SHARE EXCHANGE AGREEMENT
THIS
SHARE EXCHANGE AGREEMENT
(this
“Agreement”),
is
entered into as of the 1st day of July, 2005, by and among: (i) Xxxxxx
Engineered Plastics Corp. a Nevada corporation (Alternatively referred to as
“Xxxxxx” or the “Corporation”), whose shares of common stock are registered
under Section 12(g) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”),
(ii)
Xxxxxxx Xxxxxxx Group, Inc., a Florida corporation (“CDG”), and (iii) the
shareholders of the Corporation as identified on Schedule A hereto (the
“CDG
Shareholders”).
Xxxxxx, the Corporation, and the CDG Shareholders are referred to collectively
as the “Parties”.
WHEREAS,
Xxxxxx,
the Corporation and CDG Shareholders have determined that the acquisition by
Xxxxxx of CDG is advisable and in the best interests of their respective
companies and stockholders, and presents an opportunity for their respective
companies to achieve long-term strategic and financial benefits;
WHEREAS,
Xxxxxx
has proposed to acquire CDG pursuant to an exchange transaction whereby,
pursuant to the terms and subject to the conditions of this Agreement and in
accordance with applicable law, CDG shall become a wholly owned subsidiary
of
Xxxxxx (the “Exchange”)
in
consideration for the issuance of 96,468,627 shares of common stock and one
share of preferred stock of Xxxxxx (the “Corporation
Common Shares”)
to the
CDG Shareholder constituting 81% of the then issued and outstanding Corporation
Common Shares on a fully diluted basis;
WHEREAS,
the
Corporation Common Shares to be issued to the CDG Shareholders (the
“Issuable
Shares”)
shall
be issued or reserved for issuance, as the case may be, in exchange for 100%
of
the shares of capital stock of CDG on a fully diluted basis (the “CDG
Shares”);
WHEREAS,
the
obligation of each of the parties to this Agreement to effect the Exchange
is
subject to the conditions hereinafter set forth.
WHEREAS,
the
parties intend that the Exchange qualify as a tax free “reorganization” within
the meaning of Section 368(a) (1) (B) of the Internal Revenue Code of 1986,
as
amended (the “Code”),
and
the parties intend this Agreement to qualify as a “plan of reorganization”
within the meaning of Treasury Regulation Sections 1.368-2(g) and
1.368-3(a).
WHEREAS,
the
Parties are executing and delivering this Agreement in reliance upon the
exemption from securities registration afforded by the provisions of Section
4(2) of the Securities Act of 1933, as amended (the “Securities
Act”).
NOW
THEREFORE,
on the
stated premises and for and in consideration of the mutual covenants and
agreements hereinafter set forth and the mutual benefits to the Parties to
be
derived herefrom, it is hereby agreed as follows:
ARTICLE
I
REPRESENTATIONS
AND WARRANTIES OF THE CORPORATION
As
an
inducement to, and to obtain the reliance of CDG, the Corporation, represents
and warrants as follows:
1.1 Organization.
The
Corporation is a company duly organized and validly existing under the laws
of
Nevada and has the corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances,
and
orders of public authorities to own all of its properties and assets and to
carry on its business.
1.2 Due
Authorization.
The
Corporation has taken, or will have taken prior to Closing (as defined below),
all actions required by law, its certificate of incorporation, its bylaws,
or
otherwise to authorize the execution and delivery of this Agreement. No
authorization, approval, consent, or order of, or registration, declaration,
or
filing with, any court or other governmental body is required in connection
with
the execution and delivery by the Corporation of this Agreement and consummation
by the Corporation of the transactions contemplated by this
Agreement.
1.3 Absence
of Violation.
The
execution and delivery of this Agreement, and all exhibits hereto does not
and
the consummation of the transactions contemplated hereby and thereby will not
(i) conflict with, violate, result in a breach of or constitute a default under
any provision of the Certificate of Incorporation (as amended) or bylaws or
other organizational documents of the Corporation; (ii) violate, conflict with
or result in the breach or termination of or modification, or otherwise give
any
other contracting party the right to terminate or modify, or constitute a
default, with or without notice, the lapse of time or both, or cause the
acceleration of any obligation, under the terms of any contract to which the
Corporation is a party, (iii) result in the creation of any lien, charge or
encumbrance upon the properties or other assets of the Corporation, or (iv)
conflict with, violate, result in a breach of or constitute a default under
any
judgment, order, injunction, decree or award against, or binding upon, the
Corporation or upon any of its properties or assets.
1.4 Consents.
The
Corporation is not subject to any law, ordinance, regulation, rule, order,
judgment, injunction, decree, charter, bylaw, contract, commitment, lease,
agreement, instrument or other restriction of any kind which would prevent
the
Corporation from performing the terms of this Agreement or any of the
transactions contemplated hereby without the consent of any third party, or
which would require the consent of any third party for the consummation of
this
Agreement or any of the transactions contemplated hereby, or which would result
in any penalty, forfeiture or other termination as a result of such
consummation.
1.5 Binding
Obligation.
When
executed by the Corporation, this Agreement and all exhibits hereto and the
representations and warranties contained herein and therein will constitute
a
valid and binding obligation of the Corporation enforceable in accordance with
their respective terms.
1.6 Capitalization
and Outstanding Shares.
At the
time of Closing, there will be 525,000,000 shares of capital stock of the
Corporation (the “Corporation
Capital Shares”)
authorized, consisting of 500,000 shares of common stock Corporation $0.001
par
value per share, 25,000,000 shares of Preferred Stock (2,400,258 of which are
outstanding and designated as Series A Preferred Stock), 10,000,000 shares
of
Preferred BCV (none of which are outstanding) and 1,000,000 shares of “blank
check” preferred stock (one share of which is outstanding and designated as
Series C Preferred Stock, the Certificate of Designation of which is attached
hereto as Exhibit A) (the “Corporation
Preferred Shares”).
Except
as
provided in this Agreement, no person is entitled to any rights with respect
to
the issuance or transfer of the Corporation Common Shares. The outstanding
Corporation Capital Shares will on the Closing Date be validly issued, fully
paid, non-assessable, not subject to pre-emptive rights and will have been
issued in compliance with all state and federal securities laws or other
applicable law.
1.7 Issuable
Shares.
The
Issuable Shares issuable to the CDG Shareholders as the holders of the CDG
Shares will when issued pursuant to this Agreement be duly and validly
authorized and issued, fully paid and non-assessable.
1.8 Compliance
With Laws and Regulations.
The
Corporation has complied with all applicable statutes and regulations of any
federal, state, or other governmental entity or agency thereof, except to the
extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets, or condition of the Corporation or
except to the extent that noncompliance would not result in the occurrence
of
any material liability for the Corporation.
1.9 Litigation.
There
are no claims, actions, suits, proceedings or investigations pending or, to
the
knowledge of the Corporation’s management, threatened against the Corporation or
any of its assets or business or this Agreement or any exhibit hereto, at law
or
in equity, by or before any court, arbitrator or governmental authority,
domestic or foreign.
1.10 No
Bankruptcy.
There
has not been filed any petition or application, nor any proceeding commenced
by
or against the Corporation with respect to any assets of the Corporation under
any law, domestic or foreign, relating to bankruptcy, reorganization, fraudulent
transfer, compromise, arrangements, insolvency, readjustment of debt or
creditors' rights, and no assignment has been made by the Corporation for the
benefit of creditors generally.
1.11 No
Shareholders’ Agreement.
Except
for this Agreement and any agreements incorporated as exhibits hereto, there
is
no agreement which governs or purports to govern the shareholdings of the
Corporation or which restricts or purports to restrict the exercise by any
shareholder of the Corporation of his rights as a shareholder of the
Corporation, including without restriction, any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rates or disposition of the shares (or units or other equity interest,
as the case may be) of the Corporation.
1.12 Acquisition
of Equity Securities.
There
is no share option plan or other arrangement to acquire any equity securities
of
the Corporation or securities convertible or exercisable into or exchangeable
for, or which otherwise confer on the holder thereof any right to acquire,
any
such additional equity securities, as the case may be, except as disclosed
in
this Agreement.
1.13 Issuance
of Shares Exempt from Registration.
The
issuance of the Issuable Shares to CDG Shareholders is exempt from registration
under United States federal and state securities laws and regulations.
1.14 No
Materially Adverse Undisclosed Facts.
There
is no fact known to the management of the Corporation which has not previously
been disclosed in writing to CDG which may in the reasonable expectation of
the
Corporation’s management materially adversely affect the Corporation or its
respective assets, properties, business, prospects, operation or condition
(financial or otherwise) and no state of facts is known to the management of
the
Corporation that would operate to prevent the Corporation from continuing to
carry on its business in the manner in which carried on at the date
hereof.
1.15 Absence
of Certain Changes or Events.
Except
as contemplated by this Agreement, the Merger Agreement or any transactions
or
developments contemplated thereby, from the date of this Agreement until the
completion of the Closing (as described below) the Corporation will, other
than
as disclosed in writing to CDG, not: (i) incur any liability or obligation
whatsoever, secured or unsecured, direct or indirect, other than in the ordinary
and usual course of its business; (ii) enter into any contracts or agreements
whatsoever, other than in the ordinary and usual conduct and course of its
business; (iii) change any of its accounting methods, principles, practices
or
policies; (iv) cease to operate its properties, if any, or fail to maintain
any
of its properties, rights and assets consistently with past practices; (v)
sell
or otherwise in any way alienate or dispose of any of its assets other than
in
the ordinary course of business and in a manner consistent with past practices;
(vi) modify its Certificate of Incorporation, Bylaws or capital structure;
except to increase its authorized capital to 525,000,000 shares (vii) make
any
dividend to any of its shareholders or to any affiliate or associate thereof,
or
reserve or declare any dividend; (viii) other than the ordinary course of
business, grant to any customer any special allowance or discount, or change
its
pricing, credit or payment policies; (ix) make any loan or advance, or assume,
guarantee or otherwise become liable with respect to the liabilities or
obligations of any person, or (x) purchase or otherwise acquire any shares
or
other equity security, as the case may be, in any person.
1.16 Reliance.
All
representations and warranties of the Corporation contained herein, shall be
deemed to have been relied upon by CDG and the CDG shareholders notwithstanding
any investigation heretofore or hereafter made by CDG or by its counsel and
shall survive the date hereof and continue in full force and effect for the
benefit of CDG until the limitation period under any applicable tax statute
has
expired or, in all other cases, until the first anniversary of the date
hereof.
1.17 Assets
and Liabilities at the Time of Closing.
At the
time of the Closing , the Corporation shall have no liabilities and no
assets.
ARTICLE
II
REPRESENTATIONS
AND WARRANTIES OF CDG
As
an
inducement to, and to obtain the reliance of the Corporation, CDG, represents
and warrants, as of the date of this Agreement and as of the Effective Time,
as
follows:
2.1 Organization.
(a) CDG
is a
company duly organized, validly existing and in good standing under the laws
of
the State of Florida and has the corporate power and is duly authorized,
qualified, franchised, and licensed under all applicable laws, regulations,
ordinances, and orders of public authorities to own all of its properties and
assets and to carry on its business.
2.2 Due
Authorization.
CDG has
taken, or will have taken prior to Closing (as defined below) all actions
required by law, as the case may be, or otherwise to authorize the execution
and
delivery of this Agreement. No authorization, approval, consent, or order of,
or
registration, declaration, or filing with, any court or other governmental
body
is required in connection with the execution and delivery by CDG of this
Agreement and consummation by CDG of the transactions contemplated by this
Agreement.
2.3 Absence
of Violation.
The
execution and delivery of this Agreement, and all exhibits hereto does not
and
the consummation of the transactions contemplated hereby and thereby will not
(i) conflict with, violate, result in a breach of or constitute a default under
any provision of the Memorandum of Association, Articles of Association (each
as
amended) or other organizational documents of CDG, as applicable; (ii) violate,
conflict with or result in the breach or termination of or modification, or
otherwise give any other contracting party the right to terminate or modify,
or
constitute a default, with or without notice, the lapse of time or both, or
cause the acceleration of any obligation, under the terms of any contract to
which CDG is a party, (iii) result in the creation of any lien, charge or
encumbrance upon the properties or other assets of CDG, or (iv) conflict with,
violate, result in a breach of or constitute a default under any judgment,
order, injunction, decree or award against, or binding upon CDG or Keyuan,
or
upon any of the properties or assets of CDG.
2.4 Consents.
No
consent, waiver, approval, order or authorization of, or registration,
declaration or filing with, any court, administrative agency or commission
or
other federal, state, county, local or other foreign governmental authority,
instrumentality, agency or commission or any third party, including a party
to
any agreement with CDG, is required by or with respect to CDG in connection
with
the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
2.5 Litigation.
There
are no claims, actions, suits, proceedings or investigations pending or
threatened or reasonably anticipated against or affecting CDG or any assets
or
business of either CDG or this Agreement or any exhibit hereto, at law or in
equity, by or before any court, arbitrator or governmental authority, domestic
or foreign.
2.6 No
Bankruptcy.
There
has not been filed any petition or application, nor any proceeding commenced
by
or against CDG with respect to any assets of CDG under any law, domestic or
foreign, relating to bankruptcy, reorganization, fraudulent transfer,
compromise, arrangements, insolvency, readjustment of debt or creditors' rights,
and no assignment has been made by CDG for the benefit of creditors generally.
2.7 No
Option Plan.
There
is no share option plan or similar plan to acquire any additional shares or
units or other equity interests, as the case may be, of CDG or securities
convertible or exercisable into or exchangeable for, or which otherwise confer
on the holder thereof any right to acquire, any such additional shares or units
or equity interests, as the case may be.
2.8
Tax
Returns.
All
required tax returns and information returns and reports of or relating to
any
tax and the information and data contained therein have been properly and
accurately compiled and completed in all material respects, and filed and paid
in a timely manner with the appropriate taxation authority for each
CDG.
2.9 Guarantees.
CDG has
no outstanding contracts or commitments guaranteeing (or indemnifying or making
contribution to others for breaches in connection with) the payment or
collection or the performance of the obligations of others, and neither of
them
has entered into any deficiency agreements, or issued any comfort letters,
or
otherwise granted any material financial assistance to any person, firm,
corporation or other entity.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES OF THE CDG SHAREHOLDERS
As
an
inducement to, and to obtain the reliance of the Corporation, the CDG
Shareholders represent and warrant, as of the date of this Agreement and as
of
the Effective Time, as follows:
3.1 Ownership
of Shares.
The CDG
Shareholders own, as of the date of this Agreement and at all times herefrom
to
the Closing owns the amount of shares of CDG set forth next to their respective
name on Schedule B hereto.
3.2 Binding
Obligation.
When
executed by the CDG Shareholders, this Agreement, and all exhibits hereto and
the representations and warranties contained herein and therein will constitute
a valid and binding obligation of the CDG Shareholders, enforceable in
accordance with its terms.
3.3 Reliance.
All
representations and warranties of the CDG Shareholders contained in this Article
III shall be deemed to have been relied upon by the Corporation notwithstanding
any investigation heretofore or hereafter made by the Corporation or by its
counsel and shall survive the date hereof and continue in full force and effect
for the benefit of the Corporation until the first anniversary of the date
hereof.
ARTICLE
IV
THE
CLOSING
4.1 The
Exchange.
The CDG
Shareholders agree to assign, transfer, and deliver to the Corporation, free
and
clear of all liens, pledges, encumbrances, charges, restrictions or known claims
of any kind, nature, or description, all of the outstanding common shares and
one Series A Preferred Stock of CDG constituting 100% of the issued and
outstanding shares of CDG on a fully diluted basis, and the Corporation agrees
to acquire such shares by issuing and delivering to the CDG Shareholders in
exchange therefor an aggregate of 96,468,627 common shares and one Series C
Preferred Stock constituting 81% percent of the then issued and outstanding
common stock of the Corporation on a fully-diluted basis to the CDG
Shareholders.
4.2 Closing.
The
closing (“Closing”)
of the
transactions contemplated by this Agreement shall be affected once the
Corporation amends its Certificate of Incorporation to increase its authorized
capital (“Closing
Date”).
ARTICLE
V
ADDITIONAL
AGREEMENTS
5.1 Restrictions
on Resale
(i) The
Issuable Shares.
The
Issuable Shares will not be registered under the Securities Act, or the
securities laws of any state, and cannot be transferred, hypothecated, sold
or
otherwise disposed of until; (i) a registration statement with respect to such
securities is declared effective under the Securities Act, or (ii) the
Corporation receives an opinion of counsel for the stockholder, reasonably
satisfactory to counsel for Corporation, that an exemption from the registration
requirements of the Securities Act is available.
“THE
SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE DISPOSED OF UNTIL A REGISTRATION STATEMENT WITH
RESPECT THERETO IS DECLARED EFFECTIVE UNDER SUCH ACT, OR THE CORPORATION
RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER REASONABLY SATISFACTORY TO COUNSEL
FOR THE CORPORATION THAT AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
SUCH
ACT IS AVAILABLE.”
ARTICLE
VIII
MISCELLANEOUS
6.1 Governing
Law.
This
Agreement shall be governed by, enforced, and construed under and in accordance
with the laws the State of New York without regard to its conflicts of laws
principles.
6.2 Resolution
of Disputes.
(a) Any
dispute, controversy or claim arising out of or relating to this Agreement,
or
the interpretation, breach, termination or validity hereof, shall first be
resolved through friendly consultation, if possible. Such consultation shall
begin immediately after one party has delivered to the other party a written
request for such consultation (the “Consultation
Date”).
If
the dispute cannot be resolved within 30 days following the Consultation Date,
the dispute shall be submitted to arbitration upon the request of either party,
with written notice to the other party.
(b) Arbitration.
The
arbitration shall be conducted by a tribunal (the “Tribunal”)
in New
York, New York under the auspices of the American Arbitration Association
(“AAA”)
in
accordance with the commercial arbitration rules and supplementary procedures
for international commercial arbitration of the AAA. There shall be three
arbitrators—one arbitrator shall be chosen by each party to the dispute and
those two arbitrators shall choose the third arbitrator. All arbitration
proceedings shall be conducted in English. Each party shall cooperate with
the
other in making full disclosure of and providing complete access to all
information and documents requested by the other party in connection with the
arbitration proceedings. Arbitration shall be the sole, binding, exclusive
and
final remedy for resolving any dispute between the parties; either party may
apply to any court of competent jurisdiction in the State of New York for
enforcement of any award granted by the Tribunal.
(c) During
the period when a dispute is being resolved, except for the matter being
disputed, the parties shall in all other respects continue to abide by the
terms
of this Agreement.
6.3 Notices.
Any
notice or other communications required or permitted hereunder shall be
sufficiently given if personally delivered to it or sent by registered mail
or
certified mail, postage prepaid, or by prepaid telegram:
6.4 Schedules;
Knowledge.
Each
party is presumed to have full knowledge of all information set forth in the
other party's schedules delivered pursuant to this Agreement.
6.5 Entire
Agreement.
This
Agreement represents the entire agreement between the parties relating to the
subject matter thereof.
6.6 Survival
of Representations and Warranties.
The
representations, warranties, and covenants of the respective parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated for a period of one year. All rights and obligations under this
entire Agreement shall be binding upon and inure to the benefit of the heirs,
executors, administrators and assigns of the parties.
6.7 Assignment.
Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned by any of the Parties (whether by operation of
law
or otherwise) without the prior written consent of the other Parties.
6.8 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument. For purposes of this Agreement, facsimile signatures may be deemed
originals.
6.9 Amendment
or Waiver.
Every
right and remedy provided herein shall be cumulative with every other right
and
remedy, whether conferred herein, at law, or in equity, and may be enforced
concurrently herewith, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same of any other
default then, theretofore, or thereafter occurring or existing. At any time
prior to the Closing Date, this Agreement may be amended by a writing signed
by
all parties hereto, with respect to any of the terms contained herein, and
any
term or condition of this Agreement may be waived or the time for performance
may be extended by a writing signed by the party or parties for whose benefit
the provision is intended.
6.10 Headings;
References.
The
article, section and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All references herein to “Articles” or
“Sections” shall be deemed to be references to Articles or Sections of this
Agreement unless otherwise indicated.
6.11 No
Third Party Beneficiaries.
Except
as expressly provided by this Agreement, nothing herein is intended to confer
upon any person or entity not a Party to this Agreement any rights or remedies
under or by reason of this Agreement.
6.12 Severability;
Enforcement.
Any
term or provision of this Agreement that is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provisions shall be interpreted to be only so broad as is
enforceable.
6.13 Rules
of Construction.
The
Parties agree that they have been represented by counsel during the negotiation
and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities
in
an agreement or other
document will be construed against the party drafting such agreement or
document.
IN
WITNESS WHEREOF,
this
Agreement has been duly executed and delivered by each party hereto as of the
date first above written.
|
XXXXXXX
XXXXXXX GROUP, INC.
By:
\s\Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
President
THE
CORPORATION
By:
\s\Xxxxxx
X. Xxx
Name:
Xxxxxx X. Xxx
Title:
Chairman & Chief Executive Officer
\s\Xxxxxx
X. Xxx
Xxxxxx
X. Xxx, Individually
\s\
Xxxxxxx X. Xxxxxx
Xxxxxxx
X. Xxxxxx, Individually
\s\
Xxx Xxxxxxxx
Xxx
Xxxxxxxx, Individually
\s\
Xxxxx Xxxxxxxx
Xxxxx
Xxxxxxxx, Individually
ROADRUNNER
CAPITAL GROUP, LLC
By:
\s\
Xxxxxxxxxxx Xxxxxxxx
Xxxxxxxxxxx
Xxxxxxxx
|
Schedule
A
Xxxxxx
X.
Xxx
Xxxxxxx
X. Xxxxxx
Roadrunner
Capital Group, LLC
Xxx
Xxxxxxxx
Xxxxx
Xxxxxxxx
Schedule
B
|
Xxxxxx
X. Xxx
|
59,480,013
|
|||
|
Xxxxxxx
X. Xxxxxx
|
22,875,425
|
|||
|
Roadrunner
Capital Group, LLC
|
9,188,123
|
|||
|
Xxx
Xxxxxxxx
|
4,502,980
|
|||
|
Xxxxx
Xxxxxxxx
|
459,406
|
EXHIBIT
A
CERTIFICATE
OF DESIGNATION OF RIGHTS, PREFERENCES
AND
PRIVILEGES OF SERIES C PREFERRED STOCK
OF
XXXXXX ENGINEERED PLASTICS CORP.
The
undersigned, Xxxxxx X. Xxx does hereby certify:
1. That
he
is the duly elected and acting Chairman and Chief Executive Officer, of Xxxxxx
Engineered Plastics Corp., a Nevada corporation (the
"Corporation").,
2.
That
the Shareholders of the Corporation resolved on June 29, 2005, to authorize
and
issue to Xxxxxx X. Xxx, a class of preferred stock which shall be governed
by
this Certificate of Designation creating a series of one share of Preferred
Stock designated as Series C Preferred Stock which has the following
designations, powers, preferences and relative and other special rights and
the
qualifications, limitations and restrictions as follows:
Section.
l. DESIGNATION
AND AMOUNT. The shares of such series shall be designated as "SERIES C PREFERRED
STOCK." The Series C Preferred Stock shall have a par value of $.001 per share,
and the number of shares constituting such series shall be one.
Section
2. PROPORTIONAL
ADJUSTMENT. In the event that the Corporation shall at any time after the
issuance of any share or shares of Series C Preferred Stock (i) declare any
dividend on Common Stock of the Corporation ("Common Stock") payable in shares
of Common Stock, (ii) subdivide the outstanding Common Stock or' (iii) combine
the outstanding Common Stock into a smaller number of shares, then in each
such
case the Corporation shall simultaneously effect a proportional adjustment
to
the number of outstanding shares of Series C Preferred Stock.
Section
3. DIVIDENDS
AND DISTRIBUTIONS.
The
Series C Preferred Stock shall not entitle the holder to any dividends or
preference on distribution.
Section
4. VOTING
RIGHTS. The holder of the Series C Preferred Stock shall have the right to
vote
on all matters submitted for a vote to shareholders of the Company and shall
have the right to vote 50.1 % of the total outstanding shares entitled to vote
at such meeting. Effectively, the provision gives the holder of the Series
C
Preferred Stock the right to unilaterally control the voting of the
Corporation's securities.
Section
5. REACQUIRED
SHARES. Any shares of Series C Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and canceled
promptly. 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 and in the Restated Certificate of Incorporation, as then
amended.
Section
6. LIQUIDATION,
DISSOLUTION OR. WINDING UP. Upon any liquidation, dissolution or winding up
of
the Corporation, the holders of shares of Series C Preferred Stock shall not
be
entitled to receive any distribution.
Section
7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in which the shares
of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of Series C
Preferred Stock shall at the same time be similarly exchanged or changed into
preferred stock of the surviving corporation with the same rights and
preferences as the Series C Preferred Stock.
Section
8. AMENDMENT.
The Restated Certificate of Incorporation of the Corporation shall not be
further amended in any manner which would materially alter or change the powers,
preference or special rights of the Series C Preferred Stock so as to affect
them adversely without the affirmative vote of the holders of a majority of
the
outstanding shares of Series C Preferred Stock, voting separately as a
series.
It
was
further resolved that the Corporation's executive officers are authorized and
directed to take all such actions and to do all such things as the Corporation
or any executive officer of the Corporation shall deem necessary or convenient
to implement and render effective the Series C Preferred Stock, Accordingly,
the
Chairman and Secretary are authorized to prepare and file this Certificate
of
Designation of Rights, Preferences and Privileges in accordance with the
foregoing resolution and the provisions of Nevada law.
We
further declare that the matters set forth in the foregoing Certificate of
Designation are true and correct of our own knowledge.
\s\
Xxxxxx X. Xxx
Xxxxxx
X.
Xxx, Chairman of the Board of Directors &
Chief
Executive Officer
