EXHIBIT A

 

The undersigned Daniel Wiesel, hereby certifies that:

 

1. He is the Chairman of the Board of Directors and the Chief Executive Officer
of The PAWS Pet Company, Inc., an Illinois corporation (the “Corporation”).

 

2. The Corporation is authorized to issue 10,000,000 shares of preferred stock,
none of which are issued or outstanding.

 

3. That on December 27, 2013 the following resolutions were duly adopted by the
Board of Directors:

 

WHEREAS, the Amended and Restated Articles of Incorporation, as amended to date,
of the Corporation provide for a class of its authorized stock known as
preferred stock, comprised of 10,000,000 shares, no par value per share (the
“Preferred Stock”), issuable from time to time in one or more series;

 

WHEREAS, the Board of Directors of the Corporation is authorized to fix the
dividend rights, dividend rates, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly unissued series of
Preferred Stock and the number of shares constituting any series and designation
thereof, of any of them;

 

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors of the Corporation
does hereby authorize this Certificate of Designation of SERIES D CONVERTIBLE
PREFERRED STOCK to provide for the issuance of a series of Preferred Stock for
cash or exchange of other securities, rights or property and does hereby fix and
determine the rights, preferences, restrictions and other matters relating to
such series of Preferred Stock as follows:

 

TERMS OF PREFERRED STOCK

 

ARTICLE I. Designation, Amount and Par Value.

 

Section 1.01 The series of Preferred Stock shall be designated as the
Corporation’s SERIES D CONVERTIBLE PREFERRED STOCK (the “Series D Stock”) and
the number of shares so designated shall be five hundred thousand (500,000),
which shall not be subject to increase without the affirmative vote or written
consent of the holders (each a “Holder” and collectively, the “Holders”) of at
least sixty-seven percent (67%) of the Series D Stock issued and outstanding at
the time of any such vote or written consent. Each share of Series D Stock shall
have no par value per share.

 

ARTICLE II. Ranking.

 

Section 2.01 The Series D Stock shall be, with respect to dividend rights and
rights upon liquidation, winding-up or dissolution, rank:

 

(a)Senior to the Corporation’s Common A Stock, no par value per share (“Common
Stock”); and

 

(b)Equal to the Corporation’s Series B Convertible Preferred Stock, no par value
per share (“Common Stock”); and

 

(c)Senior to any and all other classes or series of Preferred Stock of the
Corporation, whether authorized now, or at any time in the future, unless any
such subordination to any other class or series of Preferred Stock, is expressly
agreed to, pursuant to an affirmative vote or written consent of Holders of at
least sixty-seven percent (67%) of the Series D Stock issued and outstanding at
the time of any such vote or written consent.

 

ARTICLE III. Liquidation Rights.

 

Section 3.01 With respect to rights on Liquidation (as defined in Section 3.02
of this Article III), the Series D Stock shall rank senior and prior to the any
and all classes of the Corporation’s common stock and to any and all other
classes or series of preferred stock of the Corporation, except as otherwise
approved by the affirmative vote or written consent of the Holders of at least a
sixty-seven percent (67%) of the Series D Stock issued and outstanding at the
time of any such vote or written consent. Furthermore, the Corporation may not
designate any other class of common stock or preferred stock without first
obtaining the affirmative vote or consent of the Holders of at least sixty-seven
percent (67%) of the Series D Stock issued and outstanding at the time of any
such vote or written consent.

 

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EXHIBIT A

 

Section 3.02 In the event of any liquidation, dissolution or winding-up of the
affairs of the Corporation (collectively, a “Liquidation”), the sole
participation to which the Holders of shares of Series D Stock then issued and
outstanding (the “Series D Stockholders”) shall be entitled, out of the assets
of the Corporation legally available for distribution to its stockholders,
whether from capital, surplus or earnings, to receive, before any payment shall
be made to the holders of the Common Stock or any other class or series of
preferred stock ranking on Liquidation junior to such Series D Stock, an amount
per share equal to the Face Value (as hereinafter defined). If upon any such
Liquidation, the remaining assets of the Corporation available for distribution
to its shareholders shall be insufficient to pay the Holders of shares of Series
D Stock the full amount to which they shall be entitled, the Holders of shares
of Series D Stock, and of any class or series of stock ranking upon liquidation
on a parity with the Series D Stock, shall share pari passu in any distribution
of the remaining assets and funds of the Corporation in proportion to the
respective liquidation amounts that would otherwise be payable to the Holders of
preferred stock with respect to the shares held by them upon such distribution
if all amounts payable on or with respect to such shares were paid in full.

 

ARTICLE IV. Restrictive Legend.

 

Section 4.01 Any Series D Stock certificate issued in reference to this
designation shall bear on its face the following restrictive legend:

 

THE SHARES REPRESENTED BY THE CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 AND APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED UNLESS, IN THE OPINION OF COUNSEL SATISFACTORY
TO THE ISSUER, THE TRANSFER QUALIFIES FOR AN EXEMPTION FROM OR EXEMPTION TO THE
REGISTRATION PROVISIONS THEREOF.

 

Section 4.02 For purposes of this CERTIFICATE OF DESIGNATION OF SERIES D
CONVERTIBLE PREFERRED STOCK, the term “Valid Exemption From or To Registration”
shall mean, an exemption from or to registration, under the Securities Act of
1933 and applicable state securities laws and then, only after receipt, by the
Corporation, its Transfer Agent and the Holder, of an opinion of counsel which
clearly states that such an exemption is available to the Holder.

 

ARTICLE V. Conversion and Face Value.

 

Section 5.01 Any Holder of Series D Stock shall have the right to convert any or
all of the Holder’s Series D Stock into a number of fully paid and
non-assessable shares of Common Stock for each share of Series D Stock so
converted, as set forth in this Article V.

 

(a)Any Series D Stockholder may exercise the right to convert such shares into
Common Stock pursuant to this Article V by delivering to the Corporation during
regular business hours, at the office of the Corporation or any transfer agent
of the Corporation or at such other place as may be designated by the
Corporation, the certificate or certificates for the shares to be converted (the
“Series D Preferred Certificate”), duly endorsed or assigned in blank to the
Corporation (if required by it).

 

(b)Each Series D Preferred Certificate shall be accompanied by written notice
(the “Conversion Demand”) stating that such Holder elects to convert such shares
and stating the name or names (with address) in which the certificate or
certificates for the shares of Common Stock (the “Common Certificate”) are to be
issued. Such conversion shall be deemed be effected on the date when such
delivery is made, and such date is referred to herein as the “Conversion Date.”

 

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EXHIBIT A

 

(c)As promptly as practicable thereafter, the Corporation shall issue and
deliver to or upon the written order of such Holder, at the place designated by
such Holder, a certificate or certificates for the number of shares of Common
Stock calculated pursuant to this Article V, to which such Holder is entitled.

 

(d)The person in whose name the certificate or certificates for Common Stock are
to be issued shall be deemed to have become a Holder of record of Common Stock
on the applicable Conversion Date, unless the transfer books of the Corporation
are closed on such Conversion Date, in which event the Holder shall be deemed to
have become the stockholder of record on the next succeeding date on which the
transfer books are open, provided that the Conversion Ratio (as hereinafter
defined) shall be the Conversion Ratio in effect on the Conversion Date.

 

(e)Upon conversion of only a portion of the number of shares covered by a Series
D Preferred Certificate, the Corporation shall issue and deliver to, or upon the
written order of, the Holder of such Series D Preferred Certificate, at the
expense of the Corporation, a new certificate covering the number of shares of
the Series D Stock representing the unconverted portion of the Series D
Preferred Certificate, which new certificate shall entitle the Holder thereof to
all the rights, powers and privileges of a Holder of such shares.

 

(f)The number of shares to be issued in conversion of each share of Series D
Stock upon receipt of a Conversion Demand shall be one thousand (1,000) Common
shares for each Series D Stock share converted (the “Conversion Ratio”). The
number of shares to be issued upon conversion may not be increased at any time
without the consent of at least sixty-seven percent (67%) of all of the other
series of preferred stock issued and outstanding at the time of any such vote or
written consent.

 

Section 5.02 The Corporation shall pay all documentary, stamp or other
transactional taxes (excluding income taxes) attributable to the issuance or
delivery of shares of capital stock of the Corporation upon conversion of any
shares of Series D Stock; provided, however, that the Corporation shall not be
required to pay any taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificate for such shares in a
name other than that of the Holder of the Series D Stock in respect of which
such shares of Common Stock are being issued.

 

Section 5.03 The Corporation shall reserve out of its authorized, but unissued,
shares of Common Stock, solely for the purpose of effecting the conversion of
the Series D Stock, sufficient shares of Common Stock to provide for the
conversion of all outstanding shares of Series D Stock.

 

Section 5.04 All shares of Common Stock which may be issued in connection with
the conversion provisions set forth herein will, upon issuance by the
Corporation, be validly issued, fully paid and non-assessable, not subject to
any preemptive or similar rights and free from all taxes, liens or charges with
respect thereto created or imposed by the Corporation.

 

Section 5.05 In no event, shall a Holder of any Series D Stock be allowed to
convert such shares of Series D Stock into Common Stock which, upon giving
effect to such conversion, would cause the aggregate number of shares of Common
Stock beneficially owned by the Holder, and/or its affiliates, to exceed four
and nine tenths percent (4.9%) of the currently issued and outstanding shares of
the Corporation. In reference to the written notice of election to convert
required by Article V Section 5.01 (b) above, the Holder shall affirm in that
notice, under penalty of perjury, the exact number of shares held by the Holder
on the date of the notice and the Corporation shall have the right to reduce any
demand for conversion by a number such that the total number of shares of Common
Stock held by the Holder after conversion will not exceed four and nine tenths
percent (4.9%) of the currently issued and outstanding shares of Common Stock of
the Corporation.

 

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EXHIBIT A

 

Section 5.06 Notwithstanding the limitations on conversion contained within
Section 5.05 above, the limitations on conversion contained therein may be
waived, in the sole discretion of the Holder upon, and at the election of the
Holder, not less than sixty-one (61) days’ prior notice to the Corporation, and
the provisions of the conversion limitation shall continue to apply until such
sixty-first (61st) day (or such later date, as determined by the Holder, as may
be specified in such notice of waiver).

 

Section 5.07 Effect of Subdivisions, Combinations and Dividends.

 

(a)In the event that the Corporation shall at any time subdivide the outstanding
shares of Common Stock, or shall issue a stock dividend on the outstanding
Common Stock, the Conversion Ratio in effect immediately prior to such
subdivision or the issuance of such dividend shall be proportionately increased
and shall continue to be proportionately increased through any subsequent
subdivision, subdivisions, issuance or issuances.

 

(b)In the event that the Corporation shall at any time combine the outstanding
shares of Common Stock, the Conversion Ratio in effect immediately prior to such
combination shall be proportionately decreased and shall continue to be
proportionately decreased through any subsequent combination or combinations.

 

Section 5.08 In no event may the Corporation combine or divide the number of
shares of Series D Stock outstanding, nor change the authorized number of shares
of Series D Stock, except as otherwise approved by the affirmative vote or
written consent of the Holders of at least a sixty-seven percent (67%) of the
Series D Stock issued and outstanding at the time of any such vote or written
consent.

 

Section 5.09 As used herein, the term “Face Value” shall mean Forty United
States Dollars (US$40.00) per share of Series D Stock. Notwithstanding the
foregoing, if any agreement under which Series D Stock is subscribed specifies a
different Face Value, the Face Value so specified shall supersede and replace
the Face Value specified herein.

 

ARTICLE VI. Voting Rights of Series D Stockholders.

 

Section 6.01 Holders are entitled to vote on matters relating to modifications,
adjustments, waivers or other changes or matters relating only to Series D
Stock. Each Holder shall have one (1) vote per each share on matters relating
only to Series D Stock.

 

Section 6.02 Definitions. For the purposes of this Article VI, the following
terms shall have the meaning set forth herein.

 

(a)An “Original Holder” shall mean any person that obtains any Series D Stock in
any manner, directly from the Corporation, whether by purchase, gift, grant, the
order of any court, state or federal agency, any arbitrator or in any other
manner in any transaction.

 

(b)A “Subsequent Holder” shall mean any Holder that obtains any Series D Stock
from any Original Holder in any transaction or series of transactions whereby
the Subsequent holder is not in privity of contract with the Corporation as
regards the transfer of any Series D Stock from an Original Holder.

 

(c)A “Shareholder Meeting” shall mean any annual, regular or special meeting of
the shareholders, or any written consent held in lieu of any annual, regular or
special meeting of the shareholders where any matters are presented to the
Common stockholders of the Corporation for their vote, action or consideration.

 

(d)“IBCA” is the Illinois Business Corporation Act of 1983.

 

(e)An “Affirmative Vote” shall mean any vote of the shareholders at any
Shareholder Meeting, that meets any and all requirements of the IBCA, the
Articles of Incorporation and/or the By-Laws of the Corporation as they may
relate to Shareholder Meetings, notices of Shareholder Meetings, voter
thresholds required at any Shareholder Meetings and waiver of any notices of
Shareholder Meetings.

 

Section 6.03 Voting Rights of Original Holders and Subsequent Holders related to
matters presented to the Common stockholders.

 

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EXHIBIT A

 

(a)No Original Holder shall be entitled to any vote at any Shareholder Meeting.

 

(b)Each Subsequent Holder shall be entitled to vote at any Shareholder Meeting
and each such Subsequent Holder shall have one thousand (1,000) votes for each
Series D share outstanding in their name on the books of the Corporation.

 

Section 6.04 Notwithstanding the above, no Subsequent Holder shall be entitled
to vote at any Shareholder Meeting unless and until;

 

(a)the Corporation has either, fully complied with all of the requirements of
Rule 14C (17 CFR § 240.14c-1 through 17 CFR § 240.14c-101, inclusive) as
promulgated by the Securities and Exchange Commission (“SEC”) regarding
notification of an Affirmative Vote by the written consent, specifically
authorizing the Board of Directors to designate classes or series of preferred
stock with voting and/or super majority voting rights; or

 

(b)the Corporation has fully complied with all of the requirements of Regulation
14A (17 CFR § 240.14a-1 through 17 CFR § 240.14b-2, inclusive) as promulgated by
the SEC regarding the solicitation of proxies from shareholders and the
Corporation has obtained the Affirmative Vote, specifically authorizing the
Board of Directors to designate classes or series of preferred stock with voting
and/or super majority voting rights; and

 

(c)the Corporation has filed an amendment to its Articles of Incorporation,
authorizing the Board of Directors to designate classes or series of preferred
stock with voting and/or super majority voting rights, subsequent to an
Affirmative Vote and after the Corporation has fully complied with all of the
requirements of either subsection (a) or (b) of this Section 6.04.

 

ARTICLE VII. Certain Covenants.

 

Section 7.01 Any Holder of Series D Stock may proceed to protect and enforce its
rights and the rights of such Holders by any available remedy by proceeding at
law or in equity, whether for the specific enforcement of any provision in this
Certificate of Designation or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy.

 

ARTICLE VIII. Dividends.

 

Section 8.01 The Series D Stock shall not be entitled to dividends.

 

ARTICLE IX. Notice to the Corporation.

 

Section 9.01 All notices and other communications required or permitted to be
given to the Corporation hereunder shall be made by first-class mail, postage
prepaid, to the Corporation at its principal executive offices as may be fixed
from time to time by the Board of Directors. Any notice to a Holder shall me
made to their address as set forth on the books and records of the Corporation.

 

  PAWS PET COMPANY, INC.         By: /s/ Daniel Wiesel     Daniel Wiesel,
Chairman & CEO       Dated: December 27, 2013    

 

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