CERTIFICATE OF DESIGNATIONS,
PREFERENCES AND RIGHTS OF
SERIES A PREFERRED STOCK
OF
MAGICINC.COM
(Pursuant to Section 151 of the Delaware General Corporation Law)
- --------------------------------------------------------------------------------
The name of the corporation is MAGICINC.COM (the "Corporation").
The Corporation hereby certifies that, pursuant to authority vested in
the Board of Directors by Article Fourth of the Certificate of Incorporation,
the Certificate of Designations, Preferences and Rights of Series A Preferred
Stock of Magicinc.com was adopted as of March 23, 2001 by the Board of Directors
of the Corporation, pursuant to Section 141 of the Delaware General Corporation
Law. Mr. Gordon Scott Venters, although present at the board meeting, took no
part in the vote upon this resolution.
RESOLVED that, pursuant to authority vested in the Board of Directors
of the Corporation by Article Fourth of the Corporation's Certificate of
Incorporation of the total authorized number of 20,000,000 shares of Open Stock,
par value $.0001 per share, of the Corporation, there shall be designated a
series of 3,076,923 shares which shall be issued in and constitute a single
series to be known as "Series A Preferred Stock" (hereinafter called the "Series
A Preferred Stock"). The shares of Series A Preferred Stock have the voting
powers, designations, preferences and other special rights, and qualifications,
limitations and restrictions thereof set forth below:
1. Dividends. The holders of Series A Preferred Stock shall be entitled to
share in any dividends, if any, declared and paid upon or set aside for the
Common Stock or any series or class of preferred stock of the Corporation,
whether now existing or hereafter created or designated, that is pari passu with
the Series A Preferred Stock in respect of dividends, pro rata in accordance
with the number of shares of Common Stock into which such shares of Series A
Preferred Stock are then convertible pursuant to Section 4.
2. Rights on Liquidation, Dissolution or Winding-Up. In the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series A Preferred Stock and the holders
of any shares of any series or class of preferred stock of the Corporation,
whether now existing or hereafter created or designated, ranking by its terms
pari passu with the Series A Preferred Stock in respect of rights on
liquidation, dissolution or winding up of the Corporation ("Pari Passu Preferred
Stock"), in each case then outstanding shall be entitled to be paid out of the
assets of the Corporation available for distribution to its stockholders by
reason of their ownership thereof, pro rata in accordance with the number of
shares of Common Stock into which such shares of Series A Preferred Stock are
then convertible pursuant to Section 4.
3. Voting. In addition to any other rights provided by law or in the By-laws
of the Corporation, each share of Series A Preferred Stock shall entitle the
holder thereof to four votes per share. The number of votes per share will be
adjusted in accordance with any changes in the Conversion Ratio pursuant to 4(d)
so that the number of votes the Series A Preferred stockholder shall be entitled
to shall equal four times the number of shares of Common Stock (rounded down to
the nearest whole number based on the aggregate number of shares of Series A
Preferred Stock held by such stockholder) into which such share of Series A
Preferred Stock is then convertible as provided in Section 4 hereof, in the same
manner and with the same effect as such holders of Common Stock, voting together
with the holders of Common Stock and any other class or series of preferred
stock, whether now existing or hereafter created or designated (except and to
the extent otherwise expressly provided in any such series or class of preferred
stock), as one class; provided, however, holders of the Series A Preferred Stock
shall not be entitled to a separate vote as a class, or as a series thereof,
with respect to any amendment, alteration or repeal of the Certificate of
Incorporation that may be deemed or that purports to have been effected by way
of a merger or consolidation of the Corporation, or otherwise by operation of
law.
4. Optional Conversion.
The holder of any shares of the Series A Preferred Stock shall have
the right, at such holder's option, at any time or from time to time to convert
any of such shares into such whole number of fully paid and nonassessable shares
of Common as last adjusted and then in effect, for the shares of the Series A
Preferred Stock being converted, by surrender of the certificates representing
the shares of Series A Preferred Stock so to be converted in the manner provided
in Section 4(b) hereof. Each share of Series A Preferred Stock shall be
convertible into Common Stock at the Conversion Ratio (the "Conversion Ratio").
The conversion ratio at which shares of Common Stock shall be issuable upon
conversion of shares of Series A Preferred Stock shall initially be one share of
common Stock for each share of Series A Preferred Stock; provided, however, that
such Series A Preferred Conversion Ratio shall be subject to adjustment as set
forth in Section 4(d) hereof.
The holder of any shares of Series A Preferred Stock may exercise the
conversion right pursuant to Section 4(a) hereof as to one or more shares
thereof by delivering to the Corporation during regular business hours, at the
office of the Corporation or any transfer agent of the Corporation for the
Series A Preferred Stock as may be designated by the Corporation, the
certificate or certificates for the shares to be converted, duly endorsed or
assigned in blank or to the Corporation (if required by it), accompanied by
written notice stating that the holder elects to convert such shares and stating
the name or names (with address) in which the certificate or certificates for
the shares of Common Stock are to be issued. Conversion shall be deemed to have
been effected on the date when the aforesaid delivery is made (the "Conversion
Date"). As promptly as practicable thereafter, the Corporation shall issue and
deliver to or upon the written order of such holder, to the place designated by
such holder, a certificate to which such holder is entitled and a check or cash
in respect of any fractional interest in a share of Common Stock as provided in
Section 4(c) hereof. The person in whose name the certificate or certificates
for Common Stock are to be issued shall be deemed to have become a Common Stock
holder of record on the applicable Conversion Date unless the transfer books of
the Corporation are closed on that date, in which event such person shall be
deemed to have become a Common Stock holder of record on the next succeeding
date on which the transfer books are open, but the Series A Preferred Conversion
Price shall be that in effect on the Conversion Date. Upon conversion of only a
portion of the number of shares covered by a certificate representing shares of
Series A Preferred Stock surrendered for conversion, the Corporation shall issue
and deliver to or upon the written order of the holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate
covering the number of shares of Series A Preferred Stock representing the
unconverted portion of the certificate so surrendered, which new certificate
shall entitle the holder thereof to dividends on the shares of Series A
Preferred Stock represented thereby to the same extent as if the portion of the
certificate theretofore covering such unconverted shares had not been
surrendered for conversion.
No fractional shares of Common Stock or scrip shall be issued upon
conversion of shares of Series A Preferred Stock. If more than one share of
Series A Preferred Stock shall be surrendered for conversion at any one time
2
by the same holder, the number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of such Series A Preferred Stock so surrendered. Instead of any
fractional shares of Common Stock which would otherwise be issuable upon
conversion of any shares of Series A Preferred Stock, the Corporation shall pay
a cash adjustment in respect of such fractional interest in an amount equal to
the then fair market value, as determined in good faith by the Board of
Directors of the Corporation, of a share of Common Stock multiplied by such
fractional interest. Fractional interests shall not be entitled to dividends,
and the holders of fractional interests shall not be entitled to any rights as
stockholders of the Corporation in respect of such fractional interest.
For purposes of any adjustment of the Series A Preferred Conversion
Ratio pursuant to this Section 4, the following provisions should be applicable:
If, at any time after the Original Issuance Date, the number of shares
of Common Stock outstanding is increased by a stock dividend payable in shares
of Common Stock or by a subdivision or split-up of shares of Common Stock, then,
following the record date fixed for the determination of holders of Common Stock
entitled to receive such stock dividend, subdivision or split-up, the Series A
Preferred Conversion Ratio shall be appropriately decreased so that the number
of shares of Common Stock issuable on conversion of each share of Series A
Preferred Stock shall be increased in proportion to such increase in outstanding
shares. "Original Issuance Date" shall mean the date of original issuance of the
first share of Series A Preferred Stock.
If, at any time after the Original Issuance Date, the number of shares
of Common Stock outstanding is decreased by a combination or reverse stock split
of the outstanding shares of Common Stock, then, following the record date for
such combination, the Series A Preferred Conversion Ratio for such series shall
be appropriately increased so that the number of shares of Common Stock issuable
on conversion of each share of Series A Preferred Stock shall be decreased in
proportion to such decrease in outstanding shares.
In case, at any time after the Original Issuance Date, of any capital
reorganization, or any reclassification of the stock of the Corporation (other
than a change in par value or from par value to no par value or from no par
value to par value or as a result of a stock dividend or subdivision, split-up
or combination of shares), or the consolidation or merger of the Corporation
with or into another person (other than a consolidation or merger in which the
Corporation is the continuing corporation and which does not result in any
change in the Common Stock) or of the sale or other disposition of all or
substantially all the properties and assets of the Corporation as an entirety to
any other person, each share of Series A Preferred Stock shall after such
reorganization, reclassification, consolidation, merger, sale or other
disposition 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 consolidation or surviving such merger or to which such properties and
assets shall have been sold or otherwise disposed to which the holder of the
number of shares of Common Stock deliverable (immediately prior to the time of
such reorganization, reclassification, consolidation, merger, sale or other
disposition) upon conversion of such Series A Preferred Stock would have been
entitled upon such reorganization, reclassification, consolidation, merger, sale
or other disposition. The provisions of this Section 4 shall similarly apply to
successive reorganizations, reclassifications, consolidations, mergers, sales or
other dispositions.
(i) All calculations under Sections 4(d)(i) and 4(d)(ii) shall be made
to the nearest one tenth (1/10) of a cent or to the nearest one tenth (1/10) of
a share, as the case may be and (ii) in any case in which the provisions of this
Section 5 shall require that an adjustment shall become effective immediately
after a record date for an event, the Corporation may defer until the occurrence
of such event (A) issuing to the holder of any share of Series A Preferred Stock
converted after such record date and before the occurrence of such event the
additional shares of common stock issuable upon such conversion by reason of the
adjustment required by such event over and above the shares of capital stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount in cash in lieu of a fractional share of common
stock pursuant to Section 4(c); provided, however, that the Corporation shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares, and such cash, upon the
occurrence of the event requiring such adjustment.
3
Whenever the Series A Preferred Conversion Ratio shall be adjusted as
provided in this Section 4, the Corporation shall forthwith file, at the office
of the Corporation or of any transfer agent designated by the Corporation for
the Series A Preferred Stock, a statement, signed by its chief financial
officer, showing in detail the facts requiring such adjustment and the Series A
Preferred Conversion Ratio then in effect. The Corporation shall also cause a
copy of such statement to be sent by first-class certified mail, return receipt
requested, postage prepaid, to each holder of shares of Series A Preferred Stock
at his or its address appearing on the Corporation's records. Where appropriate,
such copy may be given in advance and may be included as part of a notice
required to be mailed under the provisions of Section 4.
In the event the Corporation shall propose to take any action of the
types described in Section 4(d), the Corporation shall give notice to each
holder of shares of Series A Preferred Stock, in the manner set forth in Section
4(f), which notice shall specify the record date, if any, with respect to any
such action and the date on which such action is to take place. Such notice
shall also set forth such facts with respect thereto as shall be reasonably
necessary to indicate the effect of such action (to the extent such effect may
be known at the date of such notice) on the Series A Preferred Conversion Ratio
and the number, kind or class of shares or other securities or property which
shall be deliverable or purchasable upon the occurrence of such action or
deliverable upon conversion of shares of Series A Preferred Stock.
The Corporation shall pay all documentary, stamp or other
transactional taxes attributable to the issuance or delivery of shares of common
stock of the Corporation upon conversion of any shares of Series A Preferred
Stock.
The Corporation shall reserve, free from preemptive rights, out of its
authorized but unissued shares of Common Stock solely for the purpose of
effecting the conversion of the shares of Series A Preferred Stock sufficient
shares to provide for the conversion of all outstanding shares of Series A
Preferred Stock.
All shares of Common Stock which may be issued in connection with the
conversion provisions set forth herein will, upon issuance by the Corporation,
be validly issued, fully paid and nonassessable.
IN WITNESS WHEREOF, this Certificate of Designations has been signed by the
President and members of the Board of Directors of the Corporation, this 23rd
day of March, 2001
Magicinc.com
By: /s/ G. Scott Venters
-----------------------------
G. Scott Venters, President
By: /s/ G. Scott Venters
-----------------------------
G. Scott Venters, Director
By: /s/ Robert Michael Ingria
-----------------------------
Robert Michael Ingria,
Director
By: /s/ Todd Nugent
-----------------------------
Todd Nugent, Director
4