EXHIBIT 3.6A
CERTIFICATE OF DESIGNATIONS
SERIES C CONVERTIBLE PREFERRED STOCK
($0.01 Par Value)
of
AVATECH SOLUTIONS, INC.
--------------------
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
--------------------
Avatech Solutions, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
FIRST: That pursuant to the authority conferred upon the Board of
Directors by the Amended and Restated Certificate of Incorporation of the
Corporation, the Board of Directors of the Corporation adopted the following
resolutions creating a series of One Million (1,000,000) shares of Preferred
Stock, $0.01 par value per share, designated as Series C Convertible Preferred
Stock:
RESOLVED: That pursuant to the authority vested in the Board of
Directors of this Corporation in accordance with the provisions of Article
SIXTH, Section 2 of the Corporation's Amended and Restated Certificate of
Incorporation, a series of Preferred Stock of the Corporation (the "Series C
Convertible Preferred Stock") be, and it hereby is, created, and that the
designation and amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of the Series C
Convertible Preferred Stock, and the qualifications, limitations or restrictions
thereof, shall be as set forth in Exhibit A attached hereto.
RESOLVED: That the Chairman and Chief Executive Officer, President or
any Vice President and the Secretary or any Assistant Secretary of the
Corporation be, and they hereby are, authorized and directed, in the name and on
behalf of the Corporation, to file the Certificate of Designations in accordance
with the provisions of the Delaware General Corporation Law and to take such
actions as they may deem necessary or appropriate to carry out the intent of the
foregoing resolution.
SECOND: That the aforesaid resolutions were duly and validly adopted in
accordance with the applicable provisions of Section 151 of the General
Corporation Law of the State of Delaware and the Amended and Restated
Certificate of Incorporation and the By-Laws of the Corporation.
THIRD: That the aforesaid designations shall become effective upon the
filing of this Certificate with the office of the Secretary of State of the
State of Delaware.
E-1
IN WITNESS WHEREOF, said Avatech Solutions, Inc. has caused this
Certificate to be executed and attested, this 4th day of April, 2003.
2003.
AVATECH SOLUTIONS, INC.
By:_________________________________
Donald R. Walsh
Chief Executive Officer
Attest:
____________________________________
Gary Rever, Secretary
E-2
1. Designation. The Corporation hereby designates a single series of
Preferred Stock, the designation of which shall be "Series C Convertible
Preferred Stock," $0.01 par value per share (hereinafter called the "Series C
Convertible Preferred Stock"), and the number of authorized shares constituting
the Series C Convertible Preferred Stock shall be one million (1,000,000)
shares.
2. Certain Definitions.
(a) "Board" shall mean the Board of Directors of the Corporation.
(b) "Common Stock" shall mean the Common Stock, $.01 par value, of
the Corporation.
(c) "Corporation" shall mean Avatech Solutions, Inc., a Delaware
corporation.
(d) "Liquidity Event" shall mean (i) a sale of all or substantially
all of the assets or Common Stock of the Corporation, (ii) a merger or
consolidation of the Corporation with any other entity that results in the
existing holders of Common Stock (on a fully diluted basis) owning less than 50%
of the combined entities (on a fully diluted basis), or (iii) a liquidation,
dissolution or winding-up of the Corporation.
(e) "Original Issuance Date" for any share of the Series C
Convertible Preferred Stock shall mean the date on which such share of the
Series C Convertible Preferred Stock was originally issued.
(f) "Original Series C Issuance Price" shall mean $1.69 per share
for the Series C Convertible Preferred Stock as adjusted to reflect any stock
splits, stock dividends or other recapitalizations involving the Series C
Convertible Preferred Stock.
(g) "Preferred Stock" shall mean any series of preferred stock of
the Corporation.
3. Voting. Except as may be otherwise provided in these terms of the
Series C Convertible Preferred Stock or by law, the Series C 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 C Convertible Preferred
Stock shall entitle the holder thereof to one vote per share on each such
action.
4. Dividends. The holders of the Series C Convertible Preferred Stock
shall be entitled to receive, out of funds legally available therefor, quarterly
dividends when, as and if declared by the Board, at the rate of ten percent
(10.0%) per annum of the Original Series C Issuance Price from the Original
Issuance Date. Such dividends are (i) prior and in preference to any declaration
or payment of any dividend or other distribution on Common Stock (other than a
dividend payable in shares of Common Stock) or on any other class or series of
capital stock ranking junior to the Series C Convertible Preferred Stock with
respect to dividends, (ii) pari passu with any other shares of Preferred Stock
entitled to participate pari passu with the Series C Convertible Preferred Stock
with respect to dividends and (iii) subject to the rights of any series of
Preferred Stock that ranks, with respect to dividends, senior to the Series C
Convertible Preferred Stock. Except as otherwise provided in Section 7 hereof,
such dividends shall accrue on each share of Series C Convertible Preferred
Stock on a daily basis from the Original Issuance Date whether or not earned or
declared and whether or not there shall be net assets or profits of the
Corporation legally available for the payment of such dividends. Such dividends
shall be cumulative, so that if such dividends with respect to any previous or
current dividend period at the rate provided for herein have not been paid on
all shares of Series C Convertible Preferred Stock at the time outstanding, the
deficiency shall be fully paid on such shares before any distribution shall be
paid on, or declared and set apart for, Common Stock or any other class or
series of capital stock ranking junior to the Series C Convertible Preferred
Stock with respect to dividends. All accrued but unpaid dividends shall be paid,
in cash, at or before any Liquidity Event.
5. Liquidation.
(a) Except as otherwise provided in Section 7 hereof, in the event
of any liquidation, dissolution or winding up of the Corporation, either
voluntary or involuntary, after payment or provision for
E-3
payment of the debts and other liabilities and obligations of the Corporation,
the holders of Series C Convertible Preferred Stock shall be entitled to receive
for each share of Series C Convertible Preferred Stock, prior and in preference
to any distribution of any of the assets or surplus funds of the Corporation to
the holders of Common Stock, and subject to the rights of any series of
Preferred Stock that ranks, on liquidation, senior to the Series C Convertible
Preferred Stock ("Senior Securities"), but pari passu with any other shares of
Preferred Stock under the terms of which holders thereof shall be entitled to
participate pari passu with the Series C Convertible Preferred Stock upon
liquidation, an amount equal to the Original Series C Issuance Price, plus an
amount equal to all accumulated but unpaid dividends thereon to and including
the date full payment is tendered to the holders of Series C Convertible
Preferred Stock (collectively the "Series C Preference Amount"). If upon the
occurrence of such event the assets and funds thus distributed among the holders
of Series C Convertible Preferred Stock and any other shares of Preferred Stock
entitled to participate pari passu with the Series C Convertible Preferred Stock
upon liquidation are insufficient to permit the payment to such holders of their
full preferential amount described herein, then the entire assets and funds of
the Corporation legally available for distribution, after satisfaction of the
rights of any Senior Securities, shall be distributed ratably among the holders
of the then outstanding Series C Convertible Preferred Stock and any other
shares of Preferred Stock entitled to participate pari passu with the Series C
Convertible Preferred Stock, upon liquidation, in proportion to the preferential
amount that each such holder is otherwise entitled to receive.
(b) For purposes of this Section 5, a liquidation, dissolution or
winding up of the Corporation shall include the Corporation's sale of all or
substantially all of its assets. The Corporation shall not consummate any
transaction deemed to constitute a liquidation, dissolution or winding up of the
affairs of the Corporation under this subsection (b) until the provisions of
this Section 5 have been satisfied.
6. Protective Provisions. So long as any shares of Series C
Convertible Preferred Stock remain outstanding, the Corporation shall not,
without the vote or written consent of the holders of at least a majority of the
then outstanding shares of Series C Convertible Preferred Stock, voting as a
single class:
(a) amend the Certificate of Incorporation or the bylaws of the
Corporation in any manner that would alter, change or repeal any of the
designations, powers, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations and restrictions thereof, of
the Series C Convertible Preferred Stock, or
(b) effect any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, including the sale
of all or substantially all of its assets.
7. Conversion. The holders of shares of Series C Convertible Preferred
Stock shall have the following conversion rights:
(a) Optional Conversion. At any time from and after 120 days
following the Original Issuance Date.
(b) Mandatory Conversion. Upon the Corporation's common stock being
listed on the NASDAQ National Market System, and the Corporation's common stock
closing at or in excess of $6.76 per share for 60 consecutive trading days in
such market.
(c) Conversion Mechanics.
(i) In the case of a conversion pursuant to Section 7(b)
above, the Corporation shall give the holders of the Series C Convertible
Preferred Stock written notice of a Mandatory Conversion, no less than 20
business days prior to the closing thereof. As soon as practicable after the
closing of a Mandatory Conversion or after the Corporation receives written
notice of an Optional Conversion, the Corporation shall send written
instructions to the holders of the shares of Series C Convertible Preferred
Stock being converted (the "Converting Shares") regarding surrender of
certificates representing Converting Shares, and the holders of the Converting
Shares shall surrender the certificate(s) evidencing the Converting Shares,
which were automatically converted at the principal office of the Corporation
(or such other office or agency of the Corporation as the Corporation may
E-4
designate by notice in writing to the holders of such class of capital stock) at
any time during its usual business hours, together with written notice by the
holder of the Converting Shares, giving the name(s) (with addresses) and
denominations in which the certificate(s) evidencing the shares of Common Stock
shall be issued and instructions for the delivery thereof (the "Notice of
Recipients of Common Stock"). If the person(s) named in the Notice of Recipients
of Common Stock are not the same as the names of the registered holder of the
Converting Shares, the notice provided by the holder of the Converting Shares to
the Corporation shall include a duly executed written instrument or instruments
of transfer in a form which is reasonably satisfactory to the Corporation. As
soon as practicable after receipt by the Corporation of the Notice of Recipients
of Common Stock, together with the certificate(s) evidencing the shares of
Series C Convertible Preferred Stock which were automatically converted (and
written instruments of transfer, if necessary), the Corporation shall be
obligated to, and shall, issue and deliver in accordance with such instructions
the certificate(s) evidencing the Common Stock issuable upon such conversion.
(ii) All shares of Series C Convertible Preferred Stock which
are converted pursuant to this Section 7 as herein provided shall no longer be
deemed to be outstanding and all rights with respect to such shares, including
rights, if any, to receive notices and to vote, shall immediately cease and
terminate as of the effective date of conversion, and in the case of a
conversion pursuant to a Liquidating Event prior to the closing of the
Liquidating Event), except only the right of the holders thereof to receive
shares of Common Stock in exchange therefor and payment of any accrued and
unpaid dividends thereon. Any shares of Series C Convertible Preferred Stock so
converted shall be retired.
(iii) Upon any conversion of Series C Convertible Preferred
Stock pursuant to this Section 7, no adjustment to the Conversion Price shall be
made for any accrued but unpaid dividends on the Series C Convertible Preferred
Stock converted or to be converted, which dividends shall be paid in accordance
with clause (ii) above.
(iv) Upon the issuance of the Common Stock in accordance with
this Section 7, such shares shall be deemed to be duly authorized, validly
issued, fully paid and non-assessable.
(d) Conversion Rate. The "Conversion Rate" as used in this Section
7 refers to the conversion of a share of Series C Convertible Preferred Stock
into a number of shares of Common Stock equal to the Series C Preference Amount
divided by the Conversion Price (as defined below) in effect from time to time.
The "Conversion Price" per share applicable to the Series C Convertible
Preferred Stock shall initially be the Original Series C Issuance Price,
provided that the Conversion Price shall be subject to adjustment as hereinafter
provided.
(e) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issuance
Date effect a subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock, the applicable Conversion Price then
in effect immediately before that subdivision shall be proportionately
decreased; conversely, if the Corporation shall at any time or from time to time
after the Original Issuance Date effect a combination of the outstanding shares
of Common Stock into a smaller number of shares of Common Stock, the applicable
Conversion Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this Section 7(e) shall become
effective at the time the subdivision or combination becomes effective.
(f) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Original
Issuance Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in additional shares of Common Stock, then and in each such event the
applicable Conversion Price then in effect shall be decreased as of the time of
such issuance or, in the event such a record date shall have been fixed, as of
the close of business on such record date, by multiplying the applicable
Conversion Price then in effect by a fraction;
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or at the close of business on such record date; and
E-5
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or at the close of business on such record date, plus the number
of shares of Common Stock issuable in payment of such dividend or distribution;
provided, however, that if such record date shall have been fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the applicable Conversion Price shall be recomputed accordingly
as of the close of business on such record date and thereafter the Conversion
Price shall be adjusted pursuant to this Section 7(e) as of the time of actual
payment of such dividends or distributions.
(g) Adjustment for Reclassification, Exchange or Substitution.
If the Common Stock shall be changed into or exchanged for the same or different
number of shares of any class or classes of stock of the Corporation, whether by
capital reorganization, reclassification or otherwise (other than a subdivision
or combination of shares of Common Stock provided for in Section 7(e)), then and
in each such event the holder of each share of Series C Convertible Preferred
Stock shall have the right thereafter to convert such share into the kind and
amounts of shares of stock and other securities and property receivable upon
such reorganization, reclassification or other change, by holders of the numbers
of shares of Common Stock into which such shares of Series C Convertible
Preferred Stock might have been converted immediately prior to such
reorganization, reclassification or change, all subject to further adjustment as
provided herein or with respect to such other securities or property by the
terms thereof.
(h) Adjustments to Conversion Price for Certain Diluting Issues.
(i) Special Definitions. For purposes of this Section 7
(h), the following definitions shall apply:
(1) "Additional Common Stock" shall mean all Common
Stock issued (or, pursuant to Section 7(h)(iii) below, deemed to be issued) by
the Corporation after the Original Issue Date, other than Common Stock issued or
issuable:
(A) as a dividend or distribution on the Series
C Convertible Preferred Stock;
(B) shares of Common Stock issued upon a
subdivision or combination of shares of Common Stock as provided in Section 7(e)
above or as a dividend as provided in Section 7(f) above or securities issued
pursuant to a recapitalization or other event specified in Section 7(g) above;
(C) shares of Common Stock as compensation to
employees, consultants, officers or directors of the Corporation pursuant to
stock option, restricted stock or other equity compensation plans or agreements,
as approved by the Board;
(D) shares of Common Stock issued or issuable in
a registered public offering;
(E) shares of Common Stock or instruments
convertible or exercisable into shares of Common Stock issued to a financial
institution in connection with a credit facility or other debt financing, as
approved by the Board; and
(F) shares of Common Stock or instruments
convertible or exercisable into shares of Common Stock of the Corporation issued
in connection with a merger, consolidation, acquisition or similar business
combination that has been approved by at least a majority of the then
outstanding Series C Convertible Preferred Stock.
(2) "Convertible Securities" shall mean any evidence
of indebtedness, shares or other securities, issued after the Original Issue
Date, convertible into or exchangeable for Common Stock.
E-6
(3) "Options" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Additional Common Stock
or Convertible Securities.
(ii) Adjustment of Series C Conversion Price Upon Issuance
of Additional Common Stock. If the Corporation issues Additional Common Stock
before conversion or redemption of the Series C Convertible Preferred Stock
(including Additional Common Stock deemed to be issued pursuant to Section
7(h)(iii) below) for a consideration per share less than the Original Series C
Issuance Price of any outstanding share of Series C Convertible Preferred Stock
in effect on the date of and immediately prior to such issuance, then, in each
such event, the Conversion Price of such share then in effect shall be reduced,
concurrently with such issuance, to a price determined by multiplying such
Conversion Price by a fraction, (A) the numerator of which shall be (1) the
number of shares of Common Stock outstanding immediately prior to such issuance
plus (2) the number of shares of Common Stock which the aggregate consideration
received by the Corporation for the total number of Additional Common Stock so
issued would purchase at such Conversion Price in effect immediately prior to
such issuance, and (B) the denominator of which shall be (1) the number of
shares of Common Stock outstanding immediately prior to such issuance plus (2)
the number of such Additional Common Stock so issued. For the purpose of the
above calculation, the number of shares of Common Stock outstanding immediately
prior to such issuance shall be calculated as if any Convertible Securities had
been fully converted into shares of Common Stock immediately prior to such
issuance and all outstanding Options had been exercised.
(iii) Deemed Issuance of Additional Common Stock.
(1) Options and Convertible Securities. If the
Corporation, at any time or from time to time after the Original Issuance Date,
issues any Options or Convertible Securities or fixes a record date for the
determination of holders of any class of securities entitled to receive any such
Options or Convertible Securities, then the Corporation shall be deemed to have
issued Additional Common Stock as of the time of such issuance or, if such a
record date has been fixed, as of the close of business on such record date, in
the amount and for the consideration per share provided herein.
(A) Number of Additional Shares. The number of
shares of Additional Common Stock deemed issued with respect to such Options or
Convertible Securities shall be the maximum number of shares (as set forth in
the instrument relating thereto without regard to any provisions contained
therein for a subsequent adjustment of such number) of Common Stock issuable
upon the exercise of such Options and/or the conversion or exchange of such
Convertible Securities.
(B) Consideration Per Share. The consideration
per share received by the Corporation for Additional Common Stock deemed to have
been issued pursuant to Options and Convertible Securities, shall be determined
by dividing: (1) the total amount, if any, received or receivable by the
Corporation as consideration for the issuance of such Options or Convertible
Securities, plus the minimum aggregate amount of additional consideration (as
set forth in the instruments relating thereto, without regard to any-provision
contained therein for a subsequent adjustment of such consideration) payable to
the Corporation upon the exercise of such Options or the conversion or exchange
of such Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and the
conversion or exchange of such Convertible Securities, by (2) the maximum number
of shares of Common Stock (as set forth in the instruments relating thereto,
without regard to any provision contained therein for a subsequent adjustment of
such number) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
(2) Adjustments. In any such case in which
Additional Common Stock are deemed to be issued:
(A) no further adjustment in the Series C
Conversion Price shall be made upon (a) the subsequent issue of Convertible
Securities or shares of Common Stock upon the exercise of such Options or (b)
the conversion or exchange of such Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any decrease in
the consideration payable to the Corporation, or increase in the number of
shares of Common Stock issuable upon the exercise, conversion or exchange
thereof, then
E-7
the Series C Conversion Price computed upon the original issuance thereof (or
upon the occurrence of a record date with respect thereto) and any subsequent
adjustments based thereon shall, upon any such increase or decrease becoming
effective, be recomputed to reflect such increase or decrease insofar as it
affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(C) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any increase in
the consideration payable to the Corporation, or decrease in the number of
shares of Common Stock issuable, upon the exercise, conversion or exchange
thereof, then the Series C Conversion Price computed upon the original issuance
thereof (or upon the occurrence of a record date with respect thereto) and any
subsequent adjustments based thereon shall, upon any such increase or decrease
becoming effective, be recomputed to reflect such increase or decrease insofar
as it affects such Options or the rights of conversion or exchange under such
Convertible Securities;
(D) if the conversion privilege or similar right
represented by any such Convertible Securities shall expire or be cancelled or
terminated without having been exercised, the Series C Conversion Price as
adjusted upon the original issuance of such Convertible Securities shall be
readjusted to the Series C Conversion Price that would have been in effect had
an adjustment been made on the basis that the only Additional Common Stock
deemed to be issued were the Additional Common Stock, if any, actually issued or
sold on the exercise of such conversion or similar right with respect to such
Convertible Securities, and such Additional Common Stock, if any, were issued or
sold for the consideration actually received by the Corporation upon such
exercise, plus the consideration, if any, actually received by the Corporation,
whether or not converted, for issuing or selling the Convertible Securities; and
(E) no readjustment pursuant to clause 2 above
shall have the effect of increasing the Series C Conversion Price above the
Series C Conversion Price that would be in effect if such Option or Convertible
Securities had not been issued.
(iv) Determination of Consideration. For purposes of this
Section 7(h), the consideration received by the Corporation for the issuance of
any Additional Common Stock shall:
(1) insofar as it consists of cash, be computed at
the aggregate amount of cash received by the Corporation excluding amounts paid
or payable for accrued interest or accrued dividends;
(2) insofar as it consists of property other
than cash, be computed at the fair value thereof at the time of such issuance,
as determined in good faith by the Board; and
(3) if Additional Common Stock is issued together
with other shares or securities or other assets of the Corporation for
consideration that covers both, be the proportion of such consideration so
received, computed as provided in clauses (1) and (2) above, as determined in
good faith by the Board.
(i) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Series C Conversion Price pursuant to this
Section 7, the Corporation at its expense shall promptly compute such adjustment
or readjustment in accordance with the terms of this Section 7 and furnish to
each holder of Series C Convertible Preferred Stock a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (i) the
consideration received or to be received by the Corporation for any Additional
Common Stock issued or sold or deemed to have been issued or sold, (ii) the
Series C Conversion Price at the time in effect for the Series C Convertible
Preferred Stock, and (iii) the number of shares of Common Stock and the type and
amount, if any, or other property that at the time would be received upon
conversion of the Series C Convertible Preferred Stock. Upon the written request
of any holder of Series C Convertible Preferred Stock, the Corporation will as
soon as reasonably practicable provide to such holder written statement of the
Series C Conversion Price at the time in effect for the Series C Convertible
Preferred Stock and the number of shares of Common Stock which at the time would
be received upon conversion of the Series C Convertible Preferred Stock.
E-8
(j) Payment of Taxes. The Corporation will pay all taxes and
other governmental charges (other than taxes measured by the revenue or income
of the holders of the Series C Convertible Preferred Stock) that may be imposed
in respect o the issue or delivery of shares of PlanetCAD Common Stock upon
conversion of the shares of Series C Convertible Preferred Stock.
(k) Minimum Adjustment. No adjustment of the Series C
Conversion Price shall be made in an amount less than $.01 per share; provided,
however, that any adjustments which are not required to be made as a result of
the operation of this subsection shall be carried forward and shall be taken
into account in any subsequent adjustment.
8. Reissue of Shares. Shares of Series C Convertible Preferred
Stock acquired by the Corporation by reason of redemption, purchase, conversion
or otherwise shall not be cancelled, retired or eliminated from the shares which
the Corporation is authorized to issue, and may be reissued as shares of Series
C Convertible Preferred Stock or redesignated as part of another series of
preferred stock
9. Exchange for Other Preferred Stock. If the Corporation issues
shares of another series of Preferred Stock containing (a) a higher preference
for dividends or (b) a lower Conversion Price than the Series C Convertible
Preferred Stock, a holder of shares of Series C Convertible Preferred Stock may
exchange all, but not less than all, of his shares for the number of shares of
such new Preferred Stock that equal the largest whole number equal to or less
than the total amount paid by the holder for his Series C Convertible Preferred
Stock divided by the purchase price per share of such new Preferred Stock. In
order to exercise this right of exchange, the Purchaser must notify the
Corporation in writing of his intent and must sign any agreement the Corporation
reasonably requires to effect the exchange, including, but not limited to, any
agreement relating to the registration of such stock with the SEC or any State.
10. Redemption. The Corporation shall redeem any outstanding
shares of Series C Convertible Preferred concurrently with, or as soon as
practicable after, the Corporation is merged with or consolidated into another
corporation ("Business Combination"), provided that all of the following
conditions are satisfied: (a) the Corporation's Board of Directors has approved
the Business Combination and, if required by Delaware law, has submitted the
Business Combination to a vote of the Corporation's shareholders, and the
shareholders have approved the Business Combination, and (b) at the meeting at
which the Corporation's Board of Directors has approved the Business
Combination, any director who holds, directly or indirectly, any shares of the
Series C Convertible Preferred Stock shall not vote on the proposed Business
Combination.
11. Notices. Unless otherwise specified, any notice required by
the provisions of these designations shall be deemed given upon the earlier of
the following events: (a) personal delivery to the party to be notified, (b)
facsimile transmission to the party to be notified (with written or facsimile
confirmation of receipt), (c) delivery by an overnight express courier service
to the party to be notified (delivery, postage or freight charges prepaid), or
(d) on the third business day following deposit in the United States Post Office
(if sent by registered or certified mail, return receipt requested, with
delivery, postage or freight charges prepaid), addressed in the case of notice
to the holders of record of Series C Convertible Preferred Stock to each holder
at such holder's address appearing on the books of the Corporation and in the
case of notice to the Corporation to the President at the principal executive
offices of the Corporation.
12. Exclusion of Other Rights. Except as may otherwise be required
by law, the shares of Series C Convertible Preferred Stock shall not have any
voting powers, preferences and relative, participating, optional or other
special rights, other than those specifically set forth in this designation (as
such designation may be amended from time to time) and in the Certificate of
Incorporation of the Corporation.
13. Headings of Subdivisions. The headings of the various
subdivisions hereof are for convenience of reference only and shall not affect
the interpretation of any of the provisions hereof.
14. Severability of Provisions. If any voting powers, preferences
and relative, participating, optional and other special rights of the Series C
Convertible Preferred Stock and qualifications, limitations and restrictions
thereof set forth in this designation (as such designation may be amended from
time to time) is held invalid, unlawful or incapable of being enforced by reason
of any rule of law or public policy, all other voting powers,
E-9
preferences and relative, participating, optional and other special rights of
Series C Convertible Preferred Stock and qualifications, limitations and
restrictions thereof set forth in this designation (as so amended) that can be
given effect without the invalid, unlawful or unenforceable voting powers,
preferences and relative, participating, optional and other special rights of
Series C Convertible Preferred Stock and qualifications, limitations and
restrictions thereof shall, nevertheless, remain in full force and effect, and
no voting powers, preferences and relative, participating, optional or other
special rights of Series C Convertible Preferred Stock and qualifications,
limitations and restrictions thereof herein set forth shall be deemed dependent
upon any other such voting powers, preferences and relative, participating,
optional, or other special rights of Series C Convertible Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed herein.
E-10