EXHIBIT 3.5
THIRD AMENDED AND RESTATED CERTIFICATE OF DESIGNATION
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WHEREAS, the Board of Directors of this Corporation has previously
authorized the issuance of Series B Preferred Stock and has filed a
Certificate of Designation relating thereto with the Secretary of
State of Nevada on December 14, 1994, which Certificate of Designation
this Corporation has, by filing appropriate certificates, amended and
restated on December 16, 1994 and on December 30, 1994, and corrected
on January 3, 1995;
WHEREAS, no shares of such Series B Preferred Stock have been issued;
WHEREAS, the Board of Directors of this Corporation has filed a
Certificate of Designation with the Secretary of State of Nevada on
January 3, 1996 intending such Certificate to supersede, amend and
restate all Certificates filed by this Corporation with respect to the
Series B Preferred Stock. However, the Certificate filed on January
3, 1996 did not set forth such intentions;
WHEREAS, the Board of Directors of this Corporation hereby determines
that it is in the best interests of this Corporation that this Third
Amended and Restated Certificate of Designation completely supersede,
amend and restate all of the aforementioned Certificates with respect
to the Series B Preferred Stock as follows:
WHEREAS, the Articles of Incorporation of this Corporation, as
amended, authorize this Corporation to issue 50,000,000 shares of
preferred stock, par value $.001 per share;
WHEREAS, the Articles of Incorporation of this Corporation, as
amended, authorize the Board of Directors of this Corporation to
determine the designations, powers, preferences, rights and
limitations of such preferred stock, including the rights, if any, of
the holders thereof with respect to voting, dividends, redemption,
liquidation and conversion;
WHEREAS, the Board of Directors of this Corporation has previously
authorized the issuance of Series A Preferred Stock of this
Corporation;
WHEREAS, the Board of Directors hereby determines that it is in the
best interests of this Corporation to designate 6,800 shares of Series
B Preferred Stock upon the following terms and conditions:
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby
fixes and determines the designation of, the number of shares
constituting, and the powers, preferences, rights and limitations
relating to, said Series B Preferred Stock, as follows:
1. Designation and Number of Shares. The designation of such series
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of Preferred Stock is Series B Preferred Stock and the number of shares of such
series is 6,800.
2. Dividend Rights. Each of the shares of the Series B Preferred
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Stock, on an "as-converted" and pro-rata basis, shall participate with the
shares of the Common Stock of this Corporation in any dividends paid by this
Corporation thereon.
3. Rights of Liquidation. Upon any voluntary or involuntary
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liquidation, dissolution or winding up of the Corporation, the holders of Series
B Preferred Stock shall
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be entitled, before any distribution of assets shall be made to the holders of
Common Stock or any other shares of the Corporation ranking junior to Series B
Preferred Stock, to receive an amount equal to $500 per share of Series B
Preferred Stock so held. After the full preferential liquidation amount has
been paid to, or determined or set apart for, the holders of Series B Preferred
Stock, the remaining assets shall be paid to the holders of all classes of
Common Stock and other shares of the Corporation ranking junior to Series B
Preferred Stock. In the event the assets of the Corporation, after being valued
at the highest value permitted by law, are insufficient to pay the full
preferential liquidation amount required to be paid to the holders of Series B
Preferred Stock, the entire remaining assets shall be paid to the holders of
Series B Preferred Stock on a pro-rate basis, and the holders of Common Stock
and any other shares of the Corporation ranking junior to Series B Preferred
Stock shall receive nothing. Neither the merger, consolidation or
reorganization of the Corporation nor the sale, lease or conveyance of all or
substantially all of the Corporation's assets shall be deemed a liquidation,
dissolution or winding up of the Corporation within the meaning of this section.
However, the Company shall notify the holders of the Series B Preferred Stock as
to any such merger, consolidation or reorganization.
4. Rights Upon Reorganizations, Mergers; Consolidations or Sale of
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Assets. If at any time there shall be a capital reorganization of the
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Corporation's Common Stock (other than a stock dividend, combination or split
provided for herein) or merger of the Corporation into another corporation, or
the sale of the Corporation's properties and assets as, or substantially as, an
entirety to any other person or entity, then, as part of such reorganization,
merger or sale, lawful provision shall be made so that the holders of the Series
B Preferred Stock shall thereafter be entitled to receive upon conversion of the
Series B Preferred Stock, the number of shares of stock or other securities or
property of the Corporation, or of the successor corporation resulting from such
merger, to which the holders of the Common Stock deliverable upon conversion of
the Series B Preferred Stock would have been entitled on such capital
reorganization, merger or sale if the Series B Preferred Stock had been
converted immediately before that capital reorganization, merger or sale to the
end that the provisions of this Section 4 (including adjustment of the
"Conversion Rate", defined below, then in effect and number of shares
purchasable upon conversion of the Series B Preferred Stock) shall be applicable
after that event as nearly equivalently as may be practicable.
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5. Voting Rights.
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(a) Holders of Series B Preferred Stock will to the extent
permitted by law be entitled to vote on matters submitted to a vote of
shareholders of the Corporation as if the Series B Preferred Stock were
converted into shares of Common Stock pursuant to the other provisions hereof on
the record date for determining who is so entitled to receive notice of and vote
upon any such matter, or, if no record was taken, the date as of which holders
of Common Stock entitled to vote was determined. Notwithstanding the foregoing,
each share of Series B Preferred Stock will be deemed convertible into 100
shares of Common Stock solely for purposes of determining voting rights until
such share has been converted as provided below.
(b) So long as any of the shares of Series B Preferred Stock are
outstanding, the Corporation will not, without the affirmative vote or consent
of the holders of at least fifty percent (50%) of the shares of Series B
Preferred Stock (the holders of such shares voting or consenting separately as a
class) at the time outstanding, given in person or by proxy, either in writing
or by a resolution adopted at a meeting called for the purpose of amending,
altering or repealing any of the provisions of the Corporation's Articles of
Incorporation, By-laws or the resolution providing for the issuance of such
shares, pass any stockholder resolution, including such action effected by
merger or similar transaction in which the Corporation is the surviving
corporation, if such amendment or resolution would affect adversely the
preferences, special rights or powers of the shares of Series B Preferred Stock.
6. Redemption Rights.
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(a) At the individual option of each holder of shares of Series
B Preferred Stock, the Corporation shall redeem the number of shares of Series B
Preferred Stock held by such holder that is specified in a request for
redemption delivered to the Corporation by the holder on or prior to fifteen
(15) days from the date that the Corporation notifies such holder of its intent
to file a registration statement (the "Optional Registration Statement") with
the Securities and Exchange Commission (the "Commission") for a public offering
by the Corporation of the Common Stock of the Corporation with respect to which
the applicable
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registration statement designates that all or a portion of the proceeds thereof
will be used to redeem the Series B Preferred Stock. The Corporation shall
redeem such shares out of the proceeds of such public offering by paying in cash
therefor $500 per share (as adjusted for any stock dividends, combinations or
splits with respect to such shares) less the holder's pro rata share of the
underwriter's commission for the sale in the public offering of that number of
shares of Common Stock necessary to redeem the Series B Preferred Stock.
(b) Application of Funds; Payment. If, on that date that is
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twenty-one (21) business days after the date of closing of any public offering
of the Corporation the net proceeds of which are designated to be used to redeem
the Series B Preferred Stock (the "Redemption Date"), the funds necessary for
such redemption shall have been irrevocably set aside by the Corporation,
separate and apart from its other funds, for the pro rata benefit of the holders
of the shares of Series B Preferred Stock so called for redemption, then
notwithstanding that any certificate for the shares of Series B Preferred Stock
so called for redemption shall not have been surrendered for cancellation by the
Redemption Date, the shares represented thereby shall no longer be deemed
outstanding, the right to receive any dividends thereon shall cease to
accumulate from the Redemption Date, and all rights of the holders of the shares
so called for redemption shall forthwith, after the Redemption Date, cease and
terminate, excepting only the right of the holder thereof to receive the
redemption price therefor, but without interest, upon surrender of the
certificate or certificates evidencing such shares as provided in the notice of
redemption. Any funds so set aside by the Corporation and unclaimed at the end
of two (2) years from the Redemption Date shall revert to the general funds of
the Corporation, after which reversion, the holders of such shares of Series B
Preferred Stock so called for redemption shall look solely to the Corporation
for payment of the redemption price. Any interest accrued on funds so deposited
shall be paid to the party entitled to such funds. Notwithstanding the
foregoing, if such funds become available or are paid to a public official
pursuant to any abandoned property, escheat or similar law, the Corporation
shall have no further obligation with respect to such funds or payment of the
redemption proceeds to any former holder of such shares.
7. Conversion. The shares of Series B Preferred Stock shall be
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convertible into the Common Stock of the
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Corporation, on and subject to the following terms and conditions:
(a) The conversion rights set forth herein shall apply only as
follows:
(i) To the extent that a holder does not elect to redeem
the shares of Series B Preferred Stock as provided in Section 6 above, the
remaining Series B Preferred Stock shall be automatically converted, on the same
date that the redemption price is paid to the redeeming holders, into one
hundred (100) shares of Common Stock (as adjusted for any stock dividends,
combinations or splits);
(ii) If, by that date which is two (2) years after the
date on which the shares of the Series B Preferred Stock are distributed to the
holders (the "Two Year Date"), such holders have not been able to redeem their
shares because Purchaser has not made a public offering, the net proceeds of
which are designated to be used to redeem the Sunbase Preferred Shares, the
holder's shares shall automatically convert into shares of the Common Stock of
Purchaser as follows: On the first business day following the Two Year Date,
each share shall automatically be converted into that number of shares of Common
Stock of Purchaser that equals $500 divided by the lesser of (a) $5.00
("Conversion Share Amount") or (b) the average closing price of the Common Stock
of the Purchaser (subject to adjustment for stock dividends, combinations or
splits). As used herein, the average closing price shall be computed by taking
the then most recent 60 consecutive trading days where Purchaser's Common Stock
has traded at a minimum volume of 2,000 shares per day for 45 of those 60
trading days.
(b) In order to convert the shares of Series B Preferred Stock
into shares of Common Stock, the holder thereof shall surrender at any office of
the Corporation the certificate or certificates therefore, duly endorsed or
assigned to the Corporation or in blank.
Shares of Series B Preferred Stock shall be deemed to have been converted
as provided herein notwithstanding the failure of any holder to surrender such
holder's certificates, and the person or persons entitled to receive Common
Stock issuable upon the effective date of such conversion
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shall be treated for all purposes as the record holder or holders of such Common
Stock at such time. As promptly as practicable on or after the effective date
of conversion, the Corporation shall issue and shall deliver at said office a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion.
(c) In case the outstanding shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares of Common
Stock, then the rates of conversion set forth in subsections (a)(i) and (a)(ii)
above (collectively, the "Conversion Rate") shall be adjusted as follows: (i)
with regard to a conversion under subsection (a)(i) above, the number of shares
of Common Stock issuable upon conversion of the shares of Series B Preferred
Stock shall be proportionately increased in the event the shares of Common Stock
are subdivided and proportionately decreased in the event the shares of Common
Stock are combined; and (ii) with regard to a conversion under subsection
(a)(ii) above, the Conversion Share Amount shall be proportionately decreased in
the event the shares of Common Stock are subdivided and proportionately
increased in the event the shares of Common Stock are combined. Any adjustment
to the Conversion Rate shall become effective immediately after the opening of
business on the day following the day upon which such subdivision or combination
becomes effective.
(d) Whenever the Conversion Rate is adjusted as herein provided:
(i) the Corporation shall compute the adjusted Conversion
Rate in accordance with these Resolutions and shall prepare a certificate signed
by the Treasurer of the Corporation setting forth the adjusted Conversion Rate
and showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the transfer agent or agents
for the Series B Preferred Stock; and
(ii) a notice stating that the Conversion Rate has been
adjusted and setting forth the adjusted Conversion Rate shall forthwith be
required, and as soon as practicable after it is required, such notice shall be
mailed to the holders of record of the outstanding shares of the Series B
Preferred Stock.
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(e) The Corporation shall at all times reserve and keep
available, free from preemptive rights, out of its authorized but unissued
Common Stock, for the purpose of effecting the conversion of the shares of
Series B Preferred Stock, the full number of shares of Common Stock then
deliverable upon the conversion of all shares of Series B Preferred Stock then
outstanding.
(f) The Company will round-up any fractional shares of Common
Stock that would otherwise be issued by the Corporation.
(g) The Corporation will pay any and all taxes that may be
payable in respect of the issue or delivery of shares of Common Stock on
conversion of shares of the Series B Preferred Stock pursuant hereto. The
Corporation shall not, however, be required to pay any tax which may be payable
in respect of any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of the Series B
Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until this person requesting such issue has paid to the
Corporation the amount of any such tax, or has established, to the satisfaction
of the Corporation, that such tax has been paid.
(h) For the purpose of this Section 7, the term "Common Stock"
shall include any stock of any class of the Corporation which has no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation and which
is not subject to redemption by the Corporation. However, shares issuable on
conversion of shares of the Series B Preferred Stock shall include only shares
of the class designated as Common Stock of the Corporation as the date hereof or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and which are not subject to
redemption by the Corporation; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable
shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
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RESOLVED FURTHER, that the president or the Vice President and the
Secretary or Assistant Secretary of the Corporation are each
authorized to do or cause to be done all such acts or things and to
make, execute and deliver or cause to be made, executed and delivered
all such agreements, documents, instruments and certificates in the
name and on behalf of the Corporation or otherwise as they deem
necessary, desirable or appropriate to execute or carry out the
purpose and intent of the foregoing resolutions.
Each of the undersigned swears that the foregoing is true and accurate and
that he has the authority to sign this document on behalf of the Corporation.
IN WITNESS WHEREOF, we have executed this Certificate and duly affirm the
foregoing as true under the penalties of perjury as of this ____ day of January,
1996.
______________________________ ______________________________
Roger Li, Vice President John Chong, Secretary
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