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EXHIBIT 3.4
CERTIFICATE OF THE DESIGNATIONS, POWERS,
PREFERENCES AND RIGHTS
OF THE
SERIES C CONVERTIBLE PREFERRED STOCK
(Par Value $.01 Per Share)
of
TELYNX, INC.
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Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
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The undersigned duly authorized officers of Telynx, Inc., a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the "Corporation"),
DO HEREBY CERTIFY:
FIRST: That Article 4 of the Corporation's Restated Certificate of
Incorporation provides that the Corporation is authorized to issue 1,000,000
shares of preferred stock, $.01 par value per share, in any number of series,
with such designations, rights and preferences as may be determined from time to
time by the Board of Directors.
SECOND: That pursuant to such authority expressly vested in the Board of
Directors of the Corporation, said Board of Directors duly adopted the
resolution set forth below, providing for the designation and issuance of one
hundred thousand (100,000) shares of Series C Convertible Preferred Stock, $.01
par value per share:
RESOLVED, that this Board of Directors, pursuant to authority expressly
vested in it by the provisions of the Certificate of Incorporation of the
Corporation, hereby authorizes the issue from time to time of a series of
Preferred Stock of the Corporation (which series shall be in addition to any
other series of preferred stock of the Corporation otherwise authorized) and
hereby fixes the designations, preferences and the relative, participating,
optional or other rights, and the qualifications, limitations or restrictions
thereof, in addition to those set forth in said Certificate of Incorporation, to
be in their entirety as follows:
Section 1. Number of Shares and Designation. One hundred thousand (100,000)
shares of the preferred stock, $.01 par value, of the Corporation are hereby
constituted as a series of preferred stock of the Corporation designated as
"Series C Convertible Preferred Stock" (the "Series C Preferred Stock").
Section 2. Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation, the
holders of each share of Series C Preferred Stock outstanding on the date of
such liquidation, dissolution or winding up
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of the affairs of the Corporation shall be entitled to receive, prior to and in
preference to any distribution of any of the assets or surplus funds of the
Corporation to the holders of the Common Stock of the Corporation, par value
$.01 per share (the "Common Stock"), or any other class of Preferred Stock of
the Corporation other than the existing Series B Preferred Stock, $.01 par value
(the "Series B Preferred Stock"), by reason of their ownership thereof, an
amount equal to three thousand and five hundred dollars ($3,500) per share (the
"Liquidation Value") of each share of Series C Preferred Stock held by the
holders (subject to adjustment for stock splits, combinations, reclassifications
or similar events affecting such shares).
After the payment or the setting apart for payment to the holders of the
Series B Preferred Stock of the preferential amounts so payable to them, all of
the preferential amounts to be paid to the holders of the Series C Preferred
Stock under this Section 2 shall be paid or set apart for payment before the
payment or setting apart for payment of any amount for, or the distribution of
any assets of the Corporation to, the holders of the Common Stock or any other
class or series of Preferred Stock (other than the Series B Preferred Stock) in
connection with such liquidation, dissolution or winding up. After the payment
or the setting apart for payment to the holders of the Series C Preferred Stock
of the preferential amounts so payable to them and the preferential amounts
payable to any other classes or series of Preferred Stock, the holders of the
Series C Preferred Stock, shall be entitled to receive, pro rata with the Common
Stock, as if the Series C Preferred Stock and any such other applicable class or
series of Preferred Stock are converted into the number of shares of Common
Stock into which the Series C Preferred Stock, and other such class or series of
Preferred Stock, are then convertible pursuant to the Certificate of
Incorporation of the Corporation and the applicable Certificate of Designations,
Powers, Preferences and Rights of such Series of Preferred Stock (as amended, to
the extent applicable), all remaining assets of the Corporation. If the assets
or surplus funds to be distributed to the holders of the Series C Preferred
Stock are insufficient to permit the payment to such holders of their full
preferential amount, the assets and surplus funds legally available for
distribution shall be distributed ratably among the holders of the Series C
Preferred Stock in proportion to the full preferential amount each such holder
is otherwise entitled to receive.
Section 3. Merger, Consolidation, Sale of Assets. Any merger or
consolidation of the Corporation with or into another corporation in which the
Corporation shall not survive, or the sale or transfer of all or substantially
all of the assets of the Corporation to another entity, or a merger or
consolidation in which the Corporation is the survivor but its Common Stock is
exchanged for stock, securities or property of another entity shall be treated
as a liquidation, dissolution or winding up of the Corporation and shall entitle
the holder of Series C Preferred Stock to receive at the closing, in cash,
securities or other property, amounts as specified in Section 2.
Section 4. Conversion into Common Stock. The holder of any shares of the
Series C Preferred Stock shall have conversion rights as follows (the
"Conversion Rights"):
(a) Right to Convert. Each share of Series C Preferred Stock shall be
convertible, without the payment of any additional consideration by the holder
thereof and at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for the Series C Preferred Stock, into 160,000 shares of
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Common Stock (the "Conversion Ratio"). The Conversion Ratio at which shares of
Common Stock shall be deliverable upon conversion of Series C Preferred Stock
without the payment of any additional consideration by the holder thereof, shall
be subject to adjustment, in order to adjust the number of shares of Common
Stock into which the Series C Preferred Stock is convertible, as provided in
this Section 4.
(b) Mechanics of Conversion. No fractional shares of Common Stock shall be
issued upon conversion of the Series C Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall round the share amount to the nearest whole share number.
Before any holder of Series C Preferred Stock shall be entitled to receive
certificates representing shares of Common Stock issuable upon conversion of the
Series C Preferred Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed, at the office of the Corporation or of any
transfer agent for the Series C Preferred Stock, and shall give written notice
to the Corporation at such office in the manner specified in the Purchase
Agreement (which notice shall be irrevocable once tendered, unless otherwise
agreed to in writing by the Corporation) that such holder elects to convert the
same, and shall state therein such holder's name or the name or names of such
holder's nominees in which such holder wishes the certificate or certificates
for shares of Common Stock to be issued. The Corporation shall, as soon as
practicable after receipt of the certificate(s) representing Series C Preferred
Stock, issue and deliver at such office to such holder of Series C Preferred
Stock, or to such holder's nominee or nominees, a certificate or certificates
for the number of shares of Common Stock to which such holder shall be entitled
as aforesaid, together with cash in lieu of any fraction of a share, and a
certificate or certificates for such shares of Series C Preferred Stock as were
represented by the certificates surrendered and not converted. Conversions
pursuant to Section 4(a) 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 C
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon conversion shall be treated for all
purposes as the record holder or holders of such shares of Common Stock as of
the close of business on such date.
(c) Adjustment to Conversion Ratio for Stock Splits, Combinations,
Dividends and Distributions.
(i) Stock Splits and Combinations. In the event the Corporation shall
at any time or from time to time effect a subdivision of the outstanding
Common Stock, the Conversion Ratio then in effect immediately before that
subdivision shall be proportionately decreased, and, conversely, in the
event the Corporation shall at any time or from time to time combine the
outstanding shares of Common Stock, the Conversion Ratio then in effect
immediately before the combination shall be proportionately increased. Any
adjustment pursuant to this Section 4(c)(i) shall become effective at the
close of business on the date the subdivision or combination becomes
effective.
(ii) Dividends and Distributions of Common Stock. In the event the
Corporation at any time or from time to time shall make or issue, or fix a
record date for the determination of holders of Common Stock entitled to
receive, a
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dividend or other distribution payable in additional shares of Common
Stock, then and in each such event the Conversion Ratio then in effect
shall be adjusted accordingly as of the time of such issuance
(iii) Other Dividends and Distributions. In the event the Corporation
at any time or from time to time shall make or issue, or fix a record date
for the determination of holders of Common Stock entitled to receive, a
dividend or other distribution payable in securities of the Corporation
other than shares of Common Stock, then and in each such event provision
shall be made so that the holders of the Series C Preferred Stock shall
receive upon conversion thereof, in addition to the number of shares of
Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Series C Preferred
Stock been converted into Common Stock on the date of such event and had
thereafter, during the period from the date of such event to and including
the conversion date, retained such securities receivable by them as
aforesaid during such period giving application to all adjustments called
for during such period under this Section 4 with respect to the rights of
holders of the Series C Preferred Stock.
(d) Adjustment for Reclassification, Exchange or Substitution. If the
Common Stock issuable upon the conversion of the Series C Preferred Stock shall
be changed into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or otherwise
(other than a subdivision or combination of shares or stock dividend provided
for in Section 4(c), or a reorganization, merger, consolidation or sale of
assets provided for in Section 3), then and in each such event the holder of
each share of Series C Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification,
or other change, by holders of the number of shares of Common Stock into which
such shares of Series C Preferred Stock might have been converted immediately
prior to such reorganization, reclassification, or change, all subject to
further adjustment as provided in this Section 4.
(e) No Impairment. The Corporation shall not, by amendment of its
Certificate of Incorporation or through any reorganization, 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 of
the terms to be observed or performed under this Section 4 by the Corporation
but shall at all times in good faith assist in the carrying out of all the
provisions of this Section 4 and in the taking of all such action as may be
necessary or appropriate in order to protect the conversion rights of the
holders of the Series C Preferred Stock that by its terms is convertible against
impairment.
(f) Certificate as to Adjustments. Upon the occurrence of each adjustment
or readjustment of the Conversion Ratio of the Series C Preferred Stock pursuant
to this Section 4, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of the Series C Preferred Stock a
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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 such Series C
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii) the
Conversion Ratio at the time in effect, and (iii) 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 the Series C Preferred Stock.
(g) 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 which is the same as cash dividends paid in previous
quarters) or other distribution, the Corporation shall mail to each holder of
Series C Preferred Stock, at least ten (10) days prior to the date specified
herein, a notice specifying the date on which any such record is to be taken for
the purpose of such dividend or distribution.
(h) Common Stock Reserved. The Corporation shall reserve and keep available
out of its authorized but unissued Common Stock such number of shares of Common
Stock as shall from time to time be sufficient to effect conversion of the
Series C Preferred Stock and of all other shares of all classes or series of
Preferred Stock, in all instances which are then convertible into Common Stock.
Section 5. Voting Rights. In addition to the voting rights required by the
laws of the State of Delaware and by Section 6, the holders of shares of Series
C Preferred Stock shall vote, as a single class with all other stockholders of
the Corporation, on all matters voted on by the stockholders of the Corporation,
with each such holder of Series C Preferred Stock entitled to the number of
votes equal to 805,929 shares of Common Stock for each one share of Series C
Preferred Stock (the "Voting Ratio"); provided, that if and to the extent the
Conversion Ratio for the Series C Preferred Stock is adjusted pursuant to the
terms hereof, a like proportionate adjustment simultaneously shall be made to
the Voting Ratio (favorably or negatively). Except as set forth herein or as
otherwise provided by law, holders of Series C Preferred Stock shall have no
special voting rights and their consent shall not be required for taking any
corporate action. These voting rights will apply notwithstanding that an
insufficient number of shares of Common Stock may be reserved for issuance upon
conversion of the Series C Preferred Stock.
Section 6. Covenants. So long as any of the shares of Series C Preferred
Stock authorized hereby shall be outstanding, the Corporation shall not, without
first obtaining the affirmative vote or written consent of the holders of not
less than a majority of such outstanding shares of Series C Preferred Stock:
(a) except as permitted by subsection 6(c) below, amend or repeal any
provision of, or add any provision to, the Corporation's Certificate of
Incorporation or By-laws if such action would alter or change the preferences,
rights, privileges or powers of, or the restrictions provided for the benefit
of, the Series C Preferred Stock;
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(b) reclassify any Common Stock into shares having any preference or
priority as to assets superior to or on a parity with any such preference or
priority of the Series C Preferred Stock; or
(c) create or issue any securities of the Corporation which have equity
features and which rank senior to the Series C Preferred Stock upon
liquidation or other distribution of assets.
Section 7. Status of Converted or Reacquired Stock. Any shares of Series C
Preferred Stock purchased, redeemed or otherwise acquired by the Corporation in
any manner whatsoever, and any shares of Series C Preferred Stock converted
pursuant to Section 4 hereof shall be retired and canceled promptly after the
acquisition or conversion thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of Incorporation,
or in any other Certificate of Designations creating a series of Preferred Stock
or any similar stock or as otherwise required by law.
THIRD: That said determination of the designation, preferences and the
relative, participating, optional or other rights, and qualifications,
limitations or restrictions thereof, relating to said Series C Convertible
Preferred Stock, was duly made by the Board of Directors pursuant to the
provisions of the Certificate of Incorporation of the Corporation, as amended,
and in accordance with the provisions of Section 151 of the General Corporation
Law of the State of Delaware.
IN WITNESS WHEREOF, Telynx, Inc. has caused this Certificate of the
Designations, Powers, Preferences and Rights of the Series C Convertible
Preferred Stock (par value $.01 per share) of Telynx, Inc. to be executed and
attested this 7 day of May, 2001.
Telynx, Inc.
By: /s/ Ali Al-Dahwi
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Name: Ali Al-Dahwi
Title: President and Chief Executive Officer
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