Unassociated Document


     

    
       

      CERTIFICATE
OF DESIGNATION

      of
the

      PREFERENCES,
RIGHTS, LIMITATIONS, QUALIFICATIONS AND RESTRICTIONS

      of
the

      SERIES A
CONVERTIBLE PREFERRED STOCK

      of

      KUN RUN
BIOTECHNOLOGY, INC.

      


      KUN RUN
BIOTECHNOLOGY, INC. (the “Corporation”), a corporation organized and existing
under Chapter 78 of the Nevada Revised Statutes, as amended (the "NRS"), hereby
certifies that, pursuant to the authority conferred upon the Board of Directors
of the Corporation (the “Board”) by its Amended and Restated Articles of
Incorporation, filed with the Secretary of State of the State of Nevada (the
"Articles of Incorporation"), and pursuant to the provisions of the NRS, the
Board adopted the following resolution providing for the authorization of
6,800,000 shares of the Corporation's Series A Convertible Preferred Stock,
$0.001 par value per share (the "Series A Preferred Stock"):

      


      RESOLVED,
that pursuant to the authority vested in the Board by the Corporation’s Articles
of Incorporation, the Board hereby establishes the Series A Preferred Stock of
the Corporation, authorizes 6,800,000 shares of Series A Preferred Stock and
determines the designation, preferences, rights, qualifications, limitations and
privileges of Series A Preferred Stock of the Corporation as
follows:

      


      1. Voting
Rights.

      


      (a) Except as otherwise provided herein
or as required by law, the Series A Preferred Stock shall be entitled,
notwithstanding any provision hereof, to notice of any stockholders' meeting in
accordance with the Bylaws of the Corporation and shall vote together with the
Corporation's common stock, $0.001 par value per share (the "Common Stock"), as
a single class at any annual or special meeting of stockholders of the
Corporation and may act by written consent in the same manner as the Common
Stock, in either case upon the following basis: each holder of shares of Series
A Preferred Stock (each, a "Holder" and collectively, the "Holders") shall be
entitled to such number of votes as shall be equal to the whole number of shares
of Common Stock into which such Holder’s aggregate number of shares of Series A
Preferred Stock are convertible pursuant to Section 3 below immediately after
the close of business on the record date fixed for such meeting or the effective
date of such written consent.

      


      (b) The Series A Preferred Stock shall
have the following class voting rights (in addition to the voting rights set
forth in Section 1(a) hereof). So long as any shares of the Series A Preferred
Stock remain outstanding, the Corporation shall not, without the affirmative
vote or consent of the holders of a majority of the shares of the Series A
Preferred Stock outstanding at the time (the “Required Holders”), given in
person or by proxy, either in writing or at a meeting in which the holders of
the Series A Preferred Stock vote separately as a class:

      


      (i) increase or decrease the authorized
amount of the Common Stock or any class or series of Preferred
Stock;

      


      (ii) Any authorization or any
designation, whether by reclassification or otherwise, of any new class or
series of stock or any other securities convertible into equity securities of
the Corporation ranking on a parity with or senior to the Series A Preferred
Stock in right of redemption, liquidation preference, voting or dividend rights
or any increase in the authorized or designated number of any such new class or
series;;

       

      
        
           

        

        
          1

          
            

          

        

        
           

        

      

       

      (iii) amend, alter or repeal the
provisions of the Series A Preferred Stock, whether by merger, consolidation,
filing of a certificate of designation or otherwise, so as to adversely affect
any right, preference, privilege or voting power of the Series A Preferred
Stock; provided, however, that any creation and issuance of other classes and
series of equity securities of the Corporation which by their terms do not rank
pari passu or senior to the Series A Preferred Stock (“Junior Stock”) shall not
be deemed to adversely affect such rights, preferences, privileges or voting
powers;

      


      (iv) consummate an Acquisition or Asset
Transfer as defined in Section 2(c) herein;

      


      (v) repurchase or redeem shares of
Common Stock (other than as permitted by Section 5(b) hereof);

      


      (vi) amend or waive any provision of
the Articles of Incorporation or By-Laws of the Corporation so as to affect
materially and adversely any right, preference, privilege or voting power of the
Series A Preferred Stock; provided, however, that any creation and issuance of
another series of Junior Stock shall not be deemed to adversely affect such
rights, preferences, privileges or voting powers;

      


      (vii) increase or decrease the
authorized size of the Corporation’s Board of Directors;

      


      (viii) pay or declare dividends on or
make any distribution to any shares of Common Stock or any class or series of
Preferred Stock; or

      


      (ix) issue debt in excess of $250,000
(unless such issuance of debt has been approved by a majority of the
Corporation’s Board of Directors).

      


      (c)           Election
of Board of Directors.

      


      (i)           The
holders of Common Stock and Series A Preferred Stock, voting together as a
single class on an as-if-converted basis, shall be entitled to elect all members
of the Corporation’s Board of Directors at each meeting or pursuant to each
consent of the Corporation’s stockholders for the election of directors, and to
remove from office such directors and to fill any vacancy caused by the
resignation, death or removal of such directors.

      


      2.
Liquidation Rights.

      


      (a) Upon any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary (a
“Liquidation Event”), after payment or provision for payment of debts and other
liabilities of the Corporation, before any distribution or payment shall be made
to the holders of any other equity securities of the Corporation by reason of
their ownership thereof, the Holders of Series A Preferred Stock shall first be
entitled to be paid out of the assets of the Corporation available for
distribution to its stockholders an amount with respect to each share of Series
A Preferred Stock equal to $1.53 (the “Original Series A Issue Price”), plus any
declared and accrued but unpaid dividends thereon (collectively, the “Series A
Liquidation Value”).

      


      (b) After payment has been made to the
Holders of the Series A Preferred Stock of the full amount of the Series A
Liquidation Value, any remaining assets of the Corporation  (or the
consideration received by the Corporation or its stockholders in such
Acquisition or Asset Transfer) shall be distributed
ratably to the holders of the Corporation's Common Stock and Series A Preferred
Stock (on an as-if-converted to Common Stock basis) .

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

       

      (c) In the case of any merger,
consolidation, business combination, reorganization or recapitalization of the
Corporation (other than any merger effected solely for the purpose of changing
the domicile of the Corporation) in which the Corporation is not the surviving
entity or in which the stockholders of the Corporation immediately prior to such
transaction own capital stock representing less than 50% of the Corporation’s
voting power immediately after such transaction or any transaction or series of
related transactions in which capital stock representing in excess of 50% of the
Corporation’s voting power is transferred (each, an “Acquisition”) or a sale,
conveyance, transfer, lease, exclusive license or other disposition of all or
substantially all of the assets of the Corporation (each, an “Asset Transfer”),
the Holders of the Series A Preferred Stock shall be entitled to receive the
amount of cash, securities or other property which such Holders would be
entitled to receive in a Liquidation Event pursuant to sections 2(a) and
2(b).

      


      (d) If, upon any liquidation,
dissolution or winding up of the Corporation, the assets of the Corporation
shall be insufficient to make payment in full to all Holders of Series A
Preferred Stock, then such assets shall be distributed among the Holders of
Series A Preferred Stock at the time outstanding, ratably in proportion to the
full amounts to which they would otherwise be respectively
entitled.

      


      (e) Whenever any 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 thereof as
determined in good faith by the Board.

      


      3.
Conversion Rights.  The Holders of Series A Preferred Stock shall have
the following rights with respect to the conversion of Series A Preferred Stock
into shares of Common Stock pursuant to this Section 3:

      


      (a) Conversion.  Subject to
and in compliance with the provisions of this Section 3, any shares of Series A
Preferred Stock may, at the option of the Holder thereof, be converted at any
time into fully paid and nonassessable shares of Common Stock.  The
number of shares of Common Stock to which a Holder of Series A Preferred Stock
shall be entitled upon conversion shall be the product obtained by multiplying
the number of shares of Series A Preferred Stock being converted by the
then-effective Series A Conversion Rate (determined in accordance with Section
3(b) below).

      


      (b) Series A Conversion
Rate.  The conversion rate in effect at any time for conversion of the
Series A Preferred Stock (the "Series A Conversion Rate") shall be the quotient
obtained by dividing the Series A Liquidation Value by the then-effective Series
A Conversion Price (determined in accordance with Section 3(c)
below).

      


      (c) Series A Conversion
Price.  The conversion price for Series A Preferred Stock (the “Series
A Conversion Price”) initially shall be the Original Series A Issue
Price.  The Series A Conversion Price is subject to adjustment as
provided in Section 3(d) and all references herein to the Series A Conversion
Price shall mean the Series A Conversion Price as so adjusted.

      


      (d) Adjustment to the Series A
Conversion Price.

      


      (i) If, at any time or from time to
time after the filing of this Certificate of Designation with the Secretary of
State of the State of Nevada (the "Original Series A Filing Date"), the
Corporation shall issue, or is deemed to issue by the express provisions of this
Section 3(d),  any Additional Stock (as defined below) without
consideration or for consideration per share less than the Series A Conversion
Price in effect immediately prior to the issuance of such Additional Stock, then
and in such event (except as otherwise provided in this Section 3(d)) the
Conversion Price of the Series A Preferred Stock shall be reduced, concurrently
with such issue, to the lowest price at which any of the Additional Stock are
issued.

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

       

      (ii) No adjustment of the Series A
Conversion Price for any 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 taken into account in any subsequent adjustment made prior to three
years from the date of the event giving rise to the adjustment being carried
forward.  No adjustment of such Series A Conversion Price pursuant to
this Section 3(d) shall have the effect of increasing the Series A Conversion
Price above the Series A Conversion Price in effect immediately prior to such
adjustment.

      


      (iii) In the case of the issuance of
Additional 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 the Corporation for any underwriting
or otherwise in connection with the issuance and sale thereof.

      


      (iv) In the case of the issuance of the
Additional Stock for a consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair value thereof as
determined in good faith by the Board of the Corporation .

      


      (v) Additional Stock; Certain Issues
Excepted. For the purpose of making any adjustment to the Conversion Price of
the Series A Preferred Stock required under this Section 3(d), “Additional
Stock” shall mean all shares of Common Stock issued by the Corporation or deemed
to be issued pursuant to this Section 3 (including shares of Common Stock
subsequently reacquired or retired by the Corporation), other than the
following, for which, anything herein to the contrary notwithstanding, the
Corporation shall not be required to make any adjustment to the Conversion Price
upon: (A) a bona fide firm underwritten public offering of the Corporation; (B)
issuance of securities pursuant to a bona fide acquisition of another business
entity or business segment of any such entity by the Corporation pursuant to a
merger, purchase of substantially all the assets or any type of
reorganization  provided that (1) the Corporation will own more than
fifty percent (50%) of the voting power of such business entity or business
segment of such entity and (2) such transaction is approved by the Board of
Directors; (C) securities issued pursuant to the conversion or exercise of
convertible or exercisable securities issued or outstanding on or prior to the
Original Series A Filing Date or issued pursuant to the Securities Purchase
Agreement dated April 17, 2010 entered into by and among the Corporation, the
Purchasers (as defined therein) and the Key Stockholder (as defined therein) (so
long as the terms governing the conversion or exercise price of such securities
are not amended to lower such price and/or adversely affect the holders of the
Series A Preferred Stock); (D) securities issued in connection with bona fide
strategic license agreements or other partnering arrangements so long as such
issuances are not for the primary purpose of raising capital and are approved by
the Board of Directors; (E) Common Stock issued or the issuance or grants of
options to purchase Common Stock, in each case, at no less than the
then-applicable fair market value, pursuant to equity incentive plans that are
adopted and approved by the Corporation’s Board of Directors; (F) securities
issued at no less than the then-applicable fair market value to advisors or
consultants (including, without limitation, financial advisors and investor
relations firms) in connection with any engagement letter or consulting
agreement, provided that any such issuance is approved by the Board of
Directors; (G) securities issued to financial institutions or lessors in
connection with reasonable commercial credit arrangements, equipment financings
or similar transactions, provided that any such issue is approved by
the Board of Directors).

      


      (vi) In the event the Corporation at
any time or from time to time after the Original Series A Filing Date fixes 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 ("Common Stock Equivalents") without payment of any consideration
by such holder for the additional shares of Common Stock or the Common 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 Series A Conversion Price 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 Section 3(d)(v).

       

      
        
           

        

        
          4

          
            

          

        

        
           

        

      

       

      (vii) If the number of shares of Common
Stock outstanding at any time after the Original Series A Filing Date is
decreased by a combination of the outstanding shares of Common Stock, then,
following the record date of such combination, the Series A Conversion Price
shall be appropriately increased so that the number of shares of Common Stock
issuable on conversion of each share of Series A Preferred Stock shall be
decreased in proportion to such decrease in outstanding shares.

      


      (viii)           For
the purpose of the adjustment required under this Section 3(d), if the
Corporation issues or sells (x) preferred stock or other stock, options,
warrants, purchase rights or other securities convertible into, Additional Stock
(such convertible stock or securities being herein referred to as “Convertible
Securities”) or (y) rights or options for the purchase of Additional Stock or
Convertible Securities and if the Effective Price  (as defined below)
of such Additional Stock is less than the Series A Preferred Stock Conversion
Price, in each case the Corporation shall be deemed to have issued at the time
of the issuance of such rights or options or Convertible Securities the maximum
number of Additional Stock issuable upon exercise or conversion thereof and to
have received as consideration for the issuance of such shares an amount equal
to the total amount of the consideration, if any, received by the Corporation
for the issuance of such rights or options or Convertible Securities
plus:

      


      (A)           in
the case of such rights or options, the minimum amounts of consideration, if
any, payable to the Corporation upon the exercise of such rights or options;
and

      


      (B)           in
the case of Convertible Securities, the minimum amounts of consideration, if
any, payable to the Corporation upon the conversion thereof (other than by
cancellation of liabilities or obligations evidenced by such Convertible
Securities); provided that if the minimum amounts of such consideration cannot
be ascertained, but are a function of antidilution or similar protective
clauses, the Corporation shall be deemed to have received the minimum amounts of
consideration without reference to such clauses.

      


      (C)           If
the minimum amount of consideration payable to the Corporation upon the exercise
or conversion of rights, options or Convertible Securities is reduced over time
or on the occurrence or non-occurrence of specified events other than by
reason of antidilution adjustments, the Effective Price shall be recalculated
using the figure to which such minimum amount of consideration is reduced;
provided further, that if the minimum amount of consideration payable to the
Corporation upon the exercise or conversion of such rights, options or
Convertible Securities is subsequently increased, the Effective Price shall be
again recalculated using the increased minimum amount of consideration payable
to the Corporation upon the exercise or conversion of such rights, options or
Convertible Securities.

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

       

      (D)           No
further adjustment of the Series A Preferred Stock Conversion Price, as adjusted
upon the issuance of such rights, options or Convertible Securities, shall be
made as a result of the actual issuance of Additional Stock or the exercise of
any such rights or options or the conversion of any such Convertible
Securities.  If any such rights or options or the conversion privilege
represented by any such Convertible Securities shall expire without having been
exercised, the Series A Preferred Stock Conversion Price as adjusted upon the
issuance of such rights, options or Convertible Securities shall be readjusted
to the Series A Preferred Stock Conversion Price which would have been in effect
had an adjustment been made on the basis that the only Additional Stock so
issued were the Additional Stock, if any, actually issued or sold on the
exercise of such rights or options or rights of conversion of such Convertible
Securities, and such Additional Stock, if any, were issued or sold for the
consideration actually received by the Corporation upon such exercise, plus the
consideration, if any, actually received by the Corporation for the granting of
all such rights or options, whether or not exercised, plus the consideration
received for issuing or selling the Convertible Securities actually converted,
plus the consideration, if any, actually received by the Corporation (other than
by cancellation of liabilities or obligations evidenced by such Convertible
Securities) on the conversion of such Convertible Securities, provided that such
readjustment shall not apply to prior conversions of Series
Preferred.

      


      The
“Effective Price” of Additional Stock shall mean the quotient determined by
dividing the total number of shares of Additional Stock issued or sold, or
deemed to have been issued or sold by the Corporation under this Section 3, into
the aggregate consideration received, or deemed to have been received by the
Corporation for such issue under this Section 3, for such shares of
Additional Stock.  In the event that the number of shares of
Additional Common Stock or the Effective Price cannot be ascertained at the time
of issuance, such Additional Stock shall be deemed issued immediately upon the
occurrence of the first event that makes such number of shares or the Effective
Price, as applicable, ascertainable.

      


      (e) Other Distributions.  In
the event the Corporation shall declare a distribution payable in securities of
other persons, evidences of indebtedness issued by the Corporation or other
persons, assets (excluding cash dividends), securities or options or rights not
referred to in Section 3(d), then, in each such case for the purpose of this
Section 3(e), 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 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.

      


      (f) Recapitalizations.  If at
any time or from time to time there shall be a recapitalization of the Common
Stock (other than a subdivision, combination, merger or sale of assets
transaction provided for elsewhere in this Section 3 or Section 2) provision
shall be made so that the Holders of the Series A Preferred Stock shall
thereafter be entitled to receive upon conversion of the Series A Preferred
Stock the number of shares of stock or other securities or property of the
Corporation or otherwise, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such recapitalization.  In any
case, appropriate adjustment shall be made in the application of the provisions
of this Section 3 with respect to the rights of the Holders of the Series A
Preferred Stock after the recapitalization to the end that the provisions of
this Section 3 (including adjustment of the Series A Conversion Price then in
effect and the number of shares purchasable upon conversion of the Series A
Preferred Stock) shall be applicable after that event as nearly equivalent as
may be practicable.

      


      (g) Treasury Shares.  The
number of shares of Common Stock outstanding at any given time shall not include
shares owned or held by or for the account of the Corporation, if any, and the
disposition of any shares so owned or held shall be considered an issue or sale
of Common Stock.

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

       

      (h) No Impairment.  The
Corporation shall not, by the 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 the Corporation, but at all times shall in
good faith assist in the carrying out of all the provisions of this Section 3
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.

      


      (i) Mechanics of
Conversion.  Before any Holder of Series A Preferred Stock shall be
entitled to convert the same into shares of Common Stock, such Holder shall
surrender the certificate or certificates therefor, duly endorsed, at the office
of the Corporation or of any transfer agent for the Series A Preferred Stock,
and shall give written notice to the 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 Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such Holder of Series A Preferred 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, together with any cash dividends declared but unpaid on such shares
of Series A Preferred Stock.  In case the number of shares of Series A
Preferred Stock represented by the certificate or certificates surrendered
pursuant to Section 3(a) above exceeds the number of shares converted, the
Corporation shall, upon conversion, execute and deliver to the Holder (at the
expense of the Corporation) a new certificate or certificates for the number of
shares of Series A Preferred Stock surrendered but not
converted.  Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of such Series A Preferred Stock to be converted, 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.  If the conversion is in
connection with an underwritten offering of securities registered pursuant to
the Securities Act of 1933, as amended, the conversion may, at the option of any
Holder tendering such Series A Preferred Stock for conversion, be conditioned
upon the closing with the underwriters of the sale of securities pursuant to
such offering, in which event the person(s) entitled to receive Common Stock
upon conversion of such Series A Preferred Stock shall not be deemed to have
converted such Series A Preferred Stock until immediately prior to the closing
of such sale of securities.

      


      (j) Certificate of
Adjustment.  In each case of an adjustment or readjustment of the
Series A Conversion Price or the number of shares of Common Stock or other
securities issuable upon conversion of the Series A Preferred Stock, the
Corporation, at its expense, shall compute such adjustment or readjustment in
accordance with the provisions of this Section 3, prepare a certificate showing
such adjustment or readjustment and furnish such certificate to each registered
Holder of Series A Preferred Stock.  Such certificate shall set forth
such adjustment or readjustment, showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (A) the
consideration received or deemed to be received by the Corporation for any
additional shares of Common Stock issued or sold or deemed to have been issued
or sold, (B) the Series A Conversion Price in effect before and after such
adjustment, (C) the number of additional shares of Common Stock issued or sold
or deemed to have been issued or sold and (D) the type and amount, if any, of
other property which at the time would be received upon conversion of the Series
A Preferred Stock.

      


      (k) Notices of Record
Date.  Upon (i) any taking by the 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 or other distribution or (ii)
any Acquisition, Asset Transfer or any voluntary or involuntary dissolution,
liquidation or winding up of the Corporation, in each case the Corporation shall
furnish to each Holder of Series A Preferred Stock at least 20 days prior to the
record date specified therein a notice specifying (1) the date on which any such
record is to be taken for the purpose of such dividend or distribution and a
description of such dividend or distribution, (2) the date on which any such
Acquisition, Asset Transfer, dissolution, liquidation or winding up is expected
to become effective and (3) the date, if any, that is to be fixed for
determining the holders of record of Common Stock (or other securities) that
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such Acquisition, Asset
Transfer, dissolution, liquidation or winding up.

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      (l) Reservation of Stock Issuable Upon
Conversion. The 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 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 Series A Preferred Stock, in addition to such other
remedies as shall be available to the holder of such Series A Preferred Stock,
the 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
stockholder approval of any necessary amendment to the Articles of
Incorporation.

      


      (m) Fractional Shares.  No
fractional shares of Common Stock shall be issued upon conversion of Series A
Preferred Stock.  All shares of Common Stock (including fractions
thereof) issuable upon conversion of more than one share of Series A Preferred
Stock by a Holder thereof shall be aggregated for purposes of determination
whether the conversion would result in the issuance of any fractional
share.  If, after such aggregation, the conversion would result in the
issuance of any fractional share, in lieu of issuing any fractional share, the
Corporation shall round the number of shares of Common Stock to be issued to the
nearest whole number.

      


      4.  Dividend
Rights.

      


      (a)           Holders
of Series A Preferred Stock, in preference to the holders of Common Stock, shall
be entitled to receive, when, as and if declared by the Board of Directors (the
“Board”), but only out of funds that are legally available therefor, cash
dividends at the rate of six percent (6%) of the Original Series A Issue Price
per annum on each outstanding share of Series A Preferred Stock.  Such
dividends shall be payable only when, as and if declared by the Board and shall
be non-cumulative.

      


      (b)           So
long as any shares of Series A Preferred Stock are outstanding, the Corporation
shall not pay or declare any dividend, whether in cash or property, or make any
other distribution on the Common Stock, or purchase, redeem or otherwise acquire
for value any shares of Common Stock until all dividends as set forth in Section
5(a) above on the Series Preferred shall have been paid or declared and set
apart, except for:

      


      (i)           acquisitions
of Common Stock by the Corporation pursuant to agreements which permit the
Corporation to repurchase such shares at cost (or the lesser of cost or fair
market value) upon termination of services to the Corporation;

      


      (ii)           acquisitions
of Common Stock in exercise of the Corporation’s right of first refusal to
repurchase such shares; or

      


      (iii)           distributions
to holders of Common Stock in accordance with Section 2.

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      (c)           In
the event dividends are paid on any share of Common Stock, the Corporation shall
pay an additional dividend on all outstanding shares of Series A Preferred Stock
in a per share amount equal (on an as-if-converted to Common Stock basis) to the
amount paid or set aside for each share of Common Stock.

      


      


      5.
Transferability. The Series A Preferred Stock and any shares of Common Stock
issued upon conversion thereof, may only be sold, transferred, assigned, pledged
or otherwise disposed of ("Transfer") in accordance with state and federal
securities laws.  The Corporation shall keep at its principal office a
register of the Series A Preferred Stock.  Upon the surrender of any
certificate representing Series A Preferred Stock at such place, the
Corporation, at the request of the record Holder of such certificate, shall
execute and deliver (at the Corporation’s expense) a new certificate or
certificates in exchange therefor representing in the aggregate the number of
shares represented by the surrendered certificate.  Each such new
certificate shall be registered in such name and shall represent such number of
shares as is requested by the Holder of the surrendered certificate and
shall be substantially identical in form to the surrendered
certificate.

      


      6.
Amendment and Waiver.  This Certificate of Designation shall not be
amended, either directly or indirectly or through merger or consolidation with
another entity, in any manner that would alter or change the powers, preferences
or special rights of the Series A Preferred Stock so as to affect them
materially and adversely without the affirmative vote of the Required
Holders.  Any amendment, modification or waiver of any of the terms or
provisions of the Series A Preferred Stock by the Required Holders, whether
prospectively or retroactively effective, shall be binding upon all Holders of
Series A Preferred Stock.

      


      7.
Replacement.  Upon receipt of evidence reasonably satisfactory to the
Corporation (an affidavit of the registered Holder shall be satisfactory) of the
ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series A Preferred Stock, and in the case of any such loss,
theft or destruction upon receipt of indemnity reasonably satisfactory to the
Corporation (provided that if the Holder is a financial institution or other
institutional investor its own agreement shall be satisfactory) or in the case
of any such mutilation upon surrender of such certificate, the Corporation, at
its expense, shall execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of shares of such class
represented by such lost, stolen, destroyed or mutilated certificate and dated
the date of such lost, stolen, destroyed or mutilated certificate.

      


      8.
Notices.  Any notice required by the provisions of this Certificate of
Designation shall be in writing and shall be deemed effectively given: (i) upon
personal delivery to the party to be notified; (ii) when sent by confirmed
facsimile if sent during normal business hours of the recipient; if not, then on
the next business day; (iii) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt.  All notices to the
Corporation shall be addressed to the Corporation’s Chief Executive Officer at
the Corporation’s principal place of business on file with the Secretary of
State of the State of Nevada.  All notices to stockholders shall be
addressed to each holder of record at the address of such holder appearing on
the books of the Corporation.

      


      * * * *
*

      


      
        
           

        

        
          9

          
            

          

        

        
           

        

      

       

      IN
WITNESS WHEREOF, the Corporation has caused this Certificate of Designation to
be executed by Xiaoqun Ye, an Executive Officer of the Corporation, this 26th day of
April, 2010.

      


      
        	 
      	
                By:

              	
                 /s/
      Xiaoqun Ye

              
	 
      	
                Name:

              	
                Xiaoqun
      Ye

              
	 
      	
                Title:

              	
                Chief
      Executive Officer

              


      

       

      
        
           

        

        
          10