Exhibit 10

AIMS WORLDWIDE, INC.

SERIES B PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

July 8th, 2008

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AIMS WORLDWIDE, INC.

SERIES B PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

This Series B Preferred Stock and Warrant Purchase Agreement (the “Agreement”)
is made as of July 8th, 2008 by and between AIMS Worldwide, Inc., a Nevada
corporation (the “Company”) and FG Investment Holdings, LLC, a Delaware limited
liability company (“Purchaser”).

The parties hereby agree as follows:

1.

 Purchase and Sale of Preferred Stock.

1.1

Sale and Issuance of Series B Preferred Stock and Warrants.

(a) The Company has, or before the Initial Closing (as defined in Section 2)
will have, duly authorized the sale and issuance, pursuant to the terms of this
Agreement, of up to 5,000,000 shares of Series B Convertible Preferred Stock,
$.001 par value per share (the "Series B Preferred"), having the rights,
privileges, preferences and restrictions set forth in the Amendment to
Certificate of Designations of Preferences, Rights and Limitations of Preferred
Stock attached hereto as Exhibit A (the "Series B Preferred Stock Designation").
 The Company has, or before the Closing will have, adopted and filed the Series
B Preferred Stock Designation with the Secretary of State of the State of
Nevada.

(b) Subject to the terms and conditions of this Agreement, Purchaser agrees to
purchase at the Initial Closing (as hereinafter defined) and the Company agrees
to sell and issue to Purchaser at the Initial Closing 93,750 shares of Series B
Convertible Preferred Stock at a purchase price of $1.60 per share (the “Series
B Per Share Price) or One Hundred and Fifty Thousand and 00/100 dollars
($150,000), together with a warrant in the form attached hereto as Exhibit B to
purchase 6,000,000 shares of Common Stock at a price per share of Common Stock
of $0.352, subject to adjustment as set forth in the warrant (the “B-1
Warrant”), (the “Initial Closing”) (Disclosure Schedule 1.1(b)).  The shares of
Series B Convertible Preferred Stock and the warrant(s) issued to the Purchaser
pursuant to this Agreement at the Initial Closing, and each subsequent Closing,
shall be hereinafter referred to as the “Stock” and the “Warrants,”
respectively, and the shares of Common Stock issuable upon exercise of the
Warrants shall be hereinafter referred to as the “Warrant Stock.” The Stock, the
Warrants, the Warrant Stock, and the Common Stock issuable upon conversion of
the Stock shall be hereinafter referred to as the “Securities.”

1.2

Closing; Delivery.

(a) The Initial Closing shall take place at the offices of Gregory & Plotkin,
LLC, 1331 17th Street, Suite 1060, Denver, CO 80202, at 10:00 a.m., on or before
July 8th, 2008, or at such other time and place as the Company and the Purchaser
mutually agree upon, orally or in writing.

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(b) Second Closing.  Upon achievement of the Second Tranche Milestone, as
defined below, (the “Second Closing”), Purchaser shall purchase and the Company
shall issue and sell 1,406,250 shares of Series B Convertible Preferred Stock to
Purchasers for a purchase price of $1.60 per share or Two Million Two Hundred
Fifty Thousand and 00/100  ($2,250,000.00) in total (the “Second Tranche
Shares”) together with a warrant in the form attached hereto as Exhibit C to
purchase 21,875,000 shares of Common Stock with an exercise price of $0.50 per
share subject to adjustment as set forth in the warrant (the “B-2 Warrant”). The
Company shall promptly notify Purchaser in writing upon either (i) its
achievement of the Second Tranche Milestone (“Achievement Notice”), or (ii) its
failure, on or before September 30, 2008 (or such earlier or later date as the
parties shall mutually agree),  to achieve the Second Tranche Milestone
(“Failure Notice”).  Upon receipt of a Failure Notice, Purchaser shall have 30
days within which to notify the Company whether Purchaser elects to consummate
the Second Tranche investment notwithstanding the failure to meet one or both of
the conditions imposed by the Second Tranche Milestone (the “Waiver Notice”).
 The Second Closing shall occur within ten (10) Business Days of the Achievement
Notice or the Waiver Notice, as the case may be.  As used herein, the term
“Second Tranche Milestone” shall mean satisfaction of all the following
conditions as determined in the sole discretion of the Purchaser: i) the Initial
Closing has been fully consummated; and ii) the trading price of the Company’s
common stock (based on a prior 15 day VWAP of the closing bid price) must be
equal to or greater than $1.00.

(c) Third Closing.  Upon achievement of the Third Tranche Milestone, as defined
below, (the “Third Closing”), Purchaser shall purchase and the Company shall
issue and sell 1,312,500 convertible shares of Series B Convertible Preferred
Shares to Purchaser for a purchase price of $1.60 per share or Two Million One
Hundred Thousand and 00/100  ($2,100,000.00) in total) (the “Third Tranche
Shares”).  The Company shall promptly notify Purchaser in writing upon either
(i) its achievement of the Third Tranche Milestone (“Third Tranche Achievement
Notice”); or (ii) its failure, on or before December 31, 2010 to achieve the
Third Tranche Milestone (“Third Tranche Failure Notice”).  Upon receipt of a
Third Tranche Failure Notice, Purchaser shall have 30 days within which to
notify the Company whether Purchaser shall consummate the Third Tranche
investment notwithstanding the failure to meet one or more of the conditions
imposed by the Third Tranche Milestone (the “Third Tranche Waiver Notice”).  The
Third Closing shall occur within ten (10) Business Days of the Third Tranche
Achievement Notice or the Third Tranche Waiver Notice, as the case may be.  As
used herein, the term “Third Tranche Milestone” shall mean satisfaction of all
the following conditions as determined in the sole discretion of the Purchaser:
(i) both the Initial Closing and the Second Closing have been fully consummated,
(ii) the trading price of the Company’s common stock (based on a prior 15 day
VWAP of the closing bid price) must be equal to or greater than $1.00, and (iii)
the Company’s Consolidated EBITDA shall equal or exceed $500,000 for the two
most recent consecutive calendar quarters ending prior to the date of the Third
Closing (the “Testing Period”), and shall be projected by the Company to equal
or exceed $750,000 per calendar quarter (which projections shall be inclusive of
any Person acquired by the Company during the Testing Period, or any Person to
be acquired by the Company with proceeds from the Third Closing on or shortly
after the Third Closing).  The Company shall pay a fee to the Purchaser in the
amount of Four Hundred Fifty Thousand and 00/100 Dollars ($450,000.00)
simultaneously with the consummation of the Third Closing (the “Third Closing
Fee”).

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(d) At each closing, the Company shall deliver to Purchaser: (i)  a certificate
representing the Stock being purchased thereby against payment of the purchase
price therefor by wire transfer to a bank account designated by the Company, and
(ii) if called for under the terms set forth above, a Warrant. The obligations
of the Purchaser to purchase the Securities at each closing subsequent to the
Initial Closing, is subject to fulfillment, or the waiver in writing by
Purchaser, of the following conditions, on or before the date of such subsequent
closing (the “Subsequent Closing Date”):

(i)

The representations and warranties contained in Section 2 of this Agreement
shall be true in all material respects as of the Subsequent Closing Date with
the same effect as though such representations and warranties had been made on
and as of that date.

(ii)

The Company shall have in all material respects performed and complied with all
agreements and conditions contained in this Agreement and the Transaction
Agreements required to be performed or complied with by the Company prior to or
at such Subsequent Closing Date;

(iii)

At the request of the Purchaser, the Company shall have delivered to the
Purchaser copies of the documents specified in Sections 4.3 and 4.7, updated to
such Subsequent Closing Date; and

(iv)

With respect to the Third Closing, the Company shall have paid the Third Closing
Fee.

1.3

Defined Terms Used in this Agreement. In addition to the terms defined above,
the following terms used in this Agreement shall be construed to have the
meanings set forth or referenced below.

“Business Day” means any day other than a Saturday, Sunday or other day on which
the national or state banks located in the State of Colorado or the State of
Virginia are authorized to be closed.

 

“Closing” means the Initial Closing, the Second Closing, or the Third Closing,
as the context may require.

“Common Stock" means the Corporation's common stock, par value $0.001 per share,
and stock of any other class into which such shares may hereafter have been
reclassified or changed.

“Code” means the Internal Revenue Code of 1986, as amended.

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“Consolidated EBITDA” of any Person for any period, means Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
Consolidated Interest Expense of such Person and its Subsidiaries, amortization
or write-off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness, (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses, prepayment fees paid to existing lenders, and
minus, to the extent included in the statement of such Consolidated Net Income
for such period, the sum of (a) interest income (except to the extent deducted
in determining Consolidated Interest Expense), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets) and (c) any other non-cash income, all as
determined on a consolidated basis; provided, that for purposes of calculating
Consolidated EBITDA of the Company and its Subsidiaries for any period, (i) the
Consolidated EBITDA of any Person acquired by the Company or its Subsidiaries
during such period shall be excluded on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day of such
period) if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the acquisition
of such Person and the related consolidated statements of income and
stockholders’ equity and of cash flows for the period in respect of which
Consolidated EBITDA is to be calculated (x) have been previously provided to the
Purchaser and the Warrant Holder (if different) and (y) either (1) have been
reported on without a qualification arising out of the scope of the audit by
independent certified public accountants of nationally recognized standing or
(2) have been found acceptable by the Purchaser and the Warrant Holder (if
different) and (ii) the Consolidated EBITDA of any Person Disposed of by the
Company or its Subsidiaries during such period shall be excluded for such period
(assuming the consummation of such Disposition and the repayment of any
Indebtedness in connection therewith occurred on the first day of such period).

“Registration Rights Agreement” means the Registration Rights Agreement between
the Company and the Purchaser, dated as of the date of the Closing, in the form
of Exhibit D attached hereto.

“Knowledge” or “to the Company’s Knowledge of” means the actual knowledge after
reasonable investigation of the following officers: B. Joseph Vincent, Gerald
Garcia, and Patrick Summers.

“Material Adverse Effect” means a material adverse effect on the business,
assets (including intangible assets), liabilities, condition (financial or
otherwise), property, prospects or results of operation of the Company.

“Preferred Stock” has the meaning given thereto in the Series B Preferred Stock
Designation.

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“Purchaser” has the meaning set forth in the preamble to this Agreement.

“Securities Act” means the Securities Act of 1933, as amended.

“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq
SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the OTC Bulletin Board.

 

“Transaction Agreements” means this Agreement, the Warrants, the Series B
Preferred Stock Designation, and the Registration Rights Agreement.

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the primary Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg Financial
L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using
the VAP function; (b) if the Common Stock is not then listed or quoted on the
Trading Market and if prices for the Common Stock are then reported in the “Pink
Sheets” published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (c) in all
other cases, the fair market value of a share of Common Stock as determined by a
nationally recognized-independent appraiser selected in good faith by Purchasers
holding a majority of the principal amount of Preferred Stock then outstanding.

2.

Representations and Warranties of the Company. The Company hereby represents and
warrants to Purchaser that, except as set forth on the Schedule of Exceptions,
which exceptions shall be deemed to be representations and warranties as if made
hereunder, the following representations are true and complete as of the date of
the Closing, except as otherwise indicated.

2.1

Organization, Good Standing and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada and has all requisite corporate power and authority to carry on its
business as presently conducted or proposed to be conducted (Disclosure Schedule
2.1). The Company is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure so to qualify would have a Material
Adverse Effect.

2.2

 Capitalization. The authorized capital of the Company consists, or will
consist, immediately prior to the Closing, of the following (also represented
herein by Disclosure Schedule 2.2):

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(a) The Company has reserved 18,077,050 shares of Common Stock for issuance upon
exercise of certain common stock purchase warrants and options issued by the
Company pursuant to convertible note and warrant purchase agreements (the
“Convertible Note Agreements”).  The rights, privileges and preferences of the
Preferred Stock are as stated in the Certificate of Designation.  In addition,
the Company has reserved 9,983,651 shares for distribution via its private
placement memorandum and has reserved 1,156,576 shares of common stock for
fulfillment of other agreements.

(b) 200,000,000 shares of Common Stock, 47,791,621 shares of which are issued
and outstanding immediately prior to the Initial Closing, and 20,000,000 shares
of Preferred Stock, 4,912,500 shares of which are issued and currently in
escrow, and 2,187,500 are issued and outstanding immediately prior to the
Initial Closing. All of the outstanding shares of Common Stock have been duly
authorized, are fully paid and nonassessable and were issued in compliance with
all applicable federal and state securities laws.

(c) The Company has reserved 2,000,000 shares of Common Stock for issuance to
officers, directors, employees and consultants of the Company for 2008 staff
grants and options, to be proposed to the Board of Directors. Of such reserved
shares of Common Stock, no options to purchase shares have been granted and are
currently outstanding and 20,000,000 shares of Common Stock remain available for
issuance to officers, directors, employees and consultants pursuant Board
approval.

(d)  Except for (i) the conversion privileges of the Preferred Stock, (ii) the
outstanding options issued pursuant to the Stock Plan, and (iii) those matters
disclosed in Schedule 2.2, and (iv) except as set forth in the Registration
Rights Agreement (as defined below), there are no outstanding options, warrants,
rights (including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock or any
securities convertible into or exchangeable for shares of Common Stock or Series
B Preferred Stock. None of the Company’s stock purchase agreements or stock
option documents contains a provision for acceleration of vesting (or lapse of a
repurchase right) or other changes in the vesting provisions or other terms of
such agreement upon the occurrence of any event or combination of events. The
Company has never adjusted or amended the exercise price of any stock options
previously awarded, whether through amendment, cancellation, replacement grant,
repricing, or any other means.

(f) Section 2.2(f) of the Disclosure Schedule (“Schedule 2: Disclosure”) sets
forth the capitalization of the Company immediately following the Closing
including the number of shares of the following: (i) issued and outstanding
Common Stock, including, with respect to restricted Common Stock, vesting
schedule and repurchase price; (ii) issued stock options, including vesting
schedule and exercise price; (iii) stock options not yet issued but reserved for
issuance; (iv) each series of Preferred Stock; and (v) warrant or stock purchase
rights, if any.

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2.3

Subsidiaries. Except as set forth in Disclosure Schedule 2.3, The Company does
not currently own or control, directly or indirectly, any interest in any other
corporation, partnership, trust, joint venture, limited liability company,
association or other business entity. The Company is not a participant in any
joint venture, partnership or similar arrangement.

2.4

Authorization. All corporate action on the part of the Company, its officers,
directors and holders of capital stock necessary for the authorization,
execution and delivery of this Agreement and the other Transaction Agreements,
the performance of all obligations of the Company hereunder and thereunder and
the authorization, issuance and delivery of the Securities has been taken or
will be taken prior to the Closing (Disclosure Schedule 2.4), and the
Transaction Agreements, when executed and delivered by the Company, shall
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief, or
other equitable remedies, or (iii) to the extent the indemnification provisions
contained in the Registration Rights Agreement, may be limited by applicable
federal or state securities laws.

2.5

Valid Issuance of Securities. The Stock and Warrants when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable and free
of restrictions on transfer other than restrictions on transfer under this
Agreement and the Registration Rights Agreement, applicable state and federal
securities laws and liens or encumbrances created by or imposed by Purchaser.
Based in part upon the representations of the Purchasers in Section 3 of this
Agreement and subject to the provisions of Section 2.6 below, the Stock and
Warrants will be issued in compliance with all applicable federal and state
securities laws. The Warrant Stock has been duly and validly reserved for
issuance, and upon issuance in accordance with the terms of the Warrant will be
duly and validly issued, fully paid and nonassessable and free of restrictions
on transfer other than restrictions on transfer under this Agreement, the
Registration Rights Agreement, and applicable federal and state securities laws
and will be issued in compliance with all applicable federal and state
securities laws. The Common Stock issuable upon conversion of the Stock has been
duly and validly reserved for issuance, and upon issuance in accordance with the
terms of the Series B Preferred Stock Designation, shall be duly and validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under this Agreement and the Registration Rights
Agreement, applicable federal and state securities laws and liens or
encumbrances created by or imposed by Purchaser. Based in part upon the
representations of the Purchaser in Section 3 of this Agreement, and subject to
Section 2.6 below, the Common Stock and Warrants issuable upon conversion of the
Stock will be issued in compliance with all applicable federal and state
securities laws.

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2.6

Governmental Consents and Filings. Assuming the accuracy of the representations
made by the Purchaser in Section 3 of this Agreement, no consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any federal, state or local governmental authority
is required on the part of the Company in connection with the consummation of
the transactions contemplated by this Agreement, other applicable state
securities laws and Regulation D of the Securities Act, which have been made or
will be made in a timely manner.

2.7

Litigation. Other than as described on Disclosure Schedule 2.7, there is no
claim, action, suit, proceeding, arbitration, complaint, charge or investigation
pending or, to the Company’s knowledge, currently threatened against the Company
that questions the validity of the Transaction Agreements or the right of the
Company to enter into them, or to consummate the transactions contemplated
hereby or thereby, or that would reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, or any change in
the current equity ownership of the Company, nor is the Company aware that there
is any basis for the foregoing. Except as set forth in Schedule 2.7(a), neither
the Company nor, to the Company’s knowledge, any of its officers or directors,
is a party or is named as subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. Except as set forth in Schedule 2.7(b), there is no action,
suit, proceeding or investigation by the Company pending or which the Company
intends to initiate. The foregoing includes, without limitation, actions, suits,
proceedings or investigations pending or threatened in writing (or any basis
therefor known to the Company) involving the prior employment of any of the
Company’s employees, their use in connection with the Company’s business, or any
information or techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers.

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2.8

Intellectual Property. The Company owns or possesses sufficient legal rights to
all patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and proprietary rights and processes necessary for its
business without, to the Company’s knowledge, any conflict with, or infringement
of, the rights of others. There are no outstanding options, licenses, or
agreements of any kind relating to the foregoing, nor is the Company bound by or
a party to any options, licenses or agreements of any kind with respect to the
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information, proprietary rights and processes of any other person or
entity. The Company has not received any communications alleging that the
Company has violated or, by conducting its business, would violate any of the
patents, trademarks, service marks, trade names, copyrights, trade secrets or
other proprietary rights or processes of any other person or entity. To the
Company’s knowledge, none of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of such employee’s best efforts to
promote the interest of the Company or that would conflict with the Company’s
business. Neither the execution or delivery of this Agreement, nor the carrying
on of the Company’s business by the employees of the Company, nor the conduct of
the Company’s business as proposed, will, to the Company’s knowledge, conflict
with or result in a breach of the terms, conditions, or provisions of, or
constitute a default under, any contract, covenant or instrument under which any
such employee is now obligated. To the Company’s knowledge, it will not be
necessary to use any inventions of any of its employees or consultants (or
persons it currently intends to hire) made prior to their employment by the
Company. Each employee and consultant has assigned to the Company all
intellectual property rights he or she owns that are related to the Company’s
business as now conducted and as presently proposed to be conducted. Disclosure
Schedule 2.8 of the Disclosure Schedule lists all registered Company patents and
trademarks. The Company has not embedded any open source, copyright or community
source code in any of its products generally available or in development,
including but not limited to any libraries or code licensed under any general
public license, lesser general public license or similar license arrangement.

2.9

Compliance with Other Instruments. The Company is not in violation or default of
any provisions of its Articles of Incorporation, as amended, or Bylaws, or of
any instrument, judgment, order, writ, or decree, or under any note, indenture,
mortgage, lease, agreement, contract or purchase order to which it is a party or
by which it is bound or, to its knowledge, of any provision of federal or state
statute, rule or regulation applicable to the Company, the violation of which
would have a Material Adverse Effect. The execution, delivery and performance of
the Transaction Agreements and the consummation of the transactions contemplated
hereby or thereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument, judgment, order, writ, decree or
contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company.

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2.10

 Agreements; Actions.

(a) Other than (i) standard employee benefits generally made available to all
employees, (ii) standard director and officer indemnification agreements
approved by the Board of Directors, and (iii) the purchase of shares of the
Company’s capital stock and the issuance of options to purchase shares of the
Company’s Common Stock, in each instance, approved by the Board of Directors,
there are no agreements, understandings or proposed transactions between the
Company and any of its officers, directors, affiliates, or any affiliate
thereof.

(b) Except for the Transaction Agreements and disclosures in the Company’s
filings with the Federal Securities and Exchange Commission (the “SEC”), there
are no agreements, understandings, instruments, contracts or proposed
transactions to which the Company is a party or by which it is bound that
involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of $10,000, (ii) the license of any patent, copyright, trade
secret or other proprietary right to or from the Company, or (iii) the grant of
rights to manufacture, produce, assemble, license, market, or sell its products
to any other person or affect the Company’s exclusive right to develop,
manufacture, assemble, distribute, market or sell its products.

(c) Except as set forth in the Company’s filings with the SEC, the Company has
not (i) declared or paid any dividends, or authorized or made any distribution
upon or with respect to any class or series of its capital stock, (ii) incurred
any indebtedness for money borrowed or incurred any other liabilities
individually in excess of $10,000 or in excess of $25,000 in the aggregate,
(iii) made any loans or advances to any person, other than ordinary advances for
travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its
assets or rights, other than the sale of its inventory in the ordinary course of
business.

(d) For the purposes of subsections (b) and (c) above, all indebtedness,
liabilities, agreements, understandings, instruments, contracts and proposed
transactions involving the same person or entity (including persons or entities
the Company has reason to believe are affiliated with that person or entity)
shall be aggregated for the purposes of meeting the individual minimum dollar
amounts of each such subsection.

(e) The Company has not engaged in the past three months in any discussion with
any representative of any corporation, partnership, trust, joint venture,
limited liability company, association or other entity, or any individual,
regarding (i) a sale of all or substantially all of the Company’s assets, (ii)
any merger, consolidation or other business combination transaction of the
Company with or into another corporation, entity or person, other than a
transaction in which the holders of at least a majority of the shares of voting
capital stock of the Company outstanding immediately prior to such transaction
continue to hold (either by such shares remaining outstanding or by their being
converted into shares of voting capital stock of the surviving entity) a
majority of the total voting power represented by the shares of voting capital
stock of the Company (or the surviving entity) outstanding immediately after
such transaction, or (iii) the direct or indirect acquisition (including by way
of a tender or exchange offer) by any person, or persons acting as a group, of
beneficial ownership or a right to acquire beneficial ownership of shares
representing a majority of the voting power of the then outstanding shares of
capital stock of the Company.

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2.11

Disclosure. The Company and the Purchaser have engaged in a due diligence
process, and in connection with that process the Company has made available to
the Purchaser all the information reasonably available to the Company that the
Purchaser has requested for deciding whether to acquire the Securities and all
information that the Company believes is reasonably necessary to enable the
Purchaser to make such a decision, including certain of the Company’s
projections describing its proposed business (collectively, the “Business
Plan”). No representation or warranty of the Company contained in this Agreement
and the exhibits attached hereto, any certificate furnished or to be furnished
to Purchaser at the Closing, or the Business Plan contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made. To the extent the Business Plan was
prepared by management of the Company, the Business Plan and the financial and
other projections contained in the Business Plan were prepared in good faith;
however, the Company does not warrant that it will achieve such projections.

2.12

No Conflict of Interest. Except as set forth in the Company’s filings with the
SEC, the Company is not indebted, directly or indirectly, to any of its officers
or directors or to their respective spouses or children, in any amount
whatsoever other than in connection with expenses or advances of expenses
incurred in the ordinary course of business or relocation expenses of employees.
None of the Company’s officers or directors, or any members of their immediate
families, are, directly or indirectly, indebted to the Company (other than in
connection with purchases of the Company’s stock) or, to the Company’s
knowledge, have any direct or indirect ownership interest in any firm or
corporation with which the Company is affiliated or with which the Company has a
business relationship, or any firm or corporation which competes with the
Company except that officers, directors and/or holders of capital stock of the
Company may own stock in (but not exceeding two percent of the outstanding
capital stock of) any publicly traded company that may compete with the Company.
None of the Company’s officers or directors or, to the Company’s knowledge, any
members of their immediate families are, directly or indirectly, interested in
any material contract with the Company. The Company is not a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation.

2.13

Rights of Registration and Voting Rights. Except as provided in the Registration
Rights Agreement, and in section 2.2(d) above, the Company is not under any
obligation to register under the Securities Act any of its currently outstanding
securities or any securities issuable upon exercise or conversion of its
currently outstanding securities. To the Company’s knowledge, no holder of
capital stock of the Company has entered into any agreements with respect to the
voting of capital shares of the Company.

2.14

Title to Property and Assets. Except as set forth in its filings with the SEC,
the Company owns its property and assets free and clear of all mortgages, deeds
of trust, liens, loans and encumbrances, except for statutory liens for the
payment of current taxes that are not yet delinquent and encumbrances and liens
that arise in the ordinary course of business and do not materially impair the
Company’s ownership or use of such property or assets. With respect to the
property and assets it leases, the Company is in compliance with such leases
and, to its knowledge, holds a valid leasehold interest free of any liens,
claims or encumbrances other than to the lessors of such property or assets.

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2.15

Financial Statements. The Company has made available to each Purchaser its
unaudited financial statements (including balance sheet, income statement and
statement of cash flows) as of March 31, 2008 (Disclosure Schedule 2.15) and for
the fiscal year ended December 31, 2007 (collectively, the “Financial
Statements”). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated. The Financial Statements fairly present in all
material respects the financial condition and operating results of the Company
as of the dates, and for the periods, indicated therein, subject to normal
year-end audit adjustments. Except as set forth in the Financial Statements, the
Company has no material liabilities or obligations, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to March 31, 2008 and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate would not
have a Material Adverse Effect. The Company maintains and will continue to
maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.

2.16

Changes. Since March 31, 2008, there has not been:

(a) any change in the assets, liabilities, financial condition or operating
results of the Company from that reflected in the Financial Statements, except
changes in the ordinary course of business that have not caused, in the
aggregate, a Material Adverse Effect;

(b) any damage, destruction or loss, whether or not covered by insurance, that
would have a Material Adverse Effect;

(c) any waiver or compromise by the Company of a valuable right or of a material
debt owed to it;

(d) any satisfaction or discharge of any lien, claim, or encumbrance or payment
of any obligation by the Company, except in the ordinary course of business and
the satisfaction or discharge of which would not have a Material Adverse Effect;

(e) any material change to a material contract or agreement by which the Company
or any of its assets is bound or subject;

(f) any material change in any compensation arrangement or agreement with any
employee, officer, director or holder of capital stock;

(g) any sale, assignment or transfer of any patents, trademarks, copyrights,
trade secrets or other intangible assets of the Company;

(h) any resignation or termination of employment of any officer or key employee
of the Company; and the Company, is not aware of any impending resignation or
termination of employment of any such officer or key employee;

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(i) any mortgage, pledge, transfer of a security interest in, or lien, created
by the Company, with respect to any of its material properties or assets, except
liens for taxes not yet due or payable and liens that arise in the ordinary
course of business and do not materially impair the Company’s ownership or use
of such property or assets;

(j) any loans or guarantees made by the Company to or for the benefit of its
employees, officers or directors, or any members of their immediate families,
other than travel advances and other advances made in the ordinary course of its
business;

(k) any declaration, setting aside or payment or other distribution in respect
to any of the Company’s capital stock, or any direct or indirect redemption,
purchase, or other acquisition of any of such stock by the Company;

(l) to the Company’s knowledge, any other event or condition of any character,
other than events affecting the economy or the Company’s industry generally,
that could reasonably be expected to result in a Material Adverse Effect;

(m) receipt of notice that there has been a loss of, or material order
cancellation by, any major customer of the Company; or

(n) any arrangement or commitment by the Company to do any of the things
described in this Section 2.16.

2.17

Employee Matters.

(a) As of the date hereof, the Company employs four (4) full-time employees and
no part-time employees and engages one (1) consultant(s) or independent
contractor(s). None of the Company’s employees, officer, consultants or
independent contractors is entitled to any bonus, commission, severance pay, or
deferred compensation, and the Company has no policy, practice, plan, or program
of paying severance pay or any form of severance compensation in connection with
the termination of employment services.

(b) The Company is not delinquent in payments to any of its employees,
consultants, or independent contractors for any wages, salaries, commissions,
bonuses, or other direct compensation for any service performed for it to the
date hereof or amounts required to be reimbursed to such employees, consultants,
or independent contractors. The Company has complied in all material respects
with all applicable state and federal equal employment opportunity laws and with
other laws related to employment, including those related to wages, hours,
worker classification, and collective bargaining. The Company has withheld and
paid to the appropriate governmental entity or is holding for payment not yet
due to such governmental entity all amounts required to be withheld from
employees of the Company and is not liable for any arrears of wages, taxes,
penalties, or other sums for failure to comply with any of the foregoing.

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(c) To the Company’s knowledge, no officer or key employee intends to terminate
employment with the Company or is otherwise likely to become unavailable to
continue as an officer or key employee, nor does the Company have a present
intention to terminate the employment of any of the foregoing. The employment of
each employee of the Company is terminable at the will of the Company. Each
former key employee whose employment was terminated by the Company has entered
into an agreement with the Company providing for the full release of any claims
against the Company or any related party arising out of such employment.

(d) The Company has not made any representations regarding equity incentives to
any officer, employees, director or consultant that are inconsistent with the
share amounts and terms set forth in the minutes of meetings of the Company’s
board of directors.

(e) Section 2.17(e) of the Disclosure Schedule (Disclosure Schedule 2.17(e))
sets forth all employee benefit plans maintained, established or sponsored by
the Company, or in or to which the Company participates or contributes, which is
subject to the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Company has made all required contributions and has no liability
to any such employee benefit plan, other than liability for health plan
continuation coverage described in Part 6 of Title I(B) of ERISA, and has
complied with all applicable laws for any such employee benefit plan.

2.18

Tax Returns and Payments. The Company has filed all tax returns and reports as
required by law. These returns and reports are true and correct in all material
respects. The Company has paid all taxes and other assessments due.

2.19

Insurance. The Company has in full force and effect fire and casualty insurance
policies, with extended coverage, sufficient in amount (subject to reasonable
deductibles) to allow it to replace any of its properties that might be damaged
or destroyed, and directors and officers liability coverage with a policy limit
as stated on the policy summary attached as Disclosure Schedule 2.19.

2.20

Labor Agreements and Actions. The Company is not bound by or subject to (and
none of its assets or properties is bound by or subject to) any written or oral,
express or implied, contract, commitment or arrangement with any labor union,
and no labor union has requested or, to the Company’s knowledge, has sought to
represent any of the employees, representatives or agents of the Company. No
strike or other labor dispute involving the Company is currently pending, or to
the Company’s knowledge threatened, which could have a Material Adverse Effect,
nor is the Company aware of any labor organization activity involving its
employees. The employment of each officer and employee of the Company is
terminable at the will of the Company. To its knowledge, the Company has
complied in all material respects with all applicable state and federal equal
employment opportunity laws and with other laws related to employment.

2.21

Permits. The Company and each of its subsidiaries has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business,
the lack of which could have a Material Adverse Effect. The Company is not in
default in any material respect under any of such franchises, permits, licenses
or other similar authority.

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2.22

 Corporate Documents. The Articles of Incorporation, as amended, and Bylaws of
the Company are in the form provided to counsel for the Purchaser. The copy of
the minute books of the Company provided to the Purchaser’s counsel contains
minutes of all meetings of directors and holders of capital stock and all
actions by written consent without a meeting by the directors and holders of
capital stock since the date of incorporation and reflects all actions by the
directors (and any committee of directors) and holders of capital stock with
respect to all transactions referred to in such minutes accurately in all
material respects.

3.

Representations and Warranties of the Purchaser. Purchaser hereby represents and
warrant to the Company that:

3.1

Authorization. The Purchaser has full power and authority to enter into this
Agreement and each of the Transaction Agreements. This Agreement, and each of
the

Transaction Agreements, when executed and delivered by the Purchaser, will
constitute valid and legally binding obligations of the Purchaser, enforceable
in accordance with their terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and any other
laws of general application affecting enforcement of creditors’ rights
generally, and as limited by laws relating to the availability of a specific
performance, injunctive relief, or other equitable remedies, or (b) to the
extent the indemnification provisions contained in the Registration Rights
Agreement may be limited by applicable federal or state securities laws.

3.2

Purchase Entirely for Own Account. This Agreement is made with the Purchaser in
reliance upon the Purchaser’s representation to the Company, which by the
Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the
Securities to be acquired by the Purchaser will be acquired for investment for
the Purchaser’s own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, the Purchaser further
represents that the Purchaser does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. The Purchaser has been formed for the specific purpose of acquiring
the Securities.

3.3

 Disclosure of Information. The Purchaser has had an opportunity to discuss the
Company’s business, management, financial affairs and the terms and conditions
of the offering of the Securities with the Company’s management and has had an
opportunity to review the Company’s facilities.  

3.4

Experience.   Purchaser has carefully reviewed the representations concerning
the Company contained in this Agreement, has read the Business Plan and has made
detailed inquiry concerning the Company, its business, management, financial
affairs and its personnel; the officers of the Company have made available to
such Purchaser any and all written information which it has requested and have
answered to Purchaser's satisfaction all inquiries made by Purchaser; and
Purchaser has sufficient knowledge and experience in finance and business that
it is capable of evaluating the risks and merits of its investment in the
Company and Purchaser is able financially to bear the risks thereof.

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3.5

 Risk Factors.   Purchaser understands that Purchaser’s investment in the
Securities involves a high degree of risk.  Purchaser understands that no United
States federal or state agency or any other government or governmental agency
has passed on or made any recommendation or endorsement of the Securities.
Purchaser warrant that Purchaser, and each of its members, is able to bear the
complete loss of Purchaser’s investment in the Securities.

3.6

 Accredited Investor. The Purchaser, and each of its members, is an accredited
investor as defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.

3.7

No General Solicitation. Neither the Purchaser, nor any of its officers,
employees, agents, directors, holders of capital stock or partners has engaged
the services of a broker, investment banker or finder to contact any potential
investor nor has the Purchaser or any of the Purchaser’s officers, employees,
agents, directors, holders of capital stock or partners, agreed to pay any
commission, fee or other remuneration to any third party to solicit or contact
any potential investor. Neither the Purchaser, nor any of its officers,
directors, employees, agents, holders of capital stock or partners has (a)
engaged in any general solicitation, or (b) published any advertisement in
connection with the offer and sale of the Stock.

4.

Conditions of the Purchasers’ Obligations at Closing. The obligations of
Purchaser to the Company under this Agreement are subject to the fulfillment, on
or before the Closing, of each of the following conditions, unless otherwise
waived:

4.1

 Representations and Warranties. The representations and warranties of the
Company contained in Section 2 shall be true and correct in all material
respects on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of the
Closing.

4.2

Performance. The Company shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.

4.3

Compliance Certificate. The President of the Company shall deliver to the
Purchasers at the Closing a certificate certifying that the conditions specified
in Sections 4.1 and 4.2 have been fulfilled.

4.4

Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Stock
and Warrants pursuant to this Agreement shall be obtained and effective as of
the Closing.

4.5

 Board of Directors. As of the Closing, the Board shall be comprised of not more
than seven directors, one of whom shall be appointed by a majority vote of the
Series B Preferred shares.  The Company shall reimburse all reasonable expenses
(including travel and lodging) incurred by the Preferred Directors in attending
meetings of the Board of Directors or committees thereof.

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4.6

Registration Rights Agreement. The Company and the Purchaser shall have executed
and delivered the Registration Rights Agreement in substantially the form
attached as Exhibit D.

4.7

Secretary’s Certificate. The Secretary of the Company shall deliver to the
Purchaser at the Closing a certificate (Disclosure Schedule 4.7) certifying (i)
the Series B Preferred Stock Designation (Exhibit A), (ii) the Bylaws of the
Company (Disclosure Schedule 4.7ii), and (iii) resolutions of the Board of
Directors of the Company approving the execution, delivery and implementation of
this Agreement, the Transaction Agreements and the transactions contemplated
hereby and thereby (Disclosure Schedule 4.7iii).

4.8

Proceedings and Documents. All corporate and other proceedings in connection
with the transactions contemplated at the Closing and all documents incident
thereto shall be reasonably satisfactory in form and substance to Purchaser, and
Purchaser (or its counsel) shall have received all such counterpart original and
certified or other copies of such documents as reasonably requested. Such
documents may include good standing certificates.

5.

Conditions of the Company’s Obligations at Closing. The obligations of the
Company to Purchaser under this Agreement are subject to the fulfillment, on or
before the Closing, of each of the following conditions, unless otherwise
waived:

5.1

 Representations and Warranties. The representations and warranties of Purchaser
contained in Section 3 shall be true and correct in all material respects on and
as of the Initial Closing and each Subsequent Closing with the same effect as
though such representations and warranties had been made on and as of each
Subsequent Closing.

5.2

 Performance. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the Initial Closing
shall have been performed or complied with in all material respects.

5.3

Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the Stock
and the Warrants pursuant to this Agreement shall be obtained and effective as
of the Closing.

6.

Miscellaneous.

6.1

Survival of Warranties. Unless otherwise set forth in this Agreement, the
warranties, representations and covenants of the Company and the Purchaser
contained in or made pursuant to this Agreement shall survive the execution and
delivery of this Agreement and the Initial and each Subsequent Closing and shall
in no way be affected by any investigation or knowledge of the subject matter
thereof made by or on behalf of the Purchaser or the Company.

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6.2

Transfer; Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties. Nothing in this Agreement, express or implied, is
intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

6.3

Governing Law. This Agreement and all acts and transactions pursuant hereto and
the rights and obligations of the parties hereto shall be governed, construed
and interpreted in accordance with the laws of the State of New York, without
giving effect to principles of conflicts of law.

6.4

Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute
one instrument.

6.5

 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.

6.6

 Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon delivery, when delivered personally or by
overnight courier or sent by fax (upon customary confirmation of receipt), or 48
hours after being deposited in the U.S. mail, as certified or registered mail,
with postage prepaid, addressed to the party to be notified at such party’s
address as set forth on the signature page, or as subsequently modified by
written notice, and (a) if to the Company, with a copy to Gerald Garcia, Jr.,
President and CEO, 10400 Eaton Place, Suite 403, Fairfax, VA 22030 or (b) if to
the Purchaser, with a copy to James P. Gregory, Gregory & Plotkin, LLC, 1331
17th Street, Suite 1060, Denver, CO 80202.

6.7

 Finder’s Fee. Each party represents that it neither is nor will be obligated
for any finder’s fee or commission in connection with this transaction. Each
Purchaser agrees to indemnify and to hold harmless the Company from any
liability for any commission or compensation in the nature of a finder’s fee
arising out of this transaction (and the costs and expenses of defending against
such liability or asserted liability) for which each Purchaser or any of its
officers, employees, or representatives is responsible. The Company agrees to
indemnify and hold harmless each Purchaser from any liability for any commission
or compensation in the nature of a finder’s or broker’s fee arising out of this
transaction (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.

6.8

 Attorney’s Fees. If any action at law or in equity (including arbitration) is
necessary to enforce or interpret the terms of any of the Agreements, the
prevailing party shall be entitled to reasonable attorney’s fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.

6.9

 Amendments and Waivers. Any term of this Agreement may be amended or waived
only with the written consent of the Parties hereto.

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6.10

Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.

6.11

 Delays or Omissions. No delay or omission to exercise any right, power or
remedy accruing to any party under this Agreement, upon any breach or default of
any other party under this Agreement, shall impair any such right, power or
remedy of such non-breaching or non-defaulting party nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any party of any breach or
default under this Agreement, or any waiver on the part of any party of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.

6.12

Entire Agreement. This Agreement, and the documents referred to herein
constitute the entire agreement between the parties hereto pertaining to the
subject matter hereof, and any and all other written or oral agreements relating
to the subject matter hereof existing between the parties hereto are expressly
canceled.

[Signature Pages Follow]

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The parties have executed this Series B Preferred Stock and Warrant Purchase
Agreement as of the date first written above.

THE COMPANY:

AIMS WORLDWIDE, INC.

By: /s/ Gerald Garcia, Jr.  

(Signature)

Name:  Gerald Garcia, Jr.

Title:    President

Address:  

10400 Eaton Place

Suite 203

Fairfax, VA

22030

Fax:

(703) 621 3865, x 2256

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The parties have executed this Series B Preferred Stock and Warrant Purchase
Agreement as of the date first written above.

PURCHASER:

FG Investment Holdings, LLC

By: /s/ James P Gregory               

(Signature)

Name:

James P. Gregory

Title:

Managing Member

Address:

1331 17th Street

Suite 1060

Denver, CO

80202

Fax:

(303) 292 9121

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EXHIBITS

Exhibit A

-     Series B Preferred Stock Designation, Officer's Certificate, Waiver of
Conflict of Interest, and Initial Preferred Stock Certificate

Exhibit B

-     Form of Common Stock Purchase Warrant B-1

Exhibit C

-     Form of Common Stock Purchase Warrant B-2

Exhibit D

-     Form of Registration Rights Agreement

SCHEDULES AND DISCLOSURES

Schedule 1

-     Exceptions to Representations and Warranties

Disclosure Schedules

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EXHIBIT A

Series B Preferred Stock Designation

AIMS WORLDWIDE, INC.

CERTIFICATE OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES B PREFERRED STOCK

        The undersigned, Gerald Garcia, Jr. and B. Joseph Vincent, do hereby
certify that:

                1. They are the President and Secretary, respectively, of AIMS
WORLDWIDE, INC., a Nevada corporation (the “Corporation”).

                2. The Corporation is authorized to issue 20,000,000 shares of
preferred stock, 7,500,000 of which have been previously designated Series A
Preferred Stock and such Series A Preferred Stock cannot be subordinated in
preference to any other Series of stock unless approved by the holders of the
Series A Preferred Stock or such Series A Preferred Stock is cancelled, retired,
or revoked.

                3. The following resolutions were duly adopted by the Board of
Directors:

        WHEREAS, the Certificate of Incorporation of the Corporation, as
amended, provides for a class of its authorized stock known as preferred stock,
comprised of 20,000,000 shares, $0.001 par value per share, issuable from time
to time in one or more series;

        WHEREAS, the Board of Directors of the Corporation is authorized to fix
the dividend rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly unissued series of
preferred stock and the number of shares constituting any Series and the
designation thereof, of any of them;

        WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to fix the rights, preferences,
restrictions and other matters relating to a series of the preferred stock,
establish the Certificate of Designation for the Series B Preferred Stock, the
corporation has the authority to issue, as follows:

        NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash or exchange of
other securities, rights or property and does hereby fix and determine the
rights, preferences, restrictions and other matters relating to the Series B
Preferred Stock as follows:

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 SERIES B PREFERRED STOCK DESIGNATION

Section 1.

Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement (as defined below) shall have the meanings
given such terms in the Purchase Agreement. For the purposes hereof, the
following terms shall have the following meanings:

“Commission” means the Securities and Exchange Commission.

“Common Stock" means the Corporation's common stock, par value $0.001 per share,
and stock of any other class into which such shares may hereafter have been
reclassified or changed.

“Common Stock Equivalents” means any securities of the Corporation or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

“Conversion Date” shall have the meaning set forth in Section 6(a).

“Conversion Ratio” shall have the meaning set forth in Section 6(a).

“Conversion Value” shall have the meaning set forth in Section 6(a).

 

“Conversion Shares” means, collectively, the shares of Common Stock into which
the shares of Preferred Stock are convertible in accordance with the terms
hereof.

“Conversion Shares Registration Statement” means a registration statement that
meets the requirements of the Registration Rights Agreement and registers the
resale of all Conversion Shares by the Holder, who shall be named as a “selling
stockholder” thereunder, all as provided in the Registration Rights Agreement.

“Dilutive Issuance” shall have the meaning set forth in Section 7(b) hereof.

“Effective Date” means the date that the Conversion Shares Registration
Statement is declared effective by the Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

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“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Corporation pursuant to any stock or
option plan duly adopted by a majority of the non-employee members of the Board
of Directors of the Corporation or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise of or conversion of any securities issued hereunder, and of any
convertible securities, options or warrants issued and outstanding on the date
of this Certificate of Designations, provided that such securities have not been
amended since the date of this Certificate of Designations to increase the
number of such securities, and (c) securities issued pursuant to acquisitions or
strategic transactions, provided any such issuance shall only be to a Person
which is, itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Corporation and in which the Corporation
receives benefits in addition to the investment of funds, but shall not include
a transaction in which the Corporation is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities.

“Fundamental Transaction” shall have the meaning set forth in Section 7(f)(iii)
hereof.

“Holder” shall have the meaning given such term in Section 2 hereof.

“Junior Securities” means the Common Stock and all other equity or equity
equivalent securities of the Corporation other than those securities that are
explicitly senior in rights or liquidation preference to the Preferred Stock.

“Original Issue Date” shall mean the date of the first issuance of any shares of
the Preferred Stock regardless of the number of transfers of any particular
shares of Preferred Stock and regardless of the number of certificates which may
be issued to evidence such Preferred Stock.

“Person” means a corporation, an association, a partnership, a limited liability
company, a business association, an individual, a government or political
subdivision thereof or a governmental agency.

“Preferred Stock” shall have the meaning set forth in Section 2.

“Purchase Agreement” means the Preferred Stock Purchase Agreement, dated as July
8, 2008, to which the Corporation and the original Holders are parties, as
amended, modified or supplemented from time to time in accordance with its
terms, a copy of which is on file at the principal offices of the Corporation.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the Closing Date, to which the Corporation and the original Holder are
parties, as amended, modified or supplemented from time to time in accordance
with its terms.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

“Senior Securities” means the authorized Series A Preferred Stock of the
Company.

“Subsidiary” shall mean a corporation, limited liability company, partnership,
joint venture or other  business entity of which the Corporation owns
beneficially or of record more than 19% of the equity interest.

“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

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“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq
SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the OTC Bulletin Board.

“Transaction Agreements” shall have the meaning set forth in the Purchase
Agreement.

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the primary Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg Financial
L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using
the VAP function; (b) if the Common Stock is not then listed or quoted on the
Trading Market and if prices for the Common Stock are then reported in the “Pink
Sheets” published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (c) in all
other cases, the fair market value of a share of Common Stock as determined by a
nationally recognized-independent appraiser selected in good faith by Purchasers
holding a majority of the principal amount of Preferred Stock then outstanding.

         Section 2.     Designation, Amount and Par Value. The series of
preferred stock shall be designated as the Corporation’s Series B Preferred
Stock (the “Preferred Stock”) and the number of shares so designated shall be
5,000,000 which shall not be subject to increase without the consent of all of
the holders of the Preferred Stock (each a “Holder” and collectively, the
“Holders”).  Each share of Preferred Stock shall have a par value of $0.001 per
share.  Capitalized terms not otherwise defined herein shall have the meaning
given such terms in Section 1 hereof.

 

Section 3.

Dividends and Other Distributions.  No dividends shall be payable with respect
to the Preferred Stock.  No dividends shall be payable with respect to the
Common Stock while the Preferred Stock is outstanding.  The Common Stock shall
not be redeemed while the Preferred Stock is outstanding.

Section 4.

Voting Rights and Holder Approvals. The Preferred Stock shall have voting rights
equal in all aspects to the number of shares of shares of Common Stock
represented by such Preferred Stock on an as converted basis and shall be
entitled to vote on any and all matters brought to a vote of shareholders of
Common Stock and all matters brought to a vote of shareholders of Preferred
Stock. Furthermore, so long as any shares of Preferred Stock are outstanding:

a)       The Corporation shall not, without the affirmative approval of the
Holders of the shares of the Preferred Stock then outstanding, (A) alter or
change adversely the powers, preferences or rights given to the Preferred Stock
or alter or amend this Certificate of Designation, (B) authorize or create any
class of stock ranking as to dividends or distribution of assets upon a
Liquidation (as defined in Section 5) senior to or otherwise pari passu with the
Preferred Stock, or any stock possessing greater voting rights or the right to
convert at a more favorable price than the Preferred Stock, (C) amend its
certificate or articles of incorporation or other charter documents in breach of
any of the provisions hereof, (D) increase the authorized number of shares of
Preferred Stock, or (E) enter into any agreement with respect to the foregoing;

27

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b)

     The Corporation shall (A) cause the appointment of a director to the Board
of Directors as approved by a  majority of the Holders of the shares of
Preferred Stock, (B) maintain, commencing 60 days from the date hereof, a Board
of Directors with a majority of the Directors being Independent Directors, (C)
maintain,  a Board of Directors’ Audit Committee and a Board of Directors’
Compensation Committee with the majority of members being Independent Directors,
(D) be managed by and under the direction of its Board of Directors which may
exercise all lawful powers of the Corporation, including but not limited to, the
election of officers and agents for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time by the Board of
Directors, and (E) not convene a Board of Directors meeting or Board of
Directors Committee meeting without a quorum of Directors being comprised of a
majority of Independent Directors; and

        c)

    The Corporation shall not, without the affirmative approval of the Holders
of the shares of the Preferred Stock then outstanding, (A) enter into any
agreement with, or distribute any assets or equity to, Company Stockholders,
with the exception of such distributions made in accordance with the Purchase
Agreement or participation in the Company’s Option Plan; (B) delist the
Corporation’s Common Stock from a Trading Market; or (C) purchase, or enter into
any option to purchase, any equity or convertible debt instrument of the
Corporation.

Section 5.

Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary (a “Liquidation”), the Holders shall be
entitled to receive out of the assets of the Corporation, whether such assets
are capital or surplus, for each share of Preferred Stock an amount equal to 32
cents ($0.32), (the “Liquidation Value”) before any distribution or payment
shall be made to the holders of any Junior Securities, and if the assets of the
Corporation shall be insufficient to pay in full such amounts, then the entire
assets to be distributed to the Holders shall be distributed among the Holders
ratably in accordance with the respective amounts that would be payable on such
shares if all amounts payable thereon were paid in full.  A Fundamental
Transaction or Change of Control Transaction shall not be treated as a
Liquidation. The Corporation shall mail written notice of any such Liquidation,
not less than 70 days prior to the payment date stated therein, to each record
Holder.

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Section 6.

Conversion.

a)

Conversions at Option of Holder. Each share of Preferred Stock shall be
initially convertible (subject to the limitations set forth in Section 6(b)),
into five (5) shares of Common Stock (as adjusted as provided below, the
“Conversion Ratio”) at the option of the Holders, at any time and from time to
time from and after the Original Issue Date.  Holders shall effect conversions
by providing the Corporation with the form of conversion notice attached hereto
as Annex A (a “Notice of Conversion”) as fully and originally executed by the
Holder, together with the delivery by the Holder to the Corporation of the stock
certificate(s) representing the number of shares of Preferred Stock so
converted, with such stock certificates being duly endorsed in full for transfer
to the Corporation or with an applicable stock power duly executed by the Holder
in the manner and form as deemed reasonable by the transfer agent of the Common
Stock. Each Notice of Conversion shall specify the number of shares of Preferred
Stock to be converted, the number of shares of Preferred Stock owned prior to
the conversion at issue, the number of shares of Preferred Stock owned
subsequent to the conversion at issue, the stock certificate number and the
shares of Preferred Stock represented thereby which are accompanying the Notice
of Conversion, and the date on which such conversion is to be effected, which
date may not be prior to the date the Holder delivers such Notice of Conversion
and the applicable stock certificates to the Corporation by overnight delivery
service (the “Conversion Date”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the Trading Day immediately
following the date that such Notice of Conversion and applicable stock
certificates are received by the Corporation. The calculations and entries set
forth in the Notice of Conversion shall control in the absence of manifest or
mathematical error.  Shares of Preferred Stock converted into Common Stock in
accordance with the terms hereof shall be canceled and may not be reissued.  The
initial value of the Preferred Stock, on an as converted to Common Stock basis
(calculated utilizing the Conversion Ratio), on the Conversion Date shall be
equal to $0.32, per share (as adjusted pursuant to Section 7 or otherwise as
provided herein, the “Conversion Value”).  If the initial Conversion Value is
adjusted pursuant to Section 7 or as otherwise provided herein, the Conversion
Ratio shall likewise be adjusted and the new Conversion Ratio shall equal the
Liquidation Value divided by the new Conversion Value.  Thereafter, subject to
any further adjustments in the Conversion Value, each share of Preferred Stock
shall be convertible into that number of shares of Common Stock equal to the new
Conversion Ratio.  

b)

Reserved.

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c)

Mechanics of Conversion

(i)

Delivery of Certificate Upon Conversion. Except as otherwise set forth herein,
not later than three Trading Days after each Conversion Date (the “Share
Delivery Date”), the Corporation shall deliver to the Holder (A) as applicable
either (1) prior to the Effective Date, a certificate or certificates with 144
restrictions representing the number of shares of Common Stock being acquired
upon the conversion of shares of Preferred Stock or 2 days after the Effective
Date, a certificate or certificates which shall be free of restrictive legends
and trading restrictions (other than those required by the Purchase Agreement)
representing the number of shares of Common Stock being acquired upon the
conversion of shares of Preferred Stock, and (B) a bank check in the amount of
accrued and unpaid dividends (if the Corporation has elected or is required to
pay accrued dividends in cash). After the Effective Date, the Corporation shall,
upon request of the Holder, deliver any certificate or certificates required to
be delivered by the Corporation under this Section electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions. If in the case of any Notice of Conversion such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the third Trading Day after the Conversion Date, the Holder
shall be entitled to elect by written notice to the Corporation at any time on
or before its receipt of such certificate or certificates thereafter, to rescind
such conversion, in which event the Corporation shall immediately return the
certificates representing the shares of Preferred Stock tendered for conversion.

i.

Reservation of Shares Issuable Upon Conversion. The Corporation covenants that
it will at all times reserve and keep available out of its authorized and
unissued shares of Common Stock solely for the purpose of issuance upon
conversion of the Preferred Stock, each as herein provided, free from preemptive
rights or any other actual contingent purchase rights of persons other than the
Holders, not less than such number of shares of the Common Stock as shall
(subject to any additional requirements of the Corporation as to reservation of
such shares set forth in the Purchase Agreement) be issuable (taking into
account the adjustments and restrictions of Section 7) upon the conversion of
all outstanding shares of Preferred Stock.  The Corporation covenants that all
shares of Common Stock that shall be so issuable shall, upon issue, be duly and
validly authorized, issued and fully paid, nonassessable and, if the Conversion
Shares Registration Statement is then effective under the Securities Act,
registered for public sale in accordance with such Conversion Shares
Registration Statement.

ii.

Fractional Shares. Upon a conversion hereunder, the Corporation shall not be
required to issue stock certificates representing fractions of shares of the
Common Stock.

iii.

Transfer Taxes.  The issuance of certificates for shares of the Common Stock on
conversion of the Preferred Stock shall be made without charge to the Holders
thereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificate, provided that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate
upon conversion in a name other than that of the Holder of such shares of
Preferred Stock so converted and the Corporation shall not be required to issue
or deliver such certificates unless or until the person or persons requesting
the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.

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Section 7.

Certain Adjustments.

a)

Stock Dividends and Stock Splits.  If the Corporation, at any time while the
Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make
a distribution or distributions on shares of its Common Stock or any other
equity or equity equivalent securities payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by
the Corporation pursuant to this Preferred Stock), (B) subdivide outstanding
shares of Common Stock into a larger number of shares, (C) combine (including by
way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (D) issue by reclassification of shares of the Common Stock
any shares of capital stock of the Corporation, then the Conversion Value shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding after such event.  Any adjustment made pursuant to this Section
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

b)

Subsequent Equity Sales.  Neither the Corporation nor any Subsidiary, as
applicable, at any time while Preferred Stock is outstanding, without the
express written consent of the Preferred Holders, shall offer, sell, grant any
option to purchase or offer, sell or grant any right to reprice its securities,
or otherwise dispose of or issue (or announce any offer, sale, grant or any
option to purchase or other disposition) any Common Stock or Common Stock
Equivalents entitling any Person to acquire shares of Common Stock at an
effective price per share less than the then Conversion Value (“Dilutive
Issuance”), as adjusted hereunder (if the holder of the Common Stock or Common
Stock Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which is
issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share which is less than the Conversion Value,
such issuance shall be deemed to have occurred for less than the Conversion
Value).

c)

Subsequent Rights Offerings.  The Corporation, at any time while the Preferred
Stock is outstanding, shall not issue rights, options or warrants to holders of
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than the Conversion Value.   

d)

Pro Rata Distributions. If the Corporation, at any time while Preferred Stock is
outstanding, shall distribute to all holders of Common Stock (and not to
Holders) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security, then in each such case the Conversion
Value shall be determined by multiplying such Conversion Value in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the VWAP determined as of the record date mentioned above, and of which
the numerator shall be such VWAP on such record date less the then fair market
value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments shall be described in a statement provided to the Holders of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock.  Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

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e)

Calculations.  All calculations under this Section 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.  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, and the description of
any such shares of Common Stock shall be considered on issue or sale of Common
Stock.  For purposes of this Section 7, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) actually
issued and outstanding.

f)

Notice to Holders.

i.

Adjustment to Conversion Price.  Whenever the Conversion Value is adjusted
pursuant to any of this Section 7, the Corporation shall promptly mail to each
Holder a notice setting forth the Conversion Value after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. If the
Corporation issues a variable rate security, despite the prohibition thereon in
the Purchase Agreement, the Corporation shall be deemed to have issued Common
Stock or Common Stock Equivalents at the lowest possible conversion or exercise
price at which such securities may be converted or exercised in the case of a
Variable Rate Transaction (as defined in the Purchase Agreement), or the lowest
possible adjustment price in the case of an MFN Transaction (as defined in the
Purchase Agreement).

 

Notice to Allow Conversion by Holder.  If (A) the Corporation shall declare a
dividend (or any other distribution) on the Common Stock; (B) the Corporation
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock; (C) the Corporation shall authorize the granting to all holders of
the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights; (D) the approval of any
stockholders of the Corporation shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Corporation is a party, any sale or transfer of all or substantially all of the
assets of the Corporation, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; (E) the Corporation
shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Corporation; then in each case, the Corporation shall
cause to be filed at each office or agency maintained for the purpose of
conversion of the Preferred Stock, and shall cause to be mailed to the Holders
at their last addresses as they shall appear upon the  stock books of the
Corporation, at least 70 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice.  Any and all
Conversion Shares issued or issuable upon conversion shall be entitled to share
in such transaction notwithstanding the record date of such transaction so long
as the Holders of the Preferred Stock elect to convert their shares of Preferred
Stock into Conversion Shares prior to the expiration of such 70-day notice
period.

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ii.

Exempt Issuance. Notwithstanding the foregoing, no adjustment will be made under
this Section 7 in respect of an Exempt Issuance.

iii.

Fundamental Transaction. If, at any time while this Preferred Stock is
outstanding, (A) the Corporation effects any merger or consolidation of the
Corporation with or into another Person, (B) the Corporation effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (C) any tender offer or exchange offer (whether by the Corporation
or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (D) the Corporation effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then upon any subsequent
conversion of this Preferred Stock, the Holder shall have the right to receive,
for each Conversion Share that would have been issuable upon such conversion
absent such Fundamental Transaction, the same kind and amount of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”).  For purposes of any such conversion, the determination of the
Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the
Corporation shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration.  If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this Preferred
Stock following such Fundamental Transaction.  To the extent necessary to
effectuate the foregoing provisions, any successor to the Corporation or
surviving entity in such Fundamental Transaction shall file a new Certificate of
Designations with the same terms and conditions and issue to the Holder new
preferred stock consistent with the foregoing provisions and evidencing the
Holder’s right to convert such preferred stock into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this paragraph (f)(iii) and insuring that this Preferred
Stock (or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.

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Section 8.  

Miscellaneous.

a)

Notices.  Any and all notices or other communications or deliveries to be
provided by the Holders hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service, addressed to the Corporation,
at the address provided in the Purchase Agreement. Any and all notices or other
communications or deliveries to be provided by the Corporation hereunder shall
be in writing and delivered personally, by facsimile, sent by a nationally
recognized overnight courier service addressed to each Holder at the facsimile
telephone number or address of such Holder appearing on the books of the
Corporation, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.

  

b)

Lost or Mutilated Preferred Stock Certificate.  If a Holder’s Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall
execute and deliver, in exchange and substitution for and upon cancellation of a
mutilated certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares of Preferred Stock so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the ownership thereof,
and indemnity, if requested, all reasonably satisfactory to the Corporation.

c)

Next Business Day.  Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

d)

Headings.  The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designations and shall not be deemed to
limit or affect any of the provisions hereof.

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and
the secretary or any assistant secretary, of the Corporation be and they hereby
are authorized and directed to prepare and file a Certificate of Designation of
Preferences, Rights and Limitations in accordance with the foregoing resolution
and the provisions of Nevada law.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 7th day
of July 2008.

/s/ Gerald Garcia, Jr.     

Name: Gerald Garcia, Jr.

Title:  President

B. Joseph Vincent            

Name: B. Joseph Vincent

Title:  Secretary

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ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES B
PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series B
Preferred Stock indicated below, into shares of common stock, par value $0.001
per share (the "Common Stock"), of AIMS WORLDWIDE, INC., a Nevada corporation
(the "Corporation"), according to the conditions hereof, as of the date written
below. If shares are to be issued in the name of a person other than
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates and opinions as reasonably
requested by the Corporation in accordance therewith. No fee will be charged to
the Holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:

Date to Effect Conversion: _____________________________________________        

 

Number of shares of Common Stock owned prior to Conversion: _______________
       

 

Number of shares of Preferred Stock to be Converted: ________________________
      

 

Value of shares of Preferred Stock to be Converted: ____________________
                 

 

Number of shares of Common Stock to be Issued: ___________________________
      

 

Certificate Number of Preferred Stock attached hereto:________________________
      

 

Number of Shares of Preferred Stock represented by attached
certificate:__________      

 

 

Number of shares of Preferred Stock subsequent to Conversion: ________________
      

 

 

[HOLDER]

By:__________________________________

     Name:                                                    

     Title:                                                      

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[aims8k071008ex10001.jpg] [aims8k071008ex10001.jpg]

 

AIMS Worldwide, Inc.

10400 Eaton Place, #203

Fairfax, VA 22030

Tel

703.621.3875

Fax

703.621.3870

AIMSWorldwide,com

AIMS WORLDWIDE, INC.

OFFICER’S CERTIFICATE

Reference is made to that certain Series B Preferred Stock and Warrant Purchase
Agreement (the “Agreement”) dated and effective as of July 8, 2008 by and
between AIMS Worldwide, Inc., a Nevada corporation (the “Company”) and FG
Investment Holdings, LLC, a Delaware limited liability company (“Purchaser”).

All capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Agreement.  This Certificate is being delivered to
satisfy the conditions precedent set forth in Sections 2, 4.1 and 4.3 of the
Agreement and certain other matters relating to the Company.

* * * * * * * * * * * * * * * * * * * * * * * * * * * *

I, Gerald G. Garcia, Jr., do hereby certify that I am the President of the
Company, and that, as such, I am authorized to execute this Certificate on
behalf of the Company, and do hereby further certify that:

1.

As of the date hereof, each of the representations and warranties made by the
Company in Section 2 and Section 4.1 of the Agreement, and the information
contained in the Disclosure Schedules provided by the Company are true and
correct in all respects, with the same force and effect as if made on and as of
the date hereof.

2.

The Company has performed or complied with in all respects all covenants,
agreements and conditions contained in the Agreement required to be performed or
complied with on or prior to the date hereof.

IN WITNESS WHEREOF, I have executed this Certificate as of July 8, 2008.

/s/ Gerald G. Garcia, Jr.

Gerald G. Garcia, Jr.

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Waiver of Conflict of Interest

WHEREAS:

Gregory and Plotkin, LLC (“GP”) has been asked to represent FG Investment
Holdings, LLC (“FG” or the “Company”), whose members include James P. Gregory
(“Gregory”) in the acquisition of certain Preferred Shares and Warrants from
AIMS Worldwide, Inc.  (“AIMS”) as more particularly described in that certain
securities purchase agreement attached hereto as Exhibit A and incorporated
herein by this reference; and   

WHEREAS:

FG is engaged in the business of acquiring and holding investment securities;
and

WHEREAS:

James P. Gregory  (“Gregory”) will act as general counsel to the Company and
will also acquire an ownership interest in the Company in exchange for a capital
investment; and

WHEREAS:

AIMS acknowledges that it has been advised of the consequences of entering this
transaction by outside counsel. AIMS further acknowledges that in its opinion,
and based on advice received from outside counsel, entering this transaction
with the Company is neither unfair nor unconscionable.

WHEREAS:

In accordance with the Colorado Rules of Professional Conduct, Rules 1.5 and
1.8, a lawyer may not enter into a business transaction with a client, nor
accept an interest in a business of a client, unless i) the transaction and
terms upon which the lawyer acquires the interest are fair, reasonable and fully
disclosed to the client, ii) the client is given a reasonable opportunity to
seek the advice of independent counsel in the transaction and, iii) the client
consents in writing.

NOW, THEREFORE:

The parties agree that James P. Gregory will acquire own 100% of the issued and
outstanding membership interests in the Company which will acquire Series B
Preferred Shares and Warrants to purchase additional shares in exchange for
capital investments at the closing of the acquisition of the Preferred Series B
Shares and Warrants from AIMS Worldwide, Inc.  .

Although the interests of Gregory and AIMS in this matter are generally
consistent, it is recognized and understood that differences may exist or become
evident during the course of GP’s representation of FG and Gregory’s ownership.
 Notwithstanding these possibilities, AIMS has determined that it is in its
individual and mutual interests to enter into the transaction as well as any
future interests that may arise.  

Each party has sought and acquired outside counsel in order to review the
transaction and James P. Gregory’s associated role and interest.

Accordingly, this confirms agreement of AIMS and Gregory regarding GP’s
representation of Gregory’s interests and those of FG Investment Holdings, LLC
jointly in connection with the above-described matter.  This will also confirm
that AIMS and Gregory have each agreed to waive any conflict of interest arising
out of, and that each will not object to, GP’s representation of FG in the
matter described herein.  

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By affixing my signature below, I consent to the aforementioned business
transaction entered into by James P. Gregory and myself, and further waive any
and all claims to a conflict of interest associated therewith.

By: /s/ Gerald Garcia, Jr.   

Gerald Garcia, Jr., President

AIMS Worldwide, Inc.

Date:____________________

 

By: /s/ James P. Gregory         

James P. Gregory

FG Investment Holdings, LLC

Date:___________________

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[aims8k071008ex10002.jpg] [aims8k071008ex10002.jpg]

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EXHIBIT B

Form of Common Stock Purchase Warrant B-1

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERTO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933

Warrant No. B-1

Number of Shares: 6,000,000   

 

(subject to adjustment)

Date of Issuance:  July 8h, 2008

 

AIMS WORLDWIDE, INC.

Common Stock Purchase Warrant

(Void after July 8, 2013)

AIMS Worldwide, Inc., a Nevada corporation (the “Company”), for value received,
hereby certifies that FG Investment Holdings, LLC, or its registered assigns
(the “Registered Holder”), is entitled, subject to the terms and conditions set
forth below, to purchase from the Company, at any time or from time to time on
or after the date of issuance and on or before 5:00 p.m. (Eastern time) on July
8, 2013, up to 6,000,000 shares of Common Stock, of the Company, at a purchase
price of $0.352 cents per share.  The shares purchasable upon exercise of this
Warrant, and the purchase price per share, each as adjusted from time to time
pursuant to the provisions of this Warrant, are hereinafter referred to as the
“Warrant Shares” and the “Purchase Price,” respectively.

1.

Exercise.

(a)

This Warrant may be exercised by the Registered Holder, in whole or in part, by
surrendering this Warrant, with the purchase form appended hereto as Exhibit I
duly executed by the Registered Holder or by the Registered Holder’s duly
authorized attorney, at the principal office of the Company, or at such other
office or agency as the Company may designate, accompanied by payment in full,
in lawful money of the United States, of the Purchase Price payable in respect
of the number of Warrant Shares purchased upon such exercise.

(b)

(i)  Notwithstanding anything in Section 1(a) above to the contrary, the holder
of this Warrant may, subject to subsection (c) below, at its election exercised
in its sole discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Purchase Price, elect instead to receive upon
such exercise the “Net Number” of shares of Common Stock determined according to
the following formula (a “Cashless Exercise”):

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Net Number = (A x (B-C))/B

(ii)

For purposes of the foregoing formula:

A = the total number of shares with respect to which this Warrant is then being
exercised.

B = the last reported sale price (as reported by Bloomberg) of the Common Stock
on the day immediately preceding the date of the Exercise Notice.

C = the Warrant Purchase Price then in effect at the time of such exercise.

(c)

The holder of this Warrant agrees not to elect a Cashless Exercise on or before
July 8, 2009.  The holder of this Warrant also agrees not to elect a Cashless
Exercise so long as there is an effective registration statement for the shares
underlying this Warrant.

(d)

The Company shall register the shares of Common Stock into which the Warrant is
convertible pursuant to:

(i)

the terms and conditions of the Registration Rights Agreement attached as
Exhibit B; or

(i)

the Holder, and its designees, being hereby granted the right to “piggyback” the
Warrant Shares issuable and/or issued upon exercise of this Warrant (such shares
being referred to herein as “Registrable Securities”) on each registration
statement filed by the Company so long as the registration form to be used is
suitable for the registration of the Registrable Securities (a “Piggyback
Registration”) (it being understood that the form S-8 and Form S-4 may not be
used for such purposes), all at the Company’s cost and expense (except
commissions or discounts and fees of any of the Holders’ own professionals, if
any; it being understood that the Company shall not be obligated to pay the fees
of more than one counsel for the holders of Registrable Securities.)  The
Company shall give each holder of Registrable Securities at least 15 days
written notice of the intended filing date of any registration statement, other
than a registration statement filed on Form S-4 or Form S-8 and each holder of
Registrable Securities shall have 10 days after receipt of such notice to notify
the Company of its intent to include the Registrable Securities in the
registration statement.  The Company shall keep any registration statement onto
which any holder of Registrable Securities has “Piggybacked” its Registrable
Securities current and effective for a period of up to 2 years from the date on
which the holder is first entitled to sell the total number of its Registrable
Securities registered thereunder.  If, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of such securities, the Company may, at its election, give written notice of
such determination to all holders of the Registrable Securities and (A) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, and (B) in the case of a determination to delay such registration
of its securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other Company securities.

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Furthermore, the Company shall cause the Registration Rights Agreement to remain
in full force and effect according to the provisions of the Registration Rights
Agreement and the Company shall comply in all material respects with the terms
thereof.

(e)

Each exercise of this Warrant shall be deemed to have been effected immediately
prior to the close of business on the day on which this Warrant shall have been
surrendered to the Company as provided in subsection 1(a) above (the “Exercise
Date”).  At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in subsection 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.

(f)

As soon as practicable after the exercise of this Warrant in full or in part,
and in any event within 10 days thereafter, the Company, at its expense, will
cause to be issued in the name of, and delivered to, the Registered Holder, or
as such Holder (upon payment by such Holder of any applicable transfer taxes)
may direct:

(i)

a certificate or certificates for the number of full Warrant Shares to which the
Registered Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which the Registered Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 3 hereof; and

(ii)

in case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof for
the number of Warrant Shares equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face of this Warrant
minus the number of such shares purchased by the Registered Holder upon such
exercise.

2.

Adjustments.

(a)

Adjustment for Stock Splits and Combinations.  If the Company shall at any time
or from time to time after the date on which this Warrant was first issued (the
“Original Issue Date”) effect a split or other subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that split or
other subdivision shall be proportionately decreased.  If the Company shall at
any time or from time to time after the Original Issue Date combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before the combination shall be proportionately increased.  Any
adjustment under this paragraph shall become effective at the close of business
on the date the subdivision or combination becomes effective.

(b)

Adjustment for Certain Dividends and Distributions.  In the event the Company at
any time, or from time to time after the Original Issue Date shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Purchase Price then in
effect immediately before such event shall be decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date, by multiplying the Purchase Price then in
effect by a fraction:

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(1)

the numerator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date, and

(2)

the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution;

provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price shall be adjusted
pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.

(c)

Adjustment of Purchase Price upon Issuance of Common Stock, Warrants, Options or
other Instruments Convertible into Common Stock.  If the Company shall issue or
sell any shares of Common Stock or Common Stock Equivalents (as hereinafter
defined), whether from the Company's treasury or otherwise, for a consideration
per share of Common Stock (for these purposes the holder of the Common Stock
Equivalents shall be deemed to have exercised  the right to acquire Common Stock
granted thereby to the fullest extent possible for the minimum consideration
payable thereunder, referred to herein as a “deemed issuance”) less than the
Purchase Price in effect immediately prior to such issue or sale, forthwith upon
such issue or sale, the applicable Purchase Price in effect immediately prior to
such issue or sale shall be reduced to the price at which such shares of Common
Stock have been issued or have been deemed to have been issued.  “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.   The
adjustments called for under this Subparagraph 2(c) shall not apply to the
issuance of:   (a) shares of Common Stock or options to employees, officers or
directors of the Corporation pursuant to any stock or option plan duly adopted
by a majority of the non-employee members of the Board of Directors of the
Corporation or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise of or
conversion of any securities issued hereunder, and of any convertible
securities, options or warrants issued and outstanding on the date of this
Warrant, and (c) securities issued pursuant to acquisitions or strategic
transactions, provided any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities.

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(d)

Adjustments for Other Dividends and Distributions.  In the event the Company at
any time or from time to time after the Original Issue Date shall make or issue,
or fix a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in securities of the
Company (other than shares of Common Stock) or in cash or other property (other
than cash out of earnings or earned surplus, determined in accordance with
generally accepted accounting principles), then and in each such event provision
shall be made so that the Registered Holder shall receive upon exercise hereof,
in addition to the number of shares of Common Stock issuable hereunder, the kind
and amount of securities of the Company and/or cash and other property which the
Registered Holder would have been entitled to receive had this Warrant been
exercised into Common Stock on the date of such event and had the Registered
Holder thereafter, during the period from the date of such event to and
including the Exercise Date, retained any such securities receivable, giving
application to all adjustments called for during such period under this Section
2 with respect to the rights of the Registered Holder.

(e)

Adjustment for Mergers or Reorganizations, etc.  If there shall occur any
reorganization, recapitalization, consolidation or merger involving the Company
in which the Common Stock is converted into or exchanged for securities, cash or
other property (other than a transaction covered by subsections 2(a), 2(b) or
2(d)), then, following any such reorganization, recapitalization, consolidation
or merger, the Registered Holder shall receive upon exercise hereof the kind and
amount of securities, cash or other property which the Registered Holder would
have been entitled to receive if, immediately prior to such reorganization,
recapitalization, consolidation or merger, the Registered Holder had held the
number of shares of  Common Stock subject to this Warrant.  In such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Registered Holder, to
the end that the provisions set forth in this Section 2 (including provisions
with respect to changes in and other adjustments of the Purchase Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
securities, cash or other property thereafter deliverable upon the exercise of
this Warrant.

(f)

Certificate as to Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth such adjustment or readjustment (including the kind and amount of
securities, cash or other property for which this Warrant shall be exercisable
and the Purchase Price) and showing in detail the facts upon which such
adjustment or readjustment is based.  The Company shall, upon the written
request at any time of the Registered Holder, furnish or cause to be furnished
to the Registered Holder a certificate setting forth (i) the Purchase Price then
in effect and (ii) the number of shares of  Common Stock and the amount, if any,
of other securities, cash or property which then would be received upon the
exercise of this Warrant.

3.

Fractional Shares.  The Company shall not be required upon the exercise of this
Warrant to issue any fractional shares, but shall make an adjustment therefor in
cash on the basis of the Fair Market Value per share of Common Stock, as
determined pursuant to subsection 1(b) above.

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4.

Requirements for Transfer.

(a)

This Warrant and the Warrant Shares shall not be sold or transferred unless
either (i) they first shall have been registered under the Securities Act of
1933, as amended (the “Act”), or (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.

(b)

Notwithstanding the foregoing, no registration or opinion of counsel shall be
required for (i) a transfer by a Registered Holder to a party specified in
Section 10(b) below, or (ii) a transfer made in accordance with Rule 144 under
the Act.

(c)

Each certificate representing Warrant Shares shall bear a legend substantially
in the following form:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERTO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933”

The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.

5.

No Impairment.  The Company will not, by amendment of its charter or through
reorganization, 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 of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.

6.

Notices of Record Date, etc.  In the event:

(a)

the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right; or

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(b)

of any capital reorganization of the Company, any reclassification of the Common
Stock of the Company, any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity and its Common Stock is not converted into or exchanged
for any other securities or property), any transfer or sale of all or
substantially all of the stock or assets of the Company, any other transaction
or series of related transactions in which the holders of capital stock of the
Company before the transaction no longer hold at least 50% of the capital stock
of the Company after the transaction(s), or any sale of securities by the
Company by means of a private placement or pursuant to a registration statement,
which results in gross proceeds to the Company of at least $3,500,000; or

(c)

of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up.  Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.

7.

Reservation of Stock.  The Company will at all times reserve and keep available,
solely for issuance and delivery upon the exercise of this Warrant, such number
of Warrant Shares and other securities, cash and/or property, as from time to
time shall be issuable upon the exercise of this Warrant.

8.

Exchange of Warrants.  Upon the surrender by the Registered Holder, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 4 hereof, issue and deliver to or
upon the order of such Holder, at the Company’s expense, a new Warrant or
Warrants of like tenor, in the name of the Registered Holder or as the
Registered Holder (upon payment by the Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of  Common Stock (or other securities, cash
and/or property) then issuable upon exercise of this Warrant.

9.

Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

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10.

Transfers, etc.

(a)

The Company will maintain a register containing the name and address of the
Registered Holder of this Warrant.  The Registered Holder may change its or his
address as shown on the warrant register by written notice to the Company
requesting such change.

(b)

Subject to the provisions of Section 4 hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, to any partner, member,
stockholder or affiliate of the Registered Holder, and any such transferee shall
have the rights of the Registered Holder to the extent of the portion of this
Warrant so transferred.  Such transfer shall be effective upon surrender of this
Warrant with a properly executed assignment (in the form of Exhibit II hereto)
at the principal office of the Company.  Nothing contained in this Section 10
shall limit the transferability of the Warrant Shares.

(c)

Until any transfer of this Warrant is made in the warrant register, the Company
may treat the Registered Holder as the absolute owner hereof for all purposes;
provided, however, that if and when this Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

11.

Mailing of Notices, etc.  All notices and other communications from the Company
to the Registered Holder shall be mailed by first-class certified or registered
mail, postage prepaid, to the address last furnished to the Company in writing
by the Registered Holder.  All notices and other communications from the
Registered Holder or in connection herewith to the Company shall be mailed by
first-class certified or registered mail, postage prepaid, to the Company at its
principal office set forth below.  If the Company should at any time change the
location of its principal office to a place other than as set forth below, it
shall give prompt written notice to the Registered Holder and thereafter all
references in this Warrant to the location of its principal office at the
particular time shall be as so specified in such notice.

12.

No Rights as Shareholder.  Until the exercise of this Warrant, the Registered
Holder shall not have or exercise any rights by virtue hereof as a shareholder
of the Company.  Notwithstanding the foregoing, in the event (i) the Company
effects a split of the Common Stock by means of a stock dividend and the
Purchase Price of and the number of Warrant Shares are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), and (ii) the Registered Holder exercises this Warrant between the
record date and the distribution date for such stock dividend, the Registered
Holder shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

13.

Amendment or Waiver.  Any term of this Warrant may be amended or waived upon
written consent of the Company and the Registered Holder.  

14.

Section Headings.  The section headings in this Warrant are for the convenience
of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.

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15.

Governing Law.  This Warrant will be governed by and construed in accordance
with the internal laws of the State of New York (without reference to the
conflicts of law provisions thereof).

EXECUTED as of the Date of Issuance indicated above.

AIMS WORLDWIDE, INC.

/s/Gerald Garcia, Jr.                                          

By:  Gerald Garcia, Jr.

[Corporate Seal]

Title:  President and Chief Executive Officer

ATTEST:

                                            

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EXHIBIT I

PURCHASE FORM

To: AIMS WORLDWIDE, INC.

Dated:____________

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No. 1), hereby irrevocably elects to purchase (check applicable box):

£

_____ shares of the  Common Stock covered by such Warrant; or

£

the maximum number of shares of  Common Stock covered by such Warrant pursuant
to the cashless exercise procedure set forth in Section 1(b).

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
 Such payment takes the form of (check applicable box or boxes):

£

$______ in lawful money of the United States; and/or

£

the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in Section 1(b), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in Section 1(b).

Signature:

______________________

Address:

_______________________

                                               

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EXHIBIT II

ASSIGNMENT FORM

FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. 1) with respect to the number of shares of  Common Stock covered
thereby set forth below, unto:

Name of Assignee

Address

No. of Shares

 

 

 

 

 

 

 

 

 

 

 

 

Dated:_____________________

Signature:________________________________

Signature Guaranteed:

By: _______________________

The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

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EXHIBIT C

Form of Common Stock Purchase Warrant B-2

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERTO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933

Warrant No. B-2

Number of Shares: 21,875,000   

 

(subject to adjustment)

Date of Issuance:  July 8th, 2008

 

AIMS WORLDWIDE, INC.

Common Stock Purchase Warrant

(Void after July 8, 2013)

AIMS Worldwide, Inc., a Nevada corporation (the “Company”), for value received,
hereby certifies that FG Investment Holdings, LLC, or its registered assigns
(the “Registered Holder”), is entitled, subject to the terms and conditions set
forth below, to purchase from the Company, at any time or from time to time on
or after the date of issuance and on or before 5:00 p.m. (Eastern time) on July
8, 2013, up to 21,875,000 shares of Common Stock, of the Company, at a purchase
price of $0.50 cents per share.  The shares purchasable upon exercise of this
Warrant, and the purchase price per share, each as adjusted from time to time
pursuant to the provisions of this Warrant, are hereinafter referred to as the
“Warrant Shares” and the “Purchase Price,” respectively.

1.

Exercise.

(a)

This Warrant may be exercised by the Registered Holder, in whole or in part, by
surrendering this Warrant, with the purchase form appended hereto as Exhibit I
duly executed by the Registered Holder or by the Registered Holder’s duly
authorized attorney, at the principal office of the Company, or at such other
office or agency as the Company may designate, accompanied by payment in full,
in lawful money of the United States, of the Purchase Price payable in respect
of the number of Warrant Shares purchased upon such exercise.

(b)

(i)  Notwithstanding anything in Section 1(a) above to the contrary, the holder
of this Warrant may, subject to subsection (c) below, at its election exercised
in its sole discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Purchase Price, elect instead to receive upon
such exercise the “Net Number” of shares of Common Stock determined according to
the following formula (a “Cashless Exercise”):

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Net Number = (A x (B-C))/B

(ii)

For purposes of the foregoing formula:

A = the total number of shares with respect to which this Warrant is then being
exercised.

B = the last reported sale price (as reported by Bloomberg) of the Common Stock
on the day immediately preceding the date of the Exercise Notice.

C = the Warrant Purchase Price then in effect at the time of such exercise.

(c)

Subject to all of the following conditions being met, the Company shall have the
right to “Call” this Warrant, in whole or in part,  on or before January 1,
2010, thereby forcing a non-Cashless exercise by the Registered Holder (the
“Call”):

(i)

the trading price of the Company’s common stock (based on a prior 15 day VWAP of
the closing bid price) must be equal to or greater than $1.00,

(ii)

the Company’s Consolidated EBITDA (as defined in Exhibit A) shall equal or
exceed $750,000 for the two most recent consecutive calendar quarters ending
prior to the date of the Call notice and, post-closing of the financing provided
by exercising the Call shall be projected to equal or exceed $1,750,000
(inclusive of the EBITDA forecast for the acquired compan(ies)) per calendar
quarter,

(iii)

the proceeds derived from exercising the Call shall be used for acquisitions
approved by the Registered Holder, such approval not to be unreasonably
withheld, conditioned or delayed.

The Company may exercise its right to Call by telecopying written notice to the
Registered Holder anytime after the conditions set forth in (i) – (iii) above
have been satisfied.

(d)

If the right to Call this Warrant has not been canceled and the Company fails to
exercise a Call, then the Registered Holder of this Warrant agrees not to elect
a Cashless Exercise on or before January 1, 2010.  The holder of this Warrant
also agrees not to elect a Cashless Exercise so long as there is an effective
registration statement for the shares underlying this Warrant.

(e)

The Company shall register the shares of Common Stock into which the Warrant is
convertible pursuant to:

(i)

the terms and conditions of the Registration Rights Agreement attached as
Exhibit B; or

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(ii)

the Holder, and its designees, being hereby granted the right to “piggyback” the
Warrant Shares issuable and/or issued upon exercise of this Warrant (such shares
being referred to herein as “Registrable Securities”) on each registration
statement filed by the Company so long as the registration form to be used is
suitable for the registration of the Registrable Securities (a “Piggyback
Registration”) (it being understood that the form S-8 and Form S-4 may not be
used for such purposes), all at the Company’s cost and expense (except
commissions or discounts and fees of any of the Holders’ own professionals, if
any; it being understood that the Company shall not be obligated to pay the fees
of more than one counsel for the holders of Registrable Securities.)  The
Company shall give each holder of Registrable Securities at least 15 days
written notice of the intended filing date of any registration statement, other
than a registration statement filed on Form S-4 or Form S-8 and each holder of
Registrable Securities shall have 10 days after receipt of such notice to notify
the Company of its intent to include the Registrable Securities in the
registration statement.  The Company shall keep any registration statement onto
which any holder of Registrable Securities has “Piggybacked” its Registrable
Securities current and effective for a period of up to 2 years from the date on
which the holder is first entitled to sell the total number of its Registrable
Securities registered thereunder.  If, at any time after giving written notice
of its intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register or to delay registration
of such securities, the Company may, at its election, give written notice of
such determination to all holders of the Registrable Securities and (A) in the
case of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such abandoned
registration, and (B) in the case of a determination to delay such registration
of its securities, shall be permitted to delay the registration of such
Registrable Securities for the same period as the delay in registering such
other Company securities.

Furthermore, the Company shall cause the Registration Rights Agreement to remain
in full force and effect according to the provisions of the Registration Rights
Agreement and the Company shall comply in all material respects with the terms
thereof.

(f)

Each exercise of this Warrant shall be deemed to have been effected immediately
prior to the close of business on the day on which this Warrant shall have been
surrendered to the Company as provided in subsection 1(a) above (the “Exercise
Date”).  At such time, the person or persons in whose name or names any
certificates for Warrant Shares shall be issuable upon such exercise as provided
in subsection 1(d) below shall be deemed to have become the holder or holders of
record of the Warrant Shares represented by such certificates.

(g)

As soon as practicable after the exercise of this Warrant in full or in part,
and in any event within 10 days thereafter, the Company, at its expense, will
cause to be issued in the name of, and delivered to, the Registered Holder, or
as such Holder (upon payment by such Holder of any applicable transfer taxes)
may direct:

(i)

a certificate or certificates for the number of full Warrant Shares to which the
Registered Holder shall be entitled upon such exercise plus, in lieu of any
fractional share to which the Registered Holder would otherwise be entitled,
cash in an amount determined pursuant to Section 3 hereof; and

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(ii)

in case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, calling in the aggregate on the face or faces thereof for
the number of Warrant Shares equal (without giving effect to any adjustment
therein) to the number of such shares called for on the face of this Warrant
minus the number of such shares purchased by the Registered Holder upon such
exercise.

2.

Adjustments.

(a)

Adjustment for Stock Splits and Combinations.  If the Company shall at any time
or from time to time after the date on which this Warrant was first issued (the
“Original Issue Date”) effect a split or other subdivision of the outstanding
Common Stock, the Purchase Price then in effect immediately before that split or
other subdivision shall be proportionately decreased.  If the Company shall at
any time or from time to time after the Original Issue Date combine the
outstanding shares of Common Stock, the Purchase Price then in effect
immediately before the combination shall be proportionately increased.  Any
adjustment under this paragraph shall become effective at the close of business
on the date the subdivision or combination becomes effective.

(b)

Adjustment for Certain Dividends and Distributions.  In the event the Company at
any time, or from time to time after the Original Issue Date shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in each such event the Purchase Price then in
effect immediately before such event shall be decreased as of the time of such
issuance or, in the event such a record date shall have been fixed, as of the
close of business on such record date, by multiplying the Purchase Price then in
effect by a fraction:

(1)

the numerator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date, and

(2)

the denominator of which shall be the total number of shares of Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date plus the number of shares of Common Stock
issuable in payment of such dividend or distribution;

provided, however, if such record date shall have been fixed and such dividend
is not fully paid or if such distribution is not fully made on the date fixed
therefor, the Purchase Price shall be recomputed accordingly as of the close of
business on such record date and thereafter the Purchase Price shall be adjusted
pursuant to this paragraph as of the time of actual payment of such dividends or
distributions.

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(c)

Adjustment of Purchase Price upon Issuance of Common Stock, Warrants, Options or
other Instruments Convertible into Common Stock.  If the Company shall issue or
sell any shares of Common Stock or Common Stock Equivalents (as hereinafter
defined), whether from the Company's treasury or otherwise, for a consideration
per share of Common Stock (for these purposes the holder of the Common Stock
Equivalents shall be deemed to have exercised  the right to acquire Common Stock
granted thereby to the fullest extent possible for the minimum consideration
payable thereunder, referred to herein as a “deemed issuance”) less than the
Purchase Price in effect immediately prior to such issue or sale, forthwith upon
such issue or sale, the applicable Purchase Price in effect immediately prior to
such issue or sale shall be reduced to the price at which such shares of Common
Stock have been issued or have been deemed to have been issued.  “Common Stock
Equivalents” means any securities of the Company or the Subsidiaries which would
entitle the holder thereof to acquire at any time Common Stock, including
without limitation, any debt, preferred stock, rights, options, warrants or
other instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock.   The
adjustments called for under this Subparagraph 2(c) shall not apply to the
issuance of:   (a) shares of Common Stock or options to employees, officers or
directors of the Corporation pursuant to any stock or option plan duly adopted
by a majority of the non-employee members of the Board of Directors of the
Corporation or a majority of the members of a committee of non-employee
directors established for such purpose, (b) securities upon the exercise of or
conversion of any securities issued hereunder, and of any convertible
securities, options or warrants issued and outstanding on the date of this
Warrant, and (c) securities issued pursuant to acquisitions or strategic
transactions, provided any such issuance shall only be to a Person which is,
itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Company and in which the Company receives
benefits in addition to the investment of funds, but shall not include a
transaction in which the Company is issuing securities primarily for the purpose
of raising capital or to an entity whose primary business is investing in
securities.

(d)

Adjustments for Other Dividends and Distributions.  In the event the Company at
any time or from time to time after the Original Issue Date shall make or issue,
or fix a record date for the determination of holders of Common Stock entitled
to receive, a dividend or other distribution payable in securities of the
Company (other than shares of Common Stock) or in cash or other property (other
than cash out of earnings or earned surplus, determined in accordance with
generally accepted accounting principles), then and in each such event provision
shall be made so that the Registered Holder shall receive upon exercise hereof,
in addition to the number of shares of Common Stock issuable hereunder, the kind
and amount of securities of the Company and/or cash and other property which the
Registered Holder would have been entitled to receive had this Warrant been
exercised into Common Stock on the date of such event and had the Registered
Holder thereafter, during the period from the date of such event to and
including the Exercise Date, retained any such securities receivable, giving
application to all adjustments called for during such period under this Section
2 with respect to the rights of the Registered Holder.

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(e)

Adjustment for Mergers or Reorganizations, etc.  If there shall occur any
reorganization, recapitalization, consolidation or merger involving the Company
in which the Common Stock is converted into or exchanged for securities, cash or
other property (other than a transaction covered by subsections 2(a), 2(b) or
2(d)), then, following any such reorganization, recapitalization, consolidation
or merger, the Registered Holder shall receive upon exercise hereof the kind and
amount of securities, cash or other property which the Registered Holder would
have been entitled to receive if, immediately prior to such reorganization,
recapitalization, consolidation or merger, the Registered Holder had held the
number of shares of  Common Stock subject to this Warrant.  In such case,
appropriate adjustment (as determined in good faith by the Board of Directors of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Registered Holder, to
the end that the provisions set forth in this Section 2 (including provisions
with respect to changes in and other adjustments of the Purchase Price) shall
thereafter be applicable, as nearly as reasonably may be, in relation to any
securities, cash or other property thereafter deliverable upon the exercise of
this Warrant.

(f)

Certificate as to Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Purchase Price pursuant to this Section 2, the Company at
its expense shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and furnish to the Registered Holder a certificate setting
forth such adjustment or readjustment (including the kind and amount of
securities, cash or other property for which this Warrant shall be exercisable
and the Purchase Price) and showing in detail the facts upon which such
adjustment or readjustment is based.  The Company shall, upon the written
request at any time of the Registered Holder, furnish or cause to be furnished
to the Registered Holder a certificate setting forth (i) the Purchase Price then
in effect and (ii) the number of shares of  Common Stock and the amount, if any,
of other securities, cash or property which then would be received upon the
exercise of this Warrant.

3.

Fractional Shares.  The Company shall not be required upon the exercise of this
Warrant to issue any fractional shares, but shall make an adjustment therefor in
cash on the basis of the Fair Market Value per share of Common Stock, as
determined pursuant to subsection 1(b) above.

4.

Requirements for Transfer.

(a)

This Warrant and the Warrant Shares shall not be sold or transferred unless
either (i) they first shall have been registered under the Securities Act of
1933, as amended (the “Act”), or (ii) the Company first shall have been
furnished with an opinion of legal counsel, reasonably satisfactory to the
Company, to the effect that such sale or transfer is exempt from the
registration requirements of the Act.

(b)

Notwithstanding the foregoing, no registration or opinion of counsel shall be
required for (i) a transfer by a Registered Holder to a party specified in
Section 10(b) below, or (ii) a transfer made in accordance with Rule 144 under
the Act.

(c)

Each certificate representing Warrant Shares shall bear a legend substantially
in the following form:

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“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A
VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE
OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT
RELATED THERTO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933”

The foregoing legend shall be removed from the certificates representing any
Warrant Shares, at the request of the holder thereof, at such time as they
become eligible for resale pursuant to Rule 144(k) under the Act.

5.

No Impairment.  The Company will not, by amendment of its charter or through
reorganization, 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 of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holder of this Warrant against impairment.

(6)

Notices of Record Date, etc.  In the event:

(a)

the Company shall take a record of the holders of its Common Stock (or other
stock or securities at the time deliverable upon the exercise of this Warrant)
for the purpose of entitling or enabling them to receive any dividend or other
distribution, or to receive any right to subscribe for or purchase any shares of
stock of any class or any other securities, or to receive any other right; or

(b)

of any capital reorganization of the Company, any reclassification of the Common
Stock of the Company, any consolidation or merger of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the surviving entity and its Common Stock is not converted into or exchanged
for any other securities or property), any transfer or sale of all or
substantially all of the stock or assets of the Company, any other transaction
or series of related transactions in which the holders of capital stock of the
Company before the transaction no longer hold at least 50% of the capital stock
of the Company after the transaction(s), or any sale of securities by the
Company by means of a private placement or pursuant to a registration statement,
which results in gross proceeds to the Company of at least $3,500,000; or

(c)

of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company,

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then, and in each such case, the Company will mail or cause to be mailed to the
Registered Holder a notice specifying, as the case may be, (i) the record date
for such dividend, distribution or right, and the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up.  Such notice shall be mailed at least ten days prior
to the record date or effective date for the event specified in such notice.

7.

Reservation of Stock.  The Company will at all times reserve and keep available,
solely for issuance and delivery upon the exercise of this Warrant, such number
of Warrant Shares and other securities, cash and/or property, as from time to
time shall be issuable upon the exercise of this Warrant.

8.

Exchange of Warrants.  Upon the surrender by the Registered Holder, properly
endorsed, to the Company at the principal office of the Company, the Company
will, subject to the provisions of Section 4 hereof, issue and deliver to or
upon the order of such Holder, at the Company’s expense, a new Warrant or
Warrants of like tenor, in the name of the Registered Holder or as the
Registered Holder (upon payment by the Registered Holder of any applicable
transfer taxes) may direct, calling in the aggregate on the face or faces
thereof for the number of shares of  Common Stock (or other securities, cash
and/or property) then issuable upon exercise of this Warrant.

9.

Replacement of Warrants.  Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

10.

Transfers, etc.

(a)

The Company will maintain a register containing the name and address of the
Registered Holder of this Warrant.  The Registered Holder may change its or his
address as shown on the warrant register by written notice to the Company
requesting such change.

(b)

Subject to the provisions of Section 4 hereof, this Warrant and all rights
hereunder are transferable, in whole or in part, to any partner, member,
stockholder or affiliate of the Registered Holder, and any such transferee shall
have the rights of the Registered Holder to the extent of the portion of this
Warrant so transferred.  Such transfer shall be effective upon surrender of this
Warrant with a properly executed assignment (in the form of Exhibit II hereto)
at the principal office of the Company.  Nothing contained in this Section 10
shall limit the transferability of the Warrant Shares.

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(c)

Until any transfer of this Warrant is made in the warrant register, the Company
may treat the Registered Holder as the absolute owner hereof for all purposes;
provided, however, that if and when this Warrant is properly assigned in blank,
the Company may (but shall not be obligated to) treat the bearer hereof as the
absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

11.

Mailing of Notices, etc.  All notices and other communications from the Company
to the Registered Holder shall be mailed by first-class certified or registered
mail, postage prepaid, to the address last furnished to the Company in writing
by the Registered Holder.  All notices and other communications from the
Registered Holder or in connection herewith to the Company shall be mailed by
first-class certified or registered mail, postage prepaid, to the Company at its
principal office set forth below.  If the Company should at any time change the
location of its principal office to a place other than as set forth below, it
shall give prompt written notice to the Registered Holder and thereafter all
references in this Warrant to the location of its principal office at the
particular time shall be as so specified in such notice.

12.

No Rights as Shareholder.  Until the exercise of this Warrant, the Registered
Holder shall not have or exercise any rights by virtue hereof as a shareholder
of the Company.  Notwithstanding the foregoing, in the event (i) the Company
effects a split of the Common Stock by means of a stock dividend and the
Purchase Price of and the number of Warrant Shares are adjusted as of the date
of the distribution of the dividend (rather than as of the record date for such
dividend), and (ii) the Registered Holder exercises this Warrant between the
record date and the distribution date for such stock dividend, the Registered
Holder shall be entitled to receive, on the distribution date, the stock
dividend with respect to the shares of Common Stock acquired upon such exercise,
notwithstanding the fact that such shares were not outstanding as of the close
of business on the record date for such stock dividend.

13.

Amendment or Waiver.  Any term of this Warrant may be amended or waived upon
written consent of the Company and the Registered Holder.  

14.

Section Headings.  The section headings in this Warrant are for the convenience
of the parties and in no way alter, modify, amend, limit or restrict the
contractual obligations of the parties.

15.

Governing Law.  This Warrant will be governed by and construed in accordance
with the internal laws of the State of New York (without reference to the
conflicts of law provisions thereof).

EXECUTED as of the Date of Issuance indicated above.

AIMS WORLDWIDE, INC.

/s/ Gerald Garcia, Jr.                                          

By:  Gerald Garcia, Jr.

[Corporate Seal]

Title:  President and Chief Executive Officer

ATTEST:

_________________________

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EXHIBIT A

“Consolidated EBITDA” of any Person for any period, means Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) income tax expense, (b)
Consolidated Interest Expense of such Person and its Subsidiaries, amortization
or write-off of debt discount and debt issuance costs and commissions, discounts
and other fees and charges associated with Indebtedness, (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses, prepayment fees paid to existing lenders, and
minus, to the extent included in the statement of such Consolidated Net Income
for such period, the sum of (a) interest income (except to the extent deducted
in determining Consolidated Interest Expense), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable as
a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets) and (c) any other non-cash income, all as
determined on a consolidated basis; provided, that for purposes of calculating
Consolidated EBITDA of the Company and its Subsidiaries for any period, (i) the
Consolidated EBITDA of any Person acquired by the Company or its Subsidiaries
during such period shall be excluded on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day of such
period) if the consolidated balance sheet of such acquired Person and its
consolidated Subsidiaries as at the end of the period preceding the acquisition
of such Person and the related consolidated statements of income and
stockholders’ equity and of cash flows for the period in respect of which
Consolidated EBITDA is to be calculated (x) have been previously provided to the
Registered Holder and (y) either (1) have been reported on without a
qualification arising out of the scope of the audit by independent certified
public accountants of nationally recognized standing or (2) have been found
acceptable by the Registered Holder and (ii) the Consolidated EBITDA of any
Person Disposed of by the Company or its Subsidiaries during such period shall
be excluded for such period (assuming the consummation of such Disposition and
the repayment of any Indebtedness in connection therewith occurred on the first
day of such period).

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EXHIBIT B

Registration Rights Agreement

EXHIBIT I

PURCHASE FORM

To: AIMS WORLDWIDE, INC.

Dated:____________

The undersigned, pursuant to the provisions set forth in the attached Warrant
(No. 1), hereby irrevocably elects to purchase (check applicable box):

£

_____ shares of the  Common Stock covered by such Warrant; or

£

the maximum number of shares of  Common Stock covered by such Warrant pursuant
to the cashless exercise procedure set forth in Section 1(b).

The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant, which is $________.
 Such payment takes the form of (check applicable box or boxes):

£

$______ in lawful money of the United States; and/or

£

the cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in Section 1(b), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in Section 1(b).

Signature:

______________________

Address:

_______________________

_______________________

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EXHIBIT II

ASSIGNMENT FORM

FOR VALUE RECEIVED, ________________________________________ hereby sells,
assigns and transfers all of the rights of the undersigned under the attached
Warrant (No. 1) with respect to the number of shares of  Common Stock covered
thereby set forth below, unto:

Name of Assignee

Address

No. of Shares

 

 

 

 

 

 

 

 

 

 

 

 

Dated:_____________________

Signature:________________________________

Signature Guaranteed:

By: _______________________

The signature should be guaranteed by an eligible guarantor institution (banks,
stockbrokers, savings and loan associations and credit unions with membership in
an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
under the Securities Exchange Act of 1934.

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EXHIBIT D

REGISTRATION RIGHTS AGREEMENT

THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered into as
of the 8th day of July, 2008, by and among AIMS Worldwide, Inc., a corporation
organized and existing under the laws of the State of Nevada (“AIMS” or the
“Company”), and FG Investment Holdings, LLC, a Delaware limited liability
company (hereinafter referred to as the “Investor”). Unless defined otherwise,
capitalized terms herein shall have the identical meaning as in the Series B
Preferred Stock and Warrant Purchase Agreement of even date herewith (the
“PSPA”).

PRELIMINARY STATEMENT

WHEREAS, pursuant to the PSPA, of even date herewith, by and among AIMS
WORLDWIDE, INC. and the Investor, as part of the consideration, Investor shall
receive Preferred Stock and Warrants, which upon conversion and exercise, in
accordance with the terms of the PSPA entitle the Investor to receive Shares of
AIMS WORLDWIDE INC.; and

WHEREAS, the ability of the Investor to sell their Shares of Common Stock is
subject to certain restrictions under the 1933 Act; and

WHEREAS, as a condition to the PSPA, AIMS WORLDWIDE, INC. has agreed to provide
the Investor with a mechanism that will permit such Investor, subject to a
market stand-off agreement, to sell its Shares of Common Stock in the future.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements, and subject to the terms and conditions herein contained, the
parties hereto hereby agree as follows:

ARTICLE I

INCORPORATION BY REFERENCE, SUPERSEDER

1.1

Incorporation by Reference.  The foregoing recitals and the Exhibits attached
hereto and referred to herein, are hereby acknowledged to be true and accurate,
and are incorporated herein by this reference.

1.2

Superseder.  This Agreement, to the extent that it is inconsistent with any
other instrument or understanding among the parties governing the affairs of the
Company, shall supersede such instrument or understanding to the fullest extent
permitted by law.  A copy of this Agreement shall be filed at the Company’s
principal office.

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ARTICLE II

DEMAND REGISTRATION RIGHTS

2.1

"Registrable Securities" means and includes the Shares of AIMS WORLDWIDE, INC.
underlying the Preferred Stock and Warrants issued pursuant to the PSPA, and any
other Shares acquired by the Investor that are unregistered. As to any
particular Registrable Securities, such securities will cease to be Registrable
Securities when (a) they have been effectively registered under the 1933 Act and
disposed of in accordance with the registration statement covering them, (b)
they are or may be freely traded without registration pursuant to Rule 144 under
the 1933 Act (or any similar provisions that are then in effect), or (c) they
have been otherwise transferred and new certificates for them not bearing a
restrictive legend have been issued by AIMS WORLDWIDE, INC. and AIMS WORLDWIDE,
INC. shall not have "stop transfer" instructions against them.  "Shares" shall
mean, collectively, the shares of Common Stock of the Company issuable upon
conversion of the Preferred Stock, the shares of Common Stock of the Company
issuable upon exercise of the Warrants, and any unregistered shares of Common
Stock of the Company acquired by the Investor in any subsequent transaction.

2.2

Demand Registration.  At any time after the Second Closing, the Investor may
demand the registration, once and only once, under the 1933 Act of all or part
of the Registrable Shares then outstanding (a "Demand Registration"). Subject to
the conditions of Article 3, the Company shall use its best efforts to file such
registration statement under the 1933 Act as promptly as practicable after the
date any such request is received by the Company and to cause such registration
statement to be declared effective. The Company shall notify the Investor
promptly when any such registration statement has been declared effective.  If
more than eighty percent (80%) of the Shares issuable under the PSPA have been
registered or sold, this provision shall expire.

2.3

Registration Statement Form. Registration under Section 2.2 shall be on the
appropriate registration form of the SEC as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition specified in the Registration Statement; provided, however, such
intended method of disposition shall not include an underwritten offering of the
Registrable Securities.

2.4

Expenses. The Company will pay all Registration expenses in connection with any
registration required by under Section 2.2 herein.

2.5

Effective Registration Statement. A registration requested pursuant to Section
2.2 shall not be deemed to have been effected:  (i) unless a registration
statement with respect thereto has become effective within the time period
specified herein, provided that a registration which does not become effective
after the Company filed a registration statement with respect thereto solely by
reason of the refusal to proceed of any holder of Registrable Securities (other
than a refusal to proceed based upon the advice of counsel in the form of a
letter signed by such counsel and provided to the Company relating to a
disclosure matter unrelated to such holder) shall be deemed to have been
effected by the Company unless the holders of the Registrable Securities shall
have elected to pay all Registration Expenses in connection with such
registration, (ii) if, after it has become effective, such registration becomes
subject to any stop order, injunction or other order or extraordinary
requirement of the SEC or other governmental agency or court for any reason or
(iii) if, after it has become effective, such registration ceases to be
effective for more than the allowable Black-Out Periods (as defined herein).

2.6

Plan of Distribution. The Company hereby agrees that the Registration Statement
shall include a plan of distribution section reasonably acceptable to the
Investor; provided, however, such plan of distribution section shall be modified
by the Company so as to not provide for the disposition of the Registrable
Securities on the basis of an underwritten offering.

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ARTICLE III

INCIDENTAL REGISTRATION RIGHTS

3.1

Right to Include (“Piggy-Back”) Registrable Securities.   Provided that the
Registrable Securities have not been registered, if at any time after the date
hereof but before the second anniversary of the date hereof, the Company
proposes to register any of its securities under the 1933 Act (other than by a
registration in connection with an acquisition in a manner which would not
permit registration of Registrable Securities for sale to the public, on Form
S-8, or any successor form thereto, on Form S-4, or any successor form thereto
and other than pursuant to Article 2), on an underwritten basis (either
best-efforts or firm-commitment), then, the Company will each such time give
prompt written notice to all holders of Registrable Securities of its intention
to do so and of such holders of Registrable Securities' rights under this
Section 3.1. Upon the written request of any such holders of Registrable
Securities made within ten (10) days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be disposed of by
such holders of Registrable Securities and the intended method of disposition
thereof), the Company will, subject to the terms of this Agreement, use its
commercially reasonable best efforts to effect the registration under the 1933
Act of the Registrable Securities, to the extent requisite to permit the
disposition (in accordance with the intended methods thereof as aforesaid) of
such Registrable Securities so to be registered, by inclusion of such
Registrable Securities in the registration statement which covers the securities
which the Company proposes to register, provided that if, at any time after
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason either not to register
or to delay registration of such securities, the Company may, at its election,
give written notice of such determination to each holders of Registrable
Securities and, thereupon, (i) in the case of a  determination not to register,
shall be relieved of this obligation to register any Registrable Securities in
connection with such registration (but not from its obligation to pay the
Registration Expenses in connection therewith), without prejudice, however, to
the rights of any holder or holders of Registrable Securities entitled to do so
to request that such registration be effected as a registration under Article 2,
and (ii) in the case of a determination to delay registering, shall be permitted
to delay registering any Registrable Securities, for the same period as the
delay in registering such other securities. No registration affected under this
Section 3.1 shall relieve the Company of its obligation to affect any
registration upon request under Article 2. The Company will pay all Registration
Expenses in connection with each registration of Registrable Securities
requested pursuant to this Section 3.1. The right provided the Holders of the
Registrable Securities pursuant to this Section shall be exercisable at their
sole discretion and will in no way limit any of the Company's obligations to pay
the Securities according to their terms.

3.2

Priority in Incidental Registrations. If the managing underwriter of an
underwritten offering contemplated by this Article 3 shall inform the Company
and holders of the Registrable Securities requesting such registration by letter
of its belief that the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, then the
Company will include in such registration, to the extent of the number which the
Company is so advised can be sold in such offering, (i) first securities
proposed by the Company to be sold for its own account, and (ii) second
Registrable Securities and (iii) securities of other selling security holders
requested to be included in such registration.

ARTICLE IV

REGISTRATION PROCEDURES

4.1

REGISTRATION PROCEDURES. If and whenever the Company is required to affect the
registration of any Registrable Securities under the 1933 Act as provided in
Section 2.2, the Company shall, as expeditiously as possible:

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(i)

prepare and file with the SEC the Registration Statement, or amendments thereto,
to effect such registration (including such audited financial statements as may
be required by the 1933 Act or the rules and regulations promulgated thereunder)
and thereafter use its commercially reasonable best efforts to cause such
registration statement to be declared effective by the SEC, as soon as
practicable, (with respect to a registration pursuant to Section 2.2); provided,
however, that before filing such registration statement or any amendments
thereto, the Company will furnish to the counsel selected by the holders of
Registrable Securities which are to be included in such registration, copies of
all such documents proposed to be filed;

(ii)

with respect to any registration statement pursuant to Section 2.2, prepare and
file with the SEC such amendments and supplements to such registration statement
and the prospectus used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions of the 1933
Act with respect to the disposition of all Registrable Securities covered by
such registration statement until the earlier to occur of twenty-four (24)
months after the date of this Agreement (subject to the right of the Company to
suspend the effectiveness thereof for not more than 10 consecutive Trading Days
or an aggregate of 10 Trading Days during each year (each a "Black-Out Period"))
or such time as all of the securities which are the subject of such registration
statement cease to be Registrable Securities (such period, in each case, the
"Registration Maintenance Period");  

 (iii)

furnish to each holder of Registrable Securities covered by such registration
statement such number of conformed copies of such registration statement and of
each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the 1933 Act, in
conformity with the requirements of the 1933 Act, and such other documents, as
such holder of Registrable Securities and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of the
Registrable Securities owned by such holder of Registrable Securities;

(iv)

use its commercially reasonable best efforts to register or qualify all
Registrable Securities and other securities covered by such registration
statement under such other U.S. federal or state securities laws or U.S. state
blue sky laws as any U.S. holder of Registrable Securities thereof shall
reasonably request, to keep such registrations or qualifications in effect for
so long as such registration statement remains in effect, and take any other
action which may be reasonably necessary to enable such holder of Registrable
Securities to consummate the disposition in such jurisdictions of the securities
owned by such holder of Registrable Securities, except that the Company shall
not for any such purpose be required to qualify generally to do business as a
foreign corporation in any jurisdiction wherein it would not but for the
requirements of this subdivision (iv) be obligated to be so qualified or to
consent to general service of process in any such jurisdiction;

(v)

use its commercially reasonable best efforts to cause all Registrable Securities
covered by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable the
U.S. holder of Registrable Securities thereof to consummate the disposition of
such Registrable Securities;

(vi)

furnish to each holder of Registrable Securities a signed counterpart, addressed
to such holder of Registrable Securities, and the underwriters, if any, of an
opinion of counsel for the Company, dated the effective date of such
registration statement (or, if such registration includes an underwritten public
offering, an opinion dated the date of the closing under the underwriting
agreement), reasonably satisfactory in form and substance to such holder of
Registrable Securities) including that the prospectus and any prospectus
supplement forming a part of the Registration Statement does not contain an
untrue statement of a material fact or omits a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading, and

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(vii)

notify the Investor and its counsel promptly and confirm such advice in writing
promptly after the Company has knowledge thereof:

(A)

when the Registration Statement, the prospectus or any prospectus supplement
related thereto or post-effective amendment to the Registration Statement has
been filed, and, with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective;

(B)

of any request by the SEC for amendments or supplements to the Registration
Statement or the prospectus or for additional information;

(C)

of the issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings by any Person for
that purpose; and

(D)

of the receipt by the Company of any notification with respect to the suspension
of the qualification of any Registrable Securities for sale under the securities
or blue sky laws of any jurisdiction or the initiation or threat of any
proceeding for such purpose;

(viii)

notify each holder of Registrable Securities covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the 1933 Act, upon discovery that, or upon the happening of any
event as a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state any material facts required to be stated therein or necessary to
make the statements therein not misleading in the light of the circumstances
then existing, and at the request of any such holder of Registrable Securities
promptly prepare and furnish to such holder of Registrable Securities a
reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing;

(ix)

use its best efforts to obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest possible moment;

(x)

otherwise use its commercially reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering the
period of at least twelve months, but not more than eighteen months, beginning
with the first full calendar month after the effective date of such registration
statement, which earnings statement shall satisfy the provisions of Section
11(a) of the 1933 Act and Rule 158 thereunder;

(xi)

enter into such agreements and take such other actions as the Investor shall
reasonably request in writing (at the expense of the requesting or benefiting
Investor) in order to expedite or facilitate the disposition of such Registrable
Securities; and

(xii)

use its commercially reasonable best efforts to list all Registrable Securities
covered by such registration statement on any securities exchange on which any
of the Registrable Securities are then listed.

The Company may require each holder of Registrable Securities as to which any
registration is being affected to furnish the Company such information regarding
such holder of Registrable Securities and the distribution of such securities as
the Company may from time to time reasonably request in writing.

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4.2

The Company will not file any registration statement pursuant to Section 2.2, or
amendment thereto or any prospectus or any supplement thereto to which the
Investor shall reasonably object, provided that the Company may file such
documents in a form required by law or upon the advice of its counsel.

4.3

The Company represents and warrants to each holder of Registrable Securities
that it has obtained all necessary waivers, consents and authorizations
necessary to execute this Agreement and consummate the transactions contemplated
hereby other than such waivers, consents and/or authorizations specifically
contemplated by the Preferred Stock Purchase Agreement.

4.4

Each Holder of Registrable Securities agrees that, upon receipt of any notice
from the Company of the occurrence of any event of the kind described in
subdivision (viii) of Section 4.1, such Holder will forthwith discontinue such
Holder’s disposition of Registrable Securities pursuant to the Registration
Statement relating to such Registrable Securities until such Holder’s receipt of
the copies of the supplemented or amended prospectus contemplated by subdivision
(viii) of Section 4.1 and, if so directed by the Company, will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies,
then in such Holder's possession of the prospectus relating to such Registrable
Securities current at the time of receipt of such notice.

ARTICLE V

UNDERWRITTEN OFFERINGS

5.1

Incidental Underwritten Offerings. If the Company at any time proposes to
register any of its securities under the 1933 Act as contemplated by Section 3.1
and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by any holder of Registrable
Securities as provided in Section 3.1 and subject to the provisions of Section
3.2, use its commercially reasonable best efforts to arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
such holder among the securities to be distributed by such underwriters.

5.2

Participation In Underwritten Offerings. No holder of Registrable Securities may
participate in any underwritten offering under Section 3.1 unless such holder of
Registrable Securities (i) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved, subject to the terms and
conditions hereof, by the holders of a majority of Registrable Securities to be
included in such underwritten offering and (ii) completes and executes all
questionnaires, indemnities, underwriting agreements and other documents (other
than powers of attorney) required under the terms of such underwriting
arrangements. Notwithstanding the foregoing, no underwriting agreement (or other
agreement in connection with such offering) shall require any holder of
Registrable Securities to make a representation or warranty to or agreements
with the Company or the underwriters other than representations and warranties
contained in a writing furnished by such holder of Registrable Securities
expressly for use in the related registration statement or representations,
warranties or agreements regarding such holder of Registrable Securities, such
holder's Registrable Securities and such holder's intended method of
distribution and any other representation required by law.

5.3

Preparation; Reasonable Investigation. In connection with the preparation and
filing of each registration statement under the 1933 Act pursuant to this
Agreement, the Company will give the holders of Registrable Securities
registered under such registration statement, and their respective counsel and
accountants, the opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the SEC,
and each amendment thereof or supplement thereto, and will give each of them
such access to its books and records and such opportunities to discuss the
business of the Company with its officers and the independent public accountants
who have certified its financial statements as shall be necessary, in the
reasonable opinion of such holders' and such underwriters' respective counsel,
to conduct a reasonable investigation within the meaning of the 1933 Act.

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ARTICLE VI

INDEMNIFICATION

6.1

Indemnification by the Company. In the event of any registration of any
securities of the Company under the 1933 Act, the Company will, and hereby does
agree to indemnify and hold harmless the holder of any Registrable Securities
covered by such registration statement, its directors and officers, each other
Person who participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such holder or any such
underwriter within the meaning of the 1933 Act against any losses, claims,
damages or liabilities, joint or several, to which such holder or any such
director or officer or underwriter or controlling person may become subject
under the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions or proceedings, whether commenced or threatened, in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the 1933 Act, any preliminary
prospectus, final prospectus or summary prospectus contained therein, or any
amendment or supplement thereto, or any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and the Company will reimburse such holder
and each such director, officer, underwriter and controlling person for any
legal or any other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, liability, action or
proceeding, provided that the Company shall not be liable in any such case to
the extent that any such loss, claim, damage, liability, (or action or
proceeding in respect thereof) or expense arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in such registration statement, any such preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by such holder or
underwriter stating that it is for use in the preparation thereof and, provided
further that the Company shall not be liable to any Person who participates as
an underwriter in the offering or sale of Registrable Securities or to any other
Person, if any, who controls such underwriter within the meaning of the 1933
Act, in any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of such
Person's failure to send or give a copy of the final prospectus, as the same may
be then supplemented or amended, within the time required by the 1933 Act to the
Person asserting the existence of an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of Registrable Securities to such Person if such
statement or omission was corrected in such final prospectus or an amendment or
supplement thereto. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of such holder or any such
director, officer, underwriter or controlling person and shall survive the
transfer of such securities by such holder.

6.2

Indemnification by the Investor. The Company may require, as a condition to
including any Registrable Securities in any registration statement filed
pursuant to this Agreement, that the Company shall have received an undertaking
satisfactory to it from the prospective holder of such Registrable Securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 6.1) the Company, each director of the Company, each officer of
the Company and each other Person, if any, who controls the Company within the
meaning of the 1933 Act, with respect to any statement or alleged statement in
or omission or alleged omission from such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, if such statement or alleged
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through an
instrument duly executed by such holder of Registrable Securities specifically
stating that it is for use in the preparation of such registration statement,
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement. Any such indemnity shall remain in full force and effect, regardless
of any investigation made by or on behalf of the Company or any such director,
officer or controlling person and shall survive the transfer of such securities
by such Investor. The indemnification by the Investor shall be limited to the
amount they have invested on the Closing Date.

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6.3

Notices Of Claims, Etc. Promptly after receipt by an indemnified party of notice
of the commencement of any action or proceeding involving a claim referred to in
Sections 6.1 and Section 6.2, such indemnified party will, if  claim in respect
thereof is to be made against an indemnifying party, give written notice to the
latter of the commencement of such action, provided that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Sections 6.1 and Section 6.2, except
to the extent that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, the indemnifying party shall be entitled to participate in and to assume
the defense thereof, jointly with any other indemnifying party similarly
notified, to the extent that the indemnifying party may wish, with counsel
reasonably satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such indemnified
party for any legal or other expenses subsequently incurred by the latter in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
of any such action which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability, or a covenant not to sue, in respect to such claim or litigation.
No indemnified party shall consent to entry of any judgment or enter into any
settlement of any such action the defense of which has been assumed by an
indemnifying party without the consent of such indemnifying party.

6.4

Other Indemnification. Indemnification similar to that specified in Sections 6.1
and Section 6.2 (with appropriate modifications) shall be given by the Company
and each holder of Registrable Securities (but only if and to the extent
required pursuant to the terms herein) with respect to any required registration
or other qualification of securities under any Federal or state law or
regulation of any governmental authority, other than the 1933 Act.

6.5

Indemnification Payments. The indemnification required by Sections 6.1 and
Section 6.2 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.

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6.6

Contribution. If the indemnification provided for in Sections 6.1 and Section
6.2 is unavailable to an indemnified party in respect of any expense, loss,
claim, damage or liability referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such expense, loss, claim,
damage or liability (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the holder of
Registrable Securities or underwriter, as the case may be, on the other from the
distribution of the Registrable Securities or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
holder of Registrable Securities or underwriter, as the case may be, on the
other in connection with the statements or omissions which resulted in such
expense, loss, damage or liability, as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the holder of Registrable Securities or underwriter, as the case may be, on
the other in connection with the distribution of the Registrable Securities
shall be deemed to be in the same proportion as the total net proceeds received
by the Company from the initial sale of the Registrable Securities by the
Company to the purchasers bear to the gain, if any, realized by all selling
holders participating in such offering or the underwriting discounts and
commissions received by the underwriter, as the case may be. The relative fault
of the Company on the one hand and of the holder of Registrable Securities or
underwriter, as the case may be, on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or omission to state a material fact relates to information
supplied by the Company, by the holder of Registrable Securities or by the
underwriter and the parties' relative intent, knowledge, access to information
supplied by the Company, by the holder of Registrable Securities or by the
underwriter and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, provided that
the foregoing contribution agreement shall not inure to the benefit of any
indemnified party if indemnification would be unavailable to such indemnified
party by reason of the provisions contained herein, and in no event shall the
obligation of any indemnifying party to contribute under this Section 6.6 exceed
the amount that such indemnifying party would have been obligated to pay by way
of indemnification if the indemnification provided for hereunder had been
available under the circumstances.

The Company and the holders of Registrable Securities agree that it would not be
just and equitable if contribution pursuant to this Section 6.6 were determined
by pro rata allocation (even if the holders of Registrable Securities and any
underwriters were treated as one entity for such purpose) or by any other method
of allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. The amount paid or payable
by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth herein, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.

Notwithstanding the provisions of this Section 6.6, no holder of Registrable
Securities or underwriter shall be required to contribute any amount in excess
of the amount by which (i) in the case of any such holder, the net proceeds
received by such holder from the sale of Registrable Securities or (ii) in the
case of an underwriter, the total price at which the Registrable Securities
purchased by it and distributed to the public were offered to the public
exceeds, in any such case, the amount of any damages that such holder or
underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.

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ARTICLE VII

RULE 144

7.1

Rule 144. The Company shall timely file the reports required to be filed by it
under the 1933 Act and the 1934 Act (including but not limited to the reports
under Sections 13 and 15(d) of the 1934 Act referred to in subparagraph (c) of
Rule 144 adopted by the SEC under the 1933 Act) and the rules and regulations
adopted by the SEC thereunder (or, if the Company is not required to file such
reports, will, upon the request of any holder of Registrable Securities, make
publicly available other information) and will take such further action as any
holder of Registrable Securities may reasonably request, all to the extent
required from time to time to enable such holder to sell Registrable Securities
without registration under the 1933 Act within the limitation of the exemptions
provided by (a) Rule 144 under the 1933 Act, as such Rule may be amended from
time to time, or (b) any similar rule or regulation hereafter adopted by the
SEC. Upon the request of any holder of Registrable Securities, the Company will
deliver to such holder a written statement as to whether it has complied with
the requirements of this Section 7.1.

ARTICLE VIII

MISCELLANEOUS

8.1

Amendments and Waivers. This Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the holder or holders of the sum
of the fifty-one percent (51%) or more of the shares of (i) Registrable
Securities issued at such time, plus (ii) Registrable Securities issuable upon
exercise or conversion of the Securities then constituting derivative securities
(if such Securities were not fully exchanged or converted in full as of the date
such consent if sought). Each holder of any Registrable Securities at the time
or thereafter outstanding shall be bound by any consent authorized by this
Section 8.1, whether or not such Registrable Securities shall have been marked
to indicate such consent.

8.2

Nominees for Beneficial Owners. In the event that any Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial owner thereof
may, at its election, be treated as the holder of such Registrable Securities
for purposes of any request or other action by any holder or holders of
Registrable Securities pursuant to this Agreement or any determination of any
number of percentage of shares of Registrable Securities held by a holder or
holders of Registrable Securities contemplated by this Agreement. If the
beneficial owner of any Registrable Securities so elects, then the Company may
require assurances reasonably satisfactory to it of such owner's beneficial
ownership of such Registrable Securities.

8.3

Notices. Except as otherwise provided in this Agreement, all notices, requests
and other communications to any Person provided for hereunder shall be in
writing and shall be given to such Person (a) in the case of a party hereto
other than the Company, addressed to such party in the manner set forth in the
PSPA or at such other address as such party shall have furnished to the Company
in writing, or (b) in the case of any other holder of Registrable Securities, at
the address that such holder shall have furnished to the Company in writing, or,
until any such other holder so furnishes to the Company an address, then to and
at the address of the last holder of such Registrable Securities who has
furnished an address to the Company, or (c) in the case of the Company, at the
address set forth on the signature page hereto, to the attention of its
President, or at such other address, or to the attention of such other officer,
as the Company shall have furnished to each holder of Registrable Securities at
the time outstanding. Each such notice, request or other communication shall be
effective (i) if given by mail, 72 hours after such communication is deposited
in the mail with first class postage prepaid, addressed as aforesaid or (ii) if
given by any other means (including, without limitation, by fax or air courier),
when delivered at the address specified above, provided that any such notice,
request or communication shall not be effective until received.

8.4

Assignment. This Agreement shall be binding upon and inure to the benefit of and
be enforceable by the parties and their respective successors and assigns.

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8.5

Subsequent Holders. In addition, and whether or not any express assignment shall
have been made, the provisions of this Agreement which are for the benefit of
the Investor shall also be for the benefit of and enforceable by any subsequent
holder of any Registrable Securities. Each of the Holders of the Registrable
Securities agrees, by accepting any portion of the Registrable Securities after
the date hereof, to the provisions of this Agreement including, without
limitation, appointment of an Investor designated representative to act on
behalf of such holder pursuant to the terms hereof which such actions shall be
made in the good faith discretion of the Investor designated representative and
be binding on all persons for all purposes.

8.6

Descriptive Headings. The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for reference only and shall not limit
or otherwise affect the meaning hereof.

8.7

Governing Law.  This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to applicable
principles of conflicts of law.

8.8

Jurisdiction. This Agreement shall be exclusively governed by and construed in
accordance with the laws of the State of New York. If any action is brought
among the parties with respect to this Agreement or otherwise, by way of a claim
or counterclaim, the parties agree that in any such action, and on all issues,
the parties irrevocably waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the State or Federal Courts
serving the State of New York. In the event suit or action is brought by any
party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.

8.9

Entire Agreement. This Agreement embodies the entire agreement and understanding
between the Company and each other party hereto relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.

8.10

Severability. If any provision of this Agreement, or the application of such
provisions to any Person or circumstance, shall be held invalid, the remainder
of this Agreement, or the application of such provision to Persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.

8.11

Binding Effect.  All the terms and provisions of this Agreement whether so
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.

8.12

Preparation of Agreement.  This Agreement shall not be construed more strongly
against any party regardless of who is responsible for its preparation.  The
parties acknowledge each contributed and is equally responsible for its
preparation.  

8.13

Failure or Indulgence Not Waiver; Remedies Cumulative.  No failure or delay on
the part of any party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty, covenant or agreement herein, nor shall nay single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right.  All rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

8.14

Counterparts.  This Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto.  

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, the Investor and the Company have as of the date first
written above executed this Agreement.

AIMS WORLDWIDE, INC.

By: /s/ Gerald Garcia, Jr.

Gerald Garcia, Jr.

Title:  President

INVESTOR

FG Investment Holdings, LLC

By: /s/ James P. Gregory

James P. Gregory

Managing Member

74

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SCHEDULE 1: Exceptions to Representations and Warranties

None.

75

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Disclosures

Schedule 1.1(b) - Wire Instructions

WIRE TO:

Access National Bank

Attn.:  Ricardo Carmenates

8233 Old Courthouse Road, #120

Vienna, VA  22182

703-871-1800

FAX 703-448-8805

76

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[aims8k071008ex10003.jpg] [aims8k071008ex10003.jpg]

Nevada Secretary of State, Ross Miller.  Copyright 2007. All rights reserved.

77

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Schedule 2.2 – Post Closing Capitalization Information Disclosure

AIMS Worldwide, Inc., Capitalization Table

As of June 30, 2008

# Shares Pref. Stock

Warrants

# Shares Com. Stock

 

 

 

 

 # Shares Common Stock Outstanding

 

 

 47,791,621

 # Shares Pref. Stock Outstanding

 -   

 

 

 

 

 

 

 # Shares CS Reserved Due to Options/Warrants

 

 

 18,077,500

 

 

 

 

 # Shares Com. Stock Reserved

 

 

 

     Due to Contingencies-PPO

 

 

 9,983,651

 # Shares Com. Stock Reserved

 

 

 

     Due to Contingencies-Agreements

 

 

 1,156,576

 # Shares Com. Stock Reserved

 

 

 

     Due to Contingencies-Staff Options/Grants 2008

 

 

 2,000,000

 

 

 

 

Fully Diluted Shares Pre-Closing

 -   

 

 79,009,348

 

 

 

 

SPA AND WARRANTS/OPTIONS TERMS

 

 

 

LIBERTY/LEROTA

 

 

 

 

# Shares Pref. Stock

Warrants

# Shares Com. Stock

 

 

 

 

SPA

2,187,500

 

10,937,500

2nd Rd SPA

2,812,500

 

14,062,500

Warrant A

 

21,875,000

 21,875,000

Warrant B

 

4,000,000

 4,000,000

Warrant C

 

6,000,000

 6,000,000

Warrant D

 

6,000,000

 6,000,000

Minimum 120 Day Acquisition Penalty

500,000

 

2,500,000

Minimum EBITDA Threshold

1,600,000

 

8,000,000

Lerota Warrant

 

3,143,750

3,143,750

Lerota Acquisition Penalty Warrant

 

187,500

187,500

Lerota Minimum EBITDA Warrant

 

825,000

825,000

 

 

 

 

Liberty/Lerota TOTALS

7,100,000

42,031,250

77,531,250

 

 

 

 

SPA AND WARRANTS/OPTIONS TERMS

 

 

 

FG INVESTMENTS, LLC

 

 

 

 

# Shares Pref. Stock

Warrants

# Shares Com. Stock

 

 

 

 

PSPA

93,750

 

468,750

Warrant B-1

 

6,000,000

6,000,000

PSPA

1,406,250

 

7,031,250

Warrant B-2

 

21,875,000

21,875,000

PSPA

1,312,500

 

6,652,500

 

 

 

 

FG Investments TOTALS

2,812,500

27,875,000

41,937,500

78

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SUMMARY

 

 

 

 

# Shares Pref. Stock

Warrants

# Shares Com. Stock

 

 

 

 

Total # PS after Agrs. & Acquis.

9,912,500

 

 

Fully Diluted # CS after Agrs. & Acquis.

 

 

198,478,098

 

 

 

 

A of 6/30/08, # Shares Authorized

20,000,000

 

200,000,000

 

 

 

 

Shares Remaining Auth. Undsitributed

10,087,500

 

1,521,902

 

 

 

 

 

 

 

 

ADDL. INFORMATION

 

 

 

WITHOUT LIBERTY/LEROTA

 

 

 

 

# Shares Pref. Stock

Warrants

# Shares Com. Stock

 

 

 

 

Total # PS after Agrs. & Acquis.

 2,812,500

 

 

Fully Diluted # CS after Agrs. & Acquis.

 

 

 120,946,848

 

 

 

 

A of 6/30/08, # Shares Authorized

 20,000,000

 

 200,000,000

 

 

 

 

Shares Remaining Auth. Undistributed

 17,187,500

 

 79,053,152

     Note:  No shares reserved for acquisitions

79

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Schedule 2.3 – Subsidiaries and Affiliate Corporations of AIMS Worldwide, Inc.
Disclosure

AIMS Worldwide, Inc., Corporate Headquarters, 10400 Eaton Place, #203, Fairfax,
VA 22030, Joseph Vincent, Chairman and Vice President for Mergers and
Acquisitions, ext. 2257; Gerald Garcia, President CEO, ext. 2256; Patrick J.
Summers, CFO and Controller, ext. 2254; Alice Ann Toole Vice President Marketing
and Communications, ext. 2255.  a publicly-traded corporation; stock symbol
“AMWW.OTB”  <AIMSWorldwide.com>

________________________________________________

AIMS Interactive, Inc., 10400 Eaton Place, #203, Fairfax, VA 22030, Patrick
Summers, Controller.  A wholly-owned subsidiary of AIMS Worldwide, Inc.

ATB Media, Inc., 10400 Eaton Place, #203, Fairfax, VA 22030; Michael Foudy,
President; Patrick Summers, Controller.  A wholly-owned subsidiary of AIMS
Worldwide, Inc.

Barbara Overhoff, Inc., d/b/a Bill Main and Associates, 236 Broadway, 2nd floor,
Chico, CA 95928, William Tucker Main, Chairman and CEO; Barbara Overhoff
Geshekter, President and COO; Cynthia Wanklin, CFO and Controller.  A
wholly-owned subsidiary of AIMS Worldwide, Inc.  <BillMain.com>

Harrell, Woodcock, and Linkletter, 10400 Eaton Place, #203, Fairfax, VA 22030;
David Woodcock, President, and Patrick Summers, Controller.  A wholly-owned
subsidiary of AIMS Worldwide, Inc.

IKON Public Affairs Group, LLC, 1307 North Fourteenth Street, Arlington, VA
22209; 202-337-6600 voice, 202-558-6492 fax; Craig Snyder, Managing Partner;
also located 837 Sherman St., Suite 2-D, Denver, CO 80220; 303-861-0223 voice,
303-861-0224 fax; Dominic DelPapa, Partner.  55% owned by AIMS Worldwide, Inc.;
remaining 45% owned by IKON Holdings, Inc.  <IKONInc.net>

Streetfighter Marketing, Inc., d/b/a Street Fighter Marketing, 467 Waterbury
Court, Gahanna, OH 43230, 614-337-7474, fax 614-337-2233; Jeff Slutsky,
Pres/CEO; Marc Slutsky, Executive Vice President.  A wholly-owned subsidiary of
AIMS Worldwide, Inc.  <StreetFighterMarketing.com>

Target America, Inc., 10560 Main Street, #301, Fairfax, VA 22030, 703/383-6905,
fax 703/383-6907; James McGee, President; also located Indianapolis, IN; Nancy
Johnson, Vice President and COO; 317-422-1058, FAX 317-422-1060.  A wholly-owned
subsidiary of AIMS Worldwide, Inc.  <TgtAm.com>

80

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Disclosure Schedule 2.4 - Authorization for Binding Resolution

follows; this page intentionally left bank

81

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[aims8k071008ex10004.jpg] [aims8k071008ex10004.jpg]

 

AIMS Worldwide, Inc.

10400 Eaton Place, #203

Fairfax, VA 22030

Tel

703.621.3875

Fax

703.621.3870

AIMSWorldwide,com

Board of Directors Meeting Minutes

Monday, July 7, 2008, 5:00 PM

Via email

Call to Order

Meeting called to order at 5:00 p.m. on Monday, July 7, 2008, by Chairman B.
Joseph Vincent.  In attendance were CEO and President Gerald Garcia, Jr., CFO
and Controller Patrick J. Summers, and Board members Thomas W. Cady, Theodore L.
Innes, and Herbert I. London.

Resolution

Joseph Vincent moved to accept the following action by consent:

Whereas, the Board of Directors having previously approved the Series B
Preferred Stock and Warrant Purchase Agreement (the “Agreement”) by and between
AIMS Worldwide, Inc., a Nevada corporation (the “Company”) and FG Investment
Holdings, LLC, a Delaware limited liability company (“Purchaser”); and

Whereas, the Agreement requires the Company to authorize a class of Preferred
Stock entitled Series B Preferred Stock; be it therefore

Resolved, that the Board of Directors hereby approves and authorizes 5,000,000
shares of preferred stock be designated Series B Preferred Stock which stock
shall have the rights and preferences as defined on the Series B Preferred Stock
Designation, a copy of which is attached hereto and made a part hereof; and

Further resolved, that the Board of Directors authorizes the Officers of the
Company to take the appropriate actions to implement this resolution, including
filing the Series B Preferred Stock Designation with the State of Nevada and any
other filings or disclosures as required or deemed necessary.

Seconded by Gerald Garcia, Jr.  Passed unanimously.

Adjournment

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Gerald Garcia, Jr., moved to adjourn at 5:10 p.m.  Seconded by Joseph Vincent.
 Passed unanimously.

/s/ Gerald Garcia, Jr.

Gerald Garcia, Jr.

/s/ B. Joseph Vincent

B. Joseph Vincent

_________________________________________________________

Thomas W. Cady

_________________________________________________________

Theodore L. Innes

                                                                             /S/
 7-7-08

Herbert I. London

83

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AIMS WORLDWIDE, INC.

CERTIFICATE OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES B PREFERRED STOCK

        The undersigned, Gerald Garcia, Jr. and B. Joseph Vincent, do hereby
certify that:

                1. They are the President and Secretary, respectively, of AIMS
WORLDWIDE, INC., a Nevada corporation (the “Corporation”).

                2. The Corporation is authorized to issue 20,000,000 shares of
preferred stock, 7,500,000 of which have been previously designated Series A
Preferred Stock and such Series A Preferred Stock cannot be subordinated in
preference to any other Series of stock unless approved by the holders of the
Series A Preferred Stock or such Series A Preferred Stock is cancelled, retired,
or revoked.

                3. The following resolutions were duly adopted by the Board of
Directors:

        WHEREAS, the Certificate of Incorporation of the Corporation, as
amended, provides for a class of its authorized stock known as preferred stock,
comprised of 20,000,000 shares, $0.001 par value per share, issuable from time
to time in one or more series;

        WHEREAS, the Board of Directors of the Corporation is authorized to fix
the dividend rights, dividend rate, voting rights, conversion rights, rights and
terms of redemption and liquidation preferences of any wholly unissued series of
preferred stock and the number of shares constituting any Series and the
designation thereof, of any of them;

        WHEREAS, it is the desire of the Board of Directors of the Corporation,
pursuant to its authority as aforesaid, to fix the rights, preferences,
restrictions and other matters relating to a series of the preferred stock,
establish the Certificate of Designation for the Series B Preferred Stock, the
corporation has the authority to issue, as follows:

        NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby
provide for the issuance of a series of preferred stock for cash or exchange of
other securities, rights or property and does hereby fix and determine the
rights, preferences, restrictions and other matters relating to the Series B
Preferred Stock as follows:

SERIES B PREFERRED STOCK DESIGNATION

Section 1.

Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement (as defined below) shall have the meanings
given such terms in the Purchase Agreement. For the purposes hereof, the
following terms shall have the following meanings:

“Commission” means the Securities and Exchange Commission.

“Common Stock" means the Corporation's common stock, par value $0.001 per share,
and stock of any other class into which such shares may hereafter have been
reclassified or changed.

“Common Stock Equivalents” means any securities of the Corporation or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Stock, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

“Conversion Date” shall have the meaning set forth in Section 6(a).

“Conversion Ratio” shall have the meaning set forth in Section 6(a).

“Conversion Value” shall have the meaning set forth in Section 6(a).

 

“Conversion Shares” means, collectively, the shares of Common Stock into which
the shares of Preferred Stock are convertible in accordance with the terms
hereof.

“Conversion Shares Registration Statement” means a registration statement that
meets the requirements of the Registration Rights Agreement and registers the
resale of all Conversion Shares by the Holder, who shall be named as a “selling
stockholder” thereunder, all as provided in the Registration Rights Agreement.

“Dilutive Issuance” shall have the meaning set forth in Section 7(b) hereof.

 

“Effective Date” means the date that the Conversion Shares Registration
Statement is declared effective by the Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to
employees, officers or directors of the Corporation pursuant to any stock or
option plan duly adopted by a majority of the non-employee members of the Board
of Directors of the Corporation or a majority of the members of a committee of
non-employee directors established for such purpose, (b) securities upon the
exercise of or conversion of any securities issued hereunder, and of any
convertible securities, options or warrants issued and outstanding on the date
of this Certificate of Designations, provided that such securities have not been
amended since the date of this Certificate of Designations to increase the
number of such securities, and (c) securities issued pursuant to acquisitions or
strategic transactions, provided any such issuance shall only be to a Person
which is, itself or through its subsidiaries, an operating company in a business
synergistic with the business of the Corporation and in which the Corporation
receives benefits in addition to the investment of funds, but shall not include
a transaction in which the Corporation is issuing securities primarily for the
purpose of raising capital or to an entity whose primary business is investing
in securities.

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“Fundamental Transaction” shall have the meaning set forth in Section 7(f)(iii)
hereof.

“Holder” shall have the meaning given such term in Section 2 hereof.

“Junior Securities” means the Common Stock and all other equity or equity
equivalent securities of the Corporation other than those securities that are
explicitly senior in rights or liquidation preference to the Preferred Stock.

“Original Issue Date” shall mean the date of the first issuance of any shares of
the Preferred Stock regardless of the number of transfers of any particular
shares of Preferred Stock and regardless of the number of certificates which may
be issued to evidence such Preferred Stock.

“Person” means a corporation, an association, a partnership, a limited liability
company, a business association, an individual, a government or political
subdivision thereof or a governmental agency.

“Preferred Stock” shall have the meaning set forth in Section 2.

“Purchase Agreement” means the Preferred Stock Purchase Agreement, dated as July
8, 2008, to which the Corporation and the original Holders are parties, as
amended, modified or supplemented from time to time in accordance with its
terms, a copy of which is on file at the principal offices of the Corporation.

“Registration Rights Agreement” means the Registration Rights Agreement, dated
as of the Closing Date, to which the Corporation and the original Holder are
parties, as amended, modified or supplemented from time to time in accordance
with its terms.

 “Securities Act” means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

“Senior Securities” means the authorized Series A Preferred Stock of the
Company.

“Subsidiary” shall mean a corporation, limited liability company, partnership,
joint venture or other  business entity of which the Corporation owns
beneficially or of record more than 19% of the equity interest.

“Trading Day” means a day on which the Common Stock is traded on a Trading
Market.

“Trading Market” means the following markets or exchanges on which the Common
Stock is listed or quoted for trading on the date in question: the Nasdaq
SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the
Nasdaq National Market or the OTC Bulletin Board.

“Transaction Agreements” shall have the meaning set forth in the Purchase
Agreement.

“VWAP” means, for any date, the price determined by the first of the following
clauses that applies: (a) if the Common Stock is then listed or quoted on a
Trading Market, the daily volume weighted average price of the Common Stock for
such date (or the nearest preceding date) on the primary Trading Market on which
the Common Stock is then listed or quoted as reported by Bloomberg Financial
L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using
the VAP function; (b) if the Common Stock is not then listed or quoted on the
Trading Market and if prices for the Common Stock are then reported in the “Pink
Sheets” published by the National Quotation Bureau Incorporated (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (c) in all
other cases, the fair market value of a share of Common Stock as determined by a
nationally recognized-independent appraiser selected in good faith by Purchasers
holding a majority of the principal amount of Preferred Stock then outstanding.

         Section 2.     Designation, Amount and Par Value. The series of
preferred stock shall be designated as the Corporation’s Series B Preferred
Stock (the “Preferred Stock”) and the number of shares so designated shall be
5,000,000 which shall not be subject to increase without the consent of all of
the holders of the Preferred Stock (each a “Holder” and collectively, the
“Holders”).  Each share of Preferred Stock shall have a par value of $0.001 per
share.  Capitalized terms not otherwise defined herein shall have the meaning
given such terms in Section 1 hereof.

 

Section 3.

Dividends and Other Distributions.  No dividends shall be payable with respect
to the Preferred Stock.  No dividends shall be payable with respect to the
Common Stock while the Preferred Stock is outstanding.  The Common Stock shall
not be redeemed while the Preferred Stock is outstanding.

Section 4.

Voting Rights and Holder Approvals. The Preferred Stock shall have voting rights
equal in all aspects to the number of shares of shares of Common Stock
represented by such Preferred Stock on an as converted basis and shall be
entitled to vote on any and all matters brought to a vote of shareholders of
Common Stock and all matters brought to a vote of shareholders of Preferred
Stock. Furthermore, so long as any shares of Preferred Stock are outstanding:

a)       The Corporation shall not, without the affirmative approval of the
Holders of the shares of the Preferred Stock then outstanding, (A) alter or
change adversely the powers, preferences or rights given to the Preferred Stock
or alter or amend this Certificate of Designation, (B) authorize or create any
class of stock ranking as to dividends or distribution of assets upon a
Liquidation (as defined in Section 5) senior to or otherwise pari passu with the
Preferred Stock, or any stock possessing greater voting rights or the right to
convert at a more favorable price than the Preferred Stock, (C) amend its
certificate or articles of incorporation or other charter documents in breach of
any of the provisions hereof, (D) increase the authorized number of shares of
Preferred Stock, or (E) enter into any agreement with respect to the foregoing;

b)

     The Corporation shall (A) cause the appointment of a director to the Board
of Directors as approved by a  majority of the Holders of the shares of
Preferred Stock, (B) maintain, commencing 60 days from the date hereof, a Board
of Directors with a majority of the Directors being Independent Directors, (C)
maintain,  a Board of Directors’ Audit Committee and a Board of Directors’
Compensation Committee with the majority of members being Independent Directors,
(D) be managed by and under the direction of its Board of Directors which may
exercise all lawful powers of the Corporation, including but not limited to, the
election of officers and agents for such terms and shall exercise such powers
and perform such duties as shall be determined from time to time by the Board of
Directors, and (E) not convene a Board of Directors meeting or Board of
Directors Committee meeting without a quorum of Directors being comprised of a
majority of Independent Directors; and

85

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    c)

    The Corporation shall not, without the affirmative approval of the Holders
of the shares of the Preferred Stock then outstanding, (A) enter into any
agreement with, or distribute any assets or equity to, Company Stockholders,
with the exception of such distributions made in accordance with the Purchase
Agreement or participation in the Company’s Option Plan; (B) delist the
Corporation’s Common Stock from a Trading Market; or (C) purchase, or enter into
any option to purchase, any equity or convertible debt instrument of the
Corporation.

Section 5.

Liquidation. Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary (a “Liquidation”), the Holders shall be
entitled to receive out of the assets of the Corporation, whether such assets
are capital or surplus, for each share of Preferred Stock an amount equal to 32
cents ($0.32), (the “Liquidation Value”) before any distribution or payment
shall be made to the holders of any Junior Securities, and if the assets of the
Corporation shall be insufficient to pay in full such amounts, then the entire
assets to be distributed to the Holders shall be distributed among the Holders
ratably in accordance with the respective amounts that would be payable on such
shares if all amounts payable thereon were paid in full.  A Fundamental
Transaction or Change of Control Transaction shall not be treated as a
Liquidation. The Corporation shall mail written notice of any such Liquidation,
not less than 70 days prior to the payment date stated therein, to each record
Holder.

Section 6.

Conversion.

a)

Conversions at Option of Holder. Each share of Preferred Stock shall be
initially convertible (subject to the limitations set forth in Section 6(b)),
into five (5) shares of Common Stock (as adjusted as provided below, the
“Conversion Ratio”) at the option of the Holders, at any time and from time to
time from and after the Original Issue Date.  Holders shall effect conversions
by providing the Corporation with the form of conversion notice attached hereto
as Annex A (a “Notice of Conversion”) as fully and originally executed by the
Holder, together with the delivery by the Holder to the Corporation of the stock
certificate(s) representing the number of shares of Preferred Stock so
converted, with such stock certificates being duly endorsed in full for transfer
to the Corporation or with an applicable stock power duly executed by the Holder
in the manner and form as deemed reasonable by the transfer agent of the Common
Stock. Each Notice of Conversion shall specify the number of shares of Preferred
Stock to be converted, the number of shares of Preferred Stock owned prior to
the conversion at issue, the number of shares of Preferred Stock owned
subsequent to the conversion at issue, the stock certificate number and the
shares of Preferred Stock represented thereby which are accompanying the Notice
of Conversion, and the date on which such conversion is to be effected, which
date may not be prior to the date the Holder delivers such Notice of Conversion
and the applicable stock certificates to the Corporation by overnight delivery
service (the “Conversion Date”). If no Conversion Date is specified in a Notice
of Conversion, the Conversion Date shall be the Trading Day immediately
following the date that such Notice of Conversion and applicable stock
certificates are received by the Corporation. The calculations and entries set
forth in the Notice of Conversion shall control in the absence of manifest or
mathematical error.  Shares of Preferred Stock converted into Common Stock in
accordance with the terms hereof shall be canceled and may not be reissued.  The
initial value of the Preferred Stock, on an as converted to Common Stock basis
(calculated utilizing the Conversion Ratio), on the Conversion Date shall be
equal to $0.32, per share (as adjusted pursuant to Section 7 or otherwise as
provided herein, the “Conversion Value”).  If the initial Conversion Value is
adjusted pursuant to Section 7 or as otherwise provided herein, the Conversion
Ratio shall likewise be adjusted and the new Conversion Ratio shall equal the
Liquidation Value divided by the new Conversion Value.  Thereafter, subject to
any further adjustments in the Conversion Value, each share of Preferred Stock
shall be convertible into that number of shares of Common Stock equal to the new
Conversion Ratio.  

b)

Reserved.

 

c)

Mechanics of Conversion

(i)

Delivery of Certificate Upon Conversion. Except as otherwise set forth herein,
not later than three Trading Days after each Conversion Date (the “Share
Delivery Date”), the Corporation shall deliver to the Holder (A) as applicable
either (1) prior to the Effective Date, a certificate or certificates with 144
restrictions representing the number of shares of Common Stock being acquired
upon the conversion of shares of Preferred Stock or 2 days after the Effective
Date, a certificate or certificates which shall be free of restrictive legends
and trading restrictions (other than those required by the Purchase Agreement)
representing the number of shares of Common Stock being acquired upon the
conversion of shares of Preferred Stock, and (B) a bank check in the amount of
accrued and unpaid dividends (if the Corporation has elected or is required to
pay accrued dividends in cash). After the Effective Date, the Corporation shall,
upon request of the Holder, deliver any certificate or certificates required to
be delivered by the Corporation under this Section electronically through the
Depository Trust Corporation or another established clearing corporation
performing similar functions. If in the case of any Notice of Conversion such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the third Trading Day after the Conversion Date, the Holder
shall be entitled to elect by written notice to the Corporation at any time on
or before its receipt of such certificate or certificates thereafter, to rescind
such conversion, in which event the Corporation shall immediately return the
certificates representing the shares of Preferred Stock tendered for conversion.

i.

Reservation of Shares Issuable Upon Conversion. The Corporation covenants that
it will at all times reserve and keep available out of its authorized and
unissued shares of Common Stock solely for the purpose of issuance upon
conversion of the Preferred Stock, each as herein provided, free from preemptive
rights or any other actual contingent purchase rights of persons other than the
Holders, not less than such number of shares of the Common Stock as shall
(subject to any additional requirements of the Corporation as to reservation of
such shares set forth in the Purchase Agreement) be issuable (taking into
account the adjustments and restrictions of Section 7) upon the conversion of
all outstanding shares of Preferred Stock.  The Corporation covenants that all
shares of Common Stock that shall be so issuable shall, upon issue, be duly and
validly authorized, issued and fully paid, nonassessable and, if the Conversion
Shares Registration Statement is then effective under the Securities Act,
registered for public sale in accordance with such Conversion Shares
Registration Statement.

ii.

Fractional Shares. Upon a conversion hereunder, the Corporation shall not be
required to issue stock certificates representing fractions of shares of the
Common Stock.

iii.

Transfer Taxes.  The issuance of certificates for shares of the Common Stock on
conversion of the Preferred Stock shall be made without charge to the Holders
thereof for any documentary stamp or similar taxes that may be payable in
respect of the issue or delivery of such certificate, provided that the
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issuance and delivery of any such certificate
upon conversion in a name other than that of the Holder of such shares of
Preferred Stock so converted and the Corporation shall not be required to issue
or deliver such certificates unless or until the person or persons requesting
the issuance thereof shall have paid to the Corporation the amount of such tax
or shall have established to the satisfaction of the Corporation that such tax
has been paid.

86

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Section 7.

Certain Adjustments.

a)

Stock Dividends and Stock Splits.  If the Corporation, at any time while the
Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make
a distribution or distributions on shares of its Common Stock or any other
equity or equity equivalent securities payable in shares of Common Stock (which,
for avoidance of doubt, shall not include any shares of Common Stock issued by
the Corporation pursuant to this Preferred Stock), (B) subdivide outstanding
shares of Common Stock into a larger number of shares, (C) combine (including by
way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (D) issue by reclassification of shares of the Common Stock
any shares of capital stock of the Corporation, then the Conversion Value shall
be multiplied by a fraction of which the numerator shall be the number of shares
of Common Stock (excluding treasury shares, if any) outstanding before such
event and of which the denominator shall be the number of shares of Common Stock
outstanding after such event.  Any adjustment made pursuant to this Section
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution and shall
become effective immediately after the effective date in the case of a
subdivision, combination or re-classification.

b)

Subsequent Equity Sales.  Neither the Corporation nor any Subsidiary, as
applicable, at any time while Preferred Stock is outstanding, without the
express written consent of the Preferred Holders, shall offer, sell, grant any
option to purchase or offer, sell or grant any right to reprice its securities,
or otherwise dispose of or issue (or announce any offer, sale, grant or any
option to purchase or other disposition) any Common Stock or Common Stock
Equivalents entitling any Person to acquire shares of Common Stock at an
effective price per share less than the then Conversion Value (“Dilutive
Issuance”), as adjusted hereunder (if the holder of the Common Stock or Common
Stock Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange
prices or otherwise, or due to warrants, options or rights per share which is
issued in connection with such issuance, be entitled to receive shares of Common
Stock at an effective price per share which is less than the Conversion Value,
such issuance shall be deemed to have occurred for less than the Conversion
Value).

c)

Subsequent Rights Offerings.  The Corporation, at any time while the Preferred
Stock is outstanding, shall not issue rights, options or warrants to holders of
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than the Conversion Value.   

                                                                                               

d)

Pro Rata Distributions. If the Corporation, at any time while Preferred Stock is
outstanding, shall distribute to all holders of Common Stock (and not to
Holders) evidences of its indebtedness or assets or rights or warrants to
subscribe for or purchase any security, then in each such case the Conversion
Value shall be determined by multiplying such Conversion Value in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution by a fraction of which the denominator
shall be the VWAP determined as of the record date mentioned above, and of which
the numerator shall be such VWAP on such record date less the then fair market
value at such record date of the portion of such assets or evidence of
indebtedness so distributed applicable to one outstanding share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments shall be described in a statement provided to the Holders of the
portion of assets or evidences of indebtedness so distributed or such
subscription rights applicable to one share of Common Stock.  Such adjustment
shall be made whenever any such distribution is made and shall become effective
immediately after the record date mentioned above.

 

e)

Calculations.  All calculations under this Section 7 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be.  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, and the description of
any such shares of Common Stock shall be considered on issue or sale of Common
Stock.  For purposes of this Section 7, the number of shares of Common Stock
deemed to be issued and outstanding as of a given date shall be the sum of the
number of shares of Common Stock (excluding treasury shares, if any) actually
issued and outstanding.

f)

Notice to Holders.

i.

Adjustment to Conversion Price.  Whenever the Conversion Value is adjusted
pursuant to any of this Section 7, the Corporation shall promptly mail to each
Holder a notice setting forth the Conversion Value after such adjustment and
setting forth a brief statement of the facts requiring such adjustment. If the
Corporation issues a variable rate security, despite the prohibition thereon in
the Purchase Agreement, the Corporation shall be deemed to have issued Common
Stock or Common Stock Equivalents at the lowest possible conversion or exercise
price at which such securities may be converted or exercised in the case of a
Variable Rate Transaction (as defined in the Purchase Agreement), or the lowest
possible adjustment price in the case of an MFN Transaction (as defined in the
Purchase Agreement).

 

Notice to Allow Conversion by Holder.  If (A) the Corporation shall declare a
dividend (or any other distribution) on the Common Stock; (B) the Corporation
shall declare a special nonrecurring cash dividend on or a redemption of the
Common Stock; (C) the Corporation shall authorize the granting to all holders of
the Common Stock rights or warrants to subscribe for or purchase any shares of
capital stock of any class or of any rights; (D) the approval of any
stockholders of the Corporation shall be required in connection with any
reclassification of the Common Stock, any consolidation or merger to which the
Corporation is a party, any sale or transfer of all or substantially all of the
assets of the Corporation, of any compulsory share exchange whereby the Common
Stock is converted into other securities, cash or property; (E) the Corporation
shall authorize the voluntary or involuntary dissolution, liquidation or winding
up of the affairs of the Corporation; then in each case, the Corporation shall
cause to be filed at each office or agency maintained for the purpose of
conversion of the Preferred Stock, and shall cause to be mailed to the Holders
at their last addresses as they shall appear upon the  stock books of the
Corporation, at least 70 calendar days prior to the applicable record or
effective date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution,
redemption, rights or warrants, or if a record is not to be taken, the date as
of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, sale,
transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such reclassification, consolidation, merger,
sale, transfer or share exchange; provided, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the corporate action required to be specified in such notice.  Any and all
Conversion Shares issued or issuable upon conversion shall be entitled to share
in such transaction notwithstanding the record date of such transaction so long
as the Holders of the Preferred Stock elect to convert their shares of Preferred
Stock into Conversion Shares prior to the expiration of such 70-day notice
period.

ii.

Exempt Issuance. Notwithstanding the foregoing, no adjustment will be made under
this Section 7 in respect of an Exempt Issuance.

87

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iii.

Fundamental Transaction. If, at any time while this Preferred Stock is
outstanding, (A) the Corporation effects any merger or consolidation of the
Corporation with or into another Person, (B) the Corporation effects any sale of
all or substantially all of its assets in one or a series of related
transactions, (C) any tender offer or exchange offer (whether by the Corporation
or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or
property, or (D) the Corporation effects any reclassification of the Common
Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property
(in any such case, a “Fundamental Transaction”), then upon any subsequent
conversion of this Preferred Stock, the Holder shall have the right to receive,
for each Conversion Share that would have been issuable upon such conversion
absent such Fundamental Transaction, the same kind and amount of securities,
cash or property as it would have been entitled to receive upon the occurrence
of such Fundamental Transaction if it had been, immediately prior to such
Fundamental Transaction, the holder of one share of Common Stock (the “Alternate
Consideration”).  For purposes of any such conversion, the determination of the
Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect
of one share of Common Stock in such Fundamental Transaction, and the
Corporation shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration.  If holders of Common Stock
are given any choice as to the securities, cash or property to be received in a
Fundamental Transaction, then the Holder shall be given the same choice as to
the Alternate Consideration it receives upon any conversion of this Preferred
Stock following such Fundamental Transaction.  To the extent necessary to
effectuate the foregoing provisions, any successor to the Corporation or
surviving entity in such Fundamental Transaction shall file a new Certificate of
Designations with the same terms and conditions and issue to the Holder new
preferred stock consistent with the foregoing provisions and evidencing the
Holder’s right to convert such preferred stock into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this paragraph (f)(iii) and insuring that this Preferred
Stock (or any such replacement security) will be similarly adjusted upon any
subsequent transaction analogous to a Fundamental Transaction.

Section 8.  

Miscellaneous.

a)

Notices.  Any and all notices or other communications or deliveries to be
provided by the Holders hereunder, including, without limitation, any Notice of
Conversion, shall be in writing and delivered personally, by facsimile, sent by
a nationally recognized overnight courier service, addressed to the Corporation,
at the address provided in the Purchase Agreement. Any and all notices or other
communications or deliveries to be provided by the Corporation hereunder shall
be in writing and delivered personally, by facsimile, sent by a nationally
recognized overnight courier service addressed to each Holder at the facsimile
telephone number or address of such Holder appearing on the books of the
Corporation, or if no such facsimile telephone number or address appears, at the
principal place of business of the Holder.  Any notice or other communication or
deliveries hereunder shall be deemed given and effective on the earliest of (i)
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile telephone number specified in this Section prior to
5:30 p.m. (New York City time), (ii) the date after the date of transmission, if
such notice or communication is delivered via facsimile at the facsimile
telephone number specified in this Section later than 5:30 p.m. (New York City
time) on any date and earlier than 11:59 p.m. (New York City time) on such date,
(iii) the second Business Day following the date of mailing, if sent by
nationally recognized overnight courier service, or (iv) upon actual receipt by
the party to whom such notice is required to be given.

b)

Lost or Mutilated Preferred Stock Certificate.  If a Holder’s Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall
execute and deliver, in exchange and substitution for and upon cancellation of a
mutilated certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares of Preferred Stock so
mutilated, lost, stolen or destroyed but only upon receipt of evidence of such
loss, theft or destruction of such certificate, and of the ownership thereof,
and indemnity, if requested, all reasonably satisfactory to the Corporation.

c)

Next Business Day.  Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.

d)

Headings.  The headings contained herein are for convenience only, do not
constitute a part of this Certificate of Designations and shall not be deemed to
limit or affect any of the provisions hereof.

RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and
the secretary or any assistant secretary, of the Corporation be and they hereby
are authorized and directed to prepare and file a Certificate of Designation of
Preferences, Rights and Limitations in accordance with the foregoing resolution
and the provisions of Nevada law.

        IN WITNESS WHEREOF, the undersigned have executed this Certificate this
___ day of July 2008.

/s/ Gerald Garcia, Jr.     

Name: Gerald Garcia, Jr.

Title:  President

/s/ B. Joseph Vincent       

Name: B. Joseph Vincent

Title:  Secretary

88

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Schedule 2.7 - Legal Issues Disclosure

(a)

Jose R. Trujillo v. Michael L. Foudy, AIMS Worldwide, Inc., American Institute
for Full Employment, The Committee for Good Common Sense, et al., in the Circuit
Court of the 15th Judicial Circuit in and for Palm Beach County, Florida, case
No. 502005CA005603XXXXMB, affidavit filed December 9, 2005.

(b)

The Company is in dispute with Funai Corporation regarding amounts owed for
services rendered to the Company for fulfillment of a contract executed by both
parties.  Both parties shave been in deliberations, but the Company may pursue
litigation to recover its fees for time and charges.

(c)

AIMS Worldwide, Inc., entered into an agreement with Liberty Growth Fund, LP
("Liberty') as of July 19, 2007 (the "Liberty Agreement"). The acquisition
documents included a Purchase Agreement for the Acquisition of Series A
Preferred Shares and a Registration Rights Agreement. Liberty defaulted in its
obligation to pay the purchase price, and the status of these shares remains
subject to subsequent events which may impact the capitalization herein
described. Subsequent to the transaction, the one Liberty principal died
(November 2007) and no contact representing Liberty has emerged to date.

Schedule 2.8 – Intellectual Property Disclosure

AIMS Worldwide, Inc., holds common law trademarks on AIMS™ and ROMI™, and
One-2-One™.  AIMS™ is a unique doctrine, process, intellectual property,
delivery system and corporate development method.  AIMS™ and its consultancy
brand AIMSolutions will maximize the client’s Return On Marketing Investment
(“ROMI™”) in the process.

One-2-One™ is also a trademark/service mark owned by AIMS.  This system can meet
and exceed a client company’s goals and objectives to expand their top line
revenues, market and Customer Relationship Management (“CRM”™) at lower cost
than legacy advertising and marketing communications programs.

Myaims.com is an intellectual property for our online business and delivery
service of our products.  Our websites, www.myaims.com and www.aimsworldwide.com
are registered internet domain names owned and controlled by AIMS.

MYRA™ (MY Research Assistant) is an internally-developed, proprietary, online,
email-generated, search engine driven, accurate integrated marketing solution
owned by AIMS Worldwide, Inc.  MYRA’s design, development, source code, and
unique dashboard-driven process is currently a trade secret.  AIMS Worldwide,
Inc. has received initial patent, use patent, and federal trademark review and
application proposal from Finnegan, Henderson, Farabow, Garrett, & Dunner, LLP
(“Finnegan”).  The management of AIMS Worldwide, Inc., intends to commence
patent, trademark, and related intellectual property protection via the offices
of Finnegan.

89

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Schedule 2.15 – Financial Statements as of March 31, 2008, Disclosure

Financial Statements (unaudited)

The accompanying balance sheet of AIMS™ Worldwide, Inc. at March 31, 2008, and
the related statements of operations, shareholders deficit and cash flows, for
the three months ended March 31, 2008 and 2007 have been prepared by our
management in conformity with accounting principles generally accepted in the
United States of America.  In the opinion of management, all adjustments
considered necessary for a fair presentation of the results of operations and
financial position have been included and all such adjustments are of a normal
recurring nature.

Operating results for the three months ended March 31, 2008, are not necessarily
indicative of the results that can be expected for the year ending December 31,
2008.

AIMS Worldwide, Inc.

Condensed, Consolidated Balance Sheets

Assets

 

 

 

 

 

 

 

March 31

 

December 31

 

 

2008

 

2007

Current assets

 

(Unaudited)

 

 

    Cash

$

122,926

$

138,593

    Accounts receivable, net

 

225,573

 

174,063

    Inventory

 

6,854

 

7,269

    Prepaid expense

 

39,535

 

34,399

Total current assets

 

394,888

 

354,324

 

 

 

 

 

Property and equipment

 

 

 

 

    At cost, net of accumulated depreciation of $26,180

 

203,334

 

185,366

 

 

 

 

 

Other assets

 

 

 

 

    Deposits and other assets

 

104,140

 

111,640

    Prepaid offering costs

 

402,064

 

402,064

    Goodwill, net of impairment of $87,431

 

3,908,755

 

3,908,755

    Intangible assets, net of amortization of $424,907

 

1,810,066

 

1,899,950

Total other assets

 

6,225,025

 

6,322,409

 

 

 

 

 

Total assets

$

6,823,247

$

6,862,099

90

--------------------------------------------------------------------------------

Liabilities and Stockholders’ Deficit

 

 

 

 

 

Current liabilities

 

 

 

 

    Accounts payable

$

743,430

$

634,555

    Accounts payable - related parties

 

203,023

 

146,022

    Deferred revenue

 

75,934

 

62,083

    Current portion of long term debt

 

52,945

 

63,477

    Notes payable

 

1,747,348

 

1,715,907

    Notes payable - related parties

 

1,005,971

 

975,971

    Accrued interest payable

 

991,377

 

947,456

    Accrued interest payable - related parties

 

860,495

 

845,201

Total current liabilities

 

5,680,523

 

5,390,672

    Long term debt

 

559,919

 

536,825

Total liabilities

 

6,240,442

 

5,927,497

Minority interest

 

(240,155)

 

(205,829)

Contingencies (see Note C)

 

- 

 

- 

Stockholders' equity

 

 

 

 

     Preferred stock held in escrow, $.001 par value,   

 

 

 

 

        20,000,000 shares authorized, 7,100,000

 

 

 

 

        shares issued and 2,128,500 outstanding

 

7,100

 

7,100

     

     Common stock, $.001 par value, 200,000,000 shares

 

 

 

 

        authorized, 46,043,343 shares issued and outstanding

 

46,043

 

44,587

    Additional paid-in capital – preferred stock

 

3,488,929

 

3,488,929

    Additional paid-in capital – common stock

 

10,201,039

 

9,920,486

    Stock subscription receivable

 

(50,000)

 

(50,000)

    Deficit retained

 

(12,870,151)

 

(12,270,671)

Total stockholders' equity

 

822,960

 

1,140,431

 

 

 

 

 

Total liabilities and stockholders' equity

$

6,823,247

$

6,862,099

See accompanying notes to condensed, consolidated financial statements

91

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AIMS Worldwide, Inc.

Condensed, Consolidated Statements of Operations

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

 

2008

 

2007

 

 

 

 

 

 

 

 

 

 

Revenue

$

1,244,213

$

109,328

 

 

 

 

 

Operating expenses

 

 

 

 

     Cost of sales

 

31,845

 

26,230

     General and administrative expenses

 

1,769,236

 

455,897

 

 

1,801,081

 

482,127

 

 

 

 

 

     Operating loss

 

(556,868)

 

(372,799)

   

 

 

 

 

Interest expense, net

 

(61,646)

 

(33,646)

Interest expense, net - related parties

 

(15,293)

 

(27,200)

Minority interest

 

34,327

 

-

 

 

 

 

 

      Loss from continuing operations before provision for income taxes

 

(599,480)

 

(433,645)

 

 

 

 

 

Income taxes

 

-

 

-

 

 

 

 

 

     Loss from continuing operations

 

(599,480)

 

(433,645)

 

 

 

 

 

Earnings from equity investments held for sale, net of income taxes

 

-

 

(3,197)

 

 

 

 

 

     Net loss

$

(599,480)

$

(436,842)

 

 

 

 

 

Net loss available to common shareholders after beneficial conversion feature

$

(599,480)

 $

(436,842)

 

 

 

 

 

Basic and diluted loss per share from continuing operations

$

(0.01)

$

(0.01)

 

 

 

 

 

Basic and diluted loss per share to common shareholders

$

(0.01)

$

(0.01)

 

 

 

 

 

Weighted average number of

 

 

 

 

   shares outstanding

 

45,249,522

 

40,643,392

See accompanying notes to condensed, consolidated financial statements

92

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AIMS Worldwide, Inc.

Condensed, Consolidated Statements of Changes in Shareholders’ Deficit

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

Additional

Stock

Stock

 

 

 

Common Stock

Paid-in

Preferred Stock

Paid-in

Held In

Subscription

Accumulated

 

 

Shares

Amount

Capital

Shares

Amount

Capital

Escrow

Receivable

Deficit

Total

 

 

 

 

 

 

 

 

 

 

 

Balance,

 

 

 

 

 

 

 

 

 

 

January 1, 2008

44,586,575

$44,587

$9,920,486

7,100,000

$7,100

$3,488,929

$          -

$(50,000)

$(12,270,671)

$1,140,431

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

  issued for cash

1,366,666

1,367

232,412

- 

- 

- 

-

- 

-

233,779

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

  issued for services

90,102

90

48,140

- 

- 

- 

-

-

-

48,230

 

 

 

 

 

 

 

 

 

 

 

Loss for period

-

-

-

- 

- 

- 

-

-

(599,480)

(599,480)

 

 

 

 

 

 

 

 

 

 

 

 Balance,

 

 

 

 

 

 

 

 

 

 

   March 31, 2008

46,043,343

$46,043

$10,201,039

7,100,000

$7,100

$3,488,929

$          -

$(50,000)

$(12,870,151)

$822,960

See accompanying notes to condensed, consolidated financial statements

93

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AIMS Worldwide, Inc.

Condensed, Consolidated Statements of Cash Flows

(unaudited)

 

 

Three Months Ended

 

 

March 31,

 

 

2008

 

2007

Cash flows from operating activities:

 

 

 

 

  Net loss

$

(599,480)

$

(436,842)

  Adjustments to reconcile net loss to net

 

 

 

 

   cash used in operating activities:

 

 

 

 

     Depreciation and amortization

 

99,079

 

41,742

     Loss (income) from equity investments

 

-

 

(34,443)

     Loss (income) from minority interest

 

(34,327)

 

-

     Stock issued to employees and others for services

 

48,230

 

39,840

 

 

(486,498)

 

(389,703)

Changes in current assets and liabilities:

 

 

 

 

     Accounts receivable and other current assets

 

(48,732)

 

73,115

     Accounts payable and other current liabilities

 

238,941

 

199,644

Net cash used in operating activities

 

(296,289)

 

(116,944)

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

  Purchase of equipment

 

(27,164)

 

-

  Distributions from equity investments

 

-

 

26,500

  Investment in subsidiaries and equity investments

 

-

 

(17,390)

Net cash provided by (used in) investing activities

 

(27,164)

 

9,110

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

  Proceeds from sale of common stock

 

234,000

 

85,000

  Offering costs for sale of stock

 

(221)

 

-

  Proceeds from investor subscription paid

 

-

 

50,000

 Proceeds of notes payable, net

 

74,007

 

-

  Repayments of notes payable

 

-

 

(1,256)

Net cash provided by financing activities

 

307,786

 

133,744

 

 

 

 

 

Net increase (decrease) in cash

 

(15,667)

 

25,910

 

 

 

 

 

Cash, beginning of period

 

138,593

 

16,942

Cash, end of period

$

122,926

$ 

42,852

 

 

 

 

 

Cash paid during the period for:

 

 

 

 

  Interest

$

17,755

$ 

9,804

  Income taxes

$

-

$ 

-

 

 

 

 

 

Non-cash investing and financing activities

 

 

 

 

  Stock issued to escrow for acquisition

$

-

$ 

170,890

  Stock issued to settle debt

$

-

$ 

23,000

See accompanying notes to condensed, consolidated financial statements

94

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AIMS™ WORLDWIDE, INC.

Notes to Condensed, Consolidated Financial Statements

(Unaudited)

NOTE A:  BASIS OF PRESENTATION

The accompanying financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
in accordance with the instructions for Form 10-Q.  Accordingly, they do not
include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.

In the opinion of management, the financial statements contain all material
adjustments, consisting only of normal recurring adjustments necessary to
present fairly the financial condition, results of operations, and cash flows of
the Company for the interim periods presented.  Prior periods have been restated
to reclassify discontinued from continuing operations.

The results for the three months ended March 31, 2008, are not necessarily
indicative of the results of operations for the full year.  These financial
statements and related footnotes should be read in conjunction with the
financial statements and footnotes thereto included in the Company’s Form
10-KSB, filed with the Securities and Exchange Commission for the year ended
December 31, 2007.

NOTE B:  SUBSIDIARIES AND EQUITY INVESTMENTS

As part of its corporate development core competency acquisition strategy, AIMS™
Worldwide, Inc., owns the following subsidiaries:  AIMS Interactive, Inc.; ATB
Media, Inc.; Streetfighter Marketing, Inc.; Barbara Overhoff, Inc., d/b/a/ Bill
Main and Associates; Harrell, Woodcock, and Linkletter; Target America, Inc.;
and 55% of IKON Public Affairs Group, LLC.

Pro forma results of operations had Bill Main and Associates, IKON Public
Affairs, and Target America, Inc., been included in operations for the year
ended December 31, 2007, are as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

AIMS

 

Bill Main

 

IKON

 

Target America

 

 Pro Forma

Worldwide

 

January 1 to

 

January 1 to

 

January 1 to

 

As Reported

 

May 16, 2007

 

July 26, 2007

 

July 26, 2007

 

Twelve months 2007

 

 

 

 

 

 

 

 

 

   Revenue

$

2,119,459

$

 142,879

$

 1,579,829

$

 660,222

$

4,502,389

   Operating income (loss)

 

 (2,962,239)

 

  (92,198)

 

 54,015

 

  5,547

 

(2,994,875)

     Net income (loss)

 

 (3,189,670)

 

   (92,198)

 

97,209

 

  45,753

 

(3,138,906)

     Net loss per share

 

 (.08)

 

 

 

 

 

 

 

 (.08)

NOTE C:  CONTINGENCIES

The Internal Revenue Service is auditing IKON Holdings, Inc, the corporation
from which AIMS acquired the 55% interest in IKON Public Affairs Group, LLC.
 The examination is not complete, and no expense to AIMS is expected as a result
of the examination.

NOTE D:  INCOME TAXES

The Company records its income taxes in accordance with Statement of Financial
Accounting Standard No. 109, "Accounting for Income Taxes". The Company incurred
net operating losses during the periods shown on the condensed consolidated
financial statements resulting in a deferred tax asset, which was fully allowed
for, therefore the net benefit and expense result in $-0- income taxes.

NOTE E:  COMMON EQUITY TRANSACTIONS

During the three months ended March 31, 2008, we issued 1,366,666 shares of
common stock to four shareholders for total proceeds of $234,000.  In addition,
we issued 90,102 shares of common stock for services valued at $48,230.  Fair
value of shares issued for services was determined by the board of directors,
taking into consideration the fair market value on the date the shares were
issued.  The price of shares sold for cash were negotiated with the unrelated
investors.

NOTE F:  SEGMENT INFORMATION

We report the following information on our business segments as of and for the
three months ended March 31, 2008:

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Media

 

Media

 

Consulting

 

Strategy

 

Public

 

Digital

 

Corporate

 

 

 

 

Services

 

Properties

 

Services

 

& Planning

 

Affairs

 

Marketing

 

Overhead

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

-

$

-

$

16,896

$

226,824

$

618,633

$

381,860

$

-

$

1,244,213

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   operations

$

-

$

-

$

3,740

$

(70,760)

$

(76,282)

$

57,700

$

(471,266)

$

(556,868)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

$

-

$

-

$

-

$

-

$

- 

$

- 

$

-

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

-

$

(59,215)

$

3,770

$

(86,600)

$

(41,955)

$

55,786

$

(471,266)

$

(599,480)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Identifiable assets,

    net

$

-

$

-

$

308,511

$

1,026,559

$

2,987,235

$

2,091,266

$

409,677

$

6,823,248

We report the following information on our business segments as of and for the
three months ended March 31, 2007:

 

 

Media

 

Media

 

Consulting

 

Strategy

 

Corporate

 

 

 

 

Services

 

Properties

 

Services

 

& Planning

 

Overhead

 

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

$

- 

$

-

$

45,000

$

64,328

$

-

$

109,328

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from

 

 

 

 

 

 

 

 

 

 

 

 

   operations

$

-

$

-

$

11,881

$

(182)

$

(384,498)

$

(372,799)

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from

 

 

 

 

 

 

 

 

 

 

 

 

   discontinued operations

$

(3,197)

$

-

$

-

$

-

$

-

$

(3,197)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

$

(3,197)

$

(58,999)

$

11,881

$

(2,029)

$

(384,498)

$

(436,842)

 

 

 

 

 

 

 

 

 

 

 

 

 

Identifiable assets, net

$

218,506

$

-

$

-

$

-

$

22,320

$

240,826

NOTE G:  RELATED PARTY TRANSACTIONS

During the three months ended March 31, 2008, the Company obtained short-term
loans totaling $45,000 from the spouse of an officer, of which $30,000 remains
unpaid at March 31, 2008.

NOTE H:  CONVERTIBLE PREFERRED EQUITY AND CONTINGENCY

As of March 31, 2008, the Company is continuing in its efforts to secure
financing to complete core competency acquisitions in the marketing and
communications platform, and to fund its organic growth plan.  The Company is
placed in the position of seeking this financing by reason of the failure of
Liberty Growth Fund LP to perform its obligations under the Stock Purchase
Agreement entered into by and between the Company and Liberty in 2007.

The Company is in discussions with several investment groups to provide
replacement financing.  However, there is no guarantee or assurance that these
discussions will result in a financing alternative that can be obtained on
reasonable terms or at all.

In accordance with Emerging Issues Task Force Issue 98-5, Accounting for
Convertible Securities with Beneficial Conversion Features or Contingently
Adjustable Conversion Ratios ("EITF 98-5"), the Company recognized an imbedded
beneficial conversion feature present in the convertible preferred stock.  The
Company recognized and measured an aggregate of $2,500,000, which is equal to
the intrinsic value of the imbedded beneficial conversion feature, to additional
paid-in capital and a return to the convertible preferred stock holders.  Since
the preferred shares were convertible at the date of issuance, the return to the
preferred shareholders attributed to the beneficial conversion feature has been
recognized in full at the date the convertible preferred stock was issued.

96

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Schedule 2.17(e) – Employee Benefit Plan disclosure

AIMS Worldwide, Inc., has no employee benefit plans presently, but has Board
authorization to implement a stock option plan for all employees by year-end
2008.

At the time of acquisition employee benefit plans intact continue at the
discretion of subsidiary management.  The Company intends to have a
comprehensive employee benefit plan that is Company-wide and coverage available
for each employee by year-end 2009.

97

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Schedule 2.19 – Insurance Term Sheet(s) Disclosure

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National Union Fire Insurance Company of Pittsburgh, Pa.

1700 MARKET STREET,SUITE 2000

[aims8k071008ex10012.jpg] [aims8k071008ex10012.jpg]

AIG EXECUTIVE LIABILITYSM

Insurance provided by a member company of

American International Group, Inc.

PHILADELPHIA, PA 19103-

(215) 255-6000

NOTICE_PARA

BINDER OF INSURANCE CONFIRMATION LETTER

June 27, 2008

DAMIEN CARACCIOLO

CBIZ  INSURANCE SERVICES INC

9302  LEE HWY STE 200

FAIRFAX, VA 22031-1214

RE:

AIMS WORLDWIDE, INC.

D&O 2/2000 Executive and Organization Liability Insurance Policy

Name of Insurance Carrier: NATIONAL UNION FIRE INSURANCE COMPANY OF PITTSBURGH,
PA.

Address of Insurance Carrier: 175 WATER STREET, NEW YORK, NY, 10038

Tab#: 1178002, Submission #: 104136320

Policy#: 006213901

Replacement of Policy # 006596167

Policy Period Effective Date From: 06/29/2008 To 06/29/2009

Dear Damien:

On behalf of National Union Fire Insurance Company of Pittsburgh, Pa.
(hereinafter "Insurer"), I am pleased to confirm the binding of coverage in
accordance with our agreement as set forth below and subject to the conditions
set forth herein. Please review said Binder for accuracy and contact the Insurer
prior to the effective date of policy coverage of any inaccuracy(ies) found
within the issued Binder. If the Insurer does not hear from you prior to the
effective date of policy coverage it will be understood that the Binder has been
accepted as an accurate description of the agreed upon terms of coverage.

PLACE_GUARENTEE_FUND_WORDING

***IMPORTANT POLICY ISSUANCE VERIFICATION***

A policy will be issued with the name and address of the Insured exactly as
referenced in the “Policy Information” Section of this Binder. If this
information is inaccurate, please advise us immediately.

105

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POLICY INFORMATION

INSURED:

AIMS WORLDWIDE, INC.

INSURED’S ADDRESS:        10400 EATON PL STE 450

FAIRFAX, VA 22030-2208

TYPE OF POLICY:

D&O 2/2000 Executive and Organization Liability Insurance Policy

BASIC FORM:

75011 (02/00)

INSURANCE COMPANY:

National Union Fire Insurance Company of Pittsburgh, Pa.

POLICY NUMBER:

006213901

EFFECTIVE DATE:

06/29/2008

EXPIRATION DATE:

06/29/2009

LIMIT OF LIABILITY:

$1,000,000

CRISISFUNDSM:

  Crisis Loss:

  $50,000

Delisting Crisis Loss:

  $25,000

RETENTION:

 

Securities Claim:

  $150,000

Employment Practices Claim:

  $100,000

Other Claims:

  $100,000

CONTINUITY DATES:

Coverages A and B, other than

Outside Entity Executive coverage:

06/29/2007

Outside Entity Executive coverage,

Including Coverage C:

The date on which the Insured Person first

served as an Outside Entity Executive of

such Outside Entity.

Coverage D:

  06/29/2007

OTHER TERMS:

  Per Insurer Quote/Indication Letter dated 06/18/2008 except as indicated
below.

PREMIUM:

$9,785

COMMISSION:

13.00%

Important Conditions Of Binder: See Below

Premium for Certified Acts of Terrorism Coverage under Terrorism Risk Insurance
Act 2002: $285 included in policy premium. Any coverage provided for losses
caused by an act of terrorism as defined by TRIA (TRIA Losses) may be partially
reimbursed by the United States under a formula established by TRIA as follows:
 85% of TRIA Losses in excess of the insurer deductible mandated by TRIA, the
deductible to be based on a percentage of the insurer's direct earned premiums
for the year preceding the act of terrorism.

106

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ENDORSEMENTS

The following endorsements will be added to the basic policy:

#

Form #

Ed Dt

Title

1

52172

01/97

VA Cancellation/NonRenewal

2

89371

05/05

"NO LIABILITY" PROVISION DELETED (SECURITIES CLAIM RETENTION APPLIES TO ALL LOSS
ARISING OUT OF A SECURITIES CLAIM)

3

83549

11/03

NUCLEAR ENERGY LIABILITY EXCLUSION ENDORSEMENT WITH EXCEPTION FOR
NON-INDEMNIFIABLE LOSS

4

90496

03/08

EXCLUSION (M) AMENDED (FLSA)—NEW WORDING

5

83516

11/03

CAPTIVE INSURANCE COMPANY EXCLUSION—can be removed upon receipt of completed
warranty

6

83524

11/03

Commissions Exclusion—can be removed upon receipt of completed questionnaire

7

83569

10/07

PROFESSIONAL ERRORS & OMISSIONS EXCLUSION (WITH SECURITIES CLAIM CARVE-OUT)—NEW
WORDING

8

95001

07/07

AIG MICROCAP FLEX ENDORSEMENT—NEW

9

89639

07/05

SEVERABILITY TO THE APPLICATION ENDORSEMENT(FULL INDIVIDUAL SEVERABILITY; TOP 3
ORGANIZATION POSITIONS IMPUTED TO ORGANIZATION ; AND NON-RESCINDABLE A SIDE
COVER)

10

83588

11/03

SPECIFIC INVESTIGATION/CLAIM/LITIGATION/EVENT OR ACT EXCLUSION—Trujillo
litigation case No. 502005CA005603XXXXMB, as expiring

11

89644

07/05

COVERAGE TERRITORY ENDORSEMENT (OFAC)

12

78859

10/01

FORMS INDEX ENDORSEMENT

CONDITIONS OF BINDER

When signed by the Insurer, the coverage described above is in effect from 12:01
AM of the Effective Date listed above to 12:01 AM of the Expiration Date listed
above, pursuant to the terms, conditions and exclusions of the policy form
listed above, any policy endorsements described above, and any modifications of
such terms as described in this Binder section.Unless otherwise indicated, this
Binder may be canceled prior to the Effective Date by the Insured, or by the
Broker on the behalf of the Insured, by written notice to the Insurer or by the
surrender of this Binder stating when thereafter such cancellation shall be
effective. Unless otherwise indicated, this Binder may be canceled by the
Insurer prior to the Effective Date by sending written notice to the Insured at
the address shown above stating when, not less than thirty days thereafter, such
cancellation shall be effective.  Unless otherwise indicated, this Binder may be
canceled by the Insurer or by the Insured on or after the Effective Date in the
same manner and upon the same terms and conditions applicable to cancellation of
the policy form listed above.Issuance by the Insurer and acceptance by or on the
behalf of the Insured of the policy shall render this Binder void except as
indicated below.

 

A condition precedent to coverage afforded by this Binder is that no material
change in the risk occurs and no submission is made to the Insurer of a claim or
circumstances that might give rise to a claim between the date of this Binder
indicated above and the Effective Date.  

Please note this Binder contains only a general description of coverages
provided. For a detailed description of the terms of a policy you must refer to
the policy itself and the endorsements bound herein.

107

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PREMIUM PAYMENT

Our accounting procedures require that payment be remitted within 30 days of the
effective date of coverage or 15 days from the billing date, whichever is later.

We appreciate your compliance with this procedure.

We appreciate your business and hope that we can be of further service to you in
the future.

Sincerely,

/s/ Michael Gundzik, Jr.

Michael Gundzik, Jr.

Underwriter

If you have any questions regarding this policy, or for any other service needs,
please contact our AIG Broker Services:

Monday-Friday  9:00 AM - 6:00 PM Eastern

Telephone: 1-877-TO-SERVE or (877)867-3783

E-mail: TOSERVE@aig.com

Fax: (800) 315-3896
                                                          Raising the bar with
commitment to quality

108

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Schedule 4.7 - Secretary's Certificate

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109

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AIMS Worldwide, Inc.

10400 Eaton Place, #203

Fairfax, VA 22030

Tel

703.621.3875

Fax

703.621.3870

AIMSWorldwide,com

SECRETARY’S CERTIFICATE

The undersigned, Joseph Vincent, Secretary of AIMS Worldwide, Inc., a Nevada
corporation (the “Company”), in connection with the This Series B Preferred
Stock and Warrant Purchase Agreement (the “Agreement”) dated July 8, 2008, by
and among AIMS Worldwide, Inc., a Nevada corporation (the “Company”) and FG
Investment Holdings, LLC, a Delaware limited liability company (“Purchaser”).
hereby certifies that:

1.

He is the duly appointed Secretary of the Company.

2.

Attached as Exhibit A hereto is a true and complete copy of the Articles of
Incorporation, of the Company, as amended through the date hereof; no action has
been taken by the Company in contemplation of any amendment of said Articles of
Incorporation or any liquidation, dissolution, merger or consolidation of the
Company.

3.

Attached as Exhibit B hereto is a true and complete copy of the Bylaws of the
Company, as amended through the date hereof.

4.

Attached as Exhibit C hereto is a true and complete copy of the resolutions duly
adopted by the Board of Directors of the Company by unanimous consent on July 7,
2008; such resolutions remain in full force and effect and have not been
rescinded, modified or supplemented and no other corporate resolutions have been
adopted by the Company in connection with the Private Placement.

IN WITNESS WHEREOF, the undersigned has executed this Secretary’s Certificate as
of the 8th day of July 2008.

/s/ B. Joseph Vincent

B. Joseph Vincent

Secretary

 - (i) the Series B Preferred Stock Designation

See Exhibit A

110

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Schedule 4.7ii – Articles of Incorporation and By-laws Disclosure

PREVIOUSLY PROVIDED

111

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Schedule 4.7iii – Resolutions of the Board of Directors of the Company Approving
the Execution, Delivery and Implementation of this Agreement, the Transaction
Agreements and the Transactions Contemplated Hereby and Thereby Disclosure

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AIMS Worldwide, Inc.

10400 Eaton Place, #203

Fairfax, VA 22030

Tel

703.621.3875

Fax

703.621.3870

AIMSWorldwide,com

Board of Directors Meeting Minutes

Monday, July 7, 2008, 4:00 PM

Via email

Call to Order

Meeting called to order at 4:00 p.m. on Monday, July 7, 2008, by Chairman B.
Joseph Vincent.  In attendance were CEO and President Gerald Garcia, Jr., CFO
and Controller Patrick J. Summers, and Board members Thomas W. Cady, Theodore L.
Innes, and Herbert I. London.

Financing

Joseph Vincent moved to accept the following action by consent:

The undersigned, being all of the Directors of AIMS WORLDWIDE, INC., a Nevada
corporation, (hereinafter referred to as the “Corporation”), do hereby take the
actions below set forth, effective July 7, 2008, and to evidence waiver of any
right to dissent from such actions, do hereby consent as follows:

RESOLVED:  That the Directors of the Corporation have reviewed the terms and
conditions of the Series B Preferred Stock and Warrant Purchase Agreement for
AIMS Worldwide (“Agreement”, attached) submitted by FG Investment Holdings, LLC,
pursuant to the term sheet approved June 19, 2008, incorporated by reference
herein, and the Directors deem it advisable and in the best interests of the
Corporation that the Corporation consummate the financing on substantially the
terms and conditions as set forth in the Agreement.

RESOLVED:  That the officers of the Corporation be and are hereby authorized and
directed, in the name of and on behalf of the Corporation, to execute,
acknowledge, and deliver all documents and to take all actions on behalf of the
Corporation that the officers deem advisable, necessary or proper in connection
therewith and the foregoing resolutions.

The signature page of this Action by Consent may be delivered by facsimile,
which shall be binding and enforceable, to the same effect as if the original
signature page was executed and delivered.

113

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IN WITNESS WHEREOF, the undersigned have hereunto affixed their signatures in
their capacity as the Directors of the Corporation, it being understood that
this Action by Consent shall be effective as of July 7, 2008, at such time as
the Directors shall have executed a copy hereof.

Motion seconded by Gerald Garcia, Jr.  Passed unanimously.

Adjournment

Gerald Garcia, Jr., moved to adjourn at 4:10 p.m.  Seconded by Joseph Vincent.
 Passed unanimously.

/s/ Gerald Garcia, Jr.

Gerald Garcia, Jr.

/s/ B. Joseph Vincent

B. Joseph Vincent

_________________________________________________________

Thomas W. Cady

_________________________________________________________

Theodore L. Innes

                                                                                                       7-7-08

Herbert I. London

114