Exhibit 3(i) and 4(v)

**RESTATED CERTIFICATE OF FORMATION**

 

**OF**

 

**RETRACTABLE TECHNOLOGIES, INC.**

 

I, the undersigned natural person of the age ofeighteen (18) years or more, do hereby adopt the following Restated Certificateof Formation for a corporation under the Texas Business Organizations Code:

 

**ARTICLE I**

 

The Corporation is a for-profit corporation.  The name of the Corporation is RetractableTechnologies, Inc.

 

**ARTICLE II**

 

The period of its duration is perpetual.

 

**ARTICLE III**

 

The purpose for which the Corporation is organizedis the transaction of any or all lawful business for which corporations may beincorporated under the Texas Business Organizations Code.

 

**ARTICLE IV**

 
|   | 4.01   | The aggregate number of shares which the Corporation shall have the  authority to issue is 100,000,000 shares of Common Stock, no par value,  5,000,000 shares of Preferred Stock Class A with a par value of One  Dollar ($1.00) per share; 5,000,000 shares of Preferred Stock Class B  with a par value of One Dollar ($1.00) per share; and 5,000,000 shares of  Preferred Stock Class C with a par value of One Dollar ($1.00) per  share.                                                                                                                                                                                                                                  |
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|   | 4.02   | The Corporation is authorized to issue four classes of stock, one  designated as Common Stock, no par value, one designated as Preferred Stock Class A,  par value One Dollar ($1.00) per share; one designated as Preferred Stock Class B,  par value One Dollar ($1.00) per share; and one designated as Preferred Stock  Class C, par value One Dollar ($1.00) per share. Provided, however, that  none of the shares of Preferred Stock of any class shall carry any voting  rights for the election of Directors or for any other matters, except where  specifically designated herein or required by the applicable provisions of  the Texas Business Organizations Code. |
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|   | 4.03   | The Directors shall have the authority to divide each class of the  Preferred Stock into series and to set the relative rights and preferences as  to and between series, including dividends, issuance of Preferred Stock,  redemption of such shares and the conversion of any shares of Preferred Stock  to other or common shares. Prior to the issuance of any Preferred Stock of a  series established by resolution adopted by the Directors, the Corporation  shall file with the Secretary of State the statement required by Section 21.156  of the Texas Business Organizations Code.                                                                                           |
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|   | 4.04   | The relative rights and preferences of the shares of the Series I  Preferred Stock Class B are set forth in the Certificate of Designation,  Preferences, Rights, and Limitations of Class B Convertible Preferred  Stock of the Corporation filed on May 15, 1996, which certificate is  attached hereto and incorporated herein for all purposes as Exhibit A.                                                                                                                                                                                                                                                                                                       |
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|   | 4.05   | The relative rights and preferences of the shares of the Series II  Preferred Stock Class B are set forth in the Certificate of Designation,  Preferences, Rights, and Limitations of Series II Class B  Convertible Preferred Stock of the Corporation filed on May 27, 1997,  which certificate is attached hereto and incorporated herein for all purposes  as Exhibit B.                                                                                                                                                                                                                                                                                      |

 

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|   | 4.06   | The relative rights and preferences of the shares of the Series III  Preferred Stock Class B are set forth in the Certificate of Designation,  Preferences, Rights, and Limitations of Series III Class B  Convertible Preferred Stock of the Corporation as amended on January 22,  2010, which certificate is attached hereto and incorporated herein for all  purposes as Exhibit C. |
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|   | 4.07   | The relative rights and preferences of the shares of the Series IV  Preferred Stock Class B are set forth in the Certificate of Designation,  Preferences, Rights, and Limitations of Series IV Class B  Convertible Preferred Stock of the Corporation as amended on June 11,  2010, which certificate is attached hereto and incorporated herein for all purposes  as Exhibit D.      |
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|   | 4.08   | The relative rights and preferences of the shares of the Series V  Preferred Stock Class B are set forth in the Certificate of Designation,  Preferences, Rights, and Limitations of the Series V Class B  Convertible Preferred Stock of the Corporation filed on October 14,  2009, which certificate is attached hereto and incorporated herein for all  purposes as Exhibit E.      |

 

**ARTICLE V**

 

Cumulative voting is expressly prohibited.

 

**ARTICLE VI**

 

The street address of its registered office is 2100Ross Avenue, Suite 2600, Dallas, TX 75201 and the name of its registeredagent is Ralph S. Janvey.

 

**ARTICLE VII**

 

The Directors of the Corporation shall be not lessthan three (3) nor more than twenty-one (21) in number and the name andaddress of the directors who are to serve until the annual meeting of yearindicated or until their successors are elected and qualified or until theirterm is terminated are as follows:

 
| **Director**     |   | **Address**                                           |   | **Term Expires** |
|------------------|--------|-------------------------------------------------------|--------|-----------------------|
| Thomas J. Shaw   |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2012                  |
|             |   |                                                  |   |                  |
| Steven R. Wisner |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2011                  |
|             |   |                                                  |   |                  |
| Douglas W. Cowan |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2012                  |
|             |   |                                                  |   |                  |
| Clarence Zierhut |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2012                  |
|             |   |                                                  |   |                  |
| Marwan Saker     |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2012                  |
|             |   |                                                  |   |                  |
| Marco Laterza    |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2011                  |

 

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| **Director** |   | **Address**                                           |   | **Term Expires** |
|--------------|--------|-------------------------------------------------------|--------|-----------------------|
| Amy Mack     |   | 511  Lobo Lane

PO  Box 9

Little  Elm, TX 75068-0009 |   | 2011                  |

 

**ARTICLE VIII**

 

Thename and address of the incorporator are intentionally omitted.

 

**ARTICLE IX**

 

CorporateGovernance

 
|   | a) | *Number, Election, and Terms of Directors*. The  business and affairs of the Corporation shall be managed by a Board of Directors,  which, subject to the rights of holders of shares of any class of series of  Preferred Stock of the Corporation then outstanding to elect additional  directors under specified circumstances, shall consist of not less than three  nor more than twenty-one persons. The exact number of directors within the  minimum and maximum limitations specified in the preceding sentence shall be  fixed from time to time by either (i) the Board of Directors pursuant to  a resolution adopted by the majority of the entire Board of Directors, or (ii) the  affirmative vote of the holders of 66-2/3% or more of the voting power of all  of the shares of the Corporation entitled to vote generally in the election  of directors voting together as a single class. No decrease in the number of  directors constituting the Board of Directors shall shorten the term of any  incumbent director; provided, however, that the term of existing Directors  may be shortened to comply with this Article IX and/or the Texas  Business Organizations Code. The directors shall be divided into two classes  as nearly equal in number as possible, where the term of office of the first  class expired at the 2001 annual meeting of stockholders, and the term of  office of the second class expired at the 2002 annual meeting of  stockholders, and with the members of each class to hold office until their  successors shall have been elected and qualified. At each annual meeting of  stockholders following such initial classification and election, directors  elected to succeed those directors shall be elected for a term of office to  expire at the second succeeding annual meeting of stockholders after their  election. |
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|   | b) | *Newly Created Directorships and Vacancies.* Vacancies of  generally elected directors may be filled by a majority vote of the remaining  generally elected directors, though less than a quorum, or by a sole  remaining generally elected director. Vacancies of directors elected pursuant  to a dividend default election by preferred shareholders shall be filled by  the remaining directors so elected or by a sole remaining director elected by  such shareholders, if any. In the event that no directors elected pursuant to  a dividend default election remain, the vacancy may be filled by a vote of  those shareholders that originally elected the director whose office is  vacant. |
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|   | c) | *Removal.* Any director, or the  entire Board of Directors, may be removed from office at any annual or  special meeting called for such purpose, and then only for cause and only by  the affirmative vote of the holders of 66-2/3% or more of the voting power of  all of the shares of the Corporation entitled to vote in the election of such  director(s) being removed. As used herein, cause shall mean only the  following: proof that a director has been convicted of a felony, committed a  grossly negligent or willful misconduct resulting in a material detriment to  the Corporation, or committed a material breach of his or her fiduciary duty  to the Corporation resulting in a material detriment to the Corporation. |
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|    | d) | *Amendment, Repeal, etc.*Notwithstanding  anything contained in this Certificate of Formation to the contrary and  subject to the rights of the holders of any Preferred Stock outstanding, the  affirmative vote of the holders of 66-2/3% or more of the voting power of all  of the shares of the Corporation entitled to vote in the election of  Directors, voting together as a single class, shall be required to alter,  amend, or adopt any provision inconsistent with or repeal this Article IX  or to alter, amend, adopt any provision inconsistent with or repeal  comparable sections of the bylaws of the Corporation. |
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|   | e) | *Call of Special Meeting to Alter Article IX*.  Notwithstanding anything contained in this Certificate of |
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|   |   | Formation to the contrary, the affirmative vote of the holders of  66-2/3% or more of the voting power of all of the shares of the Corporation  entitled to vote generally in the election of directors, voting together as a  single class, shall be required to call a special meeting of the shareholders  in order to alter, amend, adopt any provision inconsistent with or repeal  this Article IX, or to alter, amend, or adopt any provision inconsistent  with comparable sections of the bylaws of the Corporation. |
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**ARTICLE X**

 

The Board of Directors is hereby authorized tocreate and issue, whether or not in connection with the issuance and sale ofany of its stock or other securities, rights (the “Rights”) entitling theholders thereof to purchase from the Corporation shares of capital stock orother securities. The times at which and the terms upon which the Rights are tobe issued will be determined by the Board of Directors and set forth in thecontracts or instruments that evidence the Rights. The authority of the Boardof Directors with respect to the Rights shall include, but not be limited to,determination of the following:

 
|   | a) | The initial purchase price per share of the capital stock or other  securities of the Corporation to be purchased upon exercise of the Rights. |
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|   | b) | Provisions relating to the times at which and the circumstances under  which the Rights may be exercised or sold or otherwise transferred, either  together with or separately from, any other securities of the Corporation. |
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|   | c) | Provisions that adjust the number or exercise price of the Rights or  amount or nature of the securities or other property receivable upon exercise  of the Rights in the event of a combination, split, or recapitalization of  any capital stock of the Corporation, a change in ownership of the  Corporation’s securities, or a reorganization, merger, consolidation, sale of  assets, or other occurrence relating to the Corporation or any capital stock  of the Corporation, and provisions restricting the ability of the Corporation  to enter into any such transaction absent an assumption by the other party or  parties thereto of the obligations of the Corporation under such Rights. |
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|    | d) | Provisions that deny the holder of a specified percentage of the  outstanding securities of the Corporation the right to exercise the Rights  and/or cause the Rights held by such holder to become void. |
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|   | e) | Provisions that permit the Corporation to redeem the Rights. |
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|   | f) | The appointment of a Rights agent with respect to the Rights. |
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**ARTICLE XI**

 

No holder of any shares of the Corporation shall haveany preemptive right to subscribe or acquire any additional, unissued ortreasury shares of the Corporation or any securities of the Corporation whichare convertible into or which carry a right to subscribe for or acquire sharesof the Corporation.

 

IN WITNESS WHEREOF, Thomas J. Shaw, the President ofthe Corporation, has executed this Restated Certificate of Formation ofRetractable Technologies, Inc. effective as of the 24th day of September,2010.

 
|   | RETRACTABLE  TECHNOLOGIES, INC. |
|--------|--------------------------------------|
|   |                                 |   |
|   | BY:                                  | /s/  Thomas J. Shaw |
|   |                                 | THOMAS  J. SHAW |
|   |                                 | PRESIDENT |

 

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CERTIFICATE OF DESIGNATION, PREFERENCES

RIGHTS AND LIMITATIONS OF CLASS B

CONVERTIBLE PREFERRED STOCK

OF

RETRACTABLE TECHNOLOGIES, INC.

 

Pursuant to Texas law and its Certificate ofFormation, Retractable Technologies, Inc., a corporation organized andexisting under the laws of the State of Texas (the Corporation),

 

DOES HEREBY CERTIFY that pursuant to the authorityconferred upon the Board of Directors of the Corporation by the Certificate ofFormation, as amended, and pursuant to Texas law, said Board of Directors, byunanimous written consent executed May 10, 1995, adopted a resolutionproviding for the creation of a series of Preferred Stock consisting of notmore than five million (5,000,000) shares of Class B Convertible PreferredStock, which resolution is and reads as follows:

 

RESOLVED that, pursuant to the authority provided inthe Corporation’s Certificate of Formation and expressly granted to and vestedin the Board of Directors of Retractable Technologies, Inc. (the “Corporation”),the Board of Directors hereby creates out of the Preferred Stock, par value onedollar per share, of the Corporation a series of Class B Preferred Stockconsisting of not more than five million (5,000,000) shares, and the Board ofDirectors hereby fixes the designation and the powers, preference and rights,and the qualifications, limitations and restrictions thereof, to the extent nototherwise provided in the Corporation’s qualifications, limitations andrestrictions thereof, to the extent not otherwise provided in the Corporation’sCertificate of Formation, as follows:

 

1. Designation of Series. The designation ofthe series of Preferred Stock created by this resolution shall be “Class BConvertible Preferred Stock” (the “Class B Preferred Stock”).

 

2. Dividends on Class B Preferred Stock.

 

a. Dividend Amount. The holders of the Class BPreferred Stock shall be entitled to receive, in any calendar year, if, whenand as declared by the Board of Directors, out of any assets at the timelegally available therefor and subject to the further limitations set outherein, dividends at the per annum rate of $0.50 per share, all such dividendsdue quarterly in arrears as of the last day of each March, June, September andDecember of each year, the first dividend being declarable on December 31,1996. On each date which a dividend may be declared is hereafter called the “DividendDate,” and each quarterly period ending with a Dividend Date is hereinafterreferred to as the “Dividend Period.” Dividends shall be payable fifteencalendar days after the Dividend Due Date, provided however, that if such dateon which a dividend is payable is a Saturday, Sunday or legal holiday, suchdividend shall be payable on the next following business day to the holders ofrecord (whether singular or plural, the “Holder”).

 

b. Dividends Cumulative. Dividends upon the Class BPreferred Stock shall be accrued and be cumulative, whether or not in anyDividend Period or Periods there shall be funds of the Corporation legallyavailable for the payment of such dividends.

 

c. Dividend Accrual. On each Dividend DueDate all dividends which shall have accrued since the last Dividend Due Date oneach share of Class B Preferred Stock outstanding on such Dividend Due Dateshall accumulate and be deemed to become “due.” Any dividend which shall not bepaid on the Dividend Due Date on which it shall become due shall be deemed tobe “past due” until such dividend shall be paid or until the share of Class BPreferred Stock with respect to which such dividend became due shall no longerbe outstanding, whichever is the earlier to occur. No interest, sum of money inlieu of interest or other property or securities shall be payable in respect ofany dividend payment or payments which are past due. Dividends paid on sharesof Class B Preferred Stock in an amount less than the total amount of suchdividends at the time accumulated and payable on such shares shall be allocatedpro rata on a share-by-share basis among all such shares at the timeoutstanding. Dividend payments made with respect to a Dividend Due Date shallbe deemed to be made in payment of the dividends which became due on thatDividend Due Date.

 

EXHIBIT A

1

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d. Dividend Arrearage. If a dividend upon anyshares of Class B Preferred Stock is in arrears, all dividends or otherdistributions declared upon shares of the Class B Preferred Stock (otherthan dividends paid in stock of the Corporation ranking junior to the Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup) may only be declared pro rata. Except as set forth above, if a dividendupon any shares of Class B Preferred Stock is in arrears: (i) nodividends (in cash, stock or other property) may be paid or declared and setaside for payment or any other distribution made upon any stock of theCorporation ranking junior to the Class B Preferred Stock as to dividends(other than dividends of distributions in stock of the Corporation rankingjunior to the Class B Preferred Stock as to dividends and uponliquidation, dissolution or winding up); and (ii) no stock of theCorporation ranking junior to the Class B Preferred Stock as to dividendsmay be (A) redeemed pursuant to a sinking fund or otherwise, except (1) bymeans of redemption pursuant to which all outstanding shares of the Class BPreferred Stock are redeemed, or (2) by conversion of any such juniorstock into, or exchange of any such junior stock into, or exchange of any suchjunior stock for stock of the Corporation ranking junior to the Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup, or (B) purchased or otherwise acquired for any consideration by theCorporation except (1) pursuant to an acquisition made pursuant to theterms of one or more offers to purchase all of the outstanding shares of the Class BPreferred Stock, which offers shall each have been accepted by the holders ofat least 50% of the shares of the Class B Preferred Stock receiving suchoffer outstanding at the commencement of the first of such purchase offers, or (2) byconversion into or exchange for stock of the Corporation ranking junior to the Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup.

 

3. General, Class and Series VotingRights. Except as provided in this Section 3 and in Section 4hereof or as otherwise from time to time required by law, the Class BPreferred Stock shall have no voting rights.

 

So long as any shares of Class B PreferredStock remain outstanding, the consent of the holders of at least fifty-one(51%) percent of the shares of Class B Preferred Stock outstanding at thetime voting separately as a class, given in person or by proxy, either inwriting at any special or annual meeting called for the purpose, shall benecessary to permit, effect or validate any one or more of the following:

 

(i) The authorization,creation or issuance, or any increase in the authorized or issued amount, ofany class or series of stock (including any class or series of Preferred Stock)ranking equal or prior (as the terms are hereinafter defined in this Section 3)to the Class B Preferred Stock; or

 

(ii) The amendment,alteration or repeal, whether by merger, consolidation or otherwise, of any ofthe provisions of the Certificate of Formation or of this resolution whichwould alter or change the powers, preferences or special rights of the sharesof the Class B Preferred Stock so as to affect them adversely; provided,however, that any increase in the amount of authorized Preferred Stock, or thecreation and issuance of other series of Preferred Stock ranking junior to the Class BPreferred Stock with respect to the payment of dividends and the distributionof assets upon liquidation, dissolution or winding up, shall not be deemed toadversely affect such powers, preferences or special rights.

 

The foregoing voting provisions shall not apply if,at or prior to the time when the act with respect to which such vote wouldotherwise be required shall be effected, all outstanding shares of Class BPreferred Stock shall have been redeemed or sufficient funds shall have beendeposited in trust to effect such redemption.

 

4. Redemption. The outstanding shares of Class BPreferred Stock shall be nonredeemable prior to the lapse of three (3) yearsfrom the date of issuance. On and after such date, the Class B PreferredStock may be redeemed at the option of the Corporation, as a whole at any timeor in part from time to time, at the Redemption Price of $7.50 per share plusall dividends (whether or not declared or due) accrued and unpaid to the dateof redemption (subject to the right of the holder of record of shares of Class BPreferred Stock on a record date for the payment of a dividend on the Class BPreferred Stock to receive the dividend due on such shares of Class BPreferred Stock on the corresponding Dividend Due Date).

 

No sinking fund shall be established for the Class BPreferred Stock.

 

Notice of any proposed redemption of shares of Class BPreferred Stock shall be mailed by means of first class mail, postage paid,addressed to the holders of record of the shares of Class B PreferredStock to be redeemed, 

 

EXHIBIT A

2

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attheir respective addresses then appearing on the books of the Corporation, atleast thirty (30) but not more than sixty (60) days prior to the date fixed forsuch redemption (herein referred to as the “Redemption Date”). Each such noticeshall specify (i) the Redemption Date; (ii) the Redemption Price; (iii) theplace for payment and for delivering the stock certificate(s) and transferinstrument(s) in order to collect the Redemption Price; (iv) theshares of Class B Preferred Stock to be redeemed; and (v) the theneffective Conversion Price (as defined below) and that the right of holders ofshares of Class B Preferred Stock being redeemed to exercise theirconversion right shall terminate as to such shares at the close of business onthe fifth day before the Redemption Date (provided that no default by theCorporation in the payment of the applicable Redemption Price  [including any accrued and unpaid dividends]shall have occurred and be continuing). Any notice mailed in such manner shallbe conclusively deemed to have been duly given whether or not such notice is infact received. If less than all the outstanding shares of Class BPreferred Stock are to be redeemed, the Corporation will select those to beredeemed by lot or by a substantially equivalent method. In order to facilitatethe redemption of Class B Preferred Stock to be redeemed, which shall notbe more than sixty (60) days prior to the Redemption Date with respect thereto.

 

The holder of any shares of Class B PreferredStock redeemed upon any exercise of the Corporation’s redemption right shallnot be entitled to receive payment of the Redemption Price for such sharesuntil such holder shall cause to be delivered to the place specified in thenotice given with respect to such redemption (i) the certificate(s) representingsuch shares of Class B Preferred Stock; and (ii) transfer instrument(s) satisfactoryto the Corporation and sufficient to transfer such shares of Class BPreferred Stock to the Corporation free of any adverse interest. No interestshall accrue on the Redemption Price of any share of Class B PreferredStock after its Redemption Date.

 

Subject to Section 2 hereof, the Corporationshall have the right to purchase shares of Class B Preferred Stock fromthe owner of such shares on such terms as may be agreeable to such owner.Shares of Class B Preferred Stock may be acquired by the Corporation fromany stockholder pursuant to this paragraph without offering any otherstockholder an equal opportunity to sell his stock to the Corporation, and nopurchase by the Corporation from any stockholder pursuant to this paragraphshall be deemed to create any right on the part of any stockholder to sell anyshares of Class B Preferred Stock (or any other stock) to the Corporation.

 

Notwithstanding the foregoing provisions of this Section 4,and subject to the provisions of Section 2 hereof, if a dividend upon anyshares of Class B Preferred Stock is past due, (i) no shares of the Class BPreferred Stock may be redeemed, except (A) by means of a redemptionpursuant to which all outstanding shares of the Class B Preferred Stockare simultaneously redeemed (or offered to be so redeemed) or pursuant to whichthe outstanding shares of the Class B Preferred Stock are redeemed on apro rata basis (or offered to be so redeemed), or (B) by conversion ofshares of Class B Preferred Stock into, or exchange of such shares for,Common Stock or any other stock of the Corporation ranking junior to the Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup.

 

5. Liquidation. In the event of any voluntaryor involuntary dissolution, liquidation or winding up of the Corporation (forthe purposes of this Section 5, a “Liquidation”), before any distributionof assets shall be made to the holders of the Common Stock or the holders ofany other stock that ranks junior to the Class B Preferred Stock inrespect of distributions upon the Liquidation of the Corporation, the holder ofeach share of Class B Preferred Stock then outstanding shall be entitledto $6.25 per share plus all dividends (whether or not declared or due) accruedand unpaid on such share on the date fixed for the distribution of assets ofthe Corporation to the holders of Class B Preferred Stock.

 

If upon any Liquidation of the Corporation, the assetsavailable for distribution to the holder of Class B Preferred Stock whichshall then be outstanding (hereinafter in this paragraph called the “TotalAmount Available”) shall be insufficient to pay the holders of all outstandingshares of Class B Preferred Stock the full amounts (including alldividends accrued and unpaid) to which they shall be entitled by reason of suchLiquidation of the Corporation, then there shall be paid ratably to the holdersof the Class B Preferred Stock in connection with such Liquidation of theCorporation, an amount equal to each holder’s pro rata share of the TotalAmount Available.

 

The voluntary sale, conveyance, lease, exchange ortransfer of all or substantially all the property or assets of the Corporation,or the merger or consolidation of the Corporation into another corporation, orany purchase or redemption of some or all of the shares of any class or seriesof stock of the Corporation, shall not be deemed to be a 

 

EXHIBIT A

3

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Liquidationof the Corporation for the purposes of this Section 5 (unless inconnection therewith the Liquidation of the Corporation is specificallyapproved).

 

6. Conversion Privilege. At any timesubsequent to three years after issuance of any share of Class B PreferredStock, the holder of any share of Class B Preferred Stock (“Holder”) shallhave the right, at such Holder’s option (but if such share is called forredemption or exchange at the election of the Corporation, then in respect ofsuch share only to and including but not after the close of business on (i) thefifth calendar day before the date fixed for such redemption; or (ii) thedate fixed for such exchange, provided that the Corporation has set aside fundssufficient to effect such redemption) to convert such share into that number offully paid and non-assessable shares of Common Stock (calculated as to eachconversion to the nearest 1/100th of a share) obtained by dividing $5.00 by theConversion Rate then in effect.

 

a. Conversion Rate. Each share of Class BPreferred Stock may be converted, subject to the terms and provisions of thisparagraph 6 into one (1) share of the Corporation’s Common Stock, which isa price equal to one share of Common Stock for each $5.00 of Class B PreferredStock or, in case an adjustment of such rate has taken place pursuant to theprovisions of subdivision (f.) of this paragraph (6), then at the ConversionRate as last adjusted (such rate or adjusted rate, shall be expressed as thenumber of shares of Common Stock to be acquired upon conversion of one share ofClass B Preferred Stock, and shall be referred to herein as the “ConversionRate”). Each share of Class B Preferred Stock shall be Convertible intoCommon Stock by surrender to the Corporation of the certificate representingsuch shares of Class B Preferred Stock to be converted by the Holder andby giving written notice to the Corporation of the Holder’s election toconvert.

 

The Corporation shall, as soon as practicable afterreceipt of such written notice and the proper surrender to the Corporation ofthe certificate or certificates representing shares of Class B PreferredStock to be converted in accordance with the above provisions, issue anddeliver for the benefit of the Holder at the office of the Corporation’s dulyappointed transfer agent (the “Transfer Agent”) to the Holder for whose accountsuch shares of Class B Preferred Stock were so surrendered or to suchHolder’s nominee or nominees, certificates for the number of shares of Common Stockto which the Holder shall be entitled. The certificates of Common Stock of theCorporation issued upon conversion shall bear such legends as may be requiredby state or federal laws. Such conversion shall be deemed to have beeneffective immediately prior to the close of business on the date on which theCorporation shall have received both such written notice and the properlysurrendered certificates for shares of Class B Preferred Stock to beconverted (the “Conversion Date”), and at such time the rights of the Holdershall cease and the person or persons entitled to receive the shares of CommonStock issuable upon the conversion of such shares of Class B PreferredStock shall be deemed to be, and shall be treated for all purposes as, therecord Holder or Holders of such Common Stock on the Conversion Date. TheCorporation shall not be required to convert, and no surrender of shares of Class BPreferred Stock or written notice of conversion with respect thereto shall beeffected for that purpose, while the stock transfer books of the Corporationare closed for any reasonable business purpose for any reasonable period oftime, but shall be required to convert upon the proper surrender of shares of Class BPreferred Stock for conversion immediately upon the reopening of such books.During the period in which the stock transfer books of the Corporation areclosed, the Corporation may neither declare a dividend, declare a record datefor payment of dividends nor make any payment of dividends.

 

b. Dividends. If any shares of Class BPreferred Stock shall be converted during any dividend payment period, theHolder shall be entitled to all dividends accrued up to and through suchConversion Date, at the rate set forth herein, whether or not there has been aDividend Date, as set forth in paragraph 2 hereof.

 

c. Cancellation. Class B Preferred Stockconverted into Common Stock pursuant to the provisions of this paragraph (6),shall be retired and cancelled by the Corporation and given the status ofauthorized and unissued preferred stock.

 

d. Reissuance if Conversion is Partial. Inthe case of any certificate representing shares of Class B Preferred Stockwhich is surrendered for conversion only in part, the Corporation shall issueand deliver to the Holder a new certificate or certificates for Class BPreferred Stock of such denominations as requested by the Holder in the amountof Class B Preferred Stock equal to the unconverted shares of the Class BPreferred Stock represented by the certificate so surrendered.

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EXHIBIT A

4

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e. Reservations of Shares. The Corporationshall at all times during which shares of Class B Preferred Stock may beconverted into Common Stock as provided in this paragraph (e), reserve and keepavailable, out of any Common Stock held as treasury stock or out of itsauthorized and unissued Common Stock, or both, solely for the purpose ofdelivery upon conversion of the shares of Class B Preferred Stock asherein provided, such number of shares of Common Stock as shall then besufficient to effect the conversion of all shares of Class B PreferredStock from time to time outstanding, and shall take such action as may fromtime to time be necessary to ensure that such shares of Common Stock will, whenissued upon conversion of Class B Preferred Stock, be fully paid andnonassessable.

 

f. Adjustment of Conversion Rate. TheConversion Rate provided in subdivision (a) of this paragraph (6), inrespect of Class B Preferred Stock, shall be subject to adjustments fromtime to time as follows:

 

(i) While any shares ofClass B Preferred Stock shall be outstanding, in case the Corporationshall subdivide the outstanding shares of Common Stock into a greater number ofshares of Common Stock or combine the outstanding shares of Common Stock into asmaller number of shares of Common Stock, or issue, by reclassification of itsshares of Common Stock, any shares of the Corporation, the Conversion Rate ineffect immediately prior thereto shall be adjusted so that the Holder shall beentitled to receive the number of shares which it would have owned or beenentitled to receive after the happening of any of the events described above,had such shares of Class B Preferred Stock been converted immediatelyprior to the happening of such event, such adjustment to become effectiveimmediately after the opening of business on the day following the day uponwhich such subdivision or combination or reclassification, as the case may be,becomes effective.

 

(ii) In case the Corporationshall be consolidated with, or merge into, any other corporation, and theCorporation does not survive, proper provisions shall be made as a part of theterms of such consolidation or merger, whereby the Holder shall thereafter beentitled, upon exercise of such Holder’s conversion rights, to receive the kindand amount of shares of stock or other securities of the Corporation resultingfrom such consolidation or merger, or such other property, as the Holder wouldhave received if such conversion rights were exercised immediately prior to theeffectiveness of such merger or consolidation.

 

(iii) In the event theCorporation at any time, or from time to time after June 15, 1996 makes orissues, or fixes a record date for the determination of holders of Common Stockentitled to receive, a dividend or other distribution payable in additionalshares of Common Stock or Common Stock Equivalents (as defined herein) whichdoes not provide for the payment of any consideration upon the issuance,conversion or exercise thereof, without a corresponding dividend or otherdistribution to the Holder, based upon the number of shares of Common Stockinto which the Class B Preferred Stock is convertible, then and in eachsuch event the Conversion Rate then in effect will be increased as of the timeof such issuance or, in the event such a record date shall have been fixed, asof the close of business on such record date, by multiplying such ConversionRate by a fraction:

 

(A) The numerator ofwhich will be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date plus the number of shares of Common Stock issuable in payment ofsuch dividend or distribution (which, in the case of Common Stock Equivalents,shall mean the maximum number of shares of Common Stock issuable with respectthereto, as set forth in the instrument relative thereto without regard to anyprovision for subsequent adjustment); and

 

(B) The denominator ofwhich will be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date;

 

provided, however, that if such record date is fixedand such dividend is not fully paid or if such distribution is not fully madeon the date fixed therefor, the Conversion Rate will be recomputed accordinglyas of the close of business on such record date, and thereafter such ConversionRate will be adjusted pursuant to this subparagraph (iii) as of the timeof actual payment of such dividends or distributions.

 

EXHIBIT A

5

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(iv) In the event theCorporation at any time or from time to time after June 15, 1996 makes orissues, or fixes a record date for the determination of holders of Common Stockentitled to receive a dividend or other distribution payable to all holders ofCommon Stock in securities of the Corporation Stock Equivalents, then, uponmaking such dividend or distribution provisions will be made so that the Holderwill receive the amount of securities of the Corporation which it would havereceived had its Class B Preferred Stock been converted into Common Stockon the date of such event.

 

(v) In the event theCorporation sells or issues any Common Stock, or sells or issues Common StockEquivalents which can be converted into Common Stock at a per shareconsideration (as defined below in this subparagraph (v)) less than theStipulated Price then in effect, then the Holder shall be entitled to purchasefrom the Corporation in cash (for the same per share consideration at whichsuch Common Stock was issued or the per share price at which a share of CommonStock is acquirable upon exercise or conversion of Common Stock Equivalents) thatadditional number of shares of Common Stock which, when added to the number ofshares of Common Stock acquirable by the Holder upon conversion of any sharesof Class B Preferred Stock outstanding and held by such Holder immediatelybefore such issue or sale (the “Acquirable Shares”), will equal a percentage ofthe number of shares of Common Stock Deemed Outstanding (as defined herein)immediately after such sale or issuance that is the same as the percentage ofthe number of shares of Common Stock Deemed Outstanding immediately before suchissuance or sale represented by the Acquirable Shares. This right shall existfor a forty-five-day period following the sale or issuance of shares of CommonStock or Common Stock Equivalents, and thereafter shall cease to exist.

 

For the above purposes, the per share considerationwith respect to the sale or issuance of Common Stock will be the price pershare received by the Corporation, prior to the payment of any expenses,commissions, discounts and other applicable costs. With respect to the sale orissuance of Common Stock Equivalents which are convertible into or exchangeablefor Common Stock without further consideration, the per share considerationwill be determined by dividing the maximum number of shares of Common Stockissuable with respect to such Common Stock Equivalents (as set forth in theinstrument relating thereto without regard to any provisions contained thereinfor subsequent adjustment of such number) into the aggregate considerationreceivable by the Corporation upon the sale or issuance of such Common StockEquivalents. With respect to the issuance of other Common Stock Equivalents,the per share consideration will be determined by dividing the maximum numberof shares of Common Stock issuable with respect to such Common StockEquivalents into the total aggregate consideration received by the Corporationupon the sale or issuance of such Common Stock Equivalents plus the minimumaggregate amount of additional consideration received by the Corporation uponthe conversion or exercise of such Common Stock Equivalents. In connection withthe sale or issuance of Common Stock and/or Common Stock Equivalents fornon-cash consideration, the amount of consideration will be the fair marketvalue of such consideration as determined in good faith by the Board ofDirectors of the Corporation.

 

(vi) As used herein,the term “Stipulated Price” means initial price of $5.00 per share of CommonStock, as adjusted from time to time pursuant to subparagraph (viii) ofthis paragraph 6(f); and the term “Common Stock Equivalent” means anysecurities (whether debt or equity securities) or rights issued by theCorporation convertible into or entitling the holder thereof to receive sharesof, or securities convertible into, Common Stock. The number of shares of “CommonStock Deemed Outstanding” at any date shall equal the sum of the number ofshares of Common Stock then outstanding plus the number of shares of CommonStock then obtainable pursuant to Common Stock Equivalents.

 

(vii) In the event theCorporation declares any dividend or distribution payable to holders of itsCommon Stock (other than dividends payable out of the Corporation’s retainedearnings or earned surplus and dividends payable in shares of Common Stock orin securities convertible into or exchangeable for shares of Common Stock orrights or warrants to purchase Common Stock or securities convertible into orexchangeable for shares of Common Stock or any other securities issued by theCorporation), the Conversion Rate in effect immediately prior to the recorddate for such dividend or distribution shall be proportionately adjusted sothat the Holder shall be entitled to receive the number of shares of CommonStock into which such shares of Common Stock or Preferred Stock was convertibleimmediately prior to such record date multiplied by a fraction, the numeratorof which is the fair market value of a share of Common Stock on such recorddate and the denominator of which is such per share fair market value of a shareof Common Stock on such record 

 

EXHIBIT A

6

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date less the fair market value on such record dateof the securities or other property which are distributed as a dividend orother distribution. The term “fair market value” of a share of Common Stock orof any other security or other type of property on any date means (A) inthe case of Common Stock or any other security (I) if the principaltrading market for such Common Stock or other security is an exchange or theNASDAQ national market on such date, the closing price on such exchange or theNASDAQ national market on such date, provided, if trading of such Common Stockor other security is listed on any consolidated tape, the fair market valueshall be the closing price set forth on such consolidated tape on such date, or(II) if the principal market for such Common Stock or other security isthe over-the-counter market (other than the NASDAQ national market) the meanbetween the closing bid and asked prices on such date as set forth by NASDAQ;or (B) in the case of Common Stock or any other security for which thefair market value cannot be determined pursuant to clause (A) above or ofany other security or type of property, fair market value thereof on such dateas determined in good faith by the Board of Directors.

 

(viii) Whenever theConversion Rate is adjusted pursuant to this paragraph 6(f), the StipulatedPrice shall also be adjusted by multiplying it by a fraction that is thereciprocal of the fraction used to adjust the Conversion Rate.

 

(ix) The Corporationwill not, by amendment of its Certificate of Formation or through anydissolution, issuance or sale of securities or any other voluntary action,avoid or seek to avoid the observance or performance of any of the terms to beobserved or performed hereunder by the Corporation, but at all times in goodfaith will assist in the carrying out of all the provisions of this paragraphand in the taking of all such action as may be necessary or appropriate inorder to protect the conversion rights of the Holder against impairment.

 

(x) No adjustment inthe Conversion Rate shall be required, unless such adjustment would require anincrease or decrease of at least one (1) share of Common Stock in theConversion Rate of one share of Class B Preferred Stock, provided that alladjustments which do not meet this minimum requirement shall be cumulated andthe adjustment will be made when the cumulated total is sufficient to requirean adjustment. All calculations made pursuant to this subparagraph (x) ofparagraph 6(f) shall be made to the nearest one hundredth (1/100th) of ashare of Common Stock.

 

g. Fractional Shares. No fractional shares ofCommon Stock or scrip representing fractional shares of Common Stock shall beissued upon any conversion of shares of Class B Preferred Stock but, inlieu thereof, there shall be paid an amount in cash equal to the same fractionof the current market price of a whole share of Common Stock on the daypreceding the day of conversion.

 

h. Statement to Transfer Agent. Whenever theConversion Rate for shares of Class B Preferred Stock shall be adjustedpursuant to the provisions of paragraph 6(f) hereof, the Corporation shallforthwith maintain at its office and, if applicable, file with the TransferAgent for shares of Class B Preferred Stock and for shares of CommonStock, a statement signed by the President or a Vice President of theCorporation and by its Treasurer or an Assistant Treasurer, stating theadjusted Conversion Rate and setting forth in reasonable detail the method ofcalculation and the facts requiring such adjustment, such calculations to beconfirmed by the Corporation’s independent auditors, and stating the facts onwhich the calculation is based. Each adjustment shall remain in effect until asubsequent adjustment hereunder is required.

 

7. Registration Rights.

 

a. Piggyback Registration. The Corporation,for a period ending six months after the last share of Class B PreferredStock is redeemed, retired, converted or otherwise no longer outstanding, willgive written notice to the Holder not less than 20 days in advance of theinitial filing of any registration statement under the Securities Act of 1933(other than a registration Statement pertaining to securities issuable pursuantto employee stock option, stock purchase, or similar plans or a registrationstatement pertaining to securities issuable in connection with the acquisitionof a business, whether through merger, consolidation, acquisition of assets, orexchange of securities) covering any Common Stock or other securities of theCorporation, and will afford the Holder the opportunity to have included insuch registration all or such part of the shares of Common Stock acquired uponconversion of Class B Preferred Stock, as may be designated by writtennotice to the Corporation not later than 10 days following receipt 

 

EXHIBIT A

7

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ofsuch notice from the Corporation. The Corporation shall be entitled to excludethe shares of Common Stock held by the Holder from any one, but not more thanone, such registration if the Corporation is advised by its investment bankingfirm that the inclusion of such shares will, in the opinion of such investmentbanking firm, materially interfere with the orderly sale and distribution ofthe securities being offered under such registration statement by theCorporation. Notwithstanding the foregoing, the Corporation shall not beentitled to exclude the shares of Common Stock held by the Holder if shares ofother shareholders are being included in any such registration statement and,in such circumstances, the Holder shall be entitled to include the shares ofCommon Stock held by them on a pro rata basis in the proportion that the numberof shares of Common Stock held by the Holder bears to the shares of CommonStock held by all other shareholders, including shares in such registrationstatement. The Holder shall not be entitled to include shares in more than tworegistration statements pursuant to the provisions of this subdivision (a) ofparagraph 7, and all rights of the Holder under this subdivision (a) ofparagraph 7 shall terminate after the Holder has included shares of CommonStock in two registration statements pursuant to this subdivision (a) ofparagraph 7.

 

b. Expenses. The Corporation will pay allout-of-pocket costs and expenses of any registration effected pursuant to theprovisions of subdivision (a) of this paragraph 7, including registrationfees, legal fees, accounting fees, printing expenses (including such number ofany preliminary and the final prospectus as may be reasonably requested), bluesky qualification fees and expenses, and all other expenses, except forunderwriting commissions or discounts applicable to the shares of Common Stockbeing sold by the Holder and the fees of counsel for the Holder, all of whichshall be paid by the Holder.

 

8. Reports.

 

So long as any of the Class B Preferred Stockshall be outstanding, the Corporation shall submit to the Holder financialreports no less frequently than annually.

 

9. Miscellaneous.

 

a. As used herein, the term “Common Stock” shallmean the Corporation’s Common Stock, no par value, or, in the case of anyreclassification or change of outstanding shares of Common Stock, the stock orsecurities issued in exchange for such Common Stock. The term “Common Stock”shall also include any capital stock of the Corporation authorized after June 15,1995 which shall not be limited to a fixed sum or sums or percentage orpercentages of par value in respect of the rights of the holders thereof toparticipate in dividends or in the distribution of assets upon the voluntary orinvoluntary liquidation, dissolution or winding up of the Corporation.

 

b. The shares of Class B Preferred Stock shallbe fully transferrable by the Holder thereof, subject to compliance with theapplicable provisions of federal and state securities laws.

 

IN WITNESS WHEREOF, RETRACTABLE TECHNOLOGIES, INC.has caused its corporate seal to be hereunto affixed and this Certificate to besigned by its President and Secretary this 30th day of April, 1996.

 
|                   |   | /s/  Thomas J. Shaw |
|------------------------|--------|---------------------|
|                   |   |                |
|                   |   |                |
|                   |   | President           |
|                   |   |                |
| ATTEST:                |   |                |
|                   |   |                |
| /s/Lillian  E. Salerno |   |                |
|                   |   |                |
|                   |   |                |
| Secretary              |   |                |

 

8

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CERTIFICATE OF DESIGNATION, PREFERENCES

RIGHTS AND LIMITATIONS OF THE SERIES II CLASS B

CONVERTIBLE PREFERRED STOCK

OF

RETRACTABLE TECHNOLOGIES, INC.

 

Pursuant to Texas law and its Certificate ofFormation, Retractable Technologies, Inc., a corporation organized andexisting under the laws of the State of Texas (the Corporation),

 

DOES HEREBY CERTIFY that pursuant to the authorityconferred upon the Board of Directors of the Corporation by the Certificate ofFormation, as amended, and pursuant to Texas law, said Board of Directors, byunanimous written consent executed May 10, 1995, adopted a resolutionproviding for the creation of a series of Preferred Stock consisting of notmore than five million (5,000,000) shares of Series II Class BConvertible Preferred Stock, which resolution is and reads as follows:

 

RESOLVED that, pursuant to the authority provided inthe Corporation’s Certificate of Formation and expressly granted to and vestedin the Board of Directors of Retractable Technologies, Inc. (the “Corporation”),the Board of Directors hereby creates out of the Preferred Stock, par value onedollar per share, of the Corporation a series of Series II Class BPreferred Stock consisting of not more than five million (5,000,000) shares,and the Board of Directors hereby fixes the designation and the powers,preference and rights, and the qualifications, limitations and restrictionsthereof, to the extent not otherwise provided in the Corporation’squalifications, limitations and restrictions thereof, to the extent nototherwise provided in the Corporation’s Certificate of Formation, as follows:

 

1. Designation of Series. The designation ofthe series of Preferred Stock created by this resolution shall be “Series IIClass B Convertible Preferred Stock” (the “Series II Class BPreferred Stock”).

 

2. Dividends on Series II Class BPreferred Stock.

 

a. Dividend Amount. The holders of the Series IIClass B Preferred Stock shall be entitled to receive, in any calendaryear, if, when and as declared by the Board of Directors, out of any assets atthe time legally available therefor and subject to the further limitations setout herein, dividends at the per annum rate of $1.00 per share, all suchdividends due quarterly in arrears as of the last day of each March, June, September andDecember of each year, the first dividend being declarable on December 31,1997. On each date which a dividend may be declared is hereafter called the “DividendDate,” and each quarterly period ending with a Dividend Date is hereinafter referredto as the “Dividend Period.” Dividends shall be payable fifteen calendar daysafter the Dividend Due Date, provided however, that if such date on which adividend is payable is a Saturday, Sunday or legal holiday, such dividend shallbe payable on the next following business day to the holders of record (whethersingular or plural, the “Holder”).

 

b. Dividends Cumulative. Dividends upon the Series IIClass B Preferred Stock shall be accrued and be cumulative, whether or notin any Dividend Period or Periods there shall be funds of the Corporationlegally available for the payment of such dividends.

 

c. Dividend Accrual. On each Dividend DueDate all dividends which shall have accrued since the last Dividend Due Date oneach share of Series II Class B Preferred Stock outstanding on suchDividend Due Date shall accumulate and be deemed to become “due.” Any dividendwhich shall not be paid on the Dividend Due Date on which it shall become dueshall be deemed to be “past due” until such dividend shall be paid or until theshare of Series II Class B Preferred Stock with respect to which suchdividend became due shall no longer be outstanding, whichever is the earlier tooccur. No interest, sum of money in lieu of interest or other property orsecurities shall be payable in respect of any dividend payment or paymentswhich are past due. Dividends paid on shares of Series II Class BPreferred Stock in an amount less than the total amount of such dividends atthe time accumulated and payable on such shares shall be allocated pro rata ona share-by-share basis among all such shares at the time outstanding. Dividendpayments made with respect to a Dividend Due Date shall be deemed to be made inpayment of the dividends which became due on that Dividend Due Date.

 

EXHIBIT B

1

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d. Dividend Arrearage. If a dividend upon anyshares of Series II Class B Preferred Stock is in arrears, alldividends or other distributions declared upon shares of the Series II Class BPreferred Stock (other than dividends paid in stock of the Corporation rankingjunior to the Series II Class B Preferred Stock as to dividends andupon liquidation, dissolution or winding up) may only be declared pro rata.Except as set forth above, if a dividend upon any shares of Series II Class BPreferred Stock is in arrears: (i) no dividends (in cash, stock or otherproperty) may be paid or declared and set aside for payment or any otherdistribution made upon any stock of the Corporation ranking junior to the Series IIClass B Preferred Stock as to dividends (other than dividends ofdistributions in stock of the Corporation ranking junior to the Series II Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup); and (ii) no stock of the Corporation ranking junior to the Series IIClass B Preferred Stock as to dividends may be (A) redeemed pursuantto a sinking fund or otherwise, except (1) by means of redemption pursuantto which all outstanding shares of the Series II Class B PreferredStock are redeemed, or (2) by conversion of any such junior stock into, orexchange of any such junior stock into, or exchange of any such junior stockfor stock of the Corporation ranking junior to the Series II Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup, or (B) purchased or otherwise acquired for any consideration by theCorporation except (1) pursuant to an acquisition made pursuant to theterms of one or more offers to purchase all of the outstanding shares of the Series IIClass B Preferred Stock, which offers shall each have been accepted by theholders of at least 50% of the shares of the Series II Class BPreferred Stock receiving such offer outstanding at the commencement of thefirst of such purchase offers, or (2) by conversion into or exchange forstock of the Corporation ranking junior to the Series II Class BPreferred Stock as to dividends and upon liquidation, dissolution or windingup.

 

3. General, Class and Series VotingRights. Except as provided in this Section 3 and in Section 4hereof or as otherwise from time to time required by law, the Series II Class BPreferred Stock shall have no voting rights.

 

So long as any shares of Series II Class BPreferred Stock remain outstanding, the consent of the holders of at leastfifty-one (51%) percent of the shares of Series II Class B PreferredStock outstanding at the time voting separately as a class, given in person orby proxy, either in writing at any special or annual meeting called for the purpose,shall be necessary to permit, effect or validate any one or more of thefollowing:

 

(i) The authorization,creation or issuance, or any increase in the authorized or issued amount, ofany class or series of stock (including any class or series of Preferred Stock)ranking equal or prior (as the terms are hereinafter defined in this Section 3)to the Series II Class B Preferred Stock; or

 

(ii) The amendment,alteration or repeal, whether by merger, consolidation or otherwise, of any ofthe provisions of the Certificate of Formation or of this resolution whichwould alter or change the powers, preferences or special rights of the sharesof the Series II Class B Preferred Stock so as to affect themadversely; provided, however, that any increase in the amount of authorizedPreferred Stock, or the creation and issuance of other series of PreferredStock ranking junior to the Series II Class B Preferred Stock withrespect to the payment of dividends and the distribution of assets uponliquidation, dissolution or winding up, shall not be deemed to adversely affectsuch powers, preferences or special rights.

 

The foregoing voting provisions shall not apply if,at or prior to the time when the act with respect to which such vote wouldotherwise be required shall be effected, all outstanding shares of Series IIClass B Preferred Stock shall have been redeemed or sufficient funds shallhave been deposited in trust to effect such redemption.

 

4. Default Voting Rights. Whenever, at anytime or times, dividends payable on the shares of Series II Class BPreferred Stock shall be in arrears for twelve (12) consecutive quarterlydividend periods, the holders of a majority of the outstanding shares of Series IIClass B Preferred Stock shall have the exclusive right (voting separatelyas a class) to elect one-third of the Board of Directors of the Corporation atthe Corporation’s next annual meeting of stockholders (to serve until the nextannual meeting of shareholders, and until their successors are duly elected andqualified) and at each subsequent annual meeting of stockholders so long assuch arrearage shall continue, and the Common Stock voting separately as aclass, shall be entitled to elect the remainder of the Board of Directors ofthe Corporation. At elections for such directors, each holder of Series IIClass B Preferred Stock shall be entitled to one vote for each share ofPreferred Stock held. The right of the holders of Series II Class BPreferred Stock, voting separately as a class, to elect members of the Board ofDirectors of the Corporation as aforesaid shall continue until such time as alldividends accumulated on the Series II Class B Preferred Stock shallhave been paid in full, at which 

 

EXHIBIT B

2

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timesuch right shall terminate, except as herein or by law expressly provided,subject to revesting in the event of each and every subsequent default of thecharacter above mentioned.

 

Directors elected by the holders of Series II Class BPreferred Stock shall continue to serve as such directors until such time asall dividends accumulated on the Series II Class B Preferred Stockshall have been paid in full, at which time the term of office of all personselected as directors by the holders of shares of Series II Class BPreferred Stock shall forthwith terminate. In the case of any vacancy in theoffice of a director occurring among the directors elected by the holder of aclass (with the Series II Class B Preferred Stock and Common Stockbeing treated as separate classes) of stock, the remaining directors so electedby that class may by affirmative vote of a majority thereof (or the remainingdirector so elected if there be but one) elect a successor or successors tohold office for the unexpired term of the director or directors whose place orplaces shall be vacant. Any director who shall have been elected by the holdersof a class of stock or by any directors so elected as provided in the nextpreceding sentence hereof may be removed during the aforesaid term of office,either for or without cause, by, and only by, the affirmative vote of theholders of a majority of the shares of the class of stock who elected suchdirector or directors, given either at a special meeting of such shareholdersduly called for that purpose or pursuant to a written consent of shareholders,and any vacancy thereby created may be filled by the holders of that class ofstock represented at such meeting or pursuant to such written consent. Wheneverthe term of office of the directors elected by the holders of Series II Class BPreferred Stock voting as a class shall end and the special voting powersvested in the holders of Series II Class B Preferred Stock voting asa class shall end and the special voting powers vested in the holders of Series IIClass B Preferred Stock as provided in this Section 4 shall haveexpired, the number of directors shall be such number as may be provided for inthe Certificate of Formation or Bylaws irrespective of any increase madepursuant to the provisions of this Section 4.

 

5. Redemption. The outstanding shares of Series IIClass B Preferred Stock shall be nonredeemable prior to the lapse of three(3) years from the date of issuance. On and after such date, the Series IIClass B Preferred Stock may be redeemed at the option of the Corporation,as a whole at any time or in part from time to time, at the Redemption Price of$15.00 per share plus all dividends (whether or not declared or due) accruedand unpaid to the date of redemption (subject to the right of the holder ofrecord of shares of Series II Class B Preferred Stock on a recorddate for the payment of a dividend on the Series II Class B PreferredStock to receive the dividend due on such shares of Series II Class BPreferred Stock on the corresponding Dividend Due Date).

 

No sinking fund shall be established for the Series IIClass B Preferred Stock.

 

Notice of any proposed redemption of shares of Series IIClass B Preferred Stock shall be mailed by means of first class mail,postage paid, addressed to the holders of record of the shares of Series IIClass B Preferred Stock to be redeemed, at their respective addresses thenappearing on the books of the Corporation, at least thirty (30) but not morethan sixty (60) days prior to the date fixed for such redemption (hereinreferred to as the “Redemption Date”). Each such notice shall specify (i) theRedemption Date; (ii) the Redemption Price; (iii) the place forpayment and for delivering the stock certificate(s) and transferinstrument(s) in order to collect the Redemption Price; (iv) theshares of Series II Class B Preferred Stock to be redeemed; and (v) thethen effective Conversion Price (as defined below) and that the right ofholders of shares of Series II Class B Preferred Stock being redeemedto exercise their conversion right shall terminate as to such shares at theclose of business on the fifth day before the Redemption Date (provided that nodefault by the Corporation in the payment of the applicable Redemption Price[including any accrued and unpaid dividends] shall have occurred and becontinuing). Any notice mailed in such manner shall be conclusively deemed tohave been duly given whether or not such notice is in fact received. If lessthan all the outstanding shares of Series II Class B Preferred Stockare to be redeemed, the Corporation will select those to be redeemed by lot orby a substantially equivalent method. In order to facilitate the redemption of Series IIClass B Preferred Stock to be redeemed, which shall not be more than sixty(60) days prior to the Redemption Date with respect thereto.

 

The holder of any shares of Series II Class BPreferred Stock redeemed upon any exercise of the Corporation’s redemptionright shall not be entitled to receive payment of the Redemption Price for suchshares until such holder shall cause to be delivered to the place specified inthe notice given with respect to such redemption (i) the certificate(s) representingsuch shares of Series II Class B Preferred Stock; and (ii) transferinstrument(s) satisfactory to the Corporation and sufficient to transfersuch shares of Series II Class B Preferred Stock to the 

 

EXHIBIT B

3

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Corporationfree of any adverse interest. No interest shall accrue on the Redemption Priceof any share of Series II Class B Preferred Stock after itsRedemption Date.

 

Subject to Section 2 hereof, the Corporationshall have the right to purchase shares of Series II Class BPreferred Stock from the owner of such shares on such terms as may be agreeableto such owner. Shares of Series II Class B Preferred Stock may beacquired by the Corporation from any stockholder pursuant to this paragraphwithout offering any other stockholder an equal opportunity to sell his stockto the Corporation, and no purchase by the Corporation from any stockholderpursuant to this paragraph shall be deemed to create any right on the part ofany stockholder to sell any shares of Series II Class B PreferredStock (or any other stock) to the Corporation.

 

Notwithstanding the foregoing provisions of this Section 5,and subject to the provisions of Section 2 hereof, if a dividend upon anyshares of Series II Class B Preferred Stock is past due, (i) noshares of the Series II Class B Preferred Stock may be redeemed,except (A) by means of a redemption pursuant to which all outstandingshares of the Series II Class B Preferred Stock are simultaneouslyredeemed (or offered to be so redeemed) or pursuant to which the outstandingshares of the Series II Class B Preferred Stock are redeemed on a prorata basis (or offered to be so redeemed), or (B) by conversion of sharesof Series II Class B Preferred Stock into, or exchange of such sharesfor, Common Stock or any other stock of the Corporation ranking junior to the Series IIClass B Preferred Stock as to dividends and upon liquidation, dissolutionor winding up.

 

6. Liquidation. In the event of any voluntaryor involuntary dissolution, liquidation or winding up of the Corporation (forthe purposes of this Section 6, a “Liquidation”), before any distributionof assets shall be made to the holders of the Common Stock or the holders ofany other stock that ranks junior to the Series II Class B PreferredStock in respect of distributions upon the Liquidation of the Corporation, theholder of each share of Series II Class B Preferred Stock thenoutstanding shall be entitled to $12.50 per share plus all dividends (whetheror not declared or due) accrued and unpaid on such share on the date fixed forthe distribution of assets of the Corporation to the holders of Series II Class BPreferred Stock.

 

If upon any Liquidation of the Corporation, theassets available for distribution to the holder of Series II Class BPreferred Stock which shall then be outstanding (hereinafter in this paragraphcalled the “Total Amount Available”) shall be insufficient to pay the holdersof all outstanding shares of Series II Class B Preferred Stock thefull amounts (including all dividends accrued and unpaid) to which they shallbe entitled by reason of such Liquidation of the Corporation, then there shallbe paid ratably to the holders of the Series II Class B PreferredStock in connection with such Liquidation of the Corporation, an amount equalto each holder’s pro rata share of the Total Amount Available.

 

The voluntary sale, conveyance, lease, exchange ortransfer of all or substantially all the property or assets of the Corporation,or the merger or consolidation of the Corporation into another corporation, orany purchase or redemption of some or all of the shares of any class or seriesof stock of the Corporation, shall not be deemed to be a Liquidation of thecorporation for the purposes of this Section 6 (unless in connectiontherewith the Liquidation of the Corporation is specifically approved).

 

7. Conversion Privilege. At any timesubsequent to three years after issuance of any share of Series II Class BPreferred Stock, the holder of any share of Series II Class BPreferred Stock (“Holder”) shall have the right, at such Holder’s option (butif such share is called for redemption or exchange at the election of theCorporation, then in respect of such share only to and including but not afterthe close of business on (i) the fifth calendar day before the date fixedfor such redemption; or (ii) the date fixed for such exchange, providedthat the Corporation has set aside funds sufficient to effect such redemption)to convert such share into that number of fully paid and non-assessable sharesof Common Stock (calculated as to each conversion to the nearest 1/100th of ashare) obtained by dividing $10.00 by the Conversion Rate then in effect.

 

a. Conversion Rate.Each share of Series II Class B Preferred Stock may be converted,subject to the terms and provisions of this paragraph 7 into one (1) shareof the Corporation’s Common Stock, which is a price equal to one share ofCommon Stock for each $10.00 of Series II Class B Preferred Stock or,in case an adjustment of such rate has taken place pursuant to the provisionsof subdivision (f.) of this paragraph (7), then at the Conversion Rate as lastadjusted (such rate or adjusted rate, shall be expressed as the number ofshares of Common Stock to be acquired upon conversion of one share of Series IIClass B Preferred Stock, 

 

EXHIBIT B

4

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and shall be referred to herein as the “ConversionRate”). Each share of Series II Class B Preferred Stock shall beConvertible into Common Stock by surrender to the Corporation of thecertificate representing such shares of Series II Class B PreferredStock to be converted by the Holder and by giving written notice to theCorporation of the Holder’s election to convert.

 

The Corporation shall, assoon as practicable after receipt of such written notice and the proper surrenderto the Corporation of the certificate or certificates representing shares of Series IIClass B Preferred Stock to be converted in accordance with the aboveprovisions, issue and deliver for the benefit of the Holder at the office ofthe Corporation’s duly appointed transfer agent (the “Transfer Agent”) to theHolder for whose account such shares of Series II Class B PreferredStock were so surrendered or to such Holder’s nominee or nominees, certificatesfor the number of shares of Common Stock to which the Holder shall be entitled.The certificates of Common Stock of the Corporation issued upon conversionshall bear such legends as may be required by state or federal laws. Suchconversion shall be deemed to have been effective immediately prior to theclose of business on the date on which the Corporation shall have received bothsuch written notice and the properly surrendered certificates for shares of Series IIClass B Preferred Stock to be converted (the “Conversion Date”), and atsuch time the rights of the Holder shall cease and the person or personsentitled to receive the shares of Common Stock issuable upon the conversion ofsuch shares of Series II Class B Preferred Stock shall be deemed tobe, and shall be treated for all purposes as, the record Holder or Holders ofsuch Common Stock on the Conversion Date. The Corporation shall not be requiredto convert, and no surrender of shares of Series II Class B PreferredStock or written notice of conversion with respect thereto shall be effectedfor that purpose, while the stock transfer books of the Corporation are closedfor any reasonable business purpose for any reasonable period of time, butshall be required to convert upon the proper surrender of shares of Series IIClass B Preferred Stock for conversion immediately upon the reopening ofsuch books. During the period in which the stock transfer books of theCorporation are closed, the Corporation may neither declare a dividend, declarea record date for payment of dividends nor make any payment of dividends.

 

b. Dividends. If anyshares of Class B Preferred Stock shall be converted during any dividendpayment period, the Holder shall be entitled to all dividends accrued up to andthrough such Conversion Date, at the rate set forth herein, whether or notthere has been a Dividend Date, as set forth in paragraph 2 hereof.

 

c. Cancellation. Class BPreferred Stock converted into Common Stock pursuant to the provisions of thisparagraph (7) shall be retired and cancelled by the Corporation and given thestatus of authorized and unissued preferred stock.

 

d. Reissuance ifConversion is Partial. In the case of any certificate representing sharesof Series II Class B Preferred Stock which is surrendered forconversion only in part, the Corporation shall issue and deliver to the Holdera new certificate or certificates for Series II Class B PreferredStock of such denominations as requested by the Holder in the amount of Series IIClass B Preferred Stock equal to the unconverted shares of the Series IIClass B Preferred Stock represented by the certificate so surrendered.

 

e. Reservations of Shares.The Corporation shall at all times during which shares of Series II Class BPreferred Stock may be converted into Common Stock as provided in thisparagraph (e), reserve and keep available, out of any Common Stock held astreasury stock or out of its authorized and unissued Common Stock, or both,solely for the purpose of delivery upon conversion of the shares of Series IIClass B Preferred Stock as herein provided, such number of shares ofCommon Stock as shall then be sufficient to effect the conversion of all sharesof Series II Class B Preferred Stock from time to time outstanding,and shall take such action as may from time to time be necessary to ensure thatsuch shares of Common Stock will, when issued upon conversion of Series IIClass B Preferred Stock, be fully paid and nonassessable.

 

f. Adjustment ofConversion Rate. The Conversion Rate provided in subdivision (a) ofthis paragraph (7), in respect of Class B Preferred Stock, shall besubject to adjustments from time to time as follows:

 

(i) While any shares ofSeries II Class B Preferred Stock shall be outstanding, in case theCorporation shall subdivide the outstanding shares of Common Stock into a greaternumber of shares of Common Stock or combine the outstanding shares of CommonStock into a smaller number of shares of

 

EXHIBIT B

5

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Common Stock, or issue, by reclassification of itsshares of Common Stock any shares of the Corporation, the Conversion Rate ineffect immediately prior thereto shall be adjusted so that the Holder shall beentitled to receive the number of shares which it would have owned or beenentitled to receive after the happening of any of the events described above,had such shares of Series II Class B Preferred Stock been convertedimmediately prior to the happening of such event, such adjustment to becomeeffective immediately after the opening of business on the day following theday upon which such subdivision or combination or reclassification, as the casemay be, becomes effective.

 

(ii) In case theCorporation shall be consolidated with, or merge into, any other corporation,and the Corporation does not survive, proper provisions shall be made as a partof the terms of such consolidation or merger, whereby the Holder shallthereafter be entitled, upon exercise of such Holder’s conversion rights, toreceive the kind and amount of shares of stock or other securities of theCorporation resulting from such consolidation or merger, or such otherproperty, as the Holder would have received if such conversion rights wereexercised immediately prior to the effectiveness of such merger orconsolidation.

 

(iii) In the event theCorporation at any time, or from time to time after June 15, 1997 makes orissues, or fixes a record date for the determination of holders of Common Stockentitled to receive, a dividend or other distribution payable in additionalshares of Common Stock or Common Stock Equivalents (as defined herein) whichdoes not provide for the payment of any consideration upon the issuance,conversion or exercise thereof, without a corresponding dividend or otherdistribution to the Holder, based upon the number of shares of Common Stockinto which the Series II Class B Preferred Stock is convertible, thenand in each such event the Conversion Rate then in effect will be increased asof the time of such issuance or, in the event such a record date shall havebeen fixed, as of the close of business on such record date, by multiplyingsuch Conversion Rate by a fraction:

 

(A) The numerator ofwhich will be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date plus the number of shares of Common Stock issuable in payment ofsuch dividend or distribution (which, in the case of Common Stock Equivalents,shall mean the maximum number of shares of Common Stock issuable with respectthereto, as set forth in the instrument relative thereto without regard to anyprovision for subsequent adjustment); and

 

(B) The denominator ofwhich will be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date;

 

provided, however, that if such record date is fixedand such dividend is not fully paid or if such distribution is not fully madeon the date fixed therefor, the Conversion Rate will be recomputed accordinglyas of the close of business on such record date, and thereafter such ConversionRate will be adjusted pursuant to this subparagraph (iii) as of the timeof actual payment of such dividends or distributions.

 

(iv) In the event theCorporation at any time or from time to time after June 15, 1997 makes orissues, or fixes a record date for the determination of holders of Common Stockentitled to receive a dividend or other distribution payable to all holders ofCommon Stock in securities of the Corporation or Common Stock Equivalents,then, upon making such dividend or distribution provisions will be made so thatthe Holder will receive the amount of securities of the Corporation which itwould have received had its Series II Class B Preferred Stock beenconverted into Common Stock on the date of such event.

 

(v) In the event theCorporation sells or issues any Common Stock, or sells or issues Common StockEquivalents which can be converted into Common Stock at a per shareconsideration (as defined below in this subparagraph (v)) less than theStipulated Price then in effect, then the Holder shall be entitled to purchasefrom the Corporation in cash (for the same per share consideration at whichsuch Common Stock was issued or the per share price at which a share of CommonStock is acquirable upon exercise or conversion of Common Stock Equivalents)that additional number of shares of Common 

 

EXHIBIT B

6

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Stock which, when added to the number of shares ofCommon Stock acquirable by the Holder upon conversion of any shares of Series IIClass B Preferred Stock outstanding and held by such Holder immediatelybefore such issue or sale (the “Acquirable Shares”), will equal a percentage ofthe number of shares of Common Stock Deemed Outstanding (as defined herein)immediately after such sale or issuance that is the same as the percentage ofthe number of shares of Common Stock Deemed Outstanding immediately before suchissuance or sale represented by the Acquirable Shares. This right shall existfor a forty-five-day period following the sale or issuance of shares of CommonStock or Common Stock Equivalents, and thereafter shall cease to exist.

 

For the above purposes, theper share consideration with respect to the sale or issuance of Common Stockwill be the price per share received by the Corporation, prior to the paymentof any expenses, commissions, discounts and other applicable costs. Withrespect to the sale or issuance of Common Stock Equivalents which are convertibleinto or exchangeable for Common Stock without further consideration, the pershare consideration will be determined by dividing the maximum number of sharesof Common Stock issuable with respect to such Common Stock Equivalents (as setforth in the instrument relating thereto without regard to any provisionscontained therein for subsequent adjustment of such number) into the aggregateconsideration receivable by the Corporation upon the sale or issuance of suchCommon Stock Equivalents. With respect to the issuance of other Common StockEquivalents, the per share consideration will be determined by dividing themaximum number of shares of Common Stock issuable with respect to such CommonStock Equivalents into the total aggregate consideration received by theCorporation upon the sale or issuance of such Common Stock Equivalents plus theminimum aggregate amount of additional consideration received by theCorporation upon the conversion or exercise of such Common Stock Equivalents.In connection with the sale or issuance of Common Stock and/or Common StockEquivalents for non-cash consideration, the amount of consideration will be thefair market value of such consideration as determined in good faith by theBoard of Directors of the Corporation.

 

(vi) As used herein,the term “Stipulated Price” means initial price of $10.00 per share of CommonStock, as adjusted from time to time pursuant to subparagraph (viii) ofthis paragraph 7(f); and the term “Common Stock Equivalent” means anysecurities (whether debt or equity securities) or rights issued by theCorporation convertible into or entitling the holder thereof to receive sharesof, or securities convertible into, Common Stock. The number of shares of “CommonStock Deemed Outstanding” at any date shall equal the sum of the number ofshares of Common Stock then outstanding plus the number of shares of CommonStock then obtainable pursuant to Common Stock Equivalents.

 

(vii) In the event theCorporation declares any dividend or distribution payable to holders of itsCommon Stock (other than dividends payable out of the Corporation’s retainedearnings or earned surplus and dividends payable in shares of Common Stock orin securities convertible into or exchangeable for shares of Common Stock orrights or warrants to purchase Common Stock or securities convertible into orexchangeable for shares of Common Stock or any other securities issued by theCorporation), the Conversion Rate in effect immediately prior to the recorddate for such dividend or distribution shall be proportionately adjusted sothat the Holder shall be entitled to receive the number of shares of CommonStock into which such shares of Common Stock or Preferred Stock was convertibleimmediately prior to such record date multiplied by a fraction, the numeratorof which is the fair market value of a share of Common Stock on such recorddate and the denominator of which is such per share fair market value of ashare of Common Stock on such record date less the fair market value on suchrecord date of the securities or other property which are distributed as adividend or other distribution. The term “fair market value” of a share ofCommon Stock or of any other security or other type of property on any datemeans (A) in the case of Common Stock or any other security (I) ifthe principal trading market for such Common Stock or other security is anexchange or the NASDAQ national market on such date, the closing price on suchexchange or the NASDAQ national market on such date, provided, if trading ofsuch Common Stock or other security is listed on any consolidated tape, thefair market value shall be the closing price set forth on such consolidatedtape on such date, or (II) if the principal market for such Common Stockor other security is the over-the-counter market (other than the NASDAQnational market) the mean between the closing bid and asked prices on such 

 

EXHIBIT B

7

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date as set forth by NASDAQ or (B) in the caseof Common Stock or any other security for which the fair market value cannot bedetermined pursuant to clause (A) above or of any other security or typeof property, fair market value thereof on such date as determined in good faithby the Board of Directors.

 

(viii) Whenever the ConversionRate is adjusted pursuant to this paragraph 7(f), the Stipulated Price shallalso be adjusted by multiplying it by a fraction that is the reciprocal of thefraction used to adjust the Conversion Rate.

 

(ix) The Corporationwill not, by amendment of its Certificate of Formation or through anydissolution, issuance or sale of securities or any other voluntary action,avoid or seek to avoid the observance or performance of any of the terms to beobserved or performed hereunder by the Corporation, but at all times in goodfaith will assist in the carrying out of all the provisions of this paragraphand in the taking of all such action as may be necessary or appropriate inorder to protect the conversion rights of the Holder against impairment.

 

(x) No adjustment inthe Conversion Rate shall be required, unless such adjustment would require anincrease or decrease of at least one (1) share of Common Stock in theConversion Rate of one share of Series II Class B Preferred Stock,provided that all adjustments which do not meet this minimum requirement shallbe cumulated and the adjustment will be made when the cumulated total issufficient to require an adjustment. All calculations made pursuant to thissubparagraph (x) of paragraph 7(f) shall be made to the nearestone-hundredth (1/100th) of a share of Common Stock.

 

g. Fractional Shares.No fractional shares of Common Stock or scrip representing fractional shares ofCommon Stock shall be issued upon any conversion of shares of Series II Class BPreferred Stock but, in lieu thereof, there shall be paid an amount in cashequal to the same fraction of the current market price of a whole share ofCommon Stock on the day preceding the day of conversion.

 

h. Statement to TransferAgent. Whenever the Conversion Rate for shares of Series II Class BPreferred Stock shall be adjusted pursuant to the provisions of paragraph 7(f) hereof,the Corporation shall forthwith maintain at its office and, if applicable, filewith the Transfer Agent for shares of Series II Class B PreferredStock and for shares of Common Stock, a statement signed by the President or aVice President of the Corporation and by its Treasurer or an AssistantTreasurer, stating the adjusted Conversion Rate and setting forth in reasonabledetail the method of calculation and the facts requiring such adjustment, suchcalculations to be confirmed by the Corporation’s independent auditors, andstating the facts on which the calculation is based. Each adjustment shallremain in effect until a subsequent adjustment hereunder is required.

 

8. Registration Rights.

 

a. Piggyback Registration. The Corporation,for a period ending six months after the last share of Series II Class BPreferred Stock is redeemed, retired, converted or otherwise no longeroutstanding, will give written notice to the Holder not less than 20 days inadvance of the initial filing of any registration statement under theSecurities Act of 1933 (other than a registration Statement pertaining tosecurities issuable pursuant to employee stock option, stock purchase, orsimilar plans or a registration statement pertaining to securities issuable inconnection with the acquisition of a business, whether through merger,consolidation, acquisition of assets, or exchange of securities) covering any CommonStock or other securities of the Corporation, and will afford the Holder theopportunity to have included in such registration all or such part of theshares of Common Stock acquired upon conversion of Series II Class BPreferred Stock, as may be designated by written notice to the Corporation notlater than 10 days following receipt of such notice from the Corporation. TheCorporation shall be entitled to exclude the shares of Common Stock held by theHolder from any one, but not more than one, such registration if theCorporation is advised by its investment banking firm that the inclusion ofsuch shares will, in the opinion of such investment banking firm, materiallyinterfere with the orderly sale and distribution of the securities beingoffered under such registration statement by the Corporation. Notwithstandingthe foregoing, the Corporation shall not be entitled to exclude the shares ofCommon Stock held by the Holder if shares of other shareholders are beingincluded in any such registration statement and, in such circumstances, theHolder shall be entitled to include the shares of Common Stock held by them ona pro rata basis in the proportion that the number of shares of Common Stockheld by the Holder bears to the shares of Common Stock held by all othershareholders, including shares in 

 

EXHIBIT B

8

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suchregistration statement. The Holder shall not be entitled to include shares inmore than two registration statements pursuant to the provisions of thissubdivision (a) of paragraph 8, and all rights of the Holder under thissubdivision (a) of paragraph 8 shall terminate after the Holder hasincluded shares of Common Stock in two registration statements pursuant to thissubdivision (a) of paragraph 8.

 

b. Expenses. The Corporation will pay allout-of-pocket costs and expenses of any registration effected pursuant to theprovisions of subdivision (a) of this paragraph 8, including registrationfees, legal fees, accounting fees, printing expenses (including such number ofany preliminary and the final prospectus as may be reasonably requested), bluesky qualification fees and expenses, and all other expenses, except forunderwriting commissions or discounts applicable to the shares of Common Stockbeing sold by the Holder and the fees of counsel for the Holder, all of whichshall be paid by the Holder.

 

c. Notwithstanding anything to the contrarycontained herein, in the event that the Corporation files an initialregistration statement under the Securities Act of 1933, as amended (other thana registration statement pertaining to securities issuable in connection withthe acquisition of a business, whether through merger, consolidation,acquisition of assets or exchange of securities) concerning any Common Stock ofthe Corporation, it will afford the Holder the opportunity to convert hisshares into that number of fully paid and non-assessable shares of Common Stockprior to the three year holding period stated in paragraph 7 above. TheCorporation may also, at its option, accelerate its redemption rights pursuantto paragraph 4 above in the event that the Corporation files an initialregistration statement under the Securities Act of 1933, as amended.

 

9. Reports.

 

So long as any of the Series II Class BPreferred Stock shall be outstanding, the Corporation shall submit to theHolder financial reports no less frequently than annually.

 

10. Miscellaneous.

 

a. As used herein, the term “Common Stock” shallmean the Corporation’s Common Stock, no par value, or, in the case of anyreclassification or change of outstanding shares of Common Stock, the stock orsecurities issued in exchange for such Common Stock. The term “Common Stock”shall also include any capital stock of the Corporation authorized after June 15,1995 which shall not be limited to a fixed sum or sums or percentage orpercentages of par value in respect of the rights of the holders thereof toparticipate in dividends or in the distribution of assets upon the voluntary orinvoluntary liquidation, dissolution or winding up of the Corporation.

 

b. The shares of Series II Class BPreferred Stock shall be fully transferable by the Holder thereof, subject tocompliance with the applicable provisions of federal and state securities laws.

 

IN WITNESS WHEREOF, RETRACTABLE TECHNOLOGIES, INC.has caused its corporate seal to be hereunto affixed and this Certificate to besigned by its President and Secretary this 10th day of May,1997.

 
|              |   | /s/Thomas  J. Shaw |
|-------------------|--------|--------------------|
|              |   |               |
|              |   |               |
|              |   | President          |
|              |   |               |
|              |   |               |
| ATTEST:           |   |               |
|              |   |               |
| /s/Shayne  Blythe |   |               |
|              |   |               |
|              |   |               |
| Secretary         |   |               |

 

EXHIBIT B

9

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AMENDED CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS

OF THE SERIES III CLASS B CONVERTIBLE PREFERRED STOCK

OF

RETRACTABLE TECHNOLOGIES, INC.

 

Pursuantto the Texas law and its Certificate of Formation, as amended, RetractableTechnologies, Inc., a corporation organized and existing under the laws ofthe State of Texas (the Corporation),

 

DOESHEREBY CERTIFY that pursuant to the authority conferred upon the Board ofDirectors of the Corporation by the Certificate of Formation, as amended, andpursuant to Texas law, said Board of Directors, by unanimous written consentexecuted July 2, 1998, adopted a resolution providing for the creation ofa series of Preferred Stock consisting of not more than two million (2,000,000)shares of Series III Class B Convertible Preferred Stock, whichresolution is and reads as follows:

 

RESOLVEDthat, pursuant to the authority provided in the Corporation’s Certificate ofFormation and expressly granted to and vested in the Board of Directors ofRetractable Technologies, Inc. (the “Corporation”), the Board of Directorshereby creates out of the Preferred Stock, par value one ($1.00) dollar pershare, of the Corporation a series of Preferred Stock called the Series IIIClass B Preferred Stock, consisting of not more than two million(2,000,000) shares, and the Board of Directors hereby fixes the designation andthe powers, preference and rights, and the qualifications, limitations andrestrictions thereof, to the extent not otherwise provided in the Corporation’squalifications, limitations and restrictions thereof, to the extent nototherwise provided in the Corporation’s Certificate of Formation, as follows:

 

1.     Designation ofSeries. The designation of the series of Preferred Stock created by thisresolution shall be “Series III Class B Convertible Preferred Stock”(the “Series III Class B Preferred Stock”).

 

2.     Dividends on Series IIIClass B Preferred Stock.

 

a.     DividendAmount. The holders of the Series III Class B Preferred Stock shallbe entitled to receive, in any calendar year, if, when and as declared by theBoard of Directors, out of any assets at the time legally available thereforand subject to the further limitations set out herein, dividends at the perannum rate of $1.00 per share, all such dividends due quarterly in arrears asof the last day of each March, June, September and December of eachyear, the first dividend being declarable on December 31, 1998. On eachdate which a dividend may be declared is hereafter called the “Dividend Date,”and each quarterly period ending with a Dividend Date is hereinafter referredto as the “Dividend Period.” Dividends shall be payable fifteen calendar daysafter the Dividend Due Date, provided however, that if such date on which adividend is payable is a Saturday, Sunday or legal holiday, such dividend shallbe payable on the next following business day to the holders of record (whethersingular or plural, the “Holder”).

 

b.     DividendsCumulative. Dividends upon the Series III Class B Preferred Stockshall be accrued and be cumulative, whether or not in any Dividend Period orPeriods there shall be funds of the Corporation legally available for thepayment of such dividends.

 

c.     DividendAccrual. On each Dividend Due Date all dividends which shall have accrued sincethe last Dividend Due Date on each share of Series III Class BPreferred Stock outstanding on such Dividend Due Date shall accumulate and bedeemed to become “due.” Any dividend which shall not be paid on the DividendDue Date on which it shall become due shall be deemed to be “past due” untilsuch dividend shall be paid or until the share of Series III Class BPreferred Stock with respect to which such dividend became due shall no longerbe outstanding, whichever is the earlier to occur. No interest, sum of money inlieu of interest or other property or securities shall be payable in respect ofany dividend payment or payments which are past due. Dividends paid on sharesof Series III Class B Preferred Stock in an amount less than thetotal amount of such dividends at the time accumulated and payable on suchshares shall be allocated pro rata on a share-by-share basis among all suchshares at the time outstanding. Dividend payments made with respect to aDividend Due Date shall be deemed to be made in payment of the dividends whichbecame due on that Dividend Due Date.

 

EXHIBIT C

1

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d.     DividendArrearage. If a dividend upon any shares of Series III Class BPreferred Stock is in arrears, all dividends or other distributions declaredupon shares of the Series III Class B Preferred Stock (other thandividends paid in stock of the Corporation ranking junior to the Series IIIClass B Preferred Stock as to dividends and upon liquidation, dissolutionor winding up) may only be declared pro rata. Except as set forth above, if adividend upon any shares of Series III Class B Preferred Stock is inarrears: (i) no dividends (in cash, stock or other property) may be paidor declared and set aside for payment upon any stock of the Corporation rankingjunior to the Series III Class B Preferred Stock as to dividends(other than dividends of distributions in stock of the Corporation rankingjunior to the Series III Class B Preferred Stock as to dividends andupon liquidation, dissolution or winding up); and (ii) no preferred stockof the Corporation ranking junior to the Series III Class B PreferredStock as to dividends may be  redeemedpursuant to a sinking fund or otherwise, except (1) by means of redemptionpursuant to which all outstanding shares of the Series III Class BPreferred Stock are redeemed, or (2) by conversion of any such juniorstock into, or exchange of any such junior stock into, or exchange of any suchjunior stock for stock of the Corporation ranking junior to the Series IIIClass B Preferred Stock as to dividends and upon liquidation, dissolutionor winding up.  Notwithstanding anythingin this Certificate to the contrary, the Corporation shall be entitled topurchase any of its shares ranking junior to the Series III Class BPreferred Stock (including Common shares) on any terms it fixes, even where adividend upon shares of Series III Class B Preferred Stock is inarrears, so long as:  (A) the cashassets of the Corporation as of its latest reporting period equals or exceeds$40,000,000 or (B) if the cash assets of the Corporation as of its latestreporting period was less than $40,000,000, the amount of funds utilized topurchase such shares within the next quarter does not exceed 25% of the valueof the cash assets as of the previous reporting period.

 

3.     General, Class andSeries Voting Rights. Except as provided in this Section 3, or asotherwise from time to time required by law, the Series III Class BPreferred Stock shall have no voting rights.

 

So long as any shares of Series III Class BPreferred Stock remain outstanding, the consent of the holders of at leastfifty-one (51%) percent of the shares of Series III Class B PreferredStock outstanding at the time voting separately as a class, given in person orby proxy, either in writing at any special or annual meeting called for thepurpose, shall be necessary to permit, effect or validate any one or more ofthe following:

 

(i)            Theauthorization, creation or issuance, or any increase in the authorized orissued amount, of any class or series of stock (including any class or seriesof Preferred Stock) ranking equal or prior (as the terms are hereinafterdefined in this Section 3) to the Series III Class B PreferredStock; or

 

(ii)           The amendment,alteration, or repeal, whether by merger, consolidation, or otherwise, of anyof the provisions of the Certificate of Formation or of this resolution whichwould alter or change the powers, preferences or special rights of the sharesof the Series III Class B Preferred Stock so as to affect themadversely; provided, however, that any increase in the amount of authorizedPreferred Stock, or the creation and issuance of other series of Preferredstock ranking junior to the Series III Class B Preferred Stock withrespect to the payment of dividends and the distribution of assets uponliquidation, dissolution or winding up, shall not be deemed to adversely affectsuch powers, preferences or special rights.

 

The foregoing voting provisions shall not apply if,at or prior to the time when the act with respect to which such vote wouldotherwise be required shall be effected, all outstanding shares of Series IIIClass B Preferred Stock shall have been redeemed or sufficient funds shallhave been deposited in trust to effect such redemption.

 

4.     Redemption. Theoutstanding shares of Series III Class B Preferred Stock shall benonredeemable prior to the lapse of three (3) years from the date ofissuance. On and after such date, the Series III Class B PreferredStock may be redeemed at the option of the Corporation, as a whole at any timeor in part from time to time, at the Redemption Price of $15.00 per share plusall dividends (whether or not declared or due) accrued and unpaid to the dateof redemption (subject to the right of the holder of record of shares of Series IIIClass B Preferred Stock on a record date for the payment of a dividend onthe Series III Class B Preferred Stock to receive the dividend due onsuch shares of Series III Class B Preferred Stock on the correspondingDividend Due Date).

 

EXHIBIT C

2

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No sinking fund shall be established for the Series IIIClass B Preferred Stock.

 

Notice of any proposed redemption of shares of Series IIIClass B Preferred Stock shall be mailed by means of first class mail,postage paid, addressed to the holders of record of the shares of Series IIIClass B Preferred Stock to be redeemed, at their respective addresses thenappearing on the books of the Corporation, at least thirty (30) days but notmore than sixty (60) days prior to the date fixed for such redemption (hereinreferred to as the “Redemption Date”). Each such notice shall specify (i) theRedemption Date; (ii) the Redemption Price; (iii) the place forpayment and for delivering the stock certificate(s) and transferinstrument(s) in order to collect the Redemption Price; (iv) theshares of Series III Class B Preferred Stock to be redeemed; and (v) thethen effective Conversion Price (as defined below) and that the right of holdersof shares of Series III Class B Preferred Stock being redeemed toexercise their Conversion right shall terminate as to such shares at the closeof business on the fifth day before the Redemption Date, provided that nodefault by the Corporation in the payment of the applicable Redemption Price(including any accrued and unpaid dividends) shall have occurred and becontinuing. Any notice mailed in such manner shall be conclusively deemed tohave been duly given whether or not such notice is, in fact, received. If lessthan all the outstanding shares of Series III Class B Preferred Stockare to be redeemed, the Corporation will select those to be redeemed by lot orby a substantially equivalent method. In order to facilitate the redemption of Series IIIClass B Preferred Stock to be redeemed, notice of any such proposedredemption, shall not be more than sixty (60) days prior to the Redemption Datewith respect thereto.

 

The holder of any shares of Series III Class BPreferred Stock redeemed upon any exercise of the Corporation’s redemptionright shall not be entitled to receive payment of the Redemption Price for suchshares until such holder shall cause to be delivered to the place specified inthe notice given with respect to such redemption (i) the certificate(s) representingsuch shares of Series III Class B Preferred Stock; and (ii) transferinstrument(s) satisfactory to the Corporation and sufficient to transfersuch shares free of any adverse interest. No interest shall accrue on theRedemption Price of any share of Series III Class B Preferred Stockafter its Redemption Date.

 

Notwithstanding anything in this Certificate to thecontrary, the Corporation shall have the right to purchase shares of Series IIIClass B Preferred Stock from any owner of such shares on such terms as maybe agreeable to such owner. Shares of Series III Class B PreferredStock may be acquired by the Corporation from any stockholder pursuant to thisparagraph without offering any other stockholder an equal opportunity to sellhis stock to the Corporation, and no purchase by the Corporation from anystockholder pursuant to this paragraph shall be deemed to create any right onthe part of any stockholder to sell any shares of Series III Class BPreferred Stock (or any other stock) to the Corporation.

 

Notwithstanding the foregoing provisions of this Section 4,and subject to the provisions of Section 2 hereof, if a dividend upon anyshares of Series III Class B Preferred Stock is past due, (i) noshares of the Series III Class B Preferred Stock may be redeemed,except (A) by means of a redemption pursuant to which all outstandingshares of the Series III Class B Preferred Stock are simultaneouslyredeemed (or offered to be so redeemed) or pursuant to which the outstandingshares of the Series III Class B Preferred Stock are redeemed on apro rata basis (or offered to be so redeemed), or (B) by conversion ofshares of Series III Class B Preferred Stock into, or exchange ofsuch shares for, Common Stock or any other stock of the Corporation rankingjunior to the Series III Class B Preferred Stock as to dividends andupon liquidation, dissolution or winding up.

 

5.     Liquidation. Inthe event of any voluntary or involuntary dissolution, liquidation or windingup of the Corporation (for the purposes of this Section 5, a “Liquidation”),before any distribution of assets shall be made to the holders of the CommonStock or the holders of any other stock that ranks junior to the Series IIIClass B Preferred Stock in respect of distributions upon the Liquidationof the Corporation, the holder of each share of Series III Class BPreferred Stock then outstanding shall be entitled to $12.50 per share plus alldividends (whether or not declared or due) accrued and unpaid on such share onthe date fixed for the distribution of assets of the Corporation to the holdersof Series III Class B Preferred Stock.

 

If upon any Liquidation of the Corporation, theassets available for distribution to the holder of Series III Class BPreferred Stock which shall then be outstanding (hereinafter in this paragraphcalled the “Total Amount Available”) shall be insufficient to pay the holdersof all outstanding shares of Series III Class B Preferred 

 

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Stock the full amounts (including all dividendsaccrued and unpaid) to which they shall be entitled by reason of suchLiquidation of the Corporation, then there shall be paid ratably to the holdersof the Series III Class B Preferred Stock in connection with suchLiquidation of the Corporation, an amount equal to each holder’s pro rata shareof the Total Amount Available.

 

The voluntary sale, conveyance, lease, exchange ortransfer of all or substantially all the property or assets of the Corporation,or the merger or consolidation of the Corporation into another corporation, orany purchase or redemption of some or all of the shares of any class or seriesof stock of the Corporation, shall not be deemed to be a Liquidation of theCorporation for the purposes of this Section 5 (unless in connectiontherewith the Liquidation of the Corporation is specifically approved).

 

6.     ConversionPrivilege. At any time subsequent to three years after issuance of any share ofSeries III Class B Preferred Stock, the holder of any share of Series IIIClass B Preferred Stock (“Holder”) shall have the right, at such Holder’soption (but if such share is called for redemption or exchange at the electionof the Corporation, then in respect of such share only to and including but notafter the close of business on (i) the fifth calendar day before the datefixed for such redemption; or (ii) the date fixed for such exchange,provided that the Corporation has set aside funds sufficient to effect suchredemption) to convert such share into that number of fully paid andnon-assessable shares of Common Stock (calculated as to each conversion to thenearest 1/100th of a share) obtained by dividing $10.00 by the Conversion Ratethen in effect.

 

a.     ConversionRate. Each share of Series III Class B Preferred Stock may beconverted, subject to the terms and provisions of this paragraph 6 into one (1) shareof the Corporation’s Common Stock, which is a price equal to one share ofCommon Stock for each $10.00 of Series III Class B Preferred Stockor, in case an adjustment of such rate has taken place pursuant to theprovisions of subdivision (f) of this paragraph 6, then at the ConversionRate as last adjusted (such rate or adjusted rate, shall be expressed as thenumber of shares of Common Stock to be acquired upon conversion of one share ofSeries III Class B Preferred Stock, and shall be referred to hereinas the “Conversion Rate”). Each share of Series III Class B PreferredStock shall be Convertible into Common Stock by surrender to the Corporation ofthe certificate representing such shares of Series III Class BPreferred Stock to be converted by the Holder and by giving written notice tothe Corporation of the Holder’s election to convert.

 

The Corporation shall, as soon as practicable afterreceipt of such written notice and the proper surrender to the Corporation ofthe certificate or certificates representing shares of Series III Class BPreferred Stock to be converted in accordance with the above provisions, issueand deliver for the benefit of the Holder at the office of the Corporation’sduly appointed transfer agent (the “Transfer Agent”) to the Holder for whoseaccount such shares of Series III Class B Preferred Stock were sosurrendered or to such Holder’s nominee or nominees, certificates for thenumber of shares of Common Stock to which the Holder shall be entitled. Thecertificates of Common Stock of the Corporation issued upon conversion shallbear such legends as may be required by state or federal laws. Such conversionshall be deemed to have been effective immediately prior to the close ofbusiness on the date on which the Corporation shall have received both suchwritten notice and the properly surrendered certificates for shares of Series IIIClass B Preferred Stock to be converted (the “Conversion Date”), and atsuch time the rights of the Holder shall cease and the person or personsentitled to receive the shares of Common Stock issuable upon the conversion ofsuch shares of Series III Class B Preferred Stock shall be deemed tobe, and shall be treated for all purposes as, the record Holder or Holders ofsuch Common Stock on the Conversion Date. The Corporation shall not be requiredto convert, and no surrender of shares of Series III Class BPreferred Stock or written notice of conversion with respect thereto shall beeffected for that purpose, while the stock transfer books of the Corporationare closed for any reasonable business purpose for any reasonable period oftime, but shall be required to convert upon the proper surrender of shares of Series IIIClass B Preferred Stock for conversion immediately upon the reopening ofsuch books. During the period in which the stock transfer books of theCorporation are closed, the Corporation may neither declare a dividend, declarea record date for payment of dividends nor make any payment of dividends.

 

b.     Dividends. Ifany shares of Series III Class B Preferred Stock shall be convertedduring any dividend payment period, the Holder shall be entitled to alldividends accrued up to and through such Conversion 

 

EXHIBIT C

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Date, at the rate set forth herein, whether or notthere has been a Dividend Date, as set forth in paragraph 2 hereof.

 

c.     Cancellation. Series IIIClass B Preferred Stock converted into Common stock pursuant to theprovisions of this paragraph 6 shall be retired and cancelled by theCorporation and given the status of authorized and unissued preferred stock.

 

d.     Reissuance ifConversion is Partial. In the case of any certificate representing shares of Series IIIClass B Preferred Stock which is surrendered for conversion only in part,the Corporation shall issue and deliver to the Holder a new certificate orcertificates for Series III Class B Preferred Stock of suchdenominations as requested by the Holder in the amount of Series III Class BPreferred Stock equal to the unconverted shares of the Series III Class BPreferred Stock represented by the certificate so surrendered.

 

e.     Reservations ofShares. The Corporation shall at all times during which shares of Series IIIClass B Preferred Stock may be converted into Common Stock as provided inthis paragraph (e), reserve and keep available, out of any Common Stock held astreasury stock or out of its authorized and unissued Common Stock, or both,solely for the purpose of delivery upon conversion of the shares of Series IIIClass B Preferred Stock as herein provided, such number of shares ofCommon Stock as shall then be sufficient to effect the conversion of all sharesof Series III Class B Preferred Stock from time to time outstanding,and shall take such action as may from time to time be necessary to ensure thatsuch shares of Common Stock will, when issued upon conversion of Series IIIClass B Preferred Stock, be fully paid and nonassessable.

 

f.      Adjustment ofConversion Rate. The Conversion Rate provided in subdivision (a) of thisparagraph 6, in respect of Series III Class B Preferred Stock, shallbe subject to adjustments from time to time as follows:

 

(i)            While anyshares of Series III Class B Preferred Stock shall be outstanding, incase the Corporation shall subdivide the outstanding shares of Common Stockinto a greater number of shares of Common Stock or combine the outstandingshares of Common Stock into a smaller number of shares of Common Stock, orissue, by reclassification of its shares of Common Stock, any shares of theCorporation, the Conversion Rate in effect immediately prior thereto shall beadjusted so that the Holder shall be entitled to receive the number of shareswhich it would have owned or been entitled to receive after the happening ofany of the events described above, had such shares of Series III Class BPreferred Stock been converted immediately prior to the happening of suchevent, such adjustment to become effective immediately after the opening ofbusiness on the day following the day upon which such subdivision orcombination or reclassification, as the case may be, becomes effective.

 

(ii)           In case theCorporation shall be consolidated with, or merge into, any other corporation,and the Corporation does not survive, proper provisions shall be made as a partof the terms of such consolidation or merger, whereby the Holder shallthereafter be entitled, upon exercise of such Holder’s conversion rights, toreceive the kind and amount of shares of stock or other securities of theCorporation resulting from such consolidation or merger, or such otherproperty, as the Holder would have received if such conversion rights wereexercised immediately prior to the effectiveness of such merger orconsolidation.

 

(iii)          In the eventthe Corporation at any time, or from time to time after August 1, 1998makes or issues, or fixes a record date for the determination of holders ofCommon Stock entitled to receive, a dividend or other distribution payable inadditional shares of Common Stock or Common Stock Equivalents (as definedherein) which does not provide for the payment of any consideration upon theissuance, conversion or exercise thereof, without a corresponding dividend orother distribution to the Holder, based upon the number of shares of CommonStock into which the Series III Class B Preferred Stock isconvertible, then and in each such event the Conversion Rate then in effectwill be increased as of the time of such issuance or, in the event such arecord date shall have been fixed, as of the close of business on such recorddate, by multiplying such Conversion rate by a fraction:

 

EXHIBIT C

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(A) The numerator ofwhich will be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date plus the number of shares of Common Stock issuable in payment ofsuch dividend or distribution (which, in the case of Common Stock Equivalents,shall mean the maximum number of shares of Common Stock issuable with respectthereto, as set forth in the instrument relative thereto without regard to anyprovision for subsequent adjustment); and

 

(B) The denominator ofwhich will be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date; provided, however, that if such record date is fixed and suchdividend is not fully paid or if such distribution is not fully made on thedate fixed therefor, the Conversion Rate will be recomputed accordingly as ofthe close of business on such record date, and thereafter such Conversion Ratewill be adjusted pursuant to this subparagraph (iii) as of the time ofactual payment of such dividends or distributions.

 

(iv)          In the eventthe Corporation at any time or from time to time after August 1, 1998makes or issues, or fixes a record date for the determination of holders ofCommon Stock entitled to receive a dividend or other distribution payable toall holders of Common Stock in securities of the Corporation or Common StockEquivalents, then, upon making such dividend or distribution provisions will bemade so that the Holder will receive the amount of securities of theCorporation which it would have received had its Series III Class BPreferred Stock been converted into Common Stock on the date of such event.

 

(v)           In the eventthe Corporation sells or issues any Common Stock, or sells or issues CommonStock Equivalents which can be converted into Common Stock at a per shareconsideration (as defined below in this subparagraph (v)) less than theStipulated Price then in effect, then the Holder shall be entitled to purchasefrom the Corporation in cash (for the same per share consideration at whichsuch Common Stock was issued or the per share price at which a share of CommonStock is acquirable upon exercise or conversion of Common Stock Equivalents)that additional number of shares of Common Stock which, when added to thenumber of shares of Common Stock acquirable by the Holder upon conversion ofany shares of Series III Class B Preferred Stock outstanding and heldby such Holder immediately before such issue or sale (the “Acquirable Shares”),will equal a percentage of the number of shares of Common Stock DeemedOutstanding (as defined herein) immediately after such sale or issuance that isthe same as the percentage of the number of shares of Common Stock DeemedOutstanding immediately before such issuance or sale represented by theAcquirable Shares. This right shall exist for a forty-five-day period followingthe sale or issuance of shares of Common Stock or Common Stock Equivalents, andthereafter shall cease to exist.

 

For the above purposes, the per share considerationwith respect to the sale or issuance of Common Stock will be the price pershare received by the Corporation, prior to the payment of any expenses,commissions, discounts and other applicable costs. With respect to the sale orissuance of Common Stock Equivalents which are convertible into or exchangeablefor Common Stock without further consideration, the per share considerationwill be determined by dividing the maximum number of shares of Common Stockissuable with respect to such Common Stock Equivalents (as set forth in theinstrument relating thereto without regarding to any provisions containedtherein for subsequent adjustment of such number) into the aggregateconsideration receivable by the Corporation upon the sale or issuance of suchCommon Stock Equivalents. With respect to the issuance of other Common StockEquivalents, the per share consideration will be determined by dividing themaximum number of shares of Common Stock issuable with respect to such CommonStock Equivalents into the total aggregate consideration received by theCorporation upon the sale or issuance of such Common Stock Equivalents plus theminimum aggregate amount of additional consideration received by the Corporationupon the conversion or exercise of such Common Stock Equivalents. In connectionwith the sale or issuance of Common Stock and/or Common Stock Equivalents fornon-cash consideration, the amount of consideration 

 

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will be the fair market value of such considerationas determined in good faith by the Board of Directors of the Corporation.

 

(vi)          As used herein,the term “Stipulated Price” means initial price of $10.00 per share of CommonStock, as adjusted from time to time pursuant to subparagraph (viii) ofthis paragraph 6(f); and the term “Common Stock Equivalent” means anysecurities (whether debt or equity securities) or rights issued by theCorporation convertible into or entitling the holder thereof to receive sharesof, or securities convertible into, Common Stock. The number of shares of “CommonStock Deemed Outstanding” at any date shall equal the sum of the number ofshares of Common Stock then outstanding plus the number of shares of CommonStock then obtainable pursuant to Common Stock Equivalents.

 

(vii)         In the eventthe Corporation declares any dividend or distribution payable to holders of itsCommon Stock (other than dividends payable out of the Corporation’s retainedearnings or earned surplus and dividends payable in shares of Common Stock orin securities convertible into or exchangeable for shares of Common Stock orrights or warrants to purchase Common Stock or securities convertible into orexchangeable for shares of Common Stock or securities convertible into orexchangeable for shares of Common Stock or any other securities issued by theCorporation), the Conversion Rate in effect immediately prior to the recorddate for such dividend or distribution shall be proportionately adjusted sothat the Holder shall be entitled to receive the number of shares of CommonStock into which such shares of Common Stock or Preferred Stock was convertibleimmediately prior to such record date multiplied by a fraction, the numeratorof which is the fair market value of a share of Common Stock on such recorddate and the denominator of which is such per share fair market value of ashare of Common Stock on such record date less the fair market value on suchrecord date of the securities or other property which are distributed as adividend or other distribution. The term “fair market value” of a share ofCommon Stock or of any other security or other type of property on any datemeans (A) in the case of Common Stock or any other security (I) ifthe principal trading market for such Common Stock or other security is anexchange or the NASDAQ national market on such date, the closing price on suchexchange or the NASDAQ national market on such date, provided, if trading ofsuch Common Stock or other security is listed on any consolidated tape, thefair market value shall be the closing price set forth on such consolidatedtape on such date, or (II) if the principal market for such Common Stockor other security is the over-the-counter market (other than the NASDAQnational market) the mean between the closing bid and asked prices on such dateas set forth by NASDAQ or (B) in the case of Common Stock or any othersecurity for which the fair market value cannot be determined pursuant toclause (A) above or of any other security or type of property, fair marketvalue thereof on such date as determined in good faith by the Board ofDirectors.

 

(viii)        Whenever theConversion Rate is adjusted pursuant to this paragraph 6(f), the StipulatedPrice shall also be adjusted by multiplying it by a fraction that is thereciprocal of the fraction used to adjust the Conversion Rate.

 

(ix)           The Corporationwill not, by amendment of its Certificate of Formation or through anydissolution, issuance or sale of securities or any other voluntary action,avoid or seek to avoid the observance or performance of any of the terms to beobserved or performed hereunder by the Corporation, but at all times in goodfaith will assist in the carrying out of all the provisions of this paragraphand in the taking of all such action as may be necessary or appropriate inorder to protect the conversion rights of the Holder against impairment.

 

(x)            No adjustmentin the Conversion Rate shall be required, unless such adjustment would requirean increase or decrease of at least one (1) share of Common Stock in theConversion Rate of one share of Series III Class B Preferred Stock,provided that all adjustments which do not meet this minimum requirement shallbe cumulated and the adjustment will be made when the cumulated total issufficient to require an adjustment.

 

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All calculations made pursuant to this subparagraph (x) ofparagraph 6(f) shall be made to the nearest one-hundredth (1/100th) of ashare of Common Stock.

 

g.     FractionalShares. No fractional shares of Common Stock or scrip representing fractionalshares of Common Stock shall be issued upon any conversion of shares of Series IIIClass B Preferred Stock but, in lieu thereof, there shall be paid anamount in cash equal to the same fraction of the current market price of awhole share of Common Stock on the day preceding the day of conversion.

 

h.     Statement toTransfer Agent. Whenever the Conversion Rate for shares of Series III Class BPreferred Stock shall be adjusted pursuant to the provisions of paragraph 6(f) hereof,the Corporation shall forthwith maintain at its office and, if applicable, filewith the Transfer Agent for shares of Series III Class B PreferredStock and for shares of Common Stock, a statement signed by the President or aVice President of the Corporation and by its Treasurer or an AssistantTreasurer, stating the adjusted Conversion Rate and setting forth in reasonabledetail the method of calculation and the facts requiring such adjustment, suchcalculations to be confirmed by the Corporation’s independent auditors, andstating the facts on which the calculation is based. Each adjustment shallremain in effect until a subsequent adjustment hereunder is required.

 

7.     RegistrationRights.

 

a.     PiggybackRegistration. The Corporation, for a period ending six months after the lastshare of Series III Class B Preferred Stock is redeemed, retired,converted or otherwise no longer outstanding, will give written notice to theHolder not less than 20 days in advance of the initial filing of anyregistration statement under the Securities Act of 1933 (other than aregistration Statement pertaining to securities issuable pursuant to employeestock option, stock purchase, or similar plans or a registration statementpertaining to securities issuable in connection with the acquisition of abusiness, whether through merger, consolidation, acquisition of assets, orexchange of securities) covering any Common Stock or other securities of theCorporation, and will afford the Holder the opportunity to have included insuch registration all or such part of the shares of Common Stock acquired uponconversion of Series III Class B Preferred Stock, as may bedesignated by written notice to the Corporation not later than 10 daysfollowing receipt of such notice from the Corporation. The Corporation shall beentitled to exclude the shares of Common Stock held by the Holder from any one,but not more than one, such registration if the Corporation in its solediscretion decides that the inclusion of such shares will materially interferewith the orderly sale and distribution of the securities being offered undersuch registration statement by the Corporation. Notwithstanding the foregoing,the Corporation shall not be entitled to exclude the shares of Common Stockheld by the Holder if shares of other shareholders are being included in anysuch registration statement and, in such circumstances, the Holder shall beentitled to include the shares of Common Stock held by them on a pro rata basisin the proportion that the number of shares of Common Stock held by the Holderbears to the shares of Common Stock held by all other shareholders, includingshares in such registration statement. The Holder shall not be entitled toinclude shares in more than two registration statements pursuant to theprovisions of this subdivision (a) of paragraph 7, and all rights of theHolder under this subdivision (a) of paragraph 7 shall terminate after theHolder has included shares of Common Stock in two registration statementspursuant to this subdivision (a) of paragraph 7.

 

b.     Expenses. TheCorporation will pay all out-of-pocket costs and expenses of any registrationeffected pursuant to the provisions of subdivision (a) of this paragraph7, including registration fees, legal fees, accounting fees, printing expenses(including such number of any preliminary and the final prospectus as may bereasonably requested), blue sky qualification fees and expenses, and all otherexpenses, except for underwriting commissions or discounts applicable to theshares of Common Stock being sold by the Holder and the fees of counsel for theHolder, all of which shall be paid by the Holder.

 

c.     Notwithstandinganything to the contrary contained herein, in the event that the Corporationfiles an initial registration statement under the Securities Act of 1933, asamended (other than a registration statement pertaining to securities issuablein connection with the acquisition of a business, whether through merger,consolidation, acquisition of assets or exchange of securities) concerning anyCommon Stock of the Corporation, it will afford the Holder the opportunity toconvert his shares into that number of fully paid 

 

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and non-assessable shares of Common Stock prior tothe three year holding period stated in paragraph 6 above. The Corporation mayalso, at its option at any time within one-hundred and eighty (180) days afteran initial registration statement is deemed effective, demand the conversion ofthe Series III Class B Preferred Stock into that number of fully paidand non-assessable shares of Common Stock as provided herein.

 

8.             Reports.

 

So long as any of the Series III Class BPreferred Stock shall be outstanding, the Corporation shall submit to theHolder financial reports no less frequently than annually.

 

9.             Miscellaneous.

 

a.     As used herein,the term “Common Stock” shall mean the Corporation’s Common Stock, no par value,or, in the case of any reclassification or change of outstanding shares ofCommon Stock, the stock or securities issued in exchange for such Common Stock.The term “Common Stock” shall also include any capital stock of the Corporationauthorized after March 31, 1998 which shall not be limited to a fixed sumor sums or percentage or percentages of par value in respect of the rights ofthe holders thereof to participate in dividends or in the distribution ofassets upon the voluntary or involuntary liquidation, dissolution or winding upof the Corporation.

 

b.     The shares of Series IIIClass B Preferred Stock shall be fully transferable by the Holder thereof,subject to compliance with the applicable provisions of federal and statesecurities laws.

 

INWITNESS WHEREOF, RETRACTABLE TECHNOLOGIES, INC. has caused its corporateseal to be hereunto affixed and this Amended Certificate to be signed by itsPresident and Secretary as of this 22nd day of January, 2010.

 
|                |   | /s/  Thomas J. Shaw |
|---------------------|--------|---------------------|
|                |   |                |
|                |   |                |
|                |   | Thomas  J. Shaw     |
|                |   | President           |
|                |   |                |
| ATTEST:             |   |                |
| /s/  Michele Larios |   |                |
|                |   |                |
|                |   |                |
| Michele  M. Larios  |   |                |
| Secretary           |   |                |

 

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AMENDED CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS

OF THE SERIES IV CLASS B CONVERTIBLE PREFERRED STOCK

OF

RETRACTABLE TECHNOLOGIES, INC.

 

Pursuantto Texas law and its Certificate of Formation, as amended, RetractableTechnologies, Inc., a corporation organized and existing under the laws ofthe State of Texas (the “Corporation”),

 

DOESHEREBY CERTIFY that, pursuant to the authority conferred upon the Board ofDirectors of the Corporation by the Certificate of Formation, as amended, andpursuant to Texas law, said Board of Directors, by unanimous written consent,executed December 20, 1999, adopted a resolution providing for thecreation of a series of Preferred Stock consisting of not more than one millionthree hundred thousand (1,300,000) shares of Series IV Class BConvertible Preferred Stock, which resolution is and reads as follows:

 

RESOLVEDthat pursuant to the authority provided in the Corporation’s Certificate ofFormation and expressly granted to and vested in the Board of Directors of theCorporation, the Board of Directors hereby creates out of the Preferred Stock,par value One Dollar ($1.00) per share, of the Corporation a series ofPreferred Stock called the Series IV Class B Preferred Stock,consisting of not more than one million three hundred thousand (1,300,000)shares, and the Board of Directors hereby fixes the designation and the powers,preference and rights, and the qualifications, limitations and restrictionsthereof, to the extent not otherwise provided in the Corporation’squalifications, limitations and restrictions thereof, to the extent nototherwise provided in the Corporation’s Certificate of Formation, as follows:

 

1.               Designation of Series. Thedesignation of the series of Preferred Stock created by this resolution shallbe “Series IV Class B Convertible Preferred Stock” (the “Series IVClass B Preferred Stock”).

 

2.               Dividends on Series IV Class BPreferred Stock.

 

a.               Dividend Amount. The holdersof the Series IV Class B Preferred Stock shall be entitled toreceive, in any calendar year, if, when and as declared by the Board ofDirectors, out of any assets at the time legally available therefor and subjectto the further limitations set out herein, dividends at the per annum rate of$1.00 per share, all such dividends due quarterly in arrears as of the last dayof each March, June, September and December of each year, the firstdividend being declarable on December 31, 2000. On each date which adividend may be declared is hereafter called the “Dividend Date,” and eachquarterly period ending with a Dividend Date is hereinafter referred to as the “DividendPeriod.” Dividends shall be payable fifteen calendar days after the DividendDue Date, provided however, that if such date on which a dividend is payable isa Saturday, Sunday or legal holiday, such dividend shall be payable on the nextfollowing business day to the holders of record (whether singular or plural,the “Holder”).

 

b.              Dividends Cumulative.Dividends upon the Series IV Class B Preferred Stock shall be accruedand be cumulative, whether or not in any Dividend Period or Periods there shallbe funds of the Corporation legally available for the payment of suchdividends.

 

c.               Dividend Accrual. On eachDividend Due Date all dividends which shall have accrued since the lastDividend Due Date on each share of Series IV Class B Preferred Stockoutstanding on such Dividend Due Date shall accumulate and be deemed to become “due.”Any dividend which shall not be paid on the Dividend Due Date on which it shallbecome due shall be deemed to be “past due” until such dividend shall be paidor until the share of Series IV Class B Preferred Stock with respectto which such dividend became due shall no longer be outstanding, whichever isthe earlier to occur. No interest, sum of money in lieu of interest or otherproperty or securities shall be payable in respect of any dividend payment orpayments which are past due. Dividends paid on shares of Series IV Class BPreferred Stock in an amount less than the total amount of such dividends atthe time accumulated and payable on such shares shall be allocated pro rata ona share-by-share basis among all such shares at the time outstanding. Dividendpayments made with respect to a Dividend Due Date shall be deemed to be made inpayment of the dividends which became due on that Dividend Due Date.

 

EXHIBIT D

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d.              Dividend Arrearage. If adividend upon any shares of Series IV Class B Preferred Stock is inarrears, all dividends or other distributions declared upon shares of the Series IVClass B Preferred Stock (other than dividends paid in stock of theCorporation ranking junior to the Series IV Class B Preferred Stockas to dividends and upon liquidation, dissolution or winding up) may only bedeclared pro rata. Except as set forth above, if a dividend upon any shares of Series IVClass B Preferred Stock is in arrears: (i) no dividends (in cash,stock or other property) may be paid or declared and set aside for payment uponany stock of the Corporation ranking junior to the Series IV Class BPreferred Stock as to dividends (other than dividends of distributions in stockof the Corporation ranking junior to the Series IV Class B PreferredStock as to dividends and upon liquidation, dissolution or winding up); and (ii) nopreferred stock of the Corporation ranking junior to the Series IV Class BPreferred Stock as to dividends may be redeemed pursuant to a sinking fund orotherwise, except (1) by means of redemption pursuant to which alloutstanding shares of the Series IV Class B Preferred Stock areredeemed, or (2) by conversion of any such junior stock into, or exchangeof any such junior stock into, or exchange of any such junior stock for stockof the Corporation ranking junior to the Series IV Class B PreferredStock as to dividends and upon liquidation, dissolution or winding up.  Notwithstanding anything in this Certificateto the contrary, the Corporation shall be entitled to purchase any of itsshares ranking junior to the Series IV Class B Preferred Stock(including Common shares) on any terms it fixes, even where a dividend uponshares of Series IV Class B Preferred Stock is in arrears, so longas:  (A) the cash assets of theCorporation as of its latest reporting period equals or exceeds $40,000,000 or (B) ifthe cash assets of the Corporation as of its latest reporting period was lessthan $40,000,000, the amount of funds utilized to purchase such shares withinthe next quarter does not exceed 25% of the value of the cash assets as of theprevious reporting period.

 

3.               General, Class and Series VotingRights. Except as provided in this Section 3, or as otherwise from time totime required by law, the Series IV Class B Preferred Stock shallhave no voting rights.

 

So long as any shares of Series IV Class BPreferred Stock remain outstanding, the consent of the holders of at leastfifty-one percent (51%) of the shares of Series IV Class B PreferredStock outstanding at the time voting separately as a class, given in person orby proxy, either in writing at any special or annual meeting called for thepurpose, shall be necessary to permit, effect or validate any one or more ofthe following:

 

(i)             The authorization, creationor issuance, or any increase in the authorized or issued amount, of any classor series of stock (including any class or series of Preferred Stock) rankingequal or prior to the Series IV Class B Preferred Stock; or

 

(ii)          The amendment, alteration,or repeal, whether by merger, consolidation or otherwise, of any of theprovisions of the Certificate of Formation or of this resolution which wouldalter or change the powers, preferences or special rights of the shares of the Series IVClass B Preferred Stock so as to affect them adversely; provided, however,that any increase in the amount of authorized Preferred Stock, or the creationand issuance of other series of Preferred stock ranking junior to the Series IVClass B Preferred Stock with respect to the payment of dividends and thedistribution of assets upon liquidation, dissolution or winding up, shall notbe deemed to adversely affect such powers, preferences or special rights.

 

The foregoing voting provisions shall not apply if,at or prior to the time when the act with respect to which such vote wouldotherwise be required shall be effected, all outstanding shares of Series IVClass B Preferred Stock shall have been redeemed or sufficient funds shallhave been deposited in trust to effect such redemption.

 

4.               Redemption. The outstandingshares of Series IV Class B Preferred Stock shall be nonredeemableprior to the lapse of three (3) years from the date of issuance. On andafter such date, the Series IV Class B Preferred Stock may beredeemed at the option of the Corporation, as a whole at any time or in part fromtime to time, at the Redemption Price of $11.00 per share plus all dividends(whether or not declared or due) accrued and unpaid to the date of redemption(subject to the right of the holder of record of shares of Series IV Class BPreferred Stock on a record date for the payment of a dividend on the Series IVClass B Preferred Stock to receive the dividend due on such shares of Series IVClass B Preferred Stock on the corresponding Dividend Due Date).

 

EXHIBIT D

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No sinking fund shall be established for the Series IVClass B Preferred Stock.

 

Notice of any proposed redemption of shares of Series IVClass B Preferred Stock shall be mailed by means of first class mail,postage paid, addressed to the holders of record of the shares of Series IVClass B Preferred Stock to be redeemed, at their respective addresses thenappearing on the books of the Corporation, at least thirty (30) days but notmore than sixty (60) days prior to the date fixed for such redemption (hereinreferred to as the “Redemption Date”). Each such notice shall specify (i) theRedemption Date; (ii) the Redemption Price; (iii) the place forpayment and for delivering the stock certificate(s) and transferinstrument(s) in order to collect the Redemption Price; (iv) theshares of Series IV Class B Preferred Stock to be redeemed; and (v) thethen effective Conversion Price (as defined below) and that the right ofholders of shares of Series IV Class B Preferred Stock being redeemedto exercise their conversion right shall terminate as to such shares at theclose of business on the fifth day before the Redemption Date, provided that nodefault by the Corporation in the payment of the applicable Redemption Price(including any accrued and unpaid dividends) shall have occurred and becontinuing. Any notice mailed in such manner shall be conclusively deemed tohave been duly given whether or not such notice is, in fact, received. If lessthan all the outstanding shares of Series IV Class B Preferred Stockare to be redeemed, the Corporation will select those to be redeemed by lot orby a substantially equivalent method. In order to facilitate the redemption of Series IVClass B Preferred Stock to be redeemed, notice of any such proposedredemption shall not be more than sixty (60) days prior to the Redemption Datewith respect thereto.

 

The holder of any shares of Series IV Class BPreferred Stock redeemed upon any exercise of the Corporation’s redemptionright shall not be entitled to receive payment of the Redemption Price for suchshares until such holder shall cause to be delivered to the place specified inthe notice given with respect to, such redemption (i) the certificate(s) representingsuch shares of Series IV Class B Preferred Stock; and (ii) transferinstrument(s) satisfactory to the Corporation and sufficient to transfersuch shares free of any adverse interest. No interest shall accrue on theRedemption Price of any share of Series IV Class B Preferred Stockafter its Redemption Date.

 

Notwithstanding anything in this Certificate to thecontrary, the Corporation shall have the right to purchase shares of Series IVClass B Preferred Stock from any owner of such shares on such term as maybe agreeable to such owner. Shares of Series IV Class B PreferredStock may be acquired by the Corporation from any stockholder pursuant to thisparagraph without offering any other stockholder an equal opportunity to sellhis stock to the Corporation, and no purchase by the Corporation from anystockholder pursuant to this paragraph shall be deemed to create any right onthe part of any stockholder to sell any shares of Series IV Class BPreferred Stock (or any other stock) to the Corporation.

 

Notwithstanding the foregoing provisions of this Section 4,and subject to the provisions of Section 2 hereof, if a dividend upon anyshares of Series IV Class B Preferred Stock is past due, no shares ofthe Series IV Class B Preferred Stock may be redeemed, except (i) bymeans of a redemption pursuant to which all outstanding shares of the Series IVClass B Preferred Stock are simultaneously redeemed (or offered to be soredeemed) or pursuant to which the outstanding shares of the Series IV Class BPreferred Stock are redeemed on a pro rata basis (or offered to be so redeemed),or (ii) by conversion of shares of Series IV Class B PreferredStock into, or exchange of such shares for, Common Stock or any other stock ofthe Corporation ranking junior to the Series IV Class B PreferredStock as to dividends and upon liquidation, dissolution or winding up.

 

5.               Liquidation. In the event ofany voluntary or involuntary dissolution, liquidation or winding up of theCorporation (for the purposes of this Section 5, a “Liquidation”), beforeany distribution of assets shall be made to the holders of the Common Stock orthe holders of any other stock that ranks junior to the Series IV Class BPreferred Stock in respect of distributions upon the Liquidation of theCorporation, the holder of each share of Series IV Class B PreferredStock then outstanding shall be entitled to $11.00 per share plus all dividends(whether or not declared or due) accrued and unpaid on such share on the datefixed for the distribution of assets of the Corporation to the holders of Series IVClass B Preferred Stock.

 

If upon any Liquidation of the Corporation, theassets available for distribution to the holder of Series IV Class BPreferred Stock which shall then be outstanding (hereinafter in this paragraphcalled the “Total 

 

EXHIBIT D

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Amount Available”) shall be insufficient to pay theholders of all outstanding shares of Series IV Class B PreferredStock the full amounts (including all dividends accrued and unpaid) to whichthey shall be entitled by reason of such Liquidation of the Corporation, thenthere shall be paid ratably to the holders of the Series IV Class BPreferred Stock in connection with such Liquidation of the Corporation, anamount equal to each holder’s pro rata share of the Total Amount Available.

 

The voluntary sale, conveyance, lease, exchange ortransfer of all or substantially all the property or assets of the Corporation,or the merger or consolidation of the Corporation into another corporation, orany purchase or redemption of some or all of the shares of any class or seriesof stock of the Corporation, shall not be deemed to be a Liquidation of theCorporation for the purposes of this Section 5 (unless in connectiontherewith the Liquidation of the Corporation is specifically approved).

 

6.               Conversion Privilege. At anytime subsequent to three years after issuance of any share of Series IV Class BPreferred Stock, the holder of any share of Series IV Class BPreferred Stock (“Holder”) shall have the right, at such Holder’s option (but ifsuch share is called for redemption or exchange at the election of theCorporation, then in respect of such share only to and including but not afterthe close of business on (i) the fifth calendar day before the date fixedfor such redemption; or (ii) the date fixed for such exchange, providedthat the Corporation has set aside funds sufficient to effect such redemption)to convert such share into that number of fully paid and non-assessable sharesof Common Stock (calculated as to each conversion to the nearest 1/100th of ashare) obtained by dividing $10.00 by the Conversion Rate then in effect.

 

a.               Conversion Rate. Each shareof Series IV Class B Preferred Stock may be converted, subject to theterms and provisions of this paragraph 6 into one (1) share of theCorporation’s Common Stock, which is a price equal to one share of Common Stockfor each $10.00 of Series IV Class B Preferred Stock or, in case anadjustment of such rate has taken place pursuant to the provisions ofsubdivision (f) of this paragraph 6, then at the Conversion Rate as lastadjusted (such rate or adjusted rate, shall be expressed as the number ofshares of Common Stock to be acquired upon conversion of one share of Series IVClass B Preferred Stock, and shall be referred to herein as the “ConversionRate”) (“Conversion Price”). Each share of Series IV Class BPreferred Stock shall be Convertible into Common Stock by surrender to theCorporation of the certificate representing such shares of Series IV Class BPreferred Stock to be converted by the Holder and by giving written notice tothe Corporation of the Holder’s election to convert.

 

The Corporation shall, as soon as practicable afterreceipt of such written notice and the proper surrender to the Corporation ofthe certificate or certificates representing shares of Series IV Class BPreferred Stock to be converted in accordance with the above provisions, issueand deliver for the benefit of the Holder at the office of the Corporation’sduly appointed transfer agent (the “Transfer Agent”) to the Holder for whoseaccount such shares of Series IV Class B Preferred Stock were sosurrendered or to such Holder’s nominee or nominees, certificates for thenumber of shares of Common Stock to which the Holder shall be entitled. Thecertificates of Common Stock of the Corporation issued upon conversion shallbear such legends as may be required by state or federal laws.

 

Such conversion shall be deemed to have beeneffective immediately prior to the close of business on the date on which the Corporationshall have received both such written notice and the properly surrenderedcertificates for shares of Series IV Class B Preferred Stock to beconverted (the “Conversion Date”), and at such time the rights of the Holdershall cease and the person or persons entitled to receive the shares of CommonStock issuable upon the conversion of such shares of Series IV Class BPreferred Stock shall be deemed to be, and shall be treated for all purposesas, the record Holder or Holders of such Common Stock on the Conversion Date.The Corporation shall not be required to convert, and no surrender of shares ofSeries IV Class B Preferred Stock or written notice of conversionwith respect thereto shall be effected for that purpose, while the stocktransfer books of the Corporation are closed for any reasonable businesspurpose for any reasonable period of time, but shall be required to convertupon the proper surrender of shares of Series IV Class B PreferredStock for conversion immediately upon the reopening of such books. During theperiod in which the stock transfer books of the Corporation are closed, theCorporation may neither declare a dividend, declare a record date for paymentof dividends nor make any payment of dividends.

 

EXHIBIT D

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b.     Dividends. Ifany shares of Series IV Class B Preferred Stock shall be convertedduring any dividend payment period, the Holder shall be entitled to alldividends accrued up to and through such Conversion Date, at the rate set forthherein, whether or not there has been a Dividend Date, as set forth inparagraph 2 hereof.

 

c.     Cancellation. Series IVClass B Preferred Stock converted into Common stock pursuant to theprovisions of this paragraph 6 shall be retired and cancelled by theCorporation and given the status of authorized and unissued preferred stock.

 

d.              Reissuance if Conversion isPartial. In the case of any certificate representing shares of Series IV Class BPreferred Stock which is surrendered for conversion only in part, theCorporation shall issue and deliver to the Holder a new certificate orcertificates for Series IV Class B Preferred Stock of suchdenominations as requested by the Holder in the amount of Series IV Class BPreferred Stock equal to the unconverted shares of the Series IV Class BPreferred Stock represented by the certificate so surrendered.

 

e.               Reservations of Shares. TheCorporation shall at all times during which shares of Series IV Class BPreferred Stock may be converted into Common Stock as provided in thisparagraph (e), reserve and keep available, out of any Common Stock held astreasury stock or out of its authorized and unissued Common Stock, or both,solely for the purpose of delivery upon conversion of the shares of Series IVClass B Preferred Stock as herein provided, such number of shares ofCommon Stock as shall then be sufficient to effect the conversion of all sharesof Series IV Class B Preferred Stock from time to time outstanding,and shall take such action as may from time to time be necessary to ensure thatsuch shares of Common Stock will, when issued upon conversion of Series IVClass B Preferred Stock, be fully paid and nonassessable.

 

f.                 Adjustment of ConversionRate. The Conversion Rate provided in subdivision (a) of this paragraph 6,in respect of Series IV Class B Preferred Stock, shall be subject toadjustments from time to time as follows:

 

(i)             While any shares of Series IVClass B Preferred Stock shall be outstanding, in case the Corporationshall subdivide the outstanding shares of Common Stock into a greater number ofshares of Common Stock or combine the outstanding shares of Common Stock into asmaller number of shares of Common Stock, or issue, by reclassification of itsshares of Common Stock, any shares of the Corporation, the Conversion Rate ineffect immediately prior thereto shall be adjusted so that the Holder shall beentitled to receive the number of shares which it would have owned or beenentitled to receive after the happening of any of the events described above,had such shares of Series IV Class B Preferred Stock been convertedimmediately prior to the happening of such event, such adjustment to becomeeffective immediately after the opening of business on the day following theday upon which such subdivision or combination or reclassification, as the casemay be, becomes effective.

 

(ii)          In case the Corporationshall be consolidated with, or merge into, any other corporation, and theCorporation does not survive, proper provisions shall be made as a part of theterms of such consolidation or merger, whereby the Holder shall thereafter beentitled, upon exercise of such Holder’s conversion rights, to receive the kindand amount of shares of stock or other securities of the Corporation resultingfrom such consolidation or merger, or such other property, as the Holder wouldhave received if such conversion rights were exercised immediately prior to theeffectiveness of such merger or consolidation.

 

(iii)       In the event the Corporationat any time, or from time to time after December 31, 1999, makes orissues, or fixes a record date for the determination of holders of Common Stockentitled to receive, a dividend distribution payable in additional shares ofCommon Stock or Common Stock Equivalents (as defined which does not provide forthe payment of any consideration upon the issuance, conversion or thereof,without a corresponding dividend or 

 

EXHIBIT D

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other distribution to the Holder, based upon thenumber of shares of Common Stock into which the Series IV Class BPreferred Stock is convertible, then and in each such event the Conversion Ratethen in effect will be increased as of the time of such issuance or, in theevent such a record date shall have been fixed, as of the close of business onsuch record date, by multiplying such Conversion rate by a fraction:

 

(A)      The numerator of which willbe the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date plus the number of shares of Common Stock issuable in payment ofsuch dividend or distribution (which, in the case of Common Stock Equivalents,shall mean the maximum number of shares of Common Stock issuable with respectthereto, as set forth in the instrument relative thereto without regard to anyprovision for subsequent adjustment); and

 

(B)        The denominator of whichwill be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date; provided, however, that if such record date is fixed and suchdividend is not fully paid or if such distribution is not fully made on thedate fixed therefor, the Conversion Rate will be recomputed accordingly as ofthe close of business on such record date, and thereafter such Conversion Ratewill be adjusted pursuant to this subparagraph (iii) as of the time ofactual payment of such dividends or distributions.

 

(iv)      In the event the Corporationat any time or from time to time after December 31, 1999, makes or issues,or fixes a record date for the determination of holders of Common Stockentitled to receive a dividend or other distribution payable to all holders ofCommon Stock in securities of the Corporation or Common Stock Equivalents,then, upon making such dividend or distribution provisions will be made so thatthe Holder will receive the amount of securities of the Corporation which itwould have received had its Series IV Class B Preferred Stock beenconverted into Common Stock on the date of such event.

 

(v)         In the event the Corporationsells or issues any Common Stock, or sells or issues Common Stock Equivalentswhich can be converted into Common Stock at a per share consideration (asdefined below in this subparagraph (v)) less than the Stipulated Price then ineffect, then the Holder shall be entitled to purchase from the Corporation incash (for the same per share consideration at which such Common Stock wasissued or the per share price at which a share of Common Stock is acquirableupon exercise or conversion of Common Stock Equivalents) that additional numberof shares of Common Stock which, when added to the number of shares of CommonStock acquirable by the Holder upon conversion of any shares of Series IV Class BPreferred Stock outstanding and held by such Holder immediately before suchissue or sale (the “Acquirable Shares”), will equal a percentage of the numberof shares of Common Stock Deemed Outstanding (as defined herein) immediatelyafter such sale or issuance that is the same as the percentage of the number ofshares of Common Stock Deemed Outstanding immediately before such issuance orsale represented by the Acquirable Shares. This right shall exist for a 45-dayperiod following the sale or issuance of shares of Common Stock or Common StockEquivalents, and thereafter shall cease to exist.

 

For the above purposes, the per share considerationwith respect to the sale or issuance of Common Stock will be the price pershare received by the Corporation, prior to the payment of any expenses,commissions, discounts and other applicable costs. With respect to the sale orissuance of Common Stock Equivalents which are convertible into or exchangeablefor Common Stock without further consideration, the per share considerationwill be determined by dividing the maximum number of shares of Common Stockissuable with respect to such Common Stock Equivalents (as set forth in theinstrument relating thereto without regarding to any provisions containedtherein for subsequent adjustment of such number) into the aggregateconsideration receivable by the Corporation upon the sale or issuance of suchCommon Stock Equivalents. With respect to the issuance of other Common Stock 

 

EXHIBIT D

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Equivalents, the per share consideration will bedetermined by dividing the maximum number of shares of Common Stock issuablewith respect to such Common Stock Equivalents into the total aggregateconsideration received by the Corporation upon the sale or issuance of suchCommon Stock Equivalents plus the minimum aggregate amount of additionalconsideration received by the Corporation upon the conversion or exercise ofsuch Common Stock Equivalents. In connection with the sale or issuance ofCommon Stock and/or Common Stock Equivalents for non-cash consideration, theamount of consideration will be the fair market value of such consideration asdetermined in good faith by the Board of Directors of the Corporation.

 

(vi)      As used herein, the term “StipulatedPrice” means initial price of $10.00 per share of Common Stock, as adjustedfrom time to time pursuant to subparagraph (viii) of this paragraph 6(f);and the term “Common Stock Equivalent” means any securities (whether debt orequity securities) or rights issued by the Corporation convertible into orentitling the holder thereof to receive shares of, or securities convertibleinto, Common Stock. The number of shares of “Common Stock Deemed Outstanding”at any date shall equal the sum of the number of shares of Common Stock thenoutstanding plus the number of shares of Common Stock then obtainable pursuantto Common Stock Equivalents.

 

(vii)   In the event the Corporationdeclares any dividend or distribution payable to holders of its Common Stock(other than dividends payable out of the Corporation’s retained earnings orearned surplus and dividends payable in shares of Common Stock or in securitiesconvertible into or exchangeable for shares of Common Stock or rights orwarrants to purchase Common Stock or securities convertible into orexchangeable for shares of Common Stock or any other securities issued by theCorporation), the Conversion Rate in effect immediately prior to the recorddate for such dividend or distribution shall be proportionately adjusted sothat the Holder shall be entitled to receive the number of shares of CommonStock into which such shares of Common Stock or Preferred Stock was convertibleimmediately prior to such record date multiplied by a fraction, the numeratorof which is the fair market value of a share of Common Stock on such recorddate and the denominator of which is such per share fair market value of ashare of Common Stock on such record date less the fair market value on suchrecord date of the securities or other property which are distributed as adividend or other distribution. The term “fair market value” of a share ofCommon Stock or of any other security or other type of property on any datemeans (A) in the case of Common Stock or any other security (I) ifthe principal trading market for such Common Stock or other security is anexchange or the NASDAQ national market on such date, the closing price on suchexchange or the NASDAQ national market on such date, provided, if trading ofsuch Common Stock or other security is listed on any consolidated tape, thefair market value shall be the closing price set forth on such consolidatedtape on such date, or (II) if the principal market for such Common Stockor other security is the over-the-counter market (other than the NASDAQnational market) the mean between the closing bid and asked prices on such dateas set forth by NASDAQ or (B) in the case of Common Stock or any othersecurity for which the fair market value cannot be determined pursuant toclause (A) above or of any other security or type of property, fair marketvalue thereof on such date as determined in good faith by the Board ofDirectors.

 

(viii)      Whenever the Conversion Rateis adjusted pursuant to this paragraph 6(f), the Stipulated Price shall also beadjusted by multiplying it by a fraction that is the reciprocal of the fractionused to adjust the Conversion Rate.

 

(ix)        The Corporation will not, byamendment of its Certificate of Formation or through any dissolution, issuanceor sale of securities or any other voluntary action, avoid or seek to avoid theobservance or performance of any of the terms to be observed or performedhereunder by the Corporation, but at all times in good faith will assist in thecarrying out of all the provisions of this paragraph and in the taking of allsuch action as may be necessary or appropriate in order to protect theconversion rights of the Holder against impairment.

 

EXHIBIT D

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(x)           No adjustment in theConversion Rate shall be required, unless such adjustment would require anincrease or decrease of at least one (1) share of Common Stock in theConversion Rate of one share of Series B Preferred Stock, provided thatall adjustments which do not meet this minimum requirement cumulated and theadjustment will be made when the cumulated total is sufficient to require anadjustment. All calculations made pursuant to this subparagraph (x) ofparagraph 6(f) shall be made to the nearest one-hundredth (1/100th) of ashare of Common Stock.

 

g.              Fractional Shares. Nofractional shares of Common Stock or scrip representing fractional shares ofCommon Stock shall be issued upon any conversion of shares of Series IV Class BPreferred Stock but, in lieu thereof, there shall be paid an amount in cashequal to the same fraction of the current market price of a whole share ofCommon Stock on the day preceding the day of conversion.

 

h.              Statement to Transfer Agent.Whenever the Conversion Rate for shares of Series IV Class BPreferred Stock shall be adjusted pursuant to the provisions of paragraph 6(f) hereof,the Corporation shall forthwith maintain at its office and, if applicable, filewith the Transfer Agent for shares of Series IV Class B PreferredStock and for shares of Common Stock, a statement signed by the President or aVice President of the Corporation and by its Treasurer or an AssistantTreasurer, stating the adjusted Conversion Rate and setting forth in reasonabledetail the method of calculation and the facts requiring such adjustment, suchcalculations to be confirmed by the Corporation’s independent auditors, andstating the facts on which the calculation is based. Each adjustment shallremain in effect until a subsequent adjustment hereunder is required.

 

7.                                       RegistrationRights.

 

a.               Piggyback Registration. TheCorporation, for a period ending six months after the last share of Series IVClass B Preferred Stock is redeemed, retired, converted or otherwise nolonger outstanding, will give written notice to the Holder not less than 20days in advance of the initial filing of any registration statement under theSecurities Act of 1933, as amended (other than a registration statementpertaining to securities issuable pursuant to employee stock option, stockpurchase, or similar plans or a registration statement pertaining to securitiesissuable in connection with the acquisition of a business, whether throughmerger, consolidation, acquisition of assets, or exchange of securities), coveringany Common Stock or other securities of the Corporation, and will afford theHolder the opportunity to have included in such registration all or such partof the shares of Common Stock acquired upon conversion of Series IV Class BPreferred Stock, as may be designated by written notice to the Corporation notlater than 10 days following receipt of such notice from the Corporation. TheCorporation shall be entitled to exclude the shares of Common Stock held by theHolder from any one, but not more than one, such registration if theCorporation in its sole discretion decides that the inclusion of such shareswill materially interfere with the orderly sale and distribution of thesecurities being offered under such registration statement by the Corporation.Notwithstanding the foregoing, the Corporation shall not be entitled to excludethe shares of Common Stock held by the Holder if shares of other shareholdersare being included in any such registration statement and, in suchcircumstances, the Holder shall be entitled to include the shares of CommonStock held by them on a pro rata basis in the proportion that the number ofshares of Common Stock held by the Holder bears to the shares of Common Stockheld by all other shareholders, including shares in such registrationstatement. The Holder shall not be entitled to include shares in more than tworegistration statements pursuant to the provisions of this subdivision (a) ofparagraph 7, and all rights of the Holder under this subdivision (a) ofparagraph 7 shall terminate after the Holder has included shares of CommonStock in two registration statements pursuant to this subdivision (a) ofparagraph 7.

 

b.              Expenses. The Corporationwill pay all out-of-pocket costs and expenses of any registration effected pursuantto the provisions of subdivision (a) of this paragraph 7, includingregistration fees, legal fees, accounting fees, printing expenses (includingsuch number of any preliminary and the final prospectus as may be reasonablyrequested), blue sky qualification fees and expenses, and all other expenses, 

 

EXHIBIT D

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except for underwriting commissions or discountsapplicable to the shares of Common Stock being sold by the Holder and the feesof counsel for the Holder, all of which shall be paid by the Holder.

 

c.               Notwithstanding anything tothe contrary contained herein, in the event that the Corporation files aninitial registration statement under the Securities Act of 1933, as amended(other than a registration statement pertaining to securities issuable inconnection with the acquisition of a business, whether through merger,consolidation, acquisition of assets or exchange of securities), concerning anyCommon Stock of the Corporation, it will afford the Holder the opportunity toconvert his shares into that number of fully paid and non-assessable shares ofCommon Stock prior to the 3-year holding period stated in paragraph 6 above.The Corporation may also, at its option at any time within one-hundred eighty(180) days after an initial registration statement is deemed effective, demandthe conversion of the Series IV Class B Preferred Stock into thatnumber of fully paid and nonassessable shares of Common Stock as providedherein.

 

8.                                       Reports.

 

So long as any of the Series IV Class BPreferred Stock shall be outstanding, the Corporation shall submit to theHolder financial reports no less frequently than annually.

 

9.                                       Miscellaneous.

 

a.               As used herein, the term “CommonStock” shall mean the Corporation’s Common Stock, no par value, or, in the caseof any reclassification or change of outstanding shares of Common Stock, thestock or securities issued in exchange for such Common Stock.

 

b.              The shares of Series IVClass B Preferred Stock shall be fully transferable by the Holder thereof,subject to compliance with the applicable provisions of federal and statesecurities laws.

 

INWITNESS WHEREOF, RETRACTABLE TECHNOLOGIES, INC. has caused its corporateseal to be hereunto affixed and this Amended Certificate to be signed by itsPresident and Secretary as of the 11th day of June, 2010.

 
|                   |   | /s/  Thomas J. Shaw |
|------------------------|--------|---------------------|
|                   |   | Thomas  J. Shaw     |
|                   |   | President           |
| ATTEST:                |   |                |
|                   |   |                |
| /s/  Michele M. Larios |   |                |
| Michele  M. Larios     |   |                |
| Secretary              |   |                |

 

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AMENDED CERTIFICATE OF DESIGNATION, PREFERENCES, RIGHTS AND LIMITATIONS

OF THE SERIES V CLASS B CONVERTIBLE PREFERRED STOCK

OF

RETRACTABLE TECHNOLOGIES, INC.

 

Pursuantto Texas law and its Certificate of Formation, Retractable Technologies, Inc.,a corporation organized and existing under the laws of the State of Texas (the “Corporation”),

 

DOESHEREBY CERTIFY that, pursuant to the authority conferred upon the Board ofDirectors of the Corporation by the Certificate of Formation, as amended, andpursuant to Texas law, said Board of Directors, on April 15, 2002, at ameeting duly called and noticed adopted a resolution by all necessary action onthe part of the Corporation providing for the creation of a series of PreferredStock consisting of not more than 1,500,000 shares of Series V Class BConvertible Preferred Stock, which resolution was amended by a Board resolutiondated June 20, 2002 to increase the number of shares to 3,097,855 andwhich resolution now reads as follows:

 

RESOLVEDthat, pursuant to the authority provided in the Corporation’s Certificate ofFormation and expressly granted to and vested in the Board of Directors of theCorporation, the Board of Directors hereby creates out of the Preferred Stock,par value One Dollar ($1.00) per share, of the Corporation a series ofPreferred Stock called the Series V Class B Preferred Stock,consisting of not more than 3,097,855 shares, which shall be subordinate to theSeries I through IV Class B Convertible Preferred Stock, and theBoard of Directors hereby fixes the designation and the powers, preference andrights, and the qualifications, limitations, and restrictions thereof, to theextent not otherwise provided in the Corporation’s qualifications, limitations,and restrictions thereof, to the extent not otherwise provided in theCorporation’s Certificate of Formation, as follows:

 

1.               Designation of Series. Thedesignation of the series of Preferred Stock created by these resolutions shallbe “Series V Class B Convertible Preferred Stock” (the “Series VClass B Preferred Stock”).

 

2.               Dividends on Series V Class BPreferred Stock

 

a.               Dividend Amount. The holdersof the Series V Class B Preferred Stock shall be entitled to receive,in any calendar year, if, when, and as declared by the Board of Directors, outof any assets at the time legally available therefor and subject to the furtherlimitations set out herein, dividends at the per annum rate of $.32 per share,all such dividends due quarterly in arrears as of the last day of each March,June, September, and December of each year, the first dividend beingdeclarable on December 31, 2002. On each date which a dividend may bedeclared is hereafter called the “Dividend Date,” and each quarterly periodending with a Dividend Date is hereinafter referred to as the “Dividend Period.”Dividends shall be payable 15 calendar days after the Dividend Due Date;provided, however, that if such date on which a dividend is payable is aSaturday, Sunday, or legal holiday, such dividend shall be payable on the nextfollowing business day to the holders of record (whether singular or plural,the “Holder”).

 

b.              Dividends Cumulative.Dividends upon the Series V Class B Preferred Stock shall be accruedand be cumulative, whether or not in any Dividend Period or Periods there shallbe funds of the Corporation legally available for the payment of suchdividends.

 

c.               Dividend Accrual. On eachDividend Due Date all dividends which shall have accrued since the lastDividend Due Date on each share of Series V Class B Preferred Stockoutstanding on such Dividend Due Date shall accumulate and be deemed to become “due.”Any dividend which shall not be paid on the Dividend Due Date on which it shallbecome due shall be deemed to be “past due” until such dividend shall be paidor until the share of Series V Class B Preferred Stock with respectto which such dividend became due shall no longer be outstanding, whichever isthe earlier to occur. No interest, sum of money in lieu of interest, or otherproperty or securities shall be payable in respect of any dividend payment orpayments which are past due. Dividends paid on shares of Series V Class BPreferred Stock in an amount less than the total amount of such dividends atthe time accumulated and payable on such shares shall be allocated pro rata ona share-by-share basis among all such shares at the time 

 

EXHIBIT E

 

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outstanding. Dividend payments made with respect toa Dividend Due Date shall be deemed to be made in payment of the dividendswhich became due on that Dividend Due Date.

 

d.              Dividend Arrearage. If adividend upon any shares of Series V Class B Preferred Stock is inarrears, all dividends or other distributions declared upon shares of the Series VClass B Preferred Stock (other than dividends paid in stock of theCorporation ranking junior to the Series V Class B Preferred Stock asto dividends and upon liquidation, dissolution, or winding up) may only bedeclared pro rata. Except as set forth above, if a dividend upon any shares of Series VClass B Preferred Stock is in arrears: (i) no dividends (in cash,stock, or other property) may be paid or declared and set aside for paymentupon any stock of the Corporation ranking junior to the Series V Class BPreferred Stock as to dividends (other than dividends of distributions in stockof the Corporation ranking junior to the Series V Class B PreferredStock as to dividends and upon liquidation, dissolution, or winding up); and (ii) nopreferred stock of the Corporation ranking junior to the Series V Class BPreferred Stock as to dividends may be redeemed pursuant to a sinking fund orotherwise, except (1) by means of redemption pursuant to which alloutstanding shares of the Series V Class B Preferred Stock areredeemed, or (2) by conversion of any such junior stock into, or exchangeof any such junior stock into, or exchange of any such junior stock for stockof the Corporation ranking junior to the Series V Class B PreferredStock as to dividends and upon liquidation, dissolution, or winding up.Notwithstanding anything in this Certificate to the contrary, the Corporationshall be entitled to purchase any of its shares ranking junior to the Series VClass B Preferred Stock (including Common shares) on any terms it fixes,even where a dividend upon shares of Series V Class B Preferred Stockis in arrears, so long as:  (A) thecash assets of the Corporation as of its latest reporting period equals orexceeds $40,000,000 or (B) if the cash assets of the Corporation as of itslatest reporting period was less than $40,000,000, the amount of funds utilizedto purchase such shares within the next quarter does not exceed 25% of thevalue of the cash assets as of the previous reporting period.

 

3.               General, Class, and Series VotingRights. Except as provided in this Section 3, or as otherwise from time totime required by law, the Series V Class B Preferred Stock shall haveno voting rights.

 

So long as any shares of Series V Class BPreferred Stock remain outstanding, the consent of the holders of at least 51%of the shares of Series V Class B Preferred Stock outstanding at thetime voting separately as a class, given in person or by proxy, either inwriting at any special or annual meeting called for the purpose, shall benecessary to permit, effect, or validate any one or more of the following:

 

(i)             The authorization, creation,or issuance, or any increase in the authorized or issued amount, of any classor series of stock (including any class or series of Preferred Stock) rankingequal or prior to the Series V Class B Preferred Stock; or

 

(ii)          The amendment, alteration,or repeal, whether by merger, consolidation, or otherwise, of any of theprovisions of the Certificate of Formation or of this resolution which wouldalter or change the powers, preferences, or special rights of the shares of theSeries V Class B Preferred Stock so as to affect them adversely;provided, however, that any increase in the amount of authorized PreferredStock, or the creation and issuance of other series of Preferred Stock rankingjunior to the Series V Class B Preferred Stock with respect to thepayment of dividends and the distribution of assets upon liquidation,dissolution, or winding up, shall not be deemed to adversely affect suchpowers, preferences, or special rights.

 

The foregoing voting provisions shall not apply if,at or prior to the time when the act with respect to which such vote wouldotherwise be required shall be effected, all outstanding shares of Series VClass B Preferred Stock shall have been redeemed or sufficient funds shallhave been deposited in trust to effect such redemption.

 

4.          Redemption. The outstandingshares of Series V Class B Preferred Stock shall be nonredeemableprior to the lapse of two (2) years from the date of issuance. On and aftersuch date, the Series V Class B Preferred Stock may be redeemed atthe option of the Corporation, as a whole at any time or in part from time totime, at the Redemption Price of $4.40 per share plus all dividends (whether ornot declared or due) accrued and unpaid to the date of redemption (subject tothe right of the holder of record of shares of Series V Class BPreferred Stock 

 

EXHIBIT E

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ona record date for the payment of a dividend on the Series V Class BPreferred Stock to receive the dividend due on such shares of Series VClass B Preferred Stock on the corresponding Dividend Due Date).

 

No sinking fund shall be established for the Series VClass B Preferred Stock.

 

Notice of any proposed redemption of shares of Series VClass B Preferred Stock shall be mailed by means of first class mail,postage paid, addressed to the holders of record of the shares of Series VClass B Preferred Stock to be redeemed, at their respective addresses thenappearing on the books of the Corporation, at least thirty (30) days but notmore than sixty (60) days prior to the date fixed for such redemption (hereinreferred to as the “Redemption Date”). Each such notice shall specify (i) theRedemption Date; (ii) the Redemption Price; (iii) the place forpayment and for delivering the stock certificate(s) and transferinstrument(s) in order to collect the Redemption Price; (iv) theshares of Series V Class B Preferred Stock to be redeemed; and (v) thethen effective Conversion Price (as defined below) and that the right ofholders of shares of Series V Class B Preferred Stock being redeemedto exercise their conversion right shall terminate as to such shares at theclose of business on the fifth day before the Redemption Date, provided that nodefault by the Corporation in the payment of the applicable Redemption Price(including any accrued and unpaid dividends) shall have occurred and becontinuing. Any notice mailed in such manner shall be conclusively deemed tohave been duly given whether or not such notice is, in fact, received. If lessthan all the outstanding shares of Series V Class B Preferred Stockare to be redeemed, the Corporation will select those to be redeemed by lot orby a substantially equivalent method. In order to facilitate the redemption of Series VClass B Preferred Stock to be redeemed, notice of any such proposedredemption shall not be more than sixty (60) days prior to the Redemption Datewith respect thereto.

 

The holder of any shares of Series V Class BPreferred Stock redeemed upon any exercise of the Corporation’s redemptionright shall not be entitled to receive payment of the Redemption Price for suchshares until such holder shall cause to be delivered to the place specified inthe notice given with respect to such redemption (i) the certificate(s) representingsuch shares of Series V Class B Preferred Stock; and (ii) transferinstrument(s) satisfactory to the Corporation and sufficient to transfersuch shares free of any adverse interest. No interest shall accrue on theRedemption Price of any share of Series V Class B Preferred Stockafter its Redemption Date.

 

Notwithstanding anything in this Certificate to thecontrary, the Corporation shall have the right to purchase shares of Series VClass B Preferred Stock from the owner of such shares on such term as maybe agreeable to such owner. Shares of Series V Class B PreferredStock may be acquired by the Corporation from any stockholder pursuant to thisparagraph without offering any other stockholder an equal opportunity to sellhis stock to the Corporation, and no purchase by the Corporation from anystockholder pursuant to this paragraph shall be deemed to create any right onthe part of any stockholder to sell any shares of Series V Class BPreferred Stock (or any other stock) to the Corporation.

 

Notwithstanding the foregoing provisions of this Section 4,and subject to the provisions of Section 2 hereof, if a dividend upon anyshares of Series V Class B Preferred Stock is past due, no shares ofthe Series V Class B Preferred Stock may be redeemed, except (i) bymeans of a redemption pursuant to which all outstanding shares of the Series VClass B Preferred Stock are simultaneously redeemed (or offered to be soredeemed) or pursuant to which the outstanding shares of the Series V Class BPreferred Stock are redeemed on a pro rata basis (or offered to be soredeemed), or (ii) by conversion of shares of Series V Class BPreferred Stock into, or exchange of such shares for, Common Stock or any otherstock of the Corporation ranking junior to the Series V Class BPreferred Stock as to dividends and upon liquidation, dissolution, or windingup.

 

5.          Liquidation. In the event ofany voluntary or involuntary dissolution, liquidation, or winding up of the Corporation(for the purposes of this Section 5, a “Liquidation”), before anydistribution of assets shall be made to the holders of the Common Stock or theholders of any other stock that ranks junior to the Series V Class BPreferred Stock in respect of distributions upon the Liquidation of theCorporation, the holder of each share of Series V Class B PreferredStock then outstanding shall be entitled to $4.40 per share plus all dividends(whether or not declared or due) accrued and unpaid on such share on the datefixed for the distribution of assets of the Corporation to the holders of Series VClass B Preferred Stock.

 

EXHIBIT E

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If upon any Liquidation of the Corporation, theassets available for distribution to the holder of Series V Class BPreferred Stock which shall then be outstanding (hereinafter in this paragraphcalled the “Total Amount Available”) shall be insufficient to pay the holdersof all outstanding shares of Series V Class B Preferred Stock thefull amounts (including all dividends accrued and unpaid) to which they shallbe entitled by reason of such Liquidation of the Corporation, then there shallbe paid ratably to the holders of the Series V Class B PreferredStock in connection with such Liquidation of the Corporation, an amount equalto each holder’s pro rata share of the Total Amount Available.

 

The voluntary sale, conveyance, lease, exchange, ortransfer of all or substantially all the property or assets of the Corporation,or the merger or consolidation of the Corporation into another corporation, orany purchase or redemption of some or all of the shares of any class or seriesof stock of the Corporation, shall not be deemed to be a Liquidation of theCorporation for the purposes of this Section 5 (unless in connectiontherewith the Liquidation of the Corporation is specifically approved).

 

6.             Conversion Privilege. At anytime after issuance of any share of Series V Class B Preferred Stock,the holder of any share of Series V Class B Preferred Stock (“Holder”)shall have the right, at such Holder’s option (but if such share is called forredemption or exchange at the election of the Corporation, then in respect ofsuch share only to and including but not after the close of business on (i) thefifth calendar day before the date fixed for such redemption; or (ii) thedate fixed for such exchange, provided that the Corporation has set aside fundssufficient to effect such redemption) to convert such share into that number offully paid and nonassessable shares of Common Stock (calculated as to eachconversion to the nearest 1/100th of a share) obtained by dividing $4.00 by theConversion Rate then in effect.

 

a.               Conversion Rate. Each shareof Series V Class B Preferred Stock may be converted, subject to theterms and provisions of this paragraph 6 into one (1) share of theCorporation’s Common Stock, which is a price equal to one share of Common Stockfor each $4.00 of Series V Class B Preferred Stock or, in case anadjustment of such rate has taken place pursuant to the provisions ofsubdivision (f) of this paragraph 6, then at the Conversion Rate as lastadjusted (such rate or adjusted rate, shall be expressed as the number ofshares of Common Stock to be acquired upon conversion of one share of Series VClass B Preferred Stock, and shall be referred to herein as the “ConversionRate”) (“Conversion Price”). Each share of Series V Class B PreferredStock shall be Convertible into Common Stock by surrender to the Corporation ofthe certificate representing such shares of Series V Class BPreferred Stock to be converted by the Holder and by giving written notice tothe Corporation of the Holder’s election to convert.

 

The Corporation shall, as soon as practicable afterreceipt of such written notice and the proper surrender to the Corporation ofthe certificate or certificates representing shares of Series V Class BPreferred Stock to be converted in accordance with the above provisions, issueand deliver for the benefit of the Holder at the office of the Corporation’sduly appointed transfer agent (the “Transfer Agent”) to the Holder for whoseaccount such shares of Series V Class B Preferred Stock were sosurrendered or to such Holder’s nominee or nominees, certificates for thenumber of shares of Common Stock to which the Holder shall be entitled. Thecertificates of Common Stock of the Corporation issued upon conversion shallbear such legends as may be required by state or federal laws. Such conversionshall be deemed to have been effective immediately prior to the close ofbusiness on the date on which the Corporation shall have received both suchwritten notice and the properly surrendered certificates for shares of Series VClass B Preferred Stock to be converted (the “Conversion Date”), and atsuch time the rights of the Holder shall cease and the person or personsentitled to receive the shares of Common Stock issuable upon the conversion ofsuch shares of Series V Class B Preferred Stock shall be deemed tobe, and shall be treated for all purposes as, the record Holder or Holders ofsuch Common Stock on the Conversion Date. The Corporation shall not be requiredto convert, and no surrender of shares of Series V Class B PreferredStock or written notice of conversion with respect thereto shall be effectedfor that purpose, while the stock transfer books of the Corporation are closedfor any reasonable business purpose for any reasonable period of time, butshall be required to convert upon the proper surrender of shares of Series VClass B Preferred Stock for conversion immediately upon the reopening ofsuch books. During the period in which the stock transfer books of theCorporation are closed, the Corporation may neither declare a dividend, declarea record date for payment of dividends, nor make any payment of dividends.

 

EXHIBIT E

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b.              Dividends. If any shares of Series VClass B Preferred Stock shall be converted during any dividend paymentperiod, the Holder shall be entitled to all dividends accrued up to and throughsuch Conversion Date, at the rate set forth herein, whether or not there hasbeen a Dividend Date, as set forth in paragraph 2 hereof.

 

c.               Cancellation. Series V Class BPreferred Stock converted into Common Stock pursuant to the provisions of thisparagraph 6 shall be retired by the Corporation and given the status ofauthorized and unissued Preferred Stock.

 

d.              Reissuance if Conversion isPartial. In the case of any certificate representing shares of Series V Class BPreferred Stock which is surrendered for conversion only in part, theCorporation shall issue and deliver to the Holder a new certificate orcertificates for Series V Class B Preferred Stock in the amount of Series VClass B Preferred Stock equal to the unconverted shares of the Series VClass B Preferred Stock represented by the certificate so surrendered.

 

e.               Reservations of Shares. TheCorporation shall at all times during which shares of Series V Class BPreferred Stock may be converted into Common Stock as provided in thisparagraph (e), reserve and keep available, out of any Common Stock held astreasury stock or out of its authorized and unissued Common Stock, or both,solely for the purpose of delivery upon conversion of the shares of Series VClass B Preferred Stock as herein provided, such number of shares ofCommon Stock as shall then be sufficient to effect the conversion of all sharesof Series V Class B Preferred Stock from time to time outstanding,and shall take such action as may from time to time be necessary to ensure thatsuch shares of Common Stock will, when issued upon conversion of Series V Class BPreferred Stock, be fully paid and nonassessable.

 

f.                 Adjustment of ConversionRate. The Conversion Rate provided in subdivision (a) of this paragraph 6,in respect of Series V Class B Preferred Stock, shall be subject toadjustments from time to time as follows:

 

(i)             While any shares of Series VClass B Preferred Stock shall be outstanding, in case the Corporationshall subdivide the outstanding shares of Common Stock into a greater number ofshares of Common Stock or combine the outstanding shares of Common Stock into asmaller number of shares of Common Stock, or issue, by reclassification of itsshares of Common Stock, any shares of the Corporation, the Conversion Rate ineffect immediately prior thereto shall be adjusted so that the Holder shall beentitled to receive the number of shares which it would have owned or beenentitled to receive after the happening of any of the events described above,had such shares of Series V Class B Preferred Stock been convertedimmediately prior to the happening of such event, such adjustment to becomeeffective immediately after the opening of business on the day following theday upon which such subdivision or combination or reclassification, as the casemay be, becomes effective.

 

(ii)          In case the Corporationshall be consolidated with, or merge into, any other corporation, and theCorporation does not survive, proper provisions shall be made as a part of theterms of such consolidation or merger, whereby the Holder shall thereafter beentitled, upon exercise of such Holder’s conversion rights, to receive the kindand amount of shares of stock or other securities of the Corporation resultingfrom such consolidation or merger, or such other property, as the Holder wouldhave received if such conversion rights were exercised immediately prior to theeffectiveness of such merger or consolidation.

 

(iii)       In the event the Corporationat any time makes or issues, a record date for the determination of holders ofCommon Stock entitled to receive, a dividend distribution payable in additionalshares of Common Stock or Common Stock Equivalents (as defined in subparagraph (iv) ofthis paragraph 6(f)) which does not provide for the payment of anyconsideration upon the issuance, conversion or thereof, without a correspondingdividend or other distribution to the Holder, based upon the number of sharesof Common Stock into which the Series V Class B Preferred Stock isconvertible, then and in each such event the Conversion Rate then in effect 

 

EXHIBIT E

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will be increased as of the time of such issuanceor, in the event such a record date shall have been fixed, as of the close ofbusiness on such record date, by multiplying such Conversion rate by afraction:

 

(A)      The numerator of which willbe the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date plus the number of shares of Common Stock issuable in payment ofsuch dividend or distribution (which, in the case of Common Stock Equivalents,shall mean the maximum number of shares of Common Stock issuable with respectthereto, as set forth in the instrument relative thereto without regard to anyprovision for subsequent adjustment); and

 

(B)        The denominator of whichwill be the total number of shares of Common Stock issued and outstandingimmediately prior to the time of such issuance or the close of business on suchrecord date; provided, however, that if such record date is fixed and suchdividend is not fully paid or if such distribution is not fully made on thedate fixed therefor, the Conversion Rate will be recomputed accordingly as ofthe close of business on such record date, and thereafter such Conversion Ratewill be adjusted pursuant to this subparagraph (iii) as of the time ofactual payment of such dividends or distributions.

 

(iv)      In the event the Corporationat any time makes or issues, or fixes a record date for the determination ofholders of Common Stock entitled to receive a dividend or other distributionpayable to all holders of Common Stock in securities of the Corporation orCommon Stock Equivalents, then, upon making such dividend or distribution,provisions will be made so that the Holder will receive the amount ofsecurities of the Corporation which it would have received had its Series VClass B Preferred Stock been converted into Common Stock on the date ofsuch event.

 

(v)         In the event the Corporationsells or issues any Common Stock, or sells or issues Common Stock Equivalentswhich can be converted into Common Stock at a per share consideration (asdefined below in this subparagraph (v) of paragraph 6(f)) less than theStipulated Price then in effect, then the Holder shall be entitled to purchasefrom the Corporation in cash (for the same per share consideration at whichsuch Common Stock was issued or the per share price at which a share of CommonStock is acquirable upon exercise or conversion of Common Stock Equivalents)that additional number of shares of Common Stock which, when added to thenumber of shares of Common Stock acquirable by the Holder upon conversion ofany shares of Series V Class B Preferred Stock outstanding and heldby such Holder immediately before such issue or sale (the “Acquirable Shares”),will equal a percentage of the number of shares of Common Stock DeemedOutstanding (as defined herein) immediately after such sale or issuance that isthe same as the percentage of the number of shares of Common Stock DeemedOutstanding immediately before such issuance or sale represented by theAcquirable Shares. This right shall exist for a 45-day period following thesale or issuance of shares of Common Stock or Common Stock Equivalents, andthereafter shall cease to exist.

 

For the above purposes, the per share considerationwith respect to the sale or issuance of Common Stock will be the price pershare received by the Corporation, prior to the payment of any expenses,commissions, discounts and other applicable costs. With respect to the sale orissuance of Common Stock Equivalents which are convertible into or exchangeablefor Common Stock without further consideration, the per share considerationwill be determined by dividing the maximum number of shares of Common Stockissuable with respect to such Common Stock Equivalents (as set forth in theinstrument relating thereto without regard to any provisions contained thereinfor subsequent adjustment of such number) into the aggregate considerationreceivable by the Corporation upon the sale or issuance of such Common StockEquivalents. With respect to the issuance of other Common Stock Equivalents,the per share consideration will be determined by dividing the maximum numberof shares of Common Stock issuable with respect to such Common StockEquivalents into the 

 

EXHIBIT E

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total aggregate consideration received by theCorporation upon the sale or issuance of such Common Stock Equivalents plus theminimum aggregate amount of additional consideration received by theCorporation upon the conversion or exercise of such Common Stock Equivalents.In connection with the sale or issuance of Common Stock and/or Common StockEquivalents for noncash consideration, the amount of consideration will be thefair market value of such consideration as determined in good faith by theBoard of Directors of the Corporation.

 

(vi)      As used herein, the term “StipulatedPrice” means initial price of $4.00 per share of Common Stock, as adjusted fromtime to time pursuant to subparagraph (viii) of this paragraph 6(f); andthe term “Common Stock Equivalent” means any securities (whether debt or equitysecurities) or rights issued by the Corporation convertible into or entitlingthe holder thereof to receive shares of, or securities convertible into, CommonStock. The number of shares of “Common Stock Deemed Outstanding” at any dateshall equal the sum of the number of shares of Common Stock then outstandingplus the number of shares of Common Stock then obtainable pursuant to CommonStock Equivalents.

 

(vii)   In the event the Corporationdeclares any dividend or distribution payable to holders of its Common Stock(other than dividends payable out of the Corporation’s retained earnings orearned surplus and dividends payable in shares of Common Stock or in securitiesconvertible into or exchangeable for shares of Common Stock or rights orwarrants to purchase Common Stock or securities convertible into orexchangeable for shares of Common Stock or any other securities issued by theCorporation), the Conversion Rate in effect immediately prior to the recorddate for such dividend or distribution shall be proportionately adjusted sothat the Holder shall be entitled to receive the number of shares of CommonStock into which such shares of Common Stock or Preferred Stock was convertibleimmediately prior to such record date multiplied by a fraction, the numeratorof which is the fair market value of a share of Common Stock on such recorddate and the denominator of which is such per share fair market value of ashare of Common Stock on such record date less the fair market value on suchrecord date of the securities or other property which are distributed as adividend or other distribution. The term “fair market value” of a share ofCommon Stock or of any other security or other type of property on any datemeans (A) in the case of Common Stock or any other security (I) ifthe principal trading market for such Common Stock or other security is anexchange or the NASDAQ national market on such date, the closing price on suchexchange or the NASDAQ national market on such date, provided, if trading ofsuch Common Stock or other security is listed on any consolidated tape, thefair market value shall be the closing price set forth on such consolidatedtape on such date, or (II) if the principal market for such Common Stockor other security is the over-the-counter market (other than the NASDAQnational market) the mean between the closing bid and asked prices on such dateas set forth by NASDAQ or (B) in the case of Common Stock or any othersecurity for which the fair market value cannot be determined pursuant toclause (A) above or of any other security or type of property, fair marketvalue thereof on such date as determined in good faith by the Board ofDirectors.

 

(viii)      Whenever the Conversion Rateis adjusted pursuant to this paragraph 6(f), the Stipulated Price shall also beadjusted by multiplying it by a fraction that is the reciprocal of the fractionused to adjust the Conversion Rate.

 

(ix)        The Corporation will not, byamendment of its Certificate of Formation or through any dissolution, issuance,or sale of securities or any other voluntary action, avoid or seek to avoid theobservance or performance of any of the terms to be observed or performedhereunder by the Corporation, but at all times in good faith will assist in thecarrying out of all the provisions of this paragraph and in the taking of allsuch action as may be necessary or appropriate in order to protect theconversion rights of the Holder against impairment.

 

(x)           No adjustment in theConversion Rate shall be required, unless such adjustment would require anincrease or decrease of at least one (1) share of Common Stock in theConversion Rate of 

 

EXHIBIT E

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one share of Series V Class B PreferredStock, provided that all adjustments which do not meet this minimum requirementcumulated and the adjustment will be made when the cumulated total issufficient to require an adjustment. All calculations made pursuant to thissubparagraph (x) of paragraph 6(f) shall be made to the nearest1/100th of a share of Common Stock.

 

g.              Fractional Shares. Nofractional shares of Common Stock or scrip representing fractional shares ofCommon Stock shall be issued upon any conversion of shares of Series V Class BPreferred Stock but, in lieu thereof, there shall be paid an amount in cashequal to the same fraction of the current market price of a whole share ofCommon Stock on the day preceding the day of conversion.

 

h.              Statement to Transfer Agent.Whenever the Conversion Rate for shares of Series V Class B PreferredStock shall be adjusted pursuant to the provisions of paragraph 6(f) hereof,the Corporation shall forthwith maintain at its office and, if applicable, filewith the Transfer Agent for shares of Series V Class B PreferredStock and for shares of Common Stock, a statement signed by the President ofthe Corporation and by its Treasurer, stating the adjusted Conversion Rate andsetting forth in reasonable detail the method of calculation and the factsrequiring such adjustment, such calculations to be confirmed by the Corporation’sindependent Accountants, and stating the facts on which the calculation isbased. Each adjustment shall remain in effect until a subsequent adjustmenthereunder is required.

 

7.                                       RegistrationRights

 

a.                                       PiggybackRegistration. The Corporation, for a period ending six months after the lastshare of Series V Class B Preferred Stock is redeemed, retired,converted, or otherwise no longer outstanding, will give written notice to theholder not less than 20 days in advance of the initial filing of any registrationstatement under the Securities Act of 1933, as amended (other than aregistration statement pertaining to securities issuable pursuant to employeestock option, stock purchase, or similar plans or a registration statementpertaining to securities issuable in connection with the acquisition of abusiness, whether through a merger, consolidation, acquisition of assets, orexchange of securities), covering any Common Stock or other securities of theCorporation, and will afford the holder the opportunity to have included insuch registration all or such part of the shares of Common Stock acquired uponconversion of Series V Class B Preferred Stock, as may be designatedby written notice to the Corporation not later than ten days following receiptof such notice from the Corporation. The Corporation shall be entitled toexclude the shares of Common Stock held by the holder from any one, but notmore than one, such registration if the Corporation in its sole discretiondecides that the inclusion of such shares will materially interfere with theorderly sale and distribution of the securities being offered under suchregistration statement by the Corporation. Notwithstanding the foregoing, theCorporation shall not be entitled to exclude the shares of Common Stock held bythe Holder if shares of other shareholders are being included in any suchregistration statement and, in such circumstances, the Holder shall be entitledto include the shares of Common Stock held by them on a pro-rata basis in theproportion that the number of shares of Common Stock held by the Holder bearsto the shares of Common Stock held by all other shareholders, including sharesin such registration statement. The Holder shall not be entitled to includeshares in more than two registration statements pursuant to the provisions ofthis subdivision (a) of paragraph 7, and all rights of the Holder underthis subdivision (a) of paragraph 7 shall terminate after the Holder hasincluded shares of Common Stock in two registration statements pursuant to thissubdivision (a) of paragraph 7.

 

b.                                      Expenses. TheCorporation will pay all out-of-pocket costs and expenses of any registrationeffected pursuant to the provisions of subdivision (a) of this paragraph7, including registration fees, legal fees, accounting fees, printing expenses(including such number of any preliminary and the final prospectus as may bereasonably requested), blue sky qualification fees and expenses, and all otherexpenses, except for underwriting commissions or discounts applicable to theshares of Common Stock being sold by the Holder and the fees of counsel for theHolder, all of which shall be paid by the Holder.

 

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c.                                       Notwithstandinganything to the contrary contained herein, in the event that the Corporationfiles an initial registration statement under the Securities Act of 1933, asamended (other than a registration statement pertaining to securities issuablein connection with the acquisition of a business, whether through merger,consolidation, acquisition of assets, or exchange of securities), concerningany Common Stock of the Corporation, it may, at its option, at any time within180 days after the initial registration statement is deemed effective, demand theconversion of the Series V Class B Convertible Preferred shares intothat number of fully paid and nonassessable shares of Common Stock as providedherein.

 

8.                                       Reports

 

So long as any of the Series V Class BPreferred Stock shall be outstanding, the Corporation shall submit to theHolder financial reports no less frequently than annually.

 

9.                                       Miscellaneous

 

a.                                       As used herein,the term “Common Stock” shall mean the Corporation’s Common Stock, no parvalue, or, in the case of any reclassification or change of outstanding sharesof Common Stock, the stock or securities issued in exchange for such CommonStock.

 

b.                                      The shares of Series VClass B Preferred Stock shall be fully transferable by the Holder thereof,subject to compliance with the applicable provisions of federal and statesecurities laws.

 

 

INWITNESS WHEREOF, RETRACTABLE TECHNOLOGIES, INC. has caused its corporateseal to be hereunto affixed and this Amended Certificate to be signed by itsPresident and Secretary this 14th day of October, 2009.

 
|                  |   | /s/  Thomas J. Shaw |
|-----------------------|--------|---------------------|
|                  |   | Thomas  J. Shaw     |
|                  |   | President           |
|                  |   |                |
| ATTEST:               |   |                |
|                  |   |                |
|                  |   |                |
| /s/Michele  M. Larios |   |                |
| Michele  M. Larios    |   |                |
| Secretary             |   |                |

 

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