exh4_3.htm


     

    
      

      

    

    
 

    Exhibit
4.3

    


    RAPID
LINK, INCORPORATED

    a
Delaware corporation

     

    


     

    CERTIFICATE
OF DESIGNATIONS, RIGHTS AND PREFERENCES

     

    


    OF

    


    SERIES
A CONVERTIBLE PREFERRED STOCK

    


    


    Pursuant
to the Delaware General Corporation Law, the undersigned, being an officer of
Rapid Link, Incorporated, a Delaware corporation (the “Corporation”), does
hereby certify that the following resolution was adopted by the Corporation’s
board of directors (the “Board”)
authorizing the creation and issuance of 10,000,000 shares of Series A
Convertible Preferred Stock:

    


    RESOLVED,
that pursuant to authority expressly granted to and vested in the Board by the
Certificate of Incorporation, as amended, of the Corporation, the Board hereby
creates 10,000,000 shares of Series A
Convertible Preferred Stock of the Corporation and authorizes the issuance
thereof, and hereby fixes the designation thereof, and the voting powers,
preferences and relative, participating, optional and other special rights, and
the qualifications, limitations or restrictions thereon (in addition to the
designation, preferences and relative, participating and other special rights,
and the qualifications, limitations or restrictions thereof, set forth in the
Articles Certificate of Incorporation, as amended, of the Corporation, which are
applicable to the preferred stock, if any) as follows:

    


    1. Designation.  The
series of preferred stock shall be designated and known as “Series A Convertible
Preferred Stock” (the “Series
A Preferred Stock”).  The
number of shares constituting the Series A Preferred Stock shall be
10,000,000.

     

    2. Conversion
Rights. The Series A Preferred Stock shall be convertible, without the
payment of any additional consideration by a Holder, into the common stock,
$0.001 par value, of the Corporation (“Common
Stock”) as
follows:

     

    (a) Optional
Conversion.  Subject to and upon compliance with the provisions
of this Section 2(a), a holder of any shares of the Series A Preferred Stock (a
“Holder”) shall
have the right, at such Holder’s option at any time, to convert any of such
shares of the Series A Preferred Stock held by the Holder into fully paid and
non-assessable shares of the Common Stock at the then Conversion Rate (as
defined herein).

     

    (b) Automatic
Conversion.  Each share of Series A Preferred Stock shall
automatically be converted into shares of Common Stock at the then-effective
Conversion Rate upon the effective date of the filing of the amendment to the
Corporation’s Certificate of Incorporation with the Secretary of State of the
State of Delaware which increases the number of the Corporation’s authorized
Common Stock to at least that number such that there are a sufficient number of
authorized but unissued shares of the Corporation’s Common Stock issuable upon
conversion of all shares of Series A Preferred Stock (“Automatic
Conversion Event”).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (c) Conversion
Rate.  Each share of the Series A Preferred Stock is initially
convertible into fifty-two (52) shares of the Common Stock (the “Conversion
Rate”),
subject to adjustments as set forth in Section 2(e) hereof.

     

    (d) Mechanics of
Conversion.

     

    (i) The
Holder may exercise the conversion right specified in Section 2(a) by giving
written notice to the Corporation at any time, that the Holder elects to convert
a stated number of shares of the Series A Preferred Stock into a stated number
of shares of Common Stock, and, subject to Section 2(d)(ii) below, by
surrendering the certificate or certificates representing the Series A Preferred
Stock to be converted or a Lost Certificate Affidavit (as defined below)
therefor, duly endorsed to the Corporation or in blank, to the Corporation at
its principal office (or at such other office as the Corporation may designate
by written notice, postage prepaid, to all Holders) at any time during its usual
business hours, together with a statement of the name or names (with addresses)
of the person or persons in whose name the certificate or certificates for
Common Stock shall be issued.  Such conversion shall be deemed to have
been made immediately prior to the close of business on the date of surrender of
the shares of Series A 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.

     

    (ii) On the
date of an Automatic Conversion Event, the outstanding shares of Series A
Preferred Stock shall be converted 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; provided further, however, that the
Corporation shall not be obligated to issue certificates evidencing the shares
of Common Stock issuable upon such Automatic Conversion Event unless either the
certificates evidencing such shares of Series A Preferred Stock are delivered to
the Corporation as provided above, or the holder notifies the Corporation 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 (a "Lost
Certificate Affidavit").  On the date of the occurrence of an
Automatic Conversion Event, each holder of record of shares of Series A
Preferred Stock shall be deemed to be the holder of record of the Common Stock
issuable upon such conversion, notwithstanding that the certificates
representing such shares of Series A Preferred Stock shall not have been
surrendered at the office of the Corporation, that notice from the Corporation
shall not have been received by any holder of record of shares of Series A
Preferred Stock, or that the certificates evidencing such shares of Common Stock
shall not then be actually delivered to such holder.

     

    (iii) No
fractional shares of Common Stock shall be issued upon conversion of the Series
A 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 the then fair market value of a share of Common Stock as
determined by the Board of Directors.  For such purpose, all shares of
Series A Preferred Stock held by each holder of Series A Preferred Stock shall
be aggregated, and any resulting fractional share of Common Stock shall be paid
in cash.

     

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (e) Conversion Rate
Adjustments.  The Conversion Rate shall be subject to
adjustment from time to time as follows:

     

    (i) Consolidation,
Merger, Sale, Lease or Conveyance.  In case of any
consolidation or merger of the Corporation with or into another corporation
where the Corporation is not the surviving entity, or in case of any sale, lease
or conveyance to another corporation of all or substantially all the assets of
the Corporation, each share of the Series A Preferred Stock shall after the date
of such consolidation, merger, sale, lease or conveyance be convertible into, in
lieu of the number of shares of Common Stock which the Holders would otherwise
have been entitled to receive, the number of shares of stock or other securities
or property (including cash) to which the Common Stock issuable (at the time of
such consolidation, merger, sale, lease or conveyance) upon conversion of such
share of the Series A Preferred Stock would have been entitled upon such
consolidation, merger, sale, lease or conveyance; and in any such case, if
necessary, the provisions set forth herein with respect to the rights and
interests thereafter of the Holder of the shares of the Series A Preferred Stock
shall be appropriately adjusted so as to be applicable, as nearly as may
reasonably be, to any shares of stock or other securities or property thereafter
deliverable on the conversion of the shares of the Series A Preferred
Stock.

     

    (ii) Stock
Dividends, Subdivisions, Reclassification, or Combinations.  If
the Corporation shall (i) declare a dividend or make a distribution on its
Common Stock in shares of its Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding Common Stock into a smaller number of
shares; the Conversion Rate in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination,
or reclassification shall be proportionately adjusted so that the Holder of any
shares of the Series A Preferred Stock surrendered for conversion after such
date shall be entitled to receive the number of shares of Common Stock that he
would have owned or been entitled to receive had such Series A Preferred Stock
been converted immediately prior to such date.  Successive adjustments
in the Conversion Rate shall be made whenever any event specified above shall
occur.  If the Corporation shall subdivide (by stock split, by payment
of a stock dividend or otherwise) the outstanding shares of Series A Preferred
Stock, into a greater number of shares of Series A Preferred Stock, the
Conversion Rate of the Series A Preferred Stock in effect immediately prior to
such subdivision shall, concurrently with the effectiveness of such subdivision,
be proportionately decreased.  In the event the outstanding shares of
Series A Preferred Stock shall be combined (by reclassification or otherwise)
into a lesser number of shares of Series A Preferred Stock, the Conversion Rate
of the Series A Preferred Stock in effect immediately prior to such combination
shall, concurrently with the effectiveness of such combination, be
proportionately increased.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    (iii) Excluded
Transactions. No adjustment to the Conversion Rate shall be required
under this Section 2(e) in the event of the issuance of: (i) shares of Common
Stock by the Corporation upon the conversion or exercise of or pursuant to any
outstanding stock options or stock option plan now existing or hereafter
approved by the Holders (“Stock
Option Plans”); (ii) shares of Common Stock issued upon the exercise or
conversion of options, warrants or other convertible securities outstanding as
of the date of the filing of this Certificate of Designation, Rights and
Preferences; or (iii) shares of Common Stock issued or issuable as a dividend or
distribution on the Series A Preferred Stock or pursuant to any event for which
adjustment is made pursuant to this Section 2(e)(i) or (e)(ii).

     

    (iv) Reservation,
Validity of Common Stock.  After obtaining stockholder approval
to amend the Certificate of Incorporation to increase the authorized number of
shares of Common Stock to enable the conversion of all shares of Series A
Preferred Stock into Common Stock, the Corporation covenants that it will at all
times reserve and keep available, free from preemptive rights, out of the
aggregate of its authorized but unissued shares of Common Stock for the purpose
of effecting conversion of the Series A Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all outstanding Series
A Preferred Stock not therefore converted; provided, however, if at the time of
such conversion there is not sufficient amount of shares of Common Stock the
Corporation shall take any all actions necessary to amend the Company’s
Certificate of Incorporation to increase the amount of authorized shares of
Common Stock so that the Company will at all times thereafter have authorized
and reserved for the purpose of issuance a sufficient number of shares of Common
Stock to provide for the conversion of the Series A Preferred
Stock.  Before taking any action which would cause an adjustment in
the Conversion Rate such that Common Stock issuable upon the conversion of
Series A Preferred Stock would be issued in excess of the authorized Common
Stock, the Corporation will take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Corporation may validly and
legally issue fully-paid and non assessable shares of Common Stock at such
adjusted Conversion Rate.  Such action may include, but it is not
limited to, amending the Corporation’s Certificate of Incorporation to increase
the number of authorized Common Stock.

     

    (f) Approvals.  If
any shares of the Common Stock to be reserved for the purpose of conversion of
shares of the Series A Preferred Stock require registration with or approval of
any governmental authority under any Federal or state law before such shares may
be validly issued or delivered upon conversion, then the Corporation will in
good faith and as expeditiously as possible endeavor to secure such registration
or approval, as the case may be. If, and so long as, any Common Stock into which
the shares of the Series A Preferred Stock are then convertible is listed on any
national securities exchange, the Corporation will, if permitted by the rules of
such exchange, list and keep listed on such exchange, upon official notice of
issuance, all shares of such Common Stock issuable upon conversion.

     

    (g) Valid
Issuance.  All shares of Common Stock that may be issued upon
conversion of shares of the Series A Preferred Stock will upon issuance be duly
and validly issued, fully paid and non-assessable and free from all taxes, liens
and charges with respect to the issuance thereof, and the Corporation shall take
no action that will cause a contrary result.

     

     

     


    
      
        
           

        

         


      

      
        4

        
          

        

      

      
         


      

    


    
      	
              3.  

            	
              Liquidation.

            


    

     

    (a) Liquidation
Preference.
In the event of liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (a “Liquidation
Event”), the
Holders of the Series A Preferred Stock shall receive distributions of assets on
a pro rata basis
with holders
of the Common Stock of the Corporation
in proportion to the
number of
shares of
Common Stock (on an as-converted basis) held by
them.

     

    (b) Merger, Reorganization or
Sale of Assets.  For purposes of this Section 3, (i) any
acquisition of the Corporation by means of merger or other form of corporate
reorganization in which outstanding shares of the Corporation are exchanged for
securities or other consideration issued, or caused to be issued, by the
acquiring corporation or its subsidiary (other than a transaction or series of
related transactions in which the holders of the voting securities of the
Corporation outstanding immediately prior to such transaction or series of
related transactions retain, immediately after such transaction or series of
transactions, as a result of shares in the Corporation held by such holders
prior to such transaction, at least a majority of the total voting power
represented by the outstanding voting securities of the Corporation or such
other surviving or resulting entity (or if the Corporation or such other
surviving or resulting entity is a wholly-owned subsidiary immediately following
such acquisition, its parent)) or (ii) a sale of all or substantially all of the
assets of the Corporation, shall be treated as a liquidation, dissolution or
winding up of the Corporation and shall entitle the holders of Series A
Preferred Stock to receive at the closing in cash, securities or other property
amounts as specified in Section 3(a) above.  Whenever the distribution
provided for in this Section 3 shall be payable in assets 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, except that any
publicly-traded securities to be distributed to stockholders in a liquidation,
dissolution, or winding up of the Corporation shall be valued as
follows:

     

    (i) if the
securities are then traded on a national securities exchange, then the value of
the securities shall be deemed to be the average of the closing prices of the
securities on such exchange over the ten (10) trading day period ending five (5)
trading days prior to the distribution;

     

    (ii) if the
securities are actively traded over-the-counter, then the value of the
securities shall be deemed to be the average of the closing bid prices of the
securities over the ten (10) trading day period ending five (5) trading days
prior to the Distribution.

     

    In the
event of a merger or other acquisition of the Corporation by another entity, the
Distribution date shall be deemed to be the date such transaction
closes.  For the purposes of this subsection 3(c), “trading day” shall
mean any day which the exchange or system on which the securities to be
distributed are traded is open and “closing prices” or “closing bid prices”
shall be deemed to be: (i) for securities traded primarily on the New York Stock
Exchange, the American Stock Exchange or a Nasdaq market, the last reported
trade price or sale price, as the case may be, at 4:00 p.m., New York time, on
that day and (ii) for securities listed or traded on other exchanges, markets
and systems, the market price as of the end of the regular hours trading period
that is generally accepted as such for such exchange, market or
system.  If, after the date hereof, the benchmark times generally
accepted in the securities industry for determining the market price of a stock
as of a given trading day shall change from those set forth above, the fair
market value shall be determined as of such other generally accepted benchmark
times.

     

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

    
      	
              4.  

            	
              Voting
      Rights.

            


    

     

    (a) Except as
otherwise expressly provided herein or as required by law, the holders of
Preferred Stock and the holders of Common Stock shall have identical voting
rights and shall vote together and not as separate classes.

     

    (b) Other
than as provided herein or required by law, there shall be no series
voting.

     

    (c) Except as otherwise required under Delaware law, the
Holders of the Series A Preferred Stock shall be entitled to vote at any meeting
of stockholders of the Corporation (or any written actions of stockholders in
lieu of meetings) with respect to any matters presented to the stockholders of
the Corporation for their action or consideration. For the purposes of such
stockholder votes, each share of Series A Preferred Stock shall be entitled to
one vote for each share of Common Stock such share of Series A Preferred Stock
would be convertible into at the record date set for such voting.  Fractional votes shall not, however, be
permitted and any fractional voting rights resulting from the above formula
(after aggregating all shares into which shares of Series A Preferred Stock held
by each holder could be converted), shall be disregarded.

     

    (d) Notwithstanding
the foregoing, so long as any shares of Series A Preferred Stock remain
outstanding, the Corporation shall not (and shall not cause or permit any of its
material Subsidiaries to), by amendment, merger, consolidation or otherwise,
without first obtaining the approval of the holders of at least a majority of
the then outstanding shares of Series A Preferred Stock, alter or change the
rights, preferences or privileges of the Series A Preferred Stock as outlined
herein.

     

    5. Dividends.
In the event that the Corporation declares and pays dividends to the holders of
its Common Stock, payable in cash or assets other than in shares of its Common
Stock (valued at the fair market value thereof as determined in good faith by
the Board), the Holders of the Series A Preferred Stock shall be entitled to
receive dividends for each share of Common Stock which each share of Series A
Preferred Stock would be convertible into at the record date set for such
dividend.

     

    6. Exclusion
of Other Rights.  Except as may otherwise be required by law,
the shares of the Series A Preferred Stock shall not have any preferences or
relative, participating, optional or other special rights, other than those
specifically set forth in this Certificate (as defined below) (as such
Certificate may be amended from time to time) and in the Corporation’s
Certificate of Incorporation, as amended.

     

    7. Headings
of Subdivisions.  The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.

     

     

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

     

     

    8. Severability
of Provisions.  If any right, preference or limitation of the
Series A Preferred Stock set forth in this certificate of designations, rights
and preferences (“Certificate”) (as
such Certificate may be amended from time to time) is invalid, unlawful or
incapable of being enforced by reason of any rule of law or public policy, all
other rights, preferences and limitations set forth in this Certificate (as so
amended) which can be given effect without the invalid, unlawful or
unenforceable right, preference or limitation shall, nevertheless, remain in
full force and effect, and no right, preference or limitation herein set forth
shall be deemed dependent upon any other such right, preference or limitation
unless so expressed herein.

     

    9. Status of
Reacquired Shares.  No shares of the Series A Preferred Stock
which have been issued and reacquired in any manner or converted into Common
Stock may be reissued, and all such shares shall be returned to the status of
undesignated shares of preferred stock of the Corporation.

     

    


     

    IN WITNESS WHEREOF, the
Corporation has caused this Certificate to be signed in its name and on its
behalf by its Chief Executive Officer this 23rd day
of February, 2010.

    


    


    


    


     

    
      	 	 By:        /s/ John
      Jenkins                          
	 	 Name:   John
      Jenkins                                
      
	 	 Title:     CEO                                              
        


    

     

                      

    
 

     

     

     

     

     

     

    7