EXHIBIT 3.7
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND OTHER RIGHTS
OF THE SERIES C PREFERRED STOCK
OF AT COMM CORPORATION
Pursuant to Section 151(g) of the
Delaware General Corporations Law
It is hereby certified that:
I. The name of the corporation is At Comm Corporation (the
"Corporation"), a Delaware corporation.
II. Set forth hereinafter is a statement of the voting powers,
preferences, limitations, restrictions, and relative rights of shares of Series
C Convertible Preferred Stock hereinafter designated as contained in a
resolution of the Board of Directors of the Corporation (the "Board of
Directors") pursuant to the authority conferred upon the Board of Directors by
the Certificate of Incorporation of the Corporation, as amended (the
"Certificate of Incorporation"), and in accordance with Section 151(g) of the
Delaware General Corporations Law, which resolution was duly adopted by the
Board of Directors on November 30, 2000, and remains in full force and effect as
of the date hereof:
SERIES C PREFERRED STOCK
Section 1. Designation. The series of Preferred Stock hereby created
shall be designated and known as the "Series C Preferred Stock." The number of
shares constituting such series shall be 1,082,000.
Section 2. Liquidation Rights.
2.1 In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, each holder of
shares of Series C Preferred Stock shall be entitled to receive, prior and in
preference to the payment of any liquidation amount to the holders of the
Corporation's common stock, par value $0.01 per share ("Common Stock"), a
payment equal to $15.00 per share (the "Purchase Price") together with any
declared but unpaid dividends thereon, before any payment is made to the holders
of common stock (the "Preference Amount"). After the full Preference Amount on
all outstanding shares of the Series C Preferred Stock has been paid and the
full preferential amount payable with respect to any other shares having
priority over the Common Stock has been paid, any remaining funds and assets of
the Corporation legally available for distribution to stockholders shall be
distributed pro rata among the holders of the Common Stock. The right of the
Series C Preferred Stock stockholders to receive the Preference Amount shall be
on a parity with the right of the Series A Preferred Stock and the Series B
Preferred Stock stockholders to receive the preferential amounts specified in
the Certificate of Designations, Preferences, and Other Rights of the Series A
Preferred Stock and Certificate of Designations, Preferences, and Other Rights
of the Series B Preferred Stock. If the Corporation has insufficient assets to
permit payment of the Preference Amount in full to all Series C Preferred Stock
stockholders, then the assets of the Corporation shall be distributed ratably to
the holders of the Series A Preferred Stock, the Series B
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Preferred Stock, the Series C Preferred Stock and the holders of shares of any
other series of Preferred Stock on a parity with the Series C Preferred Stock in
proportion to the Preference Amount each such holder would otherwise be entitled
to receive.
2.2 A merger or consolidation of the Corporation, or sale of
the Corporation's Common Stock (including, without limitation, pursuant to a
tender offer) in any single transaction or series of related transactions, in
any such case in which its stockholders do not retain a majority of the voting
power in the surviving corporation, or a sale of all or substantially all the
Corporation's assets, shall each be deemed to be a liquidation, dissolution or
winding up of the Corporation.
Section 3. Conversion.
3.1 Voluntary Conversion. Each share of Series C Preferred
Stock will be convertible, at the option of the holder thereof, at the office of
the Corporation or any transfer agent for such shares, into Common Stock. The
number of shares of Common Stock into which each share of Series C Preferred
Stock will be converted will be equal to the Purchase Price of such share
divided by the Conversion Price (as hereinafter defined) of such share. The
initial Conversion Price for each share of Series C Preferred Stock shall be an
amount equal to the Purchase Price of such share. The Conversion Price shall be
subject to adjustment as provided in Section 3.3.
3.2 Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Series C Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to such fraction multiplied by the then fair
market value of one share of Common Stock, as reasonably determined in good
faith by the Board of Directors. Before any holder of Series C Preferred Stock
shall be entitled to receive certificates for the shares of Common Stock issued
upon conversion, such holder shall surrender the certificate or certificates for
the shares of Series C Preferred Stock being converted, duly endorsed, at the
principal office of the Corporation and shall state therein its name or the
name, or names, of its nominees in which it wishes the certificate or
certificates for shares of Common Stock to be issued. The Corporation shall, as
soon as practicable thereafter, issue and deliver at such office to such holder
of Series C Preferred Stock or to such holder's nominee or nominees, a
certificate or certificates for the number of shares of Common Stock to which
such holder or such holder's nominee shall be entitled as aforesaid, together
with cash in lieu of any fraction of a share of Common Stock. Subject to the
foregoing, such conversion shall be deemed to have been made immediately and
upon surrender of the certificate representing the shares of Series C Preferred
Stock to be converted in the case of a voluntary conversion pursuant to Section
3.1. The Person or Persons entitled to receive the shares of Common Stock
issuable upon conversion shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
3.3 Adjustments to Conversion Price. The Conversion Price
shall be subject to adjustment from time to time as follows:
(a) If the Corporation shall issue shares of Common Stock to
the holders of Common Stock as a dividend or stock split, or in the event that
the Corporation reduces the number of outstanding shares of Common Stock in a
reverse stock split or stock combination,
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then the Conversion Price shall be adjusted such that the holders of shares of
Series C Preferred Stock shall receive, upon conversion of the Series C
Preferred Stock, that number of shares of Common Stock that such holder would
have owned following such dividend, stock split, reverse stock split or stock
combination if such conversion had occurred immediately prior to the record date
for such stock split, stock dividend, reverse stock split or stock combination
of the Common Stock, as the case may be. If the Corporation shall issue shares
of Series C Preferred Stock to the holders of Series C Preferred Stock as a
stock dividend or stock split, or in the event that the Corporation reduces the
number of outstanding shares of Series C Preferred Stock in a reverse stock
split or stock combination, then the Conversion Price shall be adjusted such
that the holder of shares of Series C Preferred Stock shall receive, upon
conversion of the Series C Preferred Stock, the number of shares of Common Stock
that such holder would have owned if such conversion had occurred immediately
prior to the record date for such stock split, stock dividend, reverse stock
split or stock combination of the Series C Preferred Stock, as the case may be.
In the event of a reclassification or other similar transaction as a result of
which shares of Common Stock are converted into another security, then the
Conversion Price shall be determined such that the holders of shares of Series C
Preferred Stock shall receive, upon conversion of such Series C Preferred Stock,
the number of such securities that such holder would have owned following such
conversion of the Common Stock into another security if such conversion had
occurred immediately prior to the record date of such reclassification or other
similar transaction. No adjustments with respect to dividends (other than stock
dividends) shall be made upon conversion of any share of Series C Preferred
Stock; provided, however, that if a share of Series C Preferred Stock shall be
converted subsequent to the record date for the payment of a dividend (other
than a stock dividend) or other distribution on shares of Series C Preferred
Stock but prior to such payment, then the registered holder of such share at the
close of business on such record date shall be entitled to receive the dividend
(other than a stock dividend) or other distribution payable on such share on
such date notwithstanding the conversion thereof or the Corporation's default in
payment of the dividend (other than a stock dividend) due on such date.
(b) Upon the issuance by the Corporation of Equity Securities
(as defined in Section 3.3(b)(ii)(A) below) at a consideration per share less
than the Conversion Price of the Series C Preferred Stock in effect immediately
prior to the time of such issue or sale, other than an issuance of stock or
securities pursuant to Section 3.3(a) above or the issuance of shares of Common
Stock upon conversion of any shares of Preferred Stock, then forthwith upon such
issue or sale, such Conversion Price shall be reduced to a price (calculated to
the nearest hundredth of a cent) determined by dividing:
(i) an amount equal to the sum of (x) the number of
shares of Common Stock outstanding immediately prior to such issue or sale
multiplied by the Conversion Price in effect immediately prior to such
adjustment, (y) the number of shares of Common Stock issuable upon conversion or
exchange of any obligations or securities of the Corporation outstanding
immediately prior to such adjustment multiplied by the Conversion Price in
effect immediately prior to such adjustment, and (z) an amount equal to the
aggregate "consideration actually received" by the Corporation upon such issue
or sale; by
(ii) the sum of the number of shares of Common Stock
outstanding immediately after such issue or sale and the number of shares of
Common Stock
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issuable upon conversion or exchange of any such obligations or securities of
the Corporation outstanding immediately after such issue or sale.
For purposes of this Section 3.3(b), the follow provisions shall be
applicable:
(A) The term "Equity Securities" as used in
this Section 3.3(b) shall mean any shares of Common Stock, or any obligation, or
any share of stock or other security of the Corporation convertible into or
exchangeable for Common Stock, except for shares of Common Stock or options to
purchase Common Stock issued or granted to officers, directors or employees of
the Corporation and its subsidiaries either pursuant to any stock purchase or
stock option plan or other incentive stock arrangement approved by the
Corporation's Board of Directors.
(B) The case of an issue or sale for cash of
shares of Common Stock, the "consideration actually received" by the Corporation
therefor shall be deemed to be the amount of cash received, before deducting
therefrom any commissions or expenses paid by the Corporation.
(C) In case of the issuance (otherwise than
upon conversion or exchange of obligations or securities of the Corporation) of
additional shares of Common Stock for a consideration other than cash or a
consideration partly other than cash, the amount of consideration other than
cash received by the Corporation for such shares shall be deemed to be the value
of such consideration as determined in good faith by the Board of Directors.
(D) In case of the issuance by the
Corporation in any manner of any rights to subscribe for or to purchase shares
of Common Stock, or any options for the purchase of shares of Common Stock or
stock convertible into Common Stock, all shares of Common Stock or stock
convertible into Common Stock to which the holders of such rights or options
shall be entitled to subscribe for or purchase pursuant to such rights or
options shall be deemed "outstanding" as of the date of the offering of such
rights or the granting of such options, as the case may be, and the minimum
aggregate consideration named in such rights or options for the shares of Common
Stock or stock convertible into Common Stock covered thereby, plus the
consideration, if any, received by the Corporation for such rights or options,
shall be deemed to be the "consideration actually received" by the Corporation
(as of the date of the offering of such rights or the granting of such options,
as the case may be) for the issuance of such shares
(E) In case of the issuance or issuances by
the Corporation in any manner of any obligations or of any securities of the
Corporation that shall be convertible into or exchangeable for Common Stock, all
shares of Common Stock issuable upon the conversion or exchange of such
obligations or securities shall be deemed issued as of the date such obligations
or securities are issued, and the amount of the "consideration actually
received" by the Corporation for such additional shares of Common Stock shall be
deemed to be the total of (x) the amount of consideration received by the
Corporation upon the issuance of such obligations or securities, plus (y) the
minimum aggregate consideration, if any, other than such obligations or shares,
receivable by the Corporation upon such conversion or exchange, except in
adjustment of dividends.
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(F) The amount of the "consideration
actually received" by the Corporation upon issuance of any rights or options
referred to in subsection (D) above or upon the issuance of any obligations or
securities that are convertible or exchangeable as described in subsection (E)
above, and the amount of the consideration, if any, other than such obligations
or securities so convertible or exchangeable, receivable by the Corporation upon
the exercise, conversion or exchange thereof shall be determined in the same
manner provided in subsections (B) and (C) above with respect to the
consideration received by the Corporation in case of the issuance of additional
shares of Common Stock; provided, however, that if such obligations or
securities so convertible or exchangeable are issued in payment or satisfaction
of any dividend upon any stock of the Corporation other than Common Stock, the
amount of the "consideration actually received" by the Corporation upon the
original issuance of such obligations or securities so convertible or
exchangeable shall be deemed to be the value of such obligations or securities
as of the date of the adoption of the resolution declaring such dividend as
determined by the Board of Directors at or as of that date. On the expiration of
any rights or options referred to in subsection (D), or the termination of any
right of conversion or exchange referred to in subsection (E), or any change in
the number of shares of Common Stock deliverable upon exercise of such options
or rights or upon conversion or exchange of such convertible or exchangeable
securities, the Conversion Price then in effect shall forthwith be readjusted to
such Conversion Price as would have obtained had the adjustments made upon the
basis of the delivery of only the number of shares of Common Stock actually
delivered or to be delivered upon the exercise of such rights or options or upon
the conversion or exchange of such securities.
(G) In the event the Corporation shall
declare a distribution payable in securities of other persons, evidences of
indebtedness issued by the Corporation or other persons, assets or options or
rights not referred to in this Section 3.3(b), then, in each such case, the
holders of the Series C Preferred Stock shall be entitled to the distributions
provided for in Section 4 below, and no adjustment to the Conversion Price
provided for in this Section 3.3(b) shall be applicable.
3.4 Common Stock Reserved. The Corporation shall reserve and
keep available out of its authorized but unissued Common Stock such number of
shares of Common Stock as shall, at all times, be sufficient for conversion of
all outstanding Series C Preferred Stock.
Section 4. Dividend Rights.
4.1 Generally. The holders of shares of Series C Preferred
Stock will be entitled to receive, if, when and as declared by the Board of
Directors, out of any funds legally available therefor, noncumulative dividends
at the rate of 6% of the Purchase Price per share per annum (appropriately
adjusted for stock splits and combinations) for each share of Series C Preferred
Stock then held by them. Such dividends may be payable quarterly or otherwise as
the Board of Directors may from time to time determine. The right of the Series
C Preferred Stock stockholders shall be on a parity with the right of the Series
A Preferred Stock and the Series B Preferred Stock stockholders to receive the
dividends specified in the Certificate of Designations, Preferences and other
Rights of the Series A Preferred Stock and the Certificate of Designations,
Preferences and other Rights of the Series B Preferred Stock, respectively.
Dividends may be declared and paid upon shares of Common Stock in any fiscal
year of the Corporation, only if
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dividends shall have been paid to or declared and set apart upon all shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
all shares of any other series of Preferred Stock on a parity with the Series C
Preferred Stock, at its annual rate for each quarter of such fiscal year of the
Corporation, including the quarter in which such dividends upon shares of Common
Stock are declared. No right shall accrue to holders of Series C Preferred Stock
by reason of the fact that dividends on said shares are not declared in any
prior year, nor shall any undeclared or unpaid dividends bear or accrue
interest.
4.2 Participation with Common. If any dividend or other
distribution payable in property other than cash is declared on the Common Stock
(excluding any dividend or other distribution for which adjustment to the
Conversion Price is provided by Section 3.3), each holder of Series C Preferred
Stock on the record date for such dividend or distribution shall be entitled to
receive on the date of payment or distribution of such dividend or other
distribution the same property that such holder would have received if on such
record date such holder was the holder of record of the number (including for
purposes of this Section 4 any fraction) of shares of Common Stock into which
the shares of Series C Preferred Stock then held by such holder are convertible.
Section 5. Voting Rights.
5.1 Generally. Each holder of shares of Series C Preferred
Stock shall be entitled to the number of votes equal to the number of shares of
Common Stock into which such shares of Series C Preferred Stock could be
converted on the record date for the vote or consent of stockholders and shall
have voting rights and powers equal to the voting rights and powers of the
Common Stock. The holders of shares of Series C Preferred Stock shall be
entitled to notice of any stockholders' meeting in accordance with the Bylaws of
the Corporation and, except as provided in Section 5.2 below, shall vote with
holders of the Common Stock upon any matter submitted to a vote of stockholders,
except those matters required by law to be submitted to a class vote.
5.2 Series Vote. So long as any shares of Series C Preferred
Stock are outstanding, the Corporation shall not, without first obtaining the
approval by vote or written consent, in the manner provided by law, of the
holders of a majority of the total number of shares of Series C Preferred Stock
outstanding, voting separately as a single class: (1) alter or change any of the
powers, preferences, privileges or rights of the Series C Preferred Stock; (2)
create any new class or series of shares having preferences prior to the Series
C Preferred Stock in any manner, including, without limitation, as to dividends
or liquidation; (3) take any action that reclassifies any outstanding shares
into shares having preferences prior to the Series C Preferred Stock in any
manner, including, without limitation, as to dividends or liquidation; or (4)
alter or change the Company's Certificate of Incorporation in a manner that
adversely affected the rights of the Series C Preferred Stock.
Section 6. Redemption.
6.1 Redemption Upon Certain Events. Subject to any legal
restrictions on the Corporation's redemption of shares, beginning on the date of
completion of the earlier of the following events (a) the consummation of the
closing of a public offering of the Corporation's Common Stock, registered under
the Securities Act of 1933, as amended, with gross proceeds to the
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Corporation in excess of $15 million or (b) the date on which the closing price
of the Corporation's Common Stock on the Nasdaq SmallCap Market exceeds
$40/share each day for a period of 15 consecutive trading days, the Corporation
may elect to redeem all of the Series C Preferred Stock then outstanding. The
redemption price for each share of Series C Preferred Stock shall be the
Purchase Price for such share plus all declared but unpaid dividends thereon to
the date of redemption, as adjusted for stock splits, stock dividends,
recapitalizations and the like. Notwithstanding anything in the foregoing to the
contrary, the holder of any share of Series C Preferred Stock may elect to
convert such share prior to the date of redemption in accordance with Section 3
hereof.
6.2 Notice. The Corporation shall give notice of any
redemption of the Series C Preferred Stock pursuant to Section 6.1 by mailing a
copy of such notice not less than twenty (20) business days prior to the
redemption date to the holders of record of the Series C Preferred Stock (the
"Redemption Notice"). The Corporation shall mail such notice to the holders'
respective addresses appearing on the books of the Corporation or to the
addresses given by the holders to the Corporation for the purpose of such
notice.
6.3 Effect of Redemption. From and after the redemption,
unless there has been a default in payment of the redemption price, all
dividends, if any, on the Series C Preferred Stock redeemed shall cease to
accrue, all rights of the holders of such shares (except the right to receive
the redemption price without interest upon surrender of their certificate or
certificates) shall cease with respect to such shares, and such shares shall not
thereafter be transferred on the books of this Corporation or be deemed to be
outstanding for any purpose whatsoever. If the funds of the Corporation legally
available for redemption of shares on the redemption date are insufficient to
redeem the total number of shares of Series C Preferred Stock to be redeemed on
such date, then those funds that are legally available shall be used to redeem
the maximum possible number of the shares ratably among the holders of the
shares to be redeemed. Series C Preferred Stock not redeemed shall remain
outstanding and entitled to all the rights and preferences provided herein.
Section 7. Reservation of Rights. Pursuant to the authority vested in
it by the Certificate of Incorporation, the Board of Directors reserves the
right to designate from time to time one or more additional series of Preferred
Stock with powers, designations, preferences, and rights on a parity with or
junior to the Series C Preferred Stock.
Section 8. Notices. In addition to any other notices to which the
holders of Series C Preferred Stock may be entitled pursuant to the Certificate
of Incorporation, the Bylaws of the Corporation, law, contract or otherwise, the
Corporation shall cause to be sent to each holder all written communications
sent generally to the holders of Common Stock. The Corporation shall cause such
communications to be sent to holders of Series C Preferred Stock concurrently
with, and in the same manner as, the sending of such communications to the
holders of Common Stock.
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Signed on this 18th day of December, 2000.
AT COMM CORPORATION
By: /s/ William H. Welling
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William H. Welling
Chief Executive Officer and President
ATTEST:
/s/ Melanie D. Johnson
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Melanie D. Johnson
Chief Financial Officer
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