DESIGNATIONS, PREFERENCES AND RIGHTS
OF SERIES A PREFERRED STOCK
The Articles of Incorporation of NUVEL HOLDINGS, INC., a Florida corporation (the "Company"), provide that the Company is authorized to issue 15,000,000 shares of preferred stock with a par value of $.001 per share. Pursuant to the authority conferred upon the Board of Directors by the Articles of Incorporation and Section 607.0602 of the Florida Statutes, the Board of Directors has adopted resolutions establishing a series of the authorized preferred stock of the Company with par value of $.001 per share, which series shall be designated as “Series A Preferred Stock” and which will consist of 7,150,000 shares and will have powers, preferences, rights, qualifications, limitations and restrictions
thereof, as follows:
1. Definitions. For the purposes hereof, the following definitions shall apply:
1.1 “Available Funds and Assets” has the meaning set forth in Section 3 hereof.
1.2 “Board” means the Board of Directors of the Company.
1.3 “Certificate” means this Certificate of Designations, Preferences and Rights of Series A Preferred Stock.
1.4 “Common Stock" means the Company's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.
1.5 “Company” means Nuvel Holdings, Inc., formerly known as Harmony Metals, Inc., a Florida corporation.
1.6 “Conversion Price” shall mean $0.70 per share.
1.7 “Original Issue Date” means the date on which the first share of Series A Preferred is issued by the Company.
1.8 “Original Purchase Price” shall mean $0.70 per share.
1.9 “Securities Act” means the Securities Act of 1933, as amended.
1.10 “Series A Preferred” means the Series A Preferred Stock of the Company.
1.11 “Subscription Agreement” means the subscription agreement between the Company and each holder of shares of Series A Preferred.
1.12 “Trading Day” means a day on which the Common Stock is traded on a Trading Market.
1.13 “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 New York Stock Exchange, the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTC Bulletin Board, or the NYSE Euronext.
1.14 “VWAP” shall mean the volume weighted average price of the Common Stock during any trading day as reported by or based on information provided by Bloomberg LP or other reputable reporting service reasonably acceptable to the Company.
1.15 “Warrant” shall mean a warrant to purchase 50% of the number of shares of Common Stock issuable upon the conversion of the Series A Preferred, substantially in the form of the common stock purchase warrant annexed to the Subscription Agreement as Exhibit B.
2. Dividends and Distributions. The holders of the Series A Preferred shall be entitled to cumulative dividends in preference to any dividends on the Common Stock at the rate of 8% of the Original Purchase Price per annum compounded daily. Dividends shall begin to accrue on the date of issuance of the Series A Preferred Stock and shall be computed on the basis of a 360-day year consisting of twelve 30-day months and shall be payable upon the first anniversary from the issuance of the Series A Preferred and semi-annually thereafter in arrears. If a dividend
date is not a business day, then the dividend shall be due and payable on the business day immediately following such dividend date. Dividends shall be payable in cash upon the first anniversary of the issuance of Series A Preferred and thereafter shall be payable in shares of Common Stock ("Dividend Shares") or, at the option of the Company, in cash, provided that the dividends which accrued during any period shall be payable in cash. Dividends paid in Dividend Shares shall be paid in a number of fully paid and nonassessable shares (rounded up to the nearest whole share) of Common Stock equal to the quotient of (i) the amount of interest payable divided by the average of VWAP for each day during the period commencing twenty (20) days preceding but not including the Dividend Date. If the
Company defaults on its obligations to pay dividends as set forth herein and fails to cure such default within five (5) business days of its occurence, the rate of the dividends of the Series A Preferred shall increase to 18% retroactive to the Original Issuance Date. In no event shall any dividends to be paid under the Series A Preferred exceed 20% or the maximum rate permitted by law.
3 Liquidation Rights. In the event of any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the funds and assets of the Company that may be legally distributed to the Company’s stockholders (the “Available Funds and Assets”) shall be distributed to the Company’s stockholders in the following manner:
3.1 Series A Preferred. First, the holders of Series A Preferred shall be entitled to receive, prior and in preference to the holders of Common Stock, an amount per share of Series A Preferred equal the sum of (i) two (2) times the Original Purchase Price and (ii) any declared and unpaid dividends, which shall be paid in cash (the “Series A Liquidation Preference”). If the Available Funds and Assets distributed to the holders of the Series A Preferred are insufficient to permit the payment
to such holders of the full Series A Liquidation Preference, then the Available Funds and Assets shall be distributed to the holders of the Series A Preferre