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EXHIBIT 4.2
CERTIFICATE OF DESIGNATION OF THE
5% CUMULATIVE PREFERRED STOCK, SERIES F, OF
DURAMED PHARMACEUTICALS, INC.
Duramed Pharmaceuticals, Inc., a corporation organized and existing
under the laws of the State of Delaware (the "Company"), does hereby certify as
follows, pursuant to Section 151 of the Delaware General Corporation Law:
FIRST: That pursuant to authority vested in the Board of Directors of
the Company (the "Board") by Article IV of the Certificate of Incorporation of
the Company, the Board, at a meeting duly convened and held on the 22nd day of
January, 1998, adopted the resolution attached hereto as Exhibit 1, creating a
series consisting of One Hundred Twenty Thousand (120,000) shares of its
preferred stock, with a stated value of $100.00 per share, designated as 5%
Cumulative Convertible Preferred Stock, Series F.
SECOND: That such resolution of the Board, and the creation and
authorization thereby of the 5% Cumulative Convertible Preferred Stock, Series
F, were duly made by the Board pursuant to its authority as aforesaid and in
accordance with Section 151 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be executed by its duly authorized agents as of this 3rd day of
February, 1998.
DURAMED PHARMACEUTICALS, INC.
/s/ Timothy J. Holt
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By: Timothy J. Holt
Senior Vice President
ATTEST:
/s/ Timothy E. Hoberg
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By: Timothy E. Hoberg
Assistant Secretary
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EXHIBIT 1
RESOLVED, that the Board hereby (a) authorizes the creation of the
120,000 shares of the 5% Cumulative Convertible Preferred Stock, Series F (the
"Series F Stock") with such final terms as may be approved by the Chairman of
the Board, and (b) authorizes and directs that the Company reserve and keep
available out of its authorized Common Stock the full number of shares of Common
Stock that may be delivered upon conversion of all outstanding shares of the
Series F Stock.
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Exhibit 1
TERMS OF 5% CUMULATIVE
STOCK, SERIES F
DURAMED PHARMACEUTICALS, INC. (the "Corporation")
1. Designation and Amount. There is hereby established a series of
Preferred Stock to be designated as the "5% Cumulative Stock, Series F" (the
"Series F Stock") and the number of shares which shall constitute such series
shall be 120,000 shares, with a stated value (the "Stated Value") of $100 per
share.
2. Dividends.
(a) General. The holders of the Series F Stock shall be
entitled to receive, when and as declared by the Board of Directors out of funds
legally available therefor, cumulative preferential cash dividends, at the rate
of 5% of the Stated Value per annum from the date of issuance (with appropriate
proration for any partial dividend period). Such cumulative dividends shall be
payable quarterly in arrears on the fifteenth day of each January, April, July
and October, commencing April, 1998.
(b) Dividends Cumulative. Dividends on the Series F Stock
shall accrue and be cumulative from the date of issuance, whether or not earned
and whether or not in any dividend period there shall be surplus or net profits
of the Corporation legally available for the payment of such dividends.
(c) Equality of Shares. No dividend shall be declared or set
apart for any shares of the Series F Stock for any period unless at the same
time a like proportionate dividend for the same period shall be declared or set
apart for all shares of the Series F Stock then outstanding and entitled to
receive such dividend.
(d) Restrictions with Respect to Junior Shares. So long as any
shares of the Series F Stock shall remain outstanding, no dividend shall be
declared or paid or set apart for payment on the common stock of the Corporation
(the "Common Stock") or any other series of Preferred Stock unless full
dividends (including interest on any accumulations of dividends) on all
outstanding shares of Series F Stock shall have been paid in full for all past
dividend periods and the dividends on all outstanding shares of Series F Stock
for the then current dividend period shall have been paid or declared and
sufficient funds set apart for payment thereof.
3. Liquidation Preference.
(a) General. The Series F Stock shall be preferred over the
Common Stock and any other class or series of stock ranking junior to the Series
F Stock in either payment of dividends or liquidation (all such junior classes
or series of stock including, without limitation, the Common Stock, hereinafter
referred to collectively as the "Junior Stock"). In the event of any liquidation
or dissolution or winding up of the Corporation, the holders of the Series F
Stock shall be entitled to receive, after payment or provision for payment of
the debts and other liabilities of the Corporation, out of the assets of the
Corporation available for distribution to its shareholders, the Stated Value of
the Series F Stock (to the extent not previously converted) plus all accumulated
and unpaid dividends before any distribution of the assets shall be made to the
holders of the Common Stock
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or any other class or series of Junior Stock or any other series of Preferred
Stock subsequent to the Series F Stock.
(b) Merger or Consolidation. Neither the merger or
consolidation of the Corporation with another corporation nor the sale or lease
of all or substantially all of the assets of the Corporation shall be deemed to
be a liquidation or dissolution or winding up of the Corporation.
(c) Notice Required. Written notice of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation, stating the payment date and the place where the distributable
amount shall be payable and stating the anticipated amount of any such
distributable amount, shall be given by mail, postage prepaid, not less than
thirty (30) days prior to the payment date stated therein, to the holders of
record of the Series F Stock at their respective addresses as the same shall
then appear on the books of the Corporation.
4. Conversion.
(a) General. Shares of Series F Stock may be converted at the
option of the holder thereof, or otherwise as provided below, into fully paid
and nonassessable shares of Common Stock of the Corporation by dividing the
aggregate Stated Value of the shares of Series F Stock to be converted (plus
accrued but unpaid dividends thereon) by the applicable conversion price as
determined below:
(i) On and prior to the Release Date up to 50% of the
Shares of Series F Stock (allocated pro-rata among the
initial holders thereof) (the "First Fifty Percent")
may be converted into shares of Common Stock at the
Closing Conversion Price.
(ii) Following the Release Date the shares of Series F
Stock will be convertible into the Common Stock as
follows:
(a) Any shares of the First Fifty Percent which have
not been converted prior to the Release Date
(allocated pro-rata among the initial holders thereof)
may be converted into Common Stock at the lesser of
the Closing Conversion Price or the following: (i) for
days 181 to 240 after the Closing Date, 90% of the
Market Price; (ii) for days 241 to 300 after the
Closing Date, 85% of the Market Price; (iii) for days
301 to maturity after the Closing Date, 80% of the
Market Price.
(b) The shares of Series F Stock other than the First
Fifty Percent may be converted into the Common Stock
at the least of the Reset Conversion Price, the
Maximum Conversion Price or the following: (i) for
days 181 to 240 after the Closing Date, 90% of the
Market Price; (ii) for days 241 to 300 after the
Closing Date, 85% of the Market Price;
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(iii) for days 301 to maturity after the Closing Date,
80% of the Market Price.
(iii) Notwithstanding the foregoing, in the event that the
Corporation extends the Release Date beyond the 180th
day following the Closing Date: the percentages set
forth in (b)(i-iii) above will each be reduced by 2%;
and, in the event that the average closing bid price of
the Common Stock over the 20 consecutive trading days
immediately preceding the date of the Release Date
Extension Notice to holders is not greater than 150% of
the Closing Price, the percentages set forth in
(a)(i-iii) also will each be reduced by 2%.
(iv) In the event that the Market Price is below $3.35
per Common Share (the "$3.35 Price") upon
requested conversion(s) of shares of Series F Stock,
the Corporation will have the option of satisfying the
notice of conversion in either (i) the number of
shares of Common Stock to which the holder(s) are
entitled, or (ii) cash in an amount equal to the
product of (a) the number of shares of Common
Stock that would otherwise be issued pursuant to the
notice of conversion, times (b) the closing bid price
of the shares of Common Stock on the trading day
prior to the date that the notice of conversion is
tendered.
(v) Beginning on the Release Date, if the 20 trading day
average closing bid price of the Common Stock (as
reported by Bloomberg, L.P.) (the "20 Day Average")
is greater than 300% of the Closing Price, the
Corporation shall have the option to convert all
outstanding shares of the Series F Stock into
Common Stock, upon 10 trading days notice to each
holder of Series F Stock, at the lowest then
applicable conversion prices. The 20 Day Average
bid price of the Common Stock must be greater than
300% of the Closing Price on the date of such
notice.
Any shares of Series F Stock not converted into Common Stock or
redeemed as provided in Section 6 prior to 24 months after the Closing Date
shall be automatically redeemed on such date, without any action of the holder
thereof, for cash at the Stated Amount thereof, plus all accrued and unpaid
dividends.
The following terms used herein shall have the stated meanings:
"Closing Conversion Price" means 140% of the Closing Price.
"Closing Date" means the day on which the closing of the first purchase
of shares of Series F Stock is completed.
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"Closing Price" when used with respect to the Common Stock means the
average closing bid price of the Common Stock over the five trading day
period ending on the trading day prior to the Closing Date.
The "Market Price" per share of Common Stock on any date shall be
deemed to be the Volume Weighted Average Price of the Common Stock as
reported by Bloomberg LP during any two consecutive trading day period
selected by the holder during the twenty trading day period ending on
the day prior to the date the holder gives notice of conversion.
The "Maximum Conversion Price" means a per share of Common Stock price
equal to 200% of the Closing Price.
"Release Date" means the first trading day following the date that is
180 days from the Closing Date; provided, however, that on any date up
through the 150th day following the Closing Date, the Corporation shall
have the non-revocable option on one occasion to extend the Release
Date up to the 240th day following the Closing Date upon written notice
to the holders of the shares of Series F Stock ("Release Date Extension
Notice").
"Reset Conversion Price" means the 20 trading day average closing bid
price of the Common Stock (as reported by Bloomberg, L.P.) ending on
the trading day prior to the Release Date.
"Valuation Period" means any of the five day, two day and twenty day
periods referred to in the above definitions.
Notwithstanding the foregoing, the maximum number of shares of Common
Stock which the Corporation may be required to issue upon conversion of the
shares of Series F Stock (the "Maximum Number of Shares of Common Stock") shall
not exceed, with respect to each holder of Series F Stock, such holder's ratable
share of 3,580,252 shares of Common Stock ("Ratable Share"). Each holder's
Ratable Share shall be calculated prior to converting such holder's shares of
Series F Stock. Any shares of Series F Stock transferred shall carry with them
the related Ratable Share. Any remaining Shares of a holder's Ratable Share
which are not required to convert fully such holder's shares shall be
reallocated to the other holders in proportion to such other holder's ratable
ownership and shall be available for conversion by the other holders of Series F
Stock. After the issuance of the Maximum Number of Shares of Common Stock to any
holder, the Corporation shall have the option of either issuing additional
shares of Common Stock upon conversion of those shares of Series F Stock that
remain outstanding (subject to compliance with applicable rules of regulatory or
self-regulatory organization) or of determining that such shares of Series F
Stock shall instead be subject to redemption as provided in Section 6 hereof.
(b) Adjustments. Once fixed, the Closing Conversion Price, the
Reset Conversion Price, the $3.35 Price, the Maximum Conversion Price, the
Maximum Number of Shares of Common Stock and the kind and amounts of securities
and property for which the shares of Series F Stock may be converted shall be
subject to adjustment from time to time as follows:
(i) If, at any time after the issuance of the Series F
Stock, the Corporation shall (A) declare or pay a dividend, or make a
distribution, to all holders of its Common Stock in shares of Common Stock, (B)
subdivide its
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outstanding shares of Common Stock into a greater number of shares, (C) combine
its outstanding shares of Common Stock into a smaller number of shares, or (D)
issue by reclassification of its shares of Common Stock (other than a
subdivision or combination thereof or a change in par value) any securities, the
Closing Conversion Price, the Reset Conversion Price, the $3.35 Price, the
Maximum Conversion Price and the Maximum Number of Shares of Common Stock in
effect immediately prior to such action shall be adjusted so that the holder of
any share of Series F Stock thereafter surrendered for conversion shall be
entitled to receive the kind and number of shares of Common Stock of the
Corporation and/or other securities which he would have owned or been entitled
to receive immediately following such action had such share of Series F Stock
been converted immediately prior thereto. Any adjustment made pursuant to this
Paragraph (b)(i) shall become effective immediately after the record date in the
case of a dividend or distribution and shall become effective immediately after
the effective date in the case of a subdivision, combination or
reclassification.
(ii) If, at any time after the date of issuance of the
Series F Stock, the Corporation shall distribute to all or substantially all
holders of its Common Stock either (A) evidences of indebtedness or assets
(excluding cash dividends or distributions) or (B) any other securities of the
Corporation or any rights, warrants or options to subscribe for, purchase or
otherwise acquire securities of the Corporation in a transaction not covered by
Paragraph (b)(i) above (any of which are referred to herein as "Other
Securities"), then and in any such case the Corporation shall either distribute
such Other Securities to the holders of the Series F Stock or reserve for the
benefit of the holders of the Series F Stock such amount of such Other
Securities as the holders of all Series F Stock then outstanding would have
owned or been entitled to receive immediately following such action had the
shares of Series F Stock been converted into shares of Common Stock immediately
prior thereto. In addition, the Corporation shall either distribute to, or
reserve for the benefit of, the holders of the Series F Stock any principal,
interest, dividends or other property payable with respect to such Other
Securities as and when such interest, dividends or other property is distributed
to the holders of Common Stock. If such a reserve is made, as and when each such
share of Series F Stock is converted, the holder of such share shall be entitled
to receive from the Corporation his share of such Other Securities together with
the principal, interest, dividends or other property payable with respect
thereto.
(iii) In the case of an adjustment pursuant to
Paragraphs (i) or (ii) above during a Valuation Period, the relevant price of
the Common Stock shall be proportionally adjusted.
(iv) All calculations under this Section 4 shall be
made to the nearest one-tenth of a cent or to the nearest one thousandth of a
share, as the case may be. No adjustment shall be required unless such
adjustment would result in an increase or decrease of at least one percent (1%)
of the Closing Conversion Price, the Reset Conversion Price, the $3.35 Price,
the Maximum Conversion Price and the Maximum Number of Shares of Common Stock;
provided, however, that any adjustments which by reason of this subparagraph
(iii) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(v) Whenever the Closing Conversion Price, the Reset
Conversion Price, the $3.35 Price, the Maximum Conversion Price and the Maximum
Number of Shares of Common Stock are adjusted or Other Securities
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are reserved as herein provided, the Corporation shall mail or cause to be
mailed a copy of a statement, verified by its independent certified public
accountants, setting forth the required adjustments or the nature and amount of
Other Securities, as the case may be, to each person who is a registered holder
of Series F Stock at such person's last address as the same appears on the books
of the Corporation. Each adjustment shall remain in effect until a subsequent
adjustment is required hereunder. Failure to give or receive such notice or any
defect therein shall not affect the legality or validity of any action taken.
Following any adjustment to the Closing Conversion Price, the Reset Conversion
Price, the $3.35 Price, the Maximum Conversion Price and the Maximum Number of
Shares of Common Stock, the holders of the Series F Stock shall be entitled, by
themselves or through attorneys or accountants retained by them, to inspect the
books and records of the Corporation in order to verify such adjustment. Such
inspection shall be at the expense of the holders of the Series F Stock
requesting such inspection unless such inspection reveals an error in the
adjustment equal to 5% or more of the Closing Conversion Price, the Reset
Conversion Price, the $3.35 Price, the Maximum Conversion Price or the Maximum
Number of Shares of Common Stock, in which case the Corporation shall promptly
reimburse the holders for all expenses incurred in connection therewith.
(vi) If at any time, as a result of an adjustment made
pursuant to Paragraph (ii) above, the holders of Series F Stock shall become
entitled to receive upon conversion any Other Securities, thereafter the number
of such Other Securities receivable upon conversion of the Series F Stock and
the price of the Other Securities shall be subject to adjustment from time to
time and in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to Series F Stock contained in Paragraphs (i) and (ii),
above.
(c) Merger or Consolidation. In case of a merger or
consolidation of the Corporation with or into another corporation, or the sale
or transfer of all, or substantially all, of the property or assets of the
Corporation, the holders of shares of Series F Stock shall thereafter have the
right to convert each of such shares into the kind and amount of shares of stock
or other securities and property (including cash) receivable (the
"Consideration") upon such merger, consolidation or sale by a holder of the
number of shares of Common Stock (whether whole or fractional) into which such
shares of Series F Stock might have been converted immediately prior to such
merger, consolidation or sale (all of which Consideration shall be reserved and
become payable upon conversion in the same manner as for Other Securities
pursuant to Paragraph (b)(ii) above and shall be adjusted as provided in
Paragraph (b) above), and shall have no other conversion rights under these
provisions and, in addition, the Corporation shall reserve, on a current basis
as and when distributed, for payment upon conversion, in the same manner as
required for Other Securities pursuant to Paragraph (b)(ii) above, any interest,
dividends, other stock, securities or property distributable with respect to the
Consideration, the same as if such shares of Series F Stock had been converted
immediately prior to such merger, consolidation, or sale of assets; and
effective provision shall be made in the charter of the resulting or surviving
corporation or otherwise, so that the provisions set forth herein for the
adjustment of the conversion terms of the Series F Stock shall thereafter be
applicable, as nearly as reasonably may be, to any of the Consideration
deliverable upon conversion of Series F Stock remaining outstanding or other
convertible preferred stock received in place thereof. Any such resulting or
surviving corporation shall expressly assume the obligation to deliver the
Consideration, upon the exercise of the conversion right, (and, to that end,
shall reserve sufficient Consideration to issue, distribute
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and/or pay the holders of the Series F Stock as if all such stock were
converted) as holders of Series F Stock remaining outstanding, or other
convertible preferred stock received by such holders in place thereof, shall be
entitled to receive pursuant to the provisions hereof, and to make provision for
protection of conversion rights as above provided. In the event a merger or
consolidation occurs prior to the Release Date, all of the shares of Series F
Stock shall thereupon become convertible at the lesser of the Closing Conversion
Price or 90% of the 5 day average closing bid price prior to the closing of such
merger, consolidation, or sale of assets.
(d) Notices. If, at any time while shares of Series F Stock
are outstanding, the Corporation shall (i) declare a dividend (or any other
distribution) on its Common Stock, other than in cash, or (ii) reclassify its
Common Stock (other than through a subdivision or combination thereof or a
change in par value) or become a party to any consolidation or merger or sale or
transfer of all or substantially all of the assets of the Corporation, for which
approval of the holders of its stock is required, then the Corporation shall
cause to be mailed to registered holders of Series F Stock by registered or
certified mail, at their last addresses as they shall appear on the books of the
Corporation, at least thirty (30) days prior to the applicable record date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend or distribution, or, if a record is not
to be taken, the date as of which holders of Common Stock of record to be
entitled to such dividend or distribution are to be determined, or (y) the date
on which any such reclassification, consolidation, merger, sale or transfer is
expected to become effective, and the date as of which it is expected that
holders of record of Common Stock shall be entitled to exchange their Common
Stock for securities or other property, if any, deliverable upon such
reclassification, consolidation, merger, sale or transfer. Failure to give or
receive the notice required by this Paragraph (d) or any defect therein shall
not affect the legality or validity of any such dividend, distribution,
reclassification, consolidation, merger, sale, transfer or other action.
(e) Exercise of Conversion Rights. The holder of any shares of
Series F Stock may exercise his option to convert such shares into shares of
Common Stock only by surrendering for such purpose to the Corporation the
certificates representing the shares to be converted, accompanied or preceded by
written notice (which may be transmitted by telecopier) that such holder elects
to convert such shares in accordance with the provisions of this Section 4. Said
notice shall also state the name or names (with addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued. Each certificate or certificates surrendered
for conversion shall, unless the shares issuable on conversion are to be issued
in the same name as that in which such certificate or certificates are
registered, be accompanied by instruments of transfer, in form satisfactory to
the Corporation, duly executed by the holder or his duly authorized attorney.
Each conversion shall be deemed to have been effected on the date on which such
notice shall have been received by the Corporation as aforesaid, provided that
the certificates to which such notice relates are received by the Corporation no
later than the fifth business day following the date of receipt of such notice,
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 on said date the holder or holders of record of the shares
represented thereby notwithstanding that the transfer books of the Corporation
may then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to
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such person. Within three business days after receipt of the certificates
representing the shares to be converted and the notice of conversion, the
Corporation shall issue and deliver to the person or persons entitled to receive
the same a certificate or certificates representing the number of shares of
Common Stock issuable upon such conversion and shall pay or cause the payment of
such Other Securities or Consideration or other property as may be payable upon
conversion pursuant to Paragraphs (b)(iii) or (c) of this Section 4. The
Corporation understands that a delay in the conversion pursuant to this
Paragraph (e) beyond the time frame provided in the previous sentence could
result in economic loss to the holder exercising his option to convert shares
into Common Stock. As compensation to the holder for such loss, and not as a
penalty, the Corporation agrees to pay liquidated damages to the holder for late
conversion pursuant to this Paragraph (e) in the amount of one percent (1%) of
the requested conversion amount, per day, beginning on the eighth (8th) business
day from the date of receipt by the Corporation of the certificates representing
the shares to be converted and the notice of the conversion pursuant to this
Paragraph (e). Any such amounts shall be paid in U.S. dollars.
(f) Fractional Shares. No fractional shares of Common Stock
shall be issued in connection with the conversion of shares of Series F Stock
into Common Stock. Instead of any fractional share of Common Stock which would
otherwise be issuable on conversion, the Corporation shall pay a cash adjustment
with respect to such fractional share computed on the basis of the then current
fair market value of the Common Stock, as determined in good faith by the
Corporation's Board of Directors.
(g) Tax on Conversion. The issuance of stock certificates on
conversions of shares of Series F Stock shall be made without charge to
converting shareholders for any tax in respect of the issuance thereof except
any tax on the income or gain derived by the converting shareholders as a result
of the issuance thereof. The Corporation shall not, however, be required to pay
any tax which may be payable in respect of any registration of transfer involved
in the issue and delivery of stock in any name other than that of the holder of
the shares of Series F Stock converted, and the Corporation shall not be
required to so issue or deliver any stock certificate unless and until the
person or persons requesting the registration of transfer shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction
of the Corporation that such tax has been paid.
(h) Securities Reserved. The Corporation shall at all times
reserve and keep available out of its authorized Common Stock (and any Other
Securities or Consideration or property) the full number of shares of Common
Stock (and any Other Securities or Consideration or property) deliverable upon
the conversion of all outstanding shares of Series F Stock. Upon the Closing
Date, the Corporation will reserve 3,580,252 shares of Common Stock for issuance
upon conversion of the Series F Stock, and an additional 500,000 shares of
Common Stock for issuance upon exercise of Warrants issued to the holders of the
Series F Stock on the Closing Date. The Corporation shall not enter into any
agreement or take any action which would impair or restrict its legal authority
to issue such shares of Common Stock, Other Securities or Consideration or
property upon conversion or to defeat in any way the right of the holders of the
Series F Stock to receive such consideration upon conversion. In addition,
whenever the Corporation is required to reserve any interest, dividends or other
property payable upon conversion of the Series F Stock, the Corporation shall,
as to cash, deposit
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such amounts in one or more separate accounts for the sole benefit of the
holders of the Series F Stock upon conversion and, as to other property,
physically segregate or otherwise set such property aside in such a manner as to
protect the rights of the holders of the Series F Stock to the receipt of such
property upon conversion.
(i) Effect of Conversion. All shares of Series F Stock which
shall have been converted into shares of Common Stock shall assume the status of
authorized but unissued shares of Preferred Stock undesignated as to series.
5. Voting Rights.
No holder of Series F Stock shall be entitled to vote on any
matter submitted to the shareholders of the Corporation for their vote, waiver,
release or other action, except as may be otherwise expressly required by law.
6. Redemption.
Within five days after issuance by the Corporation of the
Maximum Number of Shares of Common Stock upon conversion of shares of Series F
Stock, the Corporation shall provide notice of such event to registered holders
of Series F Stock, at their last known addresses as they shall appear on the
books of the Corporation. Effective the date of such mailing, holders of shares
of Series F Stock which then remain outstanding may cause such shares to be
redeemed by the Corporation at an amount equal to the Redemption Value (as
hereinafter defined) of such shares; provided that the Corporation may instead
permit the conversion of such shares of Series F Stock into shares of Common
Stock pursuant to Section 4(a) hereof. The holder of any shares of Series F
Stock may exercise his option to redeem such shares only by surrendering for
such purpose to the Corporation the certificates representing the shares to be
redeemed, accompanied or preceded by written notice (which may be transmitted by
telecopier) that such holder elects to redeem such shares in accordance with the
provisions of this Section 6. Said notice also shall state the name or names
(with addresses) in which any shares of Series F Stock represented by the
certificates surrendered which are not to be redeemed shall be re-issued. Each
redemption shall be deemed to have been effective on the date on which such
notice shall have been received by the Corporation as aforesaid, provided that
the certificates to which such notice relates are received by the Corporation no
later than the third business day following the date of receipt of such notice.
Within three business days after receipt of the certificates representing the
shares to be redeemed and the notice of redemption, the Corporation shall issue
and deliver to the person or persons entitled to receive the same the Redemption
Value of the shares to be redeemed. The Redemption Value of the shares of Series
F Stock being redeemed shall be calculated by dividing the aggregate Stated
Value of such shares by the conversion price (as provided in Section 4(a)) which
would be applicable if such shares were being converted into shares of common
stock as provided in Section 4(a) on the date of redemption and multiplying the
result by the Market Price (as defined in Section 4(a)) per share of Common
Stock on the date of redemption, plus any accrued and unpaid dividends.
7. Amendment.
Notwithstanding the provisions of Section 5 above, so long as
any share of Series F Stock is outstanding, the Articles of Incorporation of the
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Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series F Stock so as to
affect them adversely without the affirmative vote of the holders of a majority
of the outstanding shares of Series F Stock, voting separately as a class.
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