REDDI BRAKE SUPPLY CORPORATION
CERTIFICATE OF DESIGNATION
OF
CLASS C PREFERRED STOCK
Nevada Revised Statutes Section 78.1955
The undersigned, being the President and the Secretary of
Reddi Brake Supply Corporation, a Nevada corporation (the
"Corporation"), certify that the Board of Directors of the
Corporation, pursuant to the authority granted in Article IV of
the Corporation's Articles of Incorporation, as amended, has
adopted a resolution establishing a series consisting of
2,000,000 of the Corporation's authorized preferred stock
designated as Class C Preferred Stock (the "Class C Preferred
Stock") and has prescribed the following voting powers,
designations, preferences, limitations, restrictions and relative
rights of the Class B Preferred Stock:
A. Liquidation rights. The holders of the Class C Preferred
Stock shall have liquidation rights as follows (the "Liquidation
Rights"):
1. In the event of any liquidation, dissolution or winding up
of the Company, holders of shares of Class C Preferred Stock are
entitled to receive, out of legally available assets, a
liquidation preference of $.01 per share, plus an amount equal to
any accrued and unpaid dividends to the payment date, and no
more, before any payment or distribution is made to the holders
of Common Stock or any series or class of the Company=s stock
hereafter issued that ranks junior as to liquidation rights to
the Class C Preferred Stock. But the holders of Class C
Preferred Stock will not be entitled to receive the liquidation
preference of such shares until the liquidation preferences of
any series or class of the Company=s stock hereafter issued that
ranks senior as to liquidation rights to the Class C Preferred
Stock (Asenior liquidation stock@) has been paid in full. The
holders of Class C Preferred Stock and all other series or
classes of the Company=s stock hereafter issued that rank on a
parity as to liquidation rights with the Class C Preferred Stock
are entitled to share ratably, in accordance with the respective
preferential amounts payable on such stock, in any distribution
(after payment of the liquidation preference of the senior
liquidation stock) which is not sufficient to pay in full the
aggregate of the amounts payable thereon. After payment in full
of the liquidation preference of the shares of Class C Preferred
Stock, the holders of such shares will not be entitled to any
further participation in any distribution of assets by the
Company.
2. Neither a consolidation, merger or other business
combination of the Company with or into another corporation or
other entity nor a sale or transfer of all or part of the
Company's assets for cash, securities or other property will be
considered a liquidation, dissolution or winding upon the
Company.
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B. Conversion. The holders of the Class C Preferred Stock
shall have conversion rights as follows (the "Conversion
Rights"):
1. Right to Convert. Each holder of Class C Preferred Stock of
the Corporation shall be entitled to convert the shares of Class
C Preferred Stock held by such holder, at such holder's option,
at any time after ninety (90) days following the date of issuance
of such shares and in the manner specified in Paragraph B(2)
below, into that number of fully-paid and non-assessable shares
of the Corporation's Common Stock determined as follows: Each
share of Class C Preferred Stock so surrendered for conversion
shall be converted into an equal number of shares of Common
Stock.
2. Mechanics of Conversion. In order to convert Class C
Preferred Stock into full shares of Common Stock, the holder
shall surrender the certificate or certificates therefore, duly
endorsed, by either overnight courier or 2-day courier, or in
person to the office of the Corporation or of any transfer agent
for its Common Stock, and shall give concurrent written notice to
the Corporation at such office that he elects to convert the
same, the number of shares of Class C Preferred Stock to be
converted and the notice sent to the Corporation's principal
offices via facsimile; provided, however, that the Corporation
shall not be obligated to issue certificates evidencing the
shares of Common Stock issuable upon such conversion unless
either the certificates evidencing such shares of Class C
Preferred Stock are delivered to the Corporation or its transfer
agent as provided above, or the holder notifies the Corporation
or its transfer agent that such certificates have been lost,
stolen or destroyed and executes an agreement satisfactory to the
Corporation to evidence such loss and to indemnify the
Corporation from any loss incurred by it in connection with such
certificates.
The Corporation shall deliver as soon as reasonably
practicable after delivery to the Corporation of such
certificates, or after such agreement and
indemnification, to such holder of Class C Preferred
Stock at the address of the holder on the stock books
of the Corporation, a certificate or certificates for
the number of shares of Common Stock to which the
holder shall be entitled as aforesaid. The date on
which notice of conversion is given (the "Conversion
Date") shall be deemed to be the date set forth in such
notice of conversion provided that delivery and advance
facsimile notice is made as provided above and that the
original shares of Class C Preferred Stock to be
converted are received by the transfer agent or the
Corporation within three (3) business days thereafter,
and the person or persons entitled to receive the
shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
If the original shares of Class C Preferred Stock to be
converted are not received by the transfer agent or the
Corporation within three (3) business days after the
Conversion Date, the notice of conversion shall be
deemed null and void.
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C. Corporate Change. The Conversion Rate shall be
appropriately adjusted to reflect, as deemed equitable and
appropriate by the Board of directors of the Corporation, any
stock dividend, stock split or share combination of the Common
Stock or any distribution of a material portion of the
Corporation's assets to the holders of Common Stock. In the
event of a merger, reorganization, recapitalization or similar
event of or with respect to the Corporation (a "Corporate
Change") (other than a Corporate Change in which the Corporation
is the surviving entity or in which all of substantially all of
the consideration received by the holders of the Corporation's
capital stock upon such Corporate Change consists of cash or
assets other than securities issued by the acquiring entity or
any affiliate thereof), this Class C Preferred Stock shall be
assumed by the acquiring entity and thereafter this Class C
Preferred Stock shall be convertible into such class and type of
securities as the Holder would have received had the Holder
converted this Class C Preferred Stock immediately prior to such
Corporate Change.
D. Voting Rights. The Holders of the Class C Preferred Stock
shall have 50 votes for every share of Class C Preferred Stock
held and shall be entitled to vote on any and all matters brought
to a vote of shareholders of Common Stock. Holders of Class C
Preferred Stock shall be entitled to notice of all shareholder
meetings or written consents with respect to which they would be
entitled to vote, which notice would be provided pursuant to the
Corporation's Bylaws and applicable statutes.
E. Protective Provisions. So long as shares of Class C
Preferred Stock are outstanding, the Corporation shall not
without first obtaining the approval (by voting or written
consent, as provided by Nevada law) of the holders of at least a
majority of the then outstanding shares of Class C Preferred
Stock:
1. alter or change the rights, preferences or privileges of the
shares of Class C Preferred Stock so as to affect adversely the
Class C Preferred Stock;
2. create any new class or series of stock having a preference
over the Class C Preferred Stock with respect to Distributions
(as defined in Paragraph A above):
3. do any act or thing not authorized or contemplated by this
Designation which would result in taxation of the holders of
shares of the Class C Preferred Stock under Section 305 of the
Internal Revenue Code of 1986, as amended (or any comparable
provision of the Internal Revenue Code as hereafter from time to
time amended).
F. Status of Converted Stock. In the event any shares of Class
C Preferred Stock shall be converted pursuant to Paragraph B
here, the shares so converted shall be cancelled, shall return to
the status of authorized but unissued Preferred Stock of no
designated class or series, and shall not be issuable by the
Corporation as Class C Preferred Stock.
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G. Reservation of Stock Issuable Upon Conversion. The
Corporation 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 the shares of the
Class C Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the
conversion of all outstanding shares of the Class C Preferred
Stock; 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 the Class C
Preferred Stock, in addition to such other remedies as shall be
available to the holder of the Class C Preferred Stock, the
Corporation will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized
but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purposes, including, without
limitation, engaging in best efforts to obtain the requisite
stockholder approval of any necessary amendment to these
provisions.
H. Redemption of Stock.
1.Redemption Price. For each share of Class C Preferred
Stock which is to be redeemed, the Corporation will be
obligated on the Redemption Date (as defined below) to
pay to the holder thereof (upon surrender by such
holder at the Corporation's principal office or to the
Corporation's transfer agent of the certificates
representing such shares of Class C Preferred Stock) an
amount in immediately available funds equal to the
Liquidation Value plus all accrued dividends as of the
Redemption Date.
2. Notice of Redemption. The Corporation will mail written
notice of each redemption of Class C Preferred Stock to each
record holder of Class C Preferred Stock not more than sixty (60)
nor less than thirty (30) days prior to the date on which such
redemption is to be made. The date specified in such notice for
redemption is herein referred to as the "Redemption Date."
3.Termination of Rights. On the Redemption Date all
rights pertaining to the Class C Preferred Stock,
including, but not limited to, any right of conversion,
will cease, and such Class C Preferred Stock will not
be deemed to be outstanding. All certificates
representing the Class C Preferred Stock subject to
redemption will represent only the right to receive
payment in accordance with the provisions of this Part
5.
4.Redeemed or Otherwise Acquire Shares. Any shares of
Class C Preferred Stock which are redeemed or otherwise
acquired by the Corporation shall be canceled, may not
be reissued as Class C Preferred Stock, and shall be
returned to the status of authorized and unissued
shares of Preferred Stock without designation as to
series.
5. Optional Redemption. The Corporation may, at any time on or
after January 1, 2001, redeem all or any portion of the Class C
Preferred Stock.
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I. Preference Rights. Nothing contained herein shall be
construed to prevent the Board of Directors of the Corporation
from issuing one or more series of preferred stock with such
preferences as may be determined by the Board of Directors, in
its discretion.
J. Amendments. Subject to Paragraph E above, the designation,
number of, and voting powers, designations, preferences,
limitations, restrictions and relative rights of the Class C
Preferred Stock may be amended by a resolution of the Board of
Directors.
DATED this 13th day of June, 2000.
/s/ John Chymboryk, President
/s/ Kip Eardley, Secretary/Treasurer
State of Utah )
:ss.
County of Salt Lake )
On the 13th day of June, 2000 personally appeared before me,
a notary public (or judge or other authorized person, as the case
may be), duly commissioned and sworn, John Chymboryk and Kip
Eardley, President and Secretary/Treasurer respectively of Reddi
Brake Supply Corporation, personally known or proven to me on the
basis of satisfactory evidence to be the person whose name is
subscribed to the foregoing instrument and who acknowledged that
they executed the instrument.
IN WITNESS WHEREOF, I have executed this notary and affixed
my official seal.
NOTARY SEAL
/s/ Cletha A. Walstrand
NOTARY PUBLIC
My Commission Expires 3/4/02
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