EXHIBIT 10(g)
FORM OF CERTIFICATE OF DESIGNATION
AND TERMS OF THE SERIES A PARTICIPATING
CONVERTIBLE PREFERRED STOCK OF C.I.S. TECHNOLOGIES, INC.
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Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
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We, the undersigned, Philip D. Kurtz and Kellie J. Watts, the Chairman of
the Board and Chief Executive Officer, and Secretary, respectively, of C.I.S.
Technologies, Inc., a Delaware corporation (the "Corporation"), do hereby
certify that, pursuant to authority granted by Article [FOURTH] of the
Certificate of Incorporation of the Corporation, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors of the Corporation has adopted the following
resolution fixing the designation and certain terms, powers, preferences and
other rights of a new series of the Corporation's preferred stock, par value
$0.01 per share, and certain qualifications, limitations and restrictions
thereof:
RESOLVED, that there is hereby established a series of Preferred
Stock, par value $0.01 per share ("Preferred Stock"), of the Corporation,
and the designation and certain terms, powers, preferences and other rights
of the shares of such series, and certain qualifications, limitations and
restrictions thereof, are hereby fixed as follows:
Section 1. Designation and Number. (a) The distinctive serial
designation of this series shall be "Series A Participating Convertible
Preferred Stock" (hereinafter referred to as the "Series A Preferred Stock").
Each share of Series A Preferred Stock shall be identical in all respects with
the other shares of Series A Preferred Stock except as to the dates from and
after which dividends thereon shall be cumulative.
(b) The number of shares of Series A Preferred Stock shall initially
be _________, which number may from time to time be increased or decreased (but
not below the number then outstanding) by resolution of the Board of Directors.
Shares of Series A Preferred Stock purchased by the Corporation shall be
cancelled and shall revert to authorized but unissued shares of Preferred Stock
undesignated as to series. Shares of Series A Preferred Stock may be issued in
fractional shares, which fractional shares shall entitle the holder, in
proportion to such holder's fractional share, to all rights of a holder of a
whole share of Series A Preferred Stock.
Section 2. Liquidation Preference. The preferences of each share of
Series A Preferred Stock as to distribution of assets upon Liquidation (as
defined in Section 9) will be in every respect on a parity with the preferences
of every other share of capital stock of the Corporation which is not
specifically made senior or junior to the Series A Preferred Stock as to
distribution of assets upon Liquidation. The rights of the Common Stock (as
defined in Section 9) will be junior to the Series A Preferred Stock as to
distributions upon Liquidation to the extent herein provided.
Section 3. Dividends. (a) The holders of shares of Series A
Preferred Stock shall be entitled to receive, when and as declared by the Board
of Directors, but only out of funds legally available therefor, dividends, on
each date that dividends or other distributions (other than dividends or
distributions payable solely in Common Stock of the Corporation) are payable on
or in respect of Common Stock comprising part of the Reference Package (as
defined in Section 9), in an amount per whole share of Series A Preferred Stock
equal to the aggregate amount (in cash or other property) of dividends or other
distributions (other than dividends or distributions payable solely in Common
Stock of the Corporation) that would be payable on such date to a holder of the
Reference Package. Each such dividend shall be paid to each holder of record of
shares of Series A Preferred Stock on the record date, not exceeding sixty days
preceding such payment date, fixed for the purpose by the Board of Directors in
advance of payment of each particular dividend or distribution (which record
date shall be the same date as the record date for the corresponding payment of
dividends on the Common Stock). To the extent that
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dividends or other distributions on or in respect of the Common Stock comprising
part of the Reference Package are either (i) cumulative or (ii) actually paid,
dividends on each share of Series A Preferred Stock shall be cumulative from the
date such share is originally issued; provided that any such share originally
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issued after a dividend record date and on or prior to the dividend payment date
to which such record date relates shall not be entitled to receive the dividend
payable on such dividend payment date or any amount in respect of the period
from such original issuance to such dividend payment date.
(b) Holders of shares of Series A Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in excess
of full cumulative dividends, as herein provided.
(c) So long as any shares of Series A Preferred Stock shall be
outstanding, no dividend (other than a dividend payable solely in Common Stock
or in any other stock ranking junior to the Series A Preferred Stock as to
dividends and distribution of assets upon Liquidation) shall be declared or paid
or set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to the Series A Preferred Stock as
to dividends or distribution of assets upon Liquidation, nor shall any Common
Stock nor any other stock of the Corporation ranking junior to or on a parity
with the Series A Preferred Stock as to dividends or distribution of assets upon
Liquidation be redeemed, purchased or otherwise acquired for any consideration
(or any moneys be paid to, set aside or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to the
Series A Preferred Stock as to distribution of assets upon Liquidation), unless,
in each case, the full cumulative dividends (including the dividend to be due
upon payment of such dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of Series A Preferred Stock shall have
been, or shall then be, paid.
Section 4. Liquidation. In the event of any Liquidation the holders
of shares of Series A Preferred Stock shall be entitled, before any distribution
or payment is made on any date to the holders of the Common Stock or any other
stock of the Corporation ranking junior to the Series A Preferred Stock as to
distribution of assets upon Liquidation, to be paid in full an amount per share
of Series A Preferred Stock equal to $0.01. Additionally, in the event of any
Liquidation the holders of shares of Series
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A Preferred Stock shall be entitled, contemporaneously with any distribution or
payment being made on any date to the holders of the Common Stock, to be paid in
full an amount per share of Series A Preferred Stock equal to the aggregate
amount distributed or to be distributed in connection with such Liquidation to a
holder of the Reference Package. If such payment shall have been made in full
to all holders of shares of Series A Preferred Stock, then the holders of shares
of Series A Preferred Stock as such shall have no right or claim to any of the
remaining assets of the Corporation.
(b) If the assets of the Corporation available for distribution to
the holders of shares of Series A Preferred Stock upon any Liquidation shall be
insufficient to pay in full all amounts to which such holders shall be entitled
pursuant to Section 4(a), no such distribution shall be made on account of any
shares of any other class or series of Preferred Stock ranking on a parity with
the Series A Preferred Stock as to distribution of assets upon Liquidation
unless proportionate distributive amounts shall be paid on account of all
outstanding shares of Series A Preferred Stock, ratably in proportion to the
full distributable amounts for which holders of all such parity shares are
respectively entitled upon such Liquidation.
(c) Upon any Liquidation the holders of outstanding shares of Series
A Preferred Stock shall be entitled to be paid out of assets of the Corporation
available for distribution to its stockholders all amounts to which such holders
are entitled pursuant to Section 4(a) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking junior to
the Series A Preferred Stock as to distribution of assets upon Liquidation.
Section 5. Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 6. Conversion. After the Conversion Trigger Date (as defined
in Section 9) for a share of Series A Preferred Stock, such share shall be
convertible, at the option of the holder thereof, into shares of the
Corporation's Common Stock at any time after the issue thereof, subject to the
following terms and conditions:
(a) The Series A Preferred Stock shall be convertible on any
Business Day (as defined in Section 9) at the office of the
Corporation and at the office of any Transfer Agent for such shares
("Transfer Agent"), and at such other office or
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offices, if any, as the Board of Directors may designate, into fully
paid and nonassessable shares of Common Stock, at the Conversion Rate,
determined as hereinafter provided, in effect at the time of
conversion. The ratio at which shares of Common Stock shall be
delivered upon conversion (the "Conversion Rate") shall be initially
one (1.00). The Conversion Rate shall be adjusted in certain
instances as provided in Sections 6(c), (d), (e), (f) and (i) below.
(b) In order to convert Series A Preferred Stock into Common
Stock, the holder thereof shall surrender at any office hereinabove
mentioned the certificate or certificates therefor, duly endorsed or
assigned to the Corporation or in blank, and give written notice to
the Corporation at such office that he elects to convert such shares.
Such notice shall be substantially in the following form:
"NOTICE OF EXERCISE OF CONVERSION RIGHT
The undersigned, being a holder of shares of Series A
Participating Convertible Preferred Stock ("Series A Preferred Stock")
of C.I.S. Technologies, Inc., irrevocably exercises the right to
convert ____ outstanding shares of Series A Preferred Stock into
shares of Common Stock of C.I.S. Technologies, Inc. in accordance with
the terms of the Series A Preferred Stock, and directs that the shares
issuable and deliverable upon the conversion, together with any check
in payment for fractional shares, be issued and delivered in the
denominations indicated below to the registered holder hereof unless a
different name has been indicated below.
Dated: _________________
Fill in for registration of
shares of Common Stock
if to be issued otherwise
than to the registered
holder:
________________________
Name
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________________________
Address
________________________ ___________________
(Please print name (Signature)
and address,
including zip code
number)
Denominations: ___________________"
A payment or adjustment shall be made by the Corporation upon any
conversion on account of any dividends accrued on the shares of Series
A Preferred Stock surrendered for conversion but not on account of any
dividends or distributions on the Common Stock or other securities
issued upon conversion.
Series A Preferred Stock shall be deemed to have been converted
immediately prior to the close of business on the day of the surrender
of such shares for conversion in accordance with the foregoing
provisions, and the person or persons entitled to receive the Common
Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such Common Stock at such time. As
promptly as practicable on or after the conversion date, the
Corporation shall issue and shall deliver at such office a certificate
or certificates for the number of full shares of Common Stock issuable
upon such conversion, together with payment in lieu of any fraction of
a share, as hereinafter provided, to the person or persons entitled to
receive the same.
(c) In case at any time the Corporation shall pay or make a
dividend or other distribution on any class of stock of the
Corporation in Common Stock, the Conversion Rate in effect at the
opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such dividend or
other distribution shall be adjusted by multiplying such Conversion
Rate by a fraction of which (i) the numerator shall be the sum of the
number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination and the total number of
shares constituting such
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dividend or other distribution and (ii) the denominator shall be the
number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination, such adjustment to become
effective immediately after the opening of business on the day
following the date fixed for such determination.
(d) In case at any time the Corporation shall issue rights or
warrants to substantially all holders of its Common Stock entitling
them to subscribe for or purchase shares of Common Stock at a price
per share less than the then current market price per share
(determined as provided in Section 6(h)) of the Common Stock on the
date fixed for the determination of stockholders entitled to receive
such rights or warrants, the Conversion Rate in effect at the opening
of business on the day following the date fixed for such determination
shall be adjusted by multiplying such Conversion Rate by a fraction of
which (i) the numerator shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock so offered for
subscription or purchase and (ii) the denominator shall be the number
of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common
Stock which the aggregate of the offering price of the total number of
shares of Common Stock so offered for subscription or purchase would
purchase at such current market price, such adjustment to become
effective immediately after the opening of business on the day
following the date fixed for such determination.
(e) In case at any time outstanding shares of Common Stock shall
be subdivided into a greater number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day
following the date upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, if at any time
outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such
increase or
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reduction, as the case may be, to become effective immediately after
the opening of business on the day following the day upon which such
subdivision or combination becomes effective.
(f) In case at any time the Corporation shall, by dividend or
otherwise, distribute to all holders of its Common Stock evidences of
its indebtedness or assets (including securities, but excluding any
rights or warrants referred to in Section 6(d) above, the portion of
any cash dividend or distribution paid out of the retained earnings of
the Corporation and any dividend or distribution referred to in
Section 6(c) above), the Conversion Rate shall be adjusted by
multiplying the Conversion Rate in effect immediately prior to the
close of business on the date fixed for the determination of
stockholders entitled to receive such distribution by a fraction of
which (i) the numerator shall be the current market price per share
(determined as provided in Section 6(h)) of the Common Stock on the
date fixed for such determination and the denominator shall be such
current market price per share of the Common Stock less the then fair
market value (as determined in good faith by the Board of Directors,
whose determination shall, absent manifest error, be conclusive) of
the portion of the evidences of indebtedness or assets so distributed
applicable to one share of Common Stock, such adjustment to become
effective immediately prior to the opening of business on the day
following the date fixed for the determination of stockholders
entitled to receive such distribution.
(g) The reclassification of Common Stock into securities
including other than Common Stock (other than any reclassification
upon a consolidation or merger to which Section 6(o) applies) shall be
deemed to involve (i) a subdivision or combination, as the case may
be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common
Stock outstanding immediately thereafter (and the effective date of
such reclassification shall be deemed to be "the day upon which such
subdivision becomes effective" or "the day upon which such combination
becomes effective", as the case may be, and "the day upon which such
subdivision or combination becomes
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effective" within the meaning of Section 6(e)), and (ii) a
distribution of such securities other than Common Stock to all holders
of Common Stock (and the effective date of such reclassification shall
be deemed to be "the date fixed for the determination of the
shareholders entitled to receive such distribution" and "the date
fixed for such determination" within the meaning of Section 6(f)).
(h) For the purpose of any computation under Sections 6(d), (f)
or (m), the current market price per share of Common Stock on any date
shall be the average of the daily closing prices for any period of
five to ten consecutive business days selected by the Corporation
commencing not more than 20 Business Days before the day in question.
The closing price for each day shall be the last reported sales price,
regular way, or, in case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices, regular
way, in either case on the New York Stock Exchange, Inc. or, if the
Common Stock is not listed or admitted to trading on such Exchange, on
the principal national securities exchange on which the Common Stock
is listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, on the Nasdaq Stock
Market, Inc. National Market or, if the Common Stock is not listed or
admitted to trading on any national securities exchange or quoted on
such National Market, the fair market value as determined in good
faith by the Board of Directors, whose determination shall, absent
demonstrable error, be conclusive.
(i) The Corporation may make such increases in the Conversion
Rate, in addition to those required by Sections 6(c), (d), (e) and
(f), as it considers advisable in order that any event treated for
federal income tax purposes as a dividend of stock or stock rights
shall not be taxable to the recipients.
(j) Whenever the Conversion Rate is adjusted:
(i) the Corporation shall compute the adjusted Conversion
Rate in accordance with this Section 6 and shall prepare a
certificate signed by the Chief Financial
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Officer of the Corporation setting forth the adjusted Conversion
Rate and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be
filed with the Transfer Agent or Agents for the Series A
Preferred Stock; and
(ii) the Corporation shall mail to the holders of record of
shares of Series A Preferred Stock a notice stating that the
Conversion Rate has been adjusted and setting forth the adjusted
Conversion Rate.
(k) In case:
(i) the Corporation shall declare a dividend (or any other
distribution) on its Common Stock payable otherwise than in cash
out of its retained earnings; or
(ii) the Corporation shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe
for or purchase any shares of Common Stock; or
(iii) of any reclassification of the Common Stock (other
than a subdivision or combination of its outstanding shares of
Common Stock), or of any consolidation or merger to which the
Corporation is a party and for which approval of any stockholders
of the Corporation is required, or of the sale or transfer of all
or substantially all of the assets of the Corporation; or
(iv) of any Liquidation;
then the Corporation shall cause to be filed with the Transfer Agent
or Agents for the Series A Preferred Stock, and shall cause to be
mailed to the holders of record of the outstanding shares of Series A
Preferred Stock, at least 20 days (or ten days in any case specified
in clause (i) or (ii) above) prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the record
date for the purpose of determining the holders of Common Stock
entitled to receive such dividend, distribution or grant, or (y) the
date on which such reclassification, consolidation, merger, sale or
transfer or Liquidation is
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expected to become effective, and the date as of which it is expected
that record holders of Common Stock shall be entitled to exchange
their shares of Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale or
transfer or Liquidation.
(l) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but
unissued Common Stock, for the purpose of effecting the conversion of
Series A Preferred Stock, the full number of shares of Common Stock
then deliverable upon the conversion of all Series A Preferred Stock
then outstanding.
(m) No fractional shares of Common Stock shall be issued upon
conversion, but, instead of any fraction of a share which would
otherwise be issuable, the Corporation shall pay a cash adjustment in
respect of such fraction in an amount equal to the same fraction of
the current market price per share of Common Stock, as determined
pursuant to Section 6(h), on the day of conversion.
(n) The Corporation shall pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock
on conversion of Series A Preferred Stock pursuant hereto.
(o) In case of any consolidation or share exchange of the
Corporation with, or merger of the Corporation into, any other person,
any merger of another person into the Corporation (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Corporation)
or any sale or transfer of all or substantially all the assets of the
Corporation, the person formed by such consolidation or resulting from
such merger or share exchange or which acquires such assets, as the
case may be, shall execute and deliver an agreement for the benefit of
the holders of the Series A Preferred Stock providing that the holder
of each outstanding share of Series A Preferred Stock shall have the
right thereafter to convert such share of Series A Preferred Stock
into the kind
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and amount of securities, cash and other property receivable upon such
consolidation, merger, share exchange, sale or transfer by a holder of
the number of shares of Common Stock into which such share of Series A
Preferred Stock might have been converted immediately prior to such
consolidation, merger, share exchange, sale or transfer, assuming such
holder of Common Stock (i) is not a person with which the Corporation
consolidated or engaged in the share exchange or into which the
Corporation merged or which merged into the Corporation or to which
such sale or transfer was made, as the case may be ("constituent
person"), or an affiliate of a constituent person and (ii) failed to
exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such
consolidation, merger, share exchange, sale of transfer (provided that
if the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer is not
the same for each share of Common Stock held immediately prior to such
consolidation, merger, share exchange, sale or transfer by any person
other than a constituent person or an affiliate thereof and in respect
of which such rights of election shall not have been exercised ("non-
electing share"), then for purposes of this Section 6(o) the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, share exchange, sale or transfer by each non-
electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of the non-electing shares). Such agreement
shall provide for adjustments which, for events subsequent to the
effective date of such agreement, shall be as nearly equivalent as may
be practicable to the adjustments provided for in this Section 6. The
above provisions of this Section 6(o) shall similarly apply to
successive consolidations, mergers, share exchanges, sales or
transfers.
7. Voting Rights. (a) Except as hereinafter in this Section 7
expressly provided and as otherwise from time to time required by law, the
Series A Preferred Stock shall not have any voting rights.
(b) Whenever, at any time or times, dividends payable on shares of
Series A Preferred Stock or any other series of Preferred Stock shall be in
arrears in an amount
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equivalent to two full quarterly dividends thereon, then, immediately upon the
happening of such event, the holders of outstanding shares of Series A Preferred
Stock shall have the right, voting together as a single class with holders of
shares of any other series of Preferred Stock then outstanding upon which like
voting rights have been conferred and are then exercisable, to vote for the
election of two additional members of the Board of Directors of the Corporation
until all dividends in arrears on the Series A Preferred Stock and all such
other series of Preferred Stock have been fully paid or set apart for payment.
The rights of the holders of Series A Preferred Stock to elect members of the
Board of Directors of the Corporation as aforesaid shall continue until such
time as all dividends in arrears on all series of Preferred Stock shall have
been fully paid or set apart for payment, at which time such right shall
terminate, except as herein or by law expressly provided, subject to
reinstatement in the event of each and every subsequent arrearage in the amount
above mentioned. Upon any termination of the right of such holders to elect
directors as herein provided, the term of office of all directors then in office
elected thereby shall terminate immediately. Any director who shall have been
so elected pursuant to this Section 7(b) may be removed at any time, either with
or without cause, and any vacancy thereby created may be filled, only by the
affirmative vote of the holders of Series A Preferred Stock voting together as a
single class with the holders of shares of any other series of Preferred Stock
upon which like voting rights have been conferred and are then exercisable. If
the office of any director so elected pursuant to this Section 7(b) becomes
vacant for any reason other than removal from office as aforesaid, the remaining
director may choose a successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.
(c) So long as any shares of Series A Preferred Stock remain
outstanding, the consent of the holders of two-thirds of the outstanding shares
of Series A Preferred Stock and of any other series of Preferred Stock upon
which like voting rights have been conferred and are then exercisable, voting
together as a single class, given in person or by proxy either in writing or at
any special or annual meeting called for the purpose, shall be necessary to
permit, effect or validate any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions of the Certificate
of Incorporation or of this Resolution which would materially affect any right,
preference, privilege or power of the Series A Preferred Stock.
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(d) Holders of Series A Preferred Stock shall be entitled to one vote
for each share of such stock held on matters as to which such holders shall be
entitled to vote, and the holders of shares of any other series of preferred
stock shall be entitled, for purposes of this Section, to such number of votes
per share, if any, as shall have been conferred by the terms of such series.
9. Definitions. For purposes of this Resolution, the following
definitions shall apply:
(a) Any class or series of stock of the Corporation shall be deemed
to rank:
(i) "prior to" the Series A Preferred Stock as to dividends or
distribution of assets upon Liquidation, if the holders of such class or
series shall be entitled to the receipt of dividends or of amounts
distributable upon Liquidation, as the case may be, in preference or
priority to the holders of Series A Preferred Stock;
(ii) on a "parity" with the Series A Preferred Stock as to dividends
or distribution of assets upon Liquidation, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per share
thereof are different from those of the Series A Preferred Stock, if the
holders of such class or series of stock and of the Series A Preferred
Stock shall be entitled to the receipt of dividends or of amounts
distributable upon Liquidation, as the case may be, in proportion to their
respective dividend amounts or liquidation prices, without preference or
priority to the holders of Series A Preferred Stock; and
(iii) "junior to" the Series A Preferred Stock as to dividends or
distribution of assets upon Liquidation, if such stock shall be Common
Stock or if the holders of the Series A Preferred Stock shall be entitled
to the receipt of dividends or of amounts distributable upon Liquidation,
as the case may be, in preference or priority to the holders of shares of
such class or series.
(b) "Business Day" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday, other than any day on which securities are not traded
on the principal exchange or the principal market through which shares of
Common Stock are traded.
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(c) "Common Stock" shall mean the common stock, par value $0.01 per
share, of the Corporation; provided that for purposes of Section 6, the
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term "Common Stock" shall include any stock of any class of the Corporation
which (i) has no preference as to dividends or distribution of assets upon
liquidation, dissolution or winding-up and (ii) is not subject to
redemption by the Corporation. However, subject to the provisions of
Section 6(o), shares issuable on conversion of Series A Preferred Stock
shall include only shares of the class designated as Common Stock of the
Corporation as of the date of this Resolution, or shares of any class or
classes resulting from any reclassification or reclassifications thereof
and which have no preference in respect of dividends or of amounts payable
in the event of any liquidation, dissolution or winding-up, and which are
not subject to redemption by the Corporation; provided that if at any time
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there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
(d) "Conversion Trigger Date", for any share or shares of Series A
Preferred Stock, shall mean the earliest of (i) the date on which Bankers
Trust New York Corporation delivers to the Corporation an opinion of
counsel, reasonably acceptable in form and substance to the Corporation, to
the effect that, as a result of the receipt of approval of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") or
otherwise, Bankers Trust New York Corporation and its affiliates may
acquire direct or indirect ownership or control of shares of Common Stock
in a number at least equal to the number of shares that Bankers Trust New
York Corporation and its affiliates would own or control, directly or
indirectly, immediately after conversion of such shares of Series A
Preferred Stock without violating the Bank Holding Company Act of 1956, as
amended, or any successor statute, (ii) the date on which Bankers Trust New
York Corporation delivers to the Corporation a certificate stating that,
immediately after conversion of such shares of Series A Preferred Stock,
Bankers Trust New York Corporation and its affiliates would own less than
5% of any class of voting securities of the Corporation and less than 15%
of the total capital securities of the Corporation, and (iii) the date on
which such shares are first sold, transferred or otherwise
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disposed of by Bankers Trust New York Corporation and/or its affiliates to
any person, other than an affiliate of Bankers Trust New York Corporation,
in (A) a widely dispersed public distribution, (B) a private placement in
which no one party acquires the right to purchase in excess of 2% of the
voting shares of the Corporation (including, for purposes of such
determination, shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock), (C) an assignment to a single party (e.g., a
broker or investment banker) for the purpose of conducting a widely
dispersed public distribution on the transferor's behalf, or (D) any other
manner approved by the Federal Reserve Board; provided that in the event of
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any such sale, transfer or disposition described in this clause (iii),
Bankers Trust New York Corporation shall have delivered to the Corporation
such certificates or opinions as shall reasonably be required by the
Corporation to evidence compliance with this clause (iii).
(e) "Liquidation" shall mean any liquidation, dissolution or winding-
up of the affairs of the Corporation, whether voluntary or involuntary;
provided that for purposes of Section 4, a consolidation or merger of, or
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share exchange by, the Corporation with any other person shall not
constitute a Liquidation.
(f) "Reference Package," at any date, shall mean that number of
shares of Common Stock into which one share of Series A Preferred Stock
shall be convertible at the Conversion Rate then in effect pursuant to
Section 6.
IN WITNESS WHEREOF, the undersigned Corporation has caused this
Certificate to be signed by a duly authorized officer and its corporate seal,
duly attested by
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another such officer, to be hereunto affixed this ______ day of _____, 1994.
C.I.S. TECHNOLOGIES, INC.
[SEAL]
By____________________________
Chairman and Chief Executive
Officer
Attest:
__________________________
Secretary
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