-------------------------------------- [ FILED ]
IN THE OFFICE OF THE
AMENDED AND RESTATED SECRETARY OF STATE
OF THE STATE OF NEVADA
CERTIFICATE OF DESIGNATION - JULY 20, 2001
-------------------------
OF
TOPAZ GROUP INCORPORATED
Pursuant to Section 78.1955 of the General
Corporation Law of the State of Nevada
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SERIES A PREFERRED STOCK AND
SERIES B PREFERRED STOCK
Topaz Group Incorporated, a Nevada corporation (the "Corporation"), hereby
certifies that the following resolution has been duly adopted by the board of
directors of the Corporation (the "Board"):
RESOLVED, that pursuant to the authority granted to and vested in the Board
by the provisions of the certificate of incorporation of the Corporation (as
amended, the "Certificate of Incorporation"), there hereby is created, out of
the fifty million (50,000,000) shares of preferred stock, par value $.001 per
share, of the Company authorized by Article IV of the Certificate of
Incorporation ("Preferred Stock"), the Series A Preferred Stock consisting of
26,000,000 shares and the Series B Preferred Stock consisting of 10,000,000
shares, which series shall have the following powers, designations, preferences
and relative, participating, optional and other special rights, and the
following qualifications, limitations and restrictions:
The specific powers, preferences, rights and limitations of the Preferred
Stock are as follows:
1. Designation; Rank. These series of Preferred Stock shall be designated
and known as "Series A Preferred Stock" and "Series B Preferred Stock." The
number of shares constituting the Series A Preferred Stock shall be twenty-six
million (26,000,000) shares. The number of shares constituting the Series B
Preferred Stock shall be 10 million (10,000,000) shares. Except as otherwise
provided herein, the Series A Preferred Stock and the Series B Preferred Stock
shall rank on a parity with each other, shall have the same rights, preferences
and privileges, and shall collectively referred to herein as the "Preferred
Stock." The Preferred Stock shall, with respect to dividend rights and rights on
liquidation, winding up and dissolution, rank senior to (a) the Common Stock,
and (b) all classes and series of stock of the Corporation now or hereafter
authorized, issued or outstanding which by their terms do not expressly provide
that they are senior to, or on parity with, to the Preferred Stock
(collectively, "Junior Securities").
2. Dividends.
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(a) The holders of shares of the Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors, out of assets of
the Corporation legally available therefor, non-cumulative dividends on a pro
rata basis with all other holders of Preferred Stock and all holders of Common
Stock (as adjusted for any stock dividends, combinations or splits with respect
to such stock).
(b) Each fractional share of Preferred Stock outstanding shall be
entitled to a ratably proportionate amount of any dividends or other
distributions made with respect to each outstanding share of Preferred Stock,
and all such distributions shall be payable in the same manner and at the same
time as distributions on each outstanding share of Preferred Stock.
3. Liquidation Preference.
----------------------
(a) In the event of any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of Preferred Stock
shall be entitled to receive out of the assets of the Corporation, for each
share of Preferred Stock then outstanding, before any payment or distribution
shall be made in respect of any Junior Securities, cash in an amount equal to
(i) $0.001 (as adjusted for any stock dividend, split, combination,
recapitalization or similar transaction with respect to the capital stock of the
Corporation), plus an amount equal to all accrued or declared but unpaid
dividends thereon to the date of such payment, and (ii) the pro rata share of
any proceeds, treating the Preferred Stock as if converted into shares of Common
Stock.
(b) If the assets of the Corporation available for distribution to the
holders of Preferred Stock upon any dissolution, liquidation or winding up of
the Corporation, whether voluntary or involuntary, shall be insufficient to pay
the full preferential amount to which holders of Preferred Stock are entitled
pursuant to Section 3(a) of this certificate of designation, (this
"Designation"), no distribution shall be made in respect of any shares of any
other class or series of stock ranking on a parity with the Preferred Stock upon
liquidation, unless the distribution is made pro rata, so that the ratio of the
amount distributed per share on the Preferred Stock to the amount distributed
per share on each such other class or series of stock shall be the same as the
ratio of the amount of the liquidation preference per share of the Preferred
Stock to the amount of the liquidation preference per share of each such other
class or series of stock.
(c) If upon any dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, payment shall have been made to
the holders of Preferred Stock of the full preferential amount to which they
shall be entitled pursuant to Section 3(a) of this Designation, the entire
remaining assets, if any, of the Corporation available for distribution to
stockholders shall be distributed to the holders of Common Stock pro rata,
treating the Preferred Stock as if converted into shares of Common Stock
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(d) The Corporation shall give each holder of Preferred Stock written
notice of any dissolution, liquidation or winding up not later than 15 days
prior to any meeting of stockholders to approve such dissolution, liquidation or
winding up or, if no meeting is to be held, not later than 30 days prior to the
date of such dissolution, liquidation or winding up.
4. Optional Conversion of Series A Preferred Stock. The holders of Series A
Preferred Stock shall have conversion rights as follows:
(a) Conversion Right. Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof and without the payment of
additional consideration by the holder thereof, at any time, into one share of
Common Stock (the "Conversion Rate") on the Optional Conversion Date (as
hereinafter defined).
(b) Mechanics of Optional Conversion. To effect the optional conversion
of shares of Series A Preferred Stock in accordance with Section 4(a) of this
Designation, the holder of record thereof shall make a written demand for such
conversion (for purposes of this Designation, a "Conversion Demand") upon the
Corporation at its principal executive offices setting forth therein (i) the
number of shares so to be converted, (ii) the certificate or certificates
representing such shares, and (iii) the proposed date of such conversion, which
shall be a business day not less than 15 nor more than 30 days after the date of
such Conversion Demand (for purposes of this Designation, the "Optional
Conversion Date"). Within five days of receipt of the Conversion Demand, the
Corporation shall give written notice (for purposes of this Designation, a
"Conversion Notice") to such holder setting forth therein (i) the address of the
place or places at which the certificate or certificates representing the shares
so to be converted are to be surrendered; and (ii) whether the certificate or
certificates to be surrendered are required to be endorsed for transfer or
accompanied by a duly executed stock power or other appropriate instrument of
assignment and, if so, the form of such endorsement or power or other instrument
of assignment. The Conversion Notice shall be sent by first class mail, postage
prepaid, to such holder at such holder's address as may be set forth in the
Conversion Demand or, if not set forth therein, as it appears on the records of
the stock transfer agent for the Series A Preferred Stock, if any, or, if none,
of the Corporation. On or before the Optional Conversion Date, the holder of the
Series A Preferred Stock so to be converted shall surrender the certificate or
certificates representing such shares, duly endorsed for transfer or accompanied
by a duly executed stock power or other instrument of assignment, if the
Conversion Notice so provides, to the Corporation at any place set forth in such
notice or, if no such place is so set forth, at the principal executive offices
of the Corporation. As soon as practicable after the Optional Conversion Date
and the surrender of the certificate or certificates representing such shares,
the Corporation shall issue and deliver to such holder, or its nominee, at such
holder's address as it appears on the records of the stock transfer agent for
the Series A Preferred Stock, if any, or, if none, of the Corporation a
certificate or certificates for the number of whole shares of Common Stock
issuable upon such conversion in accordance with the provisions hereof.
(c) No Fractional Shares. No fractional shares of Common Stock or scrip
shall be issued upon conversion of shares of Series A Preferred Stock. In lieu
of any fractional
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share to which the holder would be entitled but for the provisions of this
Section 4(c), based on the full number of shares of Series A Preferred Stock
held by such holder, the Corporation shall issue a number of shares to such
holder rounded up to the nearest whole number of shares of Common Stock. No cash
shall be paid to any holder of Series A Preferred Stock by the Corporation upon
conversion of Series A Preferred Stock by such holder.
(d) Reservation of Stock. The Corporation shall, at all times when any
shares of Series A Preferred Stock shall be outstanding, reserve and keep
available out of its authorized but unissued stock, such number of shares of
Common Stock as shall from time to time be sufficient to effect the conversion
of all outstanding shares of Series A Preferred Stock.
(e) Dividends; Rights. All outstanding shares of Series A Preferred
Stock to be converted pursuant to the Conversion Notice shall, on the Optional
Conversion Date, be converted into Common Stock for all purposes,
notwithstanding the failure of the holder thereof to surrender any certificate
representing such shares on or prior to such date. On and after the Optional
Conversion Date, (i) no such share of Series A Preferred Stock shall be deemed
to be outstanding or be transferable on the books of the Corporation or the
stock transfer agent, if any, for the Series A Preferred Stock, and (ii) the
holder of such shares, as such, shall not be entitled to receive any dividends
or other distributions, to receive notices or to vote such shares or to exercise
or to enjoy any other powers, preferences or rights thereof, other than the
right, upon surrender of the certificate or certificates representing such
shares, to receive a certificate or certificates for the number of shares of
Common Stock into which such shares have been converted. On the Optional
Conversion Date, all such shares shall be retired and canceled and shall not be
reissued.
(f) Consolidation, Merger, Sale, Etc. In case the Corporation shall
effect a Qualified Sale (as defined herein), then lawful and adequate provision
shall be made whereby, subject to Section 3(a) of this Designation, each share
of Series A Preferred Stock shall, after such Qualified Sale, be convertible
into the kind and number of shares of stock or other securities or property of
the Corporation or of the corporation resulting from such Qualified Sale, or to
which assets shall have been sold in such Qualified Sale, to which the holder of
shares of Series A Preferred Stock would have been entitled if it had held the
Common Stock issuable upon the conversion of such shares of Series A Preferred
Stock on the record date, or, if none, immediately prior to such Qualified Sale,
at the Conversion Rate in effect on such date. The provisions of this Section
4(f) shall similarly apply to successive Qualified Sales.
(g) Stock Dividends, Splits, Combinations and Reclassifications. If the
Corporation shall (i) declare a dividend or other distribution payable in
Securities, (ii) split its outstanding shares of Common Stock into a larger
number, (iii) combine its outstanding shares of Common Stock into a smaller
number, or (iv) increase or decrease the number of shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a merger, consolidation or other business combination in
which the Corporation is the continuing entity), then in each instance the
Conversion Rate in effect immediately prior to such dividend or other
distribution, split, combination or reclassification, as the case may be,
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shall forthwith be proportionally adjusted so that each holder of Series A
Preferred Stock shall be entitled to receive the number of shares of Common
Stock which such holder would have owned or been entitled to receive had such
Series A Preferred Stock been converted immediately prior to the record date for
such dividend or other distribution, split, combination or reclassification.
Successive adjustments to the Conversion Rate shall be made upon each such
dividend or other distribution, split, combination or reclassification.
(h) No Impairment. The Corporation shall not, by amendment of its
certificate of incorporation or through any reorganization, sale, exchange or
other disposition of assets, merger, consolidation, dissolution, issue or sale
of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Section 4 by the Corporation, but will at all times in good faith carry out
all the provisions of this Section 4 and take all such action as may be
necessary or appropriate in order to protect the conversion rights of the
holders of Series A Preferred Stock against impairment.
(i) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Conversion Rate pursuant to this Section 4,
the Corporation at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and cause its principal
financial officer to verify such computation and prepare and furnish to each
holder of Series A Preferred Stock a certificate setting forth such adjustment
or readjustment and setting forth in reasonable detail the facts upon which such
adjustment or readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred Stock, furnish or cause
to be furnished to such holder a like certificate setting forth: (i) such
adjustments and readjustments; (ii) the Conversion Rate in effect at such time
for the Series A Preferred Stock; and (iii) the number of shares of Common Stock
and the amount, if any, of other property that at such time would be received
upon the conversion of the Series A Preferred Stock.
(j) Notices of Record Date. In the event (i) any record date is fixed
for the purpose of determining the holders of any class or series of stock or
other securities who are entitled to receive any dividend or other distribution
or (ii) of any recapitalization or reorganization of the capital stock of the
Corporation, any merger or consolidation of the Corporation, or any sale,
exchange or other disposition of all or substantially all the assets of the
Corporation or any voluntary or involuntary dissolution, liquidation or winding
up of the Corporation, the Corporation shall mail to each holder of Preferred
Stock at least 20 days prior to the record date set forth therein a notice
setting forth: (i) such record date and a description of such dividend or
distribution; (ii) the date on which any such recapitalization, reorganization,
merger, consolidation, disposition, dissolution, liquidation or winding up is
expected to become effective; and (iii) the time, if any is to be fixed, as to
when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their shares of Common Stock (or other securities) for
securities or other property deliverable upon such recapitalization,
reorganization, merger, consolidation, disposition, dissolution, liquidation or
winding up.
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(k) Issue Taxes. The Corporation shall pay any and all issue and other
non-income taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of shares of Series A Preferred Stock.
(l) Minimum Adjustment: No Increase. No adjustment of the Conversion
Rate shall be made in an amount less than one per centum, provided that any
adjustment which is not made by reason of this Section 4(l) shall be carried
forward and shall be taken into account in any subsequent adjustment. No
adjustments of the Conversion Rate in accordance with Section 4 of this
Designation shall have the effect of increasing the Conversion Rate above the
Conversion Rate in effect immediately prior to such adjustment.
5. Mandatory Conversion of Series A Preferred Stock.
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(a) Upon the closing of a Qualified Public Offering or a Qualified Sale
(each as defined below), each share of Series A Preferred Stock shall
automatically be converted into the number of shares of Common Stock into which
such shares of Series A Preferred Stock would be converted on the date of the
closing of such Qualified Public Offering or Qualified Sale, as the case may be
(the "Transaction Date"), in accordance with Section 4 of this Designation. For
purposes of this Designation, (i) "Qualified Public Offering" means the sale of
shares of Common Stock pursuant to a public offering of shares of Common Stock
by the Corporation on a firmly underwritten basis, pursuant to a registration
statement on Form S-1, S-2 or S-3 (or a similar form of general application
prescribed by the Securities and Exchange Commission) filed under the Securities
Act at a price to the public of at least $4.00 per share (as adjusted for any
stock dividend, split, combination, recapitalization or similar transaction with
respect to the capital stock of the Corporation) and in which at least
$5,000,000 in gross proceeds is received by the Corporation, and (ii) "Qualified
Sale" means the sale of all or substantially all of the assets of the
Corporation or the outstanding shares of capital stock of the Corporation
entitled to vote generally for the election of directors, in any such case for
cash or securities having a value of at least $1.00 per share of Common Stock
(as adjusted for any stock dividend, split, combination, recapitalization or
similar transaction with respect to the capital stock of the Corporation), but
excluding any such transaction in which the consideration received by the
Corporation or its stockholders includes securities of the purchaser and such
purchaser is not subject to the reporting requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended.
(b) No fractional shares of Common Stock or scrip shall be issued upon
conversion of shares of Series A Preferred Stock. In lieu of any fractional
share to which the holder would be entitled but for the provisions of this
Section 5(b), based on the full number of shares of Series A Preferred Stock
held by such holder, the Corporation shall issue a number of shares to such
holder rounded up to the nearest whole number of shares of Common Stock. No cash
shall be paid to any holder of Series A Preferred Stock by the Corporation upon
conversion of Series A Preferred Stock by such holder.
(c) The Corporation shall give to each holder of record of Series A
Preferred Stock written notice of mandatory conversion at least 10 business days
prior to the Transaction
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Date, setting forth therein: (i) the Conversion Rate on the Transaction Date or
a reasonable estimate thereof; (ii) the number of shares of Common Stock into
which such holder's shares of Series A Preferred Stock are to be converted based
on such Conversion Rate; (iii) the amount of cash, if any, to be paid in lieu of
a fractional share pursuant to Section 5(b) of this Designation; (iv) that the
conversion is to be effective on the Transaction Date; (v) the address of the
place or places at which the certificate or certificates representing such
holder's shares of Series A Preferred Stock are to be surrendered; and (vi)
whether the certificate or certificates to be surrendered are required to be
endorsed for transfer or accompanied by a duly executed stock power or other
appropriate instrument of assignment and, if so, the form of such endorsement or
power or other instrument of assignment. Such notice shall be sent by first
class mail, postage prepaid, to each holder of record of Series A Preferred
Stock at such holder's address as it appears on the records of the stock
transfer agent for the Series A Preferred Stock, if any, or, if none, of the
Corporation. On or before the Transaction Date, each holder of Series A
Preferred Stock shall surrender the certificate or certificates representing all
such holder's shares, duly endorsed for transfer or accompanied by a duly
executed stock power or other instrument of assignment, if the notice so
provides, to the Corporation at any place set forth in such notice or, if no
such place is so set forth, at the principal executive offices of the
Corporation. As soon as practicable after the Transaction Date and the surrender
of the certificate or certificates representing shares of Series A Preferred
Stock, the Corporation shall issue and deliver to each such holder, or its
nominee, at such holder's address as it appears on the records of the stock
transfer agent for the Series A Preferred Stock, if any, or, if none, of the
Corporation a certificate or certificates for the number of whole shares of
Common Stock issuable upon such conversion in accordance with the provisions
hereof, together with cash payable in lieu of any fraction of a share of Common
Stock pursuant to Section 5(b) of this Designation.
(d) All outstanding shares of Series A Preferred Stock shall, on the
Transaction Date, be converted into Common Stock for all purposes,
notwithstanding the failure of any holder or holders thereof to surrender any
certificate representing such shares on or prior to such date. On and after the
Transaction Date, (i) no share of Series A Preferred Stock shall be deemed to be
outstanding or be transferable on the books of the Corporation or the stock
transfer agent, if any, for the Series A Preferred Stock, and (ii) each holder
of Series A Preferred Stock, as such, shall not be entitled to receive any
dividends or other distributions, to receive notices or to vote such shares or
to exercise or to enjoy any other powers, preferences or rights in respect
thereof, other than the right, upon surrender of the certificate or certificates
representing such shares, to receive a certificate or certificates for the
number of shares of Common Stock into which such shares shall have been
converted. On the Transaction Date, all such shares shall be retired and
canceled and shall not be reissued.
6. Mandatory Conversion of Series B Preferred Stock.
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(a) The Series B Preferred Stock shall convert on a one-to-one basis in
Common Stock (the "Series B Conversion Rate") automatically (i) immediately
prior to a sale to
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a third party of 100% of the Corporation's capital stock or (ii) immediately
prior to the merger of the Corporation into another surviving corporation (other
than in connection with a recapitalization, reorganization, change of domicile
or like events).
(b) No fractional shares of Common Stock or scrip shall be issued upon
conversion of shares of Series B Preferred Stock. In lieu of any fractional
share to which the holder would be entitled but for the provisions of this
Section 6(b), based on the full number of shares of Series B Preferred Stock
held by such holder, the Corporation shall issue a number of shares to such
holder rounded up to the nearest whole number of shares of Common Stock. No cash
shall be paid to any holder of Series B Preferred Stock by the Corporation upon
conversion of Series B Preferred Stock by such holder.
(c) The Corporation shall give to each holder of record of Series B
Preferred Stock written notice of mandatory conversion at least 10 business days
prior to the Transaction Date, setting forth therein: (i) the Series B
Conversion Rate on the Transaction Date or a reasonable estimate thereof; (ii)
the number of shares of Common Stock into which such holder's shares of Series A
Preferred Stock are to be converted based on such Conversion Rate; (iii) the
amount of cash, if any, to be paid in lieu of a fractional share pursuant to
Section 6(b) of this Designation; (iv) that the conversion is to be effective on
the Transaction Date; (v) the address of the place or places at which the
certificate or certificates representing such holder's shares of Series A
Preferred Stock are to be surrendered; and (vi) whether the certificate or
certificates to be surrendered are required to be endorsed for transfer or
accompanied by a duly executed stock power or other appropriate instrument of
assignment and, if so, the form of such endorsement or power or other instrument
of assignment. Such notice shall be sent by first class mail, postage prepaid,
to each holder of record of Series B Preferred Stock at such holder's address as
it appears on the records of the stock transfer agent for the Series B Preferred
Stock, if any, or, if none, of the Corporation. On or before the Transaction
Date, each holder of Series B Preferred Stock shall surrender the certificate or
certificates representing all such holder's shares, duly endorsed for transfer
or accompanied by a duly executed stock power or other instrument of assignment,
if the notice so provides, to the Corporation at any place set forth in such
notice or, if no such place is so set forth, at the principal executive offices
of the Corporation. As soon as practicable after the Transaction Date and the
surrender of the certificate or certificates representing shares of Series B
Preferred Stock, the Corporation shall issue and deliver to each such holder, or
its nominee, at such holder's address as it appears on the records of the stock
transfer agent for the Series B Preferred Stock, if any, or, if none, of the
Corporation a certificate or certificates for the number of whole shares of
Common Stock issuable upon such conversion in accordance with the provisions
hereof, together with cash payable in lieu of any fraction of a share of Common
Stock pursuant to Section 6(b) of this Designation.
(d) All outstanding shares of Series B Preferred Stock shall, on the
Transaction Date, be converted into Common Stock for all purposes,
notwithstanding the failure of any holder or holders thereof to surrender any
certificate representing such shares on or prior to such date. On and after the
Transaction Date, (i) no share of Series B Preferred Stock shall be deemed to be
outstanding or be transferable on the books of the Corporation or the stock
transfer
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agent, if any, for the Series B Preferred Stock, and (ii) each holder of Series
B Preferred Stock, as such, shall not be entitled to receive any dividends or
other distributions, to receive notices or to vote such shares or to exercise or
to enjoy any other powers, preferences or rights in respect thereof, other than
the right, upon surrender of the certificate or certificates representing such
shares, to receive a certificate or certificates for the number of shares of
Common Stock into which such shares shall have been converted. On the
Transaction Date, all such shares shall be retired and canceled and shall not be
reissued.
(e) Stock Dividends, Splits, Combinations and Reclassifications. If the
Corporation shall (i) declare a dividend or other distribution payable in
Securities, (ii) split its outstanding shares of Common Stock into a larger
number, (iii) combine its outstanding shares of Common Stock into a smaller
number, or (iv) increase or decrease the number of shares of its capital stock
in a reclassification of the Common Stock (including any such reclassification
in connection with a merger, consolidation or other business combination in
which the Corporation is the continuing entity), then in each instance the
Series B Conversion Rate in effect immediately prior to such dividend or other
distribution, split, combination or reclassification, as the case may be, shall
forthwith be proportionally adjusted so that each holder of Series B Preferred
Stock shall be entitled to receive the number of shares of Common Stock which
such holder would have owned or been entitled to receive had such Series B
Preferred Stock been converted immediately prior to the record date for such
dividend or other distribution, split, combination or reclassification.
Successive adjustments to the Series B Conversion Rate shall be made upon each
such dividend or other distribution, split, combination or reclassification.
(f) No Impairment. The Corporation shall not, by amendment of its
certificate of incorporation or through any reorganization, sale, exchange or
other disposition of assets, merger, consolidation, dissolution, issue or sale
of securities, or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed under
this Section 6 by the Corporation, but will at all times in good faith carry out
all the provisions of this Section 6 and take all such action as may be
necessary or appropriate in order to protect the conversion rights of the
holders of Series B Preferred Stock against impairment.
7. Voting.
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(a) Except as otherwise required by applicable law, the holders of
Preferred Stock shall be entitled to vote on all matters on which the holders of
Common Stock shall be entitled to vote, in the same manner and with the same
effect as the holders of Common Stock, voting together with the holders of
Common Stock as a single class. For this purpose, the holders of Preferred Stock
shall be given notice of any meeting of stockholders as to which the holders of
Common Stock are given notice in accordance with the bylaws of the Corporation.
As to any matter on which the holders of Preferred Stock shall be entitled to
vote, each holder of Series A Preferred Stock shall have a number of votes per
share of Series A Preferred Stock held of record by such holder on the record
date for the meeting of stockholders, if such matter is
9
subject to a vote at a meeting of stockholders, or on the effective date of any
written consent, if such matter is subject to a written consent of the
stockholders without a meeting of stockholders, equal to the number of shares of
Common Stock into which such share of Series A Preferred Stock is convertible on
such record date or effective date, as the case may be, in accordance with
Section 4 of this Designation. As to any matter on which the holders of
Preferred Stock shall be entitled to vote, each holder of Series B Preferred
Stock shall have a number of votes per share of Series B Preferred Stock held of
record by such holder on the record date for the meeting of stockholders, if
such matter is subject to a vote at a meeting of stockholders, or on the
effective date of any written consent, if such matter is subject to a written
consent of the stockholders without a meeting of stockholders, equal to twenty
(20) times the number of shares of Common Stock into which such share of Series
B Preferred Stock would be convertible assuming a mandatory conversion on such
record date or effective date, in accordance with Section 6 of this Designation.
(b) Notwithstanding anything herein to the contrary, the consent of the
holders of a majority of all of the shares of the Series A Preferred Stock and
the Series B Preferred Stock at the time outstanding shall be required to (i)
authorize or issue any class or series of capital stock of the Corporation
ranking senior to, or on parity with, the such class of Preferred Stock, or (ii)
authorize or issue any class or series of capital stock or bonds, debentures,
notes or other securities or obligations of the Corporation convertible into, or
exercisable or exchangeable for, any class or series of capital of the
Corporation ranking senior to, or on parity with, the Preferred Stock. The
Consent of the holders of the Preferred Stock at the time outstanding shall not
be required to (i) authorize or issue any class or series of capital stock of
the Corporation ranking junior to such class of Preferred Stock, or (ii)
authorize or issue any class or series of capital stock or bonds, debentures,
notes or other securities or obligations of the Corporation convertible into, or
exercisable or exchangeable for, any class or series of capital of the
Corporation ranking junior to the Preferred Stock.
8. No Sinking Fund. The Corporation shall not be required to make any
payment to any sinking fund or otherwise to deposit or set aside any funds or
other assets of the Corporation in respect of the Preferred Stock.
9. Amount of Noncash Dividends, Distributions or Consideration. Whenever a
dividend or distribution provided for in Section 2 or 3 of this Designation
(except as otherwise provided therein with respect to the payment of dividends
in shares of Preferred Stock) is to be made in, or any consideration received or
paid by the Corporation consists of securities or other property, other than
cash, the amount of such dividend, distribution or consideration shall be the
fair market value of such securities or other property as determined in good
faith by the Board of Directors.
10. Definition of Certain Preferences. For purposes hereof, any class or
series of stock of the Corporation shall be deemed to rank:
(a) senior to the Preferred Stock, either as to dividends or upon
liquidation, if the holders of shares of that class or series of stock shall
expressly be entitled to receive
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dividends or amounts distributable upon dissolution, liquidation or winding up
of the Corporation, as the case may be, in preference or priority to the holders
of Preferred Stock;
(b) on a parity with the Preferred Stock, either as to dividends or
upon liquidation, whether or not the dividend rates, dividend payment dates,
redemption or liquidation prices per share or conversion or sinking fund
provisions, if any, are different from those of the Preferred Stock, if the
holders of shares of that class or series of stock shall expressly be entitled
to receive dividends or amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in proportion to their
respective dividend preferences (whether based on their respective dividend
rates or the respective amounts of accumulated and unpaid dividends thereon) or
their respective liquidation preferences, without preference or priority, one
over the other, as between the holders of shares of that class or series of
stock and the holders of shares of Preferred Stock; and
(c) junior to the Preferred Stock, either as to dividends or upon
liquidation, if the holders of shares of Preferred Stock shall be entitled to
receive dividends or amounts distributable upon dissolution, liquidation or
winding up of the Corporation, as the case may be, in preference or priority to
the holders of shares of that class or series of stock.
[The next page is the signature page]
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IN WITNESS WHEREOF, the undersigned have duly signed this Certificate of
Designation as of this ___th day of ___________, 2001.
TOPAZ GROUP INCORPORATED
By:
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Name: Thammatinna Thammaradi
Title: President
By:
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Name: Supanee Satasut
Title: Secretary
STATE OF )
) ss.:
COUNTY OF )
On the ____th day of _______, 2001 personally appeared before me Thammatinna
Thammaradi who, being duly sworn, declared that she is the person who signed the
within and foregoing Certificate of Designation as President of Topaz Group
Incorporated, and that the statements contained therein are true.
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Notary Public, residing at
My Commission Expires:
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