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EXHIBIT 3.1.3
CERTIFICATE OF DESIGNATION OF NORTH AMERICAN DATACOM, INC.
In accordance with Section 103 and Section 151 of the General
Corporation Law of Delaware (the "Code"), North American DataCom, Inc. (the
"Corporation"), a corporation organized and existing under the laws of Delaware,
the undersigned does hereby certify the following:
1. The name of the Corporation is North American DataCom, Inc.
2. The following resolution setting forth the rights,
preferences, powers, of the Series B Preferred Stock has been
duly adopted by the Board of Directors.
RESOLVED, that Five Hundred Thousand (500,000) shares
of the Corporation's preferred stock, $.0001 par value per
share, shall be designated as "Series B Convertible Preferred
Stock" and shall have the terms, preferences, limitations and
relative rights set forth on Exhibit A attached hereto and
made a part hereof.
3. The foregoing resolution containing the designation of the
Series B Convertible Preferred Stock was duly adopted on May
7, 2000 by the Corporation's Board of Directors.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by the undersigned duly authorized officer, this 15th day of
November, 2000.
North American DataCom, Inc.
By:
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Robert R. Crawford, President
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EXHIBIT A TO CERTIFICATE OF DESIGNATION
DESIGNATION OF PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF SERIES B
CONVERTIBLE PREFERRED STOCK OF NORTH AMERICAN DATACOM, INC.
North American DataCom, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies as
follows:
Pursuant to the authority granted in the certificate of incorporation,
as amended (the "Certificate of Incorporation") of the Corporation and Section
103 and Section 151 of the General Corporation Law of Delaware, the Corporation,
by resolution of the Board of Directors of the Corporation, has established and
fixed the preferences, powers, and limitations and relative rights of 500,000
shares of Preferred Stock as the "Series B Convertible Preferred Stock," $.0001
par value per share as follows.
Section 1. Designation and Number. (a) There is hereby
established a series of preferred stock designated as "Series B
Convertible Preferred Stock" (the "Series B Preferred Stock"). The
number of shares constituting the Series B Preferred Stock is 500,000,
with a par value of $0.0001 per share.
Section 2. Dividends and Distributions. (a) General. The
Corporation shall not declare or pay any dividend or other distribution
on the Common Stock or (except as expressly provided in this Section 2)
any other class or series of capital stock of the Corporation, unless
(i) the Corporation shall have previously paid in full the cumulative
preferred dividend to which the holders of the Series B Preferred Stock
are entitled pursuant to Section 2(b) hereunder, and (ii) the
Corporation shall have previously declared and paid or shall
simultaneously declare and pay a dividend or other distribution on the
Series B Preferred Stock in such amount so that each holder of Series B
Preferred Stock shall receive the amount that such holder would have
received had such holder converted such holder's shares of Series B
Preferred Stock into Common Stock immediately prior to the record date
(or distribution date if no record date is established) of such
dividend or other distribution on the Common Stock.
(b) Series B Preferred Stock Dividends. The Series B Preferred
Stock shall be entitled to a cumulative preferred dividend of 6.00% per
annum, compounded annually, based upon the Stated Value of each share
of Series B (as adjusted for stock splits, stock dividends and similar
events), which dividend shall accrue from and after the date of
issuance for so long as such share of Series B Preferred Stock is
issued and outstanding Stock (the "Series B Preferred Dividend"). The
accrued but unpaid Series B Preferred Dividend shall be payable to the
holders of record of the Series B Preferred Stock as of June 15th of
each
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year, and shall be paid in cash (or such other consideration as agreed
to by the holder of Series B Preferred Stock) to such holders on or
before July 1st of each year following the date of issuance. The Series
B Preferred Stock shall not be entitled to any other dividends except
to the extent it participates with the Common Stock as provided in
Section 2(a) above.
Section 3. Voting Rights. In addition to any voting rights
provided by law, the holders of shares of Series B Preferred Stock
shall have the following voting rights:
(a) Each share of Series B Preferred Stock shall entitle the
holder thereof to vote on all matters submitted to a vote of the
shareholders of the Corporation, voting together as a single class with
the holders of Common Stock. In any such vote, each holder of Series B
Preferred Stock shall be entitled to a number of votes equal to the
number of shares of Series B Preferred Stock held by such holder,
provided that, in the event the Corporation does not timely pay in full
the Series B Preferred Dividend due and payable thereon as provided in
Section 2(b), the holder thereof shall thereafter be entitled to a
number of votes with respect to each share of Series B Preferred Stock
(for which there was a default in the timely payment of the Series B
Preferred Dividend) held by such holder equal to the number of shares
of Common Stock into which such share of Series B Preferred Stock is
then convertible.
(b) In addition to the other voting rights set forth herein,
the affirmative vote of the holders of at least a majority of the
outstanding shares of Series B Preferred Stock, voting separately as a
single class, shall be necessary (i) to authorize, increase the
authorized number of shares of, or issue any shares of any class or
classes or series of preferred stock; (ii) to increase or decrease the
par value of the shares of Series B Preferred Stock; or (iii) to alter
or change the powers, preferences or special rights of the Series B
Preferred Stock so as to affect adversely the rights of such holders of
shares of Series B Preferred Stock.
Section 4. Liquidation, Dissolution or Winding Up. (a) If the
Corporation shall commence a voluntary case under the federal
bankruptcy laws or any other applicable federal or state bankruptcy,
insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee or sequestrator (or
other similar official) of the Corporation, 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, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the
premises in an involuntary case under the federal bankruptcy laws or
any other applicable federal or state bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or other similar official) of the Corporation or of
any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and any such decree or order shall be
unstayed and in effect for a period of 90 consecutive
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days and on account of any such event the Corporation shall liquidate,
dissolve or wind up, or if the Corporation shall otherwise liquidate,
dissolve or wind up, no distribution shall be made to the holders of
any shares of Common Stock (or other stock ranking junior to the Series
B Preferred Stock) unless, prior thereto, the holders of outstanding
shares of Series B Preferred Stock shall have each received the
Liquidation Value with respect to the shares of Series B Preferred
Stock held by such holder.
(b) The consolidation, reorganization, merger, sale of all or
any substantial portion of the consolidated assets of the Corporation
and its Subsidiaries or other business combination of the Corporation
with or into any other Person or Persons shall be deemed to be a
liquidation, dissolution or winding up of the Corporation for purposes
of this Section 4, unless after such transaction the shareholders of
the Corporation immediately prior to such transaction hold at least a
majority of the outstanding voting stock of the surviving parent entity
in such transaction.
Section 5. Certain Covenants. Any registered holder of Series
B Preferred Stock may proceed to protect and enforce its rights and the
rights of such holders by any available remedy by proceeding at law or
in equity to protect and enforce any such rights, whether for the
specific enforcement of any provision contained herein or in aid of the
exercise of any power granted herein, or to enforce any other proper
remedy.
Section 6. Conversion. (a) Subject to the provisions for
adjustment hereinafter set forth, each share of Series B Preferred
Stock (i) shall be convertible at any time from and after July 1, 2001
at the option of the holder, into fully paid and nonassessable shares
of Common Stock, and (ii) shall be automatically converted into fully
paid and nonassessable shares of Common Stock upon the written request
by the Board of Directors, on behalf of the Corporation, in connection
with a material transaction involving the Corporation, provided that
any such automatic conversion pursuant to clause (ii) shall require the
affirmative vote of the holders of at least a majority of the
outstanding shares of Series B Preferred Stock, voting separately as a
single class.
(b) Conversion of the Series B Preferred Stock may be effected
by any such holder upon the surrender to the Corporation at the
principal office of the Corporation or at the office of any agent or
agents of the Corporation (the "Transfer Agent"), as may be designated
by the Board of Directors of the Corporation, of the certificate for
such Series B Preferred Stock to be converted accompanied, in the case
of a conversion pursuant to clause (i) of paragraph (a) by a written
notice stating that such holder elects to convert all or a specified
whole number of such shares in accordance with the provisions of this
Section 6 and specifying the name or names in which such holder wishes
the certificate or certificates for shares of Common Stock to be
issued; provided that any issuance of shares in the name of a Person
other than the holder shall be subject to
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compliance by the holder with applicable securities laws. The
Corporation will pay any and all issue and other taxes (other than
taxes based on income) that may be payable in respect of any issue or
delivery of shares of Common Stock on conversion of Series B Preferred
Stock pursuant hereto. Within five Business Days after the surrender of
such certificate or certificates and the receipt of such notice
relating thereto, the Corporation 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 B Preferred Stock being converted shall be
entitled and (ii) if less than the full number of shares of Series B
Preferred Stock evidenced by the surrendered certificate or
certificates is being converted, a new certificate or certificates, of
like tenor, for the number of shares evidenced by such surrendered
certificate or certificates less the number of shares being converted.
Any conversion pursuant to clause (i) of paragraph (a) shall be deemed
to have been made at the close of business on the date of giving of
such notice and of such surrender of the certificate or certificates
representing the shares of Series B 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.
(c) The number of shares of Common Stock deliverable upon
conversion of a share of Series B Preferred Stock, adjusted as
hereinafter provided, is referred to herein as the "Conversion Ratio."
The Conversion Ratio shall be the number obtained by dividing (1) the
Stated Value by (2) the Conversion Price (as defined below) applicable
to such share, determined as hereinafter provided, in effect on the
date the certificate is surrendered for conversion. The Conversion
Price per share shall initially be $2.00 and the Conversion Ratio shall
initially be five hundred (500). The Conversion Price and the
Conversion Ratio are subject to adjustment from time to time pursuant
to paragraph (f) of this Section 6. Any adjustment in the Conversion
Price shall cause a corresponding adjustment in the Conversion Ratio
and vice versa.
(d) In connection with the conversion of any shares of Series
B Preferred Stock, no fractions of shares of Common Stock shall be
issued, but in lieu thereof the Corporation shall pay a cash adjustment
in respect of such fractional interest in an amount equal to such
fractional interest multiplied by the Current Market Price per share of
Common Stock on the day on which such shares of Series B Preferred
Stock are deemed to have been converted. If more than one share of
Series B Preferred Stock shall be surrendered for conversion by the
same holder at the same time, the number of full shares of Common Stock
issuable on conversion thereof shall be computed on the basis of the
total number of shares of Series B Preferred Stock so surrendered.
(e) The Corporation shall at all times reserve and keep
available for issuance upon the conversion of the Series B Preferred
Stock, such number of its
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authorized but unissued shares of Common Stock as will from time to
time be sufficient to permit the conversion of all outstanding shares
of Series B Preferred Stock, and shall take all action required to
increase the authorized number of shares of Common Stock if necessary
to permit the conversion of all outstanding shares of Series B
Preferred Stock.
(f) The Conversion Ratio and Conversion Price will be subject
to adjustment from time to time as follows:
(i) In case the Corporation shall at any time or from time to
time after the Issue Date (A) pay a dividend, or make a distribution,
on the outstanding shares of Common Stock in shares of Common Stock,
(B) subdivide the outstanding shares of Common Stock, (C) combine the
outstanding shares of Common Stock into a smaller number of shares or
(D) issue by reclassification of the shares of Common Stock any shares
of capital stock of the Corporation, then, and in each such case, the
Conversion Ratio in effect immediately prior to such event or the
record date therefor, whichever is earlier, shall be adjusted so that
the holder of any shares of Series B Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the number of
shares of Common Stock or other securities of the Corporation which
such holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such shares of
Series B Preferred Stock been converted immediately prior to the
happening of such event or the record date therefor, whichever is
earlier. An adjustment made pursuant to this clause (i) shall become
effective (x) 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 (y) in the case of such subdivision,
reclassification or combination, at the close of business on the day
upon which such corporate action becomes effective.
(ii) If the Corporation shall take a record of the holders of
its Common Stock for the purpose of entitling them to receive a
dividend or other distribution, and shall thereafter and before the
distribution to shareholders thereof legally abandon its plan to pay or
deliver such dividend or distribution, then thereafter no adjustment in
the number of shares of Common Stock issuable upon exercise of the
right of conversion granted by this paragraph (f) or in the Conversion
Ratio then in effect shall be required by reason of the taking of such
record. In the event that, as a result of an adjustment made pursuant
to this paragraph (f), the holder of any share of Series B Preferred
Stock thereafter surrendered for conversion shall be entitled to
receive any shares of capital stock of the Corporation other than
shares of Common Stock, thereafter the Conversion Ratio of such other
shares so receivable upon conversion of any shares of Series B
Preferred Stock shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to Common Stock contained in this paragraph
(f).
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Section 7. Definitions. As used herein, the following terms
shall have the meanings indicated:
"Aggregate Original Basis" shall mean, with respect to any
holder of Series B Preferred Stock, the product of (A) $1,000
multiplied by (B) the number of shares of Series B Preferred Stock held
by such holder (as appropriately adjusted for stock splits, stock
dividends, recapitalizations and similar occurrences).
"Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in Nashville, Tennessee
are authorized or obligated by law or executive order to close.
"Corporation" shall mean North American DataCom, Inc., a
Delaware corporation.
"Issue Date" shall mean the date on which shares of Series B
Preferred Stock are first issued by the Corporation to the holders
thereof.
"Liquidation Value" shall mean, with respect to any holder of
Series B Preferred Stock as of the applicable date of determination, an
amount equal to the Aggregate Original Basis of such holder's shares of
Series B Preferred Stock plus all accrued but unpaid dividends payable
with respect to such Series B Preferred Stock held by such holder.
"Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by merger
or otherwise) of such entity.
"Securities Act" shall mean the Securities Act of 1933, as
amended, or any successor federal statute, and the rules and
regulations thereunder, all as the same shall be in effect at the time.
"Stated Value" shall mean $1,000 per share.
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