Exhibit 3.1
FEDERAL IDENTIFICATION
NO. 04-2464749
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The Commonwealth of Massachusetts
William Francis Galvin
Secretary of the Commonwealth
One Ashburton Place, Boston, Massachusetts 02108-1512
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A CLASS OR SERIES OF STOCK
(General Laws, Chapter 156B, Section 26)
We, Peter J. Murphy , *President/XXXXXXXXXXXXXXX,
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and Edward D. Kutchin , *Clerk/XXXXXXXXXXXXXXXXXXX,
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of Parlex Corporation ,
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(Exact name of corporation)
located at: One Parlex Place, Methuen, MA 01844 ,
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(Street Address of corporation in Massachusetts)
do hereby certify that at a meeting of the directors of the corporation
held on May 6, 2004, the following vote establishing and designating a
class or series of stock and determining the relative rights and
preferences thereof was duly adopted:
See attached terms of Series A Convertible
Preferred Stock.
[STAMPED]
SECRETARY OF STATE
RECEIVED
04 MAY - 7 AM 9:08
CORPORATIONS DIVISION
* Delete the inapplicable words.
Note: Votes for which the space provided above is not sufficient should be
provided on one side of separate 8 1/2 x 11 sheets of white paper, numbered
2A, 2B, etc., with a left margin of at least 1 inch.
SERIES A CONVERTIBLE PREFERRED STOCK
OF
PARLEX CORPORATION
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1. Designation and Amount. The shares of this series shall be
designated as "Series A Convertible Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be one hundred fifty thousand (150,000). Such number
of shares may be increased or decreased by resolution of the Board of
Directors; provided, that no decrease shall reduce the number of shares of
Series A 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 or
exchangeable for Series A Preferred Stock.
2. Dividends.
(a) Subject to the terms of Section 8 and Section 2(b) below,
dividends on each outstanding share of Series A Preferred Stock will accrue
cumulatively on a daily basis during each fiscal quarter of the Corporation
at an annual rate of $6.60 per share of the Series A Preferred Stock
(appropriately adjusted to reflect the occurrence of any stock split,
combination, reclassification or similar event affecting the Series A
Preferred Stock) (the "Dividend Rate"), and will be payable, on the first
day of each fiscal quarter, in arrears (each such date, a "Series A
Dividend Payment Date"). Any calculation of accrued dividends pursuant to
the provisions of this Section 2(a) will be made based on a 365-day year
and on the number of days actually elapsed during any fiscal quarter of the
Corporation.
(1) Subject to Section 2(b) below, all dividends payable on the
Series A Preferred Stock shall be payable in the form of either: (i)
cash, out of funds legally available therefor, or (ii) shares of
Common Stock (a "PIK Dividend"), or (iii) a combination of cash and
PIK Dividends. The form of the dividend will be determined by the
Corporation in its sole and absolute discretion. If the Corporation
elects to pay any portion of a dividend in cash, but is unable to do
so for any reason, then such portion of the dividend due and payable
shall be paid in the form of a PIK Dividend. If the Corporation
elects to pay any portion of a dividend in the form of a PIK
Dividend, the shares of Common Stock so issued will be valued at the
Closing Price on the Trading Day immediately preceding the applicable
Series A Dividend Payment Date. The Corporation shall not issue
fractional shares of Common Stock or any scrip representing
fractional shares of Common Stock upon payment of a PIK Dividend. If
any fractional share of Common Stock otherwise would be issuable upon
the payment of a PIK Dividend, the Corporation, at its option, may
either make an adjustment thereof in cash at the current market value
thereof to the holder of Series A Preferred Stock, or round the
fractional shares up to the nearest whole share, provided that if
such holder holds more than one share of
Series A Preferred stock, the number of full shares that shall be
issuable upon payment of a PIK Dividend shall be computed on the
basis of the aggregate number of shares of Series A Preferred Stock
held of record by such holder. As used herein, "Trading Day" shall
mean each day on which the primary securities exchange or quotation
system or over-the-counter market on which the Company's Common Stock
is listed or otherwise available for trading is open for trading or
quotation; and "Closing Price" of a single share of Common Stock on
any Trading Day shall mean the closing sale price per share for the
Common Stock (or if no closing sale price is reported, the average of
the bid and ask prices) on such Trading Day on the principal United
States national securities exchange on which the Common Stock is
traded or, if the Common Stock is not listed on a United States
national securities exchange, as reported by the Nasdaq, or, if the
Common Stock is not listed on the Nasdaq, the principal United States
regional securities exchange on which the Common Stock is traded or,
if the Common Stock is not listed on a United States regional stock
exchange, as reported by the principal over-the-counter market on
which the Common Stock is traded, including the Over the Counter
Bulletin Board (the "OTCBB") or the National Quotation Service Bureau
(commonly knows as the "Pink Sheets") or successor markets. All
shares of Stock issued pursuant to a PIK Dividend will thereupon be
duly authorized, validly issued, fully paid and non-assessable.
(2) Upon any conversion of Series A Preferred Stock pursuant to
Section 5, all accrued but unpaid dividends on the Series A Preferred
Stock so converted, whether or not declared, shall, immediately prior
to such conversion, be paid in the form set forth in Section 2(a)(1)
above or Section 2(b) below, as the case may be.
(3) No dividends or other distributions will be paid, declared
or set apart with respect to the Junior Stock (as defined in Section
3 below) if, and for so long as, the Corporation fails to make
payment of any dividend due and payable in respect of the Series A
Preferred Stock. No dividend of cash or other property or other
distribution (other than a stock dividend giving rise to an
adjustment under Section 5 below) shall be paid, or declared and set
apart for payment on any share of Common Stock or any other class or
series of Junior Stock, unless a pro rata dividend or other
distribution is paid, or declared and set apart for payment, with
respect to all outstanding shares of Series A Preferred Stock, on an
as-converted basis.
(b) If the Corporation fails to redeem by the third anniversary of
the Original Issue Date (as defined in Section 5(d)), all of the then
outstanding shares of Series A Preferred Stock in accordance with the terms
and conditions of Section 8, then the Dividend Rate shall thereafter
increase to $11.20 per share of the Series A Preferred Stock and will be
payable, on the first day of each fiscal quarter, in arrears. In addition,
in the event of the failure to redeem on such date, and notwithstanding any
other provision herein contained, all dividends payable on the Series A
Preferred Stock shall thereafter be payable exclusively in cash, out of
funds legally available therefor.
3. Liquidation, Dissolution or Winding Up.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the holders of shares of
Series A Preferred Stock then outstanding shall be entitled to be paid out
of the assets of the Corporation available for
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distribution to its stockholders after and subject to the payment in full
of all amounts required to be distributed to the holders of any other class
or series of stock of the Corporation ranking on liquidation prior and in
preference to the Series A Preferred Stock (collectively referred to as
"Senior Preferred Stock"), but before any payment shall be made to the
holders of Common Stock or any other class or series of stock ranking on
liquidation junior to the Series A Preferred Stock (such Common Stock and
other stock being collectively referred to as "Junior Stock") by reason of
their ownership thereof, an amount equal $80.00 per share of Series A
Preferred Stock (subject to appropriate equitable adjustment for any stock
splits, stock dividends, combinations, reorganizations, reclassifications,
recapitalizations or other similar events affecting the shares of Series A
Preferred Stock) (the "Original Purchase Price") plus an amount equal to
all accrued and unpaid dividends on the Series A Preferred Stock. If upon
any such liquidation, dissolution or winding up of the Corporation the
remaining assets of the Corporation available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series A
Preferred Stock the full amount to which they shall be entitled, the
holders of shares of Series A Preferred Stock and any class or series of
stock ranking on liquidation on a parity with the Series A Preferred Stock
shall share ratably in any distribution of the remaining assets and funds
of the Corporation in proportion to the respective amounts which would
otherwise be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to such shares were
paid in full.
(b) After the payment of all preferential amounts required to be
paid to the holders of Senior Preferred Stock, Series A Preferred Stock and
any other class or series of stock of the Corporation ranking on
liquidation on a parity with the Series A Preferred Stock, upon the
dissolution, liquidation or winding up of the Corporation, the holders of
shares of Junior Stock then outstanding shall be entitled to receive the
remaining assets and funds of the Corporation available for distribution to
its stockholders on a pro-rata basis.
(c) The merger or consolidation of the Corporation into or with
another corporation which results in the exchange of outstanding shares of
the Corporation for securities or other consideration issued or paid or
caused to be issued or paid by such other corporation or an affiliate
thereof, the sale, by the Corporation to a unaffiliated third party, of
equity securities representing in excess of fifty percent (50%) of the
voting securities of the Corporation on a fully-diluted basis, the sale of
all or substantially all the assets of the Corporation, or the consummation
of a voluntary going private transaction by the Corporation, shall be
deemed to be a liquidation, dissolution or winding up of the Corporation
for purposes of this Section 3, but only if, in the case of a merger, after
giving effect to such merger, the securities of the surviving corporation
received by former holders of the Corporation's securities as a result of
their ownership of the Corporation's securities represent fifty percent
(50%) or less of any surviving entity's voting securities. The amount
deemed distributed to the holders of Series A Preferred Stock upon any such
merger or consolidation shall be the cash or the value of the property,
rights or securities distributed to such holders by the acquiring person,
firm or other entity. The value of such property, rights or other
securities shall be determined in good faith by the Board of Directors of
the Corporation.
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4. Voting.
(a) Except as set forth herein, the Series A Preferred Stock shall
have no voting rights. At any time when at least 33 1/3% of the originally
issued shares of Series A Preferred Stock remain outstanding, the
Corporation shall not, without the written consent or affirmative vote of
the holders of more than fifty percent (50%) of the then outstanding shares
of Series A Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a class:
(i) amend, alter or repeal the preferences, special rights or
other powers of the Series A Preferred Stock so as to affect
adversely the Series A Preferred Stock;
(ii) increase or decrease the number of authorized shares of
Series A Preferred Stock;
(iii) create any additional class or series of shares of stock
unless the same ranks junior to the Series A Preferred Stock as to
dividends and the distribution of assets on the liquidation,
dissolution or winding up of the Corporation, whether any such
creation shall be by means of amendment to the Articles of
Organization of the Corporation or by merger, consolidation,
reclassification or otherwise; or
(iv) purchase or redeem, or set aside any sums for the
purchase or redemption of, any shares of Common Stock, except for the
repurchase of shares of Common Stock held by officers, employees,
directors or consultants of the Corporation which are subject to
restrictive employment agreements, stock purchase agreements or stock
restriction agreements under which the Corporation has the option to
repurchase such shares upon the occurrence of certain events,
including the termination of employment.
5. Optional Conversion. The holders of the Series A Preferred
Stock shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any
time and from time to time (subject to Section 8(c) hereof), into
such number of fully paid and nonassessable shares of Common Stock as
is determined by dividing the Original Purchase Price by the
Conversion Price (as defined below) in effect at the time of
conversion. The conversion price at which shares of Common Stock
shall be deliverable upon conversion of Series A Preferred Stock
without the payment of additional consideration by the holder thereof
(the "Conversion Price") shall initially be $8.00. Such initial
Conversion Price, and the rate at which shares of Series A Preferred
Stock may be converted into shares of Common Stock, shall be subject
to adjustment as provided below.
In the event of a liquidation of the Corporation, the Conversion
Rights shall terminate at the close of business on the first full day
preceding the date fixed for the payment of any amounts distributable on
liquidation to the holders of Series A Preferred Stock.
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(b) Fractional Shares. 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 effective Conversion Price.
(c) Mechanics of Conversion.
(i) In order for a holder of Series A Preferred Stock
to convert shares of Series A Preferred Stock into shares of
Common Stock, such holder shall surrender the certificate or
certificates for such shares of Series A Preferred Stock, at
the office of the transfer agent for the Series A Preferred
Stock (or at the principal office of the Corporation if the
Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any
number of the shares of the Series A Preferred Stock
represented by such certificate or certificates. Such notice
shall state such holder's name or the names of the nominees in
which such holder wishes the certificate or certificates for
shares of Common Stock to be issued. If required by the
Corporation, certificates surrendered for conversion shall be
endorsed or accompanied by a written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly
executed by the registered holder or his or its attorney duly
authorized in writing. The date of receipt of such certificates
and notice by the transfer agent (or by the Corporation if the
Corporation serves as its own transfer agent) shall be the
conversion date ("Conversion Date"). The Corporation shall, as
soon as practicable after the Conversion Date, issue and
deliver at such office to such holder of Series A Preferred
Stock, or to his or its nominees, a certificate or certificates
for the number of shares of Common Stock to which such holder
shall be entitled, together with cash in lieu of any fraction
of a share.
(ii) The Corporation shall at all times when the
Series A Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued stock, for the
purpose of effecting the conversion of the Series A Preferred
Stock, such number of its duly authorized shares of Common
Stock as shall from time to time be sufficient to effect the
conversion of all outstanding Series A Preferred Stock. Before
taking any action which would cause an adjustment reducing the
Conversion Price below the then par value of the shares of
Common Stock issuable upon conversion of the Series A Preferred
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
nonassessable shares of Common Stock at such adjusted
Conversion Price.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for any declared and unpaid
dividends on the Series A Preferred Stock surrendered for
conversion or on the Common Stock delivered upon conversion.
(iv) All shares of Series A Preferred Stock which shall
have been surrendered for conversion as herein provided shall
no longer be deemed to be outstanding and all rights with
respect to such shares, including the rights, if any, to
receive notices and to vote, shall immediately cease and
terminate on the Conversion Date, except only the right of the
holders thereof to receive shares of Common Stock in exchange
therefor and payment of any declared and unpaid dividends
thereon. Any shares of Series A Preferred Stock so converted
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shall be retired and cancelled and shall not be reissued, and
the Corporation may from time to time take such appropriate
action as may be necessary to reduce the authorized Series A
Preferred Stock accordingly.
(v) If the conversion is in connection with an
underwritten offering of securities registered pursuant to the
Securities Act of 1933, as amended, the conversion may at the
option of any holder tendering Series A Preferred Stock for
conversion, be conditioned upon the closing with the
underwriter of the sale of securities pursuant to such
offering, in which event the person(s) entitled to receive the
Common Stock issuable upon such conversion of the Series A
Preferred Stock shall not be deemed to have converted such
Series A Preferred Stock until immediately prior to the closing
of the sale of securities.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the date on
which a share of a series of Preferred Stock was first issued (such
date to be referred to as the "Original Issue Date" for such series
of the Preferred Stock) effect a subdivision of the outstanding
Common Stock, the Conversion Price then in effect immediately before
that subdivision shall be proportionately decreased. If the
Corporation shall at any time or from time to time after the Original
Issue Date for a series of the Preferred Stock combine the
outstanding shares of Common Stock, the Conversion Price then in
effect immediately before the combination shall be proportionately
increased. Any adjustment under this paragraph shall become effective
at the close of business on the date the subdivision or combination
becomes effective.
(e) Adjustment for Certain Dividends and Distributions. In
the event the Corporation at any time, or from time to time after the
Original Issue Date for a series of Preferred Stock shall make or
issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such
event the Conversion Price for such series of Preferred Stock then in
effect shall be decreased as of the time of such issuance or, in the
event such a record date shall have been fixed, as of the close of
business on such record date, by multiplying the Conversion Price for
such series of Preferred Stock then in effect by a fraction:
(1) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior
to the time of such issuance or the close of business on such
record date, and
(2) the denominator of which shall be the total number
of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on
such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution;
provided, however, if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made
on the date fixed therefor, the Conversion Price for such series of
Preferred Stock shall be recomputed accordingly as of the close of
business on such record date and thereafter the Conversion Price for
such series of Preferred Stock shall be adjusted pursuant to this
paragraph as of the time of actual payment of such dividends or
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distributions.
(f) Adjustments for Other Dividends and Distributions. In the
event the Corporation at any time or from time to time after the
Original Issue Date for a series of Preferred Stock shall make or
issue, or fix a record date for the determination of holders of
Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common
Stock, then and in each such event provision shall be made so that
the holders of such series of Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common
Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Preferred Stock
been converted into Common Stock on the date of such event and had
they thereafter, during the period from the date of such event to and
including the conversion date, retained such securities receivable by
them as aforesaid during such period giving application to all
adjustments called for during such period, under this paragraph with
respect to the rights of the holders of the Preferred Stock.
(g) Adjustment for Reclassification, Exchange, or
Substitution. If the Common Stock issuable upon the conversion of the
Preferred Stock shall be changed into the same or a different number
of shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided for
above, or a reorganization, merger, consolidation, or sale of assets
provided for below), then and in each such event the holder of each
such share of Preferred Stock shall have the right thereafter to
convert such share into the kind and amount of shares of stock and
other securities and property receivable upon such reorganization,
reclassification, or other change, by holders of the number of shares
of Common Stock into which such shares of Preferred Stock might have
been converted immediately prior to such reorganization,
reclassification, or change, all subject to further adjustment as
provided herein.
(h) Adjustment for Merger or Reorganization, etc. In case of
any consolidation or merger of the Corporation with or into another
corporation or the sale of all or substantially all of the assets of
the Corporation to another corporation (other than a consolidation,
merger or sale which is treated as a liquidation pursuant to
Subsection 3(c)), each share of Series A Preferred Stock shall
thereafter be convertible into the kind and amount of shares of stock
or other securities or property to which a holder of the number of
shares of Common Stock of the Corporation deliverable upon conversion
of such Series A Preferred Stock would have been entitled upon such
consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors)
shall be made in the application of the provisions in this Section 5
set forth with respect to the rights and interests thereafter of the
holders of the Series A Preferred Stock, to the end that the
provisions set forth in this Section 5 (including provisions with
respect to changes in and other adjustments of the Conversion Price)
shall thereafter be applicable, as nearly as reasonably may be, in
relation to any shares of stock or other property thereafter
deliverable upon the conversion of the Series A Preferred Stock.
(i) No Impairment. The Corporation will not, by amendment of
its Articles of Organization or through any reorganization, transfer
of assets, consolidation, merger,
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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 Section 5 and in the
taking of all such action as may be necessary or appropriate in order
to protect the Conversion Rights of the holders of the Series A
Preferred Stock against impairment.
(j) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to
this Section 5, the Corporation at its expense shall promptly compute
such adjustment or readjustment in accordance with the terms hereof
and furnish to each holder of Series A 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
Corporation shall, upon the written request at any time of any holder
of Series A Preferred Stock, furnish or cause to be furnished to such
holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii)
the number of shares of Common Stock and the amount, if any, of other
property which then would be received upon the conversion of Series A
Preferred Stock.
(k) Notice of Record Date. In the event:
(i) that the Corporation declares a dividend (or any
other distribution) on its Common Stock payable in Common Stock
or other securities of the Corporation;
(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its
outstanding shares of Common Stock or a stock dividend or stock
distribution thereon), or of any consolidation or merger of the
Corporation into or with another corporation, or of the sale of
all or substantially all of the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution,
liquidation or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal
office or at the office of the transfer agent of the Series A
Preferred Stock, and shall cause to be mailed to the holders of
the Series A Preferred Stock at their last addresses as shown
on the records of the Corporation or such transfer agent, at
least five (5) days prior to the record date specified in
(A) below or twenty (20) days before the date specified in
(B) below, a notice stating
(A) the record date of such dividend,
distribution, subdivision or combination, or, if a record
is not to be taken, the date as of which the holders of
Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be
determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or
winding up is expected to become effective, and the date
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as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable
upon such reclassification, consolidation, merger, sale,
dissolution or winding up.
6. Mandatory Conversion.
(a) If the Closing Price of the Common Stock shall exceed one
hundred fifty percent (150%) of the Conversion Price for 20 consecutive
Trading Days, then at such time all the outstanding shares of Series A
Preferred Stock shall automatically convert into shares of Common Stock on
the basis set forth in Section 5.
(b) All holders of record of shares of Series A Preferred Stock
will be given written notice within ten (10) days of the date of mandatory
conversion of all such shares of Series A Preferred Stock pursuant to this
Section 6. Such notice will be sent by first class or registered mail,
postage prepaid, to each record holder of Series A Preferred Stock at such
holder's address last shown on the records of the transfer agent for the
Series A Preferred Stock (or the records of the Corporation, if it serves
as its own transfer agent). Within ten (10) days of receipt of such notice
of mandatory conversion, each holder of shares of Series A Preferred Stock
shall surrender his or its certificate or certificates for all such shares
to the Corporation at the place designated in such notice, and shall
thereafter receive certificates for the number of shares of Common Stock
into which such holder is entitled pursuant to this Section 6. On the date
of mandatory conversion, all rights with respect to the Series A Preferred
Stock so converted, including the rights, if any, to receive notices and
vote, will terminate, except only the rights of the holders thereof, upon
surrender of their certificate or certificates therefor, to receive
certificates for the number of shares of Common Stock into which such
Series A Preferred Stock has been converted, and payment of any declared
but unpaid dividends thereon. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly authorized in writing. As soon as practicable after the
date of such mandatory conversion and the surrender of the certificate or
certificates for Series A Preferred Stock, the Corporation shall cause to
be issued and delivered to such holder, or on his or its written order, a
certificate or certificates for the number of full shares of Common Stock
issuable on such conversion in accordance with the provisions hereof and
cash as provided in Subsection 5(b) in respect of any fraction of a share
of Common Stock otherwise issuable upon such conversion.
(c) All certificates evidencing shares of Series A Preferred Stock
which are required to be surrendered for conversion in accordance with the
provisions hereof shall, from and after the date such certificates are so
required to be surrendered, be deemed to have been retired and cancelled
and the shares of Series A Preferred Stock represented thereby converted
into Common Stock for all purposes, notwithstanding the failure of the
holder or holders thereof to surrender such certificates on or prior to
such date. The Corporation may thereafter take such appropriate action as
may be necessary to reduce the authorized Series A Preferred Stock
accordingly.
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7. Holder Redemption. The holders of shares of Series A Preferred
Stock shall have no redemption rights for those shares, and are subject to
redemption at the option of the Corporation as set forth in Section 8
below.
8. Corporation Optional Redemption. On the third (3rd) anniversary
from the Original Issue Date of the shares of Series A Preferred Stock, the
Corporation may elect, in its sole and absolute discretion, to redeem all
(but not less than all) of the outstanding shares of Series A Preferred
Stock for an amount equal to the Original Purchase Price (subject to
appropriate equitable adjustment for any stock splits, stock dividends,
combinations, reorganizations, reclassifications, recapitalizations or
other similar events affecting the shares of Series A Preferred Stock) plus
accrued and unpaid dividends (the "Redemption Price"). The aggregate
Redemption Price shall be payable, in cash, out of funds legally available
therefor, to the respective holders of the Series A Preferred Stock on the
date upon which the Series A Preferred Stock is redeemed under this Section
8, shall be the third (3rd) anniversary of the Original Issue Date, unless
such date shall fall on a weekend or holiday as recognized in the
Commonwealth of Massachusetts in which case such date shall fall on the
next business day (the "Redemption Date").
(a) Redemption Mechanics. At least 30 days prior to the
Redemption Date, written notice (the "Redemption Notice") shall be
given by the Corporation by delivery in person, certified or
registered mail, return receipt requested, overnight delivery,
telecopier or telex, to each holder of record (at the close of
business on the business day next preceding the day on which the
Redemption Notice is given) of shares of Series A Preferred Stock
notifying such holder of the redemption and specifying the applicable
Redemption Price, such Redemption Date, the number of shares of
Series A Preferred Stock to be redeemed from such holder and the
place where said Redemption Price shall be payable. The Redemption
Notice shall be addressed to each holder at his address as shown by
the records of the Corporation. From and after the close of business
on the Redemption Date, unless there shall have been a default in the
payment of the Redemption Price, all rights of holders of shares of
Series A Preferred Stock (except the right to receive the applicable
Redemption Price) shall cease with respect to the shares to be
redeemed on such Redemption Date, and such shares shall not
thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever.
(b) Surrender of Certificates. Each holder of shares of
Series A Preferred Stock to be redeemed shall surrender the
certificate or certificates representing such shares to the
Corporation, duly assigned or endorsed for transfer to the
Corporation (or accompanied by duly executed stock powers relating
thereto), or, in the event the certificate or certificates are lost,
stolen or missing, shall deliver an affidavit of loss, at the
principal executive office of the Corporation or such other place as
the Corporation may from time to time designate by notice to the
holders of Series A Preferred Stock, and each surrendered certificate
shall be canceled and retired and the Corporation shall thereafter
make payment of the Redemption Price by certified check or wire
transfer.
(c) Holder's Option to Convert. In the event the Corporation
elects to redeem the Series A Preferred Stock in accordance with the
terms of this Section 8, the holder of any such shares shall have the
right to convert such shares into fully paid, non-assessable shares
10
of Common Stock in accordance with the provisions of Section 5(c)
above, at any time on or prior to the twentieth (20th) day following
the date on which the Redemption Notice is first mailed, and no share
of Series A Preferred Stock with respect to which a holder has timely
complied with the certificate delivery and other requirements of
Section 5(c) shall be subject to redemption pursuant to this
Section 8. Notwithstanding any other provision herein contained, all
Conversion Rights shall terminate if not exercised on or prior to the
twentieth (20th) day following the date on which the Redemption
Notice is first mailed.
11
SIGNED UNDER THE PENALTIES OF PERJURY, this 7th day of May , 2004,
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/s/ Peter J. Murphy , *President/XXXXXXXXXXXXXXX,
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/s/ Edward D. Kutchin , *Clerk/XXXXXXXXXXXXXXXXXXX,
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* Delete the inapplicable words.
THE COMMONWEALTH OF MASSACHUSETTS
CERTIFICATE OF VOTE OF DIRECTORS
ESTABLISHING A SERIES OF A CLASS OF STOCK
(General Laws, Chapter 156B, Section 26)
==============================
I hereby approve the within Certificate of Vote of Directors and, the
filing fee in the amount of $ ________ having been paid, said certificate
is deemed to have been filed with me this ______ day of ________ , 20__.
Effective date: ___________________________
WILLIAM FRANCIS GALVIN
Secretary of the Commonwealth
TO BE FILED IN BY CORPORATION
Photocopy of document to be sent to:
Edward D. Kutchin, Esq.
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Kuthchin & Rufo, P.C.
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155 Federal Street, 17th Floor
Boston, MA 02110-1727
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Telephone: (617) 542-3000
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