<PAGE> 1
EXHIBIT 3.3
Certificate of the Powers, Designations,
Preferences and Relative, Participating,
Optional and Other Special Rights of the
SERIES 3 6% CUMULATIVE CONVERTIBLE PREFERRED STOCK
OF
UNIVERSITY BANCORP, INC.
and the Qualifications, Limitations or
Restrictions Thereof, Which Have Not Been Set Forth in the
Certificate of Incorporation in or Any Amendment Thereto.
(Pursuant to Section 151 of Chapter 1
of Title 8 of the Delaware Code)
The undersigned, Stephen Lange Ranzini, President of University
Bancorp, Inc., a corporation organized and existing under the laws of the State
of Delaware (hereinafter the "Corporation"), does hereby certify:
That pursuant to authority conferred upon the board of
directors of the Corporation by the Certificate of Incorporation, as amended,
and pursuant to the provisions of Section 151 of the General Corporation Law of
the State of Delaware, the board of directors of the Corporation, at a duly
called meeting thereof duly held on November 28, 2000 duly adopted the following
resolution:
"RESOLVED, that, pursuant to the authority expressly granted to
and vested in the board of directors of the Corporation by the provisions of its
Certificate of Incorporation, the Board hereby creates a series of Preferred
Stock of the Corporation to consist of 1,000 of the 500,000 shares of Preferred
Stock, par value $.001 per share, which the Corporation now has authority to
issue and the board of directors of the Corporation hereby fixes the
designation, powers, preferences and relative, participating, optional and other
special rights, and the qualifications, limitations or restrictions thereof, of
the shares of such series of Preferred Stock (in addition to the designation,
powers, preferences and relative, participating, optional and other special
rights, and the qualifications, limitations or restrictions thereof, set forth
in the Certificate of Incorporation, as amended, of the Corporation which are
applicable to Preferred Stock of all series) as follows:
1. Designation and Number.
The distinctive designation of the series shall be Series 3 6%
Cumulative Convertible Preferred Stock (hereinafter, "Series 3 Preferred
Stock"); the number of shares of Series 3 Preferred Stock which the Corporation
is authorized to issue shall be 1,000, which number may be increased (but not in
excess of the total number of authorized shares of Preferred Stock at such time)
or decreased (but not below the number of shares then outstanding) from time to
time by the board of directors of the Corporation (the "Board").
2. Definitions. For purposes hereof, the following terms
shall have the meanings indicated.
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(a) The term "Senior Stock" means all those classes and series
of preferred or special stock and all those series of Preferred Stock which, by
the terms of the Certificate of Incorporation (as the same has heretofore been
or may hereafter be amended), or of the instrument by which the Board, acting
pursuant to authority granted in the Certificate of Incorporation (as the same
has heretofore been or may hereafter be amended), shall designate the special
rights and limitations of each such class and series of preferred or special
stock or series of Preferred Stock, shall be senior to the Series 3 Preferred
Stock with respect to the right of the holders thereof to receive dividends or
to participate in the assets of the Corporation distributable to stockholders
upon any liquidation, dissolution or winding-up of the Corporation.
(b) the term "Parity Stock" means: all those classes and
series of preferred or special stock and all those series of Preferred Stock
which, by the terms of the (as the same has heretofore been or may hereafter be
amended), or of the instrument by which the Board, acting pursuant to authority
granted in the Certificate of Incorporation (as the same has heretofore been or
may hereafter be amended), shall designate the special rights and limitations of
each such class and series of preferred or special stock or series of Preferred
Stock, shall be on a parity with the Series 3 Preferred Stock with respect to
the right of the holders thereof to receive dividends and to participate in the
assets of the Corporation distributable to stockholders upon any liquidation,
dissolution or winding-up of the Corporation.
(c) The term "Junior Stock" means:
(i) Common Stock, par value $.01, of the
Corporation, and
(ii) all those classes and series of
preferred, special or common stock and all those series of Preferred Stock
which, by the terms of the Certificate of Incorporation (as the same has
heretofore been or may hereafter be amended), or of the instrument by which the
Board, acting pursuant to authority granted in the Certificate of Incorporation
(as the same has heretofore been or may hereafter be amended), shall designate
the special rights and limitations of each such class and series of preferred or
special stock or series of Preferred Stock, shall be, subordinate to the Series
3 Preferred Stock with respect to the right of the holders thereof to receive
dividends and to participate in the assets of the Corporation distributable to
stockholders upon any liquidation, dissolution or, winding-up of the
Corporation.
(d) The term "Market Price per share of Common Stock" for any
Trading Day means (i) the closing bid price for the Common Stock (as defined in
Section 8(h) hereof) on such Trading Day as published by the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") (or, if
such prices are not so published by NASDAQ, the average of the high and low bid
prices for the Common Stock on such Trading Day, as furnished by any New York
Stock Exchange member firm selected from time to time by the Corporation for
such purpose) or (ii), if the Common Stock is then listed or admitted to trading
on a national securities exchange, the last sale price regular way for the
Common Stock on such Trading
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Day as reported in the consolidated transaction reporting system for securities
listed or traded on such exchange, or, in case no such reported sale takes place
on such Trading Day, the reported closing bid price regular way for the Common
Stock on such Trading Day on the principal national securities exchange on which
the Common Stock is then listed or admitted to trading.
(e) The term "Trading Day" shall mean any day on which trading
takes place (i) in the over-the-counter market and prices reflecting such
trading are published by NASDAQ, or (ii) if the Common Stock is then listed or
admitted to trading on a national securities exchange, on the principal national
securities exchange on which the Common Stock is then listed or admitted to
trading.
3. Dividends and Distributions.
(a) Subject to the prior rights of the holders of Senior Stock
and in conjunction with any provision then being made for the holders of Parity
Stock, the holders of shares of Series 3 Preferred Stock, in preference to the
holders of Junior Stock, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the thirtieth (30th) day of January,
April, and July and October in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of shares of Series 3
Preferred Stock, at, but not exceeding, the annual rate of $60.00 per share.
(b) Dividends shall accrue on a day-to-day basis and be
cumulative on issued and outstanding shares of Series 3 Preferred Stock, whether
or not declared, beginning from the date of issue of such shares. Accrued but
unpaid dividends shall not bear interest. If the stated dividends on the shares
of Series 3 Preferred Stock are not paid in full, shares of Series 3 Preferred
Stock and all shares of Parity Stock shall share ratably in the payment of
dividends, including accumulations thereof, if any, on such shares in accordance
with the sums which would be payable on such shares if all dividends then
accrued but unpaid thereon were paid in full.
(c) So long as any shares of Series 3 Preferred Stock are
issued and outstanding:
(i) no dividends whatever shall be paid or
declared, nor shall any distribution be made, on any Junior Stock, other than a
dividend or distribution payable in Junior Stock or warrants or other rights to
purchase Junior Stock, unless all dividends on Series 3 Preferred Stock for all
past quarterly dividend periods shall have been paid or declared and a sum
sufficient for the payment thereof set apart; and
(ii) no dividends shall be paid or declared,
nor shall any distribution be made on any Parity Stock (other than dividends or
distribution of Junior Stock or of rights, warrants or options to acquire Junior
Stock), except dividends or distributions paid ratably on the Series 3 Preferred
Stock and all such Parity Stock on which dividends are payable and in arrears in
proportion to the total amounts to which the holders of all such shares would
then be entitled.
Nothing contained in this section 3 shall prohibit the Corporation from
redeeming, purchasing, or otherwise acquiring any then outstanding shares of
Junior Stock or Parity Stock at any time or from time to time.
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(d) The Board may fix a record date for the determination of
holders of shares of Series 3 Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be not more
than 60 days prior to the date fixed for the payment thereof. Absent the setting
of any such record date, each dividend shall be paid to the holders of record of
the Series 3 Preferred Stock as their names appear on the stock books of the
Corporation on the business day next preceding the Quarterly Dividend Payment
Date thereof. Dividends in arrears for any past Quarterly Dividend Payment
Date(s) may be declared and paid at any time, without reference to any regular
Quarterly Dividend Payment Date, to the holders of record of the Series 3
Preferred Stock as their names appear on the stock books of the Corporation on
such date, not exceeding 15 days preceding the payment date thereof, as may be
fixed by the Board.
4. No Voting Rights.
(a) Notwithstanding anything to the Contrary contained in this
Certificate, the Certificate of Incorporation or otherwise, the shares of Series
3 Preferred Stock shall not entitle the holders thereof to vote on any matter
whatsoever, except as required by the General Corporation Law of the State of
Delaware. Moreover, in no event shall the vote or consent of the holders of
shares of Series 3 Preferred Stock be required in connection with the creation
or authorization of any one or more classes or series of preferred or special
stock (including the Preferred Stock), whether constituting Junior Stock, Parity
Stock or Senior Stock.
(b) The number of authorized shares of any class or classes,
or any series, of stock of the Corporation (including without limitation the
Preferred Stock and the Series 3 Preferred Stock) may be increased or decreased
(but not below the number of shares of such class or classes or such series then
outstanding) by the affirmative vote of the holders of a majority of the stock
of the Corporation entitled to vote, irrespective of class or serial designation
(and without any requirement of a separate affirmative vote or consent of the
holders of the shares of Series 3 Preferred Stock voting separately as a class
or series).
5. Reacquired Shares. Any shares of Series 3 Preferred Stock redeemed,
converted, purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be deemed retired and cancelled upon the acquisition thereof,
and all such shares, upon their cancellation, shall become and return to the
status of authorized but unissued shares of Preferred Stock without serial
designation and which may be reissued as part of any new or then existing series
of Preferred Stock.
6. Liquidation. The Series 3 Preferred Stock shall be preferred as to
assets over the Junior Stock so that, in the event of the voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, the
holders of Series 3 Preferred Stock shall be entitled, in conjunction with any
provision then being made for the holders of Parity Stock, to have set apart for
them or to be paid out of the assets of the Corporation, after provision for the
holders of Senior Stock, if any, but before any distribution is made to or set
apart for the holders of Junior Stock, an amount in cash equal to, and in no
event more than, $1,000.00 per share of Series 3 Preferred Stock plus a sum of
money equal to all dividends accrued and unpaid thereon to the date that payment
is made available to the holders of Series 3 Preferred Stock. If, upon such
liquidation, dissolution or winding-up of the Corporation, the assets of the
Corporation available for distribution to the
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holders of its stock shall, after provision for the holders of Senior Stock, if
any, be insufficient to permit the distribution in full of the amounts
receivable as aforesaid by the holders of Series 3 Preferred Stock and the
amounts receivable by the holders of all Parity Stock, then all such assets of
the Corporation shall be distributed ratably among the holders of Series 3
Preferred Stock and the holders of all Parity Stock, in proportion to the
amounts which each would have been entitled to receive if such assets were
sufficient to permit distribution in full as aforesaid. Neither the
consolidation nor merger of the Corporation nor the sale, lease or transfer by
the Corporation of all or any part of its assets shall be deemed to be a
liquidation, dissolution or winding-up of the Corporation for the purposes of
this section 6.
7. Redemption. (a) Subject to the provisions of section 7(b) hereof,
the Corporation may (but shall in no event other than pursuant to section 7(h)
hereof be required to), by action of the Board, at any time, and from time to
time, except as otherwise provided in section 8 below, redeem all or part of the
issued and outstanding Series 3 Preferred Stock by paying the holders of record
thereof, out of funds legally available therefor, the sum of (i) $1,000.00 for
each such share to be redeemed plus (ii) an amount in cash equal to all
dividends accrued but not paid on each such share to be redeemed to the date of
redemption.
(b) Prior to the fifth anniversary of the date of original
issuance of shares of Series 3 Preferred Stock, the Corporation may not redeem
any of the Series 3 Preferred Stock pursuant to this section 7 unless the
average of the Market Prices per share of Common Stock, for a period of 30
consecutive Trading Days ending no more than 15 Trading Days prior to the date
upon which the notice of redemption required by this section 7 is first mailed
to holders of Series 3 Preferred Stock, shall have been at least 150% of the
then applicable conversion price fixed or determined pursuant to section 8
hereof.
(c) Following any reclassification, change, consolidation,
merger, sale or conveyance of the character referred to in section 8(d)(i)
hereof, appropriate adjustments shall be made in the application of the
provisions of sections 7(b) and 2(d) hereof consistent with the provisions made,
effective as of the effective date of such reclassification, change,
consolidation, merger, sale or conveyance, pursuant to said section 8(d)(i). Any
such adjustment required by this section 7(c) shall be binding upon the holders
of Series 3 Preferred Stock and the Corporation if made in good faith by the
Board. The above provisions of this section 7(c) shall similarly apply to
successive reclassifications, changes, consolidations, mergers, sales or
conveyances of the character referred to in section 8(d)(i) hereof.
(d) In the event that less than all of the issued and
outstanding Series Preferred Stock are to be redeemed, the shares to be redeemed
shall be chosen by lot, pro rata, or by such other method as the Board may
determine to be equitable.
(e) In the event of a redemption of shares of Series 3
Preferred Stock, a notice fixing the time and place of redemption (and if less
than all shares of Series 3 Preferred Stock are to be redeemed, identifying the
shares to be redeemed) shall be mailed not less than ten (10) days nor more than
sixty (60) days prior to the date so fixed to each holder of record of the
Series 3 Preferred Stock to be redeemed at the address thereof as it appears on
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the records of the Corporation. No failure to mail any such notice or any defect
therein or in the mailing thereof shall affect the validity of the proceedings
for such redemption.
(f) From and after the date fixed for such redemption, unless
the Corporation shall default in providing moneys for the payment of the
redemption price, the holders of the shares so called for redemption shall not
be entitled to any dividends and shall cease to have any rights or interests as
holders of said shares, except the right to receive the payment herein
designated, without interest thereon, upon presentation and surrender of their
certificates therefor.
(g) From and after the date specified for redemption, the
Corporation shall, at the place specified in the notice of redemption, upon
presentation and surrender to the Corporation by the holder thereof of the
certificate(s) representing the shares of Series 3 Preferred Stock redeemed,
deliver or cause to be delivered to or upon the written order of such holder a
sum in cash equal to the redemption price of the shares of such holder to be
redeemed, together with, if the certificate(s) presented and surrendered by such
Holder represent a greater number of shares than the number of shares to be
redeemed from such holder, one or more new certificates registered in the name
of such holder and representing the shares of Series 3 Preferred Stock not
redeemed.
(h) In the event that the Corporation sells newly issued
shares of Junior Stock via a rights offering while shares of Series 3 Preferred
Stock are outstanding, the Corporation shall, upon request of the holder of the
preferred stock, redeem shares of the Series 3 Preferred Stock provided that all
cash received for such shares (including accrued but unpaid dividends) is used
for the exercise of rights to purchase Junior Stock pursuant to the rights
offering.
8. Conversion.
(a) Subject to the provisions of section 7 hereof regarding
redemption and to the terms and conditions of this section 8, but in no event
prior to six (6) months after the date of the original issue of shares of Series
3 Preferred Stock, shares of Series 3 Preferred Stock shall be convertible, at
the option of the holder thereof (except that, in respect of any such shares
which shall have been called for redemption, such option shall terminate at the
close of business on the business day prior to the date fixed for redemption
unless the Corporation shall default in the payment of the redemption price),
into a number (calculated to the nearest 1/100th of a share, with 5/1000ths of a
share being considered as nearer to the next higher 1/100th of a share) of fully
paid and nonassessable shares of Common Stock at the then applicable conversion
price fixed or determined pursuant to the provisions of section 8(d) hereof,
each share of Series 3 Preferred Stock being taken at $1,000 for the purpose of
such conversion, by surrender of a certificate or certificates for Series 3
Preferred Stock so to be converted at the office of the Corporation's transfer
agent for the Series 3 Preferred Stock (or at such other place or places as may
be designated by the Corporation) at any time during usual business hours,
together with written notice that the holder elects to convert such Series 3
Preferred Stock, or a stated number of shares thereof, in accordance with the
provisions of this section 8.
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(b) As promptly as practicable after exercise by any holder of
such holder's option to convert any shares of Series 3 Preferred Stock pursuant
to the provisions of this section 8, but subject to the provisions of section
8(d)(iii) hereof, the Corporation shall deliver or cause to be delivered to such
holder one or more certificates representing the number of shares of Common
Stock issuable upon such conversion, together with, if the certificate(s)
surrendered evidence a greater number of shares than the number of shares to be
converted, one or more certificates evidencing the shares of Series 3 Preferred
Stock not to be converted, and together with any cash in respect of any
fractional interest in a share of Common Stock issuable upon such conversion.
Subject to section 8(d)(iii) hereof, each such conversion shall be deemed to
have been made immediately prior to the close of business on the day the option
to convert is exercised, and all rights of the converting holder as a holder of
the shares of Series 3 Preferred Stock surrendered for conversion shall cease at
such time and the person or persons in whose name or names the certificate(s)
for the shares of Common Stock issuable upon conversation are to be issued shall
be treated for all purposes as having become the record holder or holders
thereof at such time.
(c) If the last day for the exercise of the conversion option
be, in the jurisdiction in which the office of the transfer agent for the Series
3 Preferred Stock or other place designated by the Corporation as a place for
conversion of Series 3 Preferred Stock is located, a Saturday, Sunday or legal
holiday, then such conversion option may be exercised, at the conversion price
in effect on such last day, upon the next succeeding day not a Saturday, Sunday
or legal holiday in such jurisdiction.
(d) Each share of Series 3 Preferred Stock shall be
convertible into the number of shares of Common Stock as is determined by
dividing the sum of $1,000.00 by the conversion price provided for herein, and
as the same may be adjusted from time to time. The conversion price for shares
of Series 3 Preferred Stock shall be $3.00 per share, provided if adjustment of
the conversion price is required pursuant to this section 8(d), the conversion
price shall be such adjusted conversion price.
(i) In case any of the following shall occur:
(x) any reclassification or change in the
outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination);
(y) any consolidation or merger to which the
corporation is a party (other than a merger in which the Corporation is the
surviving corporation and which does not result in any reclassification of, or
change in, the outstanding shares of Common Stock); or
(z) any sale or conveyance to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, other than a sale/leaseback, mortgage or other similar financing
transactions,
then, in each such case, appropriate provision shall be made, effective as of
the effective date of any such reclassification, change, consolidation, merger,
sale or conveyance, as the case may be, whereby the holders of Series 3
Preferred Stock then outstanding shall have the right to convert such Series 3
<PAGE> 8
Preferred Stock into the kind and amount of shares of stock and other securities
and property (including cash) which would have been receivable upon such
reclassification, change, consolidation, merger, sale or conveyance by a holder
of shares of Common Stock which would have been issuable upon conversion of such
Series 3 Preferred Stock immediately prior to such reclassification, change,
consolidation, merger, sale or conveyance. In connection with any provision made
pursuant to the terms of the preceding sentence, provision shall also be made
for adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this section 8. The above provisions of this section
8(d)(i) shall similarly apply to successive reclassifications, changes,
consolidations, mergers, sales or conveyances.
(ii) In case the Corporation shall at any time
subdivide or split-up, or increase by dividend payable in shares of Common
Stock, the number of outstanding shares of Common Stock issuable upon conversion
of Series 3 Preferred Stock, or combine the outstanding shares of Common Stock
issuable upon conversion of Series 3 Preferred Stock, then, in each such case,
the conversion price in effect immediately prior to such subdivision, split-up
or stock dividend, or such combination, shall, effective as of the effective
date of such subdivision, split-up or stock dividend, or such combination, be
proportionately decreased in the case of subdivision, split-up or stock
dividend, or proportionately increased in the case of combination.
(iii) In any case in which this section 8 shall
require that an adjustment shall become effective immediately after a record
date for an event, the Corporation may defer until the occurrence of such event
(i) issuing to the holder of Series 3 Preferred Stock converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the shares issuable upon such conversion before
giving effect to such adjustment and (ii) paying to such holder any amount in
cash in lieu of a fractional share pursuant to section 8(i) hereof; provided,
however, the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares of Common Stock, and such cash, upon the occurrence of the event
requiring such adjustment.
(e) Any determination as to whether an adjustment in the
conversion price in effect hereunder is required pursuant to section 8(d)
hereof, or as to the amount of any such adjustment, if required, shall be
binding upon the holders of Series 3 Preferred Stock and the Corporation if made
in good faith by the Board.
(f) Whenever the conversion price is adjusted as provided in
this section 8, then, in each such case, the Corporation shall mail to the
holders of Series 3 Preferred Stock of record not more than 15 days before the
date of mailing (at the addresses thereof appearing on the Corporation's
records), a notice in writing stating the adjusted conversion price then and
thereafter effective under the provisions hereof, the method of calculating such
adjusted conversion price shown in reasonable detail, and the facts on which
such calculation is based. Where appropriate, such notice may be given in
advance and may be included as part of a notice required to be given under the
provisions of section 8(g) hereof.
(g) In the event the Corporation shall propose to take any
action of a type described in section 8(d) hereof, the Corporation shall give
notice thereof to each holder of shares of Series 3 Preferred Stock, in the
<PAGE> 9
manner set forth in 8(f) hereof, which notice shall specify the record date on
which such action is expected to take place. Such notice shall also set forth
such facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action (to the extent such effect may be known at the date of
such notice) on the conversion price, and the number, kind or class of shares or
other securities or property which shall be deliverable upon conversion of
Series 3 Preferred Stock. In the case of any action that would require the
fixing of a record date, such notice shall be given prior to the date so fixed,
and in case of all other action, such notice shall be given prior to the
effectiveness of such proposed action. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of any such action.
(h) As used in this section 8, the term "Common Stock" shall
mean and include the Corporation's Common Stock authorized on the date of the
original issue of shares of Series 3 Preferred Stock and shall also include any
capital stock of any class of the Corporation thereafter authorized which shall
not be limited to a fixed sum or percentage in respect of the rights of the
holders thereof to participate in dividends and in the distribution of assets
upon the voluntary or involuntary liquidation, dissolution or winding up of the
Corporation; provided, however, that the shares into which the Series 3
Preferred Stock shall be convertible pursuant to this section 8 shall include,
and, as used in sections 7(b) and 2(d) hereof, the term "Common Stock" shall
mean and include, only shares of such class designated in the Corporation's
Certificate of Incorporation as Common Stock on the date of the original issue
of shares of Series 3 Preferred Stock or (i), in the case of any
reclassification, change, consolidation, merger, sale or conveyance of the
character referred to in section 8(d)(i) hereof, the stock, securities or
property (including cash) provided for in such section or (ii), in the case of
any reclassification or change in the outstanding shares of Common Stock
issuable upon conversion of the Series 3 Preferred Stock as a result of a
subdivision or combination or consisting of a change in par value, or from par
value to no par value, or from no par value to par value, such shares of Common
Stock as so reclassified or changed.
(i) No fractional shares of stock shall be issued upon the
conversion of any Series 3 Preferred Stock. If any fractional interest in a
share of Common Stock would, except for the provisions of this section 8(i), be
deliverable upon the conversion of any Series 3 Preferred Stock, the Corporation
shall, in lieu of delivering the fractional share therefor, adjust such
fractional interest by payment to the holder of such surrendered Series 3
Preferred Stock of an amount in cash (computed to the nearest cent) equal to the
current market value of such fractional interest, computed on the basis of the
mean between the closing bid and asked prices for the Common Stock as published
by NASDAQ (or, if such prices are not so published by NASDAQ, as furnished by
any New York Stock Exchange member firm selected from time to time by the
Corporation for such purpose) on the last Trading Day prior to the date on which
such stock was surrendered or, if the Common Stock is then listed or admitted to
trading on a national securities exchange, the last sales price regular way for
the Common Stock, as reported in the consolidated trading system for securities
listed or admitted to trading on such national securities exchange, on the last
Trading Day prior to the date on which such stock was surrendered, or, if no
such sale takes place on such day, the mean between the closing bid and asked
prices regular way for the Common Stock on such date on the principal national
securities exchange on which the Common Stock is not traded in such manner that
the quotations referred to above are available, then the current market value of
<PAGE> 10
such fractional share interest shall be the fair value as determined in good
faith by the Corporation.
(j) Upon any conversion, no adjustment shall be made for
dividends, whether accrued and unpaid or otherwise, on the Series 3 Preferred
Stock surrendered for conversion or on the Common Stock delivered upon such
conversion.
(k) The Corporation will use its best efforts to reserve and
keep available out of its authorized but unissued stock, solely for the purpose
of issue upon conversion of the Series 3 Preferred Stock, as provided in this
section 8, such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series 3 Preferred Stock,
and, upon the issuance thereof upon conversion, all in accordance with the
provisions hereof, such shares of Common Stock shall be duly and validly issued,
fully paid and nonassessable.
(l) Before taking any action which would cause an adjustment
reducing the conversion price below the then par value of the Common Stock, the
Corporation will take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly and lawfully
issue fully paid and nonassessable shares of Common Stock at the conversion
price as so adjusted.
(m) The issuance of certificates for shares of Common Stock
shall be made without charge for any tax in respect of such issuance. However,
if any such certificate is to be issued in a name other than that of the holder
of the converted Series 3 Preferred Stock, the Corporation shall not be required
to issue or deliver any stock certificate or certificates unless and until the
holder has paid to the Corporation the amount of any tax which may be payable in
respect of any transfer involved in such issuance or shall establish to the
satisfaction of the Corporation that such tax has been paid.
9. Miscellaneous.
(a) All accounting terms used herein and not expressly
defined herein shall have the meaning given to them in accordance with generally
accepted accounting principles.
(b) The term "outstanding", when used herein with
reference to shares of stock, shall mean issued shares, excluding shares held by
the Corporation or a direct or indirect subsidiary thereof.
(c) The term "person" when used herein shall mean any
corporation, partnership, trust, organization, association or other entity or
individual.
(d) Nothing contained herein shall prevent the
creation, authorization or issuance, either by or pursuant to authority granted
in the Certificate of Incorporation (as the same may hereafter be amended), of
any one or more classes or series of preferred or special stock (including the
Preferred Stock), whether ranking prior to or on a parity with or junior to the
Series 3 Preferred Stock as to dividends or in liquidation and/or having or
carrying any powers, preferences and relative, participating, optional and other
special rights authorized by law and the Certificate of Incorporation (as the
same may hereafter be amended).
<PAGE> 11
(e) The headings of the sections and paragraphs of this
resolution are for convenience of reference only and shall not define, limit or
affect any of the provisions hereof."
Signed at Ann Arbor, Michigan, as of the 28th day of
November, 2000.
--------------------------------
Stephen Lange Ranzini, President
ATTEST
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Joseph L. Ranzini, Secretary
