EXHIBIT 4.1
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF THE SERIES A PREFERRED STOCK
OF
THE DIAMOND CARTEL INC.
I, Michel Atlidakis, the President and Justin S. Sood, the Secretary of The
Diamond Cartel Inc., a corporation organized and existing under the laws of
Delaware, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Articles of Incorporation of this corporation, the Board of Directors on March
20, 2006, adopted the following resolution creating a series of Preferred
Shares, $0.001 par value per share, designated as the Series A Preferred Shares.
The relative rights and preferences of the Series A Preferred Stock are as
follows:
1. Designation and Amount. The shares of such series shall be designed as
"Series A Preferred Shares" (the "Series A Preferred Shares"), and the number of
shares constituting such series shall be 54,000. The number of shares
constituting such series may, unless prohibited by the Articles of
Incorporation, be decreased by resolution of the Board of Directors; provided
that no decrease shall reduce the number of Series A Preferred Shares to a
number less than the number of shares then outstanding plus the number of shares
issuable upon the exercise of outstanding options, rights or warrants or upon
the conversion of any outstanding securities issued by the Corporation
convertible in Series A Preferred Shares.
2. Dividends and Distributions
(i) The holders of Series A Preferred Shares, in preference to the
holders of Common Shares, shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available for the purpose, annual
dividends payable in cash on the 31st day of December in each year (each such
date being referred to herein as a "Dividend Payment Dates") commencing on
December 3l, 2006 at the rate of $0.10 per share per year.
(ii) Dividends which are not declared will not accrue. Dividends not
declared will not cumulate. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Series A Preferred Shares in an amount less than
the total amount of such dividends at the time such dividends are declared and
become payable shall be allocated pro rata on a share-by-share basis among all
such shares outstanding at that time. The Board of Directors may fix a record
date for the determination of holders of Series A Preferred Shares entitled to
receive payment of a dividend or distribution declared thereon, which record
date shall be not more than thirty (30) days prior to the date fixed for the
payment thereof.
3. Voting Rights. Each Series A Preferred Share will entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of the shareholders of
the Corporation.
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Except as otherwise provided herein or in any other Certificate of
Designation creating a series of Preferred Shares or by law, the holders of
Series A Preferred Shares and the holders of Common Shares and any other capital
shares of the Corporation having general voting rights shall vote together as
one class on all matters submitted to a vote of the shareholders of the
Corporation.
4. Certain Restrictions
(i) Whenever dividends declared or other distributions payable on
the Series A Preferred Shares as provided in Section 2 hereof are in arrears,
thereafter and until all unpaid dividends and distributions on Series A
Preferred Shares outstanding shall have been paid in full, the Corporation shall
not:
(a) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares;
(b) declare or pay dividends, or make any other distributions,
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Shares,
except dividends paid ratably on the Series A Preferred Shares and all such
parity stock on which dividends are payable or in arrears in proportion to the
total amounts to which the holders of all such shares are then entitled;
(c) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Shares, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of stock of the Corporation ranking
junior (both as to dividends and upon liquidation, dissolution or winding up) to
the Series A Preferred Shares; or
(d) redeem or purchase or otherwise acquire for consideration
any Series A Preferred Shares, or any shares of stock ranking on a parity with
the Series A Preferred Shares, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other relative rights
and preferences of the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the respective series of
classes.
(ii) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under subparagraph (i) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
5. Reacquired Shares. Any Series A Preferred Shares purchased or otherwise
acquired by the Corporation in any manner whatsoever shall constitute authorized
but unissued
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Preferred Shares and may be reissued as part of a new series of Preferred Shares
by resolution or resolutions of the Board of Directors, subject to the
conditions and restrictions on issuance set forth herein, in the Articles of
Incorporation, or in any other Certificate of Designation creating a series of
Preferred Shares or as otherwise required by law.
6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made to
the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Shares unless,
prior thereto, the holders of Series A Preferred Shares shall have received
$0.25 per share, plus an amount equal to declared and unpaid dividends and
distributions thereon to the date of such payment.
7. Conversion. At any time, and at the option of the holder of the Series
A Preferred Stock, each share of the Series A Preferred Stock will be
convertible at any time into 1,000 shares of this Corporation's common stock.
In the event the Corporation shall at any time after March 20, 2006
declare or pay any dividend on Common Shares payable in Common Shares, or effect
a subdivision or combination or consolidation of the outstanding Common Shares
(by reclassification or otherwise) into a greater or lesser number of Common
Shares, then in each such case the number of Common Shares issuable upon the
conversion of the Series A Preferred Shares immediately prior to such event
shall be adjusted by multiplying such number by a fraction, the numerator of
which is the number of Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
8. Consolidation, Merger, Exchange, etc.. In case the Corporation shall
enter into any consolidation, merger, combination, statutory share exchange or
other transaction in which the Common Shares are exchanged for or changed into
other stock or securities, money and/or any other property, then in any such
case the Series A Preferred Shares shall at the same time be similarly exchanged
or changed into an amount per share equal to the aggregate amount of stock,
securities, money and/or any other property (payable in kind), as the case may
be, into which or for which each Common Share is changed or exchanged. In the
event the Corporation shall at any time after March 20, 2006 declare or pay any
dividend on Common Shares payable in Common Shares, or effect a subdivision or
combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise) into a greater or lesser number of Common Shares,
then in each such case the amount set forth in the preceding sentence with
respect to the exchange or change of Series A Preferred Shares shall be adjusted
by multiplying such amount by a fraction, the numerator of which is the number
of Common Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately prior to
such event.
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IN WITNESS WHEREOF, I have executed this Certificate of Designation,
Preferences and Rights this 20th day of March, 2006.
/s/ Michel Atlidakis
------------------------
Michel Atlidakis, President
/s/ Justin S. Sood
-------------------------
Justin S. Sood, Secretary
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