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EXHIBIT 3.3
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
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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
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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.ss.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
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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:
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(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
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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
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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
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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
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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
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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;
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(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.
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(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
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(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
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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.
* * *
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