Document:

EXECUTION VERSION

      

    

     

    

    AMENDMENT NO. 3 TO THIRD AMENDED

    AND RESTATED LOAN AGREEMENT

    

    

    

    

    This Amendment No. 3 to Third Amended and Restated Loan Agreement, dated as of September 29, 2020 (the “Amendment”), is made by and
      among RCM Technologies, Inc., a Nevada corporation, and all of its subsidiaries (collectively, the “Borrowers”), Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), in its capacity as
      administrative agent and arranger (the “Agent”), and Citizens Bank, N.A., a national banking association (as successor by merger to Citizens Bank of Pennsylvania), as lender (the “Lender”).

     

    

    BACKGROUND

    A. The Agent, the Lender and the Borrowers, together with Programming Alternatives of Minnesota, Inc. (an entity which was dissolved as of January 18, 2019), made, executed and
        delivered a Third Amended and Restated Loan Agreement, dated as of August 9, 2018, as amended by that certain Amendment No. 1 to Third Amended and Restated Loan Agreement, dated as of October 18, 2019, and that certain Amendment No. 2 to Third
        Amended and Restated Loan Agreement, dated as of June 2, 2020  (collectively, the “Original Loan Agreement”).

    

    

    B. In connection with the Original Loan Agreement, the Borrowers and the Agent entered into a certain Amended and Restated Pledge and Security Agreement, dated August 9, 2018,
        pursuant to which the Borrowers granted to the Agent, for the benefit of the Lenders, a first priority security interest in the Collateral (as defined therein) (the “Original Pledge and Security Agreement”).

    

    

    C. In connection with the Original Loan Agreement, the Borrowers executed and delivered a Tenth Amended and Restated Revolving Credit Note payable to the order of the Lender, dated
        August 9, 2018 (the “Existing Restated Credit Note”).

    

    

    D. As security for (a) the punctual performance in full by the Borrowers of their obligations under the Loan Documents (as such term is defined in the Original Loan Agreement), (b)
        the punctual payment in full of all amounts owing or to be owing under any Loan Document, and (c) the punctual payment of any other amounts which at any time may be due and payable from the Borrowers to the Agent or the Lenders, in each case
        whether presently existing or hereafter arising (collectively, the “Secured Obligations”), the Borrowers have granted a security interest to the Agent, for the benefit of the Lenders, in the Collateral (as such term is defined in the
        Original Pledge and Security Agreement), pursuant to the terms and provisions of the Original Pledge and Security Agreement.

    

    

    E. The Borrowers, the Agent and the Lender desire, subject to the terms and conditions set forth herein, to amend the Original Loan Agreement (the Original Loan Agreement, as amended
        by this Amendment, and as the same may be further amended, restated, modified and/or supplemented from time to time, being referred to as the “Loan Agreement”).

     

      

    
      
        

        

        

        

        

      

      
        

      
        

        

      

    

    
    NOW, THEREFORE, in consideration of the mutual
        promises herein contained, and each intending to be legally bound hereby, the parties hereto hereby agree as follows:

    

    

    1. Defined Terms.  Except as expressly defined herein, all terms used herein shall have the meanings ascribed to them in the Original Loan Agreement.  This Amendment is
        intended to amend the Original Loan Agreement, and the Original Loan Agreement shall be so amended, from and as of the date hereof.

    

    

    2. Amendment to Section 1.1 of Original Loan Agreement.  Section 1.1 of the Original Loan Agreement is hereby amended so that the definition of “Measurement Period”
        shall read in its entirety as follows:

    

    

    “Measurement Period” means, at any date of determination, except as otherwise provided below in this definition, the most recently
      completed four consecutive fiscal quarters of the Borrowers ending on or prior to such date.  A Measurement Period may be designated by reference to the last day thereof (e.g. the June 30, 2020 Measurement Period refers to the relevant fiscal period
      of the Borrowers ended June 30, 2020), and a Measurement Period shall be deemed to end on the last day thereof.  Notwithstanding the foregoing, for purposes of calculating the Borrowers’ Consolidated Total Funded Debt to Consolidated EBITDA Ratio and
      the Borrowers’ Consolidated  Fixed Charge Coverage Ratio for the Measurement Periods ending on or after December 31, 2020 but on or before June 30, 2021, Consolidated EBITDA shall be calculated on an annualized/cumulative basis (rather than on a
      rolling four quarters basis) as follows:

    

    

    
      	
              (i)

            	
              For the fiscal quarter ended December 31, 2020, Consolidated EBITDA shall be equal to Consolidated EBITDA for the three month period ended December 31, 2020 multiplied
                by four;

            

    

    
      	
              (ii)

            	
              For the fiscal quarter ended March 31, 2021, Consolidated EBITDA shall be equal to Consolidated EBITDA for the six month period ended March 31, 2021 multiplied by two;
                and

            

    

    
      	
              (iii)

            	
              For the fiscal quarter ended June 30, 2021, Consolidated EBITDA shall be equal to (A) Consolidated EBITDA for the nine month period ended June
                30, 2021 divided by three, multiplied by (B) four.

            

    

     

    3. Amendment to Section 7.7(b) of Original Loan Agreement.  Section 7.7(b) of the Original Loan Agreement is hereby amended and restated to read in its entirety as
        follows:

    

    

    “(b) The Borrowers will not, and will not permit any of their respective Subsidiaries to: (i) declare or pay or make any forms of distribution to the
        holders of their respective Equity Interests, or their successors or assigns, other than (A) the Permitted Dividend, (B) the repurchase by RCM of 1,858,139 shares of RCM’s outstanding stock effective as of  June 2, 2020 (the “Permitted 2020
          Stock Repurchase”), and (C) 

    
      
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    distributions constituting the repurchase of RCM’s outstanding stock, provided that from and after
        December 12, 2014, the total amount of such distributions (excluding the Permitted 2020 Stock Repurchase) shall not exceed $7,500,000.00, in the aggregate; (ii) make any prepayments on any existing or future Indebtedness for borrowed money to any
        Person without the prior written consent of the Administrative Agent, which consent will not be unreasonably withheld, except the Borrowers may prepay in full Indebtedness in the principal amount of $2,229,766.80 incurred by RCM in connection with
        the consummation of the Permitted 2020 Stock Repurchase on September 25, 2020; or (iii) hereafter borrow money other than from the Lenders hereunder, except (A) in connection with borrowed money giving rise to a Permitted Encumbrance under clause
        (o) of the definition of Permitted Encumbrance, (B) in connection with Permitted Acquisitions and Indebtedness evidenced by Sellers Notes subordinated on terms and conditions reasonably acceptable to the Administrative Agent, and (C) Indebtedness
        in the principal amount of $2,229,766.80 incurred by RCM in connection with the consummation of the Permitted 2020 Stock Repurchase so long as such Indebtedness is evidenced by documentation, and subordinated on terms and conditions, acceptable to
        the Administrative Agent in its sole discretion. Solely for purposes of this Section 7.7(b), any Earn-Out Obligation which may be required to be paid by a Borrower shall not be considered to be “borrowed money”.”

    

    

    4. Amendment to Section 7.10(c) of Original Loan Agreement.  Section 7.10(c) of the Original Loan Agreement is hereby amended and restated to read in its entirety as
        follows:

    

    

    “(c) Consolidated Total Funded Debt to Consolidated EBITDA Ratio:

    

    

    (i) After March 31, 2018, but on or prior to June 30, 2018, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.25 to
        1.00.

    

    

    (ii) After June 30, 2018, but on or prior to June 30, 2019, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.00 to
        1.00.

    

    

    (iii) After June 30, 2019, but on or prior to December 31, 2019, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 4.00
        to 1.00.

    

    

    (iv) After December 31, 2019 but on or prior to March 31, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.00
        to 1.00.

     

      

    
      
        	
                (i)

              	
                After March 31, 2020 but on or prior to June 30, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio
                  shall at no time exceed 5.00 to 1.00.

              

      

    

    
      
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              (ii)

            	
              After June 30, 2020, but on or prior to September 30, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 4.00 to 1.00.

            

    

    
      	
              (iii)

            	
              After September 30, 2020, the Consolidated Total Funded Debt to Consolidated EBITDA Ratio shall at no time exceed 3.00 to 1.00.”

            

    

    6. Amendment to Section 7.10(d) of the Original Loan Agreement. Section 7.10(d) of the Original Loan Agreement is hereby amended to read in its entirety as follows:

    

    

    “(d) Modified Current Ratio:

     

      

         (i)     The ratio of (A) 0.75 multiplied by the net book value of the Borrowers’ accounts receivable (as determined in accordance with GAAP), to (B)
      the Total Revolving Outstandings shall at no time after March 31, 2020 but prior to September 30, 2020 be less than 1.10 to 1.00; and

     

    

         (ii)     The ratio of (A) 0.75 multiplied by the net book value of the Borrowers’ accounts receivable (as determined in accordance with GAAP), to (B)
      the Total Revolving Outstandings shall not be less than 1.25 to 1.00 on September 30, 2020.” 

     

    

    7. Amendment to Exhibit D to Original Loan Agreement.  Exhibit D attached to the Original Loan Agreement is hereby replaced, in its entirety, with the form of
        Compliance Certificate attached hereto as Schedule I.

    

    

    8. Reaffirmation.  Pursuant to the terms of the Original Pledge and Security Agreement, the Borrowers have provided to the Agent, for the benefit of the Lenders, as security
        for the payment and performance of any and all of the Secured Obligations and the performance of all other obligations and covenants of Borrowers under the Original Loan Agreement, the Existing Restated Credit Note, and each other Loan Document,
        certain or contingent, now existing or hereafter arising, which are now, or may at any time or times hereafter be owing by any Borrower to the Agent or the Lenders, a first priority, perfected security interest in the Collateral.  Each Borrower
        hereby ratifies and confirms the liens and security interests granted under Original Pledge and Security Agreement; and further ratifies and confirms, without condition, that (a) such liens and security interests shall secure the payment and
        performance of any and all of the Obligations and the performance of all other obligations and covenants of any Borrower under the Loan Agreement, the Existing Restated Credit Note, and each other Loan Document, certain or contingent, now existing
        or hereafter arising, which are now, or may at any time or times hereafter be owing by any Borrower to the Agent or the Lenders, and (b) the perfected status and priority of such liens and security interests shall not be affected in any way by the
        amendments to the Original Loan Agreement set forth herein.  Each Borrower acknowledges that the outstanding principal amount of the Existing Restated Credit Note is due and owing without any claim, defense or set-off.

    
      
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    9. Representations and Warranties.  Each Borrower hereby confirms that the representations and warranties set forth in the Original Loan Agreement remain true and correct in
        all material respects.  Each Borrower also represents and warrants that (a) no Default or Event of Default is presently outstanding under any of the terms and conditions of the Original Loan Agreement; (b) each Borrower has full power and authority
        to execute, deliver, and perform its obligations under this Agreement and under any document or instrument executed in connection with this Agreement; (c) the execution, delivery, and performance of this Agreement and of any document or instrument
        executed in connection with this Agreement will not violate any provision of any existing law or regulation applicable to any Borrower, any provision of its governing organizational documents, any order or decree of any court, arbitrator or
        governmental authority, or any contractual undertaking to which it is a party or by which it may be bound; (d) no consents, licenses, approvals or authorizations of, exemptions by or registrations or filings with, any governmental authority are
        required with respect to this Agreement or any of the documents or instruments executed by a Borrower in connection herewith; and (e) this Agreement constitutes the legal valid and binding obligations of each Borrower, enforceable in accordance
        with its terms.  All representations, warranties and covenants of the Borrowers, whether hereunder, or contained in the Original Loan Agreement or the other Loan Documents, shall remain in full force and effect until all amounts due under the
        Original Loan Agreement, as amended herein, the Existing Restated Credit Note and each other Loan Document, are satisfied in full.

    

    

    10. Complimentary Nature of Documents.  Except as modified by the terms hereof, all terms, provisions and conditions of the Original Loan Agreement and each other Loan Document
        are in full force and effect and are hereby incorporated by reference as if set forth herein.  This Amendment and the Original Loan Agreement shall be deemed as complementing and not restricting the Agent’s or the Lender’s rights hereunder or
        thereunder.  If there is any conflict or discrepancy between the provisions of this Amendment and any provision of the Original Loan Agreement, the terms and provisions of this Amendment shall control and prevail.

    

    

    11. Effectiveness Conditions.  This Amendment shall be effective upon execution of this Amendment by all parties hereto.

    

    

    12. Release of Claims.  In consideration of the benefits provided to the Borrowers under the terms and provisions hereof, each Borrower hereby agrees as follows ("General
          Release"):

    

    

    (a) Each Borrower, for itself and on behalf of its successors and assigns, does hereby release, acquit and forever discharge the Agent and the Lender, all of their respective
        predecessors in interest, and all of their respective past and present officers, directors, attorneys, affiliates, employees and agents, of and from any and all claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches
        of duty or of any relationship, acts, omissions, misfeasance, malfeasance, causes of action, defenses, offsets, debts, sums of money, accounts, compensation, contracts, controversies, promises, damages, costs, losses and expenses, of every type,
        kind, nature, description or character, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, each as though fully set forth herein at length (each, a "Released Claim" and collectively, the "Released Claims"),

        that any Borrower now has or may 

     

      

    
      
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    acquire as of the date that the Borrowers have executed and delivered this Amendment to the Agent (hereafter, the "Release
          Date"), including without limitation, those Released Claims in any way arising out of, connected with or related to any and all prior credit accommodations, if any, provided by the Agent or the Lender, or any of their respective predecessors
        in interest, to any Borrower, and any agreements, notes or documents of any kind related thereto or the transactions contemplated thereby or hereby, or any other agreement or document referred to herein or therein.

    

    

    (b) Each Borrower hereby acknowledges, represents and warrants to the Agent and the Lender that it agrees to assume the risk of any and all unknown, unanticipated or misunderstood
        Released Claims which are released by the provisions of this General Release in favor of the Agent and the Lender, and each Borrower hereby waives and releases all rights and benefits which it might otherwise have under any state or local laws or
        statutes with regard to the release of such unknown, unanticipated or misunderstood Released Claims.

    

    

    (c) Each person signing below on behalf of a Borrower acknowledges that he or she has read each of the provisions of this General Release.  Each such person fully understands that
        this General Release has important legal consequences, and each such person realizes that they are releasing any and all Released Claims that any Borrower may have as of the Release Date.  Each Borrower hereby acknowledges that it has had an
        opportunity to obtain an attorney’s advice concerning the legal consequences of each of the provisions of this General Release.

    

    

    (d) Each Borrower hereby specifically acknowledges and agrees that:  (i) none of the provisions of this General Release shall be construed as or constitute an admission of any
        liability on the part of the Agent or the Lender; (ii) the provisions of this General Release shall constitute an absolute bar to any Released Claim of any kind, whether any such Released Claim is based on contract, tort, warranty, mistake or any
        other theory, whether legal, statutory or equitable; and (iii) any attempt to assert a Released Claim barred by the provisions of this General Release shall subject a Borrower to the provisions of applicable law setting forth the remedies for the
        bringing of groundless, frivolous or baseless claims or causes of action.

    

    

    13. Counterparts; Electronic Signature.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall
        constitute one and the same instrument.  Delivery of an executed signature page counterpart hereof by telecopy, emailed pdf. or any other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery
        of a manually executed counterpart hereof. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Agreement and the transactions contemplated hereby
        shall be deemed to include electronic signatures, the electronic association of signatures and records on electronic platforms,  deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or
        enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in
        Global and National Commerce Act, the New York State Electronic Signatures and Records Act, any other similar state laws based on the Uniform 

     

      

    
      
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    Electronic Transactions Act or the Uniform Commercial Code, each as amended, and the parties hereto hereby waive any
        objection to the contrary, provided that (x) nothing herein shall require the Agent or the Lender to accept electronic signature counterparts in any form or format and (y) the Agent and the Lender reserve the right to require, at any time
        and at its sole discretion, the delivery of manually executed counterpart signature pages to this Agreement and the parties hereto agree to promptly deliver such manually executed counterpart signature pages.

    

    

    14. Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns (except that a
        Borrower may not assign or transfer its rights hereunder), and no other parties shall be a beneficiary hereunder.

    

    

    15. Miscellaneous.  This Amendment (a) shall be construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania; and (b) may only be amended or modified
        pursuant to a writing signed by the parties hereto.  If any provision hereof is in conflict with any statute or rule of law of the Commonwealth of Pennsylvania or any other statute or rule of law of any other applicable jurisdiction or is otherwise
        unenforceable, such provisions shall be deemed null and void only to the extent of such conflict or unenforceability and shall be deemed separate from and shall not invalidate any other provision of this Agreement.

    

    

    16. WAIVER OF JURY TRIAL.  EACH BORROWER HEREBY WAIVES ANY AND ALL RIGHTS WHICH IT MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION COMMENCED BY OR AGAINST THE AGENT
        OR THE LENDER WITH RESPECT TO THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO.

    

    

    17. Reimbursement of Costs.  The Borrowers hereby jointly and severally agree that they will pay, or cause to be paid or reimburse the Agent and the Lender for, all of costs
        and expenses incurred by them in connection with this Amendment, including without limitation the fees of their legal counsel.

    

    

    [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

    
      
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    IN WITNESS WHEREOF, the undersigned have caused
        this Amendment to be executed and delivered by their respective officers thereunto duly authorized, as of the 29th day of September, 2020.

     

      

    
      

      

      
        	
                BORROWERS:

              	
                RCM TECHNOLOGIES, INC.

                 

                

              
	 	
                By:

              	/s/ Kevin D. Miller

              
	 	
                Print Name:

              	 Kevin D. Miller
	 	
                Title:

              	 CFO
	 	
                 

                

                RCM TECHNOLOGIES (USA), INC.

                 

                

              
	 	
                By:

              	/s/ Kevin D. Miller
	 	
                Print Name:

              	 Kevin D. Miller
	 	
                Title:

              	 CFO
	 	
                 

                

                RCMT DELAWARE, INC.

                 

                

              
	 	
                By:

              	/s/ Kevin D. Miller
	 	
                Print Name:

              	 Kevin D. Miller
	 	
                Title:

              	 CFO
	 	
                 

                

                RCM TECHNOLOGIES CANADA CORP.

                 

                

              
	 	
                By:

              	/s/ Kevin D. Miller
	 	
                Print Name:

              	 Kevin D. Miller
	 	
                Title:

              	 CFO
	 	
                 

                

                RCM EUROPE HOLDINGS, INC.

                 

                

              
	 	
                By:

              	/s/ Kevin D. Miller
	 	
                Print Name:

              	 Kevin D. Miller
	 	
                Title:

              	 CFO

      

      
        
          8

          

          

          

          

        

        
          

        
          

          

        

      

      

      

      	
              AGENT:

            	
              CITIZENS BANK, N.A.,

                as Administrative Agent and Arranger

               

              

            
	 	
              By:

            	 /s/ Lisa S. Williams

            
	 	
              Print Name:

            	 Lisa S. Williams
	 	
              Title:

            	 SVP
	
              LENDERS:

            	
               

              

              CITIZENS BANK, N.A., as Lender

               

              

            
	 	
              By:

            	 /s/ Lisa S. Williams
	 	
              Print Name:

            	 Lisa S. Williams
	 	
              Title:

            	 SVP

      

      

      

      

      

      

      

      

      

      

      

      

      

      

      
        
          9

          

          

          

          

        

        
          

        
          

          

        

      

      

      

      SCHEDULE I

      

      

      

      

      

      

      

      

      See attached.

      

      

      

      

      

      

      
        
          10

          

          

          

          

        

        
          

        
          

          

        

      

      
        

        

         RCM Technologies,
              Inc.                                                                                                                  As Amended 09/29/2020

            

        LOC Covenant Compliance

        As of __________, 20__

          

        

      
      ($ in thousands) 

       
      

         

       
      

                                                       
        	
                General Financial Data

              	 
	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                Funded Debt

              	
                 

              	
                 

              
	
                 

              	
                Cash on balance sheet as of last day of fiscal period

              	
                 

              
	
                 

              	
                Determination of Actual EBITDA for relevant Measurement Period*

              	
                 

              
	
                 

              	
                 

              	
                (i)

              	
                Operating Income

              	
                 

              
	
                 

              	
                 

              	
                (ii)

              	
                Depreciation & Amortization

              	
                 

              
	
                 

              	
                Add:

              	
                (ii)

              	
                Non-Cash Charges, Equity Based Compensation

              	
                 

              
	
                 

              	
                Add:

              	
                (iii)

              	
                Net loss if any arising solely from Permitted Asset or Stock

                Sales (up to an amount, which when added to other net

                losses previously recognized does not exceed

                $5,000,000 in the aggregate)

              	
                 

              
	
                 

              	
                Add:

              	
                Nonrecurring charges waiver

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                Actual EBITDA Acquired

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                EBITDA

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                TKE

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                Total EBITDA for relevant Measurement Period

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 *Relevant Measurement Periods are as follows:

              	
                 

              
	
                 

              	
                 

              
	 	
                -

              	
                Trailing twelve months ("LTM") for quarters ended

                prior to December 31, 2020 or after June 30, 2021)

              	
                 

              
	 	 	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                For quarter ended December 31, 2020,three months

                ended December 31, 2020 times four

              	
                 

              
	 	 	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                For quarter ended March 31, 2021, six months ended

                March 31, 2021 times two

              	
                 

              
	 	 	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                For quarter ended June 30, 2021, nine months ended

                June 30, 2021 divided by three, with the result

                multiplied by four

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                7.10 (a) Fixed Charge Ratio

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 EBITDA

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                LTM (for quarters ended prior to December 31, 2020

                or after June 30, 2021)

              	
                 

              
	 	 	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                For quarter ended December 31, 2020, EBITA for

                three months ended December 31, 2020 times four

              	
                 

              
	 	 	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                For quarter ended March 31, 2021, EBITDA for six

                months ended March 31, 2021 times two

              	
                 

              
	 	 	
                 

              	
                 

              	
                 

              	
                 

              
	 	
                -

              	
                For quarter ended June 30, 2021, EBITDA for nine

                months ended June 30, 2021 divided by three, with the

                result multiplied by four

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Divided By LTM:

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Interest Paid

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Income Taxes Paid

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Scheduled Principal Payments

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Capex

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Dividends Paid

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Total

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Actual Fixed Charge Ratio

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Minimum Fixed Charge Ratio

              	
                1.50 to 1.00

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Compliance

              	
                Yes_____

              	
                No_____

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                7.10 (b) Capital Expenditures

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Actual Capex LTM

              	
                 

              
	
                 

              	
                 

              	
                Purchase Money Financing

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                Total

              	
                 

              
	
                 

              	
                 

              	
                Maximum Capex

              	
                $5,000

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Compliance

              	
                Yes_____

              	
                No_____

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                7.10 (c) Total Funded Debt to EBITDA

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Total Funded Debt

              	
                 

              
	
                 

              	
                 

              	
                Cash on balance sheet as of last day of fiscal period,

              	
                 

              
	
                 

              	
                 

              	
                Max $2M

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                EBITDA

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	 	
                -

              	
                LTM (for quarters ended prior to December 31, 2020

                or after June 30, 2021)

              	
                 

              
	
                 

              	 	 	
                 

              	
                 

              	
                 

              
	
                 

              	 	
                -

              	
                For quarter ended December 31, 2020, EBITA for

                three months ended December 31, 2020 times four

              	
                 

              
	
                 

              	 	 	
                 

              	
                 

              	
                 

              
	
                 

              	 	
                -

              	
                For quarter ended March 31, 2021, EBITDA for six

                months ended March 31, 2021 times two

              	
                 

              
	
                 

              	 	 	
                 

              	
                 

              	
                 

              
	
                 

              	 	
                -

              	
                For quarter ended June 30, 2021, EBITDA for nine

                months ended June 30, 2021 divided by three, with the

                result multiplied by four

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Actual Funded Debt (less cash on balance sheet up to maximum of

                   $2,000) to EBITDA

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Maximum Funded Debt to EBITDA

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Compliance

                 

              	
                Yes_____

              	
                No_____

              
	
                7.10 (d) Modified Current Ratio (not applicable for quarters ended after September 30, 2020)

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Total Net Accounts Receivable

              	
                 

              
	
                 

              	
                 

              	
                0.75 times Total Net Accounts Receivable

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Total Revolving Outstandings

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Actual Current Ratio

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Minimum Current Ratio Required

              	
                 

              
	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              	
                 

              
	
                 

              	
                 

              	
                Compliance

              	
                Yes_____

              	
                No_____segn_ex42.htm

EXHIBIT 4.2
  
 CERTIFICATE OF DESIGNATION OF PREFERENCES, 
 RIGHTS AND LIMITATIONS
 OF
 SERIES B PREFERRED STOCK OF
 SUCCESS ENTERTAINMENT GROUP INTERNATIONAL, INC.,
  
 The undersigned, the President of, Success Entertainment Group International, Inc., a Nevada corporation, (the “Corporation”), does hereby certify, that, pursuant to authority conferred upon the Board of Directors by the Corporation’s Articles of Incorporation and pursuant to Section NRS 78.1955 of the Nevada General Corporation Law, the following resolutions creating a series of Series B Preferred Stock was duly adopted by the Corporation’s board of Directors on July 21, 2020:
  
 WHEREAS, the Articles of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised of one million (1,000,000) shares, par value $.00001 per share, issuable from time to time in one or more series;
  
 WHEREAS, the Board of Directors is authorized to fix the rights, terms and preferences and the number of shares constituting any Series B and the designation thereof; and
  
 WHEREAS, it is the desire of the Board of Directors, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock, which shall consist of up to 1,000,000 shares of the preferred stock which the Corporation has the authority to issue, as follows:
  
 NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of Series B preferred stock and does hereby fix and determine the rights, preferences, restrictions and other matters relating to such Series B preferred stock as follows:
  
 Section 1. Designation and Amount. The preferred stock subject hereof shall be designated Series B Preferred Stock (“Series B Preferred Stock”) and the number of shares constituting Series B Preferred Stock shall be 1,000,000 shares. No other shares of preferred stock shall be designated as Series B Preferred Stock.
  
 Section 2. Dividends.
  
 a) Participating Dividends on As-Converted Basis. Holders of Series B Preferred Stock (“Holders”) shall be entitled to participate on a pari passu, pro rata as-converted- to- Common Stock basis in any and all dividends or other distributions paid by the Corporation on the Common Stock (other than dividends paid in Common Stock). The Corporation shall pay no dividends on shares of the Common Stock unless it simultaneously complies with the previous sentence.
  
 Section 3. Liquidation Preference.Upon the occurrence of a voluntary or involuntary liquidation, dissolution or winding up of the Corporation, each holder of Series B Preferred Sock shall be entitled to receive the amount such holder would have received had such holder’s shares of Series B Preferred Stock, together with accrued and unpaid dividends thereon, been converted into Common Stock immediately prior to such liquidation, dissolution or winding up of the Corporation at a value of $1.00 a share.
  
 	 
	1
	

	 

 
  
 Section 4. Voting. Except as otherwise provided herein or by law and in addition to any right to vote as a separate class as provided by law, on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting) the holders of outstanding shares of Series B Preferred Stock shall vote together as a single class with the holders of the Corporation’s Common Stock and the holders of any other class or series of shares entitled to vote with the Common Stock. Each outstanding share of Series B Preferred Stock shall be entitled to a number of votes equal to .00001% of the voting power attributable to all shares entitled to vote divided by the sum of (i) the number of shares of Series B Preferred Stock then issued and outstanding and (ii) the number of shares, if any, of Series B Preferred Stock then converted into Common Stock pursuant to Section 6 hereof.
  
 Section 5. Conversion.
  
 a) Conversions at Option of Holder. Each share of Series B Preferred Stock shall be convertible, at any time and from time to time from and after the original issue date at the option of the Holder of any Series B Preferred Stock, into that number of shares of Common Stock (“Conversion Shares”) determined as follows:
  
 Conversion Shares = 20x0.0056xAdjusted Outstanding Common Stock
                                                (Number of Issued Series B Preferred)
  
 b) Additional Definitions. For the purposes hereof, the following terms shall bear the definitions set forth below:
  
 Adjusted Outstanding Common Stock – (x) Conversion Date Outstanding, less (y) Series B Issued Common Stock.
  
 Conversion Date Outstanding - The number of shares of Common Stock deemed outstanding on a Fully Diluted Basis immediately prior to the Conversion Date; provided, however, an equitable adjustment shall be made to such number of shares for each Capital Event, if any, occurring after the earlier of the relevant Conversion Date through and including the relevant Conversion Issuance Date.
  
 Original Issue Date - The date of the first issue of any shares of this Series B Preferred Stock.
  
 Conversion Issuance Date - The date on which the shares of Common Stock to be issued on account of the conversion made on the Conversion Date are actually issued, if the adjustment effected by the relevant Capital Event would not otherwise be applied to the Conversion Shares.
  
 	 
	2
	

	 

 
  
 Series B Issued Common Stock - The number of shares of Common Stock issued on or prior to the Conversion Date on account of (x) conversion of shares of this Series B Preferred Stock and (y) payment of dividends on shares of Series B Preferred Stock; all as adjusted equitably for each Capital Event, if any, after the relevant issuance.
  
 Series B Issued Common Stock - The number of shares of Common Stock issued on or prior to the Conversion Date on account of (x) conversion of shares of Series B Preferred Stock, $.00001 par value per share, of the Corporation (“Series B Preferred Stock”) and (y) payment of dividends on shares of Series B Preferred Stock; all as adjusted equitably for each Capital Event, if any, after the relevant issuance.
  
 Number of Issued Series B Preferred – The sum of (i) the number of shares of Series B Preferred Stock issued and outstanding on the Conversion Date (without giving effect to the conversion for which the calculation is being made) and, (ii) the number of shares, if any, of Series B Preferred Stock converted into Common Stock prior to the Conversion Date.
  
 Capital Event - Each of the following (each howsoever denominated) which has been declared or announced but, as of the Conversion Date, either has not yet been effected or would not otherwise be applied to the Conversion Shares: (w) stock split; (x) reverse stock split; (y) declared stock dividend; or (y) reclassification of shares resulting in the issuance of shares.
  
 Fully Diluted Basis – The number of shares of Common Stock equal to (x) the Adjusted Outstanding Common Stock plus (y) the number of additional shares of Common Stock deemed to be outstanding assuming all options, warrants or other convertible securities (except for unconverted shares of this Series B Preferred Stock or Series B Preferred Stock) or instruments or other rights to acquire Common Stock or any other existing or future classes of capital stock have been exercised or converted, as applicable, in full, regardless of whether or not any such options, warrants, convertible securities or instruments or other rights are then vested or exercisable or convertible in accordance with their terms.
  
 c) Conversion Procedures. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series B Preferred Stock to be converted, the number of shares of Series B Preferred Stock owned prior to the conversion at issue, the number of shares of Series B Preferred Stock owned subsequent to the conversion at issue and the date on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers by facsimile such Notice of Conversion to the Corporation (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of Series B Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing the shares of Series B Preferred Stock to the Corporation, (although the Holder may surrender the Series B Preferred Stock certificate to, and receive a replacement certificate from the Corporation, at Holder’s election) unless all of the shares of Series B Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Series B Preferred Stock promptly following the Conversion Date at issue. Shares of Series B Preferred Stock converted into Common Stock in accordance with the terms hereof shall be canceled and shall not be reissued.
  
 	 
	3
	

	 

 
  
 d) Delivery of Certificate Upon Conversion. Not later than five (5) Trading Days after each Conversion Date (the “Share Delivery Date”), the Corporation shall deliver, or cause to be delivered, to the converting Holder a certificate or certificates representing the Conversion Shares. “Trading Day” means a day on which the principal Trading Market is open for trading. “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market, the New York Stock Exchange, the OTC Pink Marketplace, the OTC Bulletin Board, the OTCQB, or the OTCQX (or any successors to any of the foregoing).
  
 e) Reservation of Shares Issuable Upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series B Preferred Stock and payment of dividends on the Series B Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (and the other holders of the Series B Preferred Stock), not less than such aggregate number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable upon the conversion of the then outstanding shares of Preferred Stock and payment of dividends hereunder. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.
  
 f) Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series B Preferred Stock. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Corporation shall round down to the next whole share.
  
 g) Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Series B Preferred Stock shall be made without charge to any Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holders of such shares of Series B Preferred Stock and the Corporation shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. The Corporation shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion.
  
 	 
	4
	

	 

 
  
 h) Legend. Each Conversion Share will be imprinted with the following legend:
  
 	  
	 “[NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [EXERCISABLE] [CONVERTIBLE]] HAS [NOT] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [EXERCISE] [CONVERSION] OF THIS SECURITY] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.”
	  

 
  
 Section 6. Adjustments. All references herein to the number of shares of Series B Preferred Stock issued by the Corporation shall be equitably adjusted to reflect any and all forward or reverse splits of the Series B Preferred Stock and reclassifications having a similar effect on the Series B Preferred Stock generally.
  
 Section 7. Miscellaneous.
  
 a) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service, addressed to the Corporation, at: 601 South Boulder Ave., Suite 600, Tulsa, OK 74119, Attention: CEO, or such other facsimile number or address as the Corporation may specify for such purposes by notice to the Holders delivered in accordance with this Section 8. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number or address of such Holder appearing on the books of the Corporation, or if no such facsimile number or address appears on the books of the Corporation, at the principal place of business of such Holder, as set forth in the Purchase Agreement. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.
  
 	 
	5
	

	 

 
  
 b) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Series B Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series B Preferred Stock so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof reasonably satisfactory to the Corporation.
  
 c) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each Holder and the Corporation agree that all legal proceedings concerning the interpretation and enforcement of this Certificate of Designation (whether brought against Holder and the Corporation or their respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each Holder and the Corporation hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each Holder and the Corporation hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Certificate of Designation or the transactions contemplated hereby. If any party shall commence an action or proceeding to enforce any provisions of this Certificate of Designation, then the prevailing party in such action or proceeding shall be reimbursed by the other party or parties for its attorneys’ fees and other costs and expenses incurred in the investigation, preparation and prosecution of such action or proceeding.
  
 	 
	6
	

	 

 
  
 d) Waiver. Any of the rights, powers, preferences and other terms of the Series B Preferred Stock set forth herein may be waived on behalf of all Holders by the affirmative written consent or vote of the holders of at least a majority of the then outstanding shares of Series B Preferred Stock. Any waiver by the Corporation or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate of Designation or, except as noted in the prior sentence, a waiver by any other Holders. The failure of the Corporation or a Holder to insist upon strict adherence to any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party (or, except as noted in the first sentence of this paragraph, any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this Certificate of Designation on any other occasion. Any waiver by the Corporation or a Holder must be in writing.
  
 e) Severability. If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable law.
  
 f) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a business day, such payment shall be made on the next succeeding business day.
  
 g) Headings. The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be deemed to limit or affect any of the provisions hereof.
  
 h) Status of Converted Series B Preferred Stock. If any shares of Series B Preferred Stock shall be converted, or shall otherwise be reacquired by the Corporation, such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series B Preferred Stock.
  
 RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file this Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Nevada law.
  
 [Signature Page Follows]
  
 	 
	7
	

	 

 
  
 IN WITNESS WHEREOF, the undersigned has executed this Certificate this 21st day of July, 2020.
  
 	 	 	 	 
			 
	
	  
	 Name: 
	William Robinson	 
	 	Title:	President	 

 
  
  
  
 SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS 
 OF SERIES B PREFERRED STOCK
  
 	 
	
	

	 

 
  
 ANNEX A
  
 NOTICE OF CONVERSION
  
 (TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES 
 OF SERIES B PREFERRED STOCK)
  
 The undersigned hereby elects to convert the number of shares of Series B Preferred Stock indicated below into shares of common stock, par value $0.00001 per share (the “Common Stock”), of Success Entertainment Group International, Inc., a Nevada corporation (the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
  
 Conversion calculations:
  
 Date to Effect Conversion:                                                                                                              
  
 Number of shares of Preferred Stock owned prior to Conversion: _______________
  
 Number of shares of Preferred Stock to be Converted: _______________________
  
 Common Stock Outstanding determined pursuant to Section 6(a): ______________
  
 Number of shares of Common Stock to be Issued: __________________________
  
 Number of shares of Preferred Stock subsequent to Conversion: _______________
  
 Address for Delivery: _________________________
 or
 DWAC Instructions: 
 Broker no: _____________
 Account no: _______________
  
 	 	[HOLDER]	
	 	 	 	 
		By:		
	  
	  
	Name: 	 
	 	 	Title:	 
	 	 	 	 

 
  
  
 SIGNATURE PAGE TO CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS AND LIMITATIONS 
 OF SERIES B PREFERRED STOCK

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