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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 12, 1997 (Date of earliest event reported: June 2, 1997)
SYNERGISTIC HOLDINGS CORP.
(Exact Name of Registrant as specified in charter)
Delaware 1-12856 42-1358066
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
50 Laser Court, Hauppauge, New York 11788
(Address of principal executive offices)
Registrant's telephone number, including area code: (516) 436-5000
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On June 2, 1997, the Registrant entered into a Subscription
Agreement (the "Subscription Agreement") with Meadows Management, LLC ("Meadows
Management") pursuant to which Meadows Management paid the Registrant $25,000.00
in exchange for 25,000 shares of the Registrant's preferred stock, $0.01 par
value per share (the "Series C Preferred Stock"). Meadows Management will also
act as a management consultant to the Registrant.
Meadows Management, as holder of the Series C Preferred Stock,
shall be entitled to convert whole shares of Series C Preferred Stock into
shares of the Registrant's common stock, $0.01 par value per share (the "Common
Shares"), issuable upon conversion of the Series C Preferred Stock, as follows:
each outstanding share of Series C Preferred Stock is convertible at any time
into one hundred (100) fully-paid and non-assessable Common Shares of the
Registrant at a price of $0.10 per Common Share. Meadows Management, as holder
of the Series C Preferred Stock, shall be entitled to vote with holders of the
Common Shares on all matters to be voted on by the Registrant's shareholders
with each share of Series C Preferred Stock entitled to one hundred votes per
share.
Pursuant to the Subscription Agreement, the Registrant has
agreed to amend its Certificate of Incorporation to increase the number of
shares of the common stock, which it is authorized to issue to have available a
sufficient number of authorized common stock to issue upon the conversion of
Series C Preferred Stock. The Registrant has further agreed that in the event
that such amendment has not been approved by the Registrant's Board of Directors
and shareholders by December 31, 1997, the Registrant will pay Meadows
Management $1,000,000.00. A copy of the Certificate of Designation relating to
the Series C Preferred Stock is filed as an Exhibit hereto.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
Exhibit No. Description
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4 Certificate of Designation dated June 2, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
SYNERGISTIC HOLDINGS CORP.
By /s/ Salvatore Crimi
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Salvatore Crimi, Chief Executive Officer
Dated: June 12, 1997
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EXHIBIT 4
CERTIFICATE OF DESIGNATION OF
PREFERRED STOCK
OF
SYNERGISTIC HOLDINGS CORP.
Synergistic Holdings Corp. (the "Company"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
that, pursuant to authority conferred upon the Board of Directors by the
Certificate of Incorporation of the Company, and pursuant to the provisions of
Section 151 of Title 8 of the Delaware Code of 1953, said Board of Directors,
adopted a resolution providing for the issuance of a series of shares of Series
C Preferred Stock, which resolution is as follows:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Company in accordance with the provisions of its Certificate
of Incorporation, a series of Preferred Stock of the Company be and hereby is
created, such series of Preferred Stock to be designated Series C Preferred
Stock, to consist of shares of the par value of $.01 per share, and shall
possess the rights and preferences set forth below:
Section 1. Designation and Amount. The shares of such series
shall have a par value of $.01 per share and shall be designated as Preferred
Stock (Series C) (the "Series C Preferred Stock") and the number of shares
constituting the Series C Preferred Stock shall be Twenty Five Thousand
(25,000). The Series C Preferred Stock shall be issued for and shall be deemed
to have an original issue price per share of $1.00 per share.
Section 2. Rank. The Series C Preferred Stock shall rank: (i)
prior to all of the Company's common stock, $.01 par value per share (the
"Common Shares"); (ii) prior to any class or series of capital stock of the
Company hereafter created not specifically ranking by its terms senior to or on
parity with any Preferred Stock of whatever subdivision (collectively, with the
Common Shares, "Junior Securities"); and (iii) on parity with any class or
series of capital stock of the Company hereafter created specifically ranking by
its terms on parity with the Series C Preferred Stock ("Parity Securities") in
each case as to distributions of assets upon liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary (all such distributions
being referred to collectively as "Distributions").
Section 3. Dividends. The Series C Preferred Stock will not
bear dividends.
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Section 4. Liquidation Preference.
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(a) In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, the holders of
Series C Preferred Stock (the "Holders") shall be entitled to receive, prior in
preference to any distribution to Junior Securities but in parity with any
distribution to Parity Securities, an amount per share equal to the original
preferred stock issue price. If upon the occurrence of such event, and after
payment in full of the preferential amounts with respect to the Senior
Securities, the assets and funds available to be distributed among the Holders
of the Series C Preferred Stock and Parity Securities shall be insufficient to
permit the payment to such Holders of the full preferential amounts due to the
Holders of the Series C Preferred Stock and the Parity Securities, respectively,
then the entire assets and funds of the Company legally available for
distribution shall be distributed among the Holders of the Series C Preferred
Stock and the Parity Securities, pro rata, based on the respective liquidation
amounts to which each such series of stock is entitled by the Company's
Certificate of Incorporation and any certificate(s) of designation relating
thereto.
(b) Upon the completion of the distribution required
by Section 4(a), if assets remain in this Company, they shall be distributed to
holders of Junior Securities in accordance with the Company's Certificate of
Incorporation including any duly adopted certificate(s) of designation.
(c) At each Holder's option, a sale, conveyance or
disposition of all or substantially all the assets of the Company to a private
entity, the common stock of which is not publicly traded, shall be deemed to be
a liquidation, dissolution or winding up within the meaning of this Section 4;
provided, however, that an event described in the prior clause that the Holder
does not elect to treat as a liquidation and a consolidation, merger,
acquisition, or other business combination of the Company with or into any other
company or companies shall not be treated as a liquidation, dissolution or
winding up within the meaning of this Section 4 (a Holder who elects to have the
transaction treated as a liquidation is herein referred to as a "Liquidating
Holder").
(d) Prior to the closing of a transaction described
in Section 4(c) which would constitute a liquidation event, the Company shall
either (i) make all cash distributions it is required to make to the Liquidating
Holders pursuant to the first sentence of Section 4(a), (ii) set aside
sufficient funds from which the cash distributions required to be made to the
Liquidating Holders can be made, or (iii) establish an escrow or other similar
arrangement with a third party pursuant to which the proceeds payable to the
Company from a sale of all or substantially all the assets of the Company will
be used to make the liquidating payments to the Liquidating Holders immediately
after the consummation of such sale. In the event that the Company has not fully
complied with either of the foregoing alternatives, the Company shall either:
(x) cause such closing to be postponed until such cash distributions have been
made, or (y) cancel such transaction, in which event the rights of the Holders
or other arrangements shall be the same as existing immediately prior to such
proposed transaction.
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Section 5. Conversion. The record Holders of the Series C
Preferred Stock shall have conversion rights as follows:
(a) Right to Convert. Each record Holder of Series C
Preferred Stock shall be entitled to convert whole shares of Series C Preferred
Stock into Common Shares issuable upon conversion of the Series C Preferred
Stock, as follows: each outstanding share of Series C Preferred Stock is
convertible at any time into one hundred (100) fully-paid and non-assessable
Common Shares of the Company (the "Conversion Rate") at a price of $0.10 per
Common Share (the "Conversion Price").
(b) In addition to the method of payment set forth in
Section 5(a) and in lieu of any cash payment required thereunder, each record
Holder of the Series C Preferred Stock shall be entitled to convert whole shares
of Series C Preferred Stock into Common Shares issuable upon conversion of the
Series C Preferred Stock as follows: by the surrender of shares of Series C
Preferred Stock in exchange for the number of Common Shares equal to the product
of (x) the number of Common Shares as to which the Series C Preferred Stock is
being tendered, multiplied by (y) a fraction, the numerator of which is the
Market Price (as defined in Section 5(c) hereof) of the Common Shares minus the
Conversion Price of the Common Shares and the denominator of which is the Market
Price per Common Share. Solely for the purposes of this Section 5, Market Price
shall be calculated (i) on the date on which the Notice of Conversion (as
defined herein) is deemed to have been sent to the Company pursuant to Section
5(d) hereof ("Notice Date") or (ii) as the average of the Market Price for each
of the five trading days immediately preceding the Notice Date, whichever of (i)
or (ii) results in a greater Market Price.
(c) As used herein, the phrase "Market Price" of the
Common Shares at any date shall be deemed to be the closing asked price, or, in
case no such closing asked price is available, the average of the last reported
closing asked prices for the last three (3) trading days, in either case as
officially reported by the principal securities exchange on which the Common
Shares are listed or admitted to trading or by the Nasdaq National Market or the
Nasdaq Small Cap, or if the Common Shares are not listed or admitted to trading
on any national securities exchange or by the Nasdaq National Market or the
Nasdaq Small Cap Market, then Market Price shall mean the quotation provided by
the OTC Bulletin Board. If the Market Price of the Common Shares cannot be
determined, the Market Price of the Common Shares shall be determined in good
faith (using customary valuation methods) by resolution of the members of the
Board of Directors of the Company, based on the best information available to
it.
(d) Mechanics of Conversion. In order to convert
Series C Preferred Stock into full Common Shares, the Holder shall (i) fax, on
or prior to 6:00 p.m., New York City time on the Date of Conversion, a copy of a
fully executed notice of conversion ("Notice of Conversion") to the Company at
the office of the Company or to the Company's designated transfer agent (the
"Transfer Agent") for the Series C Preferred Stock stating that the Holder
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elects to convert, which notice shall specify the date of conversion and the
number of shares of Series C Preferred Stock to be converted, (ii) with respect
to Section 5(a) surrender to a common courier for either overnight or two-day
delivery to the office of the Company or the Transfer Agent a certified or bank
cashier's check payable to the order of the Company, in an amount equal to the
product of the Conversion Price and the number of Common Shares for which holder
of the Series C Preferred Stock is requesting, and (iii) surrender to a common
courier for either overnight or two (2) day delivery to the office of the
Company or the Transfer Agent, the original certificates representing the Series
C Preferred Stock being converted, and with respect to Section 5(a) the Series C
Preferred Stock being tendered, (the "Series C Preferred Stock Certificates"),
duly endorsed for transfer, provided, however, that the Company shall not be
obligated to issue certificates evidencing the Common Shares issuable upon such
conversion unless the Series C Preferred Stock Certificates are delivered to the
Company or the Transfer Agent as provided above, or the Holder notifies the
Company or the Transfer Agent that such certificates have been lost, stolen or
destroyed (subject to the requirements of subparagraph (i) below).
(i) Lost or Stolen Certificates. Upon receipt by the
Company of evidence of the loss, theft, destruction or mutilation of any Series
C Preferred Stock Certificates representing shares of Series C Preferred Stock,
and (in the case of loss, theft or destruction) of indemnity or security
reasonably satisfactory to the Company, and upon surrender and cancellation of
the Series C Preferred Stock Certificate(s), if mutilated, the Company shall
execute and deliver new Series C Preferred Stock Certificate(s) of like tenor
and date.
However, the Company shall not be obligated to
re-issue such lost or stolen Series C Preferred Stock Certificates if Holder
contemporaneously requests the Company to convert such Series C Preferred Stock
into Common Shares.
(ii) Delivery of Common Shares Upon Conversion. The
Company no later than 6:00 p.m. (New York City time) on the third (3rd) business
day after payment of the Conversion Price, if applicable, and receipt by the
Company or its Transfer Agent of all necessary documentation duly executed and
in proper form required for conversion, including the original Series C
Preferred Stock Certificates to be converted or tendered (or after provision for
security or indemnification in the case of lost, stolen or destroyed
certificates, if required), shall issue and deliver to the Holder as shown on
the stock records of the Company a certificate for the number of Common Shares
to which the Holder shall be entitled as aforesaid.
(iii) No Fractional Shares. If any conversion of the
Series C Preferred Stock would create a fractional Common Share or a right to
acquire a fractional Common Share, such fractional share shall be disregarded
and the number of Common Shares issuable upon conversion, in the aggregate,
shall be the next higher number of shares.
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(iv) Date of Conversion. The date on which conversion
occurs (the "Date of Conversion") shall be deemed to be the date such Notice of
Conversion is faxed to the Company or the Transfer Agent, as the case may be,
provided an advance copy of the Notice of Conversion is faxed to the Company on
or prior to 6:00 p.m, New York City time, on the Date of Conversion. The
original Series C Preferred Stock Certificates representing the shares of Series
C Preferred Stock to be converted or tendered shall be surrendered by depositing
such certificates with a common courier for either overnight or two (2) day
delivery, as soon as possible following the Date of Conversion. The person or
persons entitled to receive the shares of Common Shares issuable upon such
conversion shall be treated for all purposes as the record Holder or Holders of
such Common Shares on the Date of Conversion.
Section 7. Voting Rights. The Holders of the Series C
Preferred Stock shall be entitled to vote with holders of the Common Shares on
all matters to be voted on by the Company's shareholders with each share of
Series C Preferred Stock entitled to one hundred votes per share. Holders of the
Series C Preferred Stock shall be entitled to notice of all shareholders
meetings or written consents with respect to which they would be entitled to
vote, which notice would be provided pursuant to the Company's by-laws and
applicable statutes.
To the extent that under Delaware Law the vote of the Holders
of the Series C Preferred Stock, voting separately as a class, is required to
authorize a given action of the Company, the affirmative vote or consent of the
Holders of at least a majority of the shares of the Series C Preferred Stock,
represented at a duly held meeting at which a quorum is present or by written
consent of a majority of the shares of Series C Preferred Stock (except as
otherwise may be required under Delaware Law) shall constitute the approval of
such action by the class. To the extent that under Delaware Law the Holders of
the Series C Preferred Stock are entitled to vote on a matter with holders of
Common Shares, voting together as one (1) class, each share of Series C
Preferred Stock shall be entitled to a number of votes equal to the number of
Common Shares into which it is then convertible using the record date for the
taking of such vote of stockholders as the date as of which the Conversion Rate
is calculated. Holders of the Series C Preferred Stock also shall be entitled to
notice of all shareholder meetings or written consents with respect to which
they would be entitled to vote, which notice would be provided pursuant to the
Company's by-laws and applicable statutes.
Section 8. Protective Provision. So long as shares of Series C
Preferred Stock are outstanding, the Company shall not without first obtaining
the approval (by vote or written consent, as provided by Delaware Law) of the
Holders of at least sixty-six and two-thirds percent (66 2/3%) of the then
outstanding Series C Preferred Stock, and at least sixty-six and two-thirds
percent (66 2/3%) of the then outstanding Holders:
(a) alter or change the rights, preferences or
privileges of the Series C Preferred Stock or any Senior Securities so as to
affect adversely the Series C Preferred Stock;
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(b) create any new class or series of stock having a
preference over the Series C Preferred Stock or increase the size of the
authorized number of Series C Preferred Stock; or
(c) do any act or thing not authorized or
contemplated by this Certificate of Designation which would result in taxation
of the holders of shares of the Series C Preferred Stock under Section 305 of
the Internal Revenue Code of 1986, as amended (or any comparable provision of
the Internal Revenue Code as hereafter from time to time amended).
Section 9. Status of Converted Stock. In the event any Series
C Preferred Stock shall be converted or tendered pursuant to Section 5 hereof,
the shares so converted or tendered shall be canceled, shall return to the
status of authorized but unissued Preferred Shares of no designated series, and
shall not be issuable by the Company as Series C Preferred Stock.
Section 10. Preference Rights. Nothing contained herein shall
be construed to prevent the Board of Directors of the Company from issuing one
(1) or more series of Series C Preferred Shares with liquidation preferences
junior to or in parity with liquidation preferences of the Series C Preferred
Stock.
Signed on June 2, 1997
/s/ Salvatore Crimi, Chief Executive Officer
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Salvatore Crimi, Chief Executive Officer
Attest:
/s/ Angelo Crimi, Secretary
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Angelo Crimi, Secretary
