-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, RH/FqhkqZNr3Hd/jlt/DfEnTlzSwvXrEr67oerkvy4vqKKIwl9g49JEq9boWnv2X 1ZUL2F+ZuHy2TZXVdSaG3A== /in/edgar/work/0001116502-00-000190/0001116502-00-000190.txt : 20001013 0001116502-00-000190.hdr.sgml : 20001013 ACCESSION NUMBER: 0001116502-00-000190 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20001012 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: INTERNATIONAL COSMETICS MARKETING CO CENTRAL INDEX KEY: 0001097339 STANDARD INDUSTRIAL CLASSIFICATION: [9995 ] IRS NUMBER: 650598868 STATE OF INCORPORATION: FL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-59721 FILM NUMBER: 739127 BUSINESS ADDRESS: STREET 1: 6501 N W PARK OF COMMERCE BLVD STREET 2: SUITE 205 CITY: BOCA RATON STATE: FL ZIP: 33487 BUSINESS PHONE: 5619998878 MAIL ADDRESS: STREET 1: 6501 N W PARK OF COMMERCE BLVD STREET 2: SUITE 205 CITY: BOCA RATON STATE: FL ZIP: 33487 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: PRONK NICO P CENTRAL INDEX KEY: 0001126170 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: C/O NOBLE FINANCIAL GROUP STREET 2: 1801 CLINT MOORE RD #110 CITY: BOCA RATON STATE: FL ZIP: 33467 BUSINESS PHONE: 5619944741 MAIL ADDRESS: STREET 1: C/O NOBLE FINANCIAL GROUP STREET 2: 1801 CLINT MOORE RD #110 CITY: BOCA RATON STATE: FL ZIP: 33467 SC 13D 1 0001.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. )* ------ International Cosmetics Marketing Co. ------------------------------------- (Name of Issuer) Common Stock (par value $.001) ------------------------------ (Title of Class of Securities) 45938M103 --------- (CUSIP Number) Nico P. Pronk 1801 Clint Moore Road, Suite 110, Boca Raton, Florida 33487 (561) 994-1191 ----------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) September 27, 2000 ------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Check the following box if a fee is being paid with the statement [ ]. (A fee is not required only if the reporting person: (1) has a previous statement on file reporting beneficial ownership of more than five percent of the class of securities described in Item 1; and (2) has filed no amendment subsequent thereto reporting beneficial ownership of five percent or less of such class). (See Rule 13d-7.) Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes.) SCHEDULE 13D CUSIP No. 45938M103 Page 2 of 6 Pages - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Nico P. Pronk - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|_| (b)|X| - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* PF - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) |_| - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION The Netherlands - -------------------------------------------------------------------------------- Number of 7 SOLE VOTING POWER ** Shares 200,000 shares of Series A Beneficially Convertible Preferred Stock and Owned by 191,875 shares of Common Stock Each Reporting 8 SHARED VOTING POWER Person 0 With 9 SOLE DISPOSITIVE POWER 200,000 shares of Series A Convertible Preferred Stock and 191,875 shares of Common Stock 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 200,000 shares of Series A Convertible Preferred Stock 191,875 shares of Common Stock - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 200,000 shares of Series A Convertible Preferred Stock represents 90% of the issued and outstanding Series A Convertible Preferred Stock 391,875 shares of Common Stock equals 8.9% of the issued and outstanding Common Stock*** - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - -------------------------------------------------------------------------------- ** Shares of Series A Convertible Preferred Stock are convertible into shares of the common stock of International Cosmetics Marketing Co. at a conversion price per share of $2.50 (subject to adjustment). Each share of Series A Convertible Preferred Stock entitles Mr. Pronk to 75 votes for each vote per share of the Company's common stock on all matters submitted to the holders of the Company's common stock for a vote. See response to Item 3 and Item 5. *** Includes 200,000 shares of Common Stock issuable upon the conversion of 200,000 shares of Series A Convertible Preferred Stock. See response to Item 3 and Item 5. Does not include 17,000 shares owned by Noble International Investments, Inc., a corporation partially controlled by Mr. Pronk and for which Mr. Pronk disclaims beneficial ownership. CUSIP No.45938M103 Page 3 of 6 Pages ATTACHMENT ---------- Item 1. Security and Issuer This report relates to 200,000 shares of International Cosmetics Marketing Co. (the "Company") Series A Convertible Preferred Stock which is convertible into the Company's common stock, par value $.001, and 191,875 shares of the Company's common stock. The address of the Company's principal office is 6501 N.W. Park of Commerce Blvd., Suite 205, Boca Raton, Florida 33487. Item 2. Identity and Background (a) Name: Nico P. Pronk (b) Principal Business: Mr. Pronk is the principal of Noble International Investments, Inc., an NASD licensed broker-dealer and Noble Capital Management, Inc., an investment advisor registered with the Securities and Exchange Commission. (c) Address of Principal Business: 1801 Clint Moore Road, Suite 110, Boca Raton, Florida 33487. (d) During the last five years Mr. Pronk has not been convicted in a criminal proceeding. (e) During the last five years Mr. Pronk has not been a party to a civil proceeding of a judicial or administrative body. (f) Mr. Pronk is a citizen of The Netherlands. Item 3. Source and Amount of Funds or Other Consideration On September 27, 2000, Mr. Pronk entered into a Stock Purchase Agreement with the Company pursuant to which Mr. Pronk purchased 200,000 shares of Series A Convertible Preferred Stock of the Company with personal funds for a purchase price of $500,000.00. Two entities unrelated to Mr. Pronk also purchased an aggregate of 21,458 shares of Series A Convertible Preferred Stock of the Company pursuant to the Stock Purchase Agreement. Mr. Pronk disclaims beneficial ownership of the shares of Series A Convertible Preferred Stock purchased by the two unrelated entities. Each share of Series A Convertible Preferred Stock entitles Mr. Pronk to 75 votes for each vote per share of the Company's common stock on all matters submitted to the holders of the Company's common stock for a vote which gives Mr. Pronk voting power in excess of 70% of the issued and outstanding common stock of the Company. Shares of the Series A Convertible Preferred Stock are convertible into shares of the Company's common stock at $2.50 per share, subject to adjustment in certain circumstances. Any shares of the Series A Convertible Preferred Stock that are not converted prior to September 30, 2005, may be redeemed by the Company at a price of $7.50 per share. In the event of a liquidation, dissolution or winding up of the Company, the holders of the Series A Convertible Preferred Stock are entitled to receive a liquidation preference of $2.50 per share of Series A Convertible Preferred Stock prior to any distributions to the holders of the Company's common stock. The consent of the holders of at least a majority of the voting power of the outstanding Series A Convertible Preferred Stock is required prior to the Company entering into material transaction, sale or issuance of any capital stock of the Company, amending its articles of incorporation or bylaws, declaring or paying dividends on any class of stock and taking certain other activities. Item 4. Purpose of the Transaction Mr. Pronk purchased the Series A Convertible Preferred Stock for the purposes of making an investment in the Company to give the Company working capital and to give Mr. Pronk voting control of the Company. Each share of Series A Convertible Preferred Stock entitles Mr. Pronk to 75 votes for each vote per share of the Company's common stock on all matters on which the holders of the Company's common stock are entitled to vote. The Series A Convertible Preferred Stock also entitles the holders thereof to vote as a separate class in CUSIP No.45938M103 Page 4 of 6 Pages certain circumstances. As of the date of this filing and except as disclosed herein, Mr. Pronk does not have definitive intentions to cause the Company to take any actions which relate to or would result in: (a) The acquisition by any person of additional securities of the issuer, or the disposition of securities of the Company; (b) An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or any of its subsidiaries; (c) A sale or transfer of a material amount of assets of the Company or of any of its subsidiaries; (d) Any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) Any material change in the present capitalization or dividend policy of the Company; (f) Any other material change in the Company's business or corporate structure; (g) Changes in the Company's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any person; (h) Causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) A class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934; or (j) Any action similar to any of those enumerated above. Mr. Pronk will however continue to evaluate his investment in the Company based on various factors including the Company's financial condition and results of operations and effectiveness of the Company's current management to achieve positive results in connection therewith. Based on such evaluation, and in an effort to maximize long term value of the Company, Mr. Pronk may, in addition to any other action, (i) elect himself to the Company's Board of Directors, (ii) increase the size of the Company's Board of Directors, (iii) recruit additional members for the Company's Board of Directors (including outside directors) or management team and (iv) remove members of the Company's current Board of Directors. Item 5. Interest in Securities of the Issuer In January, 1997, the Mr. Pronk was issued 225,000 shares of the Company's common stock as founder's stock. According to the Company's amended Quarterly Report for the period ended March 31, 2000, there were 4,766,730 shares of the Company's common stock outstanding and no shares of any class or series of preferred stock of the Company then outstanding. Because each share of Series A Convertible Preferred Stock entitles Mr. Pronk to 75 votes for each vote per share of the Company's common stock on all matters submitted to the holders of the Company's common stock for a vote, Mr. Pronk has the right to 15,000,000 votes (or 70% of the total vote) on all such matters (not including Mr. Pronk's ability to vote the additional 191,875 shares of the Company's common stock he beneficially owns) which gives Mr. Pronk the ability to control the outcome of all matter submitted to a vote of the Company's shareholders. Based on the current conversion price, the shares of Series A Convertible Preferred Stock owned by Mr. Pronk would be convertible into 200,000 shares of the Company's common stock, which together with the 191,875 shares of the Company's common stock beneficially owned by Mr. Pronk would equal 8.9% of the Company issued and outstanding common stock. CUSIP No.45938M103 Page 5 of 6 Pages Mr. Pronk has the sole power to vote and to dispose of his 200,000 shares of Series A Convertible Preferred Stock and 191,875 shares of the Company's common stock. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer Except as described in this statement, there are no contracts, arrangements, understandings or relationships between Mr. Pronk and any other person with respect to any securities of the Issuer. Item 7. Material to be Filed as Exhibits Exhibit 1 Stock Purchase Agreement dated September 27, 2000 between International Cosmetics Marketing Co., Nico P. Pronk and two unrelated purchasers. Exhibit 2 Articles of Amendment to the Articles of Incorporation of International Cosmetics Marketing Co. authorizing Series A Convertible Preferred Stock. CUSIP No.45938M103 Page 6 of 6 Pages SIGNATURE After reasonable inquiry and to the best of the undersigned's knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct. Date: October 12, 2000 /s/ Nico P. Pronk --- ----------------------------- Nico P. Pronk, individually EX-1 2 0002.txt STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT This Stock Purchase Agreement (the "Agreement") is entered into as of September 27, 2000, by and between International Cosmetics Marketing Co., a Florida corporation (the "Company") located at 6501 N.W. Park of Commerce Blvd., Suite 205, Boca Raton, FL 33487 and the purchasers whose names and signatures appear on the signature page of this Agreement (collectively the "Purchasers"). RECITALS Purchasers desire to purchase, and the Company desires to sell, upon the terms and conditions stated in this Agreement, shares of Series A Convertible Preferred Stock of the Company having the rights set forth in the Certificate of Designations, Preferences and Rights attached hereto as Exhibit A (the "Preferred Stock"), which shall be convertible into shares of the Company's common stock, par value $.001 (the "Common Stock"). The shares of Common Stock issuable upon conversion of or otherwise pursuant to the Preferred Stock are referred to herein as the "Conversion Shares." The Preferred Stock and the Conversion Shares are sometimes collectively referred to herein as the "Securities." NOW, THEREFORE, in consideration of their respective promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Purchasers hereby agree as follows: ARTICLE I PURCHASE AND SALE OF SECURITIES 1.1 Purchase of Preferred Stock. The Company shall authorize the issuance and sale to Purchasers of an aggregate of up to 200,000 shares of the Preferred Stock on or before the Closing (as defined below). The Company shall adopt and file with the Secretary of State of Florida on or before the Closing the all necessary documents to authorize and create the Preferred Stock. Subject to the terms and conditions of this Agreement, each Purchaser agrees, severally and not jointly, to purchase at the Closing and the Company agrees to sell and issue to each Purchaser at the Closing, up to that number of shares of the Preferred Stock set forth opposite each Purchaser's name on Exhibit B hereto at a price of $2.50 per share of Preferred Stock. The sale of the Preferred Stock to each Purchaser shall constitute a separate sale hereunder and the Company's agreement with each of the Purchasers shall be a separate agreement. 1.2 Closing. Subject to the satisfaction of the conditions set forth in this Agreement, closings of the separate purchases and sales of the Preferred Stock shall take place on one or more occasions at such times and at such places as mutually agreed to by the Company and the Purchasers (each a "Closing"). At each Closing the Company shall deliver to each Purchaser a certificate representing the Preferred Stock that such Purchaser is purchasing against payment of the purchase price therefor by check, wire transfer, cancellation of indebtedness or any combination thereof. If at any Closing any of the conditions set forth in this Agreement shall not have been fulfilled or accurate, each Purchaser shall, at its election, be relieved of all of its obligations under this Agreement without thereby waiving any other right such Purchaser may have by reason of such failure or such non- fulfillment. ARTICLE II PURCHASER'S REPRESENTATIONS AND WARRANTIES Purchasers, severally but not jointly, represent and warrant to the Company as set forth in this Article II. Purchasers do not make any other representations or warranties, express or implied, to the Company in connection with the transactions contemplated hereby and any and all prior representations and warranties, if any, which may have been made by each Purchaser to the Company in connection with the transactions contemplated hereby shall be deemed to have been merged in this Agreement and any such prior representations and warranties, if any, shall not survive the execution and delivery of this Agreement. 2.1 Requisite Power And Authority. Each Purchaser has all necessary power and authority under all applicable provisions of law to execute and deliver this Agreement and to carry out the provisions of this Agreement. All action on each Purchaser's part required for the execution and delivery of this Agreement has been or will be effectively taken prior to any Closing. This Agreement, when executed and delivered, will be a valid and binding obligation of each Purchaser, enforceable in accordance with its terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights; and (b) general principles of equity that restrict the availability of equitable remedies. 2.2 Consents. All consents, approvals, orders or authorizations on the part of each Purchaser required in connection with the consummation of the transactions contemplated in this Agreement have been or shall have been obtained prior to and be effective as of the Closing. 2.3 Investment Representations. Each Purchaser understands that the Securities have not been registered under the Securities Act of 1933, as amended (the "Securities Act"). Purchaser also understand that the Securities are being offered and sold pursuant to an exemption from registration contained in the Securities Act, based in part upon each Purchaser's representations contained in the Agreement. Each Purchaser hereby represents and warrants that: (a) Purchaser is an "accredited investor" within the meaning of Rule 501(a) of Regulation D under the Securities Act, (b) Purchaser must bear the economic risk of this investment indefinitely unless such Securities are registered pursuant to the Securities Act, or an exemption from registration is available. Purchaser also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow Purchaser to transfer all or any portion of such Securities under the circumstances, in the amounts or at the times Purchaser might propose, (c) Purchaser is acquiring such shares for Purchaser's own account for investment only, and not with a view towards their distribution within the meaning of the Securities Act, and (d) Purchaser has had an opportunity to discuss the Company's business, management and financial 2 affairs with directors, officers and management of the Company and has had the opportunity to review the Company's operations and facilities. 2.4 Legends. Each certificate representing the Securities may be endorsed with the following legends: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND ARE "RESTRICTED SECURITIES" AS DEFINED IN RULE 144 PROMULGATED UNDER THE ACT. THE SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE OR OTHERWISE DISTRIBUTED EXCEPT (I) IN CONJUNCTION WITH AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER THE ACT; OR (II) IN COMPLIANCE WITH RULE 144; OR (III) PURSUANT TO AN OPINION OF COUNSEL TO THE CORPORATION THAT SUCH REGISTRATION OR COMPLIANCE IS NOT REQUIRED AS TO SUCH SALE, OFFER OR DISTRIBUTION." 2.5 Removal of Legend and Transfer Restrictions. Any legend endorsed on a certificate pursuant to subsection 2.4 and any stop transfer instructions with respect to such Securities shall be removed and the Company shall issue a certificate without such legend to the holder thereof if such legend may be properly removed under the terms of Rule 144 promulgated under the Securities Act or if such holder provides the Company with an opinion of counsel for such holder, reasonably satisfactory to legal counsel for the Company, to the effect that a sale, transfer or assignment of such Securities may be made without registration. ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY As a material inducement for each Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, the Company represents and warrants to each Purchaser that as of the date hereof and as of the date of any Closing: 3.1 Organization and Qualification. The Company is a corporation duly organized, validity existing and in good standing (except with respect to any delinquent tax payments) under the laws of the jurisdiction in which it is incorporated, and has the requisite corporate power and authority to own its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing (except with respect to any delinquent tax payments) in every jurisdiction where the failure to so qualify would have a Material Adverse Effect. "Material Adverse Effect" means any material adverse effect on either (i) the business, operations, properties, financial condition, operating results or prospects of the Company and its subsidiaries, taken as a whole on a consolidated basis; or (ii) the transactions contemplated hereby. The representations in this subsection 3.1 shall not apply or relate to the Company's obligations to register its direct marketing program in any state. 3 3.2 Authorization and Enforcement. (a) The Company has the requisite corporate power and authority to enter into and perform this Agreement and to issue and sell, perform its obligations with respect to the Securities and this Agreement; (b) the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby (including without limitation the issuance of the Preferred Stock and the reservation for issuance and issuance of the Conversion Shares) have been duly authorized by all necessary corporate action and no further consent or authorization of the Company, its board of directors, or its shareholders or any other person, body or agency is required with respect to any of the transactions contemplated hereby or thereby; (c) this Agreement has been duly executed and delivered by the Company; and (d) this Agreement constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or other similar laws affecting creditors' rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance. 3.3 Issuance of Securities. The shares of Preferred Stock are duly authorized and reserved for issuance, and, upon conversion thereof the Conversion Shares, will be validly issued, fully paid and non-assessable, and free from all taxes, liens, claims and encumbrances and will not be subject to preemptive rights or other similar rights of shareholders of the Company which preemptive rights or other similar rights have not been waived prior to the execution hereof. 3.4 Acknowledgment Regarding Purchasers' Purchase of the Securities. The Company represents to each Purchaser that the Company's decision to enter into this Agreement and the transactions contemplated hereby has been based solely on an independent evaluation by the Company and its representatives. ARTICLE IV COVENANTS 4.1 Reporting Status. Subject to the completion of the Company's audit for the fiscal year ended June 30, 2000, so long as any Purchaser beneficially owns any of the Securities, the Company shall timely file all reports required to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Company shall not terminate its status as an issuer required to file reports under the Exchange Act even if the Exchange Act or the rules and regulations thereunder would permit such termination. 4.2 Information. The Company agrees to promptly provide the Purchasers with any information with respect to the Company, its properties, or its business as such Purchaser may reasonably request; provided, however, that the Company shall not without prior notice give any Purchaser any material non-public information. Without limitation of the foregoing, if any information requested by a Purchaser from the Company contains material non-public information, the Company shall inform the Purchaser in writing that the information requested contains material 4 non-public information and shall in no event provide such information to Purchaser without the express prior written consent of such Purchaser after being so informed. 4.3 Use of Proceeds. The Company agrees that a portion of the proceeds from the sale of the Preferred Stock will be used to satisfy and pay in full all delinquent federal, state and local taxes (including without limitation payroll and sales taxes). 4.4 Registration Rights. (a) In the event that the Company proposes to file a registration statement on a general form of registration under the Securities Act (other than a form S-8 or S-4) relating to securities issued or to be issued by it, then it shall give written notice of such proposal to the record owner(s) of the Securities. If, within 15 days after the giving of such notice, the record owners of any of the Securities shall request in writing that at least 51% of the Conversion Shares be included in such proposed registration, the Company shall, at its own expense (except as set forth below), also register such number of Conversion Shares as shall have been so requested in writing; provided, however, that (i) the Company shall not be required to include any of such Conversion Shares if, by reason of such inclusion, the Company shall be required to prepare and file a registration statement on a form promulgated by the Securities and Exchange Commission different from that which the Company otherwise would use; (ii) such owners shall cooperate with the Company in the preparation of such registration statement to the extent required to furnish information concerning such owners therein; and (iii) if any underwriter or managing agent is purchasing or arranging for the sale of the securities then being offered by the Company under such registration statement, then such owners (A) shall agree to have the Conversion Shares being registered sold to or by such underwriter or managing agent on terms substantially equivalent to the terms upon which the Company is selling the securities so registered, or (B) shall delay the sale of the Conversion Shares for the lesser of a 60 day period commencing with the effective date of the registration statement or the date on which the underwriter agrees to permit the sale of all or a portion of the Conversion Shares being registered; further, if the number of Conversion Shares as to which such owner, and all other owners of securities of the Company holding registration rights, has requested registration is in the aggregate sufficient that such underwriter reasonably believes in good faith that the inclusion of such Conversion Shares in the registration statement may jeopardize the success of the offering, then such underwriter may require that each such owner of securities reduce the number of Conversion Shares to be registered, with such reduction to be in proportion to the number of shares as to which each respective owner has requested registration which may be the entire number of securities thereof. (b) In the event that the record owners of at least 51% of the Conversion Shares should give written notice to the Company of their intention to exercise the rights set forth in this Section 4.4(b), then the Company shall file a registration statement in accordance with this 5 Section 4.4(b). Such notice(s) by the record owners must, to be effective, (i) be received by the Company within a 30-day period of each other, and (ii) be given with respect to Conversion Shares that the record owner is not otherwise entitled to sell publicly in the United States without registration and without restriction. The Company shall be obliged no more than twice to file a registration statement in accordance with this Section 4.4(b). The rights provided record owners by this Section 4.4(b) are in addition to those provided by Section 4.4(a). Unless the record owner's notice specifically states otherwise, it shall be deemed to be a notice with respect to all Conversion Shares owned of record by such holder. Within 15 days after receipt of any such notice or notices, the Company shall give further written notice of such proposed registration pursuant to Section 4.4(a) hereof. The Company shall then, at its own expense (except as set forth below), register such number of Conversion Shares as requested in such notice or notices pursuant to this Section 4.4(b); provided, however, that (i) such owners shall cooperate with the Company in the preparation of such registration statement to the extent required to furnish information concerning such owners therein; and (ii) if any underwriter or managing agent is purchasing or arranging for the sale of the securities then being offered by the Company under another registration statement previously filed or filed within 30 days after the notice by the record owners pursuant to this Section 4.4(b), then such owners (A) shall agree to have the Conversion Shares being registered sold to or by such underwriter or managing agent on terms substantially equivalent to the terms upon which the Company is selling the securities otherwise registered, or (B) shall delay the sale of the Conversion Shares for the lesser of the 60 day period commencing with the effective date of the other registration statement or the date on which the underwriter agrees to permit the sale of the Conversion Shares. (c) In connection with the filing of a registration statement pursuant to Section 4.4, the Company shall: (i) notify such owners as to the filing thereof and of all amendments thereto filed prior to the effective date of said registration statement; (ii) notify such owners, promptly after it shall have received notice thereof, of the time when the registration statement becomes effective or any supplement to any prospectus forming a part of the registration statement has been filed; (iii) prepare and file without expense to such owners any necessary amendment or supplement to such registration statement or prospectus as may be necessary to comply with Section 10(a)(3) of the Securities Act or advisable in connection with the proposed distribution of the Conversion Shares by such owners; 6 (iv) take all reasonable steps to qualify the Conversion Shares being so registered for sale under the securities or blue sky laws in such states as the holders of the Conversion Shares being so registered may reasonably request; (v) notify such registered owners of any stop order suspending the effectiveness of the registration statement and use its reasonable best efforts to remove such stop order; and (vi) undertake to keep said registration statement and prospectus effective until the earlier of (A) two years from the effective date thereof (provided, that if the Holders are required to delay the sale of the securities, then such period shall be extended by the amount of such delay), or (B) the date the Conversion Shares are sold or become available for public sale without restriction under the Securities Act; provided, however, that such undertaking shall apply only to the extent that the Company is permitted to register such securities for continuous sale under Rule 415 of the General Rules promulgated under the Securities Act, under any successor provision, or under authoritative interpretations of applicable law. (d) The record owners of the Conversion Shares being registered under this Section 4.4 agree to pay all of the underwriting discounts and commissions, registration fees and their own counsel fees with respect to the Conversion Shares owned by them and being registered. The Company agrees that the costs and expenses which it is obligated to pay in connection with a registration statement to be filed pursuant to Section 4.4 hereof including, but not limited to, the fees and expenses of counsel for the Company, the fees and expenses of the Company's accountants and all other costs and expenses incident to the preparation, printing and filing under the Securities Act of any such registration statement, each prospectus and all amendments and supplements thereto, the costs incurred in connection with the qualification of such securities for sale in a reasonable number of states, including fees and disbursements of counsel for the Company, and the costs of supplying a reasonable number of copies of the registration statement, each preliminary prospectus, final prospectus and any supplements or amendments thereto to such registered owners. ARTICLE V MISCELLANEOUS 5.1 Governing Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida applicable to contracts made and to be performed in the State of Florida. The parties hereto irrevocably consent to the jurisdiction of the United States federal courts located in the State of Florida and the state courts located in the County of Palm Beach in the State of Florida in any suit or proceeding based on or arising under this Agreement or the transactions contemplated hereby and irrevocably agree that all claims in respect of such suit or proceeding may be determined in such courts. The Company further agrees that service of process upon the Company delivered by nationally recognized overnight courier shall be deemed in every respect effective service of process upon the Company in any suit or proceeding arising hereunder. 7 The parties hereto agree that a final non-appealable judgment in any such suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on such judgment or in any other lawful manner. 5.2 Counterparts. This Agreement may be executed in two or more counterparts, including, without limitation, by facsimile transmission, all of which counterparts shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event any signature page is delivered by facsimile transmission, the party using such means of delivery shall cause additional original executed signature pages to be delivered to the other parties. 5.3 Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 5.4 Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this Agreement in any other jurisdiction. 5.5 Amendments. No provision of this Agreement may be waived other than by an instrument in writing signed by the party to be charged with enforcement and no provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Purchasers. 5.6 Notice. Any notice herein required or permitted to be given shall be in writing and may be personally served or delivered by courier or by facsimile-machine confirmed telecopy, and shall be deemed delivered at the time and date of receipt (which shall include telephone line facsimile transmission). 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and assigns. Neither the Company nor any Purchaser shall assign this Agreement or any rights or obligations hereunder without the prior written consent of the other. Notwithstanding the foregoing, any Purchaser may assign its rights and obligations hereunder to any of its "affiliates," as that term is defined under the Exchange Act, without the consent of the Company so long as such affiliate is an accredited investor. This provision shall not limit any Purchasers' right to transfer the Securities pursuant to the terms of this Agreement. 5.8 Third Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other person. 5.9 Survival. The representations, warranties and covenants of Purchasers and the Company set forth in Articles II, III and IV shall survive the closing hereunder notwithstanding any due 8 diligence investigation conducted by or on behalf of any Purchaser. Subject to federal and state law, the Company agrees to indemnify and hold harmless each Purchaser (including any corporation owned or controlled by any Purchaser and any officer, director, employee or partner of any such corporation) for loss or damage or expenses (including reasonable attorneys fees) arising as a result of or related to (a) any breach or alleged breach by the Company of any of its representations or covenants set forth herein, including advancement of expenses as they are incurred, (b) any cause of action, suit or claim brought or made against any Purchaser and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other certificate, instrument or document contemplated hereby or thereby, (c) any transaction financed or to be financed in whole or in part, directly or indirectly, with the proceeds of the issuance of the Securities, or (d) the status of Purchaser or holder of the Securities as an investor in the Company. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the indemnified liabilities which is permissible under applicable law. 5.10 Further Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 5.11 Remedies. No provision of this Agreement providing for any remedy to any Purchaser shall limit any remedy which would otherwise be available to Purchaser at law or in equity. Nothing in this Agreement shall limit any rights Purchaser may have with any applicable federal or state securities laws with respect to the investment contemplated hereby. 5.12 Full Agreement. Except as specifically referenced herein, this Agreement (including all schedules and exhibits hereto) constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and thereof. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein and therein. This Agreement supersedes all prior agreements and understandings among the parties hereto with respect to the subject matter hereof and thereof. 9 IN WITNESS WHEREOF, the undersigned Purchasers and the Company have caused this Agreement to be duly executed as of the date first above written. INTERNATIONAL COSMETICS MARKETING CO. By: /s/ Stephanie McAnly ------------------------------------------- Stephanie McAnly, President By: /s/ Sonny Spoden ------------------------------------------- Sonny Spoden, Chief Financial Officer PURCHASERS /s/ Nico P. Pronk ---------------------------------------------- Nico P. Pronk , individually Atlas Partners By: /s/ Charles B. Pearlman -------------------------------------------- Charles B. Pearlman, Partner Atlas Pearlman, P.A. By: /s/ Charles B. Pearlman -------------------------------------------- Charles B. Pearlman, Partner 10 EXHIBIT A 11 EXHIBIT B Number of Shares of Name of Purchaser Preferred Stock Purchased ----------------- ------------------------- Nico P. Pronk 200,000 Atlas Partners 16,000 Atlas Pearlman, P.A. 5,458 ------- 221,458 12 EX-2 3 0003.txt AMENDED ARTICLES OF INCORPORATION ARTICLES OF AMENDMENT TO THE ARTICLES OF INCORPORATION OF INTERNATIONAL COSMETICS MARKETING CO. Pursuant to Section 607.1006 of the Business Corporation Act of the State of Florida, the undersigned, being the President of INTERNATIONAL COSMETICS MARKETING CO., a corporation organized and existing under and by virtue of the Business Corporation Act of the State of Florida (the "Corporation"), bearing document number P95000054666, does hereby certify that the following resolutions were adopted pursuant to the authority of the Board of Directors as required by Section 602.0602 of the Florida Business Corporation Act: RESOLVED, that pursuant to the authority granted to and vested in the Board of Directors of this Corporation (the "Board of Directors" or the "Board") in accordance with the provisions of its Articles of Incorporation and Bylaws, each as amended through the date hereof, the Board of Directors hereby authorizes a series of the Corporation's previously authorized preferred stock, par value $.001 per share, and hereby sets forth, to be added to Article IV of the Articles of Incorporation of the Corporation, the designation and number of shares, and fixes the relative rights, preferences, privileges, powers and restrictions thereof as follows: ARTICLE IV CAPITAL STOCK The maximum number of shares that this Corporation shall be authorized to issue and have outstanding at any one time shall be 25,000,000 shares of common stock, par value $.001 per share (the "Common Stock") and 5,000,000 shares of preferred stock, par value $.001 per share (the "Preferred Stock"). Series of the Preferred Stock may be created and issued from time to time, with such designations, preferences, conversion rights, cumulative, relative, participating, optional or other rights, including voting rights, qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions providing for the creation and issuance of such series of Preferred Stock as adopted by the Board of Directors pursuant to the authority in this paragraph given. The Board of Directors of the Corporation hereby designates 226,000 of the authorized shares of Preferred Stock as Series A Convertible Preferred Stock. The rights, preferences, privileges, restrictions and other matters relating to the Series A Convertible Preferred Stock are as follows: ROXANNE K. BEILLY, ESQ., FLA. BAR #851450 Atlas Pearlman, P.A. 350 East Las Olas Boulevard, Suite 1700 Fort Lauderdale, Florida 33301 Phone No.: (954) 763-1200 Rights, Preferences and Designations of Series A Convertible Preferred Stock 1. Designation and Dividends. The designation of this series, which consists of 226,000 shares of Preferred Stock, is the Series A Convertible Preferred Stock (the "Series A Preferred Stock") and the stated value shall be $2.50 per share. The holders of shares of Series A Convertible Preferred Stock shall not be entitled to receive dividends. 2. Liquidation Preference. (a) In the event of any liquidation, dissolution or winding up of this Corporation, either voluntary or involuntary, the holders of Series A Preferred Stock may at their sole option elect to receive, prior and in preference to any distribution of any of the assets of this Corporation to the holders of Common Stock by reason of their ownership thereof, an amount per share equal to $2.50 for each outstanding share of Series A Preferred Stock (the "Original Series A Issue Price"). If upon the occurrence of such event, the assets and funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amount, then, the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of the Series A Preferred Stock in proportion to the amount of such stock owned by each such holder. (b) Upon the completion of the distribution required by subparagraph (a) of this Section 2 and any other distribution that may be required with respect to series of preferred stock of this Corporation that may from time to time come into existence, if assets remain in this Corporation, the holders of the Common Stock of this Corporation, shall receive all of the remaining assets of this Corporation. (c) For purposes of this Section 2, a liquidation, dissolution or winding up of this Corporation shall be deemed to be occasioned by, or to include, (i) the acquisition of the Corporation by another entity by means of any transaction or series of related transactions (including, without limitation, any reorganization, merger or consolidation but, excluding any merger effected exclusively for the purpose of changing the domicile of the Corporation) or (ii) a sale of all or substantially all of the assets of the Corporation; unless the Corporation's shareholders of record as constituted immediately prior to such transaction will, immediately after such transaction (by virtue of securities issued as consideration in the transaction) hold at least 50% of the voting power of the surviving or acquiring entity. This Corporation shall give each holder of record of Series A Preferred Stock written notice of such impending transaction not later than twenty (20) days prior to the shareholders' meeting called to approve such transaction, or twenty (20) days prior to the closing of such transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such transaction. The first of such notices shall describe the material terms and conditions of the impending 2 transaction and the provisions of this Section 2, and the Corporation shall thereafter give such holders prompt notice of any material changes. The transaction shall in no event take place sooner than twenty (20) days after the Corporation has given the first notice provided for herein or sooner than ten (10) days after the Corporation has given notice of any material changes provided for herein; provided, however, that such periods may be shortened upon the written consent of the holders of Series A Preferred Stock that are entitled to such notice rights or similar notice rights and that represent at least a majority of the voting power of all then outstanding shares of such Series A Preferred Stock. (d) Whenever a distribution provided for in this Section 2 shall be payable in securities or property other than cash, the value of such distribution shall be the fair market value of such securities or other property as mutually determined and agreed to in writing by the board of directors of this Corporation and the holders of a majority of the voting power of all then outstanding shares of such Series A Preferred Stock. 3. Redemption. The Series A Preferred Stock is not redeemable without the prior express written consent of the holders of a majority of the voting power of all then outstanding shares of such Series A Preferred Stock. Notwithstanding the foregoing, in the event the holders of the Series A Preferred Stock have not converted their Series A Preferred Stock into Common Stock of the Company by September 30, 2005, the Company shall have the option to redeem the Series A Preferred Stock at a price of SEVEN DOLLARS AND 50/100 ($7.50) per share. 4. Conversion. The holders of the Series A Preferred Stock shall have conversion rights as follows (the "Conversion Rights"): (a) Right to Convert. Each share of Series A Preferred Stock shall be convertible, at the sole option of the holder thereof, at any time, or from time to time, after the date of issuance of such share at the office of this Corporation into such number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Original Series A Issue Price by the Conversion Price applicable to such share, determined as hereafter provided, in effect on the date the Conversion Notice (as defined below) is received by this Corporation. The initial Conversion Price per share of Series A Preferred Stock shall be the Original Series A Issue Price; provided, however, that the Conversion Price for the Series A Preferred Stock shall be subject to adjustment as set forth in subsection 4(c). (b) Mechanics of Conversion. Before any holder of Series A Preferred Stock shall be entitled to convert the same into shares of Common Stock he shall give written notice to this Corporation at its principal corporate office of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Common Stock are to be issued (the "Conversion Notice"). This Corporation shall, within three (3) business days thereafter, issue and deliver at such office to such holder of Series A Preferred 3 Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such Conversion Notice, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. (c) Conversion Price Adjustments of Series A Preferred Stock for Certain Dilutive Issuances, Splits and Combinations. The Conversion Price of the Series A Preferred Stock shall be subject to adjustment from time to time as follows: (i) (A) If the Corporation shall issue, after the date of the purchase agreement for the shares of Series A Preferred Stock (the "Purchase Date"), any Additional Stock (as defined below) without consideration or for a consideration per share less than the Conversion Price in effect immediately prior to the issuance of such Additional Stock, the Conversion Price in effect immediately prior to each such issuance shall forthwith (except as otherwise provided in this clause (i)) be adjusted to a price equal to the price paid per share for such Additional Stock. (B) No adjustment of the Conversion Price for the Series A Preferred Stock shall be made in an amount less than one cent per share, provided that any adjustments which are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to 3 years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of 3 years from the date of the event giving rise to the adjustment being carried forward. Except to the limited extent provided for in subsections (E)(3) and (E)(4), no adjustment of such Conversion Price pursuant to this subsection 4(c)(i) shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment. (C) In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by this Corporation for any underwriting or otherwise in connection with the issuance and sale thereof. (D) In the case of the issuance of the Common Stock for a consideration in whole or in part other than cash, for the purposes of this Section the consideration other than cash shall be deemed to be the fair value thereof as mutually determined and agreed to in writing by the board of directors of this Corporation and the holders of at least a majority of the voting power of all then outstanding shares of such Series A Preferred Stock, irrespective of any accounting treatment. 4 (E) In the case of the issuance (whether on or after the applicable Purchase Date) of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock or options to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply for all purposes of this subsection 4(c)(i) and subsection 4(c)(ii): (1) The aggregate maximum number of shares of Common Stock deliverable upon exercise (assuming the satisfaction of any conditions to exerciseability, including without limitation, the passage of time, but without taking into account potential anti-dilution adjustments) of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subsections 4(c)(i)(C) and (c)(i)(D)), if any, received by the Corporation upon the issuance of such options or rights plus the minimum exercise price provided in such options or rights (without taking into account potential anti-dilution adjustments) for the Common Stock covered thereby. (2) The aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange (assuming the satisfaction of any conditions to convertibility or exchangeability including, without limitation, the passage of time, but without taking into account potential anti-dilution adjustments) for any such convertible or exchangeable securities or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options or rights were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by the Corporation (without taking into account potential anti-dilution adjustments) upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in subsections 4(c)(i)(C) and (c)(i)(D)). (3) In the event of any change in the number of shares of Common Stock deliverable or in the consideration payable to this Corporation upon exercise of such options or rights or upon conversion of or in exchange for such convertible or exchangeable securities including, but not limited to, a change resulting from the 5 anti-dilution provisions thereof, the Conversion Price of the Series A Preferred Stock, to the extent in any way affected by or computed using such options, rights or securities, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Common Stock or any payment of such consideration upon the exercise of any such options or rights or the conversion or exchange of such securities. (4) Upon the expiration of any such options or rights, the termination of any such rights to convert or exchange or the expiration of any options or rights related to such convertible or exchangeable securities, the Conversion Price of the Series A Preferred Stock, to the extent in any way affected by or computed using such options, rights or securities or options or rights related to such securities, shall be recomputed to reflect the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities which remain in effect) actually issued upon the exercise of such options or rights, upon the conversion or exchange of such securities or upon the exercise of the options or rights related to such securities. (5) The number of shares of Common Stock deemed issued and the consideration deemed paid therefor pursuant to subsections 4(c)(i)(E)(1) and (2) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either subsection 4(c)(i)(E)(3) or (4). (ii) "Additional Stock" shall mean any shares of Common Stock issued (or deemed to have been issued pursuant to subsection 4(c)(i)(E)) by this Corporation after the Purchase Date other than (A) Common Stock issued pursuant to a transaction described in subsection 4(c)(iii) hereof, (B) shares of Common Stock issuable or issued to employees and directors of this Corporation directly or pursuant to a stock option plan or restricted stock plan approved by the shareholders and board of directors of this Corporation, or (C) up to an aggregate of 4,850,000 shares of Common Stock issuable upon the exercise of options beneficially owned by Elan Sassoon, Beverly Sassoon and their affiliates granted on August 19, 1999. (iii) In the event the Corporation should at any time or from time to time after the Purchase Date fix a record date for the effectuation of a split or subdivision of the outstanding shares of Common Stock or the determination of holders of Common Stock entitled to receive a dividend or other distribution payable in additional shares of Common Stock or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock (hereinafter referred to as "Common Stock Equivalents") without payment of any consideration by such holder for the additional shares of Common Stock or the Common 6 Stock Equivalents (including the additional shares of Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the Conversion Price of the Series A Preferred Stock shall be appropriately decreased so that the number of shares of Common Stock issuable on conversion of each share of Series A Preferred Stock shall be increased in proportion to such increase of the aggregate of shares of Common Stock outstanding and those issuable with respect to such Common Stock Equivalents with the number of shares issuable with respect to Common Stock Equivalents determined from time to time in the manner provided for deemed issuances in subsection 4(c)(i)(E). (iv) If the number of shares of Common Stock outstanding at any time after the Purchase Date is decreased by a combination of the outstanding shares of Common Stock, then, following the record date of such combination, the Conversion Price for the Series A Preferred Stock shall be appropriately increased so that the number of shares of Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease in outstanding shares. (d) Other Distributions. In the event this Corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by this Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to in subsection 4(c)(iii), then, in each such case for the purpose of this subsection 4(d), the holders of the Series A Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common Stock of the Corporation into which their shares of Series A Preferred Stock are convertible as of the record date fixed for the determination of the holders of Common Stock of the Corporation entitled to receive such distribution. (e) Rights to Purchase Other Securities. In case of any merger, consolidation or acquisition with or into another Corporation, or in case of any sale, lease or conveyance to another Corporation of the assets of this Corporation as an entirety or substantially as an entirety, each share of Series A Preferred Stock shall, at the sole option of the holder thereof, after the date of such transaction be convertible into the number of shares of stock or other securities or property (including cash) to which the Common Stock issuable (at the time of such consolidation, merger, sale, lease or conveyance) upon conversion of such share of Series A Preferred Stock would have been entitled upon such consolidation, merger, sale, lease or conveyance. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of the Series A Preferred Stock after the transaction to the end that the provisions of this Section 4 (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the 7 Series A Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable. (f) No Impairment. This Corporation will not, by amendment of its Articles of Incorporation or through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by this Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such action as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Series A Preferred Stock against impairment. (g) No Fractional Shares and Certificate as to Adjustments. (i) No fractional shares shall be issued upon the conversion of any share or shares of the Series A Preferred Stock, and the number of shares of Common Stock to be issued shall be rounded up to the nearest whole share. Whether or not fractional shares are issuable upon such conversion shall be determined on the basis of the total number of shares of Series A Preferred Stock the holder is at the time converting into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion. (ii) Upon the occurrence of each adjustment or readjustment of the Conversion Price of Series A Preferred Stock pursuant to this Section 4, this Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of Series A Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. This Corporation shall, upon the written request at any time of any holder of Series A Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the Conversion Price for such series of Series A Preferred Stock at the time in effect, and (C) the number of shares of Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of a share of Series A Preferred Stock. (h) Notices of Record Date. In the event of any taking by this Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, this Corporation shall mail to each holder of Series A Preferred Stock, at least 20 days prior to the date specified therein, a notice 8 specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. (i) Reservation of Stock Issuable Upon Conversion. This Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series A Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of the Series A Preferred Stock; and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of the Series A Preferred Stock, in addition to such other remedies as shall be available to the holder of such Series A Preferred Stock, this Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purposes including, without limitation, engaging in best efforts to obtain the requisite shareholder approval of any necessary amendment to these articles. (j) Notices. Any notice required by the provisions of this Section 4 to be given to the holders of shares of Series A Preferred Stock shall be deemed given if delivered by a recognized overnight courier and addressed to each holder of record at his address appearing on the books of this Corporation. 5. Voting Rights. Each share of Series A Preferred Stock shall entitle the holder thereof to seventy-five (75) votes for each one vote per share of Common Stock, and with respect to such vote, shall be entitled, notwithstanding any provision hereof, to notice of any shareholders' meeting in accordance with the bylaws of this Corporation, and shall be entitled to vote, together as a single class with holders of Common Stock, with respect to any question or matter upon which holders of Common Stock have the right to vote. Series A Preferred Stock shall also entitle the holders thereof to vote as a separate class as set forth herein and as required by law. 6. Protective Provisions. So long as any shares of Series A Preferred Stock are outstanding, this Corporation shall not without first obtaining the written approval of the holders of at least a majority of the voting power of the then outstanding shares of such Series A Preferred Stock: (a) sell, convey, or otherwise dispose of or encumber all or substantially all of its property or business or merge into or consolidate with any other corporation (other than a wholly-owned subsidiary Corporation) or effect any transaction or series of related transactions in which more than fifty percent (50%) of the voting power of the Corporation is transferred or disposed of; (b) alter or change the rights, preferences or privileges of the Series A Preferred Stock; 9 (c) increase or decrease the total number of authorized shares of Series A Preferred Stock; (d) authorize or issue, or obligate itself to issue, any other equity security, including any other security convertible into or exercisable for any equity security having rights, preferences or privileges over, or being on a parity with or similar to, the Series A Preferred Stock; or (e) redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any security of this Corporation; (f) amend this Corporation's Articles of Incorporation or bylaws; (g) change the authorized number of directors of the Corporation; (i) declare, order or pay any dividends on any class of securities; (j) adjust the salary of executive officers, directors, executive level independent contractors and key employees of this Corporation; (k) make any capital expenditures in excess of $15,000; (l) issue new shares of capital stock of this Corporation; (m) enter into or approve any agreement or contract for the purchase of goods, services or other items between this Corporation, a shareholder or a member of a shareholder's immediate family; or (n) make any commission payment to any independent business associate in excess of $15,000. 7. Status of Converted or Redeemed Stock. In the event any shares of Series A Preferred Stock shall be converted or redeemed pursuant to Section 4 hereof, the shares so converted or redeemed shall be cancelled and shall not be issuable by the Corporation. The Articles of Incorporation of this Corporation shall be appropriately amended to effect the corresponding reduction in the Corporation's authorized capital stock. 8. Taxes. This Corporation will pay all taxes (other than taxes based upon income) and other governmental charges that may be imposed with respect to the issue or delivery of shares of Series A Preferred Stock and Common Stock upon conversion of shares of Series A Preferred Stock, excluding any tax or other charge imposed in connection with any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series A Preferred Stock so converted were registered. 10 IN WITNESS WHEREOF, the undersigned, being the President of this Corporation, has executed these Articles of Amendment as of September 27, 2000 INTERNATIONAL COSMETICS MARKETING CO. By: /s/ Stephanie McAnly ------------------------------------ Stephanie McAnly, President -----END PRIVACY-ENHANCED MESSAGE-----