CERTIFICATE OF INCORPORATION
OF
DECOR GROUP, INC.
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FIRST: The name of the corporation (hereinafter called the "Company") is
DECOR GROUP, INC.
SECOND: The address, including street, number, city, and county, of the
registered office of the corporation in the State of Delaware is 32 Loockerman
Square, Suite L-100, City of Dover, County of Kent; and the name of the
registered agent of the corporation in the State of Delaware is The
Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the Company is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.
FOURTH: The total number of shares of stock which the Corporation shall
have authority to issue is 55,000,000, 20,000,000 of which are common shares,
par value $.0001 per share, and 35,000,000 of which are preferred shares, par
value $.0001 per share. Of the 35,000,000 preferred shares, (i) 5,000,000 shall
be designated as shares of "Series A Convertible Preferred Stock", par value
$.0001 per share, and (ii) 20,000,000 shall be designated as "Series B
Non-Convertible Preferred Stock", par value $.0001 per share.
The shares of Preferred Stock may be issued from time to time in one or
more series, in any manner permitted by law, as determined from time to time by
the Board of Directors, and stated in the resolution or resolutions providing
for the issuance of such shares adopted by the Board of Directors pursuant to
authority hereby vested in it. Without limiting the generality of the foregoing,
shares in such series shall have such voting powers, full or limited, or no
voting powers, and shall have such designations, preferences, and relative,
participating, optional, or other special rights, and qualifications,
limitations, or restrictions thereof, permitted by law, as shall be stated in
the resolution or resolutions providing for the issuances of such shares adopted
by the Board of Directors pursuant to authority hereby vested in it. The number
of shares of any
such series so set forth in such resolution or resolutions may be increased (but
not above the total number of authorized shares of Preferred Stock) or decreased
(but not below the number of shares thereof then outstanding) by further
resolution or resolutions adopted by the Board of Directors pursuant to
authority hereby vested in it.
FIFTH: The shares of Series A Convertible Preferred Stock (the "Series A
Preferred Stock") shall have the powers, preferences and rights as set forth
below:
1. Dividends
Each issued and outstanding share of Series A Preferred Stock of the
Company shall entitle the holder of record to dividends when and as declared by
the Board of Directors.
2. Voting
The holders of Series A Preferred Stock shall not have the right to vote on
matters presented to the stockholders of the Company, except as provided by the
General Corporation Law of the State of Delaware.
3. Rights on Liquidation, Dissolution or Winding Up
In the event of any liquidation, dissolution, or winding up of the affairs
of the Company, whether voluntary or involuntary, each issued and outstanding
share of Series A Preferred Stock shall entitle the holder of record thereof to
payment at the rate of $.01 dollars per share, plus an amount equal to all
accrued and unpaid annual dividends, if any, before any payment or distribution
of the net assets of the Company (whether stated capital or surplus) shall be
made to or set apart for the holders of record of the issued and outstanding of
any other shares of preferred stock and shares of Common Stock ("Junior
Securities"). After setting apart or paying in full the preferential amounts
aforesaid to the holders of record of the issued and outstanding Series A
Preferred Stock, the remaining net assets (whether stated capital or surplus),
if any, shall be distributed exclusively to the holders of record of the issued
and outstanding Junior Securities, each issued and outstanding Junior Security
entitling the holder of record thereof to receive an equal proportion of said
remaining net assets relative to all other holders of any class or type of
Junior Security. If the net assets of the Company shall be insufficient to pay
in full the preferential amounts among the holders of the Series A Preferred
Stock, the holders of Series A Preferred Stock shall be entitled to a ratable
proportion of said net assets, and the holders of the Junior Securities shall in
no event be entitled to participate in the distribution of said net assets in
respect to their Junior Securities. Without excluding any other proceeding which
does not in fact effect a liquidation, dissolution, or winding up of the
Company, a merger
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or consideration of the Company into or with any other corporation, a merger of
any other corporation into the Company, participation by the Company in a plan
for share exchanges with any other corporation, or a sale, lease, mortgage,
pledge, exchange, transfer or other disposition by the Company of all or
substantially all of its assets shall not be deemed, for the purposes of this
paragraph, to be a liquidation, dissolution, or winding up of the Company,
provided that in each case, effective provision is made by the resulting and
surviving corporation or otherwise for the protection of the rights of the
holders of the Series A Preferred Stock.
4. Conversion
(a) Shares of the Series A Preferred Stock of the Company shall be
convertible from time to time, subject to adjustment, at the option of the
holders of record thereof into fully paid and nonassessable shares of Common
Stock of the Company upon surrender to the Company or its designee of the
certificate or certificates representing the share or shares of Series A
Preferred Stock to be converted, together with a written notice of election to
convert; and, upon receipt by the Company or its designee of such notice and of
such surrendered certificate or certificates with any appropriate endorsement
thereon, as may be prescribed by the Board of Directors, any such holder shall
be entitled to receive a certificate or certificates representing the shares of
Common Stock into which such share or shares of Series A Preferred Stock is
convertible, and any such holder shall be deemed to be a holder of record of
said share of Common Stock as of the time of said receipt by the Company or its
designee. Each share of Series A Preferred Stock shall be convertible into one
(1) share of the Company's Common Stock subject to adjustment in accordance with
Sections 4(c), (d) and (e) below.
(b) In connection with effecting any transfer to the Company for
cancellation of any Series A Preferred Stock upon conversion of the same into
shares of Common Stock, the Company may, but shall not be obliged to, issue a
certificate or certificates for fractions of a share of Common Stock. Any Series
A Preferred Stock which have been converted shall be canceled and shall be
restored to the status of authorized but unissued preferred shares.
(c) Whenever the Company shall (i) pay a dividend in shares of Common Stock
to holders of Common Stock or a dividend to holders of Common Stock payable in
shares of the Company's capital stock other than shares of Common Stock, (ii)
subdivide or combine outstanding shares of Common Stock, (iii) issue to all
holders of shares of Common Stock, rights, warrants or options entitling them
for a period of not more than forty-five (45) days to purchase shares of Common
Stock (or securities convertible into shares of Common Stock) at a price per
share (or having a conversion price per share) less than the then current per
share market price for such shares of Common Stock, (iv) distribute to all
holders of shares of Common Stock evidences of indebtedness or assets
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(excluding cash dividends) or rights or warrants (other than those referred to
above) or, (v) take or permit to be taken any other action which will result in
the dilution of the conversion rights and privileges of the Series A Preferred
Stock, then the Board of Directors of the Company shall forthwith cause to be
made any such adjustment on the basis of conversion as it shall determine to be
necessary to preserve to said holders of the Series A Preferred Stock those
rights and privileges which are substantially proportionate to the rights and
privileges of the Series A Preferred Stock existing prior to said event or
events, and an appropriate adjustment shall be made with respect to the
conversion rate of the Series A Preferred Stock such that the percentage
interests of shares of Common Stock of the Company that a holder of Series A
Preferred Stock would own upon the conversion of Series A Preferred Stock
subsequent to the occurrence of any of the events set forth in (i) - (v)
preceding shall be identical as if any such event shall not have occurred. No
adjustment of the conversion rate will be required until cumulative adjustments
would require any increase or decrease of at least 1% in the number of shares of
Common Stock into which each share of Series A Preferred Stock is then
convertible. No adjustment of the conversion rate will be made for cash
distributions or cash dividends.
(d) In case of any consolidation or merger to which the Company is a party
other than a merger or consolidation in which the Company is the surviving
corporation, in case of any statutory exchange of securities with another
corporation, or in case of any sale or conveyance to another corporation of all
or substantially all of the assets of the Company, there will be no adjustment
of the conversion rate of the Series A Preferred Stock but each holder of a
share of Series A Preferred Stock then outstanding will have the right
thereafter to convert such share of Series A Preferred Stock solely into the
kind and amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance by a holder of the
number of shares of Common Stock into which each such share of Series A
Preferred Stock might have been converted immediately prior to such
consolidation, merger, statutory exchange, sale or conveyance, assuming such
holder of shares of Common Stock failed to exercise his rights of election, if
any, as to the kind or amount of securities, cash or other property receivable
upon such consolidation, merger, statutory exchange, sale or conveyance
(provided, that if the kind or amount of securities, cash or other property
receivable upon such consolidation, merger, statutory exchange, sale or
conveyance for each non-electing share shall be deemed to be the kind and amount
so receivable per share by plurity of the non-electing share).
(e) In the case of a cash merger of the Company into another corporation or
any other cash transaction of the type mentioned above, the effect of these
provisions would be that the conversion features of the Series A Preferred Stock
would thereafter be limited to converting the Series A Preferred Stock at the
conversion rate in effect at such time into the same amount of cash per share
that
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such holder would have received had such holder converted the Series A Preferred
Stock into Common Stock immediately prior to the effective date of such cash
merger or transaction. Depending upon the terms of such cash merger or
transaction, the aggregate amount of cash so received on conversion could be
more or less than the liquidation preference of the Series A Preferred Stock.
The Company has the option, exercisable at any time, to increase the conversion
rate, so long as such increase is for a minimum period of twenty (20) days and
is irrevocable during such period and the Company notifies holders of Series A
Preferred Stock at least fifteen (15) days prior to the date on which the
reduced conversion price takes effect.
5. Rank of Series A Preferred Stock
The Series A Preferred Stock shall rank senior to all Junior Securities.
SIXTH: The shares of Series B Non-Convertible Preferred Stock (the "Series
B Preferred Stock") shall have the powers, preferences and rights as set forth
below:
1. Dividends
Each issued and outstanding share of Series B Preferred Stock of the
Company shall entitle the holder of record to dividends when and as declared by
the Board of Directors.
2. Voting
The holders of Series B Preferred Shares shall have the right to vote on
matters presented to the stockholders of the Company (including the holders of
Common Stock), each share of Series B Preferred Stock to have the voting power
of one (1) share of Common Stock.
3. Rights on Liquidation, Dissolution or Winding Up
In the event of any liquidation, dissolution, or winding up of the affairs
of the Company, whether voluntary or involuntary, each issued and outstanding
share of Series B Preferred Stock shall entitle the holder of record thereof to
payment at the rate of $.001 dollars per share, plus an amount equal to all
accrued and unpaid annual dividends, if any, before any payment or distribution
of the net assets of the Company (whether stated capital or surplus) shall be
made to or set apart for the holders of record of the issued and outstanding of
any shares of Common Stock. After setting apart or paying in full the
preferential amounts aforesaid to the holders of record of the issued and
outstanding Series A Preferred Stock, the remaining net assets (whether stated
capital or surplus), if any, shall be distributed to the holders of record of
the issued and outstanding Series B
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Preferred Stock. If the net assets of the Company shall be insufficient to pay
in full the preferential amounts among the holders of the Series B Preferred
Stock, the holders of Series B Preferred Stock shall be entitled to a ratable
proportion of said net assets, and the holders of the Common Stock shall in no
event be entitled to participate in the distribution of said net assets in
respect to their shares. Without excluding any other proceeding which does not
in fact effect a liquidation, dissolution, or winding up of the Company, a
merger or consideration of the Company into or with any other corporation, a
merger of any other corporation into the Company, participation by the Company
in a plan for share exchanges with any other corporation, or a sale, lease,
mortgage, pledge, exchange, transfer or other disposition by the Company of all
or substantially all of its assets shall not be deemed, for the purposes of this
paragraph, to be a liquidation, dissolution, or winding up of the Company,
provided that in each case, effective provision is made by the resulting and
surviving corporation or otherwise for the protection of the rights of the
holders of the Series B Preferred Stock.
4. Conversion
(a) Shares of the Series B Preferred Stock of the Company shall not be
convertible into shares of Common Stock.
5. Rank of Series B Preferred Stock
The Series B Preferred Stock shall rank junior to the Series A Preferred
Stock and senior to all shares of Common Stock.
SEVENTH: Whenever a compromise or arrangement is proposed between the
Company and its creditors or any class of them and/or between the Company and
its stockholders or any class of the, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of the Company or
of any creditor or stockholder thereof or on the application of any receiver or
receivers appointed for the Company under the provisions of Section 291 of Title
8 of the Delaware Code or on the application of trustees in dissolution or of
any receiver or receivers appointed for the Company under the provisions of
Section 297 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Company, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Company, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Company as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of
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creditors, and/or on all the stockholders or class of stockholders, of the
Company, as the case may be, and also on the Company.
EIGHTH: For the management of the business and for the conduct of the
affairs of the corporation, and in further definition, limitation and regulation
of the powers of the corporation and of its directors an of its stockholders or
any class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of
the Company shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be
fixed by, or in the manner provided in, the By-Laws. The phrase "whole
Board" and the phrase "total number of directors" shall be deemed to have
the same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of directors
need be by written ballot.
2. After the original or other By-Laws of the Company have been
adopted, amended or repealed, as the case may be, in accordance with the
provisions of Section 109 of the General Corporation Law of the State of
Delaware, and, after the Company has received any payment of any of its
stock, the power to adopt, amend, or repeal the By-Laws of the Company may
be exercised by the Board of Directors of the Company; provided, however,
that any provision for the classification of directors of the Company for
staggered terms pursuant to the provisions of subsection (d) of Section 141
of the General Corporation Law of the State of Delaware shall be set forth
in an initial By-Law or in a By-Law adopted by the stockholders entitled to
vote of the Company unless provisions for such classification shall be set
forth in this certificate of incorporation.
3. Whenever the Company shall be authorized to issue only one class of
stock, each outstanding share shall entitle the holder thereof to notice
of, and the right to vote at, any meeting of stockholders. Whenever the
corporation shall be authorized to issue more than one class of stock, no
outstanding share of any class of stock which is denied voting power under
the provisions of the certificate of incorporation shall entitle the holder
thereof to the right to vote at any meeting of stockholders except as the
provisions of paragraph (2) of subsection (b) of section 242 of the General
Corporation Law of the State of Delaware shall otherwise require; provided,
that no share of any such class which is otherwise denied voting power
shall entitle the holder thereof to
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vote upon the increase or decrease in the number of authorized shares of
said class.
NINTH: The personal liability of the directors of the corporation is hereby
eliminated to the fullest extent permitted by the provisions of paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
TENTH: The Company shall, to the fullest extent permitted by the provisions
of Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this certificate of
incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and all
rights at any time conferred upon the stockholders of the corporation by this
certificate of incorporation are granted subject to the provisions of this
Article ELEVENTH.
Signed on March 1, 1996.
_______________________________
Alan Forman, Incorporator
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