Exhibit 10.9

 

FORM OF

CERTIFICATE OF DESIGNATION

OF RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS

OF SERIES A CONVERTIBLE PREFERRED STOCK OF

GLOBAL PAYMENT TECHNOLOGIES, INC.

The undersigned, [________] and [_________] hereby certify that:

A.        [_______] and [_______] are the duly elected and acting Chief
Executive Officer and Secretary, respectively, of Global Payment Technologies,
Inc., a Delaware corporation (the “Corporation”).

B.        Pursuant to the authority conferred by the shareholders of the
Corporation holding a majority of outstanding voting shares and by the
Certificate of Incorporation of the Corporation, the Board of Directors adopted
the following resolutions creating a class of Preferred Stock designated as
“Series A Convertible Preferred Stock” on [_________], 2008:

“RESOLVED, that, pursuant to the Corporation’s Certificate of Incorporation
(“Certificate of Incorporation”), the Board of Directors of the Corporation (the
“Board of Directors”) hereby fixes the powers, designations, preferences and
relative, participating, optional and other special rights, and the
qualifications, limitations and restrictions, of the Series A Convertible
Preferred Stock as follows:

1.          NUMBER OF SHARES; DESIGNATION. A total of 2,000,000 shares of
preferred stock of the Corporation are hereby designated as “Series A
Convertible Preferred Stock” (the “Series  A Preferred Stock”). Shares of the
Series A Preferred Stock (“Series A Preferred Shares” or “Preferred Shares”)
will be issued pursuant to the terms of the Securities Purchase Agreement by and
between the Corporation and the Purchaser named therein (the “Purchase
Agreement”). Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in Section 16hereof.

2.          RANK. The Series A Preferred Stock shall, with respect to payment of
dividends and rights upon liquidation, dissolution or winding-up of the affairs
of the Corporation, rank senior and prior to the Common Stock, par value $0.01
par value, of the Corporation (the “Common Stock”), and any additional series of
preferred stock which may in the future be issued by the Corporation and are
designated in the amendment to the Certificate of Incorporation or the
certificate of designation establishing such additional preferred stock as
ranking junior to the Series A Preferred Stock. Any shares of the Corporation’s
capital stock which are junior to the Series A Preferred Stock with respect to
the payment of dividends are hereinafter referred to as “Junior Dividend Shares”
and any shares which are junior to the Series A Preferred Stock with respect to
rights upon liquidation, dissolution or winding-up of the affairs of the
Corporation are hereinafter referred to as “Junior Liquidation Shares”.

Any issuance of additional shares of preferred stock shall be subject to the
provisions of Section 15 hereunder.

 

 

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3.

DIVIDENDS.

(a)       The Holders of the Series A Preferred Stock will be entitled to
receive dividends if, when and as declared by the Board of Directors from time
to time, and in amounts determined by the Board of Directors; provided however,
no dividends shall be paid on any share of Common Stock unless a dividend is
paid with respect to all outstanding shares of Series A Preferred Stock in an
amount for each such share of Series A Preferred Stock equal to or greater than
the aggregate amount of such dividends for all shares of Common Stock into which
each such share of Series A Preferred Stock could then be converted.

(b)       The Corporation shall not, and shall not permit any corporation or
other entity directly or indirectly controlled by the Corporation to:

(i)        declare or pay or set aside for payment any dividend or other
distribution on or with respect to any Junior Dividend Shares, whether in cash,
securities, obligations or otherwise (other than dividends or distributions paid
in shares of capital stock of the Corporation ranking junior to Series A
Preferred Shares both as to the payment of dividends and as to rights in
liquidation, dissolution or winding-up of the affairs of the Corporation
(“Junior Stock”), or options, warrants or rights to subscribe for or purchase
shares of Junior Stock) without paying or setting aside for payment an
equivalent amount for each Series A Preferred Shares; or

(ii)       redeem, purchase or otherwise acquire, or pay into, set apart money
or make available for a sinking or other analogous fund for the redemption,
purchase or other acquisition of, any Series A Preferred Shares, or shares of
Junior Stock for any consideration (except by conversion into or exchange for
Junior Stock).

(c)       Any reference to “distribution” contained in this Section 3 shall not
be deemed to include any distribution made in connection with any liquidation,
dissolution or winding-up of the Corporation, whether voluntary or involuntary.

 

4.

LIQUIDATION.

(a)       The liquidation value per share of Series A Preferred Stock, in case
of the voluntary or involuntary liquidation, dissolution or winding-up of the
affairs of the Corporation, shall be an amount equal to $0.20, subject to
adjustment in the event of a stock split, stock dividend or similar event
applicable to the Series A Preferred Stock (the “Liquidation Value”).

(b)       In the event of any voluntary or involuntary liquidation, dissolution
or winding-up of the Corporation (a “Liquidation Event”), the Holders shall be
entitled to receive one hundred percent (100%) of the Liquidation Value of such
Series A Preferred Shares held by them (“Liquidation Amount”) in preference to
and in priority over any distributions upon the Junior Liquidation Shares. Upon
payment in full of the Liquidation Amount to which the Holders are entitled, the
Holders will not be entitled to any further participation in any distribution of
assets by the Corporation. If the assets of the Corporation are not sufficient
to pay in full the Liquidation Amount payable to the Holders and the liquidation
value payable to the holders of any Parity Liquidation Shares, the holders of
all such shares shall share ratably in such distribution of assets in accordance
with the amounts that would be payable on the

 

 

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distribution if the amounts to which the Holders and the holders of Parity
Liquidation Shares are entitled were paid in full.

(c)       The Corporation shall, no later than the date on which a Liquidation
Event occurs or is publicly announced, deliver in accordance with Section 14
written notice of any Liquidation Event, stating the payment date or dates when
and the place or places where the amounts distributable in such circumstances
shall be payable, not less than thirty (30) days prior to any payment date
stated therein, to each Holder.

(d)       Whenever the distribution provided for in this Section 4 shall be
payable in securities or property other than cash, the value of such
distribution shall be the fair market value of such securities or other property
as determined in good faith by the Board of Directors.

 

5.

VOTING; DIRECTORS.

(a)       During the first 18 months after the designation of the Series A
Preferred Stock, each holder of shares of the Series A Preferred Stock shall be
entitled to five (5) times the number of votes equal to the number of shares of
Common Stock into which such Holder’s shares of Series A Preferred Stock could
be converted and after such first 18 month period, each holder of shares of the
Series A Preferred Stock shall be entitled to the number of votes equal to the
number of shares of Common Stock into which such Holder’s shares of Series A
Preferred Stock could be converted. Each holder of Series A Preferred Stock
shall have voting rights and powers equal to the voting rights and powers of the
Common Stock (except as otherwise expressly provided herein or as required by
law, voting together with the Common Stock as a single class) and shall be
entitled to notice of any shareholders’ meeting in accordance with the Bylaws of
the Corporation. Each holder of Common Stock shall be entitled to one (l) vote
for each share of Common Stock held.

(b)       The Board of Directors shall consist of five (5) members. During the
first 18 months after the designation of the Series A Preferred Stock, so long
as any shares of Series A Preferred Stock are outstanding, the holders of Series
A Preferred Stock shall be entitled to designate three (3) members of the Board
of Directors (“Preferred Stock Appointed Director”) and the holders of the
Common Stock, as a class, shall be entitled to designate two (2) members of the
Board of Directors (“Common Stock Appointed Director”). During the first 18
months after the Series A Preferred Stock has been designated, if the number of
members of the Board of Directors is increased to more than five (5), the number
of directors designated by the holders of Series A Preferred Stock shall
increase such that the Series A Preferred Stock shall designate a majority of
the number of authorized Board of Director members.

 

6.

CONVERSION.

(a)        Holders’ Right to Convert. Each Preferred Share shall be convertible
into shares of Common Stock with such conversion being effected at the
Conversion Price then in effect at the option of the Holder in whole or in part
at any time after the Original Issuance Date. The Holders shall effect
conversions by surrendering the certificate or certificates representing the
Series A Preferred Shares to be converted to the Corporation, or its agent,

 

 

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together with the form of conversion notice attached hereto as Exhibit A (the
“Holder Conversion Notice”). Each Holder Conversion Notice shall specify the
number of Preferred Shares to be converted and the date on which such conversion
is to be effected, which date may not be prior to the date the Holder delivers
such Holder Conversion Notice to the Corporation, or its agent, in accordance
with Section 14 (the “Holder Conversion Date”). If no Holder Conversion Date is
specified in a Holder Conversion Notice, the Holder Conversion Date shall be the
date that the Holder Conversion Notice is deemed delivered pursuant to Section
14. Each Holder Conversion Notice, once given, shall be irrevocable. If the
Holder is converting less than all Series A Preferred Shares represented by the
certificate or certificates tendered by the Holder with the Holder Conversion
Notice, or if a conversion hereunder cannot be effected in full for any reason,
the Corporation shall promptly deliver to such Holder (in the manner and within
the time set forth in Section 6(d)) a certificate for such number of Preferred
Shares as have not been converted. Notwithstanding the foregoing, all Series A
Preferred Stock shall be automatically converted into Common Stock 18 months
after the date the Series A Preferred Stock has been issued.

(b)        Delivery of Common Stock. Not later than ten (10) Trading Days after
any Conversion Date, the Corporation will deliver to the Holders (i) a
certificate or certificates which shall be free of restrictive legends and
trading restrictions (other than those which may be required by the Purchase
Agreement and the federal securities laws) representing the number of shares of
Common Stock being issued upon the conversion of Series A Preferred Shares, and
(ii) one or more certificates representing the number of Preferred Shares not
converted, as applicable; provided, however, that the Corporation shall not be
obligated to issue certificates evidencing the shares of Common Stock issuable
upon conversion of any Series A Preferred Shares until certificates evidencing
such Series A Preferred Shares are either delivered for conversion to the
Corporation or any transfer agent for the Preferred Shares or Common Stock, or
the Holder of such Preferred Shares notifies the Corporation that such
certificates have been lost, stolen or destroyed and provides a bond (or other
adequate security) reasonably satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection therewith; and provided,
further, that any shares of Common Stock which are subject of a Dispute
Procedure under Section 7 hereof shall be delivered no later than the close of
business on the fifth (5th) Business Day following the determination made
pursuant thereto. The Corporation shall, upon request of the Holder, use its
best efforts to deliver any certificate or certificates required to be delivered
by the Corporation hereunder electronically through the Depository Trust
Corporation or another established clearing corporation performing similar
functions, if available.

(c)        Number of Shares of Common Stock Issuable upon Conversion. The number
of shares of Common Stock to be delivered by the Corporation to a Holder
pursuant to a conversion of Series A Preferred Shares under Section 6(a), (b) or
(c) shall be determined by dividing (i) the aggregate Liquidation Value of such
Holder’s Preferred Shares to be converted by (ii) the Conversion Price in effect
on the applicable Conversion Date. The initial Conversion Price shall be $.20
per share, and shall be adjusted in accordance with Section 8.

7.          DISPUTE PROCEDURE. In the event of a dispute between the Corporation
and a Holder as to (i) the calculation of the Conversion Price (including,
without limitation, the calculation of any adjustment to the Conversion Price
following any adjustment thereof), (ii) the

 

 

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number of shares of Common Stock issuable upon a conversion of Series A
Preferred Shares pursuant to Section 6, the Corporation shall, in the case of a
conversion of Series A Preferred Shares notify the Holder within one (1)
Business Day, issue to such Holder the number of shares of Common Stock that are
not disputed, within five (5) Business Days following the Conversion Date and
shall submit the disputed calculations to a certified public accounting firm of
national reputation selected by Holders of more than fifty percent (50.0%) of
the outstanding Series A Preferred Shares (other than the Corporation’s
regularly retained accountants) by such date which firm shall agree to act in
accordance with this Section 7. The Corporation shall cause such accountant to
calculate the Conversion Price, if applicable, in accordance herewith and to
notify the Corporation and such Holder of the results in writing no later than
five (5) Business Days following the day on which such accountant received the
disputed calculations (the “Dispute Procedure”). Such accountant’s calculation
shall be deemed conclusive absent manifest error or fraud. The fees of any such
accountant shall be borne by the Company.

8.          CONVERSION PRICE ADJUSTMENTS AND REORGANIZATIONS. The Conversion
Price for determining the number of shares of Common Stock into which the Series
A Preferred Shares shall be converted as provided for herein shall be subject to
adjustment from time to time as hereinafter set forth:

(a)        Stock Dividends - Recapitalization, Reclassification, Split-Ups. If,
prior to the date of the conversion of the Series A Preferred Shares into Common
Stock hereunder, the number of outstanding shares of Common Stock is increased
by a stock dividend on the Common Stock payable in shares of Common Stock or by
a split-up, recapitalization or reclassification of shares of Common Stock or
other similar event, then, on the effective date thereof, the Conversion Price
will be adjusted so that the number of shares of Common Stock issuable upon the
conversion of the Series A Preferred Shares shall be increased in proportion to
such increase in outstanding shares of Common Stock.

(b)        Aggregation of Shares. If prior to the date of the conversion of the
Series A Preferred Shares into Common Stock hereunder, the number of outstanding
shares of Common Stock is decreased by a consolidation, combination or
reclassification of shares of Common Stock or other similar event (including a
reverse split of Common Stock), then, upon the effective date thereof, the
Conversion Price will be adjusted so that the number of shares of Common Stock
issuable upon the conversion of the Series A Preferred Shares shall be decreased
in proportion to such decrease in outstanding shares.

(c)        Change Resulting from Reorganization or Change in Par Value, etc. In
case of any reclassification or reorganization of the outstanding shares of
Common Stock which solely affects the par value of the shares of Common Stock,
or in the case of any merger or consolidation of the Corporation with or into
another corporation (other than a consolidation or merger in which the
Corporation is the continuing corporation and which does not result in any
reclassification or reorganization of the outstanding shares of Common Stock),
or in the case of any sale or conveyance to another corporation or entity of the
property of the Corporation as an entirety or substantially as an entirety in
connection with which the Corporation is dissolved, the holders of the Series A
Preferred Shares shall have the right thereafter to receive upon the conversion
of the Series A Preferred Shares the kind and amount of shares of stock or other
securities or property (including cash) receivable upon such reclassification,
reorganization,

 

 

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merger or consolidation, or upon a dissolution following any such sale or other
transfer, by a holder of the number of shares of Common Stock into which the
Series A Preferred Shares is convertible immediately prior to such event; and if
any reclassification also results in a change in shares of Common Stock, then
such adjustment to the Conversion Price also shall be made.

(d)        Subsequent Equity Sales. If, at any time while this Preferred Stock
is outstanding, the Corporation sells or grants any option to purchase or sells
or grants any right to reprice its securities, or otherwise disposes of or
issues (or announces any sale, grant or any option to purchase or other
disposition) any Common Stock or Common Stock Equivalents entitling any Person
to acquire shares of Common Stock at an effective price per share that is lower
than the then applicable Conversion Price (such lower price, the “Base
Conversion Price” and such issuances collectively, a “Dilutive Issuance”) (if
the holder of the Common Stock or Common Stock Equivalents so issued shall at
any time, whether by operation of purchase price adjustments, reset provisions,
floating conversion, exercise or exchange prices or otherwise, or due to
warrants, options or rights per share which are issued in connection with such
issuance, be entitled to receive shares of Common Stock at an effective price
per share that is lower than the Conversion Price, such issuance shall be deemed
to have occurred for less than the Conversion Price on such date of the Dilutive
Issuance), then the Conversion Price shall be reduced to the Base Conversion
Price. Notwithstanding the foregoing, no adjustment will be made under this
Section 8(d) in respect of an Exempt Issuance. The Corporation shall notify the
Holders in writing, no later than the Business Day following the issuance of any
Common Stock or Common Stock Equivalents subject to this Section 8(d),
indicating therein the applicable issuance price, or applicable reset price,
exchange price, conversion price and other pricing terms (such notice, the
“Dilutive Issuance Notice”). For purposes of clarification, whether or not the
Corporation provides a Dilutive Issuance Notice pursuant to this Section 8(d),
upon the occurrence of any Dilutive Issuance, the Holders are entitled to
receive a number of Conversion Shares based upon the Base Conversion Price on or
after the date of such Dilutive Issuance, regardless of whether a Holder
accurately refers to the Base Conversion Price in the Notice of Conversion.

(e)        Successive Changes. The provisions of this Section shall similarly
apply to successive reclassifications, reorganizations, mergers or
consolidations, sales or other transfers.

 

9.

CERTAIN NOTICE OBLIGATIONS OF THE COMPANY.

 

(a)

In the event that:

(i)        the Corporation shall take any action which would require an
adjustment in the Conversion Price pursuant to Section 8, or the Conversion
Price is otherwise adjusted pursuant to Section 8; or

(ii)       the Corporation shall authorize the granting to the holders of its
Common Stock generally of rights, warrants or options to subscribe for or
purchase any shares of any class or any other rights, warrants or options; or

 

 

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(iii)      there shall be any reclassification or change of the Common Stock
(other than a subdivision or combination of its outstanding Common Stock or a
change in par value) or any consolidation, merger or statutory share exchange to
which the Corporation is a party and for which approval of any stockholders of
the Corporation is required, or the sale or transfer of all or substantially all
of the assets of the Corporation;

(iv)      there shall be a voluntary or involuntary dissolution, liquidation or
winding-up of the Corporation; or

(v)       a meeting of the shareholders of the Corporation shall be called;

then, the Corporation shall cause to be delivered to each Holder in accordance
with the notice provisions of Section 14, as promptly as possible, but at least
twenty (20) calendar days prior to the applicable date hereinafter specified, a
notice stating (A) the date on which a record is to be taken for the purpose of
such dividend, distribution or granting of rights, warrants or options or
shareholders meeting or, if a record is not to be taken, the date as of which
the holders of Common Stock of record to be entitled to such dividend,
distribution or rights, warrants or options or to vote at a shareholders meeting
are to be determined, or (B) the date on which such reclassification, change,
consolidation, merger, statutory share exchange, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, change, consolidation, merger,
statutory share exchange, sale, transfer, dissolution, liquidation or
winding-up.

(b)       In any case in which Section 8 provides that an adjustment shall
become effective immediately after a record date for an event and the date fixed
for such adjustment pursuant to Section 8 occurs after such record date but
before the occurrence of such event, the Corporation may defer until the actual
occurrence of such event issuing to the holder of any Series A Preferred Shares
converted after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment.

10.        STATUS OF CONVERTED SHARES. All Series A Preferred Shares that are at
any time converted hereunder, and all Series A Preferred Shares that are
otherwise reacquired by the Corporation and subsequently canceled by the
Corporation, shall be retired and shall not be subject to reissuance.

11.        RESERVATION OF COMMON STOCK. The Corporation covenants that it will
at all times reserve and keep available out of its authorized and unissued
Common Stock solely for the purpose of issuance upon conversion of Series A
Preferred Shares as herein provided, free from preemptive rights or any other
actual contingent purchase rights of persons other than the Holders of Series A
Preferred Shares, not less than 100% of such number of shares of Common Stock as
shall (subject to any additional requirements of the Corporation as to
reservation of such shares set forth in the Purchase Agreement) be issuable upon
the conversion of all outstanding Series A Preferred Shares hereunder. The
Corporation covenants

 

 

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that all shares of Common Stock that shall be so issuable shall, upon issue, be
duly and validly authorized, issued and fully paid and nonassessable.

12.        FRACTIONAL SHARES. If any conversion of Series A Preferred Shares
hereunder would create a fractional share of Common Stock, such fractional share
shall be disregarded and the number of shares of Common Stock issuable upon such
conversion, in the aggregate, shall be rounded up to the nearest whole number of
shares of Common Stock.

13.        COSTS. The issuance of certificates for shares of Common Stock upon
conversion of Series A Preferred Shares shall be made without charge to the
Holders thereof for any documentary stamp or similar taxes that may be payable
in respect of the issue or delivery of such certificate, provided that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate
upon conversion in a name other than that of the Holder of such shares of Series
A Preferred Shares so converted and the Corporation shall not be required to
issue or deliver such certificates unless or until the person or persons
requesting the issuance thereof shall have paid to the Corporation the amount of
such tax or shall have established to the satisfaction of the Corporation that
such tax has been paid.

14.        NOTICES. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section prior to 5:30 p.m. (New York City
time) on a Business Day, (ii) the Business Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Certificate of Designation later than 5:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date, (iii) upon actual receipt by the party to whom such notice
is required to be given. The address for such notices and communications shall
be if to the Corporation, at 170 Wilbur Place, Bohemia, New York 11716 and if
the Holder, to the address as set forth in the records of the Corporation.

15.        RESTRICTIONS AND LIMITATIONS. So long as any Series A Preferred
Shares remain outstanding, the Company, shall not, without the vote or written
consent by the Holders of more than fifty percent (50.0%) of the outstanding
Series A Preferred Shares, voting together as a single class, and unless
approved by the Board of Directors:

(i)        redeem, purchase or otherwise acquire for value (or pay into or set
aside for a sinking or other analogous fund for such purpose) any share or
shares of its Capital Stock, except for conversion into or exchange for Junior
Stock;

(ii)       alter, modify or amend the terms of the Series A Preferred Stock in
any way;

(iii)      create or issue any Capital Stock of the Company ranking pari passu
with or senior to the Series A Preferred Shares either as to the payment of
dividends or rights in liquidation, dissolution or winding-up of the affairs of
the Company;

 

 

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(iv)      increase the authorized number of shares of the Series A Preferred
Stock;

(v)       re-issue any Series A Preferred Shares which have been converted or
otherwise acquired by the Company in accordance with the terms hereof;

In the event that the Holders of at least a majority of the outstanding Series A
Preferred Shares agree to allow the Company to alter or change the rights,
preferences or privileges of the Series A Preferred Stock pursuant to applicable
law, no such change shall be effective to the extent that, by its terms, such
change applies to less than all of the Series A Preferred Shares then
outstanding.

16.        CERTAIN DEFINITIONS. As used in this Certificate, the following terms
shall have the following respective meanings:

“Affiliate” of any specified person means any other person directly or
indirectly controlling or controlled by or under common control with such
specified person. For purposes of this definition, “control” when used with
respect to any person means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities or otherwise; and the term “controlling” and “controlled” having
meanings correlative to the foregoing.

“Business Day” means any day except a Saturday, Sunday or day on which banking
institutions are legally authorized to close in the State of California and the
State of New York.

“Capital Stock” of any person or entity means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in the common stock or preferred stock of such person or entity,
including, without limitation, partnership and membership interests.

“Closing Price” means, for any date, the price determined by the first of the
following clauses that applies: (a) if the Common Stock is then listed on a
Principal Market other than the Over-the-Counter Bulletin Board, the last
trading price per share of the Common Stock for such date (or the nearest
preceding date) on such Principal Market as reported by Bloomberg Financial L.P.
(based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time);
(b) if the Common Stock is quoted on the Over-the-Counter Bulletin Board, the
most recent bid price per share of the Common Stock for such date (or the
nearest preceding date) on the Over-the-Counter Bulletin Board; (c) if the
Common Stock is not then listed or quoted on the OTC Bulletin Board and if
prices for the Common Stock are then reported in the “Pink Sheets” published by
the National Quotation Bureau Incorporated (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (d) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holders and reasonably acceptable to the
Corporation.

“Common Stock Equivalents” means and securities of the Company which would
entitle the holder thereof to acquire at any time Common Stock, including,
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into

 

 

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or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.

“Conversion Price” means $0.20, as adjusted from time to time pursuant to the
terms of Section 8.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, consultants, officers or directors of the Company pursuant to any
stock or option plan duly adopted for such purpose by a majority of the
non-employee members of the Board of Directors or a majority of the members of a
committee of non-employee directors established for such purpose, including
without limitation, options granted pursuant to the Company’s 2000 Stock Option
Standard 2006 Stock Option Plan and the shares of Common Stock issued upon the
exercise of such options, (b) securities upon the exercise or exchange of or
conversion of any Securities issued hereunder and/or other securities
exercisable or exchangeable for or convertible into shares of Common Stock
issued and outstanding on the date of this Certificate of Designation, provided
that such securities have not been amended since the date of this Certificate of
Designation to increase the number of such securities or to decrease the
exercise, exchange or conversion price of such securities, (c) securities issued
pursuant to acquisitions or strategic transactions provided that any such
issuance shall only be to a Person which is, itself or through its subsidiaries,
an operating company in a business synergistic with the business of the Company
and in which the Company receives benefits in addition to the investment of
funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose
primary business is investing in securities, and (d) any securities that have
been issued without the approval of any Common Stock Appointed Director.

“Holder” means any holder of Series A Preferred Stock, all of such holders being
the “Holders”.

“Original Issuance Date” means the date of the first issuance of any shares of
Series A Preferred Stock regardless of the number of transfers of any particular
shares of Series A Preferred Stock and regardless of the number of certificates
which may be issued to evidence such shares of Series A Preferred Stock.

“Principal Market” initially means the Over-the-Counter Bulletin Board and shall
also include the American Stock Exchange, the New York Stock Exchange, the
NASDAQ Global Select Market, NASDAQ Global Market or the NASDAQ Capital Market,
whichever is at the time the principal trading exchange or market for the Common
Stock, based upon share volume.

“SEC” means the U.S. Securities and Exchange Commission.

“Subsidiary” means any individual, corporation, partnership, association, trust
or other entity or organization of which a majority of the outstanding voting
securities or other voting equity interests are owned, directly or indirectly,
by the Corporation.

“Trading Day” means (a) a day on which the Common Stock is traded on a national
exchange or market on which the Common Stock has been listed, or (b) if the
Common Stock is not listed on any stock exchange or market, a day on which the
Common Stock is traded in the

 

 

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over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, however, that in the event that
the Common Stock is not listed or quoted as set forth in (a), (b) and (c)
hereof, then Trading Day shall mean any day that is a Business Day.

RESOLVED FURTHER, that the President, Chief Executive Officer and Secretary of
the Corporation be, and they hereby are, authorized and directed to prepare and
file a Certificate of Designation of Rights, Preferences, Privileges and
Restrictions of Series A Convertible Preferred Stock in accordance with the
foregoing resolution and the provisions of Delaware law and to take such actions
as they may deem necessary or appropriate to carry out the intent of the
foregoing resolution.

C.        That the authorized number of shares of preferred stock of the
Corporation is 2,000,000; that the authorized number of shares constituting
Series A Convertible Preferred Stock is 2,000,000 (the series created by this
Certificate and the resolution set forth above).”

 

 

11

 

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The undersigned further declare that the matters set forth in this Certificate
are true and correct to their own knowledge.

Date: [________]

 

, Chief Executive Officer

 

 

, Secretary

 

 

12

 

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EXHIBIT A

NOTICE OF CONVERSION

AT THE ELECTION OF HOLDER

The undersigned hereby elects to convert shares of Series A Convertible
Preferred Stock (the “Series A Preferred Stock”), represented by stock
certificate No(s). __________, into shares of common stock of Global Payment
Technologies, Inc. (the “Corporation”) according to the terms and conditions of
the Certificate of Designation relating to the Series A Preferred Stock (the
“Certificate of Designation”), as of the date written below. If shares of common
stock are to be issued in the name of a person other than undersigned, the
undersigned will pay all transfer taxes payable with respect thereto and is
delivering herewith such certificates and opinions as reasonably requested by
the Corporation in accordance therewith.

Conversion Date:_________________________________

Number of Shares of

Preferred Stock to be Converted:_____________________

Amount of Accrued

Dividends (and late fees) :______________________

Applicable Conversion Price:________________________

Number of Shares of

Common Stock to be Issued:________________________

Name of Holder:__________________________________

Address:________________________________________

_________________________________________

_________________________________________

Signature:_______________________________________

Name:

Title: