopted by the board of directors of the
Corporation on October 13, 2000, in accordance with the articles of
incorporation of the Corporation and the corporation laws of the state of
Nevada:
RESOLVED, there is hereby created a series of preferred stock of the
Corporation to be designated as the "Series A Preferred Stock" consisting of
3,000,000 shares, $0.001 par value, with the following powers, preferences,
rights, qualifications, limitations, and restrictions:
1. Liquidation.
1.01. In the event of any voluntary or involuntary liquidation (whether
complete or partial), dissolution, or winding up of the Corporation, the
holders of the Series A Preferred Stock shall be entitled to be paid out of
the assets of the Corporation available for distribution to its shareholders,
whether from capital, surplus, or earnings, an amount in cash equal to: $3.40
per share; provided, that in no event shall such preference exceed one-half
the amount available for distribution to the Corporation's shareholders. No
distribution shall be made on any common stock or other series of preferred
stock of the Corporation by reason of any voluntary or involuntary liquidation
(whether complete or partial), dissolution, or winding up of the Corporation
unless each holder of any Series A Preferred Stock shall have received all
amounts to which such holder shall be entitled under this subsection.
1.02 If on any liquidation (whether complete or partial), dissolution, or
winding up of the Corporation, the assets of the Corporation available for
distribution to holders of Series A Preferred Stock shall be insufficient to
pay the holders of outstanding Series A Preferred Stock the full amounts to
which they otherwise would be entitled under section 1.01, the assets of the
Corporation available for distribution to holders of the Series A Preferred
Stock shall be distributed to them pro rata on the basis of the number of
shares of Series A Preferred Stock held by each such holder.
1.03 Upon completion of the distribution required by Section 1.01 above, if
assets remain in the Corporation, the holders of the Corporation's Common
Stock shall receive all the remaining assets of the Corporation.
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1.04 Deemed Liquidation.
(a) Sale or Merger. For purposes of Section 1.01, a liquidation, dissolution
or winding up of the Corporation shall be deemed to occur if the Corporation
shall (i) sell, convey, or otherwise dispose of all or substantially all of
its property or business or merge or consolidate with any other corporation
(other than a wholly-owned subsidiary corporation) where the stockholders of
the Corporation own less than fifty percent (50%) of the voting power of the
surviving entity after such merger or consolidation or (ii) effect any other
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Corporation is disposed of, provided that
this Section 1.04(a) shall not apply to a merger effected solely for the
purpose of changing the domicile of the Corporation.
(b) Valuation of Consideration. In the event of a deemed liquidation as
described in Section 1.04(a) above, if the consideration received by the
Corporation is other than cash, its value will be deemed its fair market
value. Any securities shall be valued as follows:
(i) Securities not subject to investment letter or other similar
restrictions on free marketability:
(A) If traded on a securities exchange or The Nasdaq Stock Market,
the value shall be deemed to be the average of the closing prices of the
securities on such exchange over the thirty-day period ending three (3) days
prior to the closing;
(B) If actively traded over-the-counter, the value shall be deemed
to be the average of the closing bid or sale prices (whichever is applicable)
over the thirty-day period ending three (3) days prior to the closing; and
(C) If there is no active public market, the value shall be the fair
market value thereof, as mutually determined by the Corporation and the
holders of at least a majority of the voting power of all then outstanding
shares of Preferred Stock.
(ii) The method of valuation of securities subject to investment letter
or other restrictions on free marketability (other than restrictions arising
solely by virtue of a stockholder's status as an affiliate or former
affiliate) shall be to make an appropriate discount from the market value
determined as above in Section 1.04(b)(i) to reflect the approximate fair
market value thereof, as mutually determined by the Corporation and the
holders of a majority of the voting power of all then outstanding shares of
Preferred Stock.
(c) Notice of Transaction. The Corporation shall give each holder of record
of Preferred Stock written notice of such impending transaction not later than
ten (10) days prior to the stockholders' meeting called to approve such
transaction, or ten (10) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the
final approval of such transaction. The first of such notices shall describe
the material terms and conditions of the impending transaction and the
provisions of this Section 1.04, and the Corporation shall thereafter give
such holders prompt notice of any material changes. The transaction shall in
no event take place sooner than ten (10) days after the Corporation has given
the first notice provided for herein or sooner than five (5) days after the
Corporation has given notice of any material changes provided for herein .
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2. Voting Rights. The holders of the Series A Preferred Stock shall be
entitled to one vote for each share of the Corporation's Common Stock, par
value $0.001 per share (the "Common Stock"), into which the Series A Preferred
Stock may be converted, and to vote with the Common Stock of the Corporation
on all matters submitted to a vote of Common Stockholders for all purposes.
Except as otherwise provided herein or by the laws of the State of Nevada, the
holders of the Series A Preferred Stock and Common Stockholders shall vote
together as one class on all matters submitted to shareholder vote of the
Corporation. So long as at least 500,000 shares of the Series A Preferred
Stock remain outstanding, without the approval of at least one-half (1/2) of
the outstanding shares of the Preferred Stock, voting together as a single
class: (i) the Corporation shall not authorize or issue any shares, or
securities convertible into shares having preference over the Series A
Preferred Stock with respect to rights upon dissolution, liquidation, winding
up of the Corporation, or distribution of assets; (ii) the Corporation shall
not sell, lease or convey (other than by mortgage) all or substantially all of
the property or business of the Corporation and shall not effect any merger or
consolidation with any other Corporation unless as a result of such merger or
consolidation and after giving effect thereto (a) the Corporation shall be the
surviving corporation, (b) the Series A Preferred Stock shall continue to be
outstanding, (c) there shall be no change in the preference, privileges or
other rights and restrictions with respect to the Series A Preferred Stock,
and (4) there shall not be created nor thereafter exist as a result of the
merger or consolidation any new class of stock having preferences over the
Series A Preferred Stock with respect to dividends, distribution of assets, or
rights upon liquidation; and (iii) the Corporation shall not (a) increase the
number of shares of authorized Preferred Stock nor (b) amend, altar, or
repeal any of the provisions of its Certificate of Incorporation in any manner
which materially adversely affects the preferences, privileges, restrictions
or other rights of the Series A Preferred Stock.
3. Subordination. Any payment of any dividends or any redemption hereunder
shall be subordinated to payment in full of all Senior Debt as defined herein.
"Senior Debt" shall mean the principal of and premium, if any, and interest on
all indebtedness of the Corporation to any financial institution, including,
but not limited to, (i) banks whether currently outstanding or hereinafter
created and whether or not such loans are secured or unsecured; (ii) any other
indebtedness, liability, obligation, contingent or otherwise of the
Corporation to guarantee endorsement of the contingent obligation with respect
to any indebtedness, liability, or obligation whether created, assumed, or
occurred by the Corporation and after the date of the creation of the Series A
Preferred Stock, which is, when created, specifically designated by the
Corporation as Senior Debt; and (iii) any refunding, renewals, or extensions
of any indebtedness or similar obligations described as Senior Debt in
subparagraphs (i) and (ii) above.
4. Conversion.
4.01 Conversion Rate.Each share of the Series A Preferred Stock is
convertible into one share of Common Stock of the Corporation at the times, in
the manner, and subject to the conditions provided in this section 5.
4.02 Voluntary Conversion. Each share of the Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time after the
date of issuance of such share, at the office of the Corporation or any
transfer agent for such stock; provided, the holder must convert not less than
100,000 shares of Series A Preferred Stock at the time of each conversion.
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4.03 Mechanics of Conversion. Before any holder of Series A Preferred Stock
shall be entitled to convert the same into shares of Common Stock, he shall
surrender the certificate or certificates therefor, duly endorsed, at the
office of the Corporation or of any transfer agent for the Series A Preferred
Stock, and shall give written notice to the Corporation at its principal
corporate office, of the election to convert the same and shall state therein
the name or names in which the certificate or certificates for shares of
Common Stock are to be issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series A
Preferred Stock, or to the nominee or nominees of such holder, a certificate
or certificates for the number of shares of Common Stock to which such holder
shall be entitled as aforesaid. Such conversion shall be deemed to have been
made immediately prior to the close of business on the date of such surrender
of the shares of Series A Preferred Stock to be converted, and the person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders
of such shares of Common Stock as of such date. If the conversion is in
connection with an underwritten offering of securities registered pursuant to
the Securities Act the conversion may, at the option of any holder tendering
Series A Preferred Stock for conversion, be conditioned upon the closing with
the underwriters of the sale of securities pursuant to such offering, in which
event the person(s) entitled to receive Common Stock upon conversion of Series
A Preferred Stock shall not be deemed to have converted such Preferred Stock
until immediately prior to the closing of such sale of securities.
4.04 Automatic Conversion. Each share of the Series A Preferred Stock shall
be automatically converted to Common Stock (i) on October 17, 2002, upon
notice from the Corporation; (ii) upon the acquisition by the Corporation of a
business or businesses with an aggregate net asset value of not less than
$2,000,000; (iii) upon the Corporation's sale of its Common Stock in an
underwritten public offering with a minimum offering price of $4.00 per share
of Common Stock (appropriately adjusted for any stock split, dividend,
combination or other recapitalization) and minimum gross proceeds of
$5,000,000; or (iv) upon the written consent of the holders of not less than
one-half (1/2) of the then outstanding shares of Series A Preferred Stock.
Notwithstanding the foregoing, the automatic conversion provided for in
subparagraphs (ii) and (iii) above shall not take place unless the daily
trading volume of the Corporation's Common Stock as reported on the OTC
Bulletin Board (or any successor exchange or market on which the Corporation's
Common Stock is traded) shall have been a minimum of 10,000 shares on at least
fifteen of the thirty days prior to the date of such automatic conversion and
the average Closing Price (as defined below) of the Corporation's Common Stock
during the thirty trading days prior to the date of automatic conversion
shall be not less than $3.00 per share, in each case adjusted to give effect
to stock splits, reorganizations, reclassifications, consolidations, mergers
and similar events. The "Closing Price" shall mean the average of the inside
bid and asked prices for the Corporation's Common Stock on the date in
question.
4.05 Anti-Dilution. In order to prevent dilution of the rights granted
hereunder, the conversion and liquidated voting rights shall be subject to
adjustment from time to time in accordance with this section
(a) In the event the Corporation shall declare a dividend or make any
other distribution on any capital stock of the Corporation payable in Common
Stock, options to purchase Common Stock, or securities convertible into Common
Stock of the Corporation, shall at any time subdivide (other than by means of
a dividend payable in Common Stock) its outstanding shares of Common Stock
into a greater number of shares or combine such outstanding stock into a
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smaller number of shares, and if there is not a corresponding dividend or
distribution on or to, or split or subdivision of, the Series A Preferred
Stock, then in each such event, the conversion rate shall be adjusted so that
the holders of the Series A Preferred Stock shall be entitled to receive the
kind and number of shares of Common Stock or other securities of the
Corporation which they would have owned or have been entitled to receive after
the happening of any of the events described above, had such shares of the
Series A Preferred Stock been converted immediately prior to the happening of
such event or any record date with respect thereto; an adjustment made
pursuant to this paragraph (a) shall become effective immediately after the
effective date of such event retroactive to the record date for such event.
(b) If any capital reorganization or reclassification of the capital
stock of the Corporation, consolidation or merger of the Corporation with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holder of Common
Stock shall be entitled to receive stock, securities, or assets with respect
to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful
adequate provisions shall be made whereby the holders of the Series A
Preferred Stock shall thereafter, have the right to acquire and receive on
conversion of the Series A Preferred Stock such shares of stock, securities,
or assets as would have been issuable or payable (as part of the
reorganization, reclassification, consolidation, merger, or sale) with respect
to or in exchange for such number of outstanding shares of the Corporation's
Common Stock as would have been received on conversion of the Series A
Preferred Stock immediately before such reorganization, reclassification,
consolidation, merger, or sale. In any such case, appropriate provisions
shall be made with respect to the rights and interests of the holders of the
Series A Preferred Stock to the end that the provisions hereof (including
without limitations provisions for adjustments of the Conversion rate and for
the number of shares issuable on conversion of the Series A Preferred Stock)
shall thereafter be applicable in relation to any shares of stock, securities,
or assets thereafter deliverable on the conversion of the Series A Preferred
Stock. In the event of a merger or consolidation of the Corporation with or
into another corporation or the sale of all or substantially all of its assets
as a result of which a number of shares of Common Stock of the surviving or
purchasing corporation greater or lesser than the number of shares of Common
Stock of the Corporation outstanding immediately prior to such merger,
consolidation, or purchase are issuable to holders of Common Stock of the
Corporation, then the conversion rate shall be adjusted in the same manner as
though there was a subdivision or combination of the outstanding shares of
Common Stock of the Corporation.
(c) No adjustment shall be made in the conversion rate of the number
of shares of Common Stock issuable on conversion of Series A Preferred Stock
(i) in connection with the issuance of any shares of Common Stock, securities,
or assets on account of the anti-dilution provisions set forth in this section
4.05; (ii) in connection with the purchase or other acquisition by the
Corporation of any capital stock, evidence of its indebtedness, or other
securities of the Corporation; or (iii) in connection with the sale or
exchange by the Corporation of any Common Stock, evidence of its indebtedness,
or other securities of the Corporation, including securities containing the
right to subscribe for or purchase Common Stock or Series A Preferred Stock of
the Corporation.
4.06 The Corporation covenants and agrees that:
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(a) The shares of Common Stock, securities, or assets issuable on any
conversion of any shares of Series A Preferred Stock shall have been deemed to
have been issued to the person on the date such shares are surrendered to the
Corporation for conversion as provided in Section 4.02 or the date such shares
are automatically converted as provided in Section 4.04, and on such date such
person shall be deemed for all purposes to have become the record holder of
such Common Stock, securities, or assets.
(b) All shares of Common Stock or other securities which may be issued
on any conversion of the Series A Preferred Stock will, on issuance, be fully
paid and nonassessable and free from all taxes, liens, and charges with
respect to the issue thereof.
(c) The issuance of certificates for Common Stock or other securities
on conversion of the Series A Preferred Stock shall be made without charge to
the registered holder thereof for any issuance tax in respect thereof or other
costs incurred by the Corporation in connection with the conversion of the
Series A Preferred Stock and the related issuance of Common Stock or other
securities.
5. Additional Provisions
5.01 No change in the provisions of the Series A Preferred Stock set forth in
this Designation affecting any interests of the holders of any shares of
Series A Preferred Stock shall be binding or effective unless such change
shall have been approved by the holders of two-thirds of the outstanding
Series A Preferred Stock in the manner provided in the corporation laws of the
state of Nevada, as the same may be amended from time to time.
5.02 The shares of Series A Preferred Stock shall be transferable only on the
books of the Corporation maintained at its principal office, on delivery
thereof duly endorsed by the holder or by his duly authorized attorney or
representative or accompanied by proper evidence of succession, assignment, or
authority to transfer. In all cases of transfer by an attorney, the original
letter of attorney, duly approved, or an official copy thereof, duly
certified, shall be deposited and remain with the Corporation. In case of
transfer by executors, administrators, guardians, or other legal
representatives, duly authenticated evidence of their authority shall be
produced and may be required to be deposited and remain with the new
certificate representing the share of Series A Preferred Stock so transferred
to the person entitled thereto.
5.03 The Corporation shall not be required to issue any fractional shares of
Common Stock on the conversion or redemption of any share of Series A
Preferred Stock.
5.04 Any notice required or permitted to be given to the holders of the
Series A Preferred Stock under this Designation shall be deemed to have been
duly given if mailed by first class mail, postage prepaid to such holders at
their respective addresses appearing on the stock records maintained by or for
the Corporation and shall be deemed to have been given as of the date
deposited in the United States mail.
IN WITNESS WHEREOF, the foregoing Designation of Rights, Privileges, and
Preferences of Series A Preferred Stock of the Corporation has been executed
this 17th day of October, 2000
ATTEST: EZCONNECT, INC.
/S/ Elliott N. Taylor, Secretary /S/Philip R. Lacerte, President
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State of Utah)
County of Salt Lake)
On this 17th day of October, 2000, personally appeared before me, the
undersigned a notary public, Elliott N. Taylor, Secretary and Philip R.
Lacerte , President, who being by me first duly sworn, declared that they are
the president and secretary, respectively, of EZCONNECT, INC, that they signed
the foregoing Designation of Rights, Preferences, and Privileges for the
Series A Preferred Stock and that the statements contained therein are true.
WITNESS MY HAND AND OFFICIAL SEAL.
/S/Notary Public
