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Exhibit 4.1

CANEUM, INC.

CERTIFICATE OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES A CONVERTIBLE PREFERRED STOCK

   The undersigned, Suki Mudan and Ronald N. Vance, do hereby certify that:

     1. They are the President and Secretary, respectively, of Caneum, Inc., a Nevada corporation
(the “Company”).

     2. The Company is authorized to issue 20,000,000 shares of preferred stock, none of which have
been previously issued.

     3. The following resolutions were duly adopted by the Board of Directors:

     WHEREAS, the Certificate of Incorporation of the Company provides for a class of its
authorized stock known as preferred stock, comprised of 20,000,000 shares, $.001 par value per
share, issuable from time to time in one or more series;

     WHEREAS, the Board of Directors of the Company is authorized to fix the dividend rights,
dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation
preferences of any wholly unissued series of preferred stock and the number of shares constituting
any Series and the designation thereof, of any of them; and

     WHEREAS, it is the desire of the Board of Directors of the Company, 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 4,000,000 shares of the preferred stock which
the Company has the authority to issue, as follows:

     NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the
issuance of a series of preferred stock for cash or exchange of other securities, rights or
property and does hereby fix and determine the rights, preferences, restrictions and other matters
relating to such series of preferred stock as follows:

TERMS OF PREFERRED STOCK

     Section 1. Definitions. Capitalized terms used and not otherwise defined
herein that are defined in the Purchase Agreement (as defined below) shall have the meanings given
such terms in the Purchase Agreement. For the purposes hereof, the following terms shall have the
following meanings:

 

 

     “Adjusted EBITDA” means earnings before interest, taxes, depreciation, and
amortization, and is adjusted to add back into earnings the following items: (1) non-cash
stock based compensation associated with expensing stock options according to GAAP and FASB
requirements for calendar years 2006 and 2007; (2) all cash and non-cash expenses associated
with individual M&A transactions throughout the named period, including any non-cash charges
associated with the Barron financing transaction (including, but not limited to, those that
may be assessed against the convertible preferred stock and warrants and any due diligence
fees) and also including the Ascendiant fees, for calendar years 2006 and 2007; and (3) the
one-time $137,500 investor relations expense above and beyond normal investor relations
programs recognized in calendar year 2006.

     “Closing Date” means the date on which the full purchase price is paid for the
Series A Preferred Stock.

     “Common Stock” means the Company’s common stock, par value $.001 per share, and
stock of any other class into which such shares may hereafter have been reclassified or
changed.

     “Common Stock Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock,
including without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or otherwise entitles
the holder thereof to receive, Common Stock.

     “Conversion Date” shall have the meaning set forth in Section 6(a).

     “Conversion Ratio” shall have the meaning set forth in Section 6(a).

     “Conversion Value” shall have the meaning set forth in Section 6(a).

     “Conversion Shares” means, collectively, the shares of Common Stock into which
the shares of Series A Preferred Stock are convertible in accordance with the terms hereof.

     “Conversion Shares Registration Statement” means a registration statement that
meets the requirements of the Registration Rights Agreement and registers the resale of all
Conversion Shares by the Holder, who shall be named as a “selling stockholder” thereunder,
all as provided in the Registration Rights Agreement.

     “Effective Date” means the date that the Conversion Shares Registration
Statement is declared effective by the SEC.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exempt Issuance” means the issuance of (a) shares of Common Stock, options,
warrants, and shares of Common Stock issuable upon exercise of such options or warrants, to
employees, officers, directors, or consultants of the Company, or others,

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pursuant to the Company’s 2002 Stock Option/Stock Issuance Plan or similar stock or
option plan duly adopted by a majority of the non-employee members of the Board of Directors
of the Company or a majority of the members of a committee of non-employee directors
established for such purpose, (b) securities upon the exercise of or conversion of any
securities issued hereunder, including warrants and shares issued to Ascendiant Securities,
LLC associated with this transaction, and (c) securities issued pursuant to acquisitions or
strategic transactions, provided any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business synergistic with the
business of the Company and in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is issuing
securities primarily for the purpose of raising capital or to an entity whose primary
business is investing in securities.

     “Fundamental Transaction” shall have the meaning set forth in Section 7(f)(iv)
hereof.

     “Holder” shall have the meaning given such term in Section 2 hereof.

     “Junior Securities” means the Common Stock and all other equity or equity
equivalent securities of the Company other than those securities that are explicitly senior
in rights or liquidation preference to the Series A Preferred Stock.

     “Original Issue Date” shall mean the date of the first issuance of any shares
of the Series A Preferred Stock regardless of the number of transfers of any particular shares of Series A Preferred Stock and regardless of the number of certificates which may be
issued to evidence such Series A Preferred Stock.

     “Person” means an individual, partnership, firm, limited liability company,
trust, joint venture, association, corporation, or any other legal entity.

     “Purchase Agreement” means the Preferred Stock Purchase Agreement, dated as of
March 24, 2006, to which the Company and the original Holders are parties, as amended,
modified or supplemented from time to time in accordance with its terms, a copy of which is
on file at the principal offices of the Company.

     “Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the Closing Date, to which the Company and the original Holder are parties, as
amended, modified or supplemented from time to time in accordance with its terms.

     “Registration Statement” has the meaning set forth in the Registration Rights
Agreement.

     “SEC” means the Securities and Exchange Commission.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

     “Series A Preferred Stock” shall have the meaning set forth in Section 2.

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     “Shares” shall mean, collectively, the shares of Common Stock of the Company
issued upon conversion of the Series A Preferred Stock and those shares of Common Stock
issuable to the initial Holder upon exercise of the warrants granted concurrent with the
Series A Preferred Stock.

     “Significant Subsidiary” shall have the meaning set forth in Rule 1.02(w) of
Regulation S-X promulgated by the SEC.

     “Subsequent Financing” shall mean any offer and sale of shares of Preferred
Stock or debt that is initially convertible into shares of Common Stock or otherwise senior
or superior to the Preferred Stock.

     “Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

     “Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market,
the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the
OTC Bulletin Board.

     Section 2. Designation, Amount and Par Value. The series of preferred stock
shall be designated as the Company’s Series A Convertible Preferred Stock (the “Series A
Preferred Stock or “Preferred Stock”) and the number of shares so designated shall be 4,000,000
(which shall not be subject to increase without the consent of all of the holders of the Series A
Preferred Stock (each a “Holder” and collectively, the “Holders”). Each share of
Series A Preferred Stock shall have a par value of $0.50 per share. Capitalized terms not
otherwise defined herein shall have the meaning given such terms in Section 1 hereof.

     Section 3. Dividends and Other Distributions. No dividends shall be payable
with respect to the Series A Preferred Stock. No dividends shall be payable with respect to the
Common Stock while the Series A Preferred Stock is outstanding. The Common Stock shall not be
redeemed while the Series A Preferred Stock is outstanding.

     Section 4. Voting Rights. The Series A Preferred Stock shall have no voting
rights. However, so long as any shares of Series A Preferred Stock are outstanding, the Company
shall not, without the affirmative approval of the Holders of the shares of the Series A Preferred
Stock then outstanding, (a) alter or change adversely the powers, preferences or rights given to
the Series A Preferred Stock or alter or amend this Certificate of Designation, (b) authorize or
create any class of stock ranking as to dividends or distribution of assets upon a Liquidation (as
defined in Section 5) senior to or otherwise pari passu with the Series A Preferred Stock, or any
of preferred stock possessing greater voting rights or the right to convert at a more favorable
price than the Series A Preferred Stock, (c) amend its certificate or articles of incorporation or
other charter documents in breach of any of the provisions hereof, (d) increase the authorized
number of shares of Series A Preferred Stock, or (e) enter into any agreement with respect to the
foregoing.

     Section 5. Liquidation. Upon any liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary (a “Liquidation”), the Holders shall be entitled
to

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receive out of the assets of the Company, whether such assets are capital or surplus, for each
share of Series A Preferred Stock an amount equal to $0.50 (the “Liquidation Value”) before
any distribution or payment shall be made to the holders of any Junior Securities, and if the
assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to
be distributed to the Holders shall be distributed among the Holders ratably in accordance with the
respective amounts that would be payable on such shares if all amounts payable thereon were paid in
full. At the election of a Holder made by written notice delivered to the Company at least two (2)
business days prior to the effective date of the subject transaction, as to the shares of Series A
Preferred Stock held by such Holder, a Fundamental Transaction (excluding for purposes of this
Section 5 any Fundamental Transaction described in Section 7(f)(iv)(A) or 7(f)(iv)(B)) or Change of
Control shall be treated as a Liquidation.

     Section 6. Conversion.

          a) Conversions at Option of Holder. Each share of Series A Preferred Stock shall be
initially convertible (subject to the limitations set forth in Section 6(c)), into one (1) share of
Common Stock (as adjusted as provided below, the “Conversion Ratio”) at the option of the
Holders, at any time and from time to time from and after the Original Issue Date. Holders shall
effect conversions by providing the Company with the form of conversion notice attached hereto as
Annex A (a “Notice of Conversion”) as fully and originally executed by the Holder,
together with the delivery by the Holder to the Company of the stock certificate(s) representing
the number of shares of Series A Preferred Stock so converted, with such stock certificates being
duly endorsed in full for transfer to the Company or with an applicable stock power duly executed
by the Holder in the manner and form as deemed reasonable by the transfer agent of the Common
Stock. Each Notice of Conversion shall specify the number of shares of Series A Preferred Stock to
be converted, the number of shares of Series A Preferred Stock owned prior to the conversion at
issue, the number of shares of Series A Preferred Stock owned subsequent to the conversion at
issue, the stock certificate number and the shares of Series A Preferred Stock represented thereby
which are accompanying the Notice of Conversion, and the date on which such conversion is to be
effected, which date may not be prior to the date the Holder delivers such Notice of Conversion and
the applicable stock certificates to the Company by overnight delivery service (the “Conversion
Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall
be the Trading Day immediately following the date that such Notice of Conversion and applicable
stock certificates are received by the Company. The calculations and entries set forth in the
Notice of Conversion shall control in the absence of manifest or mathematical error. Shares of
Series A Preferred Stock converted into Common Stock in accordance with the terms hereof shall be
canceled and may not be reissued. The initial value of the Series A Preferred Stock on the
Conversion Date shall be equal to $0.50 per share (as adjusted pursuant to Section 7 or otherwise
as provided herein, the “Conversion Value”). If the initial Conversion Value is adjusted
pursuant to Section 7 or as otherwise provided herein, the Conversion Ratio shall likewise be
adjusted and the new Conversion Ratio shall equal the Liquidation Value divided by the new
Conversion Value. Thereafter, subject to any further adjustments in the Conversion Value, each
share of Series A Preferred Stock shall be initially convertible into that number of shares of
Common Stock equal to the new Conversion Ratio.

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          b) Automatic Conversion Upon Change of Control.

               i. Subject to Section 5, all of the outstanding shares of Series A Preferred Stock shall be
automatically converted into the Conversion Shares upon the close of business on the business day
immediately preceding the date fixed for consummation of any transaction resulting in a Change of
Control of the Company (an “Automatic Conversion Event”). A “Change in Control” means a
consolidation or merger of the Company with or into another company or entity in which the Company
is not the surviving entity or the sale of all or substantially all of the assets of the Company to
another company or entity not controlled by the then existing stockholders of the Company in a
transaction or series of transactions. The Company shall not be obligated to issue certificates
evidencing the Conversion Shares unless certificates evidencing the shares of Series A Preferred
Stock so converted are either delivered to the Company or its transfer agent or the holder notifies
the Company or its transfer agent in writing that such certificates have been lost, stolen, or
destroyed and executes an agreement satisfactory to the Company to indemnify the Company from any
loss incurred by it in connection therewith. Upon the conversion of the Series A Preferred Stock
pursuant to this Section 6(b)(i), the Company shall promptly send written notice thereof, by hand
delivery or by overnight delivery, to the holder of record of all of the Series A Preferred Stock
at its address then shown on the records of the Company, which notice shall state that certificates
evidencing shares of Series A Preferred Stock must be surrendered at the office of the Company (or
of its transfer agent for the Common Stock, if applicable).

          c) Beneficial Ownership Limitation. Except as provided in Section 6(b) above, the
Company shall not effect any conversion of the Series A Preferred Stock, and the Holder shall not
have the right to convert any portion of the Series A Preferred Stock to the extent that after
giving effect to such conversion, the Holder (together with the Holder’s affiliates), as set forth
on the applicable Notice of Conversion, would beneficially own in excess of 4.9% of the number of
shares of the Common Stock outstanding immediately after giving effect to such conversion. For
purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the
Holder and its affiliates shall include the number of shares of Common Stock issuable upon
conversion of the Series A Preferred Stock with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which would be issuable upon
(A) conversion of the remaining, nonconverted shares of Series A Preferred Stock beneficially owned
by the Holder or any of its affiliates, so long as such shares of Series A Preferred Stock are not
convertible within sixty (60) days from the date of such determination, and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of the Company
(including warrants) subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by the Holder or any of its affiliates, so long as such other
securities of the Company are not exercisable nor convertible within sixty (60) days from the date
of such determination. For purposes of this Section 6(c), in determining the number of outstanding
shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as
reflected in the most recent of the following: (A) the Company’s most recent quarterly reports,
Form 10-Q, Form 10-QSB, Annual Reports, Form 10-K, or Form 10-KSB, as the case may be, as filed
with the SEC under the Exchange Act (B) a more recent public announcement by the Company or (C) any
other written notice by the Company or the Company’s transfer agent setting forth the number of
shares of Common Stock outstanding. Upon the written or oral request of the Holder,

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the Company shall within two (2) Trading Days confirm orally and in writing to the Holder the
number of shares of Common Stock then outstanding. In any case, the number of outstanding shares
of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Company, including the Series A Preferred Stock, by the Holder or its affiliates since the
date as of which such number of outstanding shares of Common Stock was publicly reported by the
Company. This Section 6(c) may be waived or amended only with the consent of the Holders of all of
the Series A Preferred Stock and the consent of the holders of a majority of the shares of
outstanding Common Stock of the Company who are not Affiliates. For the purpose of the immediately
preceding sentence, the term “Affiliate” shall mean any person: (a) that directly or indirectly,
through one or more intermediaries controls, or is controlled by, or is under common control with
the Company, or (b) who beneficially owns (i) any shares of Series A Preferred Stock, or (ii) the
Company’s Common Stock Purchase Warrant(s) dated March 24, 2006. For purposes of this Section
6(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act
and Rule 13d-3 promulgated by the SEC thereunder.

          d) Mechanics of Conversion

               i. Delivery of Certificate Upon Conversion. Except as otherwise set forth herein, not
later than three Trading Days after each Conversion Date (the “Share Delivery Date”), the
Company shall deliver to the Holder (A) a certificate or certificates which, after the Effective
Date, shall be free of restrictive legends and trading restrictions (other than those required by
the Purchase Agreement and except as provided in the Registration Rights Agreement) representing
the number of shares of Common Stock being acquired upon the conversion of shares of Series A
Preferred Stock, and (B) a bank check in the amount of accrued and unpaid dividends (if the Company
has elected or is required to pay accrued dividends in cash). After the Effective Date, the Company
shall, upon request of the Holder, deliver any certificate or certificates required to be delivered
by the Company under this Section electronically through the Depository Trust Company or another
established clearing Company performing similar functions. If in the case of any Notice of
Conversion such certificate or certificates are not delivered to or as directed by the applicable
Holder by the third Trading Day after the Conversion Date, the Holder shall be entitled to elect by
written notice to the Company at any time on or before its receipt of such certificate or
certificates thereafter, to rescind such conversion, in which event the Company shall immediately
return the certificates representing the shares of Series A Preferred Stock tendered for
conversion.

               ii. Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to
issue and deliver the Conversion Shares upon conversion of Series A Preferred Stock in accordance
with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the
Holder to enforce the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder
or any other Person of any obligation to the Company or any violation or alleged violation of law
by the Holder or any other person, and irrespective of any other circumstance which might otherwise
limit such obligation of the Company to the Holder in connection with the issuance of such
Conversion Shares. In the event a Holder shall elect to convert any or all of its Series A
Preferred Stock, the Company may not refuse conversion based on any claim that such Holder or
anyone associated or affiliated with the Holder has been

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engaged in any violation of law, agreement or for any other reason, unless, an injunction from
a court, on notice, restraining and or enjoining conversion of all or part of this Series A
Preferred Stock shall have been sought and obtained. In the absence of an injunction precluding
the same, the Company shall issue Conversion Shares or, if applicable, cash, upon a properly
noticed conversion. If the Company fails to deliver to the Holder such certificate or certificates
pursuant to Section 6(d)(i) within two Trading Days of the Share Delivery Date applicable to such
conversion (except for permissible delays in the effectiveness of the Registration Statement as
provided in the Registration Rights Agreement), the Company shall pay to such Holder, in cash, as
liquidated damages and not as a penalty, for each $5,000 of Conversion Value of Series A Preferred
Stock being converted, $200 per Trading Day (increasing to $400 per Trading Day after three (3)
Trading Days and increasing to $800 per Trading Day six (6) Trading Days after such damages begin
to accrue) for each Trading Day after the Share Delivery Date until such certificates are
delivered. Nothing herein shall limit a Holder’s right to pursue actual damages for the Company’s
failure to deliver certificates representing shares of Common Stock upon conversion within the
period specified herein and such Holder shall have the right to pursue all remedies available to it
hereunder, at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.

               iii. Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
Conversion. If the Company fails to deliver to the Holder such certificate or certificates
pursuant to Section 6(d)(i) by a Share Delivery Date, and if after such Share Delivery Date the
Holder purchases (in an open market transaction or otherwise) Common Stock to deliver in
satisfaction of a sale by such Holder of the Conversion Shares which the Holder was entitled to
receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the
Company shall pay in cash to the Holder the amount by which (x) the Holder’s total purchase price
(including brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the product
of (1) the aggregate number of shares of Common Stock that such Holder was entitled to receive from
the conversion at issue multiplied by (2) the price at which the sell order giving rise to such
purchase obligation was executed. For example, if the Holder purchases Common Stock having a total
purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of
Series A Preferred Stock with respect to which the aggregate sale price giving rise to such
purchase obligation is $10,000, under clause (A) of the immediately preceding sentence, the Company
shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice
indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Company. Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing shares of Common Stock
upon conversion of the shares of Series A Preferred Stock as required pursuant to the terms hereof.

               iv. Reservation of Shares Issuable Upon Conversion. The Company covenants that it will
at all times reserve and keep available out of its authorized and unissued shares of Common Stock
solely for the purpose of issuance upon conversion of the Series A Preferred Stock, each as herein
provided, free from preemptive rights or any other actual contingent purchase rights of persons
other than the Holders, not less than such number of shares of the Common Stock as shall (subject
to any additional requirements of the Company as to

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reservation of such shares set forth in the Purchase Agreement) be issuable (taking into
account the adjustments and restrictions of Section 7) upon the conversion of all outstanding
shares of Series A Preferred Stock. The Company covenants that all shares of Common Stock that
shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid,
nonassessable and, if the Conversion Shares Registration Statement is then effective under the
Securities Act, registered for public sale in accordance with such Conversion Shares Registration
Statement.

               v. Fractional Shares. Upon a conversion hereunder, the Company shall not be required
to issue stock certificates representing fractions of shares of the Common Stock.

               vi. Transfer Taxes. The issuance of certificates for shares of the Common Stock on
conversion of the Series A Preferred Stock shall be made without charge to the Holders thereof for
any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of
such certificate, provided that the Company 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 Holder of such shares of Series A Preferred Stock
so converted and the Company 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 Company the
amount of such tax or shall have established to the satisfaction of the Company that such tax has
been paid.

          Section 7. Certain Adjustments.

     a) Stock Dividends and Stock Splits. If the Company, at any time while the
Series A Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make a
distribution or distributions on shares of its Common Stock or any other equity or equity
equivalent securities payable in shares of Common Stock (which, for avoidance of doubt,
shall not include any shares of Common Stock issued by the Company pursuant to this Series A
Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number of
shares, (C) combine (including by way of reverse stock split) outstanding shares of Common
Stock into a smaller number of shares, or (D) issue by reclassification of shares of the
Common Stock any shares of capital stock of the Company, then the Conversion Value shall be
multiplied by a fraction of which the numerator shall be the number of shares of Common
Stock (excluding treasury shares, if any) outstanding before such event and of which the
denominator shall be the number of shares of Common Stock outstanding after such event. Any
adjustment made pursuant to this Section shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

     b) Subsequent Equity Sales. From the date hereof until such time as the
initial Holder no longer holds any of the Company’s Shares, the Company shall be prohibited
from effecting or entering into an agreement to effect any Subsequent Financing involving a
“Variable Rate Transaction” or an “MFN Transaction” (each as

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defined below). The term “Variable Rate Transaction” shall mean a transaction in which
the Company issues or sells (i) any debt or equity securities that are convertible into,
exchangeable or exercisable for, or include the right to receive additional shares of Common
Stock either (A) at a conversion, exercise or exchange rate or other price that is based
upon and/or varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B) with a
conversion, exercise or exchange price that is subject to being reset at some future date
after the initial issuance of such debt or equity security or upon the occurrence of
specified or contingent events directly or indirectly related to the business of the Company
or the market for the Common Stock. The term “MFN Transaction” shall mean a transaction in
which the Company issues or sells any securities in a capital raising transaction or series
of related transactions which grants to an investor the right to receive additional shares
based upon future transactions of the Company on terms more favorable than those granted to
such investor in such offering. Any Holder shall be entitled to obtain injunctive relief
against the Company to preclude any such issuance, which remedy shall be in addition to any
right to collect damages. Notwithstanding the foregoing, this Section 7(b) shall not apply
in respect of an Exempt Issuance, except that no Variable Rate Transaction or MFN
Transaction shall be an Exempt Issuance.

     c) [RESERVED]

     d) Price Adjustment. From the date hereof until the earlier to occur of (A)
such time as no Holder holds any of the Preferred Stock, or (B) 24 months following the
Closing Date, the Company closes on the sale of a note or notes, shares of Common Stock, or
shares of any class of Preferred Stock at a price per share of Common Stock, or with a
conversion right to acquire Common Stock at a price per share of Common Stock, that is less
than the Conversion Price (as adjusted to the capitalization per share as of the Closing
Date, following any stock splits, stock dividends, or the like) (collectively, the
“Subsequent Conversion Price”), the Company shall make a post-Closing adjustment in the
Conversion Price so that the effective price per share paid by the Investor is reduced to
being equivalent to such lower conversion price after taking into account any prior
conversions of the Preferred Stock and/or exercises of the Warrant. Notwithstanding the
foregoing, this Section 7(d) shall not apply in respect of an Exempt Issuance and shall not
apply if the Holder has sold any shares of Common Stock within the six (6) months
immediately preceding the date otherwise triggering such an adjustment.

     e) Price Adjustment Based on Adjusted EBITDA. In the event the Company’s
Adjusted EBITDA for the year ended December 31, 2006, is less than $0.04 per share on a
fully-diluted basis, then the Company shall issue to Barron Partners LP (the “Investor”)
additional Preferred Shares based on the number of Preferred Shares owned by the Investor on
the Calculation Date (as defined below) equal to the proportional reduction in Adjusted
EBITDA. For example if the earnings are $0.038 per share (5% Decline), and the Investor
owns 4,000,000 Preferred Shares, then the Company shall issue to the Investor 200,000
additional Preferred Shares. In addition to any adjustment pursuant to the above portion of
this Section 7(e), in the event the Company’s Adjusted EBITDA for the year ended December
31, 2007, is less than $0.08 per share on a fully-diluted basis, then the Company shall
issue to the Investor additional Preferred

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Shares based on the number of Preferred Shares owned by the Investor on the Calculation
Date (as defined below) equal to the proportional reduction in Adjusted EBITDA. For example
if the earnings are $0.076 per share (5% Decline), and the Investor owns 2,000,000 of the
Preferred Shares on the Calculation Date, then the Company shall issue to the Investor
100,000 additional Preferred Shares. For purposes of this Section 7(e), the Calculation Date
shall be the fifth business day following the initial filing date of the Company’s Form
10-KSB. Notwithstanding the foregoing, the maximum number of additional shares of Preferred
Stock issuable pursuant to this 7(e) shall not exceed 2,600,000 Preferred Shares.
Fully-diluted Adjusted EBITDA Per Share shall be based on the number of outstanding shares
of Common Stock plus all shares of Common Stock issuable upon conversion of all outstanding
convertible securities and upon all outstanding warrants, options and rights, regardless of
whether (i) such shares would be included in determining diluted earnings per share, (ii)
such convertible securities are subject to a restriction or limitation on exercise (iii)
such options are vested or not vested, (iv) such options are out of the money or in the
money and (v) such options are owned by employees or non-employees. Thus, for purpose of
determining fully-diluted Adjusted EBITDA per share, the four and nine tenths percent (4.9%)
applicable to the Investor pursuant to the Purchase Agreement shall be disregarded. The
additional Preferred Shares shall be issued within five business days of the audited numbers
being reported to the SEC.

     f) Pro Rata Distributions. If the Company, at any time while Series A Preferred
Stock is outstanding, shall distribute to all holders of Common Stock (and not to Holders)
evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase
any security, then in each such case the Company shall make such distributions to the
Holders as though the shares of Preferred Stock held by the Holder had been converted
immediately prior to such distribution; provided, however, that if such distribution would
result in a violation of Section 6(c) above, the Company shall either pay to the Holders the
cash equivalent of such distribution or shall make such distribution in an amount that would
not violate Section 6(c) above and pay the balance of the distribution amount to the Holders
in cash.

     g) Calculations. All calculations under this Section 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. The number of shares of
Common Stock outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the description of any such shares of Common Stock shall be
considered on issue or sale of Common Stock. For purposes of this Section 7, the number of
shares of Common Stock deemed to be issued and outstanding as of a given date shall be the
sum of the number of shares of Common Stock (excluding treasury shares, if any) actually
issued and outstanding.

     h) Notice to Holders.

          i. Adjustment to Conversion Price. Whenever the Conversion Value is adjusted
pursuant to Section 7(a), the Company shall promptly mail to each Holder a notice setting
forth the Conversion Value after such adjustment and setting forth a brief statement of the
facts requiring such adjustment.

11

 

          ii. Notices of Other Events. If (A) the Company shall declare a dividend (or
any other distribution) on the Common Stock; (B) the Company shall declare a redemption of
the Common Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital stock of any
class or of any rights; (D) the approval of any stockholders of the Company shall be
required in connection with any reclassification of the Common Stock or any Fundamental
Transaction, (E) the Company shall authorize the voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Company; then in each case, the Company
shall cause to be filed at each office or agency maintained for the purpose of conversion of
the Series A Preferred Stock, and shall cause to be mailed to the Holders at their last
addresses as they shall appear upon the stock books of the Company, at least 30 calendar
days prior to the applicable record or effective date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such dividend,
distribution, redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such dividend,
distributions, redemption, rights or warrants are to be determined or (y) the date on which
such reclassification is expected to become effective or close, and the date as of which it
is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such
reclassification or Fundamental Transaction; provided, that the failure to mail such
notice or any defect therein or in the mailing thereof shall not affect the validity of the
corporate action required to be specified in such notice.

          iii. Exempt Issuance. Notwithstanding the foregoing, no adjustment will be made
under this Section 7 in respect of an Exempt Issuance.

          iv. Fundamental Transaction. If, at any time while this Series A Preferred
Stock is outstanding, (A) the Company effects any merger or consolidation of the Company
with or into another Person, (B) the Company effects any sale of all or substantially all of
its assets in one or a series of related transactions, (C) any tender offer or exchange
offer (whether by the Company or another Person) is completed pursuant to which holders of
Common Stock are permitted to tender or exchange their shares for other securities, cash or
property, or (D) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into
or exchanged for other securities, cash or property (in any such case, a “Fundamental
Transaction”), then upon any subsequent conversion of this Series A Preferred Stock, the
Holder shall have the right to receive, for each Conversion Share that would have been
issuable upon such conversion absent such Fundamental Transaction, the same kind and amount
of securities, cash or property as it would have been entitled to receive upon the
occurrence of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”). For purposes of any such conversion, the determination of the
Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration
based on the amount of Alternate Consideration issuable in respect of one share of Common
Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price
among the Alternate Consideration in a

12

 

reasonable manner reflecting the relative value of any different components of the
Alternate Consideration. If holders of Common Stock are given any choice as to the
securities, cash or property to be received in a Fundamental Transaction, then the Holder
shall be given the same choice as to the Alternate Consideration it receives upon any
conversion of this Series A Preferred Stock following such Fundamental Transaction. To the
extent necessary to effectuate the foregoing provisions, any successor to the Company or
surviving entity in such Fundamental Transaction shall file a new Certificate of
Designations with the same terms and conditions and issue to the Holder new preferred stock
consistent with the foregoing provisions and evidencing the Holder’s right to convert such
preferred stock into Alternate Consideration. The terms of any agreement pursuant to which a
Fundamental Transaction is effected shall include terms requiring any such successor or
surviving entity to comply with the provisions of this paragraph (f)(iv) and insuring that
this Series A Preferred Stock (or any such replacement security) will be similarly adjusted
upon any subsequent transaction analogous to a Fundamental Transaction.

          Section 8. 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, sent by a nationally recognized
overnight courier service, addressed to the Company, at the address provided in the Purchase
Agreement, facsimile number (949) 273-4001, Attn: Alan Knitowski, Chairman, or such other
address or facsimile number as the Company may specify for such purposes by notice to the
Holders delivered in accordance with this Section. Any and all notices or other
communications or deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight courier
service addressed to each Holder at the facsimile telephone number or address of such Holder
appearing on the books of the Company, or if no such facsimile telephone number or address
appears, at the principal place of business of the Holder. 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 telephone number specified in this Section prior to 5:30 p.m. (New York City
time), (ii) the date after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this Section later
than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date, (iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by the party to
whom such notice is required to be given. 

     b) Absolute Obligation. Except as expressly provided herein, no provision of
this Certificate of Designation shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the liquidated damages (if any) on, the shares of
Series A Preferred Stock at the time, place, and rate, and in the coin or currency, herein
prescribed.

13

 

     c) Lost or Mutilated Preferred Stock Certificate. If a Holder’s Series A
Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Company 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 A 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 thereof, and indemnity, if requested, all reasonably
satisfactory to the Company.

     d) Next Business Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a business day in the State of New York, such payment shall be
made on the next succeeding business day.

     e) Headings. The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designations and shall not be deemed to limit or
affect any of the provisions hereof.

     RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary
or any assistant secretary, of the Company be and they hereby are authorized and directed to
prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance
with the foregoing resolution and the provisions of Nevada law.

     IN WITNESS WHEREOF, the undersigned have executed this Certificate this 24th day of March
2006.

	 	 	 	 	 
	/s/ Suki Mudan

	 	/s/ Ronald N. Vance	 	 
	 

	 	 	 	 
	Name: Suki Mudan

	 	Name: Ronald N. Vance	 	 
	Title: President and Chief Executive Officer

	 	Title: Secretary	 	 

14

 

ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES

OF SERIES A PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series A Convertible Preferred
Stock indicated below, into shares of common stock, par value $0.001 per share (the “Common
Stock”), of Caneum, Inc., a Nevada corporation (the “Company”), according to the
conditions hereof, as of the date written below. If shares are to be issued in the name of a person
other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto
and is delivering herewith such certificates and opinions as reasonably requested by the Company in
accordance therewith. No fee will be charged to the Holder for any conversion, except for such
transfer taxes, if any.

Conversion calculations:

     Date to Effect Conversion:                                                                                                     

     Number of shares of Common Stock owned prior to Conversion:                                         

     Number of shares of Series A Preferred Stock to be Converted:                                         

     Value of shares of Series A Preferred Stock to be Converted:                                                             

     Number of shares of Common Stock to be Issued:                                                                                 

     Certificate Number of Series A Preferred Stock attached
hereto:                                                             

     Number of Shares of Series A Preferred Stock represented by attached
certificate:                     

     Number of shares of Series A Preferred Stock subsequent to Conversion:
                                        

	 	 	 	 	 
	 	[HOLDER]

 	 
	 	By:  	 	 
	 	 	Name:  	 	 	 
	 	 	Title:  	 	 	 
	 

15exv4w2

 

Exhibit 4.2

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED
UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, OR
(3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.

     INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA

P-1

CANEUM, INC.

Series A Preferred Stock

Par Value $0.001 Per Share

Total Authorized Issue 120,000,000 Shares

			
	100,000,000 Shares Authorized Common
	 	20,000,000 Shares Authorized Preferred

This is to Certify that                                          is the owner of 

                —                                         (                                        ) —                fully paid and

non-assessable Series A Preferred Shares of the above Corporation transferable only on the books of
the Corporation by the holder hereof in person or by duly authorized Attorney upon surrender of
this Certificate properly endorsed.

Witness, the seal of the Corporation and the signature of its duly authorized officers.

Dated                     

	 	 	 	 	 	 	 
	 

Suki Mudan, President

	 	 
	 	 

Ronald N. Vance, Secretary
	 	 

 

 

FOR VALUE
RECEIVED,                        
                   
                    
                                  
                                   
                    

hereby sell, assign and transfer unto
                                                                                                                                                                          

(                                        ) Shares of the Series A Preferred Shares represented by the within
certificate, and do hereby irrevocably constitute and appoint

 

to transfer the said stock on the books of the within named Corporation with full power of
substitution in the premises.

Dated                                                             

	 	 	 	 	 
	 

	 	 

Signature
	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed By:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

2

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