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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
THE CREDIT STORE, INC.
ARTICLE I
The name of the Corporation shall be The Credit Store, Inc.
ARTICLE II
The address of the registered office of the Corporation in the State of
Delaware is 1013 Centre Road, City of Wilmington, County of New Castle. The
registered agent of the Corporation at such address is Corporation Service
Company.
ARTICLE III
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.
ARTICLE IV
The total number of shares of stock which this Corporation is
authorized to issue is:
A. Common. 65,000,000 shares of Common Stock having a par
value of $.001 per share;
B. Preferred. 965,000 shares of Preferred Stock having a par
value of $.001 per share and to be issued in such series and to have
such rights, preferences, and designations as determined by the Board
of Directors of the Corporation;
C. Series A Preferred and Series B Preferred. 2,000,000 shares
of Series A Preferred Stock ("Series A") having a par value of $.001
per share and 800,000 shares of Series B Preferred Stock ("Series B")
having a par value of $.001 per share. Each share of Series A and
Series B Preferred Stock shall have the rights, preferences and
designations as set forth below and shall be on a parity with each
other with respect to dividends, redemption and liquidation as
described below and shall be treated as one class except with respect
to voting and conversion rights as further set forth below:
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1. Dividends
(a) The holders of shares of Series A and Series B shall be
entitled to receive, out of any assets at the time legally
available therefor and when and as declared by the Board of
Directors, dividends at the rate of five cents ($.05) per
share per annum, and no more, payable in cash commencing on
December 31, 1996, and thereafter on the last day of December
of each year that any such shares shall be outstanding. Such
dividends are prior and in preference to any declaration or
payment of any distribution (as defined in Section C(1)(b) of
this Article) on any other outstanding shares of preferred
stock or the common stock of this Corporation. Such dividends
shall accrue on each share of Series A and Series B from day
to day from the date of initial issuance thereof whether or
not earned or declared so that if such dividends with respect
to any previous dividend period at the rate provided for
herein have not been paid on, or declared and set apart for,
all shares of Series A and Series B at the time outstanding,
the deficiency shall be fully paid on, or declared and set
apart for, such shares before any distribution shall be paid
on, or declared and set apart for any other outstanding shares
of preferred stock or common stock.
(b) For purposes hereof, unless the context otherwise
requires, "distribution" shall mean the transfer of cash or
property without consideration, whether by way of dividend or
otherwise, payable other than in common stock, or the purchase
or redemption of shares of this Corporation (other than
redemptions set forth in Section C(2) of this Article or
repurchases of common stock held by employees or consultants
of this Corporation upon termination of their employment or
services pursuant to agreements providing for such repurchase)
for cash or property, including any such transfer, purchase or
redemption by a subsidiary of this Corporation.
2. Redemption
(a) At any time after December 31, 2001, the Corporation
may, at the option of the Board of Directors, redeem all or
part of the outstanding shares of the Series A and Series B
Preferred Stock at the redemption price set forth in Section
C(2)(b) of this Article, provided that the Corporation shall
give written notice by mail, postage prepaid, to the holders
of such stock to be redeemed at least twenty (20) days prior
to the date specified for redemption (the Redemption Date).
Such notice shall be addressed to each such shareholder at the
address of such holder appearing on the books of the
Corporation or given by such holder to the Corporation for the
purpose of notice, or if no such address appears or is so
given, at the place where the principal office of
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the Corporation is located. Such notice shall state the
Redemption Date, the Redemption Price (as defined in Section
C(2)(b) of this Article), the number of shares of Series A and
Series B Preferred Stock of such holders, treated as one
class, to be redeemed and the date of termination of the right
to convert the shares of Series B Preferred Stock of such
holder to Series A Preferred Stock pursuant to the terms
hereof and shall call upon such holder to surrender to the
Corporation on the Redemption Date at the place designated in
the notice such holder's redeemed stock. On or after the
Redemption Date, each holder of shares of Series A and Series
B Preferred Stock called for redemption shall surrender the
certificate evidencing such shares to the Corporation at the
place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price. If less
than all of the outstanding shares of Series A and Series B
Preferred Stock, treated as one class, are to be redeemed,
then the Corporation shall redeem a pro rata portion from each
holder of such stock according to the respective number of
shares of such stock held by such holder.
(b) Subject to the terms of Section C(2)(a) of this
Article, the Series A and Series B Preferred Stock may be
redeemed at a cash price equal to one dollar ($1.00) per
share, together with all unpaid dividends to and including the
Redemption Date (the "Redemption Price"); provided, however,
that payment of the Redemption Price shall be made from any
funds of the Corporation legally available therefor.
(c) From and after the Redemption Date (unless default
shall be made by the Corporation in duly paying the Redemption
Price in which case all the rights of the holders of such
shares shall continue) the holders of the shares of the Series
A and Series B Preferred Stock called for redemption shall
cease to have any rights as stockholders of the Corporation
except the right to receive, without interest, the Redemption
Price thereof upon surrender of certificates representing the
shares of such stock, and such shares shall not thereafter be
transferred (except with the consent of the Corporation) on
the books of the Corporation and shall not be deemed
outstanding for any purpose whatsoever.
(d) There shall be no redemption of any shares of Preferred
Stock of the Corporation where such action would be in
violation of applicable law.
3. Preferences on Liquidation
(a) In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation,
the holders of shares of
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the Series A and Series B Preferred Stock then outstanding,
treated as one class, shall be entitled to be paid, out of the
assets of the Corporation available for distribution to its
stockholders, whether from capital, surplus or earnings,
before any payment shall be made in respect of the
Corporation's common stock, an amount equal to one dollar
($1.00) per share, plus all unpaid dividends thereon to the
date fixed for distribution. After setting apart or paying in
full the preferential amounts due the holders of the Series A
and Series B Preferred Stock, the remaining assets of the
Corporation available for distribution to stockholders, if
any, shall be distributed exclusively to the holders of common
stock, each such issued and outstanding share of common stock
entitling the holder thereof to receive an equal proportion of
said remaining assets. If upon liquidation, dissolution, or
winding up of the Corporation, the assets of the Corporation
available for distribution to its shareholders shall be
insufficient to pay the holders of the Series A and Series B
Preferred Stock the full amounts to which they respectively
shall be entitled, the holders of such stock shall share
ratably in any distribution of assets according to the
respective amounts which would be payable in respect of the
shares held by them upon such distribution if all amounts
payable on or with respect to said shares were paid in full.
The merger or consolidation of the Corporation into or with
another corporation in which the Corporation shall not survive
and the shareholders of the Corporation shall own less than 50
percent of the voting securities of the surviving corporation
or the sale, transfer or lease (but not including a transfer
or lease by pledge or mortgage to a bona fide lender) of all
or substantially all of the assets of the Corporation shall be
deemed to be a liquidation, dissolution or winding up of the
Corporation as those terms are used in this paragraph.
(b) In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation,
the Corporation shall, within ten (10) days after the date the
Board of Directors approves such action, or within twenty (20)
days prior to any shareholder's meeting called to approve such
action, or within twenty (20) days after the commencement of
any involuntary proceeding, whichever is earlier, give each
holder of shares of Series A and Series B Preferred Stock
initial written notice of the proposed action. Such initial
written notice shall describe the material terms and
conditions of such proposed action, including a description of
the stock, cash, and property to be received by the holders of
shares of Series A and Series B Preferred Stock upon
consummation of the proposed action and the date of delivery
thereof. If any material change in the facts set forth in the
initial notice shall occur, the Corporation shall promptly
give written notice to each holder of shares of Series A and
Series B Preferred Stock of such material change.
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The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution, or winding up of the
Corporation before the expiration of twenty (20) days after
the mailing of the initial notice or ten (10) days after the
mailing of any subsequent written notice, whichever is later;
provided that any such twenty-day or ten-day period may be
shortened upon the written consent of the holders of a
majority of the outstanding shares of Series A and Series B
Preferred Stock.
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation
which will involve the distribution of assets other than cash,
the Corporation shall promptly engage competent independent
appraisers to determine the value of the assets to be
distributed to the holders of shares of Series A and Series B
Preferred Stock and the holders of shares of common stock (it
being understood that with respect to the valuation of
securities, the Corporation shall engage such appraiser as
shall be approved by the holders of a majority of shares of
the Corporation's outstanding Series A and Series B Preferred
Stock). The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each
holder of shares of Series A and Series B Preferred Stock of
the appraiser's valuation.
4. Voting Rights
(a) Except as otherwise required by law or by the
certificate of incorporation of the Corporation, based on the
number of shares of the Corporation's capital stock
outstanding upon the date of issuance, the outstanding shares
of Series A Preferred Stock, regardless of the number of such
shares outstanding and as long as at least one of such shares
is outstanding, shall represent eighty percent (80%) of all
votes entitled to be voted at any annual or special meeting of
shareholders of the Corporation or action by written consent
of shareholders. Each outstanding share of the Series A
Preferred Stock shall represent its proportionate share of the
80% which is allocated to the outstanding shares of Series A
Preferred Stock. The 80% vote to which the outstanding shares
of Series A Preferred Stock is entitled shall be subsequently
diluted in voting rights if and to the extent the Corporation
issues other shares of capital stock for value after the date
of initial issuance of shares of Series A Preferred Stock.
(b) Each outstanding share of Series B Preferred Stock
shall entitle the holder thereof to one vote on all matters as
to which holders
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of common stock shall be entitled to vote in addition to the
right to vote upon any matters described herein.
5. Conversion Rights of Series B
At any time after December 31, 2001, the holders of
outstanding shares of Series B Preferred Stock, at their
option, may convert said shares, all or in part, on a share
for share basis, to shares of Series A Preferred Stock by
notifying the Corporation in writing and by surrendering the
certificates representing the Series B Preferred Stock. Said
conversion shall be deemed to be effective on the 20th day
after written notice of conversion has been received by the
Corporation. The shares of Series A Preferred Stock issued in
exchange for the Series B Preferred Stock shall entitle the
holder thereof to the same accrued dividend rights as were in
existence with respect to the converted Series B Preferred
Stock.
6. Negative Covenants
This Corporation will not, by amendment of its certificate
of incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be
observed or performed hereunder by this Corporation, but will
at all times in good faith assist in the carrying out of all
the provisions of this section and in the taking of all such
action as may be necessary or appropriate in order to protect
the rights of the holders of the Series A and Series B
Preferred Stock against impairment.
7. Status
In case any outstanding shares of Series A and Series B
Preferred Stock shall be redeemed or converted, the shares so
redeemed shall be deemed to be permanently canceled and shall
not resume the status of authorized but unissued shares of
Series A and Series B Preferred Stock, respectively.
8. Changes Affecting Series A and Series B
So long as any shares of Series A and Series B Preferred
Stock are outstanding, the Corporation shall not (i) alter or
change any of the powers, preferences, privileges, or rights
of the Series A or Series B Preferred Stock; or (ii) amend the
provisions of this Section C(8); or (iii) create any new class
or series of shares having preferences prior to or being on a
parity with the Series A or Series B Preferred Stock as to
dividends or liquidations; in each case, without first
obtaining the approval by vote or written consent in the
manner provided by law, of the holders of at least a majority
of the total number of
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outstanding shares of each particular series of preferred
stock, both Series A and Series B, each voting separately as
to its own class, as to changes affecting that series, and
together, both Series A and Series B treated as one class.
D. Series C Preferred. 5,000 shares of Series C Preferred
Stock ("Series C") having a par value of $.001 per share with the
rights, preferences and designations set forth below:
1. Dividends.
(a) Subject to the right of the holders of the
Corporation's Series A and Series B Preferred Stock in respect
of dividend rights to receive a preferential dividend, the
holders of shares of Series C Preferred Stock shall be
entitled to receive, out of any assets at the time legally
available therefor and when and as declared by the Board of
Directors, dividends at the rate of six percent (6%) per share
per annum, and no more, payable in cash commencing on December
31, 1997, and thereafter on the last day of December of each
year that any such shares shall be outstanding. Such dividends
on the Series C Preferred Stock are prior and in preference to
any declaration or payment of any distribution (as defined in
Section D(1)(b) of this Article) on any other outstanding
shares of Preferred Stock (other than Series A and Series B
Preferred Stock) or the common stock of this Corporation. Such
dividends shall accrue on each share of Series C Preferred
Stock from day to day from the date of initial issuance
thereof whether or not earned or declared so that if such
dividends with respect to any previous dividend period at the
rate provided for herein have not been paid on, or declared
and set apart for, all shares of Series C Preferred Stock at
the time outstanding, the deficiency shall be fully paid on,
or declared and set apart for, such shares before any
distribution shall be paid on, or declared and set apart for
any other outstanding shares of Preferred Stock (other than
Series A and Series B Preferred Stock) or common stock.
(b) For purposes of this Section D, unless the context
otherwise requires, "distribution" shall mean the transfer of
cash or property without consideration, whether by way of
dividend or otherwise, payable other than in common stock, or
the purchase or redemption of shares of the Corporation (other
than redemptions set forth in Section D(2) of this Article or
repurchases of common stock held by employees or consultants
of the Corporation upon termination of their employment or
services pursuant to agreements providing for such repurchase)
for cash or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
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2. Redemption.
(a) At any time after December 31, 1998, the Corporation
may, at the option of the Board of Directors, redeem all or
part of the outstanding shares of the Series C Preferred Stock
at the redemption price set forth in Section D(2)(b) of this
Article, provided that the Corporation shall give written
notice by mail, postage prepaid, to the holders of such stock
to be redeemed at least twenty (20) days prior to the date
specified for redemption (the "Redemption Date"). Such notice
shall be addressed to each such stockholder at the address of
such holder appearing on the books of the Corporation or given
by such holder to the Corporation for the purpose of notice,
or if no such address appears or is so given, at the place
where the principal office of the Corporation is located. Such
notice shall state the Redemption Date, the Redemption Price
(as defined in Section D(2)(b) below), the number of shares of
Series C Preferred Stock of such holders to be redeemed and
shall call upon such holder to surrender to the Corporation on
the Redemption Date at the place designated in the notice such
holder's redeemed stock. On or after the Redemption Date, each
holder of shares of Series C Preferred Stock called for
redemption shall surrender the certificate evidencing such
shares to the Corporation at the place designated in such
notice and shall thereupon be entitled to receive payment of
the Redemption Price. If less than all of the outstanding
shares of Series C Preferred Stock are to be redeemed, then
the Corporation shall redeem a pro rata portion from each
holder of such stock according to the respective number of
shares of such stock held by such holder.
(b) Subject to the terms of Section D(2)(a) of this
Article, the Series C Preferred Stock may be redeemed at a
cash price equal to one thousand dollars ($1,000.00) per
share, together with all unpaid dividends to and including the
Redemption Date (the "Redemption Price"); provided, however,
that payment of the Redemption Price shall be made from any
funds of the Corporation legally available therefor.
(c) From and after the Redemption Date (unless default
shall be made by the Corporation in duly paying the Redemption
Price in which case all the rights of the holders of such
shares shall continue), the holders of the shares of the
Series C Preferred Stock called for or requesting redemption
shall cease to have any rights as stockholders of the
Corporation, except the right to receive, without interest,
the Redemption Price thereof upon surrender of certificates
representing the shares of such stock, and such shares shall
not thereafter be transferred (except with the consent of the
Corporation) on the books of
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the Corporation and shall not be deemed outstanding for any
purpose whatsoever.
(d) There shall be no redemption of any shares of Series C
Preferred Stock of the Corporation where such action would be
in violation of applicable law.
3. Preferences on Liquidation.
(a) Subject to Section D(7) of this Article, in the event
of any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation, the holders of shares of the
Series C Preferred Stock then outstanding, shall be entitled
to be paid, out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any payment shall be made in
respect of the Corporation's common stock, an amount equal to
one thousand dollars ($1,000.00) per share, plus all unpaid
dividends thereon to the date fixed for distribution. After
setting apart or paying in full the preferential amounts due
the holders of the Series C Preferred Stock, the remaining
assets of the Corporation available for distribution to
stockholders, if any, shall be distributed exclusively to the
holders of common stock, each such issued and outstanding
share of common stock entitling the holder thereof to receive
an equal proportion of said remaining assets. If upon
liquidation, dissolution, or winding up of the Corporation,
the assets of the Corporation available for distribution to
its stockholders shall be insufficient to pay the holders of
the Series C Preferred Stock the full amounts to which they
respectively shall be entitled, the holders of such stock
shall share ratably in any distribution of assets according to
the respective amounts which would be payable in respect of
the shares held by them upon such distribution if all amounts
payable on or with respect to said shares were paid in full.
The merger or consolidation of the Corporation into or with
another corporation in which the Corporation shall not survive
and the shareholders of the Corporation shall own less than
fifty percent (50%) of the voting securities of the surviving
corporation or the sale, transfer or lease (but not including
a transfer or lease by pledge or mortgage to a bona fide
lender) of all or substantially all of the assets of the
Corporation shall be deemed to be a liquidation, dissolution
or winding up of the Corporation as those terms are used in
this paragraph.
(b) In the event of any voluntary or involuntary
liquidation, dissolution, or winding up of the Corporation,
the Corporation shall, within ten (10) days after the date the
Board of Directors approves such action, or within twenty (20)
days prior to any stockholder's meeting
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called to approve such action, or within twenty (20) days
after the commencement of any involuntary proceeding,
whichever is earlier, give each holder of shares of Series
C Preferred Stock initial written notice of the proposed
action. Such initial written notice shall describe the
material terms and conditions of such proposed action,
including a description of the stock, cash, and property to
be received by the holders of shares of Series C Preferred
Stock upon consummation of the proposed action and the date
of delivery thereof. If any material change in the facts
set forth in the initial notice shall occur, the
Corporation shall promptly give written notice to each
holder of shares of Series C Preferred Stock of such
material change. The Corporation shall not consummate any
voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation before the expiration of
twenty (20) days after the mailing of the initial notice or
ten (10) days after the mailing of any subsequent written
notice, whichever is later; provided that any such twenty-
day or ten-day period may be shortened upon the written
consent of the holders of a majority of the outstanding
shares of Series C Preferred Stock.
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation
which will involve the distribution of assets other than
cash, the Corporation shall promptly engage competent
independent appraisers to determine the value of the assets
to be distributed to the holders of shares of Series A,
Series B and Series C Preferred Stock and the holders of
shares of common stock (it being understood that with
respect to the valuation of securities, the Corporation
shall engage such appraiser as shall be approved by the
holders of a majority of shares of the Corporation's
outstanding Preferred Stock). The Corporation shall, upon
receipt of such appraiser s valuation, give prompt written
notice to each holder of shares of Series C Preferred Stock
of the appraiser's valuation.
4. Voting Rights.
Except as otherwise required by law, the holders of the
Series C Preferred Stock shall not be entitled to vote upon
any matter relating to the business or affairs of the
Corporation or for any other purpose.
5. Negative Covenants.
The Corporation will not, by amendment of this Certificate
of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will
at all times in
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good faith assist in the carrying out of all the provisions of
this paragraph and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the
holders of the Series C Preferred Stock against impairment.
6. Status.
In case any outstanding shares of Series C Preferred Stock
shall be redeemed, the shares so redeemed shall be deemed to
be permanently canceled and shall not resume the status of
authorized but unissued shares of Series C Preferred Stock.
7. Ranking, Changes Affecting Series C.
(a) The Series C Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and
dissolution, (i) rank senior to any of the Corporation's
common stock and any other class or series of stock of the
Company which by its terms shall rank junior to the Series
C Preferred Stock, and (ii) rank junior to the Company's
Series A and Series B Preferred Stock and any other class
or series of stock of the Company which by its terms shall
rank senior to the Series C Preferred Stock.
(b) So long as any shares of Series C Preferred Stock
are outstanding, the Corporation shall not (i) alter or
change any of the powers preferences, privileges, or rights
of the Series C Preferred Stock; or (ii) amend the
provisions of this Section D(7); or (iii) authorize or
issue any new class or series of shares having preferences
prior to or being on a parity with the Series C Preferred
Stock as to dividends or liquidations; in each case,
without first obtaining the approval by vote or written
consent, in the manner provided by law, of the holders of
at least a majority of the outstanding shares of Series C
Preferred Stock, as to changes affecting the Series C
Preferred Stock.
E. Series D Preferred. 10,000 shares of Series D Preferred
Stock ("Series D") having a par value of $.001 per share and a stated
value of one thousand dollars ($1,000.00) per share (the "Series D
Stated Value"), with the rights, preferences and designations set forth
below:
1. Dividends.
(a) The holders of shares of Series D Preferred Stock
shall be entitled to receive, out of any assets at the time
legally available therefor and when and as declared by the
Board of Directors, dividends
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calculated on the Series D Stated Value per share at the rate
of eight percent (8%) per share per annum, and no more,
payable in cash commencing on December 31, 1998, and
thereafter on the last day of December of each year that any
such shares shall be outstanding. Such dividends on the Series
D Preferred Stock are prior and in preference to any
declaration or payment of any distribution (as defined in
Section E(1)(b) of this Article) on any other outstanding
shares of Preferred Stock or the common stock of this
Corporation. Such dividends shall accrue on each share of
Series D Preferred Stock from day to day from the date of
initial issuance thereof whether or not earned or declared so
that if such dividends with respect to any previous dividend
period at the rate provided for herein have not been paid on,
or declared and set apart for, all shares of Series D
Preferred Stock at the time outstanding, the deficiency shall
be fully paid on, or declared and set apart for, such shares
before any distribution shall be paid on, or declared or set
apart for any other outstanding shares of Preferred Stock or
common stock.
(b) For purposes hereof, unless the context otherwise
requires, "distribution" shall mean the transfer of cash or
property without consideration, whether by way of dividend or
otherwise, payable other than in common stock, or the purchase
or redemption of shares of the Corporation (other than
redemptions set forth in Section E(2) below or repurchases of
common stock held by employees or consultants of the
Corporation upon termination of their employment or services
pursuant to agreements providing for such repurchase) for cash
or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
2. Redemption.
(a) The Corporation may, at the option of the Board of
Directors, redeem all or part of the outstanding shares of the
Series D Preferred Stock at the redemption price set forth in
Section E(2)(b) below, provided that the Corporation shall
give written notice by mail, postage prepaid, to the holders
of such stock to be redeemed at least twenty (20) days prior
to the date specified for redemption (the "Redemption Date")
and provided further that such holders may, at any time prior
to the Redemption Date, convert their shares of Series D
Preferred Stock pursuant to the provisions of Section E(5) of
this Article. Such notice shall be addressed to each such
stockholder at the address of such holder appearing on the
books of the Corporation or given by such holder to the
Corporation for the purpose of notice, or if no such address
appears or is so given, at the place where the principal
office of the Corporation is located. Such notice shall state
the Redemption Date, the Redemption Price (as defined in
Section E(2)(b)
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of this Article), the number of shares of Series D Preferred
Stock of such holders to be redeemed and shall call upon such
holder to surrender to the Corporation on the Redemption Date
at the place designated in the notice such holder's redeemed
stock. On or after the Redemption Date, each holder of shares
of Series D Preferred Stock called for redemption shall
surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Redemption
Price. If less than all of the outstanding shares of Series D
Preferred Stock are to be redeemed, then the Corporation shall
redeem a pro rata portion from each holder of such stock
according to the respective number of shares of such stock
held by such holder.
(b) Subject to the terms of Section E(2)(a) above, the
Series D Preferred Stock may be redeemed at a cash price equal
to one thousand dollars ($1,000.00) per share, together with
all unpaid dividends to and including the Redemption Date (the
"Redemption Price"); provided, however, that payment of the
Redemption Price shall be made from any funds of the
Corporation legally available therefor.
(c) From and after the Redemption Date (unless default
shall be made by the Corporation in duly paying the Redemption
Price in which case all the rights of the holders of such
shares shall continue), the holders of the shares of the
Series D Preferred Stock called for or requesting redemption
shall cease to have any rights as stockholders of the
Corporation, except the right to receive, without interest,
the Redemption Price thereof upon surrender of certificates
representing the shares of such stock, and such shares shall
not thereafter be transferred (except with the consent of the
Corporation) on the books of the Corporation and shall not be
deemed outstanding for any purpose whatsoever.
(d) There be no redemption of any shares of Series D
Preferred Stock of the Corporation where such action would be
in violation of applicable law.
3. Preferences on Liquidation.
(a) Subject to Section E(8) of this Article, in the event
of any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation, the holders of shares of the
Series D Preferred Stock then outstanding, shall be entitled
to be paid, out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any payment shall be made in
respect of the Corporation's common stock, an amount equal to
one
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thousand dollars ($1,000.00) per share, plus all unpaid
dividends thereon to the date fixed for distribution. After
setting apart or paying in full the preferential amounts due
the holders of the Series D Preferred Stock, the remaining
assets of the Corporation available for distribution to
stockholders, if any, shall be distributed first to the holder
of the Corporation's Series A, Series B, and Series C
Preferred Stock in accordance with the liquidation preferences
of each such Series and then to the holders of common stock,
each such issued and outstanding share of common stock
entitling the holder thereof to receive an equal proportion of
said remaining assets. If upon liquidation, dissolution, or
winding up of the Corporation, the assets of the Corporation
available for distribution to its stockholders shall be
insufficient to pay the holders of the Series D Preferred
Stock the full amounts to which they respectively shall be
entitled, the holders of such stock shall share ratably in any
distribution of assets according to the respective amounts
which would be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with
respect to said shares were paid in full. The merger or
consolidation of the Corporation into or with another
corporation in which the Corporation shall not survive and the
stockholders of the Corporation shall own less than fifty
percent (50%) of the voting securities of the surviving
corporation or the sale, transfer or lease (but not including
a transfer or lease by pledge or mortgage to a bona fide
lender) of all or substantially all of the assets of the
Corporation shall be deemed to be a liquidation, dissolution
or winding up of the Corporation as those terms are used in
this paragraph.
(b) In the event of any voluntary or involuntary
liquidation dissolution, or winding up of the Corporation, the
Corporation shall, within ten (10) days after the date the
Board of Directors approves such action, or within twenty (20)
days prior to any stockholder's meeting called to approve such
action, or within twenty (20) days after the commencement of
any involuntary proceeding, whichever is earlier, give each
holder of shares of Series D Preferred Stock initial written
notice of the proposed action. Such initial written notice
shall describe the material terms and conditions of such
proposed action, including a description of the stock, cash
and property to be received by the holders of shares of Series
D Preferred Stock upon consummation of the proposed action and
the date of delivery thereof. If any material change in the
facts set forth in the initial notice shall occur, the
Corporation shall promptly give written notice to each holder
of shares of Series D Preferred Stock of such material change.
The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution, or winding up of the
Corporation before the expiration of twenty (20) days after
the mailing of the initial notice or ten (10) days
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after the mailing of any subsequent written notice, whichever
is later, provided that any such twenty-day or ten-day period
may be shortened upon the written consent of the holders of a
majority of the outstanding shares of Series D Preferred
Stock.
(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation
which will involve the distribution of assets other than cash,
the Corporation shall promptly engage competent independent
appraisers to determine the value of the assets to be
distributed to the holders of shares of Series A, Series B,
Series C, and Series D Preferred Stock and the holders of
shares of common stock (it being understood that with respect
to the valuation of securities, the Corporation shall engage
such appraiser as shall be approved by the holders of a
majority of shares of the Corporation's outstanding Preferred
Stock). The Corporation shall, upon receipt of such
appraiser's valuation, give prompt written notice to each
holder of shares of Series D Preferred Stock of the
appraiser's valuation.
4. Voting Rights.
Except as otherwise required by law, the holders of the
Series D Preferred Stock shall not be entitled to vote upon any matter
relating to the business or affairs of the Corporation or for any other
purpose.
5. Conversion.
(a) Subject to and upon compliance with the provisions of
Section E(5)(b) below, the holder of any shares of Series D
Preferred Stock shall have the right, at such holder's option,
at any time (and from time to time) prior to May 31, 2001, to
convert any of such shares into that number of fully paid and
nonassessable shares of common stock (calculated as to each
conversion to the nearest 1/100th of a share) equal to the
Conversion Rate (as defined below) multiplied by the number of
shares of Series D Preferred Stock to be converted pursuant to
this Section E(5)(a) by surrendering the certificate or
certificates representing shares to be converted in the manner
provided in Section E(5)(b) below. The "Conversion Rate" per
share of Series D Preferred Stock shall be Three Hundred
Eighty (380) shares of common stock for each share of Series D
Preferred Stock. If for any reason the Corporation has not
paid any portion of the unpaid accrued or declared dividends
on the shares of Series D Preferred Stock being converted,
such dividends shall be converted into an additional number of
shares of common stock determined by dividing the amount of
the unpaid dividends by 2.625.
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(b) (i) In order to exercise the optional conversion
privilege pursuant to Section E(5)(a) above, the holder of
each share to be converted shall deliver to the Corporation
during regular business hours, at the principal office of
the Corporation or at such other place as may be designated
by the Corporation, the certificate or certificates
representing the shares to be converted, duly endorsed or
assigned in blank (or to the Corporation if so requested),
accompanied by written notice stating that the holder
elects to convert such shares. Unless the shares of common
stock issuable upon conversion are to be issued in the same
name as the name in which the shares of Series D Preferred
Stock are registered, each share surrendered for conversion
shall be accompanied by an instrument of transfer, in form
satisfactory to the Corporation, duly executed by the
holder or such holder's duly authorized attorney and by
funds in an amount sufficient to pay any transfer or
similar tax.
(ii) As promptly as practicable after the surrender by
a holder of the certificate or certificates representing
shares in accordance with this Section E(5)(b), the
Corporation shall issue and shall deliver to the holder 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 Section
E(5), and a certificate representing any shares of Series D
Preferred Stock that were represented by the certificate or
certificates surrendered to the Corporation in connection
with such conversion but were not converted. Any fractional
interest in respect of a share of common stock arising out
of such conversion shall be settled as provided in Section
E(5)(c) below. The Corporation shall pay all expenses,
taxes (other than stock transfer taxes) and other charges
required to be paid by the Corporation in order to issue
the shares of common stock pursuant to this Section (5)(b).
(iii) Conversion shall be deemed to have been effected
with respect to conversion pursuant to Section E(5)(a)
above, on the date on which all of the conditions specified
in Section E(5)(b)(i) above have been satisfied (the
"Series D Conversion Date"), 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 on the Series D Conversion Date,
unless the stock transfer books of the Corporation shall be
closed on the Series D Conversion Date, in which case such
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person or persons shall be deemed to have become such
holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are
open. All shares of common stock delivered upon conversion
of the shares of Series D Preferred Stock will upon
delivery be duly and validly issued and fully paid and
nonassessable, and not subject to any preemptive rights.
Upon the surrender of certificates representing shares of
Series D Preferred Stock to be converted, such shares no
longer shall 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 as provided herein.
(c) No fractional shares or securities representing
fractional shares of common stock shall be issued upon
conversion of the shares of Series D Preferred Stock. Any
fractional interest in a share of common stock resulting from
conversion of a share shall be paid in cash (computed to the
nearest cent) based upon the fair market value of a share of
common stock on the Series D Conversion Date, as determined in
good faith by the Board of Directors in the exercise of its
reasonable business judgment.
(d) In the event the outstanding shares of common stock
shall be split, subdivided, combined or consolidated, by
reclassification or otherwise, into a greater or lesser number
of shares of common stock, and in the event that the
Corporation shall issue shares of common stock by way of a
stock dividend or other distribution to the holders of common
stock, the number of shares of common stock into which each
issued and outstanding share of Series D Preferred Stock shall
be convertible immediately prior to such split, subdivision,
stock dividend, combination or consolidation shall,
concurrently with the effectiveness of such split,
subdivision, stock dividend, combination or consolidation be
increased or decreased proportionately.
(e) Subject to the notice requirements of this Section
E(5)(e), if the Corporation shall be a party to any
transaction that involves any consolidation or merger of the
Corporation with or into another corporation, or any sale of
all or substantially all of the assets of the Corporation to
another corporation, and which is effected in such a way that
the holders of common stock shall be entitled to receive cash,
stock, securities or other assets with respect to or in
exchange for common stock, then the right to convert the
shares of Series D Preferred Stock shall terminate at the
close of business on the date as of which the holders of
common stock of record shall be entitled to exchange their
shares of common stock for cash, securities or other
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assets deliverable upon such consolidation, merger or sale of
all or substantially all of the assets of the Corporation. In
case the Corporation shall enter into any agreement or
understanding or the Board of Directors shall adopt any
resolution authorizing or proposing any transaction of the
type described in this Section E(5)(e), then in any such event
the Corporation promptly shall cause to be mailed, by
registered or certified mail, postage prepaid, to the holders
of shares of Series D Preferred Stock at each such holder's
last address appearing on the records of the Corporation,
twenty (20) days prior to the date on which the Corporation
closes its books or takes a record for determining rights to
vote with respect to any consolidation, merger or sale, a
notice of such agreement, understanding or resolution stating
the expected record date for determining holders of common
stock entitled to exchange their shares with respect to a
transaction described in this Section E(5)(e); provided,
however, that the Corporation shall not be liable or
responsible if the actual dates of any such events shall be
different from the expected dates set forth in such notice.
(f) The Corporation shall at all times reserve and keep
available out of its authorized and unissued common stock,
solely for the purpose of effecting the conversion of shares
of Series D Preferred Stock, such number of shares of common
stock as shall from time to time be sufficient to effect the
conversion of all then outstanding shares of Series D
Preferred Stock. The Corporation shall, from time to time,
subject to and in accordance with applicable law, increase the
authorized shares of common stock if at any time the number of
authorized shares of common stock remaining unissued shall not
be sufficient to permit the conversion at such time of all
then outstanding shares of Series D Preferred Stock.
6. Negative Covenants.
The Corporation will not, by amendment of the Certificate of
Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder
by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section E(6) and in the
taking of all such action as may be necessary or appropriate in order
to protect the rights of the holders of the Series D Preferred Stock
against impairment.
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7. Status.
In case any outstanding shares of Series D Preferred Stock
shall be redeemed, the shares so redeemed shall be deemed to
be permanently canceled and shall not resume the status of
authorized but unissued shares of Series D Preferred Stock.
8. Ranking: Changes Affecting Series D.
(a) The Series D Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and
dissolution, (i) rank senior to any of the Corporation's
common stock, the Company's Series A, Series B and Series C
Preferred Stock and any other class or series of stock of
the Company which by its terms shall rank junior to the
Series D Preferred Stock, and (ii) rank junior to any class
or series of stock of the Company which by its terms shall
rank senior to the Series D Preferred Stock.
(b) So long as any shares of Series D Preferred Stock
are outstanding, the Corporation shall not (i) alter or
change any of the powers, preferences, privileges, or
rights of the Series D Preferred Stock; or (ii) amend the
provisions of this Section E(8); or (iii) authorize or
issue any new class or series of shares having preferences
prior to or being on a parity with the Series D Preferred
Stock as to dividends or liquidations; in each case,
without first obtaining the approval by vote or written
consent, in the manner provided by law, of the holders of
at least a majority of the outstanding shares of Series D
Preferred Stock, as to changes affecting the Series D
Preferred Stock.
F. Series E Preferred. 20,000 shares of Series E Preferred
Stock ("Series E") having a par value of $.001 per share and a stated
value of one thousand dollars ($1,000.00) per share (the "Series E
Stated Value"), with the rights, preferences and designations set forth
below:
1. Dividends.
(a) The holders of shares of Series E Preferred Stock shall
be entitled to receive, out of any assets at the time legally
available therefor and when and as declared by the Board of
Directors, dividends calculated on the Series E Stated Value
per share at the rate of eight percent (8%) per share per
annum, and no more, payable in cash commencing on December 31,
1998, and thereafter on the last day of December of each year
that any such shares shall be outstanding. Such dividends on
the Series E Preferred Stock are prior and in preference to
any declaration or payment of any distribution (as defined in
Section
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F(1)(b) of this Article) on any other outstanding shares of
Preferred Stock or the common stock of this Corporation. Such
dividends shall accrue on each share of Series E Preferred
Stock from day to day from the date of initial issuance
thereof whether or not earned or declared so that if such
dividends with respect to any previous dividend period at the
rate provided for herein have not been paid on, or declared
and set apart for, all shares of Series E Preferred Stock at
the time outstanding, the deficiency shall be fully paid on,
or declared and set apart for, such shares before any
distribution shall be paid on, or declared or set apart for
any other outstanding shares of Preferred Stock or common
stock.
(b) For purposes hereof, unless the context otherwise
requires, "distribution" shall mean the transfer of cash or
property without consideration, whether by way of dividend or
otherwise, payable other than in common stock, or the purchase
or redemption of shares of the Corporation (other than
redemptions set forth in Section F(2) below or repurchases of
common stock held by employees or consultants of the
Corporation upon termination of their employment or services
pursuant to agreements providing for such repurchase) for cash
or property, including any such transfer, purchase or
redemption by a subsidiary of the Corporation.
2. Redemption.
(a) The Corporation may, at the option of the Board of
Directors, redeem all or part of the outstanding shares of the
Series E Preferred Stock at the redemption price set forth in
Section F(2)(b) below, provided that the Corporation shall
give written notice by mail, postage prepaid, to the holders
of such stock to be redeemed at least twenty (20) days prior
to the date specified for redemption (the "Redemption Date")
and provided further that such holders may, at any time prior
to the Redemption Date, convert their shares of Series E
Preferred Stock pursuant to the provisions of Section F(5) of
this Article. Such notice shall be addressed to each such
stockholder at the address of such holder appearing on the
books of the Corporation or given by such holder to the
Corporation for the purpose of notice, or if no such address
appears or is so given, at the place where the principal
office of the Corporation is located. Such notice shall state
the Redemption Date, the Redemption Price (as defined in
Section F(2)(b) below), the number of shares of Series E
Preferred Stock of such holders to be redeemed and shall call
upon such holder to surrender to the Corporation on the
Redemption Date at the place designated in the notice such
holder's redeemed stock. On or after the Redemption Date, each
holder of shares of Series E Preferred Stock called for
redemption shall surrender the certificate evidencing such
shares to the Corporation
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at the place designated in such notice and shall thereupon be
entitled to receive payment of the Redemption Price. If less
than all of the outstanding shares of Series E Preferred Stock
are to be redeemed, then the Corporation shall redeem a pro
rata portion from each holder of such stock according to the
respective number of shares of such stock held by such holder.
(b) Subject to the terms of Section F(2)(a) above, the
Series E Preferred Stock may be redeemed at a cash price equal
to one thousand dollars ($1,000.00) per share, together with
all unpaid dividends to and including the Redemption Date
(with respect to the Series E Preferred Stock, the "Redemption
Price"); provided, however, that payment of the Redemption
Price shall be made from any funds of the Corporation legally
available therefor.
(c) From and after the Redemption Date (unless default
shall be made by the Corporation in duly paying the Redemption
Price in which case all the rights of the holders of such
shares shall continue), the holders of the shares of the
Series E Preferred Stock called for or requesting redemption
shall cease to have any rights as stockholders of the
Corporation, except the right to receive, without interest,
the Redemption Price thereof upon surrender of certificates
representing the shares of such stock, and such shares shall
not thereafter be transferred (except with the consent of the
Corporation) on the books of the Corporation and shall not be
deemed outstanding for any purpose whatsoever.
(d) There shall be no redemption of any shares of Series E
Preferred Stock of the Corporation where such action would be
in violation of applicable law.
3. Preferences on Liquidation.
(a) Subject to Section F(8) of this Article, in the event
of any voluntary or involuntary liquidation, dissolution, or
winding up of the Corporation, the holders of shares of the
Series E Preferred Stock then outstanding, shall be entitled
to be paid, out of the assets of the Corporation available for
distribution to its stockholders, whether from capital,
surplus or earnings, before any payment shall be made in
respect of the Corporation's common stock, an amount equal to
one thousand dollars ($1,000.00) per share, plus all unpaid
dividends thereon to the date fixed for distribution. After
setting apart or paying in full the preferential amounts due
the holders of the Series E Preferred Stock, the remaining
assets of the Corporation available for distribution to
stockholders, if any, shall be distributed first to the holder
of the
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Corporation's Series A, Series B, Series C and Series D
Preferred Stock in accordance with the liquidation preferences
of each such Series and then to the holders of common stock,
each such issued and outstanding share of common stock
entitling the holder thereof to receive an equal proportion of
said remaining assets. If upon liquidation, dissolution, or
winding up of the Corporation, the assets of the Corporation
available for distribution to its stockholders shall be
insufficient to pay the holders of the Series E Preferred
Stock the full amounts to which they respectively shall be
entitled, the holders of such stock shall share ratably in any
distribution of assets according to the respective amounts
which would be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with
respect to said shares were paid in full. The merger or
consolidation of the Corporation into or with another
corporation in which the Corporation shall not survive and the
stockholders of the Corporation shall own less than fifty
percent (50%) of the voting securities of the surviving
corporation or the sale, transfer or lease (but not including
a transfer or lease by pledge or mortgage to a bona fide
lender) of all or substantially all of the assets of the
Corporation shall be deemed to be a liquidation, dissolution
or winding up of the Corporation as those terms are used in
this paragraph.
(b) In the event of any voluntary or involuntary
liquidation dissolution, or winding up of the Corporation, the
Corporation shall, within ten (10) days after the date the
Board of Directors approves such action, or within twenty (20)
days prior to any stockholder's meeting called to approve such
action, or within twenty (20) days after the commencement of
any involuntary proceeding, whichever is earlier, give each
holder of shares of Series E Preferred Stock initial written
notice of the proposed action. Such initial written notice
shall describe the material terms and conditions of such
proposed action, including a description of the stock, cash
and property to be received by the holders of shares of Series
E Preferred Stock upon consummation of the proposed action and
the date of delivery thereof. If any material change in the
facts set forth in the initial notice shall occur, the
Corporation shall promptly give written notice to each holder
of shares of Series E Preferred Stock of such material change.
The Corporation shall not consummate any voluntary or
involuntary liquidation, dissolution, or winding up of the
Corporation before the expiration of twenty (20) days after
the mailing of the initial notice or ten (10) days after the
mailing of any subsequent written notice, whichever is later,
provided that any such twenty-day or ten-day period may be
shortened upon the written consent of the holders of a
majority of the outstanding shares of Series E Preferred
Stock.
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(c) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation
which will involve the distribution of assets other than
cash, the Corporation shall promptly engage competent
independent appraisers to determine the value of the assets
to be distributed to the holders of shares of Series A,
Series B, Series C, Series D and Series E Preferred Stock
and the holders of shares of common stock (it being
understood that with respect to the valuation of
securities, the Corporation shall engage such appraiser as
shall be approved by the holders of a majority of shares of
the Corporation's outstanding Preferred Stock). The
Corporation shall, upon receipt of such appraiser's
valuation, give prompt written notice to each holder of
shares of Series E Preferred Stock of the appraiser's
valuation.
4. Voting Rights.
Except as otherwise required by law, the holders of the
Series E Preferred Stock shall not be entitled to vote upon
any matter relating to the business or affairs of the
Corporation or for any other purpose.
5. Conversion.
(a) Subject to and upon compliance with the provisions
of Section F(5)(b) below, the holder of any shares of
Series E Preferred Stock shall have the right, at such
holder's option, at any time (and from time to time) prior
to August 31, 2001, to convert any of such shares into that
number of fully paid and nonassessable shares of common
stock (calculated as to each conversion to the nearest
1/100th of a share) equal to the Conversion Rate (as
defined below) multiplied by the number of shares of Series
E Preferred Stock to be converted pursuant to this Section
F(5)(a) by surrendering the certificate or certificates
representing shares to be converted in the manner provided
in Section F(5)(b) below. The "Conversion Rate" per share
of Series E Preferred Stock shall be Two Hundred
Eighty-Five (285) shares of common stock for each share of
Series E Preferred Stock. If for any reason the Corporation
has not paid any portion of the unpaid accrued or declared
dividends on the shares of Series E Preferred Stock being
converted, such dividends shall be converted into an
additional number of shares of common stock determined by
dividing the amount of the unpaid dividends by 3.5.
(b) (i) In order to exercise the optional
conversion privilege pursuant to Section F(5)(a) above,
the holder of each share to be converted shall deliver
to the Corporation during regular business hours, at the
principal office of the Corporation
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or at such other place as may be designated by the
Corporation, the certificate or certificates representing
the shares to be converted, duly endorsed or assigned in
blank (or to the Corporation if so requested), accompanied
by written notice stating that the holder elects to convert
such shares. Unless the shares of common stock issuable
upon conversion are to be issued in the same name as the
name in which the shares of Series E Preferred Stock are
registered, each share surrendered for conversion shall be
accompanied by an instrument of transfer, in form
satisfactory to the Corporation, duly executed by the
holder or such holder's duly authorized attorney and by
funds in an amount sufficient to pay any transfer or
similar tax.
(ii) As promptly as practicable after the surrender by a
holder of the certificate or certificates representing
shares in accordance with this Section F(5)(b), the
Corporation shall issue and shall deliver to the holder 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 Section
F(5), and a certificate representing any shares of Series E
Preferred Stock that were represented by the certificate or
certificates surrendered to the Corporation in connection
with such conversion but were not converted. Any fractional
interest in respect of a share of common stock arising out
of such conversion shall be settled as provided in Section
F(5)(c) below. The Corporation shall pay all expenses,
taxes (other than stock transfer taxes) and other charges
required to be paid by the Corporation in order to issue
the shares of common stock pursuant to this Section
F(5)(b).
(iii) Conversion shall be deemed to have been effected
with respect to conversion pursuant to Section F(5)(a)
above, on the date on which all of the conditions specified
in Section F(5)(b)(i) above have been satisfied (the
"Series E Conversion Date"), 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 on the Series E Conversion Date,
unless the stock transfer books of the Corporation shall be
closed on the Series E Conversion Date, in which case such
person or persons shall be deemed to have become such
holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are
open. All shares of common stock delivered upon conversion
of the
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shares of Series E Preferred Stock will upon delivery be
duly and validly issued and fully paid and nonassessable,
and not subject to any preemptive rights. Upon the
surrender of certificates representing shares of Series E
Preferred Stock to be converted, such shares no longer
shall 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 as provided herein.
(c) No fractional shares or securities representing
fractional shares of common stock shall be issued upon
conversion of the shares of Series E Preferred Stock. Any
fractional interest in a share of common stock resulting from
conversion of a share shall be paid in cash (computed to the
nearest cent) based upon the fair market value of a share of
common stock on the Series E Conversion Date, as determined in
good faith by the Board of Directors in the exercise of its
reasonable business judgment.
(d) In the event the outstanding shares of common stock
shall be split, subdivided, combined or consolidated, by
reclassification or otherwise, into a greater or lesser number
of shares of common stock, and in the event that the
Corporation shall issue shares of common stock by way of a
stock dividend or other distribution to the holders of common
stock, the number of shares of common stock into which each
issued and outstanding share of Series E Preferred Stock shall
be convertible immediately prior to such split, subdivision,
stock dividend, combination or consolidation shall,
concurrently with the effectiveness of such split,
subdivision, stock dividend, combination or consolidation be
increased or decreased proportionately.
(e) Subject to the notice requirements of this Section
F(5)(e), if the Corporation shall be a party to any
transaction that involves any consolidation or merger of the
Corporation with or into another corporation, or any sale of
all or substantially all of the assets of the Corporation to
another corporation, and which is effected in such a way that
the holders of common stock shall be entitled to receive cash,
stock, securities or other assets with respect to or in
exchange for common stock, then the right to convert the
shares of Series E Preferred Stock shall terminate at the
close of business on the date as of which the holders of
common stock of record shall be entitled to exchange their
shares of common stock for cash, securities or other assets
deliverable upon such consolidation, merger or sale of all or
substantially all of the assets of the Corporation. In case
the Corporation shall enter into any agreement or
understanding or the Board of Directors shall adopt any
resolution authorizing or proposing
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any transaction of the type described in this Section
F(5)(e), then in any such event the Corporation promptly
shall cause to be mailed, by registered or certified mail,
postage prepaid, to the holders of shares of Series E
Preferred Stock at each such holder's last address
appearing on the records of the Corporation, twenty (20)
days prior to the date on which the Corporation closes its
books or takes a record for determining rights to vote with
respect to any consolidation, merger or sale, a notice of
such agreement, understanding or resolution stating the
expected record date for determining holders of common
stock entitled to exchange their shares with respect to a
transaction described in this Section F(5)(e); provided,
however, that the Corporation shall not be liable or
responsible if the actual dates of any such events shall be
different from the expected dates set forth in such notice.
(f) The Corporation shall at all times reserve and keep
available out of its authorized and unissued common stock,
solely for the purpose of effecting the conversion of
shares of Series E Preferred Stock, such number of shares
of common stock as shall from time to time be sufficient to
effect the conversion of all then outstanding shares of
Series E Preferred Stock. The Corporation shall, from time
to time, subject to and in accordance with applicable law,
increase the authorized shares of common stock if at any
time the number of authorized shares of common stock
remaining unissued shall not be sufficient to permit the
conversion at such time of all then outstanding shares of
Series E Preferred Stock.
6. Negative Covenants.
The Corporation will not, by amendment of the Certificate
of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to
avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Corporation, but will
at all times in good faith assist in the carrying out of all
the provisions of this Section and in the taking of all such
action as may be necessary or appropriate in order to protect
the rights of the holders of the Series E Preferred Stock
against impairment.
7. Status.
In case any outstanding shares of Series E Preferred Stock
shall be redeemed, the shares so redeemed shall be deemed to
be permanently canceled and shall not resume the status of
authorized but unissued shares of Series E Preferred Stock.
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8. Ranking: Changes Affecting Series E.
(a) The Series E Preferred Stock shall, with respect to
dividend rights and rights on liquidation, winding up and
dissolution, (i) rank senior to any of the Corporation's
common stock, the Company's Series A, Series B, Series C and
Series D Preferred Stock and any other class or series of
stock of the Company which by its terms shall rank junior to
the Series E Preferred Stock, and (ii) rank junior to any
class or series of stock of the Company which by its terms
shall rank senior to the Series E Preferred Stock.
(b) So long as any shares of Series E Preferred Stock are
outstanding, the Corporation shall not (i) alter or change any
of the powers, preferences, privileges, or rights of the
Series E Preferred Stock; or (ii) amend the provisions of this
Section F(8); or (iii) authorize or issue any new class or
series of shares having preferences prior to or being on a
parity with the Series E Preferred Stock as to dividends or
liquidations; in each case, without first obtaining the
approval by vote or written consent, in the manner provided by
law, of the holders of at least a majority of the outstanding
shares of Series E Preferred Stock as to changes affecting the
Series E Preferred Stock.
ARTICLE V
The Board of Directors shall have the power to adopt, amend or repeal
the by-laws.
ARTICLE VI
No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director shall
be liable to the extent provided by applicable law, (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article Sixth shall
apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.
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