Document/Exhibit Description Pages Size
1: 10KSB Annual Report 73 359K
2: EX-2.1 Asset Purchase Agreement, Dated as of Aug 1, 1997 24 84K
3: EX-2.2 Asset Purchase Agreement, Dated as of Apr 24, '98 23 83K
4: EX-3.1 Restated Articles of Incorporation and Amendments 18 56K
5: EX-4.5 Form of Warrant Issued With Series B Preferred 6 30K
6: EX-10.29 Letter Agreement, Dated June 9, 2000 4 20K
7: EX-10.30 Lease Agreement, Dated as of March 24,2000 12 46K
8: EX-10.31 Letter Agreement, Dated April 20, 2000 3 16K
9: EX-99 Financial Data Schedules 4 18K
EX-3.1 — Restated Articles of Incorporation and Amendments
Exhibit Table of Contents
EXHIBIT 3.1
RESTATED
ARTICLES OF INCORPORATION
OF
CHILDREN'S WONDERLAND, INC.
Debby S. Bitticks certifies that:
1. She is a majority of the Board of Directors of Children's Wonderland,
Inc. a California corporation.
2. The Articles of Incorporation of this corporation are amended and
restated to read as follows:
ONE: The name of this corporation is: CHILDREN'S WONDERLAND, INC.
TWO: The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporations
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporation Code.
THREE: The name and address in the State of California of this
corporation's initial agent for service of process is: Gerald M. Chizever, Esq.,
9601 Wilshire Boulevard, Penthouse Suite, Beverly Hills, California 90210.
FOUR: The liability of the directors of this corporation for monetary
damages shall be eliminated to the fullest extent permissible under California
law.
FIVE: The corporation is authorized to provide indemnification of agents
(as defined in Section 317 of the California Corporations Code) for breach of
duty to the corporation and its stockholders through bylaw provisions or through
agreements with the agents, or both, in excess of the indemnification otherwise
permitted by Section 317 of the California Corporations Code, subject to the
limits on such excess indemnification set forth in Section 204 of the California
Corporations Code.
SIX: (i) This corporation is authorized to issue two classes of shares, to
be designated common stock and preferred stock, respectively. This corporation
is authorized to issue twenty million (20,000,000) shares of common stock and
five million (5,000,000) shares of preferred stock.
(ii) The preferred shares may be issued in any number of series, as
determined by the Board of Directors. The Board may by resolution fix the
designation and number of shares of any such series.
(iii) The Board may determine, alter, or revoke the rights,
preferences, privileges and restrictions pertaining to any wholly unissued class
or series of preferred shares. The Board may thereafter in the same manner
increase or decrease the number of shares any such series (but not below the
number of shares of that series then outstanding).
3. The foregoing amendment and restatement of articles of incorporation has
been duly approved by the board of directors.
4. No shares have been issued.
I further declare under penalty of perjury under the laws of the State of
California that the matters set forth in this Certificate are true and correct
of my own knowledge.
Date: November 15, 1993
/s/
-------------------------------
DEBBY S. BITTICKS
Director
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
CHILDREN'S WONDERLAND, INC.
Robert M. Wilson does hereby certify that:
1. He is the President and Secretary of Children's Wonderland, Inc., a
California corporation.
2. The Board of Directors of Children's Wonderland, Inc. has approved the
following amendment to Section (i) of Article SIX of the Articles of
Incorporation of said corporation:
"(i) This corporation is authorized to issue two classes of
shares, to be designated common stock and preferred stock,
respectively. This corporation is authorized to issue twenty
million (20,000,000) shares of common stock and five million
(5,000,000) shares of preferred stock. On the amendment of
this Section (i), each one (1) outstanding share of common
stock is combined, reconstituted and converted into 0.440261
shares of common stock."
3. The foregoing amendment has been approved by the required vote of the
shareholders in accordance with Sections 902 and 903 of the California
Corporation Code. The corporation has only one class of voting shares, which are
the common shares. Each outstanding share is entitled to one vote. The
corporation has 2,036,500 shares of common stock outstanding and, hence, the
total number of common shares entitled to vote with respect to the amendment was
2,036,500. The number of voting shares voting in favor of the amendment exceeded
the vote required, in that the affirmative vote of a majority, that is, more
than fifty percent (50%) of the outstanding voting shares was required for
approval of the amendment and the amendment was approved by the affirmative vote
of more than fifty percent (50%) of the outstanding voting shares.
/s/
---------------------------
Robert M. Wilson, President
/s/
---------------------------
Robert M. Wilson, Secretary
The undersigned declares under penalty of perjury that the matters set
forth in the foregoing certificate are true and correct of his own knowledge and
that this declaration was executed on December 5, 1995.
/s/
---------------------------
Robert M. Wilson
CERTIFICATE OF DECREASE OF THE SENIOR PREFERRED AND
CERTIFICATE OF DETERMINATION
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
CHILDREN'S WONDERLAND, INC.
Debby Bitticks and Robert Wilson certify that:
1. Debby Bitticks is the President and Robert Wilson is the Secretary of
Children's Wonderland, Inc. (hereinafter called the "Corporation"), a
corporation organized and existing under and by virtue of the provisions of the
laws of the State of California.
2. The authorized number of shares of the Corporation's Preferred Stock is
5,000,000 and the number of shares constituting Series A Convertible Preferred
Stock (that is the series affected by this Certificate of Determination) is
600,000. None of the shares of that series has been issued. The 6% Senior
Convertible Preferred Stock is reduced to zero and no shares are outstanding.
3. Pursuant to authority granted by the Corporation's Restated Articles of
Incorporation, the resolutions set forth in Exhibit "A" attached hereto have
been duly adopted and approved by the Board of Directors of the Corporation
alone and no shareholder approval is required.
4. We further declare, under penalty of perjury, that the matters set forth
in this Certificate are true and correct of our own knowledge.
Executed in the City of Agoura, State of California, on this 19th day of
February, 2000.
/s/ /s/
---------------------------- ---------------------------
Debby Bitticks, President Robert Wilson, Secretary
EXHIBIT "A"
TO
CERTIFICATE OF DECREASE OF THE SENIOR PREFERRED AND
CERTIFICATE OF DETERMINATION
OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
CHILDREN'S WONDERLAND, INC.
CHILDREN'S WONDERLAND, INC., a California corporation (the "CORPORATION"),
pursuant to authority conferred upon the Board of Directors of the Corporation
(the "BOARD") by of the Restated Articles of Incorporation of the Corporation
(the "ARTICLES OF INCORPORATION") and Section 401 of the California General
Corporation, the Board has duly adopted the following resolutions:
WHEREAS, no shares of the Corporation's 6% Senior Convertible Preferred
Stock ("SENIOR PREFERRED") are issued and outstanding, as a result of their
conversion into the Corporation's no par value Common Stock ("COMMON STOCK") in
accordance with the terms of the Senior Preferred set forth in a Certificate of
Determination, as amended, filed with the Secretary of State of California; and
WHEREAS, the Board desires to decrease the number of authorized shares of
Senior Preferred to zero and to authorize a new series of Preferred Stock, all
as authorized by the Corporation's Articles of Incorporation.
NOW, THEREFORE, it is
RESOLVED, that the number of shares constituting the Senior Preferred is
hereby reduced from 1,000,000 to zero so as to ensure that, in accordance with
Section 401(f) of the California General Corporation Law, the Certificate of
Determination, as amended, for the Senior Preferred is no longer in force and
the Senior Preferred is no longer an authorized series of the Corporation.
RESOLVED FURTHER, that, pursuant to Article Six of the Articles of
Incorporation (which authorizes five million (5,000,000) shares of Preferred
Stock with no par value), the Board hereby fixes and determines the designation
of, the number of shares constituting, and the rights, preferences, privileges,
and restrictions relating to, a series of Preferred Stock, as follows:
1. DESIGNATION; AMOUNT; STATED VALUE.
From the Corporation's 5,000,000 authorized shares of Preferred Stock, no
par value, 600,000 shares are hereby designated Series A Convertible Preferred
Stock ("SERIES A PREFERRED") with the rights, preferences, privileges and
restrictions specified herein. Each share of Series A Preferred shall have a
stated value of $0.50 (the "STATED VALUE") and all shares of Series A Preferred
shall have an aggregate Stated Value of $300,000.
2. RANK.
The Series A Preferred shall rank prior to any other capital stock of the
Corporation, unless holders of two-thirds (66 2/3%) of the Series A Preferred
then outstanding give their written consent to the issuance of capital stock by
the Corporation ranking senior to the Series A Preferred.
3. DIVIDENDS.
If the Corporation shall at any time or from time to time after the date
the first share of Series A Preferred is issued (the "ORIGINAL ISSUE DATE")
declare, order, pay or make a dividend or other distribution (including, without
limitation, any distribution of stock or other securities or property or rights
of warrants to subscribe for securities of the Corporation or any of its
subsidiaries by way of dividend or spin-off) on shares of the Common Stock,
then, and in each such case, the Corporation shall declare, order, pay and make
the same dividend or distribution to each holder of record of Series A Preferred
as would have been made with respect to the number of shares of Common Stock the
holder would have received had it converted all of its Series A Preferred
Shares.
4. LIQUIDATION PREFERENCE.
In the event of a liquidation or dissolution and winding up of the
Corporation, whether voluntary or involuntary, the holders of record of the
Series A Preferred shall be entitled to receive ratably in full, out of lawfully
available assets of the Corporation, whether such assets are stated capital or
surplus of any nature, an amount in cash per outstanding share of Series A
Preferred equal to the sum of the Stated Value and all accrued and unpaid
dividends thereon, as of the date of final distribution hereunder to such
holders, before any payment shall be made or any assets distributed to the
holders of the Common Stock or other capital stock of the Corporation ranking
junior as to liquidation to the Series A Preferred. If, upon any liquidation,
dissolution and winding up, the amount available for such payment to the holders
of Series A Preferred shall not be sufficient to pay in full the amounts payable
on the Series A Preferred, the holders of the Series A Preferred, and any other
class or series of the Corporation's capital stock which may hereafter be
created having parity as to liquidation rights with the Series A Preferred,
shall share in the distribution of the amount available in proportion to the
respective preferential amounts to which each is entitled.
5. VOTING RIGHTS.
Each share of Series A Preferred shall entitle the holder thereof to such
number of votes per share, on matters requiring the vote or consent of the
holders of shares of the Common
A-2
Stock, as shall equal the number of shares of Common Stock into which each share
of Series A Preferred is convertible at the record date for the determination of
stockholders entitled to vote on such matters or, if no such record date is
established, at the date such vote is taken or any written consent of
stockholders is solicited. The holders of shares of Series A Preferred and the
holders of Common Stock shall vote as one class on all matters requiring the
vote or consent of the holders of Common Stock. In addition, the holders of
Series A Preferred shall have one vote per share of Series A Preferred when
voting separately as a class on all matters requiring the consent of the Series
A Preferred.
6. CONVERSION RIGHTS.
(a) Each share of Series A Preferred shall be convertible, at the
option of the holder of record thereof, into the number of fully paid and
nonassessable shares of Common Stock specified in Section 6 (b) (the "
CONVERSION AMOUNT").
(b) The Conversion Amount for each share of Series A Preferred shall
be determined as follows:
(i) Using a divisor of 0.10, divide the sum of (x) the number of
shares of Common Stock outstanding, as of the Original Issue Date, and
(y) the number of shares of Common Stock that would be issuable, as of
the Original Issue Date, as a result of the exercise or conversion, as
of the Original Issue Date, of all outstanding, as of the Original
Issue Date, warrants, options, convertible securities and other rights
of any kind entitling the holder to acquire, at any time, shares of
Common Stock from the Corporation; then
(ii) Divide the quotient obtained in the immediately preceding
clause (i) by 600,000.
(c) In order to exercise the conversion rights set forth in Section
6(a), a holder of record of Series A Preferred shall surrender the
certificate(s) representing such shares, duly endorsed to the Corporation or in
blank, at the principal office of the Corporation or the Corporation's transfer
agent for its Common Stock, or at such other office as the Corporation may
designate, and shall give written notice to the Corporation, in form reasonably
satisfactory to the Corporation, that states such holder elects to convert the
Series A Preferred or a specified portion thereof, and sets forth the name or
names in which the certificate or certificates for shares of Common Stock are to
be issued (the "CONVERSION Notice"); PROVIDED, HOWEVER, that nothing in this
Certificate of Determination shall be deemed to permit any holder of Series A
Preferred to designate another person to be the holder of Common Stock issuable
upon conversion of Series A Preferred if the issuance to such other person would
violate Federal or state securities laws or any agreement a holder of Series A
Preferred has with the Corporation regarding restrictions on transferability of
any securities of the Corporation held by such holder. Within five business days
after the Corporation receives the Conversion Notice, the certificate or
certificates representing the Series A Preferred being converted and payment by
the holder of any applicable transfer or similar taxes, the Corporation shall
issue and deliver (i) a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, in the name or names and
A-3
to the address or addresses specified in the Conversion Notice, subject to any
restrictions on transferability, and (ii) a check in payment for any fractional
shares pursuant to Section 10. At the close of business on the date on which the
Corporation received the Conversion Notice, the holder of the shares of
converted Series A Preferred shall cease to be a stockholder with respect
thereto and all rights whatsoever with respect to such shares shall terminate
(except the rights of the holder to receive shares of Common Stock and cash in
respect of fractional shares), and the person or persons in whose name any
certificate(s) for Common Stock are issuable upon such conversion shall be
deemed to have become the holder of record of the shares represented thereby.
(d) The Corporation shall cancel the certificates for Series A
Preferred upon the surrender thereof and shall execute and deliver a new
certificate for Series A Preferred representing the balance, if any, of the
number of shares evidenced by such certificates not so converted. Each
Conversion Notice shall constitute a contract between the holder of shares of
Series A Preferred and the Corporation whereby the holder of such shares shall
be deemed to subscribe for the amount of Common Stock which such holder shall be
entitled to receive upon such conversion and whereby the Corporation shall be
deemed to agree that the surrender of the certificate(s) therefor shall
constitute full payment of such subscription for Common Stock to be issued upon
such conversion.
(e) If for any reason it is subsequently determined that the number of
shares issued upon conversion of Series A Preferred is less than it should have
been, the Corporation shall promptly make up this deficiency by issuing
additional shares of Common Stock.
7. ADJUSTMENT OF CONVERSION AMOUNT.
(a) In the event the Corporation (i) subdivides the outstanding shares
of Common Stock into a larger number of shares, (ii) combines the outstanding
shares of Common Stock into a smaller number of shares, or (iii) issues by
reclassification of the Common Stock any shares of its capital stock (each a
"CAPITAL EVENT"), then the Conversion Amount in effect on the record date for
such subdivision, combination or reclassification shall be proportionately
adjusted so that the record holder of any shares of Series A Preferred converted
after such date shall be entitled to receive the kind and amount of shares which
such holder would have owned or have been entitled to receive had such shares of
Series A Preferred been converted immediately prior to such date. Such
adjustments shall be made successively whenever any Capital Event shall occur.
If, as a result of an adjustment made hereunder, the holder of any shares of
Series A Preferred shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Corporation, the Board shall determine the allocation of the adjusted
Conversion Amount between shares of such classes of capital stock or shares of
Common Stock and other capital stock.
(b) After each adjustment of the Conversion Amount pursuant to this
Section 7, the Corporation will promptly prepare a certificate signed by the
Chief Financial Officer of the Corporation setting forth the Conversion Amount
as so adjusted, and a brief statement of the facts accounting for such
adjustment. The Company will promptly cause a brief summary thereof to be sent
by ordinary first class mail to each record holder of Series A
A-4
Preferred at such holder's last address as it shall appear on the registry books
of the Corporation or its transfer agent, unless the Corporation reasonably
believes a holder of Series A Preferred has actual notice of the adjusted
Conversion Amount and the facts accounting for such adjustment. No failure to
mail such notice nor any defect therein or in the mailing thereof shall affect
the validity thereof except to the extent a holder of Series A Preferred shall
have suffered actual damages as a result thereof. The affidavit of the Secretary
or an Assistant Secretary of the Corporation that such notice has been mailed
shall, in the absence of fraud, be prima facie evidence of the facts stated
therein.
(c) As used in this Section 7, the term "Common Stock" shall mean and
include the Corporation's Common Stock authorized on the Original Issue Date and
shall also include any capital stock of any class of the Corporation thereafter
authorized which shall not be limited to a fixed sum or percentage in respect of
the rights of the holders thereof to participate in dividends and in the
distribution of assets upon the voluntary liquidation, dissolution or winding up
of the Corporation; PROVIDED, HOWEVER, that the shares issuable upon conversion
of the Series A Preferred shall include only shares of such class designated in
the Corporation's Articles of Incorporation as Common Stock on the Original
Issue Date or, in the case of any reclassification of the character referred to
in Section 7(a), such shares of Common Stock as so reclassified or changed.
(d) Any determination as to whether an adjustment in the Conversion
Amount in effect is required pursuant to this Section 7, or as to the amount of
any such adjustment, if required, shall be binding upon the holders of the
Series A Preferred and the Corporation if made by the Board.
8. RESERVATION OF SHARES; PAYMENT OF TAXES.
(a) The Corporation covenants that it will promptly amend its Articles
of Incorporation to provide for a sufficient number of authorized shares of
Common Stock for conversion of the Series A Preferred and will, thereafter, at
all times reserve and keep available out of its authorized Common Stock, solely
for the purpose of issue upon conversion the Series A Preferred, such number of
shares of Common Stock as shall be issuable upon the conversion of all
outstanding Series A Preferred. The Corporation covenants that all shares of
Common Stock which shall be issuable upon conversion of the Series A Preferred
shall, at the time of delivery, be duly and validly issued, fully paid,
nonassessable and free from all taxes, liens and charges with respect to the
issue thereof (other than those which the Corporation shall promptly pay or
discharge), subject to Section 8 (b).
(b) The Corporation shall pay all documentary, stamp or similar taxes
or other governmental charges that may be imposed with respect to the issuance
of the Series A Preferred, or the issuance or delivery of any shares of Common
Stock upon conversion of the Series A Preferred; PROVIDED, HOWEVER, that, if the
shares of Common Stock are to be delivered in a name other than the name of the
holder of record of the certificate representing any Series A Preferred being
converted, then no such delivery shall be made unless the person requesting the
same had paid to the Corporation the amount of transfer taxes or charges
incident thereto, if any.
A-5
9. STATUS OF REACQUIRED SHARES.
The shares of Series A Preferred which have been issued and reacquired in
any manner by the Corporation shall have the status of authorized and unissued
shares of Preferred Stock and may be reclassified and reissued as a part of a
new series of Preferred Stock to be created by resolution or resolutions of the
Board.
10. NO FRACTIONAL SHARES.
The Corporation shall not issue fractional shares of Common Stock upon any
conversion of Series A Preferred but shall pay, in lieu thereof, an amount in
cash as the Board shall determine.
11. DETERMINATION OF THE BOARD.
Whenever any provision hereof requires a determination to be made by the
Board, such determination shall be conclusive, if made in good faith, and shall
be set forth in a Board resolution.
12. NOTICES.
Any notice required by any provision hereof to be given to the holders of
Series A Preferred shall be deemed given on the third business day after
mailing, first class mail, postage prepaid, or on the day of delivery if sent by
overnight courier, receipt confirmed, in each instance in an envelope address to
each holder of record of Series A Preferred at such holder's address appearing
on the books of the Corporation.
RESOLVED, FURTHER, that the President and the Secretary of the Corporation
are each hereby authorized and directed to prepare and file a Certificate of
Determination in accordance with this resolution and as required by law.
A-6
<
CERTIFICATE OF DETERMINATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
CHILDREN'S WONDERLAND, INC.
John Clarke and Robert Wilson certify that:
1. John Clarke is the Chief Executive Officer and Robert Wilson is the
Secretary of Children's Wonderland, Inc. (hereinafter called the "Corporation"),
a corporation organized and existing under and by virtue of the provisions of
the laws of the State of California.
2. The authorized number of shares of the Corporation's Preferred Stock
is 5,000,000 and the number of shares constituting Series B Convertible
Preferred Stock (that is the series affected by this Certificate of
Determination) is 900,000. None of the shares of that series has been issued.
The Corporation has issued and outstanding 600,000 shares of its Series A
Convertible Preferred Stock.
3. Pursuant to authority granted by the Corporation's Restated Articles
of Incorporation, the resolutions set forth in Exhibit "A" attached hereto have
been duly adopted and approved by the Board of Directors of the Corporation and
the holders of all of the outstanding shares of the Corporation's Series A
Convertible Preferred Stock. No other shareholder approval is required.
4. We further declare, under penalty of perjury, that the matters set
forth in this Certificate are true and correct of our own knowledge.
Executed in the City of Agoura, State of California, on this 22nd day of
June, 2000.
/s/ /s/
------------------------------------ ---------------------------------
John Clarke, Chief Executive Officer Robert Wilson, Secretary
EXHIBIT "A"
TO
CERTIFICATE OF DETERMINATION
OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
CHILDREN'S WONDERLAND, INC.
Pursuant to authority conferred upon the Board of Directors (the "BOARD")
of Children's Wonderland, Inc., a California corporation (the "Corporation"), by
the Restated Articles of Incorporation of the Corporation (the "ARTICLES OF
INCORPORATION") and Section 401 of the California General Corporation Law, the
Board has duly adopted the following resolutions:
WHEREAS, 600,000 shares of the Corporation's Series A Convertible Preferred
Stock ("Series A Preferred") are issued and outstanding; and
WHEREAS, the Board desires to authorize a new series of Preferred Stock,
all as authorized by the Corporation's Articles of Incorporation.
NOW, THEREFORE, it is
RESOLVED, that, pursuant to Article Six of the Articles of Incorporation
(which authorizes five million (5,000,000) shares of Preferred Stock with no par
value), the Board hereby fixes and determines the designation of, the number of
shares constituting, and the rights, preferences, privileges, and restrictions
relating to, a series of Preferred Stock, as follows:
1. DESIGNATION; AMOUNT; STATED VALUE.
From the Corporation's 5,000,000 authorized shares of Preferred Stock, no
par value, 900,000 shares are hereby designated Series B Convertible Preferred
Stock ("SERIES B PREFERRED") with the rights, preferences, privileges and
restrictions specified herein. Each share of Series B Preferred shall have a
stated value of $10.00 (the "STATED VALUE") and all shares of Series B Preferred
shall have an aggregate Stated Value of $9,000,000.
2. RANK.
The Series A Preferred shall rank prior to the Series B Preferred. The
Series B Preferred shall rank prior to any other capital stock of the
Corporation other than the Series A Preferred, provided, however, that the Board
may designate one or more new series of Preferred
Stock ("New Preferred Stock"), without the consent of the holders of the Series
B Preferred, which shall rank prior to the Series B Preferred and which may have
rights and powers superior to those of the Series B Preferred.
3. DIVIDENDS.
If the Corporation shall at any time or from time to time after the date
the first share of Series B Preferred is issued (the "ORIGINAL ISSUE DATE")
declare, order, pay or make a dividend or other distribution (including, without
limitation, any distribution of stock or other securities or property or rights
or warrants to subscribe for securities of the Corporation or any of its
subsidiaries by way of dividend or spin-off) on shares of the Corporation's no
par value Common Stock ("Common Stock"), then, and in each such case, the
Corporation shall declare, order, pay and make the same dividend or distribution
to each holder of record of Series B Preferred as would have been made with
respect to the number of shares of Common Stock the holder would have received
had all of its Series B Preferred shares been converted.
4. LIQUIDATION PREFERENCE.
In the event of a liquidation or dissolution and winding up of the
Corporation, whether voluntary or involuntary, the assets of the Corporation
shall be distributed first to the holders of record of the Series A Preferred in
the amount to which they are entitled, and then to the holders of the New
Preferred Stock, if any, and then to the holders of record of the Series B
Preferred, who shall be entitled to receive ratably in full, out of the
remaining and lawfully available assets of the Corporation, whether such assets
are stated capital or surplus of any nature, an amount in cash per outstanding
share of Series B Preferred equal to the sum of the Stated Value and all accrued
and unpaid dividends thereon, as of the date of final distribution hereunder to
such holders of the Series B Preferred, and then to the holders of the Common
Stock or other capital stock of the Corporation ranking junior as to liquidation
to the Series B Preferred. If, upon any liquidation, dissolution and winding up,
the amount available for such payment to the holders of Series B Preferred shall
not be sufficient to pay in full the amounts payable on the Series B Preferred,
the holders of the Series B Preferred, and any other class or series of the
Corporation's capital stock which may hereafter be created having parity as to
liquidation rights with the Series B Preferred, shall share in the distribution
of the amount available in proportion to the respective preferential amounts to
which each is entitled.
5. VOTING RIGHTS.
Each share of Series B Preferred shall entitle the holder thereof to such
number of votes per share, on matters requiring the vote or consent of the
holders of shares of the Common Stock, as shall equal the number of shares of
Common Stock into which each share of Series B Preferred is convertible at the
record date for the determination of stockholders entitled to vote on such
matters or, if no such record date is established, at the date such vote is
taken or any written consent of stockholders is solicited. In addition, the
holders of Series B Preferred shall have one vote per share of Series B
Preferred when voting separately as a class on all matters requiring the consent
of the Series B Preferred.
2
6. CONVERSION.
(a) Each share of Series B Preferred will automatically be converted
into the number of fully paid and nonassessable shares of Common Stock specified
in Section 6(b) (the "CONVERSION AMOUNT") effective on the later of (i) January
1, 2001 or (ii) the date on which a sufficient number of shares of Common Stock
is authorized under the Corporation's Restated Articles of Incorporation to
permit the conversion into Common Stock of all of the Corporation's then
outstanding convertible securities.
(b) The Conversion Amount for each share of Series B Preferred shall
be equal to $10.00 divided by 85% of the average of the per share closing bid
and asked prices (or, if such prices are not available, then the last sale
price) for the Common Stock during the five (5) days in which trading has
occurred immediately preceding the date (the "CONVERSION DATE") as of which the
Series B Preferred is deemed to be converted into Common Stock (the "CONVERSION
PRICE"). In the event the Common Stock is not being publicly traded as of the
Conversion Date, a fair market value of the Common Stock, as determined in good
faith by the Board, shall be applied in lieu of the average of the closing bid
and asked prices for the Common Stock.
(c) Prior to the fifth (5th) day following the Conversion Date, the
Corporation shall mail to the holders of the Series B Preferred a notice stating
the Conversion Price and the date as of which the Series B Preferred was deemed
to be redeemed and converted into Common Stock. Nothing in this Certificate of
Determination shall be deemed to permit any holder of Series B Preferred to
designate another person to be the holder of Common Stock issuable upon
conversion of Series B Preferred if the issuance to such other person would
violate Federal or state securities laws or any agreement a holder of Series B
Preferred has with the Corporation regarding restrictions on transferability of
any securities of the Corporation held by such holder. Within ten (10) business
days after the Conversion Date, the Corporation shall issue and deliver (i) a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, in the name or names of the holder and to the last
address or addresses in the records of the Corporation, and (ii) a check in
payment for any fractional shares pursuant to Section 10. At the close of
business on the Conversion Date, the holder of the shares of converted Series B
Preferred shall cease to be a stockholder with respect thereto and all rights
whatsoever with respect to such shares shall terminate (except the rights of the
holder to receive shares of Common Stock and cash in respect of fractional
shares), and the person or persons in whose name any certificate(s) for Common
Stock are issuable upon such conversion shall be deemed to have become the
holder of record of the shares represented thereby.
(d) The outstanding certificates for Series B Preferred shall be
deemed to be converted and cancelled as of the Conversion Date and actual
delivery to the Corporation of the certificates representing the Series B
Preferred shall not be a condition thereof.
(e) If for any reason it is subsequently determined that the number of
shares issued upon conversion of Series B Preferred is less than it should have
been, the Corporation shall promptly make up this deficiency by issuing
additional shares of Common Stock.
3
7. ADJUSTMENT OF CONVERSION AMOUNT.
(a) In the event the Corporation (i) subdivides the outstanding shares
of Common Stock into a larger number of shares, (ii) combines the outstanding
shares of Common Stock into a smaller number of shares, or (iii) issues by
reclassification of the Common Stock any shares of its capital stock (each a
"CAPITAL EVENT"), then the Conversion Amount in effect on the record date for
such subdivision, combination or reclassification shall be proportionately
adjusted so that the record holder of any shares of Series B Preferred converted
after such date shall be entitled to receive the kind and amount of shares which
such holder would have owned or have been entitled to receive had such shares of
Series B Preferred been converted immediately prior to such date. Such
adjustments shall be made successively whenever any Capital Event shall occur.
If, as a result of an adjustment made hereunder, the holder of any shares of
Series B Preferred shall become entitled to receive shares of two or more
classes of capital stock or shares of Common Stock and other capital stock of
the Corporation, the Board shall determine the allocation of the adjusted
Conversion Amount between shares of such classes of capital stock or shares of
Common Stock and other capital stock.
(b) After each adjustment of the Conversion Amount pursuant to this
Section 7, the Corporation will promptly prepare a certificate signed by the
Chief Financial Officer of the Corporation setting forth the Conversion Amount
as so adjusted, and a brief statement of the facts accounting for such
adjustment. The Company will promptly cause a brief summary thereof to be sent
by ordinary first class mail to each record holder of Series B Preferred at such
holder's last address as it shall appear on the registry books of the
Corporation or its transfer agent, unless the Corporation reasonably believes a
holder of Series B Preferred has actual notice of the adjusted Conversion Amount
and the facts accounting for such adjustment. No failure to mail such notice nor
any defect therein or in the mailing thereof shall affect the validity thereof
except to the extent a holder of Series B Preferred shall have suffered actual
damages as a result thereof. The affidavit of the Secretary or an Assistant
Secretary of the Corporation that such notice has been mailed shall, in the
absence of fraud, be prima facie evidence of the facts stated therein.
(c) As used in this Section 7, the term "Common Stock" shall mean and
include the Corporation's Common Stock authorized on the Original Issue Date and
shall also include any capital stock of any class of the Corporation thereafter
authorized which shall not be designated a series of Preferred Stock or limited
to a fixed sum or percentage in respect of the rights of the holders thereof to
participate in dividends and in the distribution of assets upon the voluntary
liquidation, dissolution or winding up of the Corporation; PROVIDED, HOWEVER,
that the shares issuable upon conversion of the Series B Preferred shall include
only shares of such class designated in the Corporation's Articles of
Incorporation as Common Stock on the Original Issue Date or, in the case of any
reclassification of the character referred to in Section 7(a), such shares of
Common Stock as so reclassified or changed.
(d) Any determination as to whether an adjustment in the Conversion
Amount in effect is required pursuant to this Section 7, or as to the amount of
any such adjustment, if required, shall be binding upon the holders of the
Series B Preferred and the Corporation if made by the Board.
4
8. RESERVATION OF SHARES; PAYMENT OF TAXES.
(a) The Corporation covenants that it will use commercially reasonable
efforts to amend its Articles of Incorporation to provide for a sufficient
number of authorized shares of Common Stock for conversion of the Series B
Preferred and will, thereafter, at all times use commercially reasonable efforts
to reserve and keep available out of its authorized Common Stock, solely for the
purpose of issue upon conversion the Series B Preferred, such number of shares
of Common Stock as shall be issuable upon the conversion of all outstanding
Series B Preferred. The Corporation covenants that all shares of Common Stock
which shall be issuable upon conversion of the Series B Preferred shall, at the
time of delivery, be duly and validly issued, fully paid, nonassessable and free
from all taxes, liens and charges with respect to the issue thereof (other than
those which the Corporation shall promptly pay or discharge), subject to Section
8 (b).
(b) The Corporation shall pay all documentary, stamp or similar taxes
or other governmental charges that may be imposed with respect to the issuance
of the Series B Preferred, or the issuance or delivery of any shares of Common
Stock upon conversion of the Series B Preferred; PROVIDED, HOWEVER, that, if the
shares of Common Stock are to be delivered in a name other than the name of the
holder of record of the certificate representing any Series B Preferred being
converted, then no such delivery shall be made unless the person requesting the
same had paid to the Corporation the amount of transfer taxes or charges
incident thereto, if any.
9. STATUS OF REACQUIRED SHARES.
The shares of Series B Preferred which have been issued and reacquired in
any manner by the Corporation shall have the status of authorized and unissued
shares of Preferred Stock and may be reclassified and reissued as a part of a
new series of Preferred Stock to be created by resolution or resolutions of the
Board.
10. NO FRACTIONAL SHARES.
The Corporation shall not issue fractional shares of Common Stock upon any
conversion of Series B Preferred but shall pay, in lieu thereof, an amount in
cash as the Board shall determine.
11. DETERMINATION OF THE BOARD.
Whenever any provision hereof requires a determination to be made by the
Board, such determination shall be conclusive, if made in good faith, and shall
be set forth in a Board resolution.
12. NOTICES.
Any notice required by any provision hereof to be given to the holders of
Series B Preferred shall be deemed given on the third business day after
mailing, first class mail, postage prepaid, or on the day of delivery if sent by
overnight courier, receipt confirmed, in each instance in an envelope address to
each holder of record of Series B Preferred at such holder's address appearing
on the books of the Corporation.
5
RESOLVED, FURTHER, that the President and the Secretary of the Corporation
are each hereby authorized and directed to prepare and file a Certificate of
Determination in accordance with this resolution and as required by law.
6
Dates Referenced Herein
| Referenced-On Page |
|---|
| This ‘10KSB’ Filing | | Date | | First | | Last | | | Other Filings |
|---|
| |  |
| Filed on: | | 8/17/01 | | | | | | | None on these Dates |
| | 1/1/01 | | 15 |
| For Period End: | | 6/30/00 |
| | 12/5/95 | | 4 |
| | 11/15/93 | | 2 |
| List all Filings |
↑Top
Filing Submission 0001017386-01-500067 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Sun., Apr. 28, 4:36:38.1pm ET 