Dew, with all "dew" respect, these legal documents must be read in their entirety. Taking things out of context may lead to erroneous conclusions.
The 8-K of September 29,2006, clearly states there were 5,000,000 authorized shares of Preferred Stock before and after the date of filing. It also clearly states the action taken to designate 5,000 shares of that Preferred Stock to Class D Preferred was taken without shareholder approval and shareholder approval was not required. (Shareholder approval WAS required to increase the authorized shares of Common Stock from 100 million to 200 million, as was required to close the deal with LFB.)
Further, Exhibit 3.1 of the 8-K (Article 4.4) states:
>>(c) Separate Vote of Series D Preferred Stock . In addition to any other rights provided by law, the Corporation shall not, without first obtaining the affirmative vote or written consent of the holders of not less than a majority of the then outstanding shares of Series D Preferred Stock consenting or voting (as the case may be) separately as a class:
(i) alter or change the rights, preferences or privileges of the Series D Preferred Stock, whether through merger, sale consolidation or otherwise;
(ii) alter or change the rights, preferences or privileges of any capital stock of the Corporation so as to affect adversely the rights of the Series D Preferred Stock, whether through merger, sale consolidation or otherwise;
(iii) issue any shares of Series D Preferred Stock, other than pursuant to the Purchase Agreement; and
(iv) increase the number of authorized shares of Series D Preferred Stock.<<
Note, "without first obtaining the affirmative vote or written consent ................"
The above leads me to believe that the BOD can authorize additional Series D Preferred about any time they please IF LFB approves.
I'm not trying to be argumentative, but I believe there may be other explanations for LFB's conversion. It may be as simple as they just want to lighten up some .... or lighten up a lot. We should know soon.
AI
