ex4-1.htm


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    AMENDED
AND RESTATED

    CERTIFICATE
OF DESIGNATION

    of

    8%
SERIES A CONVERTIBLE PREFERRED STOCK

    of

    RUBICON
FINANCIAL INCORPORATED

    


    Establishing
the

    


    Voting
Powers, Designations, Preferences, Limitations,

    Restrictions,
and Relative Rights of

    


    
      
        
          

        
Pursuant to Section 151 of the

    

    
      General
Corporation Law of the State of Delaware 

    

    
      

    

     

    Rubicon Financial Incorporated, a
corporation organized and existing under the General Corporation Law of the
State of Delaware (hereinafter called the “Company”), hereby certifies
that the following resolution was adopted by the board of directors of the
Company as required by Section 151 of the General Corporation Law at a
meeting duly called and held on October 29, 2008;

     

     

                    RESOLVED,
that pursuant to the authority granted to and vested in the board of directors
of the Corporation (the “Board”) in accordance with
the provisions of the certificate of incorporation of the Company, as currently
in effect, the Board hereby creates a series of Preferred Stock, par value
$0.001 per share (the “Preferred Stock”), of the
Company and hereby states the designation and number of shares, and fixes the
relative rights, preferences, and limitations thereof as follows:

     

     

    8% Series
A Convertible Preferred Stock:

     

     

    The
number of shares constituting the 8% Series A Convertible Preferred Stock shall
be 1,000,000. Such number of shares may be increased or decreased by resolution
of the Board; provided,
that no decrease shall reduce the number of shares of 8% Series A Convertible
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into 8% Series A Convertible Preferred
Stock.

     

    Section
1.        DESIGNATION.  The
Shares are designated as the Company’s 8% Series A Convertible Preferred Stock
(the “Shares”).

    


    Section
2.        DIVIDEND PROVISIONS.
The holders of the Shares will be entitled to a preferred dividend at the rate
of 8% per annum.  Dividends on the Shares will be cumulative and shall
be paid, solely at the option and discretion of the Company, either (i) in cash,
or (ii) in shares of the Company’s Common Stock at a price equal to $0.50 per
share (4 shares of Common Stock for each Preferred Share).  Dividends
shall be paid semi-annually.

    


    Section
3.        REDEMPTION.

    


    (a)           This
Company may at any time following the first anniversary from the date of
issuance (the “Redemption
Date”), at the option of the Board, redeem in whole or in part the Shares
by paying in cash in exchange for the Shares to be redeemed a sum equal to the
Original Series A Issue Price (as adjusted for any stock dividends, combinations
or splits with respect to such Shares) plus all declared or accumulated but
unpaid dividends on such Shares (the “Redemption Price”). Any
redemption affected pursuant to this provision shall be made on a pro rata basis
among the holders of the Shares in proportion to the number of Shares then held
by them.

    



    
      
         


      

      
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    (b)           Subject
to the rights of series of preferred stock which may from time to time come into
existence, at least ten (10) but no more than sixty (60) days prior to each
Redemption Date, written notice shall be mailed, first class postage prepaid, to
each holder of record (at the close of business on the business day next
preceding the day on which notice is given) of the Shares to be redeemed, at the
address last shown on the records of this Company for such holder, notifying
such holder of the redemption to be effected, specifying the number of shares to
be redeemed from such holder, the Redemption Date, the Redemption Price, the
place at which payment may be obtained and calling upon such holder to surrender
to this Company, in the manner and at the place designated, his, her or its
certificate or certificates representing the Shares to be redeemed (the “Redemption Notice”). Except
as provided in subsection (4)(c) on or after the Redemption Date, each holder of
Shares to be redeemed shall surrender to this Company the certificate or
certificates representing such shares, in the manner and at the place designated
in the Redemption Notice, and thereupon the Redemption Price of such shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be cancelled. In the event less than all the Shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed Shares.

    


    (c)           From
and after the Redemption Date, unless there shall have been a default in payment
of the Redemption Price, all rights of the holders of shares of Shares
designated for redemption in the Redemption Notice as holders of Shares (except
the right to receive the Redemption Price without interest upon surrender of
their certificate or certificates) shall cease with respect to such Shares, and
such Shares shall not thereafter be transferred on the books of this Company or
be deemed to be outstanding for any purpose whatsoever. Subject to the rights of
series of preferred stock which may from time to time come into existence, if
the funds of the Company legally available for redemption of Shares on any
Redemption Date are insufficient to redeem the total number of Shares to be
redeemed on such date, those funds which are legally available will be used to
redeem the maximum possible number of such Shares ratably among the holders of
such Shares to be redeemed based upon their holdings of Shares. The Shares not
redeemed shall remain outstanding and entitled to all the rights and preferences
provided herein. Subject to the rights of series of preferred stock which may
from time to time come into existence, at any time thereafter when additional
funds of the Company are legally available for the redemption of shares of
Shares, such funds will immediately be used to redeem the balance of the Shares
which the Company has become obliged to redeem on any Redemption Date but which
it has not redeemed.

    


    Section
4.        CONVERSION. The
holders of the Shares shall have conversion rights as follows (the “Conversion
Rights”):

    


    (a)           Right to Convert.
Each Share shall be convertible into shares of the Company’s Common Stock at a
price per share of $0.50 (the “Conversion Price”) (i.e.
every 1 Share converts to 4 shares of Common Stock), at the option of the holder
thereof, at any time following the date of issuance of such Share and on or
prior to the fifth (5th) day
prior to the Redemption Date, if any, as may have been fixed in any Redemption
Notice with respect to the Shares, at the office of this Company or any transfer
agent for such stock.

    


    (b)           Automatic Conversion.
Each Share shall automatically be converted into shares of Common Stock on the
first day of the thirty-sixth (36th) month
following the original issue date of the Shares, at the Conversion Price per
share.

    


    (c)           Mechanics of
Conversion. Before any holder of Shares shall be entitled to convert the
same into shares of Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this Company or of any
transfer agent for the Shares, and shall give written notice to this Company at
its principal corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or certificates for
shares of Common Stock are to be issued. This Company shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Shares, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Shares to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date.


    
      
         


      

      
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    (d)           No Impairment. This
Company will not, by amendment of its Certificate of incorporation or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by this Company, but will at all times in good faith
assist in the carrying out of all the provisions of this section and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Shares against
impairment.

    


    (e)           Reservation of Stock
Issuable Upon Conversion. This 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 Shares, such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Shares; 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
Shares, in addition to such other remedies as shall be available to the holder
of such Shares, this Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain the
requisite shareholder approval of any necessary amendment to the Company’s
Certificate of incorporation.

    


    (f)           Notice. Any notice
required by the provisions of this section to be given to the holders of Shares
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
this Company.

    


    Section
5.        LIQUIDATION
PREFERENCE.

    


    (a)           In
the event of any liquidation, dissolution or winding up of the Company, either
voluntary or involuntary, subject to the rights of series of preferred stock
that may from time to time come into existence, the holders of Shares shall be
entitled to receive, prior and in preference to any distribution of any of the
assets of this Company to the holders of Common Stock by reason of their
ownership thereof, an amount per share equal to the sum of (i) $2.00 for each
outstanding Share (the “Original Series A Issue
Price”) and (ii) an amount equal to 12% of the Original Series A Issue
Price for each 12 months that has passed since the date of issuance of any
Shares plus any accrued or declared but unpaid dividends on such Share (such
amount (of declared but unpaid dividends) being referred to herein as the “Premium”). If upon the
occurrence of such event, the assets and funds thus distributed among the
holders of the Shares shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then, subject to the rights
of series of preferred stock that may from time to time come into existence, the
entire assets and funds of the Company legally available for distribution shall
be distributed ratably among the holders of the Shares in proportion to the
preferential amount each such holder is otherwise entitled to
receive.

    


    (b)           Upon
the completion of the distribution required by subparagraph (a) above and any
other distribution that may be required with respect to series of preferred
stock that may from time to time come into existence, the remaining assets of
the Company available for distribution to stockholders shall be distributed
among the holders of Shares and Common Stock pro rata based on the number of
shares of Common Stock held by each (assuming conversion of all such
Shares).

    


    (i) For
purposes of this provision, a liquidation, dissolution or winding up of this
Company shall be deemed to be occasioned by, or to include, (A) the acquisition
of the Company by another entity by means of any transaction or series of
related transactions (including, without limitation, any reorganization, merger
or consolidation but, excluding any merger effected exclusively for the purpose
of changing the domicile of the Company); or (B) a sale of all or substantially
all of the assets of the Company; unless the Company’s
shareholders of record as constituted immediately prior to such acquisition or
sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Company’s acquisition or sale or otherwise) hold
at least 50% of the voting power of the surviving or acquiring
entity.

    



    
      
         


      

      
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    (ii)           In
any of such events, if the consideration received by the Company is other than
cash, its value will be deemed its fair market value. Any securities shall be
valued as follows:

    


    (A)           Securities
not subject to investment letter or other similar restrictions on free
marketability (covered by (B) below):

    


    (1)           If
traded on a securities exchange (NASDAQ, AMEX, NYSE, etc.), the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the thirty-day period ending three (3) days prior to the
closing;

    


    (2)           If
traded on a quotation system, such as the Over-the-Counter Bulletin Board or
Pink Sheets, the value shall be deemed to be the average of the closing bid or
sale prices (whichever is applicable) over the thirty-day period ending three
(3) days prior to the closing; and

    


    (3)           If
there is no active public market, the value shall be the fair market value
thereof, as mutually determined by the Company and the holders of at least a
majority of the voting power of all then outstanding shares of Preferred
Stock.

    


    (B)           The
method of valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a shareholder’s status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as above in (A)
(1), (2) or (3) to reflect the approximate fair market value thereof, as
mutually determined by the Company and the holders of at least a majority of the
voting power of all then outstanding shares of such Preferred
Stock.

    


    (iii)           In
the event the requirements of this provision are not complied with, this Company
shall forthwith either:

    


    (A)           cause
such closing to be postponed until such time as the requirements of this
provision have been complied with; or

    


    (B)           cancel
such transaction, in which event the rights, preferences and privileges of the
holders of the Shares shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date of the first
notice referred to in subsection 3(c)(iv) hereof.

    


    (iv)           The
Company shall give each holder of record of Shares written notice of such
impending transaction not later than ten (10) days prior to the shareholders’
meeting called to approve such transaction, or ten (10) days prior to the
closing of such transaction, whichever is earlier, and shall also notify such
holders in writing of the final approval of such transaction. The first of such
notices shall describe the material terms and conditions of the impending
transaction and the provisions of this Section 3, and the Company shall
thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty (20) days after the
Company has given the first notice provided for herein or sooner than ten (10)
days after the Company has given notice of any material changes provided for
herein; provided, however, that such periods may be shortened upon the written
consent of the holders of Shares that are entitled to such notice rights or
similar notice rights and that represent at least a majority of the voting power
of all then outstanding shares of such Shares.

    


    Section
6.        VOTING RIGHTS. The
holder of each Share shall not have any voting rights, except in the case of
voting on a change in the preferences of Shares.

    



    
      
         


      

      
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    Section
7.       PROTECTIVE
PROVISIONS. So long as any Shares are outstanding, this Company shall not
without first obtaining the approval (by vote or written consent, as provided by
law) of the holders of Shares which is entitled, other than solely by law, to
vote with respect to the matter, and which Shares represents at least a majority
of the voting power of the then outstanding Shares:

    


    (a)           sell,
convey, or otherwise dispose of or encumber all or substantially all of its
property or business or merge into or consolidate with any other corporation
(other than a wholly-owned subsidiary corporation) or effect any transaction or
series of related transactions in which more than fifty percent (50%) of the
voting power of the Company is disposed of;

    


    (b)           alter
or change the rights, preferences or privileges of the Shares so as to affect
adversely the Shares;

    


    (c)           increase
or decrease (other than by redemption or conversion) the total number of
authorized shares of preferred stock;

    


    (d)           authorize
or issue, or obligate itself to issue, any other equity security, including any
other security convertible into or exercisable for any equity security (i)
having a preference over, or being on a parity with, the Shares with respect to
dividends or upon liquidation, or (ii) having rights similar to any of the
rights of the Preferred Stock; or

    


    
      	
                                     
      (e)  

            	
              amend
      the Company’s Certificate of Incorporation or
  bylaws.

            


    

    


    In
WITNESS WHEREOF, the undersigned hereby declares and certifies that this Amended
and Restated Certificate of Designation is executed on behalf of the Company as
of this 30th day of
October, 2008.

    


    


    
      	 
      	
              Company:

            
	 
      	
              Rubicon
      Financial Incorporated

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:
      /s/ Joseph Mangiapane,
      Jr.

            
	 
      	
                     Joseph
      Mangiapane, Jr., CEO

            


    

    



    
      
         


      

      
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