<PAGE> 1
Exhibit 3.03
RUBICON MEDICAL, INC.
DESIGNATION OF RIGHTS, PRIVILEGES, AND PREFERENCES OF
2000 SERIES A CONVERTIBLE PREFERRED STOCK
Pursuant to the provisions of the General Corporate Law of Delaware, the
above corporation (the "Corporation") hereby adopts the following Designation
of Rights, Privileges, and Preferences of 2000 Series A Convertible Preferred
Stock (the "Designation"):
FIRST: The name of the Corporation is Rubicon Medical Corporation
SECOND: The following resolution establishing a series of convertible
preferred stock designated as the "2000 Series A Convertible Preferred Stock"
consisting of 500,000 shares of the Corporation's preferred stock, par value
$0.001, was duly adopted by the board of directors of the Corporation on
October 11, 2000, in accordance with the articles of incorporation of the
Corporation and the corporation laws of the State of Delaware:
RESOLVED, there is hereby created a series of preferred stock of the
Corporation to be designated as the "2000 Series A Convertible Preferred
Stock" consisting of 500,000 shares, par value $0.001, with the following
powers, preferences, rights, qualifications, limitations, and restrictions:
1. Liquidation.
1.01. In the event of any voluntary or involuntary liquidation
(whether complete or partial), dissolution, or winding up of the Corporation,
the holders of the 2000 Series A Convertible Preferred Stock shall be entitled
to be paid out of the assets of the Corporation available for distribution to
its shareholders, whether from capital, surplus, or earnings, an amount in
cash equal to the purchase price of five dollars ($5.00) per share plus all
unpaid dividends previously declared thereon to the date of final
distribution. No distribution shall be made on any common stock or other
series of preferred stock of the Corporation by reason of any voluntary or
involuntary liquidation (whether complete or partial), dissolution, or winding
up of the Corporation unless each holder of any 2000 Series A Convertible
Preferred Stock shall have received all amounts to which such holder shall be
entitled under this subsection.
1.02 If on any liquidation (whether complete or partial),
dissolution, or winding, up of the Corporation, the assets of the Corporation
available for distribution to holders of 2000 Series A Convertible Preferred
Stock shall be insufficient to pay the holders of outstanding 2000 Series A
Convertible Preferred Stock the full amounts to which they otherwise would be
entitled under section 1.01, the assets of the
Corporation available for distribution
to holders of the 2000 Series A Convertible Preferred Stock shall be
distributed to them pro rata on the basis of the number of shares of 2000
Series A Convertible Preferred Stock held by each such holder.
2. Voting Rights. The 2000 Series A Convertible Preferred Stock
shall not be entitled to vote as a separate class or as a single class with
the Common Stock of the Corporation, except to the extent that the consent of
the holders of the 2000 Series A Convertible Preferred Stock, voting as a
class, is specifically required by the provisions of the corporate law of the
state of Delaware, as now existing or as hereafter amended.
<PAGE>
<PAGE> 2
3. Subordination. Any payment of any dividends or any redemption
hereunder shall be subordinated to payment in full of all Senior Debt as
defined herein. "Senior Debt" shall mean the principal of and premium, if
any, and interest on all indebtedness of the Corporation to any financial
institution, including, but not limited to, (i) banks whether currently
outstanding or hereinafter created and whether or not such loans are secured
or unsecured; (ii) any other indebtedness, liability, obligation, contingent
or otherwise of the Corporation to guarantee endorsement of the contingent
obligation with respect to any indebtedness, liability, or obligation whether
created, assumed, or occurred by the Corporation and after the date of the
creation of the 2000 Series A Convertible Preferred Stock, which is, when
created, specifically designated by the Corporation as Senior Debt; and (iii)
any refunding, renewals, or extensions of any indebtedness or similar
obligations described as Senior Debt in subparagraphs (i) and (ii) above.
4. Dividends.
4.01 The Corporation shall pay to the holders of the 2000 Series A
Convertible Preferred Stock out of the assets of the Corporation at any time
for the payment of dividends at the times so declared by the board of
directors of the Corporation and in the manner provided
for in this section 4. The
dividend shall be twelve percent (12%) of the liquidation preference of
(purchase price of the shares of Preferred Stock) $5.00 per share, payable
annually, if and when declared by the board of directors. Dividends shall not
be cumulative and the board of directors shall be under no obligation to
declare dividends.
4.02 Any payment of dividends declared and due
under this section 4 with
respect to any shares of the 2000 Series A Convertible Preferred Stock shall
be made by means of a check drawn on funds immediately available for the
payment thereof to the order to the holder of such share at the address for
such record holder shown on the stock records maintained by or for the
Corporation, which check shall be mailed by United States first class mail,
postage prepaid. Any such payment shall be deemed to have been paid by the
Corporation on the date that such payment is deposited in the United States
mail as provided above; provided, that in the event the check or other medium
by which any payment shall be made shall prove not to be immediately
collectible on the date of payment, such payment shall not be deemed to have
been made until cash in the amount of such payment shall actually be received
by the person entitled to receive such payment.
4.03 Registration of transfer of any share of the 2000 Series A
Convertible Preferred Stock on the stock records maintained by or for the
Corporation to a person other than the transferor shall constitute a transfer
of any right which the transferor may have had to receive any declared but
unpaid dividends as of the date of transfer, and the Corporation shall have no
further obligation to the transferor with respect to such unpaid dividends.
5. Conversion.
5.01 Each share of the 2000 Series A Convertible Preferred Stock is
convertible into common stock, par value $0.001 (the "Common Stock"), of the
Corporation at the times, in the manner, and subject to the conditions
provided in this section 5.
<PAGE>
<PAGE> 3
5.02 Each share of the 2000 Series A Convertible Preferred Stock may
be converted during the twenty day period beginning on the earlier of five (5)
days after the date the Company has three market makers or forty five days
after the shares of Common Stock are first listed for trading on the
electronic bulletin board, NASDQ or other recognized exchange or after there
are three market markers quoting the shares of Common Stock. If the holder
has not notified the Company of such conversion during the twenty day period,
then holder will have no further opportunity to elect to convert. Conversion
shall be at the election of the holder on the presentation and surrender of
the certificate representing the share, duly endorsed, with written
instructions specifying the number of shares of the 2000 Series A Convertible
Preferred Stock to be converted and the name and address of the person to whom
certificate(s) representing the Common Stock issuable on conversion are to be
issued at the principal office of the Corporation.
5.03 Each share of 2000 Series A Convertible Preferred Stock shall be
convertible into such number of shares of fully paid and nonassessable shares
of Common Stock as is determined by dividing (purchase price of preferred
stock), plus the amount of any accrued and unpaid dividends the Corporation
elects to pay in Common Stock by the Conversion Price as defined below) in
effect at the time of conversion. The Conversion Price at which shares of
Common Stock shall be deliverable upon conversion of Preferred Stock without
the payment of additional consideration by the holder thereof (the "Conversion
Price") shall be fifty percent (50%) of the five day average Closing Bid Price
of the shares of Common Stock on the earlier of five (5) days after following
the date the Company has three market makers or forty five days after the
shares of Common Stock are first listed for trading on the electronic bulletin
board, NASDQ or other recognized exchange. As set forth herein, the term
"Closing Bid Price" means, for any security as of any date, the closing bid
price on the principal securities exchange or trading market where the Common
Stock is listed or traded as reported by Bloomberg, L.P. ("Bloomberg") or, if
applicable, the closing bid price of the Common Stock in the over-the-counter
market on the electronic bulletin board for such security as reported by
Bloomberg, or, if no closing bid price is reported for the Common Stock by
Bloomberg, then the average of the bid prices of any market makers. "Trading
Day" shall mean any day on which the Common Stock is traded for any period on
the principal securities exchange or other securities market on which the
Common Stock is then being traded. The conversion rate shall be subject to
adjustment pursuant to section 5.04.
5.04 In order to prevent dilution of the rights granted hereunder,
the Conversion Rate and liquidated voting rights shall be subject to
adjustment from time to time in accordance with this section 5.04.
(a) In the event the Corporation shall declare a dividend or make any
other distribution on any capital stock of the Corporation payable in Common
Stock, options to purchase Common Stock, or securities convertible into Common
Stock of the Corporation or shall at any time subdivide (other than by means
of a dividend payable in Common Stock) its outstanding shares of Common Stock
into a greater number of shares or combine such outstanding stock into a
smaller number of shares, then in each such event, the Conversion Rate in
effect immediately prior to such combination shall be adjusted so that the
holders of the 2000 Series A Convertible Preferred Stock shall be entitled to
receive the kind and number of shares of Common Stock or other securities of
the Corporation which they would have owned or have been entitled to receive
after the happening of any of the events described above, had such shares of
the 2000 Series A Convertible Preferred Stock been converted immediately prior
to the happening of such event or any record date with respect thereto; an
adjustment made pursuant to this paragraph (a) shall become effective
immediately after the effective date of such event retroactive to the record
date for such event.
<PAGE>
<PAGE> 4
(b) If any capital reorganization or reclassification of the capital
stock of the Corporation, consolidation or merger of the Corporation with
another corporation, or the sale of all or substantially all of its assets to
another corporation shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities, or assets with respect
to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, or sale, lawful
adequate provisions shall be made whereby the holders of the 2000 Series A
Convertible Preferred Stock shall thereafter, subject to prior redemption by
the Corporation, have the right to acquire and receive on conversion of the
2000 Series A Convertible Preferred Stock such shares of stock, securities, or
assets as would have been issuable or payable ( as part of the reorganization,
reclassification, consolidation, merger, or sale) with respect to or in
exchange for such number of outstanding shares of the Corporation's Common
Stock as would have been received on conversion of the 2000 Series A
Convertible Preferred Stock immediately before such reorganization,
reclassification, consolidation, merger, or sale. In any such case,
appropriate provisions shall be made with respect to the rights and interests
of the holders of the 2000 Series A Convertible Preferred Stock to the end
that the provisions hereof (including without limitations provisions for
adjustments of the Conversion rate and for the number of shares issuable on
conversion of the 2000 Series A Convertible Preferred Stock) shall thereafter
be applicable in relation to any shares of stock, securities, or assets
thereafter deliverable on the conversion of the 2000 Series A Convertible
Preferred Stock. In the event of a merger or consolidation of the Corporation
with or into another corporation or the sale of all or substantially all of
its assets as a result of which a number of shares of Common Stock of the
surviving or purchasing corporation greater or lesser than the number of
shares of Common Stock of the Corporation outstanding immediately prior to
such merger, consolidation, or purchase are issuable to holders of Common
Stock of the Corporation, then the Conversion Rate in effect immediately prior
to such merger, consolidation, or purchase shall be adjusted in the same
manner as though there was a subdivision or combination of the outstanding
shares of Common Stock of the Corporation.
(c) No adjustment shall be made in the Conversion Rate of the number
of shares of Common Stock issuable on conversion of 2000 Series A Convertible
Preferred Stock:
(i) In connection with the offer and sale of any shares of 2000
Series A Convertible Preferred Stock;
(ii) In connection with the issuance of any Common Stock, securities,
or assets on conversion or redemption of shares of 2000 Series A Convertible
Preferred Stock;
(iii) In connection with the issuance of any shares of Common Stock,
Securities, or assets on account of the anti-dilution provisions set forth in
this section 5.04;
(iv) In connection with the purchase or other acquisition by the
Corporation of any capital stock, evidence of its indebtedness, or other
securities of the Corporation; or
(v) In connection with the sale or exchange by the Corporation of any
Common Stock, evidence of its indebtedness, or other securities of the
Corporation, including securities containing the right to subscribe for or
purchase Common Stock or Convertible Preferred Stock of the Corporation.
<PAGE>
<PAGE> 5
5.05 The Corporation covenants and agrees that:
(a) The shares of Common Stock, securities, or assets issuable on any
conversion of any shares of 2000 Series A Convertible Preferred Stock shall
have been deemed to have been issued to the person on the Conversion Date, and
on the Conversion Date, such person shall be deemed for all purposes to have
become the record holder of such Common Stock, securities, or assets.
(b) All shares of Common Stock or other securities which may be
issued on any conversion of the 2000 Series A Convertible Preferred Stock
will, on issuance, be fully paid and nonassessable and free from all taxes,
liens, and charges with respect to the issue thereof. Without limiting the
generality of the foregoing, the Corporation will from time to time take all
such action as may be requisite to assure that the par value of the unissued
Common Stock or other securities acquirable on any conversion of the 2000
Series A Convertible Preferred Stock is at all times equal to or less than the
amount determined by dividing the par value of a share of 2000 Series A
Convertible Preferred Stock by the number shares of Common Stock or other
securities issuable on conversion of such share.
(c) The issuance of certificates for Common Stock or other securities
on conversion of the 2000 Series A Convertible Preferred Stock shall be made
without charge to the registered holder thereof for any issuance tax in
respect thereof or other costs incurred by the Corporation in connection with
the conversion of the 2000 Series A Convertible Preferred Stock and the
related issuance of Common Stock or other securities.
6. Redemption
6.01 Subject to the requirements and limitations of the corporation
laws of the state of Delaware, the Corporation shall have the right to redeem
shares of the 2000 Series A Convertible Preferred Stock on the following terms
and conditions.
6.02 The shares of the 2000 Series A Convertible Preferred Stock are
subject to redemption by the Corporation at any time after the Corporation has
three market makers offering a quote on shares of Common Stock. Redemption
shall be pursuant to written notice of redemption given to the holders thereof
on not less than 30 days, specifying the date on which the 2000 Series A
Convertible Preferred Stock shall be redeemed (the "Redemption Date").
6.03 The redemption price for each share of 2000 Series A convertible
Preferred Stock shall be one hundred ten (110%) percent of the stated value of
the shares where stated value is the purchase price for the shares plus any
unpaid dividends, if applicable, on such share as of the Redemption Date (the
"Redemption Price"). The Redemption Price shall be paid in part, or in full,
with shares of Common Stock. The number of shares of Common Stock issuable
for each share of the 2000 Series A Convertible Preferred Stock redeemed for
accrued but unpaid dividends shall be equal to the dollar value of the average
of the closing bid price for the Common Stock for the twenty (20) consecutive
trading days immediately prior to the redemption date divided by the dollar
amount of accrued but unpaid dividends.
6.04 Redemption of the 2000 Series A Convertible Preferred Stock shall
be made in the following manner:
(a) The Corporation shall notify the transfer agent of the Corporation's
Common Stock (the "Transfer Agent"), of its intention to redeem the 2000
Series A Convertible Preferred Stock. Such notice shall include a list of all
<PAGE>
<PAGE> 6
holders of the 2000 Series A Convertible Preferred Stock outstanding as of the
most recent practicable date and a statement of the number of shares of 2000
Series A Convertible Stock to be redeemed and the manner in which the
Redemption Price is to be paid. At least ten (10) days prior to the date that
written notice of redemption is given to the holders of the 2000 Series A
Convertible Preferred Stock, the Corporation shall make appropriate
arrangements with the Transfer Agent for the delivery of funds and/or Common
Stock necessary to make payment of the Redemption Price for all shares of the
2000 Series A Convertible Preferred Stock redeemed by the Corporation.
(b) The holder of any shares of 2000 Series A Convertible Preferred
Stock so redeemed shall be required to tender the certificates representing
such shares, duly endorsed, to the Transfer Agent in exchange for payment of
the Redemption Price and reissuance of the balance of the 2000 Series A
Convertible Preferred Stock not otherwise converted or redeemed. On such
surrender, the Transfer Agent shall cause to be issued and delivered a check
or Common Stock, with all reasonable dispatch to the holder and such name or
names as the holder may designate. Subsequent to notice of redemption and
prior to the redemption date, shares of the 2000 Series A Convertible
Preferred Stock may still be converted to
Common Stock pursuant to section 5 hereof.
(c) The Corporation may redeem a portion or all of the issued and
outstanding shares of the 2000 Series A Convertible Preferred Stock; provided,
that in the event that less than all of the outstanding shares of the 2000
Series A Convertible Preferred Stock are redeemed, such redemption shall be
pro rata determined on the basis of the number of shares of the 2000 Series A
Convertible Preferred Stock held by each holder reflected on the stock records
and the total number of shares of 2000 Series A Convertible Preferred Stock
outstanding.
(d) Following the expiration of a period of thirty (30) days
following the Redemption Date, the Transfer Agent shall provide to the
Corporation a complete accounting of the 2000 Series A Convertible Preferred
Stock redeemed and a list of all shares of 2000 Series A Convertible Preferred
Stock remaining unconverted and not returned to the Corporation for
redemption. Any certificates representing the 2000 Series A Convertible
Preferred Stock received by the Transfer Agent subsequent to the accounting by
the Transfer Agent to the Corporation will be promptly delivered to the
Corporation. The Corporation shall pay all costs associated with establishing
and maintaining any bank accounts for funds deposited with the Transfer Agent,
including the costs of issuing any checks or shares of Common Stock.
(e) The Corporation may not deliver notice of redemption to any
holder of the 2000 Series A Convertible Preferred Stock which would cause the
holder's election to convert the 2000 Series A Convertible Preferred Stock to
Common Stock or cash to be in violation of any federal or state securities
laws, including but not limited to, Section 16 of the Securities Exchange Act
of 1934, as amended.
7. Return of Capital. If the Corporation does not have its securities
listed for trading on a recognized securities exchange, NASDAQ or the
Electronic Bulletin Board within two years of the date of issuance of the 2000
Series A Preferred Stock, the Company covenants and agrees to repurchase the
shares of 2000 Series A Preferred Stock at a price equal to the purchase price
plus interest at the rate of twelve percent from the date of purchase. The
Company shall repay the purchase price and interest starting twenty four
months from the purchase date and make equal monthly payments over three years
at twelve percent interest.
<PAGE>
<PAGE> 7
8. Additional Provisions
8.01 No change in the provisions of the 2000 Series A
Convertible Preferred Stock set forth in this Designation affecting any
interests of the holders of any shares of 2000 Series A Convertible
Preferred Stock shall be binding or effective unless such change shall
have been approved or consented to by the holders of 2000 Series A
Convertible Preferred Stock in the manner provided in the corporation
laws of the state of Delaware, as the same may be amended from time to
time.
8.02 The shares of 2000 Series A Convertible Preferred Stock
shall be transferable only on the books of the Corporation maintained at
its principal office, on delivery thereof duly endorsed by the holder or
by his duly authorized attorney or representative or accompanied by
proper evidence of succession, assignment, or authority to transfer. In
all cases of transfer by an attorney, the original letter of attorney,
duly approved, or an official copy thereof, duly certified, shall be
deposited and remain with the Corporation. In case of transfer by
executors, administrators, guardians, or other legal representatives,
duly authenticated evidence of their authority shall be produced and may
be required to be deposited and remain with the new certificate
representing the share of 2000 Series A Convertible Preferred Stock so
transferred to the person entitled thereto.
8.03 The Corporation shall not be required to issue any
fractional shares of Common Stock on the conversion or redemption of any
share of 2000 Series A Convertible Preferred Stock.
8.04 Any notice required or permitted to be given to the holders
of the 2000 Series A Convertible Preferred Stock under this Designation
shall be deemed to have been duly given if mailed by first class mail,
postage prepared to such holders at their respective addresses appearing
on the stock records maintained by or for the Corporation and shall be
deemed to have been given as of the date deposited in the United States
mail.
IN WITNESS WHEREOF, the foregoing Designation of Rights, Privileges, and
Preferences of 2000 Series A Convertible Preferred Stock of the Corporation
has been executed this 11th day of October, 2000.
ATTEST: RUBICON MEDICAL CORPORATION
/S/Dennis Nasella, Secretary /S/Richard J. Linder, President/CEO
STATE OF UTAH )
:ss
COUNTY OF SALT LAKE )
On October 11, 2000, before me the undersigned, a notary public in and
for the above county and state, personally appeared Richard J. Linder and
Dennis Nasella, who being by me duly sworn, did state, each for himself, that
he, Richard J. Linder, is the president, and that he, Dennis Nasella, is the
secretary, of Rubicon Medical Corporation, a Delaware corporation, and that
the foregoing Designation of Rights, and Preferences of 2000 Series A
Convertible Preferred Stock of Rubicon Medical Corporation, was signed on
behalf of such corporation by authority of a resolution of its board of
directors, and that the statements contained therein are true.
WITNESS MY HAND AND OFFICIAL SEAL.
/S/Victor D. Schwarz
--------------------
NOTARY PUBLIC
