EXHIBIT 3.18
CERTIFICATE TO SET FORTH DESIGNATIONS, PREFERENCES AND RIGHTS TO
SERIES J PREFERRED STOCK OF
NUSTATE ENERGY HOLDINGS, INC.
I, Frank P. Reilly, Chief Executive Officer and Secretary of NUSTATE
ENERGY HOLDINGS, INC., a corporation organized and existing under the General
Corporation Law of the State of Nevada (the "Corporation"), in accordance with
the provisions of Section 78.195 under Nevada Revised Statutes thereof, DO
HEREBY CERTIFY:
That pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation of said Corporation, said Board of Directors adopted a
resolution providing for the issuance of a Series of eighty (80) shares of
Series J Preferred Stock pursuant to a written consent dated June 20, 2008 which
resolution is as follows:
SERIES J CONVERTIBLE PREFERRED STOCK
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1. Designation, Amounts and Par Value. The designation of this series,
which consists of eighty (80) shares of preferred stock, is the Series J
Preferred Stock (the "Series J Preferred Stock"). The "Stated Value" of the
Series J Preferred Stock shall be $2,500.00 per share. The par value is $.01 per
share.
2. Dividends. No dividend shall be payable with respect to the Series J
Preferred Stock.
3. Rank and Liquidation.
(a) The Series J Preferred Stock shall rank prior to any other class or
series of common stock of the Corporation hereinafter designated, in each case
as to the distribution of assets upon liquidation, dissolution or winding up of
the Corporation.
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(b) Upon the dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, the Holders of the Series J Preferred Stock
shall be entitled to receive, before any payment or distribution shall be made
on any class of common stock of the Corporation ("Common Stock" or "Junior
Stock"), out of the assets of the Corporation available for distribution to
stockholders, the Stated Value per share of Series J Preferred Stock. Upon the
payment in full of all amounts due to Holders of the Series J Preferred Stock
and any class of securities not designated as Junior Stock, the holders of the
Common Stock shall receive all remaining assets of the Corporation legally
available for distribution. If the assets of the Corporation available for
distribution to the Holders of the Series J Preferred Stock, or any class of
capital stock parri passu with that of the Series J Preferred Stock, shall be
insufficient to permit payment in full of the amounts payable as aforesaid to
the Holders of Series J Preferred Stock upon such liquidation, dissolution or
winding up, whether voluntary or involuntary, then all such assets of the
Corporation shall be distributed to the exclusion of the holders of shares of
Junior Stock ratably among the Holders of the Series J Preferred Stock and any
class of capital stock parri passu with that of the Series J Preferred Stock.
(c) The purchase or the redemption by the Corporation of shares of any
class of stock, the merger or consolidation of the Corporation with or into any
other corporation or entity in which the Corporation is the survivor, or the
sale or transfer by the Corporation of substantially all of its assets shall be
deemed to be a liquidation, dissolution or winding-up of the Corporation for the
purposes of this paragraph 3.
4. Conversion into Common Stock. The Series J Preferred Stock shall have the
following conversion rights and obligations:
(a) Subject to the further provisions of this paragraph 4, the Holder
of shares of Series J Preferred Stock shall have the right to convert the Series
J Preferred Stock into fully paid and non-assessable shares of Common Stock
determined in accordance with the conversion price defined in paragraph 4(b)
below (the "Conversion Price").
(b) The number of shares of Common Stock issuable upon conversion of
the Series J Preferred Stock shall equal (i) the Stated Value per share being
converted, divided by (ii) the Conversion Price. The Conversion Price shall be
fifty percent (50%) of the average closing price of the Common Stock for the ten
(10) trading days immediately preceding the conversion date as defined in
paragraph 4(c) below (the "Conversion Date"), although in no instance shall the
Conversion Price be less than $0.01 per share or greater than $0.03 per share.
Further, the Conversion Price shall be subject to adjustment as described herein
and in any subscription agreement.
(c) Holder will give notice of its decision to exercise its right to
convert the Series J Preferred Stock or part thereof by telecopying an executed
and completed Notice of Conversion (a form of which is annexed as Exhibit A to
this Certificate of Designation) to the Corporation via confirmed telecopier
transmission. The Holder will not be required to surrender the Series J
Preferred Stock certificate until the Series J Preferred Stock has been fully
converted. Each date on which a Notice of Conversion is telecopied to the
Corporation in accordance with the provisions hereof shall be deemed a
Conversion Date. The Corporation will itself, or will cause the Corporation's
transfer agent to, transmit the Corporation's Common Stock certificates
representing the Common Stock issuable upon conversion of the Series J Preferred
Stock to the Holder for receipt by such Holder within five (5) business days
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after receipt by the Corporation of the Notice of Conversion (the "Delivery
Date"). A Series J Preferred Stock certificate representing the balance of the
Series J Preferred Stock not so converted will be provided by the Corporation to
the Holder if requested by Holder, provided the Holder has delivered the
original Series J Preferred Stock certificate to the Corporation. To the extent
that a Holder elects not to surrender Series J Preferred Stock for reissuance
upon partial payment or conversion, the Holder hereby indemnifies the
Corporation against any and all loss or damage attributable to a third-party
claim in an amount in excess of the actual amount of the Stated Value of the
Series J Preferred Stock then owned by the Holder.
In the case of the exercise of the conversion rights set forth in
paragraph 4(a), the conversion privilege shall be deemed to have been exercised
and the shares of Common Stock issuable upon such conversion shall be deemed to
have been issued upon the date of receipt by the Corporation of the Notice of
Conversion. The person or entity entitled to receive Common Stock issuable upon
such conversion shall, on the date such conversion privilege is deemed to have
been exercised and thereafter, be treated for all purposes as the record holder
of such Common Stock and shall on the same date cease to be treated for any
purpose as the record holder of such shares of Series J Preferred Stock so
converted.
Upon the conversion of any shares of Series J Preferred Stock, no
adjustment or payment shall be made with respect to such converted shares on
account of any dividend on the Common Stock.
The Corporation shall not be required, in connection with any
conversion of Series J Preferred Stock to issue a fraction of a share of its
Common Stock and shall instead deliver a stock certificate representing the
nearest whole number. However, the Company may issue a fraction of a share of
Series J Preferred Stock.
(d) The Conversion Price determined pursuant to Paragraph 4(b) shall be
subject to adjustment from time to time as follows:
(i) In case the Corporation shall at any time (A) declare any
dividend or distribution on its Common Stock or other securities of the
Corporation other than the Series J Preferred Stock, (B) split or subdivide the
outstanding Common Stock, (C) combine the outstanding Common Stock into a
smaller number of shares, or (D) issue by reclassification of its Common Stock
any shares or other securities of the Corporation, then in each such event the
Conversion Price shall be adjusted proportionately so that the Holders of Series
J Preferred Stock shall be entitled to receive the kind and number of shares or
other securities of the Corporation which such Holders would have owned or have
been entitled to receive after the happening of any of the events described
above had such shares of Series J Preferred Stock been converted immediately
prior to the happening of such event (or any record date with respect thereto).
Such adjustment shall be made whenever any of the events listed above shall
occur. An adjustment made to the Conversion Price pursuant to this paragraph
4(d) (i) shall become effective immediately after the effective date of the
event.
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(ii) For so long as Series J Preferred Stock is outstanding,
the Holder is granted the anti-dilution and price protection rights set forth
herein.
(e) (i) In case of any merger of the Corporation with or into any other
corporation or entity (other than a merger in which the Corporation is the
surviving or continuing corporation and which does not result in any
reclassification, conversion, or change of the outstanding shares of Common
Stock) then unless the right to convert shares of Series J Preferred Stock shall
have terminated as part of such merger, lawful provision shall be made so that
Holders of Series J Preferred Stock shall thereafter have the right to convert
each share of Series J Preferred Stock into the kind and amount of shares of
stock and/or other securities or property receivable upon such merger by a
Holder of the number of shares of Common Stock into which such shares of Series
J Preferred Stock might have been converted immediately prior to such
consolidation or merger. Such provision shall also provide for adjustments which
shall be as nearly equivalent as may be practicable to the adjustments provided
for in paragraph 4(d). The foregoing provisions of this paragraph 4(e) shall
similarly apply to successive mergers.
(ii) In case of any sale or conveyance to another person or
entity of the property of the Corporation as an entirety, or substantially as an
entirety, in connection with which shares or other securities or cash or other
property shall be issuable, distributable, payable, or deliverable for
outstanding shares of Common Stock, then, unless the right to convert such
shares shall have terminated, lawful provision shall be made so that the Holders
of Series J Preferred Stock shall thereafter have the right to convert each
share of the Series J Preferred Stock into the kind and amount of shares of
stock or other securities or property that shall be issuable, distributable,
payable, or deliverable upon such sale or conveyance with respect to each share
of Common Stock immediately prior to such conveyance.
(f) Whenever the number of shares to be issued upon conversion of the
Series J Preferred Stock is required to be adjusted as provided in this
paragraph 4, the Corporation shall forthwith compute the adjusted number of
shares to be so issued and prepare a certificate setting forth such adjusted
conversion amount and the facts upon which such adjustment is based, and such
certificate shall forthwith be filed with the Transfer Agent for the Series J
Preferred Stock and the Common Stock; and the Corporation shall mail to each
Holder of record of Series J Preferred Stock notice of such adjusted conversion
price.
(g) In case at any time the Corporation shall propose:
(i) to pay any dividend or distribution payable in shares upon
its Common Stock or make any distribution (other than cash dividends) to the
holders of its Common Stock; or
(ii) to offer for subscription to the holders of its Common
Stock any additional shares of any class or any other rights; or
(iii) any capital reorganization or reclassification of its
shares or the merger of the Corporation with another corporation or entity
(other than a merger in which the Corporation is the surviving or continuing
corporation and which does not result in any reclassification, conversion, or
change of the outstanding shares of Common Stock); or
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(iv) the voluntary dissolution, liquidation or winding-up of
the Corporation; then, and in any one or more of said cases, the Corporation
shall cause at least fifteen (15) days prior notice of the date on which (A) the
books of the Corporation shall close or a record be taken for such stock
dividend, distribution, or subscription rights, or (B) such capital
reorganization, reclassification, merger, dissolution, liquidation or winding-up
shall take place, as the case may be, to be mailed to the Transfer Agent for the
Series J Preferred Stock and for the Common Stock and to the Holders of record
of the Series J Preferred Stock.
(h) So long as any shares of Series J Preferred Stock or any obligation
amount shall remain outstanding and the Holders thereof shall have the right to
convert the same in accordance with provisions of this paragraph 4, the
Corporation shall use its best efforts to reserve sufficient shares of its
authorized and unissued Common Stock that would be necessary to allow conversion
of the Series J Preferred Stock, and if it determines that its authorized and
unissued shares of Common Stock are not sufficient to allow such conversion, it
will amend its Articles of Incorporation and make appropriate filings with the
Securities and Exchange Commission in order to increase its authorized
capitalization.
(i) The term "Common Stock" as used in this Certificate of Designation
shall mean the $.001 par value Common Stock of the Corporation as such stock is
constituted at the date of issuance thereof or as it may from time to time be
changed, or shares of stock of any class or other securities and/or property
into which the shares of Series J Preferred Stock shall at any time become
convertible pursuant to the provisions of this paragraph 4.
(j) The Corporation shall pay the amount of any and all issue taxes
(but not income taxes) which may be imposed in respect of any issue or delivery
of stock upon the conversion of any shares of Series J Preferred Stock, but all
transfer taxes and income taxes that may be payable in respect of any change of
ownership of Series J Preferred Stock or any rights represented thereby or of
stock receivable upon conversion thereof, shall be paid by the person or persons
surrendering such stock for conversion.
(k) In the event a Holder shall elect to convert any shares of Series J
Preferred Stock as provided herein, the Corporation may not refuse conversion
based on any claim that such Holder or any one associated or affiliated with
such Holder has been engaged in any violation of law, or for any other reason
unless, an injunction from a court, on notice, restraining and or enjoining
conversion of all or part of said shares of Series J Preferred Stock shall have
been issued and the Corporation posts a surety bond for the benefit of such
Holder in the obligation amount sought to be converted, which is subject to the
injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Holder in the event it obtains judgment.
5. Voting Rights. The Holder of shares of Series J Preferred Stock
shall not have voting rights except as described in paragraph 6 hereof.
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6. Restrictions and Limitations.
(a) Amendments to Charter. The Corporation shall not amend its Articles
of Incorporation without the approval by the holders of at least 70% of the then
outstanding shares of Series J Preferred Stock if such amendment would:
(i) reduce the amount payable to the Holders of Series J
Preferred Stock upon the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation;
(ii) cancel or modify the conversion rights of the Holders of
Series J Preferred Stock provided for in paragraph 4 herein; or
(iii) cancel or modify the rights of the Holders of the Series
J Preferred Stock provided for in this paragraph 6.
7. Redemption. Holders of the Series J Preferred Stock shall have no
right to have the Corporation redeem the Series J Preferred Stock. The
Corporation shall have no right to redeem the Series J Preferred Stock.
8. Status of Converted Stock. In case any shares of Series J Preferred
Stock shall be converted or repurchased or reacquired, the shares so converted
or reacquired shall resume the status of authorized but unissued shares of
Preferred Stock and shall no longer be designated as Series J Preferred Stock.
9. Authority to Amend. This Certificate of Designation was adopted by
the Corporation's Board of Directors on June 20, 2008, and no stockholder
consent was required for the adoption thereof pursuant to the authority
conferred upon the Board of Directors by the Articles of Incorporation of said
Corporation.
IN WITNESS WHEREOF, such Corporation has caused this Certificate of
Designation to be signed by its Chief Executive Officer this 30th day of June
2008.
NUSTATE ENERGY HOLDINGS, INC.
By:
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Frank P. Reilly, Chief Executive Officer and Secretary
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EXHIBIT A
NOTICE OF CONVERSION
(To Be Executed By the Registered Holder in Order to Convert the Series J
Convertible Preferred Stock of NuState Energy Holdings, Inc.)
The undersigned hereby irrevocably elects to convert $__________ of the
Stated Value of the above Series J Convertible Preferred Stock into shares of
Common Stock of NuState Energy Holdings, Inc. according to the conditions
hereof, as of the date written below.
Date of Conversion:
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Applicable Conversion Price Per Share: $
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Number of Common Shares Issuable Upon this Conversion:
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Select one:
[ ] A Series J Convertible Preferred Stock certificate is being delivered
herewith. The unconverted portion of such certificate should be reissued and
delivered to the undersigned.
[ ] A Series J Convertible Preferred Stock certificate is not being
delivered herewith.
Signature:
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Printed Name:
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Address:
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Deliveries Pursuant to this Notice of Conversion Should Be Made to:
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