Exhibit 3.1
AMENDED CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS
Of
SERIES B CONVERTIBLE PREFERRED STOCK
OF
ATLANTIC TECHNOLOGY VENTURES, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
The undersigned officer of Atlantic Technology Ventures, Inc., a
Delaware corporation (the "Corporation"), pursuant to the provisions of Section
151 of the General Corporation Law of the State of Delaware, does hereby make
this Certificate of Amendment of the Certificate of Designations, Preferences
and Rights of Series B Convertible Preferred Stock, originally filed with the
office of the Secretary of State of the State of Delaware on September 28, 2000,
and amended on November 20, 2000 (as so amended, the "Series B Certificate of
Designations"), and does hereby state and certify that pursuant to the authority
expressly vested in the Board of Directors of the Corporation by its Certificate
of Incorporation, as amended, originally filed with the office of the Secretary
of State of the State of Delaware on May 18, 1993, the Board of Directors of the
Corporation duly adopted the following resolutions:
RESOLVED, that the Series B Certificate of Designations is hereby
amended as follows:
(1) by striking out the definition of "Conversion Price" appearing at the
end of Section 6(b) of Article II in its entirety and substituting the
following:
"Conversion Price" means, as of any Conversion Date
or other date of determination, the lower of (y) $1.00, or (z) ninety percent
(90%) of the average of the two (2) lowest Closing Bid Prices on the Principal
Market of the Common Stock out of the fifteen (15) Trading Days immediately
prior to conversion, which Conversion Price shall be adjusted proportionately
for any reorganizations, reclassifications, stock splits, stock dividends,
reverse stock splits and similar events; provided, however, that the Conversion
Price will be reduced by an additional five percent (5%) if the Common Stock is
not listed on either the Nasdaq SmallCap Market or Nasdaq National Market as of
such date, and provided further that in no event will the Conversion Price be
lower than the Floor Price, if any.
(2) by striking out the definition of "Market Price" appearing at the end
of Section 6(b) of Article II in its entirety and substituting the
following:
"Market Price" means the average Closing Bid Price of
the Common Stock on the Principal Market for the five (5) Trading Days prior to
the date for which the Market Price is to be determined.
(3) by striking out the definition of "Floor Price" appearing at the end of
Section 6(b) of Article II in its entirety and substituting the
following:
"Floor Price" means $0.50 for the conversion of a
share of Series B Preferred Stock effected on or before March 28, 2002.
(4) by adding a new subsection (m) to Section 6 of Article II as follows:
(m) Forced Conversion. So long as a Registration Statement
covering the resale of the Common Stock issued or issuable upon conversion of
the Series B Preferred Stock is effective (but only for so long as the
Corporation is required to maintain the effectiveness of such Registration
Statement pursuant to the Registration Rights Agreement dated as of September
28, 2000, between the Corporation and the investors signatory thereto (the
"Registration Rights Agreement")), if on any day after the date of this Amended
Certificate of Designations (i) for the period of twenty (20) consecutive
Trading Days ending the immediately preceding Trading Day the Closing Bid Price
of the Common Stock on the Principal Market has been equal to or greater than
$1.75 per share (as adjusted for stock splits, stock dividends and similar
events) and (ii) the average daily trading volume of the Common Stock on the
Principal Market over that period of twenty (20) consecutive Trading Days
exceeds 50,000 shares (any such day, a "Forced Conversion Trigger Day"), then
the holders of the Series B Preferred Stock shall within five (5) days after the
Forced Conversion Trigger Day give the Corporation a Conversion Notice pursuant
to Section 6(c), which Conversion Notice must specify a date of conversion no
later than 10 days after the Forced Conversion Trigger Day. In the event of
conversion pursuant to this Section 6(m), the Conversion Price will be $0.75 (as
adjusted for stock splits, stock dividends and similar events). Any conversions
pursuant to this Section 8(m) shall be subject to the all other applicable
provisions of this Section 6.
(5) by striking out those provisions of Section 7(c) of Article II
appearing prior to Section 7(c)(i) of Article II in their entirety and
substituting the following:
(c) Issuances at Less Than the Conversion Price. Upon the
issuance or sale by the Corporation, during the period ending March 28, 2002
(the "MFN Period"), of:
(6) by striking out Section 8 of Article II in its entirety and replacing
it with the following new Section 8:
8. Redemption.
(a) Mandatory Redemption.
(i) On March 28, 2002 (the "Maturity Date"), the
Corporation shall redeem all outstanding shares of Series B Preferred Stock for
cash at a redemption price per share equal to the greater of: (A) 125% of the
Series B Original Price per share, plus all accrued but unpaid dividends
thereon; or (B) an amount equal to the product of (1) the number of shares of
Common Stock then issuable to the holders upon conversion of the Series B
Preferred Stock being redeemed (irrespective of the Floor Price) and (2) the
Market Price on the date of redemption (the "Redemption Price").
(ii) Within five (5) days after the Maturity Date the
Corporation shall pay to each holder of shares of Series B Preferred Stock the
Redemption Price for all such holder's shares of Series B Preferred Stock (the
"Redemption Amount") in cash by wire transfer of immediately available funds in
accordance with such holder's written wire transfer instructions. If the
Corporation fails to do so, in addition to any remedy such holder may have under
this Certificate of Designations, the Purchase Agreement and the Registration
Rights Agreement, such unpaid amount shall bear interest at the rate of 3.0% per
month (prorated for partial months) until paid in full. Until the Redemption
Amount is paid in full to such holder, the mandatory redemption provided for in
this Section 8(a) will not be effective with respect to those shares of Series B
Preferred Stock for which the Redemption Price has not been paid in full.
(iii) As a condition to payment of the Redemption
Amount to any holder of shares of Series B Preferred Stock, on or before the
Maturity Date that holder must surrender to the Corporation at its principal
offices any certificates representing such shares (or an affidavit of lost
certificate in form and content reasonably satisfactory to the Corporation, but
which shall not require the posting of any bond). Upon payment to the holder of
the Redemption Price, each such surrendered certificate shall be cancelled and
retired.
(b) Optional Redemption.
(i) So long as a Registration Statement covering the
resale of the Common Stock issued or issuable upon conversion of the Series B
Preferred Stock is effective (but only for so long as the Corporation is
required to maintain the effectiveness of such Registration Statement pursuant
to the Registration Rights Agreement), the Corporation may at its option at any
time redeem for cash all, but not less than all, of the shares of Series B
Preferred Stock at the Redemption Price.
(ii) If the Corporation opts to redeem all the shares
of Series B Preferred Stock pursuant to this Section 8(b), it must provide
written notice to the holders of Series B Preferred Stock (the "Redemption
Notice"). The Redemption Notice must specify (A) the date for redemption (the
"Redemption Date"), which may not be sooner than seven (7) days after the date
of the Redemption Notice, and (B) the number of shares of Series B Preferred
Stock to be redeemed from the holder to whom the Redemption Notice is delivered.
Each holder of shares of Series B Preferred Stock shall be entitled to convert
its shares of Series B Preferred Stock into Common Stock prior to the Redemption
Date.
(iii) Within five (5) days after the Redemption Date
the Corporation shall pay to each holder of shares of Series B Preferred Stock
its entire Redemption Amount in cash by wire transfer of immediately available
funds in accordance with such holder's written wire transfer instructions. If it
fails to do so, (A) the option redemption provided for in this Section 8(b) will
not be effective with respect to those shares of Series B Preferred Stock for
which the Redemption Price has not been paid in full, and (B) that holder may
continue to convert its shares of Series B Preferred Stock as provided in
Section 6.
(iv) As a condition to payment of the Redemption
Amount to any holder of shares of Series B Preferred Stock, on or before the
Redemption Date, that holder must
surrender to the Corporation at its principal offices any certificates
representing such shares (or an affidavit of lost certificate in form and
content reasonably satisfactory to the Corporation, but which shall not require
the posting of any bond). Upon payment to the holder of the Redemption Price,
each such surrendered certificate shall be cancelled and retired.
This Amended Certificate of Designations of the Corporation has been
duly adopted in accordance with Section 151 of the General Corporation Law of
the State of Delaware.
The undersigned is signing this Amended Certificate of Designations on
behalf of the Corporation on January 9, 2001.
/s/ Frederic P. Zotos
-------------------------------------
Frederic P. Zotos
President