Exhibit
99.1
Articles
of Amendment
to
Articles
of Incorporation
of
Health
Discovery Corporation
1.
The
name
of the corporation is Health Discovery Corporation.
2.
The
Articles of Incorporation of Health Discovery Corporation are hereby amended
to
insert a new Section 2A – Series A Preferred Stock, as follows:
Section
2A. Series A Preferred Stock
1.
Designation.
The
shares of such series shall be designated as Series A Preferred Stock (the
“Series A Preferred Stock”) and the number of shares constituting the Series A
Preferred Stock shall be 7,437,184. The stated value of the Series A
Preferred Stock shall be $0.08
per share.
2.
Dividend
Rights.
The
Corporation shall not declare, pay or set aside any dividends on shares of
any
class or series of capital stock of the Corporation (other than dividends on
shares of Common Stock payable in shares of Common Stock) unless the holders
of
the Series A Preferred Stock then outstanding shall first receive, or
simultaneously receive, a dividend on each outstanding share of Series A
Preferred Stock in an amount at least equal to (i) in the case of a dividend
on
Common Stock or any class or series that is convertible into Common Stock,
that
dividend per share of Series A Preferred Stock as would equal the product of
(A)
the dividend payable on each share of such class or series determined, if
applicable, as if all such shares of such class or series had been converted
into Common Stock and (B) the number of shares of Common Stock issuable upon
conversion of a share of Series A Preferred Stock, in each case calculated
on
the record date for determination of holders entitled to receive such dividend
or (ii) in the case of a dividend on any class or series that is not convertible
into Common Stock, at a rate per share of Series A Preferred Stock determined
by
dividing the amount of the dividend payable on each share of such class or
series of capital stock by the original issuance price of such class or series
of capital stock and multiplying such fraction by an amount equal to
$0.08
per share (subject to appropriate adjustment in the
event of any stock dividend, stock split, combination or other similar
recapitalization affecting such shares) (such amount, as so adjusted from time
to time, being hereinafter referred to as the “Series A Original Issue
Price”).
3.
Voting
Rights.
Each
share of Series A Preferred Stock shall be entitled to vote on all matters
submitted to a vote of the shareholders of the Corporation and each share shall
have a number of votes equal to the same number of shares of Common Stock into
which it is then convertible. Except as otherwise provided herein, in
any other amendment to the Articles of Incorporation of the Corporation creating
a series of Preferred Stock or any similar stock, or by law, the holders of
Series A Preferred Stock, Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on
all
matters submitted to a vote of stockholders of the Corporation.
4.
Liquidation
Rights.
(a)
Payments
to Holders of Series A Preferred Stock
. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series A Preferred Stock then
outstanding shall be entitled to be paid out of the assets available for
distribution to its stockholders (on a pari passu basis with the holders of
any
class or series of stock ranking on liquidation on a parity with the Series
A
Preferred Stock), and before any payment shall be made to the holders of Common
Stock or any other class or series of stock ranking on liquidation junior to
the
Series A Preferred Stock (such Common Stock and other stock being
collectively referred to as “Junior Stock”) by reason of their ownership
thereof, an amount equal to the greater of (i)
one times
the Series A Original
Issue Price, plus any dividends declared but unpaid thereon, or (ii) such
amount per share as would have been payable had each such share been converted
into Common Stock pursuant to Section 6 immediately prior to such
liquidation, dissolution or winding up (the amount payable pursuant to this
sentence is hereinafter referred to as the “Series A Liquidation
Amount”). If upon any such liquidation, dissolution or winding up of
the Corporation the remaining assets available for distribution to its
stockholders shall be insufficient to pay the holders of shares of Series A
Preferred Stock and any class or series of stock ranking on liquidation on
a
parity with the Series A Preferred Stock the full aforesaid preferential
amount to which they shall be entitled, the holders of shares of Series A
Preferred Stock and any class or series of stock ranking on liquidation on
a
parity with the Series A Preferred Stock shall share ratably in any
distribution of the remaining assets available for distribution in proportion
to
the respective amounts which would otherwise be payable in respect of the shares
held by them upon such distribution if all amounts payable on or with respect
to
such shares were paid in full.
(b)
Payments
to Holders of Junior Stock
. After the payment of all preferential
amounts required to be paid to the holders of Series A Preferred Stock and
any other class or series of stock of the Corporation ranking on liquidation
senior to or on a parity with the Series A Preferred Stock, the holders of
shares of Junior Stock then outstanding shall be entitled to receive the
remaining assets of the Corporation available for distribution to its
stockholders as otherwise set forth in this Articles of
Incorporation.
(c)
Deemed
Liquidation Events
.
(i)
The
following events shall be deemed to be a liquidation of the Corporation for
purposes of this Section 4 (a “Deemed Liquidation Event”), unless the holders of
a majority of the Series A Preferred Stock elect otherwise by written notice
given to the Corporation at least five (5) days prior to the effective date
of
any such event:
(A)
a
merger,
consolidation or share exchange in which
(1)
the
Corporation is a constituent party or
(2)
a
subsidiary of the Corporation is a constituent party and the Corporation issues
shares of its capital stock pursuant to such merger, consolidation or share
exchange, except any such merger, consolidation or share exchange involving
the
Corporation or a subsidiary in which the shares of capital stock of the
Corporation outstanding immediately prior to such merger, consolidation or
share
exchange continue to represent, or are converted or exchanged for shares of
capital stock which represent, immediately following such merger, consolidation
or share exchange at least a majority, by voting power, of the capital stock
of
(1) the surviving or resulting corporation or (2) if the surviving or resulting
corporation is a wholly owned subsidiary of another corporation immediately
following such merger, consolidation or share exchange, the parent corporation
of such surviving or resulting corporation (
provided that
, for the
purpose of this
Subsection 4(c)(i)
, all shares of Common Stock
issuable upon exercise of options outstanding immediately prior to such merger,
consolidation or share exchange or upon conversion of Convertible Securities
outstanding immediately prior to such merger, consolidation or share exchange
shall be deemed to be outstanding immediately prior to such merger,
consolidation or share exchange and, if applicable, converted or exchanged
in
such merger, consolidation or share exchange on the same terms as the actual
outstanding shares of Common Stock are converted or exchanged); or
(B)
the
sale,
lease, transfer or other disposition, in a single transaction or series of
related transactions, by the Corporation or any subsidiary of the Corporation
of
all or substantially all the assets of the Corporation and its subsidiaries
taken as a whole, except where such sale, lease, transfer or other disposition
is to a wholly owned subsidiary of the Corporation.
(ii)
The
Corporation shall not have the power to effect any transaction constituting
a
Deemed Liquidation Event pursuant to
Subsection 4(c)(i)(A)(I)
above
unless the agreement or plan of merger, consolidation or share exchange provides
that the consideration payable to the stockholders of the Corporation shall
be
allocated among the holders of capital stock of the Corporation in accordance
with
Subsections 4(a) and 4(b)
above.
(iii)
In
the event of a Deemed Liquidation Event pursuant to
Subsection 4(c)(i)(A)(II)
or (B)
above, if the Corporation does not effect a dissolution of the
Corporation under the Georgia Business Corporation Code within 60 days after
such Deemed Liquidation Event, then (A) the Corporation shall deliver a written
notice to each holder of Series A Preferred Stock no later than the 60
th
day after
the
Deemed Liquidation Event advising such holders of their right (and the
requirements to be met to secure such right) pursuant to the terms of the
following
clause (B)
to require the redemption of such shares of Series A
Preferred Stock, and (B) if the holders of at least a majority of the then
outstanding shares of Series A Preferred Stock so request in a written
instrument delivered to the Corporation not later than 75 days after such Deemed
Liquidation Event, the Corporation shall use the consideration received by
the
Corporation for such Deemed Liquidation Event (net of any retained liabilities
associated with the assets sold or technology licensed, as determined in good
faith by the Board of Directors of the Corporation) (the “Net Proceeds”) to
redeem, to the extent legally available therefor, on the 90
th
day after
such
Deemed Liquidation Event (the “Liquidation Redemption Date”), all outstanding
shares of Series A Preferred Stock at a price per share equal to the Series
A
Liquidation Amount. In the event of a redemption pursuant to the
preceding sentence, if the Net Proceeds are not sufficient to redeem all
outstanding shares of Series A Preferred Stock, or if the Corporation does
not
have sufficient lawfully available funds to effect such redemption, the
Corporation shall redeem a pro rata portion of each holder’s shares of Series A
Preferred Stock to the fullest extent of such Net Proceeds or such lawfully
available funds, as the case may be, and, where such redemption is limited
by
the amount of lawfully available funds, the Corporation shall redeem the
remaining shares to have been redeemed as soon as practicable after the
Corporation has funds legally available therefor. The provisions of
Section 5 below shall apply, with such necessary changes in the details thereof
as are necessitated by the context, to the conversion of the Series A Preferred
Stock pursuant to this Subsection 4(c)(iii). Prior to the
distribution or conversion provided for in this Subsection 4(c)(iii), the
Corporation shall not expend or dissipate the consideration received for such
Deemed Liquidation Event, except to discharge expenses incurred in the ordinary
course of business.
(iv)
The
amount deemed paid or distributed to the holders of capital stock of the
Corporation upon any such merger, consolidation, sale, transfer, exclusive
license, other disposition or redemption shall be the cash or the value of
the
property, rights or securities paid or distributed to such holders by the
Corporation or the acquiring person, firm or other entity. The value
of such property, rights or securities shall be determined in good faith by
the
Board of Directors of the Corporation.
5.
Redemption
.
(a) The
Corporation shall have the right to redeem all of the outstanding shares of
Series A Preferred Stock (“Series A Redemption Right”) following the fifth
(5
th
)
anniversary of the first issue date of the Series A Preferred Stock (the
“Redemption Event”), by sending written notice to the holders of the Series A
Preferred Stock of its intent to exercise such right. The Corporation
shall in such case redeem all of the outstanding shares of Series A Preferred
Stock. Such redemption of the Series A Preferred Stock shall be at a redemption
price per share equal to $0.08 (the “Redemption Price”).
(b) Any
holder of shares of Series A Preferred Stock to be redeemed shall surrender
to
the Corporation at its principal office, on or before the date of the payment
of
the Redemption Price, the certificates evidencing the shares of Series A
Preferred Stock to be redeemed duly endorsed for transfer. The
Corporation may withhold the Redemption Price to the holder and no interest
shall accrue thereon until the certificates representing such shares shall
have
been surrendered to the Corporation properly endorsed for
transfer. All shares of Series A Preferred Stock redeemed by the
Corporation shall immediately be canceled.
6.
Optional
Conversion Rights.
(a) The
holders of the Series A Preferred Stock shall have conversion rights as
follows (the “Conversion Rights”):
(i)
Right
to Convert
. Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from time
to
time, and without the payment of additional consideration by the holder thereof,
into such number of fully paid and nonassessable shares of Common Stock as
is
determined by dividing $0.08 by the Series A Conversion Price (as defined below)
in effect at the time of conversion. The “Series A Conversion Price”
shall initially be equal to the Series A Original Issue Price. Such
initial Series A Conversion Price, and the rate at which shares of Series A
Preferred Stock may be converted into shares of Common Stock, shall be subject
to adjustment as provided below. In the event of a liquidation,
dissolution or winding up of the Corporation or a Deemed Liquidation Event,
the
Conversion Rights shall terminate at the close of business on the last full
day
preceding the date fixed for the payment of any such amounts distributable
on
such event to the holders of Series A Preferred Stock.
(ii)
Fractional
Shares
. No fractional shares of Common Stock shall be issued upon
conversion of the Series A Preferred Stock. 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 fair market
value of a share of Common Stock as determined in good faith by the Board of
Directors of the Corporation. Whether or not fractional shares would
be issuable upon such conversion shall be determined on the basis of the total
number of shares of Series A Preferred Stock the holder is at the time
converting into Common Stock and the aggregate number of shares of Common Stock
issuable upon such conversion.
(iii)
Mechanics
of Optional Conversion
.
(A)
In
order
for a holder of Series A Preferred Stock to voluntarily convert shares of
Series A Preferred Stock into shares of Common Stock, such holder shall
surrender the certificate or certificates for such shares of Series A
Preferred Stock (or, if such registered holder alleges that such certificate
has
been lost, stolen or destroyed, a lost certificate affidavit and agreement
reasonably acceptable to the Corporation to indemnify the Corporation against
any claim that may be made against the Corporation on account of the alleged
loss, theft or destruction of such certificate), at the office of the transfer
agent for the Series A Preferred Stock (or at the principal office of the
Corporation if the Corporation serves as its own transfer agent), together
with
written notice that such holder elects to convert all or any number of the
shares of the Series A Preferred Stock represented by such certificate or
certificates and, if applicable, any event on which such conversion is
contingent. Such notice shall state such holder’s name or the names
of the nominees in which such holder wishes the certificate or certificates
for
shares of Common Stock to be issued. If required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
a
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or his, her or its attorney
duly authorized in writing. The close of business on the date of
receipt by the transfer agent of such certificates (or lost certificate
affidavit and agreement) and notice (or by the Corporation if the Corporation
serves as its own transfer agent) shall be the time of conversion (the
“Conversion Time”), and the shares of Common Stock issuable upon conversion of
the shares represented by such certificate shall be deemed to be outstanding
of
record as of such date. The Corporation shall, as soon as practicable
after the Conversion Time, issue and deliver at such office to such holder
of
Series A Preferred Stock, or to his, her or its nominees, a certificate or
certificates for the number of shares of Common Stock to which such holder
shall
be entitled, together with cash in lieu of any fraction of a share.
(B)
If
at any
time the number of authorized but unissued shares of Common Stock is
insufficient to cover the number of shares of Common Stock to be issued upon
the
conversion of the Series A Preferred Stock and a holder of Series A Preferred
Stock indicates that it desires to convert, the Corporation will pursue best
efforts to acquire the authority for issuance sufficient for the conversion
of
such Series A Preferred Stock.
(C)
All
shares of Series A Preferred Stock which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding and
all rights with respect to such shares, including the rights, if any, to receive
notices and to vote, shall immediately cease and terminate at the Conversion
Time, except only the right of the holders thereof to receive shares of Common
Stock in exchange therefor and to receive payment of any dividends declared
but
unpaid thereon. Any shares of Series A Preferred Stock so
converted shall be retired and cancelled and shall not be reissued as shares
of
such series, and the Corporation (without the need for stockholder action)
may
from time to time take such appropriate action as may be necessary to reduce
the
authorized number of shares of Series A Preferred Stock
accordingly.
(D)
Upon
any
such conversion, no adjustment to the Series A Conversion Price shall be made
for any declared but unpaid dividends on the Series A Preferred Stock
surrendered for conversion or on the Common Stock delivered upon
conversion.
7.
Mandatory
Conversion.
(a) Subject
to and in compliance with the provisions of this Section 7, each share of Series
A Preferred Stock will be converted into fully-paid and nonassessable shares
of
Common Stock automatically when the trading value of the Common Stock exceeds
$0.12 per share for a period of thirty (30) consecutive calendar
days.
(b) All
holders of record of shares of Series A Preferred Stock shall be given
written notice of the Mandatory Conversion Event and the place designated for
mandatory conversion of all such shares of Series A Preferred Stock
pursuant to this Section 7. Such notice need not be given in
advance of the occurrence of the Mandatory Conversion Event. Such
notice shall be sent by first class or registered mail, postage prepaid, or
given by
electronic
communication in compliance with the provisions of the Georgia Business
Corporation Code, to each record holder of Series A Preferred
Stock. Upon receipt of such notice, each holder of shares of
Series A Preferred Stock shall surrender his, her or its certificate or
certificates for all such shares to the Corporation at the place designated
in
such notice, and shall thereafter receive certificates for the number of shares
of Common Stock to which such holder is entitled pursuant to this
Section 7(b). On the Mandatory Conversion Event, all outstanding
shares of Series A Preferred Stock shall be deemed to have been converted into
shares of Common Stock, which shall be deemed to be outstanding of record,
and
all rights with respect to the Series A Preferred Stock so converted,
including the rights, if any, to receive notices and vote (other than as a
holder of Common Stock), will terminate, except only the rights of the holders
thereof, upon surrender of their certificate or certificates therefor, to
receive certificates for the number of shares of Common Stock into which such
Series A Preferred Stock has been converted, and payment of any declared
but unpaid dividends thereon. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by his, her or its
attorney duly authorized in writing. As soon as practicable after the
Mandatory Conversion Event and the surrender of the certificate or certificates
for Series A Preferred Stock, the Corporation shall cause to be issued and
delivered to such holder, or on his, her or its written order, a certificate
or
certificates for the number of full shares of Common Stock issuable on such
conversion in accordance with the provisions hereof and cash as provided in
Subsection 6(a)(ii) in respect of any fraction of a share of Common Stock
otherwise issuable upon such conversion.
(c) All
certificates evidencing shares of Series A Preferred Stock which are
required to be surrendered for conversion in accordance with the provisions
hereof shall, from and after the Mandatory Conversion Event, be deemed to have
been retired and cancelled and the shares of Series A Preferred Stock
represented thereby converted into Common Stock for all purposes,
notwithstanding the failure of the holder or holders thereof to surrender such
certificates on or prior to such date. Such converted Series A
Preferred Stock may not be reissued as shares of such Series, and the
Corporation may thereafter take such appropriate action (without the need for
stockholder action) as may be necessary to reduce the authorized number of
shares of Series A Preferred Stock accordingly.
(d)
Adjustment
for Stock Splits and Combinations
. If the Corporation shall at
any time or from time to time after the date that the first share of Series
A
Preferred Stock is issued (the “Original Series A Issue Date”) effect a
subdivision of the outstanding Common Stock, the Series A Conversion Price
in
effect immediately before that subdivision shall be proportionately
decreased. Conversely, if the Corporation shall at any time or from
time to time after the Original Series A Issue Date combine the outstanding
shares of Common Stock into a smaller number of shares, the Series A Conversion
Price in effect immediately before the combination shall be proportionately
increased. Any adjustment under this Section 7(d) shall become
effective at the close of business on the date the subdivision or combination
becomes effective.
(e)
Adjustment
for Common Stock Dividends and Distributions
. If the Corporation at any time
or from time to time after the Original Series A Issue Date makes, or fixes
a
record date for the determination of holders of Common Stock entitled to
receive, a dividend or other distribution to holders of Common Stock payable
in
additional shares of Common Stock, in each such event the Series A Conversion
Price that is then in effect shall be decreased as of the time of such issuance
or, in the event such record date is fixed, as of the close of business on
such
record date, by multiplying the Series A Conversion Price then in effect by
a
fraction (1) the numerator of which is the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such issuance
or
the close of business on such record date, and (2) the denominator of which
is the total number of shares of Common Stock issued and outstanding immediately
prior to the time of such issuance or the close of business on such record
date
plus the number of shares of Common Stock issuable in payment of such dividend
or distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the
date
fixed therefor, the Series A Conversion Price shall be recomputed accordingly
as
of the close of business on such record date and thereafter the Series A
Conversion Price shall be adjusted pursuant to this Section 7(e) to reflect
the
actual payment of such dividend or distribution.
(f)
Adjustment
for Reclassification, Exchange and Substitution
. If at any time
or from time to time after the Original Series A Issue Date, the Common Stock
issuable upon the conversion of the Series A Preferred Stock is changed into
the
same or a different number of shares of any class or classes of stock, whether
by recapitalization, reclassification or otherwise (other than a subdivision
or
combination of shares or stock dividend or a reorganization, merger,
consolidation or sale of assets provided for elsewhere in this Section 7),
in
any such event each holder of Series A Preferred Stock shall have the right
thereafter to convert such stock into the kind and amount of stock and other
securities and property receivable in connection with such recapitalization,
reclassification or other change with respect to the maximum number of shares
of
Common Stock into which such shares of Series A Preferred Stock could have
been
converted immediately prior to such recapitalization, reclassification or
change, all subject to further adjustments as provided herein or with respect
to
such other securities or property by the terms thereof.
(g)
Reorganizations,
Mergers, Consolidations or Sales of Assets
. If at any time or
from time to time after the Original Series A Issue Date, there is a capital
reorganization of the Common Stock (other than a recapitalization, subdivision,
combination, reclassification, exchange or substitution of shares provided
for
elsewhere in this Section 7), as a part of such capital reorganization,
provision shall be made so that the holders of the Series A Preferred Stock
shall thereafter be entitled to receive upon conversion of the Series A
Preferred Stock the number of shares of stock or other securities or property
of
the Corporation to which a holder of the maximum number of shares of Common
Stock deliverable upon conversion would have been entitled in connection with
such capital reorganization, subject to adjustment in respect of such stock
or
securities by the terms thereof. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
7
with respect to the rights of the holders of Series A Preferred Stock after
the
capital reorganization to the end that the provisions of this Section 7
(including adjustment of the Series A Conversion Price then in effect and the
number of shares issuable upon conversion of the Series A Preferred Stock)
shall
be applicable after that event and be as nearly equivalent as
practicable.
(h)
Certificate
of Adjustment
. In each case of an adjustment or readjustment of
the Series A Conversion Price for the number of shares of Common Stock or other
securities issuable upon conversion of the Series A Preferred Stock, the
Corporation, at its expense, shall compute such adjustment or readjustment
in
accordance with the provisions hereof and prepare a certificate showing such
adjustment or readjustment, and shall mail such certificate, by first class
mail, postage prepaid, to each registered holder of Series A Preferred Stock
at
the holder’s address as shown in the Corporation’s books. The
certificate shall set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (1) the consideration received or deemed to be received by the
Corporation for any additional shares of Common Stock issued or sold or deemed
to have been issued or sold, (2) the Series A Conversion Price at the time
in effect, (3) the number of additional shares of Common Stock issued or
sold or deemed to have been issued or sold, and (4) the type and amount, if
any, of other property which at the time would be received upon conversion
of
the Series A Preferred Stock.
(i)
Notices
of Record Date
. Upon (i) any taking by the Corporation of a
record of the holders of any class of securities for the purpose of determining
the holders thereof who are entitled to receive any dividend or other
distribution, or (ii) any voluntary or involuntary dissolution, liquidation
or winding up of the Corporation, any Deemed Liquidation Event, or any
redemption, the Corporation shall mail to each holder of Series A Preferred
Stock at least ten (10) days prior to the record date specified therein a notice
specifying (1) the date on which any such record is to be taken for the
purpose of such dividend or distribution and a description of such dividend
or
distribution, (2) the date on which any such voluntary or involuntary
dissolution, liquidation or winding up, Deemed Liquidation Event, or redemption
is expected to become effective, and (3) the date, if any, that is to be
fixed for determining the holders of record of Common Stock (or other
securities) that shall be entitled to exchange their shares of Common Stock
(or
other securities) for securities or other property deliverable upon such
voluntary or involuntary dissolution, liquidation or winding up, Deemed
Liquidation Event, or redemption.
8.
Ranking.
The
Series A Preferred Stock shall, with respect to dividend rights and distribution
of assets on liquidation, dissolution or winding up of the Corporation, rank
(a) junior to, or on parity with, as the case may be, any other stock of
the Corporation, the terms of which shall specifically provide that such stock
shall rank senior to, or on parity with, as the case may be, the Series A
Preferred Stock with respect to dividend rights and distribution of assets
on
liquidation, dissolution or winding up of the Corporation and (b) senior to
any
other stock of the Corporation, including the Common Stock.
9.
General
Provisions.
(a)
Registration
of Transfer
. The Corporation shall keep at its principal office a register
for the registration of the Series A Preferred Stock. Upon the surrender of
any
certificate representing Series A Preferred Stock at such place, the Corporation
shall, at the request of the record holder of such certificate, execute and
deliver (at the Corporation’s expense) a new certificate or certificates in
exchange therefor representing in the aggregate the number of shares represented
by the surrendered certificate. Each such new certificate shall be registered
in
such name and shall represent such number of shares as is requested by the
holder of the surrendered certificate and shall be substantially identical
in
form to the surrendered certificate.
(b)
Replacement
.
Upon receipt of evidence reasonably satisfactory to the Corporation of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series A Preferred Stock, and in the case of any such
loss,
theft or destruction, upon receipt of indemnity reasonably satisfactory to
the
Corporation (provided that if the holder is a financial institution or other
institutional investor its own agreement shall be satisfactory), or in the
case
of any such mutilation upon surrender of such certificate, the Corporation
shall
(at its expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.
(c)
Notices
.
Any notice required by the provisions of this Article shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party
to be notified, (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified
mail, return receipt requested, postage prepaid, or (iv) one (1) day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All notices to shareholders
shall be addressed to each holder of record at the address of such holder
appearing on the books of the Corporation.
(d)
No
Dilution or Impairment
. The Corporation shall not amend the Articles of
Incorporation or participate in any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, for the purpose of avoiding or seeking to avoid the observance
or performance of any of the terms to be observed or performed hereunder by
the
Corporation.
(e)
No
Reissuance of Series A Preferred Stock
. Any shares of Series A
Preferred Stock which is redeemed or otherwise acquired (by purchase or
otherwise) by the Corporation will be canceled and not be reissued, sold or
transferred.
(f)
Stock
to be Reserved
. If at any time the number of authorized but
unissued shares of Common Stock is insufficient to cover the number of shares
of
Common Stock to be issued upon the conversion of the Series A Preferred Stock,
the Corporation will pursue best efforts to acquire the authority for issuance
sufficient for the conversion of such Series A Preferred Stock. The Corporation
covenants that all shares of Common Stock which shall be so issued shall be
duly
and validly issued and fully paid and nonassessable and free from all taxes,
liens and charges with respect to the issue thereof, and, without limiting
the
generality of the foregoing, the Corporation covenants that it will from time
to
time take all such action as may be requisite to assure that the par value
per
share of the Common Stock is at all times equal to or less than the lowest
applicable Series A Conversion Price in effect at the time. The
Corporation will take all such action as may be necessary to assure that all
such shares of Common Stock may be so issued without violation of any applicable
law or regulation, or of any requirement of any national securities exchange
upon which the Common Stock may be listed.
(g)
Issue
Tax
. The issuance of certificates for shares of Common Stock upon
conversion of Series A Preferred Stock shall be made without charge to the
holders thereof for any issuance tax in respect thereof, provided that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any certificate in
a
name other than that of the holder of Series A Preferred Stock that is being
converted, in which case no such issuance or delivery shall be made unless
and
until the person or entity requesting such issuance has paid to the Corporation
the amount of any such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
3.
These
Articles of Amendment were adopted by the Board of Directors of the Corporation
on October 5, 2007.
4.
Pursuant
to authority vested in the Board of Directors of the Corporation by its Articles
of Incorporation and pursuant to the provisions of Section 14-2-602 of the
Georgia Business Corporation Code, the Board of Directors of the Corporation
adopted these Articles of Amendment.
IN
WITNESS WHEREOF, the Corporation has
caused these Articles of Amendment to be executed by its duly authorized officer
this 9
th
day of
October, 2007.
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HEALTH
DISCOVER CORPORATION
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By:
/s/ Daniel R. Furth
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