Exhibit 4.1
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
SERIES B CONVERTIBLE PREFERRED STOCK
_____________________
($.001 Par Value)
of
GK INTELLIGENT SYSTEMS, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
GK Intelligent Systems, Inc. filed an Amended and Restated Certificate
of Incorporation with the Secretary of State of Delaware on August 14, 1995 as
further amended on September 2, 1997, May 28, 1998 and March 25, 2002. On
February 7, 2005, GK Intelligent Systems, Inc. filed a Certificate of
Designation for Series B Convertible Preferred Stock.
Following is an Amended and Restated Certificate of Designation for
Series B Convertible Preferred Stock.
GK Intelligent Systems, 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 the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the
Corporation, the Board of Directors of the Corporation at a meeting of the
Board of Directors on March 1, 2005, adopted the following resolution creating
a series of 1,100,000 shares of Preferred Stock, $.001 par value per share,
designated as Series B Convertible Preferred Stock:
RESOLVED: That pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the
provisions of Article FOURTH of its Amended and Restated
Certificate of Incorporation, as amended, a series of
Preferred Stock of the Corporation (the "Series B Convertible
Preferred Stock") be, and it hereby is, created, and that the
designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other
special rights of the shares of the Series B Convertible
Preferred Stock, and the qualifications, limitations or
restrictions thereof, shall be as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Convertible Preferred Stock" and the number of shares
constituting such series shall be 1,100,000. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series B
Convertible Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series B
Convertible Preferred Stock.
Section 2. Dividends. The holders of shares of Series B Convertible
Preferred Stock shall not be entitled to receive dividends, whether in cash,
property, or shares of the corporation's capital stock.
Section 3. Voting Rights. The holders of shares of Series B Convertible
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Convertible Preferred Stock shall entitle the holder
thereof to vote on all matters submitted to a vote of the stockholders of the
Corporation. Each share of Series B Convertible Preferred Stock shall have
the number of votes equal to the aggregate number of shares of Common Stock
into which each share of Series B Convertible Preferred Stock is convertible.
In the event the Corporation shall at any time declare or pay any dividend on
Common Stock payable in shares of Common Stock or effect a subdivision,
combination of consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series B Convertible Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, by law, or in any other
Certificate of Designation creating a series of Preferred Stock or any similar
stock, the holders of shares of Series B Convertible Preferred Stock, the
holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
Section 5. Reacquired Shares. Any shares of Series B Convertible
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein.
Section 6. Liquidation, Dissolution on Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, holders of Series B Convertible Preferred Stock will receive
their pro rata share of the total value of the assets and funds of the
Corporation to be distributed, assuming the conversion of Series B Convertible
Preferred Stock to Common Stock.
(B) Neither the consolidation, merger or other business combination
of the Corporation with or into any other corporation the sale, lease,
exchange or conveyance of all or any part of the property, assets or business
of the Corporation shall be deemed to be a liquidation, dissolution or winding
up of the Corporation for purposes of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the
shares of Series B Convertible Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) into which or for which each
share of Common Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision, combination or consolidation
of the outstanding Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Series B Convertible Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denomination of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series B Convertible Preferred
Stock shall not be redeemable.
Section 9. Amendment. The Amended and Restated Certificate of
Incorporation, as amended, of the Corporation shall not be further amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series B Convertible Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of at least fifty
percent of the outstanding shares of Series B Convertible Preferred Stock,
voting together as a single class.
Section 10. Fractional Shares. Series B Convertible Preferred Stock may
be issued in fractions of a share which shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
participate in distributions and to have the benefit of all other rights of
holders of Series B Convertible Preferred Stock.
Section 11. Conversion. The holders of the Series B Convertible Preferred
Stock shall have the following rights with respect to the conversion of the
Series B Convertible Preferred Stock into shares of Common Stock (the
"Conversion Rights"):
(A) Conversion. Subject to and in compliance with the provisions
of this Section 11, any shares of Series B Convertible Preferred Stock may, at
any time after June 1, 2005, at the option of the holder or the Corporation,
be converted into fully paid and nonassessable shares of Common Stock (a
"Conversion"). The number of shares of Common Stock to which a holder of
Series B Convertible Preferred Stock shall be entitled upon a Conversion shall
be the product obtained by multiplying the number of shares of Series B
Convertible Preferred Stock being converted by six hundred and thirty (630),
subject to adjustment as set forth in this Section 11.
(B) Mechanics of the Conversion. Upon a Conversion, the holder of
Series B Convertible Preferred Stock shall surrender the applicable
certificate or certificates therefore, duly endorsed, at the office of the
Corporation or any transfer agent for the Series B Convertible Preferred
Stock, and, shall give written notice to the Corporation of the Conversion
and the number of shares of Series B Convertible Preferred Stock being
converted. Thereupon, the Corporation shall promptly issue and deliver to
such holder a certificate or certificates for the number of shares of Common
Stock to which such holder is entitled.
(C) Adjustment for Reclassification, Exchange and Substitution. If
at any time or from time to time after the Common Stock issuable upon
the conversion of the Series B Convertible Preferred Stock is changed into
the same or a different number of shares of any class or classes of
stock, whether by recapitalization, reclassification or otherwise (other
than a transaction provided for elsewhere in this Section 11), in any
such event each holder of Series B Convertible Preferred Stock shall have the
right, but not the obligation, thereafter to convert such stock into the
kind and amount of stock and other securities and property receivable upon
such recapitalization, reclassification or other change by holders of the
maximum number of shares of Common Stock into which such shares of Series B
Convertible Preferred Stock could have been converted immediately prior to
such recapitalization, reclassification or change, all subject to further
adjustment as provided herein or with respect to such other securities or
property by the terms thereof.
(D) Reorganizations, Mergers, Consolidations or Sales of Assets.
If at any time or from time to time after the date of issuance of the Series
B Convertible Preferred Stock , there is a capital reorganization of the
Common Stock (other than a transaction provided for elsewhere in this
Section 11), as a part of such capital reorganization, provision shall be
made so that the holders of the Series B Convertible Preferred Stock shall
thereafter be entitled to receive upon conversion of the Series B
Convertible Preferred Stock the number of shares of stock or other
securities or property of the Corporation to which a holder of the number
of shares of Common Stock deliverable upon conversion would have
been entitled on such capital reorganization, subject to adjustment in
respect of such stock or securities by the terms thereof.
(E) Fractional Shares. Any fractional share resulting from the
conversion of the Series B Convertible Preferred Stock may be rounded up to
the nearest whole share at the discretion of the Corporation.
(F) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times after June 1, 2005, 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 Convertible
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 Convertible Preferred Stock . 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 Convertible Preferred Stock, the Corporation 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 purpose.
Section 12 Notices. Any notice required by the provisions of this
Certificate of Designation shall be in writing and shall be deemed
effectively given: (i) upon personal delivery to the party to be notified,
(ii) when sent by confirmed telex or facsimile if sent during normal business
hours of the recipient; if not, then on the next business day, (iii) three
(3) days after having been sent by registered or certified mail, return
receipt requested, postage prepaid, or (iv) one (1) day after deposit with a
nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All notices shall be addressed to each holder
of record at the address of such holder appearing on the books of the
Corporation.
Section 13. No Impairment. The Corporation will not, by amendment of its
Amended and Restated Certificate of Incorporation, as amended, 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 the terms to be
observed or performed hereunder by the Corporation but will at all times in
good faith assist in the carrying out of all the provisions of this Amended
and Restated Certificate of Designation and in the taking of all such action
as may be necessary or appropriate in order to protect the Conversion Rights
of the holder of the Series B Convertible Preferred Stock against impairment.
IN WITNESS WHEREOF, said GK Intelligent Systems, Inc. has caused this
Amended and Restated Certificate of Designation to be signed by its duly
authorized officer this 2nd day of March, 2005.
GK INTELLIGENT SYSTEMS, INC.
By /s/ Gary F. Kimmons
------------------------------------------
Gary F. Kimmons,
Chief Executive Officer and President