TEXT OF PROPOSED AMENDMENT TO THE CERTIFICATE OF INCORPORATIONTO AUTHORIZE A SERIES OF PREFERRED STOCK TO BE KNOWN AS THE COMPANY'S
10% CONVERTIBLE PREFERRED STOCK, SERIES I
FOURTH
D. 10% Convertible Preferred Stock, Series 1: 2,000,000 shares of the Preferred Stock are hereby
constituted as a separate series of Preferred Stock with the rights, preferences and limitations stated here in.
Section 1. Designation and Amount. The shares of this series shall be designated as "10% Convertible
Preferred Stock, Series 1" (the "Series 1 Preferred Stock") and the number of shares constituting the Series 1
Preferred Stock shall be 2,000,000 shares. Such number of shares may be increased or decreased by
resolution of the Board of Directors; provide that no decrease shall reduce the number of shares of Series 1
Preferred Stock to a number less than the number of shares then outstanding plus the number of 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 1 Preferred Stock.
Section 2. Dividends and Distributions.
(A) The holders of record of shares of Series 1 Preferred Stock shall be entitled to receive, if, as and when
declared by the Board of Directors out of funds legally available for the purpose, quarterly cash dividends
payable in arrears on the first day of January, April, July and October in each year (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), to the holders of record of the Series 1 Preferred
Stock at the close of business on or about the 15th day of the month next preceding the first day of January,
April, July or October, as the case may be, fixed by the Board of Directors (the "Record Date"), commencing
on the first Quarterly Dividend Payment Date after March 31, 1994 in an amount (if any) per share (rounded
to the nearest cent), subject to the provision for adjustment hereinafter set forth, equal to one-quarter of the
total annual dividend of ninety cents (90¢) per share.
(B) Dividends due pursuant to paragraph (A) of this Section shall begin to accrue on outstanding shares of
Series 1 Preferred Stock from the Quarterly Dividend Payment Date next preceding March 31, 1994.
Dividends accruing on outstanding shares of Series 1 Preferred Stock shall be cumulative. Dividends accrued
but unpaid ("Accumulated Dividends") shall not bear interest. Dividends paid on the shares of Series I
Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding.
Section 3. Certain Restrictions.
(A) Prior to March 31, 1994, the Corporation shall not in any circumstances, and after March 31, 1994,
whenever quarterly dividends or other dividends or distributions payable on the Series 1 Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions,
whether or not declared, on shares of Series 1 Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on any shares of stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series 1 Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking
on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series 1
Preferred Stock, except dividends paid ratably on the Series 1 Preferred Stock and all such parity stock
on which dividends are payable or in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled; or
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking
junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series 1 Preferred
Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of
any such junior stock in exchange for shares of any stock of the Corporation ranking junior (as to
dividends and upon dissolution, liquidation or winding up) to the Series 1 Preferred Stock.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless the Corporation could, under paragraph (A) of this
Section 3, purchase or otherwise acquire such shares at such time and in such manner.
Section 4. Voting Rights. The holders of shares of Series 1 Preferred Stock shall have the following voting
rights:
(A) Each share of Series 1 Preferred Stock shall entitle the holder thereof to such number of votes on all
matters submitted to a vote of the stockholders of the Corporation, voting with the Common Stock and not as
a separate class, as to which such share would be entitled if such share had been converted into the whole
number of shares of Common Stock into which it would then be entitled to convert pursuant to Section 5
hereof. For purposes of the foregoing, any fractional shares of Common Stock into which a share of the Series
1 Preferred Stock shall be convertible shall not be entitled to a vote and shall not be aggregated with any other
fractional share to which the holder of the Series I Preferred Stock may be entitled.
(B) Except as otherwise provided by the Certificate of Incorporation of the Corporation, including any
Certificate of Designations creating a series of Preferred Stock or any similar stock, or by statute, the holders
of shares of Series 1 Preferred Stock and the holders of shares of Common Stock and any other capital stock
of the Corporation having general voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by statute, holders of Series 1 Preferred Stock shall
have no special voting rights and their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 5. Conversion.
(A) Conversion Privilege and Conversion Price. Each holder of a share of Series 1 Preferred Stock shall have
the right, at his option, at any time or from time to time (except that, as to any share of Series 1 Preferred
Stock called for redemption pursuant to Section 6 and the Corporation shall not thereafter default in the
payment due upon redemption thereof, such right shall terminate as to such share at the close of business on
the date fixed for such redemption), to convert such share into fully paid and nonassessable shares of
Common Stock (calculated as to each conversion to the nearest 1/100th of a share) at the conversion price
(the "Implied Conversion Price") equal to six shares of Common Stock for each nine dollars ($9) in Original
Liquidation Value per share of Series 1 Preferred Stock (as defined in Section 8). No adjustment or allowance
shall be made for dividends on shares of Series 1 Preferred Stock surrendered for conversion, whether
accrued, accumulated or otherwise. The Implied Conversion Price shall be subject to adjustment from time to
time as provided in paragraph (D) of this Section 5. The Implied Conversion Price at any time in effect or, in
the case of any such adjustment, such Implied Conversion Price as most recently so adjusted, is herein called
the "Current Conversion Price."(B) Manner of Exercise. In order to exercise the conversion privilege with respect to any shares of Series 1
Preferred Stock, the holder thereof shall surrender the certificate or certificates therefor to any transfer agent
of the Corporation for the Series 1 Preferred Stock, duly endorsed in blank for transfer, accompanied by
written notice of election to convert such shares of Series I Preferred Stock or a portion thereof executed on
the form set forth on such certificates or on such other form as may be provided from time to time by the
Corporation. As soon as practicable after the surrender of such certificates as provided above, the Corporation
shall cause to be issued and delivered, at the office of such transfer agent, to or on the order of the holder of
the certificates thus surrendered, a certificate or certificates for the number of full shares of Common Stock
issuable hereunder upon the conversion of such shares of Series 1 Preferred Stock and scrip, in respect of any
fraction of a share of Common Stock issuable upon such conversion as provided in paragraph (C). Such
conversion shall be deemed to have been effected on the date on which the certificates for such shares of
Series 1 Preferred Stock have been surrendered as provided above, and the person in whose name any
certificate or certificates for shares of Common Stock are issuable upon such conversion shall be deemed to
have become on such date the holder of record of the shares represented thereby.
(C) Issuance of Scrip in Lieu of Fractional Shares. No fractional shares of Common Stock shall be issued
upon any conversion of Series 1 Preferred Stock. If two or more shares of Series 1 Preferred Stock are
surrendered for conversion at one time by the same holder, the number of full shares issuable upon the
conversion of such shares shall be computed on the basis of the aggregate Original Liquidation Value
(without adjustment for allowance for dividends whether accrued, accumulated or otherwise) of such shares.
In lieu of any fraction of a share of Common Stock to which any holder would otherwise be entitled upon
conversion of any shares of Series 1 Preferred Stock, the Corporation shall issue non-interest-bearing and
non-voting scrip certificates which shall not be entitled to dividends for such fraction, such certificates,
together with other similar certificates, to be exchangeable for the number of full shares of Common Stock
represented thereby, to be issued in such denominations and in such form, to expire after such reasonable time
(which shall be not less than one year after the date of issue thereof), to contain such provisions for the sale,
for the account of the holders of such certificates, of shares of Common Stock for which such certificates are
exchangeable, and to be subject to such other terms and conditions, as the Board of Directors may from time
to time determine prior to the issue thereof.
(D) Adjustment of Conversion Price.
(i) In case, at any time or from time to time after date of original issuance, the Corporation shall issue or sell
any shares of Common Stock (except as provided in subparagraph (D)(vi)) for a consideration per share less
than the Current Conversion Price in effect immediately prior to such issue or sale, then forthwith upon such
issue or sale the Current Conversion Price in effect immediately prior to such issue or sale shall be reduced to
a price (calculated to the nearest cent) determined by dividing (a) an amount equal to the sum of (i) the
number of shares of Common Stock outstanding immediately prior to such issue or sale multiplied by the
existing Current Conversion Price, and (ii) the consideration, if any, received by the Corporation upon such
issue or sale, by (b) the total number of shares of Common Stock upon such issue or sale. No adjustment of
the Current Conversion Price, however, shall be made in an amount less than ten cents (10¢) per share, but
any lesser adjustment shall be carried forward and shall be made at the time of and together with the next
subsequent adjustment which, together with any adjustments so carried forward, shall amount to ten cents
(10¢) per share or more.(ii) For the purposes of subparagraph (D)(i) above, the following paragraphs (1) to (6), inclusive, shall also be
applicable:
(1) In case at any time the Corporation shall grant any rights to subscribe for, or any rights or
options to purchase, Common Stock or any stock or other securities convertible into or exchangeable
for Common Stock (such convertible or exchangeable stock or securities being herein called
"Convertible Securities"), whether or not such rights or options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price per share for which Common
Stock is issuable upon the exercise of such rights or options or upon conversion or exchange of such
Convertible Securities
(determined by dividing (a) the total amount, if any, received or receivable by the Corporation
as consideration for the granting of such rights or options, plus the minimum aggregate amount
of additional consideration payable to the Corporation upon the exercise of such rights or
options, plus, in the case of any such rights or options which relate to such Convertible
Securities, the minimum aggregate amount of additional consideration, if any, payable upon
the issue or sale of such Convertible Securities and upon the conversion or exchange thereof,
by (b) the total maximum number of shares of Common Stock issuable upon the exercise of
such rights or options or upon the conversion or exchange of all such Convertible Securities
issuable upon the exercise of such rights or options)
shall be less than the Current Conversion Price in effect immediately prior to the time of the granting
of such rights or options, then the total maximum number of shares of Common Stock issuable upon
the exercise of such rights or options or upon conversion or exchange of the total maximum amount of
such Convertible Securities issuable upon the exercise of such rights or options shall (as of the date of
granting of such rights or options) be deemed to be outstanding and to have been issued for such price
per share. Except as provided in subparagraph (D)(v), no further adjustments of the Current
Conversion Price shall be made upon the actual issue of such Common Stock or of such Convertible
Securities upon exercise of such rights or options or upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities.
(2) In case at any time the Corporation shall issue or sell any Convertible Securities, whether or not the rights
to exchange or convert thereunder and immediately exercisable, and the price per share for which Common
Stock is issuable upon such conversion or exchange
(determined by dividing (a) the total amount received or receivable by the Corporation as
consideration for the issue or sale of such Convertible Securities, plus the minimum aggregate amount
of additional consideration, if any, payable to the Corporation upon the conversion or exchange
thereof, by (b) the total maximum number of shares of Common Stock issuable upon the conversion
or exchange of all such Convertible Securities)
shall be less than the Current Conversion Price in effect immediately prior to the time of such issue or sale,
then the total maximum number of shares of Common Stock issuable upon conversion or exchange of all such
Convertible Securities shall (as of the date of the issue or sale of such Convertible Securities) be deemed to be
outstanding and to have been issued for such price per share, provided that (i) except as provided in
subparagraph (D)(v) of this Section, no further adjustments of the Current Conversion Price shall be made
upon the actual issue of such Common Stock upon conversion or exchange of such Convertible Securities,
and (ii) if any issue or sale of such Convertible Securities is made upon exercise of any Tights to subscribe for
or to purchase or any option to purchase any such Convertible Securities for which adjustments of the Current
Conversion Price have been or are to be made pursuant to other provisions of subparagraph (D)(ii), no further
adjustment of the Current Conversion Price shall be made by reason of such issue or sale.(3) In case at any time the Corporation shall declare a dividend or make any other distribution upon any stock
of the Corporation payable in Common Stock or Convertible Securities, any Common Stock or Convertible
Securities, as the case may be, issuable in payment of such dividend or distribution shall be deemed to have
been issued or sold without consideration.
(4) In case at any time any shares of Common Stock or Convertible Securities or any rights or options to
purchase any such Common Stock or Convertible Securities shall be issued or sold for cash, the consideration
received therefor shall be deemed to be the amount received by the Corporation therefor, without deduction
therefrom of any expenses incurred or any underwriting commissions or concessions or discounts paid or
allowed by the Corporation in connection therewith. In case any shares of Common Stock or Convertible
Securities or any rights or options to purchase any such Common Stock or Convertible Securities shall be
issued or sold for a consideration other than cash, the amount of the consideration other than cash received by
the Corporation shall be deemed to be the fair value of such consideration as determined by the Board of
Directors, without deduction therefrom of any expenses incurred or any underwriting commissions or
concessions or discounts paid or allowed by the Corporation in connection therewith. In case any shares of
Common Stock or Convertible Securities or any rights or options to purchase any such Common Stock or
Convertible Securities shall be issued in connection with any merger of another corporation into the
Corporation, the amount of consideration therefor shall be deemed to be the fair value of the assets of such
merged corporation as determined by the Board of Directors after deducting therefrom all cash and other
consideration (if any) paid by the Corporation in connection with such merger.
(5) In case at any time the Corporation shall take a record of the holders of Common Stock for the purpose of
entitling them (i) to receive a dividend or other distribution payable in Common Stock or in Convertible
Securities, or (ii) to subscribe for or purchase Common Stock or Convertible Securities, then such record date
shall be deemed to be the date of the issue or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may be.
(6) The number of shares of Common Stock outstanding at any given time shall include shares owned or held
by or for the account of the Corporation, and the disposition of any such shares shall not be considered an
issue or sale of Common Stock for the purposes of subparagraph (D)(i) above.
(iii) In the event that the Corporation shall make any distribution of its assets upon or with respect to its
Common Stock, as a liquidating or partial liquidating dividend, or other than as a dividend payable out of
earnings or any surplus legally available for dividends under the laws of the state of incorporation of the
Corporation, each holder of any shares of Series I Preferred Stock then outstanding shall, upon the exercise of
his right to convert after the record date for such distribution or, in the absence of a record date, after the date
of such distribution, receive, in addition to the shares subscribed for, the amount of such assets (or, at the
option of the Corporation, a sum equal to the value thereof at the time of distribution as determined by the
Board of Directors in its sole discretion) which would have been distributed to such holder if he had exercised
his right to convert immediately prior to the record date for such distribution or, in the absence of a record
date, immediately prior to the date of such distribution.(iv) In case at any time the Corporation shall subdivide its outstanding shares of Common Stock into a greater
number of shares, the Current Conversion Price in effect immediately prior to such subdivision shall be
proportionately reduced and conversely, in case the outstanding shares of Common Stock of the Corporation
shall be combined into a smaller number of shares, the Current Conversion Price in effect immediately prior
to such combination shall be proportionately increased.
(v) If the purchase price provided for in any right or option referred to in paragraph (1) of subparagraph
(D)(ii), or the rate at which any Convertible Securities referred to in paragraphs (1) or (2) of said
subparagraph (D)(ii) are convertible into or exchangeable for Common Stock, shall change or a different
purchase price or rate shall become effective at any time or from time to time (other than under or by reason
of provisions designed. to protect against dilution), then, upon such change becoming effective, the Current
Conversion Price then in effect hereunder shall forthwith be increased or decreased to such Current
Conversion Price as would have obtained had the adjustments made upon the granting or issuance of such
rights or options or Convertible Securities been made upon the basis of (1) the issuance of the number of
shares of Common Stock theretofore actually delivered upon the exercise of such options or rights or upon the
conversion or exchange of such Convertible Securities, and the total consideration received therefor, and (2)
the granting or issuance at the time of such change of any such options, rights, or Convertible Securities then
still outstanding for the consideration, if any, received by the Corporation therefor and to be received on the
basis of such changed price. On the expiration of any right or option referred to in paragraph (1) of
subparagraph (D)(ii) of this Section, or on the termination of any right to convert or exchange any Convertible
Securities referred to in paragraphs (1) or (2) of said subparagraph (D)(ii), the Current Conversion Price shall
forthwith be readjusted to such amount as would have obtained had the adjustment made upon the granting or
issuance of such rights or options or Convertible Securities been made upon the basis of the issuance or sale
of only the number of shares of Common Stock actually issued upon the exercise of such options or rights or
upon the conversion or exchange of such Convertible Securities. If the purchase price provided for in any
such right or option, or the rate at which any such Convertible Securities are convertible into or exchangeable
for Common Stock, shall change at any time under or by reason of provisions with respect thereto designed to
protect against dilution, then in case of the delivery of Common Stock upon the exercise of any such right or
option or upon conversion or exchange of any such Convertible Security, the Current Conversion Price then
in effect hereunder shall forthwith be decreased to such Current Conversion Price as would have obtained had
the adjustments made upon the issuance of such right or option or Convertible Security been made upon the
basis of the issuance of (and the total consideration received for) the shares of Common Stock delivered as
aforesaid.
(vi) The Corporation shall not be required to make any adjustment of the Current Conversion Price in the case
of (1) the granting by the Corporation of stock options to its directors, officers or employees so
long as the shares of Common Stock covered by all such options granted (and not theretofore
terminated) do not in the aggregate exceed on a cumulative basis 10% of the aggregate number of
shares of Common Stock issued and outstanding and which would be issued and outstanding upon
conversion of the all shares of Series 1 Preferred Stock issued and outstanding at the time of the latest
granting of any such option, or
(2) the issuance of shares of Common Stock pursuant to the exercise of such options, or
(3) the issuance of such additional shares of Common Stock as may be issuable upon the
exercise of such options as a result of adjustment in the number of shares covered by such options for
stock dividends, stock splits or other changes in the capitalization of the Corporation.
(vii) On the effective date of any new Implied Conversion Price, as specified in paragraph (A), the Current
Conversion Price in effect immediately prior to such effective date shall be increased to a price (calc ulated to
the nearest cent) which bears the same ratio to such new Implied Conversion Price as (i) the Current
Conversion Price in effect immediately prior to such effective date bears to (ii) the Implied Conversion Pric e
for the immediately preceding period, as specified in paragraph (A).
(F) The Corporation shall at all times reserve and keep available out of the authorized Common Stock the full
number of shares of the Common Stock issuable upon the conversion of all outstanding shares of the Series I
Preferred Stock.
Section 6. Redemption of the Series I Preferred Stock.
(A) Redemption at the Corporation's Option. At any time on or after January 1, 1996, the Corporation may
redeem all or any portion of the Series 1 Preferred Stock then outstanding at a price per share equal to the
Redemption Price (as defined herein) plus Accumulated Dividends. For each share which is called for
redemption, the Corporation will be obligated to pay to the holder thereof on the date on which redemption is
to be made (the "Redemption Date"), upon surrender by such holder at the offices of the transfer agent for the
Series 1 Preferred Stock of the certificate representing such share, duly endorsed in blank or accompanied by
an appropriate form of assignment, an amount in cash equal to the following percentages of the original
purchase price of nine dollars ($9) per share (the "Redemption Price"):
On or after January 1, 1996: 105% January 1, 1997: 104%
January 1, 1998: 103%
January 1, 1999: 102%
January 1, 2000: 101%
January 1, 2001: 100%
(B) Partial Redemption. In the event that less than all of the outstanding shares of the Series 1 Preferred Stock
are to be redeemed, the number of shares to be redeemed shall be determined by the Board of Directors of the
Corporation and the shares to be redeemed shall be determined by lot or pro rata or by any other method as
may be determined by such Board of Directors in its sole discretion to be equitable, and the certificate of the
Corporation's Secretary filed with the transfer agent for the Series 1 Preferred Stock in respect of such
determination shall be conclusive. (C) Notice of Redemption. In the event the Corporation shall redeem shares of Series 1 Preferred Stock,
notice of such redemption shall be given by first class mail, postage prepaid, mailed not less than fifteen (15)
nor more than sixty (60) days prior to the Redemption Date, to each record holder of the shares to be
redeemed, at such holder's address as the same appears on the books of the Corporation. Each such notice
shall state: (i) the time and date as of which the redemption shall occur; (ii) the total number of shares of
Series 1 Preferred Stock to be redeemed and, if fewer than all the shares held by such holder are to be
redeemed, the number of such shares to be redeemed from such holder-, (iii) the Redemption Price; (iv) that
the shares of Series 1 Preferred Stock called for redemption may be converted at any time prior to the time
and date fixed for redemption; (y) the applicable conversion price or rate; (vi) the place or places where
certificates for such shares to be surrendered for payment of the Redemption Price; and (vii) that dividends on
the shares to be redeemed will cease to accrue on such Redemption Date.(D) Dividends After Redemption Date. If notice of redemption shall have been given as provided in
paragraph (C), dividends on the shares of Series 1 Preferred Stock so called for redemption shall cease to
accrue, such shares shall no longer be deemed to be outstanding, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the Corporation the Redemption Price
without interest and except the right to convert such shares in accordance with Section 5) shall cease
(including any right to receive dividends otherwise payable on any Dividend Payment Date that would have
occurred after the Redemption Date) from and after the time and date fixed in the notice of Redemption Da te
or (ii) if the Corporation shall so elect and state in the notice of redemption, from and after the time and date
(which date shall be the Redemption Date or an earlier date not less than fifteen (1-5) days after the date of
mailing of the redemption notice) on which the Corporation shall irrevocably deposit with a designated bank
or trust company, as paying agent, money sufficient to pay at the office of such paying agent on the
Redemption Date, the Redemption Price. Any money so deposited with any such paying agent which shall
not be required for such redemption because of the exercise of any right of conversion or otherwise shall be
returned to the Corporation forthwith. Upon surrender (in accordance with the notice of redemption) of the
certificate or certificates for any shares to be so redeemed (properly endorsed or assigned for transfer, if the
Corporation shall so require and the notice of redemption shall so state), such shares shall be redeemed by the
Corporation at the Redemption Price. In case fewer than all the shares represented by any such certificate a re
to be redeemed, a new certificate shall be issued representing the unredeemed shares, without cost to the
holder thereof, together with scrip in lieu of fractional shares in accordance with Section 5(C). Subject t o
applicable escheat laws, any moneys so set aside by the Corporation and unclaimed at the end of one year
from the Redemption Date shall revert to the general funds of the Corporation, after which reversion the
holders of such shares so called for redemption shall look only to the general funds of the Corporation for the
payment of the Redemption Price without interest. Any interest accrued on funds so deposited shall be paid to
the Corporation from time to time.
Section 7. Required Shares. Any shares of Series 1 Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preferred Stock subject to the conditions and restrict-ions on
issuance set forth herein, in the Certificate of Incorporation of the Corporation, including any Certificate of
Designations creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 8. Liquidation, Dissolution or Winding UR. Upon any liquidation, dissolution or winding up of the
Corporation the holders of shares of Series 1 Preferred Stock shall be entitled to receive an aggregate amount
per share, subject to the provision for adjustment hereinafter set forth, equal to nine dollars ($9) (the "Original
Liquidation Value") per share plus an amount equal to any Accumulated Dividends and the holders of the
Series 1 Preferred Stock shall not be entitled to any further payment, such amounts being herein sometimes
referred to as the "Liquidation Payments." Upon any such liquidation, dissolution or winding up of the
Corporation, after the holders of the Series 1 Preferred Stock shall have been paid in full the amounts to
which they shall be entitled, the remaining net assets of the Corporation may be distributed to the holders of
the Common Stock. Written notice of any such liquidation, dissolution or winding up, stating a payment date,
the amount of the Liquidation Payments and the place where said sums shall be payable shall be given by
mail, postage prepaid, not less than thirty (30) days prior to the payment date stated therein, to the holders of
record of the Series 1 Preferred Stock, such notice to be addressed to each stockholder at his post office
address as shown by the records of the Corporation. Neither the consolidation nor merger of the Corporation
into or with any other corporation or corporations, nor the sale or transfer by the Corporation of all or any part
of its assets, nor the reduction of the capital stock of the Corporation, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of any of the provisions of this Section 8.Section 9. Consolidation, Merger, et . In the event the Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in any such event each share of Series I
Preferred Stock shall at the same time be similarly exchanged or changed into an amount per share, subject to
the provision for adjustment hereinafter set forth, equal to the amount which would have been received by the
holder thereof if such share of Series 1 Preferred Stock had been converted to Common Stock immediately
prior to such transaction pursuant to Section 5 hereof.
Section 10. Restriction on Transfer
(A) The Series 1 Preferred Stock and shares of the Common Stock issued upon conversion of Series 1
Preferred Stock may not be transferred by any person (the "Initial Transferor") in any manner or to any extent
to any other person if such other person is or would become by reason of the transfer a beneficial owner of
more than 4.5% of the Corporation's stock (a "Prohibited Transferee"), as the term "stock" is defined and such
ownership is determined under Section 382 of the Internal Revenue Code of 1986, as amended, and
regulations thereunder (collectively, "Section 382"). For purposes of this provision, transfers to a Prohibited
Transferee shall include transfers directly or through trusts, estates, corporations or partnerships, and
attribution through such entities shall be determined pursuant to Section 382.
(B) Transfers made in violation of paragraph (A) of this Article shall not be effective to transfer ownership
of the shares of Series I Preferred Stock or Common Stock subject thereto ("Prohibited Stock").
(C) Upon the transfer of Prohibited Stock, the Corporation shall have thirty (30) days from discovery of such
prohibited transfer to demand the transfer of the Prohibited Stock from the Prohibited Transferee to the
Corporation or its agent. Further, the Corporation or its agent shall demand the transfer of any distributions
received on such Prohibited Stock by the Prohibited Transferee. Discovery shall be deemed to have been
made pursuant to provisions of Section 382 regarding discovery of ownership changes. If a Prohibited
Transferee shall refuse or fail upon demand by the Corporation to transfer such Prohibited Stock and
distributions received thereon, the Corporation shall take all necessary action at law or in equity to compel
such transfer as soon as possible.
(D) Upon transfer by the Prohibited Transferee of the Prohibited Stock, together with distributions received
thereon, the Corporation shall sell such Prohibited Stock as soon as practicable thereafter in an arm's length
transaction and in a manner consistent with the restriction set forth in this Section. Proceeds from such sale
shall be remitted to the Prohibited Transferee in an amount not to exceed the amount paid by the Prohibited
Transferee for such Prohibited Stock, or, for the transfer made in violation of this Section was by gift,
inheritance or similar transfer), (or the fair market value of such shares at the time of receipt by the Prohibite d
Transferee. For purposes of the foregoing, the fair market value per share of the Prohibited Stock shall not be
less than: (1) the average of the highest and lowest selling price at the time of receipt by the Prohibited
Transferee or if there were no sales on such date, then not less than the mean between the bid and asked price
on such date, if the Prohibited Stock was listed on a national securities exchange or the NASDAQ National
Market System on such date; (2) the mean between the bid and asked price on such date or, if there was no
bid and asked price on such date, then on the next prior business day on which there was a bid and asked price
if the Prohibited Stock was traded otherwise than on a national securities exchange or the NASDAQ National
Market System on such date; or (3) as determined by the Board of Directors.(E) Any sale of Prohibited Stock by a Prohibited Transferee received in violation of this Section shall be
deemed to have been made solely as agent for the Corporation, and the Corporation shall demand of the
Prohibited Transferee the proceeds from such sale together with distributions received from such Prohibited
Stock. Such demand shall be made within thirty (30) days of discovery (as that term is described in paragraph
(C) of this Section) by the Corporation of the transfer of the Prohibited Stock to the Prohibited Transferee. If
the Prohibited Transferee shall refuse or fail upon demand by the Corporation to surrender such proceeds and
distributions, the Corporation shall take all necessary action at law or in equity to compel the tra nsfer of such
proceeds and distributions. The Corporation, at its discretion, may make demand of such proceeds in the
amount net of the amount which the Prohibited Transferee would have received from the Corporation had the
Corporation rather than the Prohibited Transferee sold such Prohibited Stock.
(F) Any proceeds received by the Corporation or its agent as a result of the sale of the Prohibited Stock,
whether by the Corporation or its agent or by the Prohibited Transferee, and the distributions received on such
Prohibited Stock, shall be transferred to the Initial Transferor, less any amounts remitted to or retained by the
Prohibited Transferee as otherwise described in this Section. If such Initial Transferor cannot be determined
by the Corporation within ninety (90) days after receipt by the Corporation of such proceeds and distributions,
the Corporation or its agent may pay any such amounts due the Initial Transferor into a court or governmental
agency, if applicable law permits, and otherwise must irrevocably transfer such amounts to a charity
designated by the Corporation. In no event shall amounts due to such Initial Transferor inure to the benefit of
the Corporation or its agent, but such amounts may be used to reimburse the agent, if any, for reasonable
expenses incurred in attempting to identify the Initial Transferor.
(G) The Board of Directors is expressly empowered to waive application of this Section to any specific
transaction, provided that such waiver is by resolution of the Board duly considered and approved by at least
a majority of the Board of Directors prior to any such transfer of stock described within this Section.
(H) This Section shall have no applicability and shall be of no force and effect, notwithstanding notations to
the contrary on any certificates evidencing ownership of any securities of the Corporation, thirtyseven (37)
months after the date of initial issuance of the Series 1 Preferred Stock.
