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EXHIBIT 3(i).2
vFINANCE.COM, INC.
CERTIFICATE OF DESIGNATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
Pursuant to section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), vFinance.com, Inc. (the "Corporation"), a corporation
organized existing under the DGCL, hereby certifies as follows:
FIRST: The Certificate of Incorporation of the Corporation authorizes
the issuance of up to 2,500,000 shares of Preferred Stock, par value $.01 per
share (the "Preferred Stock"), and further authorizes the Board of Directors of
the Corporation by resolution or resolutions to provide for the issuance of
Preferred Stock in series and to establish the number of shares to be included
in each such series and to fix the designation, voting powers, preferences and
relative rights and qualifications, limitations or restrictions of each such
series.
SECOND: The Board of Directors of the Corporation, by action by written
consent dated as of January 3, 2001, duly adopted the following resolution
authorizing the creation and issuance of a series of Preferred Stock to be
designated as Series B Convertible Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of the Corporation in accordance with the provisions of its
Certificate of Incorporation, a series of Preferred Stock of the Corporation is
hereby created, and that the designation and number of shares thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof, are as follows:
1. Designation and Number. The shares of such series of
Preferred Stock shall be designated "Series B Convertible Preferred Stock" (the
"Series B Preferred Stock"). The number of shares constituting such series shall
be 50,000.
2. Rank. The Series B Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and dissolution, rank (i)
junior to the Corporation's Series A Convertible Preferred Stock and (ii) senior
to (x) the Corporation's common stock, par value $0.01 per share (the "Common
Stock"), and (y) all classes and series of stock of the Corporation now or
hereafter authorized, issued or outstanding that by their terms expressly
provided that they are junior to the Series B Preferred Stock (collectively, the
"Junior Securities").
3. Dividends. (a) The holders of shares of the Series B Preferred
Stock, in preference to the holders of Junior Securities, shall be entitled to
receive, when, as and if declared by the Board of Directors for the Corporation,
out of assets of the Corporation legally
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available therefor, cumulative dividends payable in cash at the annual rate of
7% per annum of the face amount of such Preferred Stock. Such dividends shall be
cumulative and shall accrue and be payable, in arrears, quarterly on December
31, March 31, June 30 and September 30 in each year (each, a "Dividend Payment
Date"), commencing March 31, 2001, to holders of record at the close of business
on the date specified by the Board of Directors at the time such dividend is
declared (the "Record Date"). All dividends paid with respect to shares of
Series B Preferred Stock pursuant to this Section 3 shall be paid pro rata to
the holders entitled thereto.
(b) Dividends on the shares of Series B Preferred Stock
shall accrue and be cumulative from the date of the original issuance of shares
of Series B Preferred Stock (the "Issue Date"), whether or not earned or
declared. Accrued but unpaid dividends shall not bear interest.
(c) Each fractional share of Series B Preferred Stock
outstanding shall be entitled to a ratably proportionate amount of all dividends
accruing with respect to each outstanding share of Series B Preferred Stock
pursuant to Subsection 3(a), and all such dividends with respect to such
outstanding fractional shares shall be cumulative and shall accrue (whether or
not declared), and shall be payable in the same manner and at such times as
provided for in Subsection 3(a) with respect to dividends on each outstanding
share of Series B Preferred Stock. Each fractional share of Series B Preferred
Stock outstanding shall also be entitled to a ratably proportionate amount of
any other distributions made with respect to each outstanding share of Series B
Preferred Stock, and all such distributions shall be payable in the same manner
and at the same time as distributions on each outstanding share of Series B
Preferred Stock
(d) Accrued but unpaid dividends for any past dividend
periods may be declared by the Board of Directors and paid on any date fixed by
the Board of Directors, whether or not a regular Dividend Payment Date, to
holders of record on the books of the Corporation on such record date as may be
fixed by the Board of Directors, which record date shall be no more than 60 days
prior to the payment date thereof. Holders of Series B Preferred Stock will not
be entitled to any dividends, whether payable in cash, property or stock, in
excess of the full cumulative dividends provided for herein.
(e) So long as any shares of the Series B Preferred Stock
are outstanding, the Corporation shall not declare, pay or set apart for payment
any dividend or make any distribution on any Junior Securities (other than
dividends or distributions payable in additional shares of Junior Securities),
unless at the time of such dividend or distribution the Corporation shall have
paid all accrued and unpaid dividends on the outstanding shares of Series B
Preferred Stock.
(f) Whenever dividends on the Series B Preferred Stock
are in arrears, the Corporation shall not declare dividends on or make any other
distribution in respect of any other capital stock ranking on a parity with the
Series B Preferred Stock as to dividends and on which dividends are payable in
arrears, unless simultaneously therewith dividends are paid pro rata on the
Series B Preferred Stock.
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(g) The Corporation shall not, directly or indirectly,
retire, redeem, purchase or otherwise acquire any Junior Securities unless the
Series B Preferred Stock has been redeemed or retired in full; provided,
however, that the Corporation may repurchase shares of Common Stock from any
employees of the Corporation upon or in connection with termination of
employment if such repurchase is required or permitted by the terms of any stock
subscription agreement, employment agreement, option agreement or similar
agreement, plan or arrangement between the Corporation and such employee
relating to the employment of such employee and providing for the repurchase by
the Corporation of Common Stock or options to acquire Common Stock, provided
that at the time of any repurchase under this Subsection 3(g) all dividends
accrued on the Series B Preferred Stock shall have been paid or set aside for
payment.
(h) The Corporation shall not retire, redeem, purchase or
otherwise acquire any capital stock ranking on a parity with the Series B
Preferred Stock as to dividends or upon the dissolution, liquidation or winding
up of the Corporation except for mandatory redemptions made in accordance with
the terms of such parity stock, provided that at the time of any such redemption
all dividends accrued on the Series B Preferred Stock shall have been paid or
set aside for payment.
4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, the holders of
Series B Preferred Stock shall be entitled to receive out of the assets of the
Corporation, for each share of Series B Preferred Stock then outstanding, before
any payment or distribution shall be made in respect of the Common Stock or any
other class or series of stock ranking junior to the Series B Preferred Stock
upon liquidation, dissolution or winding up, cash in the amount of $10.00 (as
adjusted for any stock dividend, split, combination, recapitalization or similar
transaction with respect to the capital stock of the Corporation), plus an
amount equal to all accrued and unpaid dividends thereon to the date of such
payment, whether or not declared. After payment in full of the liquidation
preference of the Series B Preferred Stock, holders of Series B Preferred Stock
shall not be entitled to receive any additional cash, property or other assets
of the Corporation upon liquidation, dissolution or winding up of the
Corporation.
(b) If the assets of the Corporation available for
distribution to the holders of Series B Preferred Stock upon any liquidation,
dissolution or winding up of the Corporation, whether voluntary or involuntary,
shall be insufficient to pay the full preferential amount to which holders in
respect of any shares of any other class or series of stock ranking on a parity
with the Series B Preferred Stock upon liquidation, dissolution or winding up,
the distribution shall be made pro rata, so that the ratio of the amount
distributed per share on the Series B Preferred Stock to the amount distributed
per share of each such other class or series of stock shall be the same as the
ratio of the amount of the liquidation preference per share of the Series B
Preferred Stock to the amount of the liquidation preference per share of each
such other class or series of stock.
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(c) For the purposes of this Section 4, neither the
voluntary sale, conveyance, exchange or transfer (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
or assets of the Corporation nor the consolidation or merger of the Corporation
with any other corporation shall be deemed to be a voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, unless such voluntary
sale, conveyance, exchange or transfer shall be in connection with a plan of
liquidation, dissolution or winding up of the Corporation.
5. Conversion. The holders of Series B Preferred Stock shall have
conversion rights as follows:
(a) Conversion at the Option of the Holder. Each share of
Series B Preferred Stock shall be convertible, at the option of the holder
thereof and without the payment of additional consideration, at any time, into
the number of shares of Common Stock determined by dividing $10.00 by the
Current Conversion Price (as hereinafter defined) in effect on the Conversion
Date (as hereinafter defined).
To effect the conversion of shares of Series B Preferred
Stock, the holder of record thereof shall make a written demand for such
conversion (a "Conversion Demand") upon the Corporation at its principal
executive offices setting forth therein (i) the number of shares of Series B
Preferred Stock to be converted, (ii) the certificate or certificates
representing such shares, (iii) the proposed date of conversion, which shall be
a business day not less than 15 nor more than 30 days after the date of such
Conversion Demand (the "Conversion Date"); and (iv) the name of any nominee to
which any shares of Common Stock into which such shares are to be converted are
to be registered. Within five days of receipt of the Conversion Demand, the
Corporation shall give written notice (a "Conversion Notice") to such holder
setting forth therein (i) the address of the place or places at which the
certificate or certificates representing the shares so to be converted are to be
endorsed for transfer or accompanied by a duly executed stock power or other
appropriate instrument of assignment. The Conversion Notice shall be sent by
first class mail, postage prepaid, to such holder at such holder's address as
may be set forth in the Conversion Demand or, if not set forth therein as it
appears on the records of the stock transfer agent of the Series B Preferred
Stock, if any, or, if none, of the Corporation. On or before the Conversion
Date, the holder of Series B Preferred Stock so to be converted shall surrender
the certificate or certificates representing such shares, duly endorsed for
transfer or accompanied by a duly executed stock power or other instrument of
assignment, if the Conversion Notice so provides, to the Corporation at any
place set forth in such notice or, if no such place is so set forth, at the
principal executive offices of the Corporation. As soon as practical after the
Conversion Date and the surrender of the certificate or certificates
representing such shares, the Corporation shall issue and deliver to such
holder, or its nominee, at such holder's address as it appears on the records of
the stock transfer agent for the Series B Preferred Stock, if any, or, if none,
of the Corporation a certificate or certificates for the number of whole shares
of Common Stock issuable upon such conversion in accordance with the provisions
hereof, together with cash payable in lieu of any fraction of a share of Common
Stock pursuant to Subsection 5(c).
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The resale of the shares of Common Stock issuable upon
conversion of the Series B Preferred Stock may be restricted from resale by a
holder unless the resale of such shares of Common Stock is (i) registered under
the Securities Act and any applicable state securities laws or (ii) exempt from
the registration requirements of the Securities Act and a applicable state
securities laws. The certificates representing such shares of Common Stock may
be issued with a restrictive legend to the foregoing effect.
(b) Conversion at the Option of the Company. In the event
that (i) the Common Stock is listed for trading on an exchange or automated
dealer quotation system and the closing price per share of Common Stock on any
such exchange or system (the "TRADING PRICE") is equal to or greater than $3.37
for 20 consecutive trading days and (ii) the shares of Common Stock issuable
upon conversion of the then outstanding shares of Series B Preferred Stock may
be resold by all holders thereof pursuant to Rule 144 promulgated under the
Securities Act (without regard to the volume limitations set forth in paragraph
(e) thereof) or are the subject of an effective registration statement
registering their resale under the Securities Act, the Company may cause all,
but not less than all, of the then outstanding shares of Preferred Stock to be
converted into the number of shares of Common Stock equal to the number of
shares of Series B Preferred Stock then outstanding multiplied by $10.00 divided
by the Current Conversion Price in effect on the Mandatory Conversion Date (as
defined below).
For the Company to effect the mandatory conversion of all
outstanding shares of Series B Preferred Stock, the Corporation shall give
written notice (a "MANDATORY CONVERSION NOTICE") to each record holder of Series
B Preferred Stock setting forth therein (i) the effective date of such mandatory
conversion, which shall be a business day not less than 15 nor more than 30 days
after the date of the Mandatory Conversion Notice (the "MANDATORY CONVERSION
DATE"), (ii) the address of the place or places at which the certificate or
certificates representing the shares so to be converted are to be surrendered;
and (iii) whether the certificate or certificates to be surrendered are required
to be endorsed for transfer or accompanied by a duly executed stock power or
other appropriate instrument of assignment and, if so, the form of such
endorsement or power or other instrument of assignment. The Mandatory Conversion
Notice shall be sent by first class mail, postage prepaid, to each holder at
such holder's address as it appears on the records of the stock transfer agent
for the Series B Preferred Stock, if any, or, if none, of the Corporation. On or
before the Mandatory Conversion Date, each holder of Series B Preferred Stock
shall surrender the certificate or certificates representing his shares, duly
endorsed for transfer or accompanied by a duly executed stock power or other
instrument of assignment, if the Mandatory Conversion Notice so provides, to the
Corporation at any place set forth in such notice or, if no such place is so set
forth, at the principal executive offices of the Corporation. As soon as
practicable after the Mandatory Conversion Date and the surrender of the
certificate or certificates representing such shares, the Corporation shall
issue and deliver to each holder, or its nominee, at such holder's address as it
appears on the records of the stock transfer agent for the Series B Preferred
Stock, if any, or, if none, of the Corporation, a certificate or certificates
for the number of whole shares of Common Stock issuable upon conversion in
accordance with the provisions hereof, together with cash payable in lieu of any
fraction of a share of Common Stock pursuant to Subsection 5(c).
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(c) No Fractional Shares. No fractional shares of Common
Stock or scrip shall be issued upon conversion of shares of Series B Preferred
Stock. In lieu of any fractional share to which the holder would be entitled but
for the provisions of this Subsection 5(c), based on the full number of shares
of Series B Preferred Stock held by such holder, the Corporation shall pay cash
in an amount equal to the same fraction of the Current Market Price (as
hereinafter defined) of one share of Common Stock on the Conversion Date or the
Mandatory Conversion Date, as applicable.
(d) Reservation of Stock. The Corporation shall, at all
times when any shares of Series B Preferred Stock are outstanding, reserve and
keep available out of its authorized but unissued stock, such number of shares
of Common Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of Series B Preferred Stock.
(e) Dividends: Rights. All outstanding shares of Series B
Preferred Stock to be converted pursuant to the Conversion Notice or the
Mandatory Conversion Notice, as the case may be, shall, on the Conversion Date
or the Mandatory Conversion Date, as applicable, be converted into Common Stock
for all purposes, notwithstanding the failure of the holder thereof to surrender
any certificate representing such shares on or prior to such date. On and after
the Conversion Date or the Mandatory Conversion Date, as applicable, (i) no such
share of Series B Preferred Stock shall be deemed to be outstanding or be
transferable on the books of the Corporation or the stock transfer agent, if
any, for the Series B Preferred Stock, and (ii) the holder of such shares, as
such, shall not be entitled to receive any dividends or other distributions, to
receive notices or to vote such shares or to exercise or to enjoy any other
powers, preferences or rights thereof, other than the right, upon surrender of
the certificate or certificates representing such shares, to receive a
certificate or certificates for the number of shares of Common Stock into which
such shares have been converted. On the Conversion Date or the Mandatory
Conversion Date, as applicable, all such shares shall be retired and canceled
and shall have the status of authorized and unissued shares of Preferred Stock,
undesignated as to series.
(f) Current Conversion Price; Adjustments. The Current
Conversion Price of the Series B Preferred Stock shall be $2.60 per share as of
the Issue Date and thereafter such amount as adjusted in the manner herein set
forth.
(g) Consolidation, Merger, Sale, Etc. In case of any
capital reorganization or reclassification of outstanding shares of Common
Stock, or any merger or consolidation of the Corporation with or into another
entity (other than mergers or consolidations of wholly-owned subsidiaries into
the Corporation or any wholly-owned subsidiary), or any sale or conveyance of
all or substantially all of the assets of the Corporation (each, a
"Transaction"), then lawful and adequate provision shall be made whereby each
share of Series B Preferred Stock shall, after such Transaction, be convertible
into the kind and number of shares of stock or other securities or property of
the Corporation or of the corporation resulting from such Transaction, or to
which assets shall have been sold in such Transaction, to which the holder of
shares of Series B Preferred Stock would have been entitled if it had held the
Common Stock issuable upon the
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conversion of such shares of Series B Preferred Stock on the record date, or, if
none, immediately prior to such Transaction, at the Current Conversion Price in
effect on such date. The provision of this Subsection 5(g) shall similarly apply
to each successive Transaction.
(h) Stock Dividends, Splits, Combinations. If the
Corporation shall (i) declare a dividend or other distribution payable in
securities or (ii) 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, then the Current Conversion Price in effect
immediately prior to such dividend or other distribution, split or combination,
as the case may be, shall forthwith be proportionally adjusted so that each
holder of Series B Preferred Stock shall be entitled to receive the number of
shares of Common Stock which such holder would have owned or been entitled to
receive had such Series B Preferred Stock been converted immediately prior to
the record date for such dividend or other distribution, split or combination.
Successive adjustments to the Current Conversion Price shall be made upon each
such dividend or other distribution, split or combination.
(i) Current Market Price. For the purposes hereof, the
"Current Market Price" of one share of Common Stock on any date shall be deemed
to be the average of the daily closing prices for the 30 consecutive business
days commencing 45 business days before the day in question. The closing price
for each day shall be the last reported sales price regular way or, in case no
such reported sale takes place on such day, the average of the reported closing
bid and asked prices regular way, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to trading,
or if not listed or admitted to trading on any national securities exchange, the
last reported sales price on the NASDAQ National Market, if the Common Stock is
included therein or, if not, the average of the highest reported bid and lowest
reported asked prices as reported by The Nasdaq Market, Inc., or the nearest
comparable system, or, if no such price is available, as determined in good
faith by the Board of Directors.
(j) No Impairment. The Corporation shall not, by
amendment of its Articles of Incorporation or through any reorganization, sale,
exchange or other disposition of assets, merger, consolidation, dissolution,
issue or sale of securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be observed or
performed under this Section 5 by the Corporation, but will at all times in good
faith carry out all the provisions of this Section 5 and take all such action as
may be necessary or appropriate in order to protect the conversion rights of the
holders of Series B Preferred Stock against impairment.
(k) Notice of Adjustments. Upon the occurrence of each
adjustment or readjustment of the Current Conversion Price pursuant to this
Section 5, the Corporation shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish a notice of
adjustment to each holder of Series B Preferred Stock, which notice shall set
forth, in reasonable detail, the facts upon which such adjustment or
readjustment is based.
(l) Notices of Record Date. In the event (i) any record
date is fixed for the purpose of determining the holders of any class or series
of stock or other securities who are
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entitled to receive any dividend or other distribution or (ii) of any
recapitalization or reorganization of the capital stock of the Corporation, any
merger or consolidation of the Corporation, or any sale, exchange or other
disposition of all or substantially all the assets of the Corporation or any
voluntary or involuntary dissolution, liquidation or winding up of the
Corporation, the Corporation shall mail to each holder of Series B Preferred
Stock at least 10 days prior to the record date therefor a notice setting forth
(a) such record date and a description of such dividend or distribution, (b) the
date on which any such recapitalization, reorganization, merger, consolidation,
disposition, dissolution, liquidation or winding up is expected to become
effective, and (c) the time, if any is to be fixed, as to when the holders of
record of Common Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or other property
deliverable upon such recapitalization, reorganization, merger, consolidation,
disposition, dissolution, liquidation or winding up.
(m) Issue Taxes. The Corporation shall pay all issue and
other non-income taxes that may be payable in respect of any issue or delivery
of shares of Common Stock on conversion of shares of Series B Preferred Stock,
other than taxes payable as a result of the issuance of delivery of Common Stock
to a person other than the record holder of the Series A Preferred surrendered
for conversion.
(n) Minimum Adjustment; No Increase. No adjustment of the
Current Conversion Price shall be made in an amount less than one cent, provided
that any adjustment that is not made by reason of this Subsection 5(n) shall be
carried forward and shall be taken into account in any subsequent adjustment.
Except to the limited extent provided for in Subsection 5(h), no adjustments of
the Current Conversion Price in accordance with this Section 5 shall have the
effect of increasing the Current Conversion Price above the Current Conversion
Price in effect immediately prior to such adjustment.
(o) Termination of Conversion Right. Notwithstanding anything
herein to the contrary, the rights of the holders to convert shares of Series B
Preferred Stock shall cease on the 10th day following the delivery of a
Redemption Notice (as hereinafter defined) pursuant to Section 6.
6. Redemption.
(a) Subject to the terms of this Subsection 6, to the
extent the Corporation shall have funds legally available therefor, the
Corporation, at its option, may redeem, in whole or in part, the shares of
Series B Preferred Stock outstanding, at any time, upon notice given as
hereinafter provided, at a redemption price equal to $10.00 per share.
(b) In the event that fewer than all the outstanding
shares of Series B Preferred Stock are to be redeemed, the shares to be redeemed
shall be redeemed pro rata.
(c) Notice of such redemption (the "Redemption Notice")
shall be mailed by first class mail, postage prepaid, not less than 30 days nor
more than 60 days prior to the
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redemption date to the holders of record of the shares to be redeemed at their
respective addresses as they shall appear in the records of the Corporation;
provided, however, that failure to give such notice or any defect therein or in
the mailing thereof shall not affect the validity of the proceeding for the
redemption of any shares so to be redeemed except as to the holder to whom the
Corporation has failed to give such notice or except as to the holder to whom
notice was defective. Each Redemption Notice shall state: (i) the redemption
date; (ii) the number of shares of Series B Preferred Stock to be redeemed and,
if less than all the shares held by such holder are to be redeemed, the number
of such shares to be redeemed; (iii) the redemption price; (iv) the place or
places where certificates for such shares are to be surrendered for payment of
the redemption price; (v) that dividends on the shares to be redeemed will cease
to accrue on such redemption date and (vi) that the holder's right to convert
such shares into shares of Common Stock shall terminate on the close of business
on the day preceding such redemption date.
(d) Notice by the Corporation having been mailed as
provided in Subsection 6(c), and provided that on or before the applicable
redemption date funds necessary for such redemption shall have been set aside by
the Corporation, separate and apart from its other funds, in trust for the pro
rata benefit of the holders of the shares so called for redemption, then, from
and after such redemption date (unless the Corporation defaults in the payment
of the redemption price, in which case such rights shall continue until the
redemption price is paid), dividends on the shares of Series B Preferred Stock
so called for redemption shall cease to accrue, and such shares shall no longer
be deemed to be outstanding and shall not have the status of shares of Series B
Preferred Stock, and all rights of the holders thereof as shareholders of the
Corporation (except the right to receive the applicable redemption price and any
accrued and unpaid dividends from the Corporation to the date of redemption and
the right to convert such shares into shares of Common Stock, which shall
continue until the close of business on the 10th day preceding the date of
redemption) shall cease. Upon surrender of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
of the Corporation shall so require and a notice by the Corporation shall so
state), such shares shall be redeemed by the Corporation at the applicable
redemption price as provided herein. In case fewer than all the shares
represented by any such certificate are redeemed, a new certificate or
certificates shall be issued representing the unredeemed shares without cost to
the holder thereof.
(e) If, from and after the date of issuance of the Series
B Preferred Stock, the Corporation shall receive proceeds (net of commissions
and direct expenses) from a single sale of its equity securities of at least
$500,000, the holders of the Series B Preferred Stock may at their option, by
written notice to the Corporation given within twenty business days of the
consummation of such sale, require the Corporation to redeem all, but not less
than all, the Series B Preferred Stock at a redemption price equal to $10.00 per
share.
7. Reacquired Shares. Shares of Series B Preferred Stock that
have been issued and reacquired in any manner, including shares reacquired by
purchase, redemption or conversion, shall have the status of authorized and
unissued shares of the class of Preferred Stock undesignated as to series and
may be redesignated and reissued as part of any series of Preferred Stock other
than the Series B Preferred Stock.
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8. Voting.
(a) Except as otherwise provided herein or as required by
applicable law, the holders of Series B Preferred Stock shall have no voting
rights.
(b) The consent of the holders of a majority (or such
greater number as may then be required by law) of the shares of Series B
Preferred Stock at the time outstanding, given in person or by proxy, by a vote
at a meeting called for the purpose, or by consent in lieu thereof, at which the
holders of shares of Series B Preferred Stock shall vote together as a separate
class, shall be necessary for authorizing, effecting or validating:
(i) any change in the preferences, limitations
or special rights of the Series B Preferred Stock adverse to the Series B
Preferred Stock;
(ii) a new class or series of shares having a
preference as to dividends or assets that is on a parity with, or senior to, the
Series B Preferred Stock; or
(iii) any increase in the number of authorized
shares of any class or series having a preference as to dividends or assets that
is senior in any respect to the Series B Preferred Stock.
9. No Sinking Fund. The Corporation shall not be required to make
any payment to any sinking fund or otherwise to deposit or set aside any funds
or other assets of the Corporation in respect of the Series B Preferred Stock.
10. Amount of Noncash Dividends, Distributions or Consideration.
Whenever a dividend or distributions to be made in, or any consideration
received or paid by the Corporation consists of, securities or other property
other than cash, the amount of such dividend, distribution or consideration
shall be the fair market value of such securities or other property as
determined in good faith by the Board of Directors.
11. Definition of Certain Preferences. For purposes hereof, any
class or series of stock of the Corporation shall be deemed to rank:
(a) senior to the Series B Preferred Stock, either as to
dividends or upon liquidation, dissolution or winding up, if the holders of
shares of that class or series of stock shall be entitled to receive dividends
or amounts distributable upon liquidation, dissolution or winding up of the
Corporation, as the case may be, in preference or priority to the holders of
Series B Preferred Stock;
(b) on a parity with the Series B Preferred Stock, either
as to dividends or upon liquidation, dissolution or winding up whether or not
the dividend rates, dividend payment dates, redemption or liquidation prices per
share or conversion or sinking fund provisions, if any,
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are different from those of the Series B Preferred Stock, if the holders of
shares of that class or series of stock shall be entitled to receive dividends
or amounts distributable upon liquidation, dissolution or winding up of the
Corporation, as the case may be, in proportion to their respective dividend
preferences (whether based on their respective dividend rates or the respective
amounts of accumulated and unpaid dividends thereon) or their respective
liquidation preferences, without preference or priority, one over the other, as
between the holders of shares of that class or series of stock and the holders
of shares of Series B Preferred Stock; and
(c) junior to the Series B Preferred Stock, either as to dividends
or upon liquidation, if the holders of shares of Series B Preferred Stock shall
be entitled to receive dividends or amounts distributable upon liquidation,
dissolution or winding up of the Corporation, as the case may be, in preference
or priority to the holders of shares of that class or series of stock.
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IN WITNESS WHEREOF, the undersigned officer of the Corporation has
executed this certificate on behalf of the Corporation this third day of
January, 2001.
vFINANCE.COM, INC.
By: /s/ Leonard J. Sokolow
------------------------------
Leonard Sokolow
Title: CEO
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