·
|
to
increase the authorized number of shares of Common Stock from 70
million
to 150 million;
|
·
|
to
amend the powers, designation, preferences and rights of the Series
A
Preferred to provide that immediately upon filing of a Certificate
of
Amendment of the Certificate of Incorporation of the Company regarding
such matter, each outstanding share of Series A Preferred shall be
automatically converted into two shares of Common Stock; and
|
·
|
to
amend the powers, designation, preferences and rights of the Series
B
Preferred to provide that immediately upon the filing of a Certificate
of
Amendment of the Certificate of Incorporation of the Company regarding
such matter, each outstanding share of Series B Preferred shall be
automatically converted into one share of Common
Stock.
|
o
|
63,837,482
shares of Common Stock,
|
o
|
7,611
shares of Series A Preferred,
|
o
|
1,458
shares of Series B Preferred, and
|
o
|
279,208
shares of Series C Preferred.
|
Class
or Series
|
Votes
Approving
Amendments
|
Total
Outstanding
Shares
of Such
Class
or Series
|
Percentage
of
Total
Shares of
Such
Class or
Series
Approving
Amendments
|
Common
Stock
|
50,074,605
|
63,837,482
|
78.4%
|
Series
A Preferred
|
3,875
|
7,611
|
50.9%
|
Series
B Preferred
|
1,458
|
1,458
|
100%
|
1.
|
As
a result of the conversion of the Series K Convertible Preferred
Stock in connection with closing of the Agreement, the Company
currently has 63,837,482 shares of Common Stock
outstanding;
|
2.
|
The
Company currently has options and warrants to purchase an aggregate
of 15,073,784 of Common Stock outstanding, including warrants to
purchase an agreegate of 2,281,914 shares issued to the Buyer under
the
Agreement
|
3.
|
The
Series B-1 Stock and warrants sold to the Buyer are convertible and/or
exercisable for approximately 8,816,856 shares of common
stock. In the event that an additional $5 million is invested
under the Agreement at a second closing the additional B-15 Stock
which
would be issued at the second closing would be convertible into or
exercisable for an additional 4,408,428 shares of common stock;
and
|
4.
|
Pursuant
to the Agreement and the agreed upon terms for the Series B-1 Stock,
the
Company may, at its option, pay the dividends on the Series B-1 Stock
in
common stock.
|
-
|
Title.
Series A 10% Cumulative Convertible Preferred Stock, $.01 par
value.
|
-
|
Voting.
The Series A Preferred is entitled to one vote per share, voting
together
as a class with the holders of our Common Stock; provided, however,
that.
The Company may not without the affirmative consent of the holders
of a
majority of the outstanding shares of Series A Preferred, voting
separately as a class, amend any of the provisions of the Company’s
Certificate of Incorporation so as to adversely affect the powers,
preferences or special rights of the shares of the Series A Preferred
or
merge or consolidate with or into any other corporation if such merger
or
consolidation would adversely affect the powers, preferences or rights
of
the shares of the Series A
Preferred.
|
-
|
Liquidation
Preference. For each share of Series A Preferred, an amount equal
to $100
plus all accrued and unpaid dividends on the Series A Preferred (which
amount is currently approximately $110 per share) must be paid to
holders
of Series A Preferred before any payments or distributions are made
on any
shares of the Company’s stock ranking junior to the Series A Preferred on
liquidation.
|
-
|
Dividend
Rights. Cumulative cash dividends at an annual rate of $10 shall
accrue on
February 10 of each year whether or not declared, and are not paid
unless
and until declared by the Company’s Board of Directors. The dividends have
not been declared or paid since 1994. If accrued dividends with respect
to
any previous dividend period have not been paid on, and set apart
for all
shares of Series A Preferred at the time outstanding, the deficiency
shall
be fully paid on, declared and set apart for such shares of Series
A
Preferred before any distribution is made on any shares of the Company’s
stock ranking junior to the Series A Preferred as to
dividends.
|
-
|
Redemption
Provisions. The Company has the right to redeem all or a portion
of the
outstanding shares of Series A Preferred for $100 per share plus
all
accrued and unpaid dividends on the Series A Preferred (which amount
is
currently approximately $110 per share) if either (a) the closing
price of
the Common Stock equals or exceeds $120.00 for twenty consecutive
trading
days within 30 days of the date the Company sends a notice of redemption
or (b) less than 40,000 shares of Series A Preferred are outstanding
when
the notice of redemption is given.
|
-
|
Amount
Authorized. 29,233 shares.
|
-
|
Amount
Outstanding. 7,611
|
-
|
Conversion.
Each share of Series A Preferred is convertible at the option of
the
holder into shares of Common Stock at the conversion rate in effect
at the
time the holder elects to convert. The conversion rate is subject
to
adjustment upon the occurrence of certain events, including, among
other
things, subdivisions or combinations of the Company’s Common Stock, the
payment by the Company of stock dividends on the Common Stock, and
the
issuance of shares of Common Stock for a consideration below an amount
calculated under a formula. As of June 2, 2006 the conversion rate
was
approximately 1.6 shares of Common Stock for each share of Series
A
Preferred.
|
-
|
Title.
Series B Convertible Preferred Stock, $.01 par
value.
|
-
|
Voting
and Consent Rights. The Series B Preferred is entitled to one vote
per
share, voting together as a class with the holders of our Series
A
Preferred and Common Stock; provided, however, that the Company may
not
without the affirmative consent of the holders of a majority of the
outstanding shares of Series B Preferred, voting separately as a
class,
amend any of the provisions of the Company’s Certificate of Incorporation
so as to adversely affect the powers, preferences or special rights
of the
shares of the Series B Preferred. In addition, so long as the Series
B
Preferred is outstanding, without the written consent of the holders
of at
least two-thirds of the outstanding shares of the Series B Preferred,
voting separately as a class, the Company may not (a) alter or change
any
of the powers, preferences, privileges or rights of the Series B
Preferred, (b) amend the provisions of the certificate of designations
of
the Series B Preferred relating to this consent right, (c) create
any new
class or series of shares having preferences prior to or on a parity
with
the Series B Preferred as to dividends or assets or (d) sell, lease,
convey, exchange, transfer or otherwise dispose of all or substantially
all of its assets, (e) merge or consolidate with or into another
corporation, except a wholly owned subsidiary of the Company, (f)
issue
any shares of Common Stock or securities convertible into or exercisable
for Common Stock, (g) avoid or seek to avoid the performance of any
of the
terms to be performed or observed by the Company under the certificate
of
designations of the Series B
Preferred.
|
-
|
Liquidation
Preference. For each share of Series B Preferred, an amount equal
to $1.00
must be paid to holders of Series A Preferred before any payments
or
distributions are made on any shares of the Company’s stock ranking junior
to the Series B Preferred on
liquidation.
|
-
|
Dividend
Rights. None.
|
-
|
Redemption
Provisions. Neither the Company nor any holder of shares of Series
B
Preferred has the right to redeem pr cause the redemption of shares
of
Series B Preferred
|
-
|
Amount
Authorized. 12,704
|
-
|
Amount
Outstanding. 1,458
|
-
|
Conversion.
Each share of Series A Preferred is convertible at the option of
the
holder into one share of Common Stock.
|
Name
and
Address
of
Beneficial
Owner
|
Title
of
Class
|
Amount
and
Nature
of
Beneficial
Ownership
|
Percent
of
Class
(1)
|
|
Maganlal
K. Sutaria
|
Common
Stock
|
643,500
(2)
|
1.00%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Rajs
Holdings I, LLC(3)
|
Common
Stock
|
15,526,100
(3)
|
24.34%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Bhupatlal
K. Sutaria
|
Common
Stock
|
404,000
(4)
|
*
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Rametra
Holdings I, LLC
|
Common
Stock
|
8,014,930
(5)
|
12.57%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
David
Reback
|
Common
Stock
|
25,773
(6)
|
*
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Stewart
Benjamin
|
Common
Stock
|
17,273
(7)
|
*
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Ravis
Holdings I, LLC
|
Common
Stock
|
10,518,645
(8)
|
16.49%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Perry
Sutaria
|
Common
Stock
|
44,093,771
(9)
|
69.13%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Kennith
Johnson
|
Common
Stock
|
27,500
|
*
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
Cameron
Reid
|
Common
Stock
|
3,000,000
(10)
|
4.49%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
George
Aronson
|
Common
Stock
|
306,250
(11)
|
*
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
P&K
Holdings, LLC
|
Common
Stock
|
8,014,930
(12)
|
12.57%
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
Richard
S. Miller
|
Common
Stock
|
0
|
*
|
|
75
Adams Avenue
|
||||
Hauppauge,
NY 11788
|
||||
All
Directors and
|
Common
Stock
|
7,052,576(13)
|
10.27%
|
|
Officers
as a
|
||||
Group
(9 persons)
|
/s/ Mona Rametra | ||
Mona Rametra |
/s/ Perry Sutaria | ||
Perry Sutaria |
/s/ Raj Sutaria | ||
Raj Sutaria |
/s/ Ravi Sutaria | ||
Ravi Sutaria |
P&K HOLDINGS, LLC | ||
|
|
|
By: | /s/ Perry Sutaria | |
Perry Sutaria, Manager |
RAMETRA HOLDINGS I, LLC | ||
|
|
|
By: | /s/ Perry Sutaria | |
Perry Sutaria, Manager |
RAJS HOLDINGS I, LLC | ||
|
|
|
By: | /s/ Perry Sutaria | |
Perry Sutaria, Manager |
RAVIS HOLDINGS I, LLC | ||
|
|
|
By: | /s/ Perry Sutaria | |
Perry Sutaria, Manager |
HOLDER OF CLASS A STOCK | ||
GUZOV OFSINK, LLC | ||
|
|
|
By: | /s/ Darren Ofsink | |
Darren Ofsink, Member |
HOLDER OF CLASS B STOCK | ||
|
|
|
By: | /s/ Kenneth Cappel | |
Kenneth
Cappel, as Attorney-in-
Fact
for Surinder Rametra
|