Document:

exv10w23

 

EXHIBIT 10.23

FIRST AMENDMENT TO DISTRIBUTION AGREEMENT

This First Amendment to Distribution Agreement (this “Amendment”) is made and
entered into the 24th day of October, 2003, by and between Dexterity Surgical,
Inc. (“Dexterity”) and Pilling Weck Incorporated, successor to Weck Closure
Systems, LLC (“Distributor”). Dexterity and Distributor are hereinafter
sometimes referred to as the “Parties.”

W I T N E S S E T H:

WHEREAS, the Parties previously entered into a Distribution Agreement dated as
of June 5, 2001 (the “Agreement”); and

WHEREAS, the Parties desire to amend the Agreement in order to extend the term
of the Agreement, to provide Dexterity advances against future shipments, and
certain other modifications, as further set forth herein.

NOW, THEREFORE, in consideration of the mutual promises and covenants contained
herein, and intending to be legally bound, the Parties hereto agree as follows:

1.     Unless elsewhere expressly defined in this Amendment, all capitalized terms
used herein shall have the definitions given to such terms in the Agreement.

2.     Distributor has made previous advance payments to Dexterity. The
outstanding advanced amount of $123,000 (“First Advance”) by Distributor will
be offset against Distributor’s purchase orders Nos. P17873, P17874, P17875 and
P17876.

3.     Distributor will advance $150,000 (“Second Advance”) to Distributor promptly
after execution of this Amendment by the Parties. Dexterity will offset the
Second Advance against Distributor’s purchase orders issued during the fourth
calendar quarter of 2003 and all other future purchase orders issued by
Distributor until the full amount of the Second Advance has been offset and
repaid to Distributor.

4.     Section 3 of the Agreement is hereby deleted in its entirety and shall now
read:

	 	 	 	“The initial term of this Agreement shall expire on the date that
Dexterity shall have repaid the First Advance and the Second Advance to
Distributor through offsets against Distributor’s purchase orders; provided
however that in no event shall this Agreement expire earlier than June 30,
2004.”

5.     New Section 6.8 is hereby inserted into the Agreement, which new section
shall read as follows:

 

 

	 	 	 	“6.8 Simultaneously with Dexterity’s cost reductions from Apogee for the
Products, Dexterity will pass on to Distributor 100% of Apogee’s cost
reductions in the form of lower transfer pricing for the Products.

6.            During the period of the extension of the Agreement as provided for herein,
the Parties agree to negotiate a new distribution agreement, which includes a
new pricing structure utilizing anticipated Apogee cost reductions.

7.            Except as amended hereby, the terms of the Amendment shall continue in full
force and effect in accordance with their terms.

IN WITNESS WHEREOF, the parties have caused this Amendment to be duly executed
and delivered by their respective duly authorized officers as of the date first
above written.

	 	 	 
	DEXTERITY SURGICAL, INC.
	 
	 	 
	By:

	 	   /s/ Randall K. Boatright
	

	 	
 
	

	 	Name: Randall K. Boatright
	

	 	Title: Executive Vice President and CFO
	 
	 	 
	PILLING WECK INCORPORATED
	 
	 	 
	By:

	 	   /s/ Chris Tihansky
	

	 	
 
	

	 	Name: Chris Tihansky
	

	 	Title: Vice President Surgical<PAGE>

                                                                     EXHIBIT 4.1

                                 CERTIFICATE OF
                     DESIGNATION, PREFERENCES AND RIGHTS OF
                            SERIES A PREFERRED STOCK
                                       OF
                                KITTY HAWK, INC.

         Pursuant to Section 151 of the General Corporation Law of the State of
Delaware

         I, Steven E. Markhoff, Secretary of Kitty Hawk, Inc. (the
"CORPORATION"), a corporation organized and existing under the General
Corporation Law of the State of Delaware (the "GCL"), in accordance with the
provisions of Section 103 of the GCL, DO HEREBY CERTIFY

         That pursuant to the authority conferred upon the Board of Directors
(the "BOARD") by the Second Amended and Restated Certificate of Incorporation of
the Corporation, as amended, the said Board on January 21, 2004, adopted the
following resolutions creating a series of 120,000 shares of Preferred Stock,
par value $.01 per share, designated as Series A Preferred Stock:

         RESOLVED, that, pursuant to the authority vested in the Board in
accordance with the provisions of its Second Amended and Restated Certificate of
Incorporation, as amended, the Board does hereby create, authorize and provide
for the issuance upon the exercise of the Corporation's Preferred Stock Purchase
Rights, of a series of Preferred Stock of the Corporation, and does hereby fix
and state that the designations, amounts, powers, preferences and relative and
other special rights and the qualifications, limitations or restrictions thereof
are as follows:

Series A Preferred Stock

         Section 1. Designation and Amount. The shares of such series shall be
designated as Series A Preferred Stock and the number of shares constituting
such series shall be 120,000.

         Section 2. Dividends and Distributions.

                  (A)      Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Preferred Stock with respect to dividends,
the holders of shares of Series A Preferred Stock in preference to the holders
of Common Stock, par value $0.000001 per share (the "COMMON STOCK"), and of any
other stock of the Corporation ranking junior to the Series A Preferred Stock
with respect to dividends shall be entitled to receive, when, as and if declared
by the Board out of funds legally available for that purpose, quarterly
dividends payable in cash on the 1st day of March, June, September and December
(each such 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 share or fraction of a share of Series A Preferred Stock, in an
amount per share (rounded to the nearest cent) equal to the greater of (a)
$0.001 or (b) subject to the provision for adjustment hereinafter set forth, one
thousand (1,000) times the aggregate per share amount of all cash dividends, and
one thousand (1,000) times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable in
shares of

<PAGE>

Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock, since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Preferred Stock. In the event the Corporation
shall at any time after January 21, 2004 (the "RIGHTS DECLARATION DATE") (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount to
which holders of shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  (B)      The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $0.001 per share on
the Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.

                  (C)      Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series A
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board
may fix a record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than sixty (60) days prior
to the date fixed for the payment thereof.

         Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:

                  (A)      Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall entitle the holder
thereof to one thousand (1,000) votes which each share of Common Stock is
entitled to vote. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of

<PAGE>

Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.

                  (B)      Except as otherwise provided herein or by law, the
holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class on all matters submitted to a vote
of stockholders of the Corporation. Except as otherwise provided herein or by
law, the holders of the shares of Series A Preferred Stock shall not be entitled
to vote as a separate class on any matters submitted to a vote of the
stockholders.

                  (C)      Except as set forth herein, holders of Series A
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.

         Section 4. Certain Restrictions.

                  (A)      Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:

                           (i)      declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for consideration
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to, the Series A Preferred Stock;

                           (ii)     declare or pay dividends on, or make any
other distributions on, any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled;

                           (iii)    redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series A Preferred Stock; or

                           (iv)     purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred

<PAGE>

Stock, except in accordance with a purchase offer made in writing or by
publication (as determined by the Board) to all holders of such shares upon such
terms as the Board, after consideration of the respective annual dividend rates
and other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among
the respective series or classes.

                  (B)      The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.

         Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
to be created by resolution or resolutions of the Board, subject to the
conditions and restrictions on issuance set forth herein.

         Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of Common Stock or of shares of
any other stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
an amount equal to the greater of (i) $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment and (ii) an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 1,000 times the
aggregate amount to be distributed per share to holders of shares of Common
Stock (the "SERIES A LIQUIDATION PREFERENCE") or (2) to the holders of shares of
stock ranking on a parity upon liquidation, dissolution or winding up with the
Series A Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total amounts to
which the holders of all such shares are entitled upon such liquidation,
dissolution or winding up. In the event the Corporation shall at any time after
the Rights Declaration Date (i) declare any dividend on Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in
each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.

         Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock,
securities, cash or any other property, then in any such case the shares of
Series A Preferred Stock shall at the same time be similarly exchanged for or
changed into an amount per share (subject to the provision for adjustment
hereinafter set

<PAGE>

forth) equal to one thousand (1,000) times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the 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 after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (ii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.

         Section 8. Redemption. The outstanding shares of Series A Preferred
Stock may be redeemed at the option of the Board as a whole, but not in part, at
any time, or from to time to time, at a cash price per share equal to one
hundred five percent (105%) of (i) the product of the Adjustment Number (as such
term is hereinafter defined) times the Average Market Value (as such term is
hereinafter defined) of the Common Stock, plus (ii) all dividends which on the
redemption date have accrued on the shares to be redeemed and have not been
paid, or declared and a sum sufficient for the payment thereof set apart,
without interest. The "Adjustment Number" is one thousand (1,000) (as
appropriately adjusted as set forth in the last sentence of Section 6 to reflect
such events as stock splits, stock dividends and recapitalizations with respect
to the Common Stock). The "Average Market Value" is the average of the closing
sale prices of the Common Stock during the thirty (30) day period immediately
preceding the date before the redemption date on the New York Stock Exchange,
or, if such stock is not listed on such Exchange, on the Composite Tape for
American Stock Exchange Listed Stocks, or, if such stock is not quoted on the
Composite Tape, on the principal United States securities exchange registered
under the Securities Exchange Act of 1934, as amended, on which such stock is
listed, or, if such stock is not listed on any such exchange, the average of the
closing sale prices with respect to a share of Common Stock during such thirty
(30) day period, as quoted on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use, or if no such
quotations are available, the fair market value of the Common Stock as
determined by the Board in good faith.

         Section 9. Ranking. The Series A Preferred Stock shall rank (a) senior
to all Common Stock and (b) junior to all other series of preferred stock with
respect to the payment of dividends and the distribution of assets, unless the
terms of any such series shall provide otherwise.

         Section 10. Amendment. The Second Amended and Restated Certificate of
Incorporation of the Corporation, as amended, shall not be further amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Preferred Stock, voting separately as a class.

<PAGE>

         Section 11. Fractional Shares. At the Corporation's sole discretion,
Series A Preferred Stock may be issued in fractions of a share which shall
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Preferred Stock.

                                    ********

<PAGE>

         IN WITNESS WHEREOF, I have executed and subscribed this Certificate of
Designation and do affirm the foregoing as true as of January 26, 2004.

                                                 /s/ Steven E. Markhoff
                                                 -------------------------------
                                                 Steven E. Markhoff, Secretary

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