share, and "Series C Preferred
Stock" (the "Series C Preferred Stock"), par value $.001 per share.
The number
of shares initially constituting the Series B Preferred Stock and the Series C
Preferred Stock shall be 290,000 shares and 530,000 shares, respectively.
The
Series B Preferred Stock and Series C Preferred Stock are sometimes referred to
together as the "Series Preferred Stock."
SECTION 2:
DIVIDENDS AND DISTRIBUTIONS.
(A)
DIVIDENDS. THE HOLDERS OF THE SERIES B PREFERRED STOCK (THE
"SERIES B HOLDERS") AND THE HOLDERS OF THE SERIES C PREFERRED STOCK (THE "SERIES
C HOLDERS" OR, COLLECTIVELY WITH THE SERIES B HOLDERS, THE "SERIES HOLDERS")
SHALL BE ENTITLED TO RECEIVE WHEN, AS AND IF DECLARED BY THE BOARD OF DIRECTORS,
OUT OF ANY ASSETS LEGALLY AVAILABLE THEREFOR, DIVIDENDS NOT LESS THAN, AND IN
PREFERENCE AND PRIORITY TO ANY PAYMENT OF, ANY DIVIDEND OR DISTRIBUTION ON THE
COMMON STOCK OR ANY OTHER CLASS OR SERIES OF STOCK OF THE CORPORATION RANKING
JUNIOR TO THE SERIES PREFERRED STOCK AND PRO RATA WITH PAYMENT OF ANY DIVIDEND
ON ANY CLASS OR SERIES OF STOCK OF THE CORPORATION RANKING ON A PARITY WITH THE
SERIES PREFERRED STOCK AS TO DIVIDENDS.
SUCH DIVIDENDS ON THE SERIES B
PREFERRED STOCK AND THE SERIES C PREFERRED STOCK SHALL ACCRUE AT THE RATE OF
$.41 PER SHARE AND $.23 PER SHARE, RESPECTIVELY, PER ANNUM FROM THE DATE OF
ISSUANCE TO THE DATE OF PAYMENT, BASED ON THE ACTUAL NUMBER OF DAYS ELAPSED, AND
SHALL BE PAYABLE ON THE PAYMENT DATE FIXED BY THE DECLARATION OR, IF NO PAYMENT
DATE IS FIXED, SHALL ACCRUE SEMI-ANNUALLY ON MAY 31ST, AND NOVEMBER 30TH OF EACH
YEAR, AND UPON ANY LIQUIDATION (AS HEREINAFTER DEFINED). IN THE EVENT DIVIDENDS
IN LESS THAN THE FULL PREFERENTIAL AMOUNT SHALL BE PAID TO THE HOLDERS OF THE
SERIES PREFERRED STOCK, SUCH DIVIDENDS SHALL BE DISTRIBUTED RATABLY AMONG SUCH
HOLDERS IN PROPORTION TO THE FULL PREFERENTIAL AMONT THAT EACH SUCH HOLDER IS
OTHERWISE ENTITLED TO RECEIVE UNDER THIS SECTION 2(A).
(B)
DISTRIBUTIONS. AS USED IN THIS SECTION 2, THE TERM "DISTRIBUTION"
SHALL MEAN A TRANSFER OF CASH, PROPERTY OR SECURITIES WITHOUT CONSIDERATION,
WHETHER BY WAY OF DIVIDEND OR OTHERWISE, OR THE PURCHASE OR REDEMPTION OF SHARES
OF THE CORPORATION.
(C)
NECESSARY ACTIONS. THE CORPORATION SHALL TAKE ANY AND ALL
CORPORATE ACTION NECESSARY TO DECLARE AND PAY THE DIVIDENDS REQUIRED.
SECTION 3:
LIQUIDATION.
(A)
LIQUIDATION DEFINED. "LIQUIDATION" MEANS ANY VOLUNTARY OR
INVOLUNTARY LIQUIDATION, DISSOLUTION OR WINDING UP OF THE AFFAIRS OF THE
CORPORATION, OTHER THAN ANY DISSOLUTION, LIQUIDATION OR WINDING UP IN CONNECTION
WITH ANY REINCORPORATION OF THE CORPORATION IN ANOTHER JURISDICTION.
A
CORPORATE TRANSACTION (AS HEREINAFTER DEFINED) SHALL BE DEEMED TO BE A
LIQUIDATION.
AS USED HEREIN, "CORPORATE TRANSACTION" SHALL MEAN (I) ANY
CONSOLIDATION OR MERGER OF THE CORPORATION WITH OR INTO ANY OTHER CORPORATION OR
OTHER ENTITY OR PERSON, OR ANY OTHER CORPORATE REORGANIZATION, IN WHICH THE
STOCKHOLDERS OF THE CORPORATION IMMEDIATELY PRIOR TO SUCH CONSOLIDATION, MERGER
OR REORGANIZATION OWN LESS THAN FIFTY PERCENT (50%) OF THE CORPORATION'S