Attached files
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| 8-K - CURRENT REPORT - Intelligent Living America, Inc. | f8k021414_intelligent.htm |
| EX-3.1 - CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION - Intelligent Living America, Inc. | f8k021414ex3i_intelligent.htm |
Exhibit 3.2
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES AND PRIVILEGES
OF SERIES B 7% ROYALTY INTEREST PARTICIPATING PREFERRED STOCK OF
INTELLIGENT LIVING, INC.
Pursuant to Section NRS 78.1955 of the
General Corporation Law of the State of Nevada
The undersigned, Victoria Rudman, does hereby certify that:
1. She is the duly elected Chief Executive Officer and Chairperson of the Board of Directors of Intelligent Living, Inc., a Nevada corporation (the "Corporation").
2. Pursuant to the authority conferred upon the Board of Directors of the Company (the "Board") by the Amended and Restated Certificate of Incorporation, as amended, of the Corporation, on January, 2014, the Board adopted the following resolutions creating a series of preferred stock, par value $1.00 per share ("Preferred Stock"), of the Corporation designated as Series B 7% Royalty Interest Participating Preferred Stock:
RESOLVED: That pursuant to the authority vested in the Board by the Amended and Restated Certificate of Incorporation, as amended, of the Corporation (the "Charter"), the Board does hereby provide for the issuance of a series of Preferred Stock of the Corporation and does hereby fix and herein state and express the designations, powers, preferences and relative and other special rights, and the qualifications, limitations and restrictions, of such series of Preferred Stock as follows:
Section 1. Designation and Amount. The shares of such series shall be designated as "Series B 7% Royalty Interest Participating Preferred Stock." The Series B 7% Royalty Interest Participating Preferred Stock shall have a par value of $1.00 per share, and the number of shares constituting such series shall be 96,000. The 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 B 7% Royalty Interest Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series B 7% Royalty Interest Participating Preferred Stock, voting separately as a class.
Section 2. Proportional Adjustment. As the Series B Royalty Interest Participating Preferred Stock is subject to an ongoing Royalty Payment calculated as a percentage of net sales with those voting rights described in Section 4 below, in the event that the Corporation shall at any time after the issuance of any share or shares of Series B Royalty Interest Participating Preferred Stock (the "Rights Declaration Date") (a) declare any dividend on the common stock of the Corporation, par value $0.001 per share (the "Common Stock"), payable in shares of Common Stock, (b) subdivide the outstanding Common Stock or (c) combine the outstanding Common Stock into a smaller number of shares, the Company agrees that in no such case shall the Company proportionally adjust the number of outstanding shares of Series B Participating Preferred Stock, but only the votes applicable to such Series B 7% Royalty Interest Participating Preferred Stock and then only by an amount the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
Section 3. Royalty Payments, Dividends and Distributions.
(a) Royalty Payments. (i)The holders of the Series B 7% Royalty Interest Participating Preferred Stock shall be entitled to receive, prior to and senior to any series of Preferred Stock, Notes or other obligations of the Company, Recurring Royalty Payments, calculated and payable monthly, derived from the net sales of the Company and all current and future subsidiaries. For the purpose of properly calculating Royalty Payments, net sales shall be defined as gross sales less discounts and returns. These figures shall be calculated following the conclusion of each calendar month and payable by no later than the 15th of the month following the end of the fiscal month as calculated for financial reporting purposes ("Payable Date"). Payable dates occurring on non-business days are due on the succeeding business day. Royalty Payments to holders shall occur and be payable prior to and separate from any declaration by the Board of any dividends or distributions, shall begin to accrue and be cumulative on the outstanding shares of Series B 7% Royalty Interest Participating Preferred Stock from the date of issue until the conclusion of the fiscal month. In any month where shares are issued the net sales for the entire fiscal month shall be prorated and due according to the format described above in the Section 3(a).
(ii) If at any time Royalty Payments on any Series B 7% Royalty Interest Participating Preferred Stock shall be in arrears for a time of more than 15 calendar days from the end of business on the payable date as defined in Section 3(a)(i) above, then the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") that shall extend until such time as all accrued and unpaid royalty payments for all previous fiscal periods and for the current monthly royalty payment period on all shares of Series B 7% Royalty Interest Participating Preferred Stock then outstanding shall have been due and paid or set apart for payment. During each default period, all monies in arrears for a period of more than 15 calendar days shall earn interest at the rate of 18% per annum ("Default Rate") all holders of Series B 7% Royalty Interest Participating Preferred Stock with payments in arrears. Should the payable date fall on a non-business day, the calculation of arrearages and Default Rate interest shall commence on the succeeding business day.
(b) Subject to Section 2 and to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series B 7% Royalty Interest Participating Preferred Stock with respect to dividends, the holders of shares of Series B 7% Royalty Interest Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board out of funds legally available for the purpose, quarterly dividends payable in cash on the last day of March, June, September and December in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series B 7% Royalty Interest Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00 and (ii) subject to Section 2,1,000 times the aggregate per share amount of all cash dividends, and 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B 7% Royalty Interest Participating Preferred Stock.
(c) The Corporation shall declare a dividend or distribution on the Series B 7% Royalty Interest Participating Preferred Stock as provided in paragraph (b) above immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided, however, that, in the event that no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series B 7% Royalty Interest Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(d) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B 7% Royalty Interest Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series B 7% Royalty Interest Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series B 7% Royalty Interest Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series B 7% Royalty Interest Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board may fix a record date for the determination of holders of shares of Series B 7% Royalty Interest Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon which record date shall be no more than 60 days prior to the date fixed for the payment thereof.
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Section 4. Voting Rights. The holders of shares of Series B 7% Royalty, Interest Participating Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter set forth, each share of Series B 7% Royalty Interest Participating Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote of the stockholders of the Corporation. In the event that the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on 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 number of votes per share to which holders of shares of Series B 7% Royalty Interest Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided herein, in any other Certificate of Designation creating a series of Preferred Stock or any similar stock, the Charter or the Amended and Restated Bylaws of the Corporation (the "Bylaws"), or by law, the holders of shares of Series B 7% Royalty Interest Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein or as required by law, the holders of Series B 7% Royalty Interest Participating Preferred Stock shall have no special voting rights and their consent shall not be required (except to the extent that they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.
(d) (i) If at any time dividends on any Series B 7% Royalty Interest Participating Preferred Stock shall be in arrears in an amount equal to six monthly royalty payments thereon, then the occurrence of such contingency shall mark the beginning of a period (herein called a "default period") that shall extend until such time as all accrued and unpaid royalty payments for all previous fiscal periods and for the current monthly royalty payment period on all shares of Series B 7% Royalty Interest Participating Preferred Stock then outstanding shall have been due and paid or set apart for payment. During each default period, all holders of Series B 7% Royalty Interest Participating Preferred Stock with payments in arrears in an amount equal to six monthly royalty payments thereon, voting as a class, shall have the right to elect two directors.
(ii) During any default period, such voting right of the holders of Series B 7% Royalty Interest Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 4( d) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders; provided, however, that such voting shall not be exercised unless the holders of at least one-third in number of shares of Series B 7% Royalty Interest Participating Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board as may then exist up to two directors or, if such right is exercised at an annual meeting of stockholders, to elect two directors. If the number that may be so elected at any special meeting does not amount to the required number, the holders of Series B 7% Royalty Interest Participating Preferred Stock shall have the right to make such increase in the number of directors as shall be necessary to permit the election by them of the required number. After the holders of Preferred Stock shall have exercised their right to elect directors in any default period and during the continuance of such period, the number of directors shall not be increased or decreased except by vote of the holders of Series B 7% Royalty Interest Participating Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari-passu with the Series B 7% Royalty Interest Participating Preferred Stock.
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(iii) Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect directors, the Corporation shall, by action of the Chairman of the Board, the Chief Executive Officer, the President or the Board in accordance with the Charter, promptly call a special meeting of the holders of Preferred Stock for such purpose. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (d)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to such holder at such holder's last address as the same appears on the books of the Corporation. Notwithstanding the provisions of this paragraph (d)(iii), no such special meeting shall be called during the period within 60 days immediately preceding the date fixed for the next annual meeting of the stockholders.
(iv) In any default period, the holders of Common Stock and other classes of stock of the Corporation, if applicable, shall continue to be entitled to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect two directors voting as a class, after the exercise of which right (A) the directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (B) any vacancy in the Board may (except as provided in subparagraph (ii) of this Section 4(d)) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock that elected the director whose office shall have become vacant. References in this Section 4(d) to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (B) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (A) the right of the holders of Preferred Stock as a class to elect directors shall cease, (B) the term of any directors elected by the holders of Preferred Stock as a class shall terminate and (C) the number of directors shall be such number as may be provided for in the Charter or the Bylaws irrespective of any increase made pursuant to the provisions of subparagraph (ii) of this Section 4(d) (such number being subject, however, to change thereafter in any manner provided by law or in the Charter or Bylaws). Any vacancies in the Board effected by the provisions of clauses (B) and (C) in the preceding sentence may be filled by a majority of the remaining directors.
Section 5. Certain Restrictions.
(a) The Corporation shall not declare any dividend on, make any distribution on, or redeem or purchase or otherwise acquire for consideration any shares of Common Stock after the first issuance of a share or fraction of a share of Series B 7% Royalty Interest Participating Preferred Stock unless concurrently therewith it shall declare a dividend on the Series B 7% Royalty Interest Participating Preferred Stock as required by Section 3 hereof.
(b) Whenever quarterly dividends or other dividends or distributions payable on the Series B 7% Royalty Interest Participating Preferred Stock as provided in Section 3 hereof are in arrears, thereafter and until al1 accrued and unpaid dividends and distributions, whether or not declared, on shares of Series B 7% Royalty Interest Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B 7% Royalty Interest Participating Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B 7% Royalty Interest Participating Preferred Stock, except dividends paid ratably on the Series B 7% Royalty Interest Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B 7% Royalty Interest Participating Preferred Stock; provided, however, that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B 7% Royalty Interest Participating Preferred Stock; or
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(iv) redeem or purchase or otherwise acquire for consideration any shares of Series B 7% Royalty Interest Participating Preferred Stock, or any shares of stock ranking on a parity with the Series B 7% Royalty Interest Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board) to all holders of such shares upon such terms as the Board, after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.
(c) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, pursuant to paragraph (a) of this Section 5, purchase or otherwise acquire such shares at such time and in such manner.
Section 6. Reacquired Shares. Any shares of Series B 7% Royalty Interest Participating 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, subject to the conditions and restrictions on issuance set forth herein, in the Charter or in any other Certificate of Designation creating a series of Preferred Stock or any similar stock or as otherwise required by law.
Section 7. Liquidation. Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B 7% Royalty Interest Participating Preferred Stock unless, prior thereto, the holders of shares of Series B 7% Royalty Interest Participating Preferred Stock shall have received an amount equal to $1,000 per share of Series B 7% Royalty Interest Participating Preferred Stock, plus an amount equal to accrued and unpaid royalties, dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series B Liquidation Preference"). Following the payment of the full amount of the Series B Liquidation Preference, no additional distributions shall be made to the holders of shares of Series B 7% Royalty Interest Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series B Liquidation Preference by (ii) 1,000 (as appropriately adjusted to reflect events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series B 7% Royalty Interest Participating Preferred Stock and Common Stock, respectively, holders of Series B 7% Royalty Interest Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one with respect to such Preferred Stock and Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient assets available to permit payment in full of the Series B Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, that rank on a parity with the Series B 7% Royalty Interest Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.
(c) In the event that the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on the 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 Adjustment Number in effect immediately prior to such event by an amount the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
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Section 8. Consolidation, Merger, etc. In the event that the Corporation shall enter into any consolidation, merger, combination, conversion, share exchange or other transaction in which the shares of Common Stock are exchanged for or changed into other stock, securities, cash and/or any other property (payable in kind), then in any such case the shares of Series B 7% Royalty Interest Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to Section 2) equal to 1,000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged.
Section 9. No Redemption. The shares of Series B 7% Royalty Interest Participating Preferred Stock shall not be redeemable.
Section 10. Ranking. The Series B 7% Royalty Interest Participating Preferred Stock shall rank senior to all other series of the Preferred Stock as to the payment of royalties and junior to the Series A Preferred stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.
Section 11. Amendment. At any time when any shares of Series B 7% Royalty Interest Participating Preferred Stock are outstanding, neither the Charter nor this Certificate of Designation shall be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series B 7% Royalty Interest Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Series B 7% Royalty Interest Participating Preferred Stock, voting separately as a class.
Section 12. Fractional Shares. Series B 7% Royalty Interest Participating Preferred Stock may be issued in fractions of a share that shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series B 7% Royalty Interest Participating Preferred Stock.
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I further declare under penalty of perjury that the matters set forth in the foregoing Certificate of Designation are true and correct to my own knowledge.
| Executed at Aventure, Florida on January 2, 2014. | |||
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By: | /s/ Victoria Rudman | |
| Name: | Victoria Rudman | ||
| Title: |
Chairperson of the Board of Directors
and Chief Executive Officer
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