UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
Standard Industrial Classification Code
3826
SCHEDULE
14C
(Rule
14c-101)
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c)
of
the Securities Exchange Act of 1934
Check the
appropriate box:
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o
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Preliminary
Information Statement.
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Confidential,
for use of the Commission Only (as permitted by Rule
14a-6(e)(2)).
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þ
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Definitive
Information Statement.
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Integrated
Media Holdings, Inc.
(Name of
Registrant as Specified in its Charter)
Doing
business as
Payment
of Filing Fee (check the appropriate box):
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þ
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No
fee required.
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o
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Fee
computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth amount on which the filing fee is
calculated and state how it was determined):
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4)
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Proposed
maximum aggregate value of transaction:
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5)
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Total
fee paid:
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Fee
paid previously with preliminary materials.
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Check
box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offering fee was paid
previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of the
filing.
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1)
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Amount
previously paid:
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2)
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Form,
schedule or registration statement no.:
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3)
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Filing
party:
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4)
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Date
filed:
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Integrated
Media Holdings, Inc.
Doing
business as
524 East
Weddell Drive
Sunnyvale,
CA 94089
Telephone
(408) 744-1331– Facsimile (408) 744-1711
NOTICE
OF ACTION TAKEN AND TO BE TAKEN PURSUANT TO THE WRITTEN
CONSENT
OF THE BOARD OF DIRECTORS AND MAJORITY STOCKHOLDERS IN LIEU OF
A
SPECIAL MEETING OF THE DIRECTORS AND STOCKHOLDERS
To Our
Stockholders:
NOTICE IS
HEREBY GIVEN to inform the holders of record of shares of our common stock and
preferred stock, that on February 8, 2008 (and supplemented on December 15,
2008), our board of directors and stockholders holding a majority of our voting
shares authorized the following:
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·
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Reincorporation
in Nevada and change of our corporate name by merger with and into our
wholly-owned Nevada subsidiary, Arrayit Corporation.
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·
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The
Amended and Restated Articles of Incorporation and Bylaws of our Nevada
subsidiary will become the Amended and Restated Articles of Incorporation
and Bylaws of the Company on the effective time of the
reincorporation.
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·
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The
Amended and Restated Articles of Incorporation and Bylaws of our Nevada
subsidiary provide for a classified board of directors, limitation of the
liability of directors to the Company and the indemnification of directors
and other persons, adoption of certain restrictions on calling special
meetings of stockholders and nominating directors, and authorizing the
board of directors to change the corporate
name.
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WE
ARE NOT ASKING YOU FOR A PROXY
AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
The
actions have been approved by our board of directors and by shareholders holding
2,926,787 shares of our Series A Preferred Stock, which in aggregate can vote a
total of 28,097,155 shares of our voting stock and shareholders holding 100,000
shares of our Series C Preferred Stock, which in aggregate can vote a total of
35,000,000 shares of our voting stock, representing an aggregate of 55,999,443
voting shares or 62.8% of our total voting shares based on 89,096,378 voting
shares outstanding (the “Majority Shareholders”). The total of
89,096,378 voting shares outstanding represents 17,499,262 shares of common
stock issued and outstanding, which each vote one (1) share on shareholder
matters, a total of 3,697,611 shares of Series A Preferred Stock issued and
outstanding, which each vote 9.6 shares on shareholder matters, and a total of
103,143 shares of our Series C Preferred Stock issued and outstanding, which
each vote 350 shares on shareholder matters..
We have
asked brokers and other custodians, nominees and fiduciaries to forward this
Information Statement to the beneficial owners of the common stock held of
record by such persons and will reimburse such persons for out-of-pocket
expenses incurred in forwarding such material.
We are
mailing the Information Statement on or about February 20, 2009 to stockholders
of record of the Company at the close of business on the day immediately
preceding the date of mailing (the “Record Date”).
THIS IS
NOT A NOTICE OF A SPECIAL MEETING OF STOCKHOLDERS AND NO STOCKHOLDER MEETING
WILL BE HELD TO CONSIDER ANY MATTER WHICH IS DESCRIBED HEREIN, INSTEAD, THE
MATTERS DESCRIBED ABOVE WILL BE EFFECTIVE ON THE 20TH DAY
AFTER THE MAILING OF THIS INFORMATION STATEMENT WITHOUT ANY FURTHER
ACTION.
By Order
of the Board of Directors,
_____________________________________________
Rene’ A.
Schena, Chairman and Chief Executive Officer
January_____,
2009
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VOTING
SECURITIES AND OWNERSHIP THEREOF
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BY
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT..........................................................3
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Principal
Reasons for Reincorporation
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Principal
Features of the Reincorporation
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How
to Exchange Company Certificates for J-Kan Nevada
Certificates
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Capitalization
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Significant
Differences Between the Corporation Laws of Nevada and
Arkansas
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DEFENSES
AGAINST HOSTILE TAKEOVERS....................................................................................8
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General
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Authorized
Shares of Capital Stock
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Stockholder
Meetings
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Classified
Board of Directors and Removal of Directors
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Election
and Removal of Directors
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Supermajority
Voting Requirements for Certain Amendments
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EXHIBITS
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Exhibit
A – Amended and Restated Articles of Incorporation
Exhibit
B - Plan and Agreement of
Merger
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OVERVIEW
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Effective
February 21, 2008, TeleChem International, Inc., a Delaware corporation,
became a wholly owned, Nevada, subsidiary of the Company by merger into
the Company’s wholly owned Nevada subsidiary. The two
transactions summarized below simultaneously will: (i)
reincorporate the Company from Delaware to Nevada, and (ii) change the
corporate name of the Company to Arrayit Corporation
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TRANSACTION:
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Reincorporation
in Nevada
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PURPOSE:
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To
provide greater flexibility and simplicity in corporate transactions,
reduce taxes and other costs of doing business.
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METHOD:
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Merger
of the Company with and into our wholly-owned Nevada subsidiary, Arrayit
Corporation. See “Reincorporation in Nevada -
Principal Features of the Reincorporation.”
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EXCHANGE
RATIOS:
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One
share of Arrayit common stock and one share of Arrayit preferred stock
will be issued for each share of our common stock and preferred stock held
as of the Effective Time. See “Reincorporation in Nevada –
Principal Features of the Reincorporation.”
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TRANSACTION:
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Change
corporate name to Arrayit Corporation
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PURPOSE:
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A
new corporate name to more accurately reflect the business of the
Company.
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METHOD:
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Merger
of the Company with and into our wholly-owned Nevada subsidiary, Arrayit
Corporation.
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RECORD
DATE:
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February
19, 2009 (one day prior to the date this information statement is
mailed)
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EFFECTIVE
TIME:
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4:00
o’clock p.m. e.s.t., March 12, 2009 (twenty days after the
mailing)
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ADDITIONAL
PROVISIONS:
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Exchange
of outstanding certificates representing shares of Company common stock
and preferred stock for certificates representing shares of Arrayit common
stock and preferred stock. See “Reincorporation in Nevada -
How to Exchange Company Certificates for Arrayit
Certificates.”
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The
beneficial owners of approximately 62.8% of the total voting shares of the
Company’s capital stock entitled to vote on these matters approved the
Reincorporation, the New Articles and name change, without a meeting dated as of
February 8, 2008. This Information Statement is furnished only to
inform stockholders of the Company of the above actions which were taken by the
Majority Shareholders of the Company before such action can take effect in
accordance with the Securities Exchange Act of 1934, as amended (the “Exchange
Act”).
Because
the stockholders holding a majority of the voting rights of all of the
outstanding shares of capital stock voted in favor of the foregoing proposals by
resolution on February 8, 2008, no other stockholder consents will be solicited
in connection with this Information Statement.
The
elimination of the need for a special or annual meeting of stockholders to
ratify or approve the New Articles to affect the Reincorporation and name change
is authorized by Section 228(a) of the Delaware General Corporation Law
(“DGCL”), which provides that the written consent of stockholders holding at
least a majority of the voting power may be substituted for such a special or
annual meeting. In order to eliminate the costs and management time
involved in holding a special or annual meeting and in order to effect or ratify
the actions described herein as early as possible in order to accomplish the
purposes of the Company as hereafter described, the board of directors of the
Company believes it is in the best interests of the shareholders to utilize the
written consent of stockholders holding a majority of the voting power of the
Company, rather than holding a special meeting of shareholders.
The
Company has asked brokers and other custodians, nominees and fiduciaries to
forward this Information Statement to the beneficial owners of the common stock
held of record by such persons and will reimburse such persons for out-of-pocket
expenses incurred in forwarding such material.
This
Information Statement will serve as written notice to stockholders pursuant to
Section 228(e) of the DGCL.
QUESTIONS
AND ANSWERS
This
Information Statement is first being sent to stockholders on or about February
20, 2009. The following questions and answers are intended to respond
to frequently asked questions concerning the reincorporation of Integrated Media
Holdings, Inc. a Delaware corporation into a Nevada
corporation. These questions do not, and are not intended to, address
all the questions that may be important to you. You should carefully
read the entire Information Statement, as well as its appendices and the
documents incorporated by reference in this Information Statement.
Q:
WHY IS THE COMPANY REINCORPORATING TO NEVADA?
A: Nevada imposes
no income taxes or franchise taxes on Nevada corporations. We believe
that we will be able to save tax expenses in Nevada levied on our profitable
operation.
Q: WHY
ISN'T THE COMPANY HOLDING A MEETING OF STOCKHOLDERS TO APPROVE THE
REINCORPORATION?
A: The board of
directors has already approved the reincorporation plan and have received the
written consent of our shareholders who are officers and directors, and the
shareholders which represent a majority of our outstanding voting
shares. Under Delaware General Corporation Law and our Certificate of
Incorporation this transaction may be approved by the written consent of a
majority of the shares entitled to vote. Because we already have
received confirmation that a majority of our voting shares have approved the
transactions discussed herein, a formal shareholders meeting is not necessary
and represents a substantial and avoidable expense.
Q:
HOW WILL THE REINCORPORATION CHANGE OUR ARTICLES OF INCORPORATION AND
BYLAWS?
A. The Amended and Restated
Articles of Incorporation and Bylaws of our Nevada subsidiary provide for a
classified board of directors, limitation of the liability of directors to the
Company and the indemnification of directors and other persons, adoption of
certain restrictions on calling special meetings of stockholders and nominating
directors, authorizing the board of directors to change the corporate
name.
Q: WHAT
ARE THE PRINCIPAL FEATURES OF THE REINCORPORATION?
A: A: The
reincorporation will be accomplished by a merger of the Company with and into
our wholly owned subsidiary, Arrayit Corporation, a Nevada corporation
(“Arrayit”). One fully paid and non-assessable common share of
Arrayit will be issued for each outstanding share of our common
stock. In addition, one fully paid and non-assessable preferred share
of Arrayit will be issued for each outstanding share of our preferred
stock. The shares of the Company will cease to trade on the
over-the-counter bulletin board and the shares of Arrayit will begin trading in
their place beginning on the day following the Effective Time of the
reincorporation, under a new trading symbol and new CUSIP number that has not
yet been assigned. Other securities of the Company, such as options,
warrants, other rights to purchase common stock, and securities exchangeable for
or convertible into our common stock will also be exchanged for similar
securities issued by Arrayit.
Q: HOW
WILL THE REINCORPORATION AFFECT THE NUMBER OF SHARES OF COMMON STOCK AND
PREFERRED STOCK WE ARE AUTHORIZED TO ISSUE?
A: The
reincorporation will not change the number of common shares or preferred shares
we are authorized to issue. Both will remain unchanged at
100,000,000 shares of common stock and 5,000,000 shares of preferred
stock.
Q: HOW
WILL THE REINCORPORATION AFFECT OUR OWNERS, OFFICERS, DIRECTORS AND
EMPLOYEES?
A: Our
officers, directors and employees will become the officers, directors and
employees of Arrayit on the Effective Time of the
reincorporation. Arrayit will continue our business at the same
locations and with the same assets.
Q: HOW
WILL THE ACTIONS DESCRIBED HERE AFFECT MY SECURITIES AND PERCENTAGE OF OWNERSHIP
OF THE COMPANY?
A: The action
described in this Information Statement will not affect the number of the
securities you own or your percentage of ownership on the Company.
Q: HOW DO I EXCHANGE
COMPANY CERTIFICATES FOR CERTIFICATES OF ARRAYIT?
A: Enclosed
with this Information Statement is a letter of transmittal and instructions for
surrendering certificates representing our shares. If you are a
record stockholder, you should complete the letter of transmittal and send it
with certificates representing our shares to the address set forth in the
letter. Upon surrender of a certificate for cancellation with a duly
executed letter of transmittal, Arrayit will issue a new certificate
representing the number of shares of Arrayit as soon as practical after the
Effective Time of the reincorporation. If you hold our stock in
street name or in a brokerage account, we encourage you to request that
certificate be issued to you so that you can exchange it for a certificate
representing shares of Arrayit.
Q: WHAT
HAPPENS IF I DO NOT SURRENDER MY COMPANY CERTIFICATES?
A: You
are not required to surrender your certificates representing Company shares to
receive shares of Arrayit. However, until you receive your shares of
Arrayit you are entitled to receive notice of or vote at stockholder meetings
and receive dividends or other distributions on the shares of
Arrayit.
Q: WHAT
IF I HAVE LOST MY COMPANY CERTIFICATES?
A: If
you have lost your Company certificates, you should contact our transfer agent
as soon as possible to have a new certificate issued. You may be
required to post a bond or other security to reimburse us for any damages or
costs if the certificate is later delivered for conversion. Our
transfer agent is:
Standard
Registrar & Transfer, Inc.
12528
South 1840 East
Draper,
UT 84020
Q: CAN I
REQUIRE THE COMPANY TO PURCHASE MY STOCK?
A: No.
Under the General Corporation Law of the State of Delaware, you are not entitled
to appraisal and purchase of your stock as a result of the
reincorporation.
Q: WHO
WILL PAY THE COSTS OF REINCORPORATION?
A. Arrayit
will pay all of the costs of reincorporation in Nevada, including distributing
this Information Statement and the cost of exchanging certificates representing
shares of the Company for certificates representing shares of
Arrayit. We may also pay brokerage firms and other custodians
for their reasonable expenses for forwarding information materials to the
beneficial owners of our common stock. We do not anticipate
contracting for other services in connection with the
reincorporation.
Q: WILL
I HAVE TO PAY TAXES ON THE NEW CERTIFICATES?
A: We
believe that the reincorporation is not a taxable event and that you will be
entitled to the same basis in the shares of Arrayit that you had in our common
stock. EVERYONE'S TAX SITUATION IS DIFFERENT AND YOU SHOULD CONSULT
WITH YOUR PERSONAL TAX ADVISOR REGARDING THE TAX EFFECT OF THE
REINCORPORATION.
VOTING
SECURITIES AND OWNERSHIP THEREOF
BY
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of
December 15, 2008, date of the consent authorizing the actions described in this
Information Statement the Company’s authorized capitalization
consisted of 100,000,000 shares of common stock, $.001 par value per share, of
which 17,499,262 shares were issued and outstanding, and 5,000,000 shares of
preferred stock, $.001 par value per share, of which 1,000 shares had been
designated as Series A Preferred Stock, 100,000 had been designated as Series B
Preferred Stock, and 103,143 had been designated as Series C Preferred
Stock. A total of 3,697,611 shares of Series A Preferred Stock, no
shares of Series B Preferred Stock, and 103,143 shares of Series C Preferred
Stock were issued and outstanding. Each share of Series A Preferred
Stock entitles its holder to 9.6 votes (based upon the 9.6-to-1 conversion
ratio) on each matter submitted to the stockholders and each share of Series C
Preferred Stock entitles its holder to 350 votes on each matter submitted to the
stockholders (based upon the 350-to-1 conversion ratio). Holders of
common stock of the Company have no preemptive rights to acquire or subscribe to
any of the additional shares of common stock. Each share of common
stock entitles its holder to one vote on each matter submitted to the
stockholders. Therefore, as December 15, 2008, the common stock
shareholders were able to vote 17,499,262 voting shares, the Series A Preferred
Stock shareholders were able to vote a total of 35,497,066 voting shares, and
the Series C Preferred Stock shareholders were able to vote 36,100,050 voting
shares, which in aggregate represented 89,096,378 total voting
shares.
The
following table sets forth a description of any substantial interest, direct or
indirect of each person who has been a director or executive officer of the
registrant at any time since the beginning of the last fiscal
year. The address of each person, unless otherwise noted, is 524 East
Weddell Drive, Sunnyvale, California 94089. Additionally we have included
information about persons more than 5% of the total voting rights.
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Name
and Address of Beneficial Owner
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Common
Stock
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Total
Voting Percentage of Common Stock
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Series
A Preferred Stock
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Total
Voting Percentage of Series A Preferred Stock
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Total
Shares the Series A Preferred Stock is Able to Vote
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Series
C Preferred Stock
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Total
Voting Percentage of Series C Preferred Stock
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Total
Shares the Series C Preferred Stock is Able to Vote
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Total
Voting Shares Based on All Voting Shares Outstanding
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Total
%
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Officers and Directors
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Rena’
A Schena,
Chief
Executive Officer,
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0 | 0.00 | % | 0 | 0.00 | % | 0 | 42,857 | 41.60 | % | 14,999,950 | 14,999,950 | 16.80 | % | ||||||||||||||||||||||||||
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Chief
Financial Officer and Director
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Mark
Schena, Director
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0 | 0.00 | % | 0 | 0.00 | % | 0 | 14,286 | 13.90 | % | 5,000,100 | 5,000,100 | 5.60 | % | ||||||||||||||||||||||||||
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William
L. Sklar, Director
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19,996 | 0.10 | % | 98,807 | 2.67 | % | 948,543 | 0 | 0.00 | % | 0 | 968,539 | 1.10 | % | ||||||||||||||||||||||||||
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Todd
Martinsky, Director
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0 | 0.00 | % | 0 | 0.00 | % | 0 | 28,571 | 27.70 | % | 9,999,850 | 9,999,850 | 11.20 | % | ||||||||||||||||||||||||||
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Paul
K. Haje
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0 | 0.00 | % | 0 | 0.00 | % | 0 | 14,286 | 13.90 | % | 5,000,100 | 5,000,100 | 5.60 | % | ||||||||||||||||||||||||||
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Director
of Advertising and Public Relations
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Greater Than 5%
Shareholders
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WV
Fiber, LLC (2)
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4,055,448 | 23.20 | % | 0 | 0.00 | % | 0 | 0 | 0.00 | % | 0 | 4,055,448 | 4.60 | % | ||||||||||||||||||||||||||
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Mashrua
Shipping & Transport Ltd. (3)
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1,000,000 | 5.70 | % | 0 | 0.00 | % | 0 | 0 | 0.00 | % | 0 | 1,000,000 | 1.10 | % | ||||||||||||||||||||||||||
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WEM
Equity Capital Investments, Ltd.
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71,946 | (1) | 0.40 | % | 355,505 | 9.61 | % | 3,412,851 | 0 | 0.00 | % | 0 | 3,484,797 | 3.90 | % | |||||||||||||||||||||||||
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3111
Rosemary Park Lane
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Houston,
Texas 77082(4)
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Briarpatch,
Ltd.
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71,946 | (1) | 0.40 | % | 355,505 | 9.61 | % | 3,412,851 | 0 | 0.00 | % | 0 | 3,484,797 | 3.90 | % | |||||||||||||||||||||||||
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2038
Albans,
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Houston,
Texas 77005(5)
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Donald
Sapaugh
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44,003 | (1) | 0.30 | % | 217,432 | 5.88 | % | 2,087,349 | 0 | 0.00 | % | 0 | 2,131,352 | 2.40 | % | |||||||||||||||||||||||||
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204
Century Drive
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Friendswood,
Texas 77546
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Hunter
Carr
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43,452 | (1) | 0.20 | % | 214,707 | 5.81 | % | 2,061,187 | 0 | 0.00 | % | 0 | 2,104,639 | 2.40 | % | |||||||||||||||||||||||||
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12000
Westheimer
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Suite
340
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Houston,
Texas 77077
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First
Sage Equity, Inc. (6)
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50,137 | (1) | 0.30 | % | 247,739 | 6.70 | % | 2,378,293 | 0 | 0.00 | % | 0 | 2,428,430 | 2.70 | % | |||||||||||||||||||||||||
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227
Edgewood
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Friendswood,
Texas 77546
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Phillip
Johnson
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41,781 | (1) | 0.20 | % | 206,449 | 5.58 | % | 1,981,911 | 0 | 0.00 | % | 0 | 2,023,691 | 2.30 | % | |||||||||||||||||||||||||
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12000
Westheimer
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Suite
340
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Houston,
Texas 77077
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Jukka
Tolonen
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40,151 | (1) | 0.20 | % | 198,398 | 5.37 | % | 1,904,616 | 0 | 0.00 | % | 0 | 1,944,768 | 2.20 | % | |||||||||||||||||||||||||
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Fairfield
Financing, Inc. (7)
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50,137 | (1) | 0.30 | % | 247,739 | 6.70 | % | 2,378,293 | 0 | 0.00 | % | 0 | 2,428,430 | 2.70 | % | |||||||||||||||||||||||||
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221
West Exchange Ave. Suite 221
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Ft.
Worth, Texas 76184
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| All of the Officers and Directors as a Group (5 Persons) | 19,996 | 0.10 | % | 98,807 | 2.67 | % | 948,543 | 100,000 | 97.00 | % | 35,000,000 | 35,968,539 | 40.40 | % | ||||||||||||||||||||||||||
(1) Held
under the terms of a custodian agreement that grants exclusive voting,
dispositive and any other economic rights to the beneficial owners named in the
agreements and provides that no beneficial owner is affiliated with any other
beneficial owner and the beneficial owners are not acting and will not act as a
group.
(2) The
Company is not aware of the individual with investment authority over the shares
beneficially owned by WV Fiber, LLC, which entity is currently in
Bankruptcy.
(3) The
Company is not aware of the individual with investment authority over the shares
beneficially owned by Mashrua Shipping & Transport Ltd.
(4) The
natural person with dispositive authority over securities of the company is
William E. McIlwain at the above address.
(5) The
natural person with dispositive authority over securities of the company is Brad
Fleming at the above address.
(6) The
natural person with dispositive authority over securities of the company is Joe
Wiley.
(7) The
natural person with dispositive authority over securities of the company is O.
Preston Smith.
REINCORPORATION IN NEVADA
The
following discussion summarizes certain aspects of our reincorporation in Nevada
(the “Reincorporation”). This summary does not include all of the
provisions of the Amended and Restated Plan and Agreement of Merger between the
Company and Arrayit Corporation., a Nevada corporation (“Arrayit”), a copy of
which is attached hereto as Exhibit “A,” or the Amended and Restated Articles of
Incorporation of Arrayit (formerly Integrated Media Holdings, Inc.) as amended a
copy of which is attached hereto as Exhibit “B.” Copies of the bylaws
of Arrayit are available for inspection at our principal office and we will send
copies to stockholders upon request.
The
Company entered into an Amended and Restated Plan and Agreement of Merger to
amend and clarify several sections of its original Plan and Agreement of Merger,
including to:
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Clarify
that the corporate name of Arrayit, Arrayit’s registered office and agent,
and all of the Company’s outstanding agreements, stock option plans,
December 19, 2005, Form S-8 Registration Statement, the Company’s
committees, and code of ethics shall survive the Reincorporation;
and
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To
reflect the prior name change of the Company’s wholly owned Nevada
subsidiary from Integrated Media Holdings, Inc. to Arrayit Corporation in
connection with the prior merger of TeleChem into Integrated Media
Holdings, Inc., the Company’s wholly owned subsidiary, which resulted in
the name change of the Company’s subsidiary to Arrayit
Corporation.
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Principal
Reasons for Reincorporation
We
believe that the reincorporation in Nevada will give us more flexibility and
simplicity in various corporate transactions. Nevada has adopted
Revised Statutes that includes by statute many concepts created by judicial
rulings in other jurisdictions and provides additional rights in connection with
the issuance and redemption of stock.
We also
believe our reincorporation in Nevada will save expenses for taxes and fees
because Nevada imposes no corporate income taxes on corporations that are
incorporated in Nevada.
Principal
Features of the Reincorporation
The
reincorporation will be effected by the merger of the Company, with and into our
wholly owned subsidiary, Arrayit. Arrayit will be the surviving
entity.
On the
Effective Time, each of our common stockholders will be entitled to receive one
fully paid and non-assessable share of common stock or preferred stock of
Arrayit for each share of our common stock or preferred stock, respectively,
outstanding as of the Effective Time and (ii) the Company will cease its
corporate existence in the State of Delaware. We anticipate that the
shares of the Company will cease trading on the first trading date following the
Effective Time and shares of Arrayit will begin trading in their place but under
a new CUSIP number and trading symbol.
The
Amended and Restated Articles of Incorporation and by-laws of Arrayit are
significantly different from the Certificate of Incorporation and by-laws of the
Company. Because of the differences between the Certificate of
Incorporation and by-laws of the Company and the laws of the State of Delaware,
which govern the Company, and the Amended and Restated Articles of Incorporation
and by-laws of Arrayit and the laws of the State of Nevada, which govern
Arrayit, your rights as stockholders will be affected by the
reincorporation. See the information under “Significant Differences Between the
Corporation Laws of Nevada and Delaware” for a summary of the differences
between the Certificate of Incorporation and by-laws of the Company and the laws
of the State of Delaware and the Amended and Restated Articles of Incorporation
and by-laws of Arrayit and the laws of the State of Nevada.
Following
the Reincorporation, the members of our Board of Directors and officers will
remain the same and become officers and Directors of Arrayit. Our
daily business operations will continue at the principal executive offices at
524 East Weddell Drive, Sunnyvale, CA 94089.
Upon
completion of the reincorporation, the Amended and Restated Articles of
Incorporation of Arrayit will become the Amended and Restated Articles of
Incorporation of the Company. Therefore the number of common shares
we are authorized to issue will remain unchanged at 100 million and the number
of common shares we are authorized to issue will remain unchanged at
5,000,000.
How
to Exchange Company Certificates for Arrayit Certificates
Enclosed
are (i) a form letter of transmittal and (ii) instructions for surrender of your
certificates representing our common stock, Series A Preferred Stock and Series
C Preferred Stock in exchange for certificates representing shares of Arrayit
common stock, Series A Preferred Stock, or Series C Preferred Stock,
respectively. Upon surrender of a certificate representing our common
stock, Series A Preferred Stock, or Series C Preferred Stock to Arrayit,
together with a duly executed letter of transmittal, Arrayit will issue, as soon
as practicable, a certificate representing the number of shares of Arrayit each
stockholder is entitled to receive.
If you
own our shares through a nominee or in a brokerage account, you do not have a
certificate to submit for exchange. Usually, your nominee or broker
will submit certificates representing our shares for exchange on your
behalf. We recommend that you contact your nominee or broker and
confirm that a certificate is submitted for exchange.
Because
of the reincorporation in Nevada, holders of our common stock, preferred stock,
warrants and options are not required to exchange their certificates for Arrayit
certificates. Dividends and other distributions declared after the
Effective Time with respect to common stock or preferred stock of the Company
and payable to holders of record thereof after the Effective Time will be paid
to the holder of any unsurrendered common stock or preferred stock certificate
of the Company and, which by virtue of the reincorporation are represented
thereby and such holder will be entitled to exercise any right as a shareholder
of the Company and, until such holder has surrendered the certificate of the
Company. Holders of warrants or options will be entitled to exercise
any right as a holder of the Company, until such holder has surrendered the
certificate of the Company.
Capitalization
Our
authorized capital consists of 100,000,000 shares of common stock, $.001 par
value, and 5,000,000 shares of Preferred stock, $.001 par value. As
of December 15, 2008, there were 17,499,262 shares of our common stock 3,697,611
shares of our Series A Preferred Stock outstanding and 103,143 shares of our
Series C Preferred Stock issued and outstanding. The authorized
capital of Arrayit consists of 105,000,000 shares of capital stock divided into
100,000,000 shares of common stock, $.001 par value per share, and 5,000,000
shares of preferred stock, $.001 par value per share. The board of
directors of Arrayit has adopted designations, rights and preferences for Series
A Convertible Preferred Stock, and Series C Preferred Stock which are identical
to the rights and preferences of the Series A Preferred Stock and Series C
Preferred Stock issued by the Company. As the Company does not currently
have any Series B Preferred Stock issued, no Series B Preferred Stock has been
designated in Arrayit. As a result of the reincorporation and exchange of
the common stock, the number of outstanding shares of our common stock, Series A
and Series C Preferred Stock will not be affected by the
Reincorporation. The reincorporation will not affect our total
stockholder equity or total capitalization.
Significant
Differences Between the Corporation Laws of Nevada and Delaware
The
Company is incorporated under the laws of the State of Delaware. On the
Effective Time of the Reincorporation, our stockholders, whose rights are
currently governed by Delaware Law and the Company Certificate of Incorporation
and the Company by-laws, which were created pursuant to Delaware Law, will
become stockholders of a Nevada company with the name Arrayit Corporation, and
their rights as stockholders will then be governed by Nevada Law and the Nevada
Amended and Restated Articles of Incorporation and the Nevada by-laws which were
created under Nevada Law.
The
corporate statutes of Nevada and Delaware have certain differences, summarized
below. This summary is not intended to be complete, and is qualified
by reference to the full text of, and decisions interpreting, Delaware law and
Nevada law.
Classified Board of
Directors. Both Delaware and Nevada law permit corporations to
classify their board of directors so that less than all of the directors are
elected each year to overlapping terms. Our Nevada Articles provide
for classified boards consisting of three classes, elected to three-year
terms. Our present Delaware Certificate of Incorporation does not
provide for a classified board of directors. As a result of the
reincorporation, our board will be divided into three classes, with William L.
Sklar serving until the annual meeting in 2009, Mark Schena, Ph.D. serving until
the annual meeting in 2010, and Rene’ A. Schena and Todd J. Martinsky serving
until the annual meeting in 2011. At the expiration of each
director's term, a successor will be elected to a three-year term. In
addition, any increase in the size of the board of directors will be allocated
among the classes so that they are as nearly equal as possible. The
implementation of the classified board of directors may make it more difficult
for our stockholders to replace the entire board of directors because only
one-third of the board is elected each year. See “Defenses against Hostile
Takeovers.”
Removal of
Directors. Under Delaware law, members of a classified board
of directors may only be removed for cause. Removal requires the vote
of a majority of the outstanding shares entitled to vote for the election of
directors. Nevada law provides that any or all directors may be
removed by the vote of two-thirds of the voting interests entitled to vote for
the election of directors. Nevada does not distinguish between
removal of directors with and without cause. However, the Nevada
Articles provide that directors may only be removed for cause by the vote of not
less than 75% of the outstanding shares entitled to vote for the election of
directors. The reincorporation will make it more difficult for the
stockholders of Arrayit to remove a member of the board of directors because it
increases the number of shares that must be voted for removal.
Special Meetings of
Stockholders. Delaware law permits special meetings of
stockholders to be called by the board of directors or by any other person
authorized in the certificate of incorporation or bylaws to call a special
stockholder meeting. Nevada law does not address the manner in which special
meetings of stockholders may be called but permits corporations to determine the
manner in which meetings are called in their bylaws. The Certificate of
Incorporation and bylaws of the Company and the Amended and Restated Articles of
Incorporation and bylaws of Arrayit each provide that special meetings of the
stockholders may be called only by the board of directors or a committee of the
board of directors that is delegated the power to call special meetings by the
board of directors. There will be no change to this provision as a
result of the reincorporation.
Special Meetings Pursuant to
Petition of Stockholders. Delaware law provides that a director or a
stockholder of a corporation may apply to the Court of Chancery of the State of
Delaware if the corporation fails to hold an annual meeting for the election of
directors or there is no written consent to elect directors in lieu of an annual
meeting taken, in both cases for a period of thirty (30) days after the date
designated for the annual meeting or if there is no such date designated, within
thirteen (13) months after the last annual meeting. Nevada law is more
restrictive. Under Nevada law stockholders having not less than 15% of the
voting interest may petition the district court to order a meeting for the
election of directors if a corporation fails to call a meeting for that purpose
within eighteen (18) months after the last meeting at which directors were
elected. The reincorporation may make it more difficult for the
stockholders of Arrayit to require that an annual meeting be held without the
consent of the board of directors.
Cumulative Voting. Cumulative
voting for directors entitles stockholders to cast a number of votes that is
equal to the number of voting shares held multiplied by the number of directors
to be elected. Stockholders may cast all such votes either for one nominee or
distribute such votes among up to as many candidates as there are positions to
be filled. Cumulative voting may enable a minority stockholder or group of
stockholders to elect at least one representative to the board of directors
where such stockholders would not otherwise be able to elect any directors. Both
Delaware and Nevada law permit cumulative voting if provided for in the
certificate or articles of incorporation and pursuant to specified procedures.
Neither the Certificate of Incorporation of the Company nor the Amended and
Restated Articles of Incorporation of Arrayit provide for cumulative voting. The
reincorporation does not change the rights of the stockholders to cumulate their
votes.
Vacancies. Under
Delaware law, vacancies on the board of directors may be filled by the
affirmative vote of a majority of the remaining directors then in office, even
if less than a quorum. Any director so appointed will hold office for the
remainder of the full term of the class of directors in which the vacancy
occurred. Similarly, Nevada law provides that vacancies may be filled by a
majority of the remaining directors, though less than a quorum, unless the
articles of incorporation provide otherwise. The bylaws of both the Company and
Arrayit address the election of persons to fill vacancies on the board of
directors in the same manner.
Indemnification of Officers and
Directors and Advancement of Expenses. Delaware and Nevada have
substantially similar provisions regarding indemnification by a corporation of
its officers, directors, employees and agents. Delaware and Nevada law differ in
their provisions for advancement of expenses incurred by an officer or director
in defending a civil or criminal action, suit or proceeding. Delaware law
provides that expenses incurred by an officer or director in defending any
civil, criminal, administrative or investigative action, suit or proceeding may
be paid by the corporation in advance of the final disposition of the action,
suit or proceeding upon receipt of an undertaking by or on behalf of the
director or officer to repay the amount if it is ultimately determined that he
or she is not entitled to be indemnified by the corporation. A Delaware
corporation has the discretion to decide whether or not to advance expenses,
unless its certificate of incorporation or bylaws provides for mandatory
advancement. Nevada law differs in two respects: First, Nevada law applies to
advance of expenses incurred by both officers and directors. Second, under
Nevada law, the articles of incorporation, bylaws or an agreement made by the
corporation may provide that the corporation must pay advancements of expenses
in advance of the final disposition of the action, suit or proceedings upon
receipt of an undertaking by or on behalf of the director or officer to repay
the amount if it is ultimately determined that he or she is not entitled to be
indemnified by the corporation. There will be a difference in stockholders'
rights with respect to this issue because the bylaws of the Company do not
provide for the mandatory advancement of expenses of directors and officers and
the Arrayit by laws do so provide.
Limitation on Personal Liability of
Directors. Delaware law permits a corporation to adopt provisions
limiting or eliminating the liability of a director to a company and its
stockholders for monetary damages for breach of fiduciary duty as a director,
provided that such liability does not arise from certain proscribed conduct,
including breach of the duty of loyalty, acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law or liability
to the corporation based on unlawful dividends or distributions or improper
personal benefit. The Certificate of Incorporation of the Company excludes
director liability to the maximum extent allowed by Delaware law. Nevada law
permits, and Arrayit has adopted, a broader exclusion of liability of both
officers and directors to the corporation and its stockholders, providing for an
exclusion of all monetary damages for breach of fiduciary duty unless they arise
from acts or omissions which involve intentional misconduct, fraud or a knowing
violation of law or payments of dividends or distributions in excess of the
amount allowed. The reincorporation will result in the elimination of any
liability of an officer or director for a breach of the duty of loyalty unless
arising from intentional misconduct, fraud, or a knowing violation of
law.
Dividends. Delaware law is
more restrictive than Nevada law with respect to when dividends may be paid.
Under the Delaware law, unless further restricted in the certificate of
incorporation, a corporation may declare and pay dividends, out of surplus, or
if no surplus exists, out of net profits for the fiscal year in which the
dividend is declared and/or the preceding fiscal year (provided that the amount
of capital of the corporation is not less than the aggregate amount of the
capital represented by the issued and outstanding stock of all classes having a
preference upon the distribution of assets). In addition, the
Delaware law provides that a corporation may redeem or repurchase its shares
only if the capital of the corporation is not impaired and such redemption or
repurchase would not impair the capital of the corporation. Nevada
law provides that no distribution (including dividends on, or redemption or
repurchases of, shares of capital stock) may be made if, after giving effect to
such distribution, the corporation would not be able to pay its debts as they
become due in the usual course of business, or, except as specifically permitted
by the articles of incorporation, the corporation's total assets would be less
than the sum of its total liabilities plus the amount that would be needed at
the time of a dissolution to satisfy the preferential rights of preferred
stockholders. The reincorporation makes it possible for Arrayit to
pay dividends or other distributions that would not be payable under Delaware
law.
Restrictions on Business
Combinations. Both Delaware and Nevada law contain provisions restricting
the ability of a corporation to engage in business combinations with an
interested stockholder. Under Delaware law, a corporation which is listed on a
national securities exchange, included for quotation on the Nasdaq Stock Market
or held of record by more than 2,000 stockholders, is not permitted to engage in
a business combination with any interested stockholder for a three-year period
following the time such stockholder became an interested stockholder, unless (i)
the transaction resulting in a person becoming an interested stockholder, or the
business combination, is approved by the board of directors of the corporation
before the person becomes an interested stockholder; (ii) the interested
stockholder acquires 85% or more of the outstanding voting stock of the
corporation in the same transaction that makes it an interested stockholder
(excluding shares owned by persons who are both officers and directors of the
corporation, and shares held by certain employee stock ownership plans); or
(iii) on or after the date the person becomes an interested stockholder, the
business combination is approved by the corporation's board of directors and by
the holders of at least 66 2/3% of the corporation's outstanding voting stock at
an annual or special meeting (and not by written consent), excluding shares
owned by the interested stockholder. Delaware law defines “interested
stockholder” generally as a person who owns 15% or more of the outstanding
shares of a corporation's voting stock.
Nevada
law regulates business combinations more stringently. First, an
“interested stockholder” is defined as a beneficial owner (directly or
indirectly) of ten percent (10%) or more of the voting power of the outstanding
shares of the corporation. Second, the three-year moratorium can be lifted only
by advance approval by a corporation's board of directors. Finally, after the
three-year period, combinations with “interested stockholders” remain prohibited
unless (i) they are approved by the board of directors, the disinterested
stockholders or a majority of the outstanding voting power not beneficially
owned by the interested party, or (ii) the interested stockholders satisfy
certain fair value requirements. As in Delaware, a Nevada corporation may
opt-out of the statute with appropriate provisions in its articles of
incorporation.
We have
not opted out of the applicable statutes and the more stringent requirements of
Nevada law apply to mergers and combinations after the Effective Time of the
reincorporation.
Amendment to Articles of
Incorporation/Certificate of Incorporation or Bylaws. Both
Delaware and Nevada law require the approval of the holders of a majority of all
outstanding shares entitled to vote to approve proposed amendments to a
corporation's certificate or articles of incorporation. Both Delaware and Nevada
law also provide that in addition to the vote of the stockholders, the vote of a
majority of the outstanding shares of a class may be required to amend the
certificate of incorporation or articles of incorporation. Neither state
requires stockholder approval for the board of directors of a corporation to fix
the voting powers, designation, preferences, limitations, restrictions and
rights of a class of stock provided that the corporation's organizational
documents grant such power to its board of directors. Both Delaware
and Nevada law permit the number of authorized shares of any such class of stock
to be increased or decreased (but not below the number of shares then
outstanding) by the board of directors unless otherwise provided in the articles
of incorporation or resolution adopted pursuant to the certificate of
incorporation, respectively. The Arrayit Articles require not less
than 75% of the outstanding shares entitled to vote for the election of
directors.
Actions by Written Consent of
Stockholders. Both Delaware and Nevada law provide that,
unless the articles or certificate of incorporation provides otherwise, any
action required or permitted to be taken at a meeting of the stockholders may be
taken without a meeting if the holders of outstanding stock having at least the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote consents to the action in
writing. The Nevada Articles provide that action may be taken by
written consent of the shareholders only if expressly approved by the Board of
Directors. Delaware law requires the corporation to give prompt
notice of the taking of corporate action without a meeting by less than
unanimous written consent to those stockholders who did not consent in
writing. Nevada law does not require notice to the stockholders of
action taken by less than all of the stockholders.
Stockholder Vote for Mergers and
Other Corporation Reorganizations. Both jurisdictions require
authorization by an absolute majority of the outstanding voting rights, as well
as approval by the board of directors, of the terms of a merger or a sale of
substantially all of the assets of the corporation. Neither Delaware nor Nevada
law require a stockholder vote of the surviving corporation in a merger (unless
the corporation provides otherwise in its certificate of incorporation) if: (a)
the merger agreement does not amend the existing certificate of incorporation of
the surviving corporation; (b) each share of stock of the surviving corporation
outstanding immediately before the Effective Time of the merger is an identical
outstanding share after the merger; and (c) either no shares of common stock of
the surviving corporation and no shares, securities or obligations convertible
into such stock are to be issued or delivered under the plan of merger, or the
authorized unissued shares or shares of common stock of the surviving
corporation to be issued or delivered under the plan of merger plus those
initially issuable upon conversion of any other shares, securities or
obligations to be issued or delivered under such plan do not exceed twenty
percent (20%) of the shares of common stock of such constituent corporation
outstanding immediately prior to the Effective Time of the merger.
DEFENSES
AGAINST HOSTILE TAKEOVERS
The
following discussion summarizes the reasons for, and the operation and effects
of, certain provisions in the Arrayit Amended and Restated Articles of
Incorporation which management has identified as potentially having an
anti-takeover effect. It is not intended to be a complete description of all
potential anti-takeover effects, and it is qualified in its entirety by
reference to the Arrayit Amended and Restated Articles of Incorporation.
Substantially similar provisions were contained in the Company’s Certificate of
Incorporation and the reincorporation does not change the nature of the
anti-takeover provisions or their effect.
The
anti-takeover provisions of the Arrayit Amended and Restated Articles of
Incorporation are designed to minimize the possibility of a sudden acquisition
of control of Arrayit which has not been negotiated with and approved by the
Arrayit board of directors. These provisions may tend to make it more difficult
to remove the incumbent members of the board of directors. The
provisions would not prohibit an acquisition of control of Arrayit or a tender
offer for all of its capital stock. However, to the extent these provisions
successfully discourage the acquisition of control of Arrayit or tender offers
for all or part of its capital stock without approval of the board of directors,
they may have the effect of preventing an acquisition or tender offer which
might be viewed by stockholders to be in their best interests.
Tender
offers or other non-open market acquisitions of stock are usually made at prices
above the prevailing market price. In addition, acquisitions of stock by persons
attempting to acquire control through market purchases may cause the market
price of the stock to reach levels which are higher than would otherwise be the
case. Anti-takeover provisions may discourage such purchases, particularly those
of less than all of the outstanding capital stock, and may thereby deprive
stockholders of an opportunity to sell their stock at a temporarily higher
price. These provisions may therefore decrease the likelihood that a tender
offer will be made adversely affect those stockholders who would desire to
participate in a tender offer. These provisions may also serve to insulate
incumbent management from change and to discourage not only sudden or hostile
takeover attempts, but any attempts to acquire control which are not approved by
the board of directors, whether or not stockholders deem such transactions to be
in their best interests.
Authorized Shares of Capital
Stock. The Arrayit Amended and Restated Articles of
Incorporation authorizes the issuance of up to 5,000,000 shares of serial
preferred stock, without any action on the part of the stockholders. Shares of
Arrayit's serial preferred stock with voting rights could be issued and would
then represent an additional class of stock required to approve any proposed
acquisition. This preferred stock, together with authorized but unissued shares
of common stock (the Articles of Incorporation authorizes the issuance of up to
100,000,000 shares of common stock), could represent additional capital stock
required to be purchased by an acquiror. If the board of directors of Arrayit
determined to issue an additional class of voting preferred stock to a person
opposed to a proposed acquisition, such person might be able to prevent the
acquisition single-handedly.
Stockholder
Meetings. Nevada law provides that the annual stockholder
meeting may be called by a corporation's board of directors or by such person or
persons as may be authorized by a corporation's articles of incorporation or
bylaws. The Arrayit Amended and Restated Articles of Incorporation provides that
annual stockholder meetings may be called only by the Arrayit board of directors
or a duly designated committee of the board. Although Arrayit believes that this
provision will discourage stockholder attempts to disrupt the business of
Arrayit between annual meetings, its effect may be to deter hostile takeovers by
making it more difficult for a person or entity to obtain immediate control of
Arrayit.
Classified Board of Directors and
Removal of Directors. Arrayit's Amended and Restated Articles of
Incorporation provide that the board of directors is to be divided into three
classes which shall be as nearly equal in number as possible. The directors in
each class serve for terms of three years, with the terms of one class expiring
each year. Each class currently consists of approximately one-third of the
number of directors. Each director will serve until his successor is elected and
qualified. A classified board of directors could make it more difficult for
stockholders, including those holding a majority of Arrayit's outstanding stock,
to force an immediate change in the composition of a majority of the board of
directors. Since the terms of only one-third of the incumbent directors expire
each year, it requires at least two annual elections for the stockholders to
change a majority, whereas a majority of a non-classified board may be changed
in one year. The provision for a staggered board of directors affects
every election of directors and is not triggered by the occurrence of a
particular event such as a hostile takeover. Thus a staggered board of directors
makes it more difficult for stockholders to change the majority of directors
even when the reason for the change would be unrelated to a
takeover.
Restriction of Maximum Number of
Directors and Filling Vacancies on the Board of Directors. Nevada law
requires that the board of directors of a corporation consist of one or more
members and that the number of directors shall be set by or in the manner
described in the corporation's articles of incorporation or bylaws. Arrayit's
Amended and Restated Articles of Incorporation provides that the number of
directors (exclusive of directors, if any, to be elected by the holders of
preferred stock) shall not be less than one or more than 15, as shall be
provided from time to time in accordance with the bylaws. The power to determine
the number of directors within these numerical limitations is vested in the
board of directors and requires the concurrence of at least two-thirds of the
entire board of directors. The effect of such provisions may be to prevent a
person or entity from quickly acquiring control of Arrayit through an increase
in the number of the directors and election of nominees to fill the newly
created vacancies.
Restriction on Business Combination.
If, at any time during the ten years from the Effective Time of the
Arrayit Articles, any person shall acquire the beneficial ownership (as
determined pursuant to Rules 13d-3 and 13d-5 under the Act) of more than 20% of
any class of common stock, then the record holders of common stock beneficially
owned by such acquiring person shall have only the voting rights set forth in
this paragraph on any matter requiring their vote or consent. With
respect to each vote in excess of 20% of the voting power of the outstanding
shares of common stock which such record holders would otherwise be entitled to
cast without giving effect to this paragraph, the record holders in the
aggregate shall be entitled to cast only one-hundredth of one vote. A
person who is a record owner of shares of common stock that are beneficially
owned simultaneously by more than one person shall have, with respect to such
shares, the right to cast the least number of votes that such person would be
entitled to cast under this paragraph by virtue of such shares being so
beneficially owned by any of such acquiring persons. The effect of
the reduction in voting power required by this paragraph shall be given effect
in determination the presence of a quorum for purposes of convening a meeting of
the stockholders of the Corporation.
The
limitation on voting rights prescribed by this paragraph shall terminate and be
of no force and effect as of the earliest to occur of: (i) the date that any
person becomes the beneficial owner of shares of stock representing at least 75%
of the total number of votes entitled to be cast in respect of all outstanding
shares of stock, before giving effect to the reduction in votes prescribed by
this paragraph; or (ii) the date (the “Reference Date”) one day prior to the
date on which, as a result of such limitation of voting rights, the common stock
will be delisted from any stock exchange or automated quotation
system.
The term
“Related Person” means and includes (i) any individual, corporation, partnership
or other person or entity which together with its “affiliates” or “associates”
(as those terms are defined in the Securities Act of 1933, as amended (the
“Act”)) which “beneficially owns” (as that term is defined in the Act) in the
aggregate 10% or more of the outstanding shares of the common stock of the
Company; and (ii) any “affiliate” or “associate” (as those terms are defined in
the Act) of any such individual, Company, partnership or other person or entity;
provided, however, that the term “Related Person” does not include the Company,
any subsidiary of the Company, any employee benefit plan, employee stock plan of
the Company or of any subsidiary of the Company, or any trust established by the
Company in connection with the foregoing, or any person or entity organized,
appointed, established or holding shares of capital stock of the Company for or
pursuant to the terms of any such plan, nor shall such term encompass shares of
capital stock of the Company held by any of the foregoing (whether or not held
in a fiduciary capacity or otherwise). Without limitation, any shares of the
common stock of the Company which any Related Person has the right to acquire
pursuant to any agreement, or upon exercise or conversion rights, warrants or
options, or otherwise, shall be deemed “beneficially owned” by such Related
Person.
Approval of Certain Business
Combination. Except as otherwise expressly provided in the
Arrayit Articles and in addition to any other vote required by law, the
affirmative vote of the holders of (i) at least 75% of the voting power of the
outstanding shares entitled to vote thereon (and, if any class or series of
shares is entitled to vote thereon separately the affirmative vote of the
holders of at least 75% of the outstanding shares of each such class or series),
and (ii) at least a majority of the outstanding shares entitled to vote thereon,
not including shares deemed beneficially owned by a Related Person, is required
in order to authorize (a) any merger or consolidation of the Company or a
subsidiary of the Company with or into a Related Person; (b) any sale, lease,
exchange, transfer or other disposition, including without limitation, a
mortgage or pledge, of all or any substantial part of the assets of the Company
(including without limitation any voting securities of a subsidiary) or of a
subsidiary, to a Related Person; (c) any merger or consolidation of a Related
Person with or into the Company or a subsidiary of the Company; (d) any sale,
lease, exchange, transfer or other disposition of all or any Substantial Part of
the assets of a Related Person to the Company or a subsidiary of the Company;
(e) the issuance of any securities of the Company or a subsidiary of the Company
to a Related Person other than on a pro rata basis to all holders of capital
stock of the Company of the same class or classes held by the Related person,
pursuant to a stock split, stock dividend or distribution or warrants or rights,
and other than in connection with the exercise or conversion of securities
exercisable for or convertible into securities of the Company or any of its
subsidiaries which securities have been distributed pro rata to all holders of
capital stock of the Company; (f) the acquisition by the Company or a subsidiary
of the Company of any securities of a Related Person; (g) any reclassification
of the common stock of the Company, or any recapitalization involving the common
stock of the Company or any similar transaction (whether or not with or into or
otherwise involving a Related Person) that has the effect directly or
indirectly, of increasing by more than 1% the proportionate share of the
outstanding shares of any class of equity or convertible securities of the
Company or any subsidiary that are directly or indirectly owned by any Related
Person; and (h) any agreement, contract or other arrangement providing for any
of the transactions described in this paragraph.
Such
affirmative vote is required notwithstanding any other provision of the
Articles, any provision of law, or any agreement with any regulatory agency or
national securities exchange which might otherwise permit a lesser vote or no
vote; provided, however, that in no instance shall the provisions of the Arrayit
Articles require the vote of greater than 85% of the voting power of the
outstanding shares entitled to vote thereon for the approval of a business
combination.
Advance Notice Requirements for
Nomination of Directors and Proposal of New Business at Annual Stockholder
Meetings. Arrayit's Amended and Restated Articles of
Incorporation provide that any stockholder desiring to make a nomination for the
election of directors or a proposal for new business at a stockholder meeting
must submit written notice not less than 30 or more than 60 days in advance of
the meeting: provided, however, that if less than forty days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Company not later than the close
of the tenth day following the day on which notice of the meeting was mailed to
stockholders. This advance notice requirement may give management
time to solicit its own proxies in an attempt to defeat any dissident slate of
nominations. Similarly, adequate advance notice of stockholder
proposals will give management time to study such proposals and to determine
whether to recommend to the stockholders that such proposals be adopted. In
certain instances, such provisions could make it more difficult to oppose
management's nominees or proposals, even if the stockholders believe such
nominees or proposals are in their interests. These provisions may
tend to discourage persons from bringing up matters disclosed in the proxy
materials furnished to the stockholders and could inhibit the ability of
stockholders to bring up new business in response to recent
developments.
The
reincorporation will be conducted as a merger of the Company into our wholly
owned subsidiary pursuant to Section 253 of the General Corporation Law of the
State of Delaware. Delaware law does not provide for any right of
appraisal or redemption in connection with mergers of a parent corporation into
its subsidiary. The stockholders are not entitled to receive
consideration in lieu of the shares of Arrayit.
CHANGE
OF CORPORATE NAME
The name
change which will be affected in connection with the Reincorporation and
adoption of the Arrayit Articles will more accurately reflect the business of
the Company.
ADDITIONAL INFORMATION
The
Company has received no indication from any of its directors or non-employee
directors of any intent to oppose any action to be taken by the
Company. There have been no proposals for action submitted to the
Company by any stockholders other than the proposals which are the subject of
this Information Statement.
By Order
of the Board of Directors,
____________________________________________
Rene’ A.
Schena, Chairman and Chief Executive Officer
February
17, 2009
AMENDED
AND RESTATED ARTICLES OF INCORPORATION
OF
ARRAYIT
CORPORATION
ARTICLE
I
NAME
The name
of the Corporation is Arrayit Corporation (hereinafter, the
“Corporation).
ARTICLE
II
REGISTERED
OFFICE AND AGENT
The name
of the Corporation's resident agent in the State of Nevada is Inc. Plan of
Nevada, and the street address of the said resident agent where process may be
served on the Corporation is 613 Saddle River Court, Henderson, Nevada 89015.
The mailing address and the street address of the said resident agent are
identical.
ARTICLE
III
POWERS
The
purpose for which the Corporation is organized is to transact all lawful
business for which corporations may be incorporated pursuant to the laws of the
State of Nevada. The Corporation shall have all the powers of a corporation
organized under the General Corporation Law of the State of Nevada.
ARTICLE
IV
TERM
The
Corporation is to have perpetual existence.
ARTICLE
V
CAPITAL
STOCK
A. Number and
Designation. The total number of shares of all classes that
this Corporation shall have authority to issue shall be 105,000,000, of which
100,000,000 shall be shares of common stock, par value $0.001 per share (“Common
Stock”), and 5,000,000 shall be shares of preferred stock, par value $0.001 per
share (“Preferred Stock”). The shares may be issued by the
Corporation from time to time as approved by the board of directors of the
Corporation without the approval of the stockholders except as otherwise
provided in this Article V or the rules of a national securities exchange if
applicable. The consideration for subscriptions to, or the purchase
of, the capital stock to be issued by a corporation shall be paid in such form
and in such manner as the board of directors shall determine. The
board of directors may authorize capital stock to be issued for consideration
consisting of cash, any tangible or intangible property or any benefit to the
corporation, or any combination thereof. In the absence of actual
fraud in the transaction, the judgment of the directors as to the value of such
consideration shall be conclusive. The capital stock so issued shall
be deemed to be fully paid and nonassessable stock upon receipt by the
corporation of such consideration. In the case of a stock dividend,
the part of the surplus of the Corporation which is transferred to stated
capital upon the issuance of shares as a stock dividend shall be deemed to be
the consideration for their issuance.
A
description of the different classes and series (if any) of the Corporation's
capital stock, and a statement of the relative powers, designations, preferences
and rights of the shares of each class and series (if any) of capital stock, and
the qualifications, limitations or restrictions thereof, are as
follows:
B. Undesignated Common
Stock. Shares of Common Stock not at the time designated as
shares of a particular series pursuant to this Article (V)(B) or any other
provision of these Articles of Incorporation may be issued from time to time in
one or more additional series or without any distinctive
designation. The board of directors may determine, in whole or in
part, the preferences, voting powers, qualifications and special or relative
rights or privileges of any such series before the issuance of any shares of
that series. The board of directors shall determine the number of
shares constituting each series of Common Stock and each series shall have a
distinguishing designation.
C. Common
Stock. Except as provided in these Articles or the designation
of any series or class of capital stock, the holders of the Common Stock shall
exclusively posses all voting power. Subject to the provisions of
these Articles, each holder of shares of Common Stock shall be entitled to one
vote for each share held by such holders.
Whenever
there shall have been paid, or declared and set aside for payment, to the
holders of the outstanding shares of any class or series of stock having
preference over the Common Stock as to the payment of dividends, the full amount
of dividends and sinking fund or retirement fund or other retirement payments,
if any, to which such holders are respectively entitled in preference to the
Common Stock, then dividends may be paid on the Common Stock, and on any class
or series of stock entitled to participate therewith as to dividends, out of any
assets legally available for the payment of dividends, but only when and as
declared by the board of directors of the Corporation.
In the
event of any liquidation, dissolution or winding up of the Corporation, after
there shall have been paid, or declared and set aside for payment, to the
holders of the outstanding shares of any class having preference over
the Common Stock in any such event, the full preferential amounts to which they
are respectively entitled, the holders of the Common Stock and of any class or
series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets shall be entitled, after payment or provision for payment
of all debts and liabilities of the Corporation, to receive the remaining assets
of the Corporation available for distribution, in cash or in kind.
Each
share of Common Stock shall have the same relative powers, preferences and
rights as, and shall be identical in all respects with, all the other shares of
Common Stock of the Corporation.
D. Serial Preferred
Stock. Shares of Preferred Stock not at the time designated as
shares of a particular series pursuant to this Article (V)(D) or any other
provision of these Articles of Incorporation may be issued from time to time in
one or more additional series. The board of directors may determine,
in whole or in part, the preferences, voting powers, qualifications and special
or relative rights or privileges of any such series before the issuance of any
shares of that series. The board of directors shall determine the
number of shares constituting each series of Preferred Stock and each series
shall have a distinguishing designation. Each share of each series of
serial preferred stock shall have the same relative powers, preferences and
rights as, and shall be identical in all respects with, all the other shares of
the Corporation of the same series, except the times from which dividends on
shares which may be issued from time to time of any such series may begin to
accrue.
E. Series A
Convertible Preferred Stock. There shall be a series of
Convertible Preferred Stock designated as “Series A Convertible Preferred
Stock.” Such series is referred to herein as the “Series A Preferred
Stock.”
1. Amount. The
number of shares constituting Series A Preferred Stock shall be
4,500,000.
2. Stated
Capital. The amount to be represented in stated capital at all
times for each share of Series A Convertible Preferred Stock shall be
$.001.
3. Rank. All
shares of Series A Convertible Preferred Stock shall rank prior to all of the
Corporation’s Common Stock, par value $.001 per share (the “Common Stock”), now
or hereafter issued, both as to payment of dividends and as to distributions of
assets upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.
4. Dividends. No
dividends shall be payable to the holder of shares of Series A Convertible
Preferred Stock.
5. Liquidation
Preference.
(a) The
liquidation value of shares of this Series, in case of the voluntary or
involuntary liquidation, dissolution or winding-up of the Company, shall be
$.001 per share.
(b) In
the event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Company, the holders of shares of this Series shall be entitled to
receive the liquidation value of such shares held by them until the liquidation
value of all shares of Series A Convertible Preferred Stock shall have been paid
in full. Upon payment in full of the liquidation value to which the
holders of shares of the shares of Series A Convertible Preferred Stock are
entitled, the holders of shares of this Series will not be entitled to any
further participation in any distribution of assets by the Company.
(c)
Neither a consolidation or merger of the Company with or into any other
corporation, nor a merger of any other corporation with or into the Company, nor
a sale or transfer of all or any part of the Company's assets for cash or
securities or other property shall be considered a liquidation, dissolution or
winding-up of the Company within the meaning of this Paragraph 5.
6. Voting
Rights. Except as otherwise required by law, each share of
outstanding Series A Convertible Preferred Stock shall entitle the holder
thereof to vote on each matter submitted to a vote of the stockholders of the
Corporation and to have the number of votes equal to the number (including any
fraction) of shares of Common Stock into which such share of Series A
Convertible Preferred Stock is then convertible pursuant to the provisions
hereof at the record date for the determination of shareholders entitled to vote
on such matters or, if no such record date is established, at the date such vote
is taken or any written consent of stockholders becomes
effective. Except as otherwise required by law or by these Articles,
the holders of shares of Common Stock and Series A Convertible Preferred Stock
shall vote together and not as separate classes.
7. No
Redemption. The shares of Series A Convertible Preferred Stock
are not redeemable.
8. Conversion
Provisions.
(a) Conversion at Option of the
Holders. Provided that, and only to the extent that, the
Corporation has a sufficient number of shares of authorized but unissued and
unreserved Common Stock available to issue upon conversion, each share of Series
A Convertible Preferred Stock shall be convertible, at the option of the holder
thereof, at any time on or after the date of issue, into fully paid and
nonassessable shares of Common Stock and such other securities and property as
hereinafter provided, initially at the rate of 9.6 shares of Common Stock for
each full share of Series A Convertible Preferred Stock (“Conversion
Ratio”).
(b) Mechanics of
Conversion. Any holder of shares of Series A Convertible
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates for such shares of Series A
Convertible Preferred Stock at the office of the transfer agent for the Series A
Convertible Preferred Stock, which certificate or certificates, if the
Corporation shall so require, shall be duly endorsed to the Corporation or in
blank, or accompanied by proper instruments of transfer to the Corporation or in
blank, accompanied by irrevocable written notice to the Corporation that the
holder elects so to convert such shares of Series A Convertible Preferred Stock
and specifying the name or names (with address) in which a certificate or
certificates for Common Stock are to be issued.
(c) Adjustments to Conversion
Ratio. The Conversion Ratio shall be subject to adjustment as
follows:
(i) In
case the Company shall (A) pay a dividend or make a distribution in Common
Stock, (B) subdivide or reclassify its outstanding shares of Common Stock into a
greater number of shares, or (C) reclassification or combination into a smaller
number of shares, the Conversion Ratio in effect immediately prior thereto shall
be adjusted retroactively as provided below so that the Conversion Ratio
thereafter shall be by multiplying the Conversion Ratio at which such shares of
this Series were theretofore convertible by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding immediately following
such action and of which the denominator shall be the number of shares of Common
Stock outstanding immediately prior thereto. Such adjustment shall be made
whenever any event listed above shall occur and shall become effective
retroactively immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision or reclassification. (ii) In case the Company shall issue rights or
warrants to all holders of its Common Stock entitling them (for a period
expiring within 45 days after the record date therefor) to subscribe for or
purchase shares of Common Stock at a price per share less than the current
market price per share of Common Stock (as determined in accordance with the
provisions of subclause (iv) of this clause (d)) at the record date therefor
(the “Current Market Price”), or in case the Company shall issue other
securities convertible into or exchangeable for Common Stock for a consideration
per share of Common Stock deliverable upon conversion or exchange thereof less
than the Current Market Price; then the Conversion Ratio in effect immediately
prior thereto shall be adjusted retroactively as provided below so that the
Conversion Ratio therefor shall be equal to the price determined by multiplying
the Conversion Ratio at which shares of this Series were theretofore convertible
by a fraction of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such convertible or exchangeable
securities, rights or warrants plus the number of additional shares of Common
Stock offered for subscription or purchase and of which the numerator shall be
the number of shares of Common Stock outstanding on the date of issuance of such
shares, convertible or exchangeable securities, rights or warrants plus the
number of additional shares of Common Stock which the aggregate offering price
of the number of shares of Common Stock so offered would purchase at the Current
Market Price per share of Common Stock (as determined in accordance with the
provisions of subclause (iv) of this clause (d). Such adjustment
shall be made whenever such convertible or exchangeable securities rights or
warrants are issued, and shall become effective retroactively immediately after
the record date for the determination of stockholders entitled to receive such
securities. However upon the expiration of any right or warrant to
purchase Common Stock the issuance of which resulted in an adjustment in the
Conversion Ratio pursuant to this subclause (ii), if any such right or warrant
shall expire and shall not have been exercised, the Conversion Ratio shall be
recomputed immediately upon such expiration and effective immediately upon such
expiration shall be increased to the price it would have been (but reflecting
any other adjustments to the Conversion Ratio made pursuant to the provisions of
this clause (d) after the issuance of such rights or warrants) had the
adjustment of the Conversion Ratio made upon the issuance of such rights or
warrants been made on the basis of offering for subscription or purchase only
that number of shares of Common Stock actually purchased upon the exercise of
such rights or warrants actually exercised.
(iii) In
case the Company shall distribute to all holders of its Common Stock (including
any such distribution made in connection with a consolidation or merger in which
the Company is the continuing corporation) shares of capital stock (other than
Common Stock), evidences of its indebtedness or assets (excluding cash
dividends) or rights to subscribe (excluding those referred to in subclause (ii)
of this clause (d)), then in each such case the number of shares of Common Stock
into which each share of this Series shall thereafter be convertible shall be
determined by multiplying the number of shares of Common Stock into which such
share of this Series was theretofore convertible by a fraction of which the
numerator shall be the number of outstanding shares of Common Stock multiplied
by the Current Market Price per share of Common Stock (as determined in
accordance with the provisions of subclause (iv) of this clause (d)) on the date
of such distribution and of which the denominator shall be the product of the
number of outstanding shares of Common Stock and the Current Market Price per
share of Common Stock, less the aggregate fair market value (as determined by
the Board of Directors of the Company, whose determination shall be conclusive,
and described in a statement filed with the transfer agent for the shares of
this Series) of the capital stock, assets or evidences of indebtedness so
distributed or of such subscription rights. Such adjustment shall be
made whenever any such distribution is made, and shall become effective
retroactively immediately after the record date for the determination of
stockholders entitled to receive such distribution.
(iv) For
the purpose of any computation under subclause (ii) and (iii) of this clause
(d), the Current Market Price per share of Common Stock at any date shall be
deemed to be the average Sale Price for the thirty consecutive trading days
commencing forty-five trading days before the day in question. As
used herein, “Sale Price” means the closing sales price of the Common Stock (or
if no sale price is reported, the average of the high and low bid prices) as
reported by the principal national or regional stock exchange on which the
Common Stock is listed or, if the Common Stock is not listed on a national or
regional stock exchange, as reported by national Association of Securities
Dealers Automated Quotation System and if not so reported then as reported by
the Electronic Bulletin Board or the National Quotation Bureau
Incorporated.
(v) No
adjustment in the Conversion Ratio shall be required unless such adjustment
would require an increase of at least 1% in the price then in effect; provided,
however, that any adjustments which by reason of this subclause (v) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this paragraph 8 shall
be made to the nearest cent.
(vi) In
the event that, at any time as a result of an adjustment made pursuant to
subclause (i) or subclause (iii) of this clause (d), the holder of any share of
this Series thereafter surrendered for conversion shall become entitled to
receive any shares of the Company other than shares of the Common Stock,
thereafter the number of such other shares so receivable upon conversion of any
share of this Series shall be subject to adjustment from time to time in a
manner and on the terms as nearly equivalent as practicable to the provisions
with respect to the Common Stock contained in subclauses (i) through (v) of this
clause (d), and the other provisions of this clause (d) with respect to the
Common Stock shall apply on like terms to any such other shares.
(vii)
Whenever the conversion rate is adjusted, as herein provided, the Company shall
promptly file with the transfer agent for this Series, a certificate of an
officer of the Company setting forth the conversion rate after such adjustment
and setting forth a brief statement of the facts requiring such adjustment and a
computation thereof. Such certificate shall be conclusive evidence of
the correctness of such adjustment. The Company shall promptly cause
a notice of the adjusted conversion rate to be mailed to each registered holder
of shares of this Series.
(d) If
any of the following events occur, namely (i) any reclassification or change
(other than a combination of reclassification into a smaller number of shares)
of outstanding shares of Common Stock issuable upon conversion of shares of this
Series (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision) or (ii) any
consolidation or merger to which the Company is a party (other than a
consolidation or merger to which the Company is the continuing corporation and
which does not result in any classification of, or change (other than a change
in par value, or from par value to no par value, or from no par value to par
value, or as a result of a subdivision) in, outstanding shares of Common Stock);
then the Company or such successor, as the case may be, shall provide in its
Certificate of Incorporation that each share of this Series shall be convertible
into the kind and amount of shares of stock and other securities or property
receivable upon such reclassification, change, consolidation or merger by a
holder of the number of shares of Common Stock issuable upon conversion of each
such share of this Series immediately prior to such reclassification, change,
consolidation or merger. Such Certificate of Incorporation shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in clause (d). The
Company shall cause notice of the execution of any such event contemplated by
this paragraph to be mailed to each holder of shares of this Series As soon as
practicable.
The above
provisions of this clause (d) shall similarly apply to successive
reclassifications, consolidations and mergers.
(e) By
duly adopted resolution of its board of directors, the Company at any time may
increase the Conversion Ratio, temporarily or otherwise, by any amount, but in
no event shall such Conversion Ratio require the issuance of Common Stock for
less than the par value of the Common Stock at the time such reduction is
made.
Whenever
the Conversion Ratio is increased pursuant to this subclause (e), the Company
shall mail to the holders a notice of the increased Conversion
Ratio. The notice shall state the increased Conversion Ratio and the
period it will be in effect.
An
increase in the Conversion Ratio does not change or adjust the Conversion Ratio
otherwise in effect for purposes of subclauses (b) and (c) of this paragraph
8.
9. Protective
Provisions.
(a) Reservation of Shares;
Transfer Taxes; Etc. Provided that, and only to the extent
that, the Corporation has a sufficient number of shares of authorized but
unissued and unreserved Common Stock available to issue upon conversion, the
Corporation shall at all times serve and keep available, out of its authorized
and unissued stock, solely for the purpose of effecting the conversion of the
Series A Convertible Preferred Stock, such number of shares of its Common Stock
free of preemptive rights as shall from time to time be sufficient to effect the
conversion of all shares of Series A Convertible Preferred Stock from time to
time outstanding. The Corporation shall from time to time, in
accordance with the laws of the State of Nevada, increase the authorized number
of shares of Common Stock if at any time the number of shares of Common Stock
not outstanding shall not be sufficient to permit the conversion of all the then
outstanding shares of Series A Convertible Preferred Stock.
If any
shares of Common Stock required to be reserved for purposes of conversion of the
Series A Convertible Preferred Stock hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be issued upon conversion, the Corporation will in good faith
and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved, as the case may be. If the Common Stock is
listed on the New York Stock Exchange or any other national securities exchange,
the Corporation will, if permitted by the rules of such exchange, list and keep
listed on such exchange, upon official notice of issuance, all shares of Common
Stock issuable upon conversion of the Series A Convertible Preferred
Stock.
The
Corporation will pay any and all issue or other taxes that may be payable in
respect of any issue or delivery of shares of Common Stock on conversion of the
Series A Convertible Preferred Stock. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Stock (or other securities
or assets) in a name other than that which the shares of Series A Convertible
Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Corporation the amount of such tax or has established, to the satisfaction of
the Corporation, that such tax has been paid.
(b) Class Voting
Rights. So long as the Series A Convertible Preferred Stock is
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least a majority of all outstanding Series A Convertible
Preferred Stock voting separately as a class, (i) Amend, alter or repeal (by
merger or otherwise) any provision of the Articles of Incorporation or the
By-Laws of the Corporation, as amended, so as adversely to affect the relative
rights, preferences, qualifications, limitations or restrictions of the Series A
Convertible Preferred Stock, (ii) authorize or issue, or increase the authorized
amount of, any additional class or series of stock, or any security convertible
into stock of such class or series, ranking prior to the Series A Convertible
Preferred Stock in respect of the payment of dividends or upon liquidation,
dissolution or winding up of the Corporation or (iii) effect any
reclassification of the Series A Convertible Preferred Stock. A class
vote on the part of the Series A Convertible Preferred Stock shall, without
limitation, specifically not be deemed to be required (except as otherwise
required by law or resolution of the Corporation’s Board of Directors) in
connection with: (a) the authorization, issuance or increase in the authorized
amount of any shares of any other class or series of stock which ranks junior
to, or on a parity with, the Series A Convertible Preferred Stock in respect of
the payment of dividends and distributions upon liquidation, dissolution or
winding up of the Corporation; or (b) the authorization, issuance or increase in
the amount of any bonds, mortgages, debentures or other obligations of the
Corporation.
The
affirmative vote or consent of the holders of a majority of the outstanding
Series A Convertible Preferred Stock, voting or consenting separately as a
class, shall be required to (a) authorize any sale, lease or conveyance of all
or substantially all of the assets of the Corporation, or (b) approve any
merger, consolidation or compulsory share exchange of the Corporation with or
into any other person unless (i) the terms of such merger, consolidation or
compulsory share exchange do not provide for a change in the terms of the Series
A Convertible Preferred Stock and (ii) the Series A Convertible Preferred Stock
is, after such merger, consolidation or compulsory share exchange on a parity
with or prior to any other class or series of capital stock authorized by the
surviving corporation as to dividends and upon liquidation, dissolution or
winding up other than any class or series of stock of the Corporation prior to
the Series A Convertible Preferred Stock as may have been created with the
affirmative vote or consent of the holders of at least 66-2/3% of the Series A
Convertible Preferred Stock (or other than a class or series into which such
prior stock is converted as a result of such merger, consolidation or share
exchange).
10. Outstanding
Shares. For purposes of these Articles, all shares of Series A
Convertible Preferred Stock shall be deemed outstanding except (i) from the date
of surrender of certificates representing shares of Series A Convertible
Preferred Stock, all shares of Series A Convertible Preferred Stock converted
into Common Stock; (ii) the effective date of a recapitalization referred to in
clause 8(c), and (iii) from the date of registration of transfer, all shares of
Series A Convertible Preferred Stock held of record by the Corporation or any
subsidiary of the Corporation.
F. Series B
Convertible Preferred Stock. There shall be a series of
Preferred Stock designated as “Series B Convertible Preferred
Stock.” Such series is referred to herein as the “Series B
Convertible Preferred Stock.”
1. Amount. The
number of shares constituting such series shall be 100,000.
2. Stated
Capital. The amount to be represented in stated capital at all
times for each share of Series B Convertible Preferred Stock shall be
$.001.
3. Rank. All
shares of Series B Convertible Preferred Stock shall rank prior to all of the
Corporation’s Common Stock, par value $.001 per share (the “Common Stock”), now
or hereafter issued, both as to payment of dividends and as to distributions of
assets upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.
4. Dividends. No
dividends shall be payable to the holders of shares of Series B Convertible
Preferred Stock.
5. Liquidation
Preference.
(a) The
liquidation value of shares of this Series, in case of the voluntary or
involuntary liquidation, dissolution or winding-up of the Company, shall be
$.001 per share.
(b) In
the event of any voluntary or involuntary liquidation, dissolution or winding-up
of the Company, the holders of shares of this Series shall be entitled to
receive the liquidation value of such shares held by them until the liquidation
value of all shares of Series B Convertible Preferred Stock shall have been paid
in full. Upon payment in full of the liquidation value to which the
holders of shares of the shares of Series B Convertible Preferred Stock are
entitled, the holders of shares of this Series will not be entitled to any
further participation in any distribution of assets by the Company.
(c) Neither
a consolidation or merger of the Company with or into any other corporation, nor
a merger of any other corporation with or into the Company, nor a sale or
transfer of all or any part of the Company's assets for cash or securities or
other property shall be considered a liquidation, dissolution or winding-up of
the Company within the meaning of this Paragraph 5.
6. Voting
Rights. Except as otherwise required by law, each share of
outstanding Series B Convertible Preferred Stock shall entitle the holder
thereof to vote on each matter submitted to a vote of the stockholders of the
Corporation and to have the number of votes equal to the number (including any
fraction) of shares of Common Stock into which such share of Series B
Convertible Preferred Stock is then convertible pursuant to the provisions
hereof at the record date for the determination of shareholders entitled to vote
on such matters or, if no such record date is established, at the date such vote
is taken or any written consent of stockholders becomes
effective. Except as otherwise required by law or by this
Certificate, the holders of shares of Common Stock and Series B Convertible
Preferred Stock shall vote together and not as separate classes.
7. No
Redemption. The shares of Series B Convertible Preferred Stock
are not redeemable.
8. Conversion
Provisions.
(a) Conversion at Option of
Holders. Provided that, and only to the extent that, the
Corporation has a sufficient number of shares of authorized but unissued and
unreserved Common Stock available to issue upon conversion, each share of Series
B Convertible Preferred Stock shall be convertible, at the option of the holder
thereof, at any time on or after issuance, into the number of fully paid and
non-assessable shares of Common Stock as specified by the Conversion Ratio that
is in effect at the time of conversion; provided that, and only to the extent
that, the Corporation has a sufficient number of shares of authorized but
unissued and unreserved Common Stock available to issue upon conversion of all
outstanding shares of Series C Preferred Stock. The initial
“Conversion Ratio” for the Series B Preferred Stock is 150:1. The
Conversion Ratio shall be subject to adjustment from time to time as provided in
this Section 7.
For the
purpose of these Certificate of Designation, the term “Common Stock” shall
initially mean the class designated as Common Stock, par value $.001 per share,
of the Corporation as of August 8, 2004 subject to adjustment as hereinafter
provided.
(b) Mechanics of
Conversion. Any holder of shares of Series B Convertible
Preferred Stock desiring to convert such shares into Common Stock shall
surrender the certificate or certificates for such shares of Series B
Convertible Preferred Stock at the office of the transfer agent for the Series B
Convertible Preferred Stock, which certificate or certificates, if the
Corporation shall so require, shall be duly endorsed to the Corporation or in
blank, or accompanied by proper instruments of transfer to the Corporation or in
blank, accompanied by irrevocable written notice to the Corporation that the
holder elects so to convert such shares of Series B Convertible Preferred Stock
and specifying the name or names (with address) in which a certificate or
certificates for Common Stock are to be issued.
(c) Adjustment of Conversion
Ratio. The Conversion Ratio for each share of Series B
Preferred Stock and the kind of securities issuable upon the conversion of any
share of Series B Preferred Stock shall be adjusted from time to time as
follows:
(i) Subdivision or Combination
of Shares. If the Corporation at any time effects an increase
in the number of outstanding shares of Common Stock by subdivision, the
Conversion Ratio shall be increased in the same proportions as the Common Stock
is subdivided, in each case effective automatically upon, and simultaneously
with, the effectiveness of the subdivision which gives rise to the
adjustment. If the Corporation at any time effects a decrease in the
number of outstanding shares of Common Stock by combination or any other means,
the Conversion Ratio shall remain the same and unchanged.
(ii) Reclassification,
Consolidation or Merger. If at any time, as a result of (A) a
capital reorganization or reclassification (other than a subdivision or
combination which gives rise to an adjustment of the Conversion Ratio pursuant
to Section 7(d)(i)); or (B) a merger or consolidation of the Corporation with
another corporation (whether or not the Corporation is the surviving
corporation), the Common Stock issuable upon the conversion of the Series B
Preferred Stock shall be changed into or exchanged for the same or a different
number of shares of any class or classes of stock of the Corporation or any
other corporation, or other securities convertible into such shares, then, as a
part of such reorganization, reclassification, merger or consolidation,
appropriate adjustments shall be made in the terms of the Series B Preferred
Stock (or of any securities into which the Series B Preferred Stock is changed
or for which the Series B Preferred Stock is exchanged), so that: (x) the
holders of Series B Preferred Stock or of such substitute securities shall
thereafter be entitled to receive, upon conversion of the Series B Preferred
Stock or of such substitute securities, the kind and amount of shares of stock,
other securities, money and property which such holders would have received at
the time of such capital reorganization, reclassification, merger, or
consolidation, if such holders had converted their Series B Preferred Stock
immediately prior to such capital reorganization, reclassification, merger, or
consolidation, and (y) the Series B Preferred Stock or such substitute
securities shall thereafter be adjusted on terms as nearly equivalent as may be
practicable to the adjustments theretofore provided in this Section
7(d). No consolidation or merger in which the Corporation is not the
surviving corporation shall be consummated unless the surviving corporation
shall agree, in writing, to the provisions of this Section
7(d)(ii). The provisions of this Section 7(d)(ii) shall similarly
apply to successive capital reorganizations, reclassifications, mergers, and
consolidations.
(iii) Other Action Affecting
Common Stock. If at any time the Corporation takes any action
affecting its Common Stock which, in the opinion of the Board of Directors of
the Corporation, would have an adverse effect upon the Conversion Rights of the
Series B Preferred Stock and the foregoing conversion ratio adjustment
provisions are not strictly applicable but the failure to make any adjustment
would adversely affect the Conversion Rights, then the Conversion Ratio and the
kind of securities issuable upon the conversion of Series B Preferred Stock
shall be adjusted to preserve, without dilution, the Conversion Rights in such
manner and at such time as the Board of Directors of the Corporation may in good
faith determine to be equitable in the circumstances.
(iv) Notice of
Adjustments. Whenever the Conversion Ratio or the kind of
securities issuable upon the conversion of any one of or all of the Series B
Preferred Stock shall be adjusted pursuant to Sections 8(c)(i) - (iii) above,
the Corporation shall make a certificate signed by its Chief Financial Officer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board of Directors of the Corporation made any determination hereunder), and the
Conversion Ratio and the kind of securities issuable upon the conversion of the
Series B Preferred Stock after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by first class mail postage prepaid) to
each holder of Series B Preferred Stock promptly after each
adjustment.
(d) Increase of Conversion
Ratio. By duly adopted resolution of its board of directors,
the Company at any time may increase the Conversion Ratio, temporarily or
otherwise, by any amount, but in no event shall such Conversion Ratio require
the issuance of Common Stock for less than the par value of the Common Stock at
the time such reduction is made.
Whenever
the Conversion Ratio is increased pursuant to this subclause (d), the Company
shall mail to the holders a notice of the increased Conversion
Ratio. The notice shall state the increased Conversion Ratio and the
period it will be in effect.
9. Protective
Provisions.
(a) Reservation of Shares;
Transfer Taxes; Etc. Provided that, and only to the extent
that, the Corporation has a sufficient number of shares of authorized but
unissued and unreserved Common Stock available to issue upon conversion, the
Corporation shall at all times serve and keep available, out of its authorized
and unissued stock, solely for the purpose of effecting the conversion of the
Series B Convertible Preferred Stock, such number of shares of its Common Stock
free of preemptive rights as shall from time to time be sufficient to effect the
conversion of all shares of Series B Convertible Preferred Stock from time to
time outstanding. The Corporation shall from time to time, in
accordance with the laws of the State of Delaware, increase the authorized
number of shares of Common Stock if at any time the number of shares of Common
Stock not outstanding shall not be sufficient to permit the conversion of all
the then outstanding shares of Series B Convertible Preferred
Stock.
If any
shares of Common Stock required to be reserved for purposes of conversion of the
Series B Convertible Preferred Stock hereunder require registration with or
approval of any governmental authority under any Federal or State law before
such shares may be issued upon conversion, the Corporation will in good faith
and as expeditiously as possible endeavor to cause such shares to be duly
registered or approved, as the case may be. If the Common Stock is
listed on the New York Stock Exchange or any other national securities exchange,
the Corporation will, if permitted by the rules of such exchange, list and keep
listed on such exchange, upon official notice of issuance, all shares of Common
Stock issuable upon conversion of the Series B Convertible Preferred
Stock.
The
Corporation will pay any and all issue or other taxes that may be payable in
respect of any issue or delivery of shares of Common Stock on conversion of the
Series B Convertible Preferred Stock. The Corporation shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue or delivery of Common Stock (or other securities
or assets) in a name other than that which the shares of Series B Convertible
Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Corporation the amount of such tax or has established, to the satisfaction of
the Corporation, that such tax has been paid.
(b) Class Voting
Rights. So long as the Series B Convertible Preferred Stock is
outstanding, the Corporation shall not, without the affirmative vote or consent
of the holders of at least a majority of all outstanding Series B Convertible
Preferred Stock voting separately as a class, (i) Amend, alter or repeal (by
merger or otherwise) any provision of the Certificate of Incorporation or the
By-Laws of the Corporation, as amended, so as adversely to affect the relative
rights, preferences, qualifications, limitations or restrictions of the Series B
Convertible Preferred Stock, (ii) authorize or issue, or increase the authorized
amount of, any additional class or series of stock, or any security convertible
into stock of such class or series, ranking prior to the Series B Convertible
Preferred Stock in respect of the payment of dividends or upon liquidation,
dissolution or winding up of the Corporation or (iii) effect any
reclassification of the Series B Convertible Preferred Stock. A class
vote on the part of the Series B Convertible Preferred Stock shall, without
limitation, specifically not be deemed to be required (except as otherwise
required by law or resolution of the Corporation’s Board of Directors) in
connection with: (a) the authorization, issuance or increase in the authorized
amount of any shares of any other class or series of stock which ranks junior
to, or on a parity with, the Series B Convertible Preferred Stock in respect of
the payment of dividends and distributions upon liquidation, dissolution or
winding up of the Corporation; or (b) the authorization, issuance or increase in
the amount of any bonds, mortgages, debentures or other obligations of the
Corporation.
The
affirmative vote or consent of the holders of a majority of the outstanding
Series B Convertible Preferred Stock, voting or consenting separately as a
class, shall be required to (a) authorize any sale, lease or conveyance of all
or substantially all of the assets of the Corporation, or (b) approve any
merger, consolidation or compulsory share exchange of the Corporation with or
into any other person unless (i) the terms of such merger, consolidation or
compulsory share exchange do not provide for a change in the terms of the Series
B Convertible Preferred Stock and (ii) the Series B Convertible Preferred Stock
is, after such merger, consolidation or compulsory share exchange on a parity
with or prior to any other class or series of capital stock authorized by the
surviving corporation as to dividends and upon liquidation, dissolution or
winding up other than any class or series of stock of the Corporation prior to
the Series B Convertible Preferred Stock as may have been created with the
affirmative vote or consent of the holders of at least 66-2/3% of the Series B
Convertible Preferred Stock (or other than a class or series into which such
prior stock is converted as a result of such merger, consolidation or share
exchange).
10. Outstanding
Shares. For purposes of this Certificate of Designation, all
shares of Series B Convertible Preferred Stock shall be deemed outstanding
except (i) from the date of surrender of certificates representing shares of
Series B Convertible Preferred Stock, all shares of Series B Convertible
Preferred Stock converted into Common Stock; (ii) the effective date of a
Recapitalization Event defined in clause 8(b), and (iii) from the date of
registration of transfer, all shares of Series B Convertible Preferred Stock
held of record by the Corporation or any subsidiary of the
Corporation.
11. Preemptive
Rights. The Convertible Preferred is not entitled to any
preemptive or subscription rights in respect of any securities of the
Corporation.
G. Series C Convertible
Preferred Stock
1. DESIGNATION. This
series of Preferred Stock shall be designated “Series C Convertible Preferred
Stock.” Such series is referred to herein as the “Series C Preferred
Stock.”
2. NUMBER OF SHARES AND PAR
VALUE. The number of shares constituting the Series C
Preferred Stock shall be equal to 103,143. Each share of the Series C
Preferred Stock shall have $.001 par value.
3. RELATIVE
SENIORITY. The Series C Preferred Stock shall, in respect of
the right to participate in distributions or payments in the event of any
liquidation, dissolution or winding up of the Corporation, rank (a) pari passu
with the Common Stock (as defined below) of the Corporation and with any other
class or series of stock of the Corporation, the terms of which specifically
provide that such class or series shall rank pari passu with the Series C
Preferred Stock in respect of the right to participate in distributions or
payments in the event of any liquidation, dissolution or winding up of the
Corporation; and (b) junior to any other class or series of stock of the
Corporation, the terms of which specifically provide that such class or series
shall rank senior to the Series C Preferred Stock in respect of the right to
participate in distributions or payments in the event of any liquidation,
dissolution or winding up of the Corporation. The term “COMMON STOCK”
shall mean all shares now or hereafter authorized of any class of common stock
of the Corporation.
4. NO LIQUIDATION
PREFERENCE. In the event of any voluntary or involuntary
liquidation, dissolution, or winding-up of the Corporation, after distribution
in full of the preferential amounts, if any, to be distributed to the holders of
shares of any series of Preferred Stock, having a priority on liquidation
superior to that of the Series C Preferred Stock, the holders of shares of
Series C Preferred Stock shall be entitled to participate with the Common Stock
in all of the remaining assets of the Corporation available for distribution to
its stockholders, ratably with the holders of Common Stock in proportion to the
number of shares of Common Stock held by them, assuming for each holder of
Series C Preferred Stock on the record date for such distribution that each
holder was the holder of record of the number (including any fraction) of shares
of Common Stock into which the shares of Series C Preferred Stock then held by
such holder are then convertible. A liquidation, dissolution, or
winding-up of the Corporation, as such terms are used in this Section 4, shall
not be deemed to be occasioned by or to include any merger of the Corporation
with or into one or more corporations or other entities, any acquisition or
exchange of the outstanding shares of one or more classes or series of the
Corporation, or any sale, lease, exchange, or other disposition of all or a part
of the assets of the Corporation.
5. VOTING
RIGHTS. Except as otherwise required by law, each share of
outstanding Series C Preferred Stock shall entitle the holder thereof to vote on
each matter submitted to a vote of the stockholders of the Corporation and to
have the number of votes equal to the number (including any fraction) of shares
of Common Stock into which such share of Series C Preferred Stock is then
convertible pursuant to the provisions hereof at the record date for the
determination of shareholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders becomes effective. Except as otherwise
required by law or by this Certificate, the holders of shares of Common Stock
and Series C Preferred Stock shall vote together and not as separate
classes.
6. DIVIDENDS AND
DISTRIBUTIONS. If any dividend or other distribution payable
in cash, securities or other property, including a dividend payable in shares of
Common Stock, is declared on the Common Stock, each holder of shares of Series C
Preferred Stock on the record date for such dividend or distribution shall be
entitled to receive on the date of payment or distribution of such dividend or
other distribution the same cash, securities or other property which such holder
would have received on such record date if such holder was the holder of record
of the number (including any fraction) of shares of Common Stock into which the
shares of Series C Preferred Stock then held by such holder are then
convertible. No dividend or other distribution shall be declared or
paid on the Common Stock unless an equivalent dividend or other distribution
that satisfies this Section 6 is declared or paid on the Series C Preferred
Stock.
7. CONVERSION. The
holders of the Series C Preferred Stock shall have conversion rights as
follows:
(a) Conversion
Ratio. The holder of each share of Series C Preferred Stock
shall have the right (the “Conversion Right”), at such holder’s option, to
convert such share, without cost, on the terms and at the times specified in
this Section 7, into the number of fully paid and non-assessable shares of
Common Stock as specified by the Conversion Ratio that is in effect at the time
of conversion; provided that, and only to the extent that, the Corporation has a
sufficient number of shares of authorized but unissued and unreserved Common
Stock available to issue upon conversion of all outstanding shares of Series C
Preferred Stock. The initial “Conversion Ratio” for the Series C
Preferred Stock is 350:1. The Conversion Ratio shall be subject to
adjustment from time to time as provided in this Section 7.
(b) Shares Eligible for
Conversion. The below specified number of shares of Series C
Preferred Stock shall be eligible for conversion during each successive 90 days,
commencing 90 days after the effective date of an increase in the number of
authorized but unissued shares of Common Stock sufficient to issue upon
conversion of all outstanding shares of Series C Preferred Stock.
The
number of Series C Preferred Shares eligible for conversion during each 90 day
period is 10% (ten percent) of the original number of shares of Series C
Preferred Stock issued to each original holder (“Eligible
Shares”). Any Eligible Shares not converted during any 90 day period
may not be cumulated and carried forward to the next 90 day
period. Any subsequent owner or holder of all or any part of Series C
Preferred Stock shall be subject to the same eligibility provisions applicable
to the original holder of such shares.
(c) Mechanics of
Conversion. A holder of any share of Series C Preferred Stock
may exercise the Conversion Right of such share by surrendering the certificate
therefor, duly endorsed, at the office of the Corporation or of any transfer
agent for the Series C Preferred Stock, together with a written notice to the
Corporation which shall state: (A) that such holder elects to convert the same,
(B) the number of shares issued to the original holder of such shares; and (C)
the number of Eligible Shares and the number of shares of Series C Preferred
Stock being converted. Thereupon the Corporation shall promptly issue
and deliver to the holder of such shares a certificate or certificates for the
number of whole shares of Common Stock to which such holder shall be
entitled. In lieu of any fractional shares to which the holder would
otherwise be entitled, the Corporation shall pay cash equal to such fraction
multiplied by the then fair market value (as determined in good faith by the
Board of Directors of the Corporation) of the Common Stock. If the
certificate evidencing the Series C Preferred Stock being converted shall also
evidence shares of Series C Preferred Stock not being converted, then the
Corporation shall also deliver to the holder of such certificate a new stock
certificate evidencing the Series C Preferred Stock not
converted. The conversion of any shares of Series C Preferred Stock
shall be deemed to have been made immediately prior to the close of business on
the date that the shares of Series C Preferred Stock to be converted are
surrendered to the Corporation, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date. Any dividends or distributions declared but unpaid at the
time of conversion with respect to the Series C Preferred Stock so converted,
including any dividends declared on the Common Stock to which the Series C
Preferred Stock is entitled pursuant to Section 6 above, shall be paid to the
holder of Common Stock issued upon conversion of the Series C Preferred Stock
upon the payment date therefore.
The
Corporation shall give written notice to each holder of a share of Series C
Preferred Stock promptly upon the liquidation, dissolution or winding up of the
Corporation, and not more than fifty (50) nor less than twenty (20) days before
the anticipated date of consummation of any acquisition of the Corporation or
any sale of all or substantially all of the assets of the Corporation and no
such acquisition of the Corporation or sale of assets shall be effective until
such notice shall have been given.
(d) Adjustment of Conversion
Ratio. The Conversion Ratio for each share of Series C
Preferred Stock and the kind of securities issuable upon the conversion of any
share of Series C Preferred Stock shall be adjusted from time to time as
follows:
(i) Subdivision or Combination
of Shares. If the Corporation at any time effects an increase
in the number of outstanding shares of Common Stock by subdivision, the
Conversion Ratio shall be increased in the same proportions as the Common Stock
is subdivided, in each case effective automatically upon, and simultaneously
with, the effectiveness of the subdivision which gives rise to the
adjustment. If the Corporation at any time effects a decrease in the
number of outstanding shares of Common Stock by combination or any other means,
the Conversion Ratio shall remain the same and unchanged.
(ii) Reclassification,
Consolidation or Merger. If at any time, as a result of (A) a
capital reorganization or reclassification (other than a subdivision or
combination which gives rise to an adjustment of the Conversion Ratio pursuant
to Section 7(d)(i)); or (B) a merger or consolidation of the Corporation with
another corporation (whether or not the Corporation is the surviving
corporation), the Common Stock issuable upon the conversion of the Series C
Preferred Stock shall be changed into or exchanged for the same or a different
number of shares of any class or classes of stock of the Corporation or any
other corporation, or other securities convertible into such shares, then, as a
part of such reorganization, reclassification, merger or consolidation,
appropriate adjustments shall be made in the terms of the Series C Preferred
Stock (or of any securities into which the Series C Preferred Stock is changed
or for which the Series C Preferred Stock is exchanged), so that: (x) the
holders of Series C Preferred Stock or of such substitute securities shall
thereafter be entitled to receive, upon conversion of the Series C Preferred
Stock or of such substitute securities, the kind and amount of shares of stock,
other securities, money and property which such holders would have received at
the time of such capital reorganization, reclassification, merger, or
consolidation, if such holders had converted their Series C Preferred Stock
immediately prior to such capital reorganization, reclassification, merger, or
consolidation, and (y) the Series C Preferred Stock or such substitute
securities shall thereafter be adjusted on terms as nearly equivalent as may be
practicable to the adjustments theretofore provided in this Section
7(d). No consolidation or merger in which the Corporation is not the
surviving corporation shall be consummated unless the surviving corporation
shall agree, in writing, to the provisions of this Section
7(d)(ii). The provisions of this Section 7(d)(ii) shall similarly
apply to successive capital reorganizations, reclassifications, mergers, and
consolidations.
(iii) Other Action Affecting
Common Stock. If at any time the Corporation takes any action
affecting its Common Stock which, in the opinion of the Board of Directors of
the Corporation, would have an adverse effect upon the Conversion Rights of the
Series C Preferred Stock and the foregoing conversion ratio adjustment
provisions are not strictly applicable but the failure to make any adjustment
would adversely affect the Conversion Rights, then the Conversion Ratio and the
kind of securities issuable upon the conversion of Series C Preferred Stock
shall be adjusted to preserve, without dilution, the Conversion Rights in such
manner and at such time as the Board of Directors of the Corporation may in good
faith determine to be equitable in the circumstances.
(iv) Notice of
Adjustments. Whenever the Conversion Ratio or the kind of
securities issuable upon the conversion of any one of or all of the Series C
Preferred Stock shall be adjusted pursuant to Sections 7(d)(i) - (iii) above,
the Corporation shall make a certificate signed by its Chief Financial Officer,
Secretary or Assistant Secretary, setting forth, in reasonable detail, the event
requiring the adjustment, the amount of the adjustment, the method by which such
adjustment was calculated (including a description of the basis on which the
Board of Directors of the Corporation made any determination hereunder), and the
Conversion Ratio and the kind of securities issuable upon the conversion of the
Series C Preferred Stock after giving effect to such adjustment, and shall cause
copies of such certificate to be mailed (by first class mail postage prepaid) to
each holder of Series C Preferred Stock promptly after each
adjustment.
(e) Full
Consideration. All shares of Common Stock which shall be
issued upon the conversion of any Series C Preferred Stock (which is itself
fully paid and non-assessable) will, upon issuance, be fully paid and
non-assessable. The Corporation will pay such amounts and will take
such other action as may be necessary from time to time so that all shares of
Common Stock which shall be issued upon the conversion of any Series C Preferred
Stock will, upon issuance and without cost to the recipient, be free from all
pre-emptive rights, taxes, liens and charges with respect to the issue
thereof.
(f) No
Impairment. The Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation but will at
all times in good faith assist in the carrying out of all the provisions of this
Section 7 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series C Preferred Stock against impairment.
(g) Cancellation of Series C
Preferred Stock. No share of Series C Preferred Stock acquired
by the Corporation upon conversion, redemption or purchase shall be reissued and
all such shares shall be canceled, retired and returned to the status of
authorized and unissued shares of undesignated preferred stock. The
Corporation may take such appropriate corporate action to reduce the authorized
number of Series C Preferred Stock accordingly.
8. PROTECTIVE
PROVISIONS. In addition to any other rights provided by law,
so long as at least one share of Series C Preferred Stock is outstanding, the
Corporation shall not, without first obtaining the affirmative vote or written
consent of the holders of not less than a majority of the outstanding shares of
the Series C Preferred Stock voting together as a single class:
(a) amend
or repeal any provision of the Corporation’s Articles of Incorporation, Bylaws
or this Certificate of Designation if such action would materially and adversely
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Series C Preferred
Stock;
(b) increase
or decrease (other than by conversion) the total number of authorized shares of
Series C Preferred Stock;
(c) create
or issue any series or class, reclassify any authorized capital stock of the
Corporation into stock of any series or class, increase the authorized or issued
amount of any class or series of stock, or authorize, create, issue or
reclassify any obligation or security convertible or exchangeable into or
evidencing a right to purchase capital stock of any class or series, that ranks
prior to the Series C Preferred Stock as to dividends or rights upon
liquidation, dissolution or winding up;
(d) issue
any Common Stock after the date on which Series C Preferred Stock has been last
issued and sold, whether or not subsequently reacquired or retired by the
Corporation, for a consideration per share less than fair market value of the
Common Stock (as determined in good faith by the Board of Directors of the
Corporation) at such issuance or deemed issuance other than: (1) shares of
Common Stock issued in transactions giving rise to adjustments under Sections
7(d)(i) or (ii) above, (2) shares of Common Stock issued upon conversion of
shares of Series C Preferred Stock, or (3) shares issued upon the conversion of
Convertible Securities (as defined below) if the issuance of such Convertible
Securities did not violate Section 8(e) below;
(e) issue
any Convertible Securities with respect to which the Effective Price is less
than the fair market value of the Common Stock (as determined in good faith by
the Board of Directors of the Corporation), at such issuance or deemed
issuance. “CONVERTIBLE SECURITIES” means all rights or options for
the purchase of, or stock or other securities convertible into, Common Stock
(other than Common Stock issued for the purposes set forth in Sections 8(d)(1)
or (2) above) or other Convertible Securities, whenever and each time
issued. The “EFFECTIVE PRICE” with respect to any Convertible
Securities means the result of dividing: (1) the sum of (x) the total
consideration, if any, received by the Corporation for the issuance of such
Convertible Securities, plus (y) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of such Convertible Securities
(assuming that the full amount of securities issuable upon exercise or
conversion are issued), plus (z) the minimum consideration, if any, payable to
the Corporation upon exercise or conversion of any Convertible Securities
issuable upon exercise or conversion of such Convertible Securities, by: (2) the
maximum number of Common Stock (other than Common Stock issued for the purposes
set forth in Sections 8(d)(1) or (2) above) issuable upon exercise or conversion
of such Convertible Securities or of any Convertible Securities issuable upon
exercise or conversion of such Convertible Securities; or
(f) sell,
convey, or otherwise dispose of or encumber all or substantially all of its
property or business or merge or consolidate with any other corporation (other
than a wholly-owned subsidiary corporation) or effect any transaction or series
of related transactions in which more than fifty percent (50%) of the voting
power of the Corporation is disposed of.
9. SEVERABILITY OF
PROVISIONS. If any voting powers, preferences and relative,
participating, optional and other special rights of the Series C Preferred Stock
and qualifications, limitations and restrictions thereof set forth in this
resolution (as such resolution may be amended from time to time) is invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, all other voting powers, preferences and relative, participating,
optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof set forth in this
resolution (as so amended) which can be given effect without the invalid,
unlawful or unenforceable voting powers, preferences and relative,
participating, optional and other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof shall, nevertheless, remain
in full force and effect, and no voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations, and restrictions thereof herein set forth shall be
deemed dependent upon any other such voting powers, preferences and relative,
participating, optional or other special rights of Series C Preferred Stock and
qualifications, limitations and restrictions thereof unless so expressed
herein.
H. Certain
Definitions. As used in these Articles, the following terms
shall have the following respective meanings:
“Affiliate”
of any specified person means any other person directly or indirectly
controlling or controlled by or under common control with such specified
person. For purposes of this definition, “control” when used with
respect to any person means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities or otherwise; and the term “controlling” and “controlled” having
meanings correlative to the foregoing.
“Common
Shares” shall mean any stock of the Company which has no preference in respect
of dividends or of amounts payable in the event of any voluntary or involuntary
liquidation, dissolution or winding-up of the Company and which is not subject
to redemption by the Company. However, Common Shares issuable upon
conversion of shares of this series shall include only shares of the class
designated as common Shares as of the original date of issuance of shares of
this Series, or shares of the Company of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding-up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the total number of
shares of such class resulting from such reclassifications bears to the total
number of shares of all classes resulting from all such
reclassifications.
ARTICLE
VI
PREEMPTIVE
RIGHTS
No holder
of any of the shares of any class or series of stock or of options, warrants or
other rights to purchase shares of any class or series of stock or of other
securities of the Corporation shall have any preemptive right to purchase or
subscribe for any unissued stock of any class or series, or any unissued bonds,
certificates of indebtedness, debentures or other securities convertible into or
exchangeable for stock or carrying any right to purchase stock may be issued
pursuant to resolution of the board of directors of the Corporation to such
persons, firms, corporations or associations, whether or not holders thereof,
and upon such terms as may be deemed advisable by the board of directors in the
exercise of its sole discretion.
ARTICLE
VII
REPURCHASE
OF SHARES
The
Corporation may from time to time, pursuant to authorization by the board of
directors of the Corporation and without action by the stockholders, purchase or
otherwise acquire shares of any class, bonds, debentures, notes, scrip,
warrants, obligations, evidences or indebtedness, or other securities of the
Corporation in such manner, upon such terms, and in such amounts as the board of
directors shall determine; subject, however, to such limitations or
restrictions, if any, as are contained in the express terms of any class of
shares of the Corporation outstanding at the time of the purchase or acquisition
in question or as are imposed by law.
ARTICLE
VIII
MEETINGS
OF STOCKHOLDERS; CUMULATIVE VOTING
A. No
action that is required or permitted to be taken by the stockholders of the
Corporation at any annual or special meeting of stockholders may be effected by
written consent of stockholders in lieu of a meeting of stockholders, unless the
action to be effected by written consent of stockholders and the taking of such
action by such written consent have expressly been approved in advance by the
board of directors of the Corporation.
B.
Special meeting of the stockholders of the Corporation for any purpose or
purposes may be called at any time by the board of directors of the Corporation,
or by a committee of the board of directors which has been duly designated by
the board of directors and whose powers and authorities, as provided in a
resolution of the board of directors or in the bylaws of the Corporation,
include the power and authority to call such meetings but such special meetings
may not be called by another person or persons.
C. There
shall be no cumulative voting by stockholders of any class or series in the
election of directors of the Corporation.
D. Meetings
of stockholders may be held at such place as the bylaws may
provide.
ARTICLE
IX
NOTICE
FOR NOMINATIONS AND PROPOSALS
A. Nominations
for the election of directors and proposals for any new business to be taken up
at any annual or special meeting of stockholders may be made by the board of
directors of the Corporation or by any stockholder of the Corporation entitled
to vote generally in the election of directors. In order for a stockholder of
the Corporation to make any such nominations and/or proposals at an annual
meeting or such proposals at a special meeting, he or she shall give notice
thereof in writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation of not less than thirty
days or more than sixty days prior to any such meeting; provided, however, that
if less than forty days' notice of the meeting is given to stockholders, such
written notice shall be delivered or mailed, as prescribed, to the Secretary of
the Corporation not later than the close of the tenth day following the day on
which notice of the meeting was mailed to stockholders. Each such notice given
by a stockholder with respect to nominations for the election of directors shall
set forth (1) the name, age, business address and, if known, residence address
of each nominee proposed in such notice, (2) the principal occupation or
employment of each such nominee, and (3) the number of shares of stock of the
Corporation which are beneficially owned by each such nominee. In addition, the
stockholder making such nomination shall promptly provide any other information
reasonably requested by the Corporation.
B. Each
such notice given by a stockholder to the Secretary with respect to business
proposals to bring before a meeting shall set forth in writing as to each
matter: (1) a brief description of the business desired to be brought before the
meeting and the reasons for conducting such business at the meeting; (2) the
name and address, as they appear on the Corporation's books, of the stockholder
proposing such business; (3) the class and number of shares of the Corporation
which are beneficially owned by the stockholder; and (4) any material interest
of the stockholder in such business. Notwithstanding anything in these Articles
to the contrary, no business shall be conducted at the meeting except in
accordance with the procedures set forth in this Article.
C. The
Chairman of the annual or special meeting of stockholders may, if the facts
warrant, determine and declare to such meeting that a nomination or proposal was
not made in accordance with the foregoing procedure, and, if he should so
determine, he shall so declare to the meeting and the defective nomination or
proposal shall be disregarded and laid over for action at the next succeeding
adjourned, special or annual meeting of the stockholders taking place thirty
days or more thereafter. This provision shall not require the holding of any
adjourned or special meeting of stockholders for the purpose of considering such
defective nomination or proposal.
ARTICLE
X
DIRECTORS
A. Number;
Vacancies. The number of
directors of the Corporation shall be such number, not less than one nor more
than 15 (exclusive of directors, if any, to be elected by holders of preferred
stock of the Corporation), as shall be provided from time to time in a
resolution adopted by the board of directors, provided that no decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director, and provided further that no action shall be taken to
decrease or increase the number of directors from time to time unless at least
two-thirds of the directors then in office shall concur in said
action. Exclusive of directors, if any, elected by holders of
preferred stock, vacancies in the board of directors of the Corporation, however
caused, and newly created directorships shall be filled by a vote of two-thirds
of the directors then in office, whether or not a quorum, and any director so
chosen shall hold office for a term expiring at the annual meeting of
stockholders at which the term of the class to which the director has been
chosen expires and when the director's successor is elected and qualified. The
board of directors shall be classified in accordance with the provisions of
Section B of this Article X.
B. Classified
Board. The board of directors of the Corporation (other than
directors which may be elected by the holders of preferred stock) shall be
divided into three classes of directors which shall be designated Class I, Class
II and Class III. The members of each class shall be elected for a term of three
years and until their successors are elected and qualified. Such classes shall
be as nearly equal in number as the then total number of directors constituting
the entire board of directors shall permit, exclusive of directors, if any,
elected by holders of preferred stock, with the terms of office of all members
of one class expiring each year. Should the number of directors not be equally
divisible by three, the excess director or directors shall be assigned to
Classes I or II as follows: (1) if there shall be an excess of one directorship
over the number equally divisible by three, such extra directorship shall be
classified in Class I; and (2) if there be an excess of two directorships over a
number equally divisible by three, one shall be classified in Class I and the
other in Class II. At the first meeting of the board of directors of the
Corporation, directors of Class I shall be elected to hold office for a term
expiring at the first annual meeting of stockholders, directors of Class II
shall be elected to hold office for a term expiring at the second succeeding
annual meeting of stockholders and directors of Class III shall be elected to
hold office for a term expiring at the third succeeding annual meeting
thereafter. Thereafter, at each succeeding annual meeting, directors of each
class shall be elected for three-year terms. Notwithstanding the foregoing, the
director whose term shall expire at any annual meeting shall continue to serve
until such time as his successor shall have been duly elected and shall have
qualified unless his position on the board of directors shall have been
abolished by action taken to reduce the size of the board of directors prior to
said meeting.
C. Increase and Reduction in
Directors. Should the number of directors of the Corporation
be reduced, the directorship(s) eliminated shall be allocated among classes as
appropriate so that the number of directors in each class is as specified in the
position(s) to be abolished. Notwithstanding the foregoing, no decrease in the
number of directors shall have the effect of shortening the term of any
incumbent director. Should the number of directors of the Corporation
be increased, other than directors which may be elected by the holders of
preferred stock, the additional directorships shall be allocated among classes
as appropriate so that the number of directors in each class is as specified in
the immediately preceding paragraph.
D. Directors Elected by
Preferred Stockholders. Whenever the holders of any one or
more series of preferred stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation, the
board of directors shall include said directors so elected in addition to the
number of directors fixed as provided in this Article
X. Notwithstanding the foregoing, and except as otherwise may be
required by law, whenever the holders of any one or more series of preferred
stock of the Corporation elect one or more directors of the Corporation, the
terms of the director or directors elected by such holders shall expire at the
next succeeding annual meeting of stockholders.
E. In
furtherance, but not in limitation of the powers conferred by statute, the board
of directors is expressly authorized to do the following:
(a) Designate
one (1) or more committees, each committee to consist of one or more of the
directors of the Corporation and such number of natural persons who are not
directors as the board of directors shall designate, which to the extent
provided in the Resolution, or in the by-laws of the Corporation, shall have and
may exercise the powers of the board of directors in the management of the
business and affairs of the Corporation.
(b) As
provided by Nevada Revised Statutes 78.140, without repeating the section in
full here, the same is adopted and no contract or other transaction between this
Corporation and any of its officers, agents or directors shall be deemed void or
voidable solely for that reason. The balance of the provisions of the
code section cited, as it now exists, allowing such transactions, is hereby
incorporated into this Article as though more fully set forth, and such Article
shall be read and interpreted to provide the greatest latitude in its
application.
(c) As
provided by Nevada Revised Statutes 78.207, without repeating the section in
full here, the board of directors shall have the authority to change the number
of shares of any class or series, if any, of authorized stock by increasing or
decreasing the number of authorized shares of the class or series and
correspondingly increasing or decreasing the number of issued and outstanding
shares of the same class or series held by each stockholder of record at the
effective date and time of the change by a resolution adopted by the board of
directors, without obtaining the approval of the stockholders.
(d) If
a proposed increase or decrease in the number of issued and outstanding shares
of any class or series would adversely alter or change any preference or any
relative or other right given to any other class or series of outstanding
shares, then the decrease must be approved by the vote, in addition to any vote
required, of the holders of shares representing a majority of the voting power
of each class or series whose preference or rights are adversely affected by the
increase or decrease, regardless of limitations or restrictions on the voting
power thereof. The increase or decrease does not have to be approved
by the vote of the holders of shares representing a majority of the voting power
in each class or series whose preference or rights are not adversely affected by
the increase or decrease.
(e)
Special meetings of the stockholders may be called only by the board of
directors or a committee of the board of directors that is delegated the power
to call special meetings by the board of directors.
(f) Change
the name of the Corporation at any time and from time to time to any name
authorized by Nevada Revised Statutes 78.039.
ARTICLE
XI
REMOVAL
OF DIRECTORS
Notwithstanding
any other provision of these Articles or the bylaws of the Corporation, any
director or all the directors of a single class (but not the entire board of
directors) of the Corporation may be removed, at any time, but only for cause
and only by the affirmative vote of the holders of at least 75% of the voting
power of the outstanding shares of capital stock of the Corporation entitled to
vote generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that
purpose. Notwithstanding the foregoing, whenever the holders of any
one or more series of preferred stock of the Corporation shall have the right,
voting separately as a class, to elect one or more directors of the Corporation,
the preceding provisions of this Article XI shall not apply with respect to the
director or directors elected by such holders of preferred stock.
ARTICLE
XII
INDEMNIFICATION
Any
person who was or is a party or is or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative (whether or not by or in the right of
the Corporation) by reason of the fact that he is or was a director, officer,
incorporator, employee, or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, incorporator, employee,
partner, trustee, or agent of another corporation, partnership, joint venture,
trust, or other enterprise (including an employee benefit plan), shall be
entitled to be indemnified by the Corporation to the full extent then permitted
by law against expenses (including counsel fees and disbursements), judgments,
fines (including excise taxes assessed on a person with respect to an employee
benefit plan), and amounts paid in settlement incurred by him in connection with
such action, suit, or proceeding and, if so requested, the Corporation shall
advance (within two business days of such request) any and all such expenses to
the person indemnified; provided, however, that (i) the foregoing obligation of
the Company shall not apply to a claim that was commenced by the person
indemnified without the prior approval of the Board of Directors. Such right of
indemnification shall inure whether or not the claim asserted is based on
matters which antedate the adoption of this Article XV. Such right of
indemnification shall continue as to a person who has ceased to be a director,
officer, incorporator, employee, partner, trustee, or agent and shall inure to
the benefit of the heirs and personal representatives of such a person. The
indemnification provided by this Article XV shall not be deemed exclusive of any
other rights which may be provided now or in the future under any provision
currently in effect or hereafter adopted of the bylaws, by any agreement, by
vote of stockholders, by resolution of disinterested directors, by provisions of
law, or otherwise.
ARTICLE
XIII
LIMITATIONS
ON DIRECTORS' LIABILITY
No
director or officer of the Corporation shall be personally liable to the
Corporation or its stockholders for damages for breach of fiduciary duty as a
director or officer, except: (A) for acts or omissions that involve intentional
misconduct, fraud or a knowing violation of law; or (B) the payment of
distributions in violation of Nevada Revised Statutes Sec.78.300. If
the General Corporation law of the State of Nevada is amended after the date of
filing of these Articles to further eliminate or limit the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the General Corporation
Law of the State of Nevada, as so amended. Any repeal or modification of the
foregoing paragraph by the stockholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
ARTICLE
XIV
AMENDMENT
OF BYLAWS
In
furtherance and not in limitation of the powers conferred by statute, the board
of directors of the Corporation is expressly authorized to adopt, repeal, alter,
amend and rescind the bylaws of the Corporation by a vote of two-thirds of the
board of directors.
ARTICLE
XV
AMENDMENT
OF ARTICLES OF INCORPORATION
Subject
to the provisions hereof, the Corporation reserves the right to repeal, alter,
amend or rescind any provision contained in these Articles in the manner now or
hereafter prescribed by law, and all rights conferred on stockholders herein are
granted subject to this reservation.
AMENDED
AND RESTATED PLAN AND AGREEMENT OF MERGER
of
Integrated
Media Holdings, Inc.
(A
Delaware Corporation)
and
Arrayit
Corporation
(A Nevada
Corporation)
AMENDED AND RESTATED PLAN AND
AGREEMENT OF MERGER entered into on February 16, 2009, by and between
Integrated Holdings, Inc., a Delaware corporation (“Integrated Media”), and
Arrayit Corporation, a Nevada corporation (“Arrayit”).
WHEREAS, Integrated Media is a
business corporation of the State of Delaware whose registered agent is The
Corporation Trust Company and its registered office therein is located at 613
Saddle Rider Court, Henderson, Nevada; and
WHEREAS, the total number of
shares of stock which Integrated Media has authority to issue is 105,000,000, of
which 100,000,000 are common stock, $.001 par value per share, and 5,000,000 are
preferred stock, $.001 par value per share; and
WHEREAS, Arrayit is a business
corporation of the State of Nevada whose registered agent is Inc. Plan of Nevada
and its registered office therein is located at 613 Saddle Rider Court,
Henderson, Nevada; and
WHEREAS, the total number of
shares of stock which Arrayit has authority to issue is 105,000,000, of which
100,000,000 are common stock, $.001 par value per share, and 5,000,000 are
preferred stock, $.001 par value per share; and
WHEREAS, the Delaware General
Corporation Law Act permits a merger of a business corporation of the State of
Delaware with and into a business corporation of another jurisdiction;
and
WHEREAS, the Revised Statutes
of the State of Nevada permit the merger of a business corporation of another
jurisdiction with and into a business corporation of the State of Nevada;
and
WHEREAS, Integrated Media and
Arrayit and the respective Boards of Directors thereof declare it advisable and
to the advantage, welfare, and best interests of said corporations and their
respective stockholders to merge Integrated Media with and into Arrayit pursuant
to the provisions of the Delaware General Corporation Law and pursuant to the
provisions of the General Corporation Law of the State of Nevada upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, in
consideration of the premises and of the mutual agreement of the parties hereto
hereby determine and agree as follows.
ARTICLE
I
MERGER
1.1.
CONSTITUENT
CORPORATIONS. The name, address and jurisdiction of
organization of each of the constituent corporations are set forth
below.
A.
Integrated Media, a corporation organized under and governed by the laws of the
State of Delaware with a principal place of business at 524 East Weddell Drive,
Sunnyvale, CA 94089 (the “terminating corporation”).
B.
Arrayit, a corporation organized under and governed by the laws of the State of
Nevada with a principal place of business at 12000 524 East Weddell Drive,
Sunnyvale, CA 94089 (the “surviving corporation”).
1.2.
SURVIVING
CORPORATION. Arrayit shall be the surviving
corporation. The corporate name, Articles of Incorporation, bylaws,
registered agent and registered office of Arrayit shall survive the merger
without amendment or revision and be the Articles of Incorporation, bylaws,
registered agent and registered office of the surviving
corporation.
CORPORATE
MATTERS. The principal place of business, officers and
directors, indemnification agreements with officers and directors, all binding
agreements, the Amended and Restated 2004 Directors, Officers and Consultants
Stock Option, Stock Warrant and Stock Award Plan registered with the Securities
and Exchange Commission on Form S-8 effective December 19, 2005, as well as
creation and adoption of the Executive Committee, Compensation Committee, Audit
Committee, Code of Business Ethics, and Governance Committee shall survive the
merger without amendment or revision and be the indemnification agreements with
officers and directors, other binding agreements, the Amended and Restated 2004
Directors, Officers and Consultants Stock Option, Stock Warrant and Stock Award
Plan, the Executive Committee, Compensation Committee, Audit Committee, Code of
Business Ethics, and Governance Committee of the surviving
corporation.
1.3.
MERGER. At the Effective
Time (as hereinafter set forth) and subject to the terms and conditions of this
Agreement, the applicable provisions of the Delaware General Corporation Law
(“Delaware Law”), and the applicable provisions of Title 7, Chapter 78 of the
Nevada Revised Statutes (“Nevada Law”), Integrated Media is merged with and into
Arrayit. The separate existence of Integrated Media shall cease on
and after the Effective Time.
ARTICLE
II
EXCHANGE
AND CONVERSION OF SHARES
2.1.
CONVERSION OF CAPITAL
STOCK.
A. At the
Effective Time, each issued and outstanding shares of the common stock, $.001
par value per share, of Integrated Media shall be converted into the right to
receive one fully paid and non-assessable share of the common stock, $.001 par
value per share, of Arrayit.
B. At the
Effective Time, each issued and outstanding share of the preferred stock of any
series or class of Integrated Media shall be converted into the right to receive
one fully paid and non-assessable share of preferred stock, $.001 par value per
share, of Arrayit with substantially identical rights and
preferences.
2.2.
FRACTIONAL SHARES. No
fractional shares or script representing fractional shares shall be issued by
Arrayit as a result of the merger. Each fractional share that would otherwise
result from the merger shall be cancelled and returned to the authorized and
unissued capital stock of Arrayit and the holder shall be paid cash in an amount
equal to the market value of one full share.
2.3.
CANCELLATION OF EXISTING
SHARES. On the Effective Time, each share of the common stock,
$.001 par value per share, of Arrayit outstanding immediately prior to the
merger shall be cancelled and returned to the authorized and unissued capital
stock of Arrayit.
ARTICLE
III
ADDITIONAL
COVENANTS AND AGREEMENTS
3.1.
OUTSTANDING OPTIONS AND
WARRANTS. Except to the extent otherwise provided in outstanding options,
warrants, and other rights to purchase shares of the common stock, $.001 par
value per share, of Integrated Media, each option, warrant or other right to
purchase thirty shares of the common stock, $.001 par value per share, of
Integrated Media, shall be exercisable to purchase one share of the common
stock, $.001 par value per share, of Arrayit for an exercise price in the amount
of the original exercise price on the remaining same terms and
conditions.
3.2.
SUBMISSION TO SERVICE IN
DELAWARE. Arrayit agrees that it may be served with process in the State
of Delaware in any proceeding for enforcement of any obligation of the Arrayit
arising from this merger, including any suit or other proceeding to enforce the
rights of any stockholders as determined in appraisal proceedings pursuant to
the provisions of Section 262 of the Delaware General Corporation laws, and
irrevocably appoints the Secretary of State of Delaware as its agent to accept
services of process in any such suit or proceeding.
3.3.
COOPERATION. The parties
hereto agree that they will cause to be executed and filed and recorded any
document or documents prescribed by Delaware Law or Nevada Law, and that they
will cause to be performed all necessary acts within the State of Delaware and
the State of Nevada and elsewhere to effectuate the merger herein provided
for.
3.4.
ADDITIONAL ASSURANCES.
Integrated Media hereby appoints the officers and directors, each acting alone,
as its true and lawful attorneys in fact to do any and all acts and things, and
to make, execute, deliver, file, and
record
any and all instruments, papers, and documents which shall be or become
necessary, proper, or convenient to carry out or put into effect any of the
provisions of this Agreement or of the merger herein provided for.
ARTICLE
IV
EFFECTIVE
TIME
4.1.
EFFECTIVE TIME. This
merger shall be effective in the State of Delaware and the State of Nevada at
4:00 o’clock p.m. e.s.t on the last to occur of the following (the “Effective
Time”):
A. twenty
days after mailing an information statement to the shareholders that meets the
requirements of Rule 14c-101 of the Securities and Exchange Commission;
or
B. the
date this Agreement, or a certificate of merger meeting the requirements of
Delaware Law, is filed with the Secretary of State of the State of Delaware;
or
C. the
date this Agreement, or articles of merger meeting the requirements of Nevada
Law, is filed with the Secretary of State of the State of Nevada
4.2.
TERMINATION.
Notwithstanding the full approval and adoption of this Agreement, the said
Agreement may be terminated by either party at any time prior to the filing
thereof with the Secretary of State of the State of Nevada.
4.3.
AMENDMENT.
Notwithstanding the full approval and adoption of this Agreement, this Agreement
may be amended at any time and from time to time prior to the filing thereof
with the Secretary of State of the State of Nevada except that, without the
approval of the stockholders of Integrated Media and the stockholders of
Arrayit, no such amendment may (a) change the rate of exchange for any shares of
Integrated Media or the types or amounts of consideration that will be
distributed to the holders of the shares of stock of Integrated Media; (b)
change any term of the Articles of Incorporation of Arrayit; or (c) adversely
affect any of the rights of the stockholders of Integrated Media or
Arrayit.
ARTICLE
V
MISCELLANEOUS
5.1.
COUNTERPARTS. This
Agreement may be executed in one or more counterparts, each of which may have
different signatures and be signed at different times. When all parties have
signed at least one counterpart, each counterpart shall be deemed complete and
shall constitute the same instrument.
5.2.
ENTIRE AGREEMENT. This
Agreement and the is intended by the parties to be the final expression of their
agreement with respect to the matter set forth herein and is intended to contain
all of the terms of such agreement without the need to refer to other documents.
There are no other understandings, written or oral, among the parties with
respect to the matter set forth herein.
5.3.
AMENDMENT. This
Agreement may not be amended except by a written instrument signed by the
parties hereto.
IN WITNESS WHEREOF, this
Agreement is hereby executed upon behalf of each of the parties thereto as of
the 8th day of
April, 2008.
INTEGRATED
MEDIA HOLDINGS, INC. a Delaware corporation
|
By:
_________________________________________
|
|
William
L. Sklar, Chief Executive Officer &
President
|
ARRAYIT
CORPORATION a Nevada corporation
|
By:
_________________________________________
|
|
Rene’
A. Schena, Chairman & Chief Executive
Officer
|