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Sample Business Contracts

Certificate of Incorporation - Vermont Teddy Bear Co. Inc.

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                    RESTATED CERTIFICATE OF INCORPORATION
                                      OF
                      THE VERMONT TEDDY BEAR CO., INC.
                                    UNDER
                 SECTION 807 OF THE BUSINESS CORPORATION LAW

      Pursuant to Section 807 of the Business Corporation Law, the undersigned, 
being the Chairman of the Board, Chief Executive Officer and Secretary of The 
Vermont Teddy Bear Co., Inc. (the "Corporation"), hereby certify that:

1.    The name of the Corporation is The Vermont Teddy Bear Co., Inc.

2.    The Certificate of Incorporation was filed by the Department of State on 
      January 27, 1984, and Certificates of Amendment of the Certificate of 
      Incorporation were filed by the Department of State on May 7, 1993, 
      August 2, 1993, a Restated Certificate of Incorporation was filed with 
      the Department of State on September 24, 1993, and Certificate of 
      Amendment of the Restated Certificate of Incorporation was filed with the 
      Department of State on March 11, 1996.

3.    The Certificate of Incorporation, as previously amended, is further 
      amended by amending Section 4 to provide for the authorization of Three 
      Hundred Seventy-Five Thousand (375,000) shares of Series B Convertible 
      Preferred Stock and to amend the liquidation preference of the Series A 
      Preferred Stock, as follows: 

      A.  Series A Preferred Stock.  Ninety (90) shares of preferred stock 
      having a par value of $.05 per share, designated Series A Preferred Stock 
      and having the following preferences and limitations:

            1.  Dividends.  Holders of Series A Preferred  Stock shall be 
            entitled to receive out of the surplus or net profits of the 
            Corporation dividends at the rate of eight percent (8%) per annum 
            payable quarterly on the first days of January, April, July and 
            October.  Dividends on the Series A Preferred Stock shall be 
            payable before any dividends shall be paid upon, or set apart for, 
            the common stock.  Further, dividends on  Series A Preferred Stock 
            shall be cumulative, so that if in any quarterly dividend period 
            the dividends shall not have been paid or set apart, the deficiency 
            shall be fully paid, or set apart for payment, before any dividends 
            shall be set apart for or paid upon the common stock.  
            Accumulations of dividends on Series A Preferred Stock shall not 
            bear interest.  

            2.  Voting Rights.  Except as required by law, Holders of Series 
            A Preferred Stock shall have no voting power whatsoever and 
            shall not be entitled to notice of any meeting of the 
            stockholders of the Corporation.  

            3.  Liquidation.  In the event of any liquidation, voluntary or 
            involuntary, the holders of Series A Preferred Stock shall be 
            entitled to be paid the consideration they paid for their shares 
            and the unpaid cumulative dividends accrued thereon on a pari 
            passu basis with the Series B Convertible Preferred Stock before 
            any amount shall be paid to the holders of the common stock.

            4.  Redemption.  The Corporation may, at the option of its Board 
            of Directors, redeem all or any part of Series A Preferred Stock 
            outstanding on any dividend payment date after the issuance 
            thereof, by paying the holders thereof the consideration they 
            paid for their shares, together with all unpaid cumulative 
            dividends accrued thereon (the "Redemption Price").  Notice of 
            the Corporation's intention to redeem shares of the outstanding 
            preferred, and the date and place thereof, shall be sent by 
            first class mail at least thirty (30) days prior to the proposed 
            redemption date to the holders of the shares to be redeemed.  
            From and after the date fixed in any such notice as the date of 
            redemption, all dividends upon Series A Preferred Stock so 
            called for redemption shall cease to accrue, and all rights of 
            the holders of Series A Preferred Stock, except the right to 
            receive the Redemption Price upon surrender of the certificate 
            representing Series A Preferred Stock called for redemption, 
            shall cease and determine.

            5.  Conversion Rights.  The holders of Series A Preferred Stock 
            shall not have any right to convert their shares into, or 
            exchange them for, common stock.

      B.  Series B Convertible Preferred Stock.  Three Hundred Seventy-Five 
      Thousand (375,000) shares of preferred stock having a par value of 
      $.05 per share, designated Series B Convertible Preferred Stock and 
      having the following preferences and limitations:

            1.  Dividends.  Holders of Series B Convertible Preferred Stock 
            shall not be entitled to any dividends.

            2.  Voting Rights.  Except as required by law, Holders of Series 
            B Convertible Preferred Stock shall have no voting power 
            whatsoever and shall not be entitled to notice of any meeting of 
            the stockholders of the Corporation.  

            3.  Liquidation.  In the event of any liquidation, voluntary or 
            involuntary, the holders of Series B Convertible Preferred Stock 
            shall be entitled to be paid the consideration they paid for 
            their shares on a pari passu basis with the Series A Preferred 
            Stock before any amount shall be paid to the holders of the 
            common stock.

            4.  Conversion Rights.  The holders of Series B Convertible 
            Preferred Stock shall have the right to convert their shares 
            into shares of the Corporation's Common Stock, par value $0.05, 
            as follows:  

                  (a)  Right to Convert.  Each share of the Series B 
                  Convertible Preferred Stock shall be convertible, at the 
                  option of the holder thereof, at any time after the date 
                  that is one (1) year from the date of the issuance of the 
                  Series B Convertible Preferred Stock (the "Purchase 
                  Date"), at the office of the Company or the Company's 
                  transfer agent, into such number of fully paid and non-
                  assessable shares of Common Stock as is determined by 
                  dividing the original Series B Convertible Preferred Stock 
                  issue price by the Conversion Price applicable to such 
                  share, determined as provided below, in effect on the date 
                  the certificate of the Series B Convertible Preferred 
                  Stock is surrendered for conversion.  The initial 
                  Conversion Price for the Series B Convertible Preferred 
                  Stock shall be as set forth in subsection 4(c), below.

                  (b)  Mechanics of Conversion.  Before any holder of shares 
                  of Series B Convertible Preferred Stock shall be entitled 
                  to convert the same into shares of Common Stock, he shall 
                  surrender the certificate or certificates representing the 
                  Series B Convertible Preferred Stock, duly endorsed, by 
                  delivering the certificate or certificates to the 
                  Company's principal office or the Company's transfer agent 
                  for the Series B Convertible Preferred Stock, and shall 
                  give written notice to the Company's Investor Relations 
                  Department at its principal office, of the election to 
                  convert the Series B Convertible Preferred Stock and shall 
                  state therein the name or names in which the certificate 
                  or certificates for shares of Common Stock are to be 
                  issued.  The Company shall, as soon as practicable 
                  thereafter, issue and deliver to such holder, or to the 
                  nominee or nominees of such holder, a certificate or 
                  certificates for the number of shares of Common Stock to 
                  which such holder shall be entitled as described above.  
                  Such conversion shall be deemed to have been made 
                  immediately prior to the close of business on the date of 
                  such surrender of the shares of Series B Convertible 
                  Preferred Stock to be converted, and the person or persons 
                  entitled to receive the shares of Common Stock issuable 
                  upon conversion shall be treated for all purposes as the 
                  record holder or holders of such shares of Common Stock as 
                  of such date.  If the conversion is in connection with an 
                  underwritten offering of securities registered pursuant to 
                  the Securities Act of 1933, as amended (the "1933 Act"), 
                  the conversion may, at the option of any holder 
                  surrendering shares of Series B Convertible Preferred 
                  Stock for conversion, be conditioned upon the closing with 
                  the underwriters of the sale of securities pursuant to 
                  such offering, in which event the person or persons 
                  entitled to receive the Common Stock upon conversion of 
                  the Series B Convertible Preferred Stock shall not be 
                  deemed to have converted such Series B Convertible 
                  Preferred Stock until immediately prior to the closing of 
                  such sale of securities.

                  (c)  Conversion Price Adjustments of Series B Convertible 
                  Preferred Stock for Certain Dilutive Issuances Splits and 
                  Combinations.  The Conversion Price of the Series B 
                  Convertible Preferred Stock shall initially equal the 
                  issuance price per share of the Series B Convertible 
                  Preferred Stock, and shall be subject to adjustment from 
                  time to time as follows:

                        (i)   (A)  If the Company shall issue, after the 
                              Purchase Date, any Additional Stock (as 
                              defined below) without consideration or for a 
                              consideration per share less than the 
                              Conversion Price in effect immediately prior 
                              to the issuance of such Additional Stock, the 
                              Conversion Price shall be adjusted to a price 
                              equal to the price paid per share for such 
                              Additional Stock.

                              (B)  In the case of the issuance of Common 
                              Stock for cash, the consideration shall be 
                              deemed to be the amount of cash paid therefor 
                              before deducting any reasonable discounts, 
                              commissions or other expenses allowed, paid or 
                              incurred by the Company for any underwriting 
                              or otherwise in connection with the issuance 
                              and sale thereof.

                              (C)  In the case of the issuance of the Common 
                              Stock for a consideration in whole or in part 
                              other than cash, the consideration other than 
                              cash shall be deemed to be the fair value 
                              thereof as determined by the Board of 
                              Directors of the Company irrespective of any 
                              accounting treatment.

                              (D)  In the case of the issuance (whether 
                              before, on or after the applicable Purchase 
                              Date) of options to purchase or rights to 
                              subscribe for Common Stock, securities by 
                              their terms convertible into or exchangeable 
                              for Common Stock or options to purchase or 
                              rights to subscribe for such convertible or 
                              exchangeable securities, the following 
                              provisions shall apply for all purposes of 
                              this subsection 4(c)(i) and subsection 
                              4(c)(ii):

                                    (1)  The aggregate maximum number of 
                                    shares of Common Stock deliverable upon 
                                    exercise (assuming the satisfaction of 
                                    any conditions to exercisability, 
                                    including without limitation, the 
                                    passage of time, but without taking into 
                                    account potential antidilution 
                                    adjustments) of such options 
                                    to purchase or rights to subscribe for 
                                    Common Stock shall be deemed to have 
                                    been issued at the time such Options or 
                                    rights were issued and for a 
                                    consideration equal to the consideration 
                                    (determined in the manner provided in 
                                    subsections 4(c)(i)(B) and (c)(i)(C)), 
                                    if any, received by the corporation upon 
                                    the issuance of such options or rights 
                                    plus the minimum exercise price provided 
                                    in such options or rights (without 
                                    taking into account potential 
                                    antidilution adjustments) for 
                                    the Common Stock covered thereby.

                                    (2)  The aggregate maximum number of 
                                    shares of Common Stock deliverable upon 
                                    conversion of or in exchange (assuming 
                                    the satisfaction of any conditions to 
                                    convertibility or exchangeability, 
                                    including, without limitation, the 
                                    passage of time, but without taking into 
                                    account potential antidilution 
                                    adjustments) for any such convertible or 
                                    exchangeable securities or upon the 
                                    exercise of options to purchase or 
                                    rights to subscribe for such convertible 
                                    or exchangeable securities and 
                                    subsequent conversion or exchange 
                                    thereof shall be deemed to have 
                                    been issued at the time such securities 
                                    were issued or such options or rights 
                                    were issued and for a consideration 
                                    equal to the consideration, if any, 
                                    received by the corporation for any such 
                                    securities and related options or rights 
                                    (excluding any cash received on account 
                                    of accrued interest or accrued 
                                    dividends), plus the minimum additional 
                                    consideration, if any, to be received by 
                                    the corporation (without taking into 
                                    account potential antidilution 
                                    adjustments) upon the conversion or 
                                    exchange of such securities or the 
                                    exercise of any related options or 
                                    rights (the consideration in each case 
                                    to be determined in the manner provided 
                                    in subsections 4(c)(i)(B) and (c)(i)(C))

                                    (3)  In the event of any change in the 
                                    number of shares of Common Stock 
                                    deliverable or in the consideration 
                                    payable to this corporation upon 
                                    exercise of such options or rights or 
                                    upon conversion of or in exchange for 
                                    such convertible or exchangeable 
                                    securities, including, but not limited 
                                    to, a change resulting from the 
                                    antidilution provisions thereof, the 
                                    Conversion Price of the Series B 
                                    Convertible Preferred Stock, to 
                                    the extent in any way affected by or 
                                    computed using such options, rights or 
                                    securities, shall be recomputed to 
                                    reflect such change, but no further 
                                    adjustment shall be made for the actual 
                                    issuance of Common Stock or any payment 
                                    of such consideration upon the exercise 
                                    of any such options or rights or the 
                                    conversion or exchange of such 
                                    securities.

                                    (4)  Upon the expiration of any such 
                                    options or rights, the termination of 
                                    any such rights to convert or exchange 
                                    or the expiration of any options or 
                                    rights related to such convertible or 
                                    exchangeable securities, the Conversion 
                                    Price of the Series B Convertible 
                                    Preferred Stock, to the extent in any 
                                    way affected by or computed using such 
                                    options, rights or securities or options 
                                    or rights related to such securities, 
                                    shall be recomputed to reflect the 
                                    issuance of only the number of shares of 
                                    Common Stock (and convertible or 
                                    exchangeable securities which remain in 
                                    effect) actually issued upon the 
                                    exercise of such options or rights, upon 
                                    the conversion or exchange of such 
                                    securities or upon the exercise of the 
                                    options or rights related to such 
                                    securities.

                                    (5)  The number of shares of Common 
                                    Stock deemed issued and the 
                                    consideration deemed paid therefor 
                                    pursuant to subsections 4(c)(i)(D)(1) 
                                    and (2) shall be appropriately adjusted 
                                    to reflect any change, termination or 
                                    expiration of the type described in 
                                    either subsection 4(c)(i)(D)(3) or (4).

                        (ii)  "Additional Stock" shall mean any shares of 
                        Common Stock issued (or deemed to have been issued 
                        pursuant to subsection 4(c)(i)(D)) by this 
                        corporation after the Purchase Date other than

                              (A)  Common Stock issued pursuant to a 
                              transaction described in subsection 4(c)(iii) 
                              hereof,

                              (B)  shares of Common Stock issuable or issued 
                              to employees, officers, consultants, directors 
                              or vendors (if in transactions with primarily 
                              nonfinancing purposes) of this corporation 
                              directly or pursuant to a stock option plan or 
                              restricted stock plan approved by the 
                              shareholders and Board of Directors of this 
                              corporation 

                        (iii)  In the event the corporation should at any 
                        time or from time to time after the Purchase Date 
                        fix a record date for the effectuation of a split or 
                        subdivision of the outstanding shares of Common 
                        Stock or the determination of holders of Common 
                        Stock entitled to receive a dividend or other 
                        distribution payable in additional shares of Common 
                        Stock or other securities or rights convertible 
                        into, or entitling the holder thereof to receive 
                        directly or indirectly, additional shares of Common 
                        Stock (hereinafter referred to as "Common Stock 
                        Equivalents") without payment of any consideration 
                        by such holder for the additional shares of Common 
                        Stock or the Common Stock Equivalents (including the 
                        additional shares of Common Stock issuable upon 
                        conversion or exercise thereof), then, as of such 
                        record date (or the date of such dividend 
                        distribution, split or subdivision if no 
                        record date is fixed), the Conversion Price of the 
                        Series B Convertible Preferred Stock shall be 
                        appropriately decreased so that the number of shares 
                        of Common Stock issuable on conversion of each share 
                        of such series shall be increased in proportion to 
                        such increase of the aggregate of shares of Common 
                        Stock outstanding and those issuable with respect to 
                        such Common Stock Equivalents with the number of 
                        shares issuable with respect to Common Stock 
                        Equivalents determined from time to time in the 
                        manner provided for deemed issuances in subsection 
                        4(c)(i)(D).

                        (iv)  If the number of shares of Common Stock 
                        outstanding at any time after the Purchase Date is 
                        decreased by a combination of the outstanding shares 
                        of Common Stock, then, following the record date of 
                        such combination, the Conversion Price for the 
                        Series B Convertible Preferred Stock shall be 
                        appropriately increased so that the number of shares 
                        of Common Stock issuable on conversion of each share 
                        of such series shall be decreased in proportion to 
                        such decrease in outstanding shares.

                  (d)   Notice.  In case at any time the Company shall 
                  propose:

                        (i)  to pay any dividend or make any distribution on 
                        shares of Common Stock in shares of Common Stock or 
                        make any other distribution (other than regularly 
                        scheduled cash dividends which are not in a greater 
                        amount per share than the most recent such cash 
                        dividend) to all holders of Common Stock; or

                        (ii)  to issue any rights, warrants, or other 
                        securities to all holders of Common Stock entitling 
                        them to purchase any additional shares of Common 
                        Stock or any other rights, warrants, or other 
                        securities; or

                        (iii)  to effect any reclassification or change of 
                        outstanding shares of Common Stock, or any 
                        consolidation, merger, sale, lease, or conveyance of 
                        property; or

                        (iv)  to effect any liquidation, dissolution, or 
                        winding-up of the Company; or

                        (v)  to take any other action which would cause an 
                        adjustment to the Conversion Price; then, and in any 
                        one or more of such cases, the Company shall give 
                        written notice thereof, by registered mail, postage 
                        prepaid, to the Holder at his then-current address, 
                        mailed at least 15 days prior to (i) the date as of 
                        which the holders of record of shares of Common 
                        Stock to be entitled to receive any such dividend, 
                        distribution, rights, warrants, or other securities 
                        are to be determined, (ii) the date on which any 
                        such reclassification, change of outstanding shares 
                        of Common Stock, consolidation, merger, sale, lease, 
                        conveyance of property, liquidation, dissolution, or 
                        winding-up is expected to become effective, and the 
                        date as of which it is expected that holders of 
                        record of shares of Common Stock shall be entitled 
                        to exchange their shares for securities or other 
                        property, if any, deliverable upon such 
                        reclassification, change of outstanding shares, 
                        consolidation, merger, sale, lease, conveyance of 
                        property, liquidation, dissolution, or winding-up, 
                        or (iii) the date of such action which would require 
                        an adjustment to the Conversion Price.

                  C.  Undesignated Preferred Stock.  Six Hundred Twenty-Four 
                  Thousand Nine Hundred Ten (624,910) shares of preferred 
                  stock having a par value of $.05 per share and having such 
                  preferences, limitations and relative rights as determined 
                  from time to time by the Board of Directors.  The Board of 
                  Directors is hereby expressly granted authority to divide 
                  these shares of preferred stock into series and to fix and 
                  determine before the issuance thereof the number of shares 
                  and the relative rights and preferences of any series so 
                  established.

                  D.  Common Stock.  Twenty million (20,000,000) shares of 
                  common stock having a par value of $.05 per share. 

4.    The amendment related to the authorization of the Series B Convertible 
      Preferred Stock was authorized by the Corporation's Board of Directors 
      as of June 27, 1996, pursuant to Section 502 of the Business 
      Corporation Law and by the unanimous written consent of the 
      shareholders of the Series A Preferred Stock, dated June 27, 1996, 
      pursuant to Section 615 of the Business Corporation Law.

5.    The text of the Certificate of Incorporation and all prior amendments 
      thereto are hereby restated as further amended above to read herein 
      set forth in full:

                                  ARTICLE I
                                    NAME

      The name of the corporation is The Vermont Teddy Bear Co., Inc. 

                                 ARTICLE II
                                  PURPOSES

      The purpose or purposes for which this corporation is formed are as 
follows, to wit: to engage in any lawful act or activity for which 
corporations may be organized under the Business Corporation Law, provided 
that it is not formed to engage in any act or activity requiring the consent 
or approval of any state official, department, board, agency or other body, 
without first obtaining such consent or approval.

                                ARTICLE III
                                  OFFICE

      The office of the corporation is to be located in the City of Albany, 
County of Albany, State of New York.

                                ARTICLE IV
                               CAPITAL STOCK

      The aggregate number of shares which the corporation shall have 
authority to issue is twenty one million (21,000,000) shares, divided as 
follows:

      A.  Series A Preferred Stock.  Ninety (90) shares of preferred stock  
      having a par value of $.05 per share, designated Series A Preferred 
      Stock and having the following preferences and limitations:

            1.  Dividends.  Holders of Series A Preferred  Stock shall be 
            entitled to receive out of the surplus or net profits of the 
            Corporation dividends at the rate of eight percent (8%) per 
            annum payable quarterly on the first days of January, April, 
            July and October.  Dividends on the Series A Preferred Stock 
            shall be payable before any dividends shall be paid upon, or set 
            apart for, the common stock.  Further, dividends on  Series A 
            Preferred Stock shall be cumulative, so that if in any quarterly 
            dividend period the dividends shall not have been paid or set 
            apart, the deficiency shall be fully paid, or set apart for 
            payment, before any dividends shall be set apart for or paid 
            upon the common stock.  Accumulations of dividends on Series A 
            Preferred Stock shall not bear interest.  

            2.  Voting Rights.  Except as required by law, Holders of Series 
            A Preferred Stock shall have no voting power whatsoever and 
            shall not be entitled to notice of any meeting of the 
            stockholders of the Corporation.  

            3.  Liquidation.  In the event of any liquidation, voluntary or 
            involuntary, the holders of Series A Preferred Stock shall be 
            entitled to be paid the consideration they paid for their shares 
            and the unpaid cumulative dividends accrued thereon on a pari 
            passu basis with the Series B Convertible Preferred Stock before 
            any amount shall be paid to the holders of the common stock.

            4.  Redemption.  The Corporation may, at the option of its Board 
            of Directors, redeem all or any part of Series A Preferred Stock 
            outstanding on any dividend payment date after the issuance 
            thereof, by paying the holders thereof the consideration they 
            paid for their shares, together with all unpaid cumulative 
            dividends accrued thereon (the "Redemption Price").  Notice of 
            the Corporation's intention to redeem shares of the outstanding 
            preferred, and the date and place thereof, shall be sent by 
            first class mail at least thirty (30) days prior to the proposed 
            redemption date to the holders of the shares to be redeemed.  
            From and after the date fixed in any such notice as the date of 
            redemption, all dividends upon Series A Preferred Stock so 
            called for redemption shall cease to accrue, and all rights of 
            the holders of Series A Preferred Stock, except the right to 
            receive the Redemption Price upon surrender of the certificate 
            representing Series A Preferred Stock called for redemption, 
            shall cease and determine.

            5.  Conversion Rights.  The holders of Series A Preferred Stock 
            shall not have any right to convert their shares into, or 
            exchange them for, common stock.

      B.  Series B Convertible Preferred Stock.  Three Hundred Seventy-Five 
      Thousand (375,000) shares of preferred stock having a par value of 
      $.05 per share, designated Series B Convertible Preferred Stock and 
      having the following preferences and limitations:

            1.  Dividends.  Holders of Series B Convertible Preferred Stock 
            shall not be entitled to any dividends.

            2.  Voting Rights.  Except as required by law, Holders of Series 
            B Convertible Preferred Stock shall have no voting power 
            whatsoever and shall not be entitled to notice of any meeting of 
            the stockholders of the Corporation.  

            3.  Liquidation.  In the event of any liquidation, voluntary or 
            involuntary, the holders of Series B Convertible Preferred Stock 
            shall be entitled to be paid the consideration they paid for 
            their shares on a pari passu basis with the Series A Preferred 
            Stock before any amount shall be paid to the holders of the 
            common stock.

            4.  Conversion Rights.  The holders of Series B Convertible 
            Preferred Stock shall have the right to convert their shares 
            into shares of the Corporation's Common Stock, par value $0.05, 
            as follows:  

                  (a)  Right to Convert.  Each share of the Series B 
                  Convertible Preferred Stock shall be convertible, at the 
                  option of the holder thereof, at any time after the date 
                  that is one (1) year from the date of the issuance of the 
                  Series B Convertible Preferred Stock (the "Purchase 
                  Date"), at the office of the Company or the Company's 
                  transfer agent, into such number of fully paid and non-
                  assessable shares of Common Stock as is determined by 
                  dividing the original Series B Convertible Preferred Stock 
                  issue price by the Conversion Price applicable to such 
                  share, determined as provided below, in effect on the date 
                  the certificate of the Series B Convertible Preferred 
                  Stock is surrendered for conversion.  The initial 
                  Conversion Price for the Series B Convertible Preferred 
                  Stock shall be as set forth in subsection 4(c), below.

                  (b)  Mechanics of Conversion.  Before any holder of shares 
                  of Series B Convertible Preferred Stock shall be entitled 
                  to convert the same into shares of Common Stock, he shall 
                  surrender the certificate or certificates representing the 
                  Series B Convertible Preferred Stock, duly endorsed, by 
                  delivering the certificate or certificates to the 
                  Company's principal office or the Company's transfer agent 
                  for the Series B Convertible Preferred Stock, and shall 
                  give written notice to the Company's Investor Relations 
                  Department at its principal office, of the election to 
                  convert the Series B Convertible Preferred Stock and shall 
                  state therein the name or names in which the certificate 
                  or certificates for shares of Common Stock are to be 
                  issued.  The Company shall, as soon as practicable 
                  thereafter, issue and deliver to such holder, or to the 
                  nominee or nominees of such holder, a certificate or 
                  certificates for the number of shares of Common Stock to 
                  which such holder shall be entitled as described above.  
                  Such conversion shall be deemed to have been made 
                  immediately prior to the close of business on the 
                  date of such surrender of the shares of Series B 
                  Convertible Preferred Stock to be converted, and the 
                  person or persons entitled to receive the shares of Common 
                  Stock issuable upon conversion shall be treated for all 
                  purposes as the record holder or holders of such shares of 
                  Common Stock as of such date.  If the conversion is in 
                  connection with an underwritten offering of securities 
                  registered pursuant to the Securities Act of 1933, as 
                  amended (the "1933 Act"), the conversion may, at the 
                  option of any holder surrendering shares of Series B 
                  Convertible Preferred Stock for conversion, be conditioned 
                  upon the closing with the underwriters of the sale of 
                  securities pursuant to such offering, in which event the 
                  person or persons entitled to receive the Common Stock 
                  upon conversion of the Series B Convertible Preferred 
                  Stock shall not be deemed to have converted such Series B 
                  Convertible Preferred Stock until immediately prior to the 
                  closing of such sale of securities.

                  (c)  Conversion Price Adjustments of Series B Convertible 
                  Preferred Stock for Certain Dilutive Issuances Splits and 
                  Combinations.  The Conversion Price of the Series B 
                  Convertible Preferred Stock shall initially equal the 
                  issuance price per share of the Series B Convertible 
                  Preferred Stock, and shall be subject to adjustment from 
                  time to time as follows:

                        (i)   (A)  If the Company shall issue, after the 
                              Purchase Date, any Additional Stock (as 
                              defined below) without consideration or for a 
                              consideration per share less than the 
                              Conversion Price in effect immediately prior 
                              to the issuance of such Additional Stock, the 
                              Conversion Price shall be adjusted to a price 
                              equal to the price paid per share for such 
                              Additional Stock.

                              (B)  In the case of the issuance of Common 
                              Stock for cash, the consideration shall be 
                              deemed to be the amount of cash paid therefor 
                              before deducting any reasonable discounts, 
                              commissions or other expenses allowed, paid or 
                              incurred by the Company for any underwriting 
                              or otherwise in connection with the issuance 
                              and sale thereof.

                              (C)  In the case of the issuance of the Common 
                              Stock for a consideration in whole or in part 
                              other than cash, the consideration other than 
                              cash shall be deemed to be the fair value 
                              thereof as determined by the Board of 
                              Directors of the Company irrespective of any 
                              accounting treatment.

                              (D)  In the case of the issuance (whether 
                              before, on or after the applicable Purchase 
                              Date) of options to purchase or rights to 
                              subscribe for Common Stock, securities by 
                              their terms convertible into or exchangeable 
                              for Common Stock or options to purchase or 
                              rights to subscribe for such convertible or 
                              exchangeable securities, the following 
                              provisions shall apply for all purposes of 
                              this subsection 4(c)(i) and subsection 
                              4(c)(ii):

                                    (1)  The aggregate maximum number of 
                                    shares of Common Stock deliverable upon 
                                    exercise (assuming the satisfaction of 
                                    any conditions to exercisability, 
                                    including without limitation, the 
                                    passage of time, but without taking into 
                                    account potential antidilution 
                                    adjustments) of such options 
                                    to purchase or rights to subscribe for 
                                    Common Stock shall be deemed to have 
                                    been issued at the time such Options or 
                                    rights were issued and for a 
                                    consideration equal to the consideration 
                                    (determined in the manner provided in 
                                    subsections 4(c)(i)(B) and (c)(i)(C)), 
                                    if any, received by the corporation upon 
                                    the issuance of such options or rights 
                                    plus the minimum exercise price provided 
                                    in such options or rights (without 
                                    taking into account potential 
                                    antidilution adjustments) for the Common 
                                    Stock covered thereby.

                                    (2)  The aggregate maximum number of 
                                    shares of Common Stock deliverable upon 
                                    conversion of or in exchange (assuming 
                                    the satisfaction of any conditions to 
                                    convertibility or exchangeability, 
                                    including, without limitation, the 
                                    passage of time, but without taking into 
                                    account potential antidilution 
                                    adjustments) for any such convertible or 
                                    exchangeable securities or upon the 
                                    exercise of options to purchase or 
                                    rights to subscribe for such convertible 
                                    or exchangeable securities and 
                                    subsequent conversion or exchange 
                                    thereof shall be deemed to have 
                                    been issued at the time such securities 
                                    were issued or such options or rights 
                                    were issued and for a consideration 
                                    equal to the consideration, if any, 
                                    received by the corporation for any such 
                                    securities and related options or rights 
                                    (excluding any cash received on account 
                                    of accrued interest or accrued 
                                    dividends), plus the minimum additional 
                                    consideration, if any, to be received by 
                                    the corporation (without taking into 
                                    account potential antidilution 
                                    adjustments) upon the conversion or 
                                    exchange of such securities or the 
                                    exercise of any related options or 
                                    rights (the consideration in each case 
                                    to be determined in the manner provided 
                                    in subsections 4(c)(i)(B) and (c)(i)(C))

                                    (3)  In the event of any change in the 
                                    number of shares of Common Stock 
                                    deliverable or in the consideration 
                                    payable to this corporation upon 
                                    exercise of such options or rights or 
                                    upon conversion of or in exchange for 
                                    such convertible or exchangeable 
                                    securities, including, but not limited 
                                    to, a change resulting from the 
                                    antidilution provisions thereof, the 
                                    Conversion Price of the Series B 
                                    Convertible Preferred Stock, to 
                                    the extent in any way affected by or 
                                    computed using such options, rights or 
                                    securities, shall be recomputed to 
                                    reflect such change, but no further 
                                    adjustment shall be made for the actual 
                                    issuance of Common Stock or any payment 
                                    of such consideration upon the exercise 
                                    of any such options or rights or the 
                                    conversion or exchange of such 
                                    securities.

                                    (4)  Upon the expiration of any such 
                                    options or rights, the termination of 
                                    any such rights to convert or exchange 
                                    or the expiration of any options or 
                                    rights related to such convertible or 
                                    exchangeable securities, the Conversion 
                                    Price of the Series B Convertible 
                                    Preferred Stock, to the extent in any 
                                    way affected by or computed using such 
                                    options, rights or securities or options 
                                    or rights related to such securities, 
                                    shall be recomputed to reflect the 
                                    issuance of only the number of shares of 
                                    Common Stock (and convertible or 
                                    exchangeable securities which remain in 
                                    effect) actually issued upon the 
                                    exercise of such options or rights, upon 
                                    the conversion or exchange of such 
                                    securities or upon the exercise of the 
                                    options or rights related to such 
                                    securities.

                                    (5)  The number of shares of Common 
                                    Stock deemed issued and the 
                                    consideration deemed paid therefor 
                                    pursuant to subsections 4(c)(i)(D)(1) 
                                    and (2) shall be appropriately adjusted 
                                    to reflect any change, termination or 
                                    expiration of the type described in 
                                    either subsection 4(c)(i)(D)(3) or (4).

                        (ii)  "Additional Stock" shall mean any shares of 
                        Common Stock issued (or deemed to have been issued 
                        pursuant to subsection 4(c)(i)(D)) by this 
                        corporation after the Purchase Date other than

                              (A)  Common Stock issued pursuant to a 
                              transaction described in subsection 4(c)(iii) 
                              hereof,

                              (B)  shares of Common Stock issuable or issued 
                              to employees, officers, consultants, directors 
                              or vendors (if in transactions with primarily 
                              nonfinancing purposes) of this corporation 
                              directly or pursuant to a stock option plan or 
                              restricted stock plan approved by the 
                              shareholders and Board of Directors of this 
                              corporation 

                        (iii)  In the event the corporation should at any 
                        time or from time to time after the Purchase Date 
                        fix a record date for the effectuation of a split or 
                        subdivision of the outstanding shares of Common 
                        Stock or the determination of holders of Common 
                        Stock entitled to receive a dividend or other 
                        distribution payable in additional shares of Common 
                        Stock or other securities or rights convertible 
                        into, or entitling the holder thereof to receive 
                        directly or indirectly, additional shares of Common 
                        Stock (hereinafter referred to as "Common Stock 
                        Equivalents") without payment of any consideration 
                        by such holder for the additional shares of Common 
                        Stock or the Common Stock Equivalents (including the 
                        additional shares of Common Stock issuable upon 
                        conversion or exercise thereof), then, as of such 
                        record date (or the date of such dividend 
                        distribution, split or subdivision if no 
                        record date is fixed), the Conversion Price of the 
                        Series B Convertible Preferred Stock shall be 
                        appropriately decreased so that the number of shares 
                        of Common Stock issuable on conversion of each share 
                        of such series shall be increased in proportion to 
                        such increase of the aggregate of shares of Common 
                        Stock outstanding and those issuable with respect to 
                        such Common Stock Equivalents with the number of 
                        shares issuable with respect to Common Stock 
                        Equivalents determined from time to time in the 
                        manner provided for deemed issuances in subsection 
                        4(c)(i)(D).

                        (iv)  If the number of shares of Common Stock 
                        outstanding at any time after the Purchase Date is 
                        decreased by a combination of the outstanding shares 
                        of Common Stock, then, following the record date of 
                        such combination, the Conversion Price for the 
                        Series B Convertible Preferred Stock shall be 
                        appropriately increased so that the number of shares 
                        of Common Stock issuable on conversion of each share 
                        of such series shall be decreased in proportion to 
                        such decrease in outstanding shares.

                  (d)  Notice.  In case at any time the Company shall 
                  propose:

                        (i) to pay any dividend or make any distribution on 
                        shares of Common Stock in shares of Common Stock or 
                        make any other distribution (other than regularly 
                        scheduled cash dividends which are not in a greater 
                        amount per share than the most recent such cash 
                        dividend) to all holders of Common Stock; or

                        (ii)  to issue any rights, warrants, or other 
                        securities to all holders of Common Stock entitling 
                        them to purchase any additional shares of Common 
                        Stock or any other rights, warrants, or other 
                        securities; or

                        (iii)  to effect any reclassification or change of 
                        outstanding shares of Common Stock, or any 
                        consolidation, merger, sale, lease, or conveyance of 
                        property; or

                        (iv)  to effect any liquidation, dissolution, or 
                        winding-up of the Company; or

                        (v)  to take any other action which would cause an 
                        adjustment to the Conversion Price; then, and in any 
                        one or more of such cases, the Company shall give 
                        written notice thereof, by registered mail, postage 
                        prepaid, to the Holder at his then-current address, 
                        mailed at least 15 days prior to (i) the date as of 
                        which the holders of record of shares of Common 
                        Stock to be entitled to receive any such dividend, 
                        distribution, rights, warrants, or other securities 
                        are to be determined, (ii) the date on which any 
                        such reclassification, change of outstanding shares 
                        of Common Stock, consolidation, merger, sale, lease, 
                        conveyance of property, liquidation, dissolution, or 
                        winding-up is expected to become effective, and the 
                        date as of which it is expected that holders of 
                        record of shares of Common Stock shall be entitled 
                        to exchange their shares for securities or other 
                        property, if any, deliverable upon such 
                        reclassification, change of outstanding shares, 
                        consolidation, merger, sale, lease, conveyance of 
                        property, liquidation, dissolution, or winding-up, 
                        or (iii) the date of such action which would require 
                        an adjustment to the Conversion Price.

      C.  Undesignated Preferred Stock.  Six Hundred Twenty-Four Thousand 
Nine Hundred Ten (624,910) shares of preferred stock having a par value of 
$.05 per share and having such preferences, limitations and relative rights 
as determined from time to time by the Board of Directors.  The Board of 
Directors is hereby expressly granted authority to divide these shares of 
preferred stock into series and to fix and determine before the issuance 
thereof the number of shares and the relative rights and preferences of any 
series so established.

      D.  Common Stock.  Twenty million (20,000,000) shares of common stock 
having a par value of $.05 per share. 

                                  ARTICLE V
                                PROCESS AGENT

      The Secretary of State is designated as agent of the corporation upon 
whom process against it may be served.  The post office address to which the 
Secretary of State shall mail a copy of any process against the corporation 
served upon him is 2236 Shelburne Road, P.O. Box 965, Shelburne, Vermont  
05482.

                                 ARTICLE VI
                   DIRECTOR LIABILITY AND INDEMNIFICATION

      No director of the corporation shall be personally liable to the 
corporation or its shareholders for damages for any breach of duty in such 
capacity; provided, however, that this provision shall not eliminate or 
limit the liability of any director: 

      (a)  For acts or omissions in bad faith or which involved intentional 
      misconduct or a knowing violation of law, as established by a judgment 
      or other final adjudication; 

      (b)  For any transaction from which the director derived in fact a 
      financial profit or other advantage to which he or she was not legally 
      entitled, as established by a judgment or other final adjudication; 

      (c)  For any violation of Section 719 of the Business Corporation Law, 
      as established by a judgment or other final adjudication; or 

      (d)  For any act or omission occurring prior to the corporation's 
      adoption of this provision. 

6.    This restatement of the Certificate of Incorporation as previously 
      amended and as amended above was authorized by the Corporation's Board 
      of Directors, as of June 27, 1996, pursuant to Section 807 of the 
      Business Corporation Law.

      IN WITNESS WHEREOF the undersigned, being the Chairman of the Board, 
Chief Executive Officer and Secretary of the Corporation, affirm that the 
statements made herein are true under the penalties of perjury.

                              /s/ FRED MARKS
                              -----------------------------------------
                              Fred Marks, Chairman of the Board

                              /s/ R. PATRICK BURNS
                              -----------------------------------------
                              R. Patrick Burns, Chief Executive Officer

                              /s/ SPENCER C. PUTNAM
                              -----------------------------------------       
                              Spencer C. Putnam, Secretary