Document:

exv4w2w3

 

Exhibit 4.2.3

2010 NOTES

GUARANTEE

     This GUARANTEE (this “Guarantee”), dated as of _________ ___, 2005, is entered into
by Sprint Nextel Corporation, a Kansas corporation (“Sprint Nextel”), in favor of each
holder (“Holder”), of the Series B First Priority Senior Secured Floating Rate Notes due
2010 (the “Securities”), and U.S. Bank National Association, a national banking
association, as Trustee under the Indenture referred to below (the “Trustee”).

     WHEREAS, US Unwired Inc., a Louisiana corporation (“USU”), issued the Securities
pursuant to that certain Indenture, dated as of June 16, 2004, as amended, among USU, the
Guarantors named therein and the Trustee (the “Indenture”);

     WHEREAS, USU is a wholly-owned subsidiary of Sprint Nextel;

     WHEREAS, the Board of Directors of Sprint Nextel has determined it to be in the best interest
of Sprint Nextel to guarantee all of USU’s payment obligations under the Securities and all other
monetary obligations of USU under the Indenture and the Securities;

     WHEREAS, Sprint Nextel desires to enter into this Guarantee on the terms and conditions set
forth herein; and

     WHEREAS, all capitalized terms used but not defined herein shall have the meanings given to
such terms in the Indenture.

     NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Sprint Nextel hereby agrees as follows:

     1. Sprint Nextel hereby jointly and severally, with any other Person who may also guarantee
the Guaranteed Obligations (defined below), unconditionally and irrevocably guarantees, on a senior
unsecured basis, as a primary obligor and not as a surety, to each Holder of Securities and to the
Trustee and its successors and assigns, the full and punctual payment when due, whether at
maturity, by acceleration, redemption or otherwise, of the principal of and interest on, if any,
the Securities, only if lawful, and all other monetary obligations of USU under the Indenture, in
so far as such monetary obligations relate to the Securities (collectively, the “Guaranteed
Obligations”). Sprint Nextel further agrees that the Guaranteed Obligations may be extended or
renewed, in whole or in part, without notice or further assent from Sprint Nextel, and Sprint
Nextel shall remain bound under this Guarantee, notwithstanding any such extension or renewal.
Failing payment when due of any amount so guaranteed for whatever reason, Sprint Nextel will be
obligated to pay the same in full, or cause to be duly and punctually paid in full, without any
demand or notice whatsoever.

     2. Sprint Nextel hereby waives presentation to, demand of payment from and protest to, USU of
any of the Guaranteed Obligations, and also waives notice of protest for nonpayment. Sprint Nextel
also hereby waives notice of any default by USU under the Securities or the Indenture. Sprint
Nextel agrees that its obligations under this Guarantee shall be continuing, absolute, full and
unconditional under any and all circumstances, to the fullest extent permitted

 

 

by applicable law, and shall not be discharged except by payment in full of the Securities,
irrespective of:

     (a) the value, genuineness, regularity, validity, enforceability, avoidance,
subordination, discharge or disaffirmance of any of the Guaranteed Obligations, the
Securities or the Indenture, or the absence of any action to enforce the same;

     (b) any extension or waiver, at any time or from time to time, without notice to Sprint
Nextel, of the time for compliance by USU with any of its obligations under the Securities
or the Indenture;

     (c) any substitution, release or exchange of any other guarantee of or security for any
obligations of USU under the Securities or the Indenture;

     (d) any recission, amendment or modification to any of the terms or provisions of the
Securities or the Indenture;

     (e) any law, regulation or order of any jurisdiction affecting any term of any of the
Securities or the Indenture or the rights of any Holder of Securities or the Trustee with
respect thereto;

     (f) any failure to obtain any authorization or approval from, or other action by, to
notify, or to file anything with, any governmental authority or regulatory body required in
connection with the performance of this Guarantee by Sprint Nextel;

     (g) the failure by any Holder of Securities or the Trustee to assert any claim or
demand or to exercise any right or remedy against USU or any other guarantor of the
Guaranteed Obligations or any other Person;

     (h) the failure by any Holder of Securities or the Trustee to exercise any right or
remedy against any collateral securing any of the Guaranteed Obligations; or

     (i) any other circumstance whatsoever that might otherwise constitute a defense to or a
legal or equitable discharge of Sprint Nextel’s obligations, in its capacity as guarantor,
under this Guarantee.

     3. Sprint Nextel’s obligations under this Guarantee shall not be limited by any valuation,
estimation or disallowance made in connection with any proceedings filed by or against Sprint
Nextel under the United States Bankruptcy Code of 1978, as amended (the “Bankruptcy Code”),
whether pursuant to Section 502 of the Bankruptcy Code or any other section thereof. Sprint Nextel
further agrees that, in its capacity as guarantor, none of the Holders of Securities shall be under
any obligation to marshall any assets in favor of or against or in payment of any or all of the
Guaranteed Obligations or the Securities. To the extent that Sprint Nextel makes a payment or
payments on any or all of the Guaranteed Obligations and such payment or payments (or any part
thereof) is or are subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to Sprint Nextel, its estate, trustee or receiver or any other party,
including, without limitation, Sprint Nextel, under any bankruptcy law, state or federal law,
common law or equitable cause, then to the extent of such payment or

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repayment, the Guaranteed Obligations (or, if applicable, such part thereof as had been paid,
reduced or satisfied by such amount), shall be reinstated and revived and continued in full force
and effect as of the date such initial payment, reduction or satisfaction occurred. Sprint Nextel
waives all set-offs, counterclaims, reductions and diminutions of any obligation, and any defense
of any kind or nature (other than payment of the Guaranteed Obligations), that Sprint Nextel may
have or assert against USU or any other Person, and all presentments, demands for performance,
notices of nonperformance, protests, notices of protest, notices of dishonor and notices of
acceptance of this Guarantee.

     4. Sprint Nextel hereby unconditionally and irrevocably waives (a) any defense arising by
reason of any claim or defense based upon an election of remedies by any Holder of Securities that
in any manner impairs, reduces, releases or otherwise adversely affects the subrogation,
reimbursement, exoneration, contribution or indemnification rights of Sprint Nextel or other rights
of Sprint Nextel

 to proceed against USU or any other guarantor or any other Person or collateral, if any, and
(b) any defense based on any right of set-off or counterclaim against or in respect of the
Guaranteed Obligations, the Securities or the Indenture.

     5. Sprint Nextel hereby waives any right to which it may be entitled to have its obligations
under this Guarantee divided among it and other guarantors of the Guaranteed Obligations, if any,
such that Sprint Nextel’s obligations would be less than the full amount claimed. Sprint Nextel
hereby waives any right to which it may be entitled to have the assets of USU or any other Person
who became an “obligor” under the Securities or the Indenture first be used and depleted as payment
of the obligations of USU or such other Person, respectively, under the Securities and the
Indenture prior to any amounts being claimed from or paid by Sprint Nextel under this Guarantee.
Sprint Nextel hereby waives any right to which it may be entitled to require that suit be
instituted against USU or any other guarantor of the Guaranteed Obligations or “obligor” under the
Securities or the Indenture prior to an action being initiated against Sprint Nextel. Sprint
Nextel further agrees that this Guarantee constitutes a guarantee of payment when due (and not a
guarantee of collection) and waives any right, in its capacity as guarantor, to require that any
resort be had by any Holder of Securities or the Trustee to any security held for payment of the
Guaranteed Obligations.

     6. The failure to endorse a notation of this Guarantee on any Security shall not affect or
impair the validity thereof.

     7. Sprint Nextel’s obligations under this Guarantee shall not be affected if any Holder of
Securities is precluded for any reason (including, without limitation, the application of the
automatic stay under Section 362 of the Bankruptcy Code) from enforcing or exercising any right or
remedy with respect to the Securities, and Sprint Nextel shall pay to each affected Holder of
Securities, upon demand, the amount that would otherwise have been due and payable had the exercise
of such rights and remedies been permitted. In the event of any such application of the automatic
stay under Section 362 of the Bankruptcy Code, the Securities shall forthwith become due and
payable by Sprint Nextel for purposes of this Guarantee.

     8. Sprint Nextel hereby agrees that, unless and until all obligations with respect to the
Securities and the Indenture have been paid in full, in its capacity as guarantor, it shall have no
right (whether direct or indirect) of subrogation (whether contractual, under Section 509 of

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the Bankruptcy Code or otherwise) to the claims of any Holder of Securities or the Trustee
against USU or any other Person who became an “obligor” under the Securities or the Indenture in
respect of any obligation with respect to the Securities or the Indenture, notwithstanding any
payment or payments made by Sprint Nextel hereunder or any set-off or application of funds of
Sprint Nextel or by the Holder of Securities; and Sprint Nextel hereby waives all contractual,
statutory and common law rights of reimbursement, contribution or indemnity it may have against USU
or any other such Person, as the case may be, and any and all other rights of payment or recovery
from USU or any other such Person, as the case may be, that it may now have or hereafter acquire
until all Securities and all obligations under the Indenture in respect of the Securities have been
paid in full (in which event such rights of payment or recovery shall be deemed to be in the form
of a loan or loans made from Sprint Nextel to USU or any other such Person, as the case may be).
Sprint Nextel further agrees that as between Sprint Nextel, on the one hand, and the Holders of
Securities and the Trustee, on the other hand, (a) the maturity of the Securities guaranteed hereby
may be accelerated as provided in Article V of the Indenture for the purpose of this Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect
of the Securities guaranteed pursuant to this Guarantee, and (b) in the event of any declaration of
acceleration of such Securities as provided in Article V of the Indenture, such Securities (whether
or not due and payable) will forthwith become due and payable by Sprint Nextel for the purpose of
this Guarantee.

     9. Except
as otherwise specifically provided in Section 12 hereof with respect to the release
of Sprint Nextel from this Guarantee, this Guarantee shall remain in full force and effect and be
binding in accordance with and to the extent of its terms upon Sprint Nextel and the successors
thereof, and shall inure to the benefit of (and be enforceable by) the Trustee and the Holders of
Securities from time to time, or their respective successors or assignees, until the Indenture
shall have been satisfied and discharged in accordance with the terms thereof, and the principal of and interest, if any, on the Securities, and the
obligations of Sprint Nextel in respect of the Guaranteed Obligations, have been satisfied by
payment in full.

     10. Payments made
by Sprint Nextel pursuant to this Guarantee will be made to each Holder of
Securities in the same manner, and to the same location, as payments to such Holder of Securities
are required to be made pursuant to the provisions of the Indenture.

     11. Sprint Nextel shall pay all reasonable costs and expenses (including reasonable attorneys’
fees and expenses) paid or incurred by the Trustee or any Holder of Securities in connection with
the enforcement of this Guarantee or any other rights of the Trustee or such Holder of Securities
under the Securities or the Indenture with respect to this Guarantee and the prosecution or defense
of any action by or against any of the Holder of Securities in connection with this Guarantee or
the Indenture with respect to this Guarantee, whether involving Sprint Nextel or any other Person,
including a trustee in bankruptcy; provided, however, that, Sprint Nextel shall
have no such obligation in connection with any action brought by any Holder of Securities against
Sprint Nextel  or USU to the extent that Sprint Nextel or USU is the prevailing party in the judgment rendered in any such
action; and provided, further, that, Sprint Nextel shall not be responsible for the
fees and expenses of more than one firm of attorneys (in addition to any required local counsel).

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     12. Sprint Nextel may
 be released from this Guarantee upon the sale or other transfer of the
capital stock of USU or of all or substantially all of the assets of USU to an entity that is not Sprint Nextel
or a Subsidiary of Sprint Nextel, which release shall be effective

(a) only upon (1) the execution and delivery by such transferee of a
guarantee of the Guaranteed Obligations, in form and substance substantially similar to this Guarantee, in favor of each Holder of Securities and the Trustee,
and (2) written notice by Sprint Nextel to the Trustee accompanied by an Officer’s Certificate
certifying as to compliance with this Section 12, and (b) without any further

 action on the part
of the Trustee or any Holder of Securities. Upon any such release in compliance with the above requirements, the Trustee shall deliver an
appropriate instrument evidencing such release. Any
actions taken pursuant to this Section 12 shall not release USU as a primary obligor under the
Indenture or the Securities.

     13. Any invalidity or unenforceability of any provision or application of this Guarantee shall
not affect other lawful provisions and applications hereof, and to this end the provisions of this
Guarantee are declared to be severable. Except as otherwise provided herein, this Guarantee may
not be waived, amended, released or otherwise changed except with the consent of not less than a
majority in aggregate principal amount of the Outstanding Securities.

     14. This Guarantee shall be construed according to the laws of the State of New York without
regard to conflicts of laws principles.

[Remainder of Page Blank — Signature Page Follows]

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2010 NOTES

     IN WITNESS WHEREOF, the undersigned has duly executed this Guarantee as of the date first
written above.

SPRINT NEXTEL CORPORATION

By: _____________________

Name: ___________________

Title: ____________________<PAGE>

                                                                          PAGE 1

                                    DELAWARE
                                    --------
                                The First State

     I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "TRIBEWORKS, INC.", FILED IN THIS OFFICE ON THE EIGHTH DAY OF
SEPTEMBER, A.D. 2005, AT 9:48 O'CLOCK P.M.

     A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.

                                       Harriet Smith Windsor
                                       ----------------------------
                                       Harriet Smith Windsor, Secretary of State
3143589  8100  [CERTIFICATE]                 AUTHENTICATION: 4145592

050738814                                              DATE: 09-09-05

<PAGE>

                    CERTIFICATE OF DESIGNATION, PREFERENCES,
                            RIGHTS AND LIMITATIONS OF
                 SERIES B CONVERTIBLE REDEEMABLE PREFERRED STOCK
                                       OF
                                TRIBEWORKS, INC.

        Tribeworks, Inc. (the "Company"), a corporation organized and existing
under the laws of the State of Delaware,

        DOES HEREBY CERTIFY:

        that, pursuant to authority conferred upon the board of directors of the
Company (the "Board") by the Certificate of Incorporation of the Company, and
pursuant to the provisions of Section 151 of the Delaware General Corporation
Law, as amended (the "DGCL"), such Board, by unanimous written consent of its
members dated effective August 31, 2005, filed with the minutes of the Board,
adopted a resolution providing for the issuance of a series of One Million One
Hundred Eighty Thousand (1,180,000) shares of Series B Convertible Redeemable
Preferred Stock, which resolution is as follows:

        RESOLVED, that pursuant to the authority vested in the Board in
accordance with the provisions of the Company's Certificate of Incorporation, a
series of Preferred Stock of the Company be and hereby is created, such series
of Preferred Stock to be designated Series B Convertible Redeemable Preferred
Stock, to consist of One Million One Hundred Eighty Thousand (1,180,000) shares,
to be issued at a price of $0.50 per share (the "Stated Value"), with the voting
powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations or restrictions of such series to be
as set forth in the Certificate of Designation.

        The voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or restrictions
thereof shall be as follows:

1.      DESIGNATION AND AMOUNT. The shares of such series shall have a Stated
Value of $0.50 per share and shall be designated as Series B Convertible
Redeemable Preferred Stock (the "Series B Preferred Stock") and the number of
shares constituting the Series B Preferred Stock shall be One Million One
Hundred Eighty Thousand (1,180,000).

2.      RANK. The Series B Preferred Stock shall rank prior to all of the
Company's common stock, par value $0.0004 per share ("Common Stock") and parri
passu to the Company's Series A Convertible Redeemable Preferred Stock (the
"Series A Preferred Stock"), in each case, with respect to dividends and
distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary.

<PAGE>

3.      DIVIDENDS.

        (a)     Dividends on Series B Preferred Stock. Beginning on the date of
                issuance, holders of shares of Series B Preferred Stock shall be
                entitled to receive annual cumulative dividends equal to ten
                percent (10%) of the aggregate Liquidation Preference (which
                shall be the Stated Value of the Series B Preferred Stock, plus
                accrued but unpaid dividends, if any) per share of Series B
                Preferred Stock. Accrued dividends with respect to each share of
                Series B Preferred Stock shall be paid in cash or in shares of
                the Company's common stock, par value $0.0004 per share ("Common
                Stock"), at the Company's sole option.

        (b)     Restrictions on Dividends on Common Stock. During such time as
                any Series B Preferred Stock is outstanding, the Company shall
                not declare or pay any dividend on shares of Common Stock unless
                the holders of the then outstanding shares of Series B Preferred
                Stock shall have received all accrued dividends as described in
                Section 3(a) above prior to the declaration and payment of a
                dividend on the Common Stock.

        (c)     Payments to Holders of Series B Preferred Stock. Each such
                dividend shall be payable to the holders of the Series B
                Preferred Stock of record as they appear on the stock ledger of
                the Company on the record date of such dividend. No dividend
                shall be declared or paid if such declaration or payment would
                cause the Company to violate any provision of the DGCL.

4.      LIQUIDATION PREFERENCE.

        (a)     Preferential Distributions. The initial liquidation preference
                (the "Liquidation Preference") of the Series B Preferred Stock
                shall be an amount equal to $0.50 per share (subject to
                adjustment upward to the extent required to satisfy the dividend
                preference requirements of Section 3). In the event of any
                voluntary or involuntary liquidation (including a partial
                liquidation, dissolution or winding up of the affairs of the
                Company), the holders of shares of Series B Preferred Stock then
                outstanding shall be entitled to be paid out of the Company's
                funds legally available for distribution to its stockholders an
                amount in cash equal to the Liquidation Preference for each
                share of Series B Preferred Stock outstanding in parity with any
                distribution to the holders of Series A Preferred Stock but
                before any payment shall be made or any assets distributed to
                the holders of any Common Stock. If the assets of the Company
                are insufficient to pay in full the liquidation payments payable
                to the holders of outstanding shares of the Series B Preferred
                Stock, then the entire assets of the Company legally available
                for distribution shall be distributed ratably among the holders
                of the Series A Preferred Stock and Series B Preferred Stock in
                proportion to the preferential amount each such holder is
                otherwise entitled to receive.

        (b)     Certain Transactions. For purposes of this Section 4, the sale,
                conveyance, exchange or transfer (for cash, shares of stock,
                securities, or other consideration)

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<PAGE>

                of all or substantially all of the assets or property of the
                Company or the statutory exchange or consolidation or merger of
                the Company with or into one or more entities, shall be deemed
                to be a liquidation, dissolution, or winding up of the Company
                (collectively, a "Liquidity Event"), unless the holders of all
                of the then outstanding shares of Series B Preferred Stock shall
                elect not to treat any such transaction as a liquidation,
                dissolution or winding up of the Company, in which case Section
                6(c) shall apply.

        (c)     Actions upon Merger, Consolidation, Etc. Prior to the closing of
                a transaction described in Section 4(b) which would constitute a
                Liquidity Event, the Company shall either (i) make all
                distributions it is required to make to the holders of Series B
                Preferred Stock pursuant to the first sentence of Section 4(a),
                or (ii) set aside sufficient funds from which all such cash
                distributions required to be made to the holders of Series B
                Preferred Stock can be made, or (iii) establish an escrow or
                other similar arrangement with a third party pursuant to which
                the proceeds payable to the Company from a sale of all or
                substantially all the assets of the Company will be used to make
                the liquidating payments to the holders of Series B Preferred
                Stock immediately after the consummation of such sale. In the
                event that the Company has not fully complied with any of the
                foregoing alternatives, the Company shall either: (i) cause such
                closing to be postponed until such distributions have been made,
                or (ii) cancel such transaction, in which event the rights of
                the holders of shares of Series B Preferred Stock shall be the
                same as existing immediately prior to such proposed transaction.

5.      REDEMPTION.

        (a)     Redemption at the Company's Option. At any time on or after the
                date of issuance (an "Optional Redemption Date"), the Company
                may, at its election, redeem all, but not less than all, of the
                shares of Series B Preferred Stock then outstanding on such
                Optional Redemption Date.

        (b)     Redemption Payment. The aggregate Redemption Price (as defined
                in Section 5(c) below) payable to each holder of shares of
                Series B Preferred Stock pursuant to this Section 5 shall be
                paid to such holder in a single lump-sum payment.

        (c)     Redemption Price. The redemption price (the "Redemption Price")
                for each share of Series A Preferred Stock redeemed pursuant to
                this Section 5 shall be $0.50 per share of Series B Preferred
                Stock plus any accrued but unpaid dividends thereon. If on or
                before the Optional Redemption Date all funds necessary for such
                redemption shall have been set aside by the Company, separate
                and apart from its other funds in trust for the prorata benefit
                of the holders of the Series B Preferred Stock, so as to be and
                continue to be available therefor, then from and after the
                Optional Redemption date, notwithstanding that any certificate
                for shares of the Series B Preferred Stock shall not have been
                surrendered for cancellation, the shares represented thereby
                shall no longer be deemed outstanding, and all rights with
                respect to shares of the Series B Preferred Stock shall
                forthwith on the

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<PAGE>

                Optional Redemption Date cease and terminate except only as to
                the right of the holders thereof to receive the Redemption Price
                of such Shares so to be redeemed. Any monies set aside by the
                Company and unclaimed at the end of five (5) years from the
                Optional Redemption Date shall revert to the general funds of
                the Company (provided that the holders of the Series B Preferred
                Stock have received notice of the redemption within thirty (30)
                days after the Optional Redemption Date.

        (d)     Equitable Adjustment. The Redemption Price set forth in this
                Section 5 shall be subject to equitable adjustment whenever
                there shall occur a stock split, stock dividend, combination,
                reorganization, recapitalization, reclassification or other
                similar event involving a change in the Series B Preferred
                Stock.

        (e)     Redemption Notice. At least thirty (30) days prior to the
                Optional Redemption Date described specified in Section 5(a)
                above, written notice (hereinafter referred to as the
                "Redemption Notice") shall be delivered by the Company to each
                holder of record of Series B Preferred Stock, at such holder's
                address as shown on the stock ledger of the Company or its
                transfer agent, if applicable. The Redemption Notice shall
                contain the following information:

                (i)     a statement that the Company intends to redeem all the
                        shares of Series B Preferred Stock held by the holder
                        and subject to redemption on such date, and the total
                        number of shares of Series B Preferred Stock held by all
                        holders which the Company has determined will be
                        redeemed on such date;

                (ii)    the Redemption Date and the applicable Redemption Price
                        (subject to the provisions of Section 5(c) above); and

                (iii)   a statement that the holder is to surrender to the
                        Company, at the place designated in the Redemption
                        Notice or to the Company's designated transfer agent
                        (the "Transfer Agent"), its certificate or certificates
                        representing all of the shares of Series B Preferred
                        Stock so to be redeemed.

        (f)     Notice of Acknowledgement. Within thirty (30) days after receipt
                of a Redemption Notice, any holder of Series B Preferred Stock
                shall provide the Company with written notice of such holder's
                acknowledgement of the Company's intention to redeem his shares,
                which notice shall specify the number of shares to be redeemed.
                All notices hereunder shall be deemed to have been given if
                personally delivered, sent by facsimile transmission, prepaid
                overnight courier, or certified or registered mail.

        (g)     Surrender of Certificates. Each holder of shares of Series B
                Preferred Stock shall surrender the certificate(s) representing
                such shares to be redeemed to the Company at the address
                specified in the Redemption Notice or to the Transfer

                                      -4-
<PAGE>

                Agent, and thereupon the Redemption Price for such shares as set
                forth in this Section 5 shall be paid to the order of the person
                whose name appears on such certificate(s) and each surrendered
                certificate shall be cancelled and retired.

        (h)     Option to Convert. After receipt of the Redemption Notice and
                prior to the close of business on the business day prior to the
                Redemption Date, the holders of the Series B Preferred Stock so
                called for redemption may convert such stock, or any number of
                shares thereof, into Common Stock in accordance with the
                conversion privileges set forth in Section 6 hereof. Unless: (i)
                the holder of shares of Series A Preferred Stock to whom such
                Redemption Notice has been duly given shall have exercised its
                rights to convert in accordance with Section 6 hereof; or (ii)
                the Company shall default in the payment of the Redemption Price
                as set forth in the Redemption Notice (or as determined in
                accordance with the provisions Section 5(c)), upon such
                Redemption Date such holder shall no longer have any voting or
                other rights with respect to such shares, except the right to
                receive the monies payable upon such redemption from the
                Company, without interest thereon, upon surrender (and
                endorsement, if required by the Company or the Transfer Agent)
                of the certificate(s), and the shares represented thereby shall
                no longer be deemed to be outstanding as of the Redemption Date.
                In the event a holder of Series B Preferred Stock provides the
                Company with notice of conversion of all or a portion of such
                Series B Preferred Stock into shares of Common Stock on or after
                any Redemption Notice is provided, the holder shall have be
                deemed to have converted such shares as of the Redemption Date;
                provided, however, that in the event the Company shall default
                in the payment of the Redemption Price as set forth in such
                Redemption Notice (or as determined in accordance with the
                provisions Section 5(c)), the conversion shall not be effective
                unless the holder of the Series B Preferred Stock electing to
                convert provides written notice to the Company within twenty
                (20) days of the purported Redemption Date of his desire to
                effect such conversion.

        (i)     Status. All shares of Series B Preferred Stock so redeemed shall
                have the status of authorized but unissued preferred stock, but
                such shares so redeemed shall not be reissued as shares of
                Series B Preferred Stock created hereby.

        (j)     Common Stock Reservation. If the Company calls for redemption of
                the Series B Preferred Stock, it shall reserve sufficient shares
                of Common Stock for the purpose of issuing such shares of Common
                Stock to holders of Series B Preferred Stock that determine to
                convert such shares of Series B Preferred Stock into Common
                Stock pursuant to the provisions of this Section 5.

6.      CONVERSION. The Series B Preferred Stock shall be convertible as follows
(the "Conversion Rights"):

        (a)     Each share of Series B Preferred Stock shall be convertible, at
                the sole option of the Company, at any time after the date of
                issuance of such share, at the office of the Company or any
                transfer agent for the Series B Preferred Stock, into such

                                      -5-
<PAGE>

                number of fully paid and nonassessable shares of Common Stock
                (the "Conversion Rate") as is determined by dividing $0.50 per
                share by the Conversion Price for the Series B Preferred Stock
                in effect on the date of such conversion. The conversion price
                shall be $0.50 (such price being referred to as the "Conversion
                Price").

        (b)     Mechanics of Conversion. Before any holder of Series B Preferred
                Stock shall be entitled to convert any of such shares into
                shares of Common Stock, such holder shall surrender the
                certificate or certificates therefor, duly endorsed, at the
                office of the Company or of any transfer agent for the Series B
                Preferred Stock, and shall give written notice by mail, postage
                prepaid, to the Company at its principal corporate offices, of
                the election to convert the same and shall state therein the
                name or names in which the certificate or certificates for
                shares of Common Stock are to be issued. The Company shall, as
                soon as practicable thereafter, issue and deliver at such office
                to such holder of Series B Preferred Stock, or to the nominee or
                nominees of such holder, a certificate or certificates
                representing the number of shares of Common Stock to which such
                holder shall be entitled as aforesaid. 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 B
                Preferred Stock to be converted (the "Conversion Date"), 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
                as of the Conversion Date.

        (c)     Reorganizations and Recapitalizations. If at any time or from
                time to time there shall be a reorganization or recapitalization
                of the Common Stock (other than a subdivision, combination or
                merger or sale of assets transaction provided for in Section 4
                hereof), then, as a condition of such reorganization or
                recapitalization, 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 of the
                Company or otherwise, to which a holder of Common Stock
                deliverable upon conversion would have been entitled on such
                reorganization or recapitalization. In any such case,
                appropriate adjustment shall be made, in the good faith
                determination of the Board of Directors of the Company, in the
                application of the provisions of this Section 6 with respect to
                the rights of the holders of the Series B Preferred Stock after
                the recapitalization to the end that the provisions of this
                Section 6 (including adjustment of the Conversion Price then in
                effect and the number of shares receivable upon conversion of
                the Series B Preferred Stock) shall be applicable after that
                event in as nearly an equivalent manner as may be practicable.

        (d)     No Impairment. The Company will not, by amendment of its
                Certificate of Incorporation or through any reorganization,
                recapitalization, 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

                                      -6-
<PAGE>

                the terms to be observed or performed hereunder by the Company,
                but will at all times in good faith assist in the carrying out
                of all the provisions of this Section 6 and in the taking of all
                such action (including the reduction of par value of the Common
                Stock or the Series B Preferred Stock) as may be necessary or
                appropriate in order to protect the conversion rights of the
                holders of the Series B Preferred Stock.

        (e)     No Fractional Shares. No fractional shares shall be issued upon
                conversion of the Series B Preferred Stock and the number of
                shares of Common Stock to be issued shall be rounded down to the
                nearest whole share, and there shall be no payment to a holder
                of Series B Preferred Stock for any such rounded fractional
                shares. Whether or not fractional shares result from such
                conversions shall be determined on the basis of the total number
                of shares of Series B Preferred Stock the holder is at the time
                converting into Common Stock and the number of shares of Common
                Stock issuable upon such aggregate conversion.

        (f)     Certificate as to Adjustments. Upon the occurrence of each
                adjustment or readjustment of the Conversion Price of Series B
                Preferred Stock pursuant to this Section 6, the Company, at its
                expense, shall promptly compute such adjustment or readjustment
                in accordance with the terms hereof and prepare and furnish to
                each holder of Series B Preferred Stock a certificate setting
                forth such adjustment or readjustment and showing in detail the
                facts upon which such adjustment or readjustment is based. The
                Company shall, upon the written request at any time of any
                holder of Series B Preferred Stock, furnish or cause to be
                furnished to such holder a like certificate setting forth (i)
                such adjustment and readjustment, (ii) the Conversion Price at
                the time in effect, and (iii) the number of shares of Common
                Stock and the amount, if any, of other property which at the
                time would be received upon the conversion of a share of Series
                B Preferred Stock.

        (g)     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, and 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, then in
                addition to such other remedies as shall be available to the
                holder of such 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.

                                      -7-
<PAGE>

        (h)     Notices. In the event that the Company shall propose at any
                time:

                (i)     to declare any dividend or distribution upon its Common
                        Stock, whether in cash, property, stock or other
                        securities, whether or not a regular cash dividend and
                        whether or not out of earnings or earned surplus;

                (ii)    to offer for subscription pro rata to the holders of any
                        class or series of its stock any additional shares of
                        stock of any class or series or any other rights;

                (iii)   to effect any reclassification or recapitalization of
                        its Common Stock outstanding involving a change in the
                        Common Stock; or

                (iv)    to merge or consolidate with or into any other Company,
                        or sell, lease or convey all or substantially all of its
                        property or business, or to liquidate, dissolve or wind
                        up;

                        then, in connection with each such event, the Company
                        shall send to the holders of the Series B Preferred
                        Stock:

                        (A)     at least twenty (20) days' prior written notice
                                of the date on which a record shall be taken for
                                such dividend, distribution or subscription
                                rights (and specifying the date on which the
                                holders of Common Stock shall be entitled
                                thereto) or for determining rights to vote in
                                respect of the matters referred to in
                                subsections (h)(iii) and (h)(iv) above; and

                        (B)     in the case of the matters referred to in
                                subsections (h)(iii) and (h)(iv) above, at least
                                twenty (20) days' prior written notice of the
                                date when the same shall take place (and
                                specifying the date on which the holders of
                                Common Stock shall be entitled to exchange their
                                Common Stock for securities or other property
                                deliverable upon the occurrence of such events
                                or the record date for the determination of such
                                holders if such record date is earlier).

        Any notice required by the provisions of this Section 6 to be given to
the holders of shares of Series A Preferred Stock shall be deemed given if sent
by facsimile, by telex, or if deposited in the United States mail, postage
prepaid, and addressed to each holder of record at his, her or its address
appearing on the books of the Company.

7.      VOTING RIGHTS. Except as otherwise required by the DGCL, this
Certificate of Designation, or the Company's Certificate of Incorporation, the
holders of the Series B Preferred Stock shall have no voting rights, and no
consent of any holder shall be required for the taking of any corporate action.

                                      -8-
<PAGE>

8.      WARRANT. In the event of conversion of the outstanding shares of Series
B Preferred Stock, the Company shall issue to each holder of Series B Preferred
Stock a one year warrant to purchase one (1) share of Common Stock at a strike
price of US 1.00 for each share of Common Stock (the "Warrants") for each two
(2) shares of Series B Preferred Stock so converted.

9.      RESTRICTIONS AND LIMITATIONS. So long as any shares of Series B
Preferred Stock shall be outstanding, the Company shall not, without first
having obtained the affirmative vote or written consent of the holders of at
lease sixty-six and two-thirds percent (66 2/3%) of the then outstanding shares
of Series B Preferred Stock, voting as a separate class:

        (a)     effect any amendment of the Company's Certificate of
                Incorporation or By-Laws which would materially adversely affect
                the rights of the Series B Preferred Stock; or

        (b)     amend, alter or repeal the preferences, special rights or other
                powers of the Series B Preferred Stock so as to adversely affect
                the holders of shares of Series B Preferred Stock.

10.     TRANSFERABILITY. The Series B Preferred Stock shall not be transferable
by the holders.

11.     PAYMENT OF TAXES. The issuance and delivery of shares of Common Stock
upon conversion of shares of Series B Preferred Stock shall be made without
charge to the holder of Series B Preferred Stock for any issuance tax in respect
thereof, provided that the Company shall not be required to pay any tax which
may be payable in respect of any transfer and delivery of shares in a name other
than that of the holder of the Series B Preferred Stock that has been converted.

12.     NOTICE TO THE COMPANY. Except as specifically set forth herein, all
notices or communications provided for or permitted hereunder shall be made in
writing by hand delivery, express overnight courier, registered first class
mail, or telecopier addressed (i) if to the Company, to its office at 243 Front
Street, San Francisco, CA 94111, Attention: Peter B. Jacobson, CEO, and (2) if
to a holder of the Series B Preferred Stock, to such holder at the address of
such holder as listed in the stock ledger of the Company or to such other
address as the Company or such holder, as the case may be, shall have designated
by notice similarly given. All such notices and communications shall be deemed
to have been duly given: when delivered by hand, if personally delivered; five
(5) business days after being deposited in the mail, registered or certified
mail, return receipt requested, postage prepaid, if mailed; when received after
being deposited in the regular mail; the next business day after being deposited
with an overnight courier, if deposited with a nationally recognized, overnight
courier service; when receipt is acknowledged, if by telecopier, so long as
followed upon the same day by overnight courier.

13.     STATUS OF REDEEMED, CONVERTED OR UNISSUED SHARES OF SERIES B PREFERRED
STOCK. Any Series B Preferred Stock redeemed, purchased, converted or otherwise
acquired by the Company in any manner whatsoever shall not be reissued as part
of such Series B Preferred Stock and shall be retired promptly after the
acquisition thereof. Further, no shares of Series B

                                      -9-
<PAGE>

Preferred Stock shall be issued by the Company after September 30, 2005. Any
shares of Series B Preferred Stock that are not issued by September 30, 2005,
shall return to the status of undesignated shares of preferred stock of the
Company.

14.     PREFERENCE RIGHTS. Nothing contained herein shall be construed to
prevent the Board of Directors of the Company from issuing one (1) or more
additional series of preferred stock of the Company that is/are senior in rights
and preferences to the Series B Preferred Stock.

                            (EXECUTION PAGE FOLLOWS)

                                      -10-
<PAGE>

        IN WITNESS WHEREOF, Tribeworks, Inc. has caused its corporate seal to be
hereunto affixed and this Certificate to be signed by Peter B. Jacobson, its
Chief Executive Officer and Robert Gardner, its Secretary, as of this 6th day of
September, 2005.

                                               /s/ PETER B. JACOBSON
                                               ---------------------------------
                                               PETER B. JACOBSON,
                                               Chief Executive Officer

                                               /s/ ROBERT C. GARDNER
                                               ---------------------------------
                                               ROBERT C. GARDNER,
                                               Secretary

                                      -11-

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