ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION
OF
KIRSHNER ENTERTAIMENT & TECHNOLOGIES, INC.
Pursuant to Section 607.1006 of the Business Corporation Act of the
State of Florida, the undersigned, being the President of KIRSHNER ENTERTAIMENT
& TECHNOLOGIES, INC., a corporation organized and existing under and by virtue
of the Business Corporation Act of the State of Florida (the "Corporation"),
does hereby certify that the following resolutions were adopted pursuant to the
authority of the Board of Directors of the Corporation:
A. Creation of Series A Convertible Preferred Stock That pursuant to
authority conferred upon the Board of Directors by the Articles of Incorporation
of said Corporation, said Board of Directors adopt a resolution providing for
the issuance of a Series of 500,000 shares of Series A Preferred Stock pursuant
to a written consent, dated May 11, 2005, which resolution is as follows:
SERIES A CONVERTIBLE PREFERRED STOCK
1. Designation, Amounts and Stated Value. The designation of this series, which
consists of Five Hundred Thousand (500,000) shares of Preferred Stock, is the
Series A Convertible Preferred Stock (the "Series A Preferred Stock"). The
"Stated Value" of the Series A Preferred Stock shall be $.80 per share. The
shares have no par value per share.
2. Dividends. The Series A Preferred Stock shall be entitled to receive a Six
Percent (6%) per annum cumulative dividend when, as and if, declared by the
Board of Directors of the Corporation. The dividend shall be payable annually in
arrears commencing on May 31, 2006, in cash or in shares of Common Stock of the
Corporation at the option of the Corporation. If the dividend is paid in shares
of Common Stock, then such shares will be valued at the average closing price of
the Common Stock of the Corporation for the 10 trading days immediately
preceding the date of such dividend.
3. Rank. The Series A Preferred Stock shall rank parri passu with any other
series of preferred stock hereafter designated by the Corporation and not
designated as senior securities or subordinate to the Series A Convertible
Preferred Stock.
4. Voting Rights. The Series A Preferred Stock shall have no voting rights
except as provided and mandated under the laws of the State of Florida.
5. Redemption and Call Rights. The Series A Preferred Stock shall not be subject
to any redemption rights on behalf of the Corporation or subject to call by any
holder of the Series A Preferred Stock.
6. Holder Conversion Rights. The holders of the Series A Preferred Stock shall
have the following rights with respect to the conversion of the Series A
Preferred Stock into shares of Common Stock:
A. Conversion at Holders' Option. Holders shall have the right
to convert their Series A Preferred Stock one or more times in their sole
discretion, into Common Stock. The per share value used to determine the number
of shares of Common Stock the Holder would receive upon such conversion
("Conversion "Price") shall be $0.08.
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B. Limitation on Conversion. The holder shall have no right to
convert Series A Preferred Stock if by virtue of such conversion the holder
shall become the beneficial owner of 5% or more of the Corporation's Common
Stock.
C. Adjustments to Conversion Ratio. In the event the
Corporation shall (i) make or issue a dividend or other distribution payable in
Common Stock (other than with respect to the Series A Preferred Stock); (ii)
subdivide outstanding shares of Common Stock into a larger number of shares; or
(iii) combine outstanding shares of Common Stock into a smaller number of
shares, the conversion ratio shall be adjusted appropriately by the
Corporation's Board of Directors.
D. Capital Reorganization or Reclassification. If the Common
Stock issuable upon the conversion of the Series A Preferred Stock shall be
changed into the same or different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification or otherwise (other
than a subdivision or combination of shares or stock dividend provided for
elsewhere in this Section 6), then in each such event, the holder of each share
of Series A Preferred Stock shall have the right thereafter to convert such
share into the kind and amount of shares of stock and other securities and
property receivable upon such capital reorganization, reclassification or other
change by holders of the number of shares of Common Stock into which such shares
of Series A Preferred Stock might have been converted immediately prior to such
capital reorganization, reclassification or other change.
E. Certificate as to Adjustments; Notice by Corporation. In
each case of an adjustment or readjustment of the conversion ratio, the
Corporation, at its expense, will seek to furnish each holder of Series A
Preferred Stock with a certificate, showing such adjustment or readjustment, and
stating in detail the facts upon which such adjustment or readjustment is based.
F. Exercise of Conversion. Promptly after the conversion date,
the Corporation shall determine the conversion ratio. The Corporation shall
deliver to each holder of Series A Preferred Stock a certificate stating the
conversion ratio and providing such holder instructions as to where to deliver
its Series A Preferred Stock certificates, and upon surrender of such
certificates for cancellation, certificates representing the number of the
Corporation's common shares into which such Series A Preferred Stock is
converted. No fractional shares shall be issued, and, in lieu of any such
fractional securities, each holder of Series A Preferred Stock who will
otherwise be entitled to a fraction of a share upon surrender shall receive the
next highest whole share.
G. Reservation of Common Stock. The Corporation shall at all
times use its best efforts and 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, the Corporation shall take such corporate action as
may be necessary to increase its authorized but unissued shares of Common Stock
to such number of shares as shall be sufficient for such purpose.
7. Consolidation, Merger, Exchange, Etc. In case the Corporation shall enter
into any consolidation, merger, combination, statutory share exchange or other
transaction in which the Common Shares are exchanged for or changed into other
stock or securities, money and/or any other property, then in any such case the
Series A Preferred Stock shall at the same time be similarly exchanged or
changed into preferred shares of the surviving entity providing the holders of
such preferred shares with (to the extent possible) the same relative rights and
preferences as the Series A Preferred Stock.
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8. Designation of Additional Series. The Board of Directors of the Corporation
shall have the right to designate other shares of Preferred Stock having
dividend, liquidation, or other preferences equal to, subordinate to, or
superior to the rights of holders of the Series A Preferred Stock. Such
preferences shall be determined in the resolutions creating such subsequent
series.
9. Vote to Change the Terms of Series A Convertible Preferred Stock. The
affirmative vote at a meeting duly called for such purpose or the written
consent without a meeting, of the holders of not less than fifty percent (50%)
of the then outstanding Series A Preferred Stock, shall be required for any
change to the Corporation's Articles of Incorporation which would amend, alter,
change or repeal any of the powers, designations, preferences and rights of the
Series A Convertible Stock.
10. Lost or Stolen Certificates. Upon receipt by the Corporation of evidence
satisfactory to the Corporation of the loss, theft, destruction or mutilation of
any Series A Preferred Stock Certificates, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the holder to the Corporation
and, in the case of mutilation, upon surrender and cancellation of the Series A
Preferred Stock Certificate(s), the Corporation shall execute and deliver new
preferred stock certificate(s) of like tenor and date; provided, however, the
Corporation shall not be obligated to re-issue preferred stock certificates if
the holder contemporaneously requests the Corporation to convert such Series A
Preferred Stock into Common Stock in which case such Series A Preferred Stock
shall be converted pursuant to the terms of the Corporation's Articles of
Incorporation and a preferred stock certificate shall only be issued if required
pursuant to the terms hereof.
11. Remedies, Characterizations, Other Obligations, Breaches and Injunctive
Relief. The remedies provided in this Amendment to the Articles of Incorporation
shall be cumulative and in addition to all other remedies available under this
Amendment to the Articles of Incorporation, at law or in equity (including a
decree of specific performance and/or other injunctive relief), no remedy
contained herein shall be deemed a waiver of compliance with the provisions
giving rise to such remedy and nothing herein shall limit a holder's right to
pursue actual damages for any failure by the Corporation to comply with the
terms of this Amendment to the Articles of Incorporation. The Corporation
covenants to each holder of Series A Preferred Stock that there shall be no
characterization concerning this instrument other than as expressly provided
herein. Amounts set forth or provided for herein with respect to payments,
conversion and the like (and the computation thereof) shall be the amounts to be
received by the holder thereof and shall not, except as expressly provided
herein, be subject to any other obligation of the Corporation (or the
performance thereof).
12. Specific Shall Not Limit General; Construction. No specific provision
contained this Amendment to the Articles of Incorporation shall limit or modify
any more general provision contained herein. This Amendment to the Articles of
Incorporation shall be deemed to be jointly drafted by the Corporation and all
holders and shall not be construed against any person as the drafter hereof.
13. Failure or Indulgence Not Waiver. No failure or delay on the part of a
holder of Series A Preferred Stock in the exercise of any power, right or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege.
B. Authority to Amend. These Articles of Amendment were adopted by the
unanimous consent of the Corporation's Board of Directors on May 11, 2005 and no
shareholder consent was required for the adoption thereof pursuant to the
authority conferred upon the Board of Directors by the Articles of Incorporation
of said Corporation
IN WITNESS WHEREOF, the undersigned, being the President of this
Corporation, has executed these Articles of Amendment as of May 11, 2005.
KIRSHNER ENTERTAIMENT & TECHNOLOGIES, INC.
By:
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XueLian Bian, President