Exhibit 99.9
ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
AER ENERGY RESOURCES, INC.
In accordance with Sections 14-2-602 and 14-2-1006 of
the Georgia Business Corporation Code (the "Code"), AER
Energy Resources, Inc. (the "Corporation"), a corporation
organized and existing under and by virtue of the Code,
DOES HEREBY CERTIFY:
1. The name of the Corporation is AER Energy
Resources, Inc.
2. The following resolution setting forth an
amendment to the Corporation's Articles of
Incorporation has been duly adopted by the
Corporation's Board of Directors:
RESOLVED, that Article II of the
Corporation's Articles of Incorporation is hereby
amended by adding the following provisions to the
end of Section 2.4: "The Corporation is
authorized to issue 425,000 shares of Series A
Convertible Preferred Stock, no par value (the
"Series A Preferred Stock"). The Series A
Preferred Stock shall have the terms,
preferences, limitations and relative rights set
forth on Exhibit A hereto."
3. The "Exhibit A" referenced in the foregoing
resolution is included in these Articles of
Amendment and is the same "Exhibit A" as is
attached hereto.
4. The foregoing resolution containing the amendment
was duly adopted on September 21, 2000, by the
Corporation's Board of Directors in accordance
with the provisions of Sections 14-2-602 and 14-
2-1002 of the Code. This amendment was adopted
by the Corporation's Board of Directors without
shareholder action and such shareholder action was
not required.
IN WITNESS WHEREOF, the Corporation has caused these
Articles of Amendment to be signed by the undersigned duly
authorized officer, this 27th day of September, 2000.
AER ENERGY RESOURCES, INC.
By: /s/ J.T. Moore
J.T. Moore
Vice President and Chief
Financial Officer
<PAGE>
Exhibit A
TERMS, PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS OF
SERIES A CONVERTIBLE PREFERRED STOCK OF
AER ENERGY RESOURCES, INC.
The following terms shall have the meanings specified:
"Articles of Incorporation" shall mean the Articles of
Incorporation of the Corporation, as amended.
"Base Price" shall mean $0.738.
"Board of Directors" shall mean the board of directors
of the Corporation.
"Bylaws" shall mean the bylaws of the Corporation, as
amended.
"Common Stock" shall mean the common stock, no par
value per share, of the Corporation.
"Conversion Notice" shall have the meaning provided in
Section (d)(5) hereof.
"Conversion Price" shall equal $0.851; provided,
however, that if 115% of the average closing bid price of
the Common Stock as reported on the OTC-BB for the 20
consecutive trading days ending on the first anniversary of
the Original Issue Date (such 20-day average price being
referred to in this definition as the "Adjusted Price") is
less than the Conversion Price, then the Conversion Price
shall equal the greater of (1) 115% of the Adjusted Price
and (2) $0.554; provided, further, that the Conversion
Price shall also be subject to the adjustments provided in
Section (d)(6) hereof.
"Conversion Rate" shall equal such number of shares of
Common Stock equal to (1) the then applicable Liquidation
Value, divided by (2) the then applicable Conversion Price.
"Conversion Rights" shall have the meaning provided in
Section (d) hereof.
"Conversion Shares" shall mean the shares of Common
Stock into which each share of Series A Preferred Stock is
convertible pursuant to Section (d) hereof.
"Corporation" shall mean AER Energy Resources, Inc., a
Georgia corporation.
"Extraordinary Transaction" shall mean any of the
following events:
(1) the consummation of a merger, share exchange,
acquisition of stock or other similar transaction, as a
result of which the Corporation shall not continue to exist
or shall continue to exist only as a subsidiary of another
entity (other than a parent or subsidiary of the
Corporation);
(2) the consummation of a sale of all or
substantially all the assets of the Corporation to a person
or entity (other than a parent or subsidiary of the
Corporation); or
(3) the public announcement of a tender offer (other
than by a parent or subsidiary of the Corporation) for all
of the outstanding shares of Common Stock.
"Georgia Code" shall mean the Georgia Business
Corporation Code, O.C.G.A. 14-2-101 et seq., as amended.
"Liquidation" shall have the meaning provided in
Section (b) hereof.
"Liquidation Value," with respect to a share of Series
A Preferred Stock, shall equal the Stated Value of such
share plus all accrued but unpaid dividends with respect to
such share.
"Original Issue Date" shall mean September 27, 2000.
"OTC-BB" shall mean the Over-the-Counter Bulletin
Board automated quotation system operated by The Nasdaq
Stock Market, Inc., or any successor quotation system.
"Redemption Notice" shall have the meaning provided in
Section (e)(1) hereof.
"Redemption Price" shall have the meaning provided in
Section (e)(1) hereof.
"Securities Act" shall mean the Securities Act of
1933, as amended.
"Series A Preferred Stock" shall mean the 425,000
shares of Series A Convertible Preferred Stock, no par
value, hereby established.
"Stated Value" per share of the Series A Preferred
Stock shall mean the per share issue price for any share of
Series A Preferred Stock, as adjusted pursuant to Section
(d)(6) hereof after the Original Issue Date. The initial
Stated Value per share of Series A Preferred Stock is
$10.00.
The terms, preferences, limitations and relative
rights of the Series A Preferred Stock are as follows:
(a) Dividend Rights. The following dividend rights
shall apply to the Series A Preferred Stock:
(1) The holders of outstanding shares of Series
A Preferred Stock shall be entitled to receive cash
dividends when, as and if declared by the Board of
Directors out of any funds legally available therefor
at the rate of 6.75% of the Liquidation Value per
annum, or $0.675 per share of Series A Preferred Stock
based upon the initial Stated Value per share.
(2) Dividends shall accrue on each share of
Series A Preferred Stock from the Original Issue Date,
and shall accrue from day to day, whether or not
earned or declared and whether or not there shall be
funds legally available for the payment of such
dividends. Such dividends shall be cumulative so
that, if such dividends in respect of any previous or
current quarterly dividend period, at the rate
specified above, shall not have been paid or declared
and a sum sufficient for the payment thereof set
apart, the deficiency shall first be fully paid before
any dividend or other distribution shall be paid on or
declared and set apart for the Common Stock or any
other stock ranking junior to the Series A Preferred
Stock. Any accumulation of dividends on the Series A
Preferred Stock shall not bear interest.
(3) No cash dividend shall be paid or declared
on Common Stock or any or any other stock ranking
junior to the Series A Preferred Stock as to dividend
preference unless (A) full accrued and unpaid
dividends on the Series A Preferred Stock for all past
dividend periods and the then current dividend period
shall have been paid or declared and a sum sufficient
for the payment above set apart and (B) the
Corporation shall also pay each holder of the Series A
Preferred Stock the amount of such cash dividend per
share of Common Stock, multiplied by the number of
shares of Common Stock that such holder would have
received if, immediately prior to the declaration date
of such dividend, all shares of Series A Preferred
Stock owned by such holder were converted into Common
Stock pursuant to Section (d) hereof.
(4) Each dividend shall be paid to the holders
of record of the Series A Preferred Stock as they
shall appear on the stock register of the Corporation
on such record date, not exceeding 45 days nor less
than 10 days preceding a dividend payment date, as
shall be fixed by the Board of Directors or a duly
authorized committee thereof.
(b) Liquidation Rights. Subject to the rights of any
class of stock of the Corporation with liquidation
preferences senior to the Series A Preferred Stock, in the
event of the liquidation, dissolution or winding up for any
reason, including, without limitation, bankruptcy, of the
Corporation or any of the Corporation's subsidiaries, the
assets of which constitute all or substantially all the
assets of the business of the Corporation and its
subsidiaries taken as a whole (each such event being
referred to as a "Liquidation"), the holders of the
outstanding shares of Series A Preferred Stock shall be
entitled to receive in exchange for and in redemption of
each share of their Series A Preferred Stock, and on a
parity with the holders of any capital stock ranking pari
passu to the Series A Preferred Stock, from any funds,
proceeds or assets legally available for distribution to
shareholders, an amount equal to the greater of (1) the
Liquidation Value as of the date that the Liquidation is
approved by the shareholders of the Corporation, or, if no
such approval is required, the Board of Directors, or (2)
the aggregate amount of such funds, proceeds or assets,
multiplied by a fraction:
(x) the numerator of which is the number of
Conversion Shares to which the holder of such share of
Series A Preferred Stock would be entitled to receive
by virtue of converting such share; and
(y) the denominator of which is the aggregate of
the number of Conversion Shares, shares of Common
Stock outstanding, and all other shares of outstanding
capital stock of any series the holders of which are
entitled to participate in the proceeds of a
Liquidation.
All the preferential amounts to be paid to the holders
of Series A Preferred Stock under this Section (b) shall be
paid or set apart for payment before the payment or setting
apart for payment of any amount for, or the distribution of
any funds, proceeds or assets of the Corporation to, the
holders of shares of Common Stock or any class or series of
stock of the Corporation ranking junior to the Series A
Preferred Stock in connection with a Liquidation as to
which this Section (b) applies. If the funds, proceeds and
assets to be distributed to the holders of Series A
Preferred Stock are insufficient to permit the payment to
such holders of the full amounts payable to such holders,
the funds, proceeds and assets legally available for
distribution shall be distributed ratably among the holders
of Series A Preferred Stock in proportion to the full
amount each such holder is otherwise entitled to receive.
(c) Voting Rights. Except as provided herein or by
the Code, the Series A Preferred Stock shall not have any
voting rights.
(d) Conversion. The holders of Series A Preferred
Stock shall have conversion rights as follows (the
"Conversion Rights"):
(1) Conversion Rate.
(A) For purposes of this Section (d), each
share of Series A Preferred Stock shall be
convertible, at the times and under the
conditions described in this Section (d), at the
rate of one share of Series A Preferred Stock to
the number of shares of Common Stock that equals
the Conversion Rate. Such conversion shall be
deemed to have been made immediately prior to the
close of business on the date of the
surrender of the shares of Series A Preferred
Stock to be converted in accordance with the
procedures described in Section (d)(5) hereof.
(B) No fractional shares of Common Stock
shall be issued upon conversion of Series A
Preferred Stock, and any shares of Series A
Preferred Stock surrendered for conversion that
would otherwise result in a fractional share of
Common Stock shall be redeemed in cash at the
then effective Conversion Price per share,
payable as promptly as possible when funds are
legally available therefor.
(2) Conversion at Option of Holders. Subject to
Section (d)(5) hereof, each share of Series A
Preferred Stock shall be convertible, at the option of
the holder thereof, at any time after issuance, in
whole or in part, at the office of the Corporation or
any transfer agent for the Series A Preferred Stock,
into Common Stock at the then effective Conversion
Rate
(3) Conversion at Option of Company.
(A) Beginning on the date that is three
years after the Original Issue Date, and if all
the conditions of Section (d)(3)(B) are
satisfied, the Corporation may require that each
holder of Series A Preferred Stock convert such
holder's shares of Series A Preferred Stock into
Common Stock in accordance with Section (d)
hereof.
(B) All of the following conditions must be
met in order for the Corporation to exercise the
conversion rights set forth in Section (d)(3)(A)
hereof:
(i) the average closing bid price of a
share of the Common Stock (as reported on
the OTC-BB) for any 20 trading days out of
the 30 trading days immediately preceding
such exercise shall be greater than or equal
to 250% of the Conversion Price as of the
date of such exercise;
(ii) a registration statement filed
under the Securities Act covering the resale
of shares of Common Stock that may be
received upon the conversion of all shares
of the Series A Preferred Stock (the "Resale
Registration Statement") is effective and
has been continuously effective for at least
three months;
(iii) from the effective date of the
Resale Registration Statement until the date
of such exercise, the Common Stock has been
continuously listed or quoted on a national
securities exchange, on any tier of The
Nasdaq Stock Market, Inc. or on an automated
inter-dealer quotation system (including the
OTC-BB), and the Corporation has not
received any written notice stating that
such exchange, market or system has delisted
or is seeking to delist the Common Stock
from such exchange, market or system; and
(iv) for a three-month period ending on
the Conversion Date with respect to such
exercise, there has not been a public
announcement of an Extraordinary Transaction
that is pending on or has been consummated
before the Conversion Date.
(4) Conversion Upon Extraordinary Transaction.
At any time after the date that an Extraordinary
Transaction has been announced and is then pending,
any holder of Series A Preferred Stock may convert all
of its shares of Series A Preferred Stock into a
number of shares of Common Stock calculated by
dividing (A) the greater of (i) the then applicable
Liquidation Value and (ii) the Stated Value, plus the
dividends that would have accrued on the Series A
Preferred Stock in the event that no dividends were
declared and paid by the Corporation for a period of
three years from the Original Issue Date, by (B) the
then applicable Conversion Price.
(5) Mechanics of Conversion. Before any holder
of Series A Preferred Stock shall be entitled to
receive certificates representing the shares of Common
Stock into which shares of Series A Preferred Stock
are converted in accordance with Sections (d)(2),
(d)(3), (d)(4) or (e)(2) hereof, such holder shall
surrender the certificate or certificates for such
shares of Series A Preferred Stock, duly endorsed,
with signatures guaranteed, at the office of the
Corporation or of any transfer agent for the Series A
Preferred Stock, and shall give written notice to the
Corporation at such office of the name or names in
which such holder wishes the certificate or
certificates for shares of Common Stock to be issued,
if different from the name shown on the books and
records of the Corporation (the "Conversion Notice").
The Conversion Notice shall also contain such
representations as may reasonably be required by the
Corporation to the effect that the shares to be
received upon conversion are not being acquired and
will not be transferred in any way that might violate
the then applicable securities laws. The Corporation
shall, as soon as practicable thereafter and in no
event later than 10 days after the delivery of said
certificates and Conversion Notice, issue and deliver
at such office to such holder of Series A Preferred
Stock, or to the nominee or nominees of such holder as
provided in the Conversion Notice, a certificate or
certificates for the number of shares of Common Stock
to which such holder shall be entitled as aforesaid.
The conversion shall be effective at the time the
Corporation accepts the Conversion Notice as being
proper in form and substance. The person or persons
entitled to receive the shares of Common Stock
issuable upon a conversion pursuant to Sections
(d)(2), (d)(3), (d)(4) or (e)(2) hereof shall be
treated for all purposes as the record holder or
holders of such shares of Common Stock as of the
effective date of conversion pursuant to this Section
(d). All certificates issued upon the exercise or
occurrence of the conversion shall contain a legend
governing restrictions upon such shares imposed by law
(if any) or agreement of the holder or his or its
predecessors, successors or permitted assigns.
(6) Conversion Price Adjustments. The Stated
Value (and therefore, the Liquidation Value, the
Conversion Price, the corresponding Conversion Rate
and the $0.851 and $0.554 figures set forth in the
definition of Conversion Price) shall be subject to
adjustment from time to time as follows:
(A) Common Stock Issued at Less Than the
Current Conversion Price. If the Corporation
shall issue any Common Stock other than Excluded
Securities (as hereinafter defined) without
consideration or for a consideration per share
less than the then current Conversion Price, the
Conversion Price in effect immediately prior to
each such issuance shall immediately (except as
provided below) be reduced by multiplying the
Conversion Price by a fraction of which the
numerator shall be an amount equal to the sum of
(x) the number of shares of Common Stock
outstanding immediately prior to such issuance
multiplied by the current Conversion Price plus
(y) the consideration, if any, received by the
Corporation upon such issuance and the
denominator shall be the total number of shares
of Common Stock outstanding immediately after
such issuance multiplied by the current
Conversion Price.
For the purposes of any adjustment of the
Conversion Price pursuant to Section (d)(6)(A)
hereof, the following provisions shall be
applicable:
(i) Cash. In the case of the issuance
of Common Stock for cash, the amount of the
consideration received by the Corporation
shall be deemed to be the amount of the cash
proceeds received by the Corporation for
such Common Stock before deducting therefrom
any discounts, commissions, taxes or other
expenses allowed, paid or incurred by the
Corporation for any underwriting or
otherwise in connection with the issuance
and sale thereof.
(ii) Consideration Other Than Cash. In
the case of the issuance of Common Stock
(otherwise than upon the conversion of
shares of capital stock or other securities
of the Corporation) for a consideration in
whole or in part other than cash, including
securities acquired in exchange therefor
(other than securities by their terms so
exchangeable), the consideration other than
cash shall be deemed to be the fair
value thereof as determined by the Board of
Directors, irrespective of any accounting
treatment, whose determination shall be
conclusive.
(iii) Options and Convertible
Securities. Except with respect to any
securities that are Excluded Securities, in
the case of the issuance of (1) options,
warrants or other rights to purchase or
acquire Common Stock (whether or not at the
time exercisable), (2) securities by their
terms convertible into or exchangeable for
Common Stock (whether or not at the time so
convertible or exchangeable) or (3) options,
warrants or rights to purchase such
convertible or exchangeable securities
(whether or not at the time exercisable):
(a) the aggregate maximum number
of shares of Common Stock deliverable
upon exercise of such options, warrants
or other rights to purchase or acquire
Common Stock shall be deemed to have
been issued at the time such options,
warrants or rights were issued and for
a consideration equal to the
consideration (determined in the manner
provided in Sections (d)(6)(A)(i) and
(ii) hereof, if any, received by the
Corporation upon the issuance of such
options, warrants or rights plus the
minimum purchase price provided in such
options, warrants or rights for the
Common Stock covered thereby;
(b) the aggregate maximum number
of shares of Common Stock deliverable
upon conversion of or in exchange for
any such convertible or exchangeable
securities, or upon the exercise of
options, warrants or other rights to
purchase or acquire such convertible or
exchangeable securities and the
subsequent conversion or exchange
thereof, shall be deemed to have been
issued at the time such securities
were issued or such options, warrants
or rights were issued and for a
consideration equal to the
consideration, if any, received by the
Corporation for any such securities and
related options, warrants or rights
(excluding any cash received on account
of accrued interest or accrued
dividends), plus the additional
consideration (determined in the manner
provided in Sections (d)(6)(A)(i) and
(ii) hereof), if any, to be received by
the Corporation upon the conversion or
exchange of such securities, or upon
the exercise of any related options,
warrants or rights to purchase or
acquire such convertible or
exchangeable securities and the
subsequent conversion or exchange
thereof;
(c) on any change in the number
of shares of Common Stock deliverable
upon exercise of any such options,
warrants or rights or conversion or
exchange of such convertible or
exchangeable securities or any change
in the consideration to be received by
the Corporation upon such exercise,
conversion or exchange, including, but
not limited to, a change resulting from
the anti-dilution provisions thereof,
the Conversion Price as then in effect
shall forthwith be readjusted to such
Conversion Price as would have been
obtained had an adjustment been made
upon the issuance of such options,
warrants or rights not exercised prior
to such change, or of such convertible
or exchangeable securities not
converted or exchanged prior to such
change, upon the basis of such change;
(d) on the expiration or
cancellation of any such options,
warrants or rights, or the termination
of the right to convert or
exchange such convertible or
exchangeable securities, if the
Conversion Price shall have been
adjusted upon the issuance thereof, the
Conversion Price shall forthwith be
readjusted to such Conversion Price as
would have been obtained had an
adjustment been made upon the issuance
of such options, warrants, rights or
such convertible or exchangeable
securities on the basis of the issuance
of only the number of shares of Common
Stock actually issued upon the exercise
of such options, warrants or rights, or
upon the conversion or exchange of such
convertible or exchangeable securities;
and
(e) if the Conversion Price shall
have been adjusted upon the issuance of
any such options, warrants, rights or
convertible or exchangeable securities,
no further adjustment of the Conversion
Price shall be made for the actual
issuance of Common Stock upon the
exercise, conversion or exchange
thereof.
(B) Excluded Securities. Notwithstanding
the foregoing, no adjustment shall be made
pursuant to this Section (d) as a result of the
issuance or deemed issuance of any of the
foregoing (collectively, the "Excluded
Securities"):
(i) any shares of Common Stock upon
the conversion of shares of Series A
Preferred Stock;
(ii) securities of the Corporation
offered to the public pursuant to an
effective registration statement under the
Securities Act;
(iii) any securities of the Corporation
(including any shares of Common Stock that
may be issuable pursuant to the
conversion or exercise of any options,
warrants or rights of the Corporation)
pursuant to any commercial agreement if the
issuance of such securities is approved by
the Board of Directors;
(iv) any shares of Common Stock as a
result of the adjustments to the Conversion
Price and the Conversion Rate under this
Section (d);
(v) any options, warrants or rights of
the Corporation, and any shares of Common
Stock issued at any time following the
Original Issue Date (including any shares of
Common Stock that may be issuable pursuant
to the conversion or exercise of any
options, warrants or rights of the
Corporation), in each case granted under any
employee stock option or incentive plan in
which employees or directors of the
Corporation may participate;
(vi) any shares of Common Stock issued
in a transaction to which Section (d)(6)(C)
or (D) applies; or
(vii) any shares of Common Stock issued
pursuant to the exchange, conversion or
exercise of options, warrants or other
rights of the Corporation that have
previously been incorporated into
computations hereunder on the date when such
options, warrants or other rights of the
Corporation were issued.
(C) Stock Dividends, Subdivisions,
Reclassifications or Combinations. If the
Corporation shall (i) declare a dividend or make
a distribution on its Common Stock in shares of
its Common Stock, (ii) subdivide or reclassify
the outstanding shares of Common Stock into a
greater number of shares, or (iii) combine or
reclassify the outstanding Common Stock into a
smaller number of shares, the Conversion Price in
effect at the time of the record date for such
dividend or distribution or the effective
date of such subdivision, combination or
reclassification shall be proportionately
adjusted so that the holder of any shares of
Series A Preferred Stock surrendered for
conversion after such date shall be entitled to
receive the number of shares of Common Stock
which he would have owned or been entitled to
receive had such Series A Preferred Stock been
converted immediately prior to such date.
Successive adjustments in the Conversion Price
shall be made whenever any event specified above
shall occur.
(D) Other Distributions. In case the
Corporation shall fix a record date for making of
a distribution to all holders of shares of its
Common Stock of (i) shares of any class other
than its Common Stock, (ii) evidences of
indebtedness of the Corporation, (iii) assets
(excluding cash dividends or distributions, or
dividends or distributions referred to in Section
(d)(6)(C) hereof), or (iv) rights or warrants
(excluding those referred to in Section (d)(6)(A)
hereof), in each such case the Conversion Price
in effect immediately prior thereto shall be
reduced immediately thereafter to the price
determined by dividing (1) an amount equal to the
difference resulting from (x) the number of
shares of Common Stock outstanding on such record
date multiplied by the Conversion Price per share
on such record date, less (y) the fair market
value (as determined by the Board of Directors,
whose determination shall be conclusive) of said
shares or evidences of indebtedness or assets or
rights or warrants to be so distributed, by (2)
the number of shares of Common Stock outstanding
on such record date. Such adjustment shall be
made successively whenever such a record date is
fixed. In the event that such distribution is
not so made, the Conversion Price then in effect
shall be readjusted, effective as of the date
when the Board of Directors determines not to
distribute such shares, evidences of
indebtedness, assets, rights or warrants, as the
case may be, to the Conversion Price which would
then be in effect if such record date had not
been fixed.
(7) De Minimis Adjustments. No adjustment to
the Conversion Price (and, therefore, the Conversion
Rate) shall be made if such adjustment would result in
a change in the Conversion Price of less than $0.01,
but any lesser adjustment shall be carried forward and
shall be made at the time of and together with the
next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to $0.01
or more.
(8) Reservation of Stock Issuable Upon
Conversion. The Corporation 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 shares of the
Series A Preferred Stock such number of shares of
Common Stock as shall from time to time be sufficient
to effect the conversion of all outstanding shares of
the Series A Preferred Stock; and if at any time the
number of authorized but unissued shares of Common
Stock shall be insufficient to effect the conversion
of all then outstanding shares of the Series A
Preferred Stock, the Corporation shall take such
corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but
unissued shares of Common Stock to such number of
shares as shall be sufficient for such purpose.
(9) Notices of Record Date. In the event of any
taking by the Corporation of a record of the holders
of any series or class of securities other than Series
A Preferred Stock (A) for the purpose of determining
the holders thereof who are entitled to receive any
dividend or other distribution or (B) with respect to
an Extraordinary Transaction (other than a tender
offer) or any other action described in Section
(d)(6)(C) or (D) hereof, the Corporation shall mail to
each holder of Series A Preferred Stock, at least 10
days prior to the date specified therein, a notice
specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution
or action, and the amount and character of such
dividend, distribution or action; provided, however,
that the failure to give such notice shall not impair
the validity of such dividend, distribution,
Extraordinary Transaction or other action.
(e) Redemption.
(1) Optional Redemption. The Series A Preferred
Stock is redeemable by the Corporation, in whole or in
part, at any time or from time to time after issuance
of the Series A Preferred Stock at the option of the
Corporation, on at least 20 but not more than 90 days'
written notice (the "Redemption Notice"). With
respect to any such redemption, each share of Series A
Preferred Stock will be redeemable at a price equal to
the greater of (A) the then applicable Liquidation
Value and (B) the Stated Value, plus the dividends
that would have accrued on the Series A Preferred
Stock in the event that no dividends were declared and
paid by the Corporation for a period of three years
from the Original Issue Date (the "Redemption Price").
The Redemption Price is payable in cash. Any holder
of Series A Preferred Stock may, in lieu of receiving
cash pursuant to this Section (e), exercise such
holder's conversion rights pursuant to Section (d)(2)
hereof by giving the Corporation a Conversion Notice
no later than 10 days after the Corporation delivers
the Redemption Notice.
(2) Mandatory Redemption. On the fifth
anniversary of the Original Issue Date, the Company
must, at its option (A) redeem each share of Preferred
Stock for a cash payment equal to the then applicable
Liquidation Value or (B) convert each share of Series
A Preferred Stock into a number of shares of Common
Stock equal to the then Conversion Rate in accordance
with the applicable provisions of Section (d).
(f) Protective Provisions. In addition to any other
rights provided by law, so long as any shares of Series A
Preferred Stock are then outstanding, except where the vote
or written consent of the holders of a greater number of
shares is required by law or by another provision of the
Articles of Incorporation, without first obtaining the
affirmative vote or written consent of the holders of 66?%
of the total number of shares of Series A Preferred Stock
outstanding, voting together as a single class, the
Corporation shall not:
(1) amend or repeal any provision of, or add any
provision to, the Articles of Incorporation or the
Bylaws, if such action would materially and adversely
alter the preferences, rights, privileges or powers
of, or restrictions provided for the benefit of,
holders of Series A Preferred Stock; or
(2) issue any shares of capital stock with
preferences, limitations and relative rights that
would be superior to or pari passu with the Series A
Preferred Stock.
(g) Notices. Any notice required by the provisions
hereof to be given to the holders of shares of Series A
Preferred Stock shall be deemed given (i) on the date of
delivery, if such notice is hand-delivered to such holder
or (ii) on the third business day following (and not
including) the date on which such notice is either sent via
express courier or deposited in the United States Mail,
first-class, postage prepaid, and addressed to each holder
of record at his address appearing on the books of the
Corporation. Notice by any other means shall not be deemed
effective until actually received.
(h) Determination of Market Price. In each case
where these Articles of Amendment refer to the OTC-BB to
calculate the market price of the Common Stock and at such
time the Common Stock is not quoted on the OTC-BB, the
following provisions shall apply:
(1) If the Common Stock is listed on a national
securities exchange, the average closing bid price
shall be calculated according to the closing price of
the Common Stock as reported by such exchange.
(2) If the Common Stock is not listed on a
national securities exchange but is quoted on any tier
of The Nasdaq Stock Market, Inc. ("Nasdaq"), or any
successor thereto, the average closing bid price shall
be calculated according to the closing bid price of
the Common Stock as reported by such tier of Nasdaq.
(3) If the Common Stock is not listed on a
national securities exchange or quoted on a tier of
Nasdaq, the average closing bid price shall be
calculated according to the closing price of the
Common Stock as reported by the "Pink Sheets"
published by The National Quotation Bureau, Inc., or
any successor thereto, or as reported by any other
electronic or non-electronic quotation system that
publishes or reports daily quotations of the Common
Stock.
(4) If none of the foregoing apply, the average
closing bid price shall be as determined in good faith
by a resolution of the Board of Directors.
* * *
