EXHIBIT 3.3
AMENDED
CERTIFICATE OF DESIGNATION
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
VELOCITYHSI, INC.
________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
________________________
VelocityHSI, Inc. (the "Corporation"), a Corporation organized and existing
under and by virtue of the provisions of the General Corporation Law of the
State of Delaware (the "DGCL"), certifies as follows:
FIRST: The Certificate of Incorporation of the Corporation (the
"Certificate of Incorporation") authorizes the issuance of Fifty Million
(50,000,000) shares of Preferred Stock, par value $0.01 per share (the
"Preferred Stock"), and further provides that Preferred Stock may be issued in
one or more series and the number of shares, designations, preferences, rights
and restrictions of each series shall be fixed by resolution or resolutions
adopted by the Board of Directors prior to the issuance of any shares of a
particular series of Preferred Stock.
SECOND: The Board of Directors of the Corporation, in an action by
unanimous written consent of the Board of Directors on April 23, 2001 did duly
adopt the following resolutions:
WHEREAS, on October 27, 2000, the Corporation filed with the Secretary of
State of Delaware a Certificate of Designation of Rights, Preferences and
Privileges of Series A Convertible Preferred Stock, Series B Convertible
Preferred Stock, Series C Convertible Preferred Stock and Series D Convertible
Preferred Stock (the "Certificate of Designation");
WHEREAS, no shares of Series A Convertible Preferred Stock, Series B
Convertible Preferred Stock, Series C Convertible Preferred Stock or Series D
Convertible Preferred Stock have been issued; and
WHEREAS, it has been proposed and the Board of Directors deems it to be in
the best interest of the Corporation and its stockholders to (i) reduce the
number of shares of Preferred Stock designated as Series A Convertible Preferred
Stock, par value $.01 (the "Series A Preferred Stock") from 10,000,000 to
2,083,333 and to amend the designations, preferences, rights, qualifications,
powers, privileges, limitations and restrictions of the shares of such Series A
Convertible Preferred Stock; (ii) eliminate the series of Series B Convertible
Preferred Stock, (iii) eliminate the series of Series C Convertible Preferred
Stock and (iv) eliminate the series of Series D Convertible Preferred Stock.
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NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority vested in
the Board of Directors by the Certificate of Incorporation, the Certificate of
Designation be, and it hereby is, amended to (i) reduce the number of shares of
Preferred Stock designated as Series A Convertible Preferred Stock, par value
$0.01 per share of the Corporation ("Series A Preferred Stock"), from 10,000,000
to 2,083,333 shares, and set forth the following designations, preferences,
rights, qualifications, powers, privileges, limitations and restrictions of the
shares of such Series A Preferred Stock; (ii) eliminate the series of Series B
Convertible Preferred Stock, (iii) eliminate the series of Series C Convertible
Preferred Stock; and (iv) eliminate the series of the Series D Convertible
Preferred Stock.
1. Certain Definitions.
Unless the context otherwise requires, the terms defined in this paragraph
1 shall have, for all purposes of this resolution, the meanings herein
specified.
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act.
"Acquiring Corporation" shall mean any of (i) the continuing or surviving
corporation of a consolidation or merger with the Corporation (if other than the
Corporation), (ii) the Corporation in a merger in which the Corporation is the
continuing or surviving corporation, or (iii) the transferee of all or
substantially all of the Corporation's assets.
"Change of Control" shall mean:
(a) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than 50% of the combined voting power of the then outstanding Voting
Securities of the Corporation entitled to vote generally in the election of
directors; or
(b) a reorganization, merger or consolidation, in each case, with
respect to which all or substantially all of the individuals and entities who
were the respective beneficial owners of the Voting Securities of the
Corporation immediately prior to such reorganization, merger or consolidation do
not, following such reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50% of the combined voting power of the then
outstanding Voting Securities resulting from such reorganization, merger or
consolidation; or
(c) the sale or other disposition of all or substantially all of the
assets or property of the Corporation in one transaction or series of related
transactions.
"Common Stock" shall mean the common stock of the Corporation, par value
$.01 per share.
"Conversion Price" shall mean the price per share of Common Stock used to
determine the number of shares of Common Stock deliverable upon conversion of a
share of the Series A Preferred Stock, which price shall initially be $1.20 per
share, subject to adjustment in accordance with the provisions of paragraph 6
below.
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"Convertible Securities" shall mean all options, warrants or other rights
to purchase or subscribe for Common Stock other than Options.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Issue Date" shall mean the date that shares of Series A Preferred Stock
are first issued by the Corporation.
"Issue Price" shall mean $1.20 per share of Series A Preferred Stock.
"Junior Stock" shall mean the Common Stock and any other class or series of
stock of the Corporation other than Parity Stock or Senior Stock.
"Options" shall mean securities by their terms convertible into or
exchangeable for Common Stock.
"Parity Stock" shall mean any class or series of stock of the Corporation
issued after the Issue Date ranking on a parity with the Series A Preferred
Stock in respect of (i) the right to receive dividends or (ii) the right to
receive assets upon the liquidation, dissolution or winding up of the affairs of
the Corporation.
"Senior Stock" shall mean any class or series of stock of the Corporation
issued after the Issue Date ranking senior to the Series A Preferred Stock in
respect of (i) the right to receive dividends or (ii) the right to receive
assets upon the liquidation, dissolution or winding up of the affairs of the
Corporation.
"Voting Securities" of any person shall mean at any time shares of any
class of capital stock of such person which are then entitled to vote generally
in the election of directors.
2. Dividend Rights.
The holders of shares of Series A Preferred Stock shall be entitled to
receive dividends, out of any assets legally available therefor, prior and in
preference to any declaration or payment of any dividend (payable other than in
Common Stock or other securities and rights convertible into or entitling the
holder thereof to receive, directly or indirectly, additional shares of Common
Stock of the Corporation) on the Common Stock of the Corporation at the rate of
8% of the Issue Price per share per annum for the Series A Preferred Stock (as
adjusted for any stock splits, stock dividends, recapitalizations or the like),
payable when, as, and if declared by the Board of Directors. Such dividends
shall be non-cumulative.
3. Liquidation Preference.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation (a "Liquidation"), the holders of the outstanding
shares of Series A Preferred Stock shall be entitled to receive, out of the
assets of the Corporation available for distribution to its stockholders,
whether from capital, surplus funds or earnings, prior and in preference to any
distribution of any of the assets of the Corporation to the holders of Junior
Stock, an amount in cash per share equal to the Issue Price for such share (the
"Series A Liquidation Preference
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Price") plus an amount equal to any and all declared but unpaid dividends (in
the aggregate, the "Liquidation Amount"). If the assets of the Corporation
available for distribution to its shareholders shall be insufficient to pay the
holders of shares of Series A Preferred Stock the full Liquidation Amount to
which they shall be entitled, the holders of shares of Series A Preferred Stock
shall share ratably in any distribution of assets according to the amounts which
would be payable with respect to the Series A Preferred Stock held by them upon
such distribution if all amounts payable on or with respect to said shares were
paid in full. After the full liquidation preference of all of the holders of the
outstanding shares of Series A Preferred Stock has been satisfied as set forth
in this paragraph 3, the remaining assets of the Corporation shall be
distributed to the holders of shares of Common Stock on a pro rata basis.
For purposes of this paragraph 3 and subject to the provisions and
limitations of paragraph 4 below, a Liquidation shall be deemed to be occasioned
by and to include a Change of Control.
4. Change of Control.
(a) Notice. The Corporation shall give each holder of record of Series A
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Preferred Stock written notice of an impending Change of Control not later than
twenty (20) days prior to the earlier of (i) any record date relating to such
Change of Control, (ii) any stockholders' meeting called to approve such
transaction or the distribution of an action by written consent of the
stockholders to approve such transaction, or (iii) the closing of such
transaction, and shall also notify such holders in writing of the final approval
of such transaction. The first of such notices shall describe the material terms
and conditions of the impending transaction, and the Corporation shall
thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty (20) days after the
Corporation has given the first notice as provided for herein or sooner than ten
(10) days after the Corporation has given notice of any material changes as
provided for herein; provided, however, that such periods may be shortened upon
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the written consent of the holders of a majority of the Series A Preferred Stock
entitled to such notice or similar right to receive notice.
(b) Rollover of Series A Preferred. Notwithstanding any provision herein
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to the contrary, in the event that any agreement is entered into which results
in, or upon consummation will result in, a Change of Control whereby the
consideration received by the Corporation is, in part or whole, other than cash,
such Change of Control shall not be deemed to be a Liquidation provided that:
(i) to the extent that the consideration received by the
Corporation is cash, then such cash shall be distributed as a partial
Liquidation pursuant to the provisions of paragraph 3 hereof; and
(ii) to the extent that the consideration received by the
Corporation is other than cash:
(x) if the Acquiring Entity shall agree in writing to the
following provisions being incorporated into the Certificate of Incorporation
(or applicable charter document) of the Acquiring Entity (and such provisions
shall be so incorporated): each share of
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Series A Preferred Stock shall, upon consummation of a Change of Control, be
exchanged for preferred securities of the Acquiring Entity (the "Acquirer's
Preferred"), having preference over any class or classes of common stock of the
Acquiring Entity, but subordinate to any other class or series of preferred
stock of the Acquiring Entity (if any), provided that (A) the total aggregate
liquidation amounts of the Acquirer's Preferred issued to the holders of shares
of Series A Preferred Stock shall be equal to the total aggregate Liquidation
Amounts payable on all of the shares of Series A Preferred Stock outstanding
immediately prior to the Change of Control (less any amount in cash received by
holders of shares of Series A Preferred Stock pursuant to paragraph 3 hereof)
and shall otherwise be the same or as equivalent as possible in rights,
preferences, privileges or powers as the Series A Preferred Stock and (B) the
Acquirer's Preferred will convert into that number of shares of common stock of
the Acquiring Entity (the "Acquirer's Common Stock") that a Series A Preferred
Stock holder would have been entitled to receive had that holder's shares of
Series A Preferred Stock converted into Common Stock prior to the Change of
Control transaction (less the number of shares, if any, for which holders of
shares of Series A Preferred Stock received in cash the Liquidation Amount under
paragraph 3 hereof); and, in such case, appropriate adjustment (as determined in
good faith by the Board of Directors) shall be made in the application of the
provisions in paragraph 6; or
(y) if the Acquiring Entity shall not so agree (or the
provisions provided for in sub-paragraph (x) above are not incorporated into the
Acquiring Entity's Certificate of Incorporation (or applicable charter
document)), then after the earlier of receipt of the first notice as specified
in paragraph 4(a) or the date that such notice would be required under paragraph
4(a), each holder of Series A Preferred Stock, may elect to convert such stock
into Common Stock in accordance with the provisions of paragraph 6 hereof or to
treat such Change of Control as a Liquidation in accordance with the provisions
of paragraph 3 hereof.
5. Redemption.
The Corporation shall have, in accordance with the provisions of this
paragraph 5, the right to call or redeem all or any shares of the Series A
Preferred Stock at any time, subject at all times to the provisions set forth in
paragraph 4(b)(ii) and paragraph 6.
(a) Method of Redemption. The Corporation may, at its own election,
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subject to the provisions set forth in paragraph 4(b)(ii) and paragraph 6,
redeem all or a pro rata portion of the Series A Preferred Stock, to the extent
it may lawfully do so, at any time after the Issue Date (the "Redemption Date"),
by paying in cash in exchange for the shares of Series A Preferred Stock to be
redeemed a sum equal to the Issue Price per share of the Series A Preferred
Stock (as adjusted for any stock dividends, combinations, splits,
recapitalizations and the like with respect to such shares) plus any declared
and unpaid dividends on such shares. The total amount to be paid for the Series
A Preferred Stock is hereinafter referred to as the "Redemption Price." Any
redemption effected shall be made on a pro rata basis among the holders of the
Series A Preferred Stock in proportion to the aggregate Redemption Price payable
to them.
(b) Notice. At least twenty (20) days but no more than forty-five (45)
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days prior to the Redemption Date, the Corporation shall send a notice (a
"Redemption Notice") to the holders of Series A Preferred Stock to be redeemed
setting forth (i) the total number of shares of Series A Preferred Stock to be
redeemed; (ii) the Redemption Price for the shares to be redeemed; and (iii)
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the place at which such holders may obtain payment of the Redemption Price upon
surrender of their share certificates.
(c) Manner of Redemption.
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(i) Designation of Funds. On each Redemption Date, the
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Corporation shall deposit the Redemption Price of all shares to be redeemed
with a bank or trust company having aggregate capital and surplus in excess
of one hundred million dollars ($100,000,000), as a trust fund, with
irrevocable instructions and authority to the bank or trust company to pay,
on and after such Redemption Date, the Redemption Price of the shares to
their respective holders upon the surrender of their share certificates.
(ii) Surrender of Certificate. On or after the Redemption Date,
each holder of Series A Preferred Stock to be redeemed shall surrender such
holder's certificates representing such shares to the Corporation in the
manner and at the place designated in the Redemption Notice or, if such
certificates are not surrendered by any such holders, the Corporation may
mark as cancelled the certificate representing that number of shares to be
redeemed pursuant to this paragraph 5, and thereupon the Redemption Price
of such shares shall be payable to the order of the person whose name
appears on such certificate or certificates as the owner thereof and each
surrendered certificate shall be canceled. In the event less than all the
shares represented by such certificates are redeemed, a new certificate
shall be issued representing the unredeemed shares.
(iii) Termination of Rights. Unless the Corporation defaults in
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the payment of the Redemption Price for the shares of Series A Preferred
Stock to be redeemed pursuant hereto, (A) such shares of Series A Preferred
Stock tendered shall no longer be deemed outstanding, (B) the rights to
receive dividends thereon shall cease to accrue and (C) all rights of the
holders of such shares of Series A Preferred Stock shall cease (other than
the right to receive payment in full of the applicable redemption price
therefor), in each case from and after the applicable Redemption Date.
(iv) Reinstatement; Continuation of Rights upon Default. If
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the Corporation shall default in the payment of any portion of the
applicable redemption price, then, in addition to any other rights and
remedies of the holders of the affected shares of Series A Preferred Stock
which may be available herein or at law or in equity, the shares of Series
A Preferred Stock that were to be redeemed by such portion shall be deemed
to have continued to be outstanding, dividends shall have continued to
accrue thereon, and such holders shall have all of the rights of a holder
thereof, until such time as such default shall no longer be continuing.
(d) Conversion. In the event of an election by the Corporation to effect
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a redemption as provided above, the conversion rights set forth in paragraph 6
hereof for the Series A Preferred Stock shall terminate as of the close of
business on the eighth (8th) calendar day preceding the Redemption Date, unless
default is made in payment of the Redemption Price.
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6. Conversion.
The holders of the Series A Preferred Stock shall have conversion rights as
follows:
(a) Right to Convert. Each share of Series A Preferred Stock shall be
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convertible, at the option of the holder thereof, at any time following the
earlier of (i) receipt by the holders of the Series A Preferred Stock of a
Redemption Notice as provided for in, and subject to, paragraph 5 above, (ii) an
election to so convert made pursuant to and in the circumstances set forth in
paragraph 4(b)(ii) above, or (iii) April 23, 2003, at the office of the
Corporation or a transfer agent for the Series A Preferred Stock, as the case
may be, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing the Issue Price by the Conversion Price then in
effect; provided, however, that in no event shall the Corporation be obligated
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to issue shares of Common Stock in an amount such that the aggregate of the
total number of shares of Common Stock issued upon the conversion of any
warrants or other convertible securities held by the holders of the Series A
Preferred Stock, together with the conversion of the Series A Preferred Stock as
provided for in paragraph 6 hereof and any other shares held by such holders,
would be greater than 19.9% of the total outstanding shares of Common Stock or
19.9% of the total outstanding voting power of the Corporation, before the
issuance of such shares, as of the date of such conversion.
(b) Mechanics of Conversion; Fractional Shares; Dividends.
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(i) Before any holder of Series A Preferred Stock shall be entitled
to convert the same into shares of Common Stock pursuant to paragraph 6(a), such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or of a transfer agent for the Series A
Preferred Stock, as the case may be, and shall give written notice by mail,
postage prepaid, to the Corporation at its principal corporate office, of the
election to convert the same and shall state therein the name or names in which
the certificate or certificates for shares of Common Stock are to be issued.
(ii) The Corporation shall, as soon as practicable thereafter, issue
and deliver at such office, to such holder, or to the nominee or nominees of
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled. Such conversion shall be deemed to
have been made immediately prior to the close of business on the date of such
surrender of the shares of Series A Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock as of such date.
(iii) Upon conversion of only a portion of the number of shares of
Series A Preferred Stock represented by a certificate surrendered for
conversion, the Corporation shall issue and deliver to the holder of such
certificate, a new certificate for the number of shares of Series A Preferred
Stock not converted. No fractional shares shall be issued upon conversion of the
Series A Preferred Stock. Whether or not fractional shares are created upon such
conversion shall be determined on the basis of the total number of shares of
Series A Preferred Stock the holder is at the time converting into Common Stock
and the number of shares of Common Stock issuable upon such aggregate
conversion. In lieu of fractional shares to which the holder would
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otherwise be entitled, the Corporation shall pay such holder a cash amount equal
to such fraction multiplied by the fair market value of a share of the Common
Stock, as reasonably determined in good faith by the Board of Directors.
(c) Adjustments to Series A Preferred Stock Conversion Price.
(i) No Adjustment of Conversion Price. No adjustment of the
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Conversion Price shall be made in an amount less than one cent ($.01) per share;
provided that any adjustments which are not required to be made by reason of
this paragraph shall be carried forward and shall be either taken into account
in any subsequent adjustment made prior to three (3) years from the date of the
event giving rise to the adjustment being carried forward, or shall be made at
the end of three (3) years from the date of the event giving rise to the
adjustment being carried forward.
(ii) Stock Splits, Subdivisions and Dividends. In the event the
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Corporation shall at any time or from time to time after the Issue Date, fix a
record date for the effectuation of a split or subdivision of the outstanding
shares of Common Stock or the determination of holders of Common Stock entitled
to receive a dividend or other distribution payable in additional shares of
Common Stock or other securities or rights convertible into, or entitling the
holder thereof to receive directly or indirectly, additional shares of Common
Stock (hereinafter referred to as "Common Stock Equivalents") without payment of
any consideration by such holder for the additional shares of Common Stock or
the Common Stock Equivalents (including without payment for the additional
shares of Common Stock issuable upon conversion or exercise thereof) then, as of
such record date (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Conversion Price shall be
appropriately decreased so that the holders of Series A Preferred Stock shall
receive, upon the conversion thereof, the number of shares of Common Stock they
would have received if they had converted their shares of Series A Preferred
Stock into Common Stock immediately prior to the occurrence of such event.
(iii) Combinations or Consolidations. In the event that the number of
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shares of Common Stock outstanding at any time after the Issue Date is decreased
by a combination, reclassification or consolidation of the outstanding shares of
Common Stock then, on the effective date of such event, the Conversion Price
shall be appropriately increased so that the number of shares of Common Stock
issuable on conversion of each share of such series shall be decreased in
proportion to such decrease in the number of outstanding shares.
(iv) Other Distributions. In the event that the Corporation shall
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declare a distribution on the Common Stock payable in securities of other
persons, evidences of indebtedness issued by the Corporation or other persons,
or assets (excluding cash dividends and other dividends referred to in paragraph
6(c)(ii)), then, in each such case for the purpose of this paragraph 6(c)(iv),
the holders of the Series A Preferred Stock shall be entitled to a proportionate
share of any such distribution as though they were the holders of the number of
shares of Common Stock of the Corporation into which their shares of Series A
Preferred Stock are convertible as of the record date fixed for the
determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.
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(v) Recapitalizations. If at any time or from time to time there
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shall be a recapitalization of the Common Stock (other than a subdivision,
combination or Change of Control transaction provided for elsewhere in this
Amended Certificate of Designation), provision shall be made so that the holders
of the Series A Preferred Stock shall thereafter be entitled to receive upon
conversion of the Series A Preferred Stock the number of shares of stock or
other securities or property of the Corporation or otherwise, to which they
would have been entitled to receive if they had converted their shares of Series
A Preferred Stock immediately prior to such recapitalization. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this paragraph 6, with respect to the rights of the holders of the Series A
Preferred Stock after the recapitalization to the end that the provisions of
this paragraph 6 (including adjustment of the Conversion Price then in effect
and the number of shares issuable upon conversion of the Series A Preferred
Stock) shall be applicable after that event as nearly equivalent as may be
practicable. For the avoidance of doubt, this sub-paragraph (v) shall be in no
way applicable to circumstances where there shall be a Change of Control
transaction. In addition, notwithstanding the foregoing, any exchange by
creditors of the Corporation of creditor claims into or for securities of the
Corporation shall not be deemed to be a recapitalization for the purposes of
this subsection (v).
(vi) No Impairment. The Corporation will not, by amendment and/or
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restatement of this Amended Certificate of Designation or its Certificate of
Incorporation or through any reorganization, recapitalization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
paragraph 6 and in the taking of all such action as may be necessary or
appropriate in order to protect the holders of the Series A Preferred Stock
against impairment of the conversion rights.
(vii) Certificate as to Adjustments. Upon the occurrence of each
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adjustment or readjustment of the Conversion Price pursuant to this paragraph 6,
the Corporation, at its expense, shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and prepare and furnish to each
holder of the Series A Preferred Stock a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth (A) any such
adjustment and readjustment with respect to such series, (B) the Conversion
Price at the time in effect, and (C) the number of shares of Common Stock and
the amount, if any, of other property which at the time would be received upon
the conversion of a share of such series.
7. Notices of Record Date.
In the event of any taking by the Corporation of a record of the holders of
any class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend (other than a cash dividend) or other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right, the Corporation shall mail to each holder of Series A Preferred
Stock, at
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least twenty (20) days prior to the date specified therein, a notice specifying
the date on which any such record is to be taken for the purpose of such
dividend, distribution or right, and the amount and character of such dividend,
distribution or right.
8. Notices.
Any notice required by the provisions of this Amended Certificate of
Designation to be given to the holders of shares of Series A Preferred Stock
shall be deemed effectively given upon receipt by the party by means of personal
delivery, courier service delivery, electronic mail or five (5) days after
deposit with the United States Post Office, by registered or certified mail,
postage prepaid, and addressed to each holder of record at his address appearing
on the books of the Corporation.
9. Voting Rights.
Except as otherwise expressly provided in paragraph 10, no share of Series
A Preferred Stock shall carry with it any voting rights. The holders of the
Series A Preferred Stock shall be entitled, notwithstanding any provision
hereof, to notice of and receipt of any proxy statement relating to any
stockholders meeting.
10. Protective Provisions.
So long as any shares of Series A Preferred Stock are outstanding, the
Corporation shall not, without first obtaining the approval (by vote or written
consent, as provided by law) of the holders of not less than a majority of the
Series A Preferred Stock:
(a) Amend, modify or repeal any provision of the Corporation's Certificate
of Incorporation, Amended Certificate of Designation, or by-laws in any manner
which would alter, affect or change the rights, preferences, privileges or
powers of, or the restrictions provided for the benefit of, the Series A
Preferred Stock, including, but not limited to, any action that would:
(i) change the place or currency of payment of any liquidation
preference or dividend to which a holder of shares of Series A Preferred Stock
is entitled pursuant to this Amended Certificate of Designation;
(ii) impair the right to institute suit for the enforcement of any
payment on or with respect to any share of Series A Preferred Stock;
(iii) amend this Amended Certificate of Designation in a manner which
would adversely affect the right to convert any share of Series A Preferred
Stock including, without limitation, any amendment which would adversely affect
the calculation of the Issue Price or the Conversion Price; or
(iv) amend this Amended Certificate of Designation to reduce the
percentage of outstanding shares of Series A Preferred Stock required to modify,
amend or repeal the provisions of the Amended Certificate of Designation or
grant waivers of any provision hereof;
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provided, however, that no approval by any holders of the Series A
Preferred Stock shall be required to allow the Corporation to (x) issue any
class of Parity Stock or Senior Stock approved by the Board of Directors; or (y)
amend the Certificate of Incorporation to change the number of Voting Securities
required to amend the Certificate of Incorporation down to a simple majority of
the outstanding Voting Securities of the Corporation, so long as such amendment
does not affect any of the provisions set forth in this paragraph 10.
(b) Authorize (i) the distribution of, or payment of dividends on, or (ii)
the purchase, repurchase, redemption or other acquisition by the Corporation (or
otherwise set aside any sums therefor), of any securities of the Corporation, or
any interest therein, junior to the Series A Preferred Stock.
11. Reservation of Common Stock.
The Corporation shall at all times on and after the Issue Date 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 A
Preferred Stock such number of its shares of Common Stock free from preemptive
rights as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A 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 A Preferred Stock,
in addition to such other remedies as shall be available to the holders of such
Series A Preferred Stock, the Corporation will take such corporate action as may
be necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes, including,
without limitation, engaging in reasonable efforts to obtain the requisite
stockholder approval of any necessary amendment to the Corporation's Certificate
of Incorporation.
12. Costs.
The Corporation shall pay all documentary, stamp, transfer or other
transactional taxes attributable to the issuance or delivery of shares of Common
Stock upon conversion of any shares of Series A Preferred Stock; provided that
the Corporation shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificate
for such shares in a name other than that of the holder of the shares of Series
A Preferred Stock in respect of which such shares are being issued.
13. Valid Issuance.
All shares of Common Stock which may be issued upon conversion of the
shares of Series A Preferred Stock will upon issuance by the Corporation be duly
and validly issued, fully paid and nonassessable and free from all taxes, liens
and charges with respect to the issuance thereof, and the Corporation shall take
no action which will cause a contrary result (including without limitation, any
action which would cause the Conversion Price to be less than the par value, if
any, of the Common Stock).
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14. Exclusion of Other Rights.
Except as may otherwise be required by law, the shares of Series A
Preferred Stock shall not have any preferences or relative, participating,
optional or other special rights, other than those specifically set forth in
this resolution (as such resolution may be amended from time to time) and in the
Corporation's Certificate of Incorporation. The shares of Series A Preferred
Stock shall have no preemptive or subscription rights.
15. Headings of Subdivisions.
The headings of the various subdivisions hereof are for convenience of
reference only and shall not affect the interpretation of any of the provisions
hereof.
16. Severability of Provisions.
If any right, preference or limitation of the Series A Preferred Stock set
forth in this resolution (as such resolution may be amended from time to time)
is invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other rights, preferences and limitations set forth in
this resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable right, preference or limitation shall, nevertheless,
remain in full force and effect, and no right, preference or limitation herein
set forth shall be deemed dependent upon any other such right, preference or
limitation unless so expressed herein.
17. Status of Reacquired Shares.
Shares of Series A Preferred Stock which have been issued and reacquired in
any manner shall (upon compliance with any applicable provisions of the laws of
the State of Delaware) have the status of authorized and unissued shares of
Series A Preferred Stock issuable in series undesignated as to series and may be
redesignated and reissued.
FURTHER RESOLVED, that, before the Corporation shall issue any shares of
Series A Preferred Stock, a certificate pursuant to Section 151 of the DGCL
shall be made, executed, acknowledged, filed, and recorded in accordance with
the provisions of Sections 103 and 151 of the DGCL, and the proper officers of
the Corporation be, and they hereby are, authorized and directed to do all acts
and things which may be necessary or proper in their opinion to carry into
effect the purposes and intent of this and the foregoing resolutions.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation to be signed in its name and on its behalf and attested on this 23rd
day of April, 2001, by duly authorized officers of the Corporation.
VELOCITYHSI, INC.
By: /s/ Stephen E. Carlson
--------------------------------------
Name: Stephen E. Carlson
Title: President and Chief Executive Officer
ATTEST:
By: /s/ Charles P. Wingard
-------------------------
Name: Charles P. Wingard
Title: Secretary
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