EXHIBIT 3.1
AMENDMENT TO THE ARTICLES OF INCORPORATION OF
SPECTRASCIENCE, INC
DATED: July 10, 2000
ARTICLE III
CAPITAL STOCK
The authorized capital stock of this corporation shall be Seventeen
Million (17,000,000) shares of common stock with a stated par value of twenty
five cents ($.25) per share (the "Common Stock") and Twenty Million (20,000,000)
shares of preferred stock with a stated par value of one dollar ($1.00) per
share (the "Preferred Stock"). The designation and the powers, preferences and
rights, and the qualifications, limitations or restrictions of the shares of
each class of stock shall be as follows:
SECTION 1. COMMON STOCK. Subject to all of the rights of the Preferred Stock,
and except as may be expressly provided with respect to the Preferred Stock
herein, by law or by the Board of Directors pursuant to this Article III:
(a) dividends may be declared and paid or set apart for payment upon
the Common Stock out of any assets or funds of the corporation legally available
for the payment of dividends;
(b) the holders of the Common Stock shall have the exclusive right to
vote for the election of directors and on all matters requiring stockholder
action, each share being entitled to one vote; and
(c) upon the voluntary or involuntary liquidation, dissolution or
winding up of the corporation, the net assets of the corporation shall be
distributed pro rata to the holders of the Common Stock in accordance with their
respective share ownership.
SECTION 2. PREFERRED STOCK. The Preferred Stock may be issued from time to time
by the Board of Directors as shares of one or more series. Subject to the
provisions hereof and the limitations prescribed by law, the Board of Directors
is expressly authorized by adopting resolutions providing for the issuance of
shares of any particular series and, if and to the extent from time to time
required by law, by filing with the Minnesota Secretary of State a statement
with respect to the adoption of the resolutions pursuant to the Minnesota
Business Corporation Act (or other law hereafter in effect relating to the same
or substantially similar subject matter), to establish the number of shares to
be included in each such series and to fix the designation and relative powers,
preferences and rights and the qualifications and limitations or restrictions
thereof relating to the shares of each such series. The authority of the Board
of Directors with respect to each series shall include, but not be limited to,
determination of the following:
(a) the distinctive serial designation of such series and the number of
shares constituting such series, provided that the aggregate number of shares
constituting all series of Preferred Stock shall not exceed Twenty Million
(20,000,000);
(b) the annual dividend rate on shares of such series, if any, whether
dividends shall be cumulative and, if so, from which date or dates;
(c) whether the shares of such series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date or dates upon
and after which such shares shall be redeemable,
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and the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;
(d) the obligation, if any, of the corporation to retire shares of such
series pursuant to a sinking fund;
(e) whether shares of such series shall be convertible into, or
exchangeable for, shares of stock of any other class or classes and, if so, the
terms and conditions of such conversion or exchange, including the price or
prices or the rate or rates of conversion or exchange and the terms of
adjustment, if any;
(f) whether the shares of such series shall have voting rights provided
by law, and, if so, the terms of such voting rights;
(g) the rights of the shares of such series in the event of the
voluntary or involuntary liquidation, dissolution or winding up of the
corporation; and
(h) any other rights, powers, preferences, qualifications, limitations
or restrictions thereof relating to such series.
The shares of Preferred Stock of any one series shall be identical with
each other in all respects except as to the dates from and after which dividends
thereon shall cumulate, if cumulative. Although the Board of Directors may fix
and determine the relative rights and preferences among the various series of
Preferred Stock in accordance with the authority set forth above, in all other
respects, the shares of all series shall be of equal rank with each other,
regardless of series.
2.1 REDEMPTION AND CONVERSION. Any share of any series of Preferred Stock which
has been redeemed or converted shall have the status of an authorized and
unissued share of Preferred Stock and may be reissued as a part of the series of
which it was originally a part or may be reissued as part of another series of
Preferred Stock established by the Board of Directors.
2.2 PREFERENTIAL DISTRIBUTION IN LIQUIDATION. Upon the liquidation, dissolution
or winding up of the corporation, the holders of the Preferred Stock then
outstanding shall be entitled to receive the amount per share fixed for the
various series before any of the assets of the corporation are distributed to
the holders of the Common Stock. If the assets of the corporation distributable
to the holders of the Preferred Stock have a value which is less that the full
amount so fixed for the various series, such assets shall be distributed among
the holders of the various series of Preferred Stock in accordance with any
preferences among the series that may have been established or, to the extent
that no such preferences shall have been established, pro rata among the holders
of all of the series of Preferred Stock. After distribution of the preferential
amounts required to be distributed to the holders of the Preferred Stock then
outstanding, the holders of the Common Stock shall be entitled, to the exclusion
of the holders of the Preferred Stock unless otherwise provided, to share in all
the remaining assets of the corporation.
SERIES A CONVERTIBLE STOCK
--------------------------
There is hereby established and created an initial series of Preferred Stock in
the number of shares and having the designation, relative rights, preferences
and limitations as follows:
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2.3 DESIGNATION AND NUMBER OF SHARES. The distinctive designation of the series
shall be "Series A Convertible Preferred Stock" (par value $ 1.00 per share)
herein sometimes referred to as the "Series A Preferred Stock") and the number
of shares initially constituting the series shall be 5,000,000.
2.4 DIVIDENDS. The Series A Preferred Stock shall bear no dividends.
2.5 PREFERENCES IN LIQUIDATION.
(a) PREFERENTIAL PAYMENT. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the corporation, the holders of shares
of the Series A Preferred Stock then outstanding shall be entitled to be paid
according to their relationship with other holders of Preferred Stock, out of
the assets of the corporation available for distribution to shareholders,
whether from capital, surplus or earnings, before any payment shall be made in
respect of the corporation's Common Stock, an amount equal to $1.00 per share.
After setting apart or paying in full the preferential amounts due the holders
of the Series A Preferred Stock and any other holders of Preferred Stock, the
remaining assets of the corporation available for distribution to shareholders,
if any, shall be distributed to the holders of Common Stock unless otherwise
provided. If upon liquidation, dissolution or winding up of the corporation, the
assets of the corporation available for distribution to its shareholders shall
be insufficient to pay the holders of the Series A Preferred Stock the full
preferential distribution of $1 per share, the holders of the Series A Preferred
Stock shall share ratably in the distribution of such assets.
(b) NOTICE. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation, the corporation shall, within 10
days after the date the Board of Directors approves such action, or within 20
days prior to any shareholders' meeting called to approve such action, or within
20 days after the commencement of any involuntary proceeding, whichever is
earlier, give each holder of shares of Series A Preferred Stock initial written
notice of the proposed action. Such initial written notice shall describe the
material terms and conditions of the proposed action, including a description of
the stock, cash and property to be received by the holders of shares of Series A
Preferred Stock upon consummation of the proposed action and the date of
delivery thereof. If any material change in the facts set forth in the initial
notice shall occur, the corporations shall promptly give written notice to each
holder of shares of Series A Preferred Stock of such material change.
2.6 VOTING RIGHTS. Except as otherwise provided by law or as expressly provided
herein, the Common Stock shall have exclusive voting rights and powers,
including the exclusive right to notice of shareholders' meetings.
2.7 CONVERSION RIGHTS.
(a) OPTIONAL CONVERSION. Shares of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after March 31,
1996, (the "Conversion Period"), into fully paid and nonassessable shares of
Common Stock of the corporation.
(b) CONVERSION RATIO. Each share of Series A Preferred Stock shall be
converted into one share of the Common Stock of the corporation, subject to
adjustment as provided in paragraph 2.8 below.
(c) PROCEDURE FOR CONVERSION. The holder of any shares of Series A
Preferred Stock may exercise the conversion rights during the Conversion Period
as to such shares or any part thereof by delivering to the corporation during
regular business hours, at the office of any transfer agent of the corporation
for the Series A Preferred Stock, or at the principal office of the corporation,
the certificate or certificates for the shares to be converted, duly endorsed
for transfer to the corporation, accompanied by written notice stating that the
holder elects to convert such shares or a part thereof. Conversion shall
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be deemed to have been effected on the date when such delivery is made, and such
date is referred to herein as the "Conversion Date". As promptly as practicable
thereafter the corporation shall issue and deliver to or upon the written order
of such holder, at such office or other place designated by the corporation, a
certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled and a check for cash with respect to any
fractional interest in a share of Common Stock as provided in paragraph 2.7(d).
The holder shall be deemed to have become a shareholder of record on the
applicable Conversion Date unless the transfer books of the corporation are
closed on such date, in which event he shall be deemed to have become a
shareholder of record on the next succeeding date on which the transfer books
are open, but the Conversion Ratio shall be that in effect on the Conversion
Date. Upon conversion of only a portion of the number of shares of Series A
Preferred Stock represented by a certificate surrendered for conversion, the
corporation shall issue and deliver to or upon the written order of the holder
of the certificate so surrendered for conversion, at the expense of the
corporation, a new certificate covering the number of shares of Series A
Preferred Stock representing the unconverted portion of the certificate so
surrendered.
(d) FRACTIONAL SHARES. No fractional shares of Common Stock or scrip
shall be issued upon conversion of shares of Series A Preferred Stock. If more
than one share of Series A Preferred Stock shall be surrendered for conversion
at any one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series A Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any shares of Series A Preferred Stock, the corporation shall pay
a cash adjustment in respect of such fractional interest equal to the fair
market value of such fractional interest as determined by the Board of
Directors.
(e) RESERVED SHARES. The corporation shall reserve and keep available,
out of its authorized but unissued Common Stock, solely for the purpose of
effecting the conversion of the Series A Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all Series A Preferred
Stock from time to time outstanding. The corporation shall from time to time
(subject to obtaining necessary director and shareholder action) increase the
authorized amount of its Common Stock if at any time the authorized number of
shares of its Common Stock remaining unissued shall not be sufficient to permit
the conversion of all of the shares of Series A Preferred Stock at the time
outstanding.
(f) REGISTRATION. If any shares of Common Stock to be reserved for the
purpose of shares of Series A Preferred Stock require registration or listing
with, or approval of, any governmental authority, stock exchange, or other
regulatory body under any federal or state law or regulation or otherwise,
before such shares may be validly issued or delivered upon conversion, the
corporation will in good faith and as expeditiously as reasonable endeavor to
secure such registration, listing or approval, as the case may be.
(g) VALIDLY ISSUED. All shares of Common Stock which may be issued upon
conversion of the shares of Series A Preferred Stock will, upon issuance by the
corporation, be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issuance thereof.
(h) NEGATIVE COVENANTS. This corporation will not, by amendment of its
articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed thereunder, but will at all times in good
faith assist in the carrying out of all the provisions hereof and in the taking
of such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series A Preferred Stock against
impairment. In addition, the corporation shall at no time issue or sell any
shares of its Common Stock or Preferred Stock, options or warrants for a
consideration less than fair market value, as reasonably
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determined by the Board of Directors, except for grants or awards of Common
Stock or options to acquire Common Stock made to the corporation's employees,
officers, and directors and to consultants and other participants in the
corporation's stock option, stock award, stock purchase and other benefit plans,
provided such grants and awards made after the date of the first issuance of the
corporation's Series A Preferred Stock shall not represent more than 10% of the
then outstanding shares of Common Stock of the corporation.
2.8 ANTIDILUTION. The Conversion Ratio (referred to in paragraph 2.7 (b)) shall
be subject to adjustment from time to time, and the number of shares of Common
Stock issuable on conversion of any shares of Series A Preferred Stock shall be
subject to a resultant increase or decrease (calculated to the nearest 1/100th
of a share) by reason of such adjustment, as hereafter stated, except that no
adjustment shall be made, unless by reason of the occurrence of one or more of
the events hereinafter specified, the Conversion Ratio theretofore in effect
shall be changed by an amount equal to at least 5% thereof, but in the event
that an adjustment would be required except of insufficiency of amount, such
amount shall be carried forward and added to and shall be made at the time of
and together with any subsequent adjustment which, together with any adjustment
or adjustments so carried forward, amount to at least 5% of the Conversion Ratio
at such later time:
(a) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In the event the
corporation shall declare a stock dividend with respect to its Common Stock or
shall effect a subdivision or combination of its Common Stock into a greater or
lesser number of shares without a proportionate and corresponding stock
dividend, subdivision or combination with respect to its outstanding Series A
Preferred Stock, then the existing Conversion Ratio for the Series A Preferred
Stock shall be increased or decreased proportionately.
(b) CLASSIFICATION, RECLASSIFICATION, CAPITAL REORGANIZATION, ETC. In
the case of any classification, reclassification, capital reorganization or
other change of outstanding shares of Common Stock (other than a change in par
value, or from without par value to par value, or from par value to without par
value, or as a result of an issuance of Common Stock by way of dividend or other
distribution or of a subdivision or combination), or in case of any
consolidation or merger of the corporation with or into another corporation
(other than a merger with a subsidiary in which the corporation is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of the Common Stock
issuable upon conversion of the shares of the Series A Preferred Stock) or in
case of any sale or conveyance to another corporation of the property of the
corporation as an entirety or substantially as an entirety, the corporation
shall cause the holders of the Series A Preferred Stock to have the right, by
exercising their conversion rights thereunder, to purchase the kind and amount
of shares of stock and other securities and property receivable upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance, if any, which the holders of the Series A Preferred Stock
would have received had the conversion taken place immediately prior to such
event.
2.9 CHANGES AFFECTING SERIES A PREFERRED STOCK. So long as any shares of Series
A Preferred Stock are outstanding, the corporation shall not, without first
obtaining the approval by vote or written consent, in the manner provided by
law, of the holders of at least a majority of the total number of shares of
Series A Preferred Stock outstanding, voting separately as a class, (i) alter or
change any of the powers, preferences, privileges, or rights of the Series A
Preferred Stock; or (ii) amend the provisions of this paragraph 2.9; or (iii)
create any new class or series of shares having preferences prior to the Series
A Preferred Stock or reclassifying any class or series of any Common Stock or
any other shares of stock hereafter created junior to the Class A Preferred
Stock into shares having any preference or priority over the Series A Preferred
Stock.
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SERIES B CONVERTIBLE STOCK
--------------------------
There is hereby established and created a second series of Preferred Stock in
the number of shares and having the designation, relative rights, preferences
and limitations as follows:
2.10 DESIGNATION AND NUMBER OF SHARES. The distinctive designation of the series
shall be "Series B Convertible Preferred Stock" (par value $ 1.00 per share)
herein sometimes referred to as the "Series B Preferred Stock") and the number
of shares initially constituting the series shall be 1,000,000.
2.11 DIVIDENDS. Except as provided below, the Series B Preferred Stock shall
bear no dividends. In the event that the corporation has not increased the
number of authorized shares of its Common Stock to the extent sufficient to
enable the corporation to reserve a number of shares of Common Stock sufficient
to cover the conversion of the shares of Series B Preferred Stock and the
exercise of all Warrants issued in connection with the offering of the Series B
Preferred Stock by December 15, 1996, the Series B Preferred Stock shall bear an
8% cumulative annual dividend, payable quarterly, commencing upon the
corporation's failure to satisfy such condition and terminating on the date
compliance with such condition is satisfied.
2.12 PREFERENCES IN LIQUIDATION.
(a) PREFERENTIAL PAYMENT. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the corporation, the holders of shares
of the Series B Preferred Stock then outstanding shall be entitled to be paid
according to their relationship with other holders of Preferred Stock, out of
the assets of the corporation available for distribution to shareholders, PARI
PASSU, whether from capital, surplus or earnings, before any payment shall be
made in respect of the corporation's Common Stock, an amount equal to $1.00 per
share. After setting apart or paying in full the preferential amounts due the
holders of the Series B Preferred Stock and any other holders of Preferred
Stock, the remaining assets of the corporation available for distribution to
shareholders, if any, shall be distributed to the holders of Common Stock unless
otherwise provided. If upon liquidation, dissolution or winding up of the
corporation, the assets of the corporation available for distribution to its
shareholders shall be insufficient to pay the holders of the Series B Preferred
Stock the full preferential distribution of $1 per share, the holders of the
Series B Preferred Stock shall share ratably in the distribution of such assets.
(b) NOTICE. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the corporation, the corporation shall, within 10
days after the date the Board of Directors approves such action, or within 20
days prior to any shareholders' meeting called to approve such action, or within
20 days after the commencement of any involuntary proceeding, whichever is
earlier, give each holder of shares of Series B Preferred Stock initial written
notice of the proposed action. Such initial written notice shall describe the
material terms and conditions of the proposed action, including a description of
the stock, cash and property to be received by the holders of shares of Series B
Preferred Stock upon consummation of the proposed action and the date of
delivery thereof. If any material change in the facts set forth in the initial
notice shall occur, the corporations shall promptly give written notice to each
holder of shares of Series B Preferred Stock of such material change.
2.13 VOTING RIGHTS. Except as otherwise provided by law or as expressly provided
herein, the Common Stock shall have exclusive voting rights and powers,
including the exclusive right to notice shareholders' meetings.
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2.14 CONVERSION RIGHTS.
(a) OPTIONAL CONVERSION. Shares of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after December 28,
1996 (the "Conversion Period"), into fully paid and nonassessable shares of
Common Stock of the corporation.
(b) CONVERSION RATIO. Each share of Series B Preferred Stock shall be
converted into one share of the Common Stock of the corporation, subject to
adjustment as provided in paragraph 2.15 below.
(c) PROCEDURE FOR CONVERSION. The holder of any shares of Series B
Preferred Stock may exercise the conversion rights during the Conversion Period
as to such shares or any part thereof by delivering to the corporation during
regular business hours, at the office of any transfer agent of the corporation
for the Series B Preferred Stock, or at the principal office of the corporation,
the certificate or certificates for the shares to be converted, duly endorsed
for transfer to the corporation, accompanied by written notice stating that the
holder elects to convert such shares or a part thereof. Conversion shall be
deemed to have been effected on the date when such delivery is made, and such
date is referred to herein as the "Conversion Date". As promptly as practicable
thereafter the corporation shall issue and deliver to or upon the written order
of such holder, at such office or other place designated by the corporation, a
certificate or certificates for the number of full shares of Common Stock to
which such holder is entitled and a check for cash with respect to any
fractional interest in a share of Common Stock as provided in paragraph 2.14(d).
The holder shall be deemed to have become a shareholder of record on the
applicable Conversion Date unless the transfer books of the corporation are
closed on such date, in which event he shall be deemed to have become a
shareholder of record on the next succeeding date on which the transfer books
are open, but the Conversion Ratio shall be that in effect on the Conversion
Date. Upon conversion of only a portion of the number of shares of Series B
Preferred Stock represented by a certificate surrendered for conversion, the
corporation shall issue and deliver to or upon the written order of the holder
of the certificate so surrendered for conversion, at the expense of the
corporation, a new certificate covering the number of shares of Series B
Preferred Stock representing the unconverted portion of the certificate so
surrendered.
(d) FRACTIONAL SHARES. No fractional shares of Common Stock or scrip
shall be issued upon conversion of shares of Series B Preferred Stock. If more
than one share of Series B Preferred Stock shall be surrendered for conversion
at any one time by the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of Series B Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any shares of Series B Preferred Stock, the corporation shall pay
a cash adjustment in respect of such fractional interest equal to the fair
market value of such fractional interest as determined by the Board of
Directors.
(e) RESERVED SHARES. The corporation shall reserve and keep available,
out of its authorized but unissued Common Stock, solely for the purpose of
effecting the conversion of the Series B Preferred Stock, the full number of
shares of Common Stock deliverable upon the conversion of all Series B Preferred
Stock from time to time outstanding. The corporation shall from time to time
(subject to obtaining necessary director and shareholder action) increase the
authorized amount of its Common Stock if at any time the authorized number of
shares of its Common Stock remaining unissued shall not be sufficient to permit
the conversion of all of the shares of Series B Preferred Stock at the time
outstanding.
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(f) REGISTRATION. If any shares of Common Stock to be reserved for the
purpose of shares of Series B Preferred Stock require registration or listing
with, or approval of, any governmental authority, stock exchange, or other
regulatory body under any federal or state law or regulation or otherwise,
before such shares may be validly issued or delivered upon conversion, the
corporation will in good faith and as expeditiously as reasonable endeavor to
secure such registration, listing or approval, as the case may be.
(g) VALIDLY ISSUED. All shares of Common Stock which may be issued upon
conversion of the shares of Series B Preferred Stock will, upon issuance by the
corporation, be validly issued, fully paid and nonassessable and free from all
taxes, liens and charges with respect to the issuance thereof.
(h) NEGATIVE COVENANTS. This corporation will not, by amendment of its
articles of incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed thereunder, but will at all times in good
faith assist in the carrying out of all the provisions hereof and in the taking
of such action as may be necessary or appropriate in order to protect the
conversion rights of the holders of the Series B Preferred Stock against
impairment.
2.15 ANTIDILUTION. The Conversion Ratio (referred to in paragraph 2.14 (b))
shall be subject to adjustment from time to time, and the number of shares of
Common Stock issuable on conversion of any shares of Series B Preferred Stock
shall be subject to a resultant increase or decrease (calculated to the nearest
1/100th of a share) by reason of such adjustment, as hereafter stated, except
that no adjustment shall be made, unless by reason of the occurrence of one or
more of the events hereinafter specified, the Conversion Ratio theretofore in
effect shall be changed by an amount equal to at least 5% thereof, but in the
event that an adjustment would be required except of insufficiency of amount,
such amount shall be carried forward and added to and shall be made at the time
of and together with any subsequent adjustment which, together with any
adjustment or adjustments so carried forward, amount to at least 5% of the
Conversion Ratio at such later time.
(a) STOCK DIVIDENDS, SUBDIVISIONS AND COMBINATIONS. In the event the
corporation shall declare a stock dividend with respect to its Common Stock or
shall effect a subdivision or combination of its Common Stock into a greater or
lesser number of shares without a proportionate and corresponding stock
dividend, subdivision or combination with respect to its outstanding Series B
Preferred Stock, then the existing Conversion Ratio for the Series B Preferred
Stock shall be increased or decreased proportionately.
(b) CLASSIFICATION, RECLASSIFICATION, CAPITAL REORGANIZATION, ETC. In
the case of any classification, reclassification, capital reorganization or
other change of outstanding shares of Common Stock (other than a change in par
value, or from without par value to par value, or from par value to without par
value, or as a result of an issuance of Common Stock by way of dividend or other
distribution or of a subdivision or combination), or in case of any
consolidation or merger of the corporation with or into another corporation
(other than a merger with a subsidiary in which the corporation is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of outstanding shares of the Common Stock
issuable upon conversion of the shares of the Series B Preferred Stock) or in
case of any sale or conveyance to another corporation of the property of the
corporation as an entirety or substantially as an entirety, the corporation
shall cause the holders of the Series B Preferred Stock to have the right, by
exercising their conversion rights thereunder, to purchase the kind and amount
of shares of stock and other securities and property receivable upon such
reclassification, capital reorganization or other change, consolidation, merger,
sale or conveyance, if any, which the holders of the Series B Preferred Stock
would have received had the conversion taken place immediately prior to such
event.
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2.16. CHANGES AFFECTING SERIES B PREFERRED STOCK. So long as any shares of
Series B Preferred Stock are outstanding, the corporation shall not, without
first obtaining the approval by vote or written consent, in the manner provided
by law, of the holders of at least a majority of the total number of shares of
Series B Preferred Stock outstanding, voting separately as a class, (i) alter or
change any of the powers, preferences, privileges, or rights of the Series B
Preferred Stock; or (ii) amend the provisions of this paragraph 2.16; or (iii)
create any new class or series of shares having preferences prior to the Series
B Preferred Stock or reclassifying any class or series of any Common Stock or
any other shares of stock hereafter created junior to the Class B Preferred
Stock into shares having any preference or priority over the Series B Preferred
Stock.
