EXHIBIT 4
CERTIFICATE OF DESIGNATIONS
TO THE
CERTIFICATE OF INCORPORATION
OF
UNITY BANCORP, INC.
TO: Secretary of State
State of Delaware
Pursuant to the provisions of Section 151(g) of Delaware General
Corporation Law, the undersigned corporation, Unity Bancorp, Inc. (the
"Company"), executes the following Certificate of Designations to the
Certificate of Incorporation.
1. The name of the corporation is Unity Bancorp, Inc.
2. A copy of the resolutions adopted by the Board of Directors of the
Company pursuant to Section 151(g) of Delaware General Corporation Law
is attached hereto, and made a part hereof, as Exhibit A.
3. The resolutions attached hereto as Exhibit A were duly adopted by the
Board of Directors on March 21, 2000. (Via polling as follows: AYE: R.
Van Volkenburgh, D. Dallas, P. DeTommaso, C. Loring)
4. The Certificate of Incorporation is amended so that the designation
and number of shares of each class and series acted upon in the
resolutions, and the relative rights, preferences and limitations of
each such class and series are the same as stated in the terms set
forth on Exhibit B attached hereto.
IN WITNESS WHEREOF, the undersigned has signed this Certificate of
Designations to the Certificate of Incorporation this 21nd day of March, 2000.
UNITY BANCORP, INC.
By:
-----------------------------------
David Dallas
Corporate Secretary
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EXHIBIT "A" to
CERTIFICATE OF
UNITY BANCORP, INC. DESIGNATION
BOARD OF DIRECTORS RESOLUTIONS
WHEREAS, pursuant to the Certificate of Incorporation of Unity Bancorp,
Inc. (the "Company"), the Company is authorized to issue 500,000 shares of
preferred stock, no par value ("Preferred Stock"); and
WHEREAS, pursuant to the Certificate of Incorporation of the Company, the
Board of Directors (the "Board") is vested with the authority to authorize by
resolution the issue of one or more series of Preferred Stock and with respect
to each such series, to fix by resolution the voting powers, and the
designation, preferences and relative rights and the qualifications, limitations
or restrictions of such series (the "Designations"); and
WHEREAS, the Board has determined that 103,500 shares of preferred stock
should be designated at this time; and
NOW, THEREFORE, BE IT:
RESOLVED that, pursuant to the authority vested in the Board of Directors
of the Company by the Certificate of Incorporation, the Board of Directors does
hereby provide for the issue of a series of Preferred Stock, no par value per
share, of the Company to be designated "10% Cumulative Convertible Preferred
Stock, Series A" hereinafter referred to as the "Series A" or "this series"),
initially consisting of 103,500 shares, and the Certificate of Designations to
the Certificate of Incorporation, in the form attached hereto as Exhibit "B", is
hereby approved and the Company is hereby authorized to file said Certificate
with the Secretary of State of the State of Delaware;
FURTHER RESOLVED, that any officer of the Company is hereby authorized and
directed to take all such actions, file such documents and take such other steps
as they shall deem necessary or appropriate, the taking of such actions, the
filing of such documents and the taking of such other steps to be conclusive
evidence of their necessity and appropriateness.
Approval via polling:
AYE: R. Van Volkenburgh, D. Dallas, P. DeTommaso, C. Loring
To be ratified at the April 18th Board of Directors' meeting
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EXHIBIT B TO
CERTIFICATE OF
DESIGNATIONS
Certificate of the Designations, Numbers,
Relative Rights, Preferences and Limitations
of 10% Cumulative Convertible Preferred Stock, Series A
-------------------------------------------------------
A statement of the designations, numbers, relative rights and preferences
of the Preferred Stock, Series A of Unity Bancorp, Inc., a Delaware corporation
(the "Company") is as follows:
(1) Designation. There is hereby established a new class of equity
interests which shall be named "10% Cumulative Convertible Preferred Stock,
Series A" (herein called the "Series A Preferred Stock"), which shall consist of
103,500 shares, no par value.
(2) Dividends.
(a) The holder of each share of Series A Preferred Stock shall be
entitled to receive out of any funds legally available therefor, when and
as declared by the Board of Directors, preferential dividends thereon at
the annual rate of 10% of a stated value of $50 per share (the "Stated
Value"), and no more, payable quarterly on January 15, April 15, July 15
and October 15 or on such other date or dates as may be determined by the
Board of Directors. Those dividends shall accrue daily and shall be
cumulative.
(b) No dividends shall be declared or paid or set apart for payment on
any series of preferred stock or any class of capital stock of the Company
ranking, as to dividends, on a parity with or junior to this Series A
Preferred Stock for any period unless full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for payment on this Series A Preferred
Stock for all past dividend payment periods. When full cumulative dividends
for all past dividend periods are not paid or provided for, as aforesaid,
upon the shares of this Series A Preferred Stock and any other series of
preferred stock and any other class of capital stock of the Company
ranking, as to dividends, on a parity with this Series A Preferred Stock
(herein referred to as "Dividend Parity Stock"), all dividends declared
upon shares of this Series A Preferred Stock and any other Dividend Parity
Stock shall be declared pro rata so that the amount of dividends declared
per share on this Series A Preferred Stock and all other Dividend Parity
Stock shall in all cases bear to each other the same ratio that accrued
dividends per share on the shares of this Series A Preferred Stock and such
other Dividend Parity Stock bear to each other. Holders of shares of this
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, on this Series A Preferred Stock. No interest or
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sum of money in lieu of interest shall be payable in respect of any
dividend payment or payments on this Series A Preferred Stock which may
have accumulated or be in arrears.
(c) So long as any shares of this Series A Preferred Stock are
outstanding, no dividend, other than a dividend in (i) shares of the Common
Stock, without par value, of the Company or (ii) in any other stock of the
Company ranking junior to this Series A Preferred Stock as to dividends and
upon liquidation and other than as provided in paragraph (b) of this
Section 2, shall be declared or paid or set aside for payment nor shall any
other distribution be declared or made upon the Common Stock or upon any
other stock of the Company ranking junior to or on a parity with this
Series A Preferred Stock as to dividends or upon liquidation, nor shall any
Common Stock nor any other stock of the Company ranking junior to or on a
parity with this Series A Preferred Stock as to dividends or upon
liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking
fund for the redemption of any shares of any such stock) by the Company or
any subsidiary thereof (except by conversion into or exchange for stock of
the Company ranking junior to this Series A Preferred Stock as to dividends
and upon liquidation) unless, in each case, full cumulative dividends on
all outstanding shares of this Series A Preferred Stock shall have been
paid for all past dividend payment periods.
(3) Liquidation Rights. In the event of a Liquidation Event (as defined
herein), the holders of Series A Preferred Stock shall be entitled to receive
from the assets of the Company, whether represented by capital stock, paid-in
capital or retained earnings, payment in cash of an amount equal to the
aggregate Liquidation Value (as defined herein) of such Series A Preferred Stock
plus a further amount equal to the sum of (i) the amount calculated to yield to
a holder of Series A Preferred Stock a rate of return of 10% per annum on the
Stated Value of the Series A Preferred Stock (taking into account any dividends
or distributions previously paid to holders of Series A Preferred Stock), and
(ii) the amount of any dividends that have been declared on the Series A
Preferred Stock but which remain unpaid, before any distribution of assets shall
be made to the holders of Common Stock or any other equity securities of the
Company ranking junior to this Series A Preferred Stock upon liquidation. If,
upon such Liquidation Event, the assets distributable to the holders of Series A
Preferred Stock shall be insufficient to permit the payment in full to such
holders of the preferential amounts to which they are entitled, then such assets
shall be distributed ratably among the shares of Series A Preferred Stock and
any shares of any other series of preferred stock and any other class of stock
of the Company ranking on a parity with the shares of this Series A Preferred
Stock upon such a Liquidation Event, in proportion to the full amounts to which
holders of all such shares which are on a parity with the shares of this Series
A Preferred Stock are respectively entitled upon a Liquidation Event.
The liquidation value of each share of Series A Preferred Stock shall
initially be equal to $50 per share (the "Liquidation Value"). In the event that
the Company shall (1) pay a dividend
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with respect to Series A Preferred Stock in shares of its Series A Preferred
Stock, (2) subdivide its outstanding shares of Series A Preferred Stock, or (3)
combine its shares of Series A Preferred Stock into a smaller number of shares,
the Liquidation Value in effect immediately prior thereto shall be adjusted so
that the holder of any share of Series A Preferred Stock thereafter surrendered
for liquidation shall be entitled to receive from the Company cash in the amount
such holder would have been entitled to receive had such share of Series A
Preferred Stock been liquidated immediately prior to the happening of such
event. An adjustment made pursuant to this paragraph (iii) shall become
effective (i) upon the effective date of a subdivision or combination and (ii)
upon the record date in the case of a distribution of shares.
After payment in full to the holders of Series A Preferred Stock pursuant
to the two preceding paragraphs, the holders of Series A Preferred Stock shall
have no further claim to the assets of the Company.
For the purposes hereof, the term "Liquidation Event" shall mean any merger
or consolidation in which the Company is not the surviving entity, or the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary.
(4) Voting Rights. Holders of Series A Preferred Stock shall have no right
to vote at any meeting of stockholders or otherwise and shall not be entitled to
notice of any such meeting, except in each case as may be specifically required
by the Delaware General Corporation Law, as amended from time to time.
(5) Conversion.
(a) The Series A Preferred Stock may be converted by any holder at any
time after the date of issuance at the election of the holder. The Company
has the right to require conversion into common stock at any time after
twenty-four (24) months from the date of issuance of the preferred stock.
Subject to and upon compliance with the provisions of this Section 5, the
holder of any shares of this Series A Preferred Stock or the Company may
convert the shares of this Series A Preferred Stock into validly issued,
fully paid and nonassessable shares of Common Stock at a $7.25 per share
basis (the "Conversion Rate") which is equal to 6.897 shares of Common
Stock for each share of this Series A Preferred Stock by surrendering the
shares to be converted, in the manner provided in paragraph (b) of this
Section 5 below; provided however, that if the Company shall have called
some or all of the shares of this Series A Preferred Stock for redemption,
such right shall terminate on the close of business on the third business
day next preceding the date fixed for redemption unless the Company has
defaulted in making or providing for the payment due on the date fixed for
redemption. In addition, the Company may convert the Series A Preferred
Stock into validly issued, fully paid shares of Common Stock at the
Conversion Rate at any time after twenty-four (24) months from the issuance
date of the Series A Preferred Stock and after the Common Stock has closed
at $7.25 or above for ten out of any
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fifteen consecutive trading days. Anything herein to the contrary
notwithstanding, the shares of this Series A Preferred Stock shall become
immediately convertible under the circumstances, and subject to the terms
and conditions, set forth in paragraph (i) of this Section 5 below.
(b) (1) In order to exercise the conversion privilege, the holder of
each share of this Series A Preferred Stock to be converted shall
surrender the certificate representing such share to the Conversion
Agent for this Series A Preferred Stock appointed for such purpose by
the Company (the "Conversion Agent"), or, if no Conversion Agent has
been appointed or if the holder has not received notice of such
appointment, then to the Company, with the Notice of Election to
Convert on the back of said certificate duly completed and signed at
the principal office of the Conversion Agent or the Company, as the
case may be. Unless the shares issuable on conversion are to be issued
in the same name as the name in which the shares of this Series A
Preferred Stock are registered, each share surrendered for conversion
shall be accompanied by instruments of transfer, in form satisfactory
to the Company, duly executed by the holder or its duly authorized
attorney and by funds in an amount sufficient to pay any transfer or
similar tax.
(2) The holders of shares of this Series A Preferred Stock at the
close of business on a Dividend Record Date shall be entitled to
receive the dividend payable on those shares on the corresponding
Dividend Payment Date notwithstanding the conversion of the shares
after the Dividend Record Date. Except as provided above, the Company
shall make no payment or adjustment for accrued and unpaid dividends
on shares of this Series A Preferred Stock, whether or not in arrears,
on conversion of those shares, or for dividends on the shares of
Common Stock issued upon the conversion.
(3) As promptly as practicable after the surrender by a holder of
the certificates for shares of this Series A Preferred Stock in
accordance with this paragraph (b), the Company shall issue and shall
deliver at the office of the Conversion Agent to the holder, or on his
written order, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of those shares in
accordance with the provisions of this paragraph (b)(3), and any
fractional interest in respect of a share of Common Stock arising upon
the conversion shall be settled as provided in paragraph (c) of this
Section 5 below.
(4) Each conversion shall be deemed to have been effected as of
the close of business on the date on which all of the conditions
specified
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in paragraph (b)(1) of this Section 5 above shall have been satisfied,
and, the person or persons in whose name or names any certificate or
certificates for shares of Common Stock shall be issuable upon such
conversion shall be deemed to have become the holder or holders of
record of the shares of Common Stock represented by those certificates
at such time on such date and such conversion shall be at the
Conversion Rate in effect at such time on such date. All shares of
Common Stock delivered upon conversion of this Series A Preferred
Stock will upon delivery be duly and validly issued and fully paid and
nonassessable, free of all liens and charges are not subject to any
preemptive rights. Upon the surrender of certificates representing
shares of this Series A Preferred Stock to be converted, the shares
will no longer be deemed to be outstanding and all rights of a holder
with respect to the shares surrendered for conversion shall
immediately terminate except the right to receive the Common Stock or
other securities, cash or other assets as herein provided (including
without limitation any dividend payable as specified in paragraph
(b)(2) of this Section 5 above).
(c) No fractional shares or securities representing fractional shares
of Common Stock shall be issued upon conversion of this Series A Preferred
Stock. Any fractional interest in a share of Common Stock resulting from
conversion of a share of this Series A Preferred Stock shall be paid in
cash (computed to the nearest cent) based on the price (as defined in
paragraph (d)(4) of this Section 5 below) of the Common Stock on the
Trading Day (as defined in paragraph (d)(4) below) next preceding the day
of conversion.
(d) The "Conversion Rate" per share of this Series A Preferred Stock
shall be subject to adjustment from time to time as follows:
(1) In case the Company shall (1) pay a dividend or make a
distribution on its Common Stock in shares of its Common Stock, (2)
subdivide its outstanding Common Stock into a greater number of
shares, or (3) combine its outstanding Common Stock into a smaller
number of shares, the Conversion Rate in effect immediately prior to
such event shall be proportionately adjusted so that the holder of any
share of this Series A Preferred Stock thereafter surrendered for
conversion shall be entitled to receive the number and kind of shares
of Common Stock of the Company which such holder would have been
entitled to receive had the share been converted immediately prior to
the happening of such event. An adjustment made pursuant to this
paragraph (d)(1) shall become effective immediately after the record
date in the case of a dividend or distribution except as provided in
paragraph (d)(7) of this Section 5 below, and shall become effective
immediately after the effective date in the case of subdivision or
combination. If any dividend or distribution is not paid or made, the
Conversion Rate then in effect shall be appropriately readjusted.
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(2) In case the Company shall issue rights or warrants to all
holders of its Common Stock entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for
or purchase Common Stock, at a price per share less than the Current
Market Price (as defined in paragraph (d)(4) of this Section 5 below)
of the Common Stock at the record date for the determination of
stockholders entitled to receive the rights or warrants, the
Conversion Rate in effect immediately prior to the issuance of such
rights or warrants shall be adjusted so that it shall equal the price
determined by multiplying the Conversion Rate in effect immediately
prior to the date of issuance of the rights or warrants by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of the rights or warrants plus the
number of shares of Common Stock which the aggregate offering price of
the total number of shares of Common Stock so offered for subscription
or purchase would purchase at the Current Market Price at that record
date, and the denominator of which shall be the number of shares of
Common Stock outstanding on the date of issuance of the rights or
warrants plus the number of additional shares of Common Stock for
subscription or purchase. The adjustment provided for in this
paragraph (d)(2) shall be made successively whenever any such rights
or warrants are issued, and shall become effective immediately, except
as provided in paragraph (d)(7) of this Section 5 below after such
record date. In determining whether any rights or warrants entitle the
holders of the Common Stock to subscribe for or purchase shares of
Common Stock at less than the Current Market Price, and in determining
the aggregate offering price of the shares of Common Stock so offered,
there shall be taken into account any consideration received by the
Company for such rights or warrants, the value of such consideration,
if other than cash to be determined by the Board (whose determination,
if made in good faith, shall be conclusive). If any or all of such
rights or warrants are not so issued or expire or terminate without
having been exercised, the Conversion Rate then in effect shall be
appropriately readjusted.
(3) In case the Company shall distribute to all holders of its
Common Stock any shares of capital stock of the Company (other than
Common Stock) or evidences of indebtedness or assets (excluding cash
dividends or distributions paid from retained earnings of the Company)
or rights or warrants to subscribe for or purchase any of its
securities (excluding those referred to in paragraph (d)(2) of this
Section 5 above) then, in each such case, the Conversion Rate shall be
adjusted so that it
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shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the date of the
distribution by a fraction the numerator of which shall be the Current
Market Price of the Common Stock on the record date mentioned below
less the then fair market value (as determined by the Board, whose
determination, if made, in good faith, shall be conclusive) of that
portion of the capital stock or assets or evidences of indebtedness so
distributed, or of the rights or warrants so distributed, applicable
to one share of Common Stock, and the denominator of which shall be
the Current Market Price of the Common Stock on the record date. Such
adjustment shall become effective immediately, except as provided in
paragraph (d)(4) of this Section 5 below, after the record date for
the determination of stockholders entitled to receive such
distribution. If any such distribution is not made or if any or all of
such rights or warrants expire or terminate without having been
exercised, the Conversion Rate then in effect shall be appropriately
readjusted.
(4) For the purpose of any computation under paragraphs (d)(2) or
(d)(3) of this Section 5 above, the "Current Market Price" of the
Common Stock at any date shall be the average of the last reported
sale prices per share for the ten consecutive Trading Days (as defined
below) preceding the date of such computation. The last reported sale
price for each day shall be (i) the last reported sale price of the
Common Stock during normal market hours, exclusive of extended trading
hours, as reported on the National Market system of the National
Association of Securities Dealers, Inc. Automated Quotation System
(the "Nasdaq National Market System"), or any similar system of
automated dissemination of quotations of securities prices then in
common use, if so quoted, or (ii) if not quoted as described in clause
(i), the mean between the high bid and low asked quotation for the
Common Stock as reported by the National Quotation Bureau Incorporated
if at least two securities dealers have inserted both bid and asked
quotations for the Common Stock on at least five of the ten preceding
days, or (iii) if the Common Stock is listed or admitted for trading
on any national securities exchange, the last sale price, or the
closing bid price if no sale occurred, of the Common Stock on the
principal securities exchange on which the Common Stock is listed. If
the Common Stock is quoted on a national securities or central market
system, in lieu of a market or quotation system described above, the
last reported sale price shall be determined in the manner set forth
in clause (ii) of the preceding sentence if bid and asked quotations
are reported but actual transactions are not, and in the manner set
forth in clause (iii) of the preceding sentence if actual transactions
are reported. If none of the conditions set forth above is met, the
last reported sale price of the Common Stock on any day or the average
of such last reported sale
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prices for any period shall be the fair market value of such class of
stock as determined by a member firm of the National Association of
Securities Dealers selected by the Company. As used herein the term
"Trading Days" means (x) if the Common Stock is quoted on the Nasdaq
National Market System or any similar system of automated
dissemination of quotations of securities prices, days on which trades
may be made on such system, or (y) if not quoted as described in
clause (x), days on which quotations are reported by the National
Quotation Bureau Incorporated, or (z) if the Common Stock is listed or
admitted for trading on any national securities exchange, days on
which such national securities exchange is open for business.
(5) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus other adjustments postponed pursuant to this
paragraph (d)(5)) would require a change of at least one percent in
the Conversion Rate; provided, however, that any adjustments which by
reason of this paragraph (d)(5) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment,
and provided, further, that adjustment shall be required and made in
accordance with the provisions of this Section 5 (other than this
paragraph (d)(5)) not later than the earlier of one year following the
date upon which the adjustment would otherwise be required to be made
and such time as may be required in order to preserve the tax free
nature of a distribution to the holders of shares of Common Stock. All
calculations under this Section 5 shall be made to the nearest cent or
the nearest one hundredth of a share, as the case may be. Anything in
this paragraph (d) to the contrary notwithstanding, the Company shall
be entitled to make such reductions in the Conversion Rate, in
addition to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order that any stock
dividend, subdivision or combination of shares, distribution of
capital stock or rights or warrants to purchase stock or securities,
or distribution of evidences of indebtedness or assets (other than
cash dividends or distributions paid from retained earnings)
hereinafter made by the Company to its stockholders shall be a tax
free distribution for federal income tax purposes.
(6) Whenever the Conversion Rate is adjusted, as herein provided,
the Company shall promptly file with the Conversion Agent an officers'
certificate setting forth the Conversion Rate after the adjustment and
setting forth a brief statement of the facts requiring the adjustment,
which certificate shall be conclusive evidence of the correctness of
the adjustment. Promptly after delivery of the certificate, the
Company shall prepare a notice of the adjustment of the Conversion
Rate setting forth the
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adjusted Conversion Rate and the date on which the adjustment becomes
effective and shall mail the notice of such adjustment of the
Conversion Rate to the holder of each share of this Series A Preferred
Stock at such holder's last address as shown on the stock books of the
Company.
(7) In any case in which this Paragraph (d) provides that an
adjustment shall become effective immediately after a record date for
an event, the Company may defer until the occurrence of the event (i)
issuing to the holder of any share of this Series A Preferred Stock
converted after the record date and before the occurrence of the event
the additional shares of Common Stock issuable upon the conversion by
reason of the adjustment required by the event over and above the
Common Stock issuable upon such conversion before giving effect to the
adjustment and (ii) paying to the holder any amount in cash in lieu of
any fractional share pursuant to paragraph (c) of this Section 5
above.
(e) If:
(1) the Company shall authorize the granting to the holders of
the Common Stock of rights or warrants to subscribe for or purchase
any shares of any class or any other rights or warrants; or
(2) there shall be any reclassification of the Common Stock
(other than a subdivision or combination of the outstanding Common
Stock and other than a change in the par value, or from par value to
no par value, or from no par value to par value), or any
consolidation, merger, or statutory share exchange to which the
Company is a party, or any sale or transfer of all or substantially
all the assets of the Company, or
(3) there shall be a voluntary or an involuntary dissolution
liquidation or winding up of the Company;
then the Company shall cause to be filed with the Conversion Agent, and
shall cause to be mailed to the holders of shares of this Series A
Preferred Stock at their addresses as shown on the stock books of the
Company, at least 15 days prior to the applicable date hereinafter
specified, a notice stating (i) the date on which a record is to be taken
for the purpose of the dividend, distribution or rights or warrants, 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 the dividend, distribution of rights or
warrants are to be determined or (ii) the date on which the
reclassification, consolidation, merger, statutory share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to become
effective, and the date 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
Page 15 of 22
deliverable upon the reclassification, consolidation, merger, statutory
share exchange, sale, transfer, dissolution, liquidation or winding up.
Failure to give any such notice or any defect in the notice shall not
affect the legality or validity of the proceedings described in this
paragraph (e).
(f) (1) The Company covenants that it will at all times reserve
and keep available, free from preemptive rights, out of the aggregate
of its authorized but unissued shares of Common Stock or its issued
shares of Common Stock held in its treasury, or both, for the purpose
of effective conversions of this Series A Preferred Stock the full
number of shares of Common Stock deliverable upon the conversion of
all outstanding shares of this Series A Preferred Stock not
theretofore converted. For purposes of this paragraph (f), the number
of shares of Common Stock which shall be deliverable upon the
conversion of all outstanding shares of this Series A Preferred Stock
shall be computed as if at the time of computation all the outstanding
shares were held by a single holder.
(2) Before taking any action which would cause an adjustment
reducing the Conversion Rate below the then par value (if any) of
the shares of Common Stock deliverable upon conversion of this
Series A Preferred Stock, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock at the adjusted
Conversion Rate.
(3) The Company will list the shares of Common Stock
required to be delivered upon conversion of this Series A
Preferred Stock, prior to the delivery, upon each national
securities exchange, if any, or with the NASDAQ National Market,
upon which the outstanding Common Stock is listed at the time of
delivery.
(4) Prior to the delivery of any securities which the
Company shall be obligated to deliver upon conversion of this
Series A Preferred Stock, the Company will comply with all
federal and state laws and regulations thereunder requiring the
registration of those securities with, or any approval of or
consent to the delivery thereof by, any governmental authority.
(g) The Company will pay any and all documentary stamp or similar
issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock on conversion of this Series A Preferred Stock
pursuant hereto; provided, however, that the Company shall not be
required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of shares of Common Stock
in a name other than that of the holder of this Series A Preferred
Stock to be converted and no such issue or delivery shall be made
unless
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and until the person requesting the issue or delivery has paid to the
Company the amount of any such tax or has established, to the
satisfaction of the Company, that the tax has been paid.
(h) In case of any reclassification or change of outstanding
shares of Common Stock (other than change in par value, or as a result
of subdivision or combination), or in case of any consolidation of the
Company with, or merger of the Company with or into, any other entity
that requires the vote of the holders of Common Stock or that results
in a reclassification, change, conversion, exchange or cancellation of
outstanding shares of Common Stock or any sale or transfer of all or
substantially all of the assets of the Company, each holder of shares
of this Series A Preferred Stock then outstanding shall, in connection
with such transaction, have the right to convert the shares of this
Series A Preferred Stock held by the holder into the kind and amount
of securities, cash and other property which the holder would have
been entitled to receive upon such reclassification, change,
consolidation, merger, sale or transfer if the holder had held the
Common Stock issuable upon the conversion of the shares of this Series
A Preferred Stock immediately prior to the reclassification, change,
consolidation, merger, sale or transfer.
(i) In the event that the Company shall consummate any
consolidation or merger or similar business combination, pursuant to
which the outstanding shares of Common Stock are by operation of law
exchanged solely for or changed, reclassified or converted into stock,
securities or cash or any other property, or any combination thereof,
then provision shall be made so that shares of this Series A Preferred
Stock that are not immediately converted and receive the consideration
provided in paragraph (h) of this Section 5, shall, in connection with
such consolidation, merger or similar business combination, be assumed
by and shall become preferred stock of such successor or resulting
corporation, having in respect of such corporation the same powers,
preferences and relative rights, and the qualifications, limitations
or restrictions thereon, that this Series A Preferred Stock had
immediately prior to the transaction, except that after such
transaction each share of this Series A Preferred Stock shall be
immediately convertible into the nature and kind of consideration so
receivable by a holder of the number of shares of Common Stock into
which such shares of this Series A Preferred Stock could have been
converted immediately prior to such transaction. The rights of this
Series A Preferred Stock as preferred stock of such successor or
resulting corporation shall successively be subject to adjustments
pursuant to paragraph (d) of this Section 5 hereof after any such
transaction as nearly equivalent as practicable to the adjustment
provided for by such paragraph prior to such transaction. The Company
shall not consummate any such merger, consolidation or similar
transaction unless all then outstanding shares of this Series A
Preferred Stock (other than such shares that are converted pursuant to
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paragraph (h) of this Section 5) shall be assumed and authorized by
the successor or resulting corporation as aforesaid.
(6) Redemption.
(a) At any time after twenty-four (24) months from the issuance
date of the Series A Preferred Stock, shares of this Series A
Preferred Stock shall be redeemable by the Company in whole or, from
time to time, in part at the Company's option at $50 per share, plus
in each case an amount equal to all accrued and unpaid dividends
thereon (whether or not earned or declared) to the date fixed for
redemption.
(b) In the event that fewer than all the outstanding share of
this Series A Preferred Stock are to be redeemed as permitted by this
Section 6, the number of shares to be redeemed shall be determined by
the Board of Directors, and the shares to be redeemed shall be
determined on a pro rata basis by the Board of Directors unless such
other method is required to comply with any rule or regulation of any
stock exchange upon which the shares of this Series A Preferred Stock
may at any time be listed.
(c) Notice of any redemption of shares of this Series A Preferred
Stock, specifying the date fixed for redemption (herein referred to as
the "Redemption Date") and place of redemption, shall be given by
first class mail to each holder of record of the shares to be
redeemed, at his address of record, not more than sixty (60) nor less
than thirty (30) days prior to the Redemption Date. Each such notice
shall also specify the redemption price applicable to the share to be
redeemed and that dividends on shares to be redeemed shall cease to
accrue and accumulate on the Redemption Date. If less than all the
shares owned by such stockholder are then to be redeemed, the notice
shall also specify the number of shares thereof which are to be
redeemed and the fact that a new certificate or certificates
representing any unredeemed shares shall be issued without cost to
such holder.
(d) Notice of redemption of shares of this Series A Preferred
Stock having been given as provided in paragraph (c) of this Section
6, then, unless the Company shall have defaulted in providing for the
payment of the redemption price and an amount equal to all accrued and
unpaid dividends to the Redemption Date, dividends shall cease to
accrue on the shares of this Series A Preferred Stock called for
redemption at the Redemption Date, all rights of the holders thereof
(except the right to receive the redemption price and all accrued and
unpaid dividends to the Redemption Date) shall cease with respect to
such shares
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and such shares shall not, after the Redemption Date, be deemed to be
outstanding and shall not have the status of preferred stock. In case
fewer than all the shares represented by any certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares
without cost to the holder thereof.
(e) Any shares of this Series A Preferred Stock which shall at
any time have been redeemed or converted shall, after such redemption
or conversion, have the status of authorized but unissued shares of
preferred stock, without designation as to series until such shares
are once more designated as part of a particular series by the Board
of Directors.
(f) In the event that full cumulative dividends on this Series A
Preferred Stock have not been paid or declared and set apart for
payment for all past Dividend Periods, no shares of this Series A
Preferred Stock shall be redeemed unless all outstanding shares of
this Series A Preferred Stock are simultaneously redeemed, and neither
the Company nor any entity directly or indirectly controlled by the
Company shall purchase or otherwise acquire any shares of this Series
A Preferred Stock; provided, however, that the foregoing shall not
prevent the purchase or acquisition of shares of this Series A
Preferred Stock pursuant to a purchase or exchange offer made on the
same terms to all holders of all outstanding shares of this Series A
Preferred Stock or pursuant to the exercise of the conversion right
provided in Section 5.
(g) Shares of this Series A Preferred Stock are not subject or
entitled to the benefit of a sinking fund.
(7) Severability. If any provision of this Certificate of Designations or
any application of such provision is determined to be invalid by any federal or
state court having jurisdiction, the validity of the remaining provisions
hereunder shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court. To the extent the provisions of this Certificate of Designations may
be inconsistent with any other provision of the Certificate of Incorporation,
this Certificate of Designations shall be controlling.
(8) Priorities. For the purposes hereof, any stock of any series or class
of the Company shall be deemed to rank:
(a) prior to the shares of this Series A Preferred Stock, as to
dividends or upon liquidation, if the holders of such series or class
shall be entitled to the receipt of dividends or of amounts
distributable upon a Liquidation Event, as the case may be, in
preference or priority to the holders of shares of this Series A
Preferred Stock;
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(b) on a parity with shares of this Series A Preferred Stock, as
to dividends or upon liquidation, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share
or sinking fund provisions, if any, be different from those of this
Series A Preferred Stock, if the holders of such stock shall be
entitled to the receipt of dividends or of amounts distributable upon
a Liquidation Event, as the case may be, in proportion to their
respective dividend rates or liquidation prices, without preference or
priority, one over the other, as between the holders of such stock and
the holders of shares of this Series A Preferred Stock; and
(c) junior to shares of this Series A Preferred Stock, as to
dividends or upon liquidation, if such stock shall be Common Stock or
if the holders of shares of this Series A Preferred Stock shall be
entitled to receipt of dividends or of amounts distributable upon a
Liquidation Event, as the case may be, in preference or priority to
the holders of shares of such series or class.
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