EXHIBIT 3.2
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-1 Convertible Preferred Stock and has provided for the
issuance of such series.
SECOND: The terms of the Series A-1 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-1 Convertible
Preferred Stock (the "SERIES A-1 PREFERRED STOCK") shall be $100 per share (the
"ORIGINAL PURCHASE PRICE"). The Series A-1 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-1 Preferred Stock as to dividends and
upon liquidation, dissolution or winding up. The date on which any share of
Series A-1 Preferred Stock was issued shall hereinafter be referred to as the
"ORIGINAL ISSUE DATE" with respect to such share.
2. DIVIDENDS.
(a) Beginning on May 31, 2001, annually on May 31st, the holders of
record of shares of Series A-1 Preferred Stock as of May 10th of such year (the
"DIVIDEND RECORD DATE") 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-1 Preferred Stock (each an "ADJUSTMENT").
If the Board fails to declare a Cumulative Dividend , 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-1 Preferred Stock in accordance with the terms of Sections 5 or 6 or
upon a Redemption in accordance with the terms of Section 7.
(b) If the Corporation fails to redeem the Series A-1
Preferred Stock by May 31, 2004, then on and annually after May 31, 2004, the
holders of record of shares of Series A-1 Preferred Stock as of the Dividend
Record Date 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 and in
addition to the dividends described in Section 2(a), an additional annual
dividend, at a rate of 20% of the Original Purchase Price per share, subject to
an Adjustment (the "ADDITIONAL DIVIDENDS").
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-1 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-1 Preferred Stock the Liquidation Preference, the holders
of shares of Series A-1 Preferred Stock and any class or series of stock ranking
on liquidation on a parity with the shares of Series A-1 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 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-1 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
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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-1
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-1 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-1 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-1 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-1 Preferred
Stock (subject to any Adjustment) are outstanding, the holders of the Series A-1
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-1 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-1 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-1 Preferred Stock named
therein) occurs and is continuing, the holders of any outstanding shares of
Series A-1 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-1 Preferred Stock pursuant to 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-1 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-1 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
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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-1
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-1
Preferred Stock, voting together as a single class, at a meeting of the holders
of shares of Series A-1 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-1 Preferred Stock then outstanding shall constitute a quorum of the
Series A-1 Preferred Stock for the purpose of electing any directors to be
elected solely by the holders of Series A-1 Preferred Stock and for all such
other matters upon which the holders of shares of Series A-1 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-1 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-1 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-1 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;
(ii) amend, alter or repeal any rights of the
Series A-1 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-1 Preferred Stock of
less than the Liquidation Preference.
5. OPTIONAL CONVERSION. The holders of shares of Series A-1 Preferred
Stock shall have conversion rights as follows (the "CONVERSION RIGHTS"):
(a) RIGHT TO CONVERT. Each share of Series A-1 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
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conversion. The conversion price at which shares of Common Stock shall be
deliverable upon conversion of Series A-1 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-1 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-1 Preferred Stock.
(b) FRACTIONAL SHARES. No fractional shares of Common Stock
shall be issued upon conversion of the shares of Series A-1 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-1 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-1 Preferred Stock into shares of Common Stock, such holder shall
surrender the certificate or certificates for such shares of Series A-1
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-1 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 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-1 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-1 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-1 Preferred Stock for conversion, be
conditioned upon the closing of the sale of securities pursuant to such
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offering, in which event the person entitled to receive the Common Stock
issuable upon such conversion of the shares of Series A-1 Preferred Stock shall
not be deemed to have converted such shares of Series A-1 Preferred Stock until
immediately prior to the closing of such sale of securities.
(ii) The Corporation shall, at all times when the
Series A-1 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-1 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-1 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-1 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-1 Preferred Stock, in addition to such other remedies as shall be available to
the holder of such shares of Series A-1 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-1 Preferred Stock
surrendered for conversion or on the Common Stock delivered upon conversion.
(iv) All shares of Series A-1 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, 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-1
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-1 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-1 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
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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-1 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-1 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-1 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-1 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 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-1 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-1
Preferred Stock.
(e) 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-1 Preferred Stock against impairment.
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(f) 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-1 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-1 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-1 Preferred Stock.
(g) 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;
(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-1 Preferred Stock, and shall
cause to be mailed to the holders of the Series A-1 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
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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-1
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-1 Preferred Stock
shall be converted automatically 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-1 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-1 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-1 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-1 Preferred Stock accordingly.
7. REDEMPTION.
(a) The Corporation may, at its option redeem any or all of
the then outstanding shares of Series A-1 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-1 Preferred Stock (a "REDEMPTION
NOTICE").
The Redemption Notice 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
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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-1 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-1
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");
(c) If the Corporation delivers a Redemption Notice to the
holders of Series A-1 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-1 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;
15,510 shares of Series A Convertible Preferred Stock, par
value $.01 per share; and
15,510 shares of Series A-1 Convertible Preferred Stock, par
value $.01 per share.