Document:

exh4_2.htm

     

    
      

      

    

    
 

    Exhibit
4.2

    

    THIS
NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.  THIS NOTE AND THE SHARES OF COMMON STOCK ISSUABLE UPON
CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS
NOTE UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO RAPID
LINK, INCORPORATED THAT SUCH REGISTRATION IS NOT REQUIRED.

    

    CONVERTIBLE
PROMISSORY NOTE

    

     

    
      	 $500,000.00 	 February 24,
      2010

    

     

    

    FOR VALUE
RECEIVED, RAPID LINK,
INCORPORATED, a Delaware corporation (the “Maker”), with its principal
address at 5408 N. 99th
Street, Omaha, NE 68134, unconditionally promises to pay to the order of
___________________ or her assigns (the “Payee”), having an
office at ______________________________________, the principal amount of FIVE
HUNDRED THOUSAND AND 00/100 ($500,000.00) DOLLARS, or so much thereof as the
Payee advances to the Maker, pursuant hereto, together with interest on the
unpaid principal balance from time to time outstanding under this promissory
note (this “Note”), at the rate of three percent (3.00%) per annum, compounding
on the basis of a 360-day year for the actual number of days elapsed from the
date hereof through, until and including  December 31, 2011 (the
“Maturity Date”) at which time the entire unpaid principal balance and all
accrued and unpaid interest shall become due and payable, if the same had not
been converted in accordance with the terms hereof.  Interest shall
not accrue on this Note until February 28, 2011.

    

    The Maker
also agrees as follows:

    

    1. Payment of Interest and
Principal.

    

    a. Interest.  Interest
payments on this Note shall be payable quarterly in arrears commencing on June
1, 2011 and on the first business day of each calendar quarter thereafter until
the Maturity Date.

    

    b. Principal.  To
the extent not previously converted pursuant to the terms hereof, all
outstanding principal, together with accrued and unpaid interest thereon, shall
be due and payable, and shall be paid, to the Payee on the Maturity
Date.

    

    2. Place and Application of
Payments; Prepayment.

    

    a. All
payments of interest and of principal shall be payable in lawful money of the
United States of America in immediately available funds, without setoff,
counterclaim or deduction of any kind to the Payee’s address
above.  Each payment hereunder shall first be applied to accrued and
unpaid interest and then in reduction of the outstanding principal balance,
unless other costs and charges are payable pursuant to the terms of this Note,
in which event, in Payee’s sole discretion, such costs and charges shall first
be paid. This Note shall be construed and enforced in accordance with Florida
law (the “Applicable Law”).

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    b. This Note
may be prepaid in whole or in part, with 30 days prior written notice to the
Payee, without premium or penalty; provided, however, that upon receipt of such
notice of the Maker’s intent to prepay, the Payee shall have the option, in its
sole discretion, to convert all or any amounts due hereunder prior to such
prepayment (in accordance with the terms hereof), in which case the Payee shall
be granted a reasonable amount of time to execute said conversion.

    

    3. Use of
Proceeds.   All amounts advanced hereunder shall be used
by Maker for working capital purposes.

    

    4. Conversion.

    

    a. Conversion Price and
Conversion Shares.  All amounts due hereunder, including
principal and any accrued and unpaid interest thereof, may be converted at the
option of the Payee into shares of the common stock, $.001 par value per share,
of the Maker (the “Common Stock”) at the rate of $0.027 per share (the
“Conversion Price”).   This initial Conversion Price shall be
subject to adjustment to offset the effect of stock splits, stock dividends,
recapitalizations and pro rata distributions of property or equity interests to
the Maker’s shareholders.  The number of shares of Common Stock into
which this Note may be converted (“Conversion Shares”) shall be determined by
dividing the aggregate principal amount, plus any accrued and unpaid interest
thereon, by the Conversion Price in effect at the time of such
conversion.

    

    b. Voluntary
Conversion.  The Payee of this Note has the right, at the
Payee’s option, at any time after the date hereof to convert this Note, in
accordance with the provisions of Section 4(a) and 4(d), in whole or in part,
into fully paid and nonassessable shares of Common Stock.

    

    c. Conversion Procedure.
The Payee shall give notice of its decision to exercise its right to convert the
Note or any part thereof by providing an executed and completed notice of
conversion in the form attached (“Notice of Conversion”) to the Maker in
accordance with the notice provisions hereof.  The Payee will not be
required to surrender the Note until the Note has been fully converted or
satisfied.  Each date on which a Notice of Conversion is delivered to
the Maker in accordance with the provisions of this Section shall be deemed a
“Conversion Date”.

    

    d. Delivery of Stock
Certificates.  As promptly as practical after the conversion,
the Maker will instruct or cause its transfer agent to deliver the Common Stock
certificates representing the shares issuable upon conversion of the Note to the
Payee.  A Note representing the balance of any Note not so converted
will be provided to the Payee, if requested by the Payee provided an original
Note is delivered to the Maker.  To the extent that a Payee elects not
to surrender a Note for reissuance upon partial payment or conversion, the Payee
indemnifies the Maker against any and all loss or damage attributable to a
third-party claim in an amount in excess of the actual amount then due under the
Note.

    

    
      
         

      

      
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    5. Adjustments for Stock Splits
and Subdivisions.

    

    a. In the
event the Maker should at any time or from time to time after the date of
issuance hereof fix a record date for the effectuation of a split or subdivision
of the outstanding shares of Common Stock, or the issuance by reclassification
of shares of Common Stock any shares of capital stock of the Maker or the
determination of holders of Common Stock entitled to receive a dividend or other
distribution payable in additional shares of Common Stock or other securities or
rights convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of common stock (hereinafter referred to as the
“Common Stock Equivalents”) without payment of any consideration by such holder
for the additional shares of Common Stock or the Common Stock Equivalents
(including the additional shares of Common Stock issuable upon conversion or
exercise thereof), then, as of such record date, (or the date of such dividend
distribution, split or subdivision if no record date is fixed), the Conversion
Price of this Note shall be appropriately decreased, as the case shall be, so
that the number of shares of Common Stock issuable upon conversion of this Note
shall be increased in proportion to such increase of outstanding
shares.

    

    b. If the
number of shares of Common Stock outstanding any time after the date of issuance
of the Note is decreased by a combination of the outstanding shares of Common
Stock, then, following the record date of such combination, the conversion price
of this Note shall be appropriately increased so that the number of shares of
Common Stock issuable on conversion hereof shall be decreased in proportion to
such decrease in outstanding shares.

    

    c. If the
Maker at any time shall fix a record date for the distribution to holders of its
Common Stock, evidence of its indebtedness or assets or rights, options,
warrants or other security entitling them to subscribe for or purchase, convert
to, exchange for or otherwise acquire any security (excluding those referred to
in Section 5(a), above), then in each such case the Conversion Price shall
thereafter be determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the per-share market price on such record date less the then fair
market value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of Common Stock
as determined by the Board of Directors of the Maker in good faith, and the
denominator of which shall be the Conversion Price as of such record
date.  Such adjustment shall be made whenever any such distribution is
made and shall become effective immediately after the record date mentioned
above.

    

    d. Whenever
the Conversion Price is adjusted pursuant to this Section, the Maker shall
promptly provide to the Payee a notice setting forth the Conversion Price after
such adjustment and setting forth a brief statement of the facts requiring such
adjustment.

    

    6. Reservation of Stock
Issuable upon Conversion.  The Maker covenants that it will at
all times reserve and keep available out of its authorized and unissued shares
of Common Stock solely for the purpose of issuance upon conversion of the Note,
as herein provided, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Payee, not less than such number of
shares of the Common Stock as shall be issuable (taking into account the
adjustments and restrictions herein) upon the conversion of the outstanding
principal amount of the Note.  The Maker covenants that all shares of
Common Stock that shall be so issuable shall, upon issue, be duly and validly
authorized, issued, fully paid and nonassessable.

     

     

    
      
        
        

      

      
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    7. Fees and
Expenses.  Maker agrees to pay all costs and expenses incurred
by Payee, including reasonable attorneys’ fees and legal costs and expenses, in
connection with the preparation, negotiation and delivery hereof and in
collecting any sums due under this Note or in enforcing the terms and conditions
of the Note, whether for services incurred in collection, litigation proceedings
at pre-trial, trial and appellate levels, bankruptcy proceedings or
otherwise.

    

    8. Notices.  Any
notice, consent, approval or communication given pursuant to the provisions of
this Note shall (except where otherwise permitted by this Note) be in writing
and shall be (a) delivered by hand, (b) mailed by certified mail or registered
mail, return receipt requested, postage prepaid, or (c) delivered by a
nationally recognized overnight courier, U.S. Post Office Express Mail, or
similar overnight courier which delivers only upon signed receipt of the
addressee. The time of the giving of any notice shall be the time of receipt
thereof by the addressee or any agent of the addressee, except that in the event
the addressee or such agent of the addressee shall refuse to receive any notice
given as above provided or there shall be no person available at the time of
delivery thereof to receive such notice, the time of the giving of such notice
shall be the time of such refusal or the time of such delivery, as the case may
be.  Such notices shall be given to the Maker and the Payee at the
addresses provided herein.

    

    9. Events of
Default.  The following are events of default
hereunder:  (a) the failure of Maker to pay any obligation, liability
or indebtedness to the Payee, whether under this Note, as and when due (whether
upon demand, at maturity or by acceleration) including, without limitation,
those existing as of the date of execution; (b) the commencement of a proceeding
against Maker for dissolution or liquidation (which proceeding is not discharged
within 90 days after commencement), the voluntary or involuntary termination or
dissolution of Maker or the merger or consolidation of Maker with or into
another entity; (c) the insolvency of, the business failure of, the appointment
of a custodian, trustee, liquidator or receiver for or for any of the property
of, the assignment for the benefit of creditors by, or the filing of a petition
under bankruptcy, insolvency or debtor’s relief law (which petition is not
discharged within 90 days after filing) or the filing of a petition for any
adjustment of indebtedness, composition or extension by or against Maker (which
petition is not discharged within 90 days after filing); (d) the breach of any
covenant or other agreement made by the Maker to the Payee herein or otherwise
which has remained uncured after a period of 30 days following notice from Payee
of such breach; or (e) the entry of a material judgment against Maker not paid
or bonded within 90 days after entry.

    

    10. Remedies.

    

    a. Whenever
there is an event of default under this Note: (a) the entire balance outstanding
hereunder and all other obligations of Maker to the Payee (however acquired or
evidenced) shall, at the option of Payee, become immediately due and payable,
and/or (b) to the extent permitted by law, the rate of interest on the unpaid
principal shall be increased at the Payee’s discretion up to 15% per annum (the
“Default Rate”).  The provisions herein for a Default Rate and a
delinquency charge shall not be deemed to extend the time for any payment
hereunder or to constitute a “grace period” giving Maker a right to cure any
default.  At the Payee’s option, any accrued and unpaid interest, fees
or charges may, for purposes of computing and accruing interest on a daily basis
after the due date of this Note or any installment thereof, be deemed to be a
part of the principal balance, and interest shall accrue on a daily compounded
basis after such date at the Default Rate provided in this Note until the entire
outstanding balance of principal and interest is paid in full.  In
addition to the foregoing, the Payee shall have all rights and remedies provided
for by Applicable Law (including all forms of legal and equitable
relief).

     

     

    
      
         

      

      
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    b. The
remedies of Payee as provided herein shall be cumulative and concurrent and may
be pursued singly, successively, or together at the sole discretion of Payee and
may be exercised as often as occasion therefore shall arise. The acceptance by
Payee of any payment under this Note which is less than the amount then due or
the acceptance of any amount after the due date thereof, shall not be deemed a
waiver of any right or remedy available to Payee nor nullify the prior exercise
of any such right or remedy by Payee. None of the terms or provisions of this
Note may be waived, altered, modified or amended except by a written document
executed by Payee and the Maker, and then only to the extent specifically
recited therein. No course of dealing or conduct shall be effective to waive,
alter, modify or amend any of the terms or provisions hereof. The failure or
delay to exercise any right or remedy available to Payee shall not constitute a
waiver of the right of the Payee to exercise the same or any other right or
remedy available to Payee at that time or at any subsequent time.

    

    11. Usury.  Notwithstanding
any provision of this Note, the Payee does not intend to charge and Maker shall
not be required to pay any amount of interest or other charges in excess of the
maximum rate permitted by Applicable Law as amended from time to time. Should
any interest payment or other payment of the loan evidenced by this Note result
in the computation or earning of interest in excess of the highest rate
permissible under Applicable Law, then any and all such excess shall be and the
same is hereby waived by Payee, and all such excess shall be credited by Payee
against the unpaid principal balance of this Note or paid by Payee to Maker or
to any parties liable for the repayment of the loan evidenced by this Note, in
the sole discretion of Payee. It is the intent of the parties hereto that
neither Maker, nor any parties liable for the repayment of the loan evidenced by
this Note, shall be required to pay interest in excess of the highest rate
permissible under Applicable Law as amended from time to time.

    

    12. No Set-Off. Maker
acknowledges that its obligations to make payments hereunder are absolute and
unconditional, and agrees that such payments shall not be requested to be, and
shall not be, subject to any defense, set-off or counterclaim of any kind or
nature, or any other action similar to the foregoing.

    

    13. Severability.  If
any provision of this Note shall be deemed invalid, illegal or unenforceable
under Applicable Law, such invalidity, illegality or unenforceability shall not
affect any other provision (or remaining part of the affected provision) of this
Note and this Note shall be construed as if such invalid, illegal or
unenforceable provision (or part thereof) had not been contained
herein.

    

    14. Additional
Agreements.  To the fullest extent permitted by law, Maker and
all sureties, endorsers and guarantors of this Note, if any, hereby: (a) waive
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, and all other notice, filing of suit, and diligence in collecting this
Note; (b) agree to the addition or release of any party or person primarily or
secondarily liable hereon; (c) waive any right to immunity from any action or
proceeding brought in connection with this Note or any instrument securing it
and waive any immunity or exemption of any property, wherever located, from
garnishment, levy, execution, seizure or attachment prior to or in execution of
judgment, or sale under execution or other process for the collection of debts;
(d) waive any right to interpose any setoff or counterclaim or to plead any
statute of limitations as a defense in any such action or proceeding, and waive
all statutory provisions and requirements for the benefit of Maker, now or
hereafter in force; (e) agree that Payee shall not be required first to
institute any suit or to exhaust its remedies against Maker or any other person
or party liable hereunder in order to enforce payment for this Note; and (f)
consent to any extension, rearrangement, renewal, or postponement of time of
payment of this Note and to any other indulgency with respect thereto without
notice, consent or consideration to any of them.

     

     

    
      
         

      

      
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    15. JURISDICTION.  MAKER
IRREVOCABLY AGREES THAT ANY ACTION OR PROCEEDING ARISING HEREUNDER OR RELATING
HERETO THAT IS BROUGHT BY MAKER SHALL BE TRIED BY THE COURTS OF THE STATE OF
FLORIDA SITTING IN MIAMI-DADE  COUNTY, OR THE UNITED STATES DISTRICT
COURTS SITTING THERE. MAKER IRREVOCABLY SUBMITS, IN ANY SUCH ACTION OR
PROCEEDING THAT IS BROUGHT BY PAYEE, TO THE NON-EXCLUSIVE JURISDICTION OF EACH
SUCH COURT, IRREVOCABLY WAIVES THE DEFENSE OF AN INCONVENIENT FORUM WITH RESPECT
TO ANY SUCH ACTION OR PROCEEDING, AND AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE MADE UPON MAKER BY MAILING A COPY THEREOF TO MAKER
AT THE ADDRESS SET FORTH HEREIN (AS WELL AS BY ANY OTHER LAWFUL
METHOD).

    

    16. WAIVER OF JURY
TRIAL.  PAYEE AND MAKER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY AND TO BRING ANY
ACTION IN THE NATURE OF A PERMISSIVE COUNTERCLAIM WITH RESPECT TO ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS NOTE AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONNECTION HEREWITH, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF
THE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PAYEE ENTERING INTO
THE LOAN TRANSACTION EVIDENCED BY THIS NOTE.

    

    Dated and
executed as of the date first written above.

    

                                              

    
    

     

    
      	 	 MAKER:
	 	 
	 	 RAPID
      LINK, INCORPORATED
	 	 
	 	 
	 	 By:                                                                          
      
	 	 Name:                                                                     
      
	 	 Title:                                                                      
         

    

     

    
 

     

     

    
      
        
           

           

        

         

      

      
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    NOTICE
OF CONVERSION

    OF

    CONVERTIBLE
PROMISSORY NOTE

    DUE
DECEMBER 31, 2011

    

    

    (To be
Executed by the Payee in order to Convert the Note)

    

    

    

    The undersigned irrevocably elects to
convert $ ________________ of the principal amount, together with the accrued
interest thereon, of the Convertible Promissory Note, dated February 24, 2010
(the “Note”) into Shares of Common Stock of Rapid Link, Incorporated according
to the conditions of the Note.

    

    

    Conversion
Date:                                              
                                                              

    

    

    Applicable
Conversion Price:                         
                                                                         

    

    

    
                                                                              

    Name:                                                                    

    Address:                                                         
       

                                                                               
   

    

    

    

    

    

    

    

     

     

    7exh4_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.

     

     

    
      
        
        

      

      
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    (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.

     

     

    
      
        
        

      

      
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    (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.

     

     

     

    
      
        
           

        

         

      

      
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              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.

     

     

     

    
      
        
        

      

      
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    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

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