Exhibit 10.1

 

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SCHEDULE “A”

 

CERTIFICATE OF DESIGNATIONS

OF

AQUA POWER SYSTEMS INC.

ESTABLISHING THE DESIGNATIONS, PREFERENCES,

LIMITATIONS AND RELATIVE RIGHTS OF ITS

SERIES A CONVERTIBLE PREFERRED STOCK

 

Pursuant to Section 78.1955 of the Nevada Revised Statutes, Aqua Power Systems
Inc., a corporation organized and existing under the Nevada Revised Statutes
(the “Company”),

 

DOES HEREBY CERTIFY that pursuant to the authority conferred upon the Board of
Directors by the Articles of Incorporation of the Company, and pursuant to
Section 78.1955 of the Nevada Revised Statutes, the Board of Directors, by
unanimous written consent of all members of the Board of Directors on September
1, 2015, duly adopted a resolution providing for the issuance of a series of
shares of Series A Convertible Preferred Stock, which resolution is and reads as
follows:

 

RESOLVED, that the Company designates 5,000,000 shares of Preferred Stock as the
Series "A" Preferred Stock, which shares shall have attached to them, in
addition to the preferences, rights, privileges, restrictions and conditions
attaching to all of the preferred shares of the Company as a class, those
rights, privileges, restrictions and conditions set forth herein; and

 

FURTHER RESOLVED, that the series of preferred stock of the Company be, and it
hereby is, given the distinctive designation of “Series A Convertible Preferred
Stock”; and

 

FURTHER RESOLVED, that the Series A Convertible Preferred Stock shall consist of
5,000,000 shares; and

 

FURTHER RESOLVED, that the Series A Convertible Preferred Stock shall have the
powers and preferences, and the relative, participating, optional and other
rights, and the qualifications, limitations, and restrictions thereon set forth
below (the “Designation” or the “Certificate of Designations”):

 

Section 1. DESIGNATION OF SERIES; RANK. The shares of such series shall be
designated as the “Series A Convertible Preferred Stock” (the “Preferred Stock”)
or “Series A Preferred Stock”) and the number of shares initially constituting
such series shall be up to 5,000,000 shares with a par value of $0.001.

 

Section 2. DEFINITIONS.

 

For purposes of this Designation, the following definitions shall apply:

 

(a)      “Business Day” means a day in which a majority of the banks in the
State of Nevada in the United States of America are open for business.

 

(b)     “Common Stock” means the Company’s $0.0001 par value common stock, or
any other class of stock resulting from successive changes or reclassifications
of such common stock consisting solely of changes in par value, or as a result
of a subdivision, combination, or merger, consolidation or similar transaction
in which the Company is a constituent corporation.

 

(c)     “Conversion Date” shall mean the date in which a Conversion Notice is
received by the Company.

 

(d)     “Distribution” shall mean the transfer of cash or other property without
consideration whether by way of dividend or otherwise (other than dividends on
Common Stock payable in Common Stock), or the purchase or redemption of shares
of the Company for cash or property other than: (i) repurchases of Common Stock
issued to or held by employees, officers, directors or consultants of the
Company or its subsidiaries upon termination of their employment or services
pursuant to agreements providing for the right of said repurchase, (ii)
repurchases of Common Stock issued to or held by employees, officers, directors
or consultants of the Company or its subsidiaries pursuant to rights of first
refusal contained in agreements providing for such right, (iii) repurchases of
capital stock of the Company in connection with the settlement of disputes with
any shareholder, (iv) any other repurchase or redemption of capital stock of the
Company approved by the holders of (a) a majority of the Common Stock and (b) a
majority of the Preferred Stock of the Company voting as separate classes.

 

  Page 1 of 6

Aqua Power Systems Inc.

Certificate of Designations of Series A Convertible Preferred Stock

 

 

 

(e)     “Holder” shall mean the person or entity in which the Preferred Stock is
registered on the books of the Company, which shall initially be the person or
entity which subscribes for the Preferred Stock, and shall thereafter be
permitted and legal assigns which the Company is notified of by the Holder and
which the Holder has provided a valid legal opinion in connection therewith to
the Company.

 

(f)      “Holders” shall mean all Holders of the Series A Preferred Stock.

 

(g)     “Junior Stock” shall mean the Common Stock and each other class of
capital stock or series of preferred stock of the Company established prior to
or after the Original Issue Date, the terms of which do not expressly provide
that such class or series ranks senior to or on parity with the Series A
Preferred Stock upon the liquidation, winding-up or dissolution of the Company.

 

(h)     “Liquidation Preference” shall mean the Original Issue Price per share
for each share of Series A Preferred Stock (as appropriately adjusted for any
Recapitalizations).

 

(i)       “Original Issue Date” shall mean the date upon which the shares of
Preferred Stock are first issued.

 

(j)      “Preferred Stock Certificates” means the certificates, as replaced from
time to time, evidencing the outstanding Preferred Stock shares.

 

(k)     “Recapitalization” shall mean any stock dividend, stock split,
combination of shares, reorganization, recapitalization, reclassification or
other similar event.

 

(l)       “Restricted Shares” means shares of the Company’s Common Stock which
are restricted from being transferred by the Holder thereof unless the transfer
is effected in compliance with the Securities Act of 1933, as amended and
applicable state securities laws (including investment suitability standards,
which shares shall bear the following restrictive legend (or one substantially
similar):

 

“The securities represented by this certificate have not been registered under
the Securities Act of 1933 or any state securities act. The securities have been
acquired for investment and may not be sold, transferred, pledged or
hypothecated unless (i) they shall have been registered under the Securities Act
of 1933 and any applicable state securities act, or (ii) the corporation shall
have been furnished with an opinion of counsel, satisfactory to counsel for the
corporation, that registration is not required under any such acts.”

 

SECTION 3. DIVIDENDS.

 

(a)    The holders of the Preferred Stock shall not be entitled to receive any
dividends.

 

(b)    To the fullest extent permitted by the Nevada Revised Statutes, the
Company shall be expressly permitted to redeem, repurchase or make distributions
on the shares of its capital stock in all circumstances other than where doing
so would cause the Company to be unable to pay its debts as they become due in
the usual course of business.

 

  Page 2 of 6

Aqua Power Systems Inc.

Certificate of Designations of Series A Convertible Preferred Stock

 

 

  

SECTION 4. LIQUIDATION PREFERENCE

 

(a)    Liquidation Preference. In the event of any liquidation, dissolution or
winding up of the Company, either voluntary or involuntary, the Holders of the
Preferred Stock shall be entitled to receive, prior and in preference to any
Distribution of any of the assets of the Company to the Holders of the Junior
Stock by reason of their ownership of such stock, but not prior to any holders
of the Company’s Senior Securities, which holders shall have priority to the
distribution of any assets of the Company, an amount per share for each share of
Preferred Stock held by them equal to the sum of the Liquidation Preference
specified for such share of Preferred Stock. If upon the liquidation,
dissolution or winding up of the Company, the assets of the Company legally
available for distribution to the Holders of the Preferred Stock are
insufficient to permit the payment to such Holders of the full amounts specified
in this Section 4(a), subsequent to the payment to the Senior Securities then
the entire remaining assets of the Company following the payment to the Senior
Securities legally available for distribution shall be distributed with equal
priority and pro rata among the Holders of the Preferred Stock in proportion to
the full amounts they would otherwise be entitled to receive pursuant to this
Section 4(a).

 

(b)    Remaining Assets. After the payment to the Holders of Preferred Stock of
the full preferential amounts specified above, the entire remaining assets of
the Company legally available for distribution by the Company shall be
distributed with equal priority and pro rata among the Holders of the Junior
Stock in proportion to the number of shares of Junior Stock, and the terms of
such Junior Stock, held by them.

 

(c)    Valuation of Non-Cash Consideration. If any assets of the Company
distributed to shareholders in connection with any liquidation, dissolution, or
winding up of the Company are other than cash, then the value of such assets
shall be their fair market value as
determined in good faith by the Board of Directors. In the event of a merger or
other acquisition of the Company by another entity, the Distribution date shall
be deemed to be the date such transaction closes.

 

SECTION 5. CONVERSION. The Preferred Stock shall not be convertible into Common
Stock and have no other conversion rights except as specifically set forth
below:

 

(a)      Conversion. The “Conversion Ratio” per share of the Preferred Stock in
connection with a Conversion shall be at a ratio of 1:100, meaning for every (1)
one Preferred A share shall convert into 100 common shares of stock of the
Company. Holders of Class A Preferred Shares shall have the right, exercisable
at any time and from time to time (unless otherwise prohibited by law, rule or
regulation), to convert any or all their shares of the Class A Preferred Shares
into Common Stock at the Conversion Ratio.

 

(b) Taxes. The Company shall not be required to pay any tax which may be payable
in respect to any transfer involved in the issue and delivery of shares of
Common Stock upon conversion in a name other than that in which the shares of
the Preferred Stock so converted were registered, and no such issue or delivery
shall be made unless and until the person requesting such issue or delivery has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid. The Company shall
withhold from any payment due whatsoever in connection with the Preferred Stock
any and all required withholdings and/or taxes the Company, in its sole
discretion deems reasonable or necessary, absent an opinion from Holder’s
accountant or legal counsel, acceptable to the Company in its sole
determination, that such withholdings and/or taxes are not required to be
withheld by the Company.

 

(c)      Fractional Shares. If any Conversion of Preferred Stock would result in
the issuance of a fractional share of Common Stock (aggregating all shares of
Preferred Stock being converted pursuant to each Conversion), such fractional
share shall be rounded up to the nearest whole share and the Holder shall be
entitled to receive, in lieu of the final fraction of a share, one additional
whole share of Common Stock.

 

  Page 3 of 6

Aqua Power Systems Inc.

Certificate of Designations of Series A Convertible Preferred Stock

 

 

 

(d)      Reservation of Stock Issuable Upon Conversion. 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 the shares of
the Preferred Stock, such number of its shares of Common Stock as shall from
time to time be sufficient to effect the conversion of all then outstanding
shares of the 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 Preferred Stock, the Company will within a
reasonable time period make a good faith effort to 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 purpose.

 

(e)      Effect of Conversion. On the date of any Conversion, all rights of any
Holder with respect to the shares of the Preferred Stock so converted, including
the rights, if any, to receive distributions of the Company’s assets (including,
but not limited to, the Liquidation Preference) or notices from the Company,
will terminate, except only for the rights of any such Holder to receive
certificates (if applicable) for the number of shares of Common Stock into which
such shares of the Preferred Stock have been converted.

 

SECTION 6. VOTING. The holder of each share of Series A Preferred Stock shall
have the right to one vote for each share of Common Stock into which such Series
A Preferred Stock could then be converted, and with respect to such vote, such
holder shall have full voting rights and powers equal to the voting rights and
powers of the holders of Common Stock, and shall be entitled, notwithstanding
any provision hereof, to notice of any stockholders’ meeting in accordance with
the Bylaws of this Corporation, and shall be entitled to vote, together with
holders of Common Stock, with respect to any question upon which holders of
Common Stock have the right to vote. Fractional votes shall not, however, be
permitted and any fractional voting rights available on an as-converted basis
(after aggregating all shares into which shares of Series A Preferred Stock held
by each holder could be converted) shall be rounded to the nearest whole number
(with one-half being rounded upward).

 

SECTION 7. REDEMPTION. The Preferred Stock shall have no redemption rights.

 

SECTION 8. PROTECTIVE PROVISIONS. Subject to the rights of series of Preferred
Stock which may from time to time come into existence, so long as any shares of
Series A Preferred Stock are outstanding, this Company shall not without first
obtaining the approval (by written consent, as provided by law or otherwise) of
the holders of a majority of the then outstanding shares of Series A Preferred
Stock, voting together as a class:

 

(a)      Increase or decrease (other than by redemption or conversion) the total
number of authorized shares of Series A Convertible Preferred Stock;

 

(b)      Effect an exchange, reclassification, or cancellation of all or a part
of the Series a Convertible Preferred Stock, but excluding a stock split or
reverse stock split of the Company’s Common Stock or Preferred Stock;

 

(c)      Effect an exchange, or create a right of exchange, of all or part of
the shares of another class of shares into shares of Series A Convertible
Preferred Stock; or

 

(d)      Alter or change the rights, preferences or privileges of the shares of
Series A Convertible Preferred Stock so as to affect adversely the shares of
such series, including the rights set forth in this Designation.

 

For clarification, issuances of additional authorized shares of Series A
Preferred under the terms herein shall not require the authorization or approval
of the existing shareholders of Preferred Stock.

 

  Page 4 of 6

Aqua Power Systems Inc.

Certificate of Designations of Series A Convertible Preferred Stock

 

 

  

PROVIDED, HOWEVER, that the Company may, by any means authorized by law and
without any vote of the Holders of shares of the Preferred Stock, make
technical, corrective, administrative or similar changes in this Statement of
Designations that do not, individually or in the aggregate, adversely affect the
rights or preferences of the Holders of shares of the Preferred Stock. The
Company may also designate and issue additional series of preferred stock from
time to time in the sole discretion of the Company’s Board of Directors, which
such rights, privileges, preferences and limitations shall be determined by the
Company’s Board of Directors in its sole discretion, and which designations and
issuances shall not require the approval of the holders of the Preferred Stock.

 

SECTION 9. PREEMPTIVE RIGHTS. Holders of Preferred Stock and holders of Common
Stock shall not be entitled to any preemptive, subscription or similar rights in
respect to any securities of the Company, except as specifically set forth
herein or in any other document agreed to by the Company.

 

SECTION 10. REPORTS. The Company shall mail to all holders of Preferred Stock
those reports, proxy statements and other materials that it mails to all of its
holders of Common Stock.

 

SECTION 11. NOTICES. In addition to any other means of notice provided by law or
in the Company’s Bylaws, any notice required by the provisions of this
Designation to be given to the holders of Preferred Stock shall be deemed given
if deposited in the United States mail, postage prepaid, and addressed to each
Holder of record at such Holder’s address appearing on the books of the Company.

 

SECTION 12. MISCELLANEOUS.

 

(a)      The headings of the various sections and subsections of this
Certificate of Designation are for convenience of reference only and shall not
affect the interpretation of any of the provisions of this Certificate of
Designation.

 

(b)      Whenever possible, each provision of this Certificate of Designation
shall be interpreted in a manner as to be effective and valid under applicable
law and public policy. If any provision set forth herein is held to be invalid,
unlawful or incapable of being enforced by reason of any rule of law or public
policy, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining provisions of this Certificate of Designation. No provision herein
set forth shall be deemed dependent upon any other provision unless so expressed
herein. If a court of competent jurisdiction should determine that a provision
of this Certificate of Designation would be valid or enforceable if a period of
time were extended or shortened, then such court may make such change as shall
be necessary to render the provision in question effective and valid under
applicable law.

 

(c)      The Company will provide to the Holders of the Series A Preferred Stock
all communications sent by the Company to the holders of the Common Stock.

 

(d)      Except as may otherwise be required by law, the shares of the Preferred
Stock shall not have any powers, designations, preferences or other special
rights, other than those specifically set forth in this Certificate of
Designations.

 

(e)      Shares of the Series A Preferred Stock converted into Common Stock
shall be retired and canceled and shall have the status of authorized but
unissued shares of Preferred Stock of the Company undesignated as to series and
may with any and all other authorized but unissued shares of Preferred Stock of
the Company be designated or re-designated and issued or reissued, as the case
may be, as part of any series of Preferred Stock of the Company.

 

(f)      Notwithstanding the above terms and conditions of this Designation, the
Liquidation Preference and the dollar amounts and share numbers set forth herein
shall be subject to adjustment, as appropriate, whenever there shall occur a
stock split, stock dividend, combination, reclassification or other similar
event involving shares of the Series A Preferred Stock. Such adjustments shall
be made in such manner and at such time as the Board of Directors in good faith
determines to be equitable in the circumstances, any such determination to be
evidenced in a resolution duly adopted by the Board of Directors. Upon any such
equitable adjustment, the Company shall promptly deliver to each Holder a notice
describing in reasonable detail the event requiring the adjustment and the
method of calculation thereof and specifying the increased or decreased
Liquidation Preference following such adjustment.

 

  Page 5 of 6

Aqua Power Systems Inc.

Certificate of Designations of Series A Convertible Preferred Stock

 

 

 

(g)      With respect to any notice to a Holder required to be provided
hereunder, such notice shall be mailed to the registered address of such Holder,
and neither failure to mail such notice, nor any defect therein or in the
mailing thereof, to any particular Holder shall affect the sufficiency of the
notice or the validity of the proceedings referred to in such notice with
respect to the other Holders or affect the legality or validity of any
redemption, conversion, distribution, rights, warrant, reclassification,
consolidation, merger, conveyance, transfer, dissolution, liquidation,
winding-up or other action, or the vote upon any action with respect to which
the Holders are entitled to vote. All notice periods referred to herein shall
commence on the date of the mailing of the applicable notice. Any notice which
was mailed in the manner herein provided shall be conclusively presumed to have
been duly given whether or not the Holder receives the notice.

 

IN WITNESS WHEREOF, the Company has caused this statement to be duly executed by
its Chief Executive Officer this 1st day of September 2015.

 

  AQUA POWER SYSTEMS INC.           By:   Tadashi Ishikawa – President and
Director        

 

  Page 6 of 6

Aqua Power Systems Inc.

Certificate of Designations of Series A Convertible Preferred Stock