EXHIBIT 3.1
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
DIGITAL RECORDERS, INC.
The undersigned Corporation hereby executes these Articles of Amendment for
the purpose of amending its Articles of Incorporation.
1. The name of the Corporation is Digital Recorders, Inc.
2. The Amended and Restated Certificate of Designation of Series F
Convertible Preferred Stock which is attached as Exhibit A was adopted
by the Board of Directors in the manner prescribed by law and is an
amendment to the Articles of Incorporation of the Corporation.
3. The date of the adoption of these Articles of Amendment by the Board
of Directors was March 29, 2004.
4. These Articles of Amendment do not effect an exchange,
reclassification or cancellation of issued shares of the Corporation.
Dated this 5th day of April, 2004.
DIGITAL RECORDERS, INC.
By /s/ DAVID L. TURNEY
--------------------------
David L. Turney, President
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
OF
SERIES F CONVERTIBLE PREFERRED STOCK
OF
DIGITAL RECORDERS, INC.
Digital Recorders, Inc., a corporation organized and existing under the Business
Corporation Act of the State of North Carolina (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 55-6-02 of the
Business Corporation Act at a meeting duly called and held on March 29, 2004,
and approved by the sole holder of the outstanding shares of the Corporation's
Series F Convertible Preferred Stock, par value $.10 per share, as required by
Section 55-10-04 of the Business Corporation Act by written consent dated March
31, 2004;
RESOLVED, that pursuant to the authority granted to and vested in the Board of
Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") in accordance with the provisions of the Articles of Incorporation
of the Corporation ("Articles of Incorporation"), the Board of Directors hereby
amends and restates in their entirety the terms and provisions of the Series F
Convertible Preferred Stock, previously established as a series of Preferred
Stock, par value $.10 per share (the "Preferred Stock"), of the Corporation and
as so amended and restated, the Series F Convertible Preferred Stock shall have
the designation and number of shares, and the relative rights, preferences, and
limitations thereof as follows:
Section 1. Designation and Amount. The shares of this series shall be
designated as "Series F Convertible Preferred Stock" (the "Series F
Preferred Stock") and the number of shares constituting the Series F
Preferred Stock shall be 400 shares. Such number of shares may be
increased or decreased by resolution of the board of directors;
provided that no decrease shall reduce the number of shares of
Series F Preferred Stock to a number less than the number of shares
then outstanding plus the number of shares reserved for issuance
upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the
corporation convertible into Series F Preferred Stock.
Section 2. Dividends and Distributions.
(a) The holders of shares of Series F Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of
Directors, consistent with applicable law and out of funds legally
available therefor, dividends during the period commencing on
November 10, 2003 (the "Commencement Date") and continuing for as
long as any of the shares of Series F Preferred Stock remain
outstanding. Dividends shall accrue quarterly at an annual rate of
three percent (3.0%) on the Liquidation Preference (as hereinafter
defined) and shall be paid on February 10, May 10, August 10 and
November 10 of each year (each, a "Payment Date") (except that if
any such date is a Saturday, Sunday or legal holiday, then such
dividend shall be payable on the next day that is not a
Saturday, Sunday or legal holiday); provided, however, that the first
payment of dividends following the Commencement Date shall be made on
May 10, 2004. Each such dividend shall be payable in arrears to the
holders of record of shares of Series F Preferred Stock, as they appear
on the stock records of the Corporation, at the close of business on
the date that is fifteen (15) days preceding the Payment Date thereof,
provided, however, that the Board of Directors may fix a different
record date for any dividend payment, which date shall be not less than
ten (10) days nor more than sixty (60) days preceding the Payment Date
thereof. Dividends on shares of Series F Preferred Stock shall accrue
(whether or not declared) on a daily basis from and including the
Commencement Date. Accrued dividends for each Dividend Period (as
hereinafter defined) shall be cumulative (whether or not such dividends
are declared), but shall not compound. Such dividends shall accumulate
to the extent not paid on the Payment Date occurring on the last day of
the Dividend Period for which they accrue, and any such accrued and
unpaid dividends for any past Dividend Period may be declared and paid
at any time, without reference to any regular Payment Date, to holders
of record on such date, not more than forty-five (45) days preceding
the Payment Date thereof, as may be fixed by the Board of Directors.
For purposes of this paragraph, a "Dividend Period" shall mean a
quarterly dividend period commencing on the calendar day immediately
following the Commencement Date and immediately following each
subsequent Payment Date and ending on and including the next following
Payment Date. The Series F Preferred Stock shall rank pari passu with
the Series E Redeemable Nonvoting Convertible Preferred Stock ("Series
E Preferred Stock") and prior and superior to the Series AAA Preferred
Stock and the common stock, par value $.10 per share (the "Common
Stock"), of the Corporation with respect to the payment of dividends.
In the event any new shares of Series F Preferred Stock are issued
during any Dividend Period or any shares of Series F Preferred Stock
are redeemed by the Corporation or converted during any Dividend
Period, the accrued dividends shall be prorated in proportion to the
number of days during that Dividend Period during which such shares
were outstanding. All accrued but unpaid dividends shall be paid upon
redemption or conversion of the shares of Series F Preferred Stock.
(b) Such dividends shall be payable in additional shares of Series F
Preferred Stock; provided, however, that the aggregate number of shares
of Series F Preferred Stock issuable as dividends on the Series F
Preferred Stock (notwithstanding any adjustment of the rate at which
dividends accrue as hereinafter provided) shall not exceed 15.5576
shares without the approval, in accordance with the Corporation's
bylaws, by the holders of the Common Stock (other than shares of Common
Stock (i) acquired by the initial holder of Series F Preferred Stock
upon conversion of such shares of Series F Preferred Stock and held by
such initial holder or any of its "affiliates," as defined in Rule
12b-2 under the Securities Exchange Act of 1934, (ii) acquired by an
affiliate of such initial holder upon conversion of shares of Series F
Preferred Stock, or (iii) held by a subsequent holder of Series F
Preferred Stock who continues to hold shares of Series F Preferred
Stock and who acquired such shares of Common Stock upon conversion of
shares of Series F Preferred Stock). In the event that any payment
of dividends in shares of Series F Preferred Stock would require
shareholder approval in accordance with the preceding sentence, the
Corporation agrees to seek such approval at the next regularly
scheduled meeting of shareholders after it has been determined that
shareholder approval would be required for the issuance of any shares
as dividends on the next scheduled Payment Date, if such shareholder
approval shall not have previously been sought. Dividends shall be paid
in cash out of funds legally available therefor on any Payment Date(s)
that may arise between the date of such determination and the meeting
of shareholders at which the shareholders vote on such authorization.
In the event the shareholders reject such authorization, such dividends
will be paid in shares of Series F Preferred Stock to the maximum
extent that they may be so paid without violating the limitations set
forth in the first sentence of this paragraph (b), and thereafter, such
dividends shall be paid in cash out of funds legally available
therefor, commencing on the next Payment Date.
(c) The number of shares of Series F Preferred Stock (or fraction
thereof) issuable on each whole or fractional share of Series F
Preferred Stock on each Payment Date shall be equal to the quotient
(rounded to four decimal places) obtained by dividing (i) the dollar
value of the dividend to be paid thereon by (ii) the Liquidation
Preference thereof.
(d) If the Corporation fails to file with the Securities and Exchange
Commission a Registration Statement (which may be the Registration
Statement on Form S-3, registration no. 333-111534, filed prior to the
date hereof) covering the resale of the Conversion Shares (as defined
in the Amended and Restated Registration Rights Agreement dated as of
April 1, 2004, between the Corporation and the holder (the
"Registration Rights Agreement")), and cause the same to be declared
effective by May 15, 2004 (the "Target Effective Date"), assuming full
cooperation by the holder of the Series F Preferred Stock, including
compliance by the holder with all its obligations under Article I of
the Registration Rights Agreement, then the annual rate at which
dividends accrue on the Series F Preferred Stock as set forth in
subsection (a) of this Section 2 shall increase by one-tenth of one
percent (0.1%) for each period of thirty (30) days beyond the Target
Effective Date until the Registration Statement is declared effective;
provided, however, that the maximum annual dividend rate, as adjusted
pursuant to this subsection (d), shall be five percent (5.0%).
(e) If the average closing bid price for the Common Stock on the
principal public trading market for such stock does not exceed 2.5
times the then-current Conversion Price (as hereinafter defined) for
any period of seventy-five (75) consecutive trading days, or if such
closing bid price does not exceed 2.5 times the then-current Conversion
Price for a total of at least one hundred fifty (150) trading days
(whether or not consecutive), in either case during the period
commencing on the Commencement Date and ending on November 10, 2008,
then the rate at which dividends will accrue, as set forth in
subsection (a) of this Section 2, shall be increased to ten percent
(10%) beginning on November 10, 2008, effective for the dividend
payable on the February 10, 2009 Payment Date
and continuing for as long as any of the shares of Series F Preferred
Stock remain outstanding.
Section 3. Voting Rights. Except as is required by applicable law, the holders
of Series F Preferred Stock shall be entitled to vote with the holders
of common stock, voting together as a single class, on any matters on
which holders of common stock are entitled to vote, and the holder of
each outstanding whole or fractional share of Series F Preferred Stock
shall be entitled to a number of votes equal to the quotient obtained
by dividing the liquidation preference thereof by $2.35. Fractional
votes shall not, however, be permitted and any fractional voting rights
resulting from the above formula (after aggregating all whole and
fractional shares of Series F Preferred Stock held by each holder)
shall be adjusted downward to the nearest whole number.
Section 4. Liquidation.
(a) The liquidation preference for the Series F Preferred Stock (the
"Liquidation Preference") shall equal Five Thousand Dollars ($5,000.00)
per share. The Series F Preferred Stock shall be pari passu with Series
E Preferred Stock (collectively with the Series F Preferred Stock, the
"Preferred Stock") and rank prior and superior to the Series AAA
Preferred Stock and the Common Stock with respect to payments upon
liquidation, dissolution and winding up. The Series AAA Preferred
Stock, the Common Stock and any other class or series of stock ranking
junior to the Preferred Stock with respect to payments upon
liquidation, dissolution and winding up are referred to, collectively,
herein as "Junior Stock".
(b) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary (collectively, a
"Liquidating Event"), the Corporation shall pay or make adequate
provision for the payment of all indebtedness and other obligations of
the Corporation. Thereafter, the remaining assets of the Corporation
shall be used to pay, prior to any distribution of any of the assets of
the Corporation to the holders of Junior Stock by reason of the
ownership thereof, an amount equal to the Liquidation Preference per
share of the Preferred Stock set forth by the Board of Directors in
priority fixed by the Board of Directors, plus an amount equal to
accrued and unpaid dividends on such shares, if any.
(c) After all such Liquidation Preferences shall have been paid in full
to each holder of Preferred Stock (including accrued but unpaid
dividends), each holder of Junior Stock other than Common Stock shall
be entitled to be paid from the remaining assets of the Corporation
such amounts, if any, to which such holder may be entitled under any
other provision of these Articles of Incorporation prior to any
distribution of any of the assets of the Corporation to the holders of
Common Stock.
(d) Any assets of the Corporation remaining after the payments
specified in paragraphs (b) and (c) above shall be distributed pro rata
with respect to the outstanding shares of Common Stock.
(e) If upon any Liquidating Event, the assets of the Corporation shall
be insufficient to pay all the holders of any class or series of
capital stock the full amount to which they are entitled pursuant to
this Section 4, then the following rules shall apply: (i) each holder
of shares of the class or series shall be paid his pro rata share,
which shall equal the product determined by multiplying the aggregate
amount to be paid to all holders of that class or series by a fraction
(x) whose numerator equals the number of shares of that class or series
owned by the shareholder, and (y) whose denominator equals the number
of issued and outstanding shares of that class or series, and (ii) in
any case in which the owner of two or more series or classes of capital
stock shall have equal priority to any distribution, each holder shall
be paid his pro rata share, which shall equal the product determined by
multiplying the aggregate amount available for payment to all holders
of the series or classes with equal priority, by a fraction (x) whose
numerator equals the amount such shareholder would receive if the
Corporation had adequate funds to pay the Liquidation Preferences of
the shares of the series or classes having equal priorities owned by
the shareholder, and (y) whose denominator equals the aggregate
Liquidation Preferences of all issued and outstanding shares of the
series or classes having equal priorities.
(f) For the purposes of this Section 4, any merger or consolidation of
the Corporation into or with any other corporation or entity, or a
sale, conveyance, mortgage, transfer, license, pledge, lease or other
disposition 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 unless (i) the shareholders of the
Corporation immediately prior thereto shall, immediately thereafter,
hold as a group the right to cast at least a majority of the votes of
all holders of voting securities of the resulting or surviving
corporation or entity on any matter on which any such holders of voting
securities shall be entitled to vote; or (ii) the holders of Series F
Preferred Stock shall determine, by vote of the holders of a majority
of the outstanding shares of such series, voting as a separate class,
that it shall not be so deemed.
(g) For purposes of this Section 4, if any asset distributed to
shareholders upon liquidation of the Corporation consists of property
other than cash, the amount of such distribution shall be deemed to be
the fair market value thereof at the time of such distribution, as
determined in good faith by the Board of Directors of the Corporation.
(h) Written notice of any Liquidating Event stating a payment date, the
place where such payment shall be made, the amount of each payment in
liquidation and the amount of accrued dividends to be paid, shall be
given by first class mail, postage prepaid, not less than ten (10) days
prior to the payment date stated therein, to each shareholder of record
(whether or not the shareholder is to receive any payment) at such
shareholder's address as shown in the records of the Corporation.
Section 5. Redemption.
(a) The holders of the Series F Preferred Stock shall not have the
right to cause the Corporation to redeem shares of their Series F
Preferred Stock at any time.
(b) If the rate at which dividends on the Series F Preferred Stock
accrue is increased to ten percent (10%) pursuant to Section 2(d),
then, from and after November 10, 2008, the Corporation shall have the
right, but not the obligation, exercisable at any time and from time to
time, to redeem all or any portion of the outstanding shares of Series
F Preferred Stock. All redemptions of less than all outstanding shares
of Series F Preferred Stock shall be effected on a pro rata basis.
(c) The redemption price to be paid by the Corporation for any shares
of Series F Preferred Stock shall equal the Liquidation Preference for
those shares, plus an amount equal to the cash value of all accrued but
unpaid dividends thereon. Upon payment of such redemption price, the
Corporation shall have no further obligation with respect to payment of
accrued and unpaid dividends.
(d) If the assets of the Corporation legally available shall be
insufficient to pay all the holders of Series F Preferred Stock the
full amount to which they are entitled upon any redemption pursuant to
this Section, then the following rules shall apply: (i) each such
holder shall be paid his pro rata share, which shall equal the product
determined by multiplying the aggregate amount to be paid to all
holders by a fraction (x) whose numerator equals the number of shares
of Series F Preferred Stock owned by the holder, and (y) whose
denominator equals the number of issued and outstanding shares of
Series F Preferred Stock, and (ii) in any case in which the owners of
two or more series or classes of capital stock shall have equal rights
to any distribution in connection with the redemption of shares of all
such classes of series, each holder shall be paid his pro rata share,
which shall equal the product determined by multiplying the aggregate
amount available for payment to all holders of the series or classes
with equal priority, by a fraction (x) whose numerator equals the
amount such shareholder would receive if the Corporation had adequate
funds to pay the redemption prices of all shares of the series or
classes having equal priorities, and (y) whose denominator equals the
aggregate redemption prices of all issued and outstanding shares of the
series or classes having equal priorities.
(e) At least thirty (30) days prior to any redemption, the Corporation
will provide to the holders of shares to be redeemed written notice
(the "Redemption Notice") of the number of shares to be redeemed (the
"Redemption Shares"), the redemption price and the redemption date (the
"Redemption Date"). Such notice shall be sent to the address for each
holder of Series F Preferred Stock on the records of the Corporation.
Upon receipt of any Redemption Notice, holders of Series F Preferred
Stock shall send to the Corporation stock certificate(s) duly endorsed
for transfer representing the Redemption Shares as provided in the
Redemption Notice for receipt by the Corporation on or before the
Redemption Date. Upon receipt of stock certificate(s) representing the
Redemption Shares
endorsed as provided above (but not prior to the Redemption Date), the
Corporation will send to the holders of the Redemption Shares payment
of the redemption price as stated in the Redemption Notice, and if not
all the shares represented by the stock certificate(s) provided to the
Corporation are to be redeemed, stock certificate(s) representing the
shares that have not been redeemed.
The Corporation shall have no obligation to make any payment for
Redemption Shares until the owner of the Redemption Shares complies in
full with the procedures set forth above. Notwithstanding failure by
any shareholder to comply with the procedures set forth in the
preceding paragraph and the consequent failure by the Corporation to
pay the redemption price for the Redemption Shares, the Redemption
Shares shall, from and after the Redemption Date stated in the
Redemption Notice, cease to be issued and outstanding shares of capital
stock of the Corporation and the former owner shall not be entitled to
vote, receive dividends or exercise any other rights of a shareholder
on account of the Redemption Shares. From and after the Redemption Date
the sole obligation of the Corporation on account of the Redemption
Shares shall be to pay the redemption price stated in the Redemption
Notice without interest of any kind for late payment.
(f) Holders of outstanding shares of Series F Preferred Stock shall
have the right to convert such shares into shares of Common Stock in
accordance with Section 6 hereof at any time before the close of
business on the fifth Business Day preceding the Redemption Date
specified for such shares. Without limiting any rights of the
Corporation, the Corporation may reduce the number of shares that it
has elected to redeem as specified in a Redemption Notice by a number
equivalent to the number of shares of Series F Preferred Stock
converted into Common Stock during the period beginning on the date of
the Redemption Notice and ending on the Redemption Date.
(g) All shares of the Series F Preferred Stock that shall have been
redeemed as herein provided shall no longer be deemed to be
outstanding. Any shares of Series F Preferred Stock so redeemed shall
be retired and canceled and shall not be reissued, and the Corporation
may from time to time take such appropriate action as may be necessary
to reduce the authorized Series F Preferred Stock accordingly.
Section 6. Conversion of Series F Preferred Stock. Each holder of shares of
Series F Preferred Stock shall have the right to convert all or any
portion of such shares as such holder desires to convert, and in
certain circumstances such shares shall be automatically converted,
into shares of the common stock of the corporation, as follows:
(a) Optional Conversion. Subject to and in compliance with the
provisions of this Section 6, any or all shares of Series F Preferred
Stock, at the option of the holder, may be converted at any time or
from time to time prior to the fifth Business Day preceding any
Redemption Date established for such shares, into a number of fully
paid and nonassessable shares (calculated as to each conversion
to the largest whole share) of Common Stock determined by multiplying
the number of whole and fractional shares of Series F Preferred Stock
to be converted by a fraction, the numerator of which is the
Liquidation Preference of a share of Series F Preferred Stock and the
denominator of which is the conversion price then in effect for the
Series F Preferred Stock (the "Conversion Price"). Initially, the
Conversion Price is $2.00 per share; provided, however, that the
Conversion Price shall be subject to adjustment at the times and in
accordance with the provisions set forth below.
(b) Automatic Conversion. The outstanding shares of Series F Preferred
Stock shall automatically convert to shares of Common Stock in the
circumstances described in either of the following subparagraphs, as
follows:
(i) If the closing bid price for the Common Stock on The Nasdaq
Stock Market (or other exchange or market on which the Common
Stock may from time to time be traded) for any period of ten
(10) consecutive trading days exceeds $5.88 (the "Target
Price"), then all outstanding shares of Series F Preferred
Stock shall automatically convert, at the close of the market
on the last trading day in such period, into a number of fully
paid and nonassessable shares (calculated to the largest whole
share) of Common Stock determined by multiplying the number of
shares of Series F Preferred Stock then outstanding by a
fraction, the numerator of which is the Liquidation Preference
of a share of Series F Preferred Stock and the denominator of
which is the Target Price, provided that the Target Price
shall be adjusted for any stock splits, combinations or
similar events occurring after the initial issuance date of
the Series F Preferred Stock; and provided further that the
resale of the shares issuable upon conversion shall have been
registered or shall be subject to available exemption under
applicable security laws.
(ii) Upon any conversion of all or part of the debentures in the
face amount of $3,979,000 issued to The Frost National Bank,
custodian FBO Renaissance US Growth and Income Trust PLC Trust
No. W00740100 and HSBC Global Custody Nominee (U.K) Limited
Designation No. 896414 (the "Debentures") into Common Stock,
all or a proportionate part, respectively, of the outstanding
shares of Series F Preferred Stock shall automatically convert
into a number of fully paid and nonassessable shares
(calculated to the largest whole share) of Common Stock
determined by multiplying the number of whole and fractional
shares of Series F Preferred Stock being converted by a
fraction, the numerator of which is the Liquidation Preference
of a share of Series F Preferred Stock and the denominator of
which is the greater of the Conversion Price then in effect or
the deemed price (or average price, if more than one) per
share of Common Stock at which the conversion of the
Debentures shall have been effected; provided that the resale
of the
shares issuable upon conversion shall have been registered or
shall be subject to available exemption under applicable
security laws. If such conversion is accompanied by or is a
result of any benefit or incentive provided to the holder of
the Debentures, then the same benefit or incentive shall be
accorded to the Holder of the Series F Preferred Stock.
(c) Mechanics of Conversion. Before any holder of Series F Preferred
Stock shall be entitled to convert the same into full shares of Common
Stock, unless the conversion is an automatic conversion, the holder
shall surrender the certificate or certificates therefor, duly endorsed
for transfer, at the office of the Corporation or any transfer agent of
the Corporation and shall give written notice to the Corporation at
such office that he elects to convert the same, such notice to state
the name or names and addresses to which certificates for Common Stock
will be issued. No fractional shares of Common Stock shall be issued
upon conversion of Series F Preferred Stock. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation
shall pay cash equal to such fraction multiplied by the then-effective
Conversion Price. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Series F
Preferred Stock, or to a third party such holder may designate in
writing, a certificate or certificates for the number of whole shares
of Common Stock to which he shall be entitled and a check payable to
the holder in the amount of any cash amounts payable in lieu of
fractional shares as aforesaid, and if less than all the shares of
Series F Preferred Stock represented by such certificates are
converted, a certificate representing the shares of Series F Preferred
Stock not converted. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such
surrender of the shares of Series F Preferred Stock to be converted,
and the person or persons entitled to receive the shares of Common
Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such shares of Common Stock on such
date.
(d) Adjustments to Conversion Price.
(i) Adjustments for Subdivisions, Common Stock Dividends,
Combinations or Consolidations of Common Stock. In the event
the outstanding shares of Common Stock shall be subdivided or
increased by stock split or stock dividend, into a greater
number of shares of Common Stock, the Conversion Price then in
effect shall concurrently with the effectiveness of such
subdivision or payment of such stock dividend, be
proportionately decreased. In the event the outstanding shares
of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares
of Common Stock, the Conversion Price then in effect shall
concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
(ii) Adjustments for Reclassification, Exchange and Substitution.
If the Common Stock issuable upon conversion of the Series F
Preferred Stock shall be changed into the same or a different
number of shares of any other class or classes of stock,
whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares
provided for above), the Series F Preferred Stock shall
thereafter be convertible into, in lieu of the shares of
Common Stock which the holders would otherwise have been
entitled to receive, a number of shares of such other class or
classes of stock that would have been obtainable in exchange
for the shares of Common Stock that were issuable upon
conversion of the Series F Preferred Stock immediately before
that change.
(e) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this
Section 6, the Corporation at its expense, shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of Series F Preferred Stock a certificate
setting forth such adjustment or readjustment in accordance with the
terms hereof and furnish to each holder of Series F Preferred Stock a
certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any time of
any holder of Series F Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Price at the time in
effect and (iii) the number of shares of Common Stock and the amount,
if any, of other property which at the time would be received upon the
conversion of Series F Preferred Stock.
(f) No Impairment. The Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action (other than actions taken in good faith),
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 carrying out all the provisions of this Section 6 and
in taking all such action as may be necessary or appropriate in order
to protect the conversion rights of the holders of the Series F
Preferred Stock against impairment.
(g) Reservation of Stock. The Corporation shall, at all times when the
Series F Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued stock, (i) for the purpose
of effecting the conversion of the Series F Preferred Stock, such
number of its duly authorized shares of Common Stock as shall from time
to time be sufficient to effect the conversion of all outstanding
Series F Preferred Stock and (ii) for the purpose of paying accrued
dividends in the form of shares of Series F Preferred Stock, such
number of its duly authorized shares of Series F Preferred Stock as
shall from time to time be sufficient to pay such dividends.
(h) Cancellation of Series F Preferred Stock. All shares of the Series
F Preferred Stock that shall have been surrendered for conversion as
herein provided shall no longer be deemed to be outstanding. Any shares
of the Series F Preferred Stock so converted shall be retired and
canceled and shall not be reissued, and the Corporation may from time
to time take such appropriate action as may be necessary to reduce the
authorized Series F Preferred stock accordingly.