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AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
MANSUR INDUSTRIES INC.
ARTICLE I
The name of the corporation is MANSUR INDUSTRIES INC.
ARTICLE II
The period of its duration is perpetual.
ARTICLE III
The date and time of the commencement of the corporate existence shall
be November 13, 1990, the date of the filing of the original Articles with the
Department of State for the State of Florida.
ARTICLE IV
The purpose or purposes for which the corporation is organized is to
engage in the transaction of any or all lawful business for which the
corporation may be incorporated under the provisions of the Florida General
Corporation Act of the State of Florida.
ARTICLE V
This Corporation is authorized to issue Twenty Five Million
(25,000,000) shares of $.001 par value common stock, which shall be designated
"Common Shares" and One Million Five Hundred Thousand (1,500,000) shares of
preferred stock of $1.00 per share par value, which shall be designated
Preferred Shares".
ARTICLE VI
Preferred Shares may be issued from time to time in series. All
Preferred Shares shall be of equal rank and identical, except in respect to the
particulars that are set forth in these Articles or as they may be fixed by the
Board of Directors consistent with these Articles. Consistent with the
provisions of these Articles, the Board of Directors is authorized and required
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to fix, in the manner and to the full extent provided and permitted by law, all
provisions of the shares of each series set forth below:
1. The distinctive designation of all series and the number of shares
which shall constitute such series;
2. The annual rate and nature of dividends payable on the shares of all
series and the time and manner of payment;
3. The redemption price or prices, if any, for the shares of each, any
or all series;
4. The obligation, if any, of the Corporation to maintain a sinking
fund for the periodic redemption of shares of any series and to apply the
sinking fund to the redemption of such shares; and
5. The rights, if any, of the holders of shares of each series to
convert such shares into Common shares and the terms and conditions of such
conversion.
ARTICLE VII
SECTION 1. DIVIDENDS.
The holders of record of Preferred Shares shall be entitled to cash
dividends when and as declared by the Board of Directors at the rate per share
per annum and at the time and in the manner determined by the Board of Directors
in the resolution authorizing each series of Preferred Shares. Cash dividends on
Preferred Shares shall accrue from the date of issue. Upon the payment or
setting apart for payment of all current dividends at the specified percentage
rate per share per annum upon the outstanding Preferred Shares, the Directors
may declare and pay dividends upon the Common Shares.
Cash dividends on Preferred Shares shall, unless specifically fixed
otherwise by the Board of Directors with respect to any particular class or
series of preferred stock, be cumulative so that if, for any dividend period,
cash dividends at the specified percentage rate per share per annum shall not
have been declared and paid or set apart for payment on the Preferred Shares
outstanding, the deficiency shall be declared and paid or set apart for payment
prior to the making of any dividend or other distribution in the Common Shares.
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SECTION 2. RIGHTS UPON LIQUIDATION OR DISSOLUTION.
In the event of any voluntary or involuntary liquidation, dissolution
or winding up of this Corporation, the holders of record of the outstanding
Preferred Shares shall be entitled to be paid the value established by the Board
of Directors at the time any series of Preferred Shares is authorized,
consistent with these Articles. If no such value is established at the time of
authorization by the Board of Directors, then the holders of record of the
Preferred Shares shall be entitled to be paid the book value for each of such
Preferred Shares, plus accumulated dividends thereon up to the date of such
liquidation, dissolution or winding up of this Corporation, whether or not this
Corporation shall have a surplus or earnings available for dividends, and no
more. After payment to the holders of Preferred Shares of the amount payable to
them as above set forth, the remaining assets of this Corporation shall be
payable to and distributed ratably among the holders of record of the Common
Shares.
SECTION 3. VOTING RIGHTS.
Except as otherwise provided by law, the entire voting power for the
election of Directors and for all other purposes shall be vested exclusively in
the holders of the outstanding Common Shares.
ARTICLE VIII
SECTION 1. SERIES A 12% CUMULATIVE CONVERTIBLE PREFERRED STOCK.
A. DESIGNATION.
The shares of the second series of the Company's 12% Cumulative
Convertible Preferred Stock, $1.00 par value, shall be designated "Series A 12%
Cumulative Convertible Preferred Stock" (hereinafter the "Series A Preferred
Stock") and the number of authorized shares constituting such series shall be
600,000. The number of authorized shares of Series A Preferred Stock may not be
increased.
B. DIVIDENDS.
B.1. The holders of shares of Series A Preferred Stock shall be
entitled, in preference to the Common Stock and any other stock of the Company,
to receive cumulative cash dividends when and as declared by the Board of
Directors out of funds legally available for the purpose, from the date of
original issuance of such shares at a rate of $.60 per year per share of Series
A Preferred Stock. The amount of dividends per share payable for any dividend
period less than a full dividend period, shall be computed on the basis of a
360-day year of twelve 30-day months and the actual number of days elapsed in
the period for which payable. Dividends shall be payable when and as declared by
the Board of Directors, out of funds legally available therefor. Each such
dividend shall be paid to the holders of record of shares of the Series A
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Preferred Stock as they appear on the stock register of the Corporation on any
record date, not exceeding 30 days preceding the payment date thereof, as shall
be fixed by the Board of Directors. Dividends may be declared and paid at any
time, without reference to any regular dividend payment date, to holders of
record on such date, not exceeding 45 days preceding the payment date thereof,
as may be fixed by the Board of Directors. Dividends shall be cumulative,
whether or not earned, and will accrue on each share of Series A Preferred Stock
from the date of original issuance thereof.
B2. If dividends at the rate per share set forth in paragraph B1
shall not have been declared and paid or set apart for payment on all
outstanding shares of Series A Preferred Stock, then, until the aggregate
deficiency shall be declared and fully paid or set apart for payment, the
Company shall not (i) declare or pay or set apart for payment any dividends or
make any other distribution on any capital stock of the Company ranking junior
to, or on parity with, the Series A Preferred Stock with respect to the payment
of dividends or upon liquidation (such stock being herein referred to as "Junior
or Parity Stock"), or dividends or distributions paid in shares of, or options,
warrants or rights to subscribe for or purchase shares of, Junior Stock, or (ii)
make any payment on account of the purchase, redemption, retirement or other
acquisition of any Junior Stock or any options, warrants or rights to subscribe
for or purchase any Junior or Parity Stock.
C. LIQUIDATION PREFERENCE. Upon any liquidation (complete or partial),
dissolution or winding up of the Company, or sale of substantially all the
Company's assets, whether voluntary or involuntary, or any similar distribution
of its assets to its shareholders which results in a return of capital, whether
voluntary or involuntary, the holders of Series A Preferred Stock, in preference
to all other future issues of preferred stock or any junior stock, shall be
entitled to be paid out of the assets of the Company available for distribution
to its shareholders (whether from capital, surplus or earnings) an amount per
share of Series A Preferred Stock equal to $5.00 plus twice the amount of
aggregate dividends accrued through the date of distribution computed in
accordance with this paragraph, through the effective date of liquidation or
sale.
D. REDEMPTION.
D1. REDEMPTION OF SERIES A PREFERRED STOCK. The Company shall
purchase or redeem the Series A Preferred Stock on June 30, 1996, or any
extension of such redemption date which the Board of Directors of the Company
may declare at their sole discretion.
(a) For each share of the Series A Preferred Stock
redeemed by the Company, pursuant to this paragraph D1, the Company
shall be obligated to pay to the holder thereof, upon surrender, by
such holder at the Company's principal office of the certificate
representing such share, endorsed in blank or accompanied by an
appropriate form of assignment, an amount in cash (the "Redemption
Price") equal to the appropriate liquidation preference price of
$5.00, plus twice the aggregate amount of dividends accrued with
respect to such Series A Preferred Stock, calculated in accordance
with this paragraph, through the date of
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redemption, which date shall be specified in the Company's notice to
the Preferred Shareholder.
(b) The number of shares of Series A Preferred Stock to
be redeemed from each holder thereof in redemptions under this
paragraph D1 shall be the number of whole shares, as nearly as
practicable to the nearest share, determined by multiplying the
total number of shares of Series A Preferred Stock to be redeemed
times a fraction, the numerator of which shall be the total number
of shares of Series A Preferred Stock then held by such holder and
the denominator of which shall be the total number of shares of
Preferred Stock then outstanding. In case less than all the shares
represented by any certificate are redeemed, a new certificate shall
be issued representing the unredeemed shares without cost to the
holder thereof.
(c) Notice of any redemption of Series A Preferred
Stock, specifying the date and time of redemption and the Redemption
Price, shall be mailed by certified or registered mail, return
receipt requested, to each holder of record of shares to be
redeemed, at the address for such holder shown on the Company's
records, not more than 60 nor less than 30 days prior to the date on
which such redemption is to be made. If less than all the shares of
the Series A Preferred Stock owned by such holder are then to be
redeemed, the notice shall also specify the number of such shares
and the certificate numbers thereof which are to be redeemed. Upon
mailing any such notice of redemption, the Company shall become
obligated to redeem, on the date specified therein, all shares of
the Series A Preferred Stock specified in such notice.
D2. RIGHTS AFTER REDEMPTION OR REPURCHASE. On the date any share of
Series A Preferred Stock is redeemed or repurchased under this paragraph D, all
rights of the holder of such share as a shareholder of the Company by reason of
the ownership of such share shall cease, except the right to receive the
Redemption Price of such share upon the presentation and surrender of the
certificate representing such share, and such share shall not be deemed to be
outstanding after the date on which it is redeemed or repurchased.
D3. REDEEMED OR OTHERWISE ACQUIRED SHARES TO BE CANCELED. Any shares
of Series A Preferred Stock redeemed or repurchased pursuant to this section or
otherwise acquired by the Company in any manner whatsoever shall be canceled and
shall not under any circumstances be reissued, sold or transferred. The Company
shall from time to time take such action as may be necessary to reduce the
authorized number of shares of Series A Preferred Stock accordingly.
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E. CONVERSION.
E1. CONVERSION PROCEDURES.
(a) A holder of shares of Series A Preferred Stock may,
at the holder's option, at any time prior to the effective date of
redemption, as specified in the Company's notice in accordance with
Paragraph D1(c) hereof, convert all or any part (in whole numbers of
shares only) of the shares of Series A Preferred Stock held by such
holder into such number of fully paid and nonassessable whole shares
of Common Stock, on a one for one basis, that is one share of Series
A Preferred Stock may be converted into one whole share of Common
Stock.
(b) Each conversion of shares of Series A Preferred
Stock shall be effected by the surrender of the certificate or
certificates representing the shares to be converted at the
principal office of the Company (or such other office or agency of
the Company as the Company may designate by notice in writing to the
holder or holders of the Series A Preferred Stock) at any time
during its usual business hours, together with written notice by the
holder of such Series A Preferred Stock stating that such holder
desires to convert the shares, or a stated number of the shares,
represented by such certificate or certificates, into shares of
Common Stock. Such notice shall also specify the name or names (with
addresses) and denominations in which the certificate or
certificates for Common Stock shall be issued and shall include
instructions for delivery thereof. Such conversion shall be deemed
to have been effected as of the close of business on the date on
which such certificate or certificates shall have been surrendered,
and as of such date (the "Conversion Date") the rights of the holder
of such Series A Preferred Stock (or specified portion thereof) as
such holder shall cease and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock are
to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Common Stock
represented thereby.
(c) As soon as possible after the Conversion Date (but
in no event more than 30 days after the Conversion Date, the
Company shall deliver to the converting holder or, with respect
to the certificate(s) specified in (a) below, as specified by
such converting holder:
(i) a certificate or certificates
representing the number of shares of Common Stock
issuable by reason of such conversion registered in such
name or names and such denomination or denominations as
the converting holder shall have specified; and
(ii) a certificate representing any shares
of Series A Preferred Stock which shall have been
represented by the certificate or certificates which
shall have been delivered to the Company in connection
with such
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conversion but which shall not have been converted.
(iii) A Company check in the amount of any
accrued but unpaid dividends, which dividends have not
been converted to shares of Common Stock.
E2. AUTHORIZATION AND ISSUANCE OF COMMON STOCK.
(a) The Company will at all times reserve and keep
available out of its authorized but unissued shares of Common Stock,
solely for the purpose of issue upon the conversion of the Series A
Preferred Stock, as provided in this paragraph, such number of
shares of Common Stock as shall then be issuable upon the conversion
of all outstanding shares of Series A Preferred Stock together with
accrued interest thereon. The Company covenants that all shares of
Common Stock which shall be so issuable shall, when issued, be duly
and validly issued, fully paid and nonassessable and free from all
taxes, liens, and charges. The Company will take all such action as
may be necessary to assure that all such shares of Common Stock may
be so issued without violation of any applicable law or regulation.
(b) The Company will not take any action which results
in any adjustment of the number of shares of Common Stock acquirable
upon conversion of shares of the Series A Preferred Stock if after
such action the total number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock then outstanding,
together with the total number of shares of Common Stock then
outstanding and the total number of shares of Common Stock reserved
for any purpose other than issuance upon conversion of Series A
Preferred Stock, would exceed the total number of shares of Common
Stock then authorized by these Articles of Incorporation.
(c) If any shares of Common Stock required to be
reserved for purposes of conversions of shares of Series A Preferred
Stock under this paragraph E2 require registration with, or approval
of, any governmental authority under any federal or state law (other
than any registration under the Securities Act of 1933, as then in
effect, or any similar federal statute then in force, or any state
securities law, required by reason of any transfer involved in such
conversion), or listing on any domestic securities exchange, before
such shares may be issued upon conversion, the Company will, at its
expense and as expeditiously as possible, use its best efforts to
cause such shares to be duly registered or approved for listing or
listed on such domestic securities exchange, as the case may be.
(d) The issuance of certificates for shares of Common
Stock upon conversion of shares of the Series A Preferred Stock
shall be made without charge to the holders of such shares for any
issuance tax in respect thereof, or other cost incurred by the
Company in connection with such conversion and the related
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issuance of shares of Common Stock, provided that the Company shall
not be required to pay any tax which may be payable in respect of
any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Series A
Preferred Stock converted.
(e) The Company will not close its books against the
transfer of any share of Series A Preferred Stock or of any share of
Common Stock issued or issuable upon the conversion of such shares
in any manner which interferes with the timely conversion of such
shares.
E3. SUBDIVISIONS AND COMBINATIONS. In the event the Company shall at
any time subdivide (by any stock split, stock dividend or otherwise) one or more
classes of its outstanding Common Stock into a greater number of shares of
Common Stock, the Conversion Price in effect immediately prior to such
subdivision forthwith shall be proportionately reduced. Conversely, in the event
the outstanding shares of one or more classes of the Common Stock shall be
combined into a smaller number of shares (by reverse stock split or otherwise),
the Conversion Price in effect immediately prior to such combination shall be
proportionately increased.
E4. LIQUIDATING DIVIDENDS. While any shares of Series A Preferred
Stock are outstanding, the Company will not declare a dividend (other than a
dividend payable in Common Stock, Options or Convertible Securities) upon Common
Stock payable otherwise than out of earnings or retained earnings (determined in
accordance with generally accepted accounting principles, consistently applied).
For purposes of this paragraph E4, a dividend other than in cash shall be
considered payable out of earnings or earned surplus only to the extent that
such earnings or earned surplus are charged an amount equal to the fair value of
such dividend.
E5. REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any capital reorganization or reclassification of the capital stock of the
Company, or any consolidation or merger of the Company with or into another
corporation, or any sale of all or substantially all of the Company's assets to
another corporation shall be effected in such a way that holders of Common Stock
shall be entitled to receive (either directly, or upon subsequent liquidation)
stock, securities or assets with respect to or in exchange for Common Stock,
then, as a condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate provision shall be made whereby each of the
holders of the Series A Preferred Stock shall thereafter have the right to
acquire and receive upon the basis and upon the terms and conditions specified
herein and in lieu of the shares of Common Stock of the Company immediately
theretofore acquirable and receivable upon the conversion of such holder's
Series A Preferred Stock, such shares of stock, securities or assets as may be
issued or payable with respect to or in exchange for a number of outstanding
shares of Common Stock equal to the number of shares of Common Stock immediately
theretofore acquirable and receivable upon conversion of such Series A Preferred
Stock had such reorganization, reclassification, consolidation, merger or sale
not taken place, and, in any such case, appropriate provision shall be made with
respect to such holder's rights and interests to the end that the provisions of
this paragraph E (including without limitation provisions for adjustments of the
Conversion Price and
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of the number of shares of Common Stock acquirable and receivable upon the
exercise of the conversion rights granted in this paragraph E) shall thereafter
be applicable in relation to any shares of stock, securities or assets
thereafter deliverable upon the conversion of such holder's shares (including,
in the case of any such consolidation, merger or sale in which the successor
corporation or purchasing corporation is other than the Company, an immediate
adjustment of the Conversion Price to the value for the Common Stock reflected
by the terms of such consolidation, merger or sale if the value so reflected is
less than the Conversion Price in effect immediately prior to such
consolidation, merger or sale). In the event of a merger or consolidation of the
Company with or into another corporation or the sale of all or substantially all
of the Company's assets to another corporation, as a result of which a number of
shares of common stock of the surviving or purchasing corporation greater or
lesser than the number of shares of Common Stock of the Company outstanding
immediately prior to such merger, consolidation or sale are issuable to holders
of Common Stock, then the Conversion Price in effect immediately prior to such
merger, consolidation or sale shall be adjusted (pursuant to paragraph E) as
though there were a subdivision or combination of the outstanding shares of
Common Stock. The Company shall not effect any such consolidation, merger or
sale, unless prior to the consummation thereof the successor corporation (if
other than the Company) resulting from such consolidation or merger or the
corporation purchasing such assets shall assume by written instrument, executed
and mailed or delivered by first class mail, postage prepaid, to each holder of
Series A Preferred Stock at the address of each such holder as shown on the
books of the Company, the obligation to deliver to each such holder such shares
of stock, securities or assets as, in accordance with the foregoing provisions,
such holder may be entitled to acquire or receive. If the purchase, tender or
exchange offer is made to and accepted by the holders of more than fifty percent
(50%) of the outstanding shares of Common Stock, the Company shall not effect
any consolidation, merger or sale with the person having made such offer or with
any affiliate of such person unless prior to the consummation of such
consolidation, merger or sale each of the holders of Series A Preferred Stock
shall have been given a reasonable opportunity to then elect to receive upon the
conversion of such holder's shares either the stock, securities or assets then
issuable with respect to the Common Stock or the stock, securities or assets, or
the equivalent, issued to previous holders of the Common Stock in accordance
with such offer.
E6. NOTICE OF ADJUSTMENT. Immediately upon any adjustment of the
Conversion Price, the Company shall send written notice thereof to all holders
of Series A Preferred Stock (by first class mail, postage prepaid, addressed to
each such holder at the address for such holder shown on the books of the
Company), which notice shall state the Conversion Price resulting from such
adjustment and the increase or decrease, if any, in the number of shares of
Common Stock acquirable and receivable upon conversions of all shares of Series
A Preferred Stock held by each such holder, setting forth in reasonable detail
the method of calculation and the facts upon which such calculation is based.
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E7. OTHER ADJUSTMENT-RELATED NOTICES. In the event that at any time:
(a) the Company shall declare a dividend (or any other
distribution) upon its Common Stock payable otherwise than in cash
out of earnings or earned surplus;
(b) the Company shall offer for subscription pro rata to
the holders of any class of its Common Stock any additional shares
of stock of any class or other rights;
(c) there shall be any capital reorganization,
reclassification of the capital stock of the Company, or
consolidation or merger of the Company with, or sale of all or
substantially all of its assets to, another corporation; or
(d) there shall be any voluntary or involuntary
dissolution, liquidation, winding up or similar distribution of the
Company;
then, in connection with any such event, the Company shall give, by first class
mail, postage prepaid, addressed to the holders of Series A Preferred Stock at
the address for each such holder as shown on the books of the Company: (a) at
least 60 days prior written notice of the date on which the books of the Company
shall close or a record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders of Common
Stock shall be entitled thereto) or for determining rights to vote in respect of
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or similar distribution; and (b) in the case of any such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation, winding up or similar distribution, at least 60 days prior written
notice of the date when the same shall take place (and specifying the date on
which the holders of Common Stock shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation, winding
up or similar distribution).
E8. CERTAIN EVENTS. If any event occurs as to which, in the opinion
of the Board of Directors, the other provisions of this paragraph E are not
strictly applicable or if strictly applicable would not fairly protect the
conversion rights of the Series A Preferred Stock in accordance with the
essential intent and principles of such provisions, then the Board of Directors
shall make an adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such conversion
rights as aforesaid, but in no event shall any such adjustment have the effect
of increasing the Conversion Price as otherwise determined pursuant to this
paragraph E except in the event of a combination of shares of the type
contemplated in paragraph E3 and then in no event to an amount larger than the
Conversion Price as adjusted pursuant to paragraph E3.
F. VOTING. Except as otherwise provided by law or herein, the holders
of shares of Series A Preferred Stock shall not be entitled to vote upon any
matter relating to the business or
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affairs of the Company or for any other purposes.
G. REGISTRATION OF TRANSFER. The Company shall keep at its principal
office (or such other place as the Company reasonably designates) a register for
the registration of shares of Series A Preferred Stock. Upon the surrender of
any certificate representing Series A Preferred Stock at such place, the Company
shall, at the request of the registered holder of such certificate, execute and
deliver (at the Company's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of shares represented by the
surrendered certificate, subject to the requirements of applicable securities
laws. Each such new certificate shall be registered in such name and shall
represent such number of shares as shall be requested by the holder of the
surrendered certificate, shall be substantially identical in form to the
surrendered certificate, and the holders of the shares represented by such new
certificate shall be entitled to receive all mandatory redemption payments on
the shares represented by the surrendered certificate.
H. REPLACEMENT. Upon receipt of evidence reasonably satisfactory to the
Company (an affidavit of the registered holder shall be deemed satisfactory) of
the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing one or more shares of the Series A Preferred Stock and, in the case
of any such loss, theft or destruction, upon receipt of indemnity reasonably
satisfactory to the Company (provided that if the registered holder is an
institutional investor its own agreement of indemnity, without bond, shall be
satisfactory) or, in the case of any such mutilation, upon surrender of such
certificate, the Company shall (at its expense) execute and deliver in lieu of
such certificate a new certificate of like kind representing the number of
shares represented by such lost, stolen, destroyed or mutilated certificate. The
term "outstanding" when used herein with reference to shares of the Series A
Preferred Stock as of any particular time shall not include any shares
represented by any certificate in lieu of which a new certificate has been
executed and delivered by the Company in accordance with paragraph 8 or this
paragraph, but shall include only those shares represented by such new
certificate.
I. RESTRICTIONS ON COMPANY ACTION. So long as any shares of Series A
Preferred Stock shall be outstanding, and in addition to any other approvals or
consents required by law, without the prior affirmative vote or written consent
of the holders of fifty percent (50%) of all shares of Series A Preferred Stock
at the time outstanding:
(i) The Company shall not authorize, create or issue any
shares, or securities convertible into such shares, of any class of
stock having preference over, or being on a parity with, the Series
A Preferred Stock with respect to rights upon dissolution,
liquidation, winding up or similar distribution of the Company or
distribution of assets to its shareholders by way of return of
capital, whether voluntary or involuntary.
(ii) The Company shall not sell, lease, or convey all or
substantially all of the property or business of the Company (which
for purposes hereof, "substantially all" shall be deemed to
constitute fifty percent (50%) or more) and
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shall not effect a merger or consolidation of or with any other
corporation or corporations unless such merger or consolidation
shall be with a Subsidiary of the Company or unless as a result of
such merger or consolidation and after giving effect thereto (a) the
Company shall be the surviving corporation, (b) the Series A
Preferred Stock then outstanding shall continue to be outstanding,
(c) there shall be no alteration or change in the powers or
designation or the preferences and rights, and the qualifications,
limitations or restrictions applicable to outstanding shares of
Series A Preferred Stock, in any material respect prejudicial to the
holders thereof, and (d) there shall not be created or thereafter
exist any new class or series of stock, or securities convertible
into such stock, having preference over, or being on a parity with,
the Series A Preferred Stock with respect to rights upon
dissolution, liquidation, winding up or similar distribution or
distribution of assets to shareholders by way of return of capital
of the Company.
(iii) The Company shall not amend, alter or repeal any
of the provisions of these Articles of Incorporation or the Bylaws
of the Company in any manner which would adversely affect the
preferences and rights and the qualifications, limitations or
restrictions of the Series A Preferred Stock or the holders thereof,
nor shall the Company increase the number of shares of Series A
Preferred Stock which the Company is authorized to issue.
(iv) The Company shall not enter into any agreement
which would by its terms prohibit or in any way restrict the Company
from redeeming the Series A Preferred Stock or performing any other
obligation to the holders of the Series A Preferred Stock imposed on
the Company by these Articles of Incorporation.
J. DEFINITIONS. The following terms shall have the following meanings,
which meanings shall be equally applicable to the singular and plural forms of
such terms:
(i) "Common Stock" means, collectively, the Common Stock
and any capital stock of any class of the Company hereafter
authorized which shall not be limited to a fixed sum or percentage
of par or stated value in respect to the rights of the holders
thereof to participate in dividends or in the distribution of assets
upon any liquidation, dissolution, winding up or similar
distribution of the Company.
(ii) "Common Stock Deemed Outstanding" means, at any
given time, the sum of (a) the number of shares of Common Stock
actually outstanding at such time (exclusive of any shares of Common
Stock owned or held by or for the account of the Company), plus (b)
the number of shares of Common Stock deemed to be outstanding under
paragraph E hereof at such time.
(iii) "Conversion Price" means $1.00, as such price may
be adjusted from time to time pursuant to the provisions of
paragraph E hereof.
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(iv) "Person" means and includes an individual, a
partnership, a corporation, a trust, a joint venture, an
unincorporated organization or a government or any department or
agency thereof.
(v) "Junior Security" means the Company's Common Stock
and any other equity security of any kind which the Company shall at
any time issue or be authorized to issue other than the Series A
Preferred Stock. The terms and conditions of Series A Preferred
Stock are set forth in these Articles.
(vi) "Series A Preferred Stock" means the Company's
second series of 12% Cumulative Convertible Preferred Stock, par
value $1.00 per share.
(vii) "Subsidiary" means any corporation at least 50% of
the voting stock of every class of which shall, at the time as of
which any determination is being made, be owned by the Company
either directly or through one or more Subsidiaries.
K. SEVERABILITY. The unenforceability or invalidity of any provision or
provisions hereof shall not affect or tender invalid or unenforceable any other
provision or provisions herein contained.
ARTICLE IX
The number of directors constituting the Board of Directors of the
Corporation is a minimum of one (1). The number of directors may be increased or
diminished from time to time, pursuant to the Bylaws of the Corporation, but
shall never be less than one (1).
ARTICLE X
The principal place of business and mailing address of this Corporation
is:
8425 S.W. 129th Terrace
Miami, Florida 33156
ARTICLE XI
The by-laws of the Corporation may be adopted, altered, amended or
repealed from time to time by either the shareholders or the Board of Directors,
but the Board of Directors shall not alter, amend or repeal any by-laws adopted
by the shareholders if the shareholders specifically provide that such bylaws
are not subject to amendment or repeal by the directors.
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<PAGE> 14
ARTICLE XII
SECTION 1. INDEMNIFICATION
This Corporation shall indemnify and shall advance expenses on behalf
of its officers and directors to the fullest extent not prohibited by law in
existence either now or hereafter.
SECTION 2. DIRECTORS AND OFFICERS INSURANCE
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who was or is a director or officer of the Corporation, or
who is or was serving at the request of the Corporation as a director or officer
of another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him or her and incurred by him or her in
any such capacity, or arising out of his or her status as such, whether or not
the Corporation would have authority to indemnify him or her against such
liability under the provisions of these articles, or under the law.
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<PAGE> 15
ARTICLES OF AMENDMENT
CERTIFICATE OF DESIGNATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
MANSUR INDUSTRIES INC.
(Pursuant to Section 607.0602 of the
Florida Business Corporation Act)
------------------------------------
Mansur Industries Inc., a corporation organized and existing under the
Business Corporation Act of the State of Florida (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 607.0602 of the
Business Corporation Act at a meeting duly called and held on May 5, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Articles of
Incorporation of the Corporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series B Convertible Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series B Convertible Preferred Stock" (the "Series B Preferred
Stock") and the number of shares constituting the Series B Preferred Stock shall
be 150,000, of which 50,000 shares shall be reserved for use in connection with
the payment of dividends on the outstanding shares of Series B Preferred Stock
pursuant to Section 3 hereof. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series B Preferred Stock to a number less
than the number of shares then outstanding and no increase shall increase the
number of shares of Series B Preferred Stock above the total number of
authorized shares.
Section 2. RANK. The Series B Preferred Stock shall rank as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or
<PAGE> 16
involuntary: (i) senior to all of the Corporation's common stock, par value
$.001 per share (the "Common Stock"); (ii) senior to any class or series of
capital stock of the Corporation hereafter created specifically ranking by its
terms junior to the Series B Preferred Stock (collectively, with the Common
Stock, "Junior Securities" or "Junior Stock"); and (iii) on parity with any
class or series of capital stock of the Corporation hereafter created
specifically ranking by its terms on parity with the Series B Preferred Stock
("Parity Securities" or "Parity Stock"). While any shares of Series B Preferred
Stock are outstanding, no equity securities senior to the Series B Preferred
Stock ("Senior Securities") or Parity Securities shall be authorized or issued
without the approval (by vote or written consent, as provided by law) of the
holders of at least a majority of the then outstanding shares of the Series B
Preferred Stock, voting as a class. This prohibition shall not include the
authorization or issuance of any form of debt securities or instruments to a
bank or other institution.
Section 3. DIVIDENDS.
(a) The dividend rate payable with respect to the outstanding
shares of Series B Preferred Stock ("Dividend Rate") shall be 8.25% of the
Liquidation Value (as defined below) of each share per annum. During the period
commencing on the date of initial issuance of the Series B Preferred Stock and
continuing through the second anniversary of the date thereof, all such
dividends shall be paid by the Corporation, in lieu of cash, through the
issuance of additional shares of Series B Preferred Stock valued at the
Liquidation Value. Thereafter, all such dividends may, at the option of the
Corporation, be paid in lieu of cash, through the issuance of additional shares
of the Series B Preferred Stock, cash legally available for payment thereof, or
any combination of Series B Preferred Stock and cash whether or not such
dividends have been declared. If dividends are paid by the Corporation through
the issuance of additional shares of Series B Preferred Stock and such dividends
would, but for the provisions hereof, be payable with a fractional share, the
Corporation shall pay, in lieu of such fractional share, cash in an amount equal
to the value of such fractional share. Dividends on the Series B Preferred Stock
shall accrue from the date of issuance or thereafter, from the most recent date
on which dividends were payable, and shall be payable semi-annually on June 30
and December 31 of each year (each a "Dividend Payment Date"), commencing on
June 30, 1999; provided, however, that if any such day is a non-business day,
the Dividend Payment Date will be the next business day. Each declared dividend
shall be payable to holders of record as they appear at the close of business on
the stock books of the Corporation on June 10 and December 10 of each year (each
of such dates a "Record Date"). Semi-annual dividend periods (each a "Dividend
Period") shall commence on and include the 1st day of July and January of each
year and shall end on and include the day next preceding the next following
Dividend Payment Date.
(b) No dividends shall be declared or paid or set apart for
payment on any Common Stock, Parity Stock or Junior Stock during any semi-annual
period unless full dividends on the Series B Preferred Stock for all Dividend
Periods ending prior to or during such semi-annual period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment. When dividends are not so paid in
full (or a sum sufficient for such full payment is not so set apart) upon the
Series B Preferred
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<PAGE> 17
Stock and any other Parity Stock, dividends upon the Series B
Preferred Stock and dividends on such other Parity Stock payable during such
semi-annual period shall be declared pro rata so that the amount of such
dividends so payable per share on the Series B Preferred Stock and such other
Parity Stock shall in all cases bear to each other the same ratio that full
dividends on the shares of Series B Preferred Stock and full dividends, if any,
on shares of such other Parity Stock, bear to each other. If full dividends on
the Series B Preferred Stock have not been declared and paid or set apart for
payment, no dividend or distribution, other than in shares of Junior Stock, may
be declared, set aside or paid on any shares of Junior Stock. Holders of the
Series B Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of the dividends provided for herein. No
interest or sum of money in lieu of interest shall be payable in respect of any
declared dividend payment or payments on the Series B Preferred Stock which may
be in arrears. As used herein, the phrase "set apart" in respect of the payment
of dividends shall require deposit of any funds in a bank or trust company in a
separate deposit account maintained for the benefit of the holders of the Series
B Preferred Stock, or, in the case of payment of dividends through the issuance
of shares of the Corporation's Common Stock, the deposit of certificates
representing such shares of Common Stock with such bank or trust company.
Section 4. VOTING RIGHTS. On all matters to come before the
shareholders of the Corporation, the holders of Series B Preferred Stock will
vote together with the holders of the Common Stock as a single class, with each
share of Series B Preferred Stock entitled to a number of votes equal to the
number of shares of Common Stock into which it is then convertible using the
record date for the taking of such vote of shareholders as the date as of which
the Conversion Price (as hereinafter defined) is calculated except as required
by law. The affirmative vote of the holders of a majority of the outstanding
shares of Series B Preferred Stock shall be necessary for the issuance of Senior
Securities, the authorization or issuance of securities convertible into such
Senior Securities, or the amendment to the Corporation's Articles of
Incorporation so as to adversely affect the Series B Preferred Stock, or waiver
of any other covenants.
To the extent that under Florida law the vote of the holders
of shares of Series B Preferred Stock, voting separately as a class, is required
to authorize a given action of the Corporation, the affirmative vote or consent
of the holders of at least a majority of the outstanding shares of the Series B
Preferred Stock shall constitute the approval of such action by the class.
Holders of shares of Series B Preferred Stock shall be entitled to notice of all
shareholder meetings or written consents with respect to which they would be
entitled to vote, which notice shall be provided pursuant to the Corporation's
bylaws and applicable law.
Section 5. CONVERSION. Subject to and upon compliance with this SECTION
5, the holders of shares of Series B Preferred Stock shall have conversion
rights as follows:
(a) OPTIONAL CONVERSION. Each holder of a share of Series B
Preferred Stock shall have the right, at any time or from time to time prior to
the Redemption Date (as defined below), at the office of the Corporation or any
transfer agent for the Series B Preferred Stock, to convert such share of Series
B Preferred Stock into that number of fully paid and
3
<PAGE> 18
nonassessable shares of Common Stock equal to $100 divided by the Conversion
Price of such share of Series B Preferred Stock as set forth in SECTION 6
hereof. The number of shares of Common Stock into which the Series B Preferred
Stock may be converted is hereinafter referred to as the "Conversion Rate").
Notwithstanding the foregoing, the Corporation shall not be obligated to accept
shares of Series B Preferred Stock for conversion if such conversion would
require the Corporation to issue a certificate or certificates evidencing less
than an aggregate of 50,000 shares of Common Stock on any Date of Conversion (as
defined below).
(b) EARLY CONVERSION EVENT. If, after the first anniversary of
the date of issuance of the shares of Series B Preferred Stock, the closing bid
price of the Common Stock, as reported on Nasdaq (or the closing sale price if
the Common Stock is then traded on any principal national exchange or Nasdaq
National Market) exceeds 175% of the Conversion Price for a period of twenty
(20) consecutive trading days, including the twenty (20) trading days prior to
such first anniversary (the "Calculation Period"), an early conversion event
("Early Conversion Event") shall have occurred. Upon the first Early Conversion
Event, if any, in each calendar quarter, the aggregate Liquidation Value of the
outstanding shares of Series B Preferred Stock shall automatically and without
any action by the holders of the Series B Preferred Stock or the Corporation be
converted into shares of Common Stock, on a pro rata basis, in an amount
determined in accordance with the following formula:
CPS = [(V-Y)] x 22 x CP
where CPS is the aggregate stated Liquidation Value of the Series B Preferred
Stock to be converted; V is the average daily reported volume of trading in the
Common Stock on all national securities exchanges and/or reported through the
automated quotation system of a registered national securities association
during the Calculation Period and Y is the sum of (i) shares of Common Stock
which the Corporation then has the right to issue upon an "Early Conversion
Event" under the Corporation's outstanding 8 1/4% Subordinated Convertible Notes
due 2003 (tHE "Convertible Notes"), plus (ii) shares of Common Stock subject to
then effective resale registration statements of the Corporation other than
Registration Statements on Form S 8 or S-4 and other than registration
statements with respect to Common Stock underlying the Convertible Notes and the
Series B Preferred Stock which remain unsold at such time; and CP is the
applicable Conversion Price. For purposes of calculating V, trading volume in
excess of 100,000 shares on any trading day shall not be included, unless such
amounts do not exceed 200% of the trailing 30-day average reported volume of
trading.
Notwithstanding the foregoing, none of the outstanding shares
of Series B Preferred Stock shall be converted as a result of an Early
Conversion Event pursuant to this SECTION 5 unless the resale of the shares of
Common Stock issuable upon such conversion is subject to an effective
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), or an exemption from registration under the Securities Act is
then available. Accrued dividends on the shares of Series B Preferred Stock
converted upon the occurrence of an Early Conversion Event shall be paid on the
next Dividend Payment Date in accordance with SECTION 3 hereof.
4
<PAGE> 19
(c) MECHANICS OF CONVERSION. Before a holder shall be entitled
to receive shares of Common Stock upon conversion of shares of Series B
Preferred Stock, the holder of shares of Series B Preferred Stock shall (i) fax
or otherwise deliver a copy of the fully executed notice of conversion in the
form attached hereto as EXHIBIT A ("Notice of Conversion") to the Corporation at
its principal office and to the office of its designated transfer agent that
such holder elects to convert the same, which notice shall specify the number of
shares of Series B Preferred Stock to be converted and shall contain the
Conversion Price (together with a copy of the first page of each certificate to
be converted) prior to 5:00 p.m., Eastern Standard time (the "Conversion Notice
Deadline") on the date of conversion specified on the Notice of Conversion and
(ii) surrender the original certificate or certificates for the shares of Series
B Preferred Stock to be converted, duly endorsed, and deliver the original
Notice of Conversion by either overnight courier or two-day courier, to the
principal office of the Corporation or to the office of its designated transfer
agent; PROVIDED, HOWEVER, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless the certificates evidencing such shares of Series B Preferred Stock are
delivered to the Corporation or its transfer agent as provided above. Upon the
conversion of shares of Series B Preferred Stock in connection with an Early
Conversion Event, the Corporation shall send to the holders of shares of Series
B Preferred Stock a Notice of Early Conversion (in the form attached hereto as
EXHIBIT B) stating the aggregate Liquidation Value of shares of Series B
Preferred Stock to be converted and the number of shares of Common Stock into
which such Liquidation Value shall be converted.
Upon receipt by the Corporation of evidence of the loss,
theft, destruction or mutilation of any certificate representing shares of
Series B Preferred Stock, and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Corporation, and upon
surrender and cancellation of any certificate representing shares of Series B
Preferred Stock, if mutilated, the Corporation shall execute and deliver a new
certificate of like tenor and date. No fractional shares of Common Stock shall
be issued upon conversion of the Series B Preferred Stock. In lieu of any
fractional share to which the holder of shares of Series B Preferred Stock would
otherwise be entitled, the Corporation shall pay cash to such holder in an
amount equal to such fraction multiplied by the Conversion Price then in effect.
In the case of a dispute as to the calculation of the Conversion Rate, the
Corporation's calculation shall be deemed conclusive absent manifest error.
The Corporation shall use all reasonable efforts to issue and
deliver within seven (7) business days after delivery to the Corporation of the
certificates representing the shares of Series B Preferred Stock to be
converted, or after such agreement and indemnification, to such holder of shares
of Series B Preferred Stock at the address of the holder on the books of the
Corporation, a certificate or certificates for the number of shares of Common
Stock to which the holder shall be entitled as aforesaid. The date on which
conversion occurs (the "Date of Conversion") shall be deemed to be the date set
forth in such Notice of Conversion, provided (i) that the advance copy of the
Notice of Conversion is delivered to and received by the Corporation before 5:00
p.m., Eastern Standard time, on the Date of Conversion, and (ii) that the
5
<PAGE> 20
original stock certificates representing the shares of Series B Preferred Stock
to be converted are received by the Corporation or the transfer agent within two
(2) business days thereafter. In the case of an Early Conversion Event, the last
date of the Calculation Period shall be deemed to be the Date of Conversion. The
person or persons entitled to receive the shares of Series B Preferred Stock
issuable upon such conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock on the Date of Conversion. In
the case of an optional conversion, if the original certificates representing
the shares of Series B Preferred Stock to be converted are not received by the
Corporation or the transfer agent within two (2) business days after the Date of
Conversion or if the facsimile of the Notice of Conversion is not received by
the Corporation or its transfer agent prior to the Conversion Notice Deadline,
the Notice of Conversion, at the Corporation's option, may be declared null and
void.
Following any conversion of shares of Series B Preferred
Stock, such shares of Series B Preferred Stock shall no longer be outstanding
and all rights of a holder with respect to the shares surrendered for conversion
shall immediately terminate except for the right to receive Common Stock. All
shares of Series B Preferred Stock subject of an Early Conversion Event shall be
deemed to be cancelled upon such holder's receipt of shares of Common Stock in
connection with any such conversion.
(d) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all then outstanding shares of Series B
Preferred Stock; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series B Preferred Stock, the Corporation will take such
corporate action as may be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
Section 6. CONVERSION PRICE. The "Conversion Price" per share of the
Series B Preferred Stock shall be $8.25, subject to adjustment as set forth
below, with all such adjustments, if any, being cumulative from the date of
initial issuance of shares of Series B Preferred Stock such that all outstanding
shares of Series B Preferred Stock have the same Conversion Price regardless of
their date of issuance.
6.1 ADJUSTMENT OF THE NUMBER OF SHARES OF COMMON STOCK AND THE
CONVERSION PRICE. The number of shares of Common Stock issuable upon conversion
and the Conversion Price shall be subject to adjustment as follows:
(a) In case the Corporation shall at any time after
the date of the initial issuance of Series B Preferred Stock and prior to the
conversion of all outstanding shares thereof (A) pay a dividend or make a
distribution on its Common Stock in shares of its capital stock (whether in
shares of Common Stock or of capital stock of any other class), (B) subdivide
its outstanding shares of Common Stock into a greater number of shares, (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (D) reclassify,
6
<PAGE> 21
reorganize or effect any similar transaction with respect to any of its shares
of Common Stock, or in substitution or exchange therefor (other than a change in
par value, or from par value to no par value, or from no par value to par
value), then the number and, if applicable, kind of shares of Common Stock to be
received by any Holder shall be adjusted so that the Holder will be entitled to
receive on conversion the number and kind of shares of capital stock which it
would have owned immediately following such action had its Series B Preferred
Stock been converted immediately prior thereto. An adjustment made pursuant to
this subsection (a) shall become effective immediately after the payment date in
the case of a dividend or distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination,
reclassification, reorganization or similar transaction. If, as a result of an
adjustment made pursuant to this subsection (a), a Holder shall become entitled
to receive shares of two or more classes of capital stock of the Corporation,
the Board of Directors or a duly authorized committee thereof shall in good
faith determine (which determination shall be conclusive and binding) the
allocation of the Conversion Price between or among shares of such classes of
capital stock. After such allocation, the Conversion Price and number of shares
of each class of capital stock that is issuable upon conversion shall thereafter
be subject to adjustment in a manner and on terms determined by the Board of
Directors (which determination shall be conclusive and binding) to be as nearly
equivalent as practicable to those applicable to Common Stock under this Section
6.
(b) (i) From the date of the initial issuance of the
shares of Series B Preferred Stock to and including the first anniversary of the
date thereof, if the Corporation shall issue or enter into any agreement to
issue any shares of Common Stock other than Excluded Shares (as hereinafter
defined) for consideration per share (the "Issuance Price") less than the
Conversion Price (as herein defined) per share in effect immediately prior to
such issuance, the Conversion Price in effect immediately prior to such issuance
shall be reduced (but shall not be increased) to the Issuance Price.
(ii) After the first anniversary and prior to the
second anniversary of the initial issuance of the shares of Series B Preferred
Stock, if the Corporation shall issue or enter into any agreement to issue any
shares of Common Stock other than Excluded Shares for consideration per share
less than the Conversion Price per share in effect immediately prior to such
issuance, the Conversion Price in effect immediately prior to such issuance
shall be reduced (but shall not be increased) to the price (calculated to the
nearest cent) determined: by dividing (A) an amount equal to the sum of (1) the
number of shares of Common Stock outstanding on a fully diluted basis
immediately prior to such issuance multiplied by the Conversion Price per share
in effect immediately prior to such issuance and (2) the consideration, if any,
received by the Corporation upon such issuance by (B) the number of shares of
Common Stock outstanding on a fully diluted basis immediately after such
issuance.
(iii) If at any time prior to the second
anniversary of the initial issuance of the shares of Series B Preferred Stock,
the Corporation shall issue or enter into any agreement to issue any shares of
Common Stock other than Excluded Shares for consideration per share greater than
the Conversion Price but lower than the market price per share in effect
immediately
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<PAGE> 22
prior to such issuance, the Conversion Price in effect immediately prior to such
issuance shall be reduced (but shall not be increased) to the price (calculated
to the nearest cent) determined by multiplying the Conversion Price in effect
immediately prior to such issuance by the factor determined by dividing (A) an
amount equal to the sum of (1) the number of shares of Common Stock outstanding
on a fully diluted basis immediately prior to such issuance multiplied by the
market price per share in effect immediately prior to such issuance and (2) the
consideration, if any, received by the Corporation upon such issuance by (B) the
number of shares of Common Stock outstanding on a fully diluted basis
immediately after such issuance multiplied by the market price per share in
effect immediately prior to such issuance; PROVIDED, HOWEVER, no adjustment
shall be made to the Conversion Price if (i) such issuance is in connection with
a firm commitment underwritten public offering or (ii) the consideration per
share is equal to or greater than 85% of the market price per share in effect
immediately prior to such issuance. For purposes hereof, the "market price" as
of any measurement date shall be the average of the closing prices of the Common
Stock for each of the 10 consecutive trading days immediately preceding such
measurement date.
(c) CERTAIN ADJUSTMENT FACTORS. For the purposes of
any adjustment of the Conversion Price pursuant to paragraph (b) above, the
following provisions shall be applicable:
(x) CASH. In the case of the issuance of
shares 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 shares of 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; and
(y) CONSIDERATION OTHER THAN CASH. In the
case of the issuance of shares of Common Stock (other
than upon the conversion of shares of capital stock
or other securities of the Corporation) for
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 of the
Corporation based on an opinion of an outside
financial advisor of recognized regional or national
standing, which may, but need not, be the independent
public accountants who serve as the regular auditors
of the Corporation (the "Financial Advisor"), whose
determination shall be conclusive and binding),
irrespective of any accounting treatment; and
(z) OPTIONS AND CONVERTIBLE SECURITIES. In
the case of the issuance of (i) options, warrants or
other rights to purchase or acquire shares of Common
Stock (whether or not exercisable immediately
following such issuance), (ii) securities by their
terms convertible into or exchangeable for shares
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<PAGE> 23
of Common Stock (whether or not so convertible or
exchangeable immediately following such issuance), or
(iii) options, warrants or rights to purchase such
convertible or exchangeable securities (whether or
not exercisable immediately following such issuance):
(1) the aggregate maximum number of
shares of Common Stock deliverable upon
exercise of such options, warrants or other
rights to purchase or acquire shares of
Common Stock shall be deemed to have been
issued at the time such options, warrants or
other rights are first issued and for a
consideration equal to the consideration
(determined in the manner provided in
clauses (x) and (y) above), if any, received
by the Corporation upon the issuance of such
options, warrants or other rights plus the
purchase price provided in such options,
warrants or other rights for the shares of
Common Stock covered thereby (if the
purchase price per share of Common Stock is
expressed as a range, the purchase price per
share for purposes of this subparagraph
(z)(1) shall be the average of such range of
prices);
(2) 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
thereto shall be deemed to have been issued
at the time such convertible or exchangeable
securities or such options, warrants or
other rights are first issued and for a
consideration equal to the consideration, if
any, received by the Corporation for any
such convertible or exchangeable securities
or options, warrants or other rights
(excluding any cash received on account of
accrued interest or accumulated dividends),
plus the additional consideration, if any,
to be received by the Corporation upon the
conversion or exchange of such securities
and the exercise of any options, warrants or
other rights (the consideration in each case
to be determined in the manner provided in
clauses (x) and (y) above);
(3) on any change in the number of
shares of Common Stock deliverable upon
exercise of any such options, warrants or
other rights which have become exercisable
or conversion of or exchange of such
convertible or exchangeable securities which
have become convertible or exchangeable, or
any change in the consideration to be
received by the Corporation upon such
exercise, conversion or exchange, the
Conversion Price as then in effect shall
forthwith be readjusted to such Conversion
Price as would have been obtained had such
adjustment been made upon the original
issuance of such options, warrants or other
rights; provided, however, no adjustment
shall be made with respect to such
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<PAGE> 24
options, warrants or other rights exercised
prior to such change, or securities
converted or exchanged prior to such change;
(4) on the expiration or
cancellation of any such options, warrants
or other 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 such securities being issued
or becoming exercisable, convertible or
exchangeable, such Conversion Price shall
forthwith be readjusted to such Conversion
Price as would have been obtained had an
adjustment been made 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 other
rights, or upon the conversion or exchange
of such securities; and
(5) if the Conversion Price shall
have been adjusted when such options,
warrants or other rights were first issued
or such convertible or exchangeable
securities were first issued, no further
adjustment of the Conversion Price shall be
made for the actual issuance of shares of
Common Stock upon the exercise, conversion
or exchange thereof.
(d) EXCLUDED SHARES. "Excluded Shares" shall mean (i)
any shares of Common Stock issued in a transaction described in Section 6(a) of
this Agreement; and (ii) issuances of shares of Common Stock from time to time
pursuant to employment agreements, stock option or bonus plans authorized by the
Board of Directors of the Corporation as of the date hereof, (iii) issuances of
Common Stock, or warrants, options or rights to acquire shares of Common Stock,
or securities convertible into or exchangeable for Common Stock pursuant to the
terms of any acquisition by the Corporation of all or substantially all of the
operating assets, or more than fifty percent (50%) of the voting capital stock
or other management interest of any business entity in a transaction negotiated
on an arms-length basis and expressly approved in advance by the Board of
Directors of the Corporation; (iv) issuances of shares of Common Stock from time
to time upon the exercise, exchange or conversion of warrants, options,
convertible securities, the Notes (whether or not outstanding as of the date
hereof) or other securities outstanding as of the date hereof, and (v) issuances
of shares of Common Stock from time to time pursuant to the anti-dilution
provisions of other securities.
(e) No adjustment in the Conversion Price shall be
required unless such adjustment would require an increase or decrease of at
least 1.2% in such price; PROVIDE, HOWEVER, that any adjustments which by reason
of this subsection (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 6 shall be made to the nearest tenth of a cent or to the nearest
one-hundredth of a share, as the case may be.
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<PAGE> 25
(f) The number of shares of Common Stock outstanding
at any given time shall not include shares owned or held by or for the account
of the Corporation, and the disposition of any such shares shall be considered
an issuance of Common Stock for the purposes of this Section 6.
6.2 RIGHTS TO PURCHASE OTHER SECURITIES. If any of the
following shall occur:
(a) any consolidation or merger to which the
Corporation is a party, other than a consolidation or a merger in which the
Corporation is the continuing or surviving Corporation and which does not result
in any reclassification of, or change (other than as a result of a subdivision
or combination) in, outstanding shares of the Common Stock, or
(b) any sale or transfer to another corporation or
entity of all or substantially all of the assets of the Corporation;
then, and in either such case, the Holder of each share of Series B Preferred
Stock then outstanding shall have the right to purchase the kind and amount of
shares of stock and/or other securities and property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock issuable upon conversion of such stock immediately prior to such
consolidation, merger, sale, or transfer. The provisions of this Section 6.2
shall similarly apply to successive consolidations, mergers, sales or transfers.
6.3 NOTICE OF ADJUSTMENT. Whenever the number of shares of
Common Stock issuable upon the conversion of each share of Series B Preferred
Stock or the Conversion Price of such shares of Series B Preferred Stock is
adjusted or reduced, as herein provided, the Corporation shall mail by first
class, postage prepaid, to each Holder (a) notice of any reduction on or before
the day the reduction takes effect, which shall state the reduced Conversion
Price and the period during which it will be in effect and/or (b) a certificate
setting forth the number of shares of Common Stock issuable upon the conversion
of each share of Series B Preferred Stock and the Conversion Price on such
shares of Series B Preferred Stock after adjustment setting forth a brief
statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made.
6.4 NO ADJUSTMENT FOR DIVIDEND. No adjustment in respect of
any cash dividends shall be made while the Series B Preferred Stock is
outstanding or upon the conversion of the Series B Preferred Stock.
6.5 CERTAIN EVENTS. If any event occurs as to which in the
reasonable judgment of the Board of Directors of the Corporation , in good
faith, the other provisions of this Section 6 are not strictly applicable but
the lack of any adjustment would not in the opinion of the Board of Directors of
the Corporation fairly reflect the purchase rights of the Holders of the Series
B Preferred Stock in accordance with the basic intent and principles of the
provisions of this Agreement then the Board of Directors of the Corporation
shall appoint a Financial Advisor which shall give its opinion upon the
adjustment, if any, on a basis consistent with the basic
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<PAGE> 26
intent and principles established and the other provisions of this Section 6,
necessary to preserve, without dilution, the exercise rights of the Holders.
Upon receipt of such opinion, the Corporation shall forthwith make the
adjustments described therein which adjustments shall be conclusive and binding.
Section 7. STATUS OF CONVERTED OR REACQUIRED SHARES. Any shares of
Series B Preferred Stock converted into shares of Common Stock pursuant to
SECTION 5 hereof or purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the conversion or
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Series B Preferred Stock and may be reissued
as part of a new series of preferred stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of Incorporation, or
in any other Certificate of Designation creating a series of preferred stock or
any similar stock or as otherwise required by law.
Section 8. LIQUIDATION, DISSOLUTION OR CHANGE OF CONTROL.
(a) In the event of any liquidation, dissolution or
winding up of the Corporation, either voluntary or involuntary, the holders of
shares of Series B Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to shareholders under
applicable law, prior and in preference to any distribution to holders of the
Common Stock or any Junior Securities but in parity with any distribution to
holders of Parity Securities, an amount of $100 per share (the "Liquidation
Value"), plus a sum equal to all dividends accrued on such shares (whether or
not declared) and unpaid for the then current Dividend Period. If upon the
occurrence of such event, the assets and funds to be distributed among the
holders of shares of Series B Preferred Stock and Parity Securities shall be
insufficient to permit the payment to such holders of the full preferential
amounts due to the holders of shares of Series B Preferred Stock and Parity
Securities, respectively, then the entire assets and funds of the Corporation
legally available for distribution shall be distributed among the holders of
shares of Series B Preferred Stock and Parity Securities, pro rata, based on the
respective liquidation amounts to which each such series of stock is entitled by
the Corporation's Articles of Incorporation and any certificate of designation
of preferences.
(b) Upon the completion of the distribution required
by subsection 8(a) above, if assets remain in the Corporation, they shall be
distributed to holders of Parity Securities (unless holders of Parity Securities
have received distributions pursuant to subsection 8(a)) and Junior Securities
in accordance with the Corporation's Articles of Incorporation, including any
duly adopted certificate(s) of designation of preferences.
(c) (i) Upon a Change of Control (as defined below) of the
Corporation, each holder of the Series B Preferred Stock will have the option to
require the Corporation to repurchase such holder's shares of Series B Preferred
Stock at a price per share equal to the Liquidation Value plus any accrued and
unpaid dividends. A "Change of Control" shall have occurred: (A) when any person
or group is or becomes the beneficial owner of 50% or
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<PAGE> 27
more of the then outstanding voting shares of the Corporation, (B) when, during
any period of two consecutive years after the closing of the sale of the Series
B Preferred Stock, individuals who at the beginning of such period constituted
the Corporation's Board of Directors, or whose nomination for election by the
Corporation's shareholders was approved by a vote of a majority of the directors
of the Corporation then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
directors then in office or (C) upon any sale, transfer or other conveyance of
all or substantially all of the assets of the Corporation.
(ii) Upon the occurrence of a Change of Control, the
Corporation will offer to repurchase (the "Change of Control Purchase Offer")
all outstanding shares of Series B Preferred Stock, and each holder of
outstanding shares of Series B Preferred Stock will have the right to require
that the Corporation repurchase such holder's shares of Series B Preferred
Stock, at the price set forth in clause (i) of this subsection 8(c). Within 30
days following any Change of Control, the Corporation shall mail a notice, by
first class mail, to each holder of record of Series B Preferred Stock (a
"Change of Control Notice"), at his address of record, stating:
(A) that a Change of Control has occurred and that
such holder has the right to require the Corporation to
purchase such holder's shares of Series B Preferred Stock at
the price set forth above;
(B) the circumstances and relevant facts regarding
such Change of Control;
(C) the date on which the Corporation will repurchase
any shares of Series B Preferred Stock which the holders
require the Corporation to repurchase in accordance with this
subsection 8(c), which date shall be no earlier than 30 days
nor later than 60 days from the date such Change of Control
Notice is mailed (the "Change of Control Purchase Date");
(D) that, unless the Corporation defaults in making
such payment, any shares of Series B Preferred Stock accepted
for payment pursuant to the Change of Control Purchase Offer
shall cease to accrue dividends after the Change of Control
Purchase Date;
(E) that holders of Series B Preferred Stock electing
to have their shares repurchased pursuant to any Change of
Control Purchase Offer shall be required to surrender the
original certificates for the shares of Series B Preferred
Stock at the address specified in the notice, at least three
business days before the Change of Control Purchase Date; and
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<PAGE> 28
(F) that the holders of Series B Preferred Stock
shall be entitled to withdraw their election if the
Corporation receives, not later than the last business day
prior to the Change of Control Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name
of the holder, the number of shares of Series B Preferred
Stock the holder delivered for repurchase and a statement that
such holder is withdrawing his election to have such shares
repurchased.
(iii) Each holder of shares of Series B Preferred Stock
electing to have such shares purchased by the Corporation pursuant to this
subsection 8(c) shall deliver to the Corporation at its principal office, at
least three business days prior to the Change of Control Purchase Date, the
original certificate or certificate(s) for the shares to be purchased duly
endorsed, together with written notice to the Corporation specifying the number
of shares of Series B Preferred Stock to be purchased. Holders of Series B
Preferred Stock will be entitled to withdraw their election if the Corporation
receives, not later than one business day prior to the Change of Control
Purchase Date, a telegram, facsimile transmission or letter, at its principal
office, setting forth the name of the holder, the number of shares of Series B
Preferred Stock which were delivered by the holder for purchase by the
Corporation and a statement that such holder is withdrawing his election to have
such shares purchased.
(iv) Promptly following the Change of Control Purchase
Date, the Corporation will mail or deliver to each holder of shares of Series B
Preferred Stock who properly tendered such shares to the Corporation for
purchase pursuant to this subsection 8(c) and did not withdraw such election, at
his, her or its address of record, an amount equal to the purchase price for the
shares of Series B Preferred Stock so delivered for purchase as set forth in
this subsection 8(c). Unless the Corporation shall have defaulted in the payment
of the purchase price for shares of Series B Preferred Stock tendered for
purchase by the Corporation, all rights of the holders of such shares (except
the right to receive the purchase price therefor) shall cease with respect to
such shares on the Change of Control Purchase Date and such shares shall not,
after the Change of Control Purchase Date, be deemed to be outstanding and shall
not have the status of Series B Preferred Stock.
(v) The Corporation will comply, to the extent applicable,
with the requirements of Section 14(e) of the Securities Exchange Act of 1934,
as amended, and any other applicable securities laws or regulations in
connection with the repurchase of Series B Preferred Stock pursuant to this
subsection 8(c). To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this subsection 8(c), the
Corporation will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section by virtue
thereof.
Section 9. CONSOLIDATION, MERGER, ETC. Except as set forth in Section
8(c) hereof, in the event of a merger, reorganization, recapitalization or
similar event of or with respect to the Corporation (a "Corporate Change")
(other than a Corporate Change in which all or substantially all of the
consideration received by the holders of the Corporation's equity securities
upon such
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<PAGE> 29
Corporate Change consists of cash or assets other than securities issued by the
acquiring entity or any affiliate thereof), the Series B Preferred Stock shall
be assumed by the acquiring entity and thereafter the Series B Preferred Stock
shall be convertible into such class and type of securities as the holder of
shares of Series B Preferred Stock would have received had such holder converted
the Series B Preferred Stock immediately prior to such Corporate Change.
Section 10. REDEMPTION.
(a) OPTIONAL REDEMPTION. Subject to earlier conversion,
commencing on May 17, 2002 and continuing through the Mandatory Redemption Date
(as defined below), the Corporation shall have the right, exercisable at any
time and from time to time, to redeem shares of Series B Preferred Stock of the
following prices plus the payment of all accrued and unpaid dividends:
Year Redeemed Price
------------- -----
2002 104% of Liquidation Value
2003 102% of Liquidation Value
If less than all of the outstanding shares of Series B
Preferred Stock are called for redemption pursuant to this SECTION 10(A), shares
of Series B Preferred Stock shall be redeemed on a pro rata basis among the
holders thereof. Each holder of Series B Preferred Stock will be given notice of
such redemption and will have the right to convert the Series B Preferred Stock
into shares of Common Stock prior to the redemption date specified in such
notice.
(b) MANDATORY REDEMPTION.
(i) The Corporation will be required to redeem the
outstanding shares of Series B Preferred Stock on May 17, 2004 (the "Mandatory
Redemption Date"), at a redemption price per share equal to the Liquidation
Value plus accrued and unpaid dividends.
(ii) If at any time, (A) the Corporation shall breach the
terms and conditions contained in this certificate of designation, (B) the
Corporation shall breach any representation, warranty, or covenant contained in
that certain Series B Convertible Stock Purchase Agreement, dated May 6, 1999,
between the Corporation and the holders of the Series B Preferred Stock or any
subsequent Series B Stock Purchase agreement with like terms, or (C) the
Corporation shall fail to make a dividend payment on a Dividend Payment Date
(each a "Breach"), and any holder of shares of Series B Preferred Stock shall
give written notice to the Corporation of its desire to have the Corporation
redeem its shares of Series B Preferred Stock, such shares shall be redeemed by
the Corporation at a redemption price per share equal to the greater of the
amounts that would at that time be payable under Section 10(a) hereof had the
Corporation exercised its right to redeem the shares of Series B Preferred Stock
thereunder or the Liquidation Value plus accrued and unpaid dividends; PROVIDED,
HOWEVER, no holder shall have
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<PAGE> 30
the right to request a redemption of its shares of Series B Preferred Stock
pursuant to this SECTION 10(B)(II) unless and until the Corporation shall have
failed to cure any such Breach within a period of ten (10) days after having
received written notice thereof.
(c) MECHANICS OF REDEMPTION. Notice of redemption of the
Series B Preferred Stock, specifying the redemption date and place of
redemption, shall be given by first class mail to each holder of record of the
shares to be redeemed, at his address of record, not less than 30 nor more than
60 calendar days prior to the date upon which the Corporation shall redeem the
Series B Preferred Stock (the "Redemption Date"). Each such notice shall also
specify the redemption price applicable to the shares to be redeemed. If less
than all the shares owned by such holder are then to be redeemed, the notice
shall also specify the number of shares thereof which are to be redeemed and the
fact that a new certificate or certificates representing any unredeemed shares
shall be issued without cost to such holder.
(i) Notice of redemption of shares of the Series B
Preferred Stock having been given as provided in SECTION 10(B), then unless the
Corporation shall have defaulted in the payment of the redemption price and all
accrued and unpaid dividends (whether or not declared), all rights of the
holders thereof (except the right to receive the redemption price and all
accrued and unpaid dividends, whether or not declared) shall cease with respect
to such shares on the Redemption Date and such shares shall not, after the
Redemption Date, be deemed to be outstanding and shall not have the status of
Series B Preferred Stock. In case fewer than all the shares represented by any
such certificate are redeemed, a new certificate shall be issued representing
the unredeemed shares without cost to the holder thereof.
(ii) Shares of the Series B Preferred Stock are not
subject or entitled to the benefit of a sinking fund.
(iii) Notwithstanding the foregoing, if notice of
redemption shall have been given pursuant to this SECTION 10 and any holder of
the Series B Preferred Stock shall, prior to the close of business on the date
three business days next preceding the Redemption Date, give written notice to
the Corporation pursuant to SECTION 5 hereof of the conversion of any or all of
the shares held by the holder (accompanied by a certificate or certificates for
such shares, duly endorsed or assigned to the Corporation), then the redemption
shall not become effective as to such shares and the conversion shall become
effective as provided in SECTION 5.
(iv) If on the Mandatory Redemption Date funds legally
available to the Corporation for redemption of all outstanding shares of Series
B Preferred Stock are insufficient to redeem all such shares of Series B
Preferred Stock, such available funds shall be used by the Corporation to redeem
shares of Series B Preferred Stock from all holders ratably in proportion to the
full number of shares they would otherwise be entitled to have redeemed. In the
event that less than all outstanding shares of Series B Preferred Stock are
redeemed on the Mandatory Redemption Date, the Corporation will continue to
redeem shares of Series B Preferred Stock from time to time as soon as
practicable after funds become legally available
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<PAGE> 31
therefor (ratably if the funds legally available remain insufficient to redeem
all shares required to be redeemed) until all shares of Series B Preferred Stock
required to be redeemed shall have been redeemed. Until actually redeemed, each
share of Series B Preferred Stock will continue to enjoy all rights and benefits
hereof, including the right to convert into shares of Common Stock.
(d) CONVERSION PRICE ADJUSTMENT FOR FAILURE TO REDEEM. If the
Corporation fails to redeem all outstanding shares of Series B Preferred Stock
on the Mandatory Redemption Date, then, without any action by the holders of
shares of Series B Preferred Stock, the then current Conversion Price respecting
any shares of Series B Preferred Stock not redeemed by the Corporation shall be
reduced (but shall not be increased) to the greater of: (i) fifty percent (50%)
of the then current Conversion Price, and (ii) the closing price of the Common
Stock as reported by Nasdaq (or such principal national exchange on which the
Common Stock is then listed) on the Mandatory Redemption Date.
Section 11. AMENDMENT. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series B Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series B Preferred Stock, voting
together as a single class.
Section 12. NOTICES. Written notice of each meeting of the shareholders
of the Corporation shall be given by first-class mail not less than ten (10)
days prior to such meeting to each holder of record of the Series B Preferred
Stock to the address of such record holder shown on the Corporation's records.
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<PAGE> 32
IN WITNESS WHEREOF, this Certificate of Designation has been executed
on behalf of the Corporation by its Chief Executive Officer this 13th day of
May, 1999.
MANSUR INDUSTRIES INC.
By: /s/ Paul I. Mansur
--------------------------------
Paul I. Mansur
Chief Executive Officer
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<PAGE> 33
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in Order to Convert the Series B Preferred Stock)
The undersigned hereby irrevocably elects to convert ______ shares of
Series B Preferred Stock, represented by stock certificate No(s).
________________ (the "Series B Preferred Stock Certificates") into shares of
common stock, par value $.001 per share ("Common Stock"), of Mansur Industries
Inc., (the "Corporation") according to the conditions of the Certificate of
Designation of Series B Preferred Stock, as of the date written below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. No fee
will be charged to the holder for any conversion, except for transfer taxes, if
any.
The undersigned represents and warrants that all offers and sales by
the undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Series B Preferred Stock shall be made pursuant to
registration of such shares of Common Stock under the Securities Act of 1933, as
amended, or pursuant to an exemption from registration under such Act.
Conversion Calculations:
-----------------------------------------
Date of Conversion
-----------------------------------------
Applicable Conversion Price
-----------------------------------------
Signature
-----------------------------------------
Name
Address:
-----------------------------------------
-----------------------------------------
*No shares of Common Stock will be issued until the original Series B Preferred
Stock Certificate(s) to be converted and the Notice of Conversion are received
by the Corporation or its designated Transfer Agent. The original Stock
Certificate(s) representing the Series B Preferred Stock to be converted and the
Notice of Conversion must be received by the Corporation or its designated
Transfer Agent by the second business day following the Date of Conversion, or
the Notice of Conversion, at the Corporation's option, may be declared null and
void.
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<PAGE> 34
EXHIBIT B
NOTICE OF EARLY CONVERSION EVENT
Mansur Industries Inc. (the "Corporation ") hereby notifies
____________________, the holder of ___________ shares (the "Shares") of the
Corporation 's Series B Preferred Stock (the "Series B Preferred Stock"), that
an Early Conversion Event occurred on __________, and as such, you are hereby
directed to surrender the Shares as $______ of the aggregate Liquidation Value
of such Shares has been automatically converted into shares of the Corporation
's common stock, par value $.001 per share (the "Conversion Shares"), in
accordance with the terms of the Certificate of Designation respecting the
Series B Preferred Stock.
Unless otherwise instructed, the Corporation shall issue the Conversion
Shares and a new certificate representing the Shares not converted in the name
of the holder of the Shares and deliver same as soon as practicable and in
accordance with the provisions of the Certificate of Designation to the address
set forth in the Corporation 's register respecting the Series B Preferred
Stock.
Date:
----------------------------
MANSUR INDUSTRIES INC.
By:
------------------------------
Name:
Title:
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<PAGE> 35
ARTICLES OF AMENDMENT
CERTIFICATE OF DESIGNATION
OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
MANSUR INDUSTRIES INC.
(PURSUANT TO SECTION 607.0602 OF THE
FLORIDA BUSINESS CORPORATION ACT)
------------------------------------
Mansur Industries Inc., a corporation organized and existing under the
Business Corporation Act of the State of Florida (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 607.0602 of the
Business Corporation Act at a meeting duly called and held on August 23, 1999:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Articles of
Incorporation of the Corporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series C Convertible Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series C Convertible Preferred Stock" (the "Series C Preferred
Stock") and the number of shares constituting the Series C Preferred Stock shall
be 150,000, of which 50,000 shares shall be reserved for use in connection with
the payment of dividends on the outstanding shares of Series C Preferred Stock
pursuant to Section 3 hereof. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series C Preferred Stock to a number less
than the number of shares then outstanding, plus the number reserved as
aforesaid, and no increase shall increase the number of shares of Series C
Preferred Stock above the total number of authorized shares.
<PAGE> 36
Section 2. RANK. The Series C Preferred Stock shall rank as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary: (i) senior to all of the
Corporation's common stock, par value $.001 per share (the "Common Stock"); (ii)
senior to any class or series of capital stock of the Corporation hereafter
created specifically ranking by its terms junior to the Series C Preferred Stock
(collectively, with the Common Stock, "Junior Securities" or "Junior Stock");
(iii) on parity with the Series B Preferred Stock, par value $1.00 per share
("Series B Preferred Stock") of the Company: and (iv) on parity with any class
or series of capital stock of the Corporation hereafter created specifically
ranking by its terms on parity with the Series B Preferred Stock or Series C
Preferred Stock ("Parity Securities" or "Parity Stock"). While any shares of
Series C Preferred Stock are outstanding, no equity securities senior to the
Series C Preferred Stock, as to distribution of assets, payment of dividends or
otherwise ("Senior Securities") or Parity Securities and no options, warrants or
other rights (collectively, "Options") to purchase or acquire Senior Securities
or Parity Securities, or any securities (collectively, "Convertible Securities")
by their terms convertible into or exchangeable for Senior Securities or Parity
Securities, or any Options to purchase or acquire such Convertible Securities,
shall be authorized or issued and (except for shares issued as dividends on
outstanding shares of Series C Preferred Stock) no additional shares of Series C
Preferred Stock, or Options to acquire Series C Preferred Stock, or Convertible
Securities convertible into or exchangeable for Series C Preferred Stock, or any
Option to acquire such Convertible Securities, shall be issued, in each case,
without the approval (by vote or written consent, as provided by law) of the
holders of at least a majority of the then outstanding shares of Series C
Preferred Stock, voting as a single class. This prohibition shall not include
the authorization or issuance of any form of debt securities or instruments to a
bank or other institution.
Section 3. DIVIDENDS.
(a) The dividend rate payable with respect to the outstanding
shares of Series C Preferred Stock ("Dividend Rate") shall be 8.00% of the
Liquidation Value (as defined below) of each share per annum. During the period
commencing on the date of initial issuance of the Series C Preferred Stock and
continuing through the second anniversary of the date thereof, all such
dividends shall be paid by the Corporation, in lieu of cash, through the
issuance of additional shares of Series C Preferred Stock valued at the
Liquidation Value. Thereafter, all such dividends may, at the option of the
Corporation, be paid in lieu of cash, through the issuance of additional shares
of the Series C Preferred Stock, cash legally available for payment thereof, or
any combination of Series C Preferred Stock and cash whether or not such
dividends have been declared. If dividends are paid by the Corporation through
the issuance of additional shares of Series C Preferred Stock and such dividends
would, but for the provisions hereof, be payable with a fractional share, the
Corporation shall pay, in lieu of such fractional share, cash in an amount equal
to the value of such fractional share. Dividends on the Series C Preferred Stock
shall accrue from the date of issuance or thereafter, from the most recent date
on which dividends were payable, and shall be payable semi-annually on June 30
and December 31 of each year (each a "Dividend Payment Date"), commencing on
December 31, 1999; provided, however, that
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<PAGE> 37
if any such day is a non-business day, the Dividend Payment Date will be the
next business day. Each declared dividend shall be payable to holders of record
as they appear at the close of business on the stock books of the Corporation on
June 10 and December 10 of each year (each of such dates a "Record Date").
Semi-annual dividend periods (each a "Dividend Period") shall commence on and
include the 1st day of July and January of each year and shall end on and
include the day next preceding the next following Dividend Payment Date.
(b) No dividends shall be declared or paid or set apart for
payment on any Common Stock, Parity Stock or Junior Stock during any semi-annual
period unless full dividends on the Series C Preferred Stock for all Dividend
Periods ending prior to or during such semi-annual period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment. When dividends are not so paid in
full (or a sum sufficient for such full payment is not so set apart) upon the
Series C Preferred Stock and any other Parity Stock, dividends upon the Series C
Preferred Stock and dividends on such other Parity Stock payable during such
semi-annual period shall be declared pro rata so that the amount of such
dividends so payable per share on the Series C Preferred Stock and such other
Parity Stock shall in all cases bear to each other the same ratio that full
dividends on the shares of Series C Preferred Stock and full dividends, if any,
on shares of such other Parity Stock, bear to each other. If full dividends on
the Series C Preferred Stock have not been declared and paid or set apart for
payment, no dividend or distribution, other than in shares of Junior Stock, may
be declared, set aside or paid on any shares of Junior Stock. Holders of the
Series C Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of the dividends provided for herein. No
interest or sum of money in lieu of interest shall be payable in respect of any
declared dividend payment or payments on the Series C Preferred Stock which may
be in arrears. As used herein, the phrase "set apart" in respect of the payment
of dividends shall require deposit of any funds in a bank or trust company in a
separate deposit account maintained for the benefit of the holders of the Series
C Preferred Stock, or, in the case of payment of dividends through the issuance
of shares of the Corporation's Series C Preferred Stock, the deposit of
certificates representing such shares of Series C Preferred Stock with such bank
or trust company.
Section 4. VOTING RIGHTS. On all matters to come before the
shareholders of the Corporation, the holders of Series C Preferred Stock will
vote together with the holders of the Common Stock and Series B Preferred Stock
as a single class, with each share of Series C Preferred Stock and Series B
Preferred Stock entitled to a number of votes equal to the number of shares of
Common Stock into which it is then convertible using the record date for the
taking of such vote of shareholders as the date as of which the Conversion Price
(as hereinafter defined) is calculated except as required by law.
To the extent that under Florida law or this Certificate of
Designation the vote of the holders of shares of Series C Preferred Stock,
voting separately as a class, is required to authorize a given action of the
Corporation, the affirmative vote or consent of the holders of at least a
majority of the outstanding shares of the Series C Preferred Stock shall
constitute the approval of such action by the class. Holders of shares of Series
C Preferred Stock shall be
3
<PAGE> 38
entitled to notice of all shareholder meetings or written consents with respect
to which they would be entitled to vote, which notice shall be provided pursuant
to the Corporation's bylaws and applicable law.
Section 5. CONVERSION. Subject to and upon compliance with this SECTION
5, the holders of shares of Series C Preferred Stock shall have conversion
rights as follows:
(a) OPTIONAL CONVERSION. Each holder of a share of Series C
Preferred Stock shall have the right, at any time or from time to time prior to
the Redemption Date (as defined below), at the office of the Corporation or any
transfer agent for the Series C Preferred Stock, to convert such share of Series
C Preferred Stock into that number of fully paid and nonassessable shares of
Common Stock equal to $100 divided by the Conversion Price of such share of
Series C Preferred Stock as set forth in SECTION 6 hereof. The number of shares
of Common Stock into which the Series C Preferred Stock may be converted is
hereinafter referred to as the "Conversion Rate." Notwithstanding the foregoing,
the Corporation shall not be obligated to accept shares of Series C Preferred
Stock for conversion if such conversion would require the Corporation to issue a
certificate or certificates evidencing less than an aggregate of 50,000 shares
of Common Stock on any Date of Conversion (as defined below).
(b) EARLY CONVERSION EVENT. If, after the first anniversary of
the date of issuance of the shares of Series C Preferred Stock, the closing bid
price of the Common Stock, as reported on Nasdaq (or the closing sale price if
the Common Stock is then traded on any principal national exchange or Nasdaq
National Market) exceeds 175% of the Conversion Price for a period of twenty
(20) consecutive trading days, including the twenty (20) trading days prior to
such first anniversary (the "Calculation Period"), an early conversion event
("Early Conversion Event") shall have occurred. Upon the first Early Conversion
Event, if any, in each calendar quarter, the aggregate Liquidation Value of the
outstanding shares of Series C Preferred Stock shall automatically and without
any action by the holders of the Series C Preferred Stock or the Corporation be
converted into shares of Common Stock, on a pro rata basis, in an amount
determined in accordance with the following formula:
CPS = [(V-Y)] x 22 x CP
where CPS is the aggregate stated Liquidation Value of the Series C Preferred
Stock to be converted; V is the average daily reported volume of trading in the
Common Stock on all national securities exchanges and/or reported through the
automated quotation system of a registered national securities association
during the Calculation Period and Y is the sum of (i) shares of Common Stock
which the Corporation then has the right to issue upon an "Early Conversion
Event" under the Corporation's outstanding 8 1/4% Subordinated Convertible Notes
due 2003 (the "Convertible Notes"), plus (ii) shares of Common Stock subject to
then effective resale registration statements of the Corporation other than
Registration Statements on Form S-8 or S-4 and other than registration
statements with respect to Common Stock underlying the Convertible Notes, the
Series B Preferred Stock and the Series C Preferred Stock which remain unsold at
such time; and CP is the applicable Conversion Price. For purposes of
calculating V,
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trading volume in excess of 100,000 shares on any trading day shall not be
included, unless such amounts do not exceed 200% of the trailing 30-day average
reported volume of trading.
Notwithstanding the foregoing, none of the outstanding shares
of Series C Preferred Stock shall be converted as a result of an Early
Conversion Event pursuant to this SECTION 5 unless the resale of the shares of
Common Stock issuable upon such conversion is subject to an effective
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), or an exemption from registration under the Securities Act is
then available. Accrued dividends on the shares of Series C Preferred Stock
converted upon the occurrence of an Early Conversion Event shall be paid on the
next Dividend Payment Date in accordance with SECTION 3 hereof.
(c) MECHANICS OF CONVERSION. Before a holder shall be entitled
to receive shares of Common Stock upon conversion of shares of Series C
Preferred Stock, the holder of shares of Series C Preferred Stock shall (i) fax
or otherwise deliver a copy of the fully executed notice of conversion in the
form attached hereto as EXHIBIT A ("Notice of Conversion") to the Corporation at
its principal office and to the office of its designated transfer agent that
such holder elects to convert the same, which notice shall specify the number of
shares of Series C Preferred Stock to be converted and shall contain the
Conversion Price (together with a copy of the first page of each certificate to
be converted) prior to 5:00 p.m., Eastern Standard time (the "Conversion Notice
Deadline") on the date of conversion specified on the Notice of Conversion and
(ii) surrender the original certificate or certificates for the shares of Series
C Preferred Stock to be converted, duly endorsed, and deliver the original
Notice of Conversion by either overnight courier or two-day courier, to the
principal office of the Corporation or to the office of its designated transfer
agent; PROVIDED, HOWEVER, that the Corporation shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon such conversion
unless the certificates evidencing such shares of Series C Preferred Stock are
delivered to the Corporation or its transfer agent as provided above. Upon the
conversion of shares of Series C Preferred Stock in connection with an Early
Conversion Event, the Corporation shall send to the holders of shares of Series
C Preferred Stock a Notice of Early Conversion (in the form attached hereto as
EXHIBIT B) stating the aggregate Liquidation Value of shares of Series C
Preferred Stock to be converted and the number of shares of Common Stock into
which such Liquidation Value shall be converted.
Upon receipt by the Corporation of evidence of the loss,
theft, destruction or mutilation of any certificate representing shares of
Series C Preferred Stock, and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Corporation, and upon
surrender and cancellation of any certificate representing shares of Series C
Preferred Stock, if mutilated, the Corporation shall execute and deliver a new
certificate of like tenor and date. No fractional shares of Common Stock shall
be issued upon conversion of the Series C Preferred Stock. In lieu of any
fractional share to which the holder of shares of Series C Preferred Stock would
otherwise be entitled, the Corporation shall pay cash to such holder in an
amount equal to such fraction multiplied by the Conversion Price then in effect.
In the case of a
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dispute as to the calculation of the Conversion Price, the Corporation's
calculation shall be deemed conclusive absent manifest error.
The Corporation shall use all reasonable efforts to issue and
deliver within seven (7) business days after delivery to the Corporation of the
certificates representing the shares of Series C Preferred Stock to be
converted, or after such agreement and indemnification, to such holder of shares
of Series C Preferred Stock at the address of the holder on the books of the
Corporation, a certificate or certificates for the number of shares of Common
Stock to which the holder shall be entitled as aforesaid. The date on which
conversion occurs (the "Date of Conversion") shall be deemed to be the date set
forth in such Notice of Conversion, provided (i) that the advance copy of the
Notice of Conversion is delivered to and received by the Corporation before 5:00
p.m., Eastern time, on the Date of Conversion, and (ii) that the original stock
certificates representing the shares of Series C Preferred Stock to be converted
are received by the Corporation or the transfer agent within two (2) business
days thereafter. In the case of an Early Conversion Event, the last date of the
Calculation Period shall be deemed to be the Date of Conversion. The person or
persons entitled to receive the shares of Series C Preferred Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on the Date of Conversion. In the case of
an optional conversion, if the original certificates representing the shares of
Series C Preferred Stock to be converted are not received by the Corporation or
the transfer agent within two (2) business days after the Date of Conversion or
if the facsimile of the Notice of Conversion is not received by the Corporation
or its transfer agent prior to the Conversion Notice Deadline, the Notice of
Conversion, at the Corporation's option, may be declared null and void.
Following any conversion of shares of Series C Preferred
Stock, such shares of Series C Preferred Stock shall no longer be outstanding
and all rights of a holder with respect to the shares surrendered for conversion
shall immediately terminate except for the right to receive Common Stock. All
shares of Series C Preferred Stock subject to an Early Conversion Event shall be
deemed to be cancelled upon such holder's receipt of shares of Common Stock in
connection with any such conversion.
(d) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock such number of shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all then outstanding shares of Series C
Preferred Stock; and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series C Preferred Stock, the Corporation will take such
corporate action as may be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purpose.
Section 6. CONVERSION PRICE. The "Conversion Price" per share of the
Series C Preferred Stock shall be $11.50, subject to adjustment as set forth
below, with all such adjustments, if any, being cumulative from the date of
initial issuance of shares of Series C
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Preferred Stock such that all outstanding shares of Series C Preferred Stock
have the same Conversion Price regardless of their date of issuance.
6.1 ADJUSTMENT OF THE NUMBER OF SHARES OF COMMON STOCK AND THE
CONVERSION PRICE. The number of shares of Common Stock issuable upon conversion
and the Conversion Price shall be subject to adjustment as follows:
(a) In case the Corporation shall at any time after the date
of the initial issuance of Series C Preferred Stock and prior to the conversion
of all outstanding shares thereof (A) pay a dividend or make a distribution on
its Common Stock in shares of its capital stock (whether in shares of Common
Stock, of capital stock of any other class or Options to purchase or acquire
capital stock, Convertible Securities convertible or exchangeable for capital
stock, or Options with respect to such Convertible Securities), (B) subdivide
its outstanding shares of Common Stock into a greater number of shares, (C)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (D) reclassify, reorganize or effect any similar transaction with respect to
any of its shares of Common Stock, or in substitution or exchange therefor
(other than a change in par value, or from par value to no par value, or from no
par value to par value), then the number and, if applicable, kind of shares of
Common Stock to be received by any holder of shares of Series C Preferred Stock
(a "Holder") shall be adjusted so that the Holder will be entitled to receive on
conversion the number and kind of shares of capital stock or other securities
which it would have owned immediately following such action had its Series C
Preferred Stock been converted immediately prior thereto. An adjustment made
pursuant to this subsection (a) shall become effective immediately after the
payment date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination, reclassification, reorganization or similar transaction. If, as a
result of an adjustment made pursuant to this subsection (a), a Holder shall
become entitled to receive shares of two or more classes of capital stock of the
Corporation or other securities, the Board of Directors or a duly authorized
committee thereof shall in good faith determine (which determination shall be
conclusive and binding) the allocation of the Conversion Price between or among
shares of such classes of capital stock or other securities. After such
allocation, the Conversion Price and number of shares of each class of capital
stock that is issuable upon conversion shall thereafter be subject to adjustment
in a manner and on terms determined by the Board of Directors (which
determination shall be conclusive and binding) to be as nearly equivalent as
practicable to those applicable to Common Stock under this Section 6.
(b) (i) From the date of the initial issuance of the shares of
Series C Preferred Stock to and including the first anniversary of the date
thereof, if the Corporation shall issue or enter into any agreement to issue any
shares of Common Stock other than Excluded Shares (as hereinafter defined) for
consideration per share (the "Issuance Price") less than the Conversion Price
(as herein defined) per share in effect immediately prior to such issuance, the
Conversion Price in effect immediately prior to such issuance shall be reduced
(but shall not be increased) to the Issuance Price.
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(ii) After the first anniversary and prior to the
second anniversary of the initial issuance of the shares of Series C Preferred
Stock, if the Corporation shall issue or enter into any agreement to issue any
shares of Common Stock other than Excluded Shares for consideration per share
less than the Conversion Price per share in effect immediately prior to such
issuance, the Conversion Price in effect immediately prior to such issuance
shall be reduced (but shall not be increased) to the price (calculated to the
nearest cent) determined: by dividing (A) an amount equal to the sum of (1) the
number of shares of Common Stock outstanding on a fully diluted basis
immediately prior to such issuance multiplied by the Conversion Price per share
in effect immediately prior to such issuance and (2) the consideration, if any,
received by the Corporation upon such issuance by (B) the number of shares of
Common Stock outstanding on a fully diluted basis immediately after such
issuance.
(iii) If at any time prior to the second anniversary
of the initial issuance of the shares of Series C Preferred Stock, the
Corporation shall issue or enter into any agreement to issue any shares of
Common Stock other than Excluded Shares for consideration per share greater than
the Conversion Price but lower than the market price per share in effect
immediately prior to such issuance, the Conversion Price in effect immediately
prior to such issuance shall be reduced (but shall not be increased) to the
price (calculated to the nearest cent) determined by multiplying the Conversion
Price in effect immediately prior to such issuance by the factor determined by
dividing (A) an amount equal to the sum of (1) the number of shares of Common
Stock outstanding on a fully diluted basis immediately prior to such issuance
multiplied by the market price per share in effect immediately prior to such
issuance and (2) the consideration, if any, received by the Corporation upon
such issuance by (B) the number of shares of Common Stock outstanding on a fully
diluted basis immediately after such issuance multiplied by the market price per
share in effect immediately prior to such issuance; PROVIDED, HOWEVER, no
adjustment shall be made to the Conversion Price if (i) such issuance is in
connection with a firm commitment underwritten public offering or (ii) the
consideration per share is equal to or greater than 85% of the market price per
share in effect immediately prior to such issuance. For purposes hereof, the
"market price" as of any measurement date shall be the average of the closing
prices of the Common Stock for each of the 10 consecutive trading days
immediately preceding such measurement date.
(c) CERTAIN ADJUSTMENT FACTORS. For the purposes of any
adjustment of the Conversion Price pursuant to paragraph (b) above, the
following provisions shall be applicable:
(x) CASH. In the case of the issuance of shares 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 shares of 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; and
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(y) CONSIDERATION OTHER THAN CASH. In the case of the
issuance of shares of Common Stock (other than upon the conversion of
shares of capital stock or other securities of the Corporation) for
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 of the
Corporation based on an opinion of an outside financial advisor of
recognized regional or national standing, which may, but need not, be
the independent public accountants who serve as the regular auditors of
the Corporation (the "Financial Advisor"), whose determination shall be
conclusive and binding), irrespective of any accounting treatment; and
(z) OPTIONS AND CONVERTIBLE SECURITIES. In the case
of the issuance of (i) Options to purchase or acquire shares of Common
Stock (whether or not exercisable immediately following such issuance),
(ii) Convertible Securities by their terms convertible into or
exchangeable for shares of Common Stock (whether or not so convertible
or exchangeable immediately following such issuance), or (iii) Options
to purchase such Convertible Securities (whether or not exercisable
immediately following such issuance):
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such Options to
purchase or acquire shares of Common Stock shall be deemed to
have been issued at the time such Options are first issued and
for a consideration equal to the consideration (determined in
the manner provided in clauses (x) and (y) above), if any,
received by the Corporation upon the issuance of such Options
plus the purchase price provided in such Options for the
shares of Common Stock covered thereby (if the purchase price
per share of Common Stock is expressed as a range, the
purchase price per share for purposes of this subparagraph
(z)(1) shall be the average of such range of prices);
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in exchange
for any such Convertible Securities, or upon the exercise of
Options to purchase or acquire such Convertible Securities and
the subsequent conversion or exchange thereto shall be deemed
to have been issued at the time such convertible or
exchangeable securities or such options, warrants or other
rights are first issued and for a consideration equal to the
consideration, if any, received by the Corporation for any
such Convertible Securities or Options (excluding any cash
received on account of accrued interest or accumulated
dividends), plus the additional consideration, if any, to be
received by the Corporation upon the conversion or exchange of
such Convertible Securities and the exercise of any Options
(the consideration
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in each case to be determined in the manner provided in
clauses (x) and (y) above);
(3) on any change in the number of shares of
Common Stock deliverable upon exercise of any such Options
which have become exercisable or conversion of or exchange of
such Convertible Securities which have become convertible or
exchangeable, or any change in the consideration to be
received by the Corporation upon such exercise, conversion or
exchange, the Conversion Price as then in effect shall
forthwith be readjusted to such Conversion Price as would have
been obtained had such adjustment been made upon the original
issuance of such Options; provided, however, no adjustment
shall be made with respect to such Options exercised prior to
such change, or Convertible Securities converted or exchanged
prior to such change;
(4) on the expiration or cancellation of any
such Options or the termination of the right to convert or
exchange such Convertible Securities, if the Conversion Price
shall have been adjusted upon such securities being issued or
becoming exercisable, convertible or exchangeable, such
Conversion Price shall forthwith be readjusted to such
Conversion Price as would have been obtained had an adjustment
been made 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 other rights, or upon the conversion
or exchange of such securities; and
(5) if the Conversion Price shall have been
adjusted when such Options were first issued or such
Convertible Securities were first issued, no further
adjustment of the Conversion Price shall be made for the
actual issuance of shares of Common Stock upon the exercise,
conversion or exchange thereof.
(d) EXCLUDED SHARES. "Excluded Shares" shall mean (i) any
shares of Common Stock issued in a transaction described in Section 6.1(a) of
this Agreement; and (ii) issuances of shares of Common Stock from time to time
pursuant to employment agreements, stock option or bonus plans authorized by the
Board of Directors of the Corporation as of the date hereof, (iii) issuances of
Common Stock, or Options to acquire shares of Common Stock, or Convertible
Securities convertible into or exchangeable for Common Stock pursuant to the
terms of any acquisition by the Corporation of all or substantially all of the
operating assets, or more than fifty percent (50%) of the voting capital stock
or other controlling interest of any business entity in a transaction negotiated
on an arms-length basis and expressly approved in advance by the Board of
Directors of the Corporation; (iv) issuances of shares of Common Stock from time
to time upon the exercise, exchange or conversion of warrants, options,
convertible securities, the Convertible Notes or other securities outstanding as
of the date hereof, and (v) issuances of shares of Common Stock from time to
time pursuant to the anti-dilution provisions of other
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securities. For purposes hereof, "voting capital stock" shall be deemed to be
capital stock of any class or classes, however designated having ordinary voting
power for the election of members of the board of directors or other governing
body and "controlling" shall mean the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
party, whether through the ownership of voting capital stock, by contract or
otherwise.
(e) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1.2% in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
subsection (e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section 6
shall be made to the nearest tenth of a cent or to the nearest one-hundredth of
a share, as the case may be.
(f) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Corporation, and the disposition of any such shares shall be considered an
issuance of Common Stock for the purposes of this Section 6.
6.2 RIGHTS TO PURCHASE OTHER SECURITIES. If any of the following shall
occur:
Without limiting any provisions of Section 9:
(a) any Corporate Change (as hereinafter defined) to which the
Corporation is a party, other than a Corporate Change in which the Corporation
is the continuing or surviving Corporation and which does not result in any
reclassification of, or change (other than as a result of a subdivision or
combination) in, outstanding shares of the Common Stock, or
(b) any sale or transfer to another corporation or entity of
all or substantially all of the assets of the Corporation;
then, and in either such case, the Holder of each share of Series C Preferred
Stock then outstanding shall have the right to purchase the kind and amount of
shares of stock and/or other securities and property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock issuable upon conversion of such stock immediately prior to such
consolidation, merger, sale, or transfer. The provisions of this Section 6.2
shall similarly apply to successive consolidations, mergers, sales or transfers.
6.3 NOTICE OF ADJUSTMENT. Whenever the number of shares of Common Stock
issuable upon the conversion of each share of Series C Preferred Stock or the
Conversion Price of such shares of Series C Preferred Stock is adjusted or
reduced, as herein provided, the Corporation shall mail by first class, postage
prepaid, to each Holder (a) notice of any reduction on or before the day the
reduction takes effect, which shall state the reduced Conversion Price and the
period during which it will be in effect and/or (b) a certificate setting forth
the number of
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shares of Common Stock issuable upon the conversion of each share of Series C
Preferred Stock and the Conversion Price on such shares of Series C Preferred
Stock after adjustment setting forth a brief statement of the facts requiring
such adjustment and setting forth the computation by which such adjustment was
made.
6.4 NO ADJUSTMENT FOR DIVIDEND. No adjustment in respect of
any cash dividends shall be made while the Series C Preferred Stock is
outstanding or upon the conversion of the Series C Preferred Stock.
6.5 CERTAIN EVENTS. If any event occurs as to which in the
reasonable judgment of the Board of Directors of the Corporation , in good
faith, the other provisions of this Section 6 are not strictly applicable but
the lack of any adjustment would not in the opinion of the Board of Directors of
the Corporation fairly reflect the purchase rights of the Holders of the Series
C Preferred Stock in accordance with the basic intent and principles of the
provisions of this Agreement then the Board of Directors of the Corporation
shall appoint a Financial Advisor which shall give its opinion upon the
adjustment, if any, on a basis consistent with the basic intent and principles
established and the other provisions of this Section 6, necessary to preserve,
without dilution, the exercise rights of the Holders. Upon receipt of such
opinion, the Corporation shall forthwith make the adjustments described therein
which adjustments shall be conclusive and binding.
Section 7. STATUS OF CONVERTED OR REACQUIRED SHARES. Any shares of
Series C Preferred Stock converted into shares of Common Stock pursuant to
SECTION 5 hereof or purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the conversion or
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Series C Preferred Stock and may be reissued
as part of a new series of preferred stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of Incorporation, or
in any other Certificate of Designation creating a series of preferred stock or
any similar stock or as otherwise required by law.
Section 8. LIQUIDATION, DISSOLUTION OR CHANGE OF CONTROL.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary, the holders of shares of
Series C Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to shareholders under applicable law,
prior and in preference to any distribution to holders of the Common Stock or
any Junior Securities but in parity with any distribution to holders of Parity
Securities, an amount of $100 per share (the "Liquidation Value"), plus a sum
equal to all dividends accrued on such shares (whether or not declared) and
unpaid through and including the then current Dividend Period. If upon the
occurrence of such event, the assets and funds to be distributed among the
holders of shares of Series B Preferred Stock, Series C Preferred Stock and
Parity Securities shall be insufficient to permit the payment to such holders of
the full preferential amounts due to the holders of shares of Series B Preferred
Stock, Series C Preferred
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Stock and Parity Securities, respectively, then the entire assets and funds of
the Corporation legally available for distribution shall be distributed among
the holders of shares of Series B Preferred Stock, Series C Preferred Stock and
Parity Securities, pro rata, based on the respective liquidation amounts to
which each such series of stock is entitled by the Corporation's Articles of
Incorporation and any certificate of designation of preferences.
(b) Upon the completion of the distribution required by
subsection 8(a) above, if assets remain in the Corporation, they shall be
distributed to holders of Parity Securities (unless holders of Parity Securities
have received distributions pursuant to subsection 8(a)) and Junior Securities
in accordance with the Corporation's Articles of Incorporation, including any
duly adopted certificate(s) of designation of preferences.
(c) (i) Upon a Change of Control (as defined below) of the
Corporation, each holder of the Series C Preferred Stock will have the option to
require the Corporation to repurchase such holder's shares of Series C Preferred
Stock at a price per share equal to the Liquidation Value plus any accrued and
unpaid dividends. A "Change of Control" shall have occurred: (A) when any person
or group is or becomes the beneficial owner of 50% or more of the then
outstanding voting capital stock of the Corporation, (B) when, during any period
of two consecutive years after the closing of the sale of the Series C Preferred
Stock, individuals who at the beginning of such period constituted the
Corporation's Board of Directors, or whose nomination for election by the
Corporation's shareholders was approved by a vote of a majority of the directors
of the Corporation then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
directors then in office or (C) upon any sale, transfer or other conveyance of
all or substantially all of the assets of the Corporation.
(ii) Upon the occurrence of a Change of Control, the
Corporation will offer to repurchase (the "Change of Control Purchase Offer")
all outstanding shares of Series C Preferred Stock, and each holder of
outstanding shares of Series C Preferred Stock will have the right to require
that the Corporation repurchase such holder's shares of Series C Preferred
Stock, at the price set forth in clause (i) of this subsection 8(c). Within 30
days following any Change of Control, the Corporation shall mail a notice, by
first class mail, to each holder of record of Series C Preferred Stock (a
"Change of Control Notice"), at his address of record, stating:
(A) that a Change of Control has occurred
and that such holder has the right to require the Corporation
to purchase such holder's shares of Series C Preferred Stock
at the price set forth above;
(B) the circumstances and relevant facts
regarding such Change of Control;
(C) the date on which the Corporation will
repurchase any shares of Series C Preferred Stock which the
holders require the
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Corporation to repurchase in accordance with this subsection
8(c), which date shall be no earlier than 30 days nor later
than 60 days from the date such Change of Control Notice is
mailed (the "Change of Control Purchase Date");
(D) that, unless the Corporation defaults in
making such payment, any shares of Series C Preferred Stock
accepted for payment pursuant to the Change of Control
Purchase Offer shall cease to accrue dividends after the
Change of Control Purchase Date;
(E) that holders of Series C Preferred Stock
electing to have their shares repurchased pursuant to any
Change of Control Purchase Offer shall be required to
surrender the original certificates for the shares of Series C
Preferred Stock at the address specified in the notice, at
least three business days before the Change of Control
Purchase Date; and
(F) that the holders of Series C Preferred
Stock shall be entitled to withdraw their election if the
Corporation receives, not later than the last business day
prior to the Change of Control Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name
of the holder, the number of shares of Series C Preferred
Stock the holder delivered for repurchase and a statement that
such holder is withdrawing his election to have such shares
repurchased.
(iii) Each holder of shares of Series C Preferred
Stock electing to have such shares purchased by the Corporation pursuant to this
subsection 8(c) shall deliver to the Corporation at its principal office, at
least three business days prior to the Change of Control Purchase Date, the
original certificate or certificate(s) for the shares to be purchased duly
endorsed, together with written notice to the Corporation specifying the number
of shares of Series C Preferred Stock to be purchased. Holders of Series C
Preferred Stock will be entitled to withdraw their election if the Corporation
receives, not later than one business day prior to the Change of Control
Purchase Date, a telegram, facsimile transmission or letter, at its principal
office, setting forth the name of the holder, the number of shares of Series C
Preferred Stock which were delivered by the holder for purchase by the
Corporation and a statement that such holder is withdrawing his election to have
such shares purchased.
(iv) Promptly following the Change of Control
Purchase Date, the Corporation will mail or deliver to each holder of shares of
Series C Preferred Stock who properly tendered such shares to the Corporation
for purchase pursuant to this subsection 8(c) and did not withdraw such
election, at his, her or its address of record, an amount equal to the purchase
price for the shares of Series C Preferred Stock so delivered for purchase as
set forth in this subsection 8(c). Unless the Corporation shall have defaulted
in the payment of the purchase price for shares of Series C Preferred Stock
tendered for purchase by the Corporation, all rights of the holders of such
shares (except the right to receive the purchase price therefor) shall cease
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with respect to such shares on the Change of Control Purchase Date and such
shares shall not, after the Change of Control Purchase Date, be deemed to be
outstanding and shall not have the status of Series C Preferred Stock.
(v) The Corporation will comply, to the extent
applicable, with the requirements of Section 14(e) of the Securities Exchange
Act of 1934, as amended, and any other applicable securities laws or regulations
in connection with the repurchase of Series C Preferred Stock pursuant to this
subsection 8(c). To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this subsection 8(c), the
Corporation will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section by virtue
thereof.
Section 9. CONSOLIDATION, MERGER, ETC. Except as set forth in Section
8(c) hereof, and without limiting any provision of Section 6.2 hereof, in the
event of a merger, reorganization, recapitalization or similar event of or with
respect to the Corporation (a "Corporate Change") (other than a Corporate Change
in which all or substantially all of the consideration received by the holders
of the Corporation's equity securities upon such Corporate Change consists of
cash or assets other than securities issued by the acquiring entity or any
Affiliate thereof), the Series C Preferred Stock shall be assumed by the
acquiring entity and thereafter the Series C Preferred Stock shall be
convertible into such class and type of securities as the holder of shares of
Series C Preferred Stock would have received had such holder converted the
Series C Preferred Stock immediately prior to such Corporate Change.
Section 10. REDEMPTION.
(a) OPTIONAL REDEMPTION. Subject to earlier
conversion, commencing on May 17, 2002 and continuing through the Mandatory
Redemption Date (as defined below), the Corporation shall have the right,
exercisable at any time and from time to time, to redeem shares of Series C
Preferred Stock at the following prices plus the payment of all accrued and
unpaid dividends:
YEAR REDEEMED PRICE
------------- -----
2002 104% of Liquidation Value
2003 102% of Liquidation Value
If less than all of the outstanding shares of Series C
Preferred Stock are called for redemption pursuant to this SECTION 10(A), shares
of Series C Preferred Stock shall be redeemed on a pro rata basis among the
holders thereof. Each holder of Series C Preferred Stock will be given notice of
such redemption pursuant to Section 10(c) and will have the right to convert the
Series C Preferred Stock into shares of Common Stock prior to the redemption
date specified in such notice.
15
<PAGE> 50
(b) MANDATORY REDEMPTION.
(i) The Corporation will be required to redeem the
outstanding shares of Series C Preferred Stock on May 17, 2004 (the "Mandatory
Redemption Date"), at a redemption price per share equal to the Liquidation
Value plus accrued and unpaid dividends.
(ii) If at any time, (A) the Corporation shall breach
the terms and conditions contained in this certificate of designation, (B) the
Corporation shall breach any representation, warranty, or covenant contained in
that certain Series C Convertible Stock Purchase Agreement, dated August __,
1999, between the Corporation and the initial Holders or any subsequent Series C
Stock Purchase Agreement with like terms, or (C) the Corporation shall fail to
make a dividend payment on a Dividend Payment Date (each a "Breach"), prompt
notice of such Breach shall be given to each Holder by the Corporation at such
time as the Corporation becomes aware of such Breach and (without limiting any
rights of Holder) prompt notice of such Breach shall be given to the Corporation
by each Holder at such time such Holder becomes aware of such Breach, and any
Holder shall give written notice to the Corporation of its desire to have the
Corporation redeem its shares of Series C Preferred Stock, such shares shall be
redeemed by the Corporation at a redemption price per share equal to the greater
of the amounts that would at that time be payable under Section 10(a) hereof had
the Corporation exercised its right to redeem the shares of Series B Preferred
Stock thereunder or the Liquidation Value plus accrued and unpaid dividends;
PROVIDED, HOWEVER, no Holder shall have the right to request a redemption of its
shares of Series C Preferred Stock pursuant to this SECTION 10(B)(II) unless and
until the Corporation shall have failed to cure any such Breach within a period
of ten (10) days after having received written notice thereof from the Holder.
(c) MECHANICS OF REDEMPTION. Notice of redemption of the
Series C Preferred Stock, specifying the redemption date and place of
redemption, shall be given by first class mail to each holder of record of the
shares to be redeemed, at his address of record, not less than 30 nor more than
60 calendar days prior to the date upon which the Corporation shall redeem the
Series C Preferred Stock (the "Redemption Date"). Each such notice shall also
specify the redemption price applicable to the shares to be redeemed. If less
than all the shares owned by such holder are then to be redeemed, the notice
shall also specify the number of shares thereof which are to be redeemed and the
fact that a new certificate or certificates representing any unredeemed shares
shall be issued without cost to such holder.
(i) Notice of redemption of shares of the Series C
Preferred Stock having been given as provided in SECTION 10(C), then unless the
Corporation shall have defaulted in the payment of the redemption price and all
accrued and unpaid dividends (whether or not declared), all rights of the
holders thereof (except the right to receive the redemption price and all
accrued and unpaid dividends, whether or not declared) shall cease with respect
to such shares on the Redemption Date and such shares shall not, after the
Redemption Date, be deemed to be outstanding and shall not have the status of
Series C Preferred Stock. In case fewer than all the shares represented by any
such certificate are redeemed, a new certificate shall be issued representing
the unredeemed shares without cost to the holder thereof.
16
<PAGE> 51
(ii) Shares of the Series C Preferred Stock are not
subject or entitled to the benefit of a sinking fund.
(iii) Notwithstanding the foregoing, if notice of
redemption shall have been given pursuant to this SECTION 10 and any holder of
the Series C Preferred Stock shall, prior to the close of business on the date
three business days next preceding the Redemption Date, give written notice to
the Corporation pursuant to SECTION 5 hereof of the conversion of any or all of
the shares held by the holder (accompanied by a certificate or certificates for
such shares, duly endorsed or assigned to the Corporation), then the redemption
shall not become effective as to such shares and the conversion shall become
effective as provided in SECTION 5.
(iv) If on the Mandatory Redemption Date funds
legally available to the Corporation for redemption of all outstanding shares of
Series B Preferred Stock and Series C Preferred Stock are insufficient to redeem
all such shares of Series B Preferred Stock and Series C Preferred Stock, such
available funds shall be used by the Corporation to redeem shares of Series B
Preferred Stock and Series C Preferred Stock from all holders ratably in
proportion to the full number of shares they would otherwise be entitled to have
redeemed. In the event that less than all outstanding shares of Series B
Preferred Stock and Series C Preferred Stock are redeemed on the Mandatory
Redemption Date, the Corporation will continue to redeem shares of Series B
Preferred Stock and Series C Preferred Stock from time to time as soon as
practicable after funds become legally available therefor (ratably if the funds
legally available remain insufficient to redeem all shares required to be
redeemed) until all shares of Series B Preferred Stock and Series C Preferred
Stock required to be redeemed shall have been redeemed. Until actually redeemed,
each share of Series C Preferred Stock will continue to enjoy all rights and
benefits hereof, including the right to convert into shares of Common Stock.
(d) CONVERSION PRICE ADJUSTMENT FOR FAILURE TO REDEEM. If the
Corporation fails to redeem all outstanding shares of Series C Preferred Stock
on the Mandatory Redemption Date, then, without any action by the holders of
shares of Series C Preferred Stock, the then current Conversion Price respecting
any shares of Series C Preferred Stock not redeemed by the Corporation shall be
reduced (but shall not be increased) to the greater of: (i) fifty percent (50%)
of the then current Conversion Price, and (ii) the closing price of the Common
Stock as reported by Nasdaq (or such principal national exchange on which the
Common Stock is then listed) on the Mandatory Redemption Date.
Section 11. AMENDMENT. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or special rights of the Series C Preferred Stock
so as to affect them adversely without the affirmative vote of the holders of at
least a majority of the outstanding shares of Series C Preferred Stock, voting
together as a single class.
Section 12. NOTICES. Written notice of each meeting of the shareholders
of the Corporation shall be given by first-class mail not less than ten (10)
days prior to such meeting to each holder of record of the Series C Preferred
Stock to the address of such record holder shown on the Corporation's records.
17
<PAGE> 52
IN WITNESS WHEREOF, this Certificate of Designation has been executed
on behalf of the Corporation by its Chief Executive Officer this 23rd day of
August, 1999.
MANSUR INDUSTRIES INC.
By: /s/ PAUL I. MANSUR
----------------------
Paul I. Mansur
Chief Executive Officer
18
<PAGE> 53
EXHIBIT A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER
IN ORDER TO CONVERT THE SERIES C PREFERRED STOCK)
The undersigned hereby irrevocably elects to convert ______ shares of
Series C Preferred Stock, represented by stock certificate No(s).
________________ (the "Series C Preferred Stock Certificates") into shares of
common stock, par value $.001 per share ("Common Stock"), of Mansur Industries
Inc., (the "Corporation") according to the conditions of the Certificate of
Designation of Series C Preferred Stock, as of the date written below. If shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect thereto. No fee
will be charged to the holder for any conversion, except for transfer taxes, if
any.
The undersigned represents and warrants that all offers and sales by
the undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Series C Preferred Stock shall be made pursuant to
registration of such shares of Common Stock under the Securities Act of 1933, as
amended, or pursuant to an exemption from registration under such Act.
Conversion Calculations:
------------------------------------
Date of Conversion
------------------------------------
Applicable Conversion Price
------------------------------------
Signature
------------------------------------
Name
Address:
------------------------------------
------------------------------------
*No shares of Common Stock will be issued until the original Series C Preferred
Stock Certificate(s) to be converted and the Notice of Conversion are received
by the Corporation or its designated Transfer Agent. The original Stock
Certificate(s) representing the Series C Preferred Stock to be converted and the
Notice of Conversion must be received by the Corporation or its designated
Transfer Agent by the second business day following the Date of Conversion, or
the Notice of Conversion, at the Corporation's option, may be declared null and
void.
<PAGE> 54
EXHIBIT B
NOTICE OF EARLY CONVERSION EVENT
Mansur Industries Inc. (the "Corporation ") hereby notifies
____________________, the holder of ___________ shares (the "Shares") of the
Corporation 's Series C Preferred Stock (the "Series C Preferred Stock"), that
an Early Conversion Event occurred on __________, and as such, you are hereby
directed to surrender the Shares as $______ of the aggregate Liquidation Value
of such Shares has been automatically converted into shares of the Corporation
's common stock, par value $.001 per share (the "Conversion Shares"), in
accordance with the terms of the Certificate of Designation respecting the
Series C Preferred Stock.
Unless otherwise instructed, the Corporation shall issue the Conversion
Shares and a new certificate representing the Shares not converted in the name
of the holder of the Shares and deliver same as soon as practicable and in
accordance with the provisions of the Certificate of Designation to the address
set forth in the Corporation's register respecting the Series C Preferred Stock.
Date:
------------------------------
MANSUR INDUSTRIES INC.
By:
------------------------------
Name:
--------------------------
Title:
--------------------------
<PAGE> 55
ARTICLES OF AMENDMENT
CERTIFICATE OF DESIGNATION
OF
SERIES D CONVERTIBLE PREFERRED STOCK
OF
MANSUR INDUSTRIES INC.
(PURSUANT TO SECTION 607.0602 OF THE
FLORIDA BUSINESS CORPORATION ACT)
------------------------------------
Mansur Industries Inc., a corporation organized and existing under the
Business Corporation Act of the State of Florida (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 607.0602 of the
Business Corporation Act at a meeting duly called and held on May 1, 2000:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Articles of
Incorporation of the Corporation, the Board of Directors hereby creates a series
of Preferred Stock, par value $1.00 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares, and fixes
the relative rights, preferences, and limitations thereof as follows:
Series D Convertible Preferred Stock:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series D Convertible Preferred Stock" (the "Series D Preferred
Stock") and the number of shares constituting the Series D Preferred Stock shall
be 150,000, of which 50,000 shares shall be reserved for use in connection with
the payment of dividends on the outstanding shares of Series D Preferred Stock
pursuant to Section 3 hereof. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series D Preferred Stock to a number less
than the number of shares then outstanding, plus the number reserved as
aforesaid, and no increase shall increase the number of shares of Series D
Preferred Stock above the total number of authorized shares.
Section 2. RANK. The Series D Preferred Stock shall rank as to
distributions of assets upon liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary:
<PAGE> 56
(i) senior to all of the Corporation's common stock, par value $.001 per share
(the "Common Stock"); (ii) senior to any class or series of capital stock of the
Corporation hereafter created specifically ranking by its terms junior to the
Series D Preferred Stock (collectively, with the Common Stock, "Junior
Securities" or "Junior Stock"); (iii) on parity with the Series B Convertible
Preferred Stock, par value $1.00 per share ("Series B Preferred Stock") of the
Company; (iv) on parity with the Series C Convertible Preferred Stock, par value
$1.00 per share ("Series C Preferred Stock") of the Company; and (iv) on parity
with any class or series of capital stock of the Corporation hereafter created
specifically ranking by its terms on parity with the Series B Preferred Stock,
Series C Preferred Stock or Series D Preferred Stock ("Parity Securities" or
"Parity Stock"). While any shares of Series D Preferred Stock are outstanding,
no equity securities senior to the Series D Preferred Stock, as to distribution
of assets, payment of dividends or otherwise ("Senior Securities") or Parity
Securities and no options, warrants or other rights (collectively, "Options") to
purchase or acquire Senior Securities or Parity Securities, or any securities
(collectively, "Convertible Securities") by their terms convertible into or
exchangeable for Senior Securities or Parity Securities, or any Options to
purchase or acquire such Convertible Securities, shall be authorized or issued
and (except for shares issued as dividends on outstanding shares of Series D
Preferred Stock) no additional shares of Series D Preferred Stock, or Options to
acquire Series D Preferred Stock, or Convertible Securities convertible into or
exchangeable for Series D Preferred Stock, or any Option to acquire such
Convertible Securities, shall be issued, in each case, without the approval (by
vote or written consent, as provided by law) of the holders of at least a
majority of the then outstanding shares of Series D Preferred Stock, voting as a
single class. This prohibition shall not include the authorization or issuance
of any form of debt securities or instruments to a bank or other institution.
Section 3. DIVIDENDS.
(a) The dividend rate payable with respect to the outstanding
shares of Series D Preferred Stock ("Dividend Rate") shall be 8.25% of the
Liquidation Value (as defined below) of each share per annum. During the period
commencing on the date of initial issuance of the Series D Preferred Stock and
continuing through the second anniversary of the date thereof, all such
dividends shall be paid by the Corporation, in lieu of cash, through the
issuance of additional shares of Series D Preferred Stock valued at the
Liquidation Value. Thereafter, all such dividends may, at the option of the
Corporation, be paid in lieu of cash, through the issuance of additional shares
of the Series D Preferred Stock, cash legally available for payment thereof, or
any combination of Series D Preferred Stock and cash whether or not such
dividends have been declared. If dividends are paid by the Corporation through
the issuance of additional shares of Series D Preferred Stock and such dividends
would, but for the provisions hereof, be payable with a fractional share, the
Corporation shall pay, in lieu of such fractional share, cash in an amount equal
to the value of such fractional share. Dividends on the Series D Preferred Stock
shall accrue from the date of issuance or thereafter, from the most recent date
on which dividends were payable, and shall be payable semi-annually on June 30
and December 31 of each year (each a "Dividend Payment Date"), commencing on
June 30, 2000; PROVIDED, HOWEVER, that if
2
<PAGE> 57
any such day is a non-business day, the Dividend Payment Date will be the next
business day. Each declared dividend shall be payable to holders of record as
they appear at the close of business on the stock books of the Corporation on
June 10 and December 10 of each year (each of such dates a "Record Date").
Semi-annual dividend periods (each a "Dividend Period") shall commence on and
include the 1st day of July and January of each year and shall end on and
include the day next preceding the next following Dividend Payment Date.
(b) No dividends shall be declared or paid or set apart for
payment on any Common Stock, Parity Stock or Junior Stock during any semi-annual
period unless full dividends on the Series D Preferred Stock for all Dividend
Periods ending prior to or during such semi-annual period have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for such payment. When dividends are not so paid in
full (or a sum sufficient for such full payment is not so set apart) upon the
Series D Preferred Stock and any other Parity Stock, dividends upon the Series D
Preferred Stock and dividends on such other Parity Stock payable during such
semi-annual period shall be declared pro rata so that the amount of such
dividends so payable per share on the Series D Preferred Stock and such other
Parity Stock shall in all cases bear to each other the same ratio that full
dividends on the shares of Series D Preferred Stock and full dividends, if any,
on shares of such other Parity Stock, bear to each other. If full dividends on
the Series D Preferred Stock have not been declared and paid or set apart for
payment, no dividend or distribution, other than in shares of Junior Stock, may
be declared, set aside or paid on any shares of Junior Stock. Holders of the
Series D Preferred Stock shall not be entitled to any dividends, whether payable
in cash, property or stock, in excess of the dividends provided for herein. No
interest or sum of money in lieu of interest shall be payable in respect of any
declared dividend payment or payments on the Series D Preferred Stock which may
be in arrears. As used herein, the phrase "set apart" in respect of the payment
of dividends shall require deposit of any funds in a bank or trust company in a
separate deposit account maintained for the benefit of the holders of the Series
D Preferred Stock, or, in the case of payment of dividends through the issuance
of shares of the Corporation's Series D Preferred Stock, the deposit of
certificates representing such shares of Series D Preferred Stock with such bank
or trust company.
Section 4. VOTING RIGHTS. On all matters to come before the
shareholders of the Corporation, the holders of Series D Preferred Stock will
vote together with the holders of the Common Stock, Series B Preferred Stock and
Series C Preferred Stock as a single class, with each share of Series D
Preferred Stock, Series B Preferred Stock and Series C Preferred Stock entitled
to a number of votes equal to the number of shares of Common Stock into which it
is then convertible using the record date for the taking of such vote of
shareholders as the date as of which the Conversion Price (as hereinafter
defined) is calculated except as required by law.
To the extent that under Florida law or this Certificate of
Designation the vote of the holders of shares of Series D Preferred Stock,
voting separately as a class, is required to authorize a given action of the
Corporation, the affirmative vote or consent of the holders of at least
two-thirds of the outstanding shares of the Series D Preferred Stock shall
constitute the approval of such action by the class. Holders of shares of Series
D Preferred Stock shall be
3
<PAGE> 58
entitled to notice of all shareholder meetings or written consents with respect
to which they would be entitled to vote, which notice shall be provided pursuant
to the Corporation's bylaws and applicable law.
Section 5. CONVERSION. Subject to and upon compliance with this SECTION
5, the holders of shares of Series D Preferred Stock shall have conversion
rights as follows:
(a) OPTIONAL CONVERSION. (i) Each holder of a share of Series
D Preferred Stock shall have the right, at any time or from time to time prior
to the Redemption Date (as defined below), at the office of the Corporation or
any transfer agent for the Series D Preferred Stock, to convert such share of
Series D Preferred Stock into that number of fully paid and nonassessable shares
of Common Stock equal to $100 divided by the Conversion Price of such share of
Series D Preferred Stock as set forth in SECTION 6 hereof. The number of shares
of Common Stock into which the Series D Preferred Stock may be converted is
hereinafter referred to as the "Conversion Rate." Notwithstanding the foregoing,
the Corporation shall not be obligated to accept shares of Series D Preferred
Stock for conversion if such conversion would require the Corporation to issue a
certificate or certificates evidencing less than an aggregate of 50,000 shares
of Common Stock on any Date of Conversion (as defined below).
(ii) Without limiting any other rights herein set
forth, if at any time or from time to time prior to the Redemption Date the
Corporation issues any equity security (within the meaning of Section 3(a)(11)
of the Securities Exchange Act of 1934, as amended) or any debt securities
convertible into equity securities, other than Excluded Shares, each holder of a
share of Series D Preferred Stock shall have the right to convert such share of
Series D Preferred Stock into, as the case may be, (A) a number of such fully
paid and nonassessable equity securities determined by dividing $100 by the
purchase price of each such equity security in such transaction or (B) $100
aggregate principal amount of such convertible debt securities. This right of
conversion shall terminate on the later to occur of (A) the first anniversary of
the issuance of the shares of Series D Preferred Stock and (B) the date on which
the Corporation first consummates the sale of shares of its equity securities or
convertible debt securities for gross cash proceeds to the Corporation of $2.0
million or more, other than Excluded Shares. In the event any holder of a share
of Series D Preferred Stock exercises any right under this subparagraph (ii),
any securities so acquired shall be accompanied by all registration and other
contractual rights, as acquired generally by purchasers of the Corporation's
equity or convertible debt securities in the transaction giving rise to such
rights.
(b) EARLY CONVERSION EVENT. If, after the first anniversary of
the date of issuance of the shares of Series D Preferred Stock, the closing bid
price of the Common Stock, as reported on Nasdaq (or the closing sale price if
the Common Stock is then traded on any principal national exchange or Nasdaq
National Market) exceeds 175% of the Conversion Price for a period of twenty
(20) consecutive trading days, including the twenty (20) trading days prior to
such first anniversary (the "Calculation Period"), an early conversion event
("Early Conversion Event") shall have occurred. Upon the first Early Conversion
Event, if any, in each calendar quarter, the aggregate Liquidation Value of the
outstanding shares of Series D Preferred
4
<PAGE> 59
Stock shall automatically and without any action by the holders of the Series D
Preferred Stock or the Corporation be converted into shares of Common Stock, on
a pro rata basis, in an amount determined in accordance with the following
formula:
CPS = (V x 22 - Y) x CP
where CPS is the aggregate stated Liquidation Value of the Series D Preferred
Stock to be converted; V is the average daily reported volume of trading in the
Common Stock on all national securities exchanges and/or reported through the
automated quotation system of a registered national securities association
during the Calculation Period and Y is the sum of (i) shares of Common Stock
which the Corporation then has the right to issue upon an "Early Conversion
Event" under the Corporation's outstanding 8 1/4% Subordinated Convertible Notes
due 2003 (the "Convertible Notes") or under the Series B Preferred Stock and the
Series C Preferred Stock, plus (ii) shares of Common Stock subject to then
effective resale registration statements of the Corporation other than
Registration Statements on Form S-8 or S-4 and other than registration
statements with respect to Common Stock underlying the Convertible Notes, the
Series B Preferred Stock, the Series C Preferred Stock and Series D Preferred
Stock which remain unsold at such time, plus (iii) shares of Common Stock
issuable upon exercise of the Warrants; and CP is the applicable Conversion
Price. For purposes of calculating V, trading volume in excess of 100,000 shares
on any trading day shall not be included, unless such amounts do not exceed 200%
of the trailing 30-day average reported volume of trading.
Notwithstanding the foregoing, none of the outstanding shares
of Series D Preferred Stock shall be converted as a result of an Early
Conversion Event pursuant to this SECTION 5 unless the resale of the shares of
Common Stock issuable upon such conversion is subject to an effective
Registration Statement under the Securities Act of 1933, as amended (the
"Securities Act"), or an exemption from registration under the Securities Act is
then available. Accrued dividends on the shares of Series D Preferred Stock
converted upon the occurrence of an Early Conversion Event shall be paid on the
next Dividend Payment Date in accordance with SECTION 3 hereof.
(c) MECHANICS OF CONVERSION. Before a holder shall be entitled
to receive shares of Common Stock or other securities of the Corporation upon
conversion of shares of Series D Preferred Stock, the holder of shares of Series
D Preferred Stock shall (i) fax or otherwise deliver a copy of the fully
executed notice of conversion in the form attached hereto as EXHIBIT A ("Notice
of Conversion") to the Corporation at its principal office and to the office of
its designated transfer agent that such holder elects to convert the same, which
notice shall specify the number of shares of Series D Preferred Stock to be
converted and shall contain the Conversion Price (together with a copy of the
first page of each certificate to be converted) prior to 5:00 p.m., Eastern
Standard time (the "Conversion Notice Deadline") on the date of conversion
specified on the Notice of Conversion and (ii) surrender the original
certificate or certificates for the shares of Series D Preferred Stock to be
converted, duly endorsed, and deliver the original Notice of Conversion by
either overnight courier or two-day courier, to the principal office of the
Corporation or to the office of its designated transfer agent; PROVIDED,
HOWEVER, that
5
<PAGE> 60
the Corporation shall not be obligated to issue certificates evidencing the
shares of Common Stock or other securities of the Corporation issuable upon such
conversion unless the certificates evidencing such shares of Series D Preferred
Stock are delivered to the Corporation or its transfer agent as provided above.
Upon the conversion of shares of Series D Preferred Stock in connection with an
Early Conversion Event, the Corporation shall send to the holders of shares of
Series D Preferred Stock a Notice of Early Conversion (in the form attached
hereto as EXHIBIT B) stating the aggregate Liquidation Value of shares of Series
D Preferred Stock to be converted and the number of shares of Common Stock into
which such Liquidation Value shall be converted.
Upon receipt by the Corporation of evidence of the loss,
theft, destruction or mutilation of any certificate representing shares of
Series D Preferred Stock, and (in the case of loss, theft or destruction) of
indemnity or security reasonably satisfactory to the Corporation, and upon
surrender and cancellation of any certificate representing shares of Series D
Preferred Stock, if mutilated, the Corporation shall execute and deliver a new
certificate of like tenor and date. No fractional shares of Common Stock or
other securities of the Corporation shall be issued upon conversion of the
Series D Preferred Stock. In lieu of any fractional share to which the holder of
shares of Series D Preferred Stock would otherwise be entitled, the Corporation
shall pay cash to such holder in an amount equal to such fraction multiplied by
the Conversion Price then in effect. In the case of a dispute as to the
calculation of the Conversion Price, the Corporation's calculation shall be
deemed conclusive absent manifest error.
The Corporation shall use all reasonable efforts to issue and
deliver within seven (7) business days after delivery to the Corporation of the
certificates representing the shares of Series D Preferred Stock to be
converted, or after such agreement and indemnification, to such holder of shares
of Series D Preferred Stock at the address of the holder on the books of the
Corporation, a certificate or certificates for the number of shares of Common
Stock or other securities of the Corporation to which the holder shall be
entitled as aforesaid. The date on which conversion occurs (the "Date of
Conversion") shall be deemed to be the date set forth in such Notice of
Conversion, provided (i) that the advance copy of the Notice of Conversion is
delivered to and received by the Corporation before 5:00 p.m., Eastern time, on
the Date of Conversion, and (ii) that the original stock certificates
representing the shares of Series D Preferred Stock to be converted are received
by the Corporation or the transfer agent within two (2) business days
thereafter. In the case of an Early Conversion Event, the last date of the
Calculation Period shall be deemed to be the Date of Conversion. The person or
persons entitled to receive the shares of Series D Preferred Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock or other securities of the Corporation on
the Date of Conversion. In the case of an optional conversion, if the original
certificates representing the shares of Series D Preferred Stock to be converted
are not received by the Corporation or the transfer agent within two (2)
business days after the Date of Conversion or if the facsimile of the Notice of
Conversion is not received by the Corporation or its transfer agent prior to the
Conversion Notice Deadline, the Notice of Conversion, at the Corporation's
option, may be declared null and void.
6
<PAGE> 61
Following any conversion of shares of Series D Preferred
Stock, such shares of Series D Preferred Stock shall no longer be outstanding
and all rights of a holder with respect to the shares surrendered for conversion
shall immediately terminate except for the right to receive Common Stock or
other securities of the Corporation. All shares of Series D Preferred Stock
subject to an Early Conversion Event shall be deemed to be cancelled upon such
holder's receipt of shares of Common Stock or other securities of the
Corporation in connection with any such conversion.
(d) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available out of its authorized but unissued shares of Common
Stock or other securities of the Corporation such number of shares of Common
Stock or other securities as shall from time to time be sufficient to effect the
conversion of all then outstanding shares of Series D Preferred Stock; and if at
any time the number of authorized but unissued shares of Common Stock or other
securities shall not be sufficient to effect the conversion of all then
outstanding shares of Series D Preferred Stock, the Corporation will take such
corporate action as may be necessary to increase its authorized but unissued
shares of Common Stock or other securities of the Corporation to such number of
shares as shall be sufficient for such purpose.
(e) NOTICE OF CERTAIN EVENTS. The Corporation shall deliver
written notice to each holder of Series D Preferred Stock at each issuance of
equity securities or convertible debt securities giving rise to a right under
paragraph (a)(ii) immediately preceding at least 30 days prior to the
consummation thereof, describing in reasonable detail the pertinent transaction.
Section 6. CONVERSION PRICE. The "Conversion Price" per share of the
Series D Preferred Stock shall be $5.50, subject to adjustment as set forth
below, with all such adjustments, if any, being cumulative from the date of
initial issuance of shares of Series D Preferred Stock such that all outstanding
shares of Series D Preferred Stock have the same Conversion Price regardless of
their date of issuance.
6.1 ADJUSTMENT OF THE NUMBER OF SHARES OF COMMON STOCK AND THE
CONVERSION PRICE. The number of shares of Common Stock issuable upon conversion
and the Conversion Price shall be subject to adjustment as follows:
(a) In case the Corporation shall at any time after
the date of the initial issuance of Series D Preferred Stock and prior to the
conversion of all outstanding shares thereof (A) pay a dividend or make a
distribution on its Common Stock in shares of its capital stock (whether in
shares of Common Stock, of capital stock of any other class or Options to
purchase or acquire capital stock, Convertible Securities convertible or
exchangeable for capital stock, or Options with respect to such Convertible
Securities), (B) subdivide its outstanding shares of Common Stock into a greater
number of shares, (C) combine its outstanding shares of Common Stock into a
smaller number of shares, or (D) reclassify, reorganize or effect any similar
transaction with respect to any of its shares of Common Stock, or in
substitution or exchange therefor (other than a change in par value, or from par
value to no par value, or from no par value
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to par value), then the number and, if applicable, kind of shares of Common
Stock to be received by any holder of shares of Series D Preferred Stock (a
"Holder") shall be adjusted so that the Holder will be entitled to receive on
conversion the number and kind of shares of capital stock or other securities
which it would have owned immediately following such action had its Series D
Preferred Stock been converted immediately prior thereto. An adjustment made
pursuant to this subsection (a) shall become effective immediately after the
payment date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination, reclassification, reorganization or similar transaction. If, as a
result of an adjustment made pursuant to this subsection (a), a Holder shall
become entitled to receive shares of two or more classes of capital stock of the
Corporation or other securities, the Board of Directors or a duly authorized
committee thereof shall in good faith determine (which determination shall be
conclusive and binding) the allocation of the Conversion Price between or among
shares of such classes of capital stock or other securities. After such
allocation, the Conversion Price and number of shares of each class of capital
stock that is issuable upon conversion shall thereafter be subject to adjustment
in a manner and on terms determined by the Board of Directors (which
determination shall be conclusive and binding) to be as nearly equivalent as
practicable to those applicable to Common Stock under this Section 6.
(b) (i) From the date of the initial issuance of shares of
Series D Preferred Stock until the later of (A) the first anniversary of the
date of such issuance and (B) the date on which the Corporation first
consummates a sale of equity securities or debt securities convertible into
equity securities for gross cash proceeds to the Company of $2.0 million or more
(such period through such later date, the "Reset Period"), other than Excluded
Shares (as hereinafter defined), if the Corporation shall issue or enter into
any agreement to issue any shares of Common Stock other than Excluded Shares for
consideration per share (the "Issuance Price") less than the Conversion Price
(as herein defined) per share in effect immediately prior to such issuance, the
Conversion Price in effect immediately prior to such issuance shall be reduced
(but shall not be increased) to the Issuance Price.
(ii) If, at any time subsequent to the Reset Period
and prior to the first anniversary of the expiration of the Reset Period, the
Corporation shall issue or enter into any agreement to issue any shares of
Common Stock other than Excluded Shares for consideration per share less than
the Conversion Price per share in effect immediately prior to such issuance, the
Conversion Price in effect immediately prior to such issuance shall be reduced
(but shall not be increased) to the price (calculated to the nearest cent)
determined: by dividing (A) an amount equal to the sum of (1) the number of
shares of Common Stock outstanding on a fully diluted basis immediately prior to
such issuance multiplied by the Conversion Price per share in effect immediately
prior to such issuance and (2) the consideration, if any, received by the
Corporation upon such issuance by (B) the number of shares of Common Stock
outstanding on a fully diluted basis immediately after such issuance.
(iii) If, at any time from the date of the initial
issuance of shares of Series D Preferred Stock, prior to the first anniversary
of the expiration of the Reset Period, the Corporation shall issue or enter into
any agreement to issue any shares of Common Stock
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other than Excluded Shares for consideration per share greater than the
Conversion Price but lower than the market price per share in effect immediately
prior to such issuance, the Conversion Price in effect immediately prior to such
issuance shall be reduced (but shall not be increased) to the price (calculated
to the nearest cent) determined by multiplying the Conversion Price in effect
immediately prior to such issuance by the factor determined by dividing (A) an
amount equal to the sum of (1) the number of shares of Common Stock outstanding
on a fully diluted basis immediately prior to such issuance multiplied by the
market price per share in effect immediately prior to such issuance and (2) the
consideration, if any, received by the Corporation upon such issuance by (B) the
number of shares of Common Stock outstanding on a fully diluted basis
immediately after such issuance multiplied by the market price per share in
effect immediately prior to such issuance; PROVIDED, HOWEVER, no adjustment
shall be made to the Conversion Price if (i) such issuance is in connection with
a firm commitment underwritten public offering or (ii) the consideration per
share is equal to or greater than 85% of the market price per share in effect
immediately prior to such issuance. For purposes hereof, the "market price" as
of any measurement date shall be the average of the closing prices of the Common
Stock for each of the 10 consecutive trading days immediately preceding such
measurement date.
(c) CERTAIN ADJUSTMENT FACTORS. For the purposes of any
adjustment of the Conversion Price pursuant to paragraph (b) above, the
following provisions shall be applicable:
(x) CASH. In the case of the issuance of shares 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 shares of 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; and
(y) CONSIDERATION OTHER THAN CASH. In the case of the
issuance of shares of Common Stock (other than upon the conversion of
shares of capital stock or other securities of the Corporation) for
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 of the
Corporation based on an opinion of an outside financial advisor of
recognized regional or national standing, which may, but need not, be
the independent public accountants who serve as the regular auditors of
the Corporation (the "Financial Advisor"), whose determination shall be
conclusive and binding), irrespective of any accounting treatment; and
(z) OPTIONS AND CONVERTIBLE SECURITIES. In the case
of the issuance of (i) Options to purchase or acquire shares of Common
Stock (whether or not exercisable immediately following such issuance),
(ii) Convertible
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Securities by their terms convertible into or exchangeable for shares
of Common Stock (whether or not so convertible or exchangeable
immediately following such issuance), or (iii) Options to purchase such
Convertible Securities (whether or not exercisable immediately
following such issuance):
(1) the aggregate maximum number of shares
of Common Stock deliverable upon exercise of such Options to
purchase or acquire shares of Common Stock shall be deemed to
have been issued at the time such Options are first issued and
for a consideration equal to the consideration (determined in
the manner provided in clauses (x) and (y) above), if any,
received by the Corporation upon the issuance of such Options
plus the purchase price provided in such Options for the
shares of Common Stock covered thereby (if the purchase price
per share of Common Stock is expressed as a range, the
purchase price per share for purposes of this subparagraph
(z)(1) shall be the average of such range of prices);
(2) the aggregate maximum number of shares
of Common Stock deliverable upon conversion of or in exchange
for any such Convertible Securities, or upon the exercise of
Options to purchase or acquire such Convertible Securities and
the subsequent conversion or exchange thereto shall be deemed
to have been issued at the time such convertible or
exchangeable securities or such options, warrants or other
rights are first issued and for a consideration equal to the
consideration, if any, received by the Corporation for any
such Convertible Securities or Options (excluding any cash
received on account of accrued interest or accumulated
dividends), plus the additional consideration, if any, to be
received by the Corporation upon the conversion or exchange of
such Convertible Securities and the exercise of any Options
(the consideration in each case to be determined in the manner
provided in clauses (x) and (y) above);
(3) on any change in the number of shares of
Common Stock deliverable upon exercise of any such Options
which have become exercisable or conversion of or exchange of
such Convertible Securities which have become convertible or
exchangeable, or any change in the consideration to be
received by the Corporation upon such exercise, conversion or
exchange, the Conversion Price as then in effect shall
forthwith be readjusted to such Conversion Price as would have
been obtained had such adjustment been made upon the original
issuance of such Options; provided, however, no adjustment
shall be made with respect to such Options exercised prior to
such change, or Convertible Securities converted or exchanged
prior to such change;
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(4) on the expiration or cancellation of any
such Options or the termination of the right to convert or
exchange such Convertible Securities, if the Conversion Price
shall have been adjusted upon such securities being issued or
becoming exercisable, convertible or exchangeable, such
Conversion Price shall forthwith be readjusted to such
Conversion Price as would have been obtained had an adjustment
been made 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 other rights, or upon the conversion
or exchange of such securities; and
(5) if the Conversion Price shall have been
adjusted when such Options were first issued or such
Convertible Securities were first issued, no further
adjustment of the Conversion Price shall be made for the
actual issuance of shares of Common Stock upon the exercise,
conversion or exchange thereof.
(d) EXCLUDED SHARES. "Excluded Shares" shall mean (i) any
shares of Common Stock issued in a transaction described in Section 6.1(a) of
this Agreement; (ii) issuances of shares of Common Stock from time to time
pursuant to employment agreements, stock option or bonus plans authorized by the
Board of Directors of the Corporation as of the date hereof, (iii) issuances of
Common Stock, or Options to acquire shares of Common Stock, or Convertible
Securities convertible into or exchangeable for Common Stock pursuant to the
terms of any acquisition by the Corporation of all or substantially all of the
operating assets, or more than fifty percent (50%) of the voting capital stock
or other controlling interest of any business entity in a transaction negotiated
on an arms-length basis and expressly approved in advance by the Board of
Directors of the Corporation; (iv) issuances of shares of Common Stock from time
to time upon the exercise, exchange or conversion of warrants, options,
convertible securities, the Convertible Notes or other securities outstanding as
of the date hereof and pursuant to the written terms of such securities as they
exist as of the date hereof and (v) issuances of shares of Common Stock from
time to time pursuant to the anti-dilution provisions of other securities. For
purposes hereof, "voting capital stock" shall be deemed to be capital stock of
any class or classes, however designated having ordinary voting power for the
election of members of the board of directors or other governing body and
"controlling" shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a party, whether
through the ownership of voting capital stock, by contract or otherwise.
(e) For further clarity, any change to the conversion price or
other terms of the 8 1/4% Subordinated Convertible Notes Due 2003 shall not
count toward determining the Reset Period, but shall, notwithstanding any other
provision herein, be taken into account in determining whether any adjustment to
the Conversion Price is due under this Section 6.1.
(f) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1.2% in
such price; PROVIDED, HOWEVER, that any adjustments which by reason of this
subsection (e) are not required to be made
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shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 6 shall be made to the nearest tenth of a
cent or to the nearest one-hundredth of a share, as the case may be.
(g) The number of shares of Common Stock outstanding at any
given time shall not include shares owned or held by or for the account of the
Corporation, and the disposition of any such shares shall be considered an
issuance of Common Stock for the purposes of this Section 6.
6.2 RIGHTS TO PURCHASE OTHER SECURITIES. If any of the
following shall occur:
Without limiting any provisions of Section 9:
(a) any Corporate Change (as hereinafter defined) to which the
Corporation is a party, other than a Corporate Change in which the Corporation
is the continuing or surviving Corporation and which does not result in any
reclassification of, or change (other than as a result of a subdivision or
combination) in, outstanding shares of the Common Stock, or
(b) any sale or transfer to another corporation or entity of
all or substantially all of the assets of the Corporation;
then, and in either such case, the Holder of each share of Series D Preferred
Stock then outstanding shall have the right to purchase the kind and amount of
shares of stock and/or other securities and property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
Common Stock issuable upon conversion of such stock immediately prior to such
consolidation, merger, sale, or transfer. The provisions of this Section 6.2
shall similarly apply to successive consolidations, mergers, sales or transfers.
6.3 NOTICE OF ADJUSTMENT. Whenever the number of shares of
Common Stock issuable upon the conversion of each share of Series D Preferred
Stock or the Conversion Price of such shares of Series D Preferred Stock, or the
Conversion Price, is adjusted or reduced, as herein provided, the Corporation
shall mail by first class, postage prepaid, to each Holder (a) notice of any
reduction on or before the day the reduction takes effect, which shall state the
reduced Conversion Price and the period during which it will be in effect and/or
(b) a certificate setting forth the number of shares of Common Stock issuable
upon the conversion of each share of Series D Preferred Stock and the Conversion
Price on such shares of Series D Preferred Stock after adjustment setting forth
a brief statement of the facts requiring such adjustment and setting forth the
computation by which such adjustment was made. The Corporation shall further
deliver notice to each Holder, in the manner aforesaid, of the expiration of the
Reset Period.
6.4 NO ADJUSTMENT FOR DIVIDEND. No adjustment in respect of
any cash dividends shall be made while the Series D Preferred Stock is
outstanding or upon the conversion of the Series D Preferred Stock.
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6.5 CERTAIN EVENTS. If any event occurs as to which in the
reasonable judgment of the Board of Directors of the Corporation , in good
faith, the other provisions of this Section 6 are not strictly applicable but
the lack of any adjustment would not in the opinion of the Board of Directors of
the Corporation fairly reflect the purchase rights of the Holders of the Series
D Preferred Stock in accordance with the basic intent and principles of the
provisions of this Agreement then the Board of Directors of the Corporation
shall appoint a Financial Advisor which shall give its opinion upon the
adjustment, if any, on a basis consistent with the basic intent and principles
established and the other provisions of this Section 6, necessary to preserve,
without dilution, the exercise rights of the Holders. Upon receipt of such
opinion, the Corporation shall forthwith make the adjustments described therein
which adjustments shall be conclusive and binding. Without limiting the
generality of the foregoing provisions of this Section 6.5, in the event any
holder of Series D Preferred Stock becomes entitled under Section 5(a)(ii)
hereof to convert any share thereof into any securities of the Corporation other
than Common Stock: (i) the number and kind of such securities shall be subject
thereafter to modification pursuant to comparable principles to those applicable
under this Section 6 to the Common Stock; (ii) the purchase price in such
conversion shall be subject to modification pursuant to comparable principles to
those applicable under this Section 6 to the Conversion Price; and (iii) any and
all notices under this Section 6 applicable to modifications in the Conversion
Price or the securities issuable upon conversion of the Series D Preferred Stock
shall apply MUTATIS MUTANDIS to modifications in the rights under Section
5(a)(ii) hereof, in each case under clauses (i), (ii) and (iii) immediately
preceding, so as to preserve without dilution, the rights of the Holders.
Section 7. STATUS OF CONVERTED OR REACQUIRED SHARES. Any shares of
Series D Preferred Stock converted into shares of Common Stock pursuant to
SECTION 5 hereof or purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the conversion or
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Series D Preferred Stock and may be reissued
as part of a new series of preferred stock subject to the conditions and
restrictions on issuance set forth herein, in the Articles of Incorporation, or
in any other Certificate of Designation creating a series of preferred stock or
any similar stock or as otherwise required by law.
Section 8. LIQUIDATION, DISSOLUTION OR CHANGE OF CONTROL.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, either voluntary or involuntary, the holders of shares of
Series D Preferred Stock shall be entitled to receive out of the assets of the
Corporation available for distribution to shareholders under applicable law,
prior and in preference to any distribution to holders of the Common Stock or
any Junior Securities but in parity with any distribution to holders of Parity
Securities, an amount of $100 per share (the "Liquidation Value"), plus a sum
equal to all dividends accrued on such shares (whether or not declared) and
unpaid through and including the then current Dividend Period. If upon the
occurrence of such event, the assets and funds to be distributed among the
holders of shares of Series B Preferred Stock, Series C Preferred Stock, Series
D Preferred Stock and Parity Securities shall be insufficient to permit the
payment to such holders of the full preferential amounts due to the holders of
shares of Series B Preferred Stock, Series C Preferred Stock,
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Series D Preferred Stock and Parity Securities, respectively, then the entire
assets and funds of the Corporation legally available for distribution shall be
distributed among the holders of shares of Series B Preferred Stock, Series C
Preferred Stock and Parity Securities, pro rata, based on the respective
liquidation amounts to which each such series of stock is entitled by the
Corporation's Articles of Incorporation and any certificate of designation of
preferences.
(b) Upon the completion of the distribution required by
subsection 8(a) above, if assets remain in the Corporation, they shall be
distributed to holders of Parity Securities (unless holders of Parity Securities
have received distributions pursuant to subsection 8(a)) and Junior Securities
in accordance with the Corporation's Articles of Incorporation, including any
duly adopted certificate(s) of designation of preferences.
(c) (i) Upon a Change of Control (as defined below) of the
Corporation, each holder of the Series D Preferred Stock will have the option to
require the Corporation to repurchase such holder's shares of Series D Preferred
Stock at a price per share equal to the Liquidation Value plus any accrued and
unpaid dividends. A "Change of Control" shall have occurred: (A) when any person
or group is or becomes the beneficial owner of 50% or more of the then
outstanding voting capital stock of the Corporation, (B) when, during any period
of two consecutive years after the closing of the sale of the Series D Preferred
Stock, individuals who at the beginning of such period constituted the
Corporation's Board of Directors, or whose nomination for election by the
Corporation's shareholders was approved by a vote of a majority of the directors
of the Corporation then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority of the
directors then in office or (C) upon any sale, transfer or other conveyance of
all or substantially all of the assets of the Corporation.
(ii) Upon the occurrence of a Change of Control, the
Corporation will offer to repurchase (the "Change of Control Purchase Offer")
all outstanding shares of Series D Preferred Stock, and each holder of
outstanding shares of Series D Preferred Stock will have the right to require
that the Corporation repurchase such holder's shares of Series D Preferred
Stock, at the price set forth in clause (i) of this subsection 8(c). Within 30
days following any Change of Control, the Corporation shall mail a notice, by
first class mail, to each holder of record of Series D Preferred Stock (a
"Change of Control Notice"), at his address of record, stating:
(A) that a Change of Control has occurred
and that such holder has the right to require the Corporation
to purchase such holder's shares of Series D Preferred Stock
at the price set forth above;
(B) the circumstances and relevant facts
regarding such Change of Control;
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(C) the date on which the Corporation will
repurchase any shares of Series D Preferred Stock which the
holders require the Corporation to repurchase in accordance
with this subsection 8(c), which date shall be no earlier than
30 days nor later than 60 days from the date such Change of
Control Notice is mailed (the "Change of Control Purchase
Date");
(D) that, unless the Corporation defaults in
making such payment, any shares of Series D Preferred Stock
accepted for payment pursuant to the Change of Control
Purchase Offer shall cease to accrue dividends after the
Change of Control Purchase Date;
(E) that holders of Series D Preferred Stock
electing to have their shares repurchased pursuant to any
Change of Control Purchase Offer shall be required to
surrender the original certificates for the shares of Series D
Preferred Stock at the address specified in the notice, at
least three business days before the Change of Control
Purchase Date; and
(F) that the holders of Series D Preferred
Stock shall be entitled to withdraw their election if the
Corporation receives, not later than the last business day
prior to the Change of Control Purchase Date, a telegram,
telex, facsimile transmission or letter setting forth the name
of the holder, the number of shares of Series D Preferred
Stock the holder delivered for repurchase and a statement that
such holder is withdrawing his election to have such shares
repurchased.
(iii) Each holder of shares of Series D Preferred
Stock electing to have such shares purchased by the Corporation pursuant to this
subsection 8(c) shall deliver to the Corporation at its principal office, at
least three business days prior to the Change of Control Purchase Date, the
original certificate or certificate(s) for the shares to be purchased duly
endorsed, together with written notice to the Corporation specifying the number
of shares of Series D Preferred Stock to be purchased. Holders of Series D
Preferred Stock will be entitled to withdraw their election if the Corporation
receives, not later than one business day prior to the Change of Control
Purchase Date, a telegram, facsimile transmission or letter, at its principal
office, setting forth the name of the holder, the number of shares of Series D
Preferred Stock which were delivered by the holder for purchase by the
Corporation and a statement that such holder is withdrawing his election to have
such shares purchased.
(iv) Promptly following the Change of Control
Purchase Date, the Corporation will mail or deliver to each holder of shares of
Series D Preferred Stock who properly tendered such shares to the Corporation
for purchase pursuant to this subsection 8(c) and did not withdraw such
election, at his, her or its address of record, an amount equal to the purchase
price for the shares of Series D Preferred Stock so delivered for purchase as
set forth in this subsection 8(c). Unless the Corporation shall have defaulted
in the payment of the purchase
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price for shares of Series D Preferred Stock tendered for purchase by the
Corporation, all rights of the holders of such shares (except the right to
receive the purchase price therefor) shall cease with respect to such shares on
the Change of Control Purchase Date and such shares shall not, after the Change
of Control Purchase Date, be deemed to be outstanding and shall not have the
status of Series D Preferred Stock.
(v) The Corporation will comply, to the extent
applicable, with the requirements of Section 14(e) of the Securities Exchange
Act of 1934, as amended, and any other applicable securities laws or regulations
in connection with the repurchase of Series D Preferred Stock pursuant to this
subsection 8(c). To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this subsection 8(c), the
Corporation will comply with the applicable securities laws and regulations and
will not be deemed to have breached its obligations under this Section by virtue
thereof.
Section 9. CONSOLIDATION, MERGER, ETC. Except as set forth in Section
8(c) hereof, and without limiting any provision of Section 6.2 hereof, in the
event of a merger, reorganization, recapitalization or similar event of or with
respect to the Corporation (a "Corporate Change") (other than a Corporate Change
in which all or substantially all of the consideration received by the holders
of the Corporation's equity securities upon such Corporate Change consists of
cash or assets other than securities issued by the acquiring entity or any
Affiliate thereof), the Series D Preferred Stock shall be assumed by the
acquiring entity and thereafter the Series D Preferred Stock shall be
convertible into such class and type of securities as the holder of shares of
Series D Preferred Stock would have received had such holder converted the
Series D Preferred Stock immediately prior to such Corporate Change.
Section 10. REDEMPTION.
(a) OPTIONAL REDEMPTION. Subject to earlier conversion,
commencing on May 17, 2002 and continuing through the Mandatory Redemption Date
(as defined below), the Corporation shall have the right, exercisable at any
time and from time to time, to redeem shares of Series D Preferred Stock at the
following prices plus the payment of all accrued and unpaid dividends:
YEAR REDEEMED PRICE
------------- -----
2002 104% of Liquidation Value
2003 102% of Liquidation Value
If less than all of the outstanding shares of Series D
Preferred Stock are called for redemption pursuant to this SECTION 10(A), shares
of Series D Preferred Stock shall be redeemed on a pro rata basis among the
holders thereof. Each holder of Series D Preferred Stock will be given notice of
such redemption pursuant to Section 10(c) and will have the right to
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convert the Series D Preferred Stock into shares of Common Stock prior to the
redemption date specified in such notice.
(b) MANDATORY REDEMPTION.
(i) The Corporation will be required to redeem the
outstanding shares of Series D Preferred Stock on May 17, 2004 (the "Mandatory
Redemption Date"), at a redemption price per share equal to the Liquidation
Value plus accrued and unpaid dividends.
(ii) If at any time, (A) the Corporation shall breach
the terms and conditions contained in this certificate of designation, (B) the
Corporation shall breach any representation, warranty, or covenant contained in
that certain Series D Convertible Stock and Warrant Purchase Agreement, dated
May __, 2000, between the Corporation and the initial Holders or any subsequent
Series D Stock Purchase Agreement with like terms, or (C) the Corporation shall
fail to make a dividend payment on a Dividend Payment Date (each a "Breach"),
prompt notice of such Breach shall be given to each Holder by the Corporation at
such time as the Corporation becomes aware of such Breach and (without limiting
any rights of Holder) prompt notice of such Breach shall be given to the
Corporation by each Holder at such time such Holder becomes aware of such
Breach, and any Holder shall give written notice to the Corporation of its
desire to have the Corporation redeem its shares of Series D Preferred Stock,
such shares shall be redeemed by the Corporation at a redemption price per share
equal to the greater of the amounts that would at that time be payable under
Section 10(a) hereof had the Corporation exercised its right to redeem the
shares of Series B Preferred Stock thereunder or the Liquidation Value plus
accrued and unpaid dividends; PROVIDED, HOWEVER, no Holder shall have the right
to request a redemption of its shares of Series D Preferred Stock pursuant to
this SECTION 10(B)(II) unless and until the Corporation shall have failed to
cure any such Breach within a period of ten (10) days after having received
written notice thereof from the Holder.
(c) MECHANICS OF REDEMPTION. Notice of redemption of the
Series D Preferred Stock, specifying the redemption date and place of
redemption, shall be given by first class mail to each holder of record of the
shares to be redeemed, at his address of record, not less than 30 nor more than
60 calendar days prior to the date upon which the Corporation shall redeem the
Series D Preferred Stock (the "Redemption Date"). Each such notice shall also
specify the redemption price applicable to the shares to be redeemed. If less
than all the shares owned by such holder are then to be redeemed, the notice
shall also specify the number of shares thereof which are to be redeemed and the
fact that a new certificate or certificates representing any unredeemed shares
shall be issued without cost to such holder.
(i) Notice of redemption of shares of the Series D
Preferred Stock having been given as provided in SECTION 10(C), then unless the
Corporation shall have defaulted in the payment of the redemption price and all
accrued and unpaid dividends (whether or not declared), all rights of the
holders thereof (except the right to receive the redemption price and all
accrued and unpaid dividends, whether or not declared) shall cease with respect
to such shares on the Redemption Date and such shares shall not, after the
Redemption Date, be deemed
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to be outstanding and shall not have the status of Series D Preferred Stock. In
case fewer than all the shares represented by any such certificate are redeemed,
a new certificate shall be issued representing the unredeemed shares without
cost to the holder thereof.
(ii) Shares of the Series D Preferred Stock are not
subject or entitled to the benefit of a sinking fund.
(iii) Notwithstanding the foregoing, if notice of
redemption shall have been given pursuant to this SECTION 10 and any holder of
the Series D Preferred Stock shall, prior to the close of business on the date
three business days next preceding the Redemption Date, give written notice to
the Corporation pursuant to SECTION 5 hereof of the conversion of any or all of
the shares held by the holder (accompanied by a certificate or certificates for
such shares, duly endorsed or assigned to the Corporation), then the redemption
shall not become effective as to such shares and the conversion shall become
effective as provided in SECTION 5.
(iv) If on the Mandatory Redemption Date funds
legally available to the Corporation for redemption of all outstanding shares of
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
are insufficient to redeem all such shares of Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock, such available funds shall be used
by the Corporation to redeem shares of Series B Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock from all holders ratably in
proportion to the full number of shares they would otherwise be entitled to have
redeemed. In the event that less than all outstanding shares of Series B
Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are
redeemed on the Mandatory Redemption Date, the Corporation will continue to
redeem shares of Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock from time to time as soon as practicable after funds become
legally available therefor (ratably if the funds legally available remain
insufficient to redeem all shares required to be redeemed) until all shares of
Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock
required to be redeemed shall have been redeemed. Until actually redeemed, each
share of Series D Preferred Stock will continue to enjoy all rights and benefits
hereof, including the right to convert into shares of Common Stock.
(d) CONVERSION PRICE ADJUSTMENT FOR FAILURE TO REDEEM. If the
Corporation fails to redeem all outstanding shares of Series D Preferred Stock
on the Mandatory Redemption Date, then, without any action by the holders of
shares of Series D Preferred Stock, the then current Conversion Price respecting
any shares of Series D Preferred Stock not redeemed by the Corporation shall be
reduced (but shall not be increased) to the greater of: (i) fifty percent (50%)
of the then current Conversion Price, and (ii) the closing price of the Common
Stock as reported by Nasdaq (or such principal national exchange on which the
Common Stock is then listed) on the Mandatory Redemption Date.
Section 11. AMENDMENT. The Articles of Incorporation of the
Corporation shall not be amended in any manner which would materially alter or
change the powers, preferences or
18
<PAGE> 73
special rights of the Series D Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series D Preferred Stock, voting together as a single
class.
Section 12. NOTICES. Written notice of each meeting of the shareholders
of the Corporation shall be given by first-class mail not less than ten (10)
days prior to such meeting to each holder of record of the Series D Preferred
Stock to the address of such record holder shown on the Corporation's records.
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<PAGE> 74
IN WITNESS WHEREOF, this Certificate of Designation has been executed
on behalf of the Corporation by its Chief Executive Officer this 1st day of May,
2000.
MANSUR INDUSTRIES INC.
By: /S/ PAUL I. MANSUR
----------------------
Paul I. Mansur
Chief Executive Officer
20
<PAGE> 75
EXHIBIT A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER
IN ORDER TO CONVERT THE SERIES D PREFERRED STOCK)
The undersigned hereby irrevocably elects to convert ______ shares of
Series D Preferred Stock, represented by stock certificate No(s).
________________ (the "Series D Preferred Stock Certificates") into shares of
common stock, par value $.001 per share ("Common Stock"), or other securities,
of Mansur Industries Inc., (the "Corporation") according to the conditions of
the Certificate of Designation of Series D Preferred Stock, as of the date
written below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. No fee will be charged to the holder for any conversion, except for
transfer taxes, if any.
The undersigned represents and warrants that all offers and sales by
the undersigned of the shares of Common Stock or other securities issuable to
the undersigned upon conversion of the Series D Preferred Stock shall be made
pursuant to registration of such shares of Common Stock under the Securities Act
of 1933, as amended, or pursuant to an exemption from registration under such
Act.
Conversion Calculations:
------------------------------------
Date of Conversion
------------------------------------
Applicable Conversion Price
------------------------------------
Signature
------------------------------------
Name
Address:
------------------------------------
------------------------------------
*No shares of Common Stock or other securities will be issued until the original
Series D Preferred Stock Certificate(s) to be converted and the Notice of
Conversion are received by the Corporation or its designated Transfer Agent. The
original Stock Certificate(s) representing the Series D Preferred Stock to be
converted and the Notice of Conversion must be received by the Corporation or
its designated Transfer Agent by the second business day following the Date of
Conversion, or the Notice of Conversion, at the Corporation's option, may be
declared null and void.
<PAGE> 76
EXHIBIT B
NOTICE OF EARLY CONVERSION EVENT
Mansur Industries Inc. (the "Corporation ") hereby notifies
____________________, the holder of ___________ shares (the "Shares") of the
Corporation 's Series D Preferred Stock (the "Series D Preferred Stock"), that
an Early Conversion Event occurred on __________, and as such, you are hereby
directed to surrender the Shares as $______ of the aggregate Liquidation Value
of such Shares has been automatically converted into shares of the Corporation
's common stock, par value $.001 per share (the "Conversion Shares"), in
accordance with the terms of the Certificate of Designation respecting the
Series D Preferred Stock.
Unless otherwise instructed, the Corporation shall issue the Conversion
Shares and a new certificate representing the Shares not converted in the name
of the holder of the Shares and deliver same as soon as practicable and in
accordance with the provisions of the Certificate of Designation to the address
set forth in the Corporation's register respecting the Series D Preferred Stock.
Date:
---------------------------
MANSUR INDUSTRIES INC.
By:
---------------------------
Name:
----------------------
Title:
---------------------
<PAGE> 77
ARTICLES OF AMENDMENT
TO
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
MANSUR INDUSTRIES INC.
Pursuant to the provisions of Section 607.1006 of the Florida Business
Corporation Act (the "Act"), the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation:
1. The name of the Corporation is Mansur Industries Inc (the
"Corporation"), Charter #S12439.
2. The following Amendment to the Amended and Restated
Articles of Incorporation was adopted by the Board of Directors of the
Corporation on April 27, 2000 and by the Shareholders of the Corporation, the
number of votes cast being sufficient for approval, on June 29, 2000 in the
manner prescribed by Section 607.1003 of the Act.
3. Article I of the Corporation's Amended and Restated
Articles of Incorporation is hereby deleted and replaced by a new Article I, as
follows:
"ARTICLE I
The name of the corporation is SystemOne Technologies Inc."
4. Except as hereby amended, the Amended and Restated Articles
of Incorporation of the Corporation shall remain the same.
5. The effective date of this amendment shall be upon the
filing of these Articles of Amendment.
IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment to the Amended and Restated Articles of Incorporation of Mansur
Industries Inc. on the 10th day of July, 2000.
MANSUR INDUSTRIES INC.,
a Florida corporation
By: /s/ PAUL I. MANSUR
----------------------
Print Name: Paul I. Mansur
Title: Chief Executive Officer
