Exhibit 10.3
CHINA BIOPHARMACEUTICALS HOLDING, INC.
AMENDED AND RESTATED
CERTIFICATE OF DESIGNATION
OF SERIES A CONVERTIBLE PREFERRED STOCK
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
China Biopharmaceuticals Holdings, Inc. (the "Company"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, does hereby certify:
FIRST: Pursuant to authority conferred upon the Board of Directors by
its Certificate of Incorporation, and pursuant to the provisions of Section 151
of the General Corporation Law of the State of Delaware, said Board of Directors
has adopted a resolution on March , 2006, which is set forth below, to increase
the number of shares of the Series A Convergible Preferred Stock and the related
warrants authorized pursuant to a resolution dated June 9th, 2005, a copy of
which was filed with the State of Delaware.
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company by the provisions of the
Certificate of Incorporation of the Company, as amended, out of the authorized
but unissued shares of Preferred Stock of the Company this Board of Directors
hereby creates a series of the Preferred Stock, par value $.01 per share, face
value $1.00 per share (the "Preferred Stock"), of the Company, and this Board of
Directors hereby fixes the powers, designations, preferences and relative,
participating, optional or other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof (in addition to the
powers, designations, preferences and relative, participating, optional or other
special rights, and the qualifications, limitations or restrictions thereof, set
forth in the Certificate of Incorporation of the Company which are applicable to
Preferred Stock of all series) as follows:
1. Designation. The designation of the series shall be "Series A
Convertible Preferred Stock" (the "Series A Convertible Preferred
Stock"), face value $1.00 ("Face Value"). The Series A Convertible
Preferred Stock shall be issued at a purchase price of US$1.00 per
share ("Purchase Price").
2. Number. The number of shares constituting the Series A Convertible
Preferred Stock shall be increased to 1,152,500.
3. Liquidation
a. Preference. Subject to the rights of the holders of any other series
of Preferred Stock ranking senior to or on a parity with the Series A
Convertible Preferred Stock with respect to liquidation and any other
class or series of capital stock of the Company ranking senior to or on
a parity with the Series A Convertible Preferred Stock with respect to
liquidation, in the event of any liquidation, dissolution or winding up
of the affairs of the Company, whether voluntary or involuntary, the
holders of record of the issued and outstanding shares of Series A
Convertible Preferred Stock ("Holder") shall be entitled to receive,
out of the assets of the Company available for distribution to the
Holders of shares of Series A Convertible Preferred Stock, prior and in
preference to any distribution of any of the assets of the Company to
the holders of Common Stock and any other series of Preferred Stock
ranking junior to the Series A Convertible Preferred Stock with respect
to liquidation and any other class or series of capital stock of the
Company ranking junior to the Series A Convertible Preferred Stock with
respect to liquidation, an amount in cash per share equal to $1.50,
plus an amount equal to all dividends accrued and unpaid on each such
share (whether or not declared) up to the date fixed for distribution.
If, upon such liquidation, dissolution or winding up of the affairs of
the Company, the assets of the Company distributable among the Holders
of Series A Convertible Preferred Stock and any other series of
Preferred Stock ranking on a parity therewith in respect thereto or any
class or series of capital stock of the Company ranking on a parity
therewith in respect thereto shall be insufficient to permit the
payment in full to all such Holders of shares of the preferential
amounts payable to them, then the entire assets of the Company
available for distribution to such Holders of shares shall be
distributed ratably among such Holders in proportion to the respective
amounts that would be payable per share if such assets were sufficient
to permit payment in full. After payment of the full amount to which
they are entitled upon liquidation pursuant to this Section 3(a), the
Holders of shares of Series A Convertible Preferred Stock will not be
entitled to any further participation in any distribution of assets by
the Company. Neither a consolidation or merger of the Company with
another corporation or other entity nor a sale, transfer, lease or
exchange of all or part of the Company's assets will be considered a
liquidation, dissolution or winding up of the affairs of the Company
for purposes of this Section 3(a).
b. No Preference on Common Stock. The preference in liquidation
provided in the above Section 3(a) shall not apply if the Holder of the
Series A Convertible Preferred Stock has converted the Series A
Convertible Preferred Stock into Common Stock of the Company, which
shall be ranked junior to Preferred Stock.
4. Optional Conversion Rights. The Series A Convertible Preferred Stock
shall be convertible as follows:
a. Optional Conversion. Subject to and upon compliance with the
provisions of this Section 4, the Holder of any shares of Series A
Convertible Preferred Stock shall have the right at such Holder's
option (an "Optional Conversion"), at a date elected by such Holder, to
convert such Series A Convertible Preferred Stock into fully paid and
nonassessable shares of Common Stock of the Company at the ratio of one
for one shares of the Common Stock of the Company ("Conversion Ratio").
2
c. Costs. The Company shall pay all documentary fee attributable to the
issuance or delivery of shares of Common Stock upon conversion of any
shares of Series A Convertible Preferred Stock; provided that the
Company shall not be required to pay any taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any
certificate for such shares in a name other than that of the Holder of
the shares of Series A Preferred Stock in respect of which such shares
are being issued.
d. Dividends Upon Conversion. In connection with any conversion of
shares of Series A Convertible Preferred Stock, the Company shall pay
accrued and unpaid dividends thereon in accordance with the provisions
of Section 5.
5. Dividends.
Subject to the rights of the Holders of any other series of Preferred
Stock ranking senior to or on a parity with the Series A Convertible
Preferred Stock with respect to dividends and any other class or series
of capital stock of the Company ranking senior to or on a parity with
the Series A Convertible Preferred Stock with respect to dividends,
other than the Common Stock, the Holders of the Series A Convertible
Preferred Stock shall be entitled to receive, when and as declared by
the Board of Directors, cumulative dividends per share of Series A
Convertible Preferred Stock at a rate of 7% per annum or as determined
by the Board of Directors, payable semi-annually, during the period
commencing after the date of original issuance of any shares of Series
A Convertible Preferred Stock until converted pursuant to Section 4
above; provided, however, in the event of a conversion as a result of
an Optional Conversion, no dividends will be due or payable to Holders
of Series A Convertible Preferred Stock. Any dividends shall be paid
within thirty (30) calendar days from the date it has been declared by
the Board of Directors.
6. (1) Warrant. The Company hereby agrees to grant Holders
warrants that for a period of three (3) years from the date first above
written, Holders have the right but not the obligation to purchase the
Common Stock of the Company ("Warrant"). The purchase price shall be
$2.00 per share ("Warrant Price") and the total number of shares that
Holders may purchase shall be 1,152,000 ("Warrant Amount").
(2) Registration Rights. The Company shall prepare and file
with the Securities and Exchange Commission a registration statement
under the Securities Act of 1933, as amended registering the Common
Stock issuable upon exercise of the Warrants and/or the Common Stock
issuable upon conversion of the Series A Convertible Preferred Stock,
as applicable, for unrestricted public resale by the Subscriber. The
3
Company shall cause such registration statement to be declared
effective within one hundred and twenty (120) days after the issuance
date of the respective shares of Series A Convertible Preferred Stock.
In case the registration statement is not declared effective within the
agreed period, the total number of shares of Common Stock that Holder
may purchase, either through exercise of the Warrants or conversion of
the Series A Convertible Preferred Stock, shall be increased by five
per cent (5%) per month for every month the Shares are not registered
after the one hundred and twenty (120) days.
7. (a) This Agreement and the legal relations among the parties hereto
shall be governed by and construed in accordance with the laws of the
United States of America and State of New York, regardless of the laws
that might otherwise govern under applicable choice-of-law principles.
(b) The parties hereby irrevocably submit to the non-exclusive
jurisdiction of the state and federal courts located in the State and
County of New York for purposes of all legal proceedings arising out of
or relating to this Certificate of Designation or the transactions
contemplated hereby. The parties hereby irrevocably waive, to the
fullest extent permitted by applicable law, the right to trial by jury,
any objection which they may now or hereafter have to the laying of
venue of any such proceeding brought in such a court and any claim that
any such proceeding brought in such a court has been brought in an
inconvenient forum.
FURTHER RESOLVED, that any and all actions heretofore taken by the
Company within the terms of any of the foregoing resolutions are hereby ratified
and confirmed.
SECOND: That said determination of the powers, designation, preferences
and the relative, participating, optional or other rights, and the
qualifications, limitations or restrictions thereof, relating to said series of
Preferred Stock, was duly made by the Board of Directors of the Company pursuant
to the provisions of the Certificate of Incorporation of the Company, as
amended, and in accordance with the provisions of Section 151 of the General
Corporation Law of the State of Delaware.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, said Corporation has caused this Certificate to be
signed by Stephen E. Globus, as Director on the 21 day of March, 2006.
CHINA BIOPHARMACEUTICALS HOLDINGS, INC.
By:____________________________________
Stephen E. Globus, Director
5