Unassociated Document


    EXHIBIT
4.5

     

    CERTIFICATE
OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES

    OF
THE

    SERIES
A-2 CONVERTIBLE PREFERRED STOCK

    OF

    ASTRATA
GROUP INCORPORATED

    


    The
undersigned, the Chief Executive Officer of Astrata Group Incorporated, a Nevada
corporation (the "Company"), in accordance with the provisions of the Nevada
Revised Statutes, does hereby certify that, pursuant to the authority conferred
upon the Board of Directors by the Articles of Incorporation of the Company, the
following resolution creating a series of preferred stock, designated as Series
A-2 Convertible Preferred Stock, was duly adopted on May 29, 2008, as
follows:

     

    RESOLVED,
that pursuant to the authority expressly granted to and vested in the Board of
Directors of the Company by provisions of the Articles of Incorporation of the
Company (the "Articles of Incorporation"), there hereby is created out of the
shares of the Company’s preferred stock, par value $0.0001 per share, of the
Company authorized in Article IV of the Articles of Incorporation (the
"Preferred Stock"), a series of Preferred Stock of the Company, to be named
"Series A-2 Convertible Preferred Stock," consisting of One Million Six Hundred
Eighty Six Thousand Four (1,686,004) shares, which series shall have the
following designations, powers, preferences and relative and other special
rights and the following qualifications, limitations and
restrictions:

     

    1.    ­Designation and
Rank.  The designation of such series of the Preferred Stock
shall be the Series A-2 Convertible Preferred Stock, par value $0.0001 per share
(the "Series A-2 Preferred Stock").  The maximum number of shares of
Series A-2 Preferred Stock shall be One Million Six Hundred Eighty Six Thousand
Four (1,686,004) shares.  The Series A-2 Preferred Stock shall rank
senior to the Company’s common stock, par value $0.0001 per share (the "Common
Stock"), and to all other classes and series of equity securities of the Company
which by their terms do not rank senior to the Series A-2 Preferred Stock
("Junior Stock").  The Series A-2 Preferred Stock shall be subordinate
to and rank junior to all indebtedness of the Company now or hereafter
outstanding.

     

    2.    ­Dividends.

     

    (a)    ­Payment of
Dividends.  Commencing on the date of the initial issuance (the
“Issuance Date”) of the Series A-2 Preferred Stock, the holders of record of
shares of Series A-2 Preferred Stock shall be entitled to receive, out of any
assets at the time legally available therefor and as declared by the Board of
Directors, cash dividends at the rate of eight percent (8%) of the stated
Liquidation Preference Amount (as defined in Section 4 hereof) per share per
annum (the "Dividend Payment"), and no more, payable on the date of payment of
the Liquidation Preference Amount to the holders of Series A-2 Preferred Stock,
pursuant to Section 4 hereof, in the event of a dissolution, liquidation or
winding up of the Company.   In the case of shares of Series A-2
Preferred Stock outstanding for less than a full year, dividends shall be pro
rated based on the portion of each year during which such shares are
outstanding.  Dividends on the Series A-2 Preferred Stock shall be
cumulative, shall accrue and be payable in the event of a dissolution,
liquidation or winding up of the Company pursuant to Section 4
hereof.  Dividends on the Series A-2 Preferred Stock are prior and in
preference to any declaration or payment of any distribution (as defined below)
on any outstanding shares of Junior Stock.  Such dividends shall
accrue on each share of Series A-2 Preferred Stock from day to day whether or
not earned or declared so that if such dividends with respect to any previous
dividend period at the rate provided for herein have not been paid on, or
declared and set apart for, all shares of Series A-2 Preferred Stock at the time
outstanding, the deficiency shall be fully paid on, or declared and set apart
for, such shares on a pro rata basis with all other equity securities of the
Company ranking pari passu with the Series A-2 Preferred Stock as to the payment
of dividends before any distribution shall be paid on, or declared and set apart
for Junior Stock.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (b)    So long
as any shares of Series A-2 Preferred Stock are outstanding, the Company shall
not declare, pay or set apart for payment any dividend or make any distribution
on any Junior Stock (other than dividends or distributions payable in additional
shares of Junior Stock), unless at the time of such dividend or distribution the
Company shall have paid all accrued and unpaid dividends on the outstanding
shares of Series A-2 Preferred Stock.

     

    (c)    In the
event of (i) a mandatory redemption pursuant to Section 9 hereof or (ii) a
redemption upon the occurrence of a Major Transaction (as defined in Section
8(c) hereof) or a Triggering Event (as defined in Section 8(d) hereof), all
accrued and unpaid dividends on the Series A-2 Preferred Stock shall be payable
on the date of such redemption.  In the event of a conversion pursuant
to Section 5(a) hereof, all accrued and unpaid dividends on the Series A-2
Preferred Stock being converted shall be payable on the Conversion Date (as
defined in Section 5(b)(i) hereof).

     

    (d)    For
purposes hereof, unless the context otherwise requires, "distribution" shall
mean the transfer of cash or property without consideration, whether by way of
dividend or otherwise, payable other than in shares of Common Stock or other
equity securities of the Company, or the purchase or redemption of shares of the
Company (other than redemptions set forth in Section 8 below or repurchases of
Common Stock held by employees or consultants of the Company upon termination of
their employment or services pursuant to agreements providing for such
repurchase or upon the cashless exercise of options held by employees or
consultants) for cash or property.

     

    3.    ­Voting
Rights.

     

    (a)    ­Class Voting
Rights.  So long as any shares of the Series A-2 Preferred
Stock remain outstanding, the Company shall not, without the affirmative vote or
consent of the holders of at least seventy-five percent (75%) of the shares of
the Series A-2 Preferred Stock outstanding at the time, given in person or by
proxy, either in writing or at a meeting, in which the holders of the Series A-2
Preferred Stock vote separately as a class: (i) authorize, create, issue or
increase the authorized or issued amount of any class or series of stock,
including but not limited to the issuance of any more shares of Preferred Stock,
ranking pari passu or senior to the Series A-2 Preferred Stock, with respect to
the distribution of assets on liquidation, dissolution or winding up; (ii)
amend, alter or repeal the provisions of the Series A-2 Preferred Stock, whether
by merger, consolidation or otherwise, so as to adversely affect any right,
preference, privilege or voting power of the Series A-2 Preferred Stock; provided, however, that any
creation and issuance of another series of Junior Stock shall not be deemed to
adversely affect such rights, preferences, privileges or voting powers; (iii)
repurchase, redeem or pay dividends on, shares of Common Stock or any other
shares of the Company's Junior Stock (other than de minimus repurchases from
employees of the Company in certain circumstances, and any contractual
redemption obligations existing as of the date hereof as disclosed in the
Company’s public filings with the Securities and Exchange Commission); (iv)
amend the Articles of Incorporation or By-Laws of the Company so as to affect
materially and adversely any right, preference, privilege or voting power of the
Series A-2 Preferred Stock; provided, however, that any
creation and issuance of another series of Junior Stock shall not be deemed to
adversely affect such rights, preferences, privileges or voting powers; (v)
effect any distribution with respect to Junior Stock other than as permitted
hereby; (vi) reclassify the Company's outstanding securities; (vii) voluntarily
file for bankruptcy, liquidate the Company’s assets or make an assignment for
the benefit of the Company’s creditors; or (viii) materially change the nature
of the Company’s business.

     

    
      
        
        

      

      
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    (b)    ­General Voting
Rights.  Except with respect to transactions upon which the
Series A-2 Preferred Stock shall be entitled to vote separately as a class
pursuant to Section 3(a) above and except as otherwise required by Nevada law,
the Series A-2 Preferred Stock shall have no voting rights.  The
Common Stock into which the Series A-2 Preferred Stock is convertible shall,
upon issuance, have all of the same voting rights as other issued and
outstanding Common Stock of the Company, and none of the rights of the Preferred
Stock.

     

    4.    ­Liquidation
Preference.

     

    (a)    In the
event of the liquidation, dissolution or winding up of the affairs of the
Company, whether voluntary or involuntary, the holders of shares of Series A-2
Preferred Stock then outstanding shall be entitled to receive, out of the assets
of the Company available for distribution to its stockholders, an amount equal
to $5.00 per share (the "Liquidation Preference Amount") of the Series A-2
Preferred Stock plus any accrued and unpaid dividends before any payment shall
be made or any assets distributed to the holders of the Common Stock or any
other Junior Stock.  If the assets of the Company are not sufficient
to pay in full the Liquidation Preference Amount plus any accrued and unpaid
dividends payable to the holders of outstanding shares of the Series A-2
Preferred Stock and any series of Preferred Stock or any other class of stock
ranking pari passu, as to rights on liquidation, dissolution or winding up, with
the Series A-2 Preferred Stock, then all of said assets will be distributed
among the holders of the Series A-2 Preferred Stock and the other classes of
stock ranking pari passu with the Series A-2 Preferred Stock, if any, ratably in
accordance with the respective amounts that would be payable on such shares if
all amounts payable thereon were paid in full.  The liquidation
payment with respect to each outstanding fractional share of Series A-2
Preferred Stock shall be equal to a ratably proportionate amount of the
liquidation payment with respect to each outstanding share of Series A-2
Preferred Stock.  All payments for which this Section 4(a) provides
shall be in cash, property (valued at its fair market value as determined by an
independent appraiser reasonably acceptable to the holders of a majority of the
Series A-2 Preferred Stock) or a combination thereof; provided, however, that no cash
shall be paid to holders of Junior Stock unless each holder of the outstanding
shares of Series A-2 Preferred Stock has been paid in cash the full Liquidation
Preference Amount plus any accrued and unpaid dividends to which such holder is
entitled as provided herein.  After payment of the full Liquidation
Preference Amount plus any accrued and unpaid dividends to which each holder is
entitled, such holders of shares of Series A-2 Preferred Stock will not be
entitled to any further participation as such in any distribution of the assets
of the Company.

     

    
      
        
        

      

      
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    (b)    A
consolidation or merger of the Company with or into any other corporation or
corporations, or a sale of all or substantially all of the assets of the
Company, or the effectuation by the Company of a transaction or series of
related transactions in which more than 50% of the voting shares of the Company
is disposed of or conveyed, shall not be deemed to be a liquidation,
dissolution, or winding up within the meaning of this Section 4.  In
the event of the merger or consolidation of the Company with or into another
corporation, the Series A-2 Preferred Stock shall maintain its relative powers,
designations and preferences provided for herein and no merger shall result
which is inconsistent therewith unless otherwise approved by at least
seventy-five percent (75%) of the then outstanding shares of Series A-2
Preferred Stock.

     

    (c)    Written
notice of any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Company, stating a payment date and the place where the
distributable amounts shall be payable, shall be given by mail, postage prepaid,
no less than forty-five (45) days prior to the payment date stated therein, to
the holders of record of the Series A-2 Preferred Stock at their respective
addresses as the same shall appear on the books of the Company.

     

    5.    ­Conversion.  The
holder of Series A-2 Preferred Stock shall have the following conversion rights
(the "Conversion Rights"):

     

    (a)    ­Right to
Convert.  At any time on or after the Issuance Date, the holder
of any such shares of Series A-2 Preferred Stock may, at such holder's option,
subject to the limitations set forth in Section 7 herein, elect to convert (a
"Conversion") all or any portion of the shares of Series A-2 Preferred Stock
held by such person into a number of fully paid and nonassessable shares of
Common Stock equal to the quotient of (i) the Liquidation Preference Amount of
the shares of Series A-2 Preferred Stock being converted by (ii) the Conversion
Price (as defined in Section 5(d) below) then in effect as of the date of the
delivery by such holder of its notice of election to convert.  In the
event of a notice of redemption of any shares of Series A-2 Preferred Stock
pursuant to Section 8 hereof, the Conversion Rights of the shares designated for
redemption shall terminate at the close of business on the last full day
preceding the date fixed for redemption, unless the redemption price is not paid
on such redemption date, in which case the Conversion Rights for such shares
shall continue until such price is paid in full.  In the event of a
liquidation, dissolution or winding up of the Company, the Conversion Rights
shall terminate at the close of business on the last full day preceding the date
fixed for the payment of any such amounts distributable on such event to the
holders of Series A-2 Preferred Stock.  In the event of such a
redemption or liquidation, dissolution or winding up, the Company shall provide
to each holder of shares of Series A-2 Preferred Stock notice of such redemption
or liquidation, dissolution or winding up, which notice shall (i) be sent at
least fifteen (15) days prior to the termination of the Conversion Rights (or,
if the Company obtains lesser notice thereof, then as promptly as possible after
the date that it has obtained notice thereof) and (ii) state the amount per
share of Series A-2 Preferred Stock that will be paid or distributed on such
redemption or liquidation, dissolution or winding up, as the case may
be.

     

    
      
        
        

      

      
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    (b)    ­Mechanics of
Conversion.  The Conversion of Series A-2 Preferred Stock shall
be conducted in the following manner:

     

    (i)    ­Holder's Delivery
Requirements.  To convert Series A-2 Preferred Stock into full
shares of Common Stock on any date (the "Conversion Date"), the holder thereof
shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior
to 5:00 p.m., New York time on such date, a copy of a fully executed notice of
conversion in the form attached hereto as Exhibit I (the
"Conversion Notice"), to the Company at (310) 226-8553, Attention: Chief
Executive Officer, and (B) surrender to a common carrier for delivery to the
Company as soon as practicable following such Conversion Date the original
certificates representing the shares of Series A-2 Preferred Stock being
converted (or an indemnification undertaking with respect to such shares in the
case of their loss, theft or destruction) (the "Preferred Stock Certificates")
and the originally executed Conversion Notice.

     

    (ii)    ­Company's
Response.  Upon receipt by the Company of a facsimile copy of a
Conversion Notice, the Company shall immediately send, via facsimile, a
confirmation of receipt of such Conversion Notice to such
holder.  Upon receipt by the Company of a copy of the fully executed
Conversion Notice, the Company or its designated transfer agent (the "Transfer
Agent"), as applicable, shall, within three (3) business days following the date
of receipt by the Company of the fully executed Conversion Notice, issue and
deliver to the Depository Trust Company (“DTC”) account on the Holder’s behalf
via the Deposit Withdrawal Agent Commission System (“DWAC”) as specified in the
Conversion Notice, or via physical certificate if so specified in the Conversion
Notice, registered in the name of the holder or its designee, for the number of
shares of Common Stock to which the holder shall be
entitled.  Notwithstanding the foregoing to the contrary, the Company
or its Transfer Agent shall only be obligated to issue and deliver the shares to
the DTC on a holder’s behalf via DWAC if a registration statement providing for
the resale of the shares of Common Stock issuable upon conversion of the Series
A-2 Preferred Stock is effective or such shares are otherwise eligible for
legend removal, and if the Transfer Agent is a participant in the DWAC system.
If the shares of Common Stock to be received pursuant to the Conversion Notice
are not registered or otherwise eligible for legend removal, the Transfer Agent
shall issue a physical certificate in the name of the holder representing such
shares with a restrictive legend and a notation that such shares are deemed
owned by the holder as of the Issuance Date for purposes of determining the
holder’s holding period under Rule 144 (“Rule 144”) of the Securities Act of
1933, as amended.  If the number of shares of Preferred Stock
represented by the Preferred Stock Certificate(s) submitted for conversion is
greater than the number of shares of Series A-2 Preferred Stock being converted,
then the Company shall, as soon as practicable and in no event later than three
(3) business days after receipt of the Preferred Stock Certificate(s) and at the
Company's expense, issue and deliver to the holder a new Preferred Stock
Certificate representing the number of shares of Series A-2 Preferred Stock not
converted.

     

    
      
        
        

      

      
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    (iii)    ­Dispute
Resolution.  In the case of a dispute as to the arithmetic
calculation of the number of shares of Common Stock to be issued upon
conversion, the Company shall cause its Transfer Agent to promptly issue to the
holder the number of shares of Common Stock that is not disputed and shall
submit the arithmetic calculations to the holder via facsimile as soon as
possible, but in no event later than two (2) business days after receipt of such
holder's Conversion Notice.  If such holder and the Company are unable
to agree upon the arithmetic calculation of the number of shares of Common Stock
to be issued upon such conversion within one (1) business day of such disputed
arithmetic calculation being submitted to the holder, then the Company shall
within one (1) business day submit via facsimile the disputed arithmetic
calculation of the number of shares of Common Stock to be issued upon such
conversion to the Company’s independent, outside accountant.  The
Company shall cause the accountant to perform the calculations and notify the
Company and the holder of the results no later than seventy-two (72) hours from
the time it receives the disputed calculations.  Such accountant's
calculation shall be binding upon all parties absent manifest
error.  The reasonable expenses of such accountant in making such
determination shall be paid by the Company, in the event the holder's
calculation was correct, or by the holder, in the event the Company's
calculation was correct, or equally by the Company and the holder in the event
that neither the Company's or the holder's calculation was
correct.  The period of time in which the Company is required to
effect conversions or redemptions under this Certificate of Designation shall be
tolled with respect to the subject conversion or redemption pending resolution
of any dispute by the Company made in good faith and in accordance with this
Section 5(b)(iii).

     

    (iv)    ­Record
Holder.  The person or persons entitled to receive the shares
of Common Stock issuable upon a conversion of the Series A-2 Preferred Stock
shall be treated for all purposes as the record holder or holders of such shares
of Common Stock on the Conversion Date.

     

    (v)    ­Company's Failure to Timely
Convert.  If within three (3) business days of the Company's
receipt of an executed copy of the Conversion Notice (so long as the applicable
Preferred Stock Certificates and original Conversion Notice are received by the
Company on or before such third business day) (the "Delivery Date") the Transfer
Agent shall fail to issue and deliver to a holder the number of shares of Common
Stock to which such holder is entitled upon such holder's conversion of the
Series A-2 Preferred Stock or to issue a new Preferred Stock Certificate
representing the number of shares of Series A-2 Preferred Stock to which such
holder is entitled pursuant to Section 5(b)(ii) (a "Conversion Failure"), in
addition to all other available remedies which such holder may pursue hereunder
and under the Amendment to Certain Warrants for the Purchase of Shares of Common
Stock of the Company by and among the Company, Vision Opportunity Master Fund,
Ltd. (“VOMF”) and Vision Opportunity China Fund Limited  (“VOC”) dated
as of May 29, 2008, the Warrant Exchange Agreement by and among Company and the
holders signatory thereto dated as of May 29, 2008, the Preferred Stock Exchange
Agreement by and among Company and the holders signatory thereto dated as of May
29, 2008, and the Lock-Up Agreement by and among the Company and the initial
holders of the Series A-2 Preferred Stock (collectively, the “Transaction
Documents”) among the Company and the initial holders of the Series A-2
Preferred Stock, the Company shall pay additional damages to such holder on


     

    
      
        
        

      

      
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    each
business day after such third (3rd)
business day that such conversion is not timely effected in an amount equal to
0.5% of the product of (A) the sum of the number of shares of Common Stock not
issued to the holder on a timely basis pursuant to Section 5(b)(ii) and to which
such holder is entitled and, in the event the Company has failed to deliver a
Preferred Stock Certificate to the holder on a timely basis pursuant to Section
5(b)(ii), the number of shares of Common Stock issuable upon conversion of the
shares of Series A-2 Preferred Stock represented by such Preferred Stock
Certificate, as of the last possible date which the Company could have issued
such Preferred Stock Certificate to such holder without violating Section
5(b)(ii) and (B) the Closing Bid Price (as defined below) of the Common Stock on
the last possible date which the Company could have issued such Common Stock and
such Preferred Stock Certificate, as the case may be, to such holder without
violating Section 5(b)(ii).  If the Company fails to pay the
additional damages set forth in this Section 5(b)(v) within five (5) business
days of the date incurred, then such payment shall bear interest at the rate of
2.0% per month (pro rated for partial months) until such payments are
made.  The term "Closing Bid Price" shall mean, for any security as of
any date, the last closing bid price of such security on the OTC Bulletin Board
or other quotation venue or principal exchange on which such security is traded
as reported by Bloomberg, or, if no closing bid price is reported for such
security by Bloomberg, the last closing trade price of such security as reported
by Bloomberg, or, if no last closing trade price is reported for such security
by Bloomberg, the average of the bid prices of any market makers for such
security as reported by the Pink Sheets LLC.  If the Closing Bid Price
cannot be calculated for such security on such date on any of the foregoing
bases, the Closing Bid Price of such security on such date shall be the fair
market value as mutually determined by the Company and the holders of a majority
of the outstanding shares of Series A-2 Preferred Stock.

    


    (vi)    Buy-In
Rights.  In addition to any other rights available to the
holders of Series A-2 Preferred Stock, if the Company fails to cause its
Transfer Agent to transmit to the holder a certificate or certificates
representing the shares of Common Stock issuable upon conversion of the Series
A-2 Preferred Stock on or before the Delivery Date, and if after such date the
holder is required by its broker to purchase (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by the
holder of the shares of Common Stock issuable upon conversion of Series A-2
Preferred Stock which the holder anticipated receiving upon such conversion (a
“Buy-In”), then the Company shall (1) pay in cash to the holder the amount by
which (x) the holder’s total purchase price (including brokerage commissions, if
any) for the shares of Common Stock so purchased exceeds (y) the amount obtained
by multiplying (A) the number of shares of Common Stock issuable upon conversion
of Series A-2 Preferred Stock that the Company was required to deliver to the
holder in connection with the conversion at issue times (B) the price at which
the sell order giving rise to such purchase obligation was executed, and (2) at
the option of the holder, either reinstate the shares of Series A-2 Preferred
Stock and equivalent number of shares of Common Stock for which such conversion
was not honored or deliver to the holder the number of shares of Common Stock
that would have been issued had the Company timely complied with its conversion
and delivery obligations hereunder.  For example, if the holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of shares of Common Stock with an
aggregate sale price giving rise to such purchase obligation of $10,000, under
clause (1) of the immediately preceding sentence the Company shall be required
to pay to the holder $1,000. The holder shall provide the Company written notice
indicating the amounts payable to the holder in respect of the Buy-In, together
with applicable confirmations and other evidence reasonably requested by the
Company.  Nothing herein shall limit a holder’s right to pursue any
other remedies available to it hereunder, at law or in equity including, without
limitation, a decree of specific performance and/or injunctive relief with
respect to the Company’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of the Series A-2 Preferred Stock as
required pursuant to the terms hereof.

     

    
      
        
        

      

      
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    (c)    Intentionally
omitted.

     

    (d)    ­Conversion
Price.   The term "Conversion Price" shall mean $0.25,
subject to adjustment under Section 5(e) hereof.  Notwithstanding any
adjustment hereunder, at no time shall the Conversion Price be greater than
$0.25 per share except if it is adjusted pursuant to Section
5(e)(i).

     

    (e)    ­Adjustments of Conversion
Price.

     

    (i)    ­Adjustments for Stock Splits
and Combinations.  If the Company shall at any time or from
time to time after the Issuance Date, effect a stock split of the outstanding
Common Stock, the Conversion Price shall be proportionately
decreased.  If the Company shall at any time or from time to time
after the Issuance Date, combine the outstanding shares of Common Stock, the
Conversion Price shall be proportionately increased.  Any adjustments
under this Section 5(e)(i) shall be effective at the close of business on the
date the stock split or combination becomes effective.

     

    (ii)    ­Adjustments for Certain
Dividends and Distributions.  If the Company shall at any time
or from time to time after the Issuance Date, make or issue or set a record date
for the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in shares of Common Stock, then, and in each
event, the Conversion Price shall be decreased as of the time of such issuance
or, in the event such record date shall have been fixed, as of the close of
business on such record date, by multiplying the Conversion 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.

     

    (iii)    ­Adjustment for Other
Dividends and Distributions.  If the Company shall at any time
or from time to time after the Issuance Date, make or issue or set 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, then, and in each event, an appropriate revision to the applicable
Conversion Price shall be made and provision shall be made (by adjustments of
the Conversion Price or otherwise) so that the holders of Series A-2 Preferred
Stock shall receive upon conversions thereof, in addition to the number of
shares of Common Stock receivable thereon, the number of securities of the
Company which they would have received had their Series A-2 Preferred Stock been
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    thereafter,
during the period from the date of such event to and including the Conversion
Date, retained such securities (together with any distributions payable thereon
during such period), giving application to all adjustments called for during
such period under this Section 5(e)(iii) with respect to the rights of the
holders of the Series A-2 Preferred Stock; provided, however, that 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 Conversion Price
shall be adjusted pursuant to this paragraph as of the time of actual payment of
such dividends or distributions; and provided further, however,
that no such adjustment shall be made if the holders of Series A-2 Preferred
Stock simultaneously receive (i) a dividend or other distribution of shares
of Common Stock in a number equal to the number of shares of Common Stock as
they would have received if all outstanding shares of Series A-2 Preferred Stock
had been converted into Common Stock on the date of such event or (ii) a
dividend or other distribution of shares of Series A-2 Preferred Stock which are
convertible, as of the date of such event, into such number of shares of Common
Stock as is equal to the number of additional shares of Common Stock being
issued with respect to each share of Common Stock in such dividend or
distribution.

     

    (iv)    ­Adjustments for
Reclassification, Exchange or Substitution.  If the Common
Stock issuable upon conversion of the Series A-2 Preferred Stock at any time or
from time to time after the Issuance Date shall be changed to the same or
different number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections
5(e)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale of
assets provided for in Section 5(e)(v)), then, and in each event, an appropriate
revision to the Conversion Price shall be made and provisions shall be made (by
adjustments of the Conversion Price or otherwise) so that the holder of each
share of Series A-2 Preferred Stock shall have the right thereafter to convert
such share of Series A-2 Preferred Stock into the kind and amount of shares of
stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into which such share of Series A-2 Preferred Stock might have been converted
immediately prior to such reclassification, exchange, substitution or other
change, all subject to further adjustment as provided herein.

     

    (v)    ­Adjustments for
Reorganization, Merger, Consolidation or Sales of Assets.  If
at any time or from time to time after the Issuance Date there shall be a
capital reorganization of the Company (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in
Section 5(e)(i), (ii) and (iii), or a reclassification, exchange or substitution
of shares provided for in Section 5(e)(iv)), or a merger or consolidation of the
Company with or into another corporation where the holders of outstanding voting
securities prior to such merger or consolidation do not own over 50% of the
outstanding voting securities of the merged or consolidated entity, immediately
after such merger or consolidation, or the sale of all or substantially all of
the Company's properties or assets to any other person (an "Organic Change"),
then as a part of such Organic Change an appropriate revision to the Conversion
Price shall be made if necessary and provision shall be made if necessary (by
adjustments of the Conversion Price or otherwise) so that the holder of each
share of Series A-2 Preferred Stock shall have the right thereafter to convert
such share of Series A-2 Preferred Stock into the kind and amount of shares of
stock and other securities or property of the Company or any successor
corporation resulting from Organic Change.  In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5(e)(v) with respect to the rights of the holders of the Series A-2
Preferred Stock after the Organic Change to the end that the provisions of this
Section 5(e)(v) (including any adjustment in the Conversion Price then in effect
and the number of shares of stock or other securities deliverable upon
conversion of the Series A-2 Preferred Stock) shall be applied after that event
in as nearly an equivalent manner as may be practicable.

     

    
      
        
        

      

      
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    (vi)    Adjustments for Issuance of
Additional Shares of Common Stock.

     

    (A)    In the event
the Company, shall, at any time, from time to time, issue or sell any additional
shares of Common Stock (otherwise than as provided in the foregoing subsections
(i) through (v) of this Section 5(e) or pursuant to Common Stock Equivalents
(hereafter defined) granted or issued prior to the Issuance Date) (the
"Additional Shares of Common Stock"), at a price per share less than the
Conversion Price, or without consideration, the Conversion Price then in effect
upon each such issuance shall be adjusted to that price (rounded to the nearest
cent) determined by multiplying the Conversion Price by a fraction:

     

    (1)    the
numerator of which shall be equal to the sum of (A) the number of shares of
Common Stock outstanding immediately prior to the issuance of such Additional
Shares of Common Stock plus (B) the number
of shares of Common Stock (rounded to the nearest whole share) which the
aggregate consideration for the total number of such Additional Shares of Common
Stock so issued would purchase at a price per share equal to the then Conversion
Price, and

     

    (2)    the
denominator of which shall be equal to the number of shares of Common Stock
outstanding immediately after the issuance of such Additional Shares of Common
Stock

     

    No
adjustment of the number of shares of Common Stock shall be made under paragraph
(A) of Section 5(e)(vi) upon the issuance of any Additional Shares of Common
Stock which are issued pursuant to the exercise of any warrants or other
subscription or purchase rights or pursuant to the exercise of any conversion or
exchange rights in any Common Stock Equivalents (as defined below), if any such
adjustment shall previously have been made upon the issuance of such warrants or
other rights or upon the issuance of such Common Stock Equivalents (or upon the
issuance of any warrant or other rights therefore) pursuant to Section
5(e)(vii).

     

    (vii)    Issuance of Common Stock
Equivalents. The provisions of this Section 5(e)(vii) shall apply if (a)
the Company, at any time after the Issuance Date, shall issue any securities
convertible into or exchangeable for, directly or indirectly, Common Stock
("Convertible Securities"), other than the Series A-2 Preferred Stock, or (b)
any rights or warrants or options to purchase any such Common Stock or
Convertible Securities (collectively, the "Common Stock Equivalents") shall be
issued or sold.  If the price per share for which Additional Shares of
Common Stock may be issuable pursuant to any such Common Stock Equivalent shall
be less than the applicable Conversion Price then in effect, or if, after any
such issuance of Common Stock Equivalents, the price per share for which
Additional Shares of Common Stock may be issuable thereafter is amended or
adjusted, and such price as so amended shall be less than the applicable
Conversion Price in effect at the time of such amendment or adjustment, then the
applicable Conversion Price upon each such issuance or amendment shall be
adjusted as provided in the first sentence of subsection (vi) of this Section
5(e).  No adjustment shall be made to the Conversion Price upon the
issuance of Common Stock pursuant to the exercise, conversion or exchange of any
Convertible Security or Common Stock Equivalent where an adjustment to the
Conversion Price was made as a result of the issuance or purchase of any
Convertible Security or Common Stock Equivalent.

     

    
      
        
        

      

      
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    (viii)    ­Consideration for
Stock.  In case any shares of Common Stock or Convertible
Securities other than the Series A-2 Preferred Stock, or any rights or warrants
or options to purchase any such Common Stock or Convertible Securities, shall be
issued or sold:

     

    (1)    in
connection with any merger or consolidation in which the Company is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Company shall be changed to
or exchanged for the stock or other securities of another corporation), the
amount of consideration therefore shall be, deemed to be the fair value, as
determined reasonably and in good faith by the Board of Directors of the
Company, of such portion of the assets and business of the nonsurviving
corporation as such Board may determine to be attributable to such shares of
Common Stock, Convertible Securities, rights or warrants or options, as the case
may be; or

     

    (2)    in the
event of any consolidation or merger of the Company in which the Company is not
the surviving corporation or in which the previously outstanding shares of
Common Stock of the Company shall be changed into or exchanged for the stock or
other securities of another corporation, or in the event of any sale of all or
substantially all of the assets of the Company for stock or other securities of
any corporation, the Company shall be deemed to have issued a number of shares
of its Common Stock for stock or securities or other property of the other
corporation computed on the basis of the actual exchange ratio on which the
transaction was predicated, and for a consideration equal to the fair market
value on the date of such transaction of all such stock or securities or other
property of the other corporation.  If any such calculation results in
adjustment of the applicable Conversion Price, or the number of shares of Common
Stock issuable upon conversion of the Series A-2 Preferred Stock, the
determination of the applicable Conversion Price or the number of shares of
Common Stock issuable upon conversion of the Series A-2 Preferred Stock
immediately prior to such merger, consolidation or sale, shall be made after
giving effect to such adjustment of the number of shares of Common Stock
issuable upon conversion of the Series A-2 Preferred Stock.  In the
event any consideration received by the Company for any securities consists of
property other than cash, the fair market value thereof at the time of issuance
or as otherwise applicable shall be as determined in good faith by the Board of
Directors of the Company.  In the event Common Stock is issued with
other shares or securities or other assets of the Company for consideration
which covers both, the consideration computed as provided in this Section
(5)(e)(viii) shall be allocated among such securities and assets as determined
in good faith by the Board of Directors of the Company.

     

    
      
        
        

      

      
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    (ix)    ­Record
Date.  In case the Company shall take record of the holders of
its Common Stock or any other Preferred Stock for the purpose of entitling them
to subscribe for or purchase Common Stock or Convertible Securities, then the
date of the issue or sale of the shares of Common Stock shall be deemed to be
such record date.

     

    (x)    Certain Issues
Excepted.  Anything herein to the contrary notwithstanding, the
Company shall not be required to make any adjustment to the Conversion Price
upon (i) securities issued (other than for cash) in connection with a merger,
acquisition, or consolidation, (ii) securities issued pursuant to the conversion
or exercise of convertible or exercisable securities issued or outstanding on or
prior to the date of the Transaction Documents or issued pursuant to the
Transaction Documents (so long as the conversion or exercise price in such
securities are not amended to lower such price and/or adversely affect the
holders), (iii) securities issued in connection with bona fide strategic license
agreements or other partnering arrangements so long as such issuances are not
for the purpose of raising capital, (iv) Common Stock issued or the issuance or
grants of options to purchase Common Stock pursuant to the Issuer’s stock option
plans and employee stock purchase plans outstanding as they exist on the date of
the Transaction Documents, and (v) any warrants issued to the placement agent
and its designees for the transactions contemplated by the Transaction
Documents.

     

    (f)    ­No
Impairment.  The Company shall not, by amendment of its
Articles of Incorporation or through any 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 to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of the
Series A-2 Preferred Stock against impairment.  In the event a holder
shall elect to convert any shares of Series A-2 Preferred Stock as provided
herein, the Company cannot refuse conversion based on any claim that such holder
or any one associated or affiliated with such holder has been engaged in any
violation of law, unless (i) an order from the Securities and Exchange
Commission prohibiting such conversion or (ii) an injunction from a court, on
notice, restraining and/or adjoining conversion of all or of said shares of
Series A-2 Preferred Stock shall have been issued and the Company posts a surety
bond for the benefit of such holder in an amount equal to 120% of the
Liquidation Preference Amount of the Series A-2 Preferred Stock such holder has
elected to convert, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such holder in the event it obtains judgment.

     

    (g)    ­Certificates as to
Adjustments.  Upon occurrence of each adjustment or
readjustment of the Conversion Price or number of shares of Common Stock
issuable upon conversion of the Series A-2 Preferred Stock pursuant to this
Section 5, the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
such Series A-2 Preferred Stock a certificate setting forth such adjustment and
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based.  The Company shall, upon written request of the
holder of such affected Series A-2 Preferred Stock, at any time, furnish or
cause to be furnished to such holder a like certificate setting forth such
adjustments and readjustments, the Conversion Price in effect at the time, and
the number of shares of Common Stock and the amount, if any, of other securities
or property which at the time would be received upon the conversion of a share
of such Series A-2 Preferred Stock.  Notwithstanding the foregoing,
the Company shall not be obligated to deliver a certificate unless such
certificate would reflect an increase or decrease of at least one percent of
such adjusted amount.

     

    
      
        
        

      

      
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    (h)    ­Issue
Taxes.  The Company shall pay any and all issue and other
taxes, excluding federal, state or local income taxes, that may be payable in
respect of any issue or delivery of shares of Common Stock on conversion of
shares of Series A-2 Preferred Stock pursuant hereto; provided, however, that the
Company shall not be obligated to pay any transfer taxes resulting from any
transfer requested by any holder in connection with any such
conversion.

     

    (i)    ­Notices.  All
notices and other communications hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile or three (3) business days
following being mailed by certified or registered mail, postage prepaid,
return-receipt requested, addressed to the holder of record at its address
appearing on the books of the Company.  The Company will give written
notice to each holder of Series A-2 Preferred Stock at least twenty (20) days
prior to the date on which the Company closes its books or takes a record (I)
with respect to any dividend or distribution upon the Common Stock, (II) with
respect to any pro rata subscription offer to holders of Common Stock or (III)
for determining rights to vote with respect to any Organic Change, dissolution,
liquidation or winding-up and in no event shall such notice be provided to such
holder prior to such information being made known to the public.  The
Company will also give written notice to each holder of Series A-2 Preferred
Stock at least twenty (20) days prior to the date on which any Organic Change,
dissolution, liquidation or winding-up will take place and in no event shall
such notice be provided to such holder prior to such information being made
known to the public.

     

    (j)    ­Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon conversion of the Series A-2 Preferred Stock.  In lieu of any
fractional shares to which the holder would otherwise be entitled, the Company
shall round the number of shares to be issued upon conversion up to the nearest
whole number of shares.

     

    (k)    ­Reservation of Common
Stock.  The Company shall, so long as any shares of Series A-2
Preferred Stock are outstanding, reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Series A-2 Preferred Stock, such number of shares of Common
Stock that are not issued or reserved for issuance as of the Issuance Date;
provided, however, upon the
Company filing the Charter Amendment (as defined in the Transaction Documents),
the Company shall take all action necessary to at all times have authorized, and
reserved for the purpose of issuance, free of preemptive rights and other
similar contractual rights of stockholders, a number of shares of Common Stock
equal to one hundred fifty percent (150%) of the number of shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
of the shares of Series A-2 Preferred Stock then outstanding.  The
initial number of shares of Common Stock reserved for conversions of the Series
A-2 Preferred Stock and any increase in the number of shares so reserved shall
be allocated pro rata among the holders of the Series A-2 Preferred Stock based
on the number of shares of Series A-2 Preferred Stock held by each holder of
record at the time of issuance of the Series A-2 Preferred Stock or increase in
the number of reserved shares, as the case may be.  In the event a
holder shall sell or otherwise transfer any of such holder's shares of Series
A-2 Preferred Stock, each transferee shall be allocated a pro rata portion of
the number of reserved shares of Common Stock reserved for such
transferor.

     

    
      
        
        

      

      
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    (l)    ­Retirement of Series A-2
Preferred Stock.  Conversion of Series A-2 Preferred Stock
shall be deemed to have been effected on the Conversion Date.  Upon
conversion of only a portion of the number of shares of Series A-2 Preferred
Stock represented by a certificate surrendered for conversion, the Company shall
issue and deliver to such holder at the expense of the Company, a new
certificate covering the number of shares of Series A-2 Preferred Stock
representing the unconverted portion of the certificate so surrendered as
required by Section 5(b)(ii).

     

    (m)    ­Regulatory
Compliance.  If any shares of Common Stock to be reserved for
the purpose of conversion of Series A-2 Preferred Stock require registration or
listing with or approval of any governmental authority, stock exchange or other
regulatory body under any federal or state law or regulation or otherwise before
such shares may be validly issued or delivered upon conversion, the Company
shall, at its sole cost and expense, in good faith and as expeditiously as
possible, endeavor to secure such registration, listing or approval, as the case
may be.

     

    6.    ­No Preemptive
Rights.  Except as provided in Section 5 hereof, no holder of
the Series A-2 Preferred Stock shall be entitled to rights to subscribe for,
purchase or receive any part of any new or additional shares of any class,
whether now or hereinafter authorized, or of bonds or debentures, or other
evidences of indebtedness convertible into or exchangeable for shares of any
class, but all such new or additional shares of any class, or any bond,
debentures or other evidences of indebtedness convertible into or exchangeable
for shares, may be issued and disposed of by the Board of Directors on such
terms and for such consideration (to the extent permitted by law), and to such
person or persons as the Board of Directors in their absolute discretion may
deem advisable.

     

    7.    ­Conversion
Restriction.  Notwithstanding anything to the contrary set
forth in Section 5 of this Certificate of Designation, at no time may a holder
of shares of Series A-2 Preferred Stock convert shares of the Series A-2
Preferred Stock if the number of shares of Common Stock to be issued pursuant to
such conversion would cause the number of shares of Common Stock owned by
such  holder and its affiliates at such time to exceed, when
aggregated with all other shares of Common Stock owned by such holder and its
affiliates at such time, the number of shares of Common Stock which would result
in such holder and its affiliates beneficially owning (as determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and the rules thereunder) in excess of 9.9% of the then issued and
outstanding shares of Common Stock outstanding at such time; provided, however, that upon a
holder of Series A-2 Preferred Stock providing the Company with sixty-one (61)
days notice (pursuant to Section 5(i) hereof) (the "Waiver Notice") that such
holder would like to waive Section 7 of this Certificate of Designation with
regard to any or all shares of Common Stock issuable upon conversion of Series
A-2 Preferred Stock, this Section 7 shall be of no force or effect with regard
to those shares of Series A-2 Preferred Stock referenced in the Waiver
Notice.

     

    
      
        
        

      

      
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    8.    ­Redemption.

     

    (a)    ­Redemption Option Upon Major
Transaction.  In addition to all other rights of the holders of
Series A-2 Preferred Stock contained herein, simultaneous with the occurrence of
a Major Transaction (as defined below), each holder of Series A-2 Preferred
Stock shall have the right, at such holder's option, to require the Company to
redeem all or a portion of such holder's shares of Series A-2 Preferred Stock at
a price per share of Series A-2 Preferred Stock equal to one hundred percent
(100%) of the Liquidation Preference Amount, plus any accrued but unpaid
dividends and liquidated damages (the "Major Transaction Redemption Price");
provided that the Company shall have the sole option to pay the Major
Transaction Redemption Price in cash or shares of Common Stock.  If
the Company elects to pay the Major Transaction Redemption Price in shares of
Common Stock, the price per share shall be based upon the Conversion Price then in effect on the
day preceding the date of delivery of the Notice of Redemption at Option of
Buyer Upon Major Transaction (as hereafter defined) and the holder of such
shares of Common Stock shall have demand registration rights with respect to
such shares.

     

    (b)    Redemption Option Upon
Triggering Event.  In addition to all other rights of the
holders of Series A-2 Preferred Stock contained herein, after a Triggering Event
(as defined below), each holder of Series A-2 Preferred Stock shall have the
right, at such holder's option, to require the Company to redeem all or a
portion of such holder's shares of Series A-2 Preferred Stock at a price per
share of Series A-2 Preferred Stock equal to one hundred twenty percent (120%)
of the Liquidation Preference Amount, plus any accrued but unpaid dividends and
liquidated damages the "Triggering Event Redemption Price" and, collectively
with the "Major Transaction Redemption Price," the "Redemption Price"); provided
that with respect to the Triggering Events described in clauses (i), (ii), (iii)
and (vii) of Section 8(d), the Company shall have the sole option to pay the
Triggering Event Redemption Price in cash or shares of Common Stock; and
provided, further, that with respect to the Triggering Event described in
clauses (iv), (v), (vi) and (viii) of Section 8(d), the Company shall pay the
Triggering Event Redemption Price in cash.  If the Company elects to
pay the Triggering Event Redemption Price in shares of Common Stock in
accordance with this Section 8(b), the price per share shall be based upon the
Conversion Price then in effect on the
day preceding the date of delivery of the Notice of Redemption at Option of
Buyer Upon Triggering Event and the holder of such shares of Common Stock shall
have demand registration rights with respect to such shares.

     

    (c)    "Major
Transaction".  A "Major Transaction" shall be deemed to have
occurred at such time as any of the following events:

     

    (i)    the
consolidation, merger or other business combination of the Company with or into
another Person (other than (A) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or
(B) a consolidation, merger or other business combination in which holders of
the Company's voting power immediately prior to the transaction continue after
the transaction to hold, directly or indirectly, the voting power of the
surviving entity or entities necessary to elect a majority of the members of the
board of directors (or their equivalent if other than a corporation) of such
entity or entities).

     

    
      
        
        

      

      
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    (ii)    the sale
or transfer of more than 50% of the Company's assets other than inventory in the
ordinary course of business in one or a related series of transactions;
or

     

    (iii)    closing
of a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty
percent (50%) of the outstanding shares of Common Stock were tendered and
accepted.

     

    (d)    ­"Triggering
Event".  A "Triggering Event" shall be deemed to have occurred
at such time as any of the following events:

     

    (i)    so long
as any shares of Series A-2 Preferred Stock are outstanding, (i) the Company
fails to timely file (or obtain extensions in respect thereof and file within
the applicable grace period) all reports required to be filed by the Company
after the date hereof pursuant to Section 13(a) or 15(d) of the Exchange Act, or
(ii) if the Company is not required to file reports pursuant to Section 13(a) or
15(d) of the Exchange Act, it fails to prepare and furnish to the holders and
make publicly available in accordance with Rule 144(c) promulgated under the
Securities Act annual and quarterly financial statements, together with a
discussion and analysis of such financial statements in form and substance
substantially similar to those that would otherwise be required to be included
in reports required by Section 13(a) or 15(d) of the Exchange Act, as well as
any other information required thereby, in the time period that such filings
would have been required to have been made under the Exchange Act.

     

    (ii)    the
suspension from listing or trading, without subsequent listing on any one of, or
the failure of the Common Stock to be listed or traded on at least one of, the
OTC Bulletin Board, the Nasdaq National Market, the Nasdaq Global Market, the
New York Stock Exchange, Inc. or the American Stock Exchange, Inc., for a period
of five (5) consecutive trading days;

     

    (iii)    the
Company's notice to any holder of Series A-2 Preferred Stock, including by way
of public announcement, at any time, of its inability to comply (including for
any of the reasons described in Section 9) or its intention not to comply with
proper requests for conversion of any Series A-2 Preferred Stock into shares of
Common Stock; or

     

    (iv)    the
Company's failure to comply with a Conversion Notice tendered in accordance with
the provisions of this Certificate of Designation within ten (10) business days
after the receipt by the Company of the Conversion Notice and the Preferred
Stock Certificates; or

     

    (v)    the
Company deregisters its shares of Common Stock and as a result such shares of
Common Stock are no longer publicly traded; or

     

    
      
        
        

      

      
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    (vi)    the
Company consummates a “going private” transaction and as a result the Common
Stock is no longer registered under Sections 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended; or

     

    (vii)    the
Company breaches any representation, warranty, covenant or other term or
condition of the Transaction Documents, this Certificate of Designation or any
other agreement, document, certificate or other instrument delivered in
connection with the transactions contemplated thereby or hereby, except to the
extent that such breach would not have a material adverse effect on the Company
and except, in the case of a breach of a covenant which is curable, only if such
breach continues for a period of a least ten (10) business days; or

     

    (e)    Mechanics of Redemption at
Option of Buyer Upon Major Transaction.  No sooner than thirty
(30) days nor later than ten (10) days prior to the consummation of a Major
Transaction, but not prior to the public announcement of such Major Transaction,
the Company shall deliver written notice thereof via facsimile and overnight
courier ("Notice of Major Transaction") to each holder of Series A-2 Preferred
Stock.  At any time after receipt of a Notice of Major Transaction
(or, in the event a Notice of Major Transaction is not delivered at least ten
(10) days prior to a Major Transaction, at any time within ten (10) days prior
to a Major Transaction), any holder of Series A-2 Preferred Stock then
outstanding may require the Company to redeem, effective immediately prior to
the consummation of such Major Transaction, all of the holder's Series A-2
Preferred Stock then outstanding by delivering written notice thereof via
facsimile and overnight courier ("Notice of Redemption at Option of Buyer Upon
Major Transaction") to the Company, which Notice of Redemption at Option of
Buyer Upon Major Transaction shall indicate (i) the number of shares of Series
A-2 Preferred Stock that such holder is electing to redeem and (ii) the
applicable Major Transaction Redemption Price, as calculated pursuant to Section
8(a) above.

     

    (f)    ­­Mechanics of Redemption at
Option of Buyer Upon Triggering Event.  Within one (1) business
day after the Company obtains knowledge of the occurrence of a Triggering Event,
the Company shall deliver written notice thereof via facsimile and overnight
courier ("Notice of Triggering Event") to each holder of Series A-2 Preferred
Stock.  At any time after the earlier of a holder's receipt of a
Notice of Triggering Event and such holder becoming aware of a Triggering Event,
any holder of Series A-2 Preferred Stock then outstanding may require the
Company to redeem all of the Series A-2 Preferred Stock by delivering written
notice thereof via facsimile and overnight courier ("Notice of Redemption at
Option of Buyer Upon Triggering Event") to the Company, which Notice of
Redemption at Option of Buyer Upon Triggering Event shall indicate (i) the
number of shares of Series A-2 Preferred Stock that such holder is electing to
redeem and (ii) the applicable Triggering Event Redemption Price, as calculated
pursuant to Section 8(b) above.

     

    (g)    Payment of Redemption
Price.  Upon the Company's receipt of a Notice(s) of Redemption
at Option of Buyer Upon Triggering Event or a Notice(s) of Redemption at Option
of Buyer Upon Major Transaction from any holder of Series A-2 Preferred Stock,
the Company shall immediately notify such holder of Series A-2 Preferred Stock
by facsimile of the Company's receipt of such Notice(s) of Redemption at Option
of Buyer Upon Triggering Event or Notice(s) of Redemption at Option of Buyer
Upon Major Transaction and each holder which has sent such a notice shall
promptly submit to the Company such holder's Preferred Stock Certificates which
such holder has elected to have

     

    
      
        
        

      

      
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    redeemed.  Other
than with respect to the Triggering Event described in clause (iv) of Section
8(d), the Company shall have the sole option to pay the Redemption Price in cash
or shares of Common Stock in accordance with Sections 8(a) and (b) and Section 9
of this Certificate of Designation.  The Company shall deliver the
applicable Major Transaction Redemption Price immediately prior to the
consummation of the Major Transaction; provided that a
holder's Preferred Stock Certificates shall have been so delivered to the
Company; provided further that if the
Company is unable to redeem all of the Series A-2 Preferred Stock to be
redeemed, the Company shall redeem an amount from each holder of Series A-2
Preferred Stock being redeemed equal to such holder's pro-rata amount (based on
the number of shares of Series A-2 Preferred Stock held by such holder relative
to the number of shares of Series A-2 Preferred Stock outstanding) of all Series
A-2 Preferred Stock being redeemed.  If the Company shall fail to
redeem all of the Series A-2 Preferred Stock submitted for redemption (other
than pursuant to a dispute as to the arithmetic calculation of the Redemption
Price), in addition to any remedy such holder of Series A-2 Preferred Stock may
have under this Certificate of Designation and the Transaction Documents, the
applicable Redemption Price payable in respect of such unredeemed Series A-2
Preferred Stock shall bear interest at the rate of 1.0% per month (prorated for
partial months) until paid in full.  Until the Company pays such
unpaid applicable Redemption Price in full to a holder of shares of Series A-2
Preferred Stock submitted for redemption, such holder shall have the option (the
"Void Optional Redemption Option") to, in lieu of redemption, require the
Company to promptly return to such holder(s) all of the shares of Series A-2
Preferred Stock that were submitted for redemption by such holder(s) under this
Section 8 and for which the applicable Redemption Price has not been paid, by
sending written notice thereof to the Company via facsimile (the "Void Optional
Redemption Notice").  Upon the Company's receipt of such Void Optional
Redemption Notice(s) and prior to payment of the full applicable Redemption
Price to such holder, (i) the Notice(s) of Redemption at Option of Buyer Upon
Major Transaction or Notice(s) of Redemption at Option of Buyer Upon Triggering
Event (as applicable) shall be null and void with respect to those shares of
Series A-2 Preferred Stock submitted for redemption and for which the applicable
Redemption Price has not been paid and (ii) the Company shall immediately return
any Series A-2 Preferred Stock submitted to the Company by each holder for
redemption under this Section 8(d) and for which the applicable Redemption Price
has not been paid; provided that no
adjustment shall be made if such adjustment would result in an increase of the
Conversion Price then in effect.  A holder's delivery of a Void
Optional Redemption Notice and exercise of its rights following such notice
shall not effect the Company's obligations to make any payments which have
accrued prior to the date of such notice other than interest
payments.  Payments provided for in this Section 8 shall have priority
to payments to other stockholders in connection with a Major
Transaction.

    


    (h)    Demand Registration
Rights.  If the Redemption Price upon the occurrence of a Major
Transaction or a Triggering Event is paid in shares of Common Stock and such
shares have not been previously registered on a registration statement under the
Securities Act, a holder of Series A-2 Preferred Stock may make a written
request for registration under the Securities Act pursuant to this Section 8(h)
of all of its shares of Common Stock issued upon such Major Transaction or
Triggering Event.  The Company shall use its reasonable best efforts
to cause to be filed and declared effective as soon as reasonably practicable
(but in no event later than the ninetieth (90th) day
after such holder’s request is made) a registration statement under the
Securities Act, providing for the sale of all of the shares of Common Stock
issued upon such Major Transaction or Triggering Event by such
holder.  The Company agrees to use its reasonable best efforts to keep
any such registration statement continuously effective for resale of the Common
Stock for so long as such holder shall request, but in no event shall the
Company be required to maintain the effectiveness of such registration statement
later than the date that the shares of Common Stock issued upon such Major
Transaction or Triggering Event may be offered for resale to the public without
volume restriction under Rule 144.

     

    
      
        
        

      

      
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    9.    ­Inability to Fully
Convert.

     

    (a)    ­Holder's Option if Company
Cannot Fully Convert.  If, upon the Company's receipt of a
Conversion Notice, the Company cannot issue shares of Common Stock registered
for resale under the Registration Statement for any reason, including, without
limitation, because the Company (w) does not have a sufficient number of shares
of Common Stock authorized and available, (x) is otherwise prohibited by
applicable law or by the rules or regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction over
the Company or its securities from issuing all of the Common Stock which is to
be issued to a holder of Series A-2 Preferred Stock pursuant to a Conversion
Notice or (y) subsequent to the effective date of the Registration Statement,
fails to have a sufficient number of shares of Common Stock registered for
resale under the Registration Statement, then the Company shall issue as many
shares of Common Stock as it is able to issue in accordance with such holder's
Conversion Notice and pursuant to Section 5(b)(ii) above and, with respect to
the unconverted Series A-2 Preferred Stock, the holder, solely at such holder's
option, can elect, within five (5) business days after receipt of notice from
the Company thereof to:

     

    (i)    require
the Company to redeem from such holder those Series A-2 Preferred Stock for
which the Company is unable to issue Common Stock in accordance with such
holder's Conversion Notice ("Mandatory Redemption") at a price per share equal
to the Major Transaction Redemption Price as of such Conversion Date (the
"Mandatory Redemption Price"); provided that the Company shall have the sole
option to pay the Mandatory Redemption Price in cash or,  subject to
Section 7 hereof, shares of Common Stock;

     

    (ii)    if the
Company's inability to fully convert Series A-2 Preferred Stock is pursuant to
Section 9(a)(y) above, require the Company to issue restricted shares of Common
Stock in accordance with such holder's Conversion Notice and pursuant to Section
5(b)(ii) above;

     

    (iii)    void its
Conversion Notice and retain or have returned, as the case may be, the shares of
Series A-2 Preferred Stock that were to be converted pursuant to such holder's
Conversion Notice (provided that a holder's voiding its Conversion Notice shall
not effect the Company's obligations to make any payments which have accrued
prior to the date of such notice); or

     

    
      
        
        

      

      
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    (iv)    exercise
its Buy-In rights pursuant to and in accordance with the terms and provisions of
Section 5(b)(vi) hereof.

     

    (b)    ­Mechanics of Fulfilling
Holder's Election.  The Company shall immediately send via
facsimile or overnight courier to a holder of Series A-2 Preferred Stock, upon
receipt of an original or facsimile copy of a Conversion Notice from such holder
which cannot be fully satisfied as described in Section 9(a) above, a notice of
the Company's inability to fully satisfy such holder's Conversion Notice (the
"Inability to Fully Convert Notice").  Such Inability to Fully Convert
Notice shall indicate (i) the reason why the Company is unable to fully satisfy
such holder's Conversion Notice, (ii) the number of Series A-2 Preferred Stock
which cannot be converted and (iii) the applicable Mandatory Redemption
Price.  Such holder shall notify the Company of its election pursuant
to Section 9(a) above by delivering written notice via facsimile to the Company
("Notice in Response to Inability to Convert").

     

    (c)    ­Payment of Redemption
Price.  If such holder shall elect to have its shares redeemed
pursuant to Section 9(a)(i) above, the Company shall pay the Mandatory
Redemption Price to such holder within thirty (30) days of the Company's receipt
of the holder's Notice in Response to Inability to Convert, provided that prior
to the Company's receipt of the holder's Notice in Response to Inability to
Convert the Company has not delivered a notice to such holder stating, to the
satisfaction of the holder, that the event or condition resulting in the
Mandatory Redemption has been cured and all Conversion Shares issuable to such
holder can and will be delivered to the holder in accordance with the terms of
Section 2(g).  If the Company shall fail to pay the applicable
Mandatory Redemption Price to such holder on a timely basis as described in this
Section 9(c) (other than pursuant to a dispute as to the determination of the
arithmetic calculation of the Redemption Price), in addition to any remedy such
holder of Series A-2 Preferred Stock may have under this Certificate of
Designation and the Transaction Documents, such unpaid amount shall bear
interest at the rate of 2.0% per month (prorated for partial months) until paid
in full.  Until the full Mandatory Redemption Price is paid in full to
such holder, such holder may (i) void the Mandatory Redemption with respect to
those Series A-2 Preferred Stock for which the full Mandatory Redemption Price
has not been paid, (ii) receive back such Series A-2 Preferred Stock, and (iii)
require that the Conversion Price of such returned Series A-2 Preferred Stock be
adjusted to the lesser of (A) the Conversion Price and (B) the lowest Closing
Bid Price during the period beginning on the Conversion Date and ending on the
date the holder voided the Mandatory Redemption.

     

    (d)    ­Pro-rata Conversion and
Redemption.  In the event the Company receives a Conversion
Notice from more than one holder of Series A-2 Preferred Stock on the same day
and the Company can convert and redeem some, but not all, of the Series A-2
Preferred Stock pursuant to this Section 9, the Company shall convert and redeem
from each holder of Series A-2 Preferred Stock electing to have Series A-2
Preferred Stock converted and redeemed at such time an amount equal to such
holder's pro-rata amount (based on the number shares of Series A-2 Preferred
Stock held by such holder relative to the number shares of Series A-2 Preferred
Stock outstanding) of all shares of Series A-2 Preferred Stock being converted
and redeemed at such time.

     

    
      
        
        

      

      
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    10.    ­Vote to Change the Terms of
or Issue Preferred Stock.  The affirmative vote at a meeting
duly called for such purpose or the written consent without a meeting, of the
holders of not less than seventy-five percent (75%) of the then outstanding
shares of Series A-2 Preferred Stock (in addition to any other corporate
approvals then required to effect such action), shall be required (a) for any
change to this Certificate of Designation or the Company's Articles of
Incorporation which would amend, alter, change or repeal any of the powers,
designations, preferences and rights of the Series A-2 Preferred Stock or (b)
for the issuance of shares of Series A-2 Preferred Stock other than pursuant to
the Transaction Documents.

     

    11.    ­Lost or Stolen
Certificates.  Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the shares of Series A-2 Preferred
Stock, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the holder to the Company that is reasonably acceptable to the
Company and, in the case of mutilation, upon surrender and cancellation of the
Preferred Stock Certificate(s), the Company shall execute and deliver new
preferred stock certificate(s) of like tenor and date; provided, however, that the
Company shall not be obligated to re-issue Preferred Stock Certificates if the
holder contemporaneously requests the Company to convert such shares of Series
A-2 Preferred Stock into Common Stock.

     

    12.    ­Remedies, Characterizations,
Other Obligations, Breaches and Injunctive Relief.  The
remedies provided in this Certificate of Designation shall be cumulative and in
addition to all other remedies available under this Certificate of Designation,
at law or in equity (including a decree of specific performance and/or other
injunctive relief), no remedy contained herein shall be deemed a waiver of
compliance with the provisions giving rise to such remedy and nothing herein
shall limit a holder's right to pursue actual damages for any failure by the
Company to comply with the terms of this Certificate of
Designation.  Amounts set forth or provided for herein with respect to
payments, conversion and the like (and the computation thereof) shall be the
amounts to be received by the holder thereof and shall not, except as expressly
provided herein, be subject to any other obligation of the Company (or the
performance thereof).  The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the holders of the
Series A-2 Preferred Stock and that the remedy at law for any such breach may be
inadequate.  The Company therefore agrees that, in the event of any
such breach or threatened breach, the holders of the Series A-2 Preferred Stock
shall be entitled, in addition to all other available remedies, to an injunction
restraining any breach, without the necessity of showing economic loss and
without any bond or other security being required.

     

    13.    ­Specific Shall Not Limit
General; Construction.  No specific provision contained in this
Certificate of Designation shall limit or modify any more general provision
contained herein.  This Certificate of Designation shall be deemed to
be jointly drafted by the Company and all initial purchasers of the Series A-2
Preferred Stock and shall not be construed against any person as the drafter
hereof.

     

    14.    ­Failure or Indulgence Not
Waiver.  No failure or delay on the part of a holder of Series
A-2 Preferred Stock in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

     

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the undersigned has executed and subscribed this Certificate
and does affirm the foregoing as true this 29thth day of
May, 2008.

     

     

    
      
        	 	ASTRATA GROUP
      INCORPORATED	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Martin
      George Euler	 
	 	 	Name:
      Martin George Euler	 
	 	 	Title: Chief
      Executive Officer	 
	 	 	 	 


      

    

                       

    
      
        
        

      

      
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    EXHIBIT
I

    


    ASTRATA
GROUP INCORPORATED

    CONVERSION
NOTICE

    


    Reference
is made to the Certificate of Designation of the Relative Rights and Preferences
of the Series A-2 Preferred Stock of Astrata Group Incorporated (the
"Certificate of Designation").  In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series A-2 Preferred Stock, par value $0.0001 per share (the
"Preferred Shares"), of Astrata Group Incorporated, a Nevada corporation (the
"Company"), indicated below into shares of Common Stock, par value $0.0001 per
share (the "Common Stock"), of the Company, by tendering the stock
certificate(s) representing the share(s) of Preferred Shares specified below as
of the date specified below.

     

    
      	 	Date of
      Conversion: 	_________________________
	 	 	 
	 	Number of Preferred
      Shares to be converted:	_________________________
	 	 	 
	 	Stock certificate
      no(s). of Preferred Shares to be converted:	_________________________
	 	 	 
	 	The Common Stock are
      being contemporaneously sold pursuant to the Registration
    Statement:	YES
    ____NO____
	 	 	 
	Please confirm the
      following information:	 
	 	 	 
	 	Conversion
      Price:	_________________________
	 	 	 
	 	Number of shares of
      Common Stock to
      be issued:	_________________________
	 	 	 
	Number of shares of
      Common Stock beneficially owned or deemed beneficially owned by the Holder
      on the Date of Conversion:	_________________________
	 	 	 
	
              Please
      issue the Common Stock into which the Preferred Shares are being converted
      and, if applicable, any check drawn on an account of the Company in the
      following name and to the following address:

            
	 	 	 
	 	Issue to:	
              _________________________

              _________________________

            
	 	 	 
	 	Facsimile
      Number:	_________________________
	 	 	 
	 	Authorization:	_________________________
	 	 	By:
      ______________________
	 	 	Title:
      _____________________
	 	 	 
	Dated:	 	 
	 	 


    

     

     

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