EXHIBIT to 10Q
Innovative Product Opportunities, Inc.
CERTIFICATE OF DESIGNATION OF PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES A CONVERTIBLE PREFERRED STOCK
PURSUANT TO SECTION 151 OF THE
DELAWARE GENERAL CORPORATION LAW
The undersigned, Doug Clark hereby certifies that:
1. He is the President of Innovative Product Opportunities, Inc., a Delaware
corporation (the "Corporation").
2. The Corporation is authorized to issue 1,000,000 shares of preferred stock.
3. The following resolutions were duly adopted by the Board of Directors:
WHEREAS, the Certificate of Incorporation of the Corporation provides for a
class of its authorized stock known as preferred stock, comprised
of 1,000,000 shares, $0.001 par value, issuable from time to time
in one or more series;
WHEREAS, the Board of Directors of the Corporation is authorized to fix the
dividend rights, dividend rate, voting rights, conversion rights,
rights and terms of redemption and liquidation preferences of any
wholly unissued series of preferred stock and the number of shares
constituting any Series and the designation thereof, of any of
them; and
WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to fix the rights,
preferences, restrictions and other matters relating to a series
of the preferred stock, which shall consist of 200,000 shares of
the preferred stock which the corporation has the authority to
issue, as follows:
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash
or exchange of other securities, rights or property and does hereby
fix and determine the rights, preferences, restrictions and other
matters relating to such series of preferred stock as follows:
TERMS OF PREFERRED STOCK
Section 1. Designation, Amount and Par Value. The series of preferred stock
shall be designated as Series A Convertible Preferred Stock (the
"Preferred Stock") and the number of shares so designated shall be
200,000. Each share of Preferred Stock shall have a par value of
$0.01 per share.
Section 2. Voting Rights.
a) Subject to the provision for adjustment hereinafter set forth,
each share of Preferred Stock shall entitle the Holder thereof
to the number of votes as shall be equal to the aggregate number
of shares of Common Stock into which such Holder's shares of
Preferred Stock are convertible, multiplied by 100. As used
herein, "Common Stock" means the Corporation's common stock,
par value $0.0001 per share, and stock of any other class of
securities into which such securities may hereafter have been
reclassified or changed into.
b) Except as otherwise provided herein, by law, or in any other
Certificate of Designation creating a series of preferred stock
or any similar stock, the Holders of shares of Preferred Stock,
the holders of shares of Common Stock and any other capital stock
of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
Section 3. Liquidation. Upon any liquidation, dissolution or winding-up of the
Corporation, whether voluntary or involuntary (a "Liquidation"), the
Holders shall be entitled to receive out of the assets of the
Corporation, whether such assets are capital or surplus, for each
share of Preferred Stock an amount equal to the Holder's pro rata
share of the assets and funds of the Corporation to be distributed,
assuming their conversion of Preferred Stock to Common Stock and if
the assets of the Corporation shall be insufficient to pay in full
such amounts, then the entire assets to be distributed to the
Holders shall be distributed among the Holders ratably in accordance
with the respective amounts that would be payable on such shares if
all amounts payable thereon were paid in full.
Section 4. Conversion. Holders of Preferred Stock shall have the following
rights with respect to the conversion of the Preferred Stock into
shares of Common Stock:
a) Conversions at Option of Holder. Subject to and in compliance
with the provisions of this Section 4, any shares of Preferred
Stock may, at the option of the Holder, be converted into fully
paid and non-assessable shares of Common Stock. The number of
shares of Common Stock to which a Holder of Preferred Stock shall
be entitled upon a conversion shall be the product obtained by
multiplying the number of shares of Preferred Stock being
converted by 1000. Holders shall effect conversions by providing
the Corporation with the form of conversion notice attached
hereto as Annex A (a "Notice of Conversion"). Each Notice of
Conversion shall specify the number of shares of Preferred Stock
to be converted, the number of shares of Preferred Stock owned
prior to the conversion at issue, the number of shares of
Preferred Stock owned subsequent to the conversion at issue and
the date on which such conversion is to be effected, which date
may not be prior to the date the Holder delivers such Notice of
Conversion to the Corporation (the "Conversion Date"). If no
Conversion Date is specified in a Notice of Conversion, the
Conversion Date shall be the date that such Notice of Conversion
to the Corporation is deemed delivered hereunder. To effect
conversions, as the case may be, of shares of Preferred Stock,
a Holder shall not be required to surrender the certificate(s)
representing such shares of Preferred Stock to the Corporation
unless all of the shares of Preferred Stock represented thereby
are so converted, in which case the Holder shall deliver the
certificate representing such shares of Preferred Stock promptly
following the Conversion Date at issue. Shares of Preferred
Stock converted into Common Stock or redeemed in accordance with
the terms hereof shall be cancelled and may not be reissued.
b) Mechanics of Conversion
i. Delivery of Certificate Upon Conversion. Not later than three
Trading Days after each Conversion Date (the "Share Delivery
Date"), the Corporation shall deliver or cause to be
delivered to the Holder a certificate or certificates
representing the number of shares of Common Stock being
acquired upon the conversion of shares of Preferred Stock.
"Trading Day" shall mean a day in which the Common Stock is
traded on a Trading Market. "Trading Market" means the
following markets or exchanges on which the Common Stock is
listed or quoted for trading on the date in question: the
Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq
Global Select Market, the American Stock Exchange, the New
York Stock Exchange, the OTC Bulletin Board or the Pink
Sheets, LLC.
ii. Fractional Shares. Upon a conversion hereunder, the
Corporation shall not be required to issue stock certificates
representing fractions of shares of the Common Stock, but
may if otherwise permitted, make a cash payment in respect
of any final fraction of a share. If the Corporation elects
not, or is unable, to make such a cash payment, the Holder
shall be entitled to receive, in lieu of the final fraction
of a share, one whole share of Common Stock.
c) Adjustment for Reclassification, Exchange and Substitution. If at
any time or from time to time after the Common Stock
issuable upon the conversion of the Preferred Stock is changed
into the same or a different number of shares of any class or
classes of stock, whether by recapitalization, reclassification,
reverse split or otherwise, each Holder of Preferred Stock
shall have the right, but not the obligation, thereafter to
convert such stock into the kind and amount of stock and
other securities and property receivable upon such
recapitalization, reclassification, reverse split or other
change by Holders of the maximum number of shares of Common
Stock into which such shares of Preferred Stock could have been
converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment
as provided herein or with respect to such other securities or
property by the terms thereof.
d) Reorganizations, Mergers, Consolidations or Sales of Assets. If
at any time or from time to time after the date of issuance of
the Preferred Stock, there is a capital reorganization of the
Common Stock (other than a transaction provided for elsewhere in
this Section 4), as a part of such capital reorganization,
provision shall be made so that the Holders of the Preferred
Stock shall thereafter be entitled to receive upon conversion of
the Preferred Stock the number of shares of stock or other
securities or property of the Corporation to which a Holder of
the number of shares of Common Stock deliverable upon
conversion would have been entitled on such capital
reorganization, subject to adjustment in respect of such stock
or securities by the terms thereof.
Section 5. Reacquired Shares. Any shares of Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become
authorized but unissued shares of preferred stock and may be
reissued as part of a new series of preferred stock to be created
by resolution or resolutions of the Board of Directors, subject
to the conditions and restrictions on issuance set forth herein.
Section 6. Miscellaneous.
a) Notices. Any and all notices or other communications or
deliveries to be provided by the Holder hereunder, including,
without limitation, any Notice of Conversion, shall be in writing
and delivered personally, sent by email to ipoinc.net@gmail.com,
sent by a nationally recognized overnight courier service,
addressed to the Corporation, at 28 Argonaut STE 140, Aliso Viejo,
California, USA 92656, Attn: Chief Executive Officer or such other
address or facsimile number as the Corporation may specify for
such purposes by notice to the Holders delivered in accordance
with this Section. Any and all notices or other communications
or deliveries to be provided by the Corporation hereunder shall
be in writing and delivered personally, by email, sent by a
nationally recognized overnight courier service addressed to each
Holder at the email or physical address of such
Holder appearing on the books of the Corporation, or if no such
email or address appears, at the principal
place of business of the Holder. Any notice or other
communication or deliveries hereunder shall be deemed given and
effective on the earliest of (i) the date of transmission, if
such notice or communication is delivered via email at the
email address specified in this Section prior to
5:30 p.m. (Eastern Standard time), (ii) the date after the date of
transmission, if such notice or communication is delivered via
email at the email address specified in this
Section later than 5:30 p.m. (Eastern Standard time) on any date
and earlier than 11:59 p.m. (Eastern Standard time) on such date,
(iii) the second Business Day following the date of mailing, if
sent by nationally recognized overnight courier service, or (iv)
upon actual receipt by the party to whom such notice is required
to be given. "Business Day" shall mean a day which is not a
(i) Saturday, (ii) Sunday or (iii) a national holiday observed
in either the United States or Canada.
b) Lost or Mutilated Preferred Stock Certificate. If a Holder's
Preferred Stock certificate shall be mutilated, lost, stolen or
destroyed, the Corporation shall execute and deliver, in exchange
and substitution for and upon cancellation of a mutilated
certificate, or in lieu of or in substitution for a lost, stolen
or destroyed certificate, a new certificate for the shares of
Preferred Stock so mutilated, lost, stolen or destroyed but only
upon receipt of evidence of such loss, theft or destruction of
such certificate, and of the ownership hereof, and indemnity, if
requested, all reasonably satisfactory to the Corporation.
c) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Certificate of
Designation shall be governed by and construed and enforced in
accordance with the internal laws of the State of Delaware, USA,
without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning
the interpretations, enforcement and defense of the transactions
contemplated by this Certificate of Designation (whether brought
against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced
in the state and federal courts sitting in the State of Delaware,
Country of United states of America (the "Delaware State Courts")
Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the Delaware State Courts for the adjudication
of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or such Delaware State Courts are
improper or inconvenient venue for such proceeding. Each party
hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at
the address in effect for notices to it under this Certificate of
Designation and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. Each party hereto
hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal
proceeding arising out of or relating to this Certificate of
Designation or the transactions contemplated hereby. If either
party shall commence an action or proceeding to enforce any
provisions of this Certificate of Designation, then the prevailing
party in such action or proceeding shall be reimbursed by the
other party for its attorneys' fees and other costs and expenses
incurred with the investigation, preparation and prosecution of
such action or proceeding.
d) Waiver. Any waiver by the Corporation or the Holder of a breach
of any provision of this Certificate of Designation shall not
operate as or be construed to be a waiver of any other breach of
such provision or of any breach of any other provision of this
Certificate of Designation. The failure of the Corporation or
the Holder to insist upon strict adherence to any term of this
Certificate of Designation on one or more occasions shall not be
considered a waiver or deprive that party of the right thereafter
to insist upon strict adherence to that term or any other term of
this Certificate of Designation. Any waiver must be in writing.
e) Severability. If any provision of this Certificate of Designation
is invalid, illegal or unenforceable, the balance of this
Certificate of Designation shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and
circumstances. If it shall be found that any interest or other
amount deemed interest due hereunder violates applicable laws
governing usury, the applicable rate of interest due hereunder
shall automatically be lowered to equal the maximum permitted rate
of interest.
f) Next Business Day. Whenever any obligation hereunder shall be
due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day.
g) Headings. The headings contained herein are for convenience only,
do not constitute a part of this Certificate of Designation and
shall not be deemed to limit or affect any of the provisions
hereof.
*********************
RESOLVED, FURTHER, that any officer or director of the Corporation be and
they hereby are authorized and directed to prepare and
file a Certificate of Designation of Preferences, Rights
and Limitations in accordance with the foregoing
resolution and the provisions of Delaware law.
IN WITNESS WHEREOF, the undersigned have executed this Certificate this 6th
day of August 2013.
/s/ Doug Clark
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Name: Doug Clark
Title: Chief Executive Officer
and President
ANNEX A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF
PREFERRED STOCK)
The undersigned hereby elects to convert the number of shares of Series A
Convertible Preferred Stock indicated below, into shares of common stock, par
value $0.0001 per share (the "Common Stock"), of Innovative Product
Opportunities, Inc., a Delaware corporation (the "Corporation"), according to
the conditions hereof, as of the date written below. If shares are to be
issued in the name of a person other than undersigned, the undersigned will
pay all transfer taxes payable with respect thereto and is delivering herewith
such certificates and opinions as reasonably requested by the Corporation in
accordance therewith.
No fee will be charged to the Holder for any conversion, except for such
transfer taxes, if any.
Conversion calculations:
Date to Effect Conversion: ___________________________________________________
Number of shares of Preferred Stock owned prior to Conversion: _______________
Number of shares of Preferred Stock to be Converted: _________________________
Number of shares of Common Stock to be Issued: _______________________________
Number of shares of Preferred Stock subsequent to Conversion: ________________
[HOLDER]By:___________________________________
Name:
Title: