B-1 AVTEL COMMUNICATIONS, INC.
DESIGNATION OF RIGHTS, PRIVILEGES, AND PREFERENCES OF
SERIES A CONVERTIBLE PREFERRED STOCK
Pursuant to the provisions of Section 16-10a-602, of the Utah Revised
Business Corporation Act, the above corporation (the "Corporation") hereby
adopts the following Designation of Rights, Privileges, and Preferences of
Series A Convertible Preferred Stock (the "Designation"):
We, Anthony E. Papa and James P. Pisani hereby certify that:
1. We are the President and Chief Executive Officer and the Executive Vice
President, Secretary and Chief Financial Officer, respectively, of AvTel
Communications, Inc., a Utah corporation formerly called Hi, Tiger,
International, Inc., a Utah corporation.
2. The number of shares of Preferred Stock of this corporation is
5,000,000, none of which has been issued.
3. The Board of Directors duly adopted the following resolution:
WHEREAS, the Amended and Restated Articles of Incorporation authorize the
Preferred Stock of the corporation to be issued in series and authorize the
Board of Directors to determine the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued class or series of
Preferred Stock and to fix the number of shares and designation of any such
series;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
establish a series of Preferred Stock as follows:
Section 1 Designation and Number of Shares
The shares of such preferred stock shall be designated AvTel
Communications, Inc. Series A Convertible Preferred Stock ("Series A
Convertible Preferred Stock"). The par value of each share of Series A
Convertible Preferred Stock shall be $1.00. The number of shares constituting
Series A Convertible Preferred Stock shall be 1,000,000.
Section 2 General Definitions. For purposes of designating the
preferences, privileges, restrictions and rights of the Series A Convertible
Preferred Stock, the following definitions shall apply:
2.1 Board of Directors shall mean the Board of Directors of the
Corporation.
2.2 Business Day shall mean any day other than Saturdays, Sundays or other
days on which commercial banks are authorized or required to close in Salt
Lake City, Utah.
2.3 Common Stock shall refer to the Common Stock of the Corporation.
2.4 Consideration shall mean in any issuance (other than a Non-Dilutive
Issuance) of securities, including but not limited to common stock or
Convertible Securities or Options (a "Transaction"), (a) in case of an
issuance of Common Stock for cash or property (i) the net amount of the cash
and the fair market value of the property received by the issuer for such
securities, or (b) in the case of Convertible Securities or Options, the price
at which the holders of such Convertible Securities or Options may, upon the
conversion, exchange or exercise thereof, acquire such Common Stock.
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2.5 Convertible Securities shall mean any evidence of indebtedness, shares
(other than Common Stock) or other securities of the Corporation, convertible
into or exchangeable for Common Stock.
2.6 Corporation shall mean AvTel Communications, Inc., a Utah corporation.
2.7 Current Market Price of any security on any Trading Day shall be (a)
if such security is traded on a national securities exchange, its last sale
price on such Trading Day on such national securities exchange or, if there
was no sale on that day, the last Trading Day on which there was a sale or (b)
if the principal market for such security is the over-the-counter market, and
such security is quoted on the National Association of Securities Dealers
Automated Quotations System ("NASDAQ"), the last sale price reported on NASDAQ
on such Trading Day or, if such security is an issue for which last sale
prices are not reported on NASDAQ, the mean between the bid and ask quotation
on such day, but, in each of the preceding two cases, if the relevant NASDAQ
price or quotation did not exist on such day, then the price or quotation on
the preceding Trading Day in which there was such a price or quotation.
2.8 Distribution shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, or the purchase or
redemption of shares of this Corporation for cash or property, including any
such transfer, purchase or redemption by a Subsidiary of this Corporation.
2.9 Equivalent Shares shall mean common stock and shares of any new class
(a "New Class") of securities without fixed maximum dividends or which share
with such common stock in the residual value of the issuer on liquidation.
2.10 Issuance Date shall mean the first date upon which any shares of
Series A Convertible Preferred Stock are issued by the Corporation.
2.11 Issue Price shall mean the result determined by dividing the
Consideration received by the deemed number of Equivalent Shares issued in any
Transaction.
2.12 Junior Shares shall mean all Common Stock and any other shares of
this Corporation other than the Series A Convertible Preferred Stock.
2.13 Liquidation Preference shall mean the par value of each share of
Series A Convertible Preferred Stock, in addition to the aggregate amount of
any cumulative, unpaid dividends, for each share of Series A Convertible
Preferred Stock as determined in accordance with Section 3 below.
2.14 Non-Dilutive Issuances means (a) the issuance of any series of the
Corporation's preferred stock, (b) the issuance of Common Stock upon
conversion of any Series A Convertible Preferred Stock, (c) the issuance of
Options to purchase shares of Common Stock, or the issuance of Common Stock
upon the exercise of such Options, provided that (i) such Options are issued
to employees, officers, directors or consultants of the Corporation, (ii) such
Options are issued pursuant to one or more employee stock purchase or stock
option plans or long-term incentive plans or as part of bona fide reasonable
compensation arrangements in the ordinary course of business, (iii) in the
case of Options, the exercise price of such Options shall be substantially
equal to the then Current Market Price of the underlying Common Stock on the
date of grant unless issued pursuant to an employee stock purchase plan
intended to meet the requirements of Section 423 of the Internal Revenue Code
of 1986, or (e) issuances of any Common Stock or Options by the Corporation
pursuant to any strategic alliance which, for purposes hereof shall mean any
contract or agreement between the Corporation or one of its Subsidiaries and
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one or more other parties involving an acquisition by the Corporation or one
or more of its Subsidiaries, of an ownership interest (whether partial or
whole and whether in the form of an acquisition of stock, voting or non-voting
securities, general or limited partnership interests, or similar equity
participation interests) in any other corporation, partnership, joint venture
or other business entity, or any such agreement or contract involving the
development, commercialization, marketing, sale, distribution, provisioning,
supply, licensing or production of any products or services by or for the
Corporation or one or more of its Subsidiaries.
2.15 Option shall mean rights, options or warrants to subscribe for,
purchase or otherwise acquire Common Stock or Convertible Securities.
2.16 Person means a corporation, an association, a trust, a partnership, a
joint venture, an organization, a business, an individual, a government or
political subdivision thereof or a governmental body.
2.17 Public Offering with respect to any securities means the registration
of such securities under the Securities Act, under a firm commitment
underwriting, for sale to the public.
2.18 Securities Act shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations
thereunder, all as may be in effect from time to time.
2.19 Series A Convertible Preferred Stock shall refer to the Series A
Convertible Preferred Stock of this Corporation.
2.20 Subsidiary shall mean any corporation at least 50% of whose
outstanding voting shares shall at the time be owned by the Corporation or by
one or more of such subsidiaries.
2.21 Trading Day shall mean any day on which trading occurs on the New
York Stock Exchange.
Section 3. Dividend Rights of Preferred Stock. The holders of the Series
A Convertible Preferred Stock shall be entitled to receive, out of any funds
legally available therefor, cumulative dividends, on each outstanding share of
Series A Convertible Preferred Stock, at the rate of eight percent (8.0%) of
the par value of the Series A Convertible Preferred Stock per annum per share,
on each outstanding share of Series A Convertible Preferred Stock, and no
more, payable prior and in preference to any payment of any dividend on, or
other distribution with respect to, Junior Shares and payable semi-annually,
commencing one hundred eighty (180) days from the Issuance Date, from funds
legally available therefor. Such dividends shall accrue from the Issuance
Date whether or not earned so that no dividends (other than those payable
solely in Common Stock) shall be made with respect to Junior Shares until
cumulative dividends on the Series A Convertible Preferred Stock for all past
dividend periods and for the then current six-month dividend period shall have
been declared and paid or set apart. Such dividends shall be payable to
holders of record of shares of Series A Convertible Preferred Stock as of a
record date, determined by the Board of Directors, which shall be not more
than thirty (30) days prior to the dividend payment date. Other than with
respect to the dividends paid on the Series A Convertible Preferred Stock
which represent payment cumulative dividends thereon for all past dividend
periods and for the then current six-month dividend period, no dividend shall
be declared, paid on or set apart for the outstanding shares of Series A
Convertible Preferred Stock. The holders of at least 50% of the Series A
Convertible Preferred Stock may at any time by written consent waive payment
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of any accumulated but unpaid dividends with respect to such Series A
Convertible Preferred Stock or eliminate any requirement to declare, pay, set
apart or accumulate any dividends with respect to such Series A Convertible
Preferred Stock.
Section 4. Restriction on Dividend Rights of Junior Shares. No dividend
or other Distribution (other than those payable solely in Common Stock) shall
be declared or paid with respect to Junior Shares while any shares of Series A
Convertible Preferred Stock are outstanding without the vote or written
consent by the holders of at least 50% of the outstanding shares of Series A
Convertible Preferred Stock.
Section 5. Liquidation Rights of Series A Convertible Preferred Stock. In
the event of any liquidation, dissolution or winding up of the Corporation,
either voluntary or involuntary, the holders of the Series A Convertible
Preferred Stock shall be entitled to receive, prior and in preference to any
distribution of any of the assets or surplus funds of the Corporation to the
holders of Junior Shares by reason of their ownership of such stock, an amount
(the "Liquidation Preference") equal to the sum of $1.00 for each share of
Series A Convertible Preferred Stock then held by them and, in addition, an
amount equal to all declared but unpaid dividends, if any, on the Series A
Convertible Preferred Stock. If the assets and funds thus distributed among
the holders of the Series A Convertible Preferred Stock shall be insufficient
to permit the payment to such holders of the aggregate Liquidation Preference
payable to such holders, then the entire assets and funds of the Corporation
legally available for distribution shall be distributed among the holders of
the Series A Convertible Preferred Stock, pro rata among the holders of such
Series A Convertible Preferred Stock according to the number of shares held by
each such holder. After payment to the holders of Series A Convertible
Preferred Stock of the Liquidation Preference as aforesaid, the entire assets
and funds of the Corporation legally available for distribution, if any, shall
be distributed among the holders of the Junior Shares.
Section 6. Redemption. The Corporation may, from funds legally available
therefore, redeem all or any part of the outstanding Series A Convertible
Preferred Stock as follows:
6.1 Redemption of Series A Convertible Preferred Stock After Second
Anniversary. After the second anniversary of the Issuance Date, the
Corporation may redeem, at any time, and from time to time, after the second
anniversary of the Issuance Date, all or any part, but if less than all, not
less than 25%, of the Series A Convertible Preferred Stock outstanding. Any
redemption effected pursuant to this Section 6 shall be made on a pro-rata
basis among the holders of Series A Convertible Preferred Stock in proportion
to the Shares of Series A Convertible Preferred Stock then held by them.
6.2 Redemption of Series A Convertible Preferred Stock Before First
Anniversary. The Corporation may, at any time, and from time to time, prior
to the first anniversary of the Issuance Date redeem all or any part, but if
less than all, not less than 25%, of the outstanding Series A Convertible
Preferred Stock immediately following any period of twenty (20) consecutive
Trading Days on which the Current Market Price of Common Stock was $2.00 per
share or more.
6.3 Redemption Price. The Corporation may redeem shares of Series A
Convertible Preferred Stock pursuant to either Section 6.1 or 6.2 above by
paying in cash therefore an amount (the "Redemption Price") equal to the
Liquidation Preference per share of Series A Convertible Preferred Stock.
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6.4 Redemption Notice. In order to effect a redemption pursuant to
Section 6.1 or 6.2 above, the Corporation shall, by written notice (herein the
"Redemption Notice"), mailed first class postage prepaid, to each holder of
record (at the close of business on the Business Day immediately preceding the
day on which notice is given) of Series A Convertible Preferred Stock to be
redeemed, at the address shown on the records of the Corporation for such
holder, notify such holder of the redemption to be effected. Such Redemption
Notice shall specify the number of shares of Series A Convertible Preferred
Stock to be redeemed from such holder, the Redemption Price, the place at
which payment may be obtained and calling upon such holder to surrender to the
Corporation, in the manner and at the place designated, and a date (herein the
"Delivery Date") which shall not be less than forty-five (45) days nor more
than sixty (60) days following the date of such Redemption Notice, his
certificate or certificates representing the shares to be redeemed. On or
before the Delivery Date, each holder of Series A Convertible Preferred Stock
to be redeemed shall surrender to the Corporation a certificate or
certificates representing such shares, in the manner and at the place
designated in the Redemption Notice, 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, any surrendered
certificate shall be canceled. In the event that less than all the shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed shares.
6.5 Continuing Rights of Holders of Series A Convertible Preferred Stock
Following Redemption. From and after the Delivery Date, unless there shall
have been a defaulted payment of the Redemption Price, all rights of the
holders of shares of Series A Convertible Preferred Stock designated for
redemption and the Redemption Notice as holders of Series A Convertible
Preferred Stock (except the right to receive the Redemption Price without
interest upon surrender of their certificate or certificates) 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. If the funds of the Corporation are legally available for
redemption of shares of Series A Convertible Preferred Stock on the Delivery
Date and are not sufficient to redeem the total number of shares of Series A
Convertible Preferred Stock deemed redeemed on such date, those funds which
are legally available will be used to redeem the maximum possible number of
such shares, ratably from the holders of such shares to be redeemed, based
upon their holdings of Series A Convertible Preferred Stock. The shares of
Series A Convertible Preferred Stock not redeemed shall remain outstanding and
entitled to the rights and preferences provided herein and shall no longer be
considered as having been designated for redemption in the relevant Redemption
Notice.
6.6 Deposit of Redemption Price. On or prior to each Delivery Date, the
Corporation shall deposit the Redemption Price of all shares of Series A
Convertible Preferred Stock designated for redemption in the Redemption Notice
and not yet redeemed with a bank or trust corporation having aggregate capital
and surplus in excess of $10,000,000 as a trust fund for the benefit of the
respective holders in shares designated for redemption and not yet redeemed,
with irrevocable instructions and authority to the bank or trust corporation
to pay the redemption price for such shares to the respective holders on or
after the Delivery Date on receipt of notification from the Corporation that
such holder has surrendered his or her share certificates to the Corporation
pursuant to Subsection 6.4 above. As of the Delivery Date, the deposit shall
constitute full payment of the shares to their holders, and from and after the
Delivery Date shares so called for redemption shall be redeemed and shall be
deemed to be no longer outstanding, and holders thereof shall cease to be
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stockholders with respect to such shares and shall have no rights with respect
thereto, except for rights to receive a bank or trust corporation payment of
the Redemption Price of the shares, without interest, upon surrender of their
certificates therefore. Such instructions shall also provide that any monies
deposited by the Corporation pursuant to this Subsection 6.6 for the
redemption of shares thereafter converted into shares of Common Stock pursuant
to Section 8 hereof, prior to the Delivery Date, shall be returned to the
Corporation forthwith upon such conversion. The balance of any monies
deposited by the Corporation pursuant to this Subsection 6.6 remaining
unclaimed at the expiration of one (1) year following the Delivery Date shall
thereupon be returned to the Corporation upon its request as expressed in a
resolution adopted by its Board of Directors.
Section 8. Conversion Rights of Series A Convertible Preferred Stock. The
holders of the Series A Convertible Preferred Stock shall have conversion
rights as follows (the "Conversion Rights"):
8.1 Right to Convert. Subject to the terms and conditions hereof, each
share of Series A Convertible Preferred Stock shall be convertible, at the
option of the holder thereof, at any time after the first anniversary of the
Issuance Date, into such number of fully paid and nonassessable shares of
Common Stock, as determined by dividing $1.00 by the Conversion Price
applicable to such share, determined as hereinafter provided, in effect on the
date the certificate is surrendered for conversion. The price at which shares
of Common Stock shall be deliverable upon conversion of shares of the Series A
Convertible Preferred Stock (the "Conversion Price") shall initially be $1.00
per share of Common Stock. The Conversion Price shall be subject to
adjustment as hereinafter provided in Section 8.4.
8.2 Automatic Conversion on Public Offering. Each share of Series A
Convertible Preferred Stock shall automatically be converted into the number
of fully paid and nonassessable shares of Common Stock upon the closing of a
Public Offering pursuant to an effective Registration Statement under the
Securities Act, covering the offer and sale of Common Stock to the public at a
public offering price (prior to underwriters' discounts and expenses) equal to
or exceeding $10.00 per share of Common Stock (as adjusted for stock
dividends, combinations or splits with respect to such shares) and the
proceeds to the Corporation of not less than $15 million (net only of
underwriters' commissions and expenses relating to the issuance, including
without limitation expenses of the Corporation's counsel). In the event of
such Public Offering, the person(s) entitled to receive the Common Stock
issuable upon such conversion of Series A Convertible Preferred Stock shall
not be deemed to have converted such Series A Convertible Preferred Stock
until the date of the closing of such sale of Common Stock. The Conversion
Price of shares of Series A Convertible Preferred Stock which are converted
pursuant to this Section 8.2 shall be the lower of $1.00 per share or a price
determined by multiplying .80 times the Issue Price per share of the Common
Stock issued in such Public Offering.
8.3 Mechanics of Conversion. No fractional shares of Common Stock
shall be issued upon conversion of Series A Convertible Preferred Stock. In
lieu of any fractional shares to which the holder would otherwise be entitled,
the Corporation shall pay cash equal to such fraction multiplied by a fair and
reasonable conversion price to be determined by the Board of Directors solely
for calculating payments due for fractional shares. No shares of Common Stock
will be issued in respect of accrued or declared and unpaid dividends on the
Series A Convertible Preferred Stock; however, except in the case of an
Automatic Conversion on a Public Offering as set forth in subparagraph 8.2
hereof, the Corporation shall remain liable after conversion of any Series A
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Convertible Preferred Stock for cumulative unpaid dividends accrued on such
Series A Convertible Preferred Stock prior to the time of conversion. Before
any holder of Series A Convertible Preferred Stock shall be entitled to
convert the same into full shares of Common Stock, he shall surrender the
certificate or certificates therefor, duly endorsed, at the office of the
Corporation and, except for the Automatic Conversion pursuant to subparagraph
8.2 above, shall give written notice (the "Conversion Notice") to the
Corporation, at such office that he elects to convert the same. The
Corporation shall, as soon as practicable thereafter issue and deliver or
cause to be issued and delivered to such holder of Series A Convertible
Preferred Stock, at such office or at such other place as the holder shall
specify in the Conversion Notice, a certificate or certificates for the number
of shares of Common Stock, to which he shall be entitled as aforesaid,
registered in the name of such holder or in such other name as the holder
shall specify in the aforementioned written notice. Except as set forth in
subparagraph 8.2 above, 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 Convertible 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 on such date.
8.4 Adjustments for Diluting Issues.
(a) Adjustment for Stock Splits and Combinations. If the Corporation
at any time or from time to time after the Issuance Date effects a subdivision
of the outstanding Common Stock (meaning to increase the number of shares of
Common Stock into which each share of Series A Convertible Preferred Stock is
convertible), the Conversion Price then in effect immediately before that
subdivision shall be proportionately increased, and conversely, if the
Corporation at any time or from time to time after the Issuance Date combines
the outstanding shares of Common Stock (meaning to decrease the number of
shares of Common Stock into which each share of Series A Convertible Preferred
Stock is convertible), the Conversion Price then in effect immediately before
the combination shall be proportionately increased. Any adjustment under this
subparagraph (a) shall become effective at the close of business on the date
the subdivision or combination becomes effective.
(b) Adjustment for Certain Dividends and Disbursements. In the event
the Corporation at any time, or from time to time, after the Issuance 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, then and in each such event, the Conversion Price then
in effect shall be decreased 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 Conversion Price then in effect by a fraction (a) the
numerator of which shall be 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 (but excluding shares of Common Stock previously
issued by the Corporation upon conversion of Series A Convertible Preferred
Stock) plus the number of shares of Common Stock issuable in payment of such
dividend or distribution, and (b) 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 (but excluding
shares of Common Stock previously issued by the Corporation upon conversion of
Series A Convertible Preferred Stock); 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 thereof, the Conversion Price shall be
recomputed accordingly as of the close of business on such record date and
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thereafter the Conversion Price shall be adjusted such that the number of
shares of Common Stock into which each share of Series A Convertible Preferred
Stock is convertible pursuant to this subsection as of the time of actual
payment of such dividends or distributions.
(c) Adjustments for Other Dividends and Distributions. In the event
the Corporation at any time or from time to time after the Issuance 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 securities of
the Corporation other than shares of Common Stock, then in each such event a
provision shall be made so that the holders of Series A Convertible 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 which they would have received had their Series A Convertible
Preferred Stock been converted into Common Stock on the date of such event and
had they thereafter, during the period from the date of such event to and
including the date of conversion, retained such securities receivable by them
as aforesaid during such period, subject to all other adjustments called for
during such period under this Section 8 with respect to the rights of the
holders of the Series A Convertible Preferred Stock.
(d) Adjustment for Reclassification, Exchange and Substitution. If
the Common Stock issuable upon the conversion of the Series A Convertible
Preferred Stock 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, consolidation or sale of assets,
provided for elsewhere in this Section 8) then and in any such event each
holder of Series A Convertible Preferred Stock shall have the right thereafter
to convert such stock into the kind and amount 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 A Convertible Preferred Stock might have been converted
immediately prior to such reorganization, reclassification or change, all
subject to further adjustment as provided herein.
(e) Reorganizations, Mergers, Consolidations or Sales of Assets. If
at any time or from time to time there is a capital reorganization of the
Common Stock (other than either a recapitalization, subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this Section
8) or a merger or consolidation of the Corporation with or into another
corporation, or the sale of all or substantially all of the Corporation's
properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation or sale, provision shall be made so that
the holders of the 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 stock or other securities or property of the
Corporation, or of the successor corporation resulting from such merger or
consolidation or sale, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made
in the application of the provisions of this Section 8 with respect to the
rights of the holders of the Series A Convertible Preferred Stock after the
reorganization, merger, consolidation or sale to the end that the provisions
of this Section 8 (including adjustment of the Conversion Price then in
effect) shall be applicable after that event and be as nearly equivalent to
the provisions hereof as may be practicable.
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8.5 No Impairment. The Corporation will not, by amendment of its Articles
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 hereunder by the Corporation but will
at all times in good faith assist in the carrying out of all the provisions of
this Section 8 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 A Convertible Preferred Stock against dilution or other impairment.
8.6 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 A Convertible Preferred Stock at least twenty (20) 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.
We, further certify, that the statements contained in the foregoing
resolution creating and designating the said Series of Preferred Stock and
fixing the number, powers, preferences and relative optional, participation,
and other special rights and the qualifications, limitations, restrictions,
and other distinguishing characteristics thereof shall, upon the effective
date of said Series, be deemed to be included in and be a part of the Articles
of Incorporation of the Corporation.
IN WITNESS WHEREOF, the foregoing Designation of Rights, Privileges, and
Preferences of Series A Preferred Stock of the Corporation has been executed
this ___ day of ____________, 1996.
ATTEST: AVTEL COMMUNICATIONS, INC.
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James P. Pisani, Secretary and Chief Anthony E. Papa, President and Chief
Financial Officer Executive Officer