EXHIBIT 3.8
REVISED CERTIFICATE OF DESIGNATIONS
OF
SERIES B PREFERRED STOCK
OF
iLINC COMMUNICATIONS, INC.
(Pursuant to Section 151(g) of the
Delaware General Corporation Law)
iLinc Communications, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation") does hereby
certify that the following resolutions respecting Series B Preferred Stock were
duly adopted by the Corporation's Board of Directors:
WHEREAS, the Certificate of Incorporation of iLinc Communications,
Inc., a Delaware corporation (the "Company"), authorized the Company to issue a
total of 10,000,000 shares of preferred stock, par value $0.001 per share
("Preferred Stock"), which may be divided into one or more series as the Board
of Directors may determine;
WHEREAS, the Certificate of Incorporation of the Company expressly
vests in the Board of Directors the authority to fix and determine the
designations, powers, preferences and rights, and the qualifications,
limitations and restrictions, of the Preferred Stock;
WHEREAS, the Board of Directors deems it advisable to designate a
series of the Preferred Stock consisting of shares designated as convertible
"Series B Preferred Stock;" and
WHEREAS, the first Certificate of Designations for the Series B
Preferred Stock was filed on August 9, 2005 and it is now to be a completely
amended and restated by this Revised Certificate of Designations.
NOW, THEREFORE, IT IS HEREBY:
RESOLVED, that pursuant to the authority granted by the Company's
Revised Certificate of Incorporation, the Board of Directors hereby authorize
and create a series of preferred stock hereby of 300,000 shares of the
10,000,000 of authorized preferred stock, having a par value of $0.001 per share
(the "Series B Preferred Stock"). The Series B Preferred Stock shall have the
rights, designations, powers, preferences, and qualifications, limitations and
restrictions set forth as follows:
1. Dividend Rights. The holders of Series B Preferred Stock shall be
entitled to receive dividends, but only out of funds that are legally available
therefor, at the rate of 8% of the Series B Original Issue Price (as defined
below) per annum (the "Series B Dividend Rate") on each outstanding share of
Series B Preferred Stock (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like with respect to such shares). For any
share of Series B Preferred Stock, such dividends shall begin to accrue
commencing upon the first date such share is issued and becomes outstanding (the
"Original Issue Date") and shall be payable quarterly in cash on the 15th day of
each calendar quarter beginning in the calendar quarter following the Original
Issue Date until conversion (each, a "Dividend Payment Date"), provided, that,
if any such Dividend Payment Date is not a Business Day, then any such dividend
shall be payable on the next Business Day. Subject to the foregoing, any such
dividend shall be paid to the holders of record at the close of business on the
date specified by the Board of Directors at the time such dividend is declared,
provided, however, that such date may not be more than 60 days nor less than 10
days prior to the applicable dividend payment date. Such dividends shall accrue
day-by-day and shall be cumulative, whether or not declared by the Board of
Directors and whether or not there shall be funds legally available for the
payment of dividends. The original issue price of the Series B Preferred Stock
shall be $10.00 per share (the "Series B Original Issue Price"). Dividends
payable for any period shorter or longer than a quarterly dividend period shall
be computed on the basis of a 360-day year of twelve 30-day months. Dividends in
arrears may be declared by the Board of Directors and paid on any date fixed by
the Board of Directors, without reference to any regular Dividend Payment Date.
CERTIFICATE OF DESIGNATIONS
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Any dividend paid upon the Series B Preferred Stock at a time when any accrued
dividends for any prior periods are delinquent shall be expressly declared as a
dividend in whole or partial payment of the accrued dividend for the earliest
period or periods for which dividends are then delinquent, and shall be so
designated to each holder to whom payment is made thereof. The term "Business
Day" means any day other than a Saturday, a Sunday or a day on which banking
institutions in New York, New York are authorized or required by law to be
closed. Until it has paid all dividends on the Series B Preferred Stock as
contemplated in this Certificate, the Company may not pay dividends on any
common stock, par value $0.001 per share, of the Company (the "Common Stock"),
or any other stock of the Company hereafter created that is junior to the Series
B Preferred Stock (together with the Common Stock, "Junior Stock").
2. Voting Rights. Except as otherwise provided herein or as required by
law, the holders of Series B Preferred Stock will not have the right to vote on
matters brought before the stockholders of the Company.
3. Liquidation Rights. Upon any liquidation, dissolution, or winding up
of the Company, whether voluntary or involuntary, before any distribution or
payment shall be made to the holders of any Junior Stock, subject to the rights
of any series of Preferred Stock that may from time-to-time come into existence
and which is expressly senior to the rights of the Series B Preferred Stock, the
holders of Series B Preferred Stock shall be entitled to be paid in cash out of
the assets of the Company an amount per share of Series B Preferred Stock equal
to 100% of the Series B Original Issue Price (as adjusted for any stock
dividends, combinations, splits, recapitalizations and the like with respect to
such shares), plus accrued but unpaid dividends (the "Liquidation Preference"),
for each share of Series B Preferred Stock held by each such holder. If, upon
any such liquidation, dissolution, or winding up, the assets of the Company
shall be insufficient to make payment in full of the Liquidation Preference to
all holders of Series B Preferred Stock, then such assets shall be distributed
among the holders of Series B Preferred Stock at the time outstanding, ratably
in proportion to the full amounts to which they would otherwise be respectively
entitled.
4. Conversion Rights. The holders of the Series B Preferred Stock shall
have the following rights with respect to the conversion of the Series B
Preferred Stock into shares of Common Stock:
(a) Optional Conversion. Subject to and in compliance with the
provisions of this Section 4, any shares of Series B Preferred
Stock may, at the option of the holder, be converted at any
time on and after the date that is ninety (90) days after the
Series B Original Issue Date into fully-paid and nonassessable
shares of Common Stock. The number of shares of Common Stock
to which a holder of Series B Preferred Stock shall be
entitled upon conversion shall be the product obtained by
multiplying the Series B Preferred Conversion Rate then in
effect (determined as provided in Section 4 below) by the
number of shares of Series B Preferred Stock being converted.
(b) Series B Preferred Conversion Rate and Price. The "Series B
Conversion Rate" shall mean the fraction, the numerator of
which is equal to the Series B Original Issue Price and the
denominator of which is equal to the Conversion Price in
effect at the time of Conversion. The conversion price for the
Series B Preferred Stock shall be $0.25 per share (the
"Conversion Price"). The Conversion Price at which the
Preferred Stock may be converted into shares of Common Stock
has been arbitrarily determined by the Company in its sole
discretion and is not necessarily reflective of the Company's
asset value, net worth, earnings, cash flow or any other
established criteria of value. The Conversion Price shall be
adjusted from time-to-time in accordance with this Section 4.
The Company may require conversion of the Series B Preferred
Stock at the Conversion Price (if such holder has not already
converted the Series B Preferred Stock held by it to Common
Stock) if at any time the five (5) trading day average closing
price of the Company's Common Stock exceeds $0.90 per share.
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(c) Mechanics of Conversion. Each holder of Series B Preferred
Stock who desires to convert the same into shares of Common
Stock pursuant to this Section 4 shall surrender the
certificate or certificates therefor, duly endorsed, at the
office of the Company or any transfer agent, and shall give
written notice to the Company at such office that such holder
elects to convert the same. Such notice shall state the number
of shares of Series B Preferred Stock being converted.
Thereupon, the Company shall promptly issue and deliver at
such office to such holder (or to the nominee or nominees of
such holder) a certificate or certificates for the number of
shares of Common Stock to which such holder is entitled and
shall promptly pay in cash (at the Common Stock's value (which
shall be (1) the average of the closing prices of the
securities on the American Stock Exchange (or a similar
national quotation system, if so listed) over the 30 day
period ending three days prior to the valuation date, or (2)
if not then listed on any quotation system, the fair market
value as determined in good faith by the Board of Directors as
of the date of conversion)) the value of any fractional share
of Common Stock otherwise issuable to any holder of Series B
Preferred Stock. Such conversion shall be deemed to have been
made at the close of business on the date of such surrender of
the certificates representing the shares of Series B Preferred
Stock to be converted, and the person entitled to receive the
shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder of such shares
of Common Stock on such date.
(d) Adjustment Upon Common Stock Event. Upon the happening of a
Common Stock Event (as hereinafter defined) at any time or
from time-to-time after the Issue Date, the Series B Preferred
Conversion Price shall, simultaneously with the happening of
such Common Stock Event, be adjusted by multiplying the
Conversion Price in effect immediately prior to such Common
Stock Event by a fraction, the numerator of which shall be the
number of shares of Common Stock issued and outstanding
immediately prior to such Common Stock Event, and the
denominator of which shall be the number of shares of Common
Stock issued and outstanding immediately after such Common
Stock Event. The Conversion Price shall be readjusted in the
same manner upon the happening of each subsequent Common Stock
Event. As used in this Section 4, the term "Common Stock
Event" shall mean the issue by the Company of additional
shares of Common Stock as a dividend or other distribution on
outstanding Common Stock; a subdivision of the outstanding
shares of Common Stock into a greater number of shares of
Common Stock (by stock split, reclassification or otherwise);
or a combination or consolidation, by reclassification or
otherwise, of the outstanding shares of Common Stock into a
smaller number of shares of Common Stock (unless the Series B
Preferred Stock is combined, consolidated or reclassified on
an equal basis).
(e) Adjustment for Stock Dividends and Distributions. If at any
time or from time-to-time after the Series B Original Issue
Date the Company pays a dividend or makes another distribution
to the holders of the Common Stock (or fixes a record date for
the determination of holders of Common Stock entitled to
receive such dividend or other distribution) that is payable
in Common Stock of the Company (a "Stock Dividend"), then in
each such event provision shall be made so that the holders of
Series B Preferred Stock shall receive upon conversion
thereof, in addition to the number of shares of Common Stock
receivable upon conversion thereof, the amount of securities
of the Company or such subsidiary which they would have
received had their Series B Preferred Stock been converted
into Common Stock.
(f) Adjustment for Reclassification, Exchange and Substitution. If
at any time or from time-to-time after the Series B Original
Issue Date, the Common Stock issuable upon the conversion of
the Series B Preferred Stock is changed into a different
number of shares of any class or classes of stock, whether by
recapitalization or reclassification or otherwise (a
"Reclassification") (other than a Stock Dividend or a
Reorganization provided for elsewhere in this Section 4), in
any such event each holder of Series B Preferred Stock shall
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have the right thereafter (to the extent such Series B
Preferred Stock is convertible as otherwise provided herein)
to convert such Series B Preferred Stock into the kind and
amount of stock and other securities and property receivable
upon such recapitalization, reclassification or other change
by holders of the maximum number of shares of Common Stock
into which such shares of Series B Preferred Stock could have
been converted immediately prior to such Reclassification.
(g) Adjustment for Reorganizations, Mergers or Consolidations. If
at any time or from time-to-time after the Series B Original
Issue Date, there is a reorganization of the Common Stock or
the merger or consolidation of the Company with or into
another corporation or another entity or person (a
"Reorganization") (other than a Reclassification provided for
elsewhere in this Section 4), as a part of such
Reorganization, provision shall be made so that the holders of
the Series B Preferred Stock shall thereafter be entitled to
receive upon conversion of the Series B Preferred Stock the
number of shares of stock or other securities or property
which a holder of the number of shares of Common Stock
deliverable upon conversion would have been entitled on such
capital reorganization, merger or consolidation, subject to
adjustment in respect of such stock or securities by the terms
thereof.
(h) Certificate of Adjustment. In each case of an adjustment or
readjustment of the Conversion Price or the number of shares
of Common Stock or other securities issuable upon conversion
of the Series B Preferred Stock, the Company, at its expense,
shall compute such adjustment or readjustment in accordance
with the provisions hereof and prepare a certificate showing
such adjustment or readjustment, and shall mail such
certificate, by first class mail, postage prepaid, to each
registered holder of Series B Preferred Stock at the holder's
address as shown in the Company's books. The certificate shall
set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based.
(i) Notices of Record Date. Upon any taking by the Company 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 Stock Dividend, Reclassification or Reorganization
of the Company, or any voluntary or involuntary liquidation,
the Company shall mail to each holder of Series B Preferred
Stock at least 20 days prior to the record date specified
therein a notice specifying the date on which any such record
is to be taken for the purpose of such dividend or
distribution and a description of such Stock Dividend, the
date on which any such Reorganization, Reclassification or
liquidation is expected to become effective, and the date, if
any, that is to be fixed as to when the holders of record of
Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such
Reorganization, Reclassification, or liquidation.
(j) Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of Series B Preferred Stock. All
shares of Common Stock (including fractions thereof) issuable
upon conversion of more than one share of Series B Preferred
Stock by a holder thereof shall be aggregated for purposes of
determining 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 Company shall, in lieu of issuing
any fractional share, pay cash equal to the product of such
fraction multiplied by the Common Stock's value (which shall
be (1) the average of the closing prices of the securities on
the American Stock Exchange (or a similar national quotation
system, if so listed) over the 30 day period ending three days
prior to the valuation date, or (2) if not then listed on any
quotation system, the fair market value as determined in good
faith by the Board of Directors)) on the date of conversion.
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(k) Reservation of Stock Issuable Upon Conversion. The Company
shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the shares of the
Series B Preferred Stock such number of its shares of Common
Stock as shall from time-to-time be sufficient to effect the
conversion of all outstanding shares of the Series B Preferred
Stock. 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 B
Preferred Stock, the Company 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
purposes, including without limitation engaging in best
efforts to obtain the requisite stockholder approval of any
necessary amendment to this Certificate.
(l) Notices. Any notice required by the provisions of this Section
4 shall be in writing and shall be deemed effectively given:
upon personal delivery to the party to be notified; when sent
by confirmed facsimile if sent during normal business hours of
the recipient; if not, then on the next business day; five
days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or one day after
deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of
receipt. All notices shall be addressed to each holder of
record at the address of such holder appearing on the books of
the Company.
(m) Satisfaction of Accrued Dividends. Except as otherwise
expressly provided, upon the conversion of any shares of
Series B Preferred Stock into Common Stock as provided herein,
the holders thereof shall be entitled to receive a payment in
satisfaction of all accrued but unpaid dividends.
(n) Payment of Taxes. The Company will pay all taxes (other than
taxes based upon income) and other governmental charges that
may be imposed with respect to the issue or delivery of shares
of Common Stock upon conversion of shares of Series B
Preferred 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 B Preferred Stock so converted
were registered.
5. NO REISSUANCE OF SHARES. No shares of Series B Preferred Stock
acquired by the Company by reason of redemption, purchase, conversion or
otherwise shall be reissued, and all such shares shall be cancelled, retired and
eliminated from the shares of Series B Preferred Stock that the Company is
authorized to issue.
6. NO IMPAIRMENT. The Company shall not amend its Certificate of
Incorporation or participate in any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, for the purpose of avoiding or seeking to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Company, but shall at all times in good faith assist in carrying out all such
actions as may be reasonably necessary or appropriate in order to protect the
conversion rights of the holders of the Series B Preferred Stock against
impairment.
IN WITNESS WHEREOF, the undersigned duly authorized officer of the
Company has executed this Certificate of Designations on September 16, 2005.
iLINC COMMUNICATIONS, INC.
By: /s/ James M. Powers, Jr.
-----------------------------------
James M. Powers, Jr.
President
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