EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WILDON PRODUCTIONS INC.
(to be known upon and after the effective date of the filing of this
Amended and Restated Certificate of Incorporation as
Visual Management Systems, Inc.)
(Pursuant to NRS 78.385, 78.390, 78.403, 78.207 and 78.209)
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. She is the duly elected and acting President of Wildon
Productions Inc., a Nevada corporation (the "Corporation").
2. By unanimous written consent of the Board of Directors of the
Corporation dated June 15, 2007 resolutions approving and adopting this Amended
and Restated Certificate of Incorporation (the "Certificate") and approving a
one for seven reverse stock split of the Corporation's Common Stock (the
"Reverse Stock Split"), were duly adopted and declared to be effective.
3. This Certificate and the Reverse Stock Split was approved and
adopted by written consent of the holders of 7,800,000 shares of the Common
Stock of the Corporation (representing fifty four and seven tenths percent
(54.7%) of the Corporation's issued and outstanding Common Stock). No shares
were voted against the adoption of this Certificate or the Reverse Stock Split.
4. The current number of authorized shares and the par value of
each class or series of capital stock of the Corporation before the Reverse
Stock Split and the Effective Date of the filing of this Certificate specified
in Paragraph 9 below is as follows:
Common Stock, par value $.001 per share; 75,000,000 shares
authorized
5. The number of authorized shares and the par value of each class
or series of capital stock of the Corporation after the Reverse Stock Split and
the Effective Date of the filing of this Certificate specified in Paragraph 9
below is as follows:
Common Stock, par value $.001 per share; 50,000,000 shares
authorized
Preferred Stock, par value $.001 per share; 10,000,000 shares
authorized, of which 2,300 shares have been designated as Series A Convertible
Preferred Stock.
6. The Reverse Stock Split affects the Common Stock. As a result of
the Reverse Stock Split, upon the Effective Date of the filing of this Amended
and Restated Certificate of Incorporation specified in Paragraph 9 below, the
total number of issued and outstanding shares of Common Stock held by each
stockholder will automatically convert into the number of whole shares of Common
Stock equal to (i) the total number of issued and outstanding shares of Common
Stock held by such stockholder immediately prior to the Reverse Stock Split,
divided by (ii) seven (7).
7. No fractional shares will be issued in connection with the
Reverse Stock Split. In lieu of issuing fractional shares, the Corporation will
issue one full share of post-Reverse Common Stock to any stockholder who
otherwise would have received a fractional share as a result of the Reverse
Stock Split. One hundred percent (100%) of the outstanding shares of Common
Stock will be affected thereby.
8. The Certificate of Incorporation of the Corporation is hereby
amended and restated to read in full as of the Effective Date specified in
Paragraph 9 below as follows:
ARTICLE I
CORPORATION NAME
The name of the corporation is Visual Management Systems, Inc. (the
"Corporation").
ARTICLE II
ADDRESS OF REGISTERED AGENT
The address of the Corporation's registered office in the State of
Nevada is 500N Rainbow Blvd., Suite 300. The name of its registered agent at
such address is Legalzoom Nevada, Inc.
ARTICLE III
PURPOSE OF THE CORPORATION
The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the laws of the State of
Nevada.
ARTICLE IV
CAPITAL STOCK
Section 4.1 TOTAL NUMBER OF SHARES OF STOCK. The total number of shares
of all classes of stock which the Corporation has authority to issue is sixty
million (60,000,000), consisting of fifty million (50,000,000) shares of Common
Stock, $.001 par value per share (the "Common Stock"), and ten million
(10,000,000) shares of Preferred Stock, $.001 par value per share (the
"Preferred Stock"), of which two thousand three hundred (2,300) shares are
hereby designated as Series A Convertible Preferred Stock.
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Section 4.2 COMMON STOCK.
(a) The holders of shares of Common Stock shall be entitled to one
vote for each share so held with respect to all matters voted on by the
stockholders of the Corporation. The shares of Common Stock do not have
cumulative voting rights.
(b) Subject to any prior or superior right of the Preferred Stock,
upon any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation, after payment shall have been made to the holders of
the Preferred Stock of the full amount to which they are entitled, the holders
of Common Stock shall be entitled to receive that portion of the remaining funds
to be distributed. Such funds shall be paid to the holders of Common Stock on
the basis of the number of shares of Common Stock held by each of them.
(c) Dividends may be paid on the Common Stock as and when declared
by the Board of Directors.
Section 4.3 UNDESIGNATED PREFERRED STOCK.
(a) The Preferred Stock may from time to time be divided into and
issued in series. The different series of Preferred Stock shall be established
and designated, and the variations in the relative rights and preferences as
between the different series shall be fixed and determined, by the Board of
Directors as hereinafter provided. In all other respects all shares of Preferred
Stock shall be identical.
(b) The Board of Directors is hereby expressly authorized, subject
to the provisions hereof, to establish series of Preferred Stock and to fix and
determine by vote providing for the issuance of such series, which shall have
the rights and preferences designated by the Board of Directors, including, but
no limited to, any of the following:
(i) the distinctive designation of such series and the
number of shares which shall constitute such series, which number may be
increased (except where otherwise provided by the Board of Directors in creating
such series) or decreased (but not below the number of shares then outstanding)
from time to time by the Board of Directors;
(ii) the dividend rate or rates and preferences, if any, to
which the shares of such series shall be entitled, the times at and conditions
upon which dividends shall be paid, any limitations, restrictions or conditions
on the payment of dividends, and whether dividends shall be cumulative and, if
cumulative, the terms upon and dates from which such dividends shall be
cumulative, which dates may differ for shares of any one series issued at
different times;
(iii) whether or not the shares of such series shall be
redeemable, and, if redeemable, the redemption prices which the shares of such
series shall be entitled to receive and the terms and manner of redemption;
(iv) the preferences, if any, and the amounts which the
shares of such series shall be entitled to receive and all other special or
relative rights of the shares of such series, upon any voluntary or involuntary
liquidation, dissolution or winding up of, or upon any distribution of the
assets of, the Corporation;
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(v) the obligation, if any, of the Corporation to maintain a
purchase, retirement or sinking fund for shares of such series and the
provisions with respect thereto;
(vi) the term, if any, upon which the shares of such series
shall be convertible into, or exchangeable for, shares of any other class or
classes or of any other series of the same or any other class or classes of
stock of the Corporation, including the price or prices or the rate of
conversion or exchange and the terms of adjustments, if any;
(vii) the terms and conditions of the voting rights, if any,
of the holders of the shares of such series, including the conditions under
which the shares of such series shall vote as a separate class; and
(viii) such other designating preferences, powers,
qualifications and special or relative rights or privileges of such series to
the full extent now or hereafter permitted by the laws of the State of Delaware.
Section 4.4 SERIES A CONVERTIBLE PREFERRED STOCK.
(a) DESIGNATION AND NUMBER OF SHARES. There shall be a series of
Preferred Stock that shall be designated as "SERIES A CONVERTIBLE PREFERRED
STOCK," and the number of shares constituting such series shall be 2,300 shares.
Such number of shares may be increased or decreased by resolution of the Board
of Directors; PROVIDED, HOWEVER, that no decrease shall reduce the number of
shares of Series A Convertible Preferred Stock to less than the number of shares
then issued and outstanding plus the number of shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Corporation.
(b) RANKING. The Series A Convertible Preferred Stock shall, with
respect to distribution rights upon the Liquidation (as defined in Section
4.4(c) below) of the Corporation, rank (a) subject to Section 4.4(c)(ii), senior
to the Common Stock of the Corporation, and all other preferred stock of the
Corporation, and (b) as applicable, junior to or on a parity with such preferred
stock of the Corporation the terms of which expressly provide that such
preferred stock will rank senior to or on a parity with the Series A Convertible
Preferred Stock.
(c) LIQUIDATION.
(i) Upon any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary ("LIQUIDATION"), the holders of
record of the shares of the Series A Convertible Preferred Stock shall be
entitled to receive, immediately after any distributions required by the
Corporation's Articles of Incorporation and any certificate(s) of designation,
powers, preferences and rights in respect of any securities of the Corporation
having priority over the Series A Convertible Preferred Stock with respect to
the distribution of the assets of the Corporation upon Liquidation, and before
and in preference to any distribution or payment of assets of the Corporation or
the proceeds thereof may be made or set apart with respect to any securities of
the Corporation over which the Series A Convertible Preferred Stock has priority
with respect to the distribution of the assets of the Corporation upon
Liquidation, including Common Stock ("JUNIOR SECURITIES"), an amount in cash
with respect to each share of Series A Convertible Preferred Stock held by such
holders, equal to $2,500 per share (subject to adjustment in the event of stock
splits, combinations or similar events).
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If, upon such Liquidation, the assets of the Corporation available for
distribution to the holders of Series A Convertible Preferred Stock and any
securities of the Corporation having equal priority with the Series A
Convertible Preferred Stock with respect to the distribution of the assets of
the Corporation upon Liquidation ("PARITY SECURITIES") shall be insufficient to
permit payment in full to the holders of the Series A Convertible Preferred
Stock and the holders of Parity Securities, then the entire assets and funds of
the Corporation legally available for distribution to such holders and the
holders of the Parity Securities then outstanding shall be distributed ratably
among the holders of the Series A Convertible Preferred Stock and Parity
Securities based upon the proportion the total amount distributable on each
share upon liquidation bears to the aggregate amount available for distribution
on all shares of the Series A Convertible Preferred Stock and on such Parity
Securities, if any.
Except as otherwise specifically provided, the consolidation or merger
of the Corporation with another person, or the sale, transfer or lease of all or
substantially all of its assets to another person shall not be deemed to be a
Liquidation within the meaning of this Section 3(a).
(ii) Upon the completion of the distributions required by
paragraph (i) of this Section 4.4(c), if assets remain in the Corporation, they
shall be distributed ratably among the holders of the Series A Convertible
Preferred Stock (based upon the number of shares of Common Stock into which the
shares of Series A Convertible Preferred Stock are convertible) and the holders
of any Parity Securities and holders of Junior Securities (including holders of
Common Stock) having rights to participate in such distribution in accordance
with the Corporation's Articles of Incorporation.
(d) DIVIDENDS. The Series A Convertible Preferred Stock shall not be
entitled to receive dividends or other distributions from the Corporation, and
no dividends or distributions shall be payable in respect thereof.
(e) CONVERSION RIGHTS. Each holder of record of shares of the Series
A Convertible Preferred Stock shall have the right to convert all or any part of
such holder's shares of Series A Convertible Preferred Stock into Common Stock,
without any further payment therefor, as follows:
(i) OPTIONAL CONVERSION. Subject to and upon compliance with
the provisions of this Section 5, the holder of any shares of Series A
Convertible Preferred Stock shall have the right at such holder's option, at any
time and from time to time, to convert any of such shares of Series A
Convertible Preferred Stock into fully paid and non-assessable shares of Common
Stock into that number of shares of Common Stock as shall be determined by
dividing $2,500 by the "Conversion Price." The Conversion Price shall initially
be $2.50 and shall be subject to adjustment as provided below.
(ii) MECHANICS OF CONVERSION.
1) Before any holder of Series A Convertible Preferred
Stock shall be entitled to convert the same into shares
of Common Stock, such holder
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shall surrender the certificate or certificates
therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Series A
Convertible Preferred Stock, and shall give written
notice to the Corporation at its principal corporate
office, of the election to convert the same and shall
state therein the name or names in which the certificate
or certificates for shares of Common Stock are to be
issued. The Corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such
holder of Series A Convertible Preferred Stock, or to
the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to
which such holder shall be entitled as aforesaid.
Conversion shall be deemed to have been effected on the
date when delivery of notice of an election to convert
and certificates for shares is made, and such date is
referred to herein as the "CONVERSION DATE."
2) All Common Stock which may be issued upon conversion of
the Series A Convertible Preferred Stock will, upon
issuance, be duly issued, fully paid and non-assessable
and free from all taxes, liens, and charges with respect
to the issuance thereof. At all times that any shares of
Series A Convertible Preferred Stock are outstanding,
the Corporation shall have authorized and shall have
reserved for the purpose of issuance upon such
conversion into Common Stock of all Series A Convertible
Preferred Stock, a sufficient number of shares of Common
Stock to provide for the conversion of all outstanding
shares of Series A Convertible Preferred Stock at the
then effective Conversion Price.
(iii) CONVERSION PRICE ADJUSTMENTS. The Conversion Price shall
be subject to the adjustment provisions of Section 4.4(f) below.
(f) ANTI-DILUTION PROVISIONS. During the period in which any shares
of Series A Convertible Preferred Stock remain outstanding, the Conversion Price
in effect at any time and the number and kind of securities issuable upon the
conversion of the Series A Convertible Preferred Stock shall be subject to
adjustment from time to time following the date of the original issuance of the
Series A Convertible Preferred Stock upon the happening of certain events as
follows:
(i) CONSOLIDATION, MERGER OR SALE. If any consolidation or
merger of the Corporation with another person, or the sale, transfer or lease of
all or substantially all of its assets to another person shall be effected in
such a way that holders of shares of Common Stock shall be entitled to receive
stock, securities or assets with respect to or in exchange for their shares of
Common Stock, then provision shall be made, in accordance with this Section
6(a), whereby each holder of shares of Series A Convertible Preferred Stock
shall thereafter have the right to receive such securities or assets as would
have been issued or payable with respect to or in exchange for the shares of
Common Stock into which the shares of Series A Convertible Preferred Stock held
by such holder were convertible immediately prior to the closing of such merger,
sale, transfer or lease, as applicable. The Corporation will not effect any such
consolidation, merger, sale, transfer or lease unless prior to the consummation
thereof the successor entity (if other than the Corporation) resulting from such
consolidation or merger or
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the entity purchasing or leasing such assets shall assume by written instrument
(i) the obligation to deliver to the holders of Series A Convertible Preferred
Stock such securities or assets as, in accordance with the foregoing provisions,
such holders may be entitled to purchase, and (ii) all other obligations of the
Corporation hereunder. The provisions of this Section 4.4(f)(i) shall similarly
apply to successive mergers, sales, transfers or leases.
(ii) COMMON STOCK DIVIDENDS, SUBDIVISIONS, COMBINATIONS, ETC.
In case the Corporation shall hereafter (i) declare a dividend or make a
distribution on its outstanding shares of Common Stock in shares of Common
Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into
a greater number of shares, or (iii) combine or reclassify its outstanding
shares of Common Stock into a smaller number of shares, the Conversion Price in
effect at the time of the record date for such dividend or distribution or of
the effective date of such subdivision, combination or reclassification shall be
adjusted by multiplying the then applicable Conversion Price by a fraction, the
denominator of which shall be the number of shares of Common Stock outstanding
after giving effect to such action, and the numerator of which shall be the
number of shares of Common Stock outstanding immediately prior to such action.
Such adjustment shall be made successively whenever any event listed above shall
occur.
(iii) ADJUSTMENT UPON ISSUANCE OF LOWER PRICED SECURITIES. If
and whenever on or after the date of the initial issuance of the Series A
Convertible Preferred Stock the Corporation issues or sells, or in accordance
with this Section 4.4(f) is deemed to have issued or sold, any shares of Common
Stock (other than in connection with the exercise of outstanding stock options
or the warrants issued to Brookshire Securities Corporation pursuant to the
Placement Agent Agreement (the "Placement Agent Agreement") dated February 13,
2007) for a consideration per share less than $2.50 per share (the "Applicable
Price") or the Corporation issues or sells, or in accordance with this Section
4.4(f) is deemed to have issued or sold any options, warrants or securities
convertible into shares of Common Stock having an exercise price per share or
conversion price per share less than the Applicable Price (the foregoing a
"DILUTIVE ISSUANCE"), then immediately after such Dilutive Issuance, the
Conversion Price then in effect shall be adjusted to the price per share at
which such new shares of Common Stock are issued or will be issued (the "New
Securities Issuance Price") upon exercise of such options or warrants or
conversion of such convertible securities. For purposes of determining the
adjusted Conversion Price under this Section 4.4(f)(iii), the following shall be
applicable:
1) ISSUANCE OF OPTIONS. If the Corporation in any manner
grants any rights, warrants or options (collectively,
"Options") to subscribe for or purchase (A) any shares
of Common Stock, or (B) or any securities convertible
into or exchangeable for shares of Common Stock
("Convertible Securities") and the lowest price per
share for which one share of Common Stock is issuable
upon the exercise of any such Option or upon conversion
or exchange of any Convertible Securities issuable upon
exercise of any such Option is less than the Applicable
Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by
the Corporation at the time of the granting of such
Option for such price per share. For purposes of this
Section 4.4(f)(iii)(1) the "lowest price per share for
which one share of Common Stock is issuable upon
exercise of any such Option or upon conversion or
exchange of any such
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Convertible Securities" shall be equal to the sum of the
lowest amounts of consideration (if any) received or
receivable by the Corporation with respect to any one
share of Common Stock upon the granting of the Option,
upon exercise of the Option and upon conversion or
exchange of any Convertible Security issuable upon
exercise of such Option. No further adjustment of the
Conversion Price shall be made upon the actual issuance
of such shares of Common Stock upon exercises of such
Options upon conversion or exchange of such Convertible
Securities.
2) ISSUANCE OF CONVERTIBLE SECURITIES. If the Corporation
in any manner issues or sells any Convertible Securities
and the lowest price per share for which one share of
Common Stock is issuable upon the conversion or exchange
thereof is less than the Applicable Price, then such
shares of Common Stock shall be deemed to be outstanding
and to have been issued and sold by the Corporation at
the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of
this Section 4.4(f)(iii)(2), the "lowest price per share
for which one share of Common Stock is issuable upon the
conversion or exchange" shall be equal to the sum of the
lowest amounts of consideration (if any) received or
receivable by the Corporation with respect to any one
share of Common Stock upon the issuance or sale of the
Convertible Security and upon conversion or exchange of
such Convertible Security. No further adjustment of the
Conversion Price shall be made upon the actual issuance
of such shares of Common Stock upon conversion or
exchange of such Convertible Securities, and if any such
issue or sale of such Convertible Securities is made
upon exercise of any Options for which adjustment of
this Conversion Price has been or is to be made pursuant
to other provisions of this Section 4.4(f), no further
adjustment of the Conversion Price shall be made by
reason of such issue or sale.
3) CHANGE IN OPTION PRICE OR RATE OF CONVERSION;
EXPIRATION. If the purchase price provided for in any
Options, the additional consideration, if any, payable
upon the issue, conversion or exchange of any
Convertible Securities, or the rate at which any
Convertible Securities are convertible into or
exchangeable for shares of Common Stock increases or
decreases at any time, the Conversion Price in effect at
the time of such increase or decrease shall be adjusted
to the Conversion Price which would have been in effect
at such time had such Options or Convertible Securities
provided for such increased or decreased purchase price,
additional consideration or increased or decreased
conversion rate, as the case may be, at the time
initially granted, issued or sold. For purposes of this
Section 4.4(f)(iii)(3), if the terms of any Option or
Convertible Security that was outstanding as of the date
of issuance of this Series A Convertible Preferred Stock
are increased or decreased in the manner described in
the immediate preceding sentence, then such Option or
Convertible Security and the shares of Common Stock
deemed issuable upon exercise, conversion or exchange
thereof shall be deemed to have been issued as of the
date of
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such increase or decrease. Upon the expiration of any
Option or the right to convert or exchange any
Convertible Security, the issuance of which resulted in
an adjustment of the Conversion Price under this Section
4.4(f), or if any such Option or Convertible Security
ceases to be outstanding, and such Option shall not have
been exercised or such Convertible Security shall not
have been converted into or exchanged for Common Stock,
the Conversion Price shall be recomputed to the price
which it would have been (but reflecting any other
adjustments made pursuant to this Section 4.4(f) upon
the issuance of Common Stock, Options or Convertible
Securities) had the adjustment made by reason of the
issuance of such Option or Convertible Security not been
made.
4) CALCULATION OF CONSIDERATION RECEIVED. In case any
Option is issued in connection with the issue or sale of
other securities of the Corporation, together comprising
one integrated transaction in which no specific
consideration is allocated to such Options by the
parties thereto, the Options will be deemed to have been
issued for a consideration of $0.01. If any shares of
Common Stock, Options or Convertible Securities are
issued or sold or deemed to have been issued or sold for
cash, the consideration received therefore will be
deemed to be the gross amount received by the
Corporation therefore. If any shares of Common Stock,
Options or Convertible Securities are issued or sold for
a consideration other than cash, the amount of such
consideration received by the Corporation will be the
fair value of such consideration, except where such
consideration consists of securities, in which case the
amount of consideration received by the Corporation will
be the Market Price (as defined below) of such security
on the date of receipt. The fair value of any
consideration other than cash or securities will be
determined in good faith by the Corporation's Board of
Directors. The term "Market Price" shall mean the
average of the closing prices of such security's sales
on the principal securities exchanges on which such
security may at the time be listed, or, if there has
been no sales on any such exchange on any day, the
average of the highest bid and lowest asked prices on
all such exchanges at the end of such day, or, if on any
day such security is not so listed, the average of the
representative bid and asked prices quoted on the Nasdaq
Stock Market as of 4:00 P.M., New York time, or, if on
any day such security is not quoted on the Nasdaq Stock
Market, the average of the highest bid and lowest asked
prices on such day in the NASD's over the counter
bulletin board, or any similar successor organization,
in each such case averaged over a period of five days
consisting of the day prior to the day as of which
Market Price is being determined and the four
consecutive business days prior to such day. If at any
time such security is not listed on any securities
exchange or quoted on the Nasdaq Stock Market or the
over-the-counter bulletin board, the Market Price shall
be the fair value thereof determined in good faith by
the Corporation's Board of Directors.
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5) NO ADJUSTMENT FOR CERTAIN ISSUANCES. No adjustments
shall be made under this Section 4.4(f) as a result of
(a) issuance of Common Stock upon the exercise or
conversion of any Options, Warrants or Convertible
Securities outstanding as of the date of the initial
issuance of any shares of Series A Preferred Stock, (b)
upon the issuance or exercise of warrants issued to
Brookshire Securities Corporation pursuant to the
Placement Agent Agreement, or as a result of (c)
issuances of Common Stock, Options, Warrants or
Convertible Securities in acquisitions, mergers or
strategic alliances, or upon the exercise of any such
Options or Warrants, or conversion or exchange of any
such Convertible Securities.
(iv) NOTICE OF ADJUSTMENT. Whenever the Conversion Price is
adjusted as herein provided, the Corporation shall promptly but no later than 10
days after any request for such an adjustment by the holder, cause a notice
setting forth the adjusted Conversion Price issuable upon exercise of each share
of Series A Convertible Preferred Stock, and, if requested, information
describing the transactions giving rise to such adjustments, to be mailed to the
holders at their last addresses appearing in the share register of the
Corporation, and shall cause a certified copy thereof to be mailed to its
transfer agent, if any. The Corporation may retain a firm of independent
certified public accountants selected by the Board of Directors (who may be the
regular accountants employed by the Corporation) to make any computation
required by this Section 6, and a certificate signed by such firm shall be
conclusive evidence of the correctness of such adjustment.
(g) REDEMPTION. The Corporation may not redeem the outstanding
shares of Series A Convertible Preferred Stock and the holders shall not have
any right, at any time or under any circumstances, to require the Corporation to
redeem any of the Series A Convertible Preferred Stock.
(h) VOTING RIGHTS. Except as otherwise required by law, the holders
of shares of Series A Convertible Preferred Stock shall have no voting rights.
(i) REGISTRATION OF UNDERLYING COMMON STOCK. The Corporation shall
use its commercially reasonable best efforts to file a "resale" registration
statement (the "Registration Statement") with the Securities and Exchange
Commission (the "SEC") registering all shares of Common Stock issuable to the
holders of the Series A Convertible Preferred Stock upon conversion of the
Series A Convertible Preferred Stock (the "Registrable Shares"), no later than
60 days following the final closing of the private placement (the "Private
Placement") conducted by the Corporation pursuant to the Placement Agent
Agreement (the "Final Closing Date"). The Corporation shall file such amendments
and furnish such information as may be required for such purpose and to comply
with such laws so as to continue to maintain the effectiveness of the
Registration Statement from the effective date through and until the earlier of
four (4) years or the date upon which all of the Registrable Shares may be sold
pursuant to Rule 144(k) promulgated under the Securities Act of 1933, as
amended, subject to the terms of any agreement pursuant to which the Series A
Convertible Preferred Stock may have been issued. In the event the Registration
Statement is not filed with the SEC on or prior to the date which is sixty (60)
days following the Final Closing Date or if the Registration Statement is not
declared effective by the SEC on or prior to the date which is one hundred
twenty (120) days following the Final
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Closing Date, the total number of shares of Common Stock issuable upon the
conversion of the Series A Convertible Preferred Stock sold as part of the Units
in the Private Placement and to be covered by the Registration Statement for
each investor in the Private Placement and their permitted transferees,
successors, executors or administrators shall be increased by two percent (2%)
per month for each month (or portion thereof) that the Registration Statement is
not so filed or is not effective. Furthermore, the Corporation shall use its
reasonable best efforts to respond to any SEC comments to the Registration
Statement on or prior to the date which is twenty (20) business days from the
date such comments are received. In the event that the Corporation fails to
respond to such comments within twenty (20) business days, the total number of
shares of Common Stock issuable upon conversion of the Series A Convertible
Preferred Stock sold as part of the Private Placement and to be covered by the
Registration Statement shall be increased by two percent (2%) per month for each
month (or portion thereof) that a response to the comments to the Registration
Statement has not been submitted to the SEC. Notwithstanding anything contained
in this Section 4.4(i) to the contrary, the aggregate increases in shares of
Common Stock issuable upon conversion of the Series A Convertible Preferred
Stock pursuant to this paragraph shall not exceed twenty percent (20%). The
Corporation shall use its reasonable best efforts to have such Registration
Statement declared effective by the SEC as soon as possible after the initial
filing date. The Corporation shall have no liability to a holder of the Series A
Convertible Preferred Stock for failure to maintain the effectiveness of the
Registration Statement due to any Stop Order issued by the SEC, but shall use
its commercially reasonable best efforts in such event to cause the Stop Order
to be removed.
(j) COVENANTS OF THE CORPORATION. The Corporation covenants and
agrees that, so long as the Shares are outstanding, it will perform the
obligations set forth in this Section 4.4(j):
(i) TAXES AND LEVIES. The Corporation will promptly pay and
discharge all taxes, assessments, and governmental charges or levies imposed
upon the Corporation or upon its income and profits, or upon any of its
property, before the same shall become delinquent, as well as all claims for
labor, materials and supplies which, if unpaid, might become a lien or charge
upon such properties or any part thereof; PROVIDED, HOWEVER, that the
Corporation shall not be required to pay and discharge any such tax, assessment,
charge, levy or claim so long as the validity thereof shall be contested in good
faith by appropriate proceedings and the Corporation shall set aside on its
books adequate reserves in accordance with generally accepted accounting
principles ("GAAP") with respect to any such tax, assessment, charge, levy or
claim so contested;
(ii) MAINTENANCE OF EXISTENCE. The Corporation will do or
cause to be done all things reasonably necessary to preserve and keep in full
force and effect its corporate existence, rights and franchises and comply with
all laws applicable to the Corporation, except where the failure to comply would
not have a material adverse effect on the Corporation;
(iii) MAINTENANCE OF PROPERTY. The Corporation will at all
times maintain, preserve, protect and keep its property used or useful in the
conduct of its business in good repair, working order and condition, and from
time to time make all needful and proper repairs, renewals, replacements and
improvements thereto as shall be reasonably required in the conduct of its
business;
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(iv) BOOKS AND RECORDS. The Corporation will at all times
keep true and correct books, records and accounts reflecting all of its business
affairs and transactions in accordance with GAAP; and
(k) RESERVATION OF SHARES. The Corporation shall at all times
reserve and keep available and free of preemptive rights out of its authorized
but unissued Common Stock, solely for the purpose of effecting the conversion of
the Series A Convertible Preferred Stock pursuant to the terms hereof, such
number of its shares of Common Stock (or other shares or other securities as may
be required) as shall from time to time be sufficient to effect the conversion
of all outstanding Series A Convertible Preferred Stock pursuant to the terms
hereof. If at any time the number of authorized but unissued shares of Common
Stock (or such other shares or other securities) shall not be sufficient to
affect the conversion of all then outstanding Series A Convertible Preferred
Stock, the Corporation shall promptly take such action as may be necessary to
increase its authorized but unissued Common Stock (or other shares or other
securities) to such number of shares as shall be sufficient for such purpose.
(l) MISCELLANEOUS.
(i) There is no sinking fund with respect to the Series A
Convertible Preferred Stock.
(ii) The shares of the Series A Convertible Preferred Stock
shall not have any preferences, voting powers or relative, participating,
optional, preemptive or other special rights except as set forth above in this
Resolution Designating Series A Convertible Preferred Stock and in the Articles
of Incorporation of the Corporation.
(iii) The holders of the Series A Convertible Preferred Stock
shall be entitled to receive all communications sent by the Corporation to the
holders of the Common Stock.
(iv) Holders of two-thirds (?) of the outstanding shares of
Series A Convertible Preferred Stock may, voting as a single class, elect to
waive any provision of this Section 4.4, and the affirmative vote of such
percentage with respect to any proposed waiver of any of the provisions
contained herein shall bind all holders of Series A Convertible Preferred Stock.
ARTICLE V
AMENDMENTS TO BY-LAWS
The Board of Directors shall have the power to adopt, amend or repeal
the By-laws.
ARTICLE VI
LIMITATION ON LIABILITY OF DIRECTORS
No director or officer of the Corporation shall be personally liable to
the Corporation or its stockholders for damages for breach of fiduciary duty as
a director or officer. However, this Article VI does not eliminate or limit the
liability of the director or officer for:
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(a) Acts or omissions which involve intentional misconduct, fraud or
knowing violation of law; or
(b) The payment of dividends in violation of NRS 78.300.
9. The effective date of this filing (the "Effective Date") shall
be July 9, 2007
IN WITNESS WHEREOF, the undersigned has hereunto executed this Amended
and Restated Certificate of Incorporation on this 27th day of June, 2007.
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Ekaterina Popoff, President
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