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EXHIBIT 4.2
CERTIFICATE OF DESIGNATION
OF
COUNTRY MAID FINANCIAL, INC.
A WASHINGTON CORPORATION
Country Maid Financial, Inc. ("Company"), a corporation organized and existing
under and by virtue of the Washington Business Corporation Act,
DOES HEREBY CERTIFY:
A. That the Board of Directors of the Company, by unanimous vote at a special
meeting of directors, adopted a resolution on April 29, 1999 proposing and
declaring advisable the following:
RESOLVED, that the Board of Directors pursuant to the authority
expressly vested in it by the Articles of Amendment to the Company's
Articles of Incorporation, filed with the Secretary of State on
September 23, 1998, designate 500,000 shares of Convertible Class A
Series I Preferred Stock. The powers, designations, preferences and
rights are as follows:
CLASS A SERIES I PREFERRED
1.0 DIVIDENDS
1.1 The holders of Class A Series I Preferred Stock are entitled to
cumulative dividends from the date of issue, when and if declared by the Board
of Directors, out of profits or capital legally available for that purpose
according to RCW 23B.06.400, at a rate of eight percent (8%) per annum of the
subscription price which is the amount paid by the holder to the Company as
consideration for the certain number of preferred stock received as recognized
by the Board of Directors ("Subscription Price"). The dividend will be payable
monthly beginning thirty days after the first date of issue. The Board of
Directors has no right to declare a dividend to common shareholders or other
securities ranking junior to the Preferred Stock unless all prior dividends on
the Class A Series I Preferred Stock are paid in full. Distribution by the
Company of dividends on capital stock may result in certain tax effects to
shareholders. No right to any dividends shall accrue to holder under this
paragraph in the event the Company shall fail to declare dividends.
2.0 CONVERSION
2.1 The Class A Series I Preferred Stock is convertible at the
option of the holder, but not earlier than twelve (12) months after the date of
the holder's subscription of the Preferred Stock ("Subscription Date"), unless
previously redeemed by the Company, into the nearest whole number of common
stock ("Conversion Shares") the Subscription Price would be able to purchase at
the Company's average common stock price ("Average Stock Price") which will be
equivalent to the mean between the closing bid and asked quotations for the
Company's common stock in the over-the-counter market as quoted on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), or any
other reliable quotation system if the common stock is not listed on NASDAQ, for
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the 60 trading days last preceding the date of conversion.
2.2 Unless the Company, at its election, acts to obtain effectiveness of
a registration statement under the Securities Act covering the Conversion
Shares, the Class A Series I Preferred Stock shall be converted into restricted
common stock as the term "restricted" is defined in Rule 144 under the
Securities Act. The Company has no obligation to register the Conversion Shares.
2.3 Conversion eliminates all rights and preferences resulting from the
Class A Series I Preferred Stock. The Company covenants that the Conversion
Shares, when issued, will be validly issued, fully paid and non-assessable.
2.4 No fractional share of common stock will be issued upon conversion
of the Class A Series I Preferred Stock, but if the conversion results in a
fractional share, the Company will, at its option, either round the fractional
share upward to the next whole integer or pay to the converting holder an
amount, in U.S. funds, not less than the cash conversion value of the fractional
interest.
2.5 In the event the Board of Directors of the Company acts to convert
Class A Series I Preferred Stock, the Company will take all steps reasonably
necessary to permit the conversion of the Class A Series I Preferred Stock and
the issuance of the Conversion Shares under the applicable state securities laws
of those states in which the Class A Series I Preferred Stock is originally
sold. The Company will take any reasonable steps which it determines, in its
sole discretion, are necessary to permit the conversion of the Class A Series I
Preferred Stock and the issuance of the Conversion Shares under the laws of any
other state in which the holder then resides, on the written request to do so by
the holder, but in no event shall the Company be required to consent to the
general service of process in any state other than those states in which the
Class A Series I Preferred Stock being offered is originally sold. If the holder
resides in any state where the Company cannot, with the exercise of reasonable
diligence and without consenting to general service of process, obtain an
exemption for the issuance of the Conversion Shares, the holder may not, as a
result, be able to receive the Conversion Shares in exchange for Class A Series
I Preferred Stock and the Company is under no obligation to issue the Conversion
Shares in those circumstances.
3.0 REDEMPTION
3.1 The Class A Series I Preferred Stock is redeemable at any time at
the option of the Company, in whole or in part, upon payment by the Company, in
its sole discretion, of the redemption price consisting of the Average Stock
Price of the Conversion Shares as described above in paragraph 2.1 plus an
amount equal to all declared and accrued dividends ("Redemption Price"). Upon
notice of redemption, Preferred Stockholders shall have a 30-day period after
delivery of the Company's notice to convert the Preferred Stock into Conversion
Shares.
3.2 No mandatory sinking fund payments or other similar provisions have
been established to redeem the aggregate principal amount of the Class A Series
I Preferred Stock issued, together with dividends, if any.
4.0 LIQUIDATION
4.1 If there is a liquidation of the Company, a holder of Class A Series
I Preferred Stock is entitled to a pro rata liquidation preference in an amount
equal to the Subscription Price plus any accrued dividends to the date of
distribution, before any distribution or payment to the holders of common stock
or any other security ranking junior to this class and series of Class A Series
I Preferred Stock .
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5.0 VOTING
5.1 The Class A Series I Preferred Stock is entitled to one vote per
share together as one class with common shareholders on all matters upon which
common shareholders are entitled to vote.
6.0 MISCELLANEOUS
6.1 There are no restrictions on the Company's ability to sell, lease,
or encumber the assets of the Company. There are no restrictions requiring the
maintenance of any asset ratio or the creation or maintenance of reserves by the
Company. Holders of Class A Series I Preferred Stock have no preemptive rights.
The Class A Series I Preferred Stock, on issuance against full payment of the
purchase price, will be fully paid and nonassessable.
B. That the Board of Directors of the Company, by unanimous vote at a special
meeting of directors, adopted a resolution on April 29, 1999, proposing and
declaring advisable the following:
RESOLVED, that the Board of Directors pursuant to the authority
expressly vested in it by the Certificate of Incorporation, designate
500,000 shares of Convertible Class B Series I Preferred Stock. The
powers, designations, preferences and rights are as follows:
CLASS B SERIES I PREFERRED
1.0 STOCK DIVIDENDS
1.1 The holders of Class B Series I Preferred Stock are entitled to
cumulative stock dividends from the date of issue, at a rate of eight percent
(8.0%) per annum of the Subscription Price, payable quarterly, by the issuance
of the common stock of the Company based on the Average Stock Price, which will
be equivalent to the mean between the closing bid and asked quotations for the
Company's common stock in the over-the-counter market as quoted on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), or any
other reliable quotation system if the common stock is not listed on NASDAQ, for
the 30 trading days last preceding the date of conversion. The Board of
Directors has no right to declare a dividend to common shareholders or other
securities ranking junior to the Class B Series I Preferred Stock unless all
prior dividends on the Class B Series I Preferred Stock have been paid in full.
No right to any dividends shall accrue to holder under this paragraph in the
event the Company shall fail to declare dividends.
2.0 CONVERSION
2.1 The Class B Series I Preferred Stock is convertible at the option of
the holder, but not earlier than twelve (12) months after the date of the
holder's subscription of the Preferred Stock ("Subscription Date"), unless
previously redeemed by the Company, into the nearest whole number of common
stock ("Conversion Shares") the Subscription Price would be able to purchase at
the Company's average common stock price ("Average Stock Price") which will be
equivalent to the mean between the closing bid and asked quotations for the
Company's common stock in the over-the-counter market as quoted on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), or any
other reliable quotation system if the common stock is not listed on NASDAQ, for
the 60 trading days last preceding the date of conversion.
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2.2 Unless the Company, at its election, acts to obtain effectiveness of
a registration statement under the Securities Act covering the Conversion
Shares, the Class B Series I Preferred Stock shall be converted into restricted
common stock as the term "restricted" is defined in Rule 144 under the
Securities Act. The Company has no obligation to register the Conversion Shares.
2.3 Conversion eliminates all rights and preferences resulting from the
Class B Series I Preferred Stock. The Company covenants that the Conversion
Shares, when issued, will be validly issued, fully paid and non-assessable.
2.4 No fractional share of common stock will be issued upon conversion
of the Class B Series I Preferred Stock, but if the conversion results in a
fractional share, the Company will, at its option, either round the fractional
share upward to the next whole integer or pay to the converting holder an
amount, in U.S. funds, not less than the cash conversion value of the fractional
interest.
2.5 In the event the Board of Directors of the Company acts to convert
Class B Series I Preferred Stock, the Company will take all steps reasonably
necessary to permit the conversion of the Class B Series I Preferred Stock and
the issuance of the Conversion Shares under the applicable state securities laws
of those states in which the Class B Series I Preferred Stock is originally
sold. The Company will take any reasonable steps which it determines, in its
sole discretion, are necessary to permit the conversion of the Class B Series I
Preferred Stock and the issuance of the Conversion Shares under the laws of any
other state in which the holder then resides, on the written request to do so by
the holder, but in no event shall the Company be required to consent to the
general service of process in any state other than those states in which the
Class B Series I Preferred Stock being offered is originally sold. If the holder
resides in any state where the Company cannot, with the exercise of reasonable
diligence and without consenting to general service of process, obtain an
exemption for the issuance of the Conversion Shares, the holder may not, as a
result, be able to receive the Conversion Shares in exchange for Class B Series
I Preferred Stock and the Company is under no obligation to issue the Conversion
Shares in those circumstances.
3.0 REDEMPTION
3.1 The Class B Series I Preferred Stock is redeemable at any time at
the option of the Company, in whole or in part, upon payment by the Company in
its sole discretion of the redemption price consisting of the Average Stock
Price of the Conversion Shares as described above in paragraph 2.1 plus an
amount equal to all declared and accrued dividends ("Redemption Price"). Upon
notice of redemption, Preferred Stockholders shall have a 30-day period after
delivery of the Company's notice to convert the Preferred Stock into Conversion
Shares.
3.2 No mandatory sinking fund payments or other similar provisions have
been established to redeem the aggregate principal amount of the Class B Series
I Preferred Stock issued, together with dividends, if any.
4.0 LIQUIDATION
4.1 If there is a liquidation of the Company, holder of Class B Series I
Preferred Stock is entitled to a pro rata liquidation preference in an amount
equal to the Subscription Price per share plus any amount equal to the value of
the declared and accrued stock dividends to the date of distribution, before any
distribution or payment to the holders of common stock or any other security
ranking junior to this class and series of Class B Series I Preferred Stock.
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5.0 VOTING RIGHTS
5.1 The Class B Series I Preferred Stock is entitled to one vote per
share together as one class with common shareholders on all matters upon which
common shareholders are entitled to vote.
6.0 MISCELLANEOUS
6.1 There are no restrictions on the Company's ability to sell, lease,
or encumber the assets of the Company. There are no restrictions requiring the
maintenance of any asset ratio or the creation or maintenance of reserves by the
Company. Holders of Class B Series I Preferred Stock have no preemptive rights.
The Class B Series I Preferred Stock, on issuance against full payment of the
purchase price, will be fully paid and nonassessable.
C. That the Board of Directors of the corporation, by unanimous vote at a
special meeting of directors, adopted a resolution on April 29, 1999, proposing
and declaring advisable the following:
RESOLVED, that the Board of Directors pursuant to the authority
expressly vested in it by the Certificate of Incorporation, designate
500,000 shares of Convertible Class C Series I Preferred Stock. The
powers, designations, preferences and rights are as follows:
CLASS C SERIES I PREFERRED
1.0 NO DIVIDENDS
1.1 The holders of Class C Series I Preferred Stock are not entitled to
dividends.
2.0 CONVERSION
2.1 The Class C Series I Preferred Stock is convertible at the option of
the holder, but not earlier than twelve (12) months after the date of the
holder's subscription of the Preferred Stock ("Subscription Date"), unless
previously redeemed by the Company, into the nearest whole number of common
stock ("Conversion Shares") the Subscription Price would be able to purchase at
the Company's average common stock price ("Average Stock Price") which will be
equivalent to the mean between the closing bid and asked quotations for the
Company's common stock in the over-the-counter market as quoted on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ"), or any
other reliable quotation system if the common stock is not listed on NASDAQ, for
the 60 trading days last preceding the date of conversion.
2.2 Unless the Company, at its election, acts to obtain effectiveness of
a registration statement under the Securities Act covering the Conversion
Shares, the Class C Series I Preferred Stock shall be converted into restricted
common stock as the term "restricted" is defined in Rule 144 under the
Securities Act. The Company has no obligation to register the Conversion Shares.
2.3 Conversion eliminates all rights and preferences resulting from the
Class C Series I Preferred Stock. The Company covenants that the Conversion
Shares, when issued, will be validly issued, fully paid and non-assessable.
2.4 No fractional share of common stock will be issued upon conversion
of the Class C
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Series I Preferred Stock, but if the conversion results in a fractional share,
the Company will, at its option, either round the fractional share upward to the
next whole integer or pay to the converting holder an amount, in U.S. funds, not
less than the cash conversion value of the fractional interest.
2.5 In the event the Board of Directors of the Company acts to convert
Class C Series I Preferred Stock, the Company will take all steps reasonably
necessary to permit the conversion of the Class C Series I Preferred Stock and
the issuance of the Conversion Shares under the applicable state securities laws
of those states in which the Class C Series I Preferred Stock is originally
sold. The Company will take any reasonable steps which it determines, in its
sole discretion, are necessary to permit the conversion of the Class C Series I
Preferred Stock and the issuance of the Conversion Shares under the laws of any
other state in which the holder then resides, on the written request to do so by
the holder, but in no event shall the Company be required to consent to the
general service of process in any state other than those states in which the
Class C Series I Preferred Stock being offered is originally sold. If the holder
resides in any state where the Company cannot, with the exercise of reasonable
diligence and without consenting to general service of process, obtain an
exemption for the issuance of the Conversion Shares, the holder may not, as a
result, be able to receive the Conversion Shares in exchange for Class C Series
I Preferred Stock and the Company is under no obligation to issue the Conversion
Shares in those circumstances.
3.0 REDEMPTION
3.1 The Class C Series I Preferred Stock is redeemable at any time at
the option of the Company, in whole or in part, upon payment by the Company in
its sole discretion of the redemption price consisting of the Average Stock
Price of the Conversion Shares as described above in paragraph 2.1 ("Redemption
Price"). Upon notice of redemption, Preferred Stockholders shall have a 30-day
period after delivery of the Company's notice to convert the Preferred Stock
into Conversion Shares.
3.2 No mandatory sinking fund payments or other similar provisions have
been established to redeem the aggregate principal amount of the Class C Series
I Preferred Stock issued.
4.0 LIQUIDATION
4.1 If there is a liquidation of the Company, holder of Class C Series I
Preferred Stock is entitled to a pro rata liquidation preference in an amount
equal to the Subscription Price per share, before any distribution or payment to
the holders of common stock or any other security ranking junior to this class
and series of Class C Series I Preferred Stock.
5.0 VOTING RIGHTS.
5.1 The Class C Series I Preferred Stock is entitled to one vote per
share together as one class with common shareholders on all matters upon which
common shareholders are entitled to vote.
6.0 MISCELLANEOUS
6.1 There are no restrictions on the Company's ability to sell, lease,
or encumber the assets of the Company. There are no restrictions requiring the
maintenance of any asset ratio or the creation or maintenance of reserves by the
Company. Holders of Class C Series I Preferred Stock have no preemptive rights.
The Class C Series I Preferred Stock, on issuance against full payment of the
purchase price, will be fully paid and nonassessable.
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IN WITNESS WHEREOF, the Company has caused this certificate to be signed
by C. Richard Kearns, its Chief Executive Officer.
COUNTRY MAID FINANCIAL, INC.
a Washington corporation
By: C. Richard Kearns, Chief Executive Officer
State of Oregon
County of
I certify that I know or have satisfactory
evidence that C. Richard Kearns is the
person who appeared before me, and said
person acknowledged that he signed this
instrument, on oath stated that he was
authorized to execute the instrument and
acknowledged it as the Chief Executive
Officer of Country Maid Financial, Inc. to
be the free and voluntary act of such party
for the uses and purposes mentioned in the
instrument.
Dated:
Signature
Title
My appointment expires
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