EXHIBIT 3.1
Preferred Stock Provisions
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Article IV to the Articles of Incorporation was amended by adding the following
section immediately following existing section 4.2:
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Section 4.21. Series A Convertible Preferred Stock. The Corporation shall have
an initial series of preferred stock created from the authorized Preferred
Shares. This series shall consist of 5,000,000 shares and be entitled Series A
Convertible Preferred Stock. Following are the powers, designations,
preferences, privileges and relative rights in respect of the Series A
Convertible Preferred Stock.
Section 1. Dividends.
(a) No Dividends on Series A Preferred. The Corporation is under no
obligation to declare dividends on the Series A Preferred Stock.
Section 2. Liquidation, Dissolution, or Winding-Up.
(a) Distributions to Holders of Series A Preferred. In the event of any
liquidation, dissolution or winding-up of the Corporation, the holders of
outstanding shares of Series A Preferred shall be entitled to be paid out of the
assets of the Corporation available for distribution to shareholders, before any
payment shall be made to or set aside for holders of the Common Stock, an amount
(the "Series A Liquidation Value") equal to $1.00 per share of Series A
Preferred. If upon any liquidation, dissolution or winding-up of the
Corporation, the assets lawfully available to be distributed to the holders of
Series A Preferred under the foregoing provisions of this Section 2(a) are
insufficient to permit payment to such stockholders of their full respective
preferential amounts, then all of the assets of the Corporation lawfully
available for distribution pursuant to this Section 2(a) shall be distributed
ratably among the holders of shares of Series A Preferred in proportion to the
full respective preferential amounts such holders are otherwise entitled to
receive.
(b) Deemed Liquidations. A consolidation or merger of the Corporation
with or into or with any other person(s) or entity(ies) which result in the
exchange of outstanding shares of the Corporation for securities or other
consideration issued or paid by any such entity or its affiliate and results in
the transfer of more than 49.9% of the voting power of the Corporation or a sale
or transfer by the Corporation of all or substantially all of its assets other
than in the ordinary course of business or other similar transaction (other than
any consolidation or merger involving only a change of the state of
incorporation or merger of the Corporation with or into a wholly-owned
subsidiary of the Corporation and in which there is no change in the terms of
the Series A Preferred) shall be regarded as a liquidation, dissolution, or
winding-up of the affairs of the Corporation within the meaning of this Section
2, unless the holders of a majority in interest of the Series A Preferred elect
otherwise. For purposes of this Section 2 and of Section 5 hereof, a sale of
substantially all of the assets of the Corporation shall mean the sale or other
disposition (whether in a single transaction or a series of related
transactions) other than in the ordinary course of business of all or
substantially all of its assets, as determined by reference to either the book
value or the fair market value of such assets.
(c) Non-Cash Distributions. In the event of a liquidation, dissolution,
or winding-up of the Corporation resulting in the availability of assets other
than cash for distribution to the holders of shares of Preferred Stock, the
holders of Preferred Stock shall be entitled to a distribution of cash and/or
other assets equal in value to the liquidation preference and other distribution
rights stated in Sections 2(a). In the event that such distribution to the
holders of shares of Preferred Stock shall include any assets other than cash,
the Board of Directors shall first determine in good faith and with due care the
value of such assets for such purpose, and shall notify all holders of shares of
Preferred Stock of such determination. The value of such assets for purposes of
the distribution under this Section 2(c) shall be the value as so determined by
the Board of Directors.
(d) Dispute Resolution Procedures. In the event of such objection, the
valuation of such assets for purposes of such distribution shall be determined
by an arbitrator selected by the objecting stockholders and the Board of
Directors, or in the event a single arbitrator cannot be agreed upon within 10
days after the written objection sent by the objecting stockholders in
accordance with the previous sentence, the valuation of such assets shall be
determined by arbitration in which (i) the objecting stockholders shall name in
their notice of objection one arbitrator, (ii) the Board of Directors shall name
a second arbitrator within 15 days from the receipt of such notice, (iii) the
two arbitrators thus selected shall select a third arbitrator within 15 days
thereafter, and (iv) the three arbitrators thus selected shall determine the
valuation of such assets within 15 days thereafter for purposes of such
distribution by majority vote. In the event the third arbitrator is not selected
as provided herein, then such arbitrator shall be selected by the President of
the American Arbitration Association ("AAA"). The costs of such arbitration
shall be borne by the Corporation or by the holders of Series A Preferred (on a
pro rata basis out of the assets otherwise distributable to them) as follows:
(i) If the valuation as determined by the arbitrators is greater than 90% of the
valuation as determined by the Board of Directors, the holders of Series A
Preferred shall pay the costs of the arbitration, and (ii) otherwise, the
Corporation shall bear the costs of the arbitration. The arbitration shall be
held in New York, New York in accordance with the rules of the AAA. The award
made by the arbitrators shall be binding upon the parties hereto, no appeal may
be taken from such award, and judgment thereon may be entered in any court of
competent jurisdiction.
Section 3. Voting Rights.
(a) General. Except as otherwise expressly provided herein or as
required by applicable law, the holder of each share of Series A Preferred shall
be entitled to vote on all matters. Each share of Series A Preferred shall
entitle the holder thereof to such number of votes per share as shall equal the
number of shares of Common Stock into which such share of Preferred Stock is
convertible pursuant to Section 4(a) hereof as of the record date for the
determination of stockholders entitled to vote on such matter, or if no record
date is established, at the date such vote is taken or any written consent of
stockholders is solicited.
(b) Action by Written Consent. Whenever holders of a class or series of
capital stock are required or permitted to take any action by vote, such action
may be taken without a meeting by written consent, setting forth the action so
taken and signed by the holders of at least such number of shares of such
class(es) and/or series of capital stock as would be sufficient to take such
action at a meeting of stockholders, except as otherwise expressly provided
herein.
Section 4. Conversion. Shares of Series A Preferred shall be subject to
conversion into shares of Common Stock or other securities, properties, or
rights, as set forth in this Section 4.
(a) Holders' Option to Convert.
(i) Conversion Rights. Subject to and in compliance with the
provisions of this Section 4, any shares of Series A Preferred may, at any time
or from time to time at the option of the holder, be converted into fully paid
and non-assessable shares of Common Stock. Each share of Series A Preferred
shall be entitled upon such conversion upon either optional or automatic
conversion into ten (10) shares of Common Stock, as adjusted appropriately for
stock splits, stock dividends, recombinations and the like and as adjusted
pursuant to the antidilution provisions described below.
(ii) Conversion Exercise. To exercise conversion rights under
this Section 4(a), a holder of shares of Preferred Stock to be so converted
shall surrender the certificate or certificates representing the shares being
converted to the Corporation at its principal office, and shall give written
notice to the Corporation at that office that such holder elects to convert such
shares. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for shares of Common Stock
issuable upon such conversion shall be issued. The certificate or certificates
for shares of Preferred Stock surrendered for conversion shall be accompanied by
evidence of proper assignment thereof to the Corporation. As promptly as
practicable, the Corporation shall issue and shall deliver to the holder of the
shares of Preferred Stock being converted, a certificate or certificates in such
denominations as such holder may request in writing for the number of full
shares of Common Stock issuable upon the conversion of such shares of Preferred
Stock in accordance with the provisions of this Section 4, plus cash as provided
in Section 4(h) below in respect of any fraction of a share of Common Stock
issuable upon such conversion. Such conversion shall be deemed to have been
effected immediately prior to the close of business on the Conversion Date, and
at such time the rights of the holder as holder of the converted shares of
Preferred Stock shall cease 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 shares of Common Stock represented thereby.
(b) Automatic Conversion.
(i) Qualified Public Offering. Each share of Series A
Preferred outstanding shall be converted into the number of fully paid and
non-assessable shares of Common Stock into which such share is then convertible
pursuant to Section 4(a) hereof, automatically and without further action,
immediately upon the closing of a firm-commitment underwritten public offering
of shares of Common Stock pursuant to an effective registration statement under
the Securities Act of 1933, as amended (the "Securities Act"), in which (i) the
aggregate price paid for such shares by the public shall be at least $7,500,000
and (ii) a price to the public not less than $3.00 per share (as adjusted to
reflect the occurrence of any subdivision or combination of Common Stock after
the date of filing of this Restated and Amended Certificate of Incorporation),
such conversion to be effective upon the closing of the sale of such shares by
the Corporation pursuant to the public offering (hereinafter referred to as a
"Qualified Public Offering").
(ii) Conversion of Two-thirds of Series A Preferred. Each
share of Series A Preferred outstanding shall be converted into the number of
fully paid and non-assessable shares of Common Stock into which such share is
then convertible pursuant to Section 4(a) hereof, automatically and without
further action, immediately upon conversion by the holders of two-thirds of the
Series A Preferred.
(iii) Mechanics of Automatic Conversion. Upon any automatic
conversion of shares of Preferred Stock into shares of Common Stock pursuant to
this Section 4(b), the holders of such converted shares shall surrender the
certificates formerly representing such shares at the office of the Corporation
or of any transfer agent for Common Stock. Thereupon, there shall be issued and
delivered to each such holder, promptly at such office and in his name as shown
on such surrendered certificate or certificates, a certificate or certificates
for the number of shares of Common Stock into which such shares of Preferred
Stock were so converted and cash as provided in Section 4(h) below in respect of
any fraction of a share of Common Stock issuable upon such conversion. The
Corporation shall not be obligated to issue certificates evidencing the shares
of Common Stock issuable upon such conversion unless and until certificates
formerly evidencing the converted shares of Preferred Stock are either delivered
to the Corporation or its transfer agent, as hereinafter provided, or the holder
thereof notifies the Corporation or such transfer agent that such certificates
have been lost, stolen, or destroyed and executes and delivers an agreement to
indemnify the Corporation from any loss incurred by it in connection therewith.
(c) Adjustments for Extraordinary Common Stock Events. As used herein,
"Extraordinary Common Stock Event" means, with respect to any series of
Preferred Stock, any occurrence after its original Issue Date of (i) the
issuance of additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, (ii) the subdivision of outstanding
shares of Common Stock into a greater number of shares of Common Stock, or (iii)
the combination of outstanding shares of Common Stock into a smaller number of
shares of Common Stock. In connection with the happening of any Extraordinary
Common Stock Event after the Original Issue Date of any series of Preferred
Stock, automatically and without further action, and with effect simultaneously
with the happening of such Extraordinary Common Stock Event, the applicable
Conversion Value of such series shall be adjusted by multiplying the then
effective applicable Conversion Value by a fraction, the numerator of which
shall be the number of shares of Common Stock outstanding (excluding treasury
stock) immediately before such Extraordinary Common Stock Event and the
denominator of which shall be the number of shares of Common Stock outstanding
(excluding treasury stock) immediately after such Extraordinary Common Stock
Event, and the product so obtained shall thereafter be the applicable Conversion
Value of such series. The applicable Conversion Value, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive Extraordinary
Common Stock Event or Events.
(d) Adjustments for Reclassifications. If the Common Stock issuable
upon the conversion of Preferred Stock shall be changed into the same or a
different number of shares of any class(es) or series of stock, whether by
reclassification or otherwise (other than an Extraordinary Common Stock Event or
a reorganization, merger, consolidation, or sale of assets provided for
elsewhere in this Section 4), then and in each such event the holder of each
share of Preferred Stock shall have the right thereafter to convert such share
into the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other change by
holders of the number of shares of Common Stock into which such shares of
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification, or change, all subject to further adjustment
as provided herein.
(e) Adjustments for Reorganization, Merger, Consolidation or Sale. If
at any time or from time to time (A) there shall be a capital reorganization of
Common Stock (other than a subdivision, combination of shares, reclassification,
or exchange of shares provided for elsewhere in this Section 4), or a merger or
consolidation of the Corporation with or into another Corporation, or the sale
of all or substantially all of the Corporation's assets to any other person and
(B) the holders of 75% or more of the outstanding shares of Series A Preferred
have elected pursuant to Section 2(b) hereof to forego the benefits of Section
2(b) in favor of the application to such transaction of this Section 4(e), then,
as a part of and as a condition to the effectiveness of such reorganization,
merger, consolidation, or sale, lawful and adequate provision shall be made so
that if the Corporation is not in economic effect the surviving Corporation,
each share of Preferred Stock shall be converted into a share of capital stock
of the surviving Corporation having equivalent preferences, rights, and
privileges, except that in lieu of being able to convert into shares of Common
Stock of the Corporation or the successor Corporation, the holders of shares of
Preferred Stock (including any such capital stock issued upon conversion of
Preferred Stock) shall thereafter be entitled to receive upon conversion of such
Preferred Stock (including any such capital stock issued upon conversion of
Preferred Stock) the number of shares of stock or other securities or property
of the Corporation or of the successor Corporation resulting from such merger or
consolidation or sale, to which a holder of the number of shares of Common Stock
deliverable upon conversion of such share of Preferred Stock immediately prior
to the capital reorganization, merger, consolidation, or sale would have been
entitled on such capital reorganization, merger, consolidation, or sale. In any
such case, appropriate provisions shall be made with respect to the rights of
the holders of Preferred Stock (including any such capital stock issued upon
conversion of Preferred Stock) after the reorganization, merger, consolidation,
or sale to the end that the provisions of this Section 4 (including without
limitation provisions for adjustment of the applicable Conversion Value and the
number of shares issuable upon conversion of Preferred Stock or such capital
stock) shall thereafter be applicable, as nearly as may be, with respect to any
shares of stock, securities, or assets to be deliverable thereafter upon the
conversion of such Preferred Stock or such capital stock.
(f) Adjustments for Diluting Issues.
(i) Except as otherwise provided below in this Section
4(f)(i), and except with respect to an Extraordinary Common Stock Event,
adjustments in respect of which are provided for in Section 4(c), if at any time
while there are any shares of Series A Preferred outstanding, the Corporation
shall issue any additional shares of Common Stock at a price per share less than
the applicable Conversion Value of such issues in effect immediately prior to
such issuance or sale, then in each such case the applicable Conversion Value of
such series shall be adjusted to equal the result of the following formula:
New applicable Conversion Value = (P1 x Q1) + (P2 x Q2)
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(Q1 + Q2)
where:
P1 = the applicable Conversion Value in effect immediately
prior to such issuance of additional shares of Common Stock;
Q1 = the aggregate number of shares of Common Stock
outstanding (including shares of Common Stock issuable upon
conversion, exchange or exercise of outstanding Derivative
Securities) immediately prior to such issuance of additional
shares of Common Stock;
P2 = the average price per share received by the Corporation
for the shares deemed issued in respect of such issuance of
additional shares of Common Stock; and
Q2 = the number of shares of Common Stock deemed issued in
respect of such issuance of additional shares of Common Stock.
The following (hereinafter "Excluded Issuances") shall not be deemed
issuances of additional shares of Common Stock for the purposes of this Section
4(f), or of Derivative Securities for the purposes of Section 4(f)(ii): the
Corporation's (A) issuance of shares of Common Stock upon conversion of shares
of Series A Preferred, (B) issuance of shares of Common Stock or Preferred Stock
as a dividend or other distribution on or subdivision of then outstanding Common
Stock or Preferred Stock, (C) issuance of shares of Common Stock or Derivative
Securities to officers and employees of, or bona fide consultants or advisors
(as defined for purposes of Rule 701 promulgated pursuant to the Securities Act)
to, the Corporation under any stock option or stock equity plan of the
Corporation (the "Plans") and issuance of shares of Common Stock upon exercise
of any such Derivative Securities, (D) issuance of shares of Common Stock or
Derivative Securities as consideration in connection with the Corporation's
acquisition of all or a substantial portion of the assets or all or any portion
of the capital stock of any Person or in connection with the Corporation's
entering into any business relationship with any Person with the prior approval
of the Board of Directors, including the director elected by the separate class
vote of the holders of Series A Preferred pursuant to Section 3(b), (E) issuance
of Derivative Securities, or Common Stock upon exercise of Derivative
Securities, to financial institutions or lessors in connection with commercial
credit arrangements, debt financings, equipment lease financings or similar
transactions, provided such financings are for other than primarily equity
financing purposes and approved by a majority of the Board of Directors, or (F)
issuance of shares of Common Stock in connection with a Qualified Public
Offering.
For purposes of this Section 4(f), if a part or all of the
consideration received by the Corporation in connection with the issuance of
shares of Common Stock or the issuance of any of the securities described below
in Section 4(f)(ii) consists of property other than cash, such consideration
shall be deemed to have the same value as is recorded on the books of the
Corporation with respect to receipt of such property so long as such recorded
value was determined reasonably and in good faith and with due care by the Board
of Directors of the Corporation, and shall otherwise be deemed to have a value
equal to its fair market value.
(ii) As used herein, "Derivative Securities" means (A) all
shares of stock and other securities that are convertible into or exchangeable
for shares of Common Stock and (B) all options, warrants, and other rights to
acquire shares of Common Stock or securities convertible into or exchangeable
for shares of Common Stock. For purposes of this Section 4(f), the issuance of
any Derivative Securities shall be deemed an issuance of shares of Common Stock
if the Net Consideration Per Share (as defined below) that may be received by
the Corporation for such Common Stock is less than the applicable Conversion
Value at the time of such issuance, and except as hereinafter provided, an
adjustment in the applicable Conversion Value shall be made upon each such
issuance in the manner provided in Section 4(f)(i) as if such Common Stock were
issued for such Net Consideration Per Share. No adjustment of the applicable
Conversion Value shall be made under this Section 4(f) upon the issuance of any
additional shares of Common Stock that are issued upon the exercise, conversion,
or exchange of any Derivative Securities if any such adjustment was previously
made upon the issuance of such Derivative Securities. Any adjustment of the
applicable Conversion Value with respect to this Section 4(f)(ii) shall be
disregarded if, as, and to the extent that the Derivative Securities that gave
rise to such adjustment expire or are canceled without having been exercised, so
that the applicable Conversion Value effective immediately upon such
cancellation or expiration shall be equal to the applicable Conversion Value
that otherwise would have been in effect immediately prior to the time of the
issuance of the expired or canceled Derivative Securities, with such additional
adjustments as subsequently would have been made to that applicable Conversion
Value had the expired or canceled Derivative Securities not been issued. In the
event that the terms of any Derivative Securities previously issued by the
Corporation are changed (whether by their terms or for any other reason) so as
to lower the Net Consideration Per Share payable with respect thereto (whether
or not the issuance of such Derivative Securities originally gave rise to an
adjustment of the applicable Conversion Value), the applicable Conversion Value
shall be recomputed as of the date of such change, so that the applicable
Conversion Value effective immediately upon such change shall be equal to the
applicable Conversion Value in effect at the time of the issuance of the
Derivative Securities subject to such change, adjusted for the issuance thereof
in accordance with the terms thereof after giving effect to such change, and
with such additional adjustments as subsequently would have been made to that
applicable Conversion Value had the Derivative Securities been issued on such
changed terms. For purposes of this Section 4(f)(ii), the Net Consideration Per
Share that may be received by the Corporation shall be determined as follows:
(A) "Net Consideration Per Share" shall mean the
amount equal to the total amount of consideration, if any, received by the
Corporation for the issuance of such Derivative Securities, plus the minimum
amount of additional consideration, if any, payable to the Corporation upon
exercise, conversion, and/or exchange thereof for shares of Common Stock,
divided by the maximum number of shares of Common Stock that would be issued if
all such Derivative Securities were exercised or converted at such Net
Consideration Per Share.
(B) The Net Consideration Per Share that may be
received by the Corporation shall be determined in each instance as of the date
of issuance of Derivative Securities without giving effect to any possible
future price adjustments or rate adjustments that may be applicable with respect
to such Derivative Securities and which are contingent upon future events;
provided, that in the case of an adjustment to be made as a result of a change
in terms of such Derivative Securities, the Net Consideration Per Share shall be
determined as of the date of such change.
(g) Certificate as to Adjustments. In each case of an adjustment or
readjustment of the applicable Conversion Rate, the Corporation will promptly
furnish each holder of Preferred Stock with a certificate, prepared by the chief
financial officer of the Corporation, showing such adjustment or readjustment,
and stating in detail the facts upon which such adjustment or readjustment is
based.
(h) Fractional Shares. No fractional shares of Common Stock or scrip
representing fractional shares shall be issued upon conversion of shares of
Preferred Stock. Instead of any fractional shares of Common Stock that would
otherwise be issuable upon conversion of shares of Preferred Stock, the
Corporation shall pay to the holder of the shares of Preferred Stock that were
converted a cash adjustment in respect of such fraction in an amount equal to
the same fraction of the market price per share of Common Stock (as determined
in a manner reasonably prescribed by the Board of Directors) at the close of
business on the Conversion Date.
(i) Partial Conversion. In the event some but not all of the shares of
Preferred Stock represented by a certificate or certificates surrendered by a
holder are converted, the Corporation shall execute and deliver to or on the
order of the holder, at the expense of the Corporation, a new certificate
representing the number of shares of Preferred Stock of the same series that
were not converted.
(j) Reservation of Common Stock. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock, solely for the purpose of effecting the conversion of shares of Preferred
Stock, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series A
Preferred, and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series A Preferred, then subject to the provisions of
Section 5(i) hereof, the Corporation shall take such corporate action as may, in
the opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
(k) Further Adjustment Provisions. In the event that, at any time as a
result of an adjustment made pursuant to this Section 4, the holder of any
shares of Preferred Stock upon thereafter surrendering such shares for
conversion shall become entitled to receive any shares or other securities of
the Corporation other than shares of Common Stock, the applicable Conversion
Rate in respect of such other shares or securities so receivable upon conversion
of shares of Preferred Stock shall thereafter be adjusted, and shall be subject
to further adjustment from time to time, in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Preferred Stock of
the applicable series contained in this Section 4, and the remaining provisions
hereof with respect to such issues of Preferred Stock shall apply on like or
similar terms to any such other shares or securities.
Section 5. Negative Covenants.
(a) So long as any shares of Series A Preferred are outstanding, the
Corporation shall not, without the approval of (or the waiver of rights under
this Section 5(a) by) the holders of at least a majority of the then outstanding
shares of Series A Preferred voting separately as a class, increase the
authorized number of shares of Series A Preferred or alter the powers,
preferences or rights of the holders of shares of Series A Preferred so as to
affect them adversely.
(b) So long as any shares of Series A Preferred are outstanding, the
Corporation shall not do any of the following things without the affirmative
vote or written consent of the holders of at least 50% of the then outstanding
shares of Series A Preferred, voting together as a class, and any attempt to do
so will be wholly void:
(i) Amend the Corporation's Restated and Amended Certificate
of Incorporation or the By-Laws of the Corporation to amend or change in any way
the terms of the Series A Preferred;
(ii) Authorize, designate, issue, or sell any shares of
capital stock or other securities convertible into or exercisable for any shares
of capital stock, with rights or preferences superior to the Series A Preferred;
or
(iii) Take any other action or enter into any other agreements
that might conflict with the Corporation's obligations hereunder with respect to
the holders of Series A Preferred.
Section 6. No Reissuance of Shares of Preferred Stock. No share or
shares of Series A Preferred acquired by the Corporation by reason of
redemption, purchase, conversion, or otherwise shall be reissued, and all such
shares shall be canceled, retired, and eliminated from the shares that the
Corporation is authorized to issue. The Corporation shall from time to time take
such appropriate corporate action as may be necessary to reduce the authorized
number of shares of Series A Preferred accordingly.
Section 7. Notices of Record Dates, Etc. In the event (i) the
Corporation establishes a record date to determine the holders of any class of
securities who are entitled to receive any dividend or other distribution, or
(ii) there occurs any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the Corporation,
any merger or consolidation of the Corporation, or any transfer of all or
substantially all of the assets of the Corporation to any other Corporation, or
any other entity or person, or any voluntary or involuntary dissolution,
liquidation, or winding-up of the Corporation, the Corporation shall deliver to
each holder of Series A Preferred, in accordance with Section 10(a) hereof, at
least 20 days prior to such record date or the proposed effective date of the
transaction specified therein, as the case may be, a notice specifying (a) the
date of such record date for the purpose of such dividend or distribution and a
description of such dividend or distribution, (b) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation, or winding-up is expected to become effective, and (c) the time, if
any, that is to be fixed, as to when the holders of record of Common Stock (or
other securities) shall be entitled to exchange their shares of Common Stock (or
other securities) for cash, securities, and/or other property deliverable upon
such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation, or winding-up.
Section 8. Other Rights. Except as otherwise provided in this Restated
and Amended Certificate of Incorporation, shares of Series A Preferred and
Common Stock shall be identical in all respects (each share of Preferred Stock
having equivalent rights to the number of shares of Common Stock into which it
is then convertible pursuant to Section 4 hereof), shall have the same powers,
preferences, and rights, without preference of any such class or share over any
other such class or share, and shall be treated as a single class of stock for
all purposes.
Section 9. Ranking. The Series A Preferred shall rank senior to Common
Stock, as to the distribution of assets on liquidation, dissolution, or
winding-up of the Corporation (as defined in Section 2 hereof).
Section 10. Miscellaneous.
(a) Notices. All notices, requests, payments, instructions or other
documents to be given hereunder shall be in writing or by written
telecommunication, and shall be deemed to have been duly given if (i) delivered
personally (effective upon delivery), (ii) mailed by certified mail, return
receipt requested, postage prepaid (effective five business days after
dispatch), (iii) sent by a reputable, established courier service that
guarantees next business day delivery (effective the next business day), or (iv)
sent by telecopier followed within 24 hours by confirmation by one of the
foregoing methods (effective upon receipt of the telecopy in complete, readable
form), addressed as follows (or to such other address as the recipient party may
have furnished to the sending party for the purpose pursuant to this Section
10(a)):
If to the Corporation:
X-Change Corporation, Inc.
36 W. 44th Street, Suite 1209
New York, NY 10036
Attention: President
Telecopy No. (646) 728-7023
If to any holder of Preferred Stock or Common Stock, to its
address as shown on the stock records of the Corporation.
(b) Transfer Taxes, Etc. The Corporation shall pay any and all stock
transfer, documentary stamp taxes, and the like that may be payable in respect
of any issuance or delivery of shares of Preferred Stock or shares of Common
Stock or other securities issued in respect of shares of Preferred Stock
pursuant hereto or certificates representing such shares or securities. The
Corporation shall not, however, be required to pay any such tax that may be
payable in respect of any transfer involved in the issuance or delivery of
shares of Preferred Stock or Common Stock or other securities in a name other
than that in which such shares were registered, or in respect of any payment to
any person other than the registered holder thereof with respect to any such
shares, and shall not be required to make any such issuance, delivery or payment
unless and until the person otherwise entitled to such issuance, delivery, or
payment has paid to the Corporation the amount of any such tax or has
established, to the satisfaction of the Corporation, that such tax has been paid
or is not payable.
(c) Transfer Agents. The Corporation may appoint, and from time to time
discharge and change, a transfer agent for the Preferred Stock and/or Common
Stock. Upon any such appointment or discharge of a transfer agent, the
Corporation shall send written notice thereof to each holder of record of
Preferred Stock and/or Common Stock, as applicable.