EXHIBIT
4
  SERIES P 9% CONVERTIBLE
PREFERRED STOCK TERMS
  1.         Designation, Amount and Par
Value.  The series of preferred stock shall be designated as
the Series P 9% Convertible Preferred Stock (the “Preferred Stock”),
and the number of shares so designated and authorized shall be Two Thousand
(2,000).  Each share of Preferred Stock shall have a par value of
$0.0001 per share and a stated value of $10,000 per share (the “Stated
Value”).
  2.         Dividends.
  (a)        Holders of Preferred
Stock shall be entitled to receive, when and as declared by the Board of
Directors either out of funds legally available therefor or through the issuance
of shares of the Company’s Class A common stock (the “Common Stock”), and
the Company shall accrue, quarterly in arrears on March 31, June 30, September
30, and December 31 of each year, commencing on the earlier of September 30,
2008, or any Conversion Date (as defined below), cumulative dividends on the
Preferred Stock at the rate per share (as a percentage of the Stated Value per
share) equal to nine percent (9%) per annum, payable in cash or shares of Common
Stock (as defined in Section 7) at the option of the Company.  The Company may pay, at its
option, accrued dividends at any time while the Preferred Stock remains
outstanding.  The Company shall pay all accrued and unpaid dividends
within thirty (30) days following either (a) the conversion of all of the
Preferred Stock or (b) the redemption by the Company of all of the remaining
outstanding shares of Preferred Stock.  The number of shares of Common
Stock issuable as payment of dividends hereunder shall equal the aggregate
dollar amount of dividends then being paid, divided by the Conversion Price (as
defined in Section
5(c)(i)) then in
effect.  Dividends on the Preferred Stock shall be calculated on the
basis of a 360-day year, shall accrue daily commencing on the Issuance Date (as
defined in Section
7), and shall be deemed to accrue on such date
whether or not earned or declared and whether or not there are profits, surplus
or other funds of the Company legally available for the payment of
dividends.  The party that holds the Preferred Stock on an applicable
record date for any dividend payment will be entitled to receive such dividend
payment and any other accrued and unpaid dividends which accrued prior to such
dividend payment date, without regard to any sale or disposition of such
Preferred Stock subsequent to the applicable record date but prior to the
applicable dividend payment date.  Except as otherwise provided
herein, if at any time the Company pays less than the total amount of dividends
then accrued on account of the Preferred Stock, such payment shall be
distributed ratably among the Holders of the Preferred Stock based upon the
number of shares then held by each Holder in proportion to the total number of
shares of Preferred Stock then outstanding.  In order for the Company
to exercise its right to pay dividends in cash, the Company shall, no less than
five (5) Trading Days after the last day of a calendar year for which dividends
are payable, provide the Holders of the Preferred Stock written notice of its
intention to pay dividends in cash.  In order for the Company to
exercise its right to pay dividends in cash on any Conversion Date, the Company
must provide written notice to the holders of Preferred Stock at any time prior
to the Company’s receipt of a Conversion Notice, which notice will remain in
effect for subsequent Conversion Notices until rescinded by the Company in a
written notice to such effect that is addressed to the holders of the Preferred
Stock.
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  (b)        Notwithstanding
anything to the contrary contained herein, the Company may not issue shares of
Common Stock in payment of dividends on the Preferred Stock (and must deliver
cash in respect thereof) if:  (i)  the number of shares of
Common Stock at the time authorized, unissued and unreserved for all purposes,
or held as treasury stock, is either insufficient to issue such dividends in
shares of Common Stock or the Company has not duly reserved for issuance in
respect of such dividends a sufficient number of shares of Common Stock, (ii)
such shares are not registered for resale pursuant to an effective Underlying
Securities Registration Statement (as defined in Section 7) or may not be sold without volume restrictions pursuant to Rule 144
promulgated under the Securities Act of 1933, as amended (the “Securities Act”), as
determined by counsel to the Company pursuant to a written opinion letter,
addressed and acceptable to the Company’s transfer agent or other Person
performing functions similar thereto, (iii) such shares are not listed for
trading on The NASDAQ Global Select Market, The NASDAQ Global Market, The NASDAQ
Capital Market, the American Stock Exchange or the FINRA OTC Bulletin Board
(“OTC BB”) (and
any other exchange, market or trading facility in which the Common Stock is then
listed for trading), (iv) the issuance of such shares would result in the
recipient thereof beneficially owning, determined in accordance with Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended, more than
4.999% of the then issued and outstanding shares of Common Stock, or (v) the
Company shall have failed to timely satisfy its obligations pursuant to any
Conversion Notice.  Payment of dividends in shares of Common Stock is
further subject to the provisions of Section
5(a)(ii).
  (c)        So long as any shares
of Preferred Stock remain outstanding, neither the Company nor any subsidiary
thereof shall, without the consent of the holders of one hundred percent (100%)
of the shares of Preferred Stock then outstanding, redeem, repurchase or
otherwise acquire directly or indirectly any Junior Securities (as defined in
Section
7), nor shall the Company directly or indirectly pay
or declare any dividend or make any distribution (other than a dividend or
distribution described in Section 5) upon, nor shall any distribution be made in respect of, any Junior
Securities, nor shall any monies be set aside for or applied to the purchase or
redemption (through a sinking fund or otherwise) of any Junior
Securities.
  3.         Voting Rights; Protective
Provisions.  Except as otherwise provided herein and as
otherwise required by law, the Preferred Stock shall have no voting
rights.  However, so long as any shares of Preferred Stock are
outstanding, the Company shall not and shall cause its subsidiaries no to,
without the affirmative vote of each of the holders of the Preferred Stock then
outstanding, (i) alter or change adversely the powers, preferences or rights
given to the preferred stock, (ii) alter or amend this Certificate of
Designation, (iii) authorize or create any class of stock ranking as to
dividends or distribution of assets upon a Liquidation (as defined in Section 4) or otherwise senior to pari passu with Preferred Stock, (iv) amend its
certificate of incorporation, bylaws or other charter documents so as to affect
adversely any rights of any holders of the Preferred Stock, (v) increase the
authorized or designated number of shares of Preferred Stock, (vi) issue any
additional shares of Preferred Stock (including the reissuance of any shares of
Preferred Stock converted for Common Stock) or (vii) enter into any agreement
with respect to the foregoing.
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  4.         Liquidation.  Upon
any liquidation, dissolution or winding-up of the Company, whether voluntary or
involuntary (a “Liquidation”), and
subject to the rights of the holders of the Company’s Series A Convertible
Preferred Stock then outstanding, the holders of the Preferred Stock shall be
entitled to receive out of the assets of the Company, whether such assets are
capital or surplus, for each share of Preferred Stock an amount equal to the
Stated Value plus all accrued but unpaid dividends per share, whether declared
or not, and all other amounts in respect thereof (including liquidated damages,
if any) then due and payable before any distribution or payment shall be made to
the holders of any Junior Securities, and if the assets of the Company shall be
insufficient to pay in full such amounts, then the entire assets to be
distributed to the holders of Preferred Stock shall be distributed among the
holders of Preferred Stock ratably in accordance with the respective amounts
that would be payable on such shares if all amounts payable thereon were paid in
full.  The Company shall mail written notice of any such Liquidation,
not less than 45 days prior to the payment date stated therein, to each record
holder of Preferred Stock.
  5.         Conversion.
  (a)        Conversions at Option of
Holder.  Each share of Preferred Stock shall be convertible
into shares of Common Stock (subject to the limitations set forth in Section 5(a)(ii)hereof) at the Conversion Ratio (as defined in Section 7) at the option of a Holder, at any time and from time to time, from and
after the issuance of the Preferred Stock (the “Initial Conversion
Date”), provided, however, that any
shares of Common Stock issued upon conversion while a registration statement
covering the resale of such shares is not effective shall be deemed to be
Restricted Securities as defined under Rule 144.
  (i)           Conversion
Procedures.  A Holder shall effect conversions by surrendering
to the Company the certificate or certificates representing the shares of
Preferred Stock to be converted to the Company, together with a completed form
of conversion notice attached hereto as Exhibit A (the “Conversion
Notice”).  Each Conversion Notice shall specify the number of
shares of Preferred Stock to be converted, the date on which such conversion is
to be effected, which date may not be prior to the date the holder delivers such
Conversion Notice by facsimile (the “Conversion Date”) and
the Conversion Price determined as specified in Section 5(c)(i)hereof.  If no Conversion Date is
specified in a Conversion Notice, the Conversion Date shall be the date that the
Conversion Notice is deemed delivered pursuant to Section 5(a).Subject to Sections 5(b)and 5(a)(ii)hereof, each
Conversion Notice, once given, shall be irrevocable.
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  (ii)           Certain Conversion
Restrictions.  In no event (except (i) if the Company is in
default of any of its obligations hereunder or any of the Transaction Documents,
as defined in Section
7, or (ii) except as otherwise set forth herein)
shall any Holder be entitled to convert any Preferred Stock to the extent that,
after such conversion, the sum of (1) number of shares of Common Stock
beneficially owned by such Holder and its affiliates (other than the shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Preferred Stock), and (2) the number of shares of
Common Stock issuable upon the conversion of the Preferred Stock with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock.  For purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
except as otherwise provided in clause (1) of the preceding
sentence.   To the extent that the limitation contained in this
paragraph applies, the determination of whether shares of Preferred Stock are
convertible (in relation to other securities owned by a Holder) and of which
shares of Preferred Stock are convertible shall be in the sole discretion of the
Holder, and the submission of shares of Preferred Stock for conversion shall be
deemed to be the Holder’s determination of whether such shares of Preferred
Stock are convertible (in relation to other securities owned by the Holder) and
of which portion of such shares of Preferred Stock are convertible, in each case
subject to such aggregate percentage limitation, and the Company shall have no
obligation to verify or confirm the accuracy of such
determination.   Nothing contained herein shall be deemed to
restrict the right of the Holder to convert shares of Preferred Stock at such
time as such conversion will not violate the provisions of this
paragraph.  The provisions of this Section may be waived by a Holder
(but only as to itself and not to any other Holder) upon not less than 65 days
prior notice to the Company (in which case, the Holder shall make such filings
with the Commission, including under Rule 13D or 13G, as are required by
applicable law), and the provisions of this Section shall continue to apply
until such 65th day (or later, if stated in the notice of
waiver).  Other Holders shall be unaffected by any such
waiver.
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  (b)        Company’s Obligations Upon
Conversion.  Not later than three (3) Trading Days after a
Conversion Date, the Company will deliver to the holder (i) a certificate or
certificates which shall be free of restrictive legends and trading restrictions
(other than those required by Section 3.1 of the Exchange Agreement)
representing the number of shares of Common Stock being issued upon the
conversion of shares of Preferred Stock (subject to reduction pursuant to Section 5(a)(ii)hereof), (ii) one or more certificates representing
the number of shares of Preferred Stock not converted, (iii) a bank check in the
amount of accrued and unpaid dividends (if the Company has elected or is
required to pay accrued and unpaid dividends in cash) and (iv) if the Company
has elected and is permitted hereunder to pay accrued dividends in shares of
Common Stock, certificates, which shall be free of restrictive legends and
trading restrictions (other than those required or allowed by Section 3.1 of the
Exchange Agreement), representing such number of shares of Common Stock as are
issuable on account of accrued dividends in such number as determined in
accordance with Section 2(a).Notwithstanding the foregoing, the Company shall not
be obligated to issue certificates evidencing the shares of Common Stock
issuable upon conversion of any shares of Preferred Stock until certificates
evidencing such shares of Preferred Stock together with a related Conversion
Notice are either delivered for conversion to the Company or any transfer agent
for the Preferred Stock or Common Stock, or the holder of such Preferred Stock
notifies the Company that such certificates have been lost, stolen or destroyed
and provides a bond (or other adequate security) reasonably satisfactory to the
Company to indemnify the Company from any loss incurred by it in connection
therewith.  The Company shall, upon request of the holder, use its
best efforts to deliver any certificate or certificates required to be delivered
by the Company under this Section electronically through the Depository Trust
Company or another established clearing corporation performing similar
functions.  If in the case of any Conversion Notice such certificate
or certificates, including for purposes hereof, any shares of Common Stock to be
issued on the Conversion Date on account of accrued but unpaid dividends
hereunder as specifically determined by the Company, are not delivered to or as
directed by the applicable holder by the third Trading Day after the Conversion
Date, the holder shall be entitled by written notice to the Company at any time
on or before its receipt of such certificate or certificates, to rescind such
conversion, in which event the Company shall immediately return the certificates
representing the shares of Preferred Stock tendered for
conversion.  If the Company fails to deliver to the holder such
certificate or certificates pursuant to this Section prior to the twelfth (12th)
day after the Conversion Date, the Company shall, at the Holder’s option (i)
redeem, from funds legally available therefor at the time of such redemption,
such number of shares of Preferred Stock then held by such Holder, as requested
by such Holder, and (ii) pay all accrued but unpaid dividends and all other
amounts then owing on account of the Preferred Stock for which the Company shall
have failed to issue Common Stock certificates hereunder, in
cash.  The redemption price for the shares of Preferred Stock to be
redeemed in accordance with this Section shall be the Redemption Price (as
defined in Section
7).  If the holder has requested
redemption pursuant to this Section and the Company fails for any reason to pay
the Redemption Price under this Section within seven (7) days after such notice
is given pursuant to Section
5(a)(i), the Company will pay interest on the unpaid
portion of the Redemption Price at a rate of 12% per annum, accruing from such
seventh day until the Redemption Price and any accrued interest thereon is paid
in full.  Nothing herein shall limit a holder’s right to pursue actual
damages for the Company’s failure to deliver certificates representing shares of
Common upon conversion within the period specified herein (including, without
limitation, damages relating to any purchase of shares of Common Stock by such
holder to make delivery on a sale effected in anticipation of receiving
certificates representing shares of Common Stock upon conversion, such damages
to be in an amount equal to (A) the aggregate amount paid by such holder for the
shares of Common Stock so purchased minus (B) the
aggregate amount of net proceeds, if any, received by such holder from the sale
of the shares of Common Stock issued by the Company pursuant to such
conversion), and such holder shall have the right to pursue all remedies
available to it at law or in equity (including, without limitation, a decree of
specific performance and/or injunctive relief).
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  (c)        Conversion
Price.
  (i)           The
conversion price for each share of Preferred Stock (the “Conversion Price”) on
any Conversion Date shall be eighty percent (80%) of the two (2) lowest Closing
Bid Prices over the twenty trading days prior to the Conversion
Date.
  (ii)           All
calculations under this Section 5shall be made to the nearest whole share of Common
Stock.
  (d)        Material Adverse
Effect.  If at any time conditions shall arise by reason of
action taken by the Company which in the opinion of the Board of Directors are
not adequately covered by the other provisions hereof and which might materially
and adversely affect the rights of the holders of Preferred Stock (different
than or distinguished from the effect generally on rights of holders of any
class of the Company’s capital stock) or if at any time any such conditions are
expected to arise by reason of any action contemplated by the Company, the
Company shall mail a written notice briefly describing the action contemplated
and the material adverse effects of such action on the rights of the holders of
Preferred Stock at least 30 calendar days prior to the effective date of such
action, and an Appraiser selected by the holders of majority in interest of the
Preferred Stock shall give its opinion as to the adjustment, if any (not
inconsistent with the standards established in this Section
5), of the Conversion Price (including, if
necessary, any adjustment as to the securities into which shares of Preferred
Stock may thereafter be convertible) and any distribution which is or would be
required to preserve without diluting the rights of the holders of shares of
Preferred Stock; provided, however, that the Company, after receipt of the
determination by such Appraiser, shall have the right to select an additional
Appraiser, in good faith, in which case the adjustment shall be equal to the
average of the adjustments recommended by each such Appraiser.  The
Board of Directors shall make the adjustment recommended forthwith upon the
receipt of such opinion or opinions or the taking of any such action
contemplated, as the case may be; provided, however, that no such adjustment of
the Conversion Price shall be made which in the opinion of the Appraiser(s)
giving the aforesaid opinion or opinions would result in an increase of the
Conversion Price to more than the Conversion Price then in
effect.
  (e)           Company’s
Covenants.  The Company covenants that it will at all times
reserve and keep available out of its authorized and unissued Common Stock
solely for the purpose of issuance upon conversion of Preferred Stock and
payment of dividends on Preferred Stock, each as herein provided, free from
preemptive rights or any other actual or contingent purchase rights of persons
other than the holders of Preferred Stock, not less than 200% of such number of
shares of Common Stock as shall (subject to any additional requirements of the
Company as to reservation of such shares set forth in the Exchange Agreement) be
issuable (taking into account the adjustments and restrictions of Section
5(c))upon the conversion of all outstanding shares
of Preferred Stock and payment of dividends hereunder.  The Company
covenants that all shares of Common Stock that shall be so issuable shall, upon
issue, be duly and validly authorized, issued and fully paid and
nonassessable.
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  (f)         Fractional
Shares.  Upon a conversion hereunder the Company shall not be
required to issue stock certificates representing fractions of shares of Common
Stock, but may if otherwise permitted and unless waived by the holder of the
Preferred Stock, make a cash payment in respect of any final fraction of a share
based on the Per Share Market Value at such time.  If the Company
elects not, or is unable, to make such a cash payment, the holder of a share of
Preferred Stock shall be entitled to receive, in lieu of the final fraction of a
share, one whole share of Common Stock.
  (g)        Taxes.  The
issuance of certificates for shares of Common Stock on conversion of Preferred
Stock shall be made without charge to the holders thereof for any documentary
stamp or similar taxes that may be payable in respect of the issue or delivery
of such certificate, provided that the Company shall not be required to pay any
tax that may be payable in respect of any transfer involved in the issuance and
delivery of any such certificate upon conversion in a name other than that of
the holder of such shares of Preferred Stock so converted and the Company shall
not be required to issue or deliver such certificates unless or until the person
or persons requesting the issuance thereof shall have paid to the Company the
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
  (h)        Cancellation.  Shares
of Preferred Stock converted into Common Stock shall be canceled and shall have
the status of authorized but unissued shares of undesignated preferred
stock.
  (i)         Notices.  Any
and all notices or other communications or deliveries to be provided by the
holders of the Preferred Stock hereunder, including, without limitation, any
Conversion Notice, shall be in writing and delivered personally, by facsimile,
sent by a nationally recognized overnight courier service or sent by certified
or registered mail, postage prepaid, addressed to the attention of the President
of the Company at the facsimile telephone number or address of the principal
place of business of the Company as set forth in the Exchange
Agreement.  Any and all notices or other communications or deliveries
to be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service or sent by certified or registered mail, postage prepaid, addressed to
each holder of Preferred Stock at the facsimile telephone number or address of
such holder appearing on the books of the Company, or if no such facsimile
telephone number or address appears, at the principal place of business of the
holder.  Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of
transmission, if such notice or communication is delivered via facsimile at the
facsimile telephone number specified in this Section prior to 5:00 p.m. (Salt
Lake City time), (ii) the date after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile telephone number
specified in this Section later than 5:00 p.m. (Salt Lake City time) on any date
and earlier than 11:59 p.m. (Salt Lake City time) on such date, (iii) four days
after deposit in the United States mails, (iv) the Business Day following the
date of mailing, if send by nationally recognized overnight courier service, or
(v) upon actual receipt by the party to whom such notice is required to be
given.  For purposes of Section
5(c)(i), if a Conversion Notice is delivered by
facsimile prior to 5:00 p.m. (Salt Lake City time) on any date, then the day
prior to such date shall be the last Trading Day calculated to determine the
Conversion Price applicable to such Conversion Notice, and the date of such
delivery shall commence the counting of days for purposes of Section
5(b).
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  6.         Optional Redemption.:
Adjustments to Conversion Price.
  (a)        Optional
Redemption.
  (i)           The
Company shall have the right, exercisable at its option, to redeem from funds
legally available therefor all or any portion of the then-outstanding and
unconverted shares of the Preferred Stock at a price equal to the Redemption
Price (defined below) multiplied by the Applicable Percentage (defined below) at
any time.  Any redemptions pursuant to this Section
6(a)(i)shall be effected by the delivery of a
notice to each holder of Preferred Stock to be redeemed, which notice shall
indicate the number of shares of Preferred Stock of each holder to be redeemed
and the date that such redemption is to be effected, which shall be the tenth
(10th) day after the date such notice is deemed delivered pursuant to Section5(a)(i)(the “Optional Redemption
Date”).  All redeemed shares of Preferred Stock shall cease to
be outstanding and shall have the status of authorized but unissued preferred
stock.  The Redemption Price under this Section shall be paid in cash
on the Optional Redemption Date.
  (ii)           If
any portion of the Redemption Price under this section is not paid by the
Company on or prior to the Optional Redemption Date, the redemption shall be
declared null and void, and the issuer will lose its redemption
rights.
  (b)       The
Conversion Price shall be subject to adjustment from time to time as
follows:
  (i)           Sale.   If,
for as long as any shares of Preferred Stock remain outstanding, the Company
enters into a merger (other than where the Company is the surviving entity) or
consolidation with another corporation or other entity (collectively, a “Sale”), the Company
will require, in the agreements reflecting such transaction, that the surviving
entity and, if an entity different from the successor or surviving entity, the
entity whose capital stock or assets the holders of Common Stock of the Company
are entitled to receive as a result of such transaction,  expressly
assume the obligations of the Company hereunder.  Notwithstanding the
foregoing, if the Company enters into a Sale and the holders of the Common Stock
are entitled to receive stock, securities or property in respect of or in
exchange for Common Stock, then as a condition of such Sale, the Company and any
such successor, purchaser or transferee will agree that
the  Designated Preferred Stock may thereafter be converted on the
terms and subject to the conditions set forth above into the kind and amount of
stock, securities or property receivable upon such merger, consolidation or
transfer by a Holder of the number of shares of Common Stock into which then
outstanding shares of  Designated Preferred Stock might have been
converted immediately before such merger, consolidation or transfer, subject to
adjustments which shall be as nearly equivalent as may be
practicable.  In the event of any such proposed Sale, the Holder
hereof shall have the right to either (i) convert all of any of the outstanding
Preferred Stock (without regard to the limits contemplated Section
5(a)(ii)hereof) by delivering a Notice of
Conversion to the Company within 15 days of receipt of notice of such Sale from
the Company or (ii) if the surviving entity in the transaction is not a publicly
traded entity listed on a Principal Trading Market, demand a redemption of all
or any of the outstanding  Preferred Stock for the r Redemption Amount
by delivering a notice to such effect  to the Company within fifteen
(15) days of receipt of notice of such Sale from the
Company.
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  (ii)          Spin
Off.  If, at any time prior to the Conversion Date of the
balance of the Preferred Stock held by a Holder or to the date of payment of the
Redemption Amount hereunder, the Company consummates a  spin off or
otherwise divests itself of a part of its business or operations or disposes of
all or of a part of its assets in a transaction (the “Spin Off”) in which
the Company, in addition to or in lieu of any other compensation received by the
Company  for such business, operations or assets, causes securities of
another entity (the “Spin Off Securities”)
to be issued to security holders of the Company, then the Company shall cause
(i) to be reserved Spin Off Securities equal to the number thereof which would
have been issued to the Holder had all of the holder’s shares of Preferred Stock
outstanding on the record date (the “Record Date”) for
determining the amount and number of Spin Off Securities to be issued to
security holders of the Company (the “Outstanding Designated
Preferred Stock”) been converted as of the close of business on the
Trading Day immediately before the Record Date (the “Reserved Spin Off
Shares”), and (ii) to be issued to the Holder on the conversion of all or
any of the Outstanding Preferred Stock, such amount of the Reserved Spin Off
Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction,
of which (a) the numerator is the principal amount of the Outstanding Preferred
Stock  then being converted, and (b) the denominator is the principal
amount of the Outstanding Preferred Stock.
  (iii)         Stock Splits,
etc.  If, at any time while any shares of Preferred Stock
remain outstanding, the Company effectuates a stock split or reverse stock split
of its Common Stock or issues a dividend on its Common Stock consisting of
shares of Common Stock, the Conversion Price and any other amounts calculated as
contemplated by this Certificate of Designations shall be equitably adjusted to
reflect such action.  By way of illustration, and not in limitation,
of the foregoing (i) if the Company effectuates a 2:1 split of its Common Stock,
thereafter, with respect to any conversion for which the Company issues shares
after the record date of such split, the Conversion Price shall be deemed to be
one-half of what it had been calculated to be immediately prior to such split;
(ii) if the Company effectuates a 1:10 reverse split of its Common Stock,
thereafter, with respect to any conversion for which the Company issues shares
after the record date of such reverse split, the Conversion Price shall be
deemed to be ten times what it had been calculated to be immediately prior to
such split; and (iii) if the Company declares a stock dividend of one share of
Common Stock for every 10 shares outstanding, thereafter, with respect to any
conversion for which the Company issues shares after the record date of such
dividend, the Conversion Price shall be deemed to be such amount multiplied by a
fraction, of which the numerator is the number of shares (10 in the example) for
which a dividend share will be issued and the denominator is such number of
shares plus the dividend share(s) issuable or issued thereon (11 in the
example).
  (iv)         Notice of
Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Article 6,the Company, at
its expense, shall promptly compute such adjustment or readjustment and prepare
and furnish to each Holder of  Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts upon which
such adjustment or readjustment is based.  The Company shall, upon the
written request at any time of any Holder of Preferred Stock, furnish to such
Holder a like certificate setting forth (i) such adjustment or readjustment,
(ii) the Conversion Price in effect at the time and (iii) 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 conversion of a share of Designated Preferred
Stock.
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  7.         Definitions.  For
the purposes hereof, the following terms shall have the following
meanings:
  “Applicable
Percentage” means one hundred ten percent (110%) for any payment of the
Redemption Price.
  “Business Day” means
any day except Saturday, Sunday and any day which shall be a legal holiday or a
day on which banking institutions in the State of Delaware are authorized or
required by law or other government action to close.
  “Closing Bid Price”
shall mean the closing bid price (as reported by Bloomberg L.P.) of the Class A
Common Stock on the OTC Bulletin Board or such other exchange or trading
facility on which the Common Stock is traded.
  “Common Stock” means
the Class A common stock, $.0001 par value per share, of the Company, and stock
of any other class into which such shares may hereafter have been reclassified
or changed.
  “Conversion Ratio”
means, at any time, a fraction, the numerator of which is Stated Value plus
accrued but unpaid dividends to the extent to be paid in shares of Common Stock
and the denominator of which is the Conversion Price at such time.
  “Exchange Agreement”
means the Exchange Agreement, dated as of June 27, 2008, among the Company,
Fonix GS Acquisition Corporation, Inc., a Delaware corporation, Southridge LLC,
a Connecticut limited liability company, G-Soft Limited, a Hong Kong
corporation, and those persons who are the capital stock holders of G-Soft whose
names are listed on Exhibits A of the Exchange Agreement, together with other
exchange agreements for the issuance of the Series P Preferred
Stock.
  “Issuance Date” means
the earliest date on which the Purchasers receive shares of the Preferred Stock,
regardless of the number of certificates which may be issued to evidence such
Preferred Stock.
  “Junior Securities”
means the Common Stock and all other equity securities of the Company except for
the Company’s Series A Convertible Preferred Stock.
   10
  “Per Share Market
Value” means on any particular date (a) the closing bid price per share
of the Common Stock on such date on the OTC BB or other principal stock exchange
or quotation system on which the Common Stock is then listed or quoted or if
there is no such price on such date, then the closing bid price on such exchange
or quotation system on the date nearest preceding such date, or (b) if the
Common Stock is not listed then on the OTC BB or any stock exchange or quotation
system, the closing bid price for a share of Common Stock in such other
over-the-counter market, as reported by the Nasdaq Stock Market or in the
National Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices at the close of business on such
date, or (c) if the Common Stock is not then reported by the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices, then the average of the “Pink Sheet” quotes for
the relevant conversion period, as determined in good faith by the holder, or
(d) if the Common Stock is not then publicly traded the fair market value of a
share of Common Stock as determined by an Appraiser selected in good faith by
the holders of a majority in interest of the shares of the Preferred Stock;
provided, however, that the Company, after receipt of the determination by such
Appraiser, shall have the right to select an additional Appraiser, in which
case, the fair market value shall be equal to the average of the determinations
by each such Appraiser.
  “Person” means an
individual or a corporation, partnership, trust, incorporated or unincorporated
association, joint venture, limited liability company, joint stock company,
government (or an agency or political subdivision thereof) or other entity of
any kind.
  “Redemption Price”
shall be equal to the Stated Value of such shares of Preferred Stock plus all
accrued dividends thereon at any time after the balance in the Escrow Account
equals or exceeds the stated value of the outstanding shares of the Preferred
Stock.
  “Trading Day” means
(a) a day on which the Common Stock is traded on the OTC BB or other stock
exchange or market on which the Common Stock has been listed, or (b) if the
Common Stock is not quoted on the OTC Bulletin Board, a day on which the Common
Stock is quoted in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices).
  “Transaction
Documents” means collectively, the Exchange Agreement and the exhibits
and schedules thereto.
  “Underlying Shares”
means the number of shares of Common Stock into which the Shares are convertible
in accordance with the terms hereof and the Securities Purchase Agreement and
shares of Common Stock issuable on account of dividends on or with respect to
the Preferred Stock.
   11
  EXHIBIT
A
  NOTICE
OF CONVERSION
  (To be
executed by the registered holder
 to
convert shares of Preferred Stock)
  The
undersigned hereby elects to convert the number of shares of Series P 9%
Convertible Preferred Stock indicated below, into shares of Class A Common
Stock, par value $.0001 per share (the “Common Stock”), of
Fonix Corporation (the “Company”) according
to the conditions hereof, as of the date written below.  If shares are
to be issued in the name of a person other than undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith.  No fee will be charged to the holder for any
conversion, except for such transfer taxes, if any.
  Conversion
calculations:
  Date
      to effect conversionNumber
      of shares of Preferred Stock to be convertedNumber
      of shares of Common Stock to be issuedApplicable
      conversion priceName
      of HolderAddress
      of Holder
 
  Authorized
      Signature






A-1