AMENDED CERTIFICATE OF DESIGNATION
OF
SERIES A PREFERRED STOCK
OF
ORTHOLOGIC CORP.
          The undersigned, being the President of OrthoLogic Corp. (the “Corporation”), acorporation organized and existing under the Delaware General Corporation Law, hereby certifiesthat, pursuant to the provisions of Section 151 of the Delaware General Corporation Law, the Boardof Directors of the Corporation duly adopted the following resolution on July 1, 2003, whichresolution remains in full force and effect as of the date hereof:
Series A Preferred Stock
     RESOLVED, that the Board of Directors of the Corporation, pursuant to authorityvested in it by the provisions of the Corporation’s Amended and Restated Certificateof Incorporation (the “Charter”), hereby establishes a series of thePreferred Stock, par value $.0005 per share, of the Corporation and fixes the numberof shares of such series and the powers, designations, preferences and relative,participating, optional or other rights of such series, and the qualifications,limitations or restrictions thereof, as follows:
     The first series of Preferred Stock, par value $.0005 per share, of theCorporation shall be, and hereby is, designated “Series A Preferred Stock” (the“Series A Shares”), and the number of shares constituting such series shallbe Five Hundred Thousand (500,000). The relative rights and preferences of theSeries A Shares shall be as follows:
     Section A. Dividends and Distributions.
     (1) Subject to the prior and superior rights of the holders of any shares of any seriesof stock prior and superior to the Series A Shares with respect to dividends, the holders ofSeries A Shares, in preference to the holders of Common Stock, par value $.0005 per share,of the Corporation (the “Common Stock”) and of any other junior stock, shall beentitled to receive, when and as declared by the Board of Directors, out of any fundslawfully available therefor, cash dividends thereon, payable quarterly, from the date ofissuance thereof, upon the tenth days of January, April, July and October in each year (eachsuch date being referred to herein as a “Quarterly Dividend Payment Date”),commencing on the first Quarterly Dividend Payment Date after the first issuance of a SeriesA Share, in an amount per share (rounded to the nearest cent) equal to the greater of (a)$10.00 or (b) subject to the provisions for adjustment hereinafter set forth, 100 times theaggregate per share amount of all cash dividends, and 100 times the aggregate per shareamount (payable in kind) of all non-cash dividends or other distributions, other than adividend or distribution payable in shares of Common Stock or a subdivision of
 

 

theoutstanding shares of Common Stock (by reclassification or otherwise), declared on theCommon Stock since the immediately preceding Quarterly Dividend Payment Date or, withrespect to the first Quarterly Dividend Payment Date, since the first issuance of any SeriesA Share. In the event the Corporation shall at any time after March 12, 1997 (i) declareany dividend on the Common Stock payable in shares of Common Stock, (ii) subdivide theoutstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller numberof shares, then in each such case the amounts to which holders of Series A Shares wereentitled immediately prior to such event under clause (a) and clause (b) of the precedingsentence shall be adjusted by multiplying each such amount by a fraction the numerator ofwhich is the number of shares of Common Stock outstanding immediately after such event andthe denominator of which is the number of shares of Common Stock that were outstandingimmediately prior to such event.
     (2) The Corporation shall declare a dividend or distribution on the Series A Shares asprovided in paragraph (1) of this Section immediately after it declares a dividend ordistribution on the Common Stock (other than a dividend or distribution payable in shares ofCommon Stock); provided, however, that, in the event no dividend ordistribution shall have been declared on the Common Stock during the period between anyQuarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, adividend of $10.00 per share on the Series A Shares shall nevertheless be payable on suchsubsequent Quarterly Dividend Payment Date; and providedfurther, thatnothing contained in this paragraph (2) shall be construed so as to conflict with anyprovision relating to the declaration of dividends contained in the Charter.
     (3) Dividends shall begin to accrue and be cumulative on outstanding Series A Sharesfrom the Quarterly Dividend Payment Date next preceding the date of issue of such Series AShares, unless the date of issue of such shares is prior to the record date for the firstQuarterly Dividend Payment Date, in which case dividends on such shares shall begin toaccrue from the date of issue of such shares, or unless the date of issue is a QuarterlyDividend Payment Date or is a date after the record date for the determination of holders ofSeries A Shares entitled to receive a quarterly dividend and before such Quarterly DividendPayment Date, in either of which events such dividends shall begin to accrue and becumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shallnot bear interest. Dividends paid on the Series A Shares in an amount less than the totalamount of such dividends at the time accrued and payable on such shares shall be allocatedpro rata on a share-by-share basis among all such shares at the time outstanding. The Boardof Directors may fix a record date for the determination of holders of Series A Sharesentitled to receive payment of a dividend or distribution declared thereon.
     Section B. Redemption. The Series A Shares are not redeemable.
     Section C. Liquidation, Dissolution or Winding Up. In the event of the voluntary orinvoluntary liquidation of the Corporation the “preferential amount” that the holders of the SeriesA Shares shall be entitled to receive out of the assets of the Corporation shall be $100.00 pershare plus all accrued and unpaid dividends thereon.
          (1) Upon any liquidation, dissolution or winding up of the Corporation, no
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distributionshall be made to the holders of shares of stock ranking junior (upon liquidation,dissolution or winding up) to the Series A Shares unless, prior thereto, the holders ofSeries A Shares shall have received $100.00 per share, plus an amount equal to accrued andunpaid dividends and distributions thereon, whether or not declared, to the date of suchpayment (the “Series A Liquidation Preference”). Following the payment of the fullamount of the Series A Liquidation Preference, no additional distributions shall be made tothe holders of Series A Shares unless, prior thereto, the holders of shares of common stockshall have received an amount per share (the “Common Adjustment”) equal to thequotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 100 (asappropriately adjusted as set forth in paragraph (3) of this Section C to reflect suchevents as stock splits, stock dividends and recapitalizations with respect to the CommonStock) (such number in clause (ii), the “Adjustment Number”). Following the paymentof the full amount of the Series A Liquidation Preference and the Common Adjustment inrespect of all outstanding Series A Shares and Common Stock, respectively, holders of SeriesA Shares and holders of shares of Common Stock shall receive their ratable and proportionateshare of the remaining assets to be distributed in the ratio of the Adjustment Number to onewith respect to the Series A Shares and Common Stock, on a per share basis, respectively.
     (2) In the event, however, that there are not sufficient assets available to permitpayment in full of the Series A Liquidation Preference and the liquidation preferences ofall other series of preferred stock, if any, that rank on a parity with the Series A Shares,then all such available assets shall be distributed ratably to the holders of the Series AShares and the holders of such parity shares in proportion to their respective liquidationpreferences. In the event, however, that there are not sufficient assets available topermit payment in full of the Common Adjustment, then any such remaining assets shall bedistributed ratably to the holders of Common Stock.
     (3) In the event the Corporation shall at any time after March 12, 1997 (i) declare anydividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstandingCommon Stock or (iii) combine the outstanding Common Stock into a smaller number of shares,then in each such case the Adjustment Number in effect immediately prior to such event shallbe adjusted by multiplying such Adjustment Number by a fraction, the numerator of which isthe number of shares of Common Stock outstanding immediately after such event and thedenominator of which is the number of shares of Common Stock that were outstandingimmediately prior to such event.
     Section D. Sinking Fund. The Preferred Shares shall not be entitled to the benefit ofany sinking fund for the redemption or purchase of such shares.
     Section E. Conversion.
     (1) Subject to paragraph (2) of this Section E, the Preferred Shares shall not beconvertible.
     (2) In case the Corporation shall enter into any consolidation, merger, combination orother transaction in which the shares of Common Stock are exchanged for or changed intoother stock or securities, cash and/or any other property, then in any such case the SeriesA Shares shall at the same time be similarly exchanged or changed in an
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amount per share(subject to the provision for adjustment hereinafter set forth) equal to 100 times theaggregate amount of stock, securities, cash and/or any other property (payable in kind), asthe case may be, into which or for which each share of Common Stock is changed or exchanged.In the event the Corporation shall at any time declare or pay any dividend on the CommonStock payable in shares of Common Stock, or effect a subdivision or combination orconsolidation of the outstanding shares of Common Stock (by reclassification or otherwise)into a greater or lesser number of shares of Common Stock, then in each such case the amountset forth in the preceding sentence with respect to the exchange or change of Series AShares shall be adjusted by multiplying such amount by a fraction, the numerator of which isthe number of shares of Common Stock outstanding immediately after such event, and thedenominator of which is the number of shares of Common Stock that were outstandingimmediately prior to such event.
     Section F. Voting Rights.
     (1) The holders of Series A Shares shall have no voting rights except as provided byDelaware statutes or by paragraph (2) of this Section F.
     (2) So long as any Series A Shares shall be outstanding, and in addition to any otherapprovals or consents required by law, without the consent of the holders of 66-2/3% of theSeries A Shares outstanding as of a record date fixed by the Board of Directors, giveneither by their affirmative vote at a special meeting called for that purpose, or, ifpermitted by law, in writing without a meeting:
     (i) The Corporation shall not sell, transfer or lease all or substantially allthe properties and assets of the Corporation; provided, however,that nothing herein shall require the consent of the holders of Series A Shares foror in respect of the creation of any mortgage, pledge, or other lien upon all or anypart of the assets of the Corporation.
     (ii) The Corporation shall not effect a merger or consolidation with any othercorporation or corporations unless as a result of such merger or consolidation andafter giving effect thereto holders of Series A Shares are entitled to receive a pershare amount and type of consideration equal to 100 times the per share amount andtype of consideration received by holders of shares of Common Stock, or (1) either(A) the Corporation shall be the surviving corporation or (B) if the Corporation isnot the surviving corporation, the successor corporation shall be a corporation dulyorganized and existing under the laws of any state of the United States of Americaor the District of Columbia, and all obligations of the Corporation with respect tothe Series A Shares shall be assumed by such successor corporation, (2) the Series AShares then outstanding shall continue to be outstanding and (3) there shall be noalteration or change in the designation or the preferences, relative rights orlimitations applicable to outstanding Series A Shares prejudicial to the holdersthereof.
     (iii) The Corporation shall not amend, alter or repeal any of the provisions ofits Certificate of Incorporation in any manner that adversely affects the relativerights, preferences or limitations of the Series A Shares or the holders thereof.
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     Section G. Certain Restrictions.
     (1) Whenever quarterly dividends or other dividends or distributions payable on theSeries A Shares as provided in Section A are in arrears, thereafter and until all accruedand unpaid dividends and distributions, whether or not declared, on Series A Sharesoutstanding shall have been paid in full, the Corporation shall not:
     (i) declare or pay dividends on, make any other distributions on, or redeem orpurchase or otherwise acquire for consideration any shares of stock ranking junior(as to dividends) to the Series A Shares;
     (ii) declare or pay dividends on or make any other distributions on any sharesof stock ranking on a parity (as to dividends) with the Series A Shares, exceptdividends paid ratably on the Series A Shares and all such parity stock on whichdividends are payable or in arrears in proportion to the total amounts to which theholders of all such shares are then entitled;
     (iii) redeem or purchase or otherwise acquire for consideration shares of anystock ranking junior (as to dividends) to the Series A Shares; provided,however, that the Corporation may at any time redeem, purchase or otherwiseacquire shares of any such junior stock in exchange for shares of any stock of theCorporation, ranking junior (as to dividends) to the Series A Shares; and
     (iv) purchase or otherwise acquire for consideration any Series A Shares, orany shares of stock ranking on a parity (as to dividends) with the Series A Shares,except in accordance with a purchase offer made in writing or by publication (asdetermined by the Board of Directors) to all holders of such shares upon such termsas the Board of Directors, after consideration of the respective annual dividendrates and other relative rights and preferences of the respective series andclasses, shall determine in good faith will result in fair and equitable treatmentamong the respective series or classes.
     (2) The Corporation shall not permit any subsidiary of the Corporation to purchase orotherwise acquire for consideration any shares of stock of the Corporation unless theCorporation could, under paragraph (1) of this Section G, purchase or otherwise acquire suchshares at such time and in such manner.
     Section H. Fractional Shares. The Corporation may issue fractions and certificatesrepresenting fractions of Series A Shares in integral multiples of 1/100th of a Series A Share, orin lieu thereof, at the election of the Board of Directors of the Corporation at the time of thefirst issue of any Series A Shares, evidence such fractions by depositary receipts, pursuant to anappropriate agreement between the Corporation and a depositary selected by it, provided that suchagreement shall provide that the holders of such depositary receipts shall have all rights,privileges and preferences to which they would be entitled as beneficial owners of Series A Shares.In the event that fractional Series A Shares are issued, the holders thereof shall have all therights provided herein for holders of full Series A Shares in the proportion that such fractionbears to a full share.
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     **INWITNESS WHEREOF,**the Corporation has executed this Amended Certificate of Designation asof this 15th day of April, 2005.      ORTHOLOGIC CORP.                                                          /s/ James M. Pusey   James M. Pusey, President      
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