**Exhibit 4.9**

 

**CERTIFICATE OF DESIGNATION, PREFERENCES AND**

**RELATIVE, PARTICIPATING, OPTIONAL OR OTHERSPECIAL**

**RIGHTS OF SERIES C CONVERTIBLE**

**PREFERRED STOCK**

**OF VITAL LIVING, INC.**

 

Pursuant to Section NRS 78.1955 of the Nevada Revised Statues

of the State of Nevada

 

The undersigned, Brad Edson and StuartBenson, being the duly elected Chief Executive Officer and Secretary of VitalLiving, Inc. (the “Corporation”), a corporation organized and existing underthe Nevada Revised Statues, in accordance with the provisions of NRS 78.1955thereof, DO HEREBY CERTIFY:

 

That pursuantto the authority conferred upon the Board of Directors by the RestatedCertificate of Incorporation of the Corporation, the Board of Directors adoptedthe following resolution creating a series of 3,000,000 shares of preferredstock designated as Series C Convertible Preferred Stock:

 

NOW,THEREFORE, BE IT RESOLVED, that pursuant to the authority conferred upon theBoard of Directors of this Corporation in accordance with the provisions of theRestated Certificate of Incorporation, there is hereby established, authorizedand created a series of the authorized preferred stock of the Corporation,$.001 par value per share, which series shall be designated as:

 

“Series C Convertible Preferred Stock”

 

shall consist of 3,000,000shares (“Shares” or singularly, a “Share”) and shall have the followingpreferences and relative, participating, optional and special rights andqualifications, limitations and restrictions.

 

The rights,preferences, restrictions and other matters relating to the Series C PreferredStock are as follows:

 

The PreferredStock is designated as the Company’s Series C Preferred Stock (the “PreferredStock”) and is subject to the terms and conditions of the SubscriptionAgreement (the “Subscription Agreement”) of even date herewith between theCompany and the Investor.

 

1.                                       DIVIDENDPROVISIONS.  The holders of thePreferred Stock will be entitled to a two preferred dividends at the rate of50% per annum, payable on the first and second anniversary of the issuance ofthis certificate.

 

2.                                       LIQUIDATIONPREFERENCE.  There shall be noliquidation preference.  Uponliquidation of the Company, holders of Series C Shares shall receivedistributions, if any, on a basis assuming the conversion of such shares intoshares of Common Stock.

 

3.                                       REDEMPTION.

 

Thiscorporation has no right to redeem the Series C Preferred Stock.

 

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4.                                       CONVERSION.  The holders of the Preferred Stock shallhave conversion rights as follows (the “Conversion Rights”):

 

Each shares ofPreferred Stock shall be convertible, at the option of the holder thereof, atany time following the first anniversary of the date of issuance of such shareat the office of this company or any transfer agent for such stock, into a likenumber of fully paid and non-assessable shares of Common Stock.

 

5.                                       MECHANICSOF CONVERSION.  Before any holder ofPreferred Stock shall be entitled to convert the same into shares of CommonStock, he shall surrender the certificate or certificates therefor, dulyendorsed, at the office of this corporation or of any transfer agent for thePreferred Stock, and shall give written notice to this corporation at itsprincipal corporate office, of the election to convert the same and shall statetherein the name or names in which the certificate or certificates for sharesof Common Stock are to be issued.  Thiscorporation shall, as soon as practicable thereafter, issue and deliver at suchoffice to such holder of Preferred Stock, or to the nominee or nominees of suchholder, a certificate or certificates for the number of shares of Common Stockto which such holder shall be entitled as aforesaid.  Such conversion shall be deemed to have been made immediatelyprior to the close of business on the date of such surrender of the shares ofPreferred Stock to be converted, and the person or persons entitled to receivethe shares of Common Stock issuable upon such conversion shall be treated forall purposes as the record holder or holders of such shares of Common Stock asof such date.

 

(d)                                 NoImpairment.  This corporation willnot, by amendment of its Articles of Incorporation or through anyreorganization, recapitalization, transfer of assets, consolidation, merger,dissolution, issue or sale of securities or any other voluntary action, avoidor seek to avoid the observance or performance of any of the terms to beobserved or performed hereunder by this corporation, but will at all times ingood faith assist in the carrying out of all the provisions of this Section 5and in the taking of all such action as may be necessary or appropriate inorder to protect the Conversion Rights of the holders of the Preferred Stockagainst impairment.

 

(e)                                  Reservationof Stock Issuable Upon Conversion. This corporation shall at all times reserve and keep available out ofits authorized but unissued shares of Common Stock, solely for the purpose ofeffecting the conversion of the shares of the Preferred Stock, such number ofits shares of Common Stock as shall from time to time be sufficient to effectthe conversion of all outstanding shares of the Preferred Stock; and if at anytime the number of authorized but unissued shares of Common Stock shall not besufficient to effect the conversion of all then outstanding shares of thePreferred Stock, in addition to such other remedies as shall be available tothe holder of such Preferred Stock, this corporation will take such corporateaction as may, in the opinion of its counsel, be necessary to increase itsauthorized but unissued shares of Common Stock to such number of shares asshall be sufficient for such purposes, including, without limitation, engagingin best efforts to obtain the requisite shareholder approval of any necessaryamendment to the corporation’s Articles of Incorporation.

 

(f)                                    Notice.  Any notice required by the provisions ofthis Section 5 to be given to the holders of shares of Preferred Stock shall bedeemed given if deposited in the United States mail, postage prepaid, andaddressed to each holder of record at his address appearing on the books ofthis corporation.

 

6.                                       VOTINGRIGHTS.  The holder of each share ofPreferred Stock shall not have any voting rights.

 

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IN WITNESSWHEREOF, we have executed and subscribed this Certificate and do affirm theforegoing as true under the penalties of perjury as of this 7th dayof August, 2003.

 

 
|   | /s/ Bradley  Edson                   |   |
|--------|--------------------------------------|--------|
|   | Brad Edson,  Chief Executive Officer |

 

 
| /s/ Stuart  Benson        |   |
|---------------------------|--------|
| Stuart  Benson, Secretary |

 

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