<PAGE>
SECURITIES AND EXCHANGE COMMISSION
450 Fifth Street, N.W.
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: February 26, 1998
Intercell Corporation
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Colorado 0-14306 84-0928627
- ----------------- ----------- ------------------
(State of (Commission (IRS Employer
incorporation) File Number) Identification No.)
370 Seventeenth Street, Suite 3580
Denver, Colorado 80202
----------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (303) 592-1010
Not Applicable
-------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
Intercell Corporation (hereinafter "Registrant") through its wholly owned
subsidiary, Particle Interconnect Corporation, a Colorado corporation, entered
into an agreement with Sunlight Systems, Ltd. ("Sunlight") dated February 26,
1998 (the "Agreement"). Pursuant to the Agreement, Registrant acquired control
of Sunlight by causing Registrant's wholly owned subsidiary, Particle
Interconnect Corporation to transfer all of its assets including its
intellectual properties to Sunlight in exchange for Seven Million, Two Hundred
and Fifty Thousand (7,250,000) restricted post-split common shares of Sunlight
and One Hundred (100) Series A, 8%, Voting Convertible Cumulative Participating
Preferred Shares, liquidation preference of $22,625.25 per share, convertible
into Seven Million, Two Hundred and Fifty Thousand (7,250,000) restricted common
shares of Sunlight.
As part of the transaction, Sunlight changed its name to Nanopierce
Technologies, Inc., ("Nanopierce") and its trading symbol to NPCT. It also
effected a reverse split of its issued and outstanding shares of common stock.
After the completion of the reverse stock split, Nanopierce had Four Million,
Two Hundred and Fifty-Three Thousand, Three Hundred and Fifty-Five (4,253,355)
shares issued and outstanding. By virtue of its ownership of such common and
preferred shares, on a fully diluted basis, as of the date hereof, Registrant
owned of record and beneficially approximately Seventy-Four Percent (74%) of the
outstanding common stock of Nanopierce.
The acquisition and purchase price was arbitrarily determined by
negotiations between the parties. The shareholders of Nanopierce approved the
transaction on behalf of Nanopierce. Paul H. Metzinger together with his wife,
Cheri L. Perry, are shareholders of Nanopierce, and they abstained from voting,
as shareholders, on the transaction. Paul H. Metzinger was appointed the sole
Director of Nanopierce, until additional directors could be appointed, and was
also nominated and elected President and Chief Executive Officer of Nanopierce.
Paul H. Metzinger, President and Chief Executive Officer of Intercell
Corporation, Particle Interconnect Corporation and Nanopierce, also received as
part of the transaction negotiated with the principal shareholders of Nanopierce
an option to purchase up to One Million (1,000,000) common shares of Nanopierce
for a period of ten (10) years at an exercise price per share of $0.3257.
Paul H. Metzinger and his wife own of record and beneficially, directly and
indirectly, One Million, Three Hundred and Forty Thousand (1,340,000) post-split
shares of Nanopierce.
2
<PAGE>
Item 7. Financial Statements and Exhibits
A. Exhibits.
2.01 Agreement dated February 26, 1998 by and among Registrant,
Particle Interconnect Corporation and Sunlight Systems, Ltd.
4.01 Certificate of Designation of Rights and Preferences
3
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
INTERCELL CORPORATION
Date: September 22, 1998 By: /s/ Paul H. Metzinger
------------------------------------------
Paul H. Metzinger, Chief Executive Officer
and President
4
<PAGE>
LIST OF EXHIBITS
2.01 Agreement dated February 26, 1998 by and among Registrant, Particle
Interconnect Corporation and Sunlight Systems, Ltd.
4.01 Certificate of Designation of Rights and Preferences
5
<PAGE>
EXHIBIT 2.01
AGREEMENT
1. The Parties to this Agreement are: Particle Interconnect Corporation, a
Colorado Corporation, Intercell Corporation, a Colorado Corporation,
Nanopierce Technologies, Inc., a Nevada Corporation.
2. Intercell Corporation as the Sole Shareholder of Particle Interconnect
Corporation hereby consents to the sale by Particle Interconnect
Corporation of all or substantially all of its assets, consisting of the
Intellectual Property identified on Exhibit A and such other intellectual
properties as it shall own to Nanopierce Technologies, Inc.
3. Particle Interconnect Corporation by and through its Sole Director, Paul H.
Metzinger hereby consents to the sale by Particle Interconnect Corporation
of all or substantially all of its assets, consisting of the Intellectual
Property identified on Exhibit A and such other intellectual properties as
it shall own to Nanopierce Technologies, Inc.
4. Nanopierce Technologies, Inc. through its sole officer and director Paul H.
Metzinger, hereby agrees to deliver to Intercell Corporation, Seven
Million, Two Hundred and Fifty Thousand (7,250,000) post-split common
shares and One Hundred (100) Series A, 8%, Voting Convertible Cumulative
Participating Preferred Shares, convertible into Seven Million, Two Hundred
and Fifty Thousand (7,250,000) post-split shares.
Dated: February 26, 1998
NANOPIERCE TECHNOLOGIES, INC. INTERCELL CORPORATION
By /s/ Paul H. Metzinger By /s/ Paul H. Metzinger
------------------------------ ------------------------------------
Paul H. Metzinger, President Paul H. Metzinger, President & Chief
& Chief Executive Officer Executive Officer
PARTICLE INTERCONNECT CORPORATION
By /s/ Paul H. Metzinger
------------------------------------
Paul H. Metzinger, President & Chief
Executive Officer
1
<PAGE>
PARTICLE INTERCONNECT CORPORATION
PATENTS AND APPLICATIONS
Updated: November 6, 1997
<TABLE>
<CAPTION>
========================================================================================================
Patent Serial File
Number Issue Date Title (Subject) Number Date
- ------------ ------------ ------------------------------------------ ------------- ------------
<S> <C> <C> <C> <C>
4,804,132 2/14/89 Method of Cold Bonding 90,608 8/28/87
(A method of cold bonding aluminum metal
surfaces using aluminum-coated diamond
particles)
5,083,697 1/28/92 Particle-Enhanced Joining of Metal 479,696 2/14/90
Surfaces
(A method of forming metal surfaces using
coatings containing hard particles
between the surfaces and compressive
force.)
-- -- 07/720,182 2/11/91
5,334,809 8/2/94 Particle Enhanced Joining of Metal 08/16,190 2/11/93
Surfaces
(An electrical junction formed by method
of 5,083,697.)
5,430,614 7/4/95 Electrical Interconnect Using Particle 08/148,907 11/8/93
Enhanced Joining of Metal Surfaces
(An integrated circuit carrier with a
terminal array formed by method of
5,471,151.)
5,471,151 11/28/95 Electrical Interconnect Using Particle 07/951,860 9/28/92
Enhanced Joining of Metal Surfaces
(A method of electrically coupling
terminals using particles and compressive
force.)
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================
Patent Serial File
Number Issue Date Title (Subject) Number Date
- ------------ ------------ ------------------------------------------ ------------- ------------
<S> <C> <C> <C> <C>
5,506,514 4/9/96 Electrical Interconnect Using Particle 08/422,546 4/12/95
Enhanced Joining of Metal Surfaces
(Apparatus for testing an integrative
circuit with a probe array formed by
method of 5,471,151.)
5,565,280 10/15/96 Electrical Interconnect Using Particle 08/422,447 4/12/95
Enhanced Joining of Metal Surfaces
(Spaced structure with particle enhanced
sheet between two planar sheets.)
-- -- Patternable Particle Filled Adhesive 08/320,436 10/7/94
Matrix for Localized Communication
Between Joined Surfaces
(A mixture of adhesive and particles for
joining substrates.)
5,670,251 9/23/97 Patternable Particle Filled Adhesive 8/320,443 10/7/94
Matrix for Forming Patterned Structures
Between Joined Surfaces
(A joint formed by joining substrates
with an adhesive and particle mixture.)
5,642,055 6/24/97 Electrical Interconnect Using Particle 08/422,445 4/12/95
Enhanced Joining of Metal Surfaces
(Testing apparatus including a terminal
array produced by the method of
5,471,151.)
08/422,446 4/12/95
-- -- Electrical Interconnect Using Particle 08/749,376 11/6/96
Enhanced Joining of Metal Surfaces
(A crimp for coupling a power
transmission medium to a contact point
formed by the method of 5,471,151.)
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================
Patent Serial File
Number Issue Date Title (Subject) Number Date
- ------------ ------------ ------------------------------------------ ------------- ------------
<S> <C> <C> <C> <C>
5,634,265 6/3/97 Electrical Interconnect Using Particle 08/422,448 4/12/95
Enhanced Joining of Metal Surfaces
(A method of forming a contact surface
for connecting electronic elements from a
metal containing interconnect particles.)
-- -- Method and Apparatus for Handling 08/440,497 5/10/95
Electronic Devices
(A preciser or handler with spaced
dividers and ridges forming a test site
array of recesses.)
-- -- Method and Apparatus of Handling 08/855,964 5/14/97
Electronic Devices
(A method of testing electronic devices
using a handler and test board with probe
array.)
-- -- Spiral Leaf Spring Contact ??? 5/15/97
Spiral Leaf Spring Contact PCT/US 6/6/97
97/09899
Method of Joining Surfaces with 08/854,107 5/9/97
Patternable Adhesive and Particle Matrix
(Method of joining substrates using
patterned coatings of a mixture of
adhesive and particles.)
-- -- High Ionic Flow Rate Plating Process and
Apparatus
(A latch apparatus for high ionic
apparatus for high ionic electro-coating
substrates with metal and particles.)
Electroplating Process
(Apparatus for high ionic continuous
electro-coating of substrates with metal
and particles.)
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
========================================================================================================
Patent Serial File
Number Issue Date Title (Subject) Number Date
- ------------ ------------ ------------------------------------------ ------------- ------------
<S> <C> <C> <C> <C>
Method and Apparatus for Conductivity
Joining Components
(Conductive tape.)
========================================================================================================
</TABLE>
5
<PAGE>
EXHIBIT 4.01
CERTIFICATE OF DESIGNATION OF
SERIES A PREFERRED STOCK
OF
NANOPIERCE TECHNOLOGIES, INC.
It is hereby certified that:
1. The name of the Company (hereinafter called the "Company") is
Nanopierce Technologies, Inc., a Nevada corporation.
2. The Certificate of Incorporation of the Company authorizes the issuance
of Five Million (5,000,000) shares of preferred stock, $0.0001 par value per
share, and expressly vests in the Board of Directors of the Company the
authority provided therein to issue any or all of said shares in one (1) or more
series and by resolution or resolutions to establish the designation and number
and to fix the relative rights and preferences of each series to be issued.
3. The Board of Directors of the Company, pursuant to the authority
expressly vested in it as aforesaid, has adopted the following resolutions
creating a Series A issue of Preferred Stock:
RESOLVED, that One Hundred (100) of the Five Million (5,000,000) authorized
shares of Preferred Stock of the Company shall be designated Series A Preferred
Stock, $0.0001 par value per share, shall possess the rights and preferences set
forth below and shall be issued to INTERCELL CORPORATION, a Colorado Corporation
("Holder").:
Section 1. Designation and Amount. The shares of such series shall have
----------------------
$0.0001 par value and shall be designated as Series A Preferred Stock (the
"Series A Preferred Stock") and the number of shares constituting the Series A
Preferred Stock shall be One Hundred (100). The Series A Preferred Stock shall
have a Deemed Purchase Price of Twenty-Two Thousand, Six Hundred and Fifty-Six
Dollars and Twenty-Five Cents ($22,656.25) per share, for an aggregate of Two
Million, Two Hundred and Sixty-Five thousand, Six Hundred and Twenty-Five
Dollars ($2,265,625.00).
Section 2. Rank. The Series A Preferred Stock shall rank: (i) prior and
----
senior to any other class or series of Preferred Shares or series of capital
stock of the Company hereafter created (collectively, the "Senior Securities");
(ii) prior to all of the Company's Common Stock, $0.001 par value per share
("Common Stock"); (iii) prior to any class or series of capital stock of the
Company hereafter created not specifically ranking by its terms senior to or on
parity with any Series A Preferred Stock of whatever subdivision (collectively,
with the Common Stock and any such Preferred Stock, "Junior Securities"); and
(iv) on parity with any class or series of capital stock of the Company
hereafter created specifically ranking by its terms on parity with
1
<PAGE>
the Series A Preferred Stock ("Parity Securities") in each case as to
distributions of assets upon liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary (all such distributions being referred
to collectively as "Distributions").
Section 3. Dividends. The Series A Preferred Stock shall bear an eight
---------
percent (8%), cumulative, participating dividend, commencing March 1, 1998. If
such dividend is not declared and paid, for any reason, the Deemed Purchase
Price of the Series A Preferred Shares shall be increased by such accrued
dividend and shall, at the option of the Holder, be convertible into common
stock of the Company or otherwise redeemed.
Section 4. Liquidation Preference.
----------------------
(a) In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, the Holders of shares of Series A
Preferred Stock shall be entitled to receive, immediately after distributions to
Senior Securities, if any, required by the Company's Certificate of
Incorporation or any Certificate of Designation, and prior in preference to any
distribution to Junior Securities but in parity with any distribution to Parity
Securities, an amount per share equal to the sum of (i) the Series A Deemed
Purchase Price for each outstanding share of Series A Preferred Stock and (ii)
an amount equal to eight percent (8%) of the Series A Deemed Purchase Price per
annum for the period that has passed since March 1, 1998 to the date of the
event of liquidation, dissolution or winding up of the Company. If upon the
occurrence of such event, and after payment in full of the preferential amounts
with respect to the Senior Securities, the assets and funds available to be
distributed among the Holders of the Series A Preferred Stock and Parity
Securities shall be insufficient to permit the payment to such Holders of the
full preferential amounts due to the Holders of the Series A Preferred Stock and
the Parity Securities, respectively, then the entire assets and funds of the
Company legally available for distribution shall be distributed among the
Holders of the Series A Preferred Stock and the Parity Securities, pro rata,
based on the respective liquidation amounts to which each such series of stock
is entitled by the Company's Certificate of Incorporation and any Certificate(s)
of Designation relating thereto.
(b) Upon the completion of the distribution required by subsection
4(a), if assets remain in the Company, they shall be distributed to holders of
Junior Securities in accordance with the Company's Certificate of Incorporation
including any duly adopted certificate(s) of designation.
Section 5. Conversion. The record Holders of this Series A Preferred
----------
Stock shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. On and after March 1, 1998, each record
Holder of Series A Preferred Stock shall be entitled, at any time, and
subject to the Company's right of redemption set forth in Section 6(a), at
the office of the Company or any transfer agent for the Series A Preferred
Stock (the "Transfer Agent"), to convert each Preferred Share into common
shares of the Company, at a conversion rate of $0.3257 per share (the
"Fixed Conversion Price"). Each Preferred Share is convertible into
Seventy-Two Thousand, Five Hundred (72,500) common shares and if all
Preferred shares are
2
<PAGE>
converted, in full, the Holder shall own Seven Million, Two Hundred and
Fifty Thousand (7,250,000) common shares of the Company.
(b) Mechanics of Conversion. In order to convert Series A Preferred
Stock into full shares of Common Stock, the Holder shall (i) fax, on or prior to
11:59 p.m., Denver, Colorado time (the "Conversion Notice Deadline") on the
date of conversion, a copy of the fully executed notice of conversion ("Notice
of Conversion") to the Company at the office of the Company or its designated
transfer agent (the "Transfer Agent") for the Series A Preferred Stock stating
that the Holder elects to convert, which notice shall specify the date of
conversion, the number of shares of Series A Preferred Stock to be converted,
the applicable conversion price and a calculation of the number of shares of
Common Stock issuable upon such conversion (together with a copy of the front
page of each certificate to be converted) and (ii) surrender to a common courier
for delivery to the office of the Company or the Transfer Agent, the original
certificates representing the Series A Preferred Stock being converted (the
"Preferred Stock Certificates"), duly endorsed for transfer; provided, however,
that the Company shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless either the Preferred
Stock Certificates are delivered to the Company or its Transfer Agent as
provided above, or the Holder notifies the Company or its Transfer Agent that
such certificates have been lost, stolen or destroyed (subject to the
requirements of subparagraph (i) below). Upon receipt by Company of a facsimile
copy of a Notice of Conversion, Company shall immediately send, via facsimile,
a confirmation of receipt of the Notice of Conversion to Holder which shall
specify that the Notice of Conversion has been received and the name and
telephone number of a contact person at the Company whom the Holder should
contact regarding information related to the Conversion.
(i) Lost or Stolen Certificates. Upon receipt by the Company of
evidence of the loss, theft, destruction or mutilation of any Preferred Stock
Certificates representing shares of Series A Preferred Stock, and (in the case
of loss, theft or destruction) of indemnity or security reasonably satisfactory
to the Company, and upon surrender and cancellation of the Preferred Stock
Certificate(s), if mutilated, the Company shall execute and deliver new
Preferred Stock Certificate(s) of like tenor and date. However, Company shall
not be obligated to re-issue such lost or stolen Preferred Stock Certificates if
Holder contemporaneously requests Company to convert such Series A Preferred
Stock into Common Stock.
(ii) Delivery of Common Stock Upon Conversion. The Transfer Agent or
the Company (as applicable) shall, no later than the close of business on the
second (2nd) business day (the "Deadline") after receipt by the Company or the
Transfer Agent of a facsimile copy of a Notice of Conversion and receipt by
Company or the Transfer Agent of all necessary documentation duly executed and
in proper form required for conversion, including the original Preferred Stock
Certificates to be converted (or after provision for security or indemnification
in the case of lost or destroyed certificates, if required), issue and surrender
to a common courier for either overnight or (if delivery is outside the United
States) two (2) day delivery to the Holder at the address of the Holder as shown
on the stock records of the Company a certificate for the number of shares of
Common Stock to which the Holder shall be
3
<PAGE>
entitled as aforesaid.
(iii) No Fractional Shares. If any conversion of the Series A
Preferred Stock would create a fractional share of Common Stock or a right to
acquire a fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock issuable upon conversion,
in the aggregate, shall be the next lower number of shares.
(iv) Date of Conversion. The date on which conversion occurs (the
"Date of Conversion") shall be deemed to be the date set forth in such Notice of
Conversion, provided (i) that the advance copy of the Notice of Conversion is
faxed to the Company before 11:59 p.m., Denver, Colorado time, on the Date of
Conversion, and (ii) that the original Preferred Stock Certificates representing
the shares of Series A Preferred Stock to be converted are surrendered by
depositing such certificates with a common courier, as provided above, and
received by the Transfer Agent or the Company as soon as practicable after the
Date of Conversion. The person or persons entitled to receive the shares of
Common Stock issuable upon such conversion shall be treated for all purposes as
the record Holder or Holders of such shares of Common Stock on the Date of
Conversion.
(c) Reservation of Stock Issuable Upon Conversion. The Company shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the Series A Preferred Stock, such number of its shares of Common Stock as shall
from time to time be sufficient to effect the conversion of all then outstanding
Series A Preferred Stock; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of all then outstanding shares of Series A Preferred Stock, the Company will
take such corporate action as may be necessary to increase its authorized but
unissued shares of Common Stock to such number of shares as shall be sufficient
for such purpose.
(A) Adjustment to Conversion Rate.
(i) Adjustment to Fixed Conversion Price Due to Stock Split,
Stock Dividend, Etc. If, prior to the conversion of all of the Series A
Preferred Stock, the number of outstanding shares of Common Stock is increased
by a stock split, stock dividend, or other similar event, the Fixed Conversion
Price shall be proportionately reduced, or if the number of outstanding shares
of Common Stock is decreased by a combination or reclassification of shares, or
other similar event, the Fixed Conversion Price shall be proportionately
increased.
(ii) Adjustment Due to Merger, Consolidation, Etc. If, prior
to the conversion of all Series A Preferred Stock, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other
similar event, as a result of which shares of Common Stock of the Company shall
be changed into the same or a different number of shares of the same or another
class or classes of stock or securities of the Company or another entity or
there is a sale of all or substantially all the Company's assets, then the
Holders of Series A Preferred Stock shall thereafter have the right to receive
upon conversion of Series A Preferred Stock, upon the basis and upon the terms
and conditions specified herein and in lieu of the shares
4
<PAGE>
of Common Stock immediately theretofore issuable upon conversion, such stock,
securities and/or other assets which the Holder would have been entitled to
receive in such transaction had the Series A Preferred Stock been converted
immediately prior to such transaction, and in any such case appropriate
provisions shall be made with respect to the rights and interests of the Holders
of the Series A Preferred Stock to the end that the provisions hereof
(including, without limitation, provisions for the adjustment of the Conversion
Price and of the number of shares issuable upon conversion of the Series A
Preferred Stock) shall thereafter be applicable, as nearly as may be practicable
in relation to any securities thereafter deliverable upon the exercise hereof.
(iii) No Fractional Shares. If any adjustment under this
Section 5(f) would create a fractional share of Common Stock or a right to
acquire a fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock issuable upon conversion
shall be the next lower number of shares.
Section 6. Redemption by Company.
---------------------
(a) Company's Right to Redeem at its Election. At any time, the
Company shall have the right, in its sole discretion, to redeem ("Redemption at
Company's Election"), from time to time, any or all of the Series A Preferred
Stock; provided (i) Company shall first provide six (6) months advance written
notice as provided in subparagraph 6(b)(ii) below. If the Company elects to
redeem some, but not all, of the Series A Preferred Stock, the Company shall
redeem a pro-rata amount from each Holder of the Series A Preferred Stock.
(i) Redemption Price At Company's Election. The "Redemption
Price At Company's Election" shall be the Deemed Purchase Price.
For purposes hereof, "Deemed Purchase Price" shall mean the Series A Deemed
Purchase Price (as defined in Section 4(a)) of the shares of Series A Preferred
Stock being redeemed pursuant to this Section 6(a), together with the accrued
but unpaid dividends (as defined in Section 4(a)).
(ii) Mechanics of Redemption at Company's Election. The
Company shall effect each such redemption by giving at least six (6) months
prior written notice ("Notice of Redemption At Company's Election") to the
Holders of the Series A Preferred Stock selected for redemption, at the address
and facsimile number of such Holder appearing in the Company's Series A
Preferred stock register and to the Transfer Agent, which Notice of Redemption
At Company's Election shall be deemed to have been delivered three (3) business
days after the Company's mailing (by overnight or two (2) day courier, with a
copy by facsimile) of such Notice of Redemption At Company's Election. Such
Notice of Redemption At Company's Election shall indicate (i) the number of
shares of Series A Preferred Stock that have been selected for redemption, (ii)
the date which such redemption is to become effective (the "Date of Redemption
At Company's Election") and (iii) the Redemption Price At Company's Election, as
defined in subsection (a)(i) above.
(b) Company Must Have Immediately Available Funds or Credit
Facilities.
5
<PAGE>
The Company shall not be entitled to send any Redemption Notice and begin the
redemption procedure under Section 6(a) unless it has:
(i) the full amount of the redemption price in cash, available in a
demand or other immediately available account in a bank or similar financial
institution; or
(ii) immediately available credit facilities, in the full amount of
the redemption price with a bank or similar financial institution; or
(iii) an agreement with a standby underwriter willing to purchase
from the Company a sufficient number of shares of stock to provide proceeds
necessary to redeem any stock that is not converted prior to redemption; or
(iv) a combination of the items set forth in (i), (ii) and (iii)
above, aggregating the full amount of the redemption price.
(c) Payment of Redemption Price.
(i) Each Holder submitting Preferred Stock being redeemed under this
Section 6 shall send their Series A Preferred Stock Certificates so redeemed to
the Company or its Transfer Agent, and the Company shall pay the applicable
redemption price to that Holder within five (5) business days of the Date of
Redemption at Company's Election. The Company shall not be obligated to deliver
the redemption price unless the Preferred Stock Certificates so redeemed are
delivered to the Company or its Transfer Agent, or, in the event one (1) or more
certificates have been lost, stolen, mutilated or destroyed, unless the Holder
has complied with Section 5(b)(i).
(A) Blackout Period. Notwithstanding the foregoing, the Company may
not either send out a redemption notice or effect a redemption pursuant to
Section 6(b) above during a Blackout Period (defined as a period during which
the Company's officers or directors would not be entitled to buy or sell stock
because of their holding of material non-public information), unless the Company
shall first disclose the non-public information that resulted in the Blackout
Period; provided, however, that no redemption shall be effected until at least
ten (10) days after the Company shall have given the Holder written notice that
the Blackout Period has been lifted.
Section 7. Voting Rights. The Holders of the Series A Preferred
-------------
Stock shall have voting power equal to Seven Million, Two Hundred and Fifty
Thousand (7,250,000) common shares with all the rights powers and privileges
provided to holders of common shares as provided by the Nevada Business
Corporation Act ("Nevada Law").
To the extent that under Nevada Law the vote of the Holders of the Series A
Preferred Stock, voting separately as a class, is required to authorize a given
action of the Company, the affirmative vote or consent of the Holders of at
least a majority of the shares of the Series A Preferred Stock represented at a
duly held meeting at which a quorum is present or by written consent of a
majority of the shares of Series A Preferred Stock (except as otherwise may be
required under Nevada Law) shall constitute the approval of such action by the
class. To the
6
<PAGE>
extent that under Nevada Law the Holders of the Series A Preferred Stock are
entitled to vote on a matter with holders of Common Stock, voting together as
one (1) class, each share of Series A Preferred Stock shall be entitled to a
number of votes equal to the number of shares of Common Stock into which it is
then convertible using the record date for the taking of such vote of
stockholders as the date as of which the Conversion Price is calculated. Holders
of the Series A Preferred Stock also shall be entitled to notice of all
shareholder meetings or written consents with respect to which they would be
entitled to vote, which notice would be provided pursuant to the Company's by-
laws and applicable statutes.
Section 8. Protective Provision. So long as shares of Series A Preferred
--------------------
Stock are outstanding, the Company shall not without first obtaining the
approval (by vote or written consent, as provided by Nevada Law) of the Holders
of at least seventy-five percent (75%) of the then outstanding shares of Series
A Preferred Stock, and at least seventy-five percent (75%) of the then
outstanding Holders:
(a) alter or change the rights, preferences or privileges of the
Series A Preferred Stock so as to affect adversely the Series A Preferred Stock.
(b) create any new class or series of stock having a preference over
the Series A Preferred Stock with respect to Distributions (as defined in
Section 2 above) or increase the size of the authorized number of Series A
Preferred.
In the event Holders of at least seventy-five percent (75%) of the then
outstanding shares of Series A Preferred Stock and at least seventy-five percent
(75%) of the then outstanding Holders agree to allow the Company to alter or
change the rights, preferences or privileges of the shares of Series A Preferred
Stock, pursuant to subsection (a) above, so as to affect the Series A Preferred
Stock, then the Company will deliver notice of such approved change to the
Holders of the Series A Preferred Stock that did not agree to such alteration or
change (the "Dissenting Holders") and the Dissenting Holders shall have the
right for a period of thirty (30) business days to convert pursuant to the terms
of this Certificate of Designation as they exist prior to such alteration or
change or continue to hold their shares of Series A Preferred Stock.
Section 9. Status of Converted or Redeemed Stock. In the event any shares
-------------------------------------
of Series A Preferred Stock shall be converted or redeemed pursuant to Section 5
or Section 6 hereof, the shares so converted or redeemed shall be canceled,
shall return to the status of authorized but unissued Preferred Stock of no
designated series, and shall not be issuable by the Company as Series A
Preferred Stock.
Section 10. Preference Rights. Nothing contained herein shall be
-----------------
construed to prevent the Board of Directors of the Company from issuing one (1)
or more series of Preferred Stock with dividend and/or liquidation preferences
junior to the dividend and liquidation preferences of the Series A Preferred
Stock.
Signed on March 10, 1998 NANOPIERCE TECHNOLOGIES, INC.
7
<PAGE>
By: /s/ Paul H. Metzinger
---------------------
Paul H. Metzinger,
President & Chief Executive Officer
ATTEST: By: /s/ Kristi J. Kampmann
----------------------
Kristi J. Kampmann, Secretary
STATE OF COLORADO )
) ss.
COUNTY OF DENVER )
I, Caryl L. Septon, a Notary Public, hereby certify that on the 10th day
of March, 1998, Paul H. Metzinger and Kristi J. Kampmann, the President and
Secretary of Nanopierce Technologies, Inc., respectively, personally appeared
before me, Kristi J. Kampmann, who being by me first duly sworn declared that he
is the person who signed the foregoing, and that the statements therein
contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal on the date
hereinbefore mentioned.
My commission expires 6/15/98
/s/ Caryl J. Septon
--------------------------
Notary Public
8
