EXHIBIT 3.7
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
[ FILING RECEIPT APPEARS HERE ]
N. Y. S. DEPARTMENT OF STATE
DIVISION OF CORPORATIONS AND STATE RECORDS ALBANY, NY 12231-0001
FILING RWBIPT
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ENTITY NAME: INTEGRATED PERFORMANCE SYSTEMS, INC.
DOCUMENT TYPE: AMENDMENT (DOMESTIC BUSINESS) COUNTY: SUFF
STOCK
SERVICE COMPANY: * * NO SERVICE COMPANY * * SERVICE CODE: 00
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FILED: 2/10/2003 DURATION: ********* CASH#:030210000569 FILM #:030210000539
ADDRESS FOR PROCESS
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REGISTERED AGENT
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STOCK: 110000000 PV [ STATE OF NEW YORK DEPARTMENT
OF STATE SEAL APPEARS HERE ]
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FILER FEES 60.00 PAYMENTS 60.00
----- ---- -------
FILING 60.00 CASH 0.00
P. RONALD ALLEN TAX 0.00 CHECK 60.00
INTEGRATED PBXFORMANCE SYSTEMS INC. CERT 0.00 CHARGE 0.00
17300 N. DALLAS PKWY STE. 2040 COPIES 0.00 DRAWDOWN 0.00
DALLAS, TX 75248 HANDLING 0.00 BILLED 0.00
REFUND 0.00
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DOS-1025 (11/89)
CERTIFICATE OF AMENDMENT
OF THE CERTIFICATE OF INCORPORATION
OF INTEGRATED PERFORMANCE SYSTEMS, INC.
UNDER SECTION 805 OF THE BUSINESS CORPORATION LAW
The undersigned, being the President and the Secretary of Integrated
Performance Systems, Inc., does hereby certify and set forth:
I. The name of the Corporation is Integrated Performance Systems,
Inc. The name under which the Corporation was formed is Espo's Inc.
II. The date its Certificate of Incorporation was filed by the
Department of State is the 29th day of November, 1990
III. The Certificate of Incorporation is hereby amended, pursuant to
Section 502(d) of the Business Corporation Law, by the addition of the
following provisions fixing the number, designation, relative rights,
preferences, and limitations of 50,000 shares of the 10,000,000 shares of
Preferred Stock authorized by the Certificate of Incorporation, as fixed by
the Board of Directors pursuant to authority vested in it by the Certificate
of Incorporation, as follows:
The Series A Preferred Stock, $0.01 par value ("Series A Preferred") is
to consist of 10,000 shares, of which the rights and preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions of such rights and
preferences shall be as follows:
1. Dividends. The holders of Series A Preferred shall be
entitled to receive, when and as declared by the Board of Directors out
of the funds of the Corporation, legally available therefor, and the
Corporation shall be bound to pay thereon, payable in cash only,from
said proceeds, at the annual rate of eight percent (8%) of the
Liquidation Value per annum per share of Series A Preferred, payable
monthly, for the calendar year 2000, with the dividend rate increasing
to ten percent (10%) for 2001, twelve percent (12%) for 2002, fourteen
percent (14%) for 2003 and thereafter. Such dividends shall be paid in
preference to the dividends on any other class of capital stock, or
series thereof. Such dividends shall commence to accrue on the
effective date of the agreement to issue the stock and shall be
available to holders of record on the record date as fixed by the board
of directors of the Corporation. Such dividends shall be cumulative,
so that if at any time, dividends upon the outstanding Series A
Preferred shall not have been paid or declared and a sum sufficient for
the payment thereof set apart for such payment, the amount of the
deficiency shall accrue and shall bear dividends at the annual rate of
twelve percent (12%) per annum and the aggregate deficiency shall be
fully paid, or dividends in such amount declared and a sum sufficient
for the payment thereof set apart for such payment, for all prior
periods before any sum or sums shall be paid or set aside as dividends
for any other class, or series thereof, of capital stock of the
corporation. If the dividend on the Series A Preferred for any
dividend period shall not have been paid or set apart in full, no asset
which is by law available for the payment of dividends shall be paid or
set aside for the purchase or redemption of any class of capital stock,
or any series thereof, of the corporation.
2. Voting Rights. The Series A Preferred shall have the right
to vote on any or all matters that the holders of Common Stock are
entitled to vote on. Each share of Series A Preferred shall have 1,000
votes; that is, one vote for each dollar of Liquidation Value.
3. Redemption.
a. Subject to the other provisions of this Paragraph 3
and applicable law, the corporation shall have the right, but
not the obligation, to redeem the Series A Preferred at any
time at a price equal to the Liquidation Value. If any such
notice of redemption shall have been duly given or if the
Corporation shall have granted to a bank or trust company an
irrevocable written authorization promptly to give or
complete such notice and pay all amounts due to holders of
shares (as evidenced by a list of holders of such shares
certified by the president or a vice president and by the
secretary or an assistant secretary of the Corporation)
called for redemption and if, on or before the redemption
date specified therein, all funds necessary for such
redemption (including an amount equal to the accumulated and
unpaid dividends thereon to the date fixed for redemption)
shall have been deposited by the Corporation with such bank
or trust company designated in such notice, in trust for the
pro rata benefit of the holders of the shares so called for
redemption, then, notwithstanding that any certificate for
shares so called for redemption shall not have been
surrendered for cancellation, from and after the time of such
deposit (or from and after the redemption date if such notice
shall fail to state the holders of the shares called for
redemption may receive their Redemption Price at any time
after such deposit), all shares with respect to which such
deposit shall have been made shall no longer be deemed to be
outstanding and all rights with respect to such shares shall
cease and terminate, except for the right of the holders of
the certificates, upon surrender thereof, to receive the
Redemption Price out of the funds so deposited, without
interest. Any interest accrued on such funds shall be paid
to the Corporation from time to time.
b. Any shares of Series A Preferred redeemed,
purchased or otherwise acquired by the Corporation shall be
deemed canceled and may thereafter be reissued as Series A
Preferred or any other series of Preferred Stock at a par
value set by the Board of Directors.
4. Foreclosure.
a. The Corporation assigns a secured interest and a
perfected lien position on all assets of the corporation in
order to secure the redemption of the Series A Preferred.
This security interest is not subordinated to any other class
or series of stock.
b. If dividends payable on the Series A Preferred
shall be in default in an aggregate amount equal to three
full months' dividends, the holders thereof shall have the
right, to be exercised only upon the affirmative vote of the
holders of the majority of the shares of Series A Preferred,
to foreclose on their security interest in the assets after
the notice and the notice time period legally required by the
appropriate jurisdiction for the asset classification
intended to be foreclosed. Proceeds remaining after the
foreclosure sale and related expenses (including attorney's
fees) shall be distributed to the holders of the Series A
Preferred pro-rata in accordance with the number of shares
held by each. After payment in full to the holders of Series
A Preferred of the amount distributable to them as herein
provided, the excess, if any, shall be remitted to the
corporation.
5. Conversion No holder of Series A Preferred shall have the
right to convert the shares of Series A Preferred held by such holder
into fully paid and nonassessable shares of Common Stock of the
Corporation.
6. Priority in Event of Dissolution and Liquidation or Sale of
Assets.
a. Subject to the remaining provisions of this Paragraph 5,
in the event of any sale of all or substantially all of the assets
of the Corporation or any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or otherwise
(a "Liquidating Event"), after payment or provision for payment of
the debts and other liabilities of the corporation, the holders of
Series A Preferred shall be entitled to receive, out of the
remaining net assets of the Corporation, an amount equal to
$1,000.00 in cash, plus all accumulated but unpaid dividends (the
"Liquidation Value"), for each outstanding share of Series A
Preferred, before any distribution or payment shall be made to the
holders of Common Stock of the corporation. Upon the occurrence
of any Liquidating Event, and after payment or provisions for
payment of the debts and other liabilities of the Corporation, if
the assets of the Corporation available for distribution to
shareholders shall be insufficient to permit the payment to the
holders of Series A, B, C and D Preferred of an amount equal to
the Liquidation Value per share, then all the remaining assets of
the Corporation shall be distributed ratably among the holders of
Series A, B, C and D Preferred then outstanding according to the
number of shares held by each. After payment in full to the
holders of Series A Preferred of the amount distributable to them
as herein provided, the holders of any other junior capital stock
shall be entitled, to the exclusion of the holders of Series A
Preferred, to share ratably in the remaining assets of the
Corporation in accordance with their respective rights.
b. Neither the consolidation nor merger of the corporation
with or into any other corporation shall be deemed to be a sale of
all or substantially all of the assets of the Corporation or a
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or otherwise, within the meaning of
this Paragraph 5.
c. No provision of this Paragraph 5 shall in any manner,
prior to any sale of all or substantially all of the assets of the
corporation or any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or otherwise create
or be considered or deemed to create any restriction upon the
surplus of the Corporation or prohibit the payment of dividends on
the capital stock of the corporation out of the funds of the
Corporation legally available therefor, nor shall any such
restriction or prohibition be in any manner implied from the
provisions of this Paragraph 5.
7. Shareholder's Agreement. The Series A Preferred Shareholders
shall notify the Corporation of any proposed transfer of the Series A
Preferred and shall give the Corporation a right of first refusal on a
proposed transfer of the Series A Preferred.
a. Notice of transfer of Series A Preferred shall be given
by mailing such notice not less than twenty (20) nor more than
fifty (50) days prior to the date fixed for such proposed transfer
to the Corporation of shares of Series A Preferred to be so
transferred, by first class mail, postage prepaid. If less than
all of the outstanding Series A Preferred is to be transferred,
the redemption may be made pro rata, by lot or in such other
equitable manner as may be prescribed by resolution of the Board
of directors.
b. Subject to the foregoing and to the provisions contained
in this Paragraph 6, the Board of directors shall have full power
and authority to prescribe the terms and conditions upon which
Series A Preferred shall be transferred from time to time.
The Series B Preferred Stock, $0.01 par value ("Series B Preferred") is
to consist of 10,000 shares, of which the rights and preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions of such rights and
preferences shall be as follows:
1. Dividends. The holders of Series B Preferred shall be
entitled to receive, when and as declared by the Board of Directors out
of the funds of the Corporation, legally available therefor, and the
Corporation shall be bound to pay thereon, payable in cash only, from
said proceeds, at the annual rate of six percent (6%) of the
Liquidation Value per annum per share of Series B Preferred, payable
quarterly. Such dividends shall be paid in preference to the dividends
on any other class of capital stock, or series thereof except Series A
Preferred. Such dividends shall commence to accrue on the effective
date of the agreement to issue the stock and shall be available to
holders of record on the record date as fixed by the board of directors
of the Corporation. Such dividends shall be cumulative, so that if at
any time, dividends upon the outstanding Series B Preferred shall not
have been paid or declared and a sum sufficient for the payment thereof
set apart for such payment, the amount of the deficiency shall accrue
and shall bear dividends at the annual rate of twelve percent (12%) per
annum and the aggregate deficiency shall be fully paid, or dividends in
such amount declared and a sum sufficient for the payment thereof set
apart for such payment, for all prior periods before any sum or sums
shall be paid or set aside as dividends for any other class, or series
thereof, of capital stock of the corporation. If the dividend on the
Series B Preferred for any dividend period shall not have been paid or
set apart in full, no asset which is by law available for the payment
of dividends shall be paid or set aside for the purchase or redemption
of any class of capital stock, or any series thereof, of the
corporation.
2. Voting Rights. The Series B Preferred shall not have the
right to vote on any or all matters that the holders of Common Stock
are entitled to vote on.
3. Redemption.
a. Subject to the other provisions of this Paragraph 3 and
applicable law, the corporation shall have the right, but not the
obligation, to redeem the Series B Preferred at any time at a
price equal to the Liquidation Value. If any such notice of
redemption shall have been duly given or if the Corporation shall
have granted to a bank or trust company an irrevocable written
authorization promptly to give or complete such notice and pay all
amounts due to holders of shares (as evidenced by a list of
holders of such shares certified by the president or a vice
president and by the secretary or an assistant secretary of the
Corporation) called for redemption and if, on or before the
redemption date specified therein, all funds necessary for such
redemption (including an amount equal to the accumulated and
unpaid dividends thereon to the date fixed for redemption) shall
have been deposited by the Corporation with such bank or trust
company designated in such notice, in trust for the pro rata
benefit of the holders of the shares so called for redemption,
then, notwithstanding that any certificate for shares so called
for redemption shall not have been surrendered for cancellation,
from and after the time of such deposit (or from and after the
redemption date if such notice shall fail to state the holders of
the shares called for redemption may receive their Redemption
Price at any time after such deposit), all shares with respect to
which such deposit shall have been made shall no longer be deemed
to be outstanding and all rights with respect to such shares shall
cease and terminate, except for the right of the holders of the
certificates, upon surrender thereof, to receive the Redemption
Price out of the funds so deposited, without interest. Any
interest accrued on such funds shall be paid to the Corporation
from time to time.
b. Any shares of Series B Preferred redeemed, purchased or
otherwise acquired by the Corporation shall be deemed canceled and
may thereafter be reissued as Series B Preferred or any other
series of Preferred Stock at a par value set by the Board of
Directors.
4. Conversion A holder of Series B Preferred shall have the
right to convert the shares of Series B Preferred held by such holder
into fully paid and nonassessable shares of Common Stock of the
Corporation at the rate of $3.00 per common share for a period of five
years after issuance of the Series B Preferred shares to the holder.
Notice of intent to convert shall be given in a form determined by the
Board of Directors.
5. Priority in Event of Dissolution and Liquidation or Sale of
Assets.
a. Subject to the remaining provision of this Paragraph 5,
in the event of any sale of all or substantially all of the assets
of the Corporation or any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or otherwise
(a "Liquidating Event"), after payment or provision for payment of
the debts and other liabilities of the corporation, the holders of
Series B Preferred shall be entitled to receive, out of the
remaining net assets of the Corporation, an amount equal to
$1,000.00 in cash, plus all accumulated but unpaid dividends (the
"Liquidation Value"), for each outstanding share of Series B
Preferred, before any distribution or payment shall be made to the
holders of Common Stock of the corporation. Upon the occurrence
of any Liquidating Event, and after payment or provisions for
payment of the debts and other liabilities of the Corporation, if
the assets of the Corporation available for distribution to
shareholders shall be insufficient to permit the payment to the
holders of Series A, B, C and D Preferred of an amount equal to
the Liquidation Value per share, then all the remaining assets of
the Corporation shall be distributed ratably among the holders of
Series A, B, C and D Preferred then outstanding according to the
number of shares held by each. After payment in full to the
holders of Series B Preferred of the amount distributable to them
as herein provided, the holders of any other junior capital stock
shall be entitled, to the exclusion of the holders of Series B
Preferred, to share ratably in the remaining assets of the
Corporation in accordance with their respective rights.
b. Neither the consolidation nor merger of the corporation
with or into any other corporation shall be deemed to be a sale of
all or substantially all of the assets of the Corporation or a
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or otherwise, within the meaning of
this Paragraph 5.
c. No provision of this Paragraph 5 shall in any manner,
prior to any sale of all or substantially all of the assets of the
corporation or any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or otherwise create
or be considered or deemed to create any restriction upon the
surplus of the Corporation or prohibit the payment of dividends on
the capital stock of the corporation out of the funds of the
Corporation legally available therefor, nor shall any such
restriction or prohibition be in any manner implied from the
provisions of this Paragraph 5.
6. Shareholder's Agreement. The Series B Preferred Shareholders
shall notify the Corporation of any proposed transfer of the Series B
Preferred and shall give the Corporation a right of first refusal on a
proposed transfer of the Series B Preferred.
a. Notice of transfer of Series B Preferred shall be given
by mailing such notice not less than twenty (20) nor more than
fifty (50) days prior to the date fixed for such proposed transfer
to the Corporation of shares of Series B Preferred to be so
transferred, by first class mail, postage prepaid. If less than
all of the outstanding Series B Preferred is to be transferred,
the redemption may be made pro rata, by lot or in such other
equitable manner as may be prescribed by resolution of the Board
of directors.
b. Subject to the foregoing and to the provisions contained
in this Paragraph 6, the Board of directors shall have full power
and authority to prescribe the terms and conditions upon which
Series B Preferred shall be transferred from time to time.
The Series C Preferred Stock, $0.01 par value ("Series C Preferred") is
to consist of 20,000 shares, of which the rights and preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions of such rights and
preferences shall be as follows:
1. Dividends. The holders of Series C Preferred shall be
entitled to receive, when and as declared by the Board of Directors out
of the funds of the Corporation, legally available therefor, and the
Corporation shall be bound to pay thereon, payable in cash only, from
said proceeds, at the annual rate of twelve percent (12%) of the
Liquidation Value per annum per share of Series C Preferred, payable
monthly. Such dividends shall be paid in preference to the holders of
any other class of capital stock, or series thereon, except Series A
and B Preferred. Such dividends shall commence to accrue on the
effective date of the agreement to issue the stock and shall be
available to holders of record on the record date as fixed by the board
of directors of the Corporation. Such dividends shall be cumulative,
so that if at anytime, dividends upon the outstanding Series C
Preferred shall not have been paid or declared and a sum sufficient for
the payment thereof set apart for such payment, the amount of the
deficiency shall accrue and shall bear dividends at the annual rate of
twelve percent (12%) per annum and the aggregate deficiency shall be
fully paid, or dividends in such amount declared and a sum sufficient
for the payment thereof set apart for such payment, for all prior
periods before any sum or sums shall be paid or set aside as dividends
for any other class, or series thereof, of capital stock of the
corporation. If the dividend on the Series C Preferred for any
dividend period shall not have been paid or set apart in full, no asset
which is by law available for the payment of dividends shall be paid or
set aside for the purchase or redemption of any class of capital stock,
or any series thereof, of the corporation.
2. Voting Rights. The Series C Preferred shall have the right
to vote on any or all matters that the holders of Common Stock are
entitled to vote on. Each share of Series C Preferred shall have 1,000
votes; that is, one vote for each dollar of Liquidation Value.
3. Redemption.
a. Subject to the other provisions of this Paragraph 3 and
applicable law, the corporation shall have the right, but not the
obligation, to redeem the Series C Preferred at any time at a
price equal to the Liquidation Value. If any such notice of
redemption shall have been duly given or if the Corporation shall
have granted to a bank or trust company an irrevocable written
authorization promptly to give or complete such notice and pay all
amounts due to holders of shares (as evidenced by a list of
holders of such shares certified by the president or a vice
president and by the secretary or an assistant secretary of the
Corporation) called for redemption and if, on or before the
redemption date specified therein, all funds necessary for such
redemption (including an amount equal to the accumulated and
unpaid dividends thereon to the date fixed for redemption) shall
have been deposited by the Corporation with such bank or trust
company designated in such notice, in trust for the pro rata
benefit of the holders of the shares so called for redemption,
then, notwithstanding that any certificate for shares so called
for redemption shall not have been surrendered for cancellation,
from and after the time of such deposit (or from and after the
redemption date if such notice shall fail to state the holders of
the shares called for redemption may receive their Redemption
Price at any time after such deposit), all shares with respect to
which such deposit shall have been made shall no longer be deemed
to be outstanding and all rights with respect to such shares shall
cease and terminate, except for the right of the holders of the
certificates, upon surrender thereof, to receive the Redemption
Price out of the funds so deposited, without interest. Any
interest accrued on such funds shall be paid to the Corporation
from time to time.
b. Any shares of Series C Preferred redeemed, purchased or
otherwise acquired by the Corporation shall be deemed canceled and
may thereafter be reissued as Series C Preferred or any other
series of Preferred Stock at a par value set by the Board of
Directors.
4. Foreclosure.
a. The Corporation assigns a secured interest and a
perfected lien position on all of the common stock and assets of
Varga Investments Inc. in order to secure the redemption of the
Series C Preferred. This security interest is not subordinated to
any other class or series of stock.
b. If the dividends payable on the Series C Preferred shall
be in default in an aggregate amount equal to three full months'
dividends, the holders thereof shall have the right, to be
exercised only upon the affirmative vote of the holders of the
majority of the shares of Series C Preferred, to foreclose on
their security interest in the assets after the notice and the
notice time period legally required by the appropriate
jurisdiction for the asset classification intended to be
foreclosed. Proceeds remaining after the foreclosure sale and
related expenses (including attorney's fees) shall be distributed
to the holders of the Series C Preferred pro-rata in accordance
with the number of shares held by each. After payment in full to
the holders of Series C Preferred of the amount distributable to
them as herein provided, the excess, if any, shall be remitted to
the corporation.
5. Conversion No holder of Series C Preferred shall have the
right to convert the shares of Series C Preferred held by such holder
into fully paid and nonassessable shares of Common Stock of the
Corporation.
6. Priority in Event of Dissolution and Liquidation or Sale of
Assets.
a. Subject to the remaining provision of this Paragraph 5,
in the event of any sale of all or substantially all of the assets
of the Corporation or any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or otherwise
(a "Liquidating Event"), after payment or provision for payment of
the debts and other liabilities of the corporation, the holders of
Series C Preferred shall be entitled to receive, out of the
remaining net assets of the Corporation, an amount equal to
$1,000.00 in cash, plus all accumulated but unpaid dividends (the
"Liquidation Value"), for each outstanding share of Series C
Preferred, before any distribution or payment shall be made to the
holders of Common Stock of the corporation. Upon the occurrence
of any Liquidating Event, and after payment or provisions for
payment of the debts and other liabilities of the Corporation, if
the assets of the Corporation available for distribution to
shareholders shall be insufficient to permit the payment to the
holders of Series A, B, C and D Preferred of an amount equal to
the Liquidation Value per share, then all the remaining assets of
the Corporation shall be distributed ratably among the holders of
Series A, B, C and D Preferred then outstanding according to the
number of shares held by each. After payment in full to the
holders of Series C Preferred of the amount distributable to them
as herein provided, the holders of any other junior capital stock
shall be entitled, to the exclusion of the holders of Series C
Preferred, to share ratably in the remaining assets of the
Corporation in accordance with their respective rights.
b. Neither the consolidation nor merger of the corporation
with or into any other corporation shall be deemed to be a sale of
all or substantially all of the assets of the Corporation or a
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or otherwise, within the meaning of
this Paragraph 5.
c. No provision of this Paragraph 5 shall in any manner,
prior to any sale of all or substantially all of the assets of the
corporation or any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or otherwise create
or be considered or deemed to create any restriction upon the
surplus of the Corporation or prohibit the payment of dividends on
the capital stock of the corporation out of the funds of the
Corporation legally available therefor, nor shall any such
restriction or prohibition be in any manner implied from the
provisions of this Paragraph 5.
7. Shareholder's Agreement. The Series C Preferred Shareholders
shall notify the Corporation of any proposed transfer of the Series C
Preferred and shall give the Corporation a right of first refusal on a
proposed transfer of the Series C Preferred.
a. Notice of transfer of Series C Preferred shall be given
by mailing such notice not less than twenty (20) nor more than
fifty (50) days prior to the date fixed for such proposed transfer
to the Corporation of shares of Series C Preferred to be so
transferred, by first class mail, postage prepaid. If less than
all of the outstanding Series C Preferred is to be transferred,
the redemption may be made pro rata, by lot or in such other
equitable manner as may be prescribed by resolution of the Board
of directors.
b. Subject to the foregoing and to the provisions contained
in this Paragraph 6, the Board of directors shall have full power
and authority to prescribe the terms and conditions upon which
Series C Preferred shall be transferred from time to time.
The Series D Preferred Stock, $0.01 par value ("Series D Preferred") is
to consist of 10,000 shares, of which the rights and preferences and
relative, participating, optional or other special rights, and the
qualifications, limitations or restrictions of such rights and
preferences shall be as follows:
1. Dividends. The holders of Series D Preferred shall be
entitled to receive, when and as declared by the Board of Directors out
of the funds of the Corporation, legally available therefor, and the
Corporation shall be bound to pay thereon, payable in cash only, from
said proceeds, at the annual rate of four percent (4%) of the
Liquidation Value per annum per share of Series D Preferred, payable
quarterly. Such dividends shall be paid in preference to the holders
of any class of common stock. Such dividends shall commence to accrue
on the effective date of the agreement to issue the stock and shall be
available to holders of record on the record date as fixed by the board
of directors of the Corporation. Such dividends shall be cumulative,
so that if at anytime, dividends upon the outstanding Series D
Preferred shall not have been paid or declared and a sum sufficient for
the payment thereof set apart for such payment, the amount of the
deficiency shall accrue and shall bear dividends at the annual rate of
four percent (4%) per annum and the aggregate deficiency shall be fully
paid, or dividends in such amount declared and a sum sufficient for the
payment thereof set apart for such payment, for all prior periods
before any sum or sums shall be paid or set aside as dividends for any
other class, or series thereof, of capital stock of the corporation.
If the dividend on the Series D Preferred for any dividend period shall
not have been paid or set apart in full, no asset which is by law
available for the payment of dividends shall be paid or set aside for
the purchase or redemption of any class of capital stock, or any series
thereof, of the corporation.
2. Voting Rights. The Series D Preferred shall not have the
right to vote on any or all matters that the holders of Common Stock
are entitled to vote on.
3. Redemption.
a. Subject to the other provisions of this Paragraph 3 and
applicable law, the corporation shall have the right, but not the
obligation, to redeem the Series D Preferred at any time after
five years from the effective date of the agreement to issue the
stock at a price equal to the Liquidation Value. If any such
notice of redemption shall have been duly given or if the
Corporation shall have granted to a bank or trust company an
irrevocable written authorization promptly to give or complete
such notice and pay all amounts due to holders of shares (as
evidenced by a list of holders of such shares certified by the
president or a vice president and by the secretary or an assistant
secretary of the Corporation) called for redemption and if, on or
before the redemption date specified therein, all funds necessary
for such redemption (including an amount equal to the accumulated
and unpaid dividends thereon to the date fixed for redemption)
shall have been deposited by the Corporation with such bank or
trust company designated in such notice, in trust for the pro rata
benefit of the holders of the shares so called for redemption,
then, notwithstanding that any certificate for shares so called
for redemption shall not have been surrendered for cancellation,
from and after the time of such deposit (or from and after the
redemption date if such notice shall fail to state the holders of
the shares called for redemption may receive their Redemption
Price at any time after such deposit), all shares with respect to
which such deposit shall have been made shall no longer be deemed
to be outstanding and all rights with respect to such shares shall
cease and terminate, except for the right of the holders of the
certificates, upon surrender thereof, to receive the Redemption
Price out of the funds so deposited, without interest. Any
interest accrued on such funds shall be paid to the Corporation
from time to time.
b. In the event that the Corporation or its Shareholders
enter into a sale of more than eighty percent of the common stock
of the Corporation to an unrelated party buyer, then a holder of
Series D Preferred may require the Corporation to redeem the
Series D Preferred in cash at the Liquidation Value upon giving
notice in the form specified by the Board of Directors.
c. Any shares of Series D Preferred redeemed, purchased or
otherwise acquired by the Corporation shall be deemed canceled and
may thereafter be reissued as Series D Preferred or any other
series of Preferred Stock at a par value set by the Board of
Directors.
4. Conversion A holder of Series D Preferred shall have the
right to convert the Liquidation Value of the shares of Series D
Preferred held by such Holder into fully paid and nonassessable shares
of Common Stock of the Corporation at the rate of $3.00 per common
share for a period of five years after issuance of the Series D
Preferred shares to the holder. Notice of intent to convert shall be
given in a form determined by the Board of Directors.
5. Priority in Event of Dissolution and Liquidation or Sale of
Assets.
a. Subject to the remaining provisions of this Paragraph 5,
in the event of any sale of all or substantially all of the assets
of the Corporation or any liquidation, dissolution or winding up
of the affairs of the Corporation, whether voluntary or otherwise
(a "Liquidating Event"), after payment or provision for payment of
the debts and other liabilities of the corporation, the holders of
Series D Preferred shall be entitled to receive, out of the
remaining net assets of the Corporation, an amount equal to
$2,000.00 in cash, plus all accumulated but unpaid dividends (the
"Liquidation Value"), for each outstanding share of Series D
Preferred, before any distribution or payment shall be made to the
holders of Common Stock of the corporation. Upon the occurrence
of any Liquidating Event, and after payment or provisions for
payment of the debts and other liabilities of the Corporation, if
the assets of the Corporation available for distribution to
shareholders shall be insufficient to permit the payment to the
holders of Series D Preferred of an amount equal to the
Liquidation Value per share, then all the remaining assets of the
Corporation shall be distributed ratably among the holders of
Series A, B, C, and D Preferred then outstanding according to the
number of shares held by each. After payment in full to the
holders of Series D Preferred of the amount distributable to them
as herein provided, the holders of any other junior capital stock
shall be entitled, to the exclusion of the holders of Series D
Preferred, to share ratably in the remaining assets of the
Corporation in accordance with their respective rights.
b. Neither the consolidation nor merger of the corporation
with or into any other corporation shall be deemed to be a sale of
all or substantially all of the assets of the Corporation or a
liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or otherwise, within the meaning of
this Paragraph 5.
c. No provision of this Paragraph 5 shall in any manner,
prior to any sale of all or substantially all of the assets of the
corporation or any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or otherwise create
or be considered or deemed to create any restriction upon the
surplus of the Corporation or prohibit the payment of dividends on
the capital stock of the corporation out of the funds of the
Corporation legally available therefor, nor shall any such
restriction or prohibition be in any manner implied from the
provisions of this Paragraph 5.
6. Shareholder's Agreement. The Series D Preferred Shareholders
shall notify the Corporation of any proposed transfer of the Series D
Preferred and shall give the Corporation a right of first refusal on a
proposed transfer of the Series D Preferred.
a. Notice of transfer of Series D Preferred shall be given
by mailing such notice not less than twenty (20) nor more than
fifty (50) days prior to the date fixed for such proposed transfer
to the Corporation of shares of Series D Preferred to be so
transferred, by first class mail, postage prepaid. If less than
all of the outstanding Series D Preferred is to be transferred,
the redemption may be made pro rata, by lot or in such other
equitable manner as may be prescribed by resolution of the Board
of Directors.
b. Subject to the foregoing and to the provisions contained
in this Paragraph 6, the Board of directors shall have full power
and authority to prescribe the terms and conditions upon which
Series D Preferred shall be transferred from time to time.
IV. This Amendment to the Certificate of Incorporation was authorized
by Unanimous Consent of the Board of Directors dated January 29, 2003.
IN WITNESS WHEREOF the undersigned has executed and signed this certificate
this 29 day of January, 2003.
D. Ronald Allen, Chairman of the Board
D. Ronald Allen, Secretary