Document:

NETSMART TECHNOLOGIES, INC.
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                            Executive Retirement Plan
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                                                              April 1, 2004

                           NETSMART TECHNOLOGIES, INC.
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                            Executive Retirement Plan
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                      Contents                                          Page
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        Section 1.    Purpose of the Plan                                 1

        Section 2.    Definitions                                         1

        Section 3.    Administration                                      2

        Section 4.    Participation                                       3

        Section 5.    Benefits and Payments Under the Plan                4

        Section 6.    Amendment and Termination of the Plan               5

        Section 7.    General Provisions                                  5

        APPENDIX A                                                        7

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                           NETSMART TECHNOLOGIES, INC.
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                            Executive Retirement Plan
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SECTION 1.            Purposes of the Plan.

1.1     Netsmart Technologies, Inc. (the "Company") has adopted this Executive
        Retirement Plan (the "Plan), effective April 1, 2004, in order to
        provide an unfunded retirement benefit to certain current and future
        management employees of the Company and its Subsidiaries and Affiliates
        who have attained the required age and length of service with the
        Company, and who have retired from employment with the Company in good
        standing.

SECTION 2.            Definitions.

        For purposes of the Plan, the following terms shall have the meanings
        set forth below:

2.1     "Beneficiary" shall mean the person or persons designated by the
        Participant under the Plan to receive benefits under the Plan in the
        event of the Participant's death.

2.2     "Benefit" or "Benefits" shall mean the annual and cumulative financial
        payment(s) which a Participant is eligible to receive upon Retirement
        (as herein defined) under the Plan pursuant to the provisions of Section
        5 hereof.

2.3     "Board" shall mean the Board of Directors of the Company.

2.4     "Cause" as it pertains to any Participant under this Plan shall mean (a)
        repeated failure to perform material instructions from the Board which
        are reasonable; or (b) breach of certain covenants not to compete or
        solicit, or concerning trade secrets, proprietary information,
        inventions and discoveries, as such covenants are provided by any
        employment agreement with the Company; or (c) a breach of trust whereby
        personal gain or benefit is obtained at the expense of or to the
        detriment of the Company; or (d) a conviction of any felony.

2.5     "Change in Control" shall mean a change in control of the Company as a
        result of any of the following:

        (a)     a change-in-control as such term is defined in Regulation
                240.12b-(2) of the Securities Exchange Act of 1934, as amended
                (the "Act");

        (b)     if any "person" (as such term is used in Sections 13(d) and
                14(d) of the Act) other than the Company or any person who is a
                director or officer of the Company, becomes the "beneficial
                owner" (as defined in Rule 13(d)-3 of the Act) directly or
                indirectly, of securities of the Company representing twenty
                percent (25%) of more of the voting power of the Company's then
                outstanding securities;

                                       1
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                            Executive Retirement Plan
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        (c)     if, during any period of two (2) consecutive years during the
                term of this Plan, individuals who at the beginning of such
                period constitute the Board of Directors, cease for any reason
                to constitute at least a majority thereof unless the election of
                each new director was nominated, ratified or approved by at
                least two-thirds (2/3) of the directors then still in office who
                were either directors at the beginning of such period or who
                were elected or appointed with the approval or ratification of
                at least two-thirds (2/3) of the directors who were directors at
                the beginning of such period;

        (d)    the occurrence of a CSM Disposition as such term is defined in
               certain senior executive employment agreements of the Company.

2.6     "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.7     "Committee" shall mean the Compensation Committee of the Board of
        Directors of the Company acting on the majority vote of such Committee.

2.8     "Company" shall mean Netsmart  Technologies,  Inc., a corporation
        organized under the laws of the State of Delaware (or any successor
        corporation), and any Subsidiaries or Affiliates thereof.

2.9     "Effective Date" shall mean April 1, 2004.

2.10    "Employee" shall mean any employee employed by the Company on or after
        the Effective Date of the Plan.

2.11    "Participant" shall mean any Employee of the Company and who has been
        designated by the Board for participation in this Plan pursuant to
        Paragraph 4.1 hereof at least 60 days prior to any Retirement hereunder.

2.12    "Plan" shall mean the Netsmart Technologies Inc. Executive Retirement
        Plan as set forth herein and as amended from time to time.

2.13    "Retirement" shall mean (solely for purposes of this Plan) the voluntary
        or involuntary termination of employment (other than for Cause) of any
        Participant upon such Participant's attainment of a minimum of
        fifty-five (55) years of age with a minimum of eight (8) years of
        continuous Company service.

SECTION 3.            Administration.

3.1     The Plan shall be administered by the Committee. Any Retirement by any
        Participant (as such terms are herein defined) shall be authorized by a
        majority of the Committee. The Committee shall have full power and
        authority to interpret, construe and administer the Plan in accordance
        with the provisions of this Plan document, subject to review by the full
        Board.

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3.2     The Committee shall establish and maintain Plan records and may arrange
        for the engagement of consultants or legal counsel, and make use of such
        external resources, as it shall require or deem advisable for the
        purposes of the Plan. The Committee may rely upon the written opinion of
        any such consultants or counsel engaged by the Committee, and may also
        delegate certain tasks and responsibilities necessary to the
        administration of the Plan to such consultants or counsel, or to certain
        financial or human resources personnel of the Company.

3.3     To the maximum extent permitted by applicable law, no member of the
        Committee or the Board shall be personally liable by reason of any
        resolution, contract or other instrument executed by him in his capacity
        as a member of the Committee or the Board, nor for any decisions made in
        good faith, and the Company shall indemnify and hold harmless each
        member of the Committee and the Board, and each officer, employee or
        director of the Company to whom any duty or power relating to the
        administration or interpretation of the Plan is delegated against any
        cost or expense (including reasonable legal fees) or liability arising
        out of any action or failure to act taken in good faith in connection
        with the administration of the Plan.

SECTION 4.            Participation.

4.1     The Board of Directors shall, from time to time, designate those
        management employees of the Company who shall be Participants under the
        Plan.

4.2     The participation of any designated Participant shall not be rescinded
        by the Board or the Committee other than for Cause (as herein defined)
        or for breach of Paragraph 4.3 hereof.

4.3     While receiving any Benefits under this Plan following Retirement, a
        Participant shall not, without the prior written approval of the Board,
        directly or indirectly, or through any other individual or entity,
        become an officer or employee of, or render any services (including
        consulting services) to any direct competitor of the Company. Further, a
        Participant shall not solicit, entice or induce any customer of the
        Company to cease purchasing goods or services from the Company or to
        become a customer of any direct competitor of the Company, and shall not
        solicit, entice or induce any employee of the Company to leave the
        employ of the Company or to become an employee of any direct competitor
        of the Company.

4.4     A Participant's breach of any of the provisions of Paragraph 4.3 hereof
        will result in the termination of all Benefits provided hereunder to
        such Participant unless otherwise determined by the Board in its sole
        discretion.

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SECTION 5.            Benefits and Payments Under the Plan.

5.1     Commencing with the date of the Participant's Retirement (as defined
        herein), the Company will annually pay to the Participant (or his
        designated legal representative) the Benefits afforded by this Plan.
        Such Benefits are fixed by the terms of this Plan and shall increase
        based on the number of completed calendar years of Company service
        provided by the Participant after the Effective Date in accordance with
        the Benefit schedule on Appendix A hereof. The Benefits shall be paid
        annually for a period of six calendar years after any such Retirement
        (including the year of Retirement).

5.2     Should a Participant die after Retirement but before receiving the full
        amount of the Benefits provided herein, the Company shall continue to
        make payment of such Benefits (as provided in Paragraph 5.1 hereof) to
        the Participant's Beneficiary, as designated in writing by the
        Participant and accepted by the Committee, for a period up to and
        including the sixth calendar year following Retirement (including the
        year of Retirement). In the absence of any effective designation of
        Beneficiary, the Benefits provided herein shall be payable to the
        Participant's duly-qualified Executor or Administrator for the benefit
        of the Participant's estate.

5.3     Payment of Benefits under this Plan shall be made annually in no more
        than four equal quarterly installments or (at the discretion of the
        Committee) payment may be made in one annual installment of the entire
        amount payable to the Participant. These payment(s) shall be made at
        such time(s) as is convenient for the Company (but in no event shall any
        annual or quarterly installment payments commence after March 31 of each
        year in which such Benefits are payable).

5.4     In addition to the Benefits provided by Paragraph 5.1 hereof, the
        Participant shall continue to receive for life the health benefits
        (including major medical, accident, life and long-term disability
        insurance) provided by the Company pursuant to the terms and conditions
        of any Employment Agreement in effect between the Company and the
        Participant immediately preceding such Participant's Retirement, and
        such health benefits shall be considered the Additional Benefits
        hereunder.

5.4     All Benefits payments provided for under the Plan shall be paid in cash
        from the general funds of the Company, provided, however, that such
        payments shall be reduced by the amount of any payments made to the
        Participant or his Beneficiary or estate from any trust, special or
        separate fund, or insurance policy, established by the Company to assure
        such payments. If the Company, in its sole discretion, elects to
        establish any such trusts, or special or separate funds, or elects to
        make any investments or purchase any insurance to aid it in meeting its
        obligations hereunder, the Participant or his Beneficiary or estate
        shall have no right, title or interest whatsoever in or to any such
        trusts, funds, investments, or insurance. Nothing contained in this
        Plan, and no action taken pursuant to any provisions of the Plan, shall
        create or be construed to create a trust of any kind between the Company
        and the Participant or his Beneficiary or estate. To the extent that any
        Participant acquires the right to receive payments hereunder, such right
        shall be no greater than the right of an unsecured creditor of the
        Company.

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SECTION 6.            Amendment and Termination of the Plan.

6.1     The Plan may be amended or suspended, in whole or in part, by the Board
        at any time, but no such action shall retroactively impair or otherwise
        adversely affect the rights of any Participant to receive the Benefits
        to which such Participant is otherwise entitled under the Plan prior to
        the date of such action.

6.2     The Board may terminate the Plan at any time. However, the Benefits then
        being paid or then owed to any Participant under Section 5 hereof shall
        commence or continue to be paid until paid in full. Notwithstanding the
        foregoing, no termination of the Plan upon the occurrence of a Change in
        Control of the Company shall have effect of reducing or eliminating the
        Benefits then being paid or then owed to any Participant.

6.3     Nothing in the Plan shall preclude the Company from selling to,
        consolidating or merging into or with, or transferring all or
        substantially all of its assets to, another corporation, and such
        corporation shall assume this Plan and all obligations of the Company
        hereunder.

SECTION 7.            General Provisions.

7.1     Nothing in this Plan shall be construed to affect in any manner the
        rights and privileges of any Employee or Participant to be covered by or
        participate in any employee benefit plan which the Company may now or in
        the future provide.

7.2     Nothing contained herein shall confer upon any Participant or Employee
        the right to be retained in the employ of the Company, nor interfere
        with the right of the Company to terminate the employment of any
        Participant or Employee without regard to the existence of this Plan.
        Notwithstanding any other provisions of this Plan, in the event of a
        Participant's termination for Cause, such Participant or his Beneficiary
        or estate shall forfeit all rights to payments under the Plan.

7.3     The Plan is intended to constitute an "unfunded plan for management or
        other highly compensated individuals" as defined in the Employee
        Retirement Income Security Act of 1974 (ERISA) and shall therefore not
        be construed as a qualified employee retirement benefit program.
        Notwithstanding the foregoing, the Plan may be subject to certain
        provisions of ERISA, including certain requirements relating to
        reporting, disclosure, enforcement and claims.

7.4     The Company may withhold from any Benefits payable under the Plan all
        Federal, state, city or other taxes as shall be required pursuant to any
        law or governmental regulation or ruling.

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7.5     All expenses  incurred in administering the Plan shall be paid by the
        Company and none shall be paid by the Participant.

7.6     No right to any amount payable at any time under the Plan may be
        assigned, transferred, pledged or otherwise encumbered, either
        voluntarily or by operation of law, except as expressly provided herein.
        This Plan shall be binding upon and inure to the benefit of the Company
        and its successors and assigns, and the Participant, his Beneficiary and
        estate.

7.7     This Plan shall be construed, regulated and administered according to
        the Code and the laws of the State of New York.

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                           NETSMART TECHNOLOGIES, INC.
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                            Executive Retirement Plan
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                                   APPENDIX A

Schedule of Retirement Benefits Under the Plan Assuming the Participant's
Attainment of the Minimum Retirement Age of 55 (with 8 or More Years of Total
Company Service)

      Completed Calendar Years of Company
       Service After Effective Date of Plan       Annual Retirement Benefit
       ------------------------------------       -------------------------

         Less than 1 Completed Calendar Year          $ 85,000

         1 Completed Calendar Year                    $ 93,500

         2 Completed Calendar Years                   $102,850

         3 Completed Calendar Years                   $113,135

         4 Completed Calendar Years                   $124,448

         5 Completed Calendar Years or More           $136,893 (Maximum Benefit)Designations of 5% Preferred Stock

STATE OF DELAWARE

SECRETARY OF STATE DIVISION OF CORPORATIONS FILED 09:00 AM 06/2812000

001332123 - 2154412

AMENDED CERTIFICATE OF DESIGNATIONS OF
SERIES C 6% CONVERTIBLE PREFERRED STOCK OF
USA 
BIOMASS CORPORATION

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

The undersigned, Fred H. Behrens and Hilly G. Jones, hereby certify that:

1.   They are the duly elected and acting Chairman and Secretary, respectively, of USA Biomass Corporation, a Delaware corporation (the "Corporation").

II.   The Certificate of incorporation of the Corporation authorizes three thousand (3,000) shams of preferred stock, $0.001 par value per share.

III. The following is a rave and correct copy of resolutions duly adopted by the Board of Directors of the Corporation (the "board of Directors") on June 27, 2000 pursuant to the Articles of Incorporation of the Corporation and in accordance with the provisions of the General Corporation Law of the State of Delaware.

RESOLUTIONS

WHEREAS, the Board of Directors is authorized to provide for the issuance of the shares of preferred stock, and by filing a certificate pursuant to the applicable law of the agitate of Delaware to establish and issue preferred stock with such voting powers, full or limited, or nonvoting powers, and such designations, preferences and relative, participating, optional or other special rights, and with such qualifications, limitations or restrictions thereon as the Board of Directors may determine.

WHEREAS, the Board of Directors desires, pursuant to its authority as aforesaid, to designate a new series of preferred stock, set the number of shares constituting such series and fix the rights, preferences, privileges and restrictions of such series.

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby designates a new series of preferred stock and the number of shares constituting such series and fixes the rights, preferences, privileges and restrictions relating to such series as follows:

A. Designation, Amount and Par Value. The series of preferred stock shall be designated as the Series C 6% Convertible Preferred Stock (the "Series C Preferred Stock"), and the number of shares so designated shall be three thousand (3,000) (which shall not be subject to increase or decrease). Each share of Series C Preferred Stock shall have a par value of $0.0p I per share and a stated value (the "Stated Value") of the Liquidation Preference (as hereinafter defined in Section C (I)).

	 
	 	 	 
	

	 

B.   Dividend.

(1) Holders of the Series C Preferred Stock shall be entitled to receive, out of funds legally available therefor, dividends at a rate equal to 6% (the "Dividend Rate") of the Liquidation Preference per share per annum (subject to appropriate adjustments in the event of any stock dividend, stock split, combination or other similar recapitalization affecting such shares), and no more, payable in accordance with the provisions of this Amended Certificate of Designations.

(2) At the election of the Corporation, each dividend on Series C Preferred Stock shall be paid either in shares of Common Stock of the Corporation, $0.001 par value per share ("Common Stock") or in cash on the Delivery Date (as defined in Subsection Cr(2)(a) of this Amended Certificate of Designations) with respect to any shares of Series C Preferred Stock which are the subject of a Notice of Conversion (as defined in Substation G(2) of this Amended Certificate of Designations). Dividends paid in shares of Common Stock shall be paid (based on an assumed value of $1,000 per share) in full shares only, with a cash payment equal to the value of any fractional shares. Each dividend paid in cash shall be mailed to the holders of record of the Series C Preferred Stock as their names and addresses appear on the share register of the Corporation or at the office oft he transfer agent on the corresponding dividend payment date. Holders of Series C Preferred Stock will receive written notification from the Corporation or the transfer agent if a dividend is paid in kind, which notification will specify the number of shares of Common Stock paid as a dividend and the recipient's aggregate holdings of Common Stock as of that dividend payment date and after giving effect to the dividend. All holders of shares of Common Stock issued as dividends shall be entitled to all of the rights and benefits relating to shares of Common Stock as set forth in the Corporation's Articles of incorporation, as amended, and By-laws.

(3) Holders of the Series C Preferred Stock shall be entitled to payment of any dividends in preference and priority to any payment of any cash dividend on Common Stock or any other class or series of capital stock of the Corporation, other than holders of share$ of the issued and outstanding Series A Preferred Stock of the Company, as of the date hereof, who shall be entitled to receive such dividends on a pari passu basis with the holders of the Series C Preferred Stock. Dividends on the Series C Preferred Stock shall accrue with respect to each share of the Series C Preferred Stock from the date on which such share is issued and outstanding and thereafter shall be deemed to accrue from day to day whether or not earned or declared and whether or not there exists profits, surplus or other funds legally available for the payment of dividends, and shall be cumulative so that if such dividends on the Series C Preferred Stock shall not have been laid, or declared and set apart for payment, the deficiency shall be fully paid or declared and set apart for payment before any dividend shall be paid or declared or set apart for any Common Stock cat other class or series of capital stock ranking junior to the Series C Preferred Stock (such stock being collectively referred to heroin as the "Junior Stock") and before any purchase or acquisition of any Junior Stock is made by the Corporation. At the earlier of: (1) the redemption or conversion of the Series C Preferred Stock or (2) the liquidation of the Corporation, any accrued but undeclared dividends shall be paid to the holders of record of outstanding shares of the Series C Preferred Stock

	 
	 	 	 
	

	 

in accordance with the provisions of this Amended Certificate of Designations. No accumulation o dividends on the Series C Preferred Stock shall bear interest.

C. Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of the Series C Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, before any payment shall be made to the holders of Junior Stock by reason of their ownership thereof, an amount equal to one thousand dollars ($1,000) per share of Series C Preferred Stock (the "Liquidation Preference") plus any accrued but unpaid dividends (whether or not declared). If upon any such liquidation, dissolution or winding up of the Corporation the remaining assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of the Series C Preferred Stock the full amount to which they shall be entitled, the holders of shares of the Series C Preferred Stock shall share ratably in any distribution of the remaining assets and funds of the Corporation in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

D.   Voting. Except for the limited voting rights specified in Section 3 rtf this Amended Certificate of Designations, each holder of outstanding shares of Series C Preferred Stock shall not be entitled to vote at any meeting of stockholders of the Corporation (and With respect to written consents of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration, until and unless the shares of Series C Preferred Stock held by such holder have been converted into shares of Common Stock, at which time each holder shall have the voting rights appurtenant to each whole share of Common Stock so converted.

E. Other Securities. Subject to any limitations contained in this Amended Certificate of Designations, the Corporation's Articles of incorporation and/or the Primary Documents (as defined in the Securities Purchase Agreement, dated as of March 14, 2000, hereinafter the "Securities Purchase Agreement"), the Board of Directors of the Corporation reserves the right to establish additional classes and/or series of capital stock of the Corporation and to designate the preferences, limitations and relative rights of any such classes and/or series; provided, however, that no such class and/or series may have preferences, limitations and relative rights which are superior to or senior to the preferences, limitations and relative rights granted to the holders of the Series C Preferred Stock.

F. Capital organization. If the Corporation shall at any time hereafter subdivide or combine its outstanding shares of Common Stock, declare a dividend payable in Common Stock, or in case of any capital reorganization or reclassification of the shares of Common Stock of the Corporation, the number of shares of the Series C Preferred Stock and the Stated Value of the Series C Preferred Stock shall be adjusted appropriately to allow the holders of the Series C Preferred Stock, as nearly as reasonably possible, to maintain (i) the aggregate Stated Value of the

	 
	 	 	 
	

	 

in accordance with the provisions of this Amended Certificate of Designations. No accumulation o dividends on the Series C Preferred Stock shall bear interest.

C. Liquidation, Dissolution or Winding Up. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation, the holders of shares of the Series C Preferred Stock then outstanding shall be entitled to be paid out of the assets of the Corporation available for distribution to its stockholders, before any payment shall be made to the holders of Junior Stock by reason of their ownership thereof, an amount equal to one thousand dollars ($1,000) per share of Series C Preferred Stock (the "Liquidation Preference") plus any accrued but unpaid dividends (whether or not declared). If upon any such liquidation, dissolution or winding up of the Corporation the remaining assets of the Corporation available for distribution to its stockholders shall be insufficient to pay the holders of shares of the Series C Preferred Stock the full amount to which they shall be entitled, the holders of shares of the Series C Preferred Stock shall share ratably in any distribution of the remaining assets and funds of the Corporation in proportion to the respective amounts which would otherwise be payable in respect of the shares held by them upon such distribution if all amounts payable on or with respect to such shares were paid in full.

D.   Voting. Except for the limited voting rights specified in Section 3 rtf this Amended Certificate of Designations, each holder of outstanding shares of Series C Preferred Stock shall not be entitled to vote at any meeting of stockholders of the Corporation (and With respect to written consents of stockholders in lieu of meetings) with respect to any and all matters presented to the stockholders of the Corporation for their action or consideration, until and unless the shares of Series C Preferred Stock held by such holder have been converted into shares of Common Stock, at which time each holder shall have the voting rights appurtenant to each whole share of Common Stock so converted.

E. Other Securities. Subject to any limitations contained in this Amended Certificate of Designations, the Corporation's Articles of incorporation and/or the Primary Documents (as defined in the Securities Purchase Agreement, dated as of March 14, 2000, hereinafter the "Securities Purchase Agreement"), the Board of Directors of the Corporation reserves the right to establish additional classes and/or series of capital stock of the Corporation and to designate the preferences, limitations and relative rights of any such classes and/or series; provided, however, that no such class and/or series may have preferences, limitations and relative rights which are superior to or senior to the preferences, limitations and relative rights granted to the holders of the Series C Preferred Stock.

F. Capital ' organization. If the Corporation shall at any time hereafter subdivide or combine its outstanding shares of Common Stock, declare a dividend payable in Common Stock, or in case of any capital reorganization or reclassification of the shares of Common Stock of the Corporation, the number of shares of the Series C Preferred Stock and the Stated Value of the Series C Preferred Stock shall be adjusted appropriately to allow the holders of the Series C Preferred Stock, as nearly as reasonably possible, to maintain (i) the aggregate Stated Value of the

	 
	 	 	 
	

	 

Series C Preferred Stock shareholder delivered a Notice of Conversion with respect to any such Series C Preferred Stock.

(b) In no event shall the number of shares of Common Stock Issued (A) upon conversion of the Series C Preferred Stock and (B) in lieu of dividend payments on the Series C Preferred Stock, equal 20% or more of the Corporation's outstanding Common Stock, At such time as the Board of Directors of the Corporation determines that it is necessary or appropriate to do so to ensure that the number of shares issued to the Series C Preferred Stockholder resulting from conversion and dividend payments does not equal or exceed 20% of the Corporation's outstanding Common Stock (a "Common Stock Redemption Event"), the Corporation shall (x) redeem, at a price per share equal td (A) the quotient of (i) the Liquidation Preference per share of Series C Preferred Stock has all accrued but unpaid dividends on such shares of Series C Preferred Stock and (ii) the Conversion Price as if the Series C Preferred Stock had been converted on the Series C Preferred Stock Redemption Date multiplied by (B) the average Closing Bid Price 'shares of Common Stock for the five (5) trading days immediately preceding the Series C Preferred Stock Redemption Date, all of the outstanding Series C Preferred Stock or (y) call a special meeting of its stockholders for the purpose of approving the transactions contemplated by the Securities Purchase Agreement, including the issuance of the Series C Preferred Stock on the terms set forth therein, together with any other approvals that shall be required so as to cause the transactions contemplated by the Securities Purchase Agreement to remain in compliance with the Rules and Regulations of The Nasdaq Stock Market (including Rules 4300 and 4310 of Nasdaq's Non-Qualitative Designation Criteria in connection with conversions of Series C Preferred Stock; such approvals are referred to herein as the "Required Approvals"); provided, however, that the Corporation shall not redeem the outstanding Series C Preferred Stock pursuant to clause (x) above, until such time as the Corporation has issued that number of shares of the Corporation's Common Stock equal to at least 16% of the Corporation's outstanding Common Stock to the Series C Preferred Stockholders. The Corporation shall determine within five (5) business days following the receipt of a Notice of Conversion which of such actions it shall take, and shall promptly furnish notice to each of the holders of Series C Preferred Stock as to such determination, including, if applicable, a notice of redemption. In no event shall the Corporation issue shares of Common Stock upon conversion of, or in lieu of dividend payments on, the Series C Preferred Stock, after the occurrence of a Common Stock Redemption Event until the Required Approvals, if any, are obtained.

(c) If the Corporation elects to call a special meeting of its stockholders pursuant to Subsection G (I) (b) of this Amended Certificate of Designations to obtain the Required Approvals, the Corporation shall use its best efforts to obtain such Required Approvals within thirty (30) days of the Closing Date (as defined in the Securities Purchase Agreement) (such thirty (30) day period is referred to herein as an "Approval Period"). If the Corporation does not obtain the Required Approvals within the Approval Period and the Corporation receives a Notice of Conversion after the termination of the Approval Period,

	 
	 	 	 
	

	 

the Corporation must redeem, in accordance with this Subsection G of this Amended Certificate of Designations, that number of shares of Series C Preferred Stock necessary to ensure that the number of shares issued to the Series C Preferred Stockholder result*g from conversion and dividend payments does not equal or exceed 20% of the Corp ton's outstanding Common Stock.

(d) If the Corporation elects, pursuant to this Subsection G, to redeem the Series C Preferred Stock on the occurrence of a Common Stock Redemption Event; it shall redeem such Series C Preferred Stock at the price determined in accordance with Subsection G(l)(b) of this Amended Certificate of Designations. If the Corporation shall have sleeted, pursuant to this Subsection G(1), to obtain the Required Approvals but shall not halve done so by the later of the occurrence of the Common Stock Redemption Event or the expiration of the Approval Period, it shall furnish a redemption notice to the Purchaser within three (3) business days after the expiration of the Approval Period.

(2)   The Series C Preferred Stock Conversion Rights shall be exercised as follows:

(e) The Corporation will permit each holder of Series C Preferred Stock to exercise its right to convert the Series C Preferred Stock by faxing an executed and completed notice of conversion (the "Notice of Conversion") to the Corporation, and delivering within three (3) business days thereafter, the original Notice of Conversion (and the certificates representing the related shares of Series C Preferred Stock) to the Corporation by hand delivery or by express courier, duly endorsed. Each date on which a Notice of Conversion is faxed in accordance with the provisions hereof shall be deemed a "Series C Preferred Stock Conversion Date." The Corporation will transmit the certificates representing the Common Stock issuable upon conversion of the Series C Preferred Stock (together with certificates representing the related shares of Series C Preferred Stock not so converted and, if applicable, a check representing any fraction of a share not converted) to such holder via express courier as soon as practicable, but in all events no later than (the "Delivery Date") three (3) business days after the Series C Preferred Stock Conversion Date. For purposes of this Amended Certificate of Designations, such conversion of the Series C Preferred Stock shall be deemed to have been made immediately prior to the close of business on the Series C Preferred Stock Conversion Date.

(f) In lieu of delivering physical certificates representing the Common Stock issuable upon the conversion of the Series C Preferred Stock, provided that the Corporation's transfer agent is participating in the Depository Trust Corporation (IDTC") Fast Automated Securities Transfer program, on the written request of a holder of Series C Preferred Stock who shall have previously instructed such holder's prime broker to confirm such request to the Corporation's transfer agent, the Corporation shall use its best efforts to cause its transfer agent to electronically transmit such Common Stock to such holder by crediting the account of the holder's prime broker with DTC through its Deposit Withdrawal Agent Commission system no later than the applicable Delivery Date.

(g) The Corporation will at all times have authorized and reserved for the purpose of issuance a sufficient number of shares of Common Stock to provide for the conversion of the Series C Preferred Stock. The Corporation will use its best effects at all times to maintain a number of shares of Common Stock so reserved for issuance that is no less than the sum of (i) one and one-half (1.5) times the number that would then actually be issuable upon the conversion of three thousand (3,000) shares of Series C Preferred Stock and (ii) the exercise of the Warrants (as defined in the Securities Purchase Agreement). Before taking any action which would cause an adjustment reducing the Conversion Price below the established par value of the shares of Common Stock issuable upon conversion of the Series C Preferred Stock, the Corporation shall take any corporate action which may, in the opinion of its counsel or in the opinion of counsel to holders of the Series C preferred Stock, be necessary in order that the Corporation may validly and legally issue fully paid and nonassessable shares of Common Stock at such adjusted Conversion Price.

(3) In the event of a liquidation of the Corporation, the Series C Preferred Stock Conversion Rights shall terminate at the close of business on the first full day preceding the date fixed for the payment of any amounts distributable on liquidation to the holders of the Series C Preferred Stock.

(4) If the conversion is in connection with an underwritten offer of securities registered pursuant to the Securities Act of 1933, as amended, the conversion may, at the option of any holder tendering Series C Preferred Stock for conversion, be conditioned upon the closing with the underwriter of the sale of securities pursuant to such offering, in which event the person(s) entitled to receive the Common Stock issuable upon such conversion of the Series C Preferred Stock shall not be deemed to have converted such Series C Preferred Stock until immediately prior to the closing of the sale of securities.

(5) At no time shall any holder of the Series C Preferred Stock convert such amount of Series C Preferred Stock as shall result in such Purchaser's ownership, aster such conversion, exceeding 4.99% of the Corporation's outstanding Common Stock.

(6) No fractional shares of Common Stock shall be issued upon conversion of the Preferred Stock. In lieu of fractional shares, the Corporation shall pay cash equal to such fraction multiplied by the then effective and applicable Conversion Price.

(7)   The Corporation will not, by amendment of its Articles of Incorporation or

y reorganization, transfer of assets, consolidation, merger, dissolution, issue (it sale of or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed under this Amended Certificate of Designations by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Amended Certificate of Designations and in the taking of all such action as may be necessary or appropriate in order to protect the Series C Preferred Stock Conversion Rights of the holders of the Series C Preferred Stock against impairment. (8) In the event (a) that the Corporation declares a dividend (or any other distribution) on its Common Stock payable in Common Stock or other securities of the Corporation, (b) that the Corporation subdivides or combines its outstanding shares of Common Stock, (c) of any reclassification of the Common Stock of the Corporation (other than a subdivision or combination of its outstanding shares of Common Stock or a stock dividend or stock distribution thereon), (d) of any consolidation or merger of the Corporation into or with another corporation, (e) of the sale of all or substantially all of the assets of the Corporation, or (f) of the involuntary or voluntary dissolution, liquidation or winding up of the Corporation, then the Corporation shall cause to be filed at its principal office or at the office of the transfer agent of the Series C Preferred Stock, and shall cause to be mailed to each holder of the Series C Preferred Stock at their last address as shown on the records of the Corporation or such transfer agent, at least ten (10) days prior to the record date specified in (1) below or twenty (20) days before the date specified in (ii) below, a notice Stating

(1) the record date of such dividend, distribution, subdivision or combination, or, if a record is not to be taken, the date as of which the holders of Common Stock of record to be entitled to such dividend, distribution, subdivision or combination are to be determined, or

(ii) the date on which such reclassification, consolidation merger, sale, dissolution, liquidation or winding up is expected to become effective, and tic date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities or other property deliverable upon such reclassification, consolidation, merger, sale, dissolution or winding up.

H.   Sinking Fund. There shall be no sinking fund for the payment of dividends, or liquidation preferences on the Series C Preferred Stock or the redemption of any portion thereof.

1.   Following Events. In case one or more of the following event, each a redemption event, shall have occurred:

(a) failure to deliver the shares of Common Stock received to beUndelivered upon conversion of the shares of Series C Preferred Stock in the manner and as the time required by Section 5 of the Securities Purchase Agreement; or

(c) failure of the Corporation to have authorized the number of shares of Common Stock issuable upon conversion of the shares of Series C Preferred Stock or exercise of the Stock Purchase Warrants (as defined in the Securities Purchase Agreement); or

(d) failure on the part of the Corporation to duly observe or perform any of the provision of this Amended Certificate of Designations or any of its other covenants or agreements contained in the Securities Purchase Agreement, or to cure any material breach in a material representation or covenant contained in the Securities Purchase Agreement or the Registration Rights Agreement for a period of ten (10) days after the date ion which

written notice of such failure or breach requiring the same to be remedied has   given by a registered holder of shares of Series C Preferred Stock to the Corporation;

then, and in each and every such case, so long as such redemption event has not been remedied, the holders of not less than fifty-one percent (51 %) of the shares of Series C Preferred Stock then outstanding, by notice in writing to the Corporation (the data of such notice the "Redemption Notice Date"), may demand that the Corporation redeem,# and the Corporation shall redeem, each share of Series C Preferred Stock then outstanding at a price per share equal to one hundred twenty-five percent (125%) of the sum of (x) the Stated Value and (y) the aggregate accrued and unpaid dividends on such Redemption Notice late

For purposes of this Section I "Material Subsidiary" means any subsidiary with respect to which the Corporation has directly or indirectly invested, loaned, advanced or guaranteed the obligations of, an aggregate amount exceeding fifteen percent (15%) of the Corporation's gross assets, or the Corporation's proportionate share of the assets or net income of which (based on the subsidiary's most recent financial statements) exceed fifteen percent (15%) of the Corporation’s gross assets or net income, respectively, or the gross revenues of which exceed fifteen percent (15%) of the gross revenues of the Corporation based upon the most recent financial statements!: of such subsidiary and the Corporation.

J. Amendment_ This Amended Certificate of Designations constitutes an agreement between the Corporation and the holders of the Series C Preferred Stock. The Corporation shall not amend this Amended Certificate of Designations or alter or repeal the preferences, rights, powers or other terms of the Series C Preferred Stock so as to affect adversely the Series C Preferred Stock, without the written consent or affirmative vote of the holders off at least sixty-six and two-thirds percent (66-2/3%) of the then outstanding shares of Series C Preferred Stock, given in writing or

by Vote at a meeting, consenting or voting (as the case may be) separately as a class.

.

IN WITNESS WHEREOF, USA Biomass Corporation has caused its corporate seal to be hereunto affixed and this certificate to be signed by Fred H. Behrens, Its chairman and attested by Hilly G. Jones, its Secretary this 27 day of June 2000.

USA BIOMASS CORPORATION   

By: /s/ Fred H. Behrens

Title: Chairman

Attest:

By: /s/ Hilly G. Jones

Title: Secretary

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