**CERTIFICATE
      OF AMENDMENT**


**OF**


**CERTIFICATE
      OF INCORPORATION**


**OF**


**O2DIESEL
      CORPORATION**





O2Diesel
      Corporation, a corporation organized and existing under and by virtue of the
      General Corporation Law of the State of Delaware (the "Corporation"), hereby
      certifies, as follows:





1.  At
      a
      meeting of the Board of Directors of the Corporation on May 26, 2006, at which
      a
      quorum was present and voting, pursuant to Sections 141 and 242 of the General
      Corporation Law of the State of Delaware, the directors voted unanimously to
      amend the Corporation’s Certificate of Incorporation to increase the number of
      shares of common stock the Corporation is authorized to issue, subject to
      approval of the amendment by the stockholders of the Corporation.





2.  The
      proposed amendment was approved by the stockholders of the Corporation on July
      6, 2006 at the annual meeting of the Corporation conducted in accordance with
      Sections 212 and 242 of the General Corporation Law of the State of
      Delaware.





3.  Therefore,
      the Corporation’s Certificate of Incorporation is hereby amended by deleting the
      first paragraph of the existing Article IV and substituting in its place the
      following paragraph:





The
      total
      number of shares that the Corporation is authorized to issue is 155,000,000,
      consisting of 135,000,000 shares of common stock having a par value of $0.0001
      per share (“Common Stock”) and 20,000,000 shares of preferred stock having a par
      value of $0.0001 per share (“Preferred Stock”). The Common Stock is subject to
      the rights and preferences of the Preferred Stock as set forth
      below.





IN
      WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to
      be
      signed by its duly authorized officer this 20th day of July, 2006.








**O2DIESEL
      CORPORATION**





By:
 /s/
                David H. ShipmanDavid
                H. ShipmanChief
                Financial Officer







**CERTIFICATE
      OF INCORPORATION OF**





**O2DIESEL
      DELAWARE CORPORATION**





The
      undersigned, acting as incorporator of the above-named Corporation, adopts
      the
      following Certificate of Incorporation of such Corporation pursuant to the
      General Corporation Law of Delaware (“DGCL”).





**ARTICLE
      I**





The
      name
      of the company is “O2Diesel Delaware Corporation” (the
“Corporation”).





**ARTICLE
      II**





The
      address, including street number and zip code, of the initial registered office
      of the Corporation and the name of its initial registered agent at such address
      is:





Corporation
      Service Company


2711
      Centerville Road


Wilmington,
      Delaware 19808





**ARTICLE
      III**





The
      purpose of the Corporation is to engage in any lawful act or activity for which
      corporations may be organized under DGCL.





**ARTICLE
      IV**





The
      total
      number of shares that the Corporation is authorized to issue is 120,000,000,
      consisting of 100,000,000 shares of common stock having a par value of $0.0001
      per share (“Common Stock”) and 20,000,000 shares of preferred stock having a par
      value of $0.0001 per share (“Preferred Stock”). The Common Stock is subject to
      the rights and preferences of the Preferred Stock as set forth
      below.





4.1  Common
      Stock .
      The
      Common Stock shall be non-assessable and shall not have cumulative voting rights
      or pre-emptive rights.





4.2  Preferred
      Stock .
      The
      Preferred Stock may be issued from time to time in one or more classes and
      one
      or more series within such classes in any manner permitted by law and the
      provisions of this Certificate of Incorporation, as determined from time to
      time
      by the Board of Directors (the
      “ Board ”
and
      each a “ Director ”) and
      stated in the resolution or resolutions providing for its issuance, prior to
      the
      issuance of any shares. The Board shall have the authority to fix and determine
      and to amend the designation, preferences, limitations and relative rights
      of
      the shares (including, without limitation, such matters as dividends,
      redemption, liquidation, conversion and voting) of any class or series that
      is
      wholly unissued or to be established. Unless otherwise specifically provided
      in
      the resolution establishing any class or series, the Board shall further have
      the authority, after the issuance of shares of a class or series whose number
      it
      has designated, to amend the resolution establishing such class or series to
      decrease the number of shares of that class or series, but not below the number
      of shares of such class or series then outstanding.








**DEFINITIONS**





For
      purposes of Section 4.3 and 4.4, the following definitions shall
      apply:





“ *Change
      of Control”* means
      the acquisition, directly or indirectly, by any Person of ownership of, or
      the
      power to direct the exercise of voting power with respect to, a majority of
      the
      issued and outstanding voting shares of the Corporation.





“ *Holder* ”
or
      “ *Holders* ”
means
      the holder of Preferred Stock.





*“Issuance
      Date”* means
      the date of the Closing under the Series A Purchase Agreement (as defined below)
      with respect to the initial issuance of the Series A Preferred Stock (as
      herein defined) or the Series B Purchase Agreement (as defined below) with
      respect to the initial issuance of Series B Preferred Stock (as herein
      defined).





*“Per
      Share Market Value”* of
      the
      Common Stock means on any particular date (a) the last sale price of shares
      of Common Stock on such date or, if no such sale takes place on such date,
      the
      last sale price on the most recent prior date, in each case as officially
      reported on the principal national securities exchange on which the Common
      Stock
      is then listed or admitted to trading, or (b) if the Common Stock is not
      then listed or admitted to trading on any national securities exchange, the
      closing bid price per share as reported by Nasdaq, or (c) if the Common
      Stock is not then listed or admitted to trading on the Nasdaq, the closing
      bid
      price per share of the Common Stock on such date as reported on the OTCBB or
      if
      there is no such price on such date, then the last bid price on the date nearest
      preceding such date, or (d) if the Common Stock is not quoted on the OTCBB,
      the closing bid price for a share of Common Stock on such date in the
      over-the-counter market as reported by the Pinksheets LLC (or similar
      organization or agency succeeding to its functions of reporting prices) or
      if
      there is no such price on such date, then the last bid price on the date nearest
      preceding such date, or (e) if the Common Stock is no longer publicly
      traded, the fair market value of a share of the Common Stock as determined
      by an
      Appraiser (as herein defined) selected in good faith by the Holders of a
      majority of the Series A Preferred Stock; provided , however ,
      that
      the Corporation, 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.





*“Series
      A Purchase Agreement”* means
      the Convertible Preferred Stock Purchase Agreement dated March 3, 2004, by
      and
      between the Corporation and the purchaser set forth in Schedule 1 thereto
      (the “Series A Purchaser”).








*“Series
      B Purchase Agreement”* means
      the Convertible Preferred Stock Purchase Agreement, as amended, dated March
      26,
      2004, by and between the Corporation and the purchaser set forth in
      Schedule 1 thereto (the “Series B Purchaser”).





*“Trading
      Day”* means
      (a) a day on which the Common Stock is quoted on the OTCBB or principal
      stock exchange on which the Common Stock has been listed, or (b) if the
      Common Stock is not quoted on the OTCBB or any stock exchange, a day on which
      the Common Stock is quoted in the over-the-counter market, as reported by the
      National Association of Securities Dealers, Inc. (“NASD”), or (c) if the
      Common Stock is not quoted on the NASD, a day on which the Common Stock is
      quoted in the over-the-counter market as reported by the Pinksheets LLC (or
      any
      similar organization or agency succeeding its functions of reporting
      prices).





4.3  Series
      A Preferred Stock .
      Eight
      hundred thousand (800,000) shares of Preferred Stock is designated as the Series
      A 0% Convertible Preferred Stock (the “Series A Preferred Stock”) and the stated
      value shall be U.S. ten dollars ($10.00) per share (the “Series A Stated
      Value”). The rights, preferences, privileges, restrictions and other matters
      relating to the Series A Preferred Stock are as follows:





4.3.1  Dividends .
      The
      Holder of the shares of Series A Preferred Stock as they appear on the
      stock records of the Corporation shall not be entitled to receive any dividends.





4.3.2  Conversion .





(a)  Each
      outstanding share of Series A Preferred Stock shall be convertible into the
      number of shares of Common Stock determined by dividing the Series A Stated
      Value by the Series A Conversion Price as defined below, and subject to the
      Limitation on Conversion in Section 4.13 of the Series A Purchase
      Agreement, at the option of the Holder in whole or in part, at any time
      commencing on or after the Issuance Date; provided that, any conversion under
      this Section 4.3.2(a) shall be for a minimum Series A Stated Value of
      $10,000.00 of Series A Preferred Stock. The Holder shall effect conversions
      by sending the Notice of Conversion in the manner set forth in
      Section 4.3.2(j). Each Notice of Conversion shall specify the Series A
      Stated Value of Series A Preferred Stock to be converted. The Conversion
      Date shall be on the date the Notice of Conversion is delivered pursuant to
      Section 4.3.2(j) hereof. Except as provided herein, each Notice of Conversion,
      once given, shall be irrevocable. Upon the entire conversion of the
      Series A Preferred Stock or the redemption of the Series A Preferred
      Stock, the certificates for such Series A Preferred Stock shall be returned
      to the Corporation for cancellation.





(b)  Not
      later
      than ten (10) business days after the Conversion Date, the Corporation will
      deliver to the Holder (i) a certificate or certificates representing the
      number of shares of Common Stock being acquired upon the conversion of the
      Series A Preferred Stock and (ii) once received from the Corporation,
      the Series A Preferred Stock in principal amount equal to the principal
      amount of the Series A Preferred Stock not converted; provided , however ,
      that
      the Corporation shall not be obligated to issue certificates evidencing the
      shares of Common Stock issuable upon conversion of any Series A Preferred
      Stock until the Series A Preferred Stock are either delivered for
      conversion to the Corporation or any transfer agent for the Series A
      Preferred Stock or Common Stock, or the Holder notifies the Corporation that
      such Series A Preferred Stock certificates have been lost, stolen or
      destroyed and provides an agreement reasonably acceptable to the Corporation
      to
      indemnify the Corporation from any loss incurred by it in connection therewith.
      In the case of a conversion pursuant to a Notice of Conversion, if such
      certificate or certificates are not delivered by the date required under this
      Section 4.3.2(b), the Holder shall be entitled, by providing written notice
      to the Corporation at any time on or before its receipt of such certificate
      or
      certificates thereafter, to rescind such conversion, in which event the
      Corporation shall immediately return the Series A Preferred Stock tendered
      for conversion.








(c)  Intentionally
      omitted.





(d)  (i)  The
      Series A Conversion Price for each share of Series A Preferred Stock in
      effect on any Conversion Date shall be the **lesser** of (a)
      four US dollars ($4.00) (the “Series A Fixed Conversion Price”) or (b) eighty
      percent (80%) of the lowest closing bid price for the Common Stock in the ten
      (10) business days preceding the date of conversion, but in no event less than
      twenty five percent (25%) of the Series A Fixed Conversion Price (the “Series A
      Floating Conversion Price”). For purposes of determining the closing bid price
      on any day, reference shall be to the closing bid price for a share of Common
      Stock on such date on the NASD OTC Bulletin Board, as reported on Bloomberg,
      L.P. (or similar organization or agency succeeding to its functions of reporting
      prices).





(ii)  If
      the
      Corporation, at any time while any Series A Preferred Stock are
      outstanding, (a) shall pay a stock dividend or otherwise make a
      distribution or distributions on shares of its Junior Securities (as defined
      below) payable in shares of its capital stock (whether payable in shares of
      its
      Common Stock or of capital stock of any class), (b) subdivide outstanding
      shares of Common Stock into a larger number of shares, (c) combine
      outstanding shares of Common Stock into a smaller number of shares, or
      (d) issue by reclassification of shares of Common Stock any shares of
      capital stock of the Corporation, the Series A Fixed Conversion Price designated
      in Section 4.3.2(d)(i) shall be multiplied by a fraction of which the
      numerator shall be the number of shares of Common Stock of the Corporation
      outstanding before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding after such event. Any adjustment made
      pursuant to this Section 4.3.2(d)(ii) shall become effective immediately
      after the record date for the determination of stockholders entitled to receive
      such dividend or distribution and shall become effective immediately after
      the
      effective date in the case of a subdivision, combination or
      reclassification.





(iii)  Intentionally
      omitted.





(iv)  If
      the
      Corporation, at any time while Series A Preferred Stock are outstanding,
      shall distribute to all holders of Common Stock (and not to Holders of
      Series A Preferred Stock) evidences of its indebtedness or assets or rights
      or warrants to subscribe for or purchase any security then in each such case
      the
      Series A Conversion Price at which each Series A Preferred Stock shall
      thereafter be convertible shall be determined by multiplying the Series A Fixed
      Conversion Price in effect immediately prior to the record date fixed for
      determination of stockholders entitled to receive such distribution by a
      fraction of which the denominator shall be the per share market value of Common
      Stock determined as of the record date mentioned above, and of which the
      numerator shall be such per share market value of the Common Stock on such
      record date less the then fair market value at such record date of the portion
      of such assets or evidence of indebtedness so distributed applicable to one
      outstanding share of Common Stock as determined by the Board in good faith; provided , however that in
      the event of a distribution exceeding ten percent (10%) of the net assets of
      the
      Corporation, such fair market value shall be determined by a nationally
      recognized or major regional investment banking firm or firm of independent
      certified public accountants of recognized standing (which may be the firm
      that
      regularly examines the financial statements of the Corporation) (an “Appraiser”)
      selected in good faith by the Holders of a majority of the principal amount
      of
      the Series A Preferred Stock then outstanding; and provided , further ,
      that
      the Corporation, 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.
      In
      either case the adjustments shall be described in a statement provided to the
      Holder and all other Holders of Series A Preferred Stock of the portion of
      assets or evidences of indebtedness so distributed or such subscription rights
      applicable to one share of Common Stock. Such adjustment shall be made whenever
      any such distribution is made and shall become effective immediately after
      the
      record date mentioned above.








(v)  All
      calculations under this Section 4.3.2 shall be made to the nearest 1/1000th
      of a
      cent or the nearest 1/1000th of a share, as the case may be. Any calculation
      over .005 shall be rounded up to the next cent or share and any calculation
      less
      than .005 shall be rounded down to the previous cent or share.





(vi)  In
      the
      event the Series A Fixed Conversion Price is not adjusted pursuant to
      Section 4.3.2(d)(ii), (iv), or (v), within ten (10) business days following
      the occurrence of an event described therein, and is still not adjusted
      following thirty (30) days notice from the Holder to the Corporation requesting
      that such adjustment be made, then the Holder shall have the right to require
      the Corporation to redeem all of the Holder’s Series A Preferred Stock at
      the Series A Stated Value of such Holder’s Series A Preferred Stock, and
      the Corporation shall pay such amount to the Holder pursuant to the written
      instructions provided by the Holder.





(vii)  Whenever
      the Series A Fixed Conversion Price is adjusted pursuant to
      Section 4.3.2(d)(ii), (iv) or (v), the Corporation shall within two (2)
      days after the determination of the new Series A Fixed Conversion Price mail
      and
      fax to the Holder and to each other Holder of Series A Preferred Stock, a
      notice setting forth the Series A Fixed Conversion Price after such adjustment
      and setting forth a brief statement of the facts requiring such
      adjustment.





(viii)  In
      case
      of any reclassification of the Common Stock, any consolidation or merger of
      the
      Corporation with or into another person, the sale or transfer of all or
      substantially all of the assets of the Corporation or any compulsory share
      exchange pursuant to which the Common Stock is converted into other securities,
      cash or property, then each holder of Series A Preferred Stock then
      outstanding shall have the right thereafter to convert such Series A
      Preferred Stock only into the shares of stock and other securities and property
      receivable upon or deemed to be held by holders of Common Stock following such
      reclassification, consolidation, merger, sale, transfer or share exchange
      (except in the event the property is cash, then the Holder shall have the right
      to convert the Series A Preferred Stock and receive cash in the same manner
      as other stockholders), and the Holder shall be entitled upon such event to
      receive such amount of securities or property as the shares of the Common Stock
      into which such Series A Preferred Stock could have been converted
      immediately prior to such reclassification, consolidation, merger, sale,
      transfer or share exchange would have been entitled. The terms of any such
      consolidation, merger, sale, transfer or share exchange shall include such
      terms
      so as to continue to give to the holder the right to receive the securities
      or
      property set forth in this Section 4.3.2(d)(viii) upon any conversion
      following such consolidation, merger, sale, transfer or share exchange. This
      provision shall similarly apply to successive reclassifications, consolidations,
      mergers, sales, transfers or share exchanges. Notwithstanding the foregoing,
      in
      the event of any merger, consolidation or change of control of the Corporation,
      then as provided in the Series A Purchase Agreement, the Corporation shall
      have
      the right to demand that the Holder convert all Series A Preferred Stock then
      held by the Series A Purchaser into Common Stock upon the terms and conditions
      set forth in this Certificate of Incorporation. If the Holder does not comply
      with such demand, the Corporation may redeem all Series A Preferred Stock held
      by the Series A Purchaser at their Series A Stated Value.








(ix)  If:





(A)  the
      Corporation shall declare a dividend (or any other distribution) on its Common
      Stock; or





(B)  the
      Corporation shall declare a special nonrecurring cash dividend on or a
      redemption of its Common Stock; or





(C)  the
      Corporation shall authorize the granting to all holders of the Common Stock
      rights or warrants to subscribe for or purchase any shares of capital stock
      of
      any class or of any rights; or





(D)  the
      approval of any stockholders of the Corporation shall be required in connection
      with any reclassification of the Common Stock of the Corporation (other than
      a
      subdivision or combination of the outstanding shares of Common Stock), any
      consolidation or merger to which the Corporation is a party, any sale or
      transfer of all or substantially all of the assets of the Corporation, or any
      compulsory share exchange whereby the Common Stock is converted into other
      securities, cash or property; or





(E)  the
      Corporation shall authorize the voluntary or involuntary dissolution,
      liquidation or winding-up of the affairs of the Corporation;





then
      the
      Corporation shall cause to be filed at each office or agency maintained for
      the
      purpose of conversion of Series A Preferred Stock, and shall cause to be
      mailed and faxed to the Holders of Series A Preferred Stock at their last
      addresses as it shall appear upon the Series A Preferred stock register, at
      least thirty (30) calendar days prior to the applicable record or effective
      date
      hereinafter specified, a notice stating (x) the date on which a record is
      to be taken for the purpose of such dividend, distribution, redemption, rights
      or warrants, or if a record is not to be taken, the date as of which the holders
      of Common Stock of record to be entitled to such dividend, distributions,
      redemption, rights or warrants are to be determined, or (y) the date on
      which such reclassification, consolidation, merger, sale, transfer, share
      exchange, dissolution, liquidation or winding-up is expected to become
      effective, and the date as of which it is expected that holders of Common Stock
      of record shall be entitled to exchange their shares of Common Stock for
      securities or other property deliverable upon such reclassification,
      consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
      or winding-up; provided , however ,
      that
      the failure to mail such notice or any defect therein or in the mailing thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice.








(e)  If
      at any
      time conditions shall arise by reason of action or inaction taken by the
      Corporation which in the opinion of the Board are not adequately covered by
      the
      other provisions hereof and which might materially and adversely affect the
      rights of the Holders of Series A Preferred Stock (different than or
      distinguished from the effect generally on rights of holders of any class of
      the
      Corporation’s capital stock), the Corporation shall, at least thirty (30)
      calendar days prior to the effective date of such action, mail and fax a written
      notice to each Holder of Series A Preferred Stock briefly describing the
      action contemplated and the material adverse effects of such action on the
      rights of such Holders and an Appraiser selected by the Holders of majority
      of
      the outstanding Series A Preferred Stock shall give its opinion as to the
      adjustment, if any (not inconsistent with the standards established in this
      Section 4.3), of the Series A Fixed Conversion Price (including, if necessary,
      any adjustment as to the securities into which Series A 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 Series A Preferred
      Stock; provided , however ,
      that
      the Corporation, after receipt of the determination by such Appraiser, shall
      have the right to select an additional Appraiser, in which case the adjustment
      shall be equal to the average of the adjustments recommended by each such
      Appraiser. The Board 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 Series A Fixed 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 Series A Fixed Conversion Price.





(f)  The
      Corporation 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 Series A Preferred Stock as herein provided, free from
      preemptive rights or any other actual contingent purchase rights of persons
      other than the Holders of Series A Preferred Stock, such number of shares
      of Common Stock as shall be issuable (taking into account the adjustments and
      restrictions of Section 4.3.2(d) and Section 4.3.2(e) hereof) upon the
      conversion of all outstanding shares of Series A Preferred Stock. The
      Corporation covenants that all shares of Common Stock that shall be so issuable
      shall, upon issue, be duly and validly authorized, issued and fully paid and
      nonassessable.





(g)  No
      fractional shares of Common Stock shall be issuable upon a conversion hereunder
      and the number of shares to be issued shall be rounded up to the nearest whole
      share. If a fractional share interest arises upon any conversion hereunder,
      the
      Corporation shall eliminate such fractional share interest by issuing the Holder
      an additional full share of Common Stock.








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





(i)  Series A
      Preferred Stock converted into Common Stock shall be canceled upon
      conversion.





(j)  Each
      Notice of Conversion shall be given by facsimile to the Corporation no later
      than 4:00 pm New York time. Any such notice shall be deemed given and effective
      upon the transmission of such facsimile at the facsimile telephone number
      specified in the Series A Purchase Agreement. In the event that the Corporation
      receives the Notice of Conversion after 4:00 p.m. New York time, the Conversion
      Date shall be deemed to be the next business day. In the event that the
      Corporation receives the Notice of Conversion after the end of the business
      day,
      notice will be deemed to have been given the next business day.





4.3.3  Events
      Of Default And Remedies .





(a)  “Event
      of
      Default”, wherever used herein, means any one of the following
      events:





(i)  the
      Corporation shall fail to observe or perform any material covenant, agreement
      or
      warranty contained in this Certificate of Incorporation, and such failure shall
      not have been remedied within ten (10) business days after the date on which
      written notice of such failure shall have been given;





(ii)  the
      occurrence of any material breach or event of default by the Corporation under
      the Series A Purchase Agreement or any other Transaction Document (as defined
      in
      the Series A Purchase Agreement) and such failure or breach shall not have
      been
      remedied within the applicable cure period provided for therein, if any;





(iii)  the
      Corporation or any of its subsidiaries shall commence a voluntary case under
      the
      United States Bankruptcy Code as now or hereafter in effect or any successor
      thereto (the “Bankruptcy Code”); or an involuntary case is commenced against the
      Corporation under the Bankruptcy Code and the Corporation fails to pursue
      dismissal of the case within sixty (60) days after commencement of the case;
      or
      the Corporation commences any other proceeding under any reorganization,
      arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
      or
      liquidation or similar law of any jurisdiction whether now or hereafter in
      effect relating to the Corporation or there is commenced against the Corporation
      any such proceeding and the Corporation fails to pursue dismissal of the case
      within sixty (60) days after commencement of the case; or the Corporation
      suffers any appointment of any custodian or the like for it or any substantial
      part of its property and the Corporation fails to pursue dismissal of the
      custodian within sixty (60) days after the appointment; or the Corporation
      makes
      a general assignment for the benefit of creditors; or any corporate or other
      action is taken by the Corporation for the purpose of effecting any of the
      foregoing;








(iv)  trading
      in the common stock of the Corporation shall have been suspended, delisted,
      or
      otherwise ceased by the Securities and Exchange Commission (“ SEC ”) or
      the
      NASD or other exchange or the Nasdaq (whether the National Market or otherwise),
      and trading is not reinstated within thirty (30) Trading Days, except for (i)
      any suspension of trading of limited duration solely to permit dissemination
      of
      material information regarding the Corporation, and trading is reinstated
      promptly after such dissemination and (ii) any general suspension of trading
      for
      all companies trading on such exchange or market or OTCBB; or





(v)  the
      Corporation shall issue a press release, or otherwise make publicly known,
      that
      it is not honoring properly executed Notice of Conversions for any reason
      whatsoever.





(b)  If
      any
      Event of Default occurs and continues, beyond any cure period, if any, then
      so
      long as such Event of Default shall then be continuing any Holder may, by notice
      to the Corporation, demand redemption of the shares of Series A Preferred
      Stock held by such Holder at the Series A Redemption Price (as defined herein),
      and such Holder may immediately and without expiration of any grace period
      enforce any and all of its rights and remedies hereunder and all other remedies
      available to it under applicable law. Such declaration may be rescinded and
      annulled by such Holder at any time prior to payment hereunder. No such
      rescission or annulment shall affect any subsequent Event of Default or impair
      any right consequent thereon. This shall include, but not be limited to the
      right to temporary, preliminary and permanent injunctive relief without the
      requirement of posting any bond or undertaking.





(c)  Such
      Holder may thereupon proceed to protect and enforce its rights either by suit
      in
      equity, or by action at law, or by other appropriate proceedings whether for
      the
      specific performance (to the extent permitted by law) of any covenant or
      agreement contained in this Certificate of Incorporation or in aid of the
      exercise of any power granted in this Certificate of Incorporation, and proceed
      to enforce the redemption of any of the Series A Preferred Stock held by
      it, and to enforce any other legal or equitable right of such
      Holder.





(d)  To
      effectuate the terms and provisions of this Certificate of Incorporation, the
      Holder may send notice of any default to the Attorney-in-Fact (as defined in
      the
      Series A Purchase Agreement) and send a copy of such notice to the Corporation
      and its counsel, simultaneously, and request the Attorney-in-Fact, to comply
      with the terms of this Certificate of Incorporation and the Series A Purchase
      Agreement and all agreements entered into pursuant to the Series A Purchase
      Agreement on behalf of the Corporation.





4.3.4  Redemption





(a)  Except
      as
      provided in this Section 4.3.4 (a), neither the Holder nor the Corporation
      may
      demand that the Series A Preferred Stock be redeemed. Until all of the Series
      A
      Preferred Stock has been converted, in the event that the Corporation engages
      in
      a single transaction or a series of related transactions that cause it to
      (i) consolidate with or merge with or into any other Person,
      (ii) permit any other Person to consolidate with or merge into it, or (iii)
      undergo a Change in Control, then at the option of the Corporation exercisable
      by giving thirty (30) days written notice to the Holder, the Corporation may
      demand that the Holder convert all shares of Series A Preferred Stock then
      held
      by the Holder into Common Stock upon the terms and conditions set forth in
      this
      Certificate of Incorporation. If the Holder does not comply with such demand,
      the Corporation may redeem all Series A Preferred Stock held by the Series
      A
      Purchaser at their Series A Stated Value (the “Series A Redemption Price”). The
      Corporation is not obligated to provide for redemption of the Series A
      Preferred Stock through a sinking fund.








(b)  Shares
      of
      Series A Preferred Stock which have been redeemed or converted shall be
      deemed retired pursuant to the DGCL and shall thereafter resume the status
      of
      authorized and unissued shares of Preferred Stock, undesignated as to series,
      and may be redesignated and reissued as part of any new series of Preferred
      Stock other than Series A Preferred Stock.





(c)  No
      redemption shall be made and no sum set aside for such redemption at any time
      that the terms or provisions of any indenture or agreement of the Corporation,
      including any agreement relating to indebtedness, specifically prohibits such
      redemption or setting aside or provides that such redemption or setting aside
      would constitute a breach or default thereunder (after notice or lapse of time
      or both), except with the written consent of the lender or other parties to
      said
      agreement as the case may be.





(d)  If
      any
      redemption shall at any time be prohibited by the DGCL, the same shall be
      deferred until such time as the redemption can occur in full compliance with
      such statute.





(e)  In
      the
      event the Corporation shall redeem shares of Series A Preferred Stock as
      provided herein, notice of such redemption shall be given by first class mail,
      postage prepaid, or by confirmed facsimile transmission, not less than thirty
      (30) business days prior to the date fixed by the Board for redemption to each
      holder of Series A Preferred Stock at the address that appears on the
      Corporation’s stock record books; provided , however ,
      that no
      failure to provide such notice nor any defect therein shall affect the validity
      of the redemption proceeding except as to the holder to whom the Corporation
      has
      failed to send such notice or whose notice was defective. Each notice shall
      state (i) the redemption date, (ii) the number of shares of
      Series A Preferred Stock to be redeemed; (iii) the Series A Redemption
      Price; and (iv) the place or places where certificates for shares of
      Series A Preferred Stock are to be surrendered for payment. When notice has
      been provided as aforesaid then from and after the redemption date (unless
      default shall be made by the Corporation in providing money for the payment
      of
      the Series A Redemption Price of the shares called for redemption) said shares
      shall no longer be deemed to be outstanding and all rights of the holders
      thereof shall cease (other than the right to receive the Series A Redemption
      Price or Common Stock with respect to converted Series A Preferred Stock).
      Upon
      surrender of the certificates for Series A Preferred Stock accompanied by
      appropriate stock powers, the shares shall be redeemed by the Corporation at
      the
      Series A Redemption Price.








4.3.5  Rank .
      The
      Series A Preferred Stock shall, as to redemptions and the distribution of
      assets upon liquidation, dissolution or winding up of the Corporation, rank
      (i) prior to the Corporation’s Common Stock; (ii) prior to any class
      or series of capital stock of the Corporation hereafter created that, by its
      terms, ranks junior (“Junior Securities”) to the Series A Preferred Stock;
      (iii) junior to any class or series of capital stock of the Corporation
      hereafter created which by its terms ranks senior (“Senior Securities”) to the
      Series A Preferred Stock; and (iv) pari passu with any other series of
      preferred stock of the Corporation hereafter created which by its terms ranks
      on
      a parity (“Pari Passu Securities”) with the Series A Preferred
      Stock.





4.3.6  Liquidation
      Preference .
      If the
      Corporation shall commence a voluntary case under the U.S. Federal bankruptcy
      laws or any other applicable bankruptcy, insolvency or similar law, or consent
      to the entry of an order for relief in an involuntary case under any law or
      to
      the appointment of a receiver, liquidator, assignee, custodian, trustee,
      sequestrator (or other similar official) of the Corporation or of any
      substantial part of its property, or make an assignment for the benefit of
      its
      creditors, or admit in writing its inability to pay its debts generally as
      they
      become due, or if a decree or order for relief in respect of the Corporation
      shall be entered by a court having jurisdiction in the premises in an
      involuntary case under the U.S. Federal bankruptcy laws or any other applicable
      bankruptcy, insolvency or similar law resulting in the appointment of a
      receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
      similar official) of the Corporation or of any substantial part of its property,
      or ordering the winding up or liquidation of its affairs, and any such decree
      or
      order shall be unstayed and in effect for a period of sixty (60) consecutive
      days and, on account of any such event, the Corporation shall liquidate,
      dissolve or wind up, or if the Corporation shall otherwise liquidate, dissolve
      or wind up, including, but not limited to, the sale or transfer of all or
      substantially all of the Corporation’s assets in one transaction or in a series
      of related transactions (a “Liquidation Event”), no distribution shall be made
      to the holders of any shares of capital stock of the Corporation (other than
      Senior Securities and Pari Passu Securities) upon liquidation, dissolution
      or
      winding up unless prior thereto the Holders of shares of Series A Preferred
      Stock shall have received the Liquidation Preference (as defined below) with
      respect to each share. If, upon the occurrence of a Liquidation Event, the
      assets and funds available for distribution among the Holders of the
      Series A Preferred Stock and Holders of Pari Passu Securities shall be
      insufficient to permit the payment to such holders of the preferential amounts
      payable thereon, then the entire assets and funds of the Corporation legally
      available for distribution to the Series A Preferred Stock and the Pari
      Passu Securities shall be distributed ratably among such shares in proportion
      to
      the ratio that the Liquidation Preference payable on each such share bears
      to
      the aggregate Liquidation Preference payable on all such shares. The purchase
      or
      redemption by the Corporation of stock of any class, in any manner permitted
      by
      law, shall not, for the purposes hereof, be regarded as a liquidation,
      dissolution or winding up of the Corporation. Neither the consolidation or
      merger of the Corporation with or into any other entity nor the sale or transfer
      by the Corporation of substantially all of its assets shall, for the purposes
      hereof, be deemed to be a liquidation, dissolution or winding up of the
      Corporation. The “Liquidation Preference” with respect to a share of
      Series A Preferred Stock means an amount equal to the Series A Stated Value
      thereof. The Liquidation Preference with respect to any Pari Passu Securities
      shall be as set forth in the Certificate of Incorporation filed in respect
      thereof.








4.3.7  Voting
      Rights .
      The
      Holders of the Series A Preferred Stock have no voting power whatsoever,
      except as provided by the DGCL. To the extent that under the DGCL the vote
      of
      the Holders of the Series A Preferred Stock, voting separately as a class
      or series, as applicable, is required to authorize a given action of the
      Corporation, the affirmative vote or consent of the Holders of at least a
      majority of the then outstanding shares of the Series A Preferred Stock
      represented at a duly held meeting at which a quorum is present or by written
      consent of the Holders of at least a majority of the then outstanding shares
      of
      Series A Preferred Stock (except as otherwise may be required under the
      DGCL) shall constitute the approval of such action by the class. To the extent
      that under the DGCL Holders of the Series A Preferred Stock are entitled to
      vote on a matter with holders of Common Stock, voting together as one class,
      each share of Series A Preferred Stock shall be entitled to a number of
      votes equal to the number of shares of Common Stock into which it is then
      convertible (subject to the limitations contained in Section 4.3.2) using the
      record date for the taking of such vote of stockholders as the date as of which
      the Series A Conversion Price is calculated.





(a)  Miscellaneous .
      If any
      shares of Series A Preferred Stock are converted pursuant to Section 4.3.2,
      the shares so converted shall be canceled, shall return to the status of
      authorized, but unissued preferred stock of no designated series.





(b)  Upon
      receipt by the Corporation of (i) evidence of the loss, theft, destruction
      or mutilation of any Series A Preferred Stock certificate(s) and
      (ii) (y) in the case of loss, theft or destruction, of indemnity
      (without any bond or other security) reasonably satisfactory to the Corporation,
      or (z) in the case of mutilation, upon surrender and cancellation of the
      Series A Preferred Stock certificate(s), the Corporation shall execute and
      deliver new Series A Preferred Stock certificate(s) of like tenor and date.
      However, the Corporation shall not be obligated to reissue such lost or stolen
      Series A Preferred Stock certificate(s) if the Holder contemporaneously requests
      the Corporation to convert such Series A Preferred Stock.




(c)  Upon
      submission of a Notice of Conversion by a Holder of Series A Preferred
      Stock, (i) the shares covered thereby shall be deemed converted into shares
      of Common Stock and (ii) the Holder’s rights as a Holder of such converted
      shares of Series A Preferred Stock shall cease and terminate, excepting
      only the right to receive certificates for such shares of Common Stock and
      to
      any remedies provided herein or otherwise available at law or in equity to
      such
      Holder because of a failure by the Corporation to comply with the terms of
      this
      Certificate of Incorporation. Notwithstanding the foregoing, if a Holder has
      not
      received certificates for all shares of Common Stock prior to the tenth
      (10 th )
      business day after the expiration of the delivery period with respect to a
      conversion of Series A Preferred Stock for any reason, then (unless the
      Holder otherwise elects to retain its status as a holder of Common Stock by
      so
      notifying the Corporation within five (5) business days after the expiration
      of
      such ten (10) business day period) the Holder shall regain the rights of a
      Holder of Series A Preferred Stock with respect to such unconverted shares
      of Series A Preferred Stock and the Corporation shall, as soon as
      practicable, return such unconverted shares to the Holder. In all cases, the
      Holder shall retain all of its rights and remedies for the Corporation’s failure
      to convert Series A Preferred Stock.





(d)  The
      remedies provided in this Certificate of Incorporation shall be cumulative
      and
      in addition to all other remedies available under this Certificate of
      Incorporation, at law or in equity (including a decree of specific performance
      and/or other injunctive relief), and nothing herein shall limit a Holder’s right
      to pursue actual damages for any failure by the Corporation to comply with
      the
      terms of this Certificate of Incorporation. The Corporation acknowledges that
      a
      breach by it of its obligations hereunder will cause irreparable harm to the
      Holders of Series A Preferred Stock and that the remedy at law for any such
      breach may be inadequate. The Corporation therefore agrees, in the event of
      any
      such breach or threatened breach, that the Holders of Series A 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.








(e)  Whenever
      the Corporation is obligated to purchase or redeem a Holder’s Series A Preferred
      Stock, and the Series A Redemption Price is not paid to the Holder by the tenth
      (10 th )
      day
      after the Series A Redemption Price is due and payable to such Holder, the
      Corporation shall thereafter pay interest to such Holder on the unpaid portion
      of the Series A Redemption Price at the rate of ten percent (10%) per annum,
      compounded annually, until the Series A Redemption Price is paid in
      full.





4.4  Series
      B Preferred Stock .
      Seven
      hundred and fifty thousand (750,000) shares of Preferred Stock is designated
      the
      Series B 0% Convertible Preferred Stock (the “Series B Preferred Stock”) and the
      stated value shall be U.S. ten dollars ($10.00) per share (the “Series B Stated
      Value”). The rights, preferences, privileges, restrictions and other matters
      relating to the Series B Preferred Stock are as follows:





4.4.1  Dividends . **** The
      Holder of the shares of Series B Preferred Stock as they appear on the stock
      records of the Corporation shall not be entitled to receive any dividends.





4.4.2  Conversion .





(a)  Each
      outstanding share of Series B Preferred Stock shall be convertible into the
      number of shares of Common Stock determined by dividing the Series B Stated
      Value by the Series B Conversion Price as defined below, and subject to the
      Limitation on Conversion in Section 4.13 of the Series B Purchase Agreement,
      at
      the option of the Holder in whole or in part, at any time commencing on or
      after
      the Issuance Date; provided that, any conversion under this Section 4.4.2(a)
      shall be for a minimum Series B Stated Value of $10,000.00 of Series B Preferred
      Stock. The Holder shall effect conversions by sending the Notice of Conversion
      attached hereto as Appendix I in the manner set forth in Section 4.4.2(j).
      Each
      Notice of Conversion shall specify the Series B Stated Value of Series B
      Preferred Stock to be converted. The Conversion Date shall be on the date the
      Notice of Conversion is delivered pursuant to Section 4.4.2(j) hereof. Except
      as
      provided herein, each Notice of Conversion, once given, shall be irrevocable.
      Upon the entire conversion of the Series B Preferred Stock or the redemption
      of
      the Series B Preferred Stock, the certificates for such Series B Preferred
      Stock
      shall be returned to the Corporation for cancellation.





(b)  Not
      later
      than ten (10) business days after the Conversion Date, the Corporation will
      deliver to the Holder (i) a certificate or certificates representing the number
      of shares of Common Stock being acquired upon the conversion of the Series
      B
      Preferred Stock and (ii) once received from the Corporation, the Series B
      Preferred Stock in principal amount equal to the principal amount of the Series
      B Preferred Stock not converted; provided, however, that the Corporation shall
      not be obligated to issue certificates evidencing the shares of Common Stock
      issuable upon conversion of any Series B Preferred Stock until the Series B
      Preferred Stock are either delivered for conversion to the Corporation or any
      transfer agent for the Series B Preferred Stock or Common Stock, or the Holder
      notifies the Corporation that such Series B Preferred Stock certificates have
      been lost, stolen or destroyed and provides an agreement reasonably acceptable
      to the Corporation to indemnify the Corporation from any loss incurred by it
      in
      connection therewith. In the case of a conversion pursuant to a Notice of
      Conversion, if such certificate or certificates are not delivered by the date
      required under this Section 4.4.2(b), the Holder shall be entitled, by providing
      written notice to the Corporation at any time on or before its receipt of such
      certificate or certificates thereafter, to rescind such conversion, in which
      event the Corporation shall immediately return the Series B Preferred Stock
      tendered for conversion.








(c)  Intentionally
      omitted.





(d)  (i)  The
      Series B Conversion Price for each share of Series B Preferred Stock in effect
      on any Conversion Date shall be the **lesser** of (a)
      three U.S. dollars and sixty-five cents ($3.65) (the “Series B Fixed Conversion
      Price”) or (b) eighty percent (80%) of the lowest closing bid price for the
      Common Stock in the ten (10) business days preceding the date of conversion,
      but
      in no event, less than twenty seven and four tenths percent (27.4%) of the
      Series B Fixed Conversion Price (the “Series B Floating Conversion Price”). For
      purposes of determining the closing bid price on any day, reference shall be
      to
      the closing bid price for a share of Common Stock on such date on the NASD
      OTC
      Bulletin Board, as reported on Bloomberg, L.P. (or similar organization or
      agency succeeding to its functions of reporting prices).





(ii)  If
      the
      Corporation, at any time while any Series B Preferred Stock are outstanding,
      (a)
      shall pay a stock dividend or otherwise make a distribution or distributions
      on
      shares of its Junior Securities payable in shares of its capital stock (whether
      payable in shares of its Common Stock or of capital stock of any class),
      (b) subdivide outstanding shares of Common Stock into a larger number of
      shares, (c) combine outstanding shares of Common Stock into a smaller number
      of
      shares, or (d) issue by reclassification of shares of Common Stock any shares
      of
      capital stock of the Corporation, the Series B Fixed Conversion Price designated
      in Section 4.4.2(d)(i) shall be multiplied by a fraction of which the numerator
      shall be the number of shares of Common Stock of the Corporation outstanding
      before such event and of which the denominator shall be the number of shares
      of
      Common Stock outstanding after such event. Any adjustment made pursuant to
      this
      Section 4.4.2(d)(ii) shall become effective immediately after the record date
      for the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective date
      in
      the case of a subdivision, combination or reclassification.





(iii)  If
      the
      Corporation, at any time while Series B Preferred Stock are outstanding, shall
      distribute to all holders of Common Stock (and not to Holders of Series B
      Preferred Stock) evidences of its indebtedness or assets or rights or warrants
      to subscribe for or purchase any security then in each such case the Series
      B
      Conversion Price at which each Series B Preferred Stock shall thereafter be
      convertible shall be determined by multiplying the Series B Fixed Conversion
      Price in effect immediately prior to the record date fixed for determination
      of
      stockholders entitled to receive such distribution by a fraction of which the
      denominator shall be the per share market value of Common Stock determined
      as of
      the record date mentioned above, and of which the numerator shall be such per
      share market value of the Common Stock on such record date less the then fair
      market value at such record date of the portion of such assets or evidence
      of
      indebtedness so distributed applicable to one outstanding share of Common Stock
      as determined by the Board in good faith; provided, however that in the event
      of
      a distribution exceeding ten percent (10%) of the net assets of the Corporation,
      such fair market value shall be determined by an Appraiser selected in good
      faith by the Holders of a majority of the principal amount of the Series B
      Preferred Stock then outstanding; and provided, further, that the Corporation,
      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. In either
      case the adjustments shall be described in a statement provided to the Holder
      and all other Holders of Series B Preferred Stock of the portion of assets
      or
      evidences of indebtedness so distributed or such subscription rights applicable
      to one share of Common Stock. Such adjustment shall be made whenever any such
      distribution is made and shall become effective immediately after the record
      date mentioned above.








(iv)  All
      calculations under this Section 4.4.2 shall be made to the nearest 1/1000th
      of a
      cent or the nearest 1/1000th of a share, as the case may be. Any calculation
      over .005 shall be rounded up to the next cent or share and any calculation
      less
      than .005 shall be rounded down to the previous cent or share.





(v)  In
      the
      event the Series B Fixed Conversion Price is not adjusted pursuant to Section
      4.4.2(d)(ii), (iv), or (v), within ten (10) business days following the
      occurrence of an event described therein, and is still not adjusted following
      thirty (30) days notice from the Holder to the Corporation requesting that
      such
      adjustment be made, then the Holder shall have the right to require the
      Corporation to redeem all of the Holder’s Series B Preferred Stock at the Series
      B Stated Value of such Holder’s Series B Preferred Stock, and the Corporation
      shall pay such amount to the Holder pursuant to the written instructions
      provided by the Holder.





(vi)  Whenever
      the Series B Fixed Conversion Price is adjusted pursuant to Section
      4.4.2(d)(ii), (iv) or (v), the Corporation shall within two (2) days after the
      determination of the new Series B Fixed Conversion Price mail and fax to the
      Holder and to each other Holder of Series B Preferred Stock, a notice setting
      forth the Series B Fixed Conversion Price after such adjustment and setting
      forth a brief statement of the facts requiring such adjustment.





(vii)  In
      case
      of any reclassification of the Common Stock, any consolidation or merger of
      the
      Corporation with or into another person, the sale or transfer of all or
      substantially all of the assets of the Corporation or any compulsory share
      exchange pursuant to which the Common Stock is converted into other securities,
      cash or property, then each holder of Series B Preferred Stock then outstanding
      shall have the right thereafter to convert such Series B Preferred Stock only
      into the shares of stock and other securities and property receivable upon
      or
      deemed to be held by holders of Common Stock following such reclassification,
      consolidation, merger, sale, transfer or share exchange (except in the event
      the
      property is cash, then the Holder shall have the right to convert the Series
      B
      Preferred Stock and receive cash in the same manner as other stockholders),
      and
      the Holder shall be entitled upon such event to receive such amount of
      securities or property as the shares of the Common Stock into which such Series
      B Preferred Stock could have been converted immediately prior to such
      reclassification, consolidation, merger, sale, transfer or share exchange would
      have been entitled. The terms of any such consolidation, merger, sale, transfer
      or share exchange shall include such terms so as to continue to give to the
      holder the right to receive the securities or property set forth in this Section
      4.4.2(d)(viii) upon any conversion following such consolidation, merger, sale,
      transfer or share exchange. This provision shall similarly apply to successive
      reclassifications, consolidations, mergers, sales, transfers or share exchanges.
      Notwithstanding the foregoing, in the event of any merger, consolidation or
      change of control of the Corporation, then as provided in the Series B Purchase
      Agreement, the Corporation shall have the right to demand that the Holder
      convert all Series B Preferred Stock then held by the Series B Purchaser into
      Common Stock upon the terms and conditions set forth in this Certificate of
      Incorporation. If the Holder does not comply with such demand, the Corporation
      may redeem all Series B Preferred Stock held by the Series B Purchaser at their
      Series B Stated Value.








(viii)  If:





(A)  the
      Corporation shall declare a dividend (or any other distribution) on its Common
      Stock; or





(B)  the
      Corporation shall declare a special nonrecurring cash dividend on or a
      redemption of its Common Stock; or





(C)  the
      Corporation shall authorize the granting to all holders of the Common Stock
      rights or warrants to subscribe for or purchase any shares of capital stock
      of
      any class or of any rights; or





(D)  the
      approval of any stockholders of the Corporation shall be required in connection
      with any reclassification of the Common Stock of the Corporation (other than
      a
      subdivision or combination of the outstanding shares of Common Stock), any
      consolidation or merger to which the Corporation is a party, any sale or
      transfer of all or substantially all of the assets of the Corporation, or any
      compulsory share exchange whereby the Common Stock is converted into other
      securities, cash or property; or





(E)  the
      Corporation shall authorize the voluntary or involuntary dissolution,
      liquidation or winding-up of the affairs of the Corporation; then the
      Corporation shall cause to be filed at each office or agency maintained for
      the
      purpose of conversion of Series B Preferred Stock, and shall cause to be mailed
      and faxed to the Holders of Series B Preferred Stock at their last addresses
      as
      it shall appear upon the Series B Preferred stock register, at least thirty
      (30)
      calendar days prior to the applicable record or effective date hereinafter
      specified, a notice stating (x) the date on which a record is to be taken for
      the purpose of such dividend, distribution, redemption, rights or warrants,
      or
      if a record is not to be taken, the date as of which the holders of Common
      Stock
      of record to be entitled to such dividend, distributions, redemption, rights
      or
      warrants are to be determined, or (y) the date on which such reclassification,
      consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
      or winding-up is expected to become effective, and the date as of which it
      is
      expected that holders of Common Stock of record shall be entitled to exchange
      their shares of Common Stock for securities or other property deliverable upon
      such reclassification, consolidation, merger, sale, transfer, share exchange,
      dissolution, liquidation or winding-up; provided, however, that the failure
      to
      mail such notice or any defect therein or in the mailing thereof shall not
      affect the validity of the corporate action required to be specified in such
      notice.








(e)  If
      at any
      time conditions shall arise by reason of action or inaction taken by the
      Corporation which in the opinion of the Board are not adequately covered by
      the
      other provisions hereof and which might materially and adversely affect the
      rights of the Holders of Series B Preferred Stock (different than or
      distinguished from the effect generally on rights of holders of any class of
      the
      Corporation’s capital stock), the Corporation shall, at least thirty (30)
      calendar days prior to the effective date of such action, mail and fax a written
      notice to each Holder of Series B Preferred Stock briefly describing the action
      contemplated and the material adverse effects of such action on the rights
      of
      such Holders and an Appraiser selected by the Holders of majority of the
      outstanding Series B Preferred Stock shall give its opinion as to the
      adjustment, if any (not inconsistent with the standards established in this
      Section 4.4.2), of the Series B Fixed Conversion Price (including, if necessary,
      any adjustment as to the securities into which Series B 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 Series B Preferred Stock;
      provided, however, that the Corporation, after receipt of the determination
      by
      such Appraiser, shall have the right to select an additional Appraiser, in
      which
      case the adjustment shall be equal to the average of the adjustments recommended
      by each such Appraiser. The Board 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 Series B Fixed 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 Series B Fixed Conversion Price.





(f)  The
      Corporation 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 Series B Preferred Stock as herein provided, free from
      preemptive rights or any other actual contingent purchase rights of persons
      other than the Holders of Series B Preferred Stock, such number of shares of
      Common Stock as shall be issuable (taking into account the adjustments and
      restrictions of Section 4.4.2(d) and Section 4.4.2(e) hereof) upon the
      conversion of all outstanding shares of Series B Preferred Stock. The
      Corporation covenants that all shares of Common Stock that shall be so issuable
      shall, upon issue, be duly and validly authorized, issued and fully paid and
      nonassessable.





(g)  No
      fractional shares of Common Stock shall be issuable upon a conversion hereunder
      and the number of shares to be issued shall be rounded up to the nearest whole
      share. If a fractional share interest arises upon any conversion hereunder,
      the
      Corporation shall eliminate such fractional share interest by issuing the Holder
      an additional full share of Common Stock.








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





(i)  Series
      B
      Preferred Stock converted into Common Stock shall be canceled upon
      conversion.





(j)  Each
      Notice of Conversion shall be given by facsimile to the Corporation no later
      than 4:00 pm New York time. Any such notice shall be deemed given and effective
      upon the transmission of such facsimile at the facsimile telephone number
      specified in the Series B Purchase Agreement. In the event that the Corporation
      receives the Notice of Conversion after 4:00 p.m. New York time, the Conversion
      Date shall be deemed to be the next business day. In the event that the
      Corporation receives the Notice of Conversion after the end of the business
      day,
      notice will be deemed to have been given the next business day.





4.4.3  Events
      of Default and Remedies .





(a)  “Event
      of
      Default”, wherever used herein, means any one of the following
      events:





(i)  the
      Corporation shall fail to observe or perform any material covenant, agreement
      or
      warranty contained in this Series B Preferred Stock Certificate of
      Incorporation, and such failure shall not have been remedied within ten (10)
      business days after the date on which written notice of such failure shall
      have
      been given;





(ii)  the
      occurrence of any material breach or event of default by the Corporation under
      the Series B Purchase Agreement or any other Transaction Document (as defined
      in
      the Series B Purchase Agreement) and such failure or breach shall not have
      been
      remedied within the applicable cure period provided for therein, if any;





(iii)  the
      Corporation or any of its material subsidiaries shall commence a voluntary
      case
      under the Bankruptcy Code; or an involuntary case is commenced against the
      Corporation under the Bankruptcy Code and the Corporation fails to pursue
      dismissal of the case within sixty (60) days after commencement of the case;
      or
      the Corporation commences any other proceeding under any reorganization,
      arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
      or
      liquidation or similar law of any jurisdiction whether now or hereafter in
      effect relating to the Corporation or there is commenced against the Corporation
      any such proceeding and the Corporation fails to pursue dismissal of the case
      within sixty (60) days after commencement of the case; or the Corporation
      suffers any appointment of any custodian or the like for it or any substantial
      part of its property and the Corporation fails to pursue dismissal of the
      custodian within sixty (60) days after the appointment; or the Corporation
      makes
      a general assignment for the benefit of creditors; or any corporate or other
      action is taken by the Corporation for the purpose of effecting any of the
      foregoing;








(iv)  trading
      in the common stock of the Corporation shall have been suspended, delisted,
      or
      otherwise ceased by the SEC or the NASD or other exchange or the Nasdaq (whether
      the National Market or otherwise), and trading is not reinstated within thirty
      (30) Trading Days, except for (i) any suspension of trading of limited duration
      solely to permit dissemination of material information regarding the
      Corporation, and trading is reinstated promptly after such dissemination and
      (ii) any general suspension of trading for all companies trading on such
      exchange or market or OTCBB; or





(v)  the
      Corporation shall issue a press release, or otherwise make publicly known,
      that
      it is not honoring properly executed Notice of Conversions for any reason
      whatsoever.





(b)  If
      any
      Event of Default occurs and continues, beyond any cure period, if any, then
      so
      long as such Event of Default shall then be continuing any Holder may, by notice
      to the Corporation, demand redemption of the shares of Series B Preferred Stock
      held by such Holder at the Redemption Price (as defined herein), and such Holder
      may immediately and without expiration of any grace period enforce any and
      all
      of its rights and remedies hereunder and all other remedies available to it
      under applicable law. Such declaration may be rescinded and annulled by such
      Holder at any time prior to payment hereunder. No such rescission or annulment
      shall affect any subsequent Event of Default or impair any right consequent
      thereon. This shall include, but not be limited to the right to temporary,
      preliminary and permanent injunctive relief without the requirement of posting
      any bond or undertaking.





(c)  Such
      Holder may thereupon proceed to protect and enforce its rights either by suit
      in
      equity, or by action at law, or by other appropriate proceedings whether for
      the
      specific performance (to the extent permitted by law) of any covenant or
      agreement contained in this Certificate of Incorporation or in aid of the
      exercise of any power granted in this Series B Preferred Stock Certificate
      of
      Incorporation, and proceed to enforce the redemption of any of the Series B
      Preferred Stock held by it, and to enforce any other legal or equitable right
      of
      such Holder.





(d)  To
      effectuate the terms and provisions of this Certificate of Incorporation of
      Series B Preferred Stock, the Holder may send notice of any default to the
      Attorney-in-Fact (as defined in the Series B Purchase Agreement) and send a
      copy
      of such notice to the Corporation and its counsel, simultaneously, and request
      the Attorney-in-Fact, to comply with the terms of this Certificate of
      Incorporation of Series B Preferred Stock and the Series B Purchase Agreement
      and all agreements entered into pursuant to the Series B Purchase Agreement
      on
      behalf of the Corporation.





4.4.4  Redemption .





(a)  Except
      as
      otherwise provided in this Section 4.4.4 (a), Section 4.4.3(b) or Section
      4.4.2(d) neither the Holder nor the Corporation may demand that the Series
      B
      Preferred Stock be redeemed. Until all of the Series B Preferred Stock has
      been
      converted, in the event that the Corporation engages in a single transaction
      or
      a series of related transactions that cause it to (i) consolidate with or merge
      with or into any other Person, (ii) permit any other Person to consolidate
      with
      or merge into it, or (iii) undergo a Change in Control, then at the option
      of
      the Corporation exercisable by giving thirty (30) days written notice to the
      Holder, the Corporation may demand that the Holder convert all shares of Series
      B Preferred Stock then held by the Holder into Common Stock upon the terms
      and
      conditions set forth in this Certificate of Incorporation. If the Holder does
      not comply with such demand, the Corporation may redeem all Series B Preferred
      Stock held by the Series B Purchaser at their Series B Stated Value (the “Series
      B Redemption Price”). The Corporation is not obligated to provide for redemption
      of the Series B Preferred Stock through a sinking fund.








(b)  Shares
      of
      Series B Preferred Stock which have been redeemed or converted shall be deemed
      retired pursuant to the DGCL and shall thereafter resume the status of
      authorized and unissued shares of Preferred Stock, undesignated as to series,
      and may be redesignated and reissued as part of any new series of Preferred
      Stock other than Series B Preferred Stock.





(c)  No
      redemption shall be made and no sum set aside for such redemption at any time
      that the terms or provisions of any indenture or agreement of the Corporation,
      including any agreement relating to indebtedness, specifically prohibits such
      redemption or setting aside or provides that such redemption or setting aside
      would constitute a breach or default thereunder (after notice or lapse of time
      or both), except with the written consent of the lender or other parties to
      said
      agreement as the case may be.





(d)  If
      any
      redemption shall at any time be prohibited by the DGCL, the same shall be
      deferred until such time as the redemption can occur in full compliance with
      such statute.





(e)  In
      the
      event the Corporation shall redeem shares of Series B Preferred Stock as
      provided herein, notice of such redemption shall be given by first class mail,
      postage prepaid, or by confirmed facsimile transmission, not less than thirty
      (30) business days prior to the date fixed by the Board for redemption to each
      holder of Series B Preferred Stock at the address that appears on the
      Corporation’s stock record books; provided, however, that no failure to provide
      such notice nor any defect therein shall affect the validity of the redemption
      proceeding except as to the holder to whom the Corporation has failed to send
      such notice or whose notice was defective. Each notice shall state (i) the
      redemption date, (ii) the number of shares of Series B Preferred Stock to be
      redeemed; (iii) the Series B Redemption Price; and (iv) the place or places
      where certificates for shares of Series B Preferred Stock are to be surrendered
      for payment. When notice has been provided as aforesaid then from and after
      the
      redemption date (unless default shall be made by the Corporation in providing
      money for the payment of the Series B Redemption Price of the shares called
      for
      redemption) said shares shall no longer be deemed to be outstanding and all
      rights of the holders thereof shall cease (other than the right to receive
      the
      Series B Redemption Price or Common Stock with respect to converted Series
      B
      Preferred Stock). Upon surrender of the certificates for Series B Preferred
      Stock accompanied by appropriate stock powers, the shares shall be redeemed
      by
      the Corporation at the Series B Redemption Price.








4.4.5  Rank .
      The
      Series B Preferred Stock shall, as to redemptions and the distribution of assets
      upon liquidation, dissolution or winding up of the Corporation, rank (i) prior
      to the Corporation’s Common Stock; (ii) prior to any Junior Securities to the
      Series B Preferred Stock; (iii) junior to any Senior Securities to the Series
      B
      Preferred Stock); and (iv) pari passu with the Series A Preferred Stock and
      other Pari Passu Securities.





4.4.6  Liquidation
      Preference .
      If the
      Corporation shall commence a voluntary case under the U.S. Federal bankruptcy
      laws or any other applicable bankruptcy, insolvency or similar law, or consent
      to the entry of an order for relief in an involuntary case under any law or
      to
      the appointment of a receiver, liquidator, assignee, custodian, trustee,
      sequestrator (or other similar official) of the Corporation or of any
      substantial part of its property, or make an assignment for the benefit of
      its
      creditors, or admit in writing its inability to pay its debts generally as
      they
      become due, or if a decree or order for relief in respect of the Corporation
      shall be entered by a court having jurisdiction in the premises in an
      involuntary case under the U.S. Federal bankruptcy laws or any other applicable
      bankruptcy, insolvency or similar law resulting in the appointment of a
      receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
      similar official) of the Corporation or of any substantial part of its property,
      or ordering the winding up or liquidation of its affairs, and any such decree
      or
      order shall be unstayed and in effect for a period of sixty (60) consecutive
      days and, on account of any such Liquidation Event, no distribution shall be
      made to the holders of any shares of capital stock of the Corporation (other
      than Senior Securities and Pari Passu Securities) upon liquidation, dissolution
      or winding up unless prior thereto the Holders of shares of Series B Preferred
      Stock and Series A Preferred Stock shall have received the Liquidation
      Preference (as defined below) with respect to each share. If, upon the
      occurrence of a Liquidation Event, the assets and funds available for
      distribution among the Holders of the Series B Preferred Stock, Series A
      Preferred Stock and Holders of Pari Passu Securities shall be insufficient
      to
      permit the payment to such holders of the preferential amounts payable thereon,
      then the entire assets and funds of the Corporation legally available for
      distribution to the Series B Preferred Stock and Series A Preferred Stock and
      the Pari Passu Securities shall be distributed ratably among such shares in
      proportion to the ratio that the Liquidation Preference payable on each such
      share bears to the aggregate Liquidation Preference payable on all such shares.
      The purchase or redemption by the Corporation of stock of any class, in any
      manner permitted by law, shall not, for the purposes hereof, be regarded as
      a
      liquidation, dissolution or winding up of the Corporation. Neither the
      consolidation or merger of the Corporation with or into any other entity nor
      the
      sale or transfer by the Corporation of substantially all of its assets shall,
      for the purposes hereof, be deemed to be a liquidation, dissolution or winding
      up of the Corporation. The “Liquidation Preference” with respect to a share of
      Series B Preferred Stock and Series A Preferred Stock means an amount equal
      to
      the Series B Stated Value thereof. The Liquidation Preference with respect
      to
      any Pari Passu Securities shall be as set forth in the Certificate of
      Incorporation filed in respect thereof.





4.4.7  Voting
      Rights .
      The
      Holders of the Series B Preferred Stock have no voting power whatsoever, except
      as provided by the DGCL. To the extent that under the DGCL the vote of the
      Holders of the Series B Preferred Stock, voting separately as a class or series,
      as applicable, is required to authorize a given action of the Corporation,
      the
      affirmative vote or consent of the Holders of at least a majority of the then
      outstanding shares of the Series B Preferred Stock represented at a duly held
      meeting at which a quorum is present or by written consent of the Holders of
      at
      least a majority of the then outstanding shares of Series B Preferred Stock
      (except as otherwise may be required under the DGCL) shall constitute the
      approval of such action by the class. To the extent that under the DGCL Holders
      of the Series B Preferred Stock are entitled to vote on a matter with holders
      of
      Common Stock, voting together as one class, each share of Series B Preferred
      Stock shall be entitled to a number of votes equal to the number of shares
      of
      Common Stock into which it is then convertible (subject to the limitations
      contained in Section 4.4.2) using the record date for the taking of such vote
      of
      stockholders as the date as of which the Series B Conversion Price is
      calculated.








4.4.8  Miscellaneous .





(a)  If
      any
      shares of Series B Preferred Stock are converted pursuant to Section 4.4.2,
      the
      shares so converted shall be canceled, shall return to the status of authorized,
      but unissued preferred stock of no designated series.





(b)  Upon
      receipt by the Corporation of (i) evidence of the loss, theft, destruction
      or
      mutilation of any Series B Preferred Stock certificate(s) and (ii) (y) in the
      case of loss, theft or destruction, of indemnity (without any bond or other
      security) reasonably satisfactory to the Corporation, or (z) in the case of
      mutilation, upon surrender and cancellation of the Series B Preferred Stock
      certificate(s), the Corporation shall execute and deliver new Series B
      Preferred Stock certificate(s) of like tenor and date. However, the Corporation
      shall not be obligated to reissue such lost or stolen Series B Preferred
      Stock certificate(s) if the Holder contemporaneously requests the Corporation
      to
      convert such Series B Preferred Stock.





(c)  Upon
      submission of a Notice of Conversion by a Holder of Series B Preferred Stock,
      (i) the shares covered thereby shall be deemed converted into shares of Common
      Stock and (ii) the Holder’s rights as a Holder of such converted shares of
      Series B Preferred Stock shall cease and terminate, excepting only the right
      to
      receive certificates for such shares of Common Stock and to any remedies
      provided herein or otherwise available at law or in equity to such Holder
      because of a failure by the Corporation to comply with the terms of this
      Certificate of Incorporation. Notwithstanding the foregoing, if a Holder has
      not
      received certificates for all shares of Common Stock prior to the tenth (10th)
      business day after the expiration of the delivery period with respect to a
      conversion of Series B Preferred Stock for any reason, then (unless the Holder
      otherwise elects to retain its status as a holder of Common Stock by so
      notifying the Corporation within five (5) business days after the expiration
      of
      such ten (10) business day period) the Holder shall regain the rights of a
      Holder of Series B Preferred Stock with respect to such unconverted shares
      of
      Series B Preferred Stock and the Corporation shall, as soon as practicable,
      return such unconverted shares to the Holder. In all cases, the Holder shall
      retain all of its rights and remedies for the Corporation’s failure to convert
      Series B Preferred Stock.





(d)  The
      remedies provided in this Certificate of Incorporation shall be cumulative
      and
      in addition to all other remedies available under this Certificate of
      Incorporation, at law or in equity (including a decree of specific performance
      and/or other injunctive relief), and nothing herein shall limit a Holder’s right
      to pursue actual damages for any failure by the Corporation to comply with
      the
      terms of this Certificate of Incorporation. The Corporation acknowledges that
      a
      breach by it of its obligations hereunder will cause irreparable harm to the
      Holders of Series B Preferred Stock and that the remedy at law for any such
      breach may be inadequate. The Corporation therefore agrees, in the event of
      any
      such breach or threatened breach, that the Holders of 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.








(e)  Whenever
      the Corporation is obligated to purchase or redeem a Holder’s Series B Preferred
      Stock, and the Series B Redemption Price is not paid to the Holder by the
      tenth (10th) day after the Series B Redemption Price is due and payable to
      such Holder, the Corporation shall thereafter pay interest to such Holder on
      the
      unpaid portion of the Series B Redemption Price at the rate of ten percent
      (10%) per annum, compounded annually, until the Series B Redemption Price
      is paid in full.





**ARTICLE
      V**





The
      name
      and address, including street number and zip code, of the incorporator
      is:





Name:
            Address:David
                Koontz
            100 Commerce Drive, Suite
              301Newark, Delaware
              19713





The
      incorporator’s authority on behalf of this Corporation is limited to forming it
      by the filing of this Certificate of Incorporation, and the incorporator has
      no
      further power or authority on behalf of the Corporation, express or implied,
      by
      virtue of being the incorporator.





**ARTICLE
      VI**





The
      following provisions are inserted for the management of the business and for
      the
      conduct of the affairs of the Corporation:





6.1  Number
      Of Directors .
      The
      Board shall be composed of not less than one nor more than nine Directors.
      Except with respect to the initial Director, the specific number of Directors
      shall be set by resolution of the Board or, if the Directors in office
      constitute fewer than a quorum of the Board, by the affirmative vote of a
      majority of all the Directors in office. The number of Directors of this
      corporation may be increased or decreased from time to time in the manner
      provided herein, but no decrease in the number of Directors shall have the
      effect of shortening the term of any incumbent Director.





6.2  Classification
      Of Directors .
      The
      Directors shall be divided into three classes, as nearly equal in number as
      the
      then total number of Directors constituting the entire Board permits, with
      the
      term of office of one class expiring each year. The initial Class A Directors
      shall hold office for a term expiring at the 2005 annual meeting of
      stockholders; the initial Class B Directors shall hold office for a term
      expiring at the 2006 annual meeting of stockholders; and the initial Class
      C
      Directors shall hold office for a term expiring at the 2007 annual meeting
      of
      stockholders. At each such annual meeting of stockholders and at each annual
      meeting thereafter, successors to the class of Directors whose term expires
      at
      that meeting shall be elected for a term expiring at the third annual meeting
      following their election and until their successors shall be elected and
      qualified, subject to prior death, resignation, retirement or removal. If the
      number of Directors is changed, any increase or decrease shall be apportioned
      among the classes so as to maintain the number of Directors in each class as
      nearly equal as possible, but in no event will a decrease in the number of
      Directors shorten the term of any incumbent Director.








6.3  Removal
      Of Directors .
      The
      stockholders may remove one or more Directors with or without cause, but only
      at
      a special meeting called for the purpose of removing the Director or Directors,
      and the meeting notice must state that the purpose, or one of the purposes,
      of
      the meeting is removal of the Director or Directors.





6.4  Vacancies
      On Board .
      If a
      vacancy occurs on the Board, including a vacancy resulting from an increase
      in
      the number of Directors, the Board may fill the vacancy, or, if the Directors
      in
      office constitute fewer than a quorum of the Board , they may
      fill the vacancy by the affirmative vote of a majority of all the Directors
      in
      office. The stockholders may fill a vacancy only if there are no Directors
      in
      office.





6.5  Amending
      Bylaws .
      The
      Board shall have the power to adopt, amend or repeal the Bylaws of this
      Corporation, subject to the power of the stockholders to amend or repeal such
      Bylaws. The stockholders shall also have the power to amend or repeal the Bylaws
      of this Corporation and to adopt new Bylaws





6.6  Initial
      Board .
      The
      initial Board shall consist of six Directors, divided into three classes (Class
      A, Class B and Class C):





Class
      A
      Directors:





Karim
      Jobanputra


100
      Commerce Drive, Suite 301


Newark,
      Delaware 19713





Hendrik
      Rethwilm


100
      Commerce Drive, Suite 301


Newark,
      Delaware 19713





Class
      B
      Directors:





Richard
      J. Roger


100
      Commerce Drive, Suite 301


Newark,
      Delaware 19713





David
      L.
      Koontz


100
      Commerce Drive, Suite 301


Newark,
      Delaware 19713








Class
      C
      Directors:





Anthony
      Dean Smith


100
      Commerce Drive, Suite 301


Newark,
      Delaware 19713





Alan
      R.
      Rae


100
      Commerce Drive, Suite 301


Newark,
      Delaware 19713





**ARTICLE
      VII**





Whenever
      a compromise or arrangement is proposed between the Corporation and its
      creditors or any class of them and/or between the Corporation and its
      stockholders or any class of them, any court of equitable jurisdiction within
      the State of Delaware may, on the application in a summary way of the
      Corporation or of any creditor or stockholder thereof, or on the application
      of
      any receiver or receivers appointed for the Corporation under the provisions
      of
      Section 291 of Title 8 of the Delaware Code or on the application of trustees
      in
      dissolution or of any receiver or receivers appointed for the Corporation under
      the provision of Section 279 of Title 8 of the Delaware Code, order a meeting
      of
      the creditors or class of creditors, and/or of the stockholders or class of
      stockholders of the Corporation, as the case may be, to be summoned in such
      manner as the said court directs. If a majority in number representing
      three-fourths in value of the creditors or class of creditors, and/or of the
      stockholders or class of stockholders of the Corporation, as the case may be,
      agree to any compromise or arrangement and to any reorganization of the
      Corporation, as a consequence of such compromise or arrangement, the said
      compromise or arrangement and the said reorganization shall, if sanctioned
      by
      the court to which the said application has been made, be binding on all the
      creditors or class of creditors, and/or on all the stockholders or class of
      stockholders, of the Corporation, as the case may be, and also on the
      Corporation.





**ARTICLE
      VIII**





This
      Corporation reserves the right to amend or repeal any of the provisions
      contained in this Certificate of Incorporation in any manner now or hereafter
      permitted by the DGCL, and the rights of the stockholders of this Corporation
      are granted subject to this reservation.





**ARTICLE
      IX**





9.1  Stockholder
      Actions .
      No
      action required to be taken or which may be taken at any annual or special
      meeting of stockholders of the Corporation may be taken by written consent
      without a meeting, except that any such action may be taken without prior notice
      and without a vote, if a consent in writing, setting forth that action so taken
      shall be signed by all the stockholders of the Corporation entitled to vote
      thereon.





9.2  Number
      Of Votes Necessary To Approve Actions .
      Whenever the DGCL permits a corporation’s certificate of incorporation to
      specify that a lesser number of shares than would otherwise be required shall
      suffice to approve an action by stockholders, this Certificate of Incorporation
      hereby specify that the number of shares required to approve such an action
      shall be such lesser number.








9.3  Special
      Meetings Of Stockholders .
      So long
      as this Corporation is a public company, special meetings of the stockholders
      of
      the Corporation for any purpose may be called at any time by the Board or,
      if
      the Directors in office constitute fewer than a quorum of the Board, by the
      affirmative vote of a majority of all the Directors in office, but such special
      meetings may not be called by any other person or persons.





9.4  Place
      For Stockholder Meetings .
      Meetings of the Stockholders may be held anywhere within or without the State
      of
      Delaware.





9.5  Quorum
      For Meetings Of Stockholders .
      Except
      with respect to any greater requirement contained in these Certificate of
      Incorporation or the DGCL, one-third of the votes entitled to be cast on a
      matter by the holders of shares that, pursuant to the Certificate of
      Incorporation or the DGCL, are entitled to vote and be counted collectively
      upon
      such matter, represented in person or by proxy, shall constitute a quorum of
      such shares at a meeting of stockholders.





**ARTICLE
      X**





10.1  Indemnification .
      A
      Director of the Corporation shall not be personally liable to the Corporation
      or
      its stockholders for monetary damages for breach of fiduciary duty as a
      director, except for liability (i) for any breach of the director’s duty of
      loyalty to the Corporation or its stockholders; (ii) for acts or omissions
      not
      in good faith or that involve intentional misconduct or a knowing violation
      of
      law, (iii) under Section 174 of the DGCL, or (iv) for any transaction from
      which
      the director derived an improper personal benefit. If the DGCL is amended after
      approval by the stockholders of this Article X to authorize corporate action
      further eliminating or limiting the personal liability of directors, then the
      liability of a director of the Corporation shall be eliminated or limited to
      the
      fullest extent permitted by the DGCL as so amended from time to
      time.





10.2  Authorization .
      The
      Board may take such action as is necessary to carry out these indemnification
      and expense advancement provisions. It is expressly empowered to adopt, approve,
      and amend from time to time such Bylaws, resolutions, contracts, or further
      indemnification and expense advancement arrangements as may be permitted by
      law,
      implementing these provisions. Such Bylaws, resolutions, contracts or further
      arrangements shall include but not be limited to implementing the manner in
      which determinations as to any indemnity or advancement of expenses shall be
      made.





10.3  Effect
      Of Amendment .
      No
      amendment or repeal of this Article shall apply to or have any effect on any
      right to indemnification provided hereunder with respect to acts or omissions
      occurring prior to such amendment or repeal.





[Signature
      page follows]







IN
      WITNESS WHEREOF, the undersigned has executed this Certificate of Incorporation
      this 20th day September, 2004.





/s/   David L.
              KoontzDavid
                L. Koontz














**APPENDIX
      I**





**NOTICE
      OF CONVERSION**


**AT
      THE ELECTION OF THE HOLDER**





(To
      be
      Executed by the Registered Holder


in
      order
      to Convert the Preferred Stock of O2 Diesel Corporation)





The
      undersigned hereby irrevocably elects to convert the Series __ Preferred Stock
      into shares of Common Stock, par value $.____ per share (the “Common Stock”), of
      O2 Diesel Corporation (the “Corporation”) according to the provisions of the
      Certificate of Incorporation hereof, as of the date written below. If shares
      are
      to be issued in the name of a person other than undersigned, the undersigned
      will pay all transfer taxes payable with respect thereto and is delivering
      herewith such certificates and opinions as reasonably requested by the
      Corporation in accordance therewith.








Conversion
      calculations:


Date to Effect ConversionNumber of Shares to be
                ConvertedApplicable Conversion PriceNumber of Shares to be Issued Upon
                ConversionSignatureNameAddress