SECURITIES AND EXCHANGE COMMISSION
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 (Date of earliest event reported) August 14, 1998.
SEPRAGEN CORPORATION
(Exact name of registrant as specified in its charter)
California 0-25726 68-0073366
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
30689 Huntwood Avenue
Hayward, California 94544
(Address of principal executive office, zip code)
Registrant's telephone number, including area code: (510) 476-0760
(Former name or former address, if changed since last report): N/A
THIS IS PAGE 1 OF 18 PAGES
Item 5
Other Events
In August 1998, the Company completed a debt-restructuring
transaction whereby the Company borrowed $550,000 from Mr. K.
Charles Janac pursuant to a Convertible Secured Promissory Note
issued by the Company (the "Note") in the principal amount of
$550,000 and bearing interest at the rate of 9.75% per annum. The
Note is convertible into shares of Class A Common Stock at the
option of Mr. Janac at any time before December 15, 1998 by
converting the principal balance and any unpaid interest due under
the Note into Class A Common Stock at the rate of $0.468 per share.
In addition, as further consideration for the loan of funds to the
Company, the Company issued to Mr. Janac a warrant, exercisable at
any time on or before August 18, 2003, to purchase up to 234,667
shares of Class A Common Stock at $.468 per share (the "Warrants").
The total number of shares of Class A Common Stock issuable upon
conversion of the Note or exercise of the Warrants are subject to
adjustment in the event of recapitalization, stock dividends, or
similar events. As security for the Note, the Company entered into
a Security Agreement granting Mr. Janac a first priority security
interest in the property, tangible and intangible, of the Company,
as well as a Patent and Trademark Mortgage granting Mr. Janac a
security interest in all the patents and trademarks of the Company.
All principal and accrued interest under the Note is due
and payable on or before December 15, 1998.
The business address of Mr. Janac is 651 River Oaks
Parkway, San Jose, CA 95134.
The Company used the funds loaned by Mr. Janac to retire
$532,242.47 of existing debt incurred by the Company in connection
with a certain bridge financing originally undertaken by the Company
in October of 1997, to pay legal fees and costs of the transaction,
and approximately $7,000 was utilized for working capital.
Item 7
Financial Statements and Exhibits
The following Exhibits are filed as part of this report:
3.3 Certificate of Determination for Series A Preferred
Stock of the Company.
Item 9
Sales of Equity Securities Pursuant to Regulation S.
1. On September 1, 1998, the Company sold 175,009 Shares
of Series A Preferred Stock.
2. All of the shares of Series A Preferred Stock were
sold to Anchor Products Limited of Hamilton, New Zealand ("Anchor").
The acquisition of Series A Preferred Stock by Anchor was
consummated in connection with the execution of a Commercial License
Agreement between the Company and Anchor, whereby the Company
licensed Anchor a technology that isolates proteins from whey, a low
value cheese by-product.
3. The shares of Series A Preferred Stock were sold for
cash in the aggregate amount of $500,000 ($2.857 per share). There
were no underwriting discounts or commissions paid in connection
with the transaction.
4. The shares of Series A Preferred Stock were sold
pursuant to exemptions from registration under Section 4(2) and
Regulation S under the Securities Act of 1933, in a transaction that
was not publicly offered. Anchor is a New Zealand corporation.
5. The Company's Series A Preferred Stock provides for
both a 7% dividend and liquidation preferences. The dividend is
payable from time to time at the election of the Board of Directors
of the Company subject to the Company retaining sufficient earnings
and profits. The Preferred Stock is also convertible on or before
September 30, 2000 into Class A Common Stock, at the conversion rate
of $2.86 per share. On any voluntary or involuntary liquidation,
dissolution or winding-up of the Company, the holders of Series A
Preferred Shares shall receive, out of the assets of the Company,
the sum of $2.86 per Series A Preferred Share, plus an amount equal
to any dividends accrued and unpaid on those Series A Preferred
Shares, before any payment shall be made or any assets distributed
to the holders of Common Stock. The Series A Preferred Shares shall
be redeemable at the option of the holders of the Series A Preferred
Shares or the Company commencing September 30, 2003 and expiring
December 31, 2008, at the cash price of $2.86 per share, plus any
accrued and unpaid dividends on the Series A Preferred Shares which
are redeemed. In addition, each share of Series A Preferred Stock
shall be automatically converted into one (1) share of Class A
Common Stock, if not previously redeemed, on January 1, 2009, or at
any time the closing bid price per share of the Company's Class A
Common Stock shall average at least $3.86 per share over ninety (90)
consecutive trading days prior to January 1, 2004. The conversion
ratio for the Series A Preferred Stock shall be adjusted in the
event of recapitalization, stock dividend, or any similar event
effecting the Class A Common Stock.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934
the Registrant has caused this report to be signed on its behalf by
the undersigned duly authorized.
SEPRAGEN CORPORATION
Date: September 3, 1998 By: /S/ Vinit Saxena
Vinit Saxena, Chief Executive
Officer, President,
Principal Financial Officer
and Chief Accounting Officer
INDEX TO EXHIBITS
Sequential
No. Description Page No.
3.3 Certificate of Determination 6
for Series A Preferred Stock
of the Company.
CERTIFICATE OF DETERMINATION FOR
SEPRAGEN CORPORATION
A California Corporation
Vinit Saxena, President, and Armin Ramel, Secretary,
certify that:
1. They are the President and the Secretary,
respectively, of Sepragen Corporation, a California corporation.
2. The authorized number of the corporation's Preferred
shares is 5,000,000, and the number of shares constituting Series A
Preferred (that is the series affected by this Certificate of
Determination and the resolution set forth below) is 1,000,000.
None of the shares of Series A Preferred have been issued.
3. Pursuant to authority granted by the corporation's
Articles of Incorporation, the following resolution has been duly
adopted and approved by the Board of Directors.
RESOLUTION OF BOARD OF DIRECTORS
WHEREAS, the Articles of Incorporation of this
corporation provide for a class of shares known as Preferred shares,
issuable from time to time in one or more series; and
WHEREAS, the Board of Directors of this is authorized to
determine or alter the rights, preferences, privileges, and
restrictions granted to or imposed on any wholly unissued series of
Preferred shares, to fix the number of shares constituting any such
series, and to determine the designation of that series, or any of
them; and
WHEREAS, this corporation has not issued any shares of
Preferred shares and the Board of Directors of this corporation
desires, pursuant to its authority, to determine and fix the rights,
preferences, privileges, and restrictions relating to the initial
series of Preferred shares and the number of shares constituting and
the designation of the series;
IT IS THEREFORE RESOLVED, that the Board of Directors authorizes
the original issue of a series of Preferred shares that shall be
designated and known as Series A Preferred. The number of
shares of this series shall be 1,000,000. All shares in this
series are subject to the following rights, preferences,
privileges, and restrictions:
(a) The holders of outstanding Series A Preferred shares
shall be entitled to receive, when and as declared by the Board
of Directors, out of any assets at the time legally available,
dividends at the annual rate of $.20 per Series A Preferred
share, payable on the 1st day of each January to holders of
Series A Preferred shares of record on a date not more than
sixty (60) nor fewer than ten (10) days preceding each
respective payment date as specified by the Board of Directors
or, if not so specified, as provided by law. Dividends shall
accrue on each Series A Preferred share from the date of its
original issuance and shall accrue from day to day, whether or
not earned or declared. Dividends shall be cumulative so that if
dividends in respect of any previous dividend period and for the
current dividend period at the annual rate per share shall not
have been paid or declared and set apart for all Series A
Preferred shares at the time outstanding, the deficiency shall
be fully paid or declared and set apart for those shares before
the corporation makes any distribution to holders of Class A
Common Stock.
"Distribution" in this paragraph (a) means the transfer of cash
or property without consideration, whether by way of dividend or
otherwise (except a dividend in shares of the corporation that
are junior to the Series A Preferred shares as to dividends or
assets) or the purchase or redemption of shares of the
corporation for cash or property (except such junior shares),
including any such transfer, purchase, or redemption by a
subsidiary of the corporation. The time of any distribution by
way of dividend shall be the date the dividend is declared and
the time of any distribution by purchase or redemption of shares
or otherwise than by dividend shall be the day cash or property
is transferred by the corporation, whether or not pursuant to a
contract of an earlier date; provided that when a debt
obligation that is a security is issued in exchange for shares,
the time of the distribution is the date when the corporation
acquires the shares in that exchange.
(b) On any voluntary or involuntary liquidation, dissolution,
or winding up of the corporation, the holders of the Series A
Preferred shares shall receive out of assets of the corporation,
whether those assets are capital or surplus of any nature, the
sum of $2.86 per Series A Preferred share, plus an amount equal
to any dividends accrued and unpaid on those Series A Preferred
shares, as provided in paragraph (a) of this Certificate, to the
date that payment is made available to the holders of Series A
Preferred shares, whether earned or declared or not, and no
more, before any payment shall be made or any assets distributed
to the holders of Common Stock.
If on liquidation, dissolution, or winding up of the
corporation, the assets so distributed among the holders of
Series A Preferred shares shall be insufficient to permit full
payment to those shareholders of the full preferential amounts,
then the entire assets of the corporation to be distributed
shall be distributed ratably among the holders of Series A
Preferred shares.
In the event of any voluntary or involuntary liquidation,
dissolution, or winding up of the corporation, subject to all of
the preferential rights of the holders of Series A Preferred
shares on distribution or otherwise, the holders of Common Stock
shall be entitled to receive, ratably, all remaining assets of
the corporation.
A consolidation or merger of the corporation with or into
any other corporation or corporations, or a sale of all or
substantially all of the assets of the corporation, shall not be
deemed to be a liquidation, dissolution, or winding up of the
corporation within the meaning of this paragraph (b).
(c) The Series A Preferred shares shall be redeemable, at the
option of the respective holders of the shares or the
corporation commencing September 30, 2003 and expiring December
31, 2008, at the cash price of $2.86 per share, plus any accrued
but unpaid dividends on the Series A Preferred shares which are
redeemed. The holders of Preferred shares shall give notice of
exercise of the option to redeem the Series A Preferred shares,
by tendering such shares to the corporation at the office of the
corporation or any transfer agent for the shares. The
corporation may elect the option to redeem by giving notice to
the respective holders of Series A Preferred shares at the
address of the registered holders on the stock transfer books of
the corporation with instructions of how to exchange Series A
Preferred shares for Class A Common Stock Certificates. The
corporation or its transfer agent, as the case may be, shall
exchange such certificate(s) for a certificate or certificates
representing an equal number of shares of Class A Common Stock.
Shares of Series A Preferred shall be deemed to have been
converted immediately prior to the close of business on the day
upon which the corporation declares that the targets have been
met. The person entitled to receive the Class A Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder of such Class A Common Stock at such time.
Redemption consideration will only be payable to the registered
holders on the date such registered holder tenders such shares
to the corporation at the office of the corporation or any
transfer agent of the corporation. Provided, however, the
corporation may only redeem shares out of assets legally
available therefor. If, at the time any shareholder seeks to
redeem his Series A Preferred shares the corporation is not
legally able to redeem such shares under Chapter 5 (commencing
with Section 500) of the California Corporations Code, such
shareholder shall retain the right to redeem the shareholder's
shares of Series A Preferred until a period ending ninety (90)
days after such shareholder is notified by the corporation that
the corporation is legally able to redeem the shares.
(d) Subject to Subsection (c) above, each share of Series A
Preferred shall be automatically converted into Class A Common
Stock, if not previously redeemed, on January 1, 2009 or at any
time the Bid Price per share (as defined below) of the
corporation's Class A Common Stock shall average at least $3.86
per share for ninety (90) consecutive trading days prior to
January 1, 2004. In addition, the holders of Series A Preferred
shares shall have conversion rights on or after December 1,
1999, all such conversions to occur in the following manner:
(1) On or before September 30, 2000, the Series A
Preferred shares shall be convertible at the option of the
respective holders of the shares, or upon the vote of a majority
of the outstanding Series A Preferred shares, at the office of
the corporation or any transfer agent for those shares, into
fully paid and nonassessable Class A Common Stock (calculated to
the nearest one-hundredth of a share, fractions of less than
one-hundredth of a share being disregarded) of the corporation,
at the conversion price in effect at the time of conversion
determined as provided below, each Series A Preferred share
being taken at $2.86 for the purpose of conversion. The Series
A Preferred shares shall be automatically converted into shares
of Class A Common Stock, if not previously redeemed, on January
1, 2009. The price at which Class A Common Stock shall be
deliverable on conversion shall be initially $2.86 per share.
The initial conversion price shall be subject to adjustment from
time to time in certain instances, as provided below. The
corporation shall make no payment or adjustment on account of
any dividends accrued and unpaid on the Series A Preferred
shares surrendered for conversion.
(2) Before any Series A Preferred shares may be converted
into Class A Common Stock at the option of the holder, the
holder must surrender the certificate or certificates for those
shares, duly endorsed in blank or accompanied by proper
instruments of transfer, at the office of the corporation or of
any transfer agent for the Series A Preferred shares. The holder
shall also give written notice to the corporation at that office
that the holder elects to convert a specified number or all of
the shares represented by the surrendered certificate(s). The
notice shall also specify the name or names in which the holder
wishes the certificate or certificates for the Class A Common
Stock to be issued. If a name specified is not that of the
holder, the notice shall also state the address of the new
holder and any other information required by law. The
corporation shall, as soon as practicable thereafter, issue and
deliver at that office to the holder of Series A Preferred
shares converted, or to that holder's nominee or nominees,
certificates for the number of full Class A Common Stock to
which the holder shall be entitled to receive, together with a
scrip certificate or cash in lieu of any fraction of a share as
provided below. Conversion shall be deemed to have been made as
of the date the Series A Preferred shares are surrendered for
conversion, and the person or persons entitled to receive the
Class A Common Stock issuable on conversion shall be treated for
all purposes as the record holder or holders of those shares of
Class A Common Stock on that date.
(3) If the conversion price in effect immediately prior
to the close of business on any date shall exceed by as much as
$.25 the amount determined at the close of business on that date
by dividing:
i) a sum equal to $20,000,000 plus the aggregate of
the amounts of all consideration received by the corporation on
all classes and issues of common stock after December 31, 1998,
by
ii) the total number of outstanding shares of common
stock of all classes and issues.
the conversion price shall be reduced, effective at the close of
business on the then-effective date, by the largest multiple of
ten cents ($.10) contained in the sum by which the
then-effective conversion price exceeds the amount so
determined.
For purpose of this subparagraph, the following provisions are
applicable:
A. If the corporation shall issue or sell for
cash Class A Common Stock, or any shares or obligations
convertible into or exchangeable for Class A Common Stock, the
consideration received by the corporation shall be deemed to be
the amount of cash received, before deducting commissions or
expenses paid by the corporation for any underwriting of, or
otherwise in connection with, the issue or sale. If the
corporation shall issue or sell any of those securities to an
underwriter without payment of any commission, the consideration
received by the corporation shall be deemed to be the full
amount at which those securities are initially offered by the
underwriter to the public, unless the difference between the
price to the underwriter and the initial public offering price
exceeds 15% of the price to the underwriter, in which case the
consideration received by the corporation shall be deemed to be
the price to the underwriter, plus 15% of the price to the
underwriter.
B. If the corporation shall issue (otherwise
than on conversion or exchange of obligations or shares of stock
of the corporation) additional shares of Class A Common Stock
for a consideration other than cash or a consideration partly
other than cash, the amount of the consideration other than cash
received by the corporation for those shares shall be deemed to
be the value of the consideration as determined by the Board of
Directors.
C. If the corporation shall issue additional
Class A Common Stock, not exceeding in the aggregate 1,000,000
shares of Class A Common Stock as presently constituted (subject
to adjustment in case of a subdivision or combination of Class A
Common Stock or of a dividend in Class A Common Stock declared
on Class A Common Stock), pursuant to stock or option plans for
officers or employees of the corporation, for a consideration
per share (whether cash, other than cash, or partly other than
cash) less than the conversion price in effect immediately prior
to the date of issuance, the consideration per share received by
the corporation for each of those shares shall be deemed to be
the conversion price in effect immediately prior to its
issuance.
D. If the corporation shall issue in any
manner any rights to subscribe for or purchase Class A Common
Stock or any options for the purchase of Class A Common Stock
(other than the issuance referred to in clause (C) above), at a
consideration per share (as computed below) less than the
conversion price in effect immediately prior to the date of the
offering of such rights or the granting of such options, as the
case may be, all Class A Common Stock that the holders of those
rights or options shall be entitled to subscribe for or purchase
pursuant to those rights or options shall be deemed to have been
issued or sold as of the date of the offering of those rights or
the granting of those options, as the case may be, and the
minimum aggregate consideration named in those rights or options
for the Class A Common Stock covered thereby, plus the
consideration, if any, actually received by the corporation (as
of the date of the offering of those rights or the granting of
those options, as the case may be) for the issuance of those
shares.
E. If the corporation shall issue in any
manner any obligations or any shares of the corporation (other
than the Preferred shares) that shall be convertible into or
exchangeable for Class A Common Stock, at a consideration per
share (as computed below) less than the conversion price in
effect immediately prior to the date those obligations or shares
are issued, all Class A Common Stock issuable on the conversion
or exchange of those obligations or shares shall be deemed to be
issued as of the date those obligations or shares are issued,
and the amount of consideration received by the corporation for
those additional Class A Common Stock shall be deemed to be the
total of (x) the amount of consideration received by the
corporation on the issuance of those obligations or shares, as
the case may be, plus (y) the minimum aggregate consideration,
if any, other than for those obligations or shares, receivable
by the corporation on that conversion or exchange, except in
adjustment of interest and dividends.
F. The amount of the consideration received by
the corporation on the issuance of any rights or options
referred to in clause (D) above, or on the issuance of any
obligations or shares that are convertible or exchangeable as
described in clause (E) above, and the amount of the
consideration, if any, other than those obligations or shares so
convertible or exchangeable, receivable by the corporation on
the exercise, conversion, or exchange thereof shall be
determined in the same manner provided in clauses (A) and (B)
above with respect to the consideration received by the
corporation in case of the issuance of additional Class A Common
Stock, provided, however, that if the obligations or shares of
stock so convertible or exchangeable are issued in payment or
satisfaction of any dividend on any stock of the corporation
other than Class A Common Stock, the amount of the consideration
received by the corporation on the original issuance of the
obligations or shares so convertible or exchangeable shall be
deemed to be the value of those obligations or shares, as of the
date of the adoption of the resolution declaring the dividend,
as determined by the Board of Directors at or as of that date.
On the expiration of any rights or options referred to in clause
(D), or the termination of any right of conversion or exchange
referred to in clause (E), the conversion price then in effect
shall be readjusted to the conversion price that would have been
obtained had the adjustments made on the issuance of the option,
right, or convertible or exchangeable securities been made on
the basis of the delivery of only the number of Class A Common
Stock actually delivered on the exercise of those rights or
options or on the conversion or exchange of those securities.
G. If the corporation shall issue additional
Class A Common Stock as a dividend, the aggregate number of
Class A Common Stock issued in payment of the dividend shall be
deemed to have been issued and to be outstanding on the day next
succeeding the record date for the determination of shareholders
entitled to the dividend and shall be deemed to have been issued
without consideration.
H. The number of Class A Common Stock at any
time outstanding shall include any Class A Common Stock then
owned or held by or for the account of the corporation and any
shares issuable in respect of scrip or warrants issued in lieu
of fractional Class A Common Stock.
I. Each share of Class A Common Stock issued
on conversion of Preferred shares shall be deemed to have been
issued for a consideration equal to the conversion price in
effect at the time of issuance.
J. If the corporation shall at any time
subdivide or combine the outstanding Class A Common Stock, or
shall issue as a dividend or dividends on the Class A Common
Stock a number of Class A Common Stock equalling or aggregating
10% or more of the number of Class A Common Stock outstanding at
the close of business on September 30, 1998, or on the date of
the next preceding adjustment pursuant to the provisions of this
subparagraph, the amount of $.25 referred to in subparagraph (or
the amount to which that amount may have previously been
adjusted pursuant to the provisions of this clause (J)) shall be
proportionately decreased in the case of subdivision or dividend
payable in Class A Common Stock or increased in the case of
combination, effective at the close of business on the date of
that subdivision or combination or of the declaration of that
dividend.
K. The term "dividend", as used in this
subparagraph, means a dividend or other distribution on shares
of the corporation. In the event of a declaration of a dividend
by the corporation without fixing of a record date for the
determination of shareholders entitled to that dividend, the
date fixed by applicable law for the determination of the
shareholders entitled to the dividend shall be deemed to be the
record date.
L. If the corporation shall at any time
subdivide the outstanding Class A Common Stock, or shall issue
as a dividend on the Class A Common Stock equalling 10% or more
of the number of Class A Common Stock outstanding immediately
prior to that subdivision or issuance of dividend, the
conversion price in effect immediately prior to that subdivision
or the issuance of that dividend shall be proportionately
decreased, and in case the corporation shall at any time combine
the outstanding Class A Common Stock, the conversion price in
effect immediately prior to that combination shall be
proportionately increased, effective at the close of business on
the date of the subdivision, dividend, or combination, as the
case may be. For the purpose of this subparagraph, the date of
issuance of any such dividend shall be determined in accordance
with clause (K) of subparagraph.
M. No fractional Class A Common Stock shall be
issued on the conversion of Preferred shares. If any fractional
interest in a Common Share would, except for the provisions of
this subparagraph, be deliverable on the conversion of any
Preferred shares the corporation shall, in lieu of delivering
the fractional share for that fractional interest, at its option
either (i) adjust the fractional interest by payment to the
holder of the converted Preferred shares in an amount in cash
equal (computed to the nearest cent) to the current market value
of the fractional interest, or (ii) issue nondividend-bearing
and nonvoting scrip certificates for fractions of a share that
would otherwise be issuable, in form and containing terms and
conditions as may be determined by the Board of Directors, and
exchangeable, within the period following the date of issue as
the Board of Directors shall fix, together with other unexpired
scrip certificates of like tenor aggregating one or more full
shares, for share certificates representing the full share or
shares.
N. Immediately on adjustment of the conversion
price, the corporation shall maintain at its principal executive
office and file with the transfer agent, if any, for Preferred
shares a statement, signed by the Board Chairperson, or the
President, or a Vice President of the corporation and by its
chief financial officer or an Assistant Treasurer, showing in
reasonable detail the facts requiring the adjustment and the
conversion price after the adjustment. The transfer agent shall
be under no duty or responsibility with respect to any such
statement except to exhibit the statement from time to time to
any holder of Preferred shares desiring an inspection.
O. On any capital reorganization or any
reclassification of the capital stock of the corporation,
consolidation or merger of the corporation with or into another
corporation, or the conveyance of all of substantially all of
the assets of the corporation to another corporation, each
Preferred share shall thereafter be convertible into the number
of shares or other securities or property to which a holder of
the number of Class A Common Stock of the corporation
deliverable on conversion of the Preferred share would have been
entitled on the reorganization, reclassification, consolidation,
merger or conveyance; and in any such case, appropriate
adjustment (as determined by the Board of Directors) shall be
made in the application of the provisions herein set forth with
respect to the rights and interests thereafter of the holders of
the Preferred shares, to the end that the provisions set forth
(including provisions with respect to changes in, and other
adjustments of, the conversion price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any
shares or other property thereafter deliverable on conversion of
the Preferred shares.
P. In the event that the corporation shall set
a record date for the purpose of entitling the holders of its
Class A Common Stock either to receive a dividend, or any other
distribution, payable otherwise than in cash or to subscribe for
or purchase any shares of any class or to receive any other
rights, or in the event of any consolidation or merger of the
corporation with or into another corporation, capital
reorganization of the corporation, reclassification of the
corporation's shares (other than a subdivision or combination of
its outstanding Class A Common Stock), or conveyance of all or
substantially all of the corporation's assets to another
corporation, or in the event of the voluntary or involuntary
dissolution, liquidation, or winding up of the corporation,
then, and in any such case, the corporation shall cause a notice
described below to be mailed to the holders of record of the
outstanding Preferred shares. The notice shall state the date
that has been set as the record date for the purpose of
dividend, distribution, or rights, or on which the
reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation, or winding up is to take
place and the record date as of which holders of Class A Common
Stock of record shall be entitled to exchange their Class A
Common Stock for securities or other property deliverable on
reclassification, reorganization, consolidation, merger,
conveyance, dissolution, liquidation, or winding up. The notice
shall be mailed at least ten days prior to the date specified in
the notice, as determined pursuant to the provisions of the
preceding sentence.
Q. The corporation shall at all times reserve
and keep available, out of its authorized but unissued Class A
Common Stock, solely for the purpose of effecting conversion of
the Preferred shares, the full number of Class A Common Stock
deliverable on conversion of all Preferred shares from time to
time outstanding. The corporation shall from time to time, in
accordance with California law, increase the authorized amount
of its Class A Common Stock if at any time the authorized number
of Class A Common Stock remaining unissued shall not be
sufficient to permit the conversion of all the Preferred at the
time outstanding.
R. The corporation shall pay any and all issue
and other taxes that may be payable in respect of any issue or
delivery of Class A Common Stock on conversion of preferred
shares pursuant hereto. The corporation shall not, however, be
required to pay any tax that may be payable in respect of any
transfer involved in the issue and delivery of Class A Common
Stock in a name other than that in which the Preferred shares so
converted were registered, and no such issue or delivery shall
be made unless and until the person requesting that issue has
paid to the corporation the amount of any such tax, or has
established, to the satisfaction of the corporation, that such
tax has been paid.
S. Whenever any reference is made in these
provisions to the issue or sale of Common Stock, the term
"Common Stock" shall include any stock of any class of the
corporation other than Preferred shares with a fixed limit on
dividends and a fixed amount payable in the event of any
voluntary or involuntary liquidation, dissolution, or winding up
of the corporation.
T. All certificates evidencing Preferred
shares surrendered for conversion shall be appropriately
cancelled on the books of the corporation, and the shares so
converted represented by those certificates shall be restored to
the status of authorized but unissued Preferred shares of the
corporation.
(4) As used herein, the term "Bid Price" (which shall be
subject to adjustment in the event of any stock split, dividend
or distribution, reverse stock split or other similar event)
shall mean:
i) if the principal market for the Class A Common
Stock is a national securities exchange or the National
Association of Securities Dealers Automated Quotation Systems
("NASDAQ") National Market System, the closing sales price of
the Common Stock as reported by such exchange or market system,
or on a consolidated tape reflecting transactions on such
exchange or market system; or
ii) if the principal market for the Class A Common
Stock is not a national securities exchange or the NASDAQ
National Market System and the Class A Common Stock is quoted on
NASDAQ, the closing bid price of the Class A Common Stock as
quoted on NASDAQ; or
iii) if the principal market for the Class A Common
Stock is not a national securities exchange or the NASDAQ
National Market System and the Class A Common Stock is not
quoted on NASDAQ, the closing bid for the Class A Common Stock
as reported by the National Quotation Bureau, Inc. ("NQB") or at
least one market maker in the Class A Common Stock if quotations
are not available from NQB but are available from a market maker.
RESOLVED FURTHER, that the Board Chairperson, the President or
any Vice President, and the Secretary, the Chief Financial
Officer, the Treasurer, or any Assistant Secretary or Assistant
Treasurer of this corporation are each authorized to execute,
verify, and file in the office of the California Secretary of
State a Certificate of Determination in accordance with this
resolution and California law.
4. We further declare under penalty of perjury under the laws
of the State of California that the matters set forth in this
Certificate are true and correct of our own knowledge.
Executed on August 14, 1998, at Hayward, California.
/s/ Vinit Saxena
Vinit Saxena, President
/s/ Armin Ramel
Armin Ramel, Secretary
