EXHIBIT 4.6
CERTIFICATE OF DESIGNATIONS,
RIGHTS AND PREFERENCES
OF
SERIES I CONVERTIBLE OPTIONAL
REDEMPTION PREFERRED STOCK
OF
eGLOBE, 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 DOES HEREBY CERTIFY that, pursuant to the
authority contained in Article IV of the Restated Certificate of Incorporation
of eGlobe, Inc., a Delaware corporation (the "Corporation"), and in accordance
with Section 151 of the General Corporation Law of the State of Delaware, the
Board of Directors of the Corporation has authorized the creation of Series I
Convertible Optional Redemption Preferred Stock having the designations, rights
and preferences as are set forth in Exhibit A hereto and made a part hereof and
that the following resolution was duly adopted by the Board of Directors of the
Corporation:
RESOLVED, that a series of authorized Preferred
Stock, par value $.001 per share, of the Corporation be, and it hereby
is, created; that the shares of such series shall be, and
they hereby are, designated as "Series I Convertible Optional
Redemption Preferred Stock;" that the number of shares constituting
such series shall be, and it hereby is, 400,000; and that the
designations, rights and preferences of the shares of such series are
as set forth in Exhibit A attached hereto and made a part hereof.
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by its President and Chief
Executive Officer and attested to by its Secretary this 3rd day of August, 1999.
eGLOBE, INC.
By: /s/ Christopher J. Vizas
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[SEAL] Name: Christopher J. Vizas
Title: President and Chief Executive
Officer
ATTEST:
/s/ Graeme S.R. Brown
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Name: Graeme S.R. Brown
Title: Assistant Secretary
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EXHIBIT A
SERIES I CONVERTIBLE PREFERRED STOCK
The following sections set forth the powers, rights and
preferences, and the qualifications, limitations and restrictions thereof, of
the Corporation's Series I Convertible Preferred Stock, par value $.001 per
share ("Series I Preferred"). Capitalized terms used herein are defined in
Section 6 below.
Section 1. Voting Rights.
Except as otherwise provided herein or as required by law, the
Series I Preferred shall have no voting rights.
Section 2. Redemption. The shares of Series I Preferred shall
be subject to redemption, as follows.
2A. Redemption Rights. At the option of the Corporation, in
its sole discretion,
(i) Up to 150,000 shares of Series I Preferred (the
"First Redemption Shares") on a pro rata basis from the holders of the Series I
Preferred (based upon the aggregate number of shares of Series I Preferred held
by such holders) shall be subject to redemption at any time prior to February
14, 2000 (the "First Redemption Period").
(ii) All shares of Series I Preferred other than the
First Redemption Shares (the "Second Redemption Shares") shall be subject to
redemption at any time prior to July 17, 2000 (the "Second Redemption Period"
and together with the First Redemption Period, the "Redemption Periods"). Any
such redemption shall be on a pro rata basis from the holders of the Series I
Preferred based upon the aggregate number of shares of Series I Preferred held
by such holders.
The shares of the Series I Preferred may be redeemed, in whole or in part, at
the option of the Corporation at a redemption price (the "Redemption Price") per
share equal to $10 (the "Current Amount") plus an amount equal to the Current
Amount times an 8% annual interest rate calculated from December 2, 1998 through
the date on which redemption takes place (the "Redemption Date"). The Redemption
Price is payable in (i) cash, (ii) by delivery of shares of Common Stock, valued
at the Market Price or (iii) a combination thereof.
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2B. Redemption Mechanics. The Corporation shall give
a redemption notice (the "Redemption Notice") on or prior to the final day of
the relevant Redemption Periods (i) by certified mail, postage prepaid, (ii) by
a nationally known overnight delivery service or (iii) delivered by hand,
addressed to each holder of record of shares of Series I Preferred, notifying
such holder of the redemption and specifying the Redemption Price applicable to
the Series I Preferred, the Redemption Date and the place where said Redemption
Price shall be payable. The Redemption Notice shall be addressed to each holder
at his address as shown by the records of the Corporation. On or after the
Redemption Date fixed in such Redemption Notice, each holder of shares of Series
I Preferred to be so redeemed shall present and surrender the certificate or
certificates for such shares to the Corporation at the place designated in said
notice and thereupon the Redemption Price of such shares shall be paid to, or to
the order of, the Person whose name appears on such certificate or certificates
as the owner thereof. From and after the close of business on the Redemption
Date, unless there shall have been a default in the payment of the Redemption
Price upon surrender of a certificate or certificates representing shares of
Series I Preferred to be redeemed, all rights of holders of shares of Series I
Preferred subject to redemption on the Redemption Date (except the right to
receive the Redemption Price upon surrender of a certificate or certificates
representing shares of Series I Preferred to be redeemed, but without interest)
shall cease with respect to such shares, and such shares shall not thereafter be
transferred on the books of the Corporation or be deemed to be outstanding for
any purpose whatsoever.
Section 3. Dividend Rights.
Except as otherwise provided herein or as required by law,
holders of Series I Preferred shall be entitled to receive dividends only when
and as declared by the Corporation's Board of Directors with respect to Series I
Preferred, only out of funds that are legally available therefor and only in the
event that the Corporation at the same time declares or pays any dividends upon
the Common Stock (whether payable in cash, securities or other property). In the
event that the Corporation declares or pays any dividends upon the Common Stock
(whether payable in cash, securities or other property) on or prior to the
Redemption Date or Conversion Date (as defined below), other than dividends
payable solely in shares of Common Stock, the Corporation shall also declare and
pay to the holders of the Series I Preferred, at the same time that it declares
and pays such dividends to the holders of the Common Stock, the dividends which
would have been declared and paid with respect to the Common Stock issuable upon
conversion of the Series I Preferred had all of the outstanding Series I
Preferred been converted immediately prior to the record date for such dividend,
or if no record date is fixed, the date as of which the record holders of Common
Stock entitled to such dividends are to be determined.
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Section 4. Liquidation Rights.
Upon any Liquidation, after the payment of the full
liquidation preference of any series of preferred stock senior to the Series I
Preferred, the holders of Series I Preferred shall be entitled to participate in
distributions to holders of the Common Stock (along with each other class of
stock with similar rights) such that the holders of Series I Preferred receive
aggregate distributions equal to the amounts that such holders would have
received if the Series I Preferred Stock had been converted into Common Stock
immediately prior to such Liquidation.
Section 5. Conversion.
5A. Automatic Conversion.
(i) All First Redemption Shares not redeemed by the
Corporation prior to the First Redemption Date shall automatically be converted
into shares of Common Stock on February 14, 2000 (the "First Conversion Date").
(ii) Each Second Redemption Share not redeemed by
the Corporation prior to the Second Redemption Date shall automatically be
converted into shares of Common Stock on July 17, 2000 (the "Second Conversion
Date" and together with the First Conversion Date, the "Conversion Date"). The
number of shares of Common Stock to which a holder of Series I Preferred shall
be entitled upon conversion shall be the product obtained by multiplying the
"Series I Conversion Rate" then in effect (determined as provided in 5B) by the
number of shares of Series I Preferred being converted.
(iii) Notwithstanding the foregoing, the Series I
Preferred may be converted into a maximum of 3,900,000 shares of Common Stock,
and from and after issuance of such number of shares of Common Stock upon
conversion of the Series I Preferred, all shares of the Series I Preferred shall
cease to be convertible (a "Cessation of Conversion Event"). Following the
Cessation of Conversion Event, the Corporation shall redeem all then outstanding
shares of Series I Preferred (on the applicable Conversion Date) for an amount
equal to the Redemption Price.
5B. Conversion Rate Formula. The conversion rate in
effect at any time for conversion of the Series I Preferred (the "Series I
Conversion Rate") shall equal (1) $10 plus an amount equal to the Current Amount
times an 8% annual interest rate calculated from December 2, 1998 through the
Conversion Date, divided by (2) the greater of the Market Price of the Common
Stock on the date of conversion and $2.00. The Series I Conversion Rate shall be
adjusted to the extent required by Section 5A(iii). The Series I Conversion Rate
shall be subject to adjustment pursuant to Section 5C.
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5C. Adjustment for Stock Splits and Combinations, Common Stock
Dividends and Distributions. If the Corporation shall at any time or from time
to time after the date of the initial issuance of Series I Preferred (the
"Original Series I Issue Date") effect a subdivision of the outstanding Common
Stock, the Series I Conversion Rate in effect immediately before that
subdivision shall be proportionately increased. Conversely, if the Corporation
shall at any time or from time to time after the Original Series I Issue Date
combine the outstanding shares of Common Stock into a smaller number of shares,
the Series I Conversion Rate in effect immediately before the combination shall
be proportionately decreased. Any adjustment under this Section 5C shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
If the Corporation at any time or from time to time after the
Original Series I Issue Date makes, or fixes a record date for the determination
of holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, in each such event the Series I
Conversion Rate that is then in effect shall be increased as of the time of such
issuance or, in the event such record date is fixed, as of the close of business
on such record date, by multiplying the Series I Conversion Rate then in effect
by a fraction (1) the numerator of which is the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such issuance or
the close of business on such record date plus the number of shares of Common
Stock issuable in payment of such dividend or distribution, and (2) the
denominator of which is the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the Series I Conversion Rate shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Series I Conversion Rate shall be adjusted pursuant to this
Section 5C to reflect the actual payment of such dividend or distribution.
5D. Reorganizations, Mergers or Consolidations. If at any time
or from time to time after the Original Series I Issue Date, the Common Stock is
converted into other securities or property, whether pursuant to a
reorganization, merger, consolidation or otherwise (other than a
recapitalization, subdivision, combination, reclassification, exchange or
substitution of shares provided for elsewhere in this Section 5), as a part of
such transaction, provision shall be made so that the holders of the Series I
Preferred shall thereafter be entitled to receive upon conversion of the Series
I Preferred the number of shares of stock or other securities or property of the
Corporation to which a holder of the number of shares of Common Stock
deliverable upon conversion would have been entitled in connection with such
transaction, subject to adjustment in respect of such stock or securities by the
terms thereof. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section 5 with respect to the rights of
the holders of Series I Preferred after such transaction to the end that the
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provisions of this Section 5 (including adjustment of the Series I Conversion
Rate then in effect and the number of shares issuable upon conversion of the
Series I Preferred) shall be applicable after that event and be as nearly
equivalent as practicable. In the case of any reorganization, merger or
consolidation in which the Corporation is not the surviving entity, the
Corporation shall not consummate the transaction unless the entity surviving
such transaction assumes all of the Corporation's obligations hereunder.
If at any time or from time to time after the Original Series
I Issue Date, the Common Stock issuable upon the conversion of the Series I
Preferred is changed into the same or a different number of shares of any class
or classes of stock, whether by recapitalization, reclassification or otherwise
(other than a subdivision or combination of shares or stock dividend or a
reorganization, merger or consolidation provided for elsewhere in this Section
5), in any such event each holder of Series I Preferred shall have the right
thereafter to convert such stock into the kind and amount of stock and other
securities and property receivable in connection with such recapitalization,
reclassification or other change with respect to the maximum number of shares of
Common Stock into which such shares of Series I Preferred could have been
converted immediately prior to such recapitalization, reclassification or
change, all subject to further adjustments as provided herein or with respect to
such other securities or property by the terms thereof.
5E. Notices.
(i) Immediately upon any adjustment of the Series I Conversion
Rate, the Corporation shall give written notice thereof to all holders of Series
I Preferred, setting forth in reasonable detail and certifying the calculation
of such adjustment.
(ii) Upon (A) 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 or other distribution,
or (B) any reorganization, any reclassification or recapitalization of the
capital stock of the Corporation, any merger or consolidation of the Corporation
with or into any other corporation, or any Liquidation, the Corporation shall
mail to each holder of Series I Preferred at least twenty (20) days prior to the
record date specified therein a notice specifying (1) the date on which any such
record is to be taken for the purpose of such dividend or distribution and a
description of such dividend or distribution, (2) the date on which any such
reorganization, reclassification, transfer, consolidation, merger or Liquidation
is expected to become effective, and (3) the date, if any, that is to be fixed
for determining the holders of record of Common Stock (or other securities) that
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger or Liquidation.
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5F. Mechanics of Conversion. Upon the occurrence of the
applicable event specified in Section 5A, the outstanding shares of Series I
Preferred shall be converted into Common Stock automatically without any further
action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent; provided, however, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless the certificates evidencing such shares of Series I Preferred are either
delivered to the Corporation or its transfer agent as provided below, or the
holder notifies the Corporation or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates. Upon surrender by any holder of the
certificates formerly representing shares of Series I Preferred at the office of
the Corporation or any transfer agent for the Series I Preferred, there shall be
issued and delivered to such holder promptly at such office and in its name as
shown on such surrendered certificate or certificates, a certificate or
certificates for the number of shares of Common Stock into which the shares of
Series I Preferred surrendered were convertible on the date on which such
automatic conversion occurred. Until surrendered as provided above, each
certificate formerly representing shares of Series I Preferred shall be deemed
for all corporate purposes to represent the number of shares of Common Stock
resulting from such automatic conversion.
5G. Fractional Shares. No fractional shares of Common Stock
shall be issued upon conversion of Series I Preferred. All shares of Common
Stock (including fractions thereof) issuable upon conversion of more than one
share of Series I Preferred by a holder thereof shall be aggregated for purposes
of determination whether the conversion would result in the issuance of any
fractional share. If, after the aforementioned aggregation, the conversion would
result in the issuance of any fractional share, the Corporation shall, in lieu
of issuing any fractional share, pay cash equal to the product of such fraction
multiplied by the Common Stock's fair market value (as determined by the Board)
on the date of conversion. Notwithstanding the foregoing, in the event that any
holder converts shares of Series I Preferred ten times within any one year
period, the Corporation shall not be obligated to pay any cash amount for
fractional shares upon any subsequent conversion(s) by such holder during such
year, but may withhold the fractional share(s) and aggregate such fractional
share(s) with any additional fractional share(s) issuable to such holder during
such year, and pay the cash (if any) required by this section for any fractional
shares remaining after such aggregation at the end of such year.
5H. Reservation of Shares. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of issuance upon the conversion of the shares of
Series
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I Preferred, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of the Series I
Preferred. All shares of Common Stock which are so issuable shall, when issued,
be duly and validly issued, fully paid and nonassessable and free from all
taxes, liens and charges. 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 I Preferred, the Corporation will take
such corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
5I. Payment of Taxes. The issuance of certificates for shares
of Common Stock upon conversion of Series I Preferred shall be made without
charge to the holders of such Series I Preferred for any issuance tax in respect
thereof or other cost incurred by the Corporation in connection with such
conversion and the related issuance of shares of Common Stock, excluding any tax
or other charge imposed in connection with any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that in which the
shares of Series I Preferred so converted were registered.
Section 6. Definitions.
"Closing Price" of each share of Common Stock or other
security means the composite closing price of the sales of the Common Stock or
such other security on all securities exchanges on which such security may at
the time be listed (as reported in The Wall Street Journal), or, if there has
been no sale on any such exchange on any day, the average of the highest bid and
lowest asked prices of the Common Stock or such other security on all such
exchanges at the end of such day, or, if such security is not so listed, the
closing price (or last price, if applicable) of sales of the Common Stock or
such other security in the Nasdaq National Market (as reported in The Wall
Street Journal) on such day, or if such security is not quoted in the Nasdaq
National Market but is traded over-the-counter, the average of the highest bid
and lowest asked prices on such day in the over-the-counter market as reported
by the National Quotation Bureau Incorporated, or any similar successor
organization.
"Common Stock" means, collectively, the Corporation's common
stock, par value $.001 per share; and if there is a change such that the
securities issuable upon conversion of Series I Preferred are issued by an
entity other than the Corporation or there is a change in the class of
securities so issuable, then the term "Common Stock" shall mean the shares of
the security issuable upon conversion of Series I Preferred if such security is
issuable in shares, or shall mean the smallest unit in which such security is
issuable if such security is not issuable in shares.
"Corporation" means eGlobe, Inc. a Delaware corporation.
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"Liquidation" means the liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary; provided, however, that
neither the consolidation or merger of the Corporation into or with any other
entity or entities, nor the sale or transfer by the Corporation of all or any
part of its assets, nor the reduction of the capital stock of the Corporation,
shall be deemed to be a Liquidation.
"Market Price" means (i) if the Common Stock is listed on any
securities exchange, quoted in the Nasdaq National Market, or quoted in the
over-the-counter market throughout the period of 15 consecutive trading days
immediately prior to the Conversion Date (the "Pricing Period"), the Closing
Price of the Common Stock averaged over the 15 consecutive trading days
constituting the Pricing Period, or (ii) if the Common Stock is not listed on
any securities exchange, quoted in the Nasdaq National Market, or quoted in the
over-the-counter market throughout the Pricing Period, the fair value of the
Common Stock determined by agreement between the Corporation and the holders of
a majority of the outstanding Series I Preferred or, if they are unable to reach
agreement within a reasonable period of time, the fair value of the Common Stock
as determined by an independent appraiser selected by the Corporation (which
appraiser may be the Corporation's investment banker, and the fees and expenses
of such appraiser shall be borne by the Corporation), which determination shall
be final and binding upon the Corporation and the holders of the outstanding
Series I Preferred.
"Series I Preferred" means the Corporation's Series I
Convertible Preferred Stock, par value $.001 per share.
Section 7. Amendment and Waiver.
No amendment, modification or waiver of any of the terms or
provisions of the Series I Preferred shall be binding or effective without the
prior approval (by vote or written consent) of the holders of a majority of the
Series I Preferred then outstanding. Any amendment, modification or waiver of
any of the terms or provisions of the Series I Preferred with such approval,
whether prospective or retroactively effective, shall be binding upon all
holders of Series I Preferred.
Section 8. Registration of Transfer.
The Corporation shall keep at its principal office a register
for the registration of Series I Preferred. Upon the surrender of any
certificate representing Series I Preferred at such place, the Corporation
shall, at the request of the record holder of such certificate, execute and
deliver (at the Corporation's expense) a new certificate or certificates in
exchange therefor representing in the aggregate the number of Series I Preferred
shares represented by the surrendered certificate. Each such new certificate
shall be registered in such name and shall represent such
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number of Series I Preferred shares as is requested by the holder of the
surrendered certificate and shall be substantially identical in form to the
surrendered certificate.
Section 9. Replacement.
Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series I Preferred, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the holder is a financial institution or other
institutional investor, its own agreement shall be satisfactory), or, in the
case of any such mutilation upon surrender of such certificate, the Corporation
shall (at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Series I Preferred shares
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
Section 10. Notices.
Except as otherwise expressly provided hereunder, all notices
referred to herein shall be in writing and shall be deemed effectively given:
(i) upon personal delivery to the party to be notified, (ii) when sent by
confirmed telex or facsimile if sent during normal business hours of the
recipient; if not, then on the next business day, (iii) five (5) days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (iv) one (1) day after deposit with a nationally recognized
overnight courier, specifying next day delivery, with written verification of
receipt. All notices shall be addressed (i) if to the Corporation, to its
principal executive offices, and (ii) if to stockholders, to each holder of
record at the address of such holder appearing on the books of the Corporation.
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