Exhibit 3.3
CERTIFICATE OF DESIGNATION,
PREFERENCES AND RIGHTS
of
SERIES A Convertible Preferred Stock
of
JLL VENTURES (DELAWARE) CORP.
Pursuant to Section 151(g) of the General Corporation Law
of the State of Delaware
JLL Ventures (Delaware) Corp. a Delaware corporation (the "Company"),
certifies that pursuant to the authority contained in its Certificate of
Incorporation, as amended, and in accordance with the provisions of Section
151(g) of the General Corporation Law of the State of Delaware, its Board of
Directors (the "Board of Directors") in an action taken as of April 16, 1999,
has duly adopted the following resolution amending a series of its Preferred
Stock, $.0001 par value, designating a segment thereof as Series A Convertible
Preferred Stock:
WHEREAS, the Certificate of Incorporation of the Company presently
authorizes the issuance of up to 15,000,000 shares of Preferred Stock, $.0001
par value, in one or more series upon terms and conditions that are to be
designated by the Board of Directors, of which no shares are currently issued
and outstanding;
WHEREAS, in order to effectuate a merger transaction deemed to be in
the Company's best interests by the Board of Directors, the Board of Directors
does hereby seek to provide for the designation of a segment of the Company's
Preferred Stock as "Series A Convertible Preferred Stock"; and
WHEREAS, the terms, conditions, voting rights, preferences, limitations
and special rights of the Series A Convertible Preferred Stock in their entirety
are as provided herein.
NOW, THEREFORE, be it:
RESOLVED, that a series of the class of authorized Preferred Stock,
$.0001 par value, of the Company hereinafter designated "Series A Convertible
Preferred Stock," be hereby created, and that the designation and amount thereof
and the voting powers, preferences and relative, participating and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount.
The shares of such series shall be designated as the "Series A
Convertible Preferred Stock" (the "Series A Convertible Preferred Stock") and
the number of shares initially constituting such series shall be 6,000,000,
which may be issued in whole shares.
Section 2. Dividends and Distributions.
The holders of shares of Series A Convertible Preferred Stock
shall be entitled to receive such dividends or other distributions as are
declared by the Company's Board of Directors on the same basis, and to the same
extent as if the Series A Convertible Preferred Stock had already been converted
into shares of the Company's Common Stock, based upon the Conversion Ratio
applicable on the record date of the dividend or other distribution.
Section 3. Voting Rights.
The holders of all Series A Convertible Preferred Stock issued and
outstanding, in the aggregate, shall be entitled to the number of votes equal to
the number of shares of Common Stock into which such shares of Series A
Convertible Preferred Stock are convertible on any record date, or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders is solicited, such votes to be counted together with all
other shares of stock of the Corporation having general voting power and not
separately as a class. Fractional votes by the holders of Series A Convertible
Preferred Stock shall not, however, be permitted, and any fractional voting
rights shall (after aggregating all shares into which shares of Series A
Convertible Preferred Stock held by each holder could be converted) be rounded
to the nearest whole number.
Section 4. Liquidation, Dissolution, Winding Up or Certain Mergers or
Consolidations.
(a) If the Company shall adopt a plan of liquidation or of
dissolution, or commence a voluntary case under the federal bankruptcy laws or
any other applicable state or federal bankruptcy, insolvency or similar law, or
consent to the entry of an order for relief in any involuntary case under such
law or to the appointment of a receiver, liquidator, assignee, custodian,
trustee or sequestrator (or similar official) of the Company or of any
substantial part of its property, or make an assignment for the benefit of its
creditors, or admit in writing its inability to pay its debts generally as they
become due and on account of such event the Company shall liquidate, dissolve or
wind up, or upon any other liquidation, dissolution or winding up of the
Company, or engage in a merger, plan of reorganization or consolidation in which
the Company is not the surviving corporation, then and in that event, the
holders of the Series A Convertible Preferred Stock shall be entitled to no
preference over the holders of the Company's Common Stock; rather, in that
event, the holders of the Series A Convertible Preferred Stock shall be
entitled, pari-passu with the holders of the Common Stock, to receive whatever
cash, securities or other consideration is payable or distributable to the
holders of the outstanding Common Stock of the Company, as if the Series A
Convertible Preferred Stock had already been converted into shares of the
Company's Common Stock, based upon the Conversion Ratio applicable on the record
date of the payment or distribution.
(b) Except as provided in subparagraph (a) above, neither the
consolidation, merger or other business combination of the Company with or into
any other person or persons in which the Company is the surviving corporation
nor the sale, lease, exchange or conveyance of all
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or any part of the property, assets or business of the Company to a person or
persons other than the holders of the Company's Common Stock, shall be deemed to
be a liquidation, dissolution or winding up of the Company.
Section 5. Conversion.
(a) The shares of Series A Convertible Preferred Stock shall
convert into shares of the Company's Common Stock (the "Conversion Date") upon
the earlier of: (i) the completion of audited financial statements of the
Company for the fiscal year ending March 31, 2000; (ii) June 30, 2000; or (iii)
upon whatever earlier date the holder elects to convert.
(b) Subject to the provisions for adjustment hereinafter set
forth, the shares of Series A Convertible Preferred Stock shall be convertible
into fully paid and non-assessable shares of Common Stock, based upon the
conversion ratio hereinafter set forth (the "Conversion Ratio"):
(i) Subject to subparagraph (ii) below, the
Conversion Ratio shall be one (1) share of Common Stock issuable for each share
of Series A Convertible Preferred stock converted or subject to conversion.
(ii) If, however, the Company achieves any of the
financial performance targets identified in the chart below, relating to the
Company's audited results of operations for the year ending March 31, 2000 (the
"Financial Performance Targets"), in lieu of the Conversion Ratio identified in
Subparagraph (i) above, the Conversion Ratio shall be as set forth in the chart
below:
Conversion Ratio: Shares of Common
Stock to be Issued Upon Conversion
Financial Performance Targets(1) of each Share of Preferred Stock Held
-------------------------------- -------------------------------------
Gross Revenues of $22.5 million(2) and Net Income 1.5
of $900,000(3)
Gross Revenues of $38.25 million(2) and Net Income 1.75
of $1.53 million(3)
Gross Revenues of $51 million(2) and Net Income of 2.00
$2.04 million(3)
Gross Revenues of $64 million(2) and Net Income 2.25
of $2.56 million(3)
(1) The Financial Performance Targets are to be derived from the results of
operations reflected within the Company's audited financial statements for
the fiscal year ending March 31, 2000.
(2) The Financial Performance Targets with respect to Gross Revenues shall be
considered to have been achieved if actual Gross Revenues are within 10% of
the targeted amount.
(3) The Financial Performance Targets with respect to Net Income shall be
considered to have been achieved if actual Net Income is within 10% of the
targeted amount.
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(c) The number of shares of Common Stock into which each share
of Series A Convertible Preferred Stock is convertible also shall be subject to
adjustment from time to time as follows:
(i) In case the Company shall, at any time or from
time to time while any shares of Series A Convertible Preferred Stock are
outstanding, declare a dividend, or make a distribution, on the outstanding
shares of Common Stock in shares of Common Stock or subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares or combine or
reclassify the outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then in each case,
(A) the number of shares of Common Stock
into which each share of Series A Convertible Preferred Stock is convertible
shall be adjusted so that the holder of each share thereof shall be entitled to
receive, upon the conversion thereof, the number of shares of Common Stock which
the holder of a share of Series A Convertible Preferred Stock would have been
entitled to receive after the happening of any of the events described above had
such share been converted immediately prior to the happening of such event or
the record date therefor, whichever is earlier; and
(B) an adjustment made pursuant to this
clause (i) shall become effective (I) in the case of any such dividend or
distribution, immediately after the close of business on the record date for the
determination of holders of shares of Common Stock entitled to receive such
dividend or distribution, or (II) in the case of any such subdivision,
reclassification or combination, at the close of business on the day upon which
such corporate action becomes effective.
(ii) In case there shall be, at any time or from time
to time while any shares of Series A Convertible Preferred Stock are
outstanding, a capital reorganization of the Common Stock (other than a
subdivision, combination, reclassification or exchange of shares provided for
elsewhere in this Section 5) or a merger or consolidation of the Company with or
into another corporation pursuant to which the Company is not the acquiring
entity and pursuant to which the stockholders of the Company are requested to
exchange or convert their securities for securities of an acquiring entity, or
the sale of all or substantially all of the Company's assets, then, as a
condition of the consummation of such transaction, in addition to the
requirements of paragraph 4(a), lawful and adequate provision shall be made so
that each holder of shares of Series A Convertible Preferred Stock shall
thereafter be entitled to receive upon conversion of the Series A Convertible
Preferred Stock, the number of shares of Common Stock or other securities or
property of the Company, or of the successor corporation of such merger or
consolidation to which such holder would have been entitled if such holder had
converted its shares immediately prior to the consummation of such transaction.
(d) If the nature and/or character of the Common Stock
issuable upon the conversion of the Series A Convertible Preferred Stock shall
be changed into the same or different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification or otherwise
(except as provided pursuant to Section 5(c) above), then and in each such
event, the holders of Series A Convertible Preferred Stock shall have the right
thereafter to convert such shares into the kind and amount of shares of stock
and other securities and property
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receivable upon such capital reorganization, reclassification or other change
which such holders would have received had their shares of Series A Convertible
Preferred Stock been converted immediately prior to such capital reorganization,
reclassification or other change.
(e) The holder of any shares of Series A Convertible Preferred
Stock may exercise his right to convert such shares into shares of Common Stock
by surrendering for such purpose to the Company, at the address set forth below,
or any successor location, a certificate or certificates representing the shares
of Series A Convertible Preferred Stock to be converted with the form of
election to convert (the "Election to Convert") attached hereto as Exhibit A
completed and executed as indicated, thereby stating that such holder elects to
convert all or a specified whole number of such shares in accordance with the
provisions of this Section 5 and specifying the name or names in which such
holder wishes the certificate or certificates for shares of Common Stock to be
issued. The Election to Convert and the stock certificate(s) to be converted
shall be delivered as follows:
JLL Ventures (Delaware) Corp.
4725 East Sunrise Drive, #228
Tucson, Arizona 85718
Attention: Vincent Marold, President
Telephone: (520) 615-1100
Facsimile: (520) 299-5149
with a copy to:
Stephen M. Cohen, Esquire
Buchanan Ingersoll Professional Corporation
Eleven Penn Center
1835 Market Street, 14th Floor
Philadelphia, PA 19103
Telephone: (215) 665-3873
Facsimile: (215) 665-8760
In case the Election to Convert shall specify a name or names other
than that of such holder, it shall be accompanied by payment of all transfer or
other taxes payable upon the issuance of shares of Common Stock in such name or
names that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion of Series A Convertible Preferred Stock pursuant
hereto. The Company will have no responsibility to pay any taxes with respect to
the Series A Convertible Preferred Stock. As promptly as practicable, and in any
event within five business days after the surrender of such certificate or
certificates and the receipt of the Election to Convert, and, if applicable,
payment of all transfer or other taxes (or the demonstration to the satisfaction
of the Company that such taxes have been paid), the Company shall deliver or
cause to be delivered (i) certificates representing the number of validly
issued, fully paid and nonassessable full shares of Common stock to which the
holder of shares of Series A Convertible Preferred Stock so converted shall be
entitled and (ii) if less than the full number of shares of Series A Convertible
Preferred Stock evidenced by the surrendered certificate or certificates are
being converted, a new certificate or certificates, of like tenor, for the
number of
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shares evidenced by such surrendered certificate or certificates less the number
of shares converted. Such conversion shall be deemed to have been made at the
close of business on the date of giving of the Election to Convert and of such
surrender of the certificate or certificates representing the shares of Series A
Convertible Preferred Stock to be converted so that the rights of the holder
thereof as to the shares being converted shall cease except for the right to
receive shares of Common Stock in accordance herewith, and the person entitled
to receive the shares of Common Stock shall be treated for all purposes as
having become the record holder of such shares of Common Stock at such time. The
Company shall not be required to convert, and no surrender of shares of Series A
Convertible Preferred Stock shall be effective for that purpose, while the
transfer books of the Company for the Common Stock are closed for any purpose
(but not for any period in excess of 15 calendar days); but the surrender of
shares of Series A Convertible Preferred Stock for conversion during any period
while such books are so closed shall become effective for conversion immediately
upon the reopening of such books, as if the conversion had been made on the date
such shares of Series A Convertible Preferred Stock were surrendered, and at the
conversion rate in effect at the date of such surrender.
(f) In connection with the conversion of any shares of Series
A Convertible Preferred Stock, no fractions of shares of Common Stock shall be
issued, but in lieu thereof the Company shall pay a cash adjustment in respect
of such fractional interest in an amount equal to the fair market value of such
fractional interest, as determined by the Company's Board of Directors in the
good faith exercise of its reasonable business judgment.
Section 6. Reports as to Adjustments.
Whenever the number of shares of Common Stock into which each share of
Series A Convertible Preferred Stock is convertible is adjusted as provided in
Section 5 hereof, the Company shall promptly mail to the holders of record of
the outstanding shares of Series A Convertible Preferred Stock at their
respective addresses as the same shall appear in the Company's stock records a
notice stating that the number of shares of Common Stock into which the shares
of Series A Convertible Preferred Stock are convertible has been adjusted and
setting forth the new number of shares of Common Stock (or describing the new
stock, securities, cash or other property) into which each share of Series A
Convertible Preferred Stock is convertible, as a result of such adjustment, a
brief statement of the facts requiring such adjustment and the computation
thereof, and when such adjustment became effective.
Section 7. Redemption.
The Company shall not have the right to redeem all or any part of the
Series A Convertible Preferred Stock and the Holder shall not have the right to
cause or request such a redemption.
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Section 8. Registration Rights.
The holders of the Series A Convertible Preferred Stock shall have the
registration rights as set forth in the Registration Rights Agreements attached
as Exhibit 5.5(b) to the Merger Agreement dated as of April 16, 1999.
Section 9. Amendment.
So long as any shares of Series A Convertible Preferred Stock are
outstanding, the Company shall not, without first obtaining the approval of the
holders of at least a majority of the aggregate number of then outstanding
shares of Series A Convertible Preferred Stock, take any action that alters the
rights, preferences or privileges of the Series A Convertible Preferred Stock.
Section 10. Reacquired Shares.
Any shares of Series A Convertible Preferred Stock converted, purchased
or otherwise acquired by the Company in any manner whatsoever shall be retired
and canceled promptly after the acquisition thereof, and, if necessary to
provide for the lawful purchase of such shares, the capital represented by such
shares shall be reduced in accordance with the General Corporation Law of the
State of Delaware. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock, $.0001 par value, of the
Company and may be reissued as part of another series of Preferred Stock, $.0001
par value, of the Company.
RESOLVED FURTHER, that appropriate officers of the Company are hereby
authorized to execute and acknowledge a certificate setting forth these
resolutions and to cause such certificate to be filed and recorded, all in
accordance with the requirements of Section 151 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation of Series A Convertible Preferred Stock to be duly executed by its
President this 19th day of May, 1999.
JLL VENTURES (DELAWARE) CORP.
By:/s/Vincent Marold
------------------------------
Vincent Marold,
President
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EXHIBIT A
ELECTION TO CONVERT
(To be Executed by Holder
in order to Convert Shares of Series A Convertible Preferred Stock)
The undersigned, as a holder ("Holder") of shares of Series A Convertible
Preferred Stock ("Preferred Shares") of JLL Ventures (Delaware) Corp. (the
"Company"), hereby irrevocably elects to convert _____________ Preferred Shares
for shares ("Common Shares") of common stock, par value $.0001 per share (the
"Common Stock"), of the Company according to the terms and conditions of the
Certificate of Designation for the Preferred Shares as of the date written
below. The undersigned hereby requests that share certificates for the Common
Stock to be issued to the undersigned pursuant to this Election to Convert be
issued in the name of, and delivered to, the undersigned or its designee as
indicated below. Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed thereto in the Certificate of Designation.
Conversion Date: __________________________
Conversion Information: NAME OF HOLDER: ____________________________________
By: ____________________________________
Print Name: ____________________________________
Print Title: ____________________________________
Print Address: ____________________________________
____________________________________
____________________________________
Issue Common Stock to: _____________________________
at: _____________________________
_____________________________
If Common Stock is to be issued to a person other than Holder,
Holder's signature must be guaranteed below:
SIGNATURE GUARANTEED BY: _____________________________
THE COMPUTATION OF NUMBER OF SHARES OF COMMON STOCK TO BE RECEIVED IS SET FORTH
ON PAGE 2 OF THE CONVERSION NOTICE.
Page 1 of Conversion Notice
COMPUTATION OF NUMBER OF SHARES OF COMMON STOCK TO BE RECEIVED
Number of shares of Preferred Stock converted: ________ shares
Conversion Ratio: _________________
Explain method and basis of computation of Conversion Ratio
(include cross-reference to applicable section, if necessary):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Please issue and deliver _____ certificate(s) for shares of Common Stock in the
following amount(s):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
If the Holder is receiving certificate(s) for shares of Preferred Stock upon the
conversion, please issue and deliver _____ certificate(s) for shares of
Preferred Stock in the following amounts:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Page 2 of Conversion Notice