EXHIBIT 3.4
CERTIFICATE OF DESIGNATION OF
SERIES A CONVERTIBLE PREFERRED STOCK
OF
NANNACO, INC.
Pursuant to Article 2.13 of the
Texas Business Corporation Act
Nannaco, Inc., a corporation organized and existing under the laws of the
state of Texas (the "Corporation"), hereby certifies that, pursuant to (i) the
ag uthority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, (ii) the provisions of Article 2.13 of the
Texas Business Corporation Act, and (iii) the resolutions adopted by the Board
of Directors of the Corporation by unanimous written consent dated August 23,
2004, the Board of Directors duly adopted resolutions providing for the adoption
of the Certificate of Designations of Series A Convertible Preferred Stock of
the Corporation, and creating the number of votes to which each share of Series
A Convertible Preferred Stock is entitled and the number of shares of Common
Stock into which each share of Series A Convertible Preferred Stock will become
convertible (and making similar conforming changes), which resolutions are as
follows:
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation by the Certificate of Incorporation, the Board of Directors
does hereby approve the issuance of up to 10,000,000 shares of Preferred Stock,
par value $.001 per share, of the Corporation, to be designated "Series A
Convertible Preferred Stock" of the presently authorized shares of Preferred
Stock. The voting powers, designations, preferences, and other rights of the
Series A Convertible Preferred Stock authorized hereunder and the
qualifications, limitations and restrictions of such preferences and rights are
as follows:
1. Cash Dividends. No cash dividends shall be paid with respect to the
shares of Series A Convertible Preferred Stock.
2. Voting. The holders of Series A Convertible Preferred Stock shall not
be entitled to vote on issues submitted to a vote of stockholders of the
Corporation, provided however, that each share of Series A Convertible Preferred
Stock shall be entitled to 100 votes solely on the specific issue of
reverse-splitting the Corporation's Common Stock.
3. Conversion. The Series A Convertible Preferred Stock shall not be
convertible when issued, but shall become convertible, at the Corporation's
election, into shares of Common Stock only after such date as the shareholders
vote upon a reverse-split of the Corporation's Common Stock. The following
provisions shall apply after the Series A Convertible Preferred Stock becomes
convertible:
(a) Upon the election of the Corporation to convert the Series A
Convertible Preferred Stock, the holders of said shares of Series A Convertible
Preferred Stock shall surrender the certificate or certificates for such shares
at the office of the Corporation (or at such other place as the Corporation may
designate by notice to the holders of shares of Series A Convertible Preferred
Stock) during regular business hours, duly endorsed to the Corporation or in
blank, or accompanied by instruments of transfer to the Corporation in blank, in
form satisfactory to the Corporation and shall give written notice to the
Corporation at such office that said holder has been instructed that the
Corporation has elected to convert the shares of Series A Convertible Preferred
Stock. The Corporation shall, as soon as practicable after such deposit of
certificates for shares of Series A Convertible Preferred Stock, accompanied by
the written notice above prescribed, issue and deliver at such office to the
holder for whose account such shares were surrendered, or to his nominee,
certificates representing the number of shares of Common Stock to which such
holder is entitled upon such conversion.
(b) Conversion shall be deemed to have been made as of the date of
surrender of certificates for the shares of Series A Convertible Preferred Stock
to be converted and the delivery of written notice as hereinabove provided; and
the person entitled to receive the Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder of such Common Stock on
such date.
(c) The Conversion Rate shall be as follows:
(i) The holders of all shares of the Series A Convertible Preferred
Stock surrendered for conversion shall be entitled to receive Common Stock in an
amount such that when all such Common Stock is aggregated the total number of
shares received by shareholders of the Series A Convertible Preferred Stock as a
class shall equal five percent (5%) of the number of shares of Common Stock of
the Corporation which is then currently issued and outstanding, which Common
Stock shall be distributed to each holder of Series A Convertible Preferred
Stock on a pro-rata basis, considering the relationship an individual holder's
shares of the Series A Convertible Preferred Stock bears to the total shares of
Series A Convertible Preferred Stock issued and outstanding.
(ii) The Corporation shall pay any and all issue or transfer taxes
that may be payable in respect of any issuance or delivery of shares of Common
Stock on conversion of shares of Series A Convertible Preferred Stock pursuant
hereto. The Corporation shall not, however, be required to pay any tax which is
payable in respect of any transfer involved in the issue or delivery of Common
Stock in a name other than that in which the shares of Series A Convertible
Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue has paid to the
Corporation the amount of such tax, or has established, to the satisfaction of
the Corporation, that such tax has been paid.
4. Fractional Shares. The Series A Convertible Preferred Stock may not be
issued as fractional shares.
5. Liquidation, Dissolution, Winding Up. The Series A Convertible
Preferred Stock shall have no liquidation or other preference over the
Corporation's Common Stock. Upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, its net assets shall be
distributed ratably to holders of the Series A Convertible Preferred Stock and
holders of Common Stock in pari passu.
IN WITNESS WHEREOF, Nannaco, Inc., has caused this Certificate to be
signed by Steve Careaga, its Chief Executive Officer, and attested by Tracy M.
Shier, its Temporary Secretary, this 23rd day of August, 2004.
By: /s/ Steve Careaga ATTESTED BY:/s/ Tracy M. Shier
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Steve Careaga, CEO Tracy M. Shier, Temporary Secretary