CERTIFICATE OF DESIGNATIONS
ESTABLISHING POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE,
PARTICIPATING, OPTIONAL OR OTHERWISE
AND
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS
OF THE
SERIES B CONVERTIBLE PREFERRED STOCK
OF
ASIA WEB HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law of the State of Delaware,
Michael Schaffer, Chief Executive Officer, and Waddy Stephenson, Secretary,
certify that:
1. They are the Chief Executive Officer and the Secretary,
respectively, of Asia Web Holdings, Inc., a Delaware
corporation, the Certificate of Incorporation of which was
filed in the office of the recorder of Kent County, Delaware,
on September 15, 1993 and amendments to and changes of which
and a restatement of which Certificate of Incorporation were
subsequently duly filed and recorded ("Certificate of
Incorporation").
2. The Certificate of Incorporation of the Company authorizes the
issuance of 10,000,000 shares of Preferred Stock, par value
$0.001 per share ("Preferred Stock"), and expressly vests in
the Board of Directors of the Company the authority to issue
any and all of said shares in one or more series and to fix,
by resolution or resolutions, the voting powers, designations,
preferences and relative, participating, optional, or other
special rights, and the qualifications, limitations or
restrictions thereof of each series to be issued.
3. By previous action, the Board designated 4,000,000 shares of
the authorized but unissued preferred stock as Series A
-1-
<PAGE>
Convertible Preferred. All shares of Series A stock that were
issued and outstanding have been converted into Common Stock
and there are currently no shares of the Series A Convertible
Preferred Stock issued and outstanding. In accordance with
Paragraph 7(e) of the Certificate of Designations establishing
the Series A Preferred Shares, the shares so converted shall
be canceled, shall not be re-issuable, and shall cease to be
part of the authorized capital of the Company.
4. Pursuant to the authority granted by the Company's Certificate
of Incorporation, and the Company's By-Laws, the Board of
Directors of the Company, by unanimous written consent,
adopted and approved the following resolution:
RESOLUTION OF BOARD OF DIRECTORS:
WHEREAS, by amendment to its Certificate of Incorporation, as set forth
in the Restated Certificate of Incorporation of this Corporation, filed with the
Secretary of State of the State of Delaware on June 22, 1999, 10,000,000 shares
of the Company's authorized capital stock were classified as preferred stock
with a par value of $0.001 per share; and
WHEREAS, the Board of Directors of this Company by virtue of the
Certificate of Incorporation, is expressly vested with the authority pursuant to
Section 151 of the General Corporation Law of the State of Delaware to authorize
preferred stock with such powers, preference, and relative participation,
optional or other special rights, classifications, limitations, or restrictions
thereof, as said of Board of Directors may deem appropriate; and
WHEREAS, the Board previously designated 4,000,000 shares of the
preferred stock as Series A Convertible Preferred all of which have been
converted and none of which are currently issued and outstanding; and
WHEREAS, this Board now desires to fix by resolution or resolutions,
the voting powers, designations, preferences and relative, participating,
optional or other special rights, and the qualifications, limitations or
restrictions thereof of a new series of preferred stock and the number of shares
constituting and the designation of the series;
NOW, THEREFORE BE IT RESOLVED AS FOLLOWS: that the Board of Directors
authorizes the original issue of a series of preferred shares that shall be
-2-
<PAGE>
designated and known as "Series B Convertible Preferred Stock". ("The Series B
Preferred"). The number of shares of this series shall be 1,000,000. All shares
in this series are subject to the following, rights, preferences, privileges and
restrictions ("the Rights and Preferences"):
1. STATED VALUE. The stated value for each share of Series B
Preferred shall be $10.00 (the "Stated Value").
2. RANK. The Series B Preferred shall, with respect to rights on
liquidation, winding up, and dissolution or sale of
substantially all assets in a transaction or series of
transactions, and rights with respect to non-economic
dilution, rank senior to the "Junior Securities" as defined
below and shall be considered to be "Senior Securities" (as
defined below), on a parity with the "Parity Securities" (as
defined below), and senior to the Company's Common Stock and
to all other classes and series of stock of the Company now or
hereafter authorized, issued, or outstanding which are not
expressly designated as senior to the Series B Preferred and
the Parity Securities. No securities hereafter issued by the
Company can be designated as either Senior to the Series B
Preferred or on Parity with the Series B Preferred without the
consent, in writing, of the Holders of the Series B Preferred.
For purposes hereof, "Senior Securities" shall consist of any
class or series of stock that ranks senior to the Series A
Preferred as to dividend rights, redemption rights, and rights
on liquidation, winding up, and dissolution as well as
non-economic dilution, and "Parity Securities" shall consist
of any class or series of stock that ranks on a parity with
the Series B Preferred as to dividend rights, redemption
rights, and rights on liquidation, winding up, and
dissolution, and non-economic dilution. "Junior Securities"
shall be defined as a Series A Convertible Preferred Stock,
Common Stock and any class or series of stock that ranks
junior to the Series B Preferred as to dividend rights,
redemption rights, rights on liquidation, winding up, and
dissolution and non-economic dilution.
3. LIQUIDATION PREFERENCE.
(a) In the event of a voluntary or involuntary liquidation,
dissolution, or winding up of the affairs of the Company,
or sale of substantially all assets in a transaction or
-3-
<PAGE>
in a series of transactions, the holders of shares of any
unconverted Series B Preferred then outstanding shall be
entitled to receive in conjunction with any provision
then being made for holders of Parity Securities, if any,
an amount in cash equal to the Stated Value for each
share outstanding, plus an amount equal to any dividends
on those Series B Preferred shares, declared and unpaid
thereon, to the date fixed for liquidation, dissolution,
or winding up before any payment shall be made or any
assets distributed to the holders of any of the Junior
Securities. After payment of the full amount of the
liquidation preference payable to the holders of the
Series B Preferred, the payment of any other liquidation
preference payable with respect to any Senior Securities
or Parity Securities, holders of the Series B Preferred
shall be entitled to share ratably in the distribution of
the remaining assets of the Company in proportion that
each holder's shares, calculated on an as converted
basis, bears to the total number of shares of capital
stock of the Company outstanding and eligible to
participate in such distribution, assuming conversion as
applicable.
(b) If the assets of the Company are not sufficient to pay in
full the liquidation payments payable to the holders of
the outstanding Series B Preferred and the holders of any
Parity Securities, if any, and the holders of any Senior
Securities, if any, then the holders of all such shares,
shall share ratably in such distribution of assets in
accordance with the amount which would be paid on such
distribution of the amounts to which the holders of the
outstanding shares of Series B Preferred and the holders
of the Parity Securities, and the holders of the Senior
Securities were paid in full.
4. CONVERSION. The holders of the Series B Preferred have
conversion rights as follows ("the Conversion Rights"):
(a) RIGHT TO CONVERT. Except as set forth in Section 4(a)
below, each share of the Series B Preferred shall be
convertible at the option of the holder thereof, at any
time after the issuance of those shares, at the office of
the Company, or any transfer agent for those shares.
-4-
<PAGE>
Series B Preferred shares shall be converted into a
number of fully paid and non-assessable shares of common
stock par value $0.001 per share, of the Company (the
"Common Stock") as follows ("Conversion Rate"): such
Series B Preferred will convert at the rate of 5 shares
of Common Stock for each share of Series B Preferred. The
Conversion Rate of the Series B Preferred shall be
subject to adjustment from time to time as provided in
Section 4(d) hereof. The Stated Value of each share of
Series B Preferred shall not be subject to adjustment
(except as provided in Section 4(d)). Upon conversion,
declared and unpaid dividends on the shares of Series B
Preferred so converted shall, at the option of the
Company, be paid either in cash, to the extent permitted
by applicable law (and if not then permitted by
applicable law, at such time as the Company is permitted
by applicable law to pay any such dividends) or, at the
Company's option, converted into the number of fully paid
and non-assessable shares of Common Stock which results
from the dividing the fair market value of a share of
Common Stock and as determined in good faith by the Board
of Directors at such time into the aggregate of all such
declared and unpaid dividends on the Series B Preferred
so converted. Notwithstanding anything else contained
herein to the contrary, if, in respect of any shares of
Series B Preferred, the Company elects (whether as a
result of a voluntary or automatic conversion) to pay all
declared and unpaid dividends in cash, then the Company
shall pay all declared and unpaid dividends and the
remaining shares of Series B Preferred in cash, and, if,
in respect of any shares of Series B Preferred the
Company elects (whether as a result of voluntary or
automatic conversion) to pay all declared and unpaid
dividends in shares of Common Stock, then the Company
shall pay all declared and unpaid dividends on the
remaining shares of Series B Preferred in shares of
Common Stock.
(b) EXERCISE OF CONVERSION PRIVILEGE. To exercise its
conversion privilege, a holder of Series B Preferred
shall surrender the certificate or certificates
representing the shares being converted to the Company at
its principal office, and give written notice to the
Company at that office that such holder elects to convert
such shares. Such notice shall also state the name or
names (with address or addresses) in which the
certificate or certificates for shares of Common Stock
-5-
<PAGE>
issuable upon such conversion shall be issued. The
certificate or certificates for shares of Series B
Preferred surrendered for conversion shall be accompanied
by proper assignment thereof to the Company or in blank.
The date when such written notice is received by the
Company together with the certificate or certificates
representing the shares of Series B Preferred being
converted shall be the "Series B Preferred Conversion
Date." As promptly as practicable after the Series B
Preferred Conversion Date, the Company shall issue and
deliver to the holder of the shares of the Series B
Preferred being converted, or to such other person as
such holder may request in writing, such certificate or
certificates as it may request for the number of whole
shares of Common Stock issuable upon the conversion of
such shares of Series B Preferred in accordance with the
provisions of this Paragraph 4, such number of whole
shares shall be based on the total number of shares being
converted by such holder, not upon each share of Series B
Preferred being converted, cash in the amount of any
declared and unpaid dividends on such shares of Series B
Preferred, whether up to and including the Series B
Conversion Date, and cash as provided in Section 4, in
respect of any fraction of a share of Common Stock
issuable upon such conversion. Such conversion shall be
deemed to have been effective immediately prior to the
close of business on the Series B Preferred Conversion
Date, and at such times as the rights of the holders as
holder of the converted shares of Series B Preferred
shall cease and the person or persons in whose name any
certificate or certificate for shares of Common Stock
shall be issuable upon such conversion shall be deemed to
have become the holder or holders of record of shares of
Common Stock represented thereby.
(c) CONVERSION RATE AND STATED VALUE ADJUSTMENTS. In the
event the outstanding shares of Common Stock shall be
subdivided, combined or consolidated, by stock split,
stock dividend, or combination or like event into greater
or lesser number shares of Common Stock, the Conversion
Rate and Stated Value in effect immediately prior to such
subdivision, combination, consolidation or stock dividend
shall, concurrently with the effectiveness of such
subdivision, combination, consolidation or stock dividend
be proportionately adjusted.
-6-
<PAGE>
(d) STATUS OF CONVERTED STOCK. In case any shares of Series B
Preferred shall be converted as provided in Section 4
hereof, the shares so converted shall be canceled, shall
not be re-issuable and shall cease to be part of the
authorized capital stock of the Company.
(e) FRACTIONAL SHARES. In lieu of any fractional shares in
the aggregate to which the holder of the Series B
Preferred would otherwise be entitled upon conversion,
the Company shall pay cash equal to such fraction
multiplied by fair market value of one share of Common
Stock as determined by the Board of Directors in good
faith exercise of its reasonable business judgment.
(f) MISCELLANEOUS.
i. All calculation under this Section 4 shall be made
to the nearest cent or to the nearest one hundredth
(1/100) of a share, as the case may be.
ii. No adjustment in the Conversion Rate will be made if
such adjustment would result in a change in such
Conversion Rate of less than .01. Any adjustment of
less than .01 which is not made shall be carried
forward and shall be made at the time of and
together with any subsequent adjustment which, on a
cumulative basis, amounts to an adjustment of .01 or
more in the Conversion Rate.
(g) NO IMPAIRMENT. The Company will not, through any
re-organization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek
to avoid the observance or performance of any terms to be
observed or performed hereunder by the Company, but will
at all times in good faith, assist in carrying out the
provisions of this Section 4 and in taking all action as
may be necessary and appropriate in order to protect the
Conversion Rights of the holders of the Series B
Preferred against impairment.
-7-
<PAGE>
(h) RESERVATION OF COMMON STOCK. The Company shall, at all
times, reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of shares of Series B
Preferred, such number of its shares of Common Stock as
shall, from time to time, be sufficient to affect the
conversion of all outstanding shares of Series B
Preferred, and if at any time the number of authorized
but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then
outstanding shares of Series B Preferred, the Company
shall take such corporate action as may be necessary to
increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for
such purpose.
5. ECONOMIC ANTI-DILUTION. If at any time, during the ten year
period from the date of issuance of the Series B Preferred,
the Company sells Common Stock or other securities convertible
into Common Stock to any party other than a holder of the
Series B Preferred at a more advantageous price than Two
Dollars ($2.00) per share, then the holder or holders of the
Series B Preferred shall be entitled to the economic
difference in additional shares of Common Stock.
6. RECORD HOLDERS. The Company and any transfer agent may deem
and treat the record holders of any Series B Preferred as the
true and lawful owner thereof for all purposes, and neither
the Company nor any transfer agent shall be affected by any
notice to the contrary.
7. NOTICE. Any notice or other communication to be given in this
resolution shall be in writing and shall be deemed to have
been duly given or made (a) if delivered personally at the
time of delivery; (b) if transmitted by first class registered
or certified mail, postage prepaid, return receipt requested,
(3) business days after the date of such mailing; (c) if sent
by prepaid overnight delivery service, the next business day
after being sent or (d) if transmitted by cable, telegram,
facsimile, or telex, at the time of such transmission
addressed as follows: if to the Company, at its principal
executive offices, and if to the holder of Series B Preferred,
at the last address of such holder as it shall appear on the
register maintained by or for the Company.
-8-
<PAGE>
The foregoing resolution was duly adopted by all necessary action on
the part of the Company.
IN WITNESS WHEREOF, ASIA WEB HOLDINGS, INC. has caused this Certificate
to be duly executed by its Chief Executive Officer this 19 day of June, 2000.
ASIA WEB HOLDINGS, INC.
/s/ Michael Schaffer
-------------------------------------
Michael A. Schaffer,
Chief Executive Officer
/s/ Waddy Stephenson
-------------------------------------
Waddy Stephenson, Corporate Secretary
-9-
