CERTIFICATE OF DESIGNATIONS OF PREFERENCES
OF
SERIES E PREFERRED STOCK
OF
AMTEC, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is AmTec,
Inc., a Delaware corporation.
2. The Certificate of Incorporation of the Corporation authorizes the
issuance of 10,000,000 shares of Preferred Stock, and expressly vests in the
Board of Directors of the Corporation the authority provided therein to issue
any or all of said shares in one or more series and by resolution or
resolutions to establish the designation, number, full or limited voting
powers, or the denial of voting powers, preferences and relative,
participating, optional, and other special rights and the qualifications,
limitations, restrictions, and other distinguishing characteristics of each
series to be issued.
3. The Corporation has, as of the date hereof, authorized 1, 524, 178 shares of
Series A Common Stock, of which none are issued and outstanding; the Corporation
has authorized 100 shares of Series B Preferred Stock, of which none are issued
and outstanding; the Corporation has authorized 250 shares of Series C Preferred
Stock, of which 250 shares are issued and outstanding; and the Corporation has
authorized 150 shares of Series D Preferred Stock, of which 122 shares are
issued and outstanding.
4. The Board of Directors of the Corporation, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Series E Preferred Stock:
RESOLVED, that 120 Shares of the Ten Million (10,000,000) authorized shares of
Preferred Stock of the Corporation shall be designated Series E Convertible
Preferred Stock, $0.001 par value per share, and shall possess the rights and
privileges set forth below:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series E Convertible Preferred Stock" (the "Series E Preferred
Stock.") and the number of shares constituting the Series E Preferred Stock
shall be 120. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease shall reduce
the number of shares of Series E Preferred Stock to a number less than the
number of shares then outstanding plus the number shares reserved for
issuance upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible into Series E Preferred Stock.
Section 2. Rank. The Series E Preferred Stock shall rank: (i) prior to all of
the Corporation's Common Stock, par value $0.001 per share ("Common Stock");
(ii) prior to any class or series of capital stock of the Corporation hereafter
created that does not specifically by its terms rank senior to or on parity with
the Series E Preferred Stock of whatever subdivision (collectively, with the
Common Stock, "Junior Securities"); (iii) on parity with the Series C and Series
D Preferred Stock of the Company ("Parity Securities") in each case as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary (all such distributions being
referred to collectively as "Distributions"); and (iv) junior to any Preferred
Stock subsequently created specifically ranking senior to the Series E Preferred
Stock ("Senior Securities") in terms of Distributions.
Section 3. Dividends. The Series E Preferred Stock will bear no dividends, and
the holders of the Series E Preferred Stock shall not be entitled to receive
dividends on the Series E Preferred Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the then holders of shares of
Series E Preferred Stock shall be entitled to receive, immediately after
any distributions to Senior Securities required by the Corporation's
Certificate of Incorporation or any statement of designation of
preferences, and prior and in preference to any distribution to Junior
Securities but in parity with any distribution of Parity Securities, an
amount per share equal to the sum of (I) $100,000 for each outstanding
share of Series E Preferred Stock (the "Issue Price") and (ii) an amount
equal to 8% of the Issue Price per annum for the period that has passed
since the date of issuance of the Series E Preferred Stock (such amount
being referred to herein as the "Premium"). If upon the occurrence of such
event, the assets and funds thus distributed among the holders of the
Series E Preferred Stock and Parity Securities shall be insufficient to
permit the payment to such holders of the full preferential amounts due to
the holders of the Series E Preferred Stock and the Parity Securities,
respectively, then the entire assets and funds of the Corporation legally
available for distribution shall be distributed among the holders of the
Series E Preferred Stock and the Parity Securities, pro rata, based on the
respective liquidation amounts to which each such series of stock is
entitled by the Corporation's Certificate of Incorporation and any
statement(s) of designation of preferences.
(b) Upon the completion of the distribution required by subsection 4(a), if
assets remain in this Corporation, they shall be distributed to holders of
Parity Securities (unless holders of Parity Securities have received
distributions pursuant to subsection 4(a) above and Junior Securities in
accordance with the Corporation's Certificate of Incorporation including
any duly adopted certificate(s) of designation of preferences.
(c) A consolidation or merger of the Corporation with or into any other
corporation or corporations, or a sale, conveyance or disposition of all or
substantially all of the assets of the Corporation or the effectuation by
the Corporation of a transaction or series of related transactions in which
more than 50% of the voting power of the Corporation is disposed of, shall
not be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section 4, but shall instead be treated pursuant to Section
7 hereof.
Section 5. Conversion. The record holders of the Series E Preferred Stock shall
have conversion Rights as follows (the "Conversion Rights"):
(a) Right to Convert. The record holder of the Series E Preferred Stock
shall be entitled, as set forth below, subject to the restrictions on
conversion set forth in Section 5(b) below, at the office of the Company
or any transfer agent for the Series E Preferred Stock, to convert the
shares of Series E Preferred Stock held by such holder into that number
of fully-paid and nonassessable shares of the Company's Common Stock at
the Conversion Rate as set forth
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below. The number of shares of Common Stock into which this Series E
Preferred Stock may be converted is hereinafter referred to as the
"Conversion Rate" for such Series E Preferred Stock, and is computed
as follows:
Number of shares issued upon conversion of one share of Preferred Stock equals
Issue Price + [(.08)(N/365)(Issue Price)]
-----------------------------------------
Conversion Price
where
*N = the number of days between (I) the date that, in connection with the
consummation of the initial purchase of this Series E Preferred Stock from the
Company, the escrow agent first had in its possession funds representing full
payment for the Series E Preferred Stock for which conversion is being elected,
and (ii) the applicable date of conversion for the Series E Preferred Stock for
which conversion is being elected,
*Issue Price = the Issue Price, as defined in Section 4(a), and
*Conversion Price = the lesser of (x) the Fixed Conversion Price, as may be
adjusted pursuant to Section 5(e) below, or (y) the Adjustable Conversion Price.
For purposes hereof:
* "Fixed Conversion Price" shall equal 110% of the Index Price, provided,
however, that if on March 2, 1998, the average Closing Bid Price for the prior
10 business days has declined 25% or more from the Index Price, then the Fixed
Conversion Price shall be reset to equal 110% of that 10-day average Closing Bid
Price,
* "Adjustable Conversion Price" shall equal:
(a) during the period beginning March 2, 1998 and ending April 30, 1998, 85% of
the average Closing Bid Price of the Company's Common Stock for the five (5)
trading days immediately preceding the Date of Conversion,
(b) during the period beginning May 1, 1998 and ending May 31, 1998, 84% of the
average Closing Bid Price of the Company's Common Stock for the five (5) trading
days immediately preceding the Date of Conversion,
(c) during the period beginning June 1, 1998 and ending June 30, 1998, 83% of
the average Closing Bid Price of the Company's Common Stock for the five (5)
trading days immediately preceding the Date of Conversion,
(d) during the period beginning July 1, 1998 and ending July 31, 1998, 82% of
the average Closing Bid Price of the Company's Common Stock for the five (5)
trading days immediately preceding the Date of Conversion,
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(e) during the period beginning August 1, 1998 and ending August 31, 1998, 81%
of the average Closing Bid Price of the Company's Common Stock for the five (5)
trading days immediately preceding the Date of Conversion,
(f) during the period beginning September 1, 1998, 80% of the average Closing
Bid Price of the Company's Common Stock for the five (5) trading days
immediately preceding the Date of Conversion.
* "Index Price" equals the average Closing Bid Price for the ten business days
immediately preceding the Issue Date,
* "Closing Bid Price" shall mean the closing bid price of the Company's Common
Stock as reported by the American Stock Exchange ("AMEX',) (or, if not reported
by AMEX, as reported by such other exchange or market where traded) on the
applicable date.
* "Issue Date" shall mean the date that the Series E Preferred Stock is first
issued.
(b) Mechanics of Conversion. No fractional shares of Common Stock shall be
issued upon conversion of this Series E Preferred Stock. In lieu of any
fractional share to which the holder would otherwise be entitled, the
number of shares of Common Stock to be received shall be rounded up to the
next whole number of shares. In the case of a dispute as to the calculation
of the Conversion Rate, the Company's calculation shall be deemed
conclusive absent manifest error. In order to convert Series E Preferred
Stock into full shares of Common Stock, the holder shall surrender the
certificate or certificates therefor, duly endorsed, by either overnight
courier or 2 day courier, to the office of the Company or of any transfer
agent for the Series E Preferred Stock, and shall give written notice
("Notice of Conversion") to the Company at such office that he elects to
convert the same, the number of shares of Series E Preferred Stock so
converted and a calculation of the Conversion Rate (with an advance copy of
the certificate(s) and the notice by facsimile). Once the Notice of
Conversion has been so delivered, the conversion set forth therein shall be
irrevocable, and the certificate(s) indicated for conversion shall be
canceled on the Company's books; provided, however, that the Company shall
not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such conversion unless either the certificates
evidencing such Series E Preferred Stock are delivered to the Company or
its transfer agent as provided above, or the holder notifies the Company or
its transfer agent that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the Company to
indemnify the Company from any loss incurred by it in connection with such
certificates. The Company shall issue and deliver within three (3)
business days after delivery to the Company of such certificates, or after
such agreement and indemnification, to such holder of Series E Preferred
Stock at the address of the holder on the books of the Company, a
certificate or certificates for the number of shares of Common Stock to
which the holder shall be entitled as aforesaid, and a certificate for any
unconverted shares of Series E Preferred Stock. The date on which
conversion occurs (the "Date of Conversion") shall be deemed to be the date
set forth in the Notice of Conversion.
(c) Reservation of Stock Issuable Upon Conversion. The Company shall at all
times reserve and keep available out of its authorized but unissued shares
of Common Stock, solely for the purpose of effecting the conversion of the
Series E Preferred Stock, such number of its shares
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of Common Stock as shall from time to time be suffcient to effect the
conversion of all then outstanding shares of Series E Preferred Stock; and
if at any time the number of authorized but unissued shares of Common Stock
shall not be suffcient to effect the conversion of all then outstanding
shares of Series E Preferred Stock, the Company will take such corporate
action as may be necessary to increase its authorized but unissued shares
of Common Stock to such number of shares as shall be sufficient for such
purpose.
(d) Automatic Conversion. Each share of Series E Preferred Stock outstanding on
the second anniversary of the Issue Date automatically shall be converted
into Common Stock on such date at the Conversion Price then in effect and
the second anniversary of the Issue Date shall be deemed the Date of
Conversion with respect to such Conversion.
(e) Adjustment to Fixed Conversion Price.
In computing the Fixed Conversion Price for purposes of Section 5(a):
(i) If, prior to the conversion of all of the Series E Preferred Stock, the
number of outstanding shares of Common Stock is increased by a stock split,
stock dividend, or other similar event, the Fixed Conversion Price shall be
proportionately reduced, or if the number of outstanding shares of Common
Stock is decreased by a combination or reclassification of shares, or other
similar event, the Fixed Conversion Price shall be proportionately
increased.
(ii) If, prior to the conversion of all Series E Preferred Stock, there
shall be any merger, consolidation, exchange of shares, recapitalization,
reorganization, or other similar event, as a result of which shares of
Common Stock of the Company shall be changed into the same or a different
number of shares of the same or another class or classes of stock or
securities of the Company or another entity, then the holders of Series E
Preferred Stock shall thereafter have the right to purchase and receive
upon conversion of Series E Preferred Stock, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common
Stock immediately theretofore issuable upon conversion, such shares of
stock and/or securities as may be issued or payable with respect to or in
exchange for the number of shares of Common Stock immediately theretofore
purchasable and receivable upon the conversion of Series E Preferred Stock
held by such holders had such merger, consolidation, exchange of shares,
recapitalization or reorganization not taken place, and in any such case
appropriate provisions shall be made with respect to the rights and
interests of the holders of the Series E Preferred Stock to the end that
the provisions hereof (including, without limitation, provisions for
adjustment of the Fixed Conversion Price and of the number of shares
issuable upon conversion of the Series E Preferred Stock) shall thereafter
be applicable, as nearly as may be practicable in relation to any shares of
stock or securities thereafter deliverable upon the exercise hereof. The
Company shall not effect any transaction described in this subsection 5(e)
unless the resulting successor or acquiring entity (if not the Company)
assumes by written instrument the obligation to deliver to the holders of
the Series E Preferred Stock such shares of stock and/or securities as, in
accordance with the foregoing provisions, the holders of the Series E
Preferred Stock may be entitled to purchase.
(iii) If any adjustment under this Section 5(e) would create a fractional share
of Common Stock or a right to acquire a fractional share of Common Stock,
such fractional share shall be disregarded and the number of shares of
Common Stock issuable upon conversion shall be the next higher number of
shares.
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Section 6. Corporate Change. In the event of a merger, reorganization,
recapitalization or similar event of or with respect to the Company (a
"Corporate Change") (other than a Corporate Change in which all or substantially
all of the consideration received by the holders of the Company's equity
securities upon such Corporate Change consists of cash or assets other than
securities issued by the acquiring entity or any affiliate thereof), this Series
E Preferred Stock shall be assumed by the acquiring entity and thereafter this
Series E Preferred Stock shall be convertible into such class, type and amount
of securities as the holder would have received had the holder converted this
Series E Preferred Stoek immediately prior to such Corporate Change.
Section 7. Protective Provisions. So long as shares of Series E Preferred Stock
are outstanding, the Corporation shall not without first obtaining the approval
(by vote or written consent, as provided by law) of the holders of at least
two-thirds of the then outstanding shares of Series E Preferred Stock:
(a) alter or change the rights, preferences or privileges of the shares of
Series E Preferred Stock or any Senior Securities so as to affect adversely the
Series E Preferred Stock; or
(b) create any new class or series of stock having rights preferential to those
of the Series E Preferred Stock with respect to Distributions (as defined in
Section 2 above).
Section 8. Redemption By Company.
(a) Company's Right to Redeem at its Election. At any time, the Company
shall have the right, in its sole discretion, to redeem ("Redemption at
Company's Election"), from time to time, any or all of the Series E Preferred
Stock provided the Company shall first provide ten (10) days advance written
notice. If the Company elects to redeem some but not all of the Series E
Preferred Stock, the Company shall redeem a pro-rata amount from each holder
of the Series E Preferred Stock.
(b) Redemption Price At Company's Election. The Redemption Price at
Company's Election shall be an amount per share equal to the Issue Price
multiplied by the sum of one (1) plus the Premium plus (one (1) minus the
Adjustable Conversion Price then in effect.)
(c) Mechanics of Redemption at Company's Election. The Company shall effect
each such redemption by giving at least ten (10) days prior written notice
("Notice of Redemption at Company's Election") to (a) the holders of the
Series E Preferred Stock selected for redemption, at the address and
facsimile number of such holder appearing in the Company's Series E Stock
register and (b) the transfer agent, which notice of Redemption at Company's
Election shall be deemed to have been delivered two (2) business days after
the Company's mailing (by overnight or two (2) day courier, with a copy by
facsimile) of such Notice of Redemption at Company's Election. Such Notice of
Redemption at Company's Election shall indicate (i) the number of shares of
Series E Preferred Stock that have been selected for redemption, (ii) the
date on which such redemption is to become effective (the "Date of Redemption
at Company's Election") and (iii) the applicable Redemption Price at
Company's Election. Notwithstanding the above, holder may convert into Common
Stock pursuant to Section 5 prior to the close of business on the Date of
Redemption at Company's Election, any Series E Preferred Stock which it is
otherwise entitled to convert, including Series E Preferred Stock that has
been selected for redemption at Company's Election pursuant to this section.
(d) Payment of Redemption Price. Each holder submitting Series E Preferred
Stock being redeemed under this section shall send its Series E Preferred
Stock Certificates so redeemed to the Company or its transfer agent no later
than the Date of Redemption at Company's Election, and the Company shall pay
the applicable redemption price to that holder within five (5) business days
of the Date of Redemption at Company's Election. The Company shall not be
obligated to deliver the redemption price unless the Preferred Stock
Certificates so redeemed are delivered to the Company or its transfer agent.
Section 9. Status of Converted or Redeemed Stock. In the event any shares of
Series E Preferred Stock shall be converted or redeemed, the shares so converted
or redeemed shall be canceled, shall return to the status of authorized but
unissued Preferred Stock of no designated series, and shall not be issuable by
the Corporation as Series E Preferred Stock.
Section 10. Miscellaneous. As used herein, the term "business day" means a
business day in the City of New York.
FURTHER RESOLVED, that the statements contained in the foregoing resolutions
creating and designating the said Series E Preferred Stock and fixing the
number, powers, preferences and relative, optional, participating, and other
special rights and the qualifications, limitations, restrictions, and other
distinguishing characteristics thereof shall, upon the effective date of said
series, be deemed to be included in and be a part of the certificate of
incorporation of the Corporation pursuant to the laws of the State of Delaware.
Signed on October 17, 1997.
/s/ Albert G. Pastino, CFO /s/ Joseph R. Wright, Jr.
- ------------------------- -------------------------
Attest President
/s/ Timothy P.F. Crowley
-------------------------
Secretary
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