HI guys, I pulled this out of the 8k filling.
" Series C Convertible Preferred Stock:
1. Designation, Amount and Dividends. The designation of this
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series, which consists of 8,000 shares of Preferred Stock, is the Series C
Convertible Preferred Stock (the "PREFERRED SHARES") and the stated value
shall be One Thousand Dollars ($1,000.00) per share (the "STATED VALUE").
The Preferred Shares shall not bear any dividends.
2. Holder's Conversion of Preferred Shares. A holder of Preferred
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Shares shall have the right, at such holder's option, to convert the
Preferred Shares into shares
of the Company's common stock, no par value per share (the "COMMON STOCK"),
on the following terms and conditions:
a. Conversion Right. Subject to the provisions of Section 11
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below, at any time or times on or after the date which is the earlier of
(i) 90 days after the Issuance Date (as defined below) and (ii) the date
that the Registration Statement (as defined below) is declared effective by
the United States Securities and Exchange Commission (the "SEC"), any
holder of Preferred Shares shall be entitled to convert any whole number of
Preferred Shares into fully paid and nonassessable shares (rounded to the
nearest whole share in accordance with Section 2(i) below) of Common Stock,
at the Conversion Rate (as defined below); provided, however, that in no
event shall any holder be entitled to convert Preferred Shares in excess of
that number of Preferred Shares which, upon giving effect to such
conversion, would cause the aggregate number of shares of Common Stock
beneficially owned by the holder and its affiliates to exceed 4.99% of the
outstanding shares of the Common Stock following such conversion. For
purposes of the foregoing proviso, the aggregate number of shares of Common
Stock beneficially owned by the holder and its affiliates shall include the
number of shares of Common Stock issuable upon conversion of the Preferred
Shares with respect to which the determination of such proviso is being
made, but shall exclude the number of shares of Common Stock which would be
issuable upon (i) conversion of the remaining, nonconverted Preferred
Shares beneficially owned by the holder and its affiliates and (ii)
exercise or conversion of the unexercised or unconverted portion of any
other securities of the Company (including, without limitation, any
warrants) subject to a limitation on conversion or exercise analogous to
the limitation contained herein beneficially owned by the holder and its
affiliates. Except as set forth in the preceding sentence, for purposes of
this paragraph, beneficial ownership shall be calculated in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended. Each
holder may waive the foregoing limitations with respect to its conversions
by written notice to the Company upon not less than 61 days prior notice
(with such waiver taking effect only upon the expiration of such 61 day
notice period).
b. Conversion Rate. The number of shares of Common Stock
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issuable upon conversion of each of the Preferred Shares pursuant to
Sections (2)(a) and 2(h) shall be determined according to the following
formula (the "CONVERSION RATE"):
(.08)(N/365)(1,000) + 1,000
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Conversion Price
For purposes of this Statement of Designations, the following terms shall
have the following meanings:
(i) "CONVERSION PRICE" means, as of any Conversion Date
(as defined below) or other date of determination, the lower of the Fixed
Conversion Price and the Floating Conversion Price, each in effect as of such
date and subject to adjustment as provided herein;
-2-
(ii) "FIXED CONVERSION PRICE" means 120% of the Market
Price on the date of issuance of the applicable Preferred Shares, subject to
adjustment as provided herein, and provided, however, that in the event that the
Market Price for the Common Stock on the date the Registration Statement is
declared effective by the SEC is less than 90% of the Market Price on the
Issuance Date, then thereafter, subject to adjustment as provided herein, Fixed
Conversion Price shall mean 120% of the Market Price on the date the
Registration Statement is declared effective by the SEC;
(iii) "FLOATING CONVERSION PRICE" means, as of any date of
determination, the amount obtained by multiplying the Conversion Percentage in
effect as of such date by the arithmetic average of the three (3) lowest Closing
Bid Prices during the 22 consecutive trading days immediately preceding such
date, subject to adjustment as provided herein;
(iv) "CONVERSION PERCENTAGE" means (A) as long as the
Common Stock is quoted on the Nasdaq National Market or listed on The New York
Stock Exchange, Inc. or The American Stock Exchange, Inc., 100%, (B) if the
Common Stock is quoted on the Nasdaq SmallCap Market, 80% and (C) if the Common
Stock is not quoted on the Nasdaq National Market or the Nasdaq SmallCap Market
or listed on The New York Stock Exchange, Inc. or The American Stock Exchange,
Inc., 60%; subject in each case to adjustment as provided herein;
(v) "MARKET PRICE" means, with respect to any security for
any date, arithmetic average of the Closing Bid Price for such security on each
of the five consecutive trading days immediately preceding such date;
(vi) "CLOSING BID PRICE" means, for any security as of any
date, the last closing bid price for such security on the Nasdaq National Market
as reported by Bloomberg Financial Markets ("BLOOMBERG"), or, if the Nasdaq
National Market is not the principal trading market for such security, the last
closing bid price of such security on the principal securities exchange or
trading market where such security is listed or traded as reported by Bloomberg,
or if the foregoing do not apply, the last closing bid price of such security in
the over-the-counter market on the electronic bulletin board for such security
as reported by Bloomberg, or, if no closing bid price is reported for such
security by Bloomberg, the last closing trade price of such security as reported
by Bloomberg, or, if no last closing trade price is reported for such security
by Bloomberg, the average of the bid prices of any market makers for such
security as reported in the "pink sheets" by the National Quotation Bureau, Inc.
If the Closing Bid Price cannot be calculated for such security on such date on
any of the foregoing bases, the Closing Bid Price of such security on such date
shall be the fair market value as mutually determined by the Company and the
holders of a majority of the outstanding Preferred Shares. If the Company and
the holders of Preferred Shares are unable to agree upon the fair market value
of the Common Stock, then such dispute shall be resolved pursuant to Section
2(g)(iii) below with the term "Closing Bid Price" being substituted for the term
"Market Price." (All such determinations to be appropriately adjusted for any
stock dividend, stock split or other similar transaction during such period).
-3-
(vii) "N" means the number of days from, but excluding, the
Issuance Date through and including the Conversion Date for the Preferred Shares
for which conversion is being elected; and
(viii) "ISSUANCE DATE" means, with respect to each Preferred
Share, the date of issuance of the applicable Preferred Share."
I think I was right about the intrest/dividen/what-ever-that-other-word-is. It appears to base .08/356 X the number of days till they convert.
There seems to be two possible conversion calculation they get the lowest.
One, I think is the closing price the day they were issued plus 20%.
I'm out of time. I didn't even get to read it properly.
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