ex41.htm


    
       

      DelawarePAGE
        1

      ________________________________

      The
        First State

       


       

      I,
        HARRIET SMITH WINDSOR, SECRETARY
        OF STATE OF THE STATE OF DELAWARE,
        DO HEREBY CERTIFY THE
        ATTACHED IS A TRUE AND CORRECT COPY OF
        THE CERTIFICATE OF
        DESIGNATION OF "URIGEN PHARMACEUTICALS,
        INC.", FILED IN
        THIS OFFICE ON THE THIRTY—FIRST DAY OF JULY,
        A.D. 2007,
        AT
5:19
        O'CLOCK P.M.

      A
        FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE COUNTY
        RECORDER OF DEEDS.

    

     

     

     

    
      	2784403
              8100	 	 /s/
              Harriet
              Smith Windsor
	070874997	 	 Harriet
              Smith Windsor, Secretary of State
	 	 	
              
                AUTHENTICATION:
                  5891093

              

              DATE:
                07-31-07

            


    

     

     

     

     

     

    
       

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    AMENDED
      AND RESTATED CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND
      PREFERENCES

    OF
      THE

    SERIES
      B CONVERTIBLE PREFERRED STOCK

    OF

    URIGEN
      PHARMACEUTICALS, INC.

    


    The
      undersigned, the Chief Financial Officer of Urigen Pharmaceuticals, Inc., a
      Delaware corporation (the “Company”), in accordance with the provisions of the
      Delaware General Corporation Law, does hereby certify that, pursuant to the
      authority conferred upon the Board of Directors by the Amended and Restated
      Certificate of Incorporation of the Company, the following resolution creating
      a
      series of Series B Convertible Preferred Stock, was duly adopted on July 31,
      2007:

    


    RESOLVED,
      that the Board of Directors of the Company, pursuant to the authority expressly
      granted to and vested in the Board of Directors of the Company by provisions
      of
      the Certificate of Incorporation of the Company (the “Certificate of
      Incorporation”), created out of the shares of Preferred Stock, par value $.001
      per share, of the Company authorized in Article IV of the Certificate of
      Incorporation (the “Preferred Stock”), a series of Preferred Stock designated
“Series B Convertible Preferred Stock,” consisting of two hundred and ten (210)
      shares;

    


    RESOLVED,
      that designations, powers, preferences and relative and other special rights
      and
      the following qualifications, limitations and restrictions were set forth in
      a
      Certificate of Designation of the Relative Rights and Preferences of the Series
      B Convertible Preferred Stock of Urigen Pharmaceuticals, Inc., duly adopted
      by
      the Board of Directors on July 26, 2007 and filed with the Secretary of State
      of
      the State of Delaware on July 27, 2007 (the “Original
      Certificate”);

    


    RESOLVED,
      the Board of Directors hereby amends and restated the Original Certificate
      to
      provide for designations, powers, preferences and relative and other special
      rights and the following qualifications, limitations and restrictions with
      respect to the Series B Preferred Stock as follows:

    


    1.  ­Designation
      and Rank.

    


    (a)  Designation.  The
      designation of such series of the Preferred Stock shall be the Series B
      Convertible Preferred Stock, par value $.001 per share (the “Series B Preferred
      Stock”).  The maximum number of shares of Series B Preferred Stock
      shall be two hundred and ten (210) Shares.

    


    (b)  Rank.  The
      Series B Preferred Stock shall rank prior to the common stock, par value $.001
      per share (the “Common Stock”), and to all other classes and series of equity
      securities of the Company which by its terms does not rank on a parity with
      or
      senior to the Series B Preferred Stock (“Junior Stock”).  The Series B
      Preferred Stock shall be subordinate to and rank junior to all indebtedness
      of
      the Company now or hereafter outstanding.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    2.  Dividends.

    


    (a)  Quarterly
      Dividends.  The holders of shares of the Series B Preferred Stock
      shall be entitled to receive, out of funds legally available therefor, dividends
      at an annual rate equal to 5% of the Liquidation Preference Amount, calculated
      on the basis of a 360 day year, consisting of twelve 30-day months, and shall
      accrue on a daily basis from the date of issuance thereof, whether or not
      declared.  Accrued and unpaid dividends shall compound on a quarterly
      basis, and shall be, except as set forth in Section 2(b) below, payable in
      cash.  The Board of Directors may fix a record date for the
      determination of holders of shares of Series B Preferred Stock entitled to
      receive payment of such dividends, which record date shall not be more than
      sixty (60) days prior to the applicable dividend payment date.  The
      first such dividend payment shall be due and payable on October 31, 2007, with
      subsequent payments due and payable on January 31, April 30, July 31, and
      October 31 of each year.   All accrued and unpaid dividends, if
      any, shall be mandatorily paid immediately prior to the earlier to occur of
      (i)
      a liquidation, dissolution or winding up (or deemed liquidation, dissolution
      or
      winding up under Section 4(b) hereof) of the Company (a “Liquidation”), (ii) a
      Voluntary Conversion pursuant to Section 5 hereof or (iii) a Mandatory
      Conversion pursuant to Section 5(c) hereof (the “Mandatory Dividend Payment
      Date”).

    


    (b)  Payment
      of Dividends.  At the option of the Company in compliance with
      this Section 2(b), the Company may pay dividends on the Series B Preferred
      Stock
      in shares of Common Stock, with each share of Common Stock being valued for
      this
      purpose at the Conversion Price in effect on the date of
      payment.  Notwithstanding the above, no dividend shall be paid in
      Common Stock (i) in connection with a Liquidation, (ii) if such payment would
      cause the limitations on beneficial ownership set forth in Section 7 hereof
      to
      be exceeded or (iii) unless the shares of Common Stock received upon such
      payment shall be freely salable by the recipient pursuant to a then effective
      Registration Statement meeting the requirements of the Registration Rights
      Agreement, dated on or about the date hereof, by and between the Company and
      the
      investors named therein.

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (c)  Junior
      Stock Dividends.  The Company shall not declare or pay any cash
      dividends on, or make any other distributions with respect to or redeem,
      purchase or otherwise acquire for consideration, any shares of Junior Stock
      unless and until all accrued and unpaid dividends on the Series B Preferred
      Stock have been paid in full.    In all events, Junior Stock
      dividends shall be subject to the restrictions set forth in Section 3(a)
      below.

    


    3.  ­Voting
      Rights.

    


    (a)  ­Class
      Voting Rights.  The Series B Preferred Stock shall have the
      following class voting rights (in addition to the voting rights set forth in
      Section 3(b) hereof).  So long as any shares of the Series B Preferred
      Stock remain outstanding, the Company shall not, and shall not permit any
      subsidiary to, without the affirmative vote or consent of the holders of at
      least a majority of the shares of the Series B 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 B Preferred Stock vote separately as a class:
      (i) incur Indebtedness or 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 previously authorized Preferred Stock, ranking
      prior to the Series B 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 B Preferred Stock, whether by merger, consolidation
      or otherwise, so as to adversely affect any right, preference, privilege or
      voting power of the Series B Preferred Stock; (iii) repurchase, redeem or pay
      dividends on (whether in cash, in kind, or otherwise), shares of the Company's
      Junior Stock; (iv) amend the Certificate 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 B Preferred Stock; (v) effect any
      distribution with respect to Junior Stock or parity stock; or (vi) reclassify
      the Company's outstanding securities.  “Indebtedness” means (a) all
      obligations for borrowed money, (b) all obligations evidenced by bonds,
      debentures, notes, or other similar instruments and all reimbursement or other
      obligations in respect of letters of credit, bankers acceptance, current swap
      agreements, interest rate swaps, or other financial products, (c) all capital
      lease obligations (to the extent the same exceed $100,000 in any fiscal year),
      (d) all obligations for the deferred purchase price of assets (to the extent
      the
      same exceed $100,000 in any fiscal year), (e) all synthetic leases, and (f)
      any
      obligation guaranteeing or intended to guarantee (whether directly or indirectly
      guaranteed, endorsed, co-made, discounted or sold with recourse) any of the
      foregoing obligations of any other person; provided, however, Indebtedness
      shall
      not include (a) a working capital line of credit, containing typical and
      customary terms and conditions, of up to $1,000,000 issued by a bank, credit
      union, governmental agency or similar unaffiliated corporate or institutional
      lender, (b) usual and customary trade debt incurred in the ordinary course
      of
      business and (c) endorsements for collection or deposit in the ordinary course
      of business.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (b)  ­General
      Voting Rights.  Except with respect to
      transactions upon which the Series B Preferred Stock shall be entitled to vote
      separately as a class pursuant to Section 3(a) above and except as otherwise
      required by Delaware law, the Series B Preferred Stock shall have no voting
      rights.  The Common Stock into which the Series B Preferred Stock is
      convertible shall, upon issuance, have all of the same voting rights as other
      issued and outstanding Common Stock of the Company.

    


    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 the Series
      B
      Preferred Stock then outstanding shall be entitled to receive, out of the assets
      of the Company whether such assets are capital or surplus of any nature, an
      amount equal to $10,000 per share (the “Liquidation Preference Amount”) of the
      Series B Preferred Stock, on a pro rata and pari passu basis with any parity
      stock, 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
      payable to the holders of outstanding shares of the Series B Preferred Stock
      and
      any series of preferred stock or any other class of stock on a parity as to
      rights on liquidation, dissolution or winding up, with the Series B Preferred
      Stock, then all of said assets will be distributed among the holders of the
      Series B Preferred Stock, the Pari Passu Preferred Stock and the other classes
      of stock on a parity with the Series B 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 B Preferred
      Stock shall be equal to a ratably proportionate amount of the liquidation
      payment with respect to each outstanding share of Series B 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
      B
      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 B Preferred Stock has been paid in cash the full
      Liquidation Preference Amount to which such holder is entitled as provided
      herein.  After payment of the full Liquidation Preference Amount to
      which each holder is entitled, such holders of shares of Series B Preferred
      Stock will not be entitled to any further participation as such in any
      distribution of the assets of the Company.

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    (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
      transactions in which more than 50% of the voting shares of the Company is
      disposed of or conveyed, shall be, at the election of the holders of a majority
      of the Series B Preferred Stock, 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 that
      is
      not treated as a liquidation pursuant to this Section 4(b), the Series B
      Preferred Stock shall maintain its relative powers, designations and preferences
      provided for herein and no merger shall result inconsistent
      therewith.

    


    (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 B Preferred Stock at their respective
      addresses as the same shall appear on the books of the Company.

    


    5.  ­Conversion.  The
      holder of Series B 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 B Preferred Stock may, at such holder's option,
      subject to the limitations set forth in Section 7 herein, elect to convert
      (a
“Voluntary Conversion”) all or any portion of the shares of Series B 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 B Preferred Stock being converted thereon divided 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.  The Company shall keep written records of the conversion of
      the shares of Series B Preferred Stock converted by each holder.  A
      holder shall be required to deliver the original certificates representing
      the
      shares of Series B Preferred Stock upon complete conversion of the Series B
      Preferred Stock.

    


    (b)  ­Mechanics
      of Voluntary Conversion.  The Voluntary Conversion of Series B
      Preferred Stock shall be conducted in the following manner:

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (i)  ­Holder's
      Delivery Requirements.  To convert Series B Preferred Stock into
      full shares of Common Stock on any date (the “Voluntary 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, and (B) with respect to the final
      conversion of shares of Series B Preferred Stock held by any holder, such holder
      shall surrender to a common carrier for delivery to the Company as soon as
      practicable following such Conversion Date but in no event later than six (6)
      business days after such date the original certificates representing the shares
      of Series B 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”).

    


    (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 and 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 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,
      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.

    


    (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 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 Amended and Restated 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).

    


    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    (iv)  ­Record
      Holder.  The person or persons entitled to receive the shares of
      Common Stock issuable upon a conversion of the Series B 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 five (5) business days of
      the Company's receipt of the Conversion Notice (the “Share Delivery Period”) the
      Company 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 B Preferred Stock (a “Conversion Failure”), in addition to all other
      available remedies which such holder may pursue hereunder and under the Series
      B
      Convertible Preferred Stock Purchase Agreement among the Company and the
      purchasers listed therein (the “Purchase Agreement”) between the Company and the
      initial holders of the Series B Preferred Stock (including indemnification
      pursuant to Section 6 thereof), the Company shall pay additional damages to
      such
      holder on each business day after such third (3rd) business
      day that
      such conversion is not timely effected in an amount equal 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 (B) the Closing Bid Price (as defined in Section 5(d)(ii) hereof) of the
      Common Stock on the last possible date which the Company could have issued
      such
      Common Stock 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% per month (pro rated for partial months)
      until such payments are made.

    


    (c)  Mandatory
      Conversion.

    


    (i)  Subject
      to the provisions set forth below, the shares of Series B Preferred Stock
      outstanding on the Mandatory Conversion Date shall, depending on the Closing
      Bid
      Price on such Mandatory Conversion Date, automatically and without any action
      on
      the part of the holder thereof, convert 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 B Preferred Stock
      outstanding on the Mandatory Conversion Date divided by (ii) the Conversion
      Price in effect on the Mandatory Conversion Date (a “Mandatory
      Conversion”).  If the Closing Bid Price of the Common Stock on the
      Mandatory Conversion Date is equal to or greater than $1.50 (as appropriately
      adjusted for splits and combinations occurring after the Issue Date), all of
      the
      shares of Series B Preferred Stock outstanding shall automatically convert
      into
      shares of Common Stock in accordance with this Section 5(c)(i).

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (ii)  As
      used
      herein, a “Mandatory Conversion Date” shall be the date which is at least one
      (1) day after the Effectiveness Date (as defined in the Registration Rights
      Agreement), provided, that the Closing Bid Price of the Common Stock must have
      exceeded $1.50 for a period of twenty (20) consecutive trading days immediately
      preceding such date; provided, further, that the Registration
      Statement (as defined in the Registration Rights Agreement) is effective with
      respect to all shares of Common Stock issuable upon such mandatory conversion
      or
      the shares of Common Stock into which the Series B Preferred Stock can be
      converted may be offered for sale to the public pursuant to Rule 144(k) (“Rule
      144(k)”) under the Securities Act of 1933, as
      amended.  Notwithstanding the foregoing, no mandatory conversion shall
      be effected if, on the Mandatory Conversion Date the conversion of such share
      of
      Preferred Stock would violate Section 7.  In no event shall any shares
      of Series B Preferred Stock be converted pursuant to this Section 5(c) unless
      the Common Stock issuable upon such conversion has been registered under the
      Securities Act of 1933, as amended, and may be resold pursuant to a
      then-effective registration statement meeting the requirements of the
      Registration Rights Agreement or such shares of Common Stock may be resold
      pursuant to Rule 144(k).  The Mandatory Conversion Date and the
      Voluntary Conversion Date collectively are referred to in this Amended and
      Restated Certificate of Designation as the “Conversion Date.”

    


    (iii)  On
      the
      Mandatory Conversion Date, the outstanding shares of Series B Preferred Stock
      shall be converted automatically without any further action by the holders
      of
      such shares and whether or not the Preferred Stock Certificates are surrendered
      to the Company or its transfer agent; provided, however, that the
      Company shall not be obligated to issue the shares of Common Stock issuable
      upon
      conversion of any shares of Series B Preferred Stock unless the Preferred Stock
      Certificates evidencing such shares of Series B Preferred Stock are either
      delivered to the Company or the holder notifies the Company that such Preferred
      Stock Certificates have been lost, stolen, or destroyed, and executes an
      agreement satisfactory to the Company to indemnify the Company from any loss
      incurred by it in connection therewith.  Upon the occurrence of the
      automatic conversion of the Series B Preferred Stock pursuant to this Section
      5,
      the holders of the Series B Preferred Stock shall surrender the Preferred Stock
      Certificates representing the Series B Preferred Stock for which the Mandatory
      Conversion Date has occurred to the Company and the Company shall deliver the
      shares of Common Stock issuable upon such conversion (in the same manner set
      forth in Section 5(b)(ii)) to the holder within five (5) business days of the
      holder's delivery of the applicable Preferred Stock Certificates.

    


    (d)  ­Conversion
      Price.

    


    (i)  The
      term
“Conversion Price” shall mean $0.15 per share, subject to adjustment under
      Section 5(e) hereof.  Notwithstanding any adjustment hereunder, at no
      time shall the Conversion Price be greater than $0.15 per share other than
      pursuant to the second sentence of Section 5(e)(i) in connection with a reverse
      stock split effected by the Company.

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (ii)  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 applicable
      principal trading market for such security 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 in the “pink sheets”
by the National Quotation Bureau, Inc.  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 B Preferred Stock.

    


    (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 occurs.

    


    (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, as applicable, 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
      B 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 B Preferred Stock
      been converted into Common Stock immediately prior to such event (or the record
      date for such event, if applicable) and had 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 B
      Preferred Stock.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (iv)  ­Adjustments
      for Reclassification, Exchange or Substitution.  If the Common
      Stock issuable upon conversion of the Series B 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 B Preferred Stock shall have the right thereafter to convert
      such share of Series B 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 B 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
      ofAssets.  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, or the sale of all or substantially all of the Company's properties
      or assets to any other person that is not deemed a liquidation pursuant to
      Section 4(b) (an “Organic Change”), then as a part of such Organic Change an
      appropriate revision to the Conversion Price shall be made and provision shall
      be made (by adjustments of the Conversion Price or otherwise) so that the holder
      of each share of Series B Preferred Stock shall have the right thereafter to
      convert such share of Series B 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 the Organic Change as the holder would have received
      as a result of the Organic Change and if the holder had converted its Series
      B
      Preferred Stock into the Company’s Common Stock prior to the 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 B 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 B Preferred Stock) shall
      be
      applied after that event in as nearly an equivalent manner as may be
      practicable.

    


    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    (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 upon exercise or conversion
      of Common Stock Equivalents (hereafter defined) granted or issued prior to
      the
      Issuance Date at the conversion price applicable to such Common Stock
      Equivalents in effect on 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 a price equal to the consideration per share paid for 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 therefor) pursuant to Section
      5(e)(vii).

    


    (vii)  Issuance
      of Common Stock Equivalents.  If 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 B Preferred Stock or warrants issued to the holders of the Series
      B
      Preferred Stock, or any rights or warrants or options to purchase any such
      Common Stock or Convertible Securities, shall be issued or sold (collectively,
      the “Common Stock Equivalents”) and the aggregate of the price per share for
      which Additional Shares of Common Stock may be issuable thereafter pursuant
      to
      such Common Stock Equivalent, plus the consideration received by the Company
      for
      issuance of such Common Stock Equivalent, divided by the number of shares of
      Common Stock issuable pursuant to such Common Stock Equivalent (the “Aggregate
      Per Common Share Price”), shall be less than the Conversion Price, 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 make the Aggregate Per Common
      Share
      Price be less than Conversion Price in effect at the time of such amendment,
      then the Conversion Price then in effect shall upon each such issuance be
      adjusted to a price equal to the Aggregate Per Common Share
      Price.   No adjustment of the Conversion Price shall be made
      under this subsection (vii) upon the issuance of any Convertible Security which
      is issued pursuant to the exercise of any warrants or other subscription or
      purchase rights therefor, if any adjustment shall previously have been made
      to
      the exercise price of such warrants then in effect upon the issuance of such
      warrants or other rights pursuant to this subsection (vii).

    


    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

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

    


    (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 of the Conversion
      Price
      of shares of Common Stock issuable upon conversion of the Series B Preferred
      Stock upon the issuance of (a) shares of Common Stock or options to employees,
      officers or directors of the Company pursuant to any stock or option plan duly
      adopted by a majority of the non-employee members of the Board of Directors
      of
      the Company or a majority of the members of a committee of non-employee
      directors established for such purpose, (b) securities upon the exercise or
      exchange of or conversion of any securities issued hereunder and/or securities
      exercisable or exchangeable for or convertible into shares of Common Stock
      issued and outstanding on the Issue Date, provided that such securities have
      not
      been amended since the Issue Date to increase the number of such securities
      or
      to decrease the exercise, exchange or conversion price of any such securities,
      (c) securities issued pursuant to acquisitions or strategic transactions
      (including license agreements), 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 and (d) securities issued to the Holder pursuant to the Purchase
      Agreement (or securities issued on conversion or exercise of such
      securities).

    


    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    (f)  ­No
      Impairment.  The Company shall not, by amendment of its
      Certificate 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 B Preferred Stock against impairment.  In the event a holder
      shall elect to convert any shares of Series B 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, an injunction from a court, on notice, restraining
      and/or enjoining conversion of all or of said shares of Series B Preferred
      Stock
      shall have been issued and the Company posts a surety bond for the benefit
      of
      such holder in an amount equal to 130% of the Liquidation Preference Amount
      of
      the Series B 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 B 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 B 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 B 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 B 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.

    


    (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 B Preferred Stock pursuant thereto; 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.

    


    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    (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 B 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 B 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 B Preferred Stock.  In lieu of any fractional
      shares to which the holder would otherwise be entitled, the Company shall at
      its
      option either (i) pay cash equal to the product of such fraction multiplied
      by
      the average of the Closing Bid Prices of the Common Stock for the five (5)
      consecutive trading days immediately preceding the Voluntary Conversion Date
      or
      Mandatory Conversion Date, as applicable, or (ii) in lieu of issuing such
      fractional shares issue one additional whole share to the holder.

    


    (k)  ­Reservation
      of Common Stock.  The Company shall, so long as any shares of
      Series B 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 B Preferred Stock, such number of shares of Common
      Stock as shall from time to time be sufficient to effect the conversion of
      all
      of the Series B Preferred Stock then outstanding; provided that the
      number of shares of Common Stock so reserved shall at no time be less than
      120%
      of the number of shares of Common Stock for which the shares of Series B
      Preferred Stock are at any time convertible (without regard to the limitations
      on conversion set forth in Section 7 hereof).  The initial number of
      shares of Common Stock reserved for conversions of the Series B Preferred Stock
      and each increase in the number of shares so reserved shall be allocated pro
      rata among the holders of the Series B Preferred Stock based on the number
      of
      shares of Series B Preferred Stock held by each holder at the time of issuance
      of the Series B 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 B Preferred Stock, each
      transferee shall be allocated a pro rata portion of the number of reserved
      shares of Common Stock reserved for such transferor.  Any shares of
      Common Stock reserved and which remain allocated to any person or entity which
      does not hold any shares of Series B Preferred Stock shall be allocated to
      the
      remaining holders of Series B Preferred Stock, pro rata based on the number
      of
      shares of Series B Preferred Stock then held by such holder.

    


    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    (l)  ­Retirement
      of Series B Preferred Stock.  Conversion of Series B Preferred
      Stock shall be deemed to have been effected on the applicable Voluntary
      Conversion Date or Mandatory Conversion Date.  The Company shall keep
      written records of the conversion of the shares of Series B Preferred Stock
      converted by each holder.  A holder shall be required to deliver the
      original certificates representing the shares of Series B Preferred Stock upon
      complete conversion of the Series B Preferred Stock.

    


    (m)  ­Regulatory
      Compliance.  If any shares of Common Stock to be reserved for the
      purpose of conversion of Series B 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 and in
      the Purchase Agreement, no holder of the Series B 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.

     

    (a)  Notwithstanding
      anything to the contrary set forth in Section 5 of this Amended and Restated
      Certificate of Designation, at no time may a holder of shares of Series B
      Preferred Stock convert shares of the Series B Preferred Stock if the number
      of
      shares of Common Stock to be issued pursuant to such conversion would exceed,
      when aggregated with all other shares of Common Stock owned by such holder
      at
      such time, the number of shares of Common Stock which would result in such
      holder owning more than 4.99% of all of the Common Stock outstanding at such
      time; provided, however, that upon a holder of Series B 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(a) of this Amended and Restated Certificate of Designation
      with
      regard to any or all shares of Common Stock issuable upon conversion of Series
      B
      Preferred Stock, this Section 7(a) shall be of no force or effect with regard
      to
      those shares of Series B Preferred Stock referenced in the Waiver
      Notice.

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    (b)  Notwithstanding
      anything to the contrary set forth in Section 5 of this Amended and Restated
      Certificate of Designation, at no time may a holder of shares of Series B
      Preferred Stock convert shares of the Series B Preferred Stock if the number
      of
      shares of Common Stock to be issued pursuant to such conversion would exceed,
      when aggregated with all other shares of Common Stock owned by such holder
      at
      such time, the number of shares of Common Stock which would result in such
      holder 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 9.99% of all of the Common Stock outstanding at such time;
provided, however, that upon a holder of Series B 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 Amended and Restated Certificate of Designation with
      regard to any or all shares of Common Stock issuable upon conversion of Series
      B
      Preferred Stock, this Section 7 shall be of no force or effect with regard
      to
      those shares of Series B Preferred Stock referenced in the Waiver
      Notice.

    


    8.  Most
      Favored Nations Right.  For a period of three (3) years from the
      date of issuance of the Series B Preferred Stock, if the Company enters into
      any
      equity or equity linked financing (“Subsequent Financing”) on terms more
      favorable than the terms governing the Series B Preferred Stock, then each
      holder of the Series B Preferred Stock in its sole discretion may exchange
      all
      or a portion of its Series B Preferred Stock, valued at its Liquidation
      Preference Amount, plus accrued and unpaid dividends thereon, for the securities
      issued or to be issued in the Subsequent Financing.

    


    9.  ­Inability
      to Fully Convert.

    


    (a)  ­Holder's
      Option if Company Cannot Fully Convert.  If, upon the Company's
      receipt of a Conversion Notice or on the Mandatory Conversion Date, the Company
      cannot issue shares of Common Stock registered for resale (to the extent the
      Company was obligated to register such shares under the Registration Rights
      Agreement) for any reason, including, without limitation, because the Company
      (x) does not have a sufficient number of shares of Common Stock authorized
      and
      available, (y) 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 B Preferred Stock pursuant to a Conversion Notice or (z) fails
      to have a sufficient number of shares of Common Stock registered for resale
      required under the Registration Statement (subject to the limitations set forth
      in the Registration Rights Agreement relating to Rule 415 under the Securities
      Act), 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 B Preferred
      Stock, the holder, solely at such holder's option, can elect, in addition to
      other remedies available to such holder, within five (5) business days after
      receipt of notice from the Company thereof to:

    


    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (i)  require
      the Company to redeem from such holder those Series B 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 120% of
      the Liquidation Preference Amount as of such Conversion Date (the “Mandatory
      Redemption Price”);

    


    (ii)  if
      the
      Company's inability to fully convert Series B Preferred Stock is pursuant to
      Section 9(a)(z) 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 B 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).

    


    In
      the
      event a Holder shall elect to convert any shares of Series B 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, violation of an agreement to which such Holder
      is a party or for any reason whatsoever, unless, an injunction from a court,
      on
      notice, restraining and or enjoining conversion of all or of said shares of
      Series B Preferred Stock shall have issued and the Company posts a surety bond
      for the benefit of such Holder in an amount equal to 130% of the amount of
      shares of Series B Preferred Stock the 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.

    


    (b)  ­Mechanics
      of Fulfilling Holder's Election.  The Company shall immediately
      send via facsimile to a holder of Series B Preferred Stock, upon receipt of
      a
      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 B 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”).

    


    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

    (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 B Preferred Stock may have under
      this Amended and Restated Certificate of Designation and the Purchase Agreement,
      such unpaid amount shall bear interest at the rate of 1.5% 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 B Preferred Stock for which
      the full Mandatory Redemption Price has not been paid, (ii) receive back such
      Series B Preferred Stock, and (iii) require that the Conversion Price of such
      returned Series B 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 B Preferred Stock on
      the
      same day and the Company can convert and redeem some, but not all, of the Series
      B Preferred Stock pursuant to this Section 9, the Company shall convert and
      redeem from each holder of Series B Preferred Stock electing to have Series
      B
      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 B Preferred
      Stock
      held by such holder relative to the number shares of Series B Preferred Stock
      outstanding) of all shares of Series B Preferred Stock being converted and
      redeemed at such time.

    


    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 a majority of the then outstanding
      shares of Series B Preferred Stock, shall be required (a) for any change to
      this
      Amended and Restated Certificate of Designation or the Company's Certificate
      of
      Incorporation which would amend, alter, change or repeal any of the powers,
      designations, preferences and rights of the Series B Preferred Stock or (b)
      for
      the issuance of shares of Series B Preferred Stock other than pursuant to the
      Purchase Agreement.  The provisions hereof may be waived on behalf of
      all the Holders if in writing and signed by the Holders of not less than a
      majority of the then outstanding shares of Series B Preferred
      Stock.

    


    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    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 B Preferred
      Stock, and, in the case of loss, theft or destruction, of any indemnification
      undertaking by the holder 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.

    


    12.  ­Remedies,
      Characterizations, Other Obligations, Breaches and
      InjunctiveRelief.  The remedies provided in this Amended
      and Restated Certificate of Designation shall be cumulative and in addition
      to
      all other remedies available under this Amended and Restated 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 Amended and Restated 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 B 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 B 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 Amended and Restated Certificate of Designation shall limit
      or
      modify any more general provision contained herein.  This Amended and
      Restated Certificate of Designation shall be deemed to be jointly drafted by
      the
      Company and all initial purchasers of the Series B 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 B 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.

    


    15.           Bylaw
      Limitation.  Notwithstanding anything to the contrary contained
      herein, no adjustment shall be made to the Conversion Price or the number of
      shares of Common Stock issuable upon conversion of the Series B Preferred Stock
      to the extent such adjustment would violate Section 48 of the Bylaws of the
      Company in effect on the date hereof.  Upon and after the amendment or
      repeal of said Section 48 of the Bylaws in accordance with the terms of the
      Purchase Agreement, this Section 15 shall be of no further force and
      effect.

    


    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the undersigned has executed and subscribed this Amended
      Certificate and does affirm the foregoing as true this 31st day of July,
      2007.

     

    
      	 	
              URIGEN
                PHARMACEUTICALS, INC.

            	 
	 	 	 	 
	
              Date

            	
              By:
                

            	/s/ Martin
              E.
              Shmagin                                                                      	 
	 	 	Name:
              Martin E. Shmagin	 
	 	 	Title: 
Chief
              Financial
              Officer	 
	 	 	 	 




    


     

    EXHIBIT
      I

    URIGEN
      PHARMACEUTICALS, INC.

    CONVERSION
      NOTICE

    


    Reference
      is made to the Amended and Restated Certificate of Designation of the Relative
      Rights and Preferences of the Series B Preferred Stock of Urigen
      Pharmaceuticals, Inc. (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 B Preferred Stock,
      par
      value $.001 per share (the “Preferred Shares”), of Urigen Pharmaceuticals, Inc.,
      a Delaware corporation (the “Company”), indicated below into shares of Common
      Stock, par value $.001 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 have been sold pursuant to the Registration Statement (as defined
      in the Registration Rights Agreement): 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 ownedby the Holder on the Date of
      Conversion determined in accordance with Section 16 of theSecurities Exchange
      Act of 1934, as amended: _________________________

    


    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:	 	 


    

                                                                 

    


    


                                                                   

    


                                                             

                                                               

                                                                   

     

    


    PRICES
      ATTACHED

     

     

     

     

     

    21