Exhibit 4.01
CERTIFICATE OF DESIGNATION
OF
ELINE ENTERTAINMENT GROUP, INC.
Pursuant to Section 78.1955 of the Nevada Revised Statutes of the State of
Nevada, the undersigned, being the President of ELINE ENTERTAINMENT GROUP, INC.,
a corporation organized and existing under the laws of the State of Nevada (the
corporation'), bearing file number C-12526-1997, does hereby certify that the
following resolutions were adopted pursuant to the authority of the Board of
Directors as required by Section 78.1955 of the Nevada Revised Statutes:
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, as amended
through the date hereof, the Board of Directors hereby establishes a series of
preferred stock to be designated as Series A Convertible Preferred Stock and
sets forth the number of shares, and fixes the relative rights, preferences,
privileges, powers and restrictions thereof as follows:
1.1 Designation and Dividends. The designation of this series, which
consists of 250,000 shares of Preferred Stock, is the Class A
Convertible Preferred Stock (the "Class A Preferred Stock") and the
stated value shall be $.0001 per share. The holders of shares of Class
A Preferred Stock shall not be entitled to receive dividends,
1.2 Liquidation Preference. In the event of any liquidation, dissolution
or winding up of this Corporation, either voluntary or involuntary,
the holders of Class A Preferred Stock will not be entitled to any
liquidation preference and shall be subject to the provisions of
Section 1 .1 hereof
1.3 Redemption. The Class 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 Class A Preferred
Stock,
1.4 Conversion. Each share of Class A Preferred Stock shall be
convertible, at the sole option of the Corporation, 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 mutual
agreement of the Corporation and the holder of the Class A Preferred
Stock at the time of conversion,
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1.5 Voting Rights. Each share of Class A Preferred Stock shall entitle the
holder thereof to 150 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 and any other series of Preferred Stock then outstanding, with
respect to any question or matter upon which holders of Common Stock
the have the right to vote, Class A Preferred Stock shall also entitle
the holders thereof to vote as a separate class as set forth herein
and as required by law,
1.6 Protective Provisions. So long as any shares of Class 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 Class 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
Class A Preferred Stock;
(c) increase or decrease the total number of authorized shares of
Class 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
Class A Preferred Stock;
(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) change the authorized number of directors of the Corporation,
1.7. Status of Converted or Redeemed Stock. In the event any shares of
Class A Preferred Stock shall be converted or redeemed pursuant to
Sections 1.3 or 1.4 hereof; the shares so converted or redeemed shall
be cancelled and returned to the status of authorized but unissued
shares of Preferred Stock,
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1.8. 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 Class A Preferred Stock
and Common Stock upon conversion of shares of Class 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 Class A Preferred
Stock so converted were registered.
The foregoing resolutions were adopted by the Board of Directors of the
Corporation pursuant to a written consent of the sole director of the
Corporation dated March 7, 2005 pursuant to Section 78.315(2) of the Nevada
Revised Statutes. No consent of the Corporation's shareholders was required.
IN WITNESS WHEREOF, the undersigned, being the President of this
Corporation, has executed this Certificate of Designation as of March 7, 2005.
ELINE ENTERTAINMENT GROUP, INC.
By: /s/ Barry A. Rothman
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Barry A. Rothman, President
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