EXHIBIT 3.1
RESOLUTION AMENDING THE ARTICLES OF INCORPORATION
OF
GOOD TIMES RESTAURANTS INC.
RESOLVED, that the Articles of Incorporation of the
Corporation be amended by deleting Article Fourth thereof and
substituting therefor the following:
ARTICLE IV - AUTHORIZED CAPITAL STOCK
The total number of shares of all classes of stock which
the Corporation shall have the authority to issue is 55,000,000
shares, consisting of 50,000,000 shares of common stock, $.001 par
value per share ("Common Stock"), and 5,000,000 shares of preferred
stock, $.01 par value per share ("Preferred Stock").
The designations, powers, preferences and rights and the
qualifications, limitation or restrictions of the Preferred Stock
shall be as follows:
A. Series A Convertible Preferred Stock.
One million shares of Preferred Stock shall be designated
as Series A Convertible Preferred Stock and shall have the
following designations, powers, preferences and rights and the
qualifications, limitations or restrictions as follows:
1. Number of Shares. The series of Preferred Stock
designated and known as "Series A Convertible Preferred Stock"
shall consist of 1,000,000 shares.
2. Voting.
a. General. Except as may be otherwise provided
in these terms of the Series A Convertible Preferred Stock or by
law, the Series A Convertible Preferred Stock shall vote together
with all other classes and series of stock of the Corporation as a
single class on all actions to be taken by the stockholders of the
Corporation. Each share of Series A Convertible Preferred Stock
shall entitle the holder thereof to such number of votes per share
on each action as shall equal the number of shares of Common Stock
(including fractions of a share) into which each share of Series A
Convertible Preferred Stock would be convertible based on the
Conversion Price then in effect.
b. Board Size. The Corporation shall not, without
the written consent or affirmative vote of the holders of at least
two-thirds of the then outstanding shares of Series A Convertible
Preferred Stock, given in writing or by vote at a meeting,
consenting or voting (as the case may be) separately as a series,
increase the maximum number of Directors constituting the Board of
Directors to a number in excess of seven.
c. Board Seats. The holders of the Series A
Convertible Preferred Stock voting together separately as a class
shall have the right to elect two Directors to the Board of
Directors of the Corporation, one of whom shall have the right to
serve as the Chairman of the Board at their discretion.
Notwithstanding the foregoing or anything else to the contrary
provided in these Articles of Incorporation, the holders of Series
A Convertible Preferred Stock, voting as a separate series, shall
be entitled to remove with or without cause any or all of the
Directors and to elect four Directors to the Board of the
Corporation if the following events occur: (1) the Board shall fail
to declare an Accruing Dividend when due if there is adequate
surplus to do so, unless the Board of Directors reasonably
determines that the payment of a cash dividend would jeopardize the
Corporation's ability to meet its current and reasonably
foreseeable obligations, including reasonable reserves therefor;
(2) the Corporation files a petition in bankruptcy, is adjudged
bankrupt or insolvent, makes an assignment for the benefit of
creditors, applies to or petitions any tribunal for the appointment
of a receiver, intervenor or trustee for all or a substantial part
of its assets, or a proceeding under any bankruptcy law or statute
shall have commenced and not been dismissed within 60 days; or (3)
if there has been a material breach of any agreement between the
Corporation and the holders of the Series A Convertible Preferred
Stock and the Company fails to remedy such breach within 14 days
after receiving notice of such breach or, if such breach cannot
reasonably be cured and the Company continuously and diligently
proceeds to remedy such breach, within 30 days after receiving
notice of such breach. At any meeting (or in a written consent in
lieu thereof) held for the purpose of electing Directors, the
presence in person or by proxy (or the written consent) of the
holders of a majority of the shares of Series A Convertible
Preferred Stock then outstanding shall constitute a quorum of the
Series A Convertible Preferred Stock for the election of Directors
to be elected solely by the holders of the Series A Convertible
Preferred Stock or jointly by the holders of the Series A
Convertible Preferred Stock and the Common Stock. A vacancy in any
directorship elected solely by the holders of the Series A
Convertible Preferred Stock shall be filled only by vote or written
consent of the holders of the Series A Convertible Preferred Stock,
and a vacancy in the directorship elected jointly by the holders of
the Series A Convertible Preferred Stock and the Common Stock shall
be filled only by vote or written consent of holders of the Series
A Convertible Preferred Stock and the Common Stock as provided
above.
3. Dividends. The holders of the Series A Convertible
Preferred Stock shall be entitled to receive, out of funds legally
available therefor, when and as declared by the Board of Directors,
cumulative cash dividends on each share of Preferred Stock equal to
8% of the purchase price paid for such share per annum (the
"Accruing Dividend"). The Accruing Dividend shall accrue with
respect to each share of Series A Convertible Preferred Stock
issued and outstanding from day to day from the date of original
issuance of such shares and shall be payable quarterly on January
1, April 1, July 1 and October 1 of each year (each a "Payment
Date") commencing July 1, 1997, whether or not earned or declared,
and such dividends shall be cumulative if not paid. The Accruing
Dividend shall be paid, at the option of the holder of the Series
A Convertible Preferred Stock, in cash or in Common Stock. If a
holder elects to receive an Accruing Dividend in cash, the Company
shall promptly pay such Accruing Dividend unless the Board of
Directors reasonably determines that the payment of such dividend
would jeopardize the Corporation's ability to meet its current and
reasonably foreseeable obligations, including the establishment of
reasonable reserves therefor, in which case the payment of such
cash dividend will be deferred until such time as the payment of
the dividend, in the reasonable discretion of the Board of
Directors, would not jeopardize the Corporation's ability to meet
such obligations. If a holder elects to receive a dividend of
Common Stock, the Corporation shall issue to such holder, within 30
days after the date on which such dividend was due, the number of
shares of Common Stock calculated by dividing (i) the dollar value
of the dividend, by (ii) 75% of the Dividend Conversion Rate. The
"Dividend Conversion Rate" shall be equal to the average of the
prices set forth in the "Last Price" column in the NASDAQ Small-Cap
issues for the 14 business days immediately preceding the
applicable Dividend Payment Date. Notwithstanding the foregoing,
if on the July 1, 1997 Payment Date, 75% of the Dividend Conversion
Rate is less than $0.46875, then the Dividend Conversion Rate used
on that Payment Date shall be $0.46875. If a holder or holders of
Series A Convertible Preferred Stock elect to receive a dividend in
cash, such holders shall have the right, until such time as the
cash dividend is actually paid, to change their election and
receive such dividend in the form of Common Stock as provided
above; provided, that the size of such Common Stock dividend shall
be calculated using the Dividend Conversion Rate applicable at the
time the dividend was declared.
4. Liquidation. Upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary,
the holders of the shares of Series A Convertible Preferred Stock
shall first be entitled, before any distribution or payment is made
upon any stock ranking on liquidation junior to the Series A
Convertible Preferred Stock, to be paid an amount equal to $0.46875
per share plus, in the case of each share, an amount equal to all
Accruing Dividends accrued but unpaid thereon (whether or not
declared) computed to the date payment thereof is made available
(such amount payable with respect to one share of Series A
Convertible Preferred Stock being sometimes referred to as the
"Liquidation Preference Payment" and with respect to all shares of
Series A Convertible Preferred Stock being sometimes referred to as
the "Liquidation Preference Payments"). If upon such liquidation,
dissolution or winding up of the Corporation, whether voluntary or
involuntary, the assets to be distributed among the holders of
Series A Convertible Preferred Stock shall be insufficient to
permit payment in full to the holders of Series A Convertible Stock
of the Liquidation Preference Payments, then the entire assets of
the Corporation to be so distributed shall be distributed ratably
among the holders of Series A Convertible Preferred Stock. Upon
any such liquidation, dissolution or winding up of the Corporation,
immediately after the holders of Series A Convertible Preferred
Stock shall have been paid in full the Liquidation Preference
Payments, the remaining net assets of the Corporation available for
distribution shall be distributed ratably among the holders of
Common Stock. Written notice of such liquidation, dissolution or
winding up, stating a payment date, the amount of the Liquidation
Preference Payments and the place where said Liquidation Preference
Payments shall be payable, shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by
telecopier or telex, not less than 20 days prior to the payment
date stated therein, to the holders of record of Series A
Convertible Preferred Stock, such notice to be addressed to each
such holder at its address as shown by the records of the
Corporation. The consolidation or merger of the Corporation into
or with any other entity or entities which results in the exchange
of outstanding shares of the Corporation for securities or other
consideration issued or paid or caused to be issued or paid by any
such entity or affiliate thereof (other than a merger to
reincorporate the Corporation in a different jurisdiction), and the
sale, lease, abandonment, transfer or other disposition by the
Corporation of all or substantially all its assets, shall be deemed
to be a liquidation, dissolution or winding up of the Corporation
within the meaning of the provisions of this paragraph 4. For
purposes hereof, except as provided herein, the Common Stock shall
rank on liquidation junior to the Series A Convertible Preferred
Stock.
5. Restrictions. At any time when shares of Series A
Convertible Preferred Stock are outstanding, without the unanimous
consent of both Directors of the Corporation that are elected by
the holders of the Series A Convertible Stock, consenting or voting
separately as a class, the Corporation will not:
a. (1) Consent to any liquidation, dissolution or
winding up of the Corporation, (2) consolidate or merge into or
with any other entity or entities, (3) consent to any acquisition
of stock or assets of another person or entity (except for Steak
Out, King of Steaks, Inc.), (4) sell, lease, abandon, transfer or
otherwise dispose of in excess of 51% of the Corporation's total
assets (including intellectual property rights), or (5) incur any
additional long term debt (i.e., debt that is payable over a period
of longer than one year) at any time at which the Corporation's
earnings before interest, taxes, depreciation and amortization
("EBITDA"), excluding extraordinary items of gain or loss, is less
than 120% of the aggregate interest and principal payments on long
term debt that the Corporation reasonably expects to be obligated
for over the subsequent 12-month period.
b. Amend, alter or repeal its Certificate of
Incorporation or By-laws;
c. Purchase or set aside any sums for the purchase
of, or pay any dividend or make any distribution on, any shares of
stock other than the Series A Convertible Preferred Stock, except
for dividends or other distributions payable on the Common Stock
solely in the form of additional shares of Common Stock and except
for the purchase of shares of Common Stock from former employees of
the Corporation who acquired such shares directly from the
Corporation, if each such purchase is made pursuant to contractual
rights held by the Corporation relating to the termination of
employment of such former employee and the purchase price does not
exceed the original issue price paid by such former employee to the
Corporation for such shares; or
d. Redeem or otherwise acquire any shares of
Series A Convertible Preferred Stock except as expressly authorized
in paragraph 7 hereof or pursuant to a purchase offer made pro rata
to all holders of the shares of Series A Convertible Preferred
Stock on the basis of the aggregate number of outstanding shares of
Series A Convertible Preferred Stock held by each such holder.
6. Conversion. The holders of shares of Series A
Convertible Preferred Stock shall have the following conversion
rights:
a. Right to Convert. Subject to the terms and
conditions of this paragraph 6, the holders of Series A Convertible
Preferred Stock shall have the right at any time during each
Conversion Period shown on the table below (each a "Conversion
Period"), to convert up to the Maximum Number of Shares of Series
A Convertible Preferred Stock shown on such table for that
Conversion Period into such number of fully paid and nonassessable
shares of Common Stock as is obtained by dividing the number of
shares of Series A Convertible Preferred Stock to be converted by
the applicable Conversion Price as set forth in the following
table:
Maximum
Conversion Period Number of Shares Conversion Price
October 1, 1997 - 500,000 $0.46875
October 31, 1997
November 1, 1997 - 500,000* $0.56875
December 31, 1997
January 1, 1998 - 250,000 $0.46875
January 31, 1998 500,000* $0.56875
February 1, 1998 - 750,000* $0.56875
March 31, 1998
April 1, 1998 - 250,000 $0.46875
April 30, 1998 750,000* $0.56875
May 1, 1998 -
April 30, 1999 1,000,000* $0.56875
May 1, 1999, and
thereafter 1,000,000* the greater of
(i) the
Dividend
Conversion Rate
at the time of
such
conversion, and
(ii) $0.46875
* To the extent not previously converted.
Such rights of conversion shall be exercised by the holder thereof
by giving written notice to the Corporation during the applicable
Conversion Period stating that the holder elects to convert a
stated number of shares of Series A Convertible Preferred Stock
into Common Stock and by surrender of a certificate or certificates
for the shares so to be converted to the Corporation at its
principal office (or such other office or agency of the Corporation
as the Corporation may designate by notice in writing to the
holders of the Series A Convertible Preferred Stock) at any time
during its usual business hours on the date set forth in such
notice, together with a statement of the name or names (with
address) in which the certificate or certificates for shares of
Common Stock shall be issued; provided, however, that following
each Conversion Period, no more than the Maximum Number of Shares
in the aggregate shall be converted. If holders of the Series A
Convertible Preferred Stock desire to convert in excess of the
Maximum Number of Shares for a particular Conversion Period, such
holders shall have the right to convert up to their pro rata share
of the Maximum Number of Shares, unless otherwise agreed by the
holders desiring to convert their shares hereunder.
b. Issuance of Certificate; Time Conversion
Effected. Promptly after the receipt of the written notice
referred to in subparagraph 6(a) and surrender of the certificate
or certificates for the share or shares of Series A Convertible
Preferred Stock to be converted, the Corporation shall issue and
deliver, or cause to be issued and delivered, to the holder,
registered in such name or names as such holder may direct, a
certificate or certificates for the number of whole shares of
Common Stock issuable upon the conversion of such share or shares
of Series A Convertible Preferred Stock. To the extent permitted
by law, such conversion shall be deemed to have been effected as of
the close of business on the date on which such written notice
shall have been received by the Corporation and the certificate or
certificates for such share or shares shall have been surrendered
as aforesaid, and at such time the rights of the holder of such
share or shares of Series A Convertible Preferred Stock shall
cease, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be
issuable upon such conversion shall be deemed to have become the
holder or holders of record of the shares represented thereby.
c. Fractional Shares; Dividends; Partial
Conversion. No fractional shares shall be issued upon conversion
of Series A Convertible Preferred Stock into Common Stock and no
payment or adjustment shall be made upon any conversion on account
of any cash dividends on the Common Stock issued upon such
conversion. At the time of each conversion, the Corporation shall
pay in cash an amount equal to all dividends accrued and unpaid on
the shares of Series A Convertible Preferred Stock surrendered for
conversion to the date upon which such conversion is deemed to take
place as provided in subparagraph 6(b). In case the number of
shares of Series A Convertible Preferred Stock represented by the
certificate or certificates surrendered pursuant to subparagraph
6(a) exceeds the number of shares converted, the Corporation shall,
upon such conversion, execute and deliver to the holder, at the
expense of the Corporation, a new certificate or certificates for
the number of shares of Series A Convertible Preferred Stock
represented by the certificate or certificates surrendered which
are not to be converted. If any fractional share of Common Stock
would, except for the provisions of the first sentence of this
subparagraph 6(c), be delivered upon such conversion, the
Corporation, in lieu of delivering such fractional share, shall pay
to the holder surrendering the Series A Convertible Preferred Stock
for conversion an amount in cash equal to the current market price
of such fractional share as determined in good faith by the Board
of Directors of the Corporation.
d. Subdivision or Combination of Common Stock. In
case the Corporation shall at any time subdivide (by stock split,
stock dividend or otherwise) its outstanding shares of Common Stock
into a greater number of shares, the Conversion Price in effect
immediately prior to such subdivision shall be proportionately
reduced and, conversely, in case the outstanding shares of Common
Stock shall be combined into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination
shall be proportionately increased.
e. Reorganization or Reclassification. If any
capital reorganization or reclassification of the capital stock of
the Corporation shall be effected in such a way that holders of
Common Stock shall be entitled to receive stock, securities or
assets with respect to or in exchange for Common Stock, then, as a
condition of such reorganization or reclassification, lawful and
adequate provisions shall be made whereby each holder of a share or
shares of Series A Convertible Preferred Stock shall thereupon have
the right to receive, upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common
Stock immediately therefor receivable upon the conversion of such
share or shares of Series A Convertible Preferred Stock, such
shares of stock, securities or assets as may be issued or payable
with respect to or in exchange for a number of outstanding shares
of Common Stock equal to the number of shares of such Common Stock
immediately therefore receivable upon such conversion had such
reorganization or reclassification not taken place. In any such
case, appropriate provisions shall be made with respect to the
rights and interests of such holder to the end that the provisions
hereof (including without limitation provisions for adjustments of
the Conversion Price) shall thereafter be applicable, as nearly as
may be, in relation to any shares of stock, securities or assets
thereafter deliverable upon the exercise of such conversion rights.
f. Other Notices. In case at any time:
(1) the Corporation shall declare any dividend
upon its Common Stock payable in cash or stock or make
any other distribution to the holders of its Common
Stock;
(2) the Corporation shall offer for
subscription pro rata to the holders of its Common Stock
any additional shares of stock of any class or other
rights;
(3) there shall be any capital reorganization
or reclassification of the capital stock of the
Corporation, or a consolidation or merger of the
Corporation with or into another entity or entities, or
a sale, lease, abandonment, transfer or other disposition
of all or substantially all its assets; or
(4) there shall be a voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation;
then, in any one or more of such cases, the Corporation shall give,
by delivery in person, certified or registered mail, return receipt
requested, telecopier or telex, addressed to each holder of any
shares of Series A Convertible Preferred Stock at the address of
such holder as shown on the books of the Corporation, (a) at least
20 days' prior written notice of the date on which the books of the
Corporation shall close or a record shall be taken for such
dividend, distribution or subscription rights or for determining
rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, disposition, dissolution,
liquidation or winding up, and (b) in the case of any such
reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding up, at least 20
days' prior written notice of the date when the same shall take
place. Such notice in accordance with the foregoing clause (a)
shall also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the holders of Common
Stock shall be entitled thereto and such notice in accordance with
the foregoing clause (b) shall also specify the date on which the
holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger,
disposition, dissolution, liquidation or winding up, as the case
may be.
g. Stock to be Reserved. The Corporation will at
all times reserve and keep available out of its authorized Common
Stock, solely for the purpose of issuance upon the conversion of
Series A Convertible Preferred Stock as herein provided, such
number of shares of Common Stock as shall then be issuable upon the
conversion of all outstanding shares of Series A Convertible
Preferred Stock. The Corporation covenants that all shares of
Common Stock which shall be so issued shall be duly and validly
issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, and, without
limiting the generality of the foregoing, the Corporation covenants
that it will from time to time take all such action as may be
requisite to assure that the par value per share of the Common
Stock is at all times equal to or less than the Conversion Price in
effect at the time. The Corporation will take all such action as
may be necessary to assure that all such shares of Common Stock may
be so issued without violation of any applicable law or regulation,
or of any requirement of any national securities exchange upon
which the Common Stock may be listed. The Corporation will not
take any action which results in any adjustment of the Conversion
Price if the total number of shares of Common Stock issued and
issuable after such action upon conversion of the Series A
Convertible Preferred Stock would exceed the total number of shares
of Common Stock then authorized by the Certificate of
Incorporation.
h. No reissuance of Series A Convertible Preferred
Stock. Shares of Series A Convertible Preferred Stock which are
converted into shares of Common Stock as provided herein shall not
be reissued.
i. Issue Tax. The issuance of certificates for
shares of Common Stock upon conversion of Series A Convertible
Preferred Stock shall be made without charge to the holders thereof
for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the holder
of the Series A Convertible Preferred Stock which is being
converted.
j. Closing of Books. The corporation will at no
time close its transfer books against the transfer of any Series A
Convertible Preferred Stock or of any shares of Common Stock issued
or issuable upon the conversion of any shares of Series A
Convertible Preferred Stock in any manner which interferes with the
timely conversion of such Series A Convertible Preferred Stock,
except as may otherwise be required to comply with applicable
securities laws.
k. Definition of Common Stock. As used in this
paragraph 6, the term "Common Stock" shall mean and include the
Corporation's authorized Common Stock, par value $0.01 per share,
as constituted on the date of filing of these terms of the Series
A Convertible Preferred Stock, and shall also include any capital
stock of any class of the Corporation thereafter authorized which
shall not be limited to a fixed sum or percentage in respect of the
rights of the holders thereof to participate in dividends or in the
distribution of assets upon the voluntary or involuntary
liquidation, dissolution or the distribution of assets upon the
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation; provided that the shares of Common Stock
receivable upon conversion of shares of Series A Convertible
Preferred Stock shall include only shares designated as Common
Stock of the Corporation on the date of filing of this instrument,
or in case of any reorganization or reclassification of the
outstanding shares thereof, the stock, securities or assets
provided for in subparagraph 6(g).
7. Redemption. The shares of Series A Convertible
Preferred Stock may be redeemed by the Corporation, at its option,
as follows:
a. Optional Redemption. The Corporation shall
have the right at any time after October 1, 1998, at its option, to
redeem all of the then-outstanding shares of Series A Convertible
Preferred Stock, or any portion thereof, in blocks of 100,000
shares; provided, however, that such right is contingent upon all
accrued and unpaid Accruing Dividends being fully paid prior to the
Corporation's exercise of its redemption rights hereunder; and
provided, further, however, that for so long as a holder of Series
A Convertible Preferred Stock and its affiliates, in the aggregate,
own at least 66.67% of the Series A Convertible Preferred Stock and
Conversion Shares, the Corporation shall not have the right to
redeem any shares hereunder to the extent that (i) there are fewer
than 1,000 shares of Series A Convertible Preferred Stock
outstanding, or (ii) such redemption would result in fewer than
1,000 shares of Series A Convertible Preferred Stock remaining
outstanding.
b. Redemption Price and Payment. The shares of
Series A Convertible Preferred Stock to be redeemed hereunder shall
be redeemed by paying in cash an amount equal to $1.00 per share
plus, in the case of each share, an amount equal to all Accruing
Dividends declared but unpaid thereon, computed to the date of such
redemption, such amount being referred to as the "Redemption
Price." Such payment shall be made in full on the date such shares
are redeemed to the holders entitled thereto.
c. Redemption Mechanics. At least 30 but not more
than 40 days prior to the date on which the Corporation proposes to
redeem such shares (the "Redemption Date"), written notice (the
"Redemption Notice") shall be given by the Corporation by delivery
in person, certified or registered mail, return receipt requested,
telecopier or telex, to each holder of record (at the close of
business on the business day next preceding the day on which the
Redemption Notice is given) of shares of Series A Convertible
Preferred Stock notifying such holder of the redemption and
specifying the Redemption Price, such Redemption Date, the number
of shares of Series A Convertible Preferred Stock to be redeemed
from such holder (computed on a pro rata basis in accordance with
the number of such shares held by all holders thereof) and the
place where such Redemption Price shall be payable. The Redemption
Notice shall be addressed to each holder at his address as shown by
the records of the Corporation. Notwithstanding anything to the
contrary contained herein, holders of Series A Convertible
Preferred Stock receiving such Redemption Notice shall have the
right to convert their shares of Series A Convertible Preferred
Stock subject to such Redemption Notice into Common Stock pursuant
to paragraph 6 above. From and after the close of business on a
Redemption Date, unless there shall have been a default in the
payment of the Redemption Price, all rights of holders of shares of
Series A Convertible Preferred Stock (except the right to receive
the Redemption Price) shall cease with respect to the shares to be
redeemed on such Redemption Date, and such shares shall not
thereafter be transferred on the books of the Corporation or be
deemed to be outstanding for any purpose whatsoever. If the funds
of the Corporation legally available for redemption of shares of
Series A Convertible Preferred Stock on a Redemption Date are
insufficient to redeem the total number of shares of Series A
Convertible Preferred Stock to be redeemed on such Redemption Date,
the holders of such shares shall share ratably in any funds legally
available for redemption of such shares according to the respective
amounts which would be payable to them if the full number of shares
to be redeemed on such Redemption Date were actually redeemed. The
shares of Series A Convertible Preferred Stock required to be
redeemed but not so redeemed shall remain outstanding and entitled
to all rights and preferences provided herein. At any time
thereafter when additional funds of the Corporation are legally
available for the redemption of such shares of Series A Convertible
Preferred Stock, such funds shall be used, at the end of the next
succeeding fiscal quarter, to redeem the balance of such shares, or
such portion thereof for which funds are then legally available, on
the basis set forth above.
d. Redeemed or Otherwise Acquired Shares to be
Retired. Any shares of Series A Convertible Preferred Stock
redeemed pursuant to this paragraph 7 or otherwise acquired by the
Corporation in any manner whatsoever shall be canceled and shall
not under any circumstances be reissued; and the Corporation may
from time to time take such appropriate action as may be necessary
to reduce accordingly the number of authorized shares of Series A
Convertible Preferred Stock.
8. Amendments. No provision of these terms of the
Series A Convertible Preferred Stock may be amended, modified or
waived without the written consent or affirmative vote of the
holders of at least two-thirds of the then outstanding shares of
Series A Convertible Preferred Stock.
B. Other Preferred Stock.
The Preferred Stock other than the Series A Convertible
Preferred Stock may be issued from time to time in one or more
series and for such consideration as the Board of Directors shall
determine. Subject to the limitations set forth herein and any
limitations then prescribed by law, authority is hereby expressly
granted to the Board of Directors to fix by resolution from time to
time the designation of such series and the powers, preferences and
rights of the shares of such series, and the qualifications,
limitations or restrictions thereof, including, without limitation,
the following:
(a) the designation and number of shares comprising
such series, which number may from time to time be decreased
by the Board of Directors (but not below the number of such
shares then outstanding) or may be increased (unless
prohibited by action of the Board of Directors in resolutions
creating such series);
(b) the rate, amount and times at which, and the
preferences and conditions under which, dividends shall be
payable on shares of such series, including, without
limitation, whether such dividends are cumulative or
noncumulative and whether the shares of such series
participate or do not participate in additional dividends
after the payment of preferential dividends with respect to
such shares;
(c) any rights and preferences of the holders of
shares of such series upon the liquidation, dissolution or
winding up of the affairs of, or upon any distribution of the
assets of, the Corporation, and whether such amounts vary
depending upon whether such liquidation, dissolution or
winding up is voluntary or involuntary;
(d) the full or limited voting rights, if any, of
the shares of any such series, in addition to voting rights
provided by law; and whether or not, under what conditions and
with respect to what subject matters, the shares of such
series shall be entitled to vote separately as a class;
(e) any times, terms and conditions upon which the
shares of such series may be subject to redemption and the
amount, terms, conditions and manner of operation of any
purchase, retirement or sinking fund to be provided with
respect to the redemption of such shares;
(f) any rights to convert such shares into, or to
exchange such shares for, shares of any other class or classes
of capital stock or of any other series of the same class,
including, without limitation, the prices, rates, conversion
or exchange and any other terms or conditions applicable to
such conversion or exchange;
(g) any limitations upon the payment of dividends
or the making of distributions on or the acquisition or
redemption of Common Stock or any other class of shares
subordinate to the shares of such series with respect to the
payment of dividends;
(h) any conditions or restrictions upon the issue
of any additional shares on a parity with or superior to the
shares of such series other than the Series A Convertible
Preferred Stock; and
(i) any other relative powers, preferences or
rights and any other qualifications, limitations or
restrictions with respect to the shares of such series as the
Board of Directors may deem advisable and as shall not be
inconsistent with the provisions of this Article IV.
Except as specified by the Board of Directors, all shares
of Preferred Stock shall be identical to and of equal rank
with all shares of any other series of Preferred Stock, except
as to the terms from which cumulative dividends, if any, shall
accumulate.