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EXHIBIT 4.2
Certificate of Amendment of Certificate of Designation of Series B
Convertible Preferred Stock, effective December 31, 1996
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CERTIFICATE OF AMENDMENT TO THE
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS OF
SERIES B CONVERTIBLE PREFERRED STOCK,
$.001 PAR VALUE, OF
CHINA RESOURCES DEVELOPMENT, INC.
China Resources Development, Inc., a Nevada corporation (the
"Corporation"), with its principal place of business at 23/F., Office Tower,
Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong, hereby certifies that
pursuant to authority conferred upon its Board of Directors by the Articles of
Incorporation of the Corporation, and by the provisions of the General
Corporation Law of the State of Nevada, the Board of Directors, at its annual
meeting held on December 31, 1996, adopted a resolution providing for the
amendment to the designation and terms of a series of its 10,000,000 shares of
authorized preferred stock previously designated as Series B Convertible
Preferred Stock, previously consisting of 2,500 shares, the content of which
resolution is hereafter set forth in its entirety:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation in accordance with the
provisions of its Articles of Incorporation, the Certificate of Designation
designating a series of 2,500 shares of the Corporation's authorized class of
preferred stock, established as Series B Convertible Preferred Stock, $.001 par
value (the "Series B Convertible Preferred Stock"), is hereby amended pursuant
the terms hereof. The number of shares of the Corporation's authorized class of
preferred stock to be designated as Series B Preferred Stock (no longer
convertible) (the "Series B Preferred Stock") shall be increased to 3,200,000
shares, and the preferences and relative, participating, optional, or other
special rights of, and the qualifications, limitations and restrictions imposed
upon the Series B Convertible Preferred Stock are hereby amended and restated as
follows:
The text of the original designation of Series B Convertible Preferred
Stock is as follows:
Each share of Series B Convertible Preferred Stock shall be convertible
into shares of the Corporation's Common Stock, $.001 par value (the
"Common Stock"), at any time during the two-year period commencing on
the 45th day following the date of the closing of the sale of such
share (the "Conversion Period"), upon delivery to the Corporation by
the record holder thereof of a notice of conversion (the "Conversion
Notice") and the surrender to the Corporation at its corporate offices
at 2440 South Progress Drive, Salt Lake City, Utah 84119, or at any
other place designated in writing by the Corporation, of the
certificates for shares of Series B Convertible Preferred Stock to be
so converted. The number of shares of Common Stock issuable upon
conversion of shares of Series B Convertible Preferred Stock shall
equal the number of shares of Series B Convertible Preferred Stock to
be converted, multiplied by $10,000 per share (the "Share Price"),
divided by the Conversion Factor (as hereafter defined). "Conversion
Factor" means the lesser of (a) the product derived by multiplying (i)
the average closing bid price of the Common Stock on the electronic
inter-dealer quotation system operated by Nasdaq, Inc., a subsidiary
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of the National Association of Securities Dealers, Inc. (the "NASDAQ
System"), for the five consecutive trading days immediately preceding
the date of the delivery of the Conversion Notice to the Corporation by
(ii) 69%, or (b) the product derived by multiplying (i) the average
closing bid price of the Common Stock on the NASDAQ System for the five
consecutive trading days immediately preceding the date of the delivery
of the Subscription Agreement for the related shares of Series B
Convertible Preferred Stock to the Corporation by (ii) 85%. Upon the
expiration of the Conversion Period, all remaining issued and
outstanding shares of Series B Convertible Preferred Stock shall be
converted as of such expiration date into the appropriate number of
shares of Common Stock in accordance with the above-referenced formula.
None of the shares of Series B Convertible Preferred Stock shall
entitle the holder thereof to any voting rights whatsoever in
connection therewith. The Series B Convertible Preferred Stock has no
preemptive or other subscription rights and is not subject to any
future calls or assessments. There are no redemption or sinking fund
provisions applicable to shares of Series B Convertible Preferred
Stock, and holders of Series B Convertible Preferred Stock have no
rights whatsoever to dividends or to distributions upon liquidation or
dissolution of the Corporation.
The Corporation may, at its option and in its sole discretion, issue
any other class or series of preferred stock with rights and
preferences superior to or in parity with the rights and preferences
attributable to the Series B Convertible Preferred Stock.
The forgoing designation of the shares of Series B Convertible
Preferred Stock is hereby deleted and replaced with the following designation of
Series B Preferred Stock:
The shares of Series B Preferred Stock shall entitle the holder thereof
to voting rights to the same extent and in the same manner as shares of
Common Stock, such shares of Series B Preferred Stock being aggregated
with any outstanding Common Stock at the record date of any vote for
voting purposes of the Corporation. The Series B Preferred Stock has no
preemptive or other subscription rights and is not subject to any
future calls or assessments. There are no redemption or sinking fund
provisions applicable to shares of Series B Preferred Stock, and
holders of Series B Preferred Stock have no rights whatsoever to
dividends or to distributions upon liquidation or dissolution of the
Corporation.
No shares of the Series B Preferred Stock shall be included in a
registration statement filed by the Corporation and the Corporation
shall not take any action to facilitate the registration of such
shares; provided, however, notwithstanding the forgoing, the
Corporation may, at its option and in its sole discretion, include the
Series B Preferred Stock in a registration statement filed by the
Corporation after July 22, 2000.
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The Corporation may, at its option and in its sole discretion, issue
any other class or series of preferred stock with rights and
preferences superior to or in parity with the rights and preferences
attributable to the Series B Preferred Stock.
There are no shares of Series B Preferred Stock currently outstanding.
The only class or series of stock which, before this amendment, is senior to the
Series B Preferred Stock is the Corporation's Series A Preferred Stock, of which
there are no shares of such Series A Preferred Stock which remain outstanding.
WITNESS the seal of the Corporation and the signatures of its
authorized officers this 14th day of February, 1997.
CORPORATION:
ATTEST: CHINA RESOURCES DEVELOPMENT, INC.
/s/ Zhang Yibing By:/s/ Li Shinxing
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Zhang Yibing, Secretary Li Shunxing, President
Signatures verified by:
/s/ Dominic Yiu Kuen Lai
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Print Name: DOMINIC YIU KUEN LAI
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Notary Public
Hong Kong
[SEAL]
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