CHESAPEAKE BIOLOGICAL LABORATORIES, INC.
ARTICLES SUPPLEMENTARY
Chesapeake Biological Laboratories, Inc., a Maryland corporation, having
its principal office in Baltimore, Maryland (hereinafter called the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland (the "SDAT") that:
FIRST: Pursuant to authority expressly vested in the Board of Directors of
the Corporation (the "Board") by Article SEVENTH of the Articles of
Incorporation of the Corporation, as amended (the "Charter"), the Board has duly
reclassified and designated 15,510 authorized but unissued shares of the Class A
Common Stock, par value $0.01 per share, of the Corporation into a series
designated as Series A Convertible Preferred Stock and has provided for the
issuance of such series.
SECOND: The terms of the Series A Convertible Preferred Stock (including
the preferences, conversions or other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications, or terms or
conditions of redemption) as set by the Board are as follows:
1. Issuance; Rank. The issuance price of the Series A Convertible
Preferred Stock (the "Series A Preferred Stock") shall be $100 per share (the
"Original Purchase Price"). The Series A Preferred Stock shall rank senior to
the Common Stock and any other class or series of capital stock of the
Corporation ranking junior to the Series A Preferred Stock as to dividends and
upon liquidation, dissolution or winding up. The date on which any share of
Series A Preferred Stock was issued shall hereinafter be referred to as the
"Original Issue Date" with respect to such share.
2. Dividends. Annually on May 31st, the holders of record of shares of
Series A Preferred Stock as of May 10th of such year shall be entitled to
receive, out of funds legally available for that purpose, prior and in
preference to any declaration or payment of any dividends (payable other than in
Common Stock or other securities convertible into or entitling the holder
thereof to receive directly or indirectly, additional shares of Common Stock) on
the Common Stock, cumulative dividends ("Cumulative Dividends"), at an annual
rate of 6% of the Original Purchase Price per share, as adjusted for stock
splits, stock dividends, recapitalizations, combinations, reclassifications and
similar events which affect such shares of Series A Preferred Stock (each an
"Adjustment"). Notwithstanding anything to the contrary contained in the
foregoing, in lieu of payment of the Cumulative Dividends in any year, the Board
may issue to each such holder, a warrant to purchase a number of shares of
Common Stock calculated in accordance with the following formula and exercisable
at a price calculated by averaging the
closing price of the Common Stock as reported by Nasdaq for the 20 day period
preceding the date of issuance of such warrant (each, a "Dividend Warrant"):
WS = .05 x (PS x (OPP/CP)
where:
WS is the number of shares of Common Stock for which the Dividend Warrant
may be exercised;
PS is the number of shares of Preferred Shares held by the Purchaser on
the date the Dividend Warrant is issued;
OPP is the Original Purchase Price; and
CP is the Conversion Price (as defined below).
If the Board fails to (i) declare a Cumulative Dividend or (ii) issue Dividend
Warrants, the Cumulative Dividend shall cumulate and become part of the
Liquidation Preference (as defined below) and Cumulative Dividends shall be
payable pro rata for partial year periods and shall not be payable upon
conversion of the Series A Preferred Stock in accordance with the terms of
Sections 5 or 6 or upon a Redemption in accordance with the terms of Section 7.
3. Liquidation Events.
(a) Upon the occurrence of any Liquidation Event (defined herein),
the assets of the Corporation available for distribution to its stockholders,
whether from capital, surplus or earnings (the "Corporate Assets") shall be
distributed as follows: before any distribution of assets shall be made to the
holders of Common Stock, the holder of each share of Series A Preferred Stock
then outstanding shall be entitled to be paid out of the Corporate Assets an
amount per share equal to the Original Purchase Price (subject to any
Adjustment) plus all dividends, including any accrued and unpaid Cumulative
Dividends on such share up to the date of distribution of the assets of the
Corporation (the "Liquidation Preference"). If upon the occurrence of a
Liquidation Event, the Corporate Assets shall be insufficient to pay the holders
of shares of Series A Preferred Stock the Liquidation Preference, the holders of
shares of Series A Preferred Stock and any class or series of stock ranking on
liquidation on a parity with the shares of Series A Preferred Stock shall share
ratably in the distribution of the entire remaining Corporate Assets in
proportion to the respective amounts which would otherwise be payable in respect
of the shares held by them upon such distribution if the full Liquidation
Preference payable on or with respect to such shares were paid in full.
(b) For purposes of this Section 3, the term "Liquidation Event"
shall mean (i) any liquidation, dissolution or winding up of the Corporation or
(ii) the merger or consolidation of the Corporation into or with another
corporation (except if the Corporation is
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the surviving entity) or other similar transaction or series of related
transactions in which all or substantially all of the assets of the Corporation
are sold, transferred or otherwise disposed.
(c) The amount available for distribution for purposes of satisfying
the obligation to pay the Liquidation Preference and other amounts payable under
Section 3(a) to the holders of shares of Series A Preferred Stock upon any
Liquidation Event described in Section 3(b)(ii) shall be the cash or the value
of the property, rights or securities distributed to such holders by the
acquiring person, firm or other entity. The value of such property, rights or
other securities shall be determined in good faith by the Board of Directors of
the Corporation.
(d) Written notice of such Liquidation Event, stating a payment
date, the Liquidation Preference and other amounts payable under Section 3(a),
and the place where said Liquidation Preference and other amounts shall be
payable, shall be delivered in person, mailed by certified or registered mail,
return receipt requested, or sent by telecopier or electronic mail, not less
than 20 days prior to the payment date stated therein, to the holders of record
of the Series A Preferred Stock, such notice to be addressed to each such holder
at its address as shown by the records of the Corporation.
4. Voting.
(a) Each holder of outstanding shares of Series A Preferred Stock
shall be entitled to the number of votes equal to the number of whole shares of
Common Stock into which the shares of Series A Preferred Stock held of record by
such holder are convertible (as adjusted from time to time pursuant to Section
5), at each meeting of stockholders of the Corporation (and written actions of
stockholders in lieu of meetings) with respect to any and all matters presented
to the stockholders of the Corporation for their action or consideration. Except
as provided by law and by the provisions of Sections 4(b), the holders of shares
of Series A Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(b) So long as at least 1,551 shares of Series A Preferred Stock
(subject to any Adjustment) are outstanding, the holders of the Series A
Preferred Stock shall have the right, voting together as a single class, to
elect one director of the Corporation. Such right to vote separately as a class
shall be in addition to all other rights of the holders of Series A Preferred
Stock to vote with other classes of stock in the election of members of the
Corporation's Board of Directors.
(c) So long as at least 1,551 shares of Series A Preferred Stock
(subject to any Adjustment) are outstanding, if and whenever (i) the Corporation
breaches the terms and conditions contained herein, or (ii) an Event of Default
(as defined in the Preferred Stock Purchase Agreement between the Corporation
and the original purchasers of the Series A Preferred Stock named therein)
occurs and is continuing, the holders of any outstanding shares of Series A
Preferred Stock shall have the exclusive and special right, voting as a single
class, to elect by a plurality of the votes cast the largest whole number of
directors of the Corporation that, together with the director elected by the
holders of the Series A Preferred Stock pursuant to
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Section 4(b), shall not constitute a majority of the total number of directors
of the Corporation (and if there are not a sufficient number of resignations by
the members of the Board of Directors at the time of such default, the Board of
Directors shall be expanded as is necessary to give effect to the foregoing
right). The right granted to the holders of Series A Preferred Stock in this
Section 4(c) (the "Default Right") shall continue until the breach or Event of
Default has been cured or waived and, when so cured or waived the Default Right
shall cease until such time as the Corporation commits another breach or Event
of Default. At any time the Default Right becomes applicable, the Corporation
may, upon receipt of a written request from the holders in interest of at least
20% of the outstanding shares of Series A Preferred Stock, call a special
meeting of shareholders for the election of directors. Such meeting, if called,
shall be held (i) no later than 45 days after the receipt of the request and
(ii) at the place and upon the notice required by law and the bylaws of the
Corporation; provided, however, that the Corporation shall not call such a
special meeting if such request is received less than 60 days prior to the date
fixed for any annual meeting of the shareholders of the Corporation. Directors
elected pursuant to this Section 4(c) shall serve until the next annual meeting
of the shareholders of the Corporation or until their respective successors
shall be elected and qualify.
(d) Any director elected by the holders of the Series A Preferred
Stock (each, a "Preferred Director") may be removed only by the vote of the
holders of record of a plurality of the outstanding shares of Series A Preferred
Stock, voting together as a single class, at a meeting of the holders of shares
of Series A Preferred Stock called for such purpose. Any vacancy in the office
of a Preferred Director may be filled only in accordance with Section 4(b) or
4(c) as the case may be.
(e) At any meeting held for the purpose of electing directors, the
presence in person or by proxy of the holders of a majority of the shares of
Series A Preferred Stock then outstanding shall constitute a quorum of the
Series A Preferred Stock for the purpose of electing any directors to be elected
solely by the holders of Series A Preferred Stock and for all such other matters
upon which the holders of shares of Series A Preferred Stock vote as a single
class, and the presence in person or by proxy of the holders of a majority of
the shares of Common Stock then outstanding shall constitute a quorum of the
Common Stock for the purpose of electing any directors to be elected solely by
the holders of the Common Stock.
(f) So long as 1,551 or more shares of Series A Preferred Stock
(subject to any Adjustments) are outstanding, the Corporation shall not, without
first obtaining the written consent or affirmative vote of the holders of at
least a majority of the then outstanding shares of Series A Preferred Stock,
given in writing or by vote at a meeting, consenting or voting, as the case may
be, separately as a class:
(i) authorize any series of preferred stock or other security
of the Corporation having (i) dividend rights or liquidation preference senior
to the Series A Preferred Stock or (ii) voting rights entitling the holders
thereof to more than one vote per share of Common Stock on an as-converted
basis;
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(ii) amend, alter or repeal any rights of the Series A
Preferred Stock; or
(iii) approve any liquidation, dissolution, merger or sale of
the all or substantially all of the assets of the Corporation if such event
would result in a payment to the holders of Series A Preferred Stock of less
than the Liquidation Preference.
5. Optional Conversion. The holders of shares of Series A Preferred Stock
shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock shall
be convertible, at the option of the holder thereof, at any time and from time
to time, into such number of fully paid and nonassessable shares of Common Stock
as is determined by dividing the Original Purchase Price by the Conversion Price
(as defined herein) in effect at the time of conversion. The conversion price at
which shares of Common Stock shall be deliverable upon conversion of Series A
Preferred Stock without payment of additional consideration by the holder
thereof (the "Conversion Price") shall initially be $1.50. The Conversion Price
in effect from time to time, and the rate at which shares of Series A Preferred
Stock may be converted into shares of Common Stock, shall be subject to
adjustment as provided herein. Upon a Liquidation Event or a Redemption, the
Conversion Rights shall terminate at the close of business on the first full day
preceding the date fixed for the payment of any amounts distributable upon such
Liquidation Event or Redemption to the holders of shares of Series A Preferred
Stock.
(b) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the shares of Series A 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. Whether or not a holder would otherwise be entitled
to a fractional share shall be determined on the basis of the total number of
shares of Series A Preferred Stock the holder is at the time converting into
Common Stock and the number of shares of Common Stock issuable upon such
aggregate conversion.
(c) Mechanics of Conversion.
(i) In order for a holder to convert shares of Series A
Preferred Stock into shares of Common Stock, such holder shall surrender the
certificate or certificates for such shares of Series A Preferred Stock at the
office of the transfer agent for such shares (or at the principal office of the
Corporation if the Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any number of the
shares of the Series A Preferred Stock represented by such certificate or
certificates. Such notice shall state such holder's name or the names of the
nominees in which such holder wishes the certificate or certificates for shares
of Common Stock to be issued. If required by the Corporation, certificates
surrendered for conversion shall be endorsed or accompanied by a written
instrument or instruments of transfer, in form satisfactory to the Corporation,
duly executed by the registered
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holder or his or its attorney-in-fact duly authorized in writing. The date of
receipt of such certificates and notice by the transfer agent (or by the
Corporation if the Corporation serves as its own transfer agent) shall be the
conversion date (the "Conversion Date"). The Corporation shall, as soon as
practicable after the Conversion Date, issue and deliver at such office to such
holder of shares of Series A Preferred Stock, or to his or its nominees, a
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled, together with cash in lieu of any fraction of a
share. 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 A
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 as
of such date. Other than as set forth in Section 6, if the conversion is in
connection with an underwritten offer of securities registered pursuant to the
Securities Act of 1933, as amended (the "Securities Act"), the conversion may,
at the option of any holder tendering shares of Series A Preferred Stock for
conversion, be conditioned upon the closing of the sale of securities pursuant
to such offering, in which event the person entitled to receive the Common Stock
issuable upon such conversion of the shares of Series A Preferred Stock shall
not be deemed to have converted such shares of Series A Preferred Stock until
immediately prior to the closing of such sale of securities.
(ii) The Corporation shall, at all times when the Series A
Preferred Stock shall be outstanding, reserve and keep available out of its
authorized but unissued stock, for the purpose of effecting the conversion of
the shares of Series A 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 shares of Series A Preferred Stock. Before taking
any action that would cause an adjustment reducing the Conversion Price below
the then par value of the shares of Common Stock issuable upon conversion of the
shares of Series A Preferred Stock, the Corporation will take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and nonassessable shares of
Common Stock at such adjusted Conversion Price. If at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series A Preferred Stock, in
addition to such other remedies as shall be available to the holder of such
shares of Series A Preferred Stock, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes.
(iii) Upon any such conversion, no adjustment to the
Conversion Price shall be made for, nor shall any payment be made of, any
declared and unpaid dividends on the shares of Series A Preferred Stock
surrendered for conversion or on the Common Stock delivered upon conversion.
(iv) All shares of Series A Preferred Stock that shall have
been surrendered for conversion as herein provided shall no longer be deemed to
be outstanding and all rights with respect to such shares, including the rights,
if any, to receive notices and to vote,
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shall immediately cease and terminate on the Conversion Date, except only the
right of the holders thereof to receive shares of Common Stock in exchange
therefor. Any shares of Series A 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 eliminate the
authorized Series A Preferred Stock or reduce the authorized number thereof as
may be appropriate accordingly.
(d) Adjustments to Conversion Price for Diluting Issues:
(i) Special Definitions. For purposes of this Section 5(d),
the "First Original Issue Date" means the Original Issue Date of the first
issued share of Series A Preferred Stock.
(ii) Adjustment for Combinations or Consolidation of Common
Stock. If, at any time after the First Original Issue Date the number of shares
of Common Stock outstanding are decreased by a combination of the outstanding
shares of Common Stock, then following the record date fixed for such
combination (or the date of such combination, if no record date is fixed), the
applicable Conversion Price shall be increased so that the number of shares of
Common Stock issuable on conversion of each share of Series A Preferred Stock
shall be decreased in proportion to such decrease in outstanding shares of
Common Stock.
(iii) Adjustment for Stock Dividends, Splits, Etc. If the
Corporation shall at any time after the applicable First Original Issue Date fix
a record date for the subdivision, split-up or stock dividend of shares of
Common Stock, then, following the record date fixed for the determination of
holders of shares of Common Stock entitled to receive such subdivision, split-up
or dividend (or the date of such subdivision, split-up or dividend, if no record
date is fixed), the Conversion Price shall be appropriately decreased so that
the number of shares of Common Stock issuable on conversion of each share of
Series A Preferred Stock shall be increased in proportion to such increase in
outstanding shares; provided, however, that the Conversion Price shall not be
decreased at such time if the amount of such reduction would be an amount less
than $.01, but any such amount shall be carried forward and reduction with
respect thereto made at the time of and together with any subsequent reduction
that, together with such amount and any other amount or amounts so carried
forward, shall aggregate $.01 or more.
(iv) Adjustment for Merger or Reorganization, etc. In case of
any consolidation, recapitalization or merger of the Corporation with or into
another corporation or the sale of all or substantially all of the assets of the
Corporation to another corporation (other than a subdivision or combination
provided for elsewhere in this Section 5 and other than a consolidation, merger
or sale that is treated as a Liquidation Event pursuant to Section 3), each
share of Series A Preferred Stock shall thereafter be convertible into the kind
and amount of shares of stock or other securities or property to which a holder
of the number of shares of Common Stock of the Corporation deliverable upon
conversion of such shares of Series A Preferred Stock would have been entitled
upon such consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors ) shall be
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made in the application of the provisions in this Section 5 set forth with
respect to the rights and interest thereafter of the holders of the shares of
Series A Preferred Stock, to the end that the provisions set forth in this
Section 5 (including provisions with respect to changes in and other adjustments
of the Conversion Price) shall thereafter be applicable, as nearly as reasonably
may be, in relation to any shares of stock or other property thereafter
deliverable upon the conversion of the shares of Series A Preferred Stock.
(e) Other Adjustments. If the Corporation does not exercise its
option to redeem the outstanding shares of Series A Preferred Stock on or before
June 1, 2004, in accordance with Section 7 hereof, the Conversion Price in
effect after June 1, 2004 from time to time shall be the lower of (i) $1.50 or
(ii) 80% of market price as in effect at the date of conversion. For purposes of
this Section 5(e), the market price shall be the average of the closing per
share price to the public on Nasdaq for the 20 trading days immediately
preceding the date of conversion.
(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, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
shares of Series A Preferred Stock against impairment.
(g) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to this Section 5,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
shares of Series A 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 A Preferred Stock, furnish or cause to be furnished
to such holder a similar certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Price then in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property that then would
be received upon the conversion of the shares of Series A Preferred Stock.
(h) Notice of Record Date. In the event:
(i) that the Corporation takes a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend (other than a cash dividend) or any other
distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive
any other right;
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(ii) that the Corporation subdivides or combines its
outstanding shares of Common Stock;
(iii) of any reclassification of the Common Stock of the
Corporation (other than a subdivision or combination of its outstanding shares
of Common Stock or a stock dividend or stock distribution thereon), or of any
consolidation or merger of the Corporation into or with another corporation, or
of the sale of all or substantially all of the assets of the Corporation; or
(iv) of the involuntary or voluntary dissolution, liquidation
or winding up of the Corporation;
then the Corporation shall cause to be filed at its principal office or at
the office of the transfer agent of the Series A Preferred Stock, and shall
cause to be mailed to the holders of the Series A Preferred Stock at their last
addresses as shown on the records of the Corporation or such transfer agent, at
least ten days prior to the record date specified in (A) below or twenty days
before the date specified in (B) below, a notice stating
(A) the record date of such dividend, distribution,
subdivision or combination, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to such dividend,
distribution, subdivision or combination are to be determined, or
(B) the date on which such reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up is expected
to become effective, and the date as of which it is expected that holders of
Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, dissolution or winding up.
6. Automatic Conversion.
(a) Triggering Event. All outstanding shares of Series A Preferred
Stock shall automatically convert to shares of Common Stock, at the then
effective Conversion Price pursuant to Section 5, if, at any time after the
first anniversary of the First Original Issue Date, (i) the average closing bid
price of the Common Stock for twenty (20) consecutive trading days is greater
than four times the then current Conversion Price and the average daily trading
volume (as reported by Nasdaq) for the same twenty day period is not less than
35,000 shares or (ii) upon the date of the consummation of an underwritten
public offering pursuant to an effective registration statement under the
Securities Act, resulting in at least $20,000,000 of gross proceeds to the
Corporation, at a per share price of at least four times the then current
Conversion Price.
(b) No Further Action. In the case of an automatic conversion
pursuant to this Section 6, the outstanding shares of Series A Preferred Stock
shall be converted automatically
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without any further action by the holders of such shares and whether or not the
certificates representing such shares are surrendered to the Corporation or its
transfer agent; provided, that the Corporation shall not be obligated to issue
to any holder certificates evidencing the shares of Common Stock issuable upon
such conversion unless certificates evidencing such shares of Series A Preferred
Stock are delivered either to the Corporation or any transfer agent of the
Corporation.
(c) Surrender of Certificates; Retirement and Cancellation of
Converted Shares. All certificates evidencing shares of Series A Preferred Stock
that are required to be promptly surrendered for conversion in accordance with
the provisions hereof shall, from and after the date such certificates are so
required to be surrendered, be deemed to have been retired and canceled and the
shares of Series A Preferred Stock represented thereby converted into Common
Stock for all purposes, notwithstanding the failure of the holder or holders
thereof to surrender such certificates on or prior to such date. The Corporation
may thereafter take such appropriate action as may be necessary to reduce the
authorized Series A Preferred Stock accordingly.
7. Redemption.
(a) The Corporation may, at its option redeem any or all of the then
outstanding shares of Series A Preferred Stock, out of funds legally available
for such purpose, on or after April 1, 2004, by providing notice to the holders
of outstanding shares of Series A Preferred Stock (a "Redemption Notice").
The Redemption Price shall specify the Redemption Date, the
Redemption Price, the aggregate number of shares to be redeemed, and with expect
to each holder of record, the number of shares to be redeemed; shall state that
payment of the Redemption Price will be made at the principal office of the
Corporation or if an agent for redemption if appointed, the office of the agent
for redemption, upon presentation and surrender of certificates for such shares;
that dividends accrued to the Redemption Date will be paid as specified in the
Redemption Notice and that on and after the Redemption Date dividends will cease
to accrue; shall state that the right to convert the shares to be redeemed into
shares of Common Stock in accordance with the provisions hereof will terminate
on the last business day prior to the redemption Date which date shall be
specified in the Redemption Notice; and shall state the then current Conversion
Price. In case of the redemption of a part only of the Series A Preferred Stock
at the time outstanding, the shares to be redeemed shall be selected by lot or
in such other manner as the Board of Directors may determine to be equitable;
(b) The date of any Redemption Notice shall be the "Redemption
Notice Date." The Corporation shall, no later than 30 days after the applicable
Redemption Notice Date (the "Redemption Date"), redeem the shares of Series A
Preferred Stock set forth in the notice (such redeemed shares being referred to
as the "Redemption Shares"), by paying in cash, out of funds legally available
therefor, a sum per share equal to the Liquidation Preference (the "Redemption
Price");
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(c) If the Corporation delivers a Redemption Notice to the holders
of Series A Preferred Stock, each such holder shall, no later than the close of
business on the last business day before the Redemption Date, surrender his or
its certificate or certificates representing the applicable Redemption Shares to
the Corporation. From and after the Redemption Date and the holders' receipt of
the Redemption Price, all rights of each holder with respect to such applicable
Redemption Shares shall cease and such shares shall not be deemed to be
outstanding for any purpose whatsoever. Such Redemption Shares 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 A Preferred Stock
accordingly;
THIRD: As a result of the reclassifications described herein, the
Corporation's authorized capital stock currently consists of the following:
7,984,490 shares of Class A Common Stock, par value $.01 per share;
2,000,000 shares of Class B Common Stock, par value $.01 per share
and
15,510 shares of Series A Convertible Preferred Stock, par value
$.01 per share.
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