AGREEMENT BETWEEN CHARTWELL INTERNATIONAL, INC.
AND ▇▇▇▇▇▇ ▇▇▇▇▇
AGREEMENT made the 10th day of March 1995, by and between Chartwell
International, Inc. a Nevada corporation with its principal office at ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter
called the "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter called the ("Executive").
WITNESSETH
WHEREAS. The Executive is President of the Company and has served the
company continuously during the past 3 years as its principal executive, and
WHEREAS. The leadership of the executive has constituted a major factor in
the growth and development of the Company and the Company is greatly in need
of the Executive's continued leadership so that the further and uninterrupted
progress of the Company will be assured, and
WHEREAS. The Company acknowledges and recognizes the value of the
Executive's services, including the capacity for services of special, unique,
and extraordinary character, and
WHEREAS. The Company desires to employ, retain and make secure for itself
the vast experience, outstanding abilities and services of the Executive as
President for a period of at least eight years from the effective date hereof
and thereafter to employ, retain and make secure for the Company her services
in an advisory and consultative capacity for life and to prevent any other
competitive business from securing the services of said executive and
utilizing her experience, background and know-how, and
WHEREAS. Both parties desire to embody the terms and conditions of
employment of said Executive, and the restricted stock option granted to her
in connection therewith, into a written Agreement, and
WHEREAS. All of the terms, conditions and undertakings of this Agreement,
including without limitations those of the restricted stock option embodied
herein, and the execution of this Agreement, were duly fixed, stated,
approved, authorized and directed for and on behalf of the Company by
resolution of its Board Of Directors at a meeting of such Board held at the
office of the Company on the 10th day of March, 1995, at which a quorum of
Directors was present and voted, exclusive of the Executive, and to which
resolution reference is hereby made, and which resolution by this reference
is incorporated herein as though fully at length repeated.
NOW, THEREFORE, It is mutually agreed by and between the parties hereto as
follows:
Page 1 of 9
1. EMPLOYMENT PERIOD AND DUTIES- The Company agrees to and does hereby employ
the Executive President and said Executive agrees to serve the Company in
such capacity for a period commencing on the effective date of this
Agreement and continuing for (8) years thereafter (such period being
hereinafter called "The Employment Period", unless sooner terminated as
provided hereunder. The effective date hereof shall be March 10, 1995.
2. ADVISORY EMPLOYMENT TERM AND DUTIES- The Company agrees to, and does
hereby, employ ▇▇▇▇▇▇ ▇▇▇▇▇, and she agrees to serve the Company, for the
period commencing with the expiration or termination of the employment
period and continuing for life (hereinafter called the "Advisory Employment
Term") as an advisor and consultant to the Company with such duties of an
advisory or consultative nature as may reasonable be requested by its Board
Of Directors- provided, however, that,
(A) Services required of said Executive during the advisory employment
term shall be performed in such places in the United States or
overseas as she may designate.
(B) Said Executive shall not be required to devote more than thirty (30)
hours in any month to such services,
(C) Said Executive shall not be required to return from any vacation or
any journey to render any such services,
(D) Said Executive shall not be required to render such services during
periods of illness or other incapacity.
3. COMPENSATION- The Company shall pay to said Executive, and said Executive
shall accept from the Company for her services during the employment
period, compensation at the rate of $5,000 per month from each company that
CII receives cash-flow revenues. Total compensation for first 12 months
shall be no larger than $15,000 per month. Compensation shall increase to
maximum $22,500 per month during second 12 months. With strong expansion
and growth of the Company during the 8 year period of this contract
compensation increases, bonuses and stock options shall be given when and
as approved by the Board-Of-Directors.
4. EXPENSES- During the employment period the Company will pay all expenses
incurred by the Executive in furtherance of or in connection with the
business of the Company and its subsidiaries, affiliates, including but not
by way of limitation, all traveling expenses, and all entertainment
expenses (whether incurred at the Executive's residence, while traveling,
or otherwise). If any such expenses are paid in the first instance by the
said Executive the Company will reimburse her therefor.
During the Advisory Employment Term, the Company will reimburse said
Executive for any and all expenses of any kind incident to the rendition of
the advisory and consultative services to be rendered hereunder and said
Executive shall be entitled to the use of office space and all facilities
of the same nature and character as were furnished to said Executive during
the employment period.
Page 2 of 9
5. SERVICES- The Executive agrees to devote her full time and efforts during
the employment period to the business of the Company and its subsidiaries
and to serve as the President of the Company. If elected as such,
provided, however, that she shall be entitled to a minimum vacation period
totaling at least one (1) month each year which she may take, at her option
either in whole or in part, consecutively or not, in any year, and which
vacation periods shall be cumulative over the term of the employment
period, but for no more than four months in any given year.
The Executive shall perform her duties faithfully, diligently, and to the
best of her ability during the employment period and during the Advisory
Employment Term.
6. RIGHT TO TERMINATE- The Executive shall have the right to terminate the
employment period specified herein at the end of the fifth (5the) year
thereof by giving at least one hundred and twenty (120) days prior written
notice to the Company and shall have the further right to terminate such
employment period as hereinbefore provided, the advisory and consultative
services to the Company and provided for herein and shall thereupon receive
the compensation provided for herein for such services.
7. COMPANY RIGHT TO TERMINATE- The Company shall have the right to terminate
the employment period specified herein at any time the Executive is not
able to properly perform her duties and responsibilities due to an extreme
delinquencies, criminal actions and total mental or physical disability.
As long as the Executive performs her duties and responsibilities in a
satisfactory manner, continues to improve the Company operations, and sets
personal standards of leadership the Company cannot terminate the Executive
during the period of this contract.
In the event that during the employment period said Executive shall be
disabled from rendering services hereunder as President to the Company for
nine (9) consecutive months, the Board-Of-Directors of the Company may
terminate the employment period after sixty (60) days written notice, and
in such event, the Advisory Employment Term shall begin on the first day
following such sixty (60) day period. In such event, said Executive shall
commence rendering advisory and consultative services provided and shall
receive the compensation
Page 3 of 9
8. RESTRICTIVE COVENANT- The Executive agrees that so long as this
Agreement is in full force and effect, she will not, directly or
indirectly, either as principal, agent, stock holder, or in any other
capacity, engage in or have a financial interest in, any business which is
competitive to the business of the Company and its subsidiaries, except
that nothing contained herein shall preclude the Executive from purchasing
or owning stock in any such business, providing that her holdings do not
exceed _____(%) percent of the issued and outstanding capital stock. For
the purposes hereof, a business will be deemed competitive if it involves
the production, manufacture or distribution of any product similar to those
produced, manufactured or distributed by the Company or any of its
subsidiaries. The executive expressly agrees that upon a breach or
violation of the foregoing provision of this Agreement, the Company in
addition to all other remedies shall be entitled, as a matter of right, to
injunctive relief in any court of competent jurisdiction.
9. SECRET PROCESSES- The Executive will not divulge, furnish or make
accessible to any one (otherwise than in the regular course of the business
of the Company or any of its subsidiaries) any knowledge or information
with respect to confidential or secret processes, formula, machinery,
plans, devices or material of the Company or any of its subsidiaries, with
respect to any confidential or secret process, formulas, development or
research work of the Company or any of its subsidiaries, or with respect to
any other confidential or secret aspect of the business of the Company of
any of its subsidiaries.
10. DEATH- In the event of the death of the Executive the Company shall pay to
her surviving spouse an amount equal to two (2) years compensation
calculated on the basis of the compensation payable to the Executive under
this Agreement at the date of her death. Such payments shall be made in
equal monthly installments over a period of five (5) years from the date of
the death of the Executive. If the Executive has no surviving spouse, then
such amount shall be paid to the Executive's estate in a lump sum. If the
Executive's spouse survives her but dies before all of the aforementioned
monthly payments have been made, then the balance of such payments shall be
paid to the Executive's estate in a lump sum.
11. RENEWAL OF CONTRACT- This Executive Agreement shall become renewable for
another (8) years at the end of each eight (8) year period of (32) years so
long as the Executive has fulfilled her duties and responsibilities
satisfactorily and according to the covenants set out in this Agreement.
Page 4 of 9
12. BONUSES FROM INCREASED NET-PROFITS & NET SALES
RATE OF COMPENSATION
(A) A sum, with respect to any fiscal year of the Company during the term
of employment hereunder in which the Net Profits of the Company (determined
as hereinafter provided) shall exceed the Net Profits of the Company (so
determined) for its fiscal year ending JULY 15, 1995 equal to 1% of such
excess.
(B) A sum, with respect to any fiscal year of the Company during the term
of employment hereunder in which the Net Sales of the Company (determined
as hereinafter provided)shall exceed the Net Sales of the Company (so
determined) for its fiscal year ending JULY 15, 1995 equal to 1/10th of 1%
of such excess.
TIME OF PAYMENT
(A) The sum, if any, payable with respect to any such fiscal year during
the term of employment hereunder pursuant to subdivision.
(B) or (B) Of Paragraph (1) shall be paid within 30 days after the amount
so payable has been computed as the manner hereafter provided.
METHOD OF COMPUTING PAYMENT- The Net Profits of the Company for any period
shall be determined in accordance with good accounting practice, and giving
effect to proper deductions on account of the following:
(A) All expenses paid or accrued with respect to such period, including
the amount of all compensation paid or payable hereunder in respect of
such period, and all insurance premiums paid or payable, whether
hereunder or otherwise,
(B) Adjustment of the values of inventories and any other assets and
depreciation on property, plant and equipment,
(C) All Local, State and Federal Taxes, whether on profits or otherwise,
and
(D) All other proper charges against profits, whether or not of any class
herein specified.
DETERMINATION OF NET PROFITS- The amounts of the Net Profits of the
Company for the Company's fiscal year ending JULY 15 1995, and for each
fiscal year during the term of your employment hereunder, shall be
determined as soon as practicable after the end of such year by such public
accountant or firm of public accountants as shall be designated for the
purpose by the Board Of Directors of the Company and a statement setting
forth the results of such determination shall be furnished promptly after
the completion thereof. Each such determination shall be conclusive.
Page 5 of 9
DETERMINATION OF NET-SALES- The Net Sales of the company for any period
shall be deemed to be the excess of the gross receipts from the Company
from the sale of product or services (excluding the amount of any sales tax
collection) over the amount of all returns and allowances made in such
period in respect of merchandise and services sold by the Company and any
depreciation in value of returned funds, all determined in accordance with
the Company's usual accounting practice.
Notwithstanding anything herein contained - (I) the Net Sales of the
Company for any fiscal year shall not be deemed to include any sales made
by any so-called leased department or division (namely any business
conducted otherwise than by the Company), and (II) in determining the
amount of the Company's Net Sales for any fiscal year no account shall be
taken of any sales and services, returns or allowances applicable, in
accordance with good accounting practice, to any new department, division
and subsidiary started after the beginning of such fiscal year operated by
the Company, or to any additional department, division and subsidiary
started by the Company after the beginning of such fiscal year, or to any
new business venture commenced by the Company after the beginning of such
fiscal year.
13. RESTRICTED STOCK OPTION- As a further inducement to the Executive to enter
into this Agreement and to provide a means of enhancing the Executive's
proprietary interest in the Company and to increase the Executive's
incentive, the Company hereby grants to the Executive the right and option
to purchase from the Company up to (_______) shares of its _________,
exercisable upon the following terms and conditions-
(A) The option price shall be eighty (80%) percent of the highest price at
which said stock is sold on the New York, NASDAC, or Over The Counter
exchange on the effective date hereof
(B) Subject to the provisions hereof, this option shall be exercisable as
follows-
(1) After the expiration of one (1) year form the effective date
hereof this option may be exercised with respect to all or any
part of (___________) shares of the said total ___________shares.
(2) After the expiration of two (2) years from the effective date
(______) shares of its ________
(3) After the expiration of three (3) years from the effective date
(______) shares of its _______________
(4) After the expiration of four (4) years from the effective date
(______) shares of its ________
(5) After the expiration of five (5) years from the effective date
(________) shares of its __________
Page 6 of 9
(C) This option shall not be transferable by the Executive otherwise than
by will or the laws of descent and distribution, and shall be
exercisable during her lifetime only by her (and in no event later
than eight (8) years from the effective date hereof).
(D) In the event that the Executive ceases to be an employee of the
Company hereunder, any portion of this option not then exercisable
terminates at once, and any unexercised portion of this option which
has by then become exercisable shall be exercisable by the Executive
within three (3) months after she cease to be an employee (unless
cessation of employment results from the death of the Executive as
specifically provided for in subparagraph (E) hereof), provided
however, that in no event shall such option be exercisable after the
expiration of eight (8) years from the effective date hereof.
(E) In the event of the death of the Executive while an employee of the
Company (or within three (3) months after she ceases to be an
employee), this option may be exercised by the estate of the Executive
or by any person who hereafter acquires the right to exercise such
option by bequest or inheritance of by reason of the death of the
Executive, within the period of two (2) years after the date of death
or such shorter period as may then be required under the provision of
the United States Internal Revenue Code relating to restricted stock
options and in no event later than eight (8) years from the effective
date hereof,
(F) This Executive shall make no disposition (within the meaning of
"disposition" as defined in 421(D)(4) of the Internal Revenue Code of
1954) of any share or shares transferred to her pursuant to any
exercise of this option, within tow (2) years from the date this
option is granted nor within six (6) months after the transfer of such
shares or shares to her.
(G) Subject to the requirements for restricted stock options of the United
States Internal Revenue Code, as now in effect or as hereafter
amended-
In case the Company shall hereafter declare or pay to the
holders________
(H) This option shall be exercised by written notice or notices delivered
to the Company's principal place of business.
(I) Delivery of the certificates representing the shares of stock as to
which this option shall be exercised at any given time, shall be made
promptly after receipt of such notice by the Company against the
payment of the purchase price of the shares with respect to which the
option is exercised at such time,
Page 7 of 9
(J) The Executive, on behalf of herself, her legal representative and any
other person who may become entitled to act hereunder by reason of the
Executive's death, undertakes and agrees that, in conjunction with
each purchase of stock hereunder, the purchaser will deliver to the
Company her written representation that such shares are being
purchased with the then present intention of holding the same for
investment and not with a view to the distribution thereof.
(K) Nothing contained in this paragraph "13" is intended, or shall be
construed, to deprive the Executive of the full benefits of this
option for (_______) ________ shares in the event of the wrongful
discharge of the Executive or other breach of this Agreement by the
Company,
(L) The Company agrees that it now holds and will hold available a
sufficient number of shares of its par value stock to satisfy the
requirements of this option.
(M) Nothing contained in this paragraph "13" is intended, or shall be
construed, in any way to affect the restricted stock options
heretofore granted to the Executive, it being specifically understood
that the restricted stock option hereby granted to the Executive shall
be independently of, and in addition to, such restricted stock option
s heretofore granted by the Company to the Executive.
14. EXECUTIVE'S RIGHTS UNDER CERTAIN PLANS- The Company agrees that nothing
contained herein is intended to or shall be deemed to be granted to the
Executive in lieu of any rights and privileges which the Executive may be
entitled to as an employee of the Company under any retirement, pension,
insurance, hospitalization, or other plans which may now be in effect of
which may hereafter be adopted, it being understood that the Executive
shall have the same rights and privileges to participate in such plans or
benefits as any other employee.
15. SUCCESSORS, ETC. OF THE COMPANY- This Agreement shall inure to the benefit
of and be binding upon the company, its successors and assigns, including
without any person, partnership or corporation which may acquire all or
substantially all of the company's assets and business, or with or into
which the Company may be consolidated or merged, and this provision shall
apply in the event of any subsequent merger, consolidation or transfer, and
the Executive, his heirs, assigns, executors and personal representatives.
16. ENTIRE AGREEMENT- The parties hereto agree that this Agreement supersedes
any existing employment agreement between the Executive and the Company as
amended and extended and contains the entire understanding and agreement
between the parties and cannot be amended, modified or supplemented in any
respect, except by a subsequent written agreement entered into by both
parties hereto.
Page 8 of 9
17. EFFECTIVE DATE- The restricted stock option provided for in Paragraph "13"
hereof shall become effective as of the date of this agreement, provided,
however, that said restricted stock option shall be submitted to the
stockholders of the Company at their annual meeting, and in the event that
a majority of the stockholders present in person or by proxy at said
meeting shall disapprove said restricted stock option, then said restricted
stock option shall be of no force and effect. In the event of such
disapproval by stockholders the Executive shall have the right within 30
days after date of said annual meeting to cancel this agreement by written
notice to the Company.
18. APPLICABLE LAW- This agreement shall be construed according to the laws of
the Sate of Nevada.
IN WITNESS WHEREOF, the parties hereto have exercised this agreement the day and
year first above mentioned.
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------- -----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, President ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Corp. Sec.
Chartwell International, Inc. Chartwell International, Inc.
Dated: 3-22-95 Dated: 3/27/95
MINUTES OF THE BOARD OF DIRECTORS
CHARTWELL INTERNATINAL, INC.
(A NEVADA CORPORATION)
ACTION TAKEN WITHOUT MEETING
SEPTEMBER 1, 1999
Pursuant to Section 3.8 of the by-laws of Chartwell International, Inc., and
pursuant to Section 78.315 of the Nevada Revised Statues, the undersigned,
constituting a majority of the members of the Board of Directors of Chartwell
International, Inc., a Nevada corporation, ("the Company"), hereby consent to
a meeting as though said resolutions were adopted at a duly convened meeting
of said Board:
WHEREAS, the Company and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, its Chairman of the Board and
acting President had entered into an employment agreement dated ▇▇▇▇▇ ▇▇,
▇▇▇▇ (▇▇▇▇▇▇▇▇), as amended per the Board of Directors minutes of April 19,
1998 which provided for deferred compensation of $120,000 annually, and
WHEREAS, the Company Board of Directors authorized additional compensation to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ of $2,500 cash per month as Chair of the Board of Directors
as per its September 17, 1998 meeting, and
WHEREAS, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ has worked diligently at improving the Company's
operations, including extensive work of recruiting executive personnel,
raising financing, and securing acquisitions for its CBSA, Inc. (f/k/a
SportsStar Marketing, Inc. and NCRA, Inc.) subsidiary, and has not received
cash compensation for her efforts through July 31, 1999, and
WHEREAS, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ has indicated to the Company a willingness to forgive
any compensation under the above agreements for her efforts through July 31,
1999 in exchange for considerations which follow:
1. A re-affirmation of the March 10, 1995 compensation agreement and
Board compensation agreement effective beginning August 1, 1999.
2. The personal use of trade credits from barter exchanges, including
ITEX Corporation, BXI, Trade Bank International, and any other trade
barter company, for the period March 10, 1995 through the end of the
employment contract ( initially March 10, 2003).
3. The continued payments on her life insurance policy with New York Life
Insurance Co. through her employment period at $1,700 per month.
4. The continued payments on her family health insurance through her
employment period.
5. The conveyance to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ of a 7 1/2% interest in any
acquisition made by the Company through her employment period, but
excluding acquisitions made by CBSA.
6. The granting to ▇▇▇▇▇▇ ▇▇▇▇▇ a 5 year option at $.30/share (a recent
trading price) to acquire 500,000 shares of the Company's CBSA, Inc.
common stock.
7. The granting of an option to ▇▇▇▇▇▇ ▇▇▇▇▇ to forego paying $.30/share
cash upon exercise of the above stock option by surrendering the
equivalent of $150,000 of said stock at the market value of said
shares at the date of exercise of this option, and that ▇▇▇▇▇▇ ▇▇▇▇▇
be granted a similar option with respect to the other options on CBSA
stock currently held by her.
WHEREAS, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ has provided credit to the Company over this year
through the use of credit cards in her name, or in the name of the company
with her personal guarantee, in the current outstanding amount of
approximately $90,000, and the Company had made monthly payments on these
obligations.
WHEREAS, the Company is unable to currently pay off these credit obligations,
and ▇▇▇▇▇▇ ▇▇▇▇▇ has indicated a willingness to be continually contingently
liable for these obligations.
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇ wishes the Company to reaffirm its obligations for the
credit card debt and to continue to make payments on them until such
obligations are paid-off.
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇ has forgiven $137,461 interest on her notes due her
through July 31, 1998 and $88,567 interest accrued for the year ended July
31, 1999.
WHEREAS, ▇▇▇▇▇▇ ▇▇▇▇▇ has forgiven $37,000 principal balance on her note due
her as of July 31, 1999.
RESOLVED, the Company reaffirms its March 10, 1995 employment agreement and
its September 17, 1998 board compensation agreement with ▇▇▇▇▇▇ ▇▇▇▇▇
affective beginning August 1, 1999 and affirms the consideration listed in
one through seven above.
RESOLVED, the Company cancels the April 19, 1998 deferred compensation
amendment with ▇▇▇▇▇▇ ▇▇▇▇▇.
RESOLVED, the Company will continue to pay and be responsible for the credit
card obligations, until paid-off.
RESOLVED, the Company recognizes ▇▇▇▇▇▇ ▇▇▇▇▇' forgiveness of interest and
expresses its appreciation of same.
RESOLVED, the Company recognizes ▇▇▇▇▇▇ ▇▇▇▇▇' forgiveness of $37,000 debt as
of July 31, 1999 and expresses its appreciation of same.
IN WITNESS WHEREOF, the undersigned, constituting a majority of the Board of
Directors of the Company, have executed this written consent effective as of
the date first shown above.
ABSTAINS
-------------------------------------------
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Chair of the Board
-------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Member of the Board
-------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Member of the Board
-------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Jr. Member of the Board
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
SEP 07 1999
No. C8650-84
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, SECRETARY OF STATE
RESOLUTIONS ESTABLISHING TERMS AND PREFERENCES
OF PREFERRED SHARES OF
CHARTARTWELL INTERNATIONAL, INC.
A NEVADA CORPORATION
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, does hereby certify:
1. I am the duly elected Chairman of the Board and acting President of
Chartwell International, Inc., a Nevada corporation.
2. Pursuant to authority given by said corporation's Articles of
Incorporation, the Board of Directors of said corporation has duly adopted
the following recitals and resolutions:
WHEREAS, the Articles of Incorporation of this corporation provide for a
class of its authorized shares known as Preferred Shares, comprising Ten
Million (10,000,000) shares issuable from time to time in one or more series;
and
WHEREAS, the Board of Directors of this corporation is authorized to fix
the number of shares of any series of Preferred Shares and to determine the
designation of any such series. The Board of Directors is also authorized to
determine or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Preferred Shares
and, within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series, to increase or decrease (but not below the number of
shares of such series then outstanding) the number of shares of any such
series subsequent to the issue of shares of that series; and
WHEREAS, this corporation has authorized the designation of 150,000 of
such Preferred Shares as "Series B Preferred Stock" and it is the desire of
the Board of Directors of this corporation, pursuant to Its authority as
aforesaid, to reaffirm the rights, preferences, restrictions and other
matters relating to the said Series B Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does provide
for the issue of a series of Preferred Shares of the corporation consisting
of One Hundred Fifty Thousand (150,000) shares designated as "Series B
Preferred Stock" and does hereby fix the rights, preferences, restrictions
and other matters relating to said Series B Preferred Stock as follows:
(a) STATED VALUE
The stated value of the Series B Preferred Stock shall be $10.00 per share.
(b) DIVIDENDS
The holders of outstanding Series B Preferred Shares shall be entitled
to receive, out of funds at the time legally available
therefor, noncumulative dividends in the amount of 0% of the stated value in
year one, 2% at the end of year two of date of issuance, 3% at end of year
three, 4% at end of year four, 5% at end of year five, and 6% at end of year
six and each year thereafter as long as said shares are outstanding,before
any dividend is paid on Common Shares. No right shall accrue to holders of
Series B Preferred Shares by reason of at the fact that dividends on said
shares are not paid, nor shall any unpaid dividend bear or accrue interest.
Such noncumulative dividend shall be payable as determined by the Board of
Directors when and as declared by the Board of Directors.
(c) PREFERENCE ON LIQUIDATION
(1) In the event of any liquidation, dissolution or winding
up of the corporation, the holders of Series B Preferred Shares then
outstanding shall be entitled to be paid out of the assets of the corporation
available for distribution to its stockholders, whether from capital, surplus
or earnings, before any payment shall be made in respect of the corporation's
Common Shares or junior stock, an amount equal to Ten Dollars ($10.00) per
share less an amount equal to the dividends, if any, paid thereon pursuant to
subdivision (b) above. If, upon liquidation, dissolution or winding up of
the corporation, the assets of the corporation available for the distribution
to its shareholders shall be insufficient to pay the holders of the Series B
Preferred Shares an amount equal to Ten Dollars ($10.00) per share, less an
amount equal to the dividends, if any, declared thereon, the holders of the
Series B Preferred Shares shall share ratably in any distribution of assets
according to the respective amounts which would be payable in respect of the
shares held by them upon such distribution if all amounts payable on or with
respect to said shares were paid in full. After the holders of Series B
Preferred Shares have received an amount equal to Ten Dollars ($10.00) per
share less an amount equal to the dividends, if any, declared thereon, the
assets then remaining shall be distributed equally per share to the holders
of Series A and C Preferred Shares, and then any remaining assets to the
holders of Common Shares.
(2) A reorganization, consolidation or merger of the
corporation with or into any other corporation or corporations, or a sale of
all or substantially all of the assets of the corporation, shall not be
deemed to be a liquidation, dissolution or winding up of the corporation as
those terms are used in this subdivision (b) and, in the event of any such
reorganization, consolidation, merger of sale of assets, the Series B
Preferred Shares shall be entitled only to the rights provided in the plan of
reorganization of the Colorado Corporations Code.
(d) VOTING RIGHTS
The holders of the Preferred Shares and the holders of the Common
Shares issued and outstanding shall have and possess equal rights to notice
of shareholders' meetings, and identical voting rights and powers to vote
upon the election of directors or upon any other matter.
2
(e) CONVERSION OF SERIES B PREFERRED STOCK INTO COMMON STOCK
(1) Subject to the provisions of this subdivision (e),
the holder of record of any share or shares of Series B Preferred Stock shall
have the right, at his option, at any time commencing after the date of
issuance of said shares, to convert each said share of Series B Preferred
Stock into twenty fully paid and nonassessable share of Common Stock of the
Company.
(2) Any holder of a share or shares of Series B
Preferred Stock desiring to convert such Series B Preferred Stock into Common
Stock shall surrender the certificate or certificates representing the share
or shares of Series B Preferred Stock so to be converted duly endorsed to the
Company, or in blank, at the principal office of the Company, and shall give
written notice to the Company at said office that be elects to convert the
same, and setting forth the name or names (with the address or addresses) in
which the shares of Common Stock are to be issued.
(3) Conversion of Series B Preferred Stock shall be
subject to the following additional terms and provisions:
(A) As promptly as practicable after the surrender for
conversion of any Series B Preferred Stock, the Company shall
deliver or cause to be delivered at the principal office of the
Company (or such other place as may be designated by the
Company), to or upon the written order of the holder of such
Series B Preferred Stock, certificates representing the shares
of Common Stock issuable upon such conversion, issued in such
name or names as such holder may direct. Shares of the Series B
Preferred Stock shall be deemed to have been converted as of the
close of business on the date of the surrender of the Series B
Preferred Stock for conversion, as provided above, end the
rights of the holders of such Series B Preferred Stock shall
cease at such time, and the person or persons in whose name or
names the certificates for such shares are to be issued shall be
treated for all purposes as having become the record holder or
holders of such Common Stock at such time; provided, however,
that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the person
or persons in whose name or names the certificates for such
shares are to be issued as the record holder or holders thereof
for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open.
(B) In the event that the Company shall at any time
subdivide or combine in a greater or lesser number of shares the
outstanding shares of Common Stock, the number of shares of
Common Stock issuable upon conversion of the Series B Preferred
Stock shall be proportionately increased in the case of
subdivision or decreased in the case of a combination, effective
in either case at the close of business
3
on the date when such subdivision or combination shall become
effective.
(C) In the event that the Company shall be recapitalized,
consolidated with or merged into any other corporation, or shall
sell or convey to any other corporation all or substantially all
of its property as entirety, provision shall be made as part of
the terms of such recapitalization, consolidation, merger, sale
or conveyance so that any holder of Series B Preferred Stock may
thereafter receive in lieu of the Common Stock otherwise
issuable to him upon conversion of his Series B Preferred Stock,
but at the conversion ratio stated in this subdivision (b), the
same kind and amount of securities or assets as may be
distributable upon such recapitalization, consolidation, merger,
sale or conveyance, with respect to the Common Stock of the
Company.
(D) In the event that the Company shall at any time pay to
the holders of Common Stock a dividend in common Stock, the
number of shares of Common Stock issuable upon conversion of the
Series B Preferred Stock shall be proportionately increased,
effective at the close of business on the record date for
determination of the holders of Common Stock entitled to such
dividend.
(E) Such adjustments shall be made successively if more
than one event listed in subdivisions (e) (3) (B), (C) and (D)
hereof shall occur.
(F) No adjustment of the conversion ratio shall be made by
reason of
(i) the purchase, acquisition, redemption or
retirement by the company of any shares of the Common Stock
or any other class of the capital stock of the Company,
except as provided n subdivision (e) (3) (B); or
(ii) the issuance, other than as provided in
subdivisions (e) (3) (B) and (D), of any shares of Common
Stock of the Company, or of any securities convertible into
shares of Common Stock or other securities of the Company,
or of any rights, warrants or options to subscribe for or
purchase shares of the Common Stock or other securities of
the Company, or of any other securities of the Company,
provided that in the event the Company offers any of its
securities, or any rights, warrants or options to subscribe
for or purchase any of its securities, to the holders of
its Common Stock pursuant to any preemptive or preferential
rights granted to holders of Common Stock
4
by the Certificate of Incorporation of the Company, or
pursuant to any similar rights that may be granted to such
holders of Common Stock by the Board of Directors of the
Company, at least 20 days prior to the expiration of any
such offer the Company shall mail written notice of such
offer to the holders of the Series B Preferred stock then
of record; or
(iii) any offer by the Company to redeem or acquire
shares of its Common Stock by paying or exchanging therefor
stock of another corporation or the carrying out by the
Company of the transactions contemplated by such offer,
provided that at least 20 days prior to the expiration of
any such offer the Company shall mail written notice of
such offer to the holders of the Series B Preferred Stock
then of record.
(G) The Company shall at all times reserve and keep
available solely for the purpose of issue upon conversion of
Series B Preferred Stock, as herein provided, such number of
shares of Common Stock as shall be issuable upon the conversion
of all outstanding Series B Preferred Stock.
(4) The issuance of certificates for shares of Common
Stock upon conversion of the Series B Preferred Stock shall be made without
charge for any tax in respect of such issuance. However, if any certificate
is to be issued in a name other than that of the holder of record of the
Series B Preferred Stock so converted, the person or persons requesting the
issuance thereof shall pay to the Company the amount of any tax which may be
payable in respect of any transfer involved in such issuance, or shall
establish to the satisfaction of the Company that such tax has been paid or
is not due and payable.
(f) CALL PROVISIONS
Said Series B Preferred Stock is callable by the Corporation at
110% of stated value with 15 days written notice to the holders of the
preferred stock; said holders may in turn give the Corporation its notice to
convert said shares into the Common Stock of the Corporation in accordance
with subdivision (e) above.
RESOLVED FURTHER, that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the Chairman of the Board and
acting President of this corporation, is and hereby is, authorized and
directed to execute, acknowledge, file and record a certificate evidencing
the adoption of these resolutions in accordance with the foregoing
resolutions and the provisions of Nevada law.
IN WITNESS WHEREOF, the undersigned have executed this certificate on
September 3, 1999.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President/Secretary
5
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
SEP 07 1999
No. C8650-84
/s/ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, SECRETARY OF STATE
RESOLUTIONS ESTABLISHING TERMS AND PREFERENCES
OF PREFERRED SHARES OF
CHARTARTWELL INTERNATIONAL, INC.
A NEVADA CORPORATION
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, does hereby certify:
1. I am the duly elected Chairman of the Board and acting
President of Chartwell International, Inc., a Nevada corporation.
2. Pursuant to authority given by said corporation's Articles of
Incorporation, the Board of Directors of said corporation has duly adopted
the following recitals and resolutions:
WHEREAS, the Articles of Incorporation of this corporation provide for a
class of its authorized shares known as Preferred Shares, comprising Ten
Million (10,000,000) shares issuable from time to time in one or more series;
and
WHEREAS, the Board of Directors of this corporation is authorized to fix
the number of shares of any series of Preferred Shares and to determine the
designation of any such series. The Board of Directors is also authorized to
determine or alter the rights, preferences, privileges, and restrictions
granted to or imposed upon any wholly unissued series of Preferred Shares
and, within the limits and restrictions stated in any resolution or
resolutions of the Board of Directors originally fixing the number of shares
constituting any series, to increase or decrease (but not below the number of
shares of such series then outstanding) the number of shares of any such
series subsequent to the issue of shares of that series; and
WHEREAS, this corporation has authorized the designation of 150,000 of
such Preferred Shares as "Series C Preferred Stock" and it is the desire of
the Board of Directors of this corporation, pursuant to Its authority as
aforesaid, to reaffirm the rights, preferences, restrictions and other
matters relating to the said Series C Preferred Stock;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does provide
for the issue of a series of Preferred Shares of the corporation consisting
of Three Hundred Thousand (300,000) shares designated as "Series C Preferred
Stock" and does hereby fix the rights, preferences, restrictions and other
matters relating to said Series C Preferred Stock as follows:
(a) STATED VALUE
The stated value of the Series C Preferred Stock shall be
$10.00 per share.
(b) DIVIDENDS
The holders of outstanding Series C Convertible Preferred
Stock shall be entitled to receive out of funds at the time legally
available therefor noncumulative dividends, PARI PASSU with all other series
or shares of preferred stock, before any dividend is paid on Common Shares.
No right shall accrue to holders of Series C Convertible Preferred Stock by
reason of the fact that dividends on said shares are not declared, nor shall
any undeclared or unpaid divined bear or accrue interest. Such noncumulative
dividends shall be payable as determined by the Board of Directors when and
as declared by the Board of Directors. After noncumulative dividends on the
Series C Convertible Preferred Stock shall have been declared and paid or set
apart, then, if the Board of Directors shall elect to declare and pay
additional dividends out of funds legally available therefor, such additional
dividends shall be declared and paid in equal amounts per share to the
holders of Common Shares.
(c) PREFERENCE ON LIQUIDATION
(1) In the event of any liquidation, dissolution or winding
up of the corporation, the holders of Series C Convertible Preferred Stock
then outstanding shall be entitled to be paid out of the assets of this
corporation available for distribution to its stockholders PARI PASSU with
all other series or shares of preferred stock, whether from capital, surplus
or earnings, before any payment shall be made in respect of the corporation's
Common Shares or junior stock, an amount equal to Ten Dollars ($10.00) per
share. If, upon liquidation, dissolution or winding up of this corporation,
the assets of the corporation available for the distribution to its
shareholders shall be insufficient to pay the holders of the Series C
Convertible Preferred Stock an amount equal to Ten Dollars ($10.00) per
share, the holders of the Series C Convertible Preferred Stock shall share
ratably in any distribution of assets according to the respective amounts
which would be payable in respect of the shares held by them upon such
distribution if all amounts payable on or with respect to said shares were
paid in full. After the holders of Series C Convertible Preferred Stock have
received an amount equal to Ten Dollars ($10.00) per share the assets then
remaining shall be distributed equally per share to the holders of Common
Shares and junior stock.
(2) A reorganization, consolidation or merger of the
corporation with or into any other corporation or corporations, or a sale of
all or substantially all of the assets of the corporation, shall not be
deemed to be a liquidation, dissolution or winding up of the corporation as
those terms are used in this subdivision (b) and, in the event of any such
reorganization, consolidation, merger of sale of assets, the Series C
Preferred Shares shall be entitled only to the rights provided in the plan of
reorganization of the Colorado Corporations Code.
(d) VOTING RIGHTS
The holders of the Preferred Shares and the holders of the Common
Shares issued and outstanding shall have and possess equal rights to notice
of shareholders' meetings, and identical voting rights and powers to vote
upon the election of directors or upon any other matter.
2
(e) CONVERSION OF SERIES C PREFERRED STOCK INTO COMMON STOCK
(1) Subject to the provisions of this subdivision (e), the
holder of record of any share or shares of Series C Preferred Stock shall
have the right, at his option, at any time commencing 18 months after the
date of issuance of said shares, to convert each said share of Series C
Preferred Stock into ten fully paid and nonassessable share of Common Stock
of the Company.
(2) Any holder of a share or shares of Series C Preferred
Stock desiring to convert such Series C Preferred Stock into Common Stock
shall surrender the certificate or certificates representing the share or
shares of Series C Preferred Stock so to be converted duly endorsed to the
Company, or in blank, at the principal office of the Company, and shall give
written notice to the Company at said office that be elects to convert the
same, and setting forth the name or names (with the address or addresses) in
which the shares of Common Stock are to be issued.
(3) Conversion of Series C Preferred Stock shall be subject
to the following additional terms and provisions:
(A) As promptly as practicable after the surrender for
conversion of any Series C Preferred Stock, the Company shall deliver
or cause to be delivered at the principal office of the Company (or
such other place as may be designated by the Company), to or upon the
written order of the holder of such Series C Preferred Stock,
certificates representing the shares of Common Stock issuable upon
such conversion, issued in such name or names as such holder may
direct. Shares of the Series C Preferred Stock shall be deemed to
have been converted as of the close of business on the date of the
surrender of the Series C Preferred Stock for conversion, as provided
above, end the rights of the holders of such Series C Preferred Stock
shall cease at such time, and the person or persons in whose name or
names the certificates for such shares are to be issued shall be
treated for all purposes as having become the record holder or holders
of such Common Stock at such time; provided, however, that any such
surrender on any date when the stock transfer books of the Company
shall be closed shall constitute the person or persons in whose name
or names the certificates for such shares are to be issued as the
record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books
are open.
(B) In the event that the Company shall at any time subdivide or
combine in a greater or lesser number of shares the outstanding shares
of Common Stock, the number of shares of Common Stock issuable upon
conversion of the Series C Preferred Stock shall be proportionately
increased in the case of subdivision or decreased in the case of a
combination, effective in either case at the close of business
3
on the date when such subdivision or combination shall become
effective.
(C) In the event that the Company shall be recapitalized,
consolidated with or merged into any other corporation, or shall sell
or convey to any other corporation all or substantially all of its
property as entirety, provision shall be made as part of the terms of
such recapitalization, consolidation, merger, sale or conveyance so
that any holder of Series C Preferred Stock may thereafter receive in
lieu of the Common Stock otherwise issuable to him upon conversion of
his Series C Preferred Stock, but at the conversion ratio stated in
this subdivision (b), the same kind and amount of securities or assets
as may be distributable upon such recapitalization, consolidation,
merger, sale or conveyance, with respect to the Common Stock of the
Company.
(D) In the event that the Company shall at any time pay to the
holders of Common Stock a dividend in common Stock, the number of
shares of Common Stock issuable upon conversion of the Series C
Preferred Stock shall be proportionately increased, effective at the
close of business on the record date for determination of the holders
of Common Stock entitled to such dividend.
(E) Such adjustments shall be made successively if more than one
event listed in subdivisions (e) (3) (B), (C) and (D) hereof shall
occur.
(F) No adjustment of the conversion ratio shall be made by
reason of
(i) the purchase, acquisition, redemption or retirement
by the company of any shares of the Common Stock or any other
class of the capital stock of the Company, except as provided n
subdivision (e) (3) (B); or
(ii) the issuance, other than as provided in subdivisions
(e) (3) (B) and (D), of any shares of Common Stock of the
Company, or of any securities convertible into shares of Common
Stock or other securities of the Company, or of any rights,
warrants or options to subscribe for or purchase shares of the
Common Stock or other securities of the Company, or of any other
securities of the Company, provided that in the event the Company
offers any of its securities, or any rights, warrants or options
to subscribe for or purchase any of its securities, to the
holders of its Common Stock pursuant to any preemptive or
preferential rights granted to holders of Common Stock
4
by the Certificate of Incorporation of the Company, or pursuant
to any similar rights that may be granted to such holders of
Common Stock by the Board of Directors of the Company, at least
20 days prior to the expiration of any such offer the Company
shall mail written notice of such offer to the holders of the
Series C Preferred stock then of record; or
(iii) any offer by the Company to redeem or acquire
shares of its Common Stock by paying or exchanging therefor stock
of another corporation or the carrying out by the Company of the
transactions contemplated by such offer, provided that at least
20 days prior to the expiration of any such offer the Company
shall mail written notice of such offer to the holders of the
Series C Preferred Stock then of record.
(G) The Company shall at all times reserve and keep available
solely for the purpose of issue upon conversion of Series C Preferred
Stock, as herein provided, such number of shares of Common Stock as
shall be issuable upon the conversion of all outstanding Series C
Preferred Stock.
(4) The issuance of certificates for shares of Common Stock
upon conversion of the Series C Preferred Stock shall be made without charge
for any tax in respect of such issuance. However, if any certificate is to
be issued in a name other than that of the holder of record of the Series C
Preferred Stock so converted, the person or persons requesting the issuance
thereof shall pay to the Company the amount of any tax which may be payable
in respect of any transfer involved in such issuance, or shall establish to
the satisfaction of the Company that such tax has been paid or is not due and
payable.
RESOLVED FURTHER, that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, the Chairman of the Board and
acting President of this corporation, is and hereby is, authorized and
directed to execute, acknowledge, file and record a certificate evidencing
the adoption of these resolutions in accordance with the foregoing
resolutions and the provisions of Nevada law.
IN WITNESS WHEREOF, the undersigned have executed this certificate on
September 3, 1999.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President/Secretary
5