Attached files
| file | filename |
|---|---|
| 8-K - WLG INC | v188936_8k.htm |
| EX-99.2 - WLG INC | v188936_ex99-2.htm |
| EX-99.1 - WLG INC | v188936_ex99-1.htm |
CERTIFICATE
OF DESIGNATION OF
PREFERENCES,
RIGHTS AND LIMITATIONS
OF
SERIES
C CONVERTIBLE PREFERRED STOCK
OF
WLG
INC.
WLG Inc., a Delaware corporation (the
“Company”),
acting pursuant to Section 151 of the General Corporation Law of the State of
Delaware, does hereby submit the following Certificate of Designation of Series
and Determination of Preferences, Rights and Limitations of its Series C
Preferred Stock.
FIRST: The name of the
Company is WLG Inc.
SECOND: By unanimous written
consent of the Board of Directors of the Company (the “Board”)
dated June [__], 2010, the following resolutions were duly adopted:
RESOLVED, that pursuant to
authority expressly granted to and vested in the Board, by the provisions of the
Company’s restated certificate of incorporation (the “Certificate
of Incorporation”), the Board hereby fixes the designation, voting
powers, rights on liquidation or dissolution and other preferences and rights,
and the qualifications, limitations or restrictions thereof, of the shares of
Series C Preferred Stock as follows:
1. Number of Shares;
Designation. This series
of preferred stock shall be designated as Series C Convertible Preferred Stock
and the number of shares that shall constitute such series shall be 1,000,000,
par value $.001 per share and is hereafter in this resolution called the “Series C
Preferred Shares.”
2. Voting
Rights. Except as otherwise provided herein, or the
Certificate of Incorporation, the Certificate of Designation of Preferences,
Rights and Limitations of Series A Convertible Preferred Stock, as amended (the
“Series A
Certificate of Designation”) for the Company’s Series A Convertible
Preferred Stock, par value $.001 per share (the “Series A
Preferred Shares”), the Certificate of Designations, Preferences and
Rights of Series B Convertible Preferred Stock (the “Series B
Certificate of Designation”) for the Company’s Series B Convertible
Preferred Stock, par value $.001 per share (the “Series B
Preferred Shares”), or required by law, the holders of the Series C
Preferred Shares, the holders of the Series A Preferred Shares, the holders of
the Series B Preferred Shares and the holders of the Company’s common stock, par
value $.001 per share (the “Common
Stock”) shall vote together as a single class with each Series C
Preferred Share having the number of votes equal to the largest whole number of
shares of Common Stock into which such Series C Preferred Share could be
converted, at the record date for the determination of the shareholders entitled
to vote on such matters or, if no such record date is established, at the date
such vote is taken.
3. Stated Value. Each Series C
Preferred Share shall have a “Stated
Value” equal to one dollar ($1.00) per share.
4. Conversion. Series C Preferred
Shares shall be convertible into shares of Common Stock, on the terms and
conditions set forth in this Section 4.
(a) Holders’ Conversion
Right. At any time and/or from time to time after the first issuance of
any Series C Preferred Shares (the “Original
Issuance Date”) any holder of Series C Preferred Shares shall be entitled
to convert any whole or partial number of Series C Preferred Shares into fully
paid and non-assessable shares of Common Stock at the Conversion Price (as
defined below) in accordance with this Section 4.
The Company shall not issue any fraction of a share of Common Stock upon any
conversion. All shares of Common Stock (including fractions thereof) issuable
upon conversion of more than one Series C Preferred Share by a holder thereof
shall be aggregated for purposes of determining whether the conversion would
result in the issuance of a fraction of a share of Common Stock. If, after the
aforementioned aggregation, the issuance would result in the issuance of a
fraction of a share of Common Stock, the Company shall, in lieu of issuing such
fractional share, pay to the holder the fair value (as determined by the Board)
thereof in cash.
(b) Company Forced
Conversion. Upon a Change of Control (as defined in Section
12 of this Certificate of Designation of Preferences, Rights and
Limitations of Series C Convertible Preferred Stock (this “Certificate”)),
the Company shall have the right to require the automatic conversion of the
Series C Preferred Shares into shares of Common Stock at the Conversion
Price. To effectuate such conversion, the Company shall send to the
holders a written notice (the “Company
Notice of Conversion”), not less than ten (10) business days prior to the
date such conversion shall occur, which conversion date may not be later than
the effective date of the Change of Control (the “Company
Conversion Date”), informing the holders of the Company Conversion Date,
the reason for such conversion and the number of shares of Common Stock they
will receive upon conversion of the Series C Preferred Shares.
(c) Conversion Price.
Subject to anti-dilution adjustment as provided in Section 4(e),
the conversion price (the “Conversion
Price”) of each Series C Preferred Share shall be $0.25. Each Series C
Preferred Share will convert into that number of shares of Common Stock
determined by dividing the Stated Value of the Series C Preferred Share by the
Conversion Price, as adjusted at the time of conversion.
-2-
(d) Mechanics of
Conversion. To convert Series C Preferred Shares into shares of Common
Stock on any date (a “Conversion
Date”), pursuant to Section
4(a) of this Certificate, the holder thereof shall (i) transmit by
facsimile (or otherwise deliver), a copy of an executed notice of conversion in
the form attached hereto as Exhibit A
(the “Conversion
Notice”) to the Company, and (ii) deliver to the Company the
original certificates representing the Series C Preferred Shares being converted
(or an indemnification undertaking with respect to such shares in the case of
their loss, theft or destruction) (the “Series C
Preferred Stock Certificates”). Following the date of receipt of a
Conversion Notice and the Series C Preferred Stock Certificates (the “Share
Delivery Date”), the Company shall issue and deliver to the address as
specified in the Conversion Notice, a certificate, registered in the name of the
holder or its designee, for the number of shares of Common Stock to which the
holder shall be entitled. If the number of Series C Preferred Shares represented
by the Series C Preferred Stock Certificate(s) submitted for conversion pursuant
to Section 4(a)
of this Certificate (ii) is greater than the number of Series C Preferred
Shares being converted, then the Company shall, as soon as practicable after
receipt of the Series C Preferred Stock Certificate(s) (the “Preferred
Stock Delivery Date”) and at its own expense, issue and deliver to the
holder a new Series C Preferred Stock Certificate representing the number of
Series C Preferred Shares not converted. The person or persons entitled to
receive the shares of Common Stock issuable upon a conversion of Series C
Preferred Shares shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on the Conversion Date.
(e) Anti-Dilution
Provisions. The Conversion Price in effect at any time and the number and
kind of securities issuable upon conversion of the Series C Preferred Shares
shall be subject to adjustment from time to time upon the happening of certain
events as follows:
(i) Adjustment for Stock Splits
and Combinations. If the Company at any time or from time to time on or
after the Original Issuance Date effects a subdivision of the outstanding Common
Stock, the Conversion Price then in effect immediately before that subdivision
shall be proportionately decreased, and conversely, if the Company at any time
or from time to time on or after the Original Issuance Date combines the
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this
subsection (e)(i) shall become effective at the close of business on
the date the subdivision or combination becomes effective.
(ii) Adjustment for Certain
Dividends and Distributions. If the Company at any time or from time to
time on or after the Original Issuance Date makes, or fixes a record date for
the determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in additional shares of Common Stock, then and in
each such event the Conversion Price then in effect shall be decreased as of the
time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, by multiplying the Conversion Price then
in effect by a fraction (1) the numerator of which is the total number of shares
of Common Stock issued and outstanding immediately prior to the time of such
issuance or the close of business on such record date and (2) the denominator of
which shall be the total number of shares of Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date plus the number of shares of Common Stock issuable in payment of
such dividend or distribution; provided, however, that if such
record date is fixed and such dividend is not fully paid or if such distribution
is not fully made on the date fixed therefor, the Conversion Price shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Conversion Price shall be adjusted pursuant to this
subsection (e)(ii) as of the time of actual payment of such dividends or
distributions.
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(iii) Adjustments for Other
Dividends and Distributions. In the event the Company at any time or from
time to time on or after the Original Issuance Date makes, or fixes a record
date for the determination of holders of Common Stock entitled to receive, a
dividend or other distribution payable in securities of the Company other than
shares of Common Stock, then and in each such event provision shall be made so
that the holders of Series C Preferred Shares shall receive upon conversion
thereof, in addition to the number of shares of Common Stock receivable
thereupon, the amount of securities of the Company which they would have
received had their Series C Preferred Shares been converted into Common Stock on
the date of such event and had they thereafter, during the period from the date
of such event to and including the conversion date, retained such securities
receivable by them as aforesaid during such period, subject to all other
adjustments called for during such period under this subsection (e) with
respect to the rights of the holders of the Series C Preferred
Shares.
(iv) Adjustment for
Reclassification, Exchange and Substitution. In the event that at any
time or from time to time on or after the Original Issuance Date, the Common
Stock issuable upon the conversion of the Series C Preferred Shares is changed
into the same or a different number of shares of any class or classes of stock,
whether by recapitalization, reclassification or otherwise (other than a
subdivision or combination of shares or stock dividend or a reorganization,
merger, consolidation or sale of assets, provided for elsewhere in this
subsection (e)), then and in any such event each holder of Series C
Preferred Shares shall have the right thereafter to convert such stock into the
kind and amount of stock and other securities and property receivable upon such
recapitalization, reclassification or other change, by holders of the maximum
number of shares of Common Stock into which such shares of Series C Preferred
Shares could have been converted immediately prior to such recapitalization,
reclassification or change, all subject to further adjustment as provided
herein.
(v) Reorganizations, Mergers,
Consolidations or Sales of Assets. If at any time or from time to time on
or after the Original Issuance Date there is a capital reorganization of the
Common Stock (other than a recapitalization, subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this
subsection (e)) or a merger or consolidation of the Company with or into
another corporation, or the sale of all or substantially all of the Company’s
properties and assets to any other person, then, as a part of such
reorganization, merger, consolidation or sale, provision shall be made so that
the holders of the Series C Preferred Shares shall thereafter be entitled to
receive upon conversion of the Series C Preferred Shares the number of shares of
stock or other securities or property to which a holder of the number of shares
of Common Stock deliverable upon conversion would have been entitled on such
capital reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this subsection (e)(v) with respect to the rights of the holders of the
Series C Preferred Shares after the reorganization, merger, consolidation or
sale to the end that the provisions of this subsection (e)(v) (including
adjustment of the Conversion Price then in effect and the number of shares
purchasable upon conversion of the Series C Preferred Shares) shall be
applicable after that event and be as nearly equivalent as may be
practicable.
(f) Status of Converted
Stock. In the event any Series C Preferred Shares shall be converted
pursuant to Section 4
of this Certificate, the shares so converted shall be canceled and shall not be
reissued as Series C Preferred Shares.
-4-
5. Reservation of Authorized
Shares. The Company shall, so long as any of the Series C Preferred
Shares are outstanding, take all action necessary to reserve and keep available
out of its authorized and unissued Common Stock, solely for the purpose of
effecting the conversion of the Series C Preferred Shares into shares of Common
Stock, 100% of such number of shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all of the Series C Preferred Shares
then outstanding.
6. Series C Preferred Rank. The
Series C Preferred Shares shall, with respect to all preferences as to
distributions and payments upon the liquidation, dissolution and winding up of
the Company, rank senior and prior to the Common Stock and junior to the Series
A Preferred Shares and Series B Preferred Shares.
7. Liquidation, Dissolution, Winding-Up.
In the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of the Series C Preferred
Shares shall be entitled to receive out of the assets of the Company, legally
available for distribution therefrom (the “Liquidation
Funds”), (i) before any amount shall be paid to the holders Common Stock,
(ii) after payment of obligations of the Company and its subsidiaries under
banking facilities provided by HSBC and Nova Bank, and (iii) after the payment
of the liquidation preference of the Series A Preferred Shares and Series B
Preferred Shares, as provided in the Series A Certificate of Designation and the
Series B Certificate of Designation, respectively, an amount per Series C
Preferred Share equal to $1.00 per Series C Preferred Share (as adjusted for any
stock dividend, stock split, combination or other similar recapitalization
affecting such shares in the manner provided in Section 4(e)
of this Certificate for the adjustment of the Conversion Price) (the “Preferred
Liquidation Payment”); provided, however, if the
Liquidation Funds are insufficient to pay, issue or deliver the full amount due
to the holders of Series C Preferred Shares, then all holders of Series C
Preferred Shares will share ratably in the distribution of the remaining
Liquidation Funds, before any distribution to the holders of the Common Stock.
No holder of Series C Preferred Shares shall be entitled to receive any amounts
with respect thereto upon any Liquidation other than the amounts provided for
herein.
8. Dividends; Participation. The
Company shall not pay cash dividends on the Series C Preferred
Shares.
9. Vote to Issue, or Change the Terms
of, Series C Preferred Shares. The affirmative vote of the holders of not
less than a majority of the then outstanding Series C Preferred Shares at a
meeting duly called for such purpose or the written consent without a meeting of
the holders of not less than a majority of the then outstanding Series C
Preferred Shares shall be required for any amendment to this Certificate or the
Certificate of Incorporation or the Company’s By-Laws which would amend, alter,
change, repeal or otherwise materially adversely affect any of the powers,
designations, preferences and rights of the Series C Preferred
Shares.
10. Lost or Stolen Certificates.
Upon receipt by the Company of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of any Series C Preferred Stock
Certificates representing the Series C Preferred Shares, and, in the case of
loss, theft or destruction, of any indemnification undertaking by the holder to
the Company in customary form and, in the case of mutilation, upon surrender and
cancellation of the Series C Preferred Stock Certificate(s), the Company shall
execute and deliver new Series C Preferred Stock Certificate(s) of like tenor
and date.
-5-
11.
Company’s Right to
Redeem.
(a) At
any time and from time to time on or after the date that is twenty-four (24)
months following the date of the Original Issuance Date the Company may, in its
sole discretion, by written notice to the holders of the then outstanding Series
C Preferred Shares (the “Company
Redemption Notice”), redeem all, or such lesser portion of the Series C
Preferred Shares as the Company Redemption Notice shall so indicate, at a
redemption price (the “Redemption
Price”) equal to the Preferred Liquidation Payment. Such
Company Redemption Notice shall be sent not less than ten (10) business days
prior to the proposed redemption date (the “Company
Redemption Date”) and shall disclose the Company Redemption Date, the
Redemption Price, the mechanics of redemption including how the Company will pay
the Redemption Price on the Company Redemption Date and the holders’ right to
convert the Series C Preferred Shares into Common Stock, as provided in Section
4(a) of this Certificate.
(b) On
each Company Redemption Date, the Company shall pay the Redemption Price by cash
or bank check to the order of the person whose name appears on the certificate
or certificates of the Series C Preferred Shares to be redeemed in the manner
and at the place designated, and thereupon each surrendered certificate shall be
cancelled.
(c) From
and after each Company Redemption Date, unless there shall have been a default
in payment of the Redemption Price, in which case all rights shall survive until
so paid, all rights of the holders of Series C Preferred Shares whose shares the
Company has requested to be redeemed (except the right to receive the Redemption
Price subsequent to the Company Redemption Date upon surrender of their
certificate or certificates) shall cease with respect to such Series C Preferred
Shares so redeemed, and such Series C Preferred Shares so redeemed shall not
thereafter be transferred on the books of the Company or be deemed to be
outstanding for any purpose whatsoever.
12. Change of Control. For
purposes of this Certificate, the term “Change of
Control” shall mean any of the following events:
(i) an
acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or Section 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”)) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of either (1) the then
outstanding shares of Common Stock (the "Outstanding
Company Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding
Company Voting Securities"); excluding, however, the following: (1) any
acquisition by the Company; (2) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company; or (3) any acquisition by any Person pursuant to a
transaction which complies with clauses (1), (2) and (3) of subsection (iii) of
this Section
12; or
-6-
(ii) Within
any period of twenty-four (24) consecutive months, a change in the composition
of the Board such that the individuals who, immediately prior to such period,
constituted the Board (such Board shall be hereinafter referred to as the "Incumbent
Board") cease for any reason to constitute at least a majority of the
Board; provided, however, for purposes
of this Section
12, that any individual who becomes a member of the Board during such
period, whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the Incumbent Board
(or deemed to be such pursuant to this proviso) shall be considered as though
such individual were a member of the Incumbent Board; but, provided further,
that any such individual whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board shall not be so considered as a member of the
Incumbent Board; or
(iii) The
approval by the stockholders of the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company ("Corporate
Transaction"), excluding, however, such a Corporate Transaction, pursuant
to which (1) all or substantially all of the individuals and entities who are
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such Corporate
Transaction will beneficially own, directly or indirectly, more than 50% of,
respectively, the outstanding shares of Common Stock, and the combined voting
power of the then outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation resulting from
such Corporate Transaction (including, without limitation, a corporation which
as a result of such transaction owns the Company or all or substantially all of
the Company's assets, either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Corporate Transaction, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be, and (2) individuals who were
members of the Board immediately prior to the approval by the stockholders of
the Company of such Corporate Transaction will constitute at least a majority of
the members of the board of directors of the corporation resulting from such
Corporate Transaction; or
(iv) The
approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company, other than pursuant to a transaction which would
comply with clauses (1) and (2) of subsection (iii) of this Section
12, assuming for this purpose that such transaction were a Corporate
Transaction.
13. Notice.
Any notice or other communication required or permitted to be given
hereunder will be in writing and will be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be
given (a) if to the Company, at Wako Express (HK) Co. Ltd., Units 1301-3 &
11-12 Tower 1 Ever Gain Plaza, 88 Container Port Road, Kwai Chung, N.T. Hong
Kong, SAR. Kong, Attention: President and Chief Executive
Officer, or (b) if to the holder(s) of Series C Preferred Shares, at Jumbo Glory
Limited, Unit 907-910, 118 Connaught Road West, Hong Kong, Attention: Malcolm
Wood, or, in either case, to such other address as the party will have furnished
in writing to the other person. Any notice or other communication
given by certified mail will be deemed given at the time of certification
thereof, except for a notice changing a party’s address which will be deemed
given at the time of receipt thereof.
[Signature
page follows]
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IN WITNESS WHEREOF, the
Company has caused this Certificate of Designations to be signed by Christopher
Wood, its Chairman of the Board of Directors, this ___ day of June,
2010.
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WLG
INC.
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By:
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Name:
Christopher Wood
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Title:
Chairman of the Board of
Directors
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-8-
EXHIBIT
A
WLG
INC.
CONVERSION
NOTICE
Reference
is made to the Certificate of Designations, Preferences and Rights of
Series C Convertible Preferred Stock of WLG Inc. (the “Certificate
of Designation”). In accordance with and pursuant to the Certificate of
Designation, the undersigned hereby elects to convert the number of shares of
Series C Convertible Preferred Stock, par value $.001 per share (the “Series B
Preferred Shares”), of WLG Inc., a Delaware corporation (the “Company”),
indicated below into shares of common stock, par value $.001 per share (the
“Common
Stock”), of the Company, as of the date specified below.
Date of
Conversion:
Number of
Series C Preferred Shares to be converted:
Number of
shares of Common Stock to be received:
Please
deliver the Common Stock into which the Series C Preferred Shares are being
converted to the following address:
_____________________________________
_____________________________________
_____________________________________
_____________________________________