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EXHIBIT 3.1B
CERTIFICATE OF AMENDMENT TO THE CERTIFICATE
OF INCORPORATION
OF
SERANOVA, INC.
To: The Department of the Treasury
State of New Jersey
Pursuant to the provisions of Section 14A:7-2(2) of the New Jersey
Business Corporation Act, the undersigned corporation executes the following
Certificate of Amendment to its Certificate of Incorporation:
1. The name of the corporation is SeraNova, Inc.
2. The following is a copy of a resolution duly adopted by the Board of
Directors of the corporation on September 15, 2000, pursuant to authority
conferred upon the said Board of Directors by the Certificate of Incorporation:
RESOLVED, that the Board of Directors of the Corporation, pursuant to the
authority expressly vested in it by the Certificate of Incorporation of the
Corporation, does hereby provide for and authorize the issuance of a series of
Preferred Stock of the Corporation, par value $ 0.01 per share, of the
Corporation, to be designated the "6% Series A Convertible Preferred Stock" and
does hereby fix and herein state the designations, preferences and relative,
participating, optional and other special rights, and the qualifications,
limitations and restrictions thereof, as follows:
Section a. Designation, Amount and Par Value. The series of
preferred stock shall be designated as its 6% Series A Convertible Preferred
Stock (the "Preferred Stock") and the number of shares so designated shall be
800 (which shall not be subject to increase without the consent of the holders
of the Preferred Stock (each, a "Holder" and collectively, the "Holders")). Each
share of Preferred Stock shall have a par value of $.01 per share and a stated
value equal to the sum of $10,000 plus all accrued and unpaid dividends to the
date of determination to the extent not previously paid in cash in accordance
with the terms hereof (the "Stated Value").
Section b. Dividends.
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(i) Holders shall be entitled to receive, out of funds legally
available therefor, and the Company shall pay, cumulative dividends at the rate
per share (as a percentage of the Stated Value per share) of 6% per annum,
payable on each Conversion Date (as defined herein) for such share, in cash or
by accretion of the Stated Value. Subject to the terms and conditions herein,
the decision whether to accrete dividends hereunder to the Stated Value or to
pay for dividends in cash shall be at the discretion of the Company. The Company
shall provide the Holders written notice of its intention to accrete dividends
hereunder to the Stated Value or pay dividends in cash not less than ten days
prior to each Conversion Date for so long as shares of Preferred Stock are
outstanding (the Company may indicate in such notice that the election contained
in such notice shall continue for later periods until revised). Failure to
timely provide such written notice shall be deemed (if permitted hereunder) an
election by the Company to accrete dividends hereunder to the Stated Value.
Dividends on the Preferred Stock shall be calculated on the basis of a 360-day
year, shall accrue daily commencing on the Original Issue Date (as defined in
Section 8), and shall be deemed to accrue from such date whether or not earned
or declared and whether or not there are profits, surplus or other funds of the
Company legally available for the payment of dividends. Except as otherwise
provided herein, if at any time the Company pays less than the total amount of
dividends then accrued on account of the Preferred Stock, such payment shall be
distributed ratably among the Holders based upon the number of shares of
Preferred Stock held by each Holder. Any dividends to be paid in cash hereunder
that are not paid within three Trading Days (as defined in Section 8) following
a Conversion Date shall continue to accrue and shall entail a late fee, which
must be paid in cash, at the rate of 18% per annum or the lesser rate permitted
by applicable law (such fees to accrue daily, from the date such dividend is due
hereunder through and including the date of payment).
(ii) Notwithstanding anything to the contrary contained herein and
subject to applicable legal requirements, the Company must pay dividends in cash
if:
(1) the number of shares of Common Stock (as defined in
Section 8) at the time authorized, unissued and unreserved for all purposes is
insufficient to accrete such dividends to the Stated Value to permit conversion
in full of all outstanding Stated Value;
(2) after the Dividend Effectiveness Date (as defined in
Section 8), Underlying Shares (as defined in Section 8) (x) are not registered
for resale pursuant to an effective Underlying Shares Registration Statement (as
defined in Section 8) and (y) may not be sold without volume restrictions
pursuant to Rule 144(k) promulgated under the Securities Act (as defined in
Section 8), (if the Company is permitted and elects to pay dividends in shares
of Common Stock under this clause (ii) prior to the Dividend Effectiveness Date
and thereafter an Underlying Shares Registration Statement shall be declared
effective by the Commission (as defined in Section 8), the Company shall, within
three Trading Days after the date of such declaration of effectiveness, exchange
such Underlying Shares for shares of Common Stock that are free of restrictive
legends of any kind);
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(3) the Common Stock is not then listed or quoted on the
Nasdaq National Market (the "Nasdaq"), or on the New York Stock Exchange,
American Stock Exchange or Nasdaq SmallCap Market (each, a "Subsequent Market");
or
(4) the accretion of such dividends to the Stated Value and
subsequent conversions of all then outstanding Stated Value would result in a
violation of Section 5(a)(iii) or the rules of the Nasdaq or any other rules and
regulations governing any Subsequent Market on which the Common Stock is then
listed or quoted for trading.
(iii) So long as any Preferred Stock shall remain outstanding,
neither the Company nor any subsidiary thereof shall redeem, purchase or
otherwise acquire directly or indirectly any Junior Securities (as defined in
Section 8), nor shall the Company directly or indirectly pay or declare any
dividend or make any distribution (other than a dividend or distribution
described in Section 5 or dividends due and paid in the ordinary course on
preferred stock of the Company at such times when the Company is in compliance
with its payment and other obligations hereunder) upon, nor shall any
distribution be made in respect of, any Junior Securities, nor shall any monies
be set aside for or applied to the purchase or redemption (through a sinking
fund or otherwise) of any Junior Securities or shares pari passu with the
Preferred Stock.
Section c. Voting Rights. Except as otherwise provided herein and as
otherwise required by law, the Preferred Stock shall have no voting rights.
However, so long as any shares of Preferred Stock are outstanding, the Company
shall not, without the affirmative vote of the Holders of a majority of the
shares of the Preferred Stock then outstanding, i. alter or change adversely the
powers, preferences or rights given to the Preferred Stock or alter or amend
this Certificate of Designation, ii. authorize or create any class of stock
ranking as to dividends or distribution of assets upon a Liquidation (as defined
in Section 4) senior to or otherwise pari passu with the Preferred Stock, iii.
amend its certificate or articles of incorporation or other charter documents so
as to affect adversely any rights of the Holders, iv. increase the authorized
number of shares of Preferred Stock, or (e) enter into any agreement with
respect to the foregoing.
Section d. Liquidation. Upon any liquidation, dissolution or
winding-up of the Company, whether voluntary or involuntary (a "Liquidation"),
the Holders shall be entitled to receive out of the assets of the Company,
whether such assets are capital or surplus, for each share of Preferred Stock an
amount equal to the Stated Value per share before any distribution or payment
shall be made to the holders of any Junior Securities, and if the assets of the
Company shall be insufficient to pay in full such amounts, then the entire
assets to be distributed to the Holders shall be distributed among the Holders
ratably in accordance with the respective amounts that would be payable on such
shares if all amounts payable thereon were paid in full. A sale, conveyance or
disposition of 50% or more of the assets of the Company or the effectuation by
the Company of a transaction or series of related transactions in which more
than 33% of the voting power of the Company is disposed of, or a consolidation
or merger of the Company with or into any other company or companies into one or
more companies not wholly-owned by the Company shall not be treated as a
Liquidation, but instead shall be subject to the provisions of Section 5. The
Company
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shall mail written notice of any such Liquidation, not less than 45 days
prior to the payment date stated therein, to each record Holder.
Section e. Conversion.
i.(i) Conversions at Option of Holder. Each share of Preferred Stock
shall be convertible into shares of Common Stock (subject to the limitations set
forth in Section (a)(iii)) at the Conversion Ratio (as defined in Section 8), at
the option of the Holder, at any time and from time to time from and after the
Original Issue Date. Holders shall effect conversions by providing the Company
with the form of conversion notice attached hereto as Exhibit A (a "Holder
Conversion Notice"). Each Holder Conversion Notice shall specify the number of
shares of Preferred Stock to be converted, the number of shares of Preferred
Stock owned prior to the conversion at issue, number of shares of Preferred
Stock owned subsequent to the conversion at issue and the date on which such
conversion is to be effected, which date may not be prior to the date the Holder
delivers such Conversion Notice by facsimile (the "Holder Conversion Date"). The
number of shares of Preferred Stock shown as owned by the Holder prior to and
giving effect to a conversion shall control absent manifest or mathematical
error. If no Holder Conversion Date is specified in a Holder Conversion Notice,
the Holder Conversion Date shall be the date that such Holder Conversion Notice
is deemed delivered hereunder. To effect conversions of Preferred Stock, a
Holder shall not be required to surrender the certificate(s) representing such
shares of Preferred Stock to the Company unless all of the shares of Preferred
Stock represented thereby are so converted.
(ii) Conversion At Option of the Company. If at any time after
the Effective Date, the Closing Price for 20 consecutive Trading Days exceeds
130% of Conversion Price on the Original Issue Date (subject to equitable
adjustment for stock splits, recombinations and similar events pursuant to
Section 4(c)(ii)), the Company may require the Holder to convert all or any
portion of the Preferred Stock (subject to the limitations set forth in Section
5(a)(iii)) at the Conversion Ratio. provided, that the Company shall not be
permitted to deliver a Company Conversion Notice (as defined below) at any time
when the Underlying Securities Registration Statement is not then effective or
shares of Common Stock are not actively traded on the Nasdaq National Market
("NASDAQ") or listed or quoted for trading on the New York Stock Exchange,
American Stock Exchange or Nasdaq SmallCap Market (each, a "Subsequent Market")
and provided further that the Closing Price must equal or exceed the price
required pursuant to this sentence on the Company Conversion Date. The Company
shall effect such conversion by delivering to the Holder a written notice in the
form attached hereto as Exhibit B (the "Company Conversion Notice"), which
Company Conversion Notice, once given, shall be irrevocable. Each Company
Conversion Notice shall specify the number of shares of Preferred Stock to be
converted. The date of delivery of the Company Conversion Notice is referred to
herein as the "Company Conversion Date". A Holder Conversion Notice and a
Company Conversion Notice may sometimes be referred to as a "Conversion Notice".
A Holder Conversion Date and a Company Conversion Date may sometimes be referred
to as a "Conversion Date".
(iii) Certain Conversion Restrictions.
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(A) A Holder may not convert or be required to convert shares
of Preferred Stock or receive shares of Common Stock as payment of dividends
hereunder to the extent such conversion or receipt of such dividend payment
would result in the Holder, together with any affiliate thereof, beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act (as
defined in Section 8) and the rules promulgated thereunder) in excess of 4.999%
of the then issued and outstanding shares of Common Stock, including shares
issuable upon conversion of, and payment of dividends on, the shares of
Preferred Stock held by such Holder after application of this Section. Since the
Holder will not be obligated to report to the Company the number of shares of
Common Stock it may hold at the time of a conversion hereunder, unless the
conversion at issue would result in the issuance of shares of Common Stock in
excess of 4.999% of the then outstanding shares of Common Stock without regard
to any other shares which may be beneficially owned by the Holder or an
affiliate thereof, the Holder shall have the authority and obligation to
determine whether the restriction contained in this Section will limit any
particular conversion hereunder and to the extent that the Holder determines
that the limitation contained in this Section applies, the determination of
which portion of the shares of Preferred Stock are convertible shall be the
responsibility and obligation of the Holder. If the Holder has delivered a
Conversion Notice for shares of Preferred Stock that, without regard to any
other shares that the Holder or its affiliates may beneficially own, would
result in the issuance in excess of the permitted amount hereunder, the Company
shall notify the Holder of this fact and shall honor the conversion for the
maximum number of shares of Preferred Stock permitted to be converted on such
Conversion Date in accordance with the periods described in Section 5(b) and, at
the option of the Holder, either retain shares of Preferred Stock tendered for
conversion in excess of the permitted amount hereunder for future conversions or
return such excess shares of Preferred Stock permitted to the Holder. The
provisions of this Section may be waived by a Holder (but only as to itself and
not to any other Holder) upon not less than 61 days prior notice to the Company.
Other Holders shall be unaffected by any such waiver.
(B) A Holder may not convert or be required to convert shares
of Preferred Stock or receive shares of Common Stock as payment of dividends
hereunder to the extent such conversion or receipt of such dividend payment
would result in the Holder, together with any affiliate thereof, beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules promulgated thereunder) in excess of 9.999% of the then issued and
outstanding shares of Common Stock, including shares issuable upon conversion
of, and payment of dividends on, the shares of Preferred Stock held by such
Holder after application of this Section. Since the Holder will not be obligated
to report to the Company the number of shares of Common Stock it may hold at the
time of a conversion hereunder, unless the conversion at issue would result in
the issuance of shares of Common Stock in excess of 9.999% of the then
outstanding shares of Common Stock without regard to any other shares which may
be beneficially owned by the Holder or an affiliate thereof, the Holder shall
have the authority and obligation to determine whether the restriction contained
in this Section will limit any particular conversion hereunder and to the extent
that the Holder determines that the limitation contained in this Section
applies, the determination of which portion of the shares of Preferred Stock are
convertible shall be the responsibility and obligation of the Holder. If the
Holder has delivered a Conversion Notice for shares of Preferred Stock that,
without regard to any other shares that the Holder or its affiliates may
beneficially own,
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would result in the issuance in excess of the permitted amount hereunder, the
Company shall notify the Holder of this fact and shall honor the conversion for
the maximum number of shares of Preferred Stock permitted to be converted on
such Conversion Date in accordance with the periods described in Section 5(b)
and, at the option of the Holder, either retain shares of Preferred Stock
tendered for conversion in excess of the permitted amount hereunder for future
conversions or return such excess shares of Preferred Stock permitted to the
Holder. The provisions of this Section may be waived by a Holder (but only as to
itself and not to any other Holder) upon not less than 61 days prior notice to
the Company. Other Holders shall be unaffected by any such waiver.
(C) If the Common Stock is then listed for trading on the
Nasdaq or the Nasdaq SmallCap Market and the Company has not obtained the
Shareholder Approval (as defined below), then the Company may not issue in
excess of 3,492,001.9 shares of Common Stock (which equals 19.999% of the number
of shares of Common Stock outstanding on the Trading Day immediately preceding
the Original Closing Date) upon conversions of Preferred Stock and exercise of
Redemption Warrants and Closing Warrants (each as defined in the Purchase
Agreement), in either case, at a price per share that is less than the Per Share
Market Value on the Trading Day immediately preceding the Original Issue Date
(such number of shares, the "Issuable Maximum"). Each Holder shall be entitled
to a portion of the Issuable Maximum equal to the quotient obtained by dividing
(x) the number of shares of Preferred Stock issued and sold to such Holder on
the Original Issue Date by (y) the number of shares of Preferred Stock issued
and sold by the Company on the Original Issue Date. If any Holder shall no
longer hold shares of Preferred Stock, then such Holder's remaining portion of
the Issuable Maximum shall be allocated pro-rata among the remaining Holders. If
on any Conversion Date (A) the shares of Common Stock are listed for trading on
the Nasdaq or Nasdaq SmallCap Market, (B) the Conversion Price then in effect is
such that the aggregate number of shares of Common Stock that would then be
issuable upon conversion in full of all then outstanding shares of Preferred
Stock and exercise in full of the Redemption Warrants and Closing Warrants,
together with any shares of Common Stock previously issued upon conversion of
shares of Preferred Stock and exercise in full of the Redemption Warrants and
Closing Warrants would exceed the Issuable Maximum, and (C) the Company shall
not have previously obtained the vote of shareholders (the "Shareholder
Approval"), if any, as may be required by the applicable rules and regulations
of the Nasdaq (or any successor entity) applicable to approve the issuance of
shares of Common Stock in excess of the Issuable Maximum pursuant to the terms
hereof, then the Company shall issue to the Holder requesting a conversion a
number of shares of Common Stock equal to such Holder's pro-rata portion (which
shall be calculated pursuant to the terms hereof) of the Issuable Maximum and,
with respect to the remainder of the aggregate Stated Value of the shares of
Preferred Stock then held by such Holder for which a conversion in accordance
with the Conversion Price would result in an issuance of shares of Common Stock
in excess of such Holder's pro-rata portion (which shall be calculated pursuant
to the terms hereof) of the Issuable Maximum (the "Excess Stated Value"), the
converting Holder shall have the option to require the Company to either: (1)
use its best efforts to obtain the Shareholder Approval applicable to such
issuance as soon as is possible, but in any event not later than the 60th day
after such request, or (2) pay cash to the converting Holder in an amount equal
to the Mandatory Redemption Amount (as defined in Section 8) for the Excess
Stated Value. If the converting Holder shall have elected the first option
pursuant to the immediately preceding sentence and the Company shall have failed
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to obtain the Shareholder Approval on or prior to the 60th day after such
request, then within three (3) days of such 60th day, the Company shall pay cash
to the converting Holder an amount equal to the Mandatory Redemption Amount for
the Excess Stated Value. If the Company fails to pay the Mandatory Redemption
Amount in full pursuant to this Section within seven days after the date
payable, the Company will pay interest thereon at a rate of 18% per annum or
such lesser maximum amount that is permitted to be paid by applicable law, to
the converting Holder, accruing daily from the Conversion Date until such
amount, plus all such interest thereon, is paid in full. The Company and the
Holder understand and agree that shares of Common Stock issued to and then held
by the Holder as a result of conversions of Preferred Stock shall not be
entitled to cast votes on any resolution to obtain Shareholder Approval pursuant
hereto.
ii.(i) Not later than five Trading Days after each Conversion Date,
the Company will deliver to the Holder (A) a certificate or certificates which
shall be free of restrictive legends and trading restrictions (other than those
required by Section 3.1(b) of the Purchase Agreement) representing the number of
shares of Common Stock being acquired upon the conversion of shares of Preferred
Stock, and (B) a bank check in the amount of accrued and unpaid dividends (if
the Company has elected or is required to pay accrued dividends in cash). The
Company shall, upon request of the Holder, if available, use its best efforts to
deliver any certificate or certificates required to be delivered by the Company
under this Section electronically through the Depository Trust Corporation or
another established clearing corporation performing similar functions. If in the
case of any Conversion Notice such certificate or certificates are not delivered
to or as directed by the applicable Holder by the fifth Trading Day after the
Conversion Date, the Holder shall be entitled to elect by written notice to the
Company at any time on or before its receipt of such certificate or certificates
thereafter, to rescind such conversion, in which event the Company shall
immediately return the certificates representing the shares of Preferred Stock
tendered for conversion.
(ii) If the Company fails to deliver to the Holder such
certificate or certificates pursuant to Section 5(b)(i), by the fifth Trading
Day after the Conversion Date, the Company shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, $5,000 for each Trading Day after such
fifth Trading Day until such certificates are delivered. Nothing herein shall
limit a Holder's right to pursue actual damages for the Company's failure to
deliver certificates representing shares of Common Stock upon conversion within
the period specified herein and such Holder shall have the right to pursue all
remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief.
(iii) In addition to any other rights available to the Holder,
if the Company fails to deliver to the Holder such certificate or certificates
pursuant to Section 5(b)(i), by the fifth Trading Day after the Conversion Date,
and if after such fifth Trading Day the Holder purchases (in an open market
transaction or otherwise) Common Stock to deliver in satisfaction of a sale by
such Holder of the Underlying Shares (with respect to which the Holder was
unable to utilize borrowed shares for such purpose due to the inability or
unwillingness of the broker of such Holder to loan such shares to such Holder)
which the Holder was entitled to receive upon such conversion (a "Buy-In"), then
the Company shall (A) pay in cash to the Holder the amount by which (x) the
Holder's total purchase price (including brokerage commissions, if any) for the
Common Stock so purchased
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exceeds (y) the product of (1) the aggregate number of shares of Common Stock
that such Holder was entitled to receive from the conversion at issue multiplied
by (2) the market price of the Common Stock at the time of the sale giving rise
to such purchase obligation and (B) at the option of the Holder, either return
the shares of Preferred Stock for which such conversion was not honored or
deliver to such Holder the number of shares of Common Stock that would have been
issued had the Company timely complied with its conversion and delivery
obligations under Section 5(b)(i). For example, if the Holder purchases Common
Stock having a total purchase price of $11,000 to cover a Buy-In with respect to
an attempted conversion of shares of Preferred Stock with respect to which the
market price of the Underlying Shares on the date of conversion totaled $10,000,
under clause (A) of the immediately preceding sentence the Company shall be
required to pay the Holder $1,000. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the Buy-In.
Nothing herein shall limit a Holder's right to pursue any other remedies
available to it hereunder, at law or in equity including, without limitation, a
decree of specific performance and/or injunctive relief with respect to the
Company's failure to timely deliver certificates representing shares of Common
Stock upon conversion of the shares of Preferred Stock as required pursuant to
the terms hereof.
iii.(1) The conversion price for each share of Preferred Stock in
effect on any Conversion Date shall be $7.00 (the "Conversion Price").
(2) If the Company, at any time while any shares of Preferred
Stock are outstanding, shall (a) pay a stock dividend or otherwise make a
distribution or distributions on shares of its Junior Securities or pari passu
securities payable in shares of Common Stock, (b) subdivide outstanding shares
of Common Stock into a larger number of shares, (c) combine (including by way of
reverse stock split) outstanding shares of Common Stock into a smaller number of
shares, or (d) issue by reclassification and exchange of the Common Stock any
shares of capital stock of the Company, then the Conversion Price shall be
multiplied by a fraction of which the numerator shall be the number of shares of
Common Stock (excluding treasury shares, if any) outstanding before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding after such event. Any adjustment made pursuant to this Section
5(c)(ii) shall become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.
(3) If the Company, at any time while any shares of Preferred
Stock are outstanding, shall issue rights, warrants or options to all holders of
Common Stock (and not to Holders) entitling them to subscribe for or purchase
shares of Common Stock at a price per share less than the Per Share Market Value
at the record date mentioned below, then the Conversion Price shall be
multiplied by a fraction, the numerator of which shall be the number of shares
of Common Stock outstanding immediately prior to the issuance of such rights,
warrants or options, plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares so offered would purchase
at such Per Share Market Value, and the denominator of which shall be the sum of
the number of shares of Common Stock outstanding immediately prior to such
issuance plus the number of shares of Common Stock offered for subscription or
purchase. Such adjustment shall be made whenever such rights or warrants are
issued, and shall become effective immediately
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after the record date for the determination of stockholders entitled to receive
such rights or warrants. However, upon the expiration of any right, warrant or
option to purchase shares of Common Stock the issuance of which resulted in an
adjustment in the Conversion Price pursuant to this Section 5(c)(iii), if any
such right, warrant or option shall expire and shall not have been exercised,
the Conversion Price shall immediately upon such expiration shall be recomputed
and effective immediately upon such expiration shall be increased to the price
which it would have been (but reflecting any other adjustments in the Conversion
Price made pursuant to the provisions of this Section 5 upon the issuance of
other rights or warrants) had the adjustment of the Conversion Price made upon
the issuance of such rights, warrants, or options been made on the basis of
offering for subscription or purchase only that number of shares of Common Stock
actually purchased upon the exercise of such rights, warrants or options
actually exercised.
(4) If the Company or any subsidiary thereof, as applicable
with respect to Common Stock Equivalents (as defined below), at any time while
any shares of Preferred Stock are outstanding, shall issue shares of Common
Stock or rights, warrants (including the issuance of shares of Common Stock upon
exercise of warrants issued to the Purchasers under the Purchase Agreement),
options or other securities or debt that is convertible into or exchangeable for
shares of Common Stock ("Common Stock Equivalents") entitling any Person to
acquire shares of Common Stock, at a price per share less than the Conversion
Price (if the holder of the Common Stock or Common Stock Equivalent so issued
shall at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights issued in connection with such issuance, be
entitled to receive shares of Common Stock at a price less than the Conversion
Price, such issuance shall be deemed to have occurred for less than the
Conversion Price), then, at the option of the Holder, the Conversion Price shall
be replaced with the conversion, exchange or purchase price for such Common
Stock or Common Stock Equivalents (including any reset provisions thereof) for
all subsequent conversions of Preferred Stock or such conversions as shall be
indicated by the Holder on its Conversion Notice. Such adjustment shall be made
whenever such Common Stock or Common Stock Equivalents are issued. The Company
shall notify the Holder in writing, no later than the Trading Day following the
issuance of any Common Stock or Common Stock Equivalent subject to this section,
of the issuance of such Common Stock or Common Stock Equivalent (or of such
agent pursuant to which such Common Stock or Common Stock Equivalent may be
issued, indicating therein the applicable issuance price, or of applicable reset
price, exchange price, exercise price, conversion price and other pricing terms.
Notwithstanding to the contrary anything herein, this Section shall not apply
to: (i) issuance of options and warrants to employees, officers and directors of
the Company, and the issuance of Common Stock upon exercise of such options and
warrants granted under any stock option agreements and stock option plans
heretofore issued or adopted by the Company and any stock option plan
hereinafter duly adopted by the Company, (ii) issuance of Common Stock or Common
Stock Equivalents as part payment of the purchase price in (A) the acquisition
of assets or a business by the Company or (B) in connection with the acquisition
of goods or a license by the Company and (iii) as royalty payments in connection
with or under a firm underwritten primary offering of the Company's stock in
which the full purchase price is paid upon the first closing thereof (which
shall not include equity lines of credit or any similar financing structure).
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(5) If the Company, at any time while shares of Preferred
Stock are outstanding, shall distribute to all holders of Common Stock (and not
to Holders) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security (excluding those referred to in Sections
5(c)(ii)-(iv) above), then in each such case the Conversion Price at which each
share of Preferred Stock shall thereafter be convertible shall be determined by
multiplying the Conversion Price in effect immediately prior to the record date
fixed for determination of stockholders entitled to receive such distribution by
a fraction of which the denominator shall be the Per Share Market Value
determined as of the record date mentioned above, and of which the numerator
shall be such Per Share Market Value on such record date less the then fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common Stock
as determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the Holders of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock. Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.
(6) All calculations under this Section 5 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. The number
of shares of Common Stock outstanding at any given time shall not include shares
owned or held by or for the account of the Company, and the disposition of any
such shares shall be considered an issue or sale of Common Stock.
(7) Whenever the Conversion Price is adjusted pursuant to
Section 5(c)(ii),(iii), (iv) or (v) the Company shall promptly mail to each
Holder, a notice setting forth the Fixed Conversion Price or the Conversion
Price (as applicable) after such adjustment and setting forth a brief statement
of the facts requiring such adjustment.
(8) In case of any reclassification of the Common Stock, or
any compulsory share exchange pursuant to which the Common Stock is converted
into other securities, cash or property (other than compulsory share exchanges
which constitute Change of Control Transactions), the Holders of the Preferred
Stock then outstanding shall have the right thereafter to convert such shares
only into the shares of stock and other securities, cash and property receivable
upon or deemed to be held by holders of Common Stock following such
reclassification or share exchange, and the Holders of the Preferred Stock shall
be entitled upon such event to receive such amount of securities, cash or
property as a holder of the number of shares of Common Stock of the Company into
which such shares of Preferred Stock could have been converted immediately prior
to such reclassification or share exchange would have been entitled. This
provision shall similarly apply to successive reclassifications or share
exchanges.
(9) In case of any merger or consolidation of the Company with
or into another Person, or sale by the Company of more than one-half of the
assets of the Company (on an as valued basis) in one or a series of related
transactions, a Holder shall have the right thereafter to: (A) convert its
shares of Preferred Stock into the shares of stock and other securities, cash
and property receivable upon or deemed to be held by holders of Common Stock
following such merger, consolidation or sale, and such Holder shall be entitled
upon such event or series of related events to receive such amount of
securities, cash and
<PAGE> 11
property as the shares of Common Stock into which such shares of Preferred Stock
could have been converted immediately prior to such merger, consolidation or
sales would have been entitled or (B) in the case of a merger or consolidation,
require the Company to pay to the Holder, in cash,120% of the Stated Value of
the shares of Preferred Stock then held by such Holder. The terms of any such
merger, sale or consolidation shall include such terms so as continue to give
the Holders the right to receive the securities, cash and property set forth in
this Section upon any conversion or redemption following such event. This
provision shall similarly apply to successive such events. The rights set forth
in this Section 5(c)(ix) shall not alter the rights of a Holder set forth in
Section 7, provided, that, a Holder may only exercise the rights set forth in
this Section 5(c)(ix) or the rights set forth in Section 7 with respect to a
single event giving rise to such rights.
(10) If (a) the Company shall declare a dividend (or any other
distribution) on the Common Stock, (b) the Company shall declare a special
nonrecurring cash dividend on or a redemption of the Common Stock, (c) the
Company shall authorize the granting to all holders of Common Stock rights or
warrants to subscribe for or purchase any shares of capital stock of any class
or of any rights, (d) the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common Stock, any
consolidation or merger to which the Company is a party, any sale or transfer of
all or substantially all of the assets of the Company, or any compulsory share
of exchange whereby the Common Stock is converted into other securities, cash or
property, or (e) the Company shall authorize the voluntary or involuntary
dissolution, liquidation or winding up of the affairs of the Company; then the
Company shall notify the Holders at their last addresses as they shall appear
upon the stock books of the Company, at least 20 calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, 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, distributions, redemption, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer or share exchange is expected to become effective or
close, and the date as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange. Holders are entitled to convert shares of
Preferred Stock during the 20-day period commencing the date of such notice to
the effective date of the event triggering such notice.
iv. The Company covenants that it will at all times reserve and keep
available out of its authorized and unissued shares of Common Stock solely for
the purpose of issuance upon conversion of Preferred Stock, each as herein
provided, free from preemptive rights or any other actual contingent purchase
rights of persons other than the Holders, not less than such number of shares of
Common Stock as shall be issuable (taking into account the provisions of Section
5(a) and Section 5(c)) upon the conversion of all outstanding shares of
Preferred Stock. The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly and validly authorized, issued
and fully paid and nonassessable.
<PAGE> 12
v. Upon a conversion hereunder the Company shall not be required to
issue stock certificates representing fractions of shares of Common Stock, but
may if otherwise permitted, make a cash payment in respect of any final fraction
of a share based on the Per Share Market Value at such time. If any fraction of
an Underlying Share would, except for the provisions of this Section, be
issuable upon a conversion hereunder, the Company shall pay an amount in cash
equal to the Conversion Ratio multiplied by such fraction.
vi. The issuance of certificates for Common Stock on conversion of
Preferred Stock shall be made without charge to the Holders thereof for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate upon conversion in a name other
than that of the Holder of such shares of Preferred Stock so converted.
vii. Shares of Preferred Stock converted into Common Stock or
redeemed in accordance with the terms hereof shall be canceled and may not be
reissued.
viii. Any and all notices or other communications or deliveries to
be provided by the Holders of the Preferred Stock hereunder, including, without
limitation, any Conversion Notice, shall be in writing and delivered personally,
by facsimile or sent by a nationally recognized overnight courier service,
addressed to the attention of the Chief Financial Officer of the Company
addressed to 499 Thornall Street, Edison, New Jersey 08837 Facsimile No.:
732-362-2123, attention Chief Financial Officer, or to such other address or
facsimile number as shall be specified in writing by the Company for such
purpose. Any and all notices or other communications or deliveries to be
provided by the Company hereunder shall be in writing and delivered personally,
by facsimile or sent by a nationally recognized overnight courier service,
addressed to each Holder at the facsimile telephone number or address of such
Holder appearing on the books of the Company, or if no such facsimile telephone
number or address appears, at the principal place of business of the Holder. Any
notice or other communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 6:30 p.m. (New York City time) (with
confirmation of transmission), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 6:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date
(with confirmation of transmission), (iii) upon receipt, if sent by a nationally
recognized overnight courier service, or (iv) upon actual receipt by the party
to whom such notice is required to be given.
Section f. Optional Redemption.
i. The Company shall have the right, subject to the provisions of
this Section 6, upon a 30 Trading Day prior written notice (an "Optional
Redemption Notice" and the date such Optional Redemption Notice is received by a
Holder, an "Optional Redemption Date") to the
<PAGE> 13
Holders, to redeem all or any portion of the shares of Preferred Stock which
have not previously been redeemed or for which Conversion Notices shall not have
been delivered, at a price equal to the Optional Redemption Price (as defined in
Section 8). The Company may only deliver an Optional Redemption Notice if: (1)
the number of shares of Common Stock at the time authorized, unissued and
unreserved for all purposes is sufficient to satisfy the Company's conversion
obligations of all shares of Preferred Stock then outstanding, (2) the
Underlying Shares then outstanding are registered for resale pursuant to an
effective Underlying Shares Registration Statement pursuant to which the Holders
are permitted to sell Underlying Shares or the Underlying Shares may be resold
without volume restrictions pursuant to Rule 144(k) promulgated under the
Securities Act, and (3) the Common Stock is listed for trading on the Nasdaq or
on a Subsequent Market. In order for an Optional Redemption Notice to remain in
effect subsequent to the Optional Redemption Date, each of clauses (i) - (iii)
of the immediately preceding sentence must be true during the entire 30 Trading
Days between the Optional Redemption Date and the date of payment of the
Optional Redemption Price. The entire Optional Redemption Price shall be paid in
cash. A Holder may convert (and the Company shall honor such conversions in
accordance with the terms hereof) any or all of the shares of Preferred Stock
subject to an Optional Redemption Notice delivered for conversion on or prior to
the 30th Trading Day following the Optional Redemption Date.
ii. Failure by the Company to pay any portion of the Optional
Redemption Price on the 30th Trading Day following an Optional Redemption Date
shall, at the option of the Holder subject thereto, result in the invalidation
ab initio of the unpaid portion of such optional redemption, and,
notwithstanding anything herein to the contrary, the Company shall thereafter
have no further rights to optionally redeem any shares of Preferred Stock. In
such event, the Company shall, at the option of the Holder, either, (i) not
later than three Trading Days from receipt of Holder's request for such
election, return to the Holder all of the shares of Preferred Stock for which
such Optional Redemption Price has not been paid in full (the "Unpaid Redemption
Shares") or (ii) convert all or any portion of the Unpaid Redemption Shares in
which event the Per Share Market Value for such shares shall be the lower of the
Per Share Market Value calculated on the date the Optional Redemption Price was
originally due and the Per Share Market Value as of the Holder's written demand
for conversion. If the Holder elects option (ii) above, the Company shall within
three Trading Days of its receipt of such election deliver to the Holder the
shares of Common Stock issuable upon conversion of the Unpaid Redemption Shares
subject to such Holder conversion demand and otherwise perform its obligations
hereunder with respect thereto.
Section g. Redemption Upon Triggering Events.
(a) Upon the occurrence of a Triggering Event, each Holder shall (in
addition to all other rights it may have hereunder or under applicable law),
have the right, exercisable at the sole option of such Holder, to require the
Company to redeem all or a portion of the Preferred Stock and such shares of
Common Stock as described below then held by such Holder for a redemption price,
in cash, equal to the sum of (i) the Mandatory Redemption Amount plus (ii) the
product of (A) the number of Underlying Shares issued in respect of conversions
of shares of Preferred Stock hereunder within thirty Trading Days of the
Holder's demand for redemption pursuant to this Section
<PAGE> 14
6, and then held by the Holder and (B) the Closing Price on the date such
redemption is demanded or the date the redemption price hereunder is paid in
full, whichever is greater (such sum, the "Redemption Price"). The Redemption
Price shall be due and payable within five Trading Days of the date on which the
notice for the payment therefor is provided by a Holder. If the Company fails to
pay the Redemption Price hereunder in full pursuant to this Section on the date
such amount is due in accordance with this Section, the Company will pay
interest thereon at a rate of 18% per annum (or the lesser amount permitted by
applicable law), accruing daily from such date until the Redemption Price, plus
all such interest thereon, is paid in full. For purposes of this Section, a
share of Preferred Stock is outstanding until such date as the Holder shall have
received Underlying Shares upon a conversion (or attempted conversion) thereof
that meets the requirements hereof.
A "Triggering Event" means any one or more of the following events
(whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):
(i) the failure of an Underlying Shares Registration Statement
to be declared effective by the Commission on or prior to the 180th day after
the Original Issue Date;
(ii) if, during the Effectiveness Period, the effectiveness of
the Underlying Shares Registration Statement lapses for any reason for more than
an aggregate of twenty Trading Days (which need not be consecutive Trading
Days), or the Holder shall not be permitted to resell Registrable Securities
under the Underlying Shares Registration Statement for more than an aggregate of
twenty Trading Days (which need not be consecutive Trading Days);
(iii) the Company shall fail for any reason to deliver
certificates representing Underlying Shares issuable upon a conversion hereunder
that comply with the provisions hereof prior to the tenth Trading Days after the
Conversion Date or the Company shall provide notice to any Holder, including by
way of public announcement, at any time, of its intention not to comply with
requests for conversion of any shares of Preferred Stock in accordance with the
terms hereof;
(iv) the Company shall be a party to any Change of Control
Transaction, shall agree to sell (in one or a series of related transactions)
more than 33% of its assets or shall redeem more than a de minimis number of
Common Stock or other Junior Securities (other than redemptions of Underlying
Shares);
(v) an Event (as defined in the Registration Rights Agreement)
shall not have been cured to the satisfaction of the Holders prior to the
expiration of 60 days from the Event Date (as defined in the Registration Rights
Agreement) relating thereto (other than an Event resulting from a failure of an
Underlying Shares Registration Statement to be declared effective by the
Commission on or prior to the 180th day after the Original Issue Date, which
shall be covered by Section 6(a)(i));
<PAGE> 15
(vi) the Company shall fail for any reason to pay in full the
amount of cash due pursuant to a Buy-In within twenty-one days after notice
therefor is delivered hereunder or shall fail to pay all amounts owed on account
of an Event within twenty-one days of the date due;
(vii) the Company shall fail to have available a sufficient
number of authorized and unreserved shares of Common Stock to issue to such
Holder upon a conversion hereunder; or
(viii) the Company shall fail to observe or perform any other
covenant, agreement or warranty contained in, or otherwise commit any breach of
the Transaction Documents (as defined in Section 8) that may result in a
Material Adverse Effect (as defined in the Purchase Agreement), and such failure
or breach shall not, if subject to the possibility of a cure by the Company,
have been remedied within ten Business Days after the date on which written
notice of such failure or breach shall have been given.
Section h. Definitions. For the purposes hereof, the following
terms shall have the following meanings:
"Change of Control Transaction" means the occurrence of any of (i)
an acquisition after the date hereof by an individual or legal entity or "group"
(as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of
effective control (whether through legal or beneficial ownership of capital
stock of the Company, by contract or otherwise) of in excess of 40% of the
voting securities of the Company, (ii) a replacement at one time or over time of
more than one-half of the members of the Company's board of directors which is
not approved by a majority of those individuals who are members of the board of
directors on the date hereof (or by those individuals who are serving as members
of the board of directors on any date whose nomination to the board of directors
was approved by a majority of the members of the board of directors who are
members on the date hereof), (iii) the merger of the Company with or into
another entity that is not wholly-owned by the Company, consolidation or sale of
33% or more of the assets of the Company in one or a series of related
transactions, or (iv) the execution by the Company of an agreement to which the
Company is a party or by which it is bound, providing for any of the events set
forth above in (i), (ii) or (iii).
"Closing Price" means on any particular date (a) the closing sale
price per share of Common Stock on such date on the Nasdaq or on such Subsequent
Market on which the shares of Common Stock are then listed or quoted, or if
there is no such price on such date, then the closing sale price on the Nasdaq
or on such Subsequent Market on the date nearest preceding such date, or (b) if
the shares of Common Stock are not then listed or quoted on the Nasdaq or a
Subsequent Market, the closing sale price for a share of Common Stock in the
over-the-counter market, as reported by the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions of
reporting prices) at the close of business on such date, or (c) if the shares of
Common Stock are not then reported by the National Quotation Bureau Incorporated
(or
<PAGE> 16
similar organization or agency succeeding to its functions of reporting prices),
then the average of the "Pink Sheet" quotes for the relevant conversion period,
as determined in good faith by the Holder, or (d) if the Common Stock are not
then publicly traded the fair market value of a share of Common Stock as
determined by an Appraiser selected in good faith by the Holders of a majority
of the shares of the Preferred Stock.
"Commission" means the Securities and Exchange Commission.
"Common Stock" means the Company's common stock, par value $.01 per
share, and stock of any other class into which such shares may hereafter have
been reclassified or changed.
"Conversion Ratio" means, at any time, a fraction, the numerator of
which is Stated Value (or Excess Stated Value, as the case may be) and the
denominator of which is the Conversion Price at such time.
"Dividend Effectiveness Date" means the earlier to occur of (x) the
Effectiveness Date (as defined in the Registration Rights Agreement) and (y) the
Effective Date.
"Effective Date" means the date that the Underlying Shares
Registration Statement is declared effective by the Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Junior Securities" means the Common Stock and all other equity or
equity equivalent securities of the Company other than those securities that are
outstanding on the Original Issue Date and which are explicitly senior in rights
or liquidation preference to the Preferred Stock.
"Mandatory Redemption Amount" for each share of Preferred Stock
means the sum of (i) the greater of (A) 120% of the Stated Value and (B) the
product of (a) the Closing Price on the Trading Day immediately preceding (x)
the date of the Triggering Event or the Conversion Date, as the case may be, or
(y) the date of payment in full by the Company of the applicable redemption
price, whichever is greater, and (b) the Conversion Ratio calculated on the date
of the Triggering Event, or the Conversion Date, as the case may be, and (ii)
all other amounts, costs, expenses and liquidated damages due in respect of such
share of Preferred Stock.
"Optional Redemption Price" shall be sum of (i) 105% of the Stated
Value of the shares of Preferred Stock to be redeemed pursuant to Section 6 and
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
such shares of Preferred Stock.
"Original Issue Date" shall mean the date of the first issuance of
any shares of the Preferred Stock regardless of the number of transfers of any
particular shares of Preferred Stock and regardless of the number of
certificates which may be issued to evidence such Preferred Stock.
<PAGE> 17
"Per Share Market Value" means on any particular date (a) the
closing bid price per share of Common Stock on such date on the Nasdaq or on
such Subsequent Market on which the shares of Common Stock are then listed or
quoted, or if there is no such price on such date, then the closing bid price on
the Nasdaq or on such Subsequent Market on the date nearest preceding such date,
or (b) if the shares of Common Stock are not then listed or quoted on the Nasdaq
or a Subsequent Market, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions of
reporting prices) at the close of business on such date, or (c) if the shares of
Common Stock are not then reported by the National Quotation Bureau Incorporated
(or similar organization or agency succeeding to its functions of reporting
prices), then the average of the "Pink Sheet" quotes for the relevant conversion
period, as determined in good faith by the Holder, or (d) if the Common Stock
are not then publicly traded the fair market value of a share of Common Stock as
determined by an Appraiser selected in good faith by the Holders of a majority
of the shares of the Preferred Stock.
"Person" means a corporation, an association, a partnership, an
organization, a business, an individual, a government or political subdivision
thereof or a governmental agency.
"Purchase Agreement" means the Convertible Preferred Stock Purchase
Agreement, dated as of the Original Issue Date, to which the Company and the
original Holders are parties, as amended, modified or supplemented from time to
time in accordance with its terms.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the Original Issue Date, to which the Company and the
original Holders are parties, as amended, modified or supplemented from time to
time in accordance with its terms.
"Securities Act" means the Securities Act of 1933, as amended.
"Trading Day" means (a) a day on which the shares of Common Stock
are traded on the Nasdaq or on such Subsequent Market on which the shares of
Common Stock are then listed or quoted, or (b) if the shares of Common Stock are
not listed on the Nasdaq or a Subsequent Market, a day on which the shares of
Common Stock are traded in the over-the-counter market, as reported by the OTC
Bulletin Board, or (c) if the shares of Common Stock are not quoted on the OTC
Bulletin Board, a day on which the shares of Common Stock are quoted in the
over-the-counter market as reported by the National Quotation Bureau
Incorporated (or any similar organization or agency succeeding its functions of
reporting prices); provided, that in the event that the shares of Common Stock
are not listed or quoted as set forth in (a), (b) and (c) hereof, then Trading
Day shall mean any day except Saturday, Sunday and any day which shall be a
legal holiday or a day on which banking institutions in the State of New York
are authorized or required by law or other government action to close.
"Transaction Documents" shall have the meaning set forth in the
Purchase Agreement.
<PAGE> 18
"Underlying Shares" means, collectively, the shares of Common Stock
into which the shares of Preferred Stock are convertible in accordance with the
terms hereof.
"Underlying Shares Registration Statement" means a registration
statement that meets the requirements of the Registration Rights Agreement and
registers the resale of all Underlying Shares by the Holder, who shall be named
as a "selling stockholder" thereunder.
<PAGE> 19
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert shares of Preferred Stock)
The undersigned hereby elects to convert the number of shares of 6% Series A
Convertible Preferred Stock indicated below, into shares of common stock, par
value $.01 per share (the "Common Stock"), of SeraNova, Inc., a New Jersey
corporation (the "Company"), according to the conditions hereof, as of the date
written below. If shares are to be issued in the name of a person other than
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Company in accordance therewith. No fee will be charged to the
Holder for any conversion, except for such transfer taxes, if any.
<TABLE>
<CAPTION>
<S> <C>
Conversion calculations: Date to Effect Conversion
-----------------------------------------------------
Number of shares of Preferred Stock owned prior to
Conversion
-----------------------------------------------------
Number of shares of Preferred Stock to be Converted
-----------------------------------------------------
Stated Value of shares of Preferred Stock to be
Converted
-----------------------------------------------------
Number of shares of Common Stock to be Issued
-----------------------------------------------------
Applicable Conversion Price
-----------------------------------------------------
Number of shares of Preferred Stock subsequent to
Conversion
-----------------------------------------------------
Signature
-----------------------------------------------------
Name
-----------------------------------------------------
Address
</TABLE>
3 The Certificate of Incorporation
of the corporation is hereby amended so that the designation and number of each
class and series acted upon in the aforesaid resolution, and the relative
rights, preferences and limitations of each such class and series, are as stated
in the aforesaid resolution.
<PAGE> 20
Dated this 26th day of September, 2000.
SeraNova, Inc.
By: /s/ Ravi Singh
------------------------------
(Signature)
Name: Ravi Singh
Title: Executive Vice President and Chief Financial Officer
