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EXHIBIT 4.1
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF
SERIES G CONVERTIBLE PREFERRED STOCK
OF
WORLDPORT COMMUNICATIONS, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
WorldPort Communications, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, and pursuant to Section
151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Corporation (the "Certificate of
Incorporation") and under the provisions of Section 151 of the General
Corporation Law of the State of Delaware, on February 9, 2000, the Board of
Directors adopted the following resolution creating a series of preferred stock,
$0.0001 par value per share ("Preferred Stock"), designated as Series G
Convertible Preferred Stock:
"RESOLVED that, pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of the
Corporation's Certificate of Incorporation, a series of Preferred Stock of
the Corporation be, and it hereby is, authorized and created, and that the
designation and amount thereof and the voting powers, preferences and
relative, participating, optional or other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof
are as follows:
Section 1. Designation: Series, Amount and Ranking. The shares of
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the series of Preferred Stock established hereby shall be designated
"Series G Convertible Preferred Stock" (such shares being hereafter called
the "Series G Preferred Stock"), and the number of shares constituting such
series shall be 1,000, which shares shall have a par value of $0.0001 per
share and a stated value of $2,000.00 per share (the "Stated Value"). The
Series G Preferred Stock shall rank on a parity with the shares of Series A
Preferred Stock, Series B Convertible Preferred Stock, Series C Convertible
Preferred Stock, Series D Convertible Preferred Stock, Series E Convertible
Preferred Stock and Series F Convertible Preferred Stock and prior to the
Corporation's Common Stock, as to the payment of dividends and distribution
of assets upon liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary.
Section 2. Dividends and Distributions.
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(a) The Corporation shall not declare or pay or set apart for
payment any dividends or make any other distributions on, or make any
payment on account of the purchase, redemption or other retirement of any
Series B Convertible Preferred Stock or any class of stock or series
thereof of the Corporation ranking, as to dividends or as to distributions
in the event of a liquidation, dissolution or winding up of the
Corporation, junior to the Series G Preferred Stock, including the
Corporation's Common Stock, (collectively, "Junior Stock") unless, prior to
the payment of such dividends or other payments the Corporation first
declares and pays a dividend equal to 7% of the Stated Value (the "Series G
Preferred Dividends") to the holders of shares of the Series G Preferred
Stock. Notwithstanding anything to the contrary contained
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herein, the foregoing shall not apply to (i) any dividend payable solely in
any shares of any Junior Stock; or (ii) the acquisition of shares of any
Junior Stock either (A) pursuant to any employee incentive or benefit plan
or arrangement (including any employment agreement) of the Corporation or
of any subsidiary of the Corporation heretofore or hereafter adopted or (B)
in exchange solely for shares of any other Junior Stock. The Corporation
shall not permit any subsidiary of the Corporation to purchase or otherwise
acquire any shares of capital stock of the Corporation unless the
Corporation could, pursuant to this paragraph, purchase such shares at such
time and in such manner.
(b) Series G Preferred Dividends shall be paid in cash on or
prior to the date dividends are paid on the corporation's Junior Stock (the
"Dividend Payment Date"). The Series G Preferred Dividends are not
cumulative and no interest shall accrue with respect to the Series G
Preferred Stock.
(c) Series G Preferred Dividends shall be payable to holders of
record as they appear on the books of the Corporation or any transfer agent
on a Series G Dividend Payment Date.
(d) No Series G Dividends shall be declared or paid or set apart
for payment unless dividends have been or contemporaneously are declared or
paid or set apart for payment on the Series A Preferred Stock, Series B
Convertible Preferred Stock, Series C Convertible Preferred Stock, Series D
Convertible Preferred Stock, Series E Convertible Preferred Stock, Series F
Convertible Preferred Stock or any other series of stock ranking on a
parity with the Series G Preferred Stock as to dividends (collectively,
"Parity Stock").
Section 3. Voting Rights.
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(a) Each holder of record of Series G Preferred Stock shall be
entitled to vote on all matters submitted to a vote of the stockholders of
the corporation, voting together with the holders of Common Stock as a
single class. Each holder of record of each share of Series G Preferred
Stock shall be entitled to that number of votes as is equal to the number
of shares of Common Stock into which such share of Series G Preferred Stock
could be converted on the record date for determining the stockholders
entitled to vote.
(b) At all times during which at least 33% of the Series G
Preferred Stock issued by the Corporation is outstanding, the Corporation
will not, without the approval of holders of at least a majority of the
shares of Series G Preferred Stock then outstanding, voting together as a
class, (A) issue any securities which will, with respect to dividend rights
or rights on liquidation, winding up and dissolution, rank senior to the
Series G Preferred Stock, or any obligation or security convertible into or
evidencing the right to purchase any securities senior to the Series G
Preferred Stock; (B) alter, amend or repeal any provision of the
Certificate of Incorporation of the Corporation (including any such
alteration, amendment or repeal effected by any merger or consolidation),
if such amendment, alteration or repeal would alter or change the powers,
preferences or special rights with respect to the shares of Series G
Preferred Stock in a manner adverse to the holders thereof; or (C) alter,
amend or modify this Section 3.
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Section 4. Liquidation, Dissolution or Winding Up.
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(a) Upon any liquidation, dissolution, or winding up of the
Corporation, whether voluntary or involuntary (a "Liquidation"), before any
distribution or payment shall be made to the holders of any Junior Stock,
the holders of Series G Preferred Stock shall be entitled to be paid out of
the assets of the Corporation an amount per share of Series G Preferred
Stock equal to the sum of $2,000.00 plus all declared but unpaid Series G
Preferred Dividends and any Series G Preferred Dividends required to be
declared pursuant to Section 2(a) above as a result of the Liquidation (the
"Liquidation Preference"). After the payment of the full Liquidation
Preference, the holders of the Series G Preferred Stock shall not be
entitled to any further participation in any distribution of assets of the
Corporation.
(b) Neither the merger or consolidation of the Corporation with
or into any other corporation, nor the merger or consolidation of any other
corporation with or into the Corporation, nor the sale, lease, exchange or
other transfer of all of or any portion of the assets of the Corporation,
shall be deemed to be a Liquidation for purposes of this Section 4.
(c) If upon any Liquidation the Liquidation Preference is not
paid in full to all holders of Series G Preferred Stock, the holders of
Series G Preferred Stock shall share ratably in any such distribution with
all holders of Parity Stock, in proportion to the full distributable
amounts to which holders of all such parity shares are entitled upon such
distribution of assets.
Section 5. Conversion.
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(a) Optional Conversion. Subject to and in compliance with the
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provisions of this Section 5, any shares of Series G Preferred Stock may,
at the option of the holder and without any payment of consideration, be
converted at any time into fully-paid and nonassessable shares of Common
Stock.
In the event that a holder of Series G Preferred Stock
desires to convert its Series G Preferred Stock into shares of Common
Stock, such holder shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the Corporation or any transfer
agent for the Series G Preferred Stock, and shall give written notice to
the Corporation at such office that such holder elects to convert the same.
Such notice shall state the number of shares of Series G Preferred Stock
being converted. Thereupon, the Corporation shall promptly issue and
deliver at such office to such holder a certificate or certificates for the
number of shares of Common Stock to which such holder is entitled and shall
promptly pay in cash or, to the extent sufficient funds are not then
legally available therefor, in Common Stock (at the Common Stock's fair
market value determined by the Board of Directors as of the date of such
conversion), any declared but unpaid Series G Preferred Dividends on the
shares of Series G Preferred Stock being converted. Such conversion shall
be deemed to have been made at the close of business on the date of such
surrender of the certificates representing the shares of Series G Preferred
Stock to be converted, and the person entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all
purposes as the record holder of such shares of Common Stock on such date.
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(b) Mandatory Conversion. Upon the conversion of at least 70% of
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the Series G Preferred Stock originally issued by the Corporation, each
outstanding share of Series G Preferred Stock shall, without any action on
the part of the Corporation or the holders of Series G Preferred Stock, be
automatically converted into shares of Common Stock. All such outstanding
shares of Series G Preferred Stock shall be deemed converted effective upon
the date on which at least 70% of the originally issued Series G Preferred
Stock is converted, and thereafter each certificate for Series G Preferred
Stock outstanding shall be deemed to represent the number of shares of
Common Stock into which it has been converted. Nevertheless, each holder
of Series G Preferred Stock shall thereafter surrender its certificates for
shares of Series G Preferred Stock for conversion in accordance with
Section 5(a) above.
(c) Conversion Rate. The number of shares of Common Stock to
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which a holder of Series G Preferred Stock shall be entitled upon
conversion (whether optional or mandatory) shall be the product obtained by
multiplying the "Series G Preferred Stock Conversion Rate" then in effect
by the number of shares of Series G Preferred Stock being converted. The
conversion rate in effect at any time for conversion of the Series G
Preferred Stock (the "Series G Preferred Stock Conversion Rate") shall be
the quotient obtained by dividing $2,000.00 by the "Series G Preferred
Stock Conversion Price."
(d) Conversion Price. The conversion price (the "Series G
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Preferred Stock Conversion Price") for the Series G Preferred Stock shall
initially be $2.00. The Series G Preferred Stock Conversion Price shall be
adjusted from time to time in accordance with this Section 5. All
references to the Series G Preferred Stock Conversion Price herein shall
mean such conversion price as so adjusted from time to time.
(e) Series G Preferred Stock No Longer Outstanding. Upon
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conversion of shares of Series G Preferred Stock, such shares shall no
longer be deemed to be outstanding and all rights of the holders thereof as
Series G Preferred Stockholders of the Corporation shall cease.
(f) Adjustments for Stock Splits and Dividends. In the event the
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Corporation shall, at any time or from time to time while any of the shares
of Series G Preferred Stock are outstanding, (i) pay a dividend or make a
distribution with respect to Common Stock in shares of Common Stock, (ii)
subdivide or split its outstanding shares of Common Stock into a larger
number of shares, or (iii) combine its outstanding shares of Common Stock
into a smaller number of shares, in each case whether by reclassification
of shares, recapitalization of the Corporation or otherwise, the Series G
Preferred Stock Conversion Price in effect immediately prior thereto shall
be adjusted by multiplying the Series G Preferred Stock Conversion Price by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately before such event, and the denominator of which is
the number of shares of Common Stock outstanding immediately after such
event. Such adjustment shall become effective at the opening of business
on the Business Day next following the record date for determination of
stockholders entitled to receive such dividend or distribution in the case
of a dividend or distribution, and shall become effective immediately after
the effective date in case of a subdivision, split, combination or
reclassification; and any shares of Common Stock issuable in payment of a
dividend shall be deemed to have been issued immediately prior to the close
of business on the record date for such dividend.
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(g) Adjustments for Merger, etc. If there shall occur a merger
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or consolidation of the Corporation with or into another entity, any merger
or consolidation of another entity into the Corporation (other than a
merger or consolidation that does not result in any conversion, exchange or
cancellation of outstanding shares of Common Stock), any sale or transfer
of all or substantially all of the assets of the Corporation or any
compulsory share exchange, that results in the conversion or exchange of
the Common Stock into, or the right to receive, other securities or other
property (whether of the Corporation or any other entity), then the Series
G Preferred Stock will thereafter no longer be convertible into shares of
Common Stock, but instead will be convertible into the kind and amount of
securities or other property which the holder of such shares of Series G
Preferred Stock would have owned immediately after such merger,
consolidation, sale or share exchange if such shares of Series G Preferred
Stock had been converted into shares of Common Stock immediately before the
effective time of such merger, consolidation, sale or share exchange. If
this paragraph (g) applies, then no adjustment in respect of the same
merger, consolidation, sale or share exchange shall be made pursuant to the
other provisions of this Section. In the event that at any time, as a
result of an adjustment made pursuant to this paragraph (g), the Series G
Preferred Stock shall become subject to conversion into any securities
other than shares of Common Stock, thereafter the number of such other
securities so issuable upon conversion of the shares of Series G Preferred
Stock shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions contained in
this Section 5.
(h) Fractional Shares. No fractional shares of Common Stock
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shall be issued upon conversion of Series G Preferred Stock. All shares of
Common Stock (including fractions thereof) issuable upon conversion of more
than one share of Series G Preferred Stock by a holder thereof shall be
aggregated for purposes of determining whether the conversion would result
in the issuance of any fractional share. If, after the aforementioned
aggregation, the conversion would result in the issuance of any fractional
share, the Corporation shall, in lieu of issuing any fractional share, pay
cash equal to the product of such fraction multiplied by the Common Stock's
Fair Market Value on the date of conversion. For purposes of this Section
5(h), the Fair Market Value of the Common Stock shall be equal to the
average closing sales price of a share of the Company's Common Stock on the
Nasdaq SmallCap Market (or such other national securities exchange or
automated quotation system on which the Common Stock is then listed or
quoted) for the 10 consecutive trading days immediately preceding the date
of conversion.
(i) Reservation of Stock Issuable Upon Conversion. The
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Corporation shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of the Series G Preferred Stock,
such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series
G Preferred Stock. If at any time the number of authorized but unissued
shares of Common Stock shall not be sufficient to effect the conversion of
all then outstanding shares of the Series G Preferred Stock, the
Corporation will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient for such
purpose.
(j) Payment of Taxes. The Corporation will pay all taxes (other
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than taxes based upon income) and other governmental charges that may be
imposed with respect to the
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issue or delivery of shares of Common Stock upon conversion of shares of
Series G Preferred Stock, excluding any tax or other charge imposed in
connection with any transfer involved in the issue and delivery of shares
of Common Stock in a name other than that in which the shares of Series G
Preferred Stock so converted were registered.
Section 6. Notices.
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Any notice required by the provisions hereof shall be in writing
and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed telex or facsimile, (iii)
five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All notices shall be
addressed to the Corporation at its principle office and to each holder of
record at the address of such holder appearing on the books of the
Corporation.
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IN WITNESS WHEREOF, WorldPort Communications, Inc. has caused this
Certificate of Designations, Preferences and Rights to be duly executed by its
President and attested by its Assistant Secretary, this 21st day of July, 2000.
WORLDPORT COMMUNICATIONS, INC.
By: /s/ Michael E. Heisley, Sr.
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Michael E. Heisley, Sr.
President
ATTEST:
/s/ Donald Featherstone
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Donald Featherstone, Assistant Secretary
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