SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Date of Report: September 16, 1996
NATIONAL DATACOMPUTER, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-15885 04-2942832
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification
Number)
900 Middlesex Turnpike, Bldg. 5, Billerica, Massachusetts 01821
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(Address of Principal Executive Offices)
(508) 663-7677
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(Registrant's Telephone Number Including Area Code)
TABLE OF CONTENTS
FORM 8-K
July 12, 1996
Item Page
---- ----
Item 5. Other Events 1
Item 7. Exhibits 2
Signatures 15
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ITEM 5. OTHER EVENTS
On April 26, 1996, the Registrant raised $3,000,000 through a private
equity placement involving the issuance of 3,000 shares of Series B Convertible
Preferred Stock.
On June 28, 1996, the Registrant raised $1,200,000 through a private
equity placement involving the issuance of 1,200 shares of Series B Convertible
Preferred Stock.
ITEM 7. EXHIBITS
4(a) Statement of Designation of Series B Convertible Preferred Stock.
4(b) Certificate of Increase of Shares Designated as Series B Convertible
Preferred Stock
1
EXHIBIT 4(a)
STATEMENT OF DESIGNATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
NATIONAL DATACOMPUTER, INC.
NATIONAL DATACOMPUTER, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of Delaware
(hereinafter the "Corporation"), DOES HEREBY CERTIFY:
That by unanimous written consent, dated April 19, 1996, the directors
of the Corporation adopted the following resolution setting forth the
designations, powers, preferences and rights of its Series B Convertible
Preferred Stock:
RESOLVED: That the designations, powers, preferences and rights
of the Series B Convertible Preferred Stock be, and
hereby are, as set forth below:
1. NUMBER OF SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK. Of the
50,000 shares of authorized and unissued Preferred Stock, $.001 par value per
share ("Preferred Stock") of the Corporation, three thousand (3,000) shares
shall be designated and known as "Series B Convertible Preferred Stock."
2. VOTING.
(a) Each holder of outstanding shares of Series B Convertible
Preferred Stock at each meeting of stockholders of the Corporation (and written
actions of stockholders in lieu of meetings) with respect to any and all matters
presented to the stockholders of the Corporation for their action or
consideration shall be entitled to the number of votes equal to the number of
whole shares of Common Stock, as hereinafter defined, into which the shares of
Series B Convertible Preferred Stock held by such holder are convertible on the
record date established for such meeting. Except as provided by law, by the
provisions of Subparagraph 2(b) below, or by the provisions establishing any
other series of Preferred Stock, holders of Series B Convertible Preferred Stock
shall vote together with the holders of all other classes and series of
securities of the Corporation as a single class.
(b) The Corporation shall not amend, alter or repeal the
preferences, special rights or other powers of the Series B Convertible
Preferred Stock so as to affect adversely the Series B Convertible Preferred
Stock, without the written consent or affirmative vote of the holders of at
least a majority of the then outstanding shares of Series B Convertible
Preferred Stock to be affected by
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amendment, alteration or repeal, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class. For this
purpose, without limiting the generality of the foregoing, the authorization or
issuance of any series of Preferred Stock with preference or priority over the
Series B Convertible Preferred Stock as to the right to receive either dividends
or amounts distributable upon liquidation, dissolution or winding up of the
Corporation shall be deemed to affect adversely the designated class of Series B
Convertible Preferred Stock, and the authorization or issuance of any series of
Preferred Stock on a parity with Series B Convertible Preferred Stock as to the
right to receive either dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation shall not be deemed to affect
adversely the Series B Convertible Preferred Stock. The number of authorized
shares of Preferred Stock may be increased or decreased (but not below the
number of shares then outstanding) by the affirmative vote of the holders of a
majority of the then outstanding shares of all other classes or series of stock
of the Corporation entitled to vote thereon, voting as a single class.
3. DIVIDENDS.
(a) The holders of shares of Series B Convertible Preferred Stock
shall be entitled to receive, before any cash dividend shall be declared and
paid upon or set aside for the Common Stock in any fiscal year of the
Corporation, only when, as and if declared by the Board of Directors of the
Corporation out of the funds legally available for that purpose, dividends
payable in cash or Common Stock in an amount per share for such fiscal year
equal to the product of (i) the per share amount, if any, of the cash dividend
declared, paid or set aside for the Common Stock during such fiscal year,
multiplied by (ii) the number of whole shares of Common Stock into which each
such share of Series B Convertible Preferred Stock is then convertible as
determined by Paragraph 7 below.
(b) The Corporation shall not declare or pay any dividends or any
other distributions of property or assets on shares of Common Stock, other than
dividends payable solely in cash or Common Stock, without the prior written
consent or affirmative vote of the holders of at least a majority of the then
outstanding shares of Series B Preferred Stock given in writing or by vote at a
meeting, voting as a single class.
4. ADDITIONAL PAYMENTS.
(a) In addition to any dividends for which holders of shares of
Series B Convertible Preferred Stock shall be entitled to receive pursuant to
Subparagraph 3(a) above, holders of shares of Series B Convertible Preferred
Stock shall be entitled to receive interest equal to eight percent (8%) per
annum of the stated value (the "Stated Value") of such Series B Convertible
Preferred Stock. The Stated Value for all of the shares of Series B Convertible
Preferred Stock as of the Original Issuance Date (defined below) is $3,000,000
(the "Original Aggregate Stated Value") and the Stated Value of each share of
Series B Convertible Preferred Stock is $1,000. Such interest shall accrue from
the Original Issuance Date, and shall be payable, in cash or Common Stock, on a
quarterly basis, as described in Subparagraph 4(b) below, commencing with the
Corporation's fiscal
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quarter ending June 30, 1996. In the event that the Corporation decides to make
payment of such interest in Common Stock, the amount of shares of Common Stock
to be issued to make such payment shall be that number of shares equal to (i)
the amount of interest due and payable, divided by (ii) the Average Closing
Price (defined in Subparagraph 7(a) below) of the Common Stock, as reported by
the Nasdaq SmallCap Market or in the "Pink Sheets" during the ten trading days
immediately preceding the date of delivery to the holders of the Series B
Convertible Preferred Stock of the Common Stock as required by Subparagraph 4(b)
as payment for the interest due hereunder.
(b) Interest hereunder shall accrue and be calculated and payable
with respect to (i) those shares of Series B Convertible Preferred Stock that
remain issued and outstanding at the end of each of the Corporation's fiscal
quarters (ii) and any shares of Series B Convertible Preferred Stock that are
converted during a fiscal quarter for which interest is calculated and paid.
With respect to those shares of Series B Convertible Preferred Stock that remain
issued and outstanding at the end a fiscal quarter, interest shall be calculated
based on the Stated Value of such remaining issued and outstanding shares of
Series B Convertible Preferred Stock as set forth in the Corporation's Annual
Reports on Form 10-K(SB) or Quarterly Reports on Form 10-Q(SB) to be filed with
the Securities and Exchange Commission ("SEC"). With respect to any shares of
Series B Convertible Preferred Stock that are converted during a fiscal quarter,
interest shall be calculated based on the Stated Value of such shares up to and
including the Conversion Date (defined in Subparagraph 7(f)).
(c) Payment of interest due hereunder with respect to those shares
of Series B Convertible Preferred Stock that remain issued and outstanding at
the end of each of the Corporation's fiscal quarters shall be made within 15
business days after the filing with the SEC of the applicable report. Payment of
interest due hereunder with respect to any shares of Series B Convertible
Preferred Stock that are converted during a fiscal quarter shall be calculated
and made within 30 days of the Conversion Date of such shares. Payment of
interest upon such converted shares of Series B Convertible Preferred Stock
shall be accompanied by the Company's calculation of the interest.
(d) With respect to the payment of interest due hereunder upon those
shares of Series B Convertible Preferred Stock that remain issued and
outstanding at the end of a fiscal quarter, the Corporation shall notify the
holders of the Series B Convertible Preferred Stock in writing not less than 10
days prior to the end of such fiscal quarter of whether the Corporation shall
pay the interest due hereunder in cash or Common Stock. With respect to the
payment of interest due hereunder upon those shares of Series B Convertible
Preferred Stock that are converted during a fiscal quarter, the Corporation
shall notify the holders of the Series B Convertible Preferred Stock in writing
not less than 10 days after the Conversion Date whether the Corporation shall
pay the interest due hereunder in cash or Common Stock.
5. LIQUIDATION. In the event of a voluntary or involuntary dissolution,
liquidation, or winding up of the Corporation, the holders of shares of Series B
Convertible Preferred Stock shall be entitled to receive out of the assets of
the Corporation legally available for distribution to holders
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of its capital stock, before any payment or distribution shall be made to
holders of Common Stock or any other class of stock ranking junior to Series B
Convertible Preferred Stock, an amount per share equal to the Stated Value of
such shares of Series B Convertible Preferred Stock plus all dividends which
have accrued and are unpaid and therefore are in arrears. If upon such
liquidation, dissolution or winding up of the Corporation, whether voluntary or
involuntary, the assets to be distributed among the holders of Series B
Convertible Preferred Stock shall be insufficient to permit payment to the
holders of Series B Convertible Preferred Stock of the amount distributable as
aforesaid, then the entire assets of the Corporation to be so distributed shall
be distributed ratably among the holders of Series B Convertible Preferred
Stock. Upon any such liquidation, dissolution or winding up of the Corporation,
after the holders of Series B Convertible Preferred Stock shall have been paid
in full the amounts to which they shall be entitled, the remaining net assets of
the Corporation may be distributed to the holders of stock ranking on
liquidation junior to the Series B Convertible Preferred Stock. Written notice
of such liquidation, dissolution or winding up, stating a payment date, the
amount of the liquidation payments and the place where said liquidation payments
shall be payable, shall be given by mail, postage prepaid, or by telex to
non-U.S. residents, not less than 10 days prior to the payment date stated
therein, to the holders of record of Series B Convertible Preferred Stock, such
notice to be addressed to each such holder at its address as shown by the
records of the Corporation. For purposes hereof, the Common Stock shall rank on
liquidation junior to the Series B Convertible Preferred Stock.
6. RESTRICTIONS. At any time when shares of Series B Convertible
Preferred Stock are outstanding, except where the vote or written consent of the
holders of a greater number of shares of the Corporation is required by law or
by the Corporation's Certificate of Incorporation, as amended, without the
approval of the holders of at least a majority of the then outstanding shares of
Series B Convertible Preferred Stock given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a series, the
Corporation will not create or authorize the creation of any additional class or
series of shares of stock unless the same ranks junior to the Series B
Convertible Preferred Stock as to the distribution of assets on the liquidation,
dissolution or winding up of the Corporation; or increase the authorized amount
of the Series B Convertible Preferred Stock or increase the authorized amount of
any additional class or series of shares of stock unless the same ranks junior
to the Series B Convertible Preferred Stock as to the distribution of assets on
the liquidation, dissolution or winding up of the Corporation; or create or
authorize any obligation or security convertible into shares of Series B
Convertible Preferred Stock as to the distribution of assets on the liquidation,
dissolution or winding up of the Corporation, whether any such creation,
authorization or increase shall be by means of amendment to the Corporation's
Certificate of Incorporation or by merger, consolidation or otherwise.
7. OPTIONAL CONVERSION. The holders of shares of Series B Convertible
Preferred Stock shall have the following conversion rights:
(a) Right to Convert; Conversion Price. Subject to the terms,
conditions, and restrictions of this Paragraph 7, the holder of any share or
shares of Series B Convertible Preferred Stock shall have the right to convert
each such share of Series B Convertible Preferred Stock (except
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that upon any liquidation of the Corporation, the right of conversion shall
terminate at the close of business on the business day fixed for payment of the
amount distributable on the Series B Convertible Preferred Stock) into an amount
of shares of Common Stock equal to the Stated Value of such share or shares of
Series B Convertible Preferred Stock based upon (i) the average closing bid
price of the Common Stock (the "Average Closing Price"), as reported by the
Nasdaq SmallCap Market or in the so called "Pink Sheets," during the period of
five trading days immediately preceding the date of conversion (the "Conversion
Date"), after (ii) discounting the Average Closing Price by an amount equal to
forty percent (40%) of the Average Closing Price to determine the conversion
price (the "Conversion Price"). To illustrate, if the Average Closing Price on
the Conversion Date is $2.00 and one-third (1/3) of the shares of Series B
Convertible Preferred Stock are being converted, the Stated Value for which
would be $1,000,000, then the Conversion Price shall be $1.20 per share of
Common Stock ($2.00 x .60), whereupon the Stated Value of $1,000,000 of Series B
Convertible Preferred Stock would entitle the holder thereof to convert
one-third (1/3) of the shares of Series B Convertible Preferred Stock into
833,333 shares of Common Stock ($1,000,000 divided by $1.20 equals 833,333).
(b) In no event shall the Conversion Price exceed $1.50 or be less
than, except as set forth below in Subparagraph 7(c), $1.00 (the "Minimum
Conversion Price"). To illustrate, if the Average Closing Price equals or
exceeds $2.50, then the Conversion Price shall be $1.50. If the Average Closing
Price equals or is less than $1.67, then the Conversion Price shall be $1.00.
(c) Elimination of Minimum Conversion Price. In the event that at
any time prior to March 31, 1999, the Corporation's Stockholders' Equity, as set
forth in any of the Corporation's Annual Reports on Form 10-K(SB) or Quarterly
Reports on Form 10-Q(SB) to be filed with SEC during such period, is less than
$1,000,000, then the Minimum Conversion Price as applied to any future
conversion into Common Stock of the Shares pursuant to Subparagraphs 7(a) and
7(b) shall be eliminated, and the Conversion Price shall be that price as
determined in accordance with Subparagraph 7(a) without any minimum price in
effect. In the event that the Minimum Conversion Price is eliminated pursuant to
Subparagraph 7(c), then the Company shall not be required to issue the Bonus
Warrants pursuant to Section 3.1 of that certain Regulation S Offshore
Subscription Agreement by and between the Corporation and the holder(s) of the
Series B Convertible Preferred Stock pursuant to which such shares were issued
and the provisions of Section 3.1 of the Subscription Agreement with respect to
the Bonus Warrants shall be null and void, and of no effect against the
Corporation.
(d) Restrictions on Conversion. The holder of any share or shares of
Series B Convertible Preferred Stock may not convert any of such shares for a
period of at least forty-four (44) calendar days following the date upon which
the Series B Convertible Preferred Stock was originally issued (the "Original
Issuance Date"), and thereafter may convert such shares only on the dates and in
the amounts as follows: commencing on the 45th calendar day following the
Original Issuance Date and continuing up to and including the 74th calendar day
following the Original Issuance Date, the holder may convert up to one-third
(1/3) of the Series B Convertible Preferred
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Stock held by the holder on such date (i.e. - no more than $1,000,000 of the
Stated Value of such shares of the Series B Convertible Preferred Stock);
commencing on the 75th calendar day following the Original Issuance Date and
continuing up to and including the 104th calendar day following the Original
Issuance Date, the holder may convert up to two-thirds (2/3) of the Series B
Convertible Preferred Stock held by the holder on such date (i.e. - no more than
$2,000,000 of the Stated Value of such shares of Series B Convertible Preferred
Stock); and commencing on the 105th calendar day following the Original Issuance
Date and continuing thereafter, the holder may convert up to 100% of the Series
B Convertible Preferred Stock held by the holder on such date (i.e. - the
Original Aggregate Stated Value of all of the shares of Series B Convertible
Preferred Stock.)
(e) Notice of Conversion. The right of conversion shall be exercised
by the holder thereof by giving written notice (the "Conversion Notice") to the
Corporation that the holder elects to convert a specified number of shares of
Series B Convertible Preferred Stock representing a specified Stated Value
thereof into Common Stock and by surrender of a certificate or certificates for
the shares so to be converted to the Corporation at its principal office (or
such other office or agency of the Corporation as the Corporation may designate
by notice in writing to the holders of the Series B Convertible Preferred Stock)
at any time during its usual business hours on the date set forth in the
Conversion Notice, together with a statement of the name or names (with address)
in which the certificate or certificates for shares of Common Stock shall be
issued. The Conversion Notice shall include therein the Stated Value of shares
of Series B Convertible Preferred Stock to be converted, and a calculation (i)
of the Average Closing Price, (ii) the Conversion Price, and (iii) the number of
shares of Common Stock to be issued in connection with such conversion. The
Corporation shall have the right to review the calculations included in the
Conversion Notice, and shall provide notice of any discrepancy or dispute
therewith within three business days of the receipt thereof.
(f) Issuance of Certificates; Time Conversion Effected. Promptly,
but in no event more than ten business days, after the receipt of the Conversion
Notice referred to in Subparagraph 7(e) and surrender of the certificate or
certificates for the share or shares of Series B Convertible Preferred Stock to
be converted, the Corporation shall issue and deliver, or cause to be issued and
delivered, to the holder, registered in such name or names as such holder may
direct, a certificate or certificates for the number of whole shares of Common
Stock into which such shares of Series B Convertible Preferred Stock are
converted. To the extent permitted by law, such conversion shall be deemed to
have been effected as of the close of business on the date (the "Conversion
Date") on which such Conversion Notice shall have been received by the
Corporation and the certificate and certificates for such share or shares shall
have been surrendered as aforesaid, and at such time the rights of the holder of
such share or shares of Series B Convertible Preferred Stock shall cease, and
the person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of the shares represented thereby.
(g) Fractional Shares; Dividends; Partial Conversion. No fractional
shares shall be issued upon conversion of Series B Convertible Preferred Stock
into Common Stock. In case the
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number of shares of Series B Convertible Preferred Stock represented by the
certificate or certificates surrendered pursuant to Subparagraph 7(a) exceeds
the number of shares converted, the Corporation shall, upon such conversion,
execute and deliver to the holder, at the expense of the Corporation, a new
certificate or certificates for the number of shares of Series B Convertible
Preferred Stock represented by the certificate or certificates surrendered which
are not to be converted.
(h) Reorganization or Reclassification. If any capital
reorganization or reclassification of the capital stock of the Corporation shall
be effected in such a way that holders 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 or reclassification, lawful
and adequate provisions shall be made whereby each holder of a share or shares
of Series B Convertible Preferred Stock shall thereupon have the right to
receive, upon the basis and upon the terms and conditions specified herein and
in lieu of the shares of Common Stock immediately theretofore receivable upon
the conversion of such share or shares of Series B Convertible Preferred Stock,
such shares of stock, securities or assets as may be issued or payable with
respect to or in exchange for a number of outstanding shares of such Common
Stock equal to the number of shares of such Common Stock immediately theretofore
receivable upon such conversion had such reorganization or reclassification not
taken place, and in any such case appropriate provisions shall be made with
respect to the rights and interests of such holder to the end that the
provisions hereof (including without limitation provisions for adjustments of
the conversion rights) shall thereafter be applicable, as nearly as may be, in
relation to any shares of stock, securities or assets thereafter deliverable
upon the exercise of such conversion rights.
(i) Adjustments for Splits, Combinations, etc. The Conversion Price
and the number of shares of Common Stock into which the Series B Convertible
Preferred Stock shall be convertible shall be adjusted appropriately for stock
splits, combinations, or other similar events (other than employee benefit plans
and stock option plans for employees or consultants to the Company).
Additionally, an adjustment will be made in the case of an exchange of Common
Stock, consolidation or merger of the Company with or into another corporation
or sale of all or substantially all of the assets of the Company in order to
enable the holder of Series B Convertible Preferred Stock to acquire the kind
and the number of shares of stock or other securities or property receivable in
such event by a holder of the Series B Convertible Preferred Stock of the number
of shares that might otherwise have been purchased upon the conversion of the
Series B Convertible Preferred Stock. No adjustment to the Conversion Price will
be made for dividends (other than stock dividends), if any, paid on the Common
Stock or for securities issued pursuant to exercise of the currently outstanding
options, warrants, or options that may be granted or shares issued in connection
with the acquisition of another business by the Company.
8. MANDATORY CONVERSION.
(a) Mandatory Conversion Date. If at March 31, 1999 (the "Mandatory
Conversion Date"), there remains issued and outstanding any shares of Series B
Convertible Preferred Stock, then the Corporation shall be entitled to require
all (but not less than all) holders
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of shares of Series B Convertible Preferred Stock then outstanding to convert
their shares of Series B Convertible Preferred Stock into shares of Common Stock
at the then effective Conversion Price pursuant to Subparagraph 7(a). The
Corporation shall provide written notice (the "Mandatory Conversion Notice") to
the holders of shares of Series B Convertible Preferred Stock of such mandatory
conversion. The Mandatory Conversion Notice shall include (i) the Stated Value
of the shares of Series B Convertible Preferred Stock to be converted, (ii) the
Conversion Price at March 31, 1999, and (iii) the number of shares of the
Corporation's Common Stock to be issued upon such mandatory conversion at the
then applicable Conversion Price. No Minimum Conversion Price shall be
applicable to mandatory conversion of the Series B Convertible Preferred Stock
pursuant to this Paragraph 8.
(b) Surrender of Certificates. On or before the Mandatory Conversion
Date, each holder of shares of Series B Convertible Preferred Stock shall
surrender his or its certificate or certificates for all such shares to the
Corporation at the place designated in such Mandatory Conversion Notice, and
shall thereafter receive certificates for the number of shares of Common Stock
to which such holder is entitled. On the Mandatory Conversion Rate, all rights
with respect to the Series B Convertible Preferred Stock so converted, including
the rights, if any, to receive notices and vote, will terminate. All
certificates evidencing shares of Series B Convertible Preferred Stock that are
required to be surrendered for conversion in accordance with the provisions
hereof, from and after the Mandatory Conversion Date, shall be deemed to have
been retired and cancelled and the shares of Series B Convertible Preferred
Stock represented thereby converted into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. The Corporation may thereafter take such
appropriate action as may be necessary to reduce the authorized Series B
Convertible Preferred Stock accordingly.
9. REDEMPTION OF SERIES B CONVERTIBLE PREFERRED STOCK.
(a) Right to Redeem Series B Convertible Preferred Stock. At any
time, and from time to time, on and after the expiration of the restrictions of
conversion contained in Subparagraph 7(d), if the closing bid price of the
Company's Common Stock as reported by the Nasdaq SmallCap Market or in the "Pink
Sheets" equals or exceeds $5.00 for 20 consecutive trading days, then the
Corporation may, in its sole discretion, but shall not be obligated to, redeem,
in whole or in part, the then issued and outstanding shares of Series B
Convertible Preferred Stock, at a price of $1,000 per share of such Series B
Convertible Preferred Stock (the "Redemption Price"), subject to adjustment as
provided in Paragraph 7.
(b) Notice of Redemption. The Corporation shall provide each holder
of record of the Series B Convertible Preferred Stock with written notice of
redemption (the "Redemption Notice") not less than 30 days prior to any date
stipulated by the Corporation for the redemption of the Series B Convertible
Preferred Stock (the "Redemption Date"). The Redemption Notice shall contain (i)
the Redemption Date, (ii) the number of shares of Series B Convertible Preferred
Stock to be redeemed from the holder to whom the Redemption Notice is delivered,
(iii) instructions for surrender to the Corporation of the certificate or
certificates representing the shares of Series B
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Convertible Preferred Stock to be redeemed, and (iv) instructions as to how to
specify to the Corporation the number of shares of Series B Convertible
Preferred Stock to be redeemed as provided in this Paragraph 9, and the number
of shares of Series B Convertible Preferred Stock to be converted into Common
Stock pursuant to Paragraph 7.
(c) Right to Convert Series B Convertible Preferred Stock upon
Receipt of Redemption Notice. Upon receipt of the Redemption Notice, the
recipient thereof shall have the option, at is sole election, to specify what
portion of the Series B Convertible Preferred Stock called for redemption in the
Redemption Notice shall be redeemed as provided in this Paragraph 8 or converted
into Common Stock in the manner provided in Paragraph 7. If the holder of the
Series B Convertible Preferred Stock called for redemption elects to convert
such shares, then such conversion shall take place on the Redemption Date, in
accordance with the terms of Paragraph 7.
(d) Surrender of Certificates; Payment of Redemption Price. On or
before the Redemption Date, each holder of the shares of Series B Convertible
Preferred Stock to be redeemed shall surrender the required certificate or
certificates representing such shares to the Corporation, in the manner and at
the place designated in the Redemption Notice, and upon the Redemption Date, the
Redemption Price for such shares shall be paid by the Corporation via check to
the order of the person whose name appears on such certificate or certificates
as the owner thereof, and each such surrendered certificate shall be canceled
and retired. If a certificate is surrendered and all the shares evidenced
thereby are not being redeemed, the Corporation shall issue new certificates to
be registered in the names of the person(s) whose name(s) appear(s) as the
owners on the respective surrendered certificates and deliver such certificate
to such person(s).
(e) Deposit of Redemption Price. On the Redemption Date in respect
to any shares of Series B Convertible Preferred Stock, or prior thereto, the
Corporation shall deposit with any bank or trust company (the "Depository")
having a capital and surplus of at least $50,000,000, a sum equal to (i) the
aggregate Redemption Price of all such shares called for redemption, less (ii)
the aggregate Redemption Price for those shares of Series B Convertible
Preferred Stock in respect of which the Corporation has received notice from the
holder thereof of its election, pursuant to Subparagraph 8(c), to convert shares
of Series B Convertible Preferred Stock into Common Stock. The Corporation shall
provide instructions and authority to the Depository to pay, on or after the
Redemption Date, the Redemption Price to the respective holders upon the
surrender of their share certificates. The deposit of the Redemption Price by
the Corporation with the Depository shall constitute full payment for the shares
of Series B Convertible Preferred Stock to be redeemed, and from and after that
date of the deposit, the redeemed shares shall be deemed to be no longer issued
and outstanding, and the holders thereof shall cease to be holders with respect
to such shares and shall have no rights with respect thereto, except the right
to receive from the Depository payment of the Redemption Price, without
interest, upon surrender of their certificates therefor. Any funds so deposited
and unclaimed at the end of one year from the Redemption Date shall be released
and delivered to the Corporation, after which the former holders of shares of
Series B Convertible Preferred Stock called for redemption shall be entitled to
receive payment of the Redemption Price in respect of their shares only from the
Corporation.
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10. NOTICES. In case at any time:
(a) the Corporation shall declare any dividend upon its Common Stock
payable in cash or stock or make any other pro rata distribution to the holders
of its Common Stock; or
(b) the Corporation shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights; or
(c) there shall be any capital reorganization or reclassification of
the capital stock of the Corporation, or a consolidation or merger of the
Corporation with or into, or a sale of all or substantially all its assets to,
another entity or entities; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;
then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, or by telex to non-U.S. residents, addressed to
each holder of any shares of Series B Convertible Preferred Stock at the address
of such holder as shown on the books of the Corporation, (i) at least 10 days'
prior to written notice of the date on which the books of the Corporation shall
close or a record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto and (ii) shall also
specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be.
11. STOCK TO BE RESERVED. The Corporation, upon the effective date of
this Statement of Designation, has a sufficient number of shares of Common Stock
available to reserve for issuance upon the conversion of all outstanding shares
of Series B Convertible Preferred Stock, assuming that the Minimum Conversion
Price remains in effect. (The Corporation, under such circumstances would
require to issue a maximum of 3,000,000 shares of Common Stock upon conversion
of all of the outstanding shares of Series B Convertible Preferred Stock if all
of such shares were converted at the Minimum Conversion Price). The Corporation
shall use its best efforts to effect an amendment to its Certificate of
Incorporation, as amended, such that there will be a sufficient number of shares
of Common Stock available for issuance upon conversion of all of the outstanding
shares of Series B Convertible Preferred Stock if the Minimum Conversion Price
is eliminated pursuant to Subparagraph 7(c) above. Thereafter, the Corporation
will at all times reserve and keep available out of its authorized Common Stock,
solely for the purpose of issuance upon the
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conversion of Series B Convertible Preferred Stock as herein provided, such
number of shares of Common Stock as shall then be issuable upon the conversion
of all outstanding shares of Series B Convertible Preferred. The Corporation
covenants that all shares of Common Stock which shall be so issued shall be duly
and validly issued. The Corporation will take all such action as may be so
issued without violation of any applicable law or regulation, or of any
requirement of any national securities exchange upon which the Common Stock may
be listed. The Corporation will not take any action which results in any
adjustment of the conversion rights if the total number of shares of Common
Stock issued and issuable after such action upon conversion of the Series B
Convertible Preferred Stock would exceed the total number of shares of Common
Stock then authorized by the Corporation's Certificate of Incorporation, as
amended.
12. NO REISSUANCE OF SERIES B CONVERTIBLE PREFERRED STOCK. Shares of
Series B Convertible Preferred Stock which are converted into shares of Common
Stock as provided herein shall not be reissued.
13. ISSUE TAX. The issuance of certificates for shares of Common Stock
upon conversion of Series B Convertible Preferred Stock shall be made without
charge to the holder thereof for any issuance tax in respect thereof, provided
that the Corporation shall not be required to pay any tax which may be payable
in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Series B Convertible
Preferred Stock which is being converted.
14. CLOSING OF BOOKS. The Corporation will at no time close its
transfer books against the transfer of any Series B Convertible Preferred Stock
or of any shares of Common Stock issued or issuable upon the conversion of any
shares of Series B Convertible Preferred Stock in any manner which interferes
with the timely conversion of such Series B Convertible Preferred Stock, except
as may otherwise be required to comply with applicable securities laws.
15. DEFINITION OF COMMON STOCK. As used in this Statement of
Designation, the term "Common Stock" shall mean and include the Corporation's
authorized Common Stock, $.02 par value per share, as constituted on the date of
filing of these terms of the Series B Convertible Preferred Stock, and shall
also include any capital stock of any class of the Corporation thereafter
authorized which shall neither be limited to a fixed sum or percentage of par
value in respect of the rights of the holders thereof to participate in
dividends nor entitled to a preference in the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; provided that the shares of Common Stock receivable upon conversion
of shares of Series B Convertible Preferred Stock shall include only shares
designated as Common Stock of the Corporation on the date of filing of this
instrument, or in case of any reorganization, reclassification, or stock split
of the outstanding shares thereof, the stock, securities or assets provided for
in Subparagraph 7(h).
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16. AMENDMENTS. No provision of these terms of the Series B Convertible
Preferred Stock may be amended, modified or waived without the written consent
or affirmative vote of the holders of at least a majority of the then
outstanding shares of Series B Convertible Preferred Stock.
RESOLVED: That the President and Secretary be, and
hereby are, authorized and directed to
execute and file a Statement of Designation
with the Delaware Secretary of State.
IN WITNESS HEREOF, the said National Datacomputer, Inc. has caused its
corporate seal to be hereunto affixed and this Statement of Designation to be
signed by Norman Mackinnon, its President and Secretary, this 19th day of April,
1996.
NATIONAL DATACOMPUTER, INC.
By: /s/ Norman Mackinnon
----------------------------------
Norman Mackinnon
President
/s/ Norman Mackinnon
- --------------------------
Norman Mackinnon
Secretary
[SEAL]
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EXHIBIT 4(b)
CERTIFICATE OF INCREASE
OF
SHARES DESIGNATED
AS
SERIES B CONVERTIBLE PREFERRED STOCK
NATIONAL DATACOMPUTER, INC. (the "Corporation"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
That the Certificate of Incorporation of said corporation was filed in
the office of the Secretary of State of Delaware on December 17, 1986, a
Certificate of Amendment was filed on April 15, 1987, a Certificate of Amendment
was filed on October 17, 1994 and a Certificate of the Designations, Preferences
and Rights of Series B Convertible Preferred Stock was filed in said office of
the Secretary of State on April 25, 1996.
That by unanimous written consent dated June 25, 1996, all of the
directors and all of the Series B shareholders of the Corporation adopted a
resolution authorizing and directing an increase in the number of shares
designated as Series B Convertible Preferred Stock from three thousand (3,000)
shares to four thousand two hundred (4,200) shares, in accordance with the
provisions of section 151 of The General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the said NATIONAL DATACOMPUTER, INC. has caused
this consent to be executed by its President this 26th day of June, 1996.
/s/ Malcolm M. Bibby
---------------------------------
Malcolm M. Bibby, Ph.D., President
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NATIONAL DATACOMPUTER, INC.
By: /s/ Malcolm M. Bibby
------------------------
Malcolm M. Bibby, Ph.D.
President
Date: September 16, 1996
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