AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
OF THE RELATIVE RIGHTS AND PREFERENCES OF
SERIES A PREFERRED, SERIES B PREFERRED AND COMMON STOCK
OF CYTOMEDIX, INC.
Pursuant to the authority granted to the Board of Directors of Cytomedix,
Inc., a Delaware corporation (the "Company") in its Restated Certificate of
Incorporation, the Company hereby certifies the relative rights and preferences
of designated Series A Convertible Preferred, Series B Convertible Preferred and
Common Stock of Cytomedix, Inc. as voted and approved by the shareholders in
connection with their approval of the Plan of Reorganization.
A. Series A Convertible Preferred Stock.
-----------------------------------------
1. Designation and Rank: The designation of such series of the
----------------------
Preferred Stock shall be the Series A Convertible Preferred Stock, par value
$.0001 per share (the "Series A Convertible Preferred Stock"). The maximum
number of shares of Series A Preferred Stock shall be five million (5,000,000)
shares. The Series A Preferred Stock shall have a stated liquidation preference
(the "Liquidation Preference Amount") of $1.00 per share. The Series A
Convertible Preferred Stock shall have preference over and rank (i) senior to
the Series B Preferred Stock, par value $.0001 per share, (ii) senior to the
common stock, par value $.0001 per share, and (iii) senior to all other classes
and series of equity securities of the Company which by its terms do not rank
senior to the Series A Convertible Preferred Stock ("Junior Stock"). The Series
A Convertible Preferred Stock shall contain a negative covenant prohibiting the
Company from granting any security interest in the Company's patents and/or
future royalty streams ("Intellectual Property").
2. Dividends:
---------
(a) Payment of Dividends: The holders of record of shares of
----------------------
Series A Convertible Preferred Stock shall be entitled to receive dividends at
the rate of eight percent (8%) (the "Dividend Rate") of the stated Liquidation
Preference Amount per share per annum, payable quarterly in arrears. Such
dividends on the Series A Preferred Stock shall be cumulative and shall accrue
and be payable to holders of record as they appear on the stock books on such
record dates as are fixed by the Board of Directors. Such dividends on the
Series A Convertible Preferred Stock are prior and in preference to any
declaration or payment of any distribution (as defined in Section 2(d) below) on
any outstanding shares of Common Stock or any other equity securities of the
Company ranking junior to the Series A Preferred Stock as to the payment of
dividends. Such dividends shall accrue on each share of Series A Preferred
Stock from day to day from the date of initial issuance thereof whether or not
earned or declared.
(b) On the date that the shareholder has held shares of Series A
Preferred Convertible Stock for one year, the shareholder is entitled to be paid
his/her/its dividend at the Dividend Rate in additional shares of Series A
Preferred Convertible Stock. The number of shares to be paid to the holder is
to be based on the fair market value of a share of Series A Preferred
Convertible Stock as determined in a way reasonably satisfactory to the holders
of the Series A Preferred Stock. Each year thereafter on the date dividends are
to be paid, the shareholder is entitled to be paid his/her/its dividend in
shares of Series A Preferred Convertible Stock in the manner as stated for year
one or, in the sole discretion of the Board of Directors, in cash.
(c) So long as any shares of Series A Convertible Preferred Stock
are outstanding, the Company shall not declare, pay or set apart for payment any
dividend or make any distribution on, any Junior Stock (other than dividends or
distributions payable in additional shares of Junior Stock), unless at the time
of such dividend or distribution the Company shall have paid all accrued and
unpaid dividends on the outstanding shares of Series A Convertible Preferred
Stock.
(d) In the event of a dissolution, liquidation or winding up of
the Company pursuant to Section 4, all accrued and unpaid dividends on the
Series A Convertible Preferred Stock shall be payable on the day immediately
preceding the date of payment of the preferential amount to the holders of
Series A Preferred Stock. In the event of a mandatory redemption pursuant to
Section 6, all accrued and unpaid dividends on the Series A Preferred Stock
shall be payable on the day immediately preceding the date of such redemption.
(e) For purposes hereof, unless the context otherwise requires,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable other than in
shares of equity securities of the Company, or the purchases or redemption of
shares of the Company (other than redemptions set forth in Section 6 below or
repurchases of Common Stock held by employees or consultants of the Corporation
upon termination of their employment or services pursuant to agreements
providing for such repurchase) for cash or property.
(f) If the Company shall fail to pay dividends as required in
subparagraph (a) for six (6) consecutive quarters, a majority of the holders of
Series A Convertible Preferred Stock shall have the power to elect one director
to the Company's Board of Directors, either by filling an existing vacancy on
the Board or by removing a Director of their choice.
3. Voting Rights. So long as the Series A Convertible Preferred Stock
-------------
is outstanding, each share of Series A Convertible Preferred Stock shall entitle
the holder thereof to vote on all matters voted on by holders of the Common
Stock of the Company voting together as a single class with the other shares
entitled to vote, at all meetings of the stockholders of the Company. With
respect to any such vote, each share of Series A Convertible Preferred Stock
shall entitle the holder thereof to cast the number of votes equal to the number
of votes which could be cast in such vote by a holder of one (1) share of Common
Stock of the Company.
4. Liquidation Preference.
-----------------------
(a) In the event of the liquidation, dissolution or winding up of
the affairs of the Company, whether voluntary or involuntary, after payment of
provision for payment of the debts and other liabilities of the Company, the
holders of shares of the Series A Convertible Preferred Stock then outstanding
shall be entitled to receive an amount equal to the Liquidation Preference
Amount of the Series A Preferred Stock plus any accrued and unpaid dividends
before any payment shall be made or any assets distributed to the holders of the
Series B Convertible Preferred Stock, Common Stock or any other Junior Stock.
With regard to the Intellectual Property, the holders of shares of Series A
Convertible Preferred Stock shall rank senior to any and all indebtedness and/or
other equity interests and any all persons in order to pay each holder of shares
of Series A Convertible Preferred Stock his/her/its Liquidation Preference
Amount. If the assets of the Company are not sufficient to pay in full the
Liquidation Preference Amount plus any accrued and unpaid dividends payable to
the holders of outstanding shares of the Series A Convertible Preferred Stock,
each holder shall be paid an amount equal to a ratably proportionate amount of
the total amount available. The liquidation payment with respect to each
outstanding fractional share of Series A Preferred Stock shall be equal to a
ratably proportionate amount of the liquidation payment with respect to each
outstanding share of Series A Preferred Stock, in accordance with the respective
amounts that would be payable on such shares if all amounts payable thereon were
paid in full. All payments for which this Section 4(a) provides shall be in
cash, property (valued at its fair market value as determined by the Company's
independent, outside accountant) or a combination thereof, provided, however,
-------- -------
that no cash shall be paid to holders of Series B Convertible Preferred or
Common Stock unless each holder of the outstanding shares of Series A
Convertible Preferred Stock has been paid in cash the full Liquidation
Preference Amount plus any accrued and unpaid dividends to which such holder is
entitled as provided herein. After payment of the full Liquidation Preference
Amount plus any accrued and unpaid dividends to which each holder is entitled,
such holders of shares of Series A Convertible Preferred Stock will not be
entitled to any further participation as such in any distribution of the assets
of the Company.
(b) A consolidation of the Company with or into any other
corporation or corporations, or a sale of all or substantially all of the assets
of the Company, or the effectuation by the Company of a transaction or series of
transactions in which more than 50% of the voting shares of the Company is
disposed of or conveyed, shall not be deemed to be a liquidation, dissolution,
or winding up within the meaning of this section 4. In the event of the merger
or consolidation of the Company with or into another corporation, the Series A
Convertible Preferred Stock shall maintain its relative powers, designations and
preferences provided for herein and no merger shall result inconsistent
therewith.
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, stating a payment date
and the place where the distributable amounts shall be payable, shall be given
by mail, postage prepaid, no less than 45 days prior to the payment date stated
therein, to the holders of record of the Series A Convertible Preferred Stock at
their respective addresses as the same shall appear on the books of the Company.
5. Limited Conversion Rights. All Series A Convertible Preferred Stock
-------------------------
not converted into shares of Common Stock prior to the Confirmation of the Plan
cannot be converted into Common Stock until the first year anniversary of the
date the Series A Convertible Preferred Stock was issued. On this first
anniversary date and every six months thereafter, the holder of the Series A
Convertible Preferred Stock may convert up to twenty-five percent (25%) of
his/her/its remaining holdings of Series A Convertible Preferred Stock into
Common Stock. Preferred shares are converted based on the liquidation preference
amount and the conversion price of the Common Stock shall be equal to 90% of the
twenty-day average closing ask price of the Common Stock, but in no case shall
this price be less than $3.00 per share.
6. Redemption.
----------
(a) Except as provided in this Section 6, the Series A Convertible
Preferred Stock is not subject to redemption.
(b) The Company shall redeem for cash at a price per share equal
to (i) 105% of the Series A Liquidation Preference Amount plus all accrued but
unpaid dividends if redeemed within one year of the date of issuance; (ii) 104%
of the Series A Liquidation Preference Amount plus all accrued but unpaid
dividends if redeemed later than one year from the date of issuance (the
"Corresponding Redemption Price").
(c) The Company may redeem all of the then outstanding shares of
Series A Convertible Preferred Stock at the Corresponding Redemption Price at
any time as long as proper notice as required by this paragraph is sent. Not
less than 10 days nor more than 60 days prior to a redemption date set by the
Company, written notice (the "Redemption Notice") shall be mailed, postage
prepaid, to each holder of record of the Series A Preferred Stock to be redeemed
at his post office address last shown on the records of the Company. The
Redemption Notice shall state:
(i) The total number of shares of Series A Convertible
Preferred Stock being redeemed;
(ii) The total number of shares of Series A Convertible
Preferred Stock held by the holder that the Corporation shall redeem;
(iii) The redemption date and the Redemption Price for the Series
A Convertible Preferred Stock; and
(iv) That the holder is to surrender to the Corporation, in the
manner and at the place designated, his certificate or certificates
representing the shares of Series A Convertible Preferred Stock to be redeemed.
If the Redemption Notice shall have been duly given, and if on the redemption
date the Corresponding Redemption Price is paid, then notwithstanding that the
certificates evidencing any of the shares of Series A Convertible Preferred
Stock so called for redemption shall not have been surrendered, the
Corresponding Redemption Price with respect to such shares shall cease to
increase after the redemption date and all rights with respect to such shares
shall forthwith after the redemption date terminate, except only the right of
the holders to receive the Corresponding Redemption Price upon surrender of
their certificate or certificates therefor.
(d) If on a redemption date the Board determines that funds of the
Corporation legally available for redemption of the Series A Convertible
Preferred Stock shall be insufficient to discharge such redemption requirements
in full, such funds as are so available for such purpose shall be set aside and
used for the redemption. Such redemption requirements shall be cumulative, so
that if such requirements shall not be fully discharged as they accrue because
of the insufficiency of funds legally available, all legally available funds
shall be applied thereto until such requirements are fully discharged. There
shall be a redemption within 10 days after such funds become available.
(e) In the event of the redemption of only a part of the
outstanding shares of Series A Convertible Preferred Stock, the Corporation
shall effect such redemption pro rata according to the number of shares of
Series A Convertible Preferred Stock held by each holder of the shares as of 10
days before the redemption date.
7. Vote to Change the Terms of or Issue Preferred Stock. The
-------------------------------------------------------------
affirmative vote at a meeting duly called for such purpose or the written
consent without a meeting of the holders of not less than three-fourths ( ) of
the then outstanding shares of Series A Convertible Preferred Stock, shall be
required for any change to this Amended Certificate of Designation or the
Company's Amended Certificate of Incorporation which would amend, alter, change
or repeal may of the powers, designations, preferences and rights of the Series
A Convertible Preferred Stock.
8. Lost or Stolen Certificates. Upon receipt by the Company of evidence
---------------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the shares of Series A Convertible
Preferred Stock, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the holder to the Company and, in the case of
mutilation, upon surrender and cancellation of the Series A Convertible
Preferred Stock Certificate(s), the Company shall execute and deliver new
preferred stock certificate(s) of the like lienor and date; provided, however,
-------- -------
the Company shall not be obligated to re-issue Series A Convertible Preferred
Stock Certificates if the holder contemporaneously requests the Company to
convert such shares of Series A Convertible Preferred Stock into Common Stock.
9. Remedies, Characterizations, Other Obligations, Breaches and
-----------------------------------------------------------------
Injunctive Relief. The remedies provided in this Certificate of Designation
- -------------------
shall be cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit a holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Certificate Designation.
Amounts set forth or provided for herein with respect to payments, conversion
and the like (and this computation thereof) shall be the amounts to be received
by the holder thereof and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the holders of the Series A Convertible Preferred
Stock and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the holders of the Series A Preferred Stock shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or
other security being required.
10. Specific Shall Not Limit General; Construction. No specific
---------------------------------------------------
provision contained in this Amended Certificate of Designation shall limit or
modify any more general provision contained herein. This Amended Certificate of
Designation shall be deemed to be jointly drafted by the Company and all initial
purchasers of the Series A Convertible Preferred Stock and shall not be
construed against any person as the drafter hereof.
11. Failure or Indulgence Not Waiver. No failure or delay on the part
---------------------------------
of a holder of Series A Preferred Stock in the exercise or any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
B. Series B Convertible Preferred Stock:
----------------------------------------
1. Designation and Rank: The designation of such series of the
----------------------
Preferred Stock shall be the Series B Convertible Preferred Stock, par value
$.0001 per share (the "Series B Convertible Preferred Stock"). The maximum
number of shares of Series B Preferred Stock shall be five million (5,000,000)
shares. The Series B Convertible Preferred Stock shall have a stated
liquidation preference (the "Liquidation Preference Amount") of $1.00 per share.
The Series B Convertible Preferred Stock shall be subordinate to the Series A
Convertible Preferred Stock, but shall have preference over and rank senior to
(i) the Common Stock, par value $.0001 per share, and (ii) all other classes and
series of equity securities of the Company which by its terms do not rank senior
to the Series B Convertible Preferred Stock ("Junior Stock"). The Series B
Convertible Preferred Stock shall contain a negative covenant prohibiting the
Company from granting a security interest in the Company's Intellectual
Property.
2. Dividends:
---------
(a) Payment of Dividends: The holders of record of shares of
----------------------
Series B Convertible Preferred Stock shall be entitled to receive dividends at
the rate of eight percent (8%) (the "Dividend Rate") of the stated Liquidation
Preference Amount per share per annum, payable quarterly in arrears. Such
dividends on the Series B Convertible Preferred Stock shall be cumulative and
shall accrue and be payable to holders of record as they appear on the stock
books on such record dates as are fixed by the Board of Directors. Such
dividends on the Series B Convertible Preferred Stock are prior and in
preference to any declaration or payment of any distribution (as defined in
Section 2(d) below) on any outstanding shares of Common Stock or any other
equity securities of the Company ranking junior to the Series B Preferred Stock
as to the payment of dividends. Such dividends shall accrue on each share of
Series B Preferred Stock from day to day from the date of initial issuance
thereof whether or not earned or declared.
(b) On the date that the shareholder has held shares of Series B
Preferred Convertible Stock for one year, the shareholder is entitled to be paid
his/her/its dividend at the Dividend Rate in additional shares of Series B
Preferred Convertible Stock. The number of shares to be paid to the holder is
to be based on the fair market value of a share of Series B Preferred
Convertible Stock as determined in a way reasonably satisfactory to the holder
of the Series B Preferred Stock. Each year thereafter on the date dividends are
to be paid, the shareholder is entitled to be paid his/her/its dividend in
shares of Series B Preferred Convertible Stock in the manner as stated for year
one or, in the sole discretion of the Board of Directors, in cash.
(c) So long as any shares of Series B Convertible Preferred Stock
are outstanding, the Company shall not declare, pay or set apart for payment any
dividend or make any distribution on, any Junior Stock (other than dividends or
distributions payable in additional shares of Junior Stock), unless at the time
of such dividend or distribution the Company shall have paid all accrued and
unpaid dividends on the outstanding shares of Series B Convertible Preferred
Stock.
(d) In the event of a dissolution, liquidation or winding up of
the Company pursuant to Section 4, all accrued and unpaid dividends on the
Series B Convertible Preferred Stock shall be payable on the day immediately
preceding the date of payment of the preferential amount to the holders of
Series B Preferred Stock. In the event of a redemption pursuant to Section 6,
all accrued and unpaid dividends on the Series B Preferred Stock shall be
payable on the day immediately preceding the date of such redemption.
(e) For purposes hereof, unless the context otherwise requires,
"distribution" shall mean the transfer of cash or property without
consideration, whether by way of dividend or otherwise, payable other than in
shares of equity securities of the Company, or the purchases or redemption of
shares of the Company (other than redemptions set forth in Section 6 below or
repurchases of Common Stock held by employees or consultants of the Corporation
upon termination of their employment or services pursuant to agreements
providing for such repurchase) for cash or property.
(f) If the Company shall fail to pay dividends as required in
subparagraph (a) for six (6) consecutive quarters, a majority of the holders of
Series B Convertible Preferred Stock shall have the power to elect one director
to the Company's Board of Directors, either by filling an existing vacancy on
the Board or by removing a Director of their choice.
3. Voting Rights. So long as the Series B Convertible Preferred Stock
-------------
is outstanding, each share of Series B Convertible Preferred Stock shall entitle
the holder thereof to vote on all matters voted on by holders of the Common
Stock of the Company voting together as a single class with the other shares
entitled to vote, at all meetings of the stockholders of the Company. With
respect to any such vote, each share of Series B Convertible Preferred Stock
shall entitle the holder thereof to cast the number of votes equal to the number
of votes which could be cast in such vote by a holder of one (1) share of Common
Stock of the Company.
4. Liquidation Preference.
-----------------------
(a) In the event of the liquidation, dissolution or winding up of
the affairs of the Company, whether voluntary or involuntary, after payment of
provision for payment of the debts and other liabilities of the Company, the
holders of shares of the Series B Convertible Preferred Stock then outstanding
shall be entitled to receive an amount equal to the Liquidation Preference
Amount of the Series B Convertible Preferred Stock plus any accrued and unpaid
dividends only after payment is made or assets are distributed to the holders of
the Series B Convertible Preferred Stock, but before any payment shall be made
or any assets distributed to the holders of the Common Stock or any other Junior
Stock. With regard to the Company's Intellectual Property, the holders of
Series B Convertible Preferred Stock shall rank subordinate only to the holders
of Series A Convertible Preferred Stock and shall rank senior to all other
equity interests or indebtedness of the Company now or hereafter outstanding in
order to pay each holder of shares of Series B Convertible Preferred Stock
his/her/its Liquidation Preference Amount. If the assets of the Company are not
sufficient to pay in full the Liquidation Preference Amount plus any accrued and
unpaid dividends payable to the holders of outstanding shares of the Series B
Convertible Preferred Stock, each holder shall be paid an amount equal to a
ratably proportionate amount of the total amount available. The liquidation
payment with respect to each outstanding fractional share of Series B Preferred
Stock shall be equal to a ratably proportionate amount of the liquidation
payment with respect to each outstanding share of Series B Convertible Preferred
Stock, in accordance with the respective amounts that would be payable on such
shares if all amounts payable thereon were paid in full. All payments for which
this Section 4(a) provides shall be in cash, property (valued at its fair market
value as determined by the Company's independent, outside accountant) or a
combination thereof, provided, however, that no cash shall be paid to holders of
-------- -------
Series B Convertible Preferred unless each holder of the outstanding shares of
Series A Convertible Preferred Stock has been paid in cash the full Liquidation
Preference Amount plus any accrued and unpaid dividends to which such holder of
Series A Convertible Preferred Stock is entitled. After payment of the full
Liquidation Preference Amount plus any accrued and unpaid dividends to which
each holder is entitled, such holders of shares of Series B Convertible
Preferred Stock will not be entitled to any further participation as such in any
distribution of the assets of the Company.
(b) A consolidation of the Company with or into any other
corporation or corporations, or a sale of all or substantially all of the assets
of the Company, or the effectuation by the Company of a transaction or series of
transactions in which more than 50% of the voting shares of the Company is
disposed of or conveyed, shall not be deemed to be a liquidation, dissolution,
or winding up within the meaning of this section 4. In the event of the merger
or consolidation of the Company with or into another corporation, the Series B
Convertible Preferred Stock shall maintain its relative powers, designations and
preferences provided for herein and no merger shall result inconsistent
therewith.
(c) Written notice of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company, stating a payment date
and the place where the distributable amounts shall be payable, shall be given
by mail, postage prepaid, no less than 45 days prior to the payment date stated
therein, to the holders of record of the Series B Convertible Preferred Stock at
their respective addresses as the same shall appear on the books of the Company.
5. Limited Conversion Rights. All Series A Convertible Preferred Stock
-------------------------
not converted into shares of Common Stock prior to the Confirmation of the Plan
cannot be converted into Common Stock until the first year anniversary of the
date the Series A Convertible Preferred Stock was issued. On this first
anniversary date and every six months thereafter, the holder of the Series A
Convertible Preferred Stock may convert up to twenty-five percent (25%) of
his/her/its remaining holdings of Series A Convertible Preferred Stock into
Common Stock. Preferred shares are converted based on the liquidation preference
amount and the conversion price of the Common Stock shall be equal to 90% of the
twenty-day average closing ask price of the Common Stock, but in no case shall
this price be less than $3.00 per share.
6. Redemption.
----------
(a) Except as provided in this Section 6, the Series B Convertible
Preferred Stock is not subject to redemption.
(b) The Company shall redeem for cash at a price per share equal
to (i) 105% of the Series A Liquidation Preference Amount plus all accrued but
unpaid dividends if redeemed within one year of the date of issuance; (ii)
104%of the Series A Liquidation Preference Amount plus all accrued but unpaid
dividends if redeemed after one year but within two years of the date of
issuance; or (iii) 103% of the Series B Liquidation Preference Amount plus all
accrued but unpaid dividends if redeemed later than two years from the date of
issuance (the "Corresponding Redemption Price").
(c) The Company may redeem all of the then outstanding shares of
Series B Convertible Preferred Stock at the Corresponding Redemption Price at
any time as long as proper notice as required by this paragraph is sent. Not
less than 10 days nor more than 60 days prior to a redemption date set by the
Company, written notice (the "Redemption Notice") shall be mailed, postage
prepaid, to each holder of record of the Series B Preferred Stock to be redeemed
at his post office address last shown on the records of the Company. The
Redemption Notice shall state:
(i) The total number of shares of Series B Convertible
Preferred Stock being redeemed;
(ii) The total number of shares of Series B Convertible
Preferred Stock held by the holder that the Corporation shall redeem;
(iii) The redemption date and the Corresponding
Redemption Price for the Series B Convertible Preferred Stock; and
(iv) That the holder is to surrender to the Corporation, in
the manner and at the place designated, his certificate or certificates
representing the shares of Series B Convertible Preferred Stock to be
redeemed.
If the Redemption Notice shall have been duly given, and if on the redemption
date the Corresponding Redemption Price is paid, then notwithstanding that the
certificates evidencing any of the shares of Series B Convertible Preferred
Stock so called for redemption shall not have been surrendered, the
Corresponding Redemption Price with respect to such shares shall cease to
increase after the redemption date and all rights with respect to such shares
shall forthwith after the redemption date terminate, except only the right of
the holders to receive the Redemption Price upon surrender of their certificate
or certificates therefor.
(d) If on a redemption date the Board determines that funds of the
Corporation legally available for redemption of the Series B Convertible
Preferred Stock shall be insufficient to discharge such redemption requirements
in full, such funds as are so available for such purpose shall be set aside and
used for the redemption. Such redemption requirements shall be cumulative, so
that if such requirements shall not be fully discharged as they accrue because
of the insufficiency of funds legally available, all legally available funds
shall be applied thereto until such requirements are fully discharged. There
shall be a redemption within 10 days after such funds become available.
(e) In the event of the redemption of only a part of the
outstanding shares of Series B Convertible Preferred Stock, the Corporation
shall effect such redemption pro rata according to the number of shares of
Series B Convertible Preferred Stock held by each holder of the shares as of 10
days before the redemption date.
7. Vote to Change the Terms of or Issue Preferred Stock. The
-------------------------------------------------------------
affirmative vote at a meeting duly called for such purpose or the written
consent without a meeting of the holders of not less than three-fourths ( ) of
the then outstanding shares of Series B Convertible Preferred Stock, shall be
required for any change to this Amended Certificate of Designation or the
Company's Amended Certificate of Incorporation which would amend, alter, change
or repeal may of the powers, designations, preferences and rights of the Series
B Convertible Preferred Stock.
8. Lost or Stolen Certificates. Upon receipt by the Company of evidence
---------------------------
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the shares of Series B Convertible
Preferred Stock, and, in the case of loss, theft or destruction, of any
indemnification undertaking by the holder to the Company and, in the case of
mutilation, upon surrender and cancellation of the Series B Convertible
Preferred Stock Certificate(s), the Company shall execute and deliver new
preferred stock certificate(s) of the like lienor and date; provided, however,
-------- -------
the Company shall not be obligated to re-issue Series B Convertible Preferred
Stock Certificates if the holder contemporaneously requests the Company to
convert such shares of Series B Convertible Preferred Stock into Common Stock.
9. Remedies, Characterizations, Other Obligations, Breaches and
-----------------------------------------------------------------
Injunctive Relief. The remedies provided in this Certificate of Designation
-----------
shall be cumulative and in addition to all other remedies available under this
Certificate of Designation, at law or in equity (including a decree of specific
performance and/or other injunctive relief), no remedy contained herein shall be
deemed a waiver of compliance with the provisions giving rise to such remedy and
nothing herein shall limit a holder's right to pursue actual damages for any
failure by the Company to comply with the terms of this Certificate Designation.
Amounts set forth or provided for herein with respect to payments, conversion
and the like (and this computation thereof) shall be the amounts to be received
by the holder thereof and shall not, except as expressly provided herein, be
subject to any other obligation of the Company (or the performance thereof).
The Company acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the holders of the Series B Convertible Preferred
Stock and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the holders of the Series B Preferred Stock shall be entitled, in
addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or
other security being required.
10. Specific Shall Not Limit General; Construction. No specific
---------------------------------------------------
provision contained in this Amended Certificate of Designation shall limit or
modify any more general provision contained herein. This Amended Certificate of
Designation shall be deemed to be jointly drafted by the Company and all initial
purchasers of the Series B Convertible Preferred Stock and shall not be
construed against any person as the drafter hereof.
11. Failure or Indulgence Not Waiver. No failure or delay on the part
---------------------------------
of a holder of Series B Preferred Stock in the exercise or any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
C. Common Stock:
-------------
1. Designation and Rank. The maximum number of shares of Common Stock,
--------------------
par value $.0001, shall be forty million (40,000,000) shares. The Common Stock
shall be fully paid and nonassessable. The Common Stock shall be subordinate to
both the Series A Convertible Preferred and Series B Convertible Preferred Stock
and to all other classes and series of equity securities of the Company which by
their terms rank senior to the Common Stock, in the event of a liquidation,
dissolution, or winding up of the Company or with regard to any other rights,
privileges or preferences.
2. Other Rights. Pursuant to the Restated Certificate of
-------------
Incorporation, each share of Common Stock represents the right to one (1) vote.
Holders of Common Stock will not have any cumulative voting rights, preemptive
rights, conversion rights, redemption rights or sinking fund rights.
3. Dividends. Holders of Common Stock will be entitled to receive
---------
dividends as may from time to time be declared by the Board of Directors at the
Board of Directors' sole discretion. The Company shall be prohibited from
declaring and paying dividends on the Common Stock as long as shares of Series A
Convertible Preferred and/or Series B Convertible Preferred Stock is
outstanding.
This Amended and Restated Certificate of Designation shall be effective as of
the date of filing with the Secretary of State of Delaware.
IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true this 9th day of July, 2002.
/s/Robert Burkett /s/David Crews
Robert Burkett, Director David Crews, Director