CASINO AIRLINK, INC.
Certificate of voting powers, designations, preferences, and
rights of preferred stock
By resolution of the Board of Directors.
We, William G. Forhan and Ellen Forhan of Casino Airlink, Inc., a
corporation organized in existing under the Business Corporation
Law of the state of Nevada, in accordance with 78.195 of the
Nevada Revised Statutes thereof, do hereby certify:
That, pursuant to authority conferred upon the Board of Directors
by the Articles of Incorporation or an amendment thereto of said
Corporation, said Board of Directors, by unanimous written
consent pursuant to Section 78.315.2 of the Nevada Revised
Statutes, on December 11, 1996 duly adopted a resolution
providing for the issuance of a series of one million seven
hundred thousand (1,700,000) shares of the Corporation's
preferred stock, to be known as its "Series B Preferred Stock,"
which resolution is as follows:
WHEREAS, the corporations Articles of Incorporation authorize the
issuance of 25 million (25,000,000) shares of common stock of the
corporation with a par value of $0.10 (the "Common Stock") and,
additionally, 10 million (10,000,000) shares of preferred stock,
also with a par value of $0.10 per share (the "Preferred Stock");
and,
WHEREAS, the Board of Directors has determined that it is in the
best interests of the Corporation to issue to certain investors
shares of the Company's Preferred Stock, as authorized for
issuance by the Company's Articles of Incorporation, with certain
rights, preferences and privileges;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to Section 78.1955
of the Nevada Revised Statutes, the corporation shall, and hereby
does, create a series of one million seven hundred thousand
shares (1,700,000) of its Preferred Stock, to be and hereby known
as the Series B Preferred Stock; and
RESOLVED FURTHER, that the rights, preferences, privileges and
restrictions granted to or imposed upon the Series B Preferred
Stock shall be, and hereby are, as follows:
RIGHTS, PREFERENCES, AND PRIVILEGES OF SERIES B PREFERRED STOCK
1. No voting rights. Except as otherwise required by law or
Section 5 hereof, the holders of Series B preferred stock issued
and outstanding shall not be entitled to vote on matters
submitted to the other shareholders of the corporation and shall
not have the right to vote separately as a class on such matters.
2. Dividends. The holders of the Series B preferred stock shall
be entitled, when, as and if declared by the board of directors
of the corporation, to noncumulative dividends in such amount as
may be determined from time to time by the board of directors,
such dividends to be paid out of funds legally available
therefore. No dividend or distribution shall be declared or paid
on any shares of common stock (other than dividends payable
solely in common stock of the corporation) unless at the same
time an equivalent dividend or distribution is paid or declared
and set aside for payment on the Series B preferred stock (on an
as-if converted to common stock basis).
3. Liquidation preference. In the event of any liquidation,
dissolution, or winding up of the corporation, either voluntary
or involuntary, distributions to shareholders of the corporation
shall be made in the following manner:
(a) the holders of the Series B preferred stock shall be entitled
to receive, prior and in preference to any distribution of any of
the assets or surplus funds of the corporation to the holders of
the common stock, but after any such distribution to holders of
the series A preferred stock, by reason of their ownership of
such shares, an amount equal to $1.25 for each share of Series B
preferred stock then held by them plus all declared but unpaid
dividends on such shares, minus an amount equal to all dividends
per share on the Series B preferred stock paid since the day to
such shares were issued (the "Original Issuance Date") that were
not also paid with respect to the common stock. If the assets
and funds thus distributed among the holders of the Series B
preferred stock shall be insufficient to permit the payment to
such holders of the full preferential amount, then the entire
assets and funds of the corporation legally available for such
distribution shall be distributed among the holders of the Series
B preferred stock in proportion to the shares of Series B
preferred stock then held by them. After payment has been made
to the holders of the Series A preferred stock and Series B
preferred stock of full amounts as to which they shall be
entitled as aforesaid, the holders of the common stock should be
entitled to receive ratably all the remaining assets.
(b) for purposes of this paragraph 3, (i) a merger or
consolidation of the corporation with or into any other
corporation or corporations, or (ii) the merger of any other
corporation or corporations into the corporation, as a result of
which consolidation or merger (A) the shareholders of the
corporation receive distributions in cash or securities of
another corporation or corporations as a result of such
consolidation or merger or (B) the shareholders of the
corporation shall own less than fifty percent (50%) of the voting
securities of the surviving corporation, or (iii) a sale of all
or substantially all of the assets of the corporation, shall be
treated as a liquidation, dissolution or winding up of the
corporation
(c) any securities to be delivered to the holders of the Series B
preferred stock pursuant to paragraph 3(b) below shall be valued
as follows:
(i) If traded on a Securities Exchange, the value shall be deemed
to be the average of the closing prices three (3) days prior to
the closing;
(ii) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices
(whichever are applicable) over the 30-day period ending three
(3) days prior to the closing, and
(iii) If there is no active public market, the value shall be the
fair market value thereof, as mutually determined by the
corporation and the holders of the Series B preferred stock who
would be entitled to receive such securities or the same type of
securities and whose Series B preferred stock represents at least
a majority voting power of all then outstanding shares of such
series B preferred stock.
4. Conversion. The holders of the Series B preferred stock shall
have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series B preferred stock
shall be convertible, at the option of the holder thereof, at any
time after the date of issuance of such share at the office of
the corporation or any transfer agent for the Series B preferred
stock. Each share of Series B preferred stock shall be
convertible into one (1) share of fully paid and nonassessable
Common Stock,
(b) Mechanics of Conversion. Before any holder of Series B
Preferred Stock shall be entitled to convert the same into full
shares of common stock and receive certificates therefore, he or
she shall surrender the certificate or certificates, duly
endorsed, at the office of the corporation or of any transfer
agent for the Series B Preferred Stock and shall give written
notice to the corporation at such office that such holder elects
to convert. The corporation shall issue certificates evidencing
the shares of common stock issuable upon such conversion if the
holder notifies the corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the corporation to indemnify the
corporation from any loss incurred by it. The Corporation shall,
as soon as practicable after such delivery, or such agreement of
indemnification in the case of a lost certificate, issue and
deliver at such office to such holder of Series B preferred
stock, a certificate or certificates for the number of shares of
common stock to which the holder shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash
amounts payable in lieu of conversion into fractional shares of
Common Stock as set forth below. Such conversion shall be deemed
to have been made immediately prior to the close of business on
the date of such surrender of the shares of Series B Preferred
Stock to be converted, and the person or persons entitled To
receive the shares of common stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders
of such shares of common stock on such date.
(c) Fractional Shares. In lieu of any fractional shares to which
the holder of Series B Preferred Stock would otherwise be
entitled, the corporation shall pay cash equal to such a fraction
multiplied by the fair market value of one share of common stock,
as determined in the sole discretion of the board of directors of
the corporation. Whether or not fractional shares would be
issuable upon such conversion shall be determined on the basis of
the total number of shares of Series B Preferred Stock at the
time converting and the number of shares of common stock issuable
upon such aggregate conversion.
(d) No Impairment. The corporation will not through any
reorganization, recapitalization, transfer of assets,
consolidation, merger, 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 hereunder by the corporation, but will at all times in
good faith assist in the carrying out of all the provisions of
this paragraph 4 and in the taking of 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. This provision shall not restrict the corporation's
right to amend its Articles of Incorporation with the requisite
shareholder consent.
(e) Notices of Record Date. In the event that the corporation
shall propose at any time:
(i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities,
whether or not a regular cash dividend and whether or no out of
earnings or earned surplus;
(ii) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of
any class or series or other rights;
(iii) to effect any reclassification or recapitalization of its
Common Stock outstanding involving a change in the Common Stock;
or
(iv) to merge or consolidate with or into any other corporation
or sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up;
then, in connection with each such event, the corporation shall
send to the holders of the Series B Preferred Stock:
(A) at least 10 days' prior written notice of the date on which a
record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders
of Common Stock shall be entitled thereto and the amount and
character of such dividend, distribution or right) or for
determining rights to vote in respect of the matters referred to
in (iii) and (iv) above; and
(B) in the case of the matters referred to in (iii) and (iv)
above, at least 20 days' prior written notice of the date when
the same shall take place (and specifying the date on which the
holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon
the occurrence of such event or the record date for the
determination of such holders if such record date is earlier).
Each such written notice shall be delivered personally or given
by first class mail, postage prepaid, addressed to the holders of
the Series B Preferred Stock at the address for each such holder
as shown on the books of the corporation.
(f) Reservation of Stock Issuable Upon Conversion. The
corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the
purpose of effecting the conversion of the shares of Series B
Preferred Stock such number of shares of its Common Stock as
shall from time to time be sufficient to effect the conversion of
all outstanding shares of Series B Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of Series B Preferred Stock, the corporation
will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
(g) Reissuance of Converted or Contributed Shares. In case any
shares of Series B Preferred Stock are converted into Common
Stock pursuant to Section 4 hereof or contributed back to the
corporation, after the Original Issue Date of such shares, all
such shares so converted or contributed shall, upon such
conversion or contribution, resume the status of authorized, but
undesignated and unissued, shares of Preferred Stock.
5. Protective Provisions. In addition to any other right provided
by law, so long as any Series B Preferred Stock shall be
outstanding, this corporation shall not, without first obtaining
the vote or written consent of the holders of not less than a
majority of such outstanding shares of Series B Preferred Stock:
(a) amend or repeal any provision of, or add any provision to,
this corporation's Articles of Incorporation or bylaws if such
action would alter or change materially and adversely the
preferences, rights, privileges or powers of, or the restrictions
provided for the benefit of, the Series B Preferred Stock;
(b) authorize or issue shares of any class or series of stock (or
securities convertible into or exchangeable for such stock)
having any rights, preferences or privileges superior to or on a
parity with any such rights, preferences or privileges of the
Series B Preferred Stock; or
(c) authorize a sale or transfer of all or substantially all of
the assets of the corporation or a merger or consolidation of the
corporation if, as a result of such merger or consolidation, the
shareholders of the corporation shall own less than fifty percent
(50%) of the voting securities of the surviving corporation.
IN WITNESS WHEREOF, Casino Airlink, Inc. has caused its corporate
seal to be hereunto affixed and this certificate to be signed by
William Forhan, its President and Secretary, and by Ellen Forhan,
its Chief Financial Officer, this 11th day of December, 1996.
By: /s/ William Forhan
William Forhan, President and Secretary
By: /s/ Ellen Forhan
Ellen Forhan, Chief Financial Officer