EXHIBIT 3.2
CERTIFICATE OF DESIGNATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
MEDJET INC.
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Pursuant to Section 151(a) of the General
Corporation Law of the State of Delaware
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Medjet Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "Corporation"), does hereby
certify:
FIRST: That pursuant to authority conferred upon the Board of Directors of
the Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, and pursuant to the provisions of Section 151(a) of the General
Corporation Law of the State of Delaware, said Board of Directors, by unanimous
written consent without a meeting, on November 5, 1999, adopted the following
resolutions, which remain in full force and effect as of the date hereof:
WHEREAS, the Board of Directors of the Corporation is authorized to fix or
alter the dividend rights, dividend rate, conversion rights, voting rights, and
the liquidation preferences of any wholly unissued classes of preferred shares,
and the number of shares constituting any such classes and the designation
thereof or any of them;
WHEREAS, the Corporation heretofore has provided (i) for the issue of three
series of preferred shares of the Corporation consisting of an aggregate of not
more than 400,000 shares of Preferred Stock, and (ii) for such three series to
be designated as "Series A Preferred Stock", "Series B Preferred Stock" and
"Series C Preferred Stock" and to fix the rights, preferences, privileges,
restrictions and other matters relating to said Series A Preferred Stock, Series
B Preferred Stock and Series C Preferred Stock;
WHEREAS, the Board of Directors desires to provide for the issue of a
series of preferred shares of the Corporation designated as "Series B
Convertible Preferred Stock", consisting of 16,000 shares, and to fix the
rights, preferences, privileges, restrictions and other matters relating to said
Series B Convertible Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that a series of Preferred Stock of
Medjet Inc., a Delaware corporation (the "Corporation"), having the rights,
preferences,
privileges and restrictions, and the number of shares constituting such
series and the designation of such series, set forth below be, and it
hereby is, authorized by the Board of Directors of the Corporation pursuant
to authority given by the Corporation's Certificate of Incorporation.
1. Number and Designation. This series shall consist of 16,000
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shares of Preferred Stock of the Corporation and shall be designated the
Series B Convertible Preferred Stock ("Series B Stock"). The number of
authorized shares of Series B Stock may be reduced to the extent any shares
are not issued and outstanding by further resolution duly adopted by the
Board of Directors of the Corporation and by filing amendments to the
Certificate of Designations pursuant to the provisions of the General
Corporation Law of the State of Delaware stating that such reduction has
been so authorized, but the number of authorized shares of this Series
shall not be increased except with the approval of the holders of not less
than a majority of such outstanding shares of Series B Stock. None of the
shares of Series B Stock has been issued.
2. Dividends. When and as any dividend or distribution is declared
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or paid by the Corporation on Common Stock, whether payable in cash,
property, securities or rights to acquire securities, the Series B Holders
will be entitled to participate with the holders of Common Stock in such
dividend or distribution as set forth in this Section 2. At the time such
dividend or distribution is payable to the holders of Common Stock, the
Corporation will pay to each Series B Holder such holder's share of such
dividend or distribution equal to the amount of the dividend or
distribution per share of Common Stock payable at such time multiplied by
the number of shares of Common Stock then obtainable upon conversion of
such holder's Series B Stock.
3. Voting Rights.
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A. The Series B Holders shall be entitled to notice of any
shareholders' meeting and to vote as a single class with the Common Stock
upon any matter submitted for approval by the holders of Common Stock on
the following basis: the Series B Holders shall have that number of votes
equal to the number of shares of Common Stock into which such Series B
Stock is then convertible.
B. In addition to any other rights provided by law, so long as
any Series B Stock is outstanding, the Corporation, without first obtaining
the affirmative vote or written consent of the holders of not less than a
majority of such outstanding shares of Series B Stock, will not:
(i) amend or repeal any provision of, or add any provision
to, the Corporation's Certificate of Incorporation or By-Laws if such
action would alter adversely the liquidation preferences of, or the
rights or restrictions provided for the benefit of, any Series B
Stock;
(ii) authorize or issue shares of any class or series of
stock not expressly authorized herein having any preference or
priority as to dividends, voting
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or liquidation or other rights superior to any such preference or
priority of the Series B Stock, or authorize or issue shares of stock
of any class or any bonds, debentures, notes or other obligations
convertible into or exchangeable for, or having option rights to
purchase, any shares of stock of the Corporation having any preference
or priority as to dividends, voting or liquidation or other rights
superior to any such preference or priority of the Series B Stock;
(iii) reclassify any class or series of stock junior to the
Series B Stock into stock senior to the Series B Stock with respect to
any preference or priority;
(iv) issue any class(es) or series of equity security(ies)
which (a) is (are) convertible directly or indirectly into Common
Stock at a rate related to the market price of the Common Stock or
other such variable basis (other than normal anti-dilution provisions)
or (b), in any transaction or series of transactions over a 12 month
period, constitute(s) 15% or more of the outstanding Common Stock of
the Corporation, assuming conversion or exercise in full of any
Convertible Securities included in such securities; or
(v) elect to windup, dissolve or liquidate the Corporation
or revoke any such election.
4. Preference Upon Liquidation.
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A. Upon any liquidation, dissolution or winding up of the
Corporation, each Series B Holder will be entitled to be paid, before any
distribution or payment is made upon any Junior Securities of the
Corporation, an amount in cash equal to the aggregate Liquidation Value (as
defined in Section 6C below) of all shares of Series B Stock held by such
holder, plus accrued dividends, if any; thereafter, each Series B Holder
will participate in any distribution or payment on a pro rata basis with
all Junior Securities as if the Series B Stock had been converted into
Common Stock.
B. The reorganization, consolidation or the merger of the
Corporation into or with any other corporation(s) or other entity(ies)
("Reorganization"), the sale, lease, licensing, exchange or other transfer
by the Corporation of all or any material part of its assets or the
commencement by the Corporation of a voluntary case under the United States
bankruptcy laws or any applicable bankruptcy, insolvency or similar law of
any other country, or consent to the entry of an order for relief in an
involuntary case under any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or
the making of an assignment for the benefit of its creditors, or an
admission in writing of its inability to pay its debts generally as they
become due, will be deemed to be a liquidation, dissolution or winding up
of the Corporation within the meaning of this Section 4; provided that,
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with the approval of the holders of not less than a majority of the
outstanding shares of Series B Stock (the "Reorganization Consent"), a
Reorganization of the Corporation shall not be deemed to be a liquidation,
dissolution or
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winding up of the Corporation within the meaning of this Section 4 if (i)
the principal agreement for such Reorganization shall expressly provide
that the Series B Stock shall become preferred stock of such surviving
entity with the equivalent rights to the rights set forth herein
("Surviving Entity Preferred Stock"), (ii) the holders of Junior Securities
receive, in exchange for such Junior Securities, common stock or preferred
stock in the surviving entity (whether or not the surviving entity is the
Corporation) of such Reorganization, or common stock or preferred stock of
another entity, which is junior as to dividends and upon liquidation,
dissolution or winding up to the Series B Stock or Surviving Entity
Preferred Stock, as applicable, and (iii) the Series B Holders shall be
entitled to receive at the option of each Series B Holder (A) either the
Surviving Entity Preferred Stock or (B) the kind and amount of shares or
other securities or property which they would have been entitled to receive
had they converted their shares of Series B Stock into shares of Common
Stock of the Corporation as of the record date for the determination of
holders of Common Stock entitled to cast their votes for or against or to
express any dissent to such Reorganization. After any such Reorganization
and Reorganization Consent, the rights of such holders of Surviving Entity
Preferred Stock with respect to the adjustment of the Conversion Price
shall be appropriately continued and preserved in order to afford, as
nearly as possible, protection against dilution of the conversion rights
and privileges comparable to those conferred herein.
5. Conversion into Conversion Stock
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A. Conversion.
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(i) At any time any Series B Holder may convert all or any
portion of such holder's shares of Series B Stock into a number of
shares of the Conversion Stock computed by multiplying the number of
shares to be converted by $125.00 and dividing the result by the
Conversion Price then in effect. For purposes of this Section,
"Conversion Stock" means the Common Stock.
(ii) Each conversion of Series B Stock will be deemed to
have been effected as of the close of business on the date on which
the certificate or certificates representing the Series B Stock to be
converted have been surrendered at the principal office of the
Corporation. At such time as such conversion has been effected, the
rights of the holder of such Series B Stock as such holder will cease
and the person or persons in whose name or names any certificate or
certificates for shares of Conversion Stock are to be issued upon such
conversion will be deemed to have become the holder or holders of
record of the shares of Conversion Stock represented thereby.
(iii) As soon as possible after a conversion has been
effected, the Corporation will deliver to the converting holder:
(a) a certificate or certificates representing the
number of shares of Conversion Stock issuable by reason of such
conversion in
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such name or names and such denomination or denominations as the
converting holder has specified; and
(b) a certificate representing any shares of Series B
Stock which were represented by the certificate or certificates
delivered to the Corporation in connection with such conversion
but which were not converted.
(iv) If any fractional share of Conversion Stock would be
issuable upon any conversion, the Corporation will pay the holder of
the Conversion Stock the fair market value of such fractional share.
(v) The issuance of certificates for shares of Conversion
Stock upon conversion of Series B Stock will be made without charge.
(vi) The Corporation will not close its books against the
transfer of Series B Stock or of Conversion Stock issued or issuable
upon conversion of Series B Stock in any manner which interferes with
the conversion of Series B Stock.
B. Conversion Price. The initial Conversion Price for the
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Series B Stock will be $1.25. In order to prevent dilution of the
conversion rights granted under this Section, the Conversion Price will be
subject to adjustment from time to time pursuant to this Section 5.
C. Subdivision or Combination of Common Stock; Dissolution.
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(i) If the Corporation at any time subdivides (by any stock
split, stock dividend or otherwise) its outstanding shares of Common
Stock into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision will be proportionately reduced,
and if the Corporation at any time combines (by reverse stock split or
otherwise) its outstanding shares of Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior to
such combination will be proportionately increased.
(ii) In the event of a judicial or non-judicial dissolution
of the Corporation, the conversion rights and privileges of the Series
B Holders shall terminate on a date, as fixed by the Board of
Directors of the Corporation, not more than 45 days and not less than
30 days before the date of such dissolution. The reference to shares
of Common Stock herein shall be deemed to include shares of any class
into which said shares of Common Stock may be changed.
D. Other Adjustments.
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(i) General. In any case to which Section 5C hereof is not
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applicable, where the Corporation shall issue or sell shares of its
Common Stock
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after the Original Issue Date for a consideration per share less than
the Conversion Price in effect pursuant to the terms of the Series B
Stock at the time of issuance or sale of such additional shares (the
"Lower Price"), then the Conversion Price in effect hereunder shall
simultaneously with such issuance or sale be reduced to the Lower
Price. This Section 5D shall not apply to (a) issuances of Common
Stock, Convertible Securities, rights and options that have been
approved by the holders of not less than a majority of the outstanding
shares of Series B Stock, (b) issuances of Common Stock pursuant to
the exercise of options, warrants and rights outstanding on the date
hereof or issued pursuant to a plan which has been approved by the
holders of not less than a majority of the outstanding shares of
Series B Stock or (c) the issuance of warrants to a lender pursuant to
a loan to the Company with a term of not less than four years in an
amount of not less than $10,000,000 (and the issuance of shares of
Common Stock on the exercise of such lender warrants).
(ii) Convertible Securities.
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(a) In case the Corporation shall issue or sell any
securities convertible into Common Stock of the Corporation
("Convertible Securities") after the Original Issue Date, there shall
be determined the price per share for which Common Stock is issuable
upon the conversion or exchange thereof, such determination to be made
by dividing (1) the total amount received or receivable by the
Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional
consideration, if any, payable to the Corporation upon the conversion
or exchange thereof, by (2) the maximum number of shares of Common
Stock of the Corporation issuable upon the conversion or exchange of
all of such Convertible Securities.
(b) If the price per share so determined shall be less
than the applicable Conversion Price, then such issue or sale shall be
deemed to be an issue or sale for cash (as of the date of issue or
sale of such Convertible Securities) of such maximum number of shares
of Common Stock at the price per share so determined, provided that,
if such Convertible Securities shall by their terms provide for an
increase or increases or decrease or decreases with the passage of
time, in the amount of additional consideration, if any, to the
Corporation, or in the rate of exchange, upon the conversion or
exchange thereof, the adjusted Conversion Price shall, forthwith upon
any such increase or decrease becoming effective, be readjusted to
reflect the same, and provided further, that upon the expiration of
such rights of conversion or exchange of such Convertible Securities,
if any thereof shall not have been exercised, the adjusted Conversion
Price shall forthwith be readjusted and thereafter be the price which
it would have been had an adjustment been made on the basis that the
only shares of Common Stock so issued or sold were issued or sold upon
the conversion or exchange of such Convertible Securities, and that
they were issued or sold for the consideration actually received by
the
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Corporation upon such conversion or exchange, plus the consideration,
if any, actually received by the Corporation for the issue or sale of
all of such Convertible Securities which shall have been converted or
exchanged.
(iii) Rights and Options.
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(a) In case the Corporation shall grant any rights or
options to subscribe for, purchase or otherwise acquire Common Stock,
there shall be determined the price per share for which Common Stock
is issuable upon the exercise of such rights or options, such
determination to be made by dividing (1) the total amount, if any,
received or receivable by the Corporation as consideration for the
granting of such rights or options, plus the minimum aggregate amount
of additional consideration payable to the Corporation upon the
exercise of such rights or options, by (2) the maximum number of
shares of Common Stock of the Corporation issuable upon the exercise
of such rights or options.
(b) If the price per share so determined shall be less
than the applicable Conversion Price, then the granting of such rights
or options shall be deemed to be an issue or sale for cash (as of the
date of the granting of such rights or options) of such maximum number
of shares of Common Stock at the price per share so determined,
provided that, if such rights or options shall by their terms provide
for an increase or increases or decrease or decreases, with the
passage of time, in the amount of additional consideration payable to
the Corporation upon the exercise thereof, the adjusted Conversion
Price shall, forthwith upon any such increase or decrease becoming
effective, be readjusted to reflect the same, and provided, further,
that upon the expiration of such rights or options, if any thereof
shall not have been exercised, the adjusted Conversion Price shall
forthwith be readjusted and thereafter be the price which it would
have been had an adjustment been made on the basis that the only
shares of Common Stock so issued or sold were those issued or sold
upon the exercise of such rights or options and that they were issued
or sold for the consideration actually received by the Corporation
upon such exercise, plus the consideration, if any, actually received
by the Corporation for the granting of all such rights or options,
whether or not exercised.
E. Certain Events. If any event occurs of the type contemplated
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by the provisions of this Section 5 but not expressly provided for by such
provisions, then the Board of Directors of the Corporation will make an
appropriate adjustment in the Conversion Price so as to protect the rights
of the Series B Holders; provided that no such adjustment will increase the
Conversion Price as otherwise determined pursuant to this Section 5 or
decrease the number of shares of Conversion Stock issuable upon conversion
of each share of Series B Stock so as to protect the rights of the Series B
Holders.
F. Notices.
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(i) Immediately upon any adjustment of the
Conversion Price, the Corporation will send written notice thereof to
all Series B Holders.
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(ii) The Corporation will send written notice to all Series
B Holders at least 20 days prior to the date (a) on which the
Corporation closes its books or takes a record (1) with respect to any
dividend or distribution upon Common Stock, (2) with respect to any
pro rata subscription offer to holders of Common Stock, (3) for
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determining rights to vote on or approve any matter or (b) proposes to
take any action on which the Series B Holders are entitled to vote
pursuant to Section 3B or Section 4B.
(iii) All notices and other communications from the
Corporation to a Series B Holder shall be mailed by first class
registered or certified mail, postage prepaid, at such address as may
have been furnished to the Corporation in writing by such holder, or,
until an address is so furnished, to and at the address of the last
holder who has so furnished an address to the Corporation.
G. Converted Shares. Any shares of Series B Stock which are
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converted pursuant to this Section 5 will be canceled and will not be
reissued, sold or transferred.
H. Insufficient Authorized Shares. In the event at the time any
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Series B Holder requests conversion of any of such shares and the
Corporation does not have a sufficient (for other events) number of shares
of Common Stock authorized and unreserved to provide for conversion of all
outstanding shares of Series B Stock, the Corporation shall give at least
10 days prior written notice of such requested conversion to all other
Series B Holders in order to enable such other holders to request
conversion of their respective shares. In the event that Series B Holders
request conversion of shares or Series B Stock into a greater number of
shares of Common Stock than the Corporation then has authorized and
unreserved (for other events), the Corporation shall issue all of its
authorized and unreserved (for other events) shares of Common Stock to such
holders pro rata in accordance with the number of shares of Series B Stock
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of which each holder has requested conversion. The unconverted balance of
the shares of Series B Stock will remain as shares of Series B Stock until
the Corporation has authorized a sufficient number of additional shares of
Common Stock to provide for conversion of all shares of Series B Stock then
outstanding. In the event at the time any Series B Holder requests
conversion of any of such shares and the Corporation does not have a
sufficient number of shares of Common Stock authorized and reserved to
provide for conversion of all outstanding shares of Series B Stock, the
Corporation will promptly reserve such number of shares of authorized
Common Stock as are sufficient to provide for conversion of all outstanding
shares of Series B Stock, but if the Corporation does not have a sufficient
number of shares of Common Stock authorized and unreserved (for other
events) to reserve such number of shares, the Corporation will promptly
reserve the authorized and unreserved (for other events) Common Stock and
provide for such meetings to be held, and approvals to be solicited, as are
necessary to authorize and reserve a sufficient number of shares of Common
Stock to provide for conversion of all outstanding shares of Series B
Stock.
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6. Miscellaneous.
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A. Registration of Transfer. The Corporation will keep at its
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principal office a register for the registration of Series B Stock. Upon
the surrender of any certificate representing Series B Stock at such place,
the Corporation will, at the request of the record holder of such
certificate, execute and deliver (at the Corporation's expense) a new
certificate or certificates in exchange therefor representing in the
aggregate the number of shares represented by the surrendered certificate.
Each such new certificate will be registered in such name and will
represent such number of shares as is requested by the holder of the
surrendered certificate and will be substantially identical in form to the
surrendered certificate.
B. Replacement. Upon receipt of evidence reasonably
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satisfactory to the Corporation (an affidavit of the registered holder will
be satisfactory) of the ownership and the loss, theft, destruction or
mutilation of any certificate evidencing one or more shares of Series B
Stock, and in the case of any such loss, theft or destruction, upon receipt
of indemnity reasonably satisfactory to the Corporation, the Corporation
will (at its expense) execute and deliver in lieu of such certificate a new
certificate representing the number of shares represented by such lost,
stolen, destroyed or mutilated certificate.
C. Definitions. For purposes hereof:
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"Common Stock" means the Common Stock of the Corporation, $.001
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par value per share, and includes all stock of any class or classes
(however designated) of the Company, authorized upon the Original Issue
Date or thereafter, the holders of which shall have the right, without
limitation as to amount, either to all or to a share of the balance of
current dividends and liquidating dividends after the payment of dividends
and distributions on any shares entitled to preference, and the holders of
which shall ordinarily, in the absence of contingencies, be entitled to
vote for the election of a majority of directors of the Company (even
though the right so to vote has been suspended by the happening of such a
contingency).
"Conversion Price" and "Conversion Stock" shall have the meanings
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set forth in Sections 5B and 5A(i), respectively.
"Corporation" means Medjet Inc., a Delaware corporation.
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"Junior Securities" means the Common Stock and any equity
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securities of any kind (but not including any debt securities convertible
into equity securities) which the Corporation or any Subsidiary at any time
issues or is authorized to issue other than the Series B Stock unless the
terms of such security explicitly state that such security shall be senior
to or on a par with the Series B Stock.
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"Liquidation Value" of any share of Series B Stock as of any
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particular date will be $125.00.
"Original Issue Date" means the date the Series B Stock is first
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issued.
"Person" and "person" means an individual, a partnership, a
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corporation, a limited liability company, a trust, a joint venture, an
unincorporated organization and a government or any department or agency
thereof.
"Series B Holder" shall mean a registered holder of Series B
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Stock.
"Series B Stock" shall have the meaning set forth in Section 1.
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"Subsidiary" means any corporation of which the shares of stock
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having a majority of the general voting power in electing the board of
directors are, at the time as of which any determination is being made,
owned by the Corporation either directly or indirectly through
Subsidiaries.
D. Amendment and Waiver. No amendment, modification or waiver
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will be binding or effective with respect to any provision hereof without
the prior approval of a majority of the outstanding shares of Series B
Stock; provided that notwithstanding Section 3.B above no such action will
change or affect (a) the Conversion Price of the Series B Stock or the
number of shares or the class of stock into which the Series B Stock is
convertible, (b) the Liquidation Value of the Series B Stock, or (c) the
amount of cash, securities or other property receivable or to be received
by the Series B Holders.
E. Generally Accepted Accounting Principles. When any
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accounting determination or calculation is required to be made, such
determination or calculation (unless otherwise provided) will be made in
accordance with generally accepted accounting principles, consistently
applied, except that if because of a change in generally accepted
accounting principles the Corporation would have to alter a previously
utilized accounting method or policy in order to remain in compliance with
generally accepted accounting principles, such determination or calculation
will continue to be made in accordance with the Corporation's previous
accounting methods and policies unless the Corporation has obtained the
prior written consent of the holders of a majority of the Series B Stock
then outstanding.
SECOND: That said determination of the designation and the relative
powers, preferences, rights, qualifications, limitations and restrictions
thereof, relating to the Series B Convertible Preferred Stock, was duly made by
the Board of Directors pursuant to the provisions of the Amended and Restated
Certificate of Incorporation, in accordance with the provisions of Section
151(a) of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by Eugene I. Gordon, its Chairman of the Board, as of this 29/th/ day of
October, 1999.
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MEDJET INC.
By: /s/ Eugene I. Gordon
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Name: Eugene I. Gordon
Title: Chairman of the Board and Chief Executive Officer
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