Exhibit 4.1


    

      CERTIFICATE
        OF DESIGNATIONS

      OF

      SERIES
        A CUMULATIVE CONVERTIBLE PREFERRED STOCK

      


      It
        is
        hereby certified that:

      


      I. The
        name
        of the corporation is Oblio Telecom, Inc. (the “Corporation”), a Delaware
        corporation and wholly owned subsidiary of Ventures-National Incorporated,
        a
        Utah corporation (the “Parent”). Capitalized terms used herein but not otherwise
        defined shall have the meanings assigned such term in that certain Asset
        Purchase Agreement, dated as of July 28, 2005, by and between the Parent,
        the
        Corporation, Oblio Telecom L.L.P., a Texas limited liability partnership
        (the
“Holder”), Sammy Jibrin and Radu Achiriloaie. (the “Purchase
        Agreement”)

      


      II. The
        certificate of incorporation of the Corporation, authorizes the issuance
        of
        10,000 shares of Preferred Stock, $.01 par value per share, and expressly
        vests
        in the Board of Directors of the Corporation the authority provided therein
        to
        issue all of said shares in one or more Series by resolution or resolutions
        to
        establish the designation and number and to fix the relative rights and
        preferences of each series to be issued.

      


      III. The
        Board
        of Directors of the Corporation, pursuant to the authority expressly vested
        in
        it, has adopted the following resolution creating a class of Series A Cumulative
        Convertible Preferred Stock:

      


      RESOLVED,
        that a portion of the authorized shares of Preferred Stock of the Corporation
        shall be designated as a separate series possessing the rights and preferences
        set forth below:

      


      1. Designation:
        Number of Shares; Stated Value.
        The
        designation of said series of Preferred Stock shall be Series A Cumulative
        Convertible Preferred Stock (the “Series A Preferred Stock”). The number of
        shares of Series A Preferred Stock shall be 9,000. Such shares shall be
        constituted in four (4) tranches , which shall be referred to as Tranche
        A,
        Tranche B, Tranche C and Tranche D. Each of Tranches B, C and D shall correspond
        to a year as set forth below. Tranche A consists of 3,000 shares. Each of
        the
        remaining Tranches consists of 2,000 shares. Each share of Series A Preferred
        Stock shall have an initial stated value equal to $1,000 (as adjusted for
        any
        stock dividends, combinations or splits with respect to such shares, the
“Stated
        Value”), and $.01 par value. Not later than July 15 of each of the three years
        commencing with the year 2006, the Corporation’s Chief Financial Officer shall
        prepare and deliver to the Holders a certificate setting forth a calculation
        of
        the Corporation’s net earnings, before interest, taxes, depreciation and
        amortization for the twelve full months ending on May 31 of such year (“Annual
        EBITDA”).

      


      (a) In
        the
        event the Annual EBITDA for any year shall be below the minimum amount set
        forth
        in Section 1(c) below (“Minimum EBITDA”), the Stated Value for each share with
        respect to the Tranche for such year shall be reduced by an amount equal
        to:


      


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (Minimum
        EBITDA less actual Annual EBITDA) x 0.668,
        

      2,000.

      In
        no
        event shall the Stated Value for the shares in Tranche A be subject to reduction
        hereunder.

      


      (b) In
        the
        event that the Stated Value for any Tranche is reduced pursuant to Section
        1(a)
        above, if the Annual EBITDA for any subsequent year shall exceed the Target
        EBITDA for that subsequent year, the Stated Value for each share with respect
        to
        the Tranche for such year shall be increased by an amount equal to:


      


      (actual
        Annual EBITDA less Target EBITDA) x 0.668

            2,000

      up
        to the
        aggregate amount of reduction pursuant to Section 1(a). In no event shall
        an
        increase in Stated Value for any Tranche cause the total Stated Value of
        all
        four Tranches to exceed $9,000,000.

      


      (c)  

      
        
          	 	 	 Minimum	 Target	 
	 	 Year	 EBITDA	 EBITDA	 
	 	 One	 $10,000,000	 $11,000,000	 
	 	 Two	 $12,250,000	 $13,250,000	 
	 	 Three 	 $15,000,000	 $16,000,000	 


        



      2. Ranking.
        The
        Series A Preferred Stock shall rank (i) senior to the Corporation’s common
        stock, par value $.01 per share (“Common Stock”); (ii) senior to any class or
        series of capital stock of the Corporation hereafter created (unless where
        such
        class or series of capital stock specifically, by its terms, ranks senior
        to or
        Pari Passu with the Series A Preferred Stock); (iii) on parity with any class
        or
        series of capital stock of the Corporation hereafter created specifically
        ranking, by its terms, on parity with the Series A Preferred Stock (“Pari Passu
        Securities”); and (iv) junior to any class or series of capital stock of the
        Corporation hereafter created specifically ranking, by its terms, senior
        to the
        Series A Preferred Stock (“Senior Securities”), in each case as to distribution
        of assets upon liquidation, dissolution or winding up of the Corporation,
        whether voluntary or involuntary.

      2. Ranking.
        The
        Series A Preferred Stock shall rank (i) senior to the Corporation’s common
        stock, par value $.01 per share (“Common Stock”); (ii) senior to any class or
        series of capital stock of the Corporation hereafter created (unless where
        such
        class or series of capital stock specifically, by its terms, ranks senior
        to or
        Pari Passu with the Series A Preferred Stock); (iii) on parity with any class
        or
        series of capital stock of the Corporation hereafter created specifically
        ranking, by its terms, on parity with the Series A Preferred Stock (“Pari Passu
        Securities”); and (iv) junior to any class or series of capital stock of the
        Corporation hereafter created specifically ranking, by its terms, senior
        to the
        Series A Preferred Stock (“Senior Securities”), in each case as to distribution
        of assets upon liquidation, dissolution or winding up of the Corporation,
        whether voluntary or involuntary.

      


      3. Dividends.

      


      (a) Subject
        to that certain Preferred Stock Subordination Agreement (the “Subordination
        Agreement”), dated August 12, 2005, between the holders of the Series A
        Preferred Stock and CapitalSource Finance LLC (“CapitalSource”), the holders of
        outstanding shares of Series A Preferred Stock shall be entitled to receive
        preferential dividends, in cash, out of legally available funds of the
        Corporation , before any dividend or other distribution will be paid or declared
        and set apart for payment on any shares of any Common Stock, or other class
        of
        stock presently authorized or to be authorized (the Common Stock, and such
        other
        stock being hereinafter collectively the “Junior Stock”) at a rate per annum
        equal to three percent (3%) (the “Dividend Rate”), of the then current Stated
        Value per share of each share of Series A Preferred Stock then outstanding
        (as
        adjusted pursuant to Section 4 below) (the “Quarterly Dividend Amount”). The
        Quarterly Dividend Amount shall be (i) calculated on the basis of a 365 day
        year
        and (ii) accrue commencing on the Closing Date and shall be payable commencing
        October 1, 2005, and on the first day of each consecutive three month period
        thereafter (each such date, a “Quarterly Dividend Payment Date”). 

      


      
        
          
          

        

        
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      (b) The
        dividends on the Series A Preferred Stock provided above shall be cumulative,
        whether or not earned, so that if: (i) at any time, full cumulative dividends
        on
        the Series A Preferred Stock then outstanding, from the date at which dividends
        thereon are cumulative to the end of the next quarterly dividend period,
        shall
        not have been paid or declared and set apart for payment; or (ii) the full
        dividend on Series A Preferred Stock then outstanding for the then current
        quarterly dividend period shall not have been paid or declared and set apart
        for
        payment, then the amount of the deficiency shall be paid or declared and
        set
        apart for payment (but without interest thereon) before any sum shall be
        set
        apart for or applied by the Parent, the Corporation or any Subsidiary of
        the
        Parent of the Corporation, as the case may be, to: (x) the purchase, redemption
        or other acquisition of the Series A Preferred Stock or Parri Passu Securities;
        (y) before any dividend or other distribution shall be paid or declared and
        set
        apart for payment on any Junior Stock; and (z) before any sum shall be set
        aside
        for or applied to the purchase, redemption or other acquisition of Junior
        Stock.

      


      4. Liquidation
        Rights.

      


      (a) Upon
        the
        dissolution, liquidation or winding-up of the Corporation, whether voluntary
        or
        involuntary, the Holders of the Series A Preferred Stock shall be entitled
        to
        receive, before any payment or distribution shall be made on the Junior Stock,
        out of the assets of the Corporation available for distribution to stockholders,
        the Stated Value per share of Series A Preferred Stock then outstanding and
        all
        accrued and unpaid dividends to and including the date of payment thereof.
        Upon
        the payment in full of all amounts due to Holders of the Series A Preferred
        Stock, the holders of the Common Stock of the Corporation and any other class
        of
        Junior Stock shall receive all remaining assets of the Corporation legally
        available for distribution. If the assets of the Corporation available for
        distribution to the holders of the Series A Preferred Stock shall be
        insufficient to permit payment in full of the amounts payable as aforesaid
        to
        the holders of Series A Preferred Stock upon such liquidation, dissolution
        or
        winding-up, whether voluntary or involuntary, then all such assets of the
        Corporation shall be distributed ratably among the holders of the Series
        A
        Preferred Stock.

      


      (b) Neither
        the purchase nor the redemption by the Corporation of shares of any class
        of
        stock, nor the merger or consolidation of the Corporation with or into any
        other
        corporation or corporations, nor the sale or transfer by the Corporation
        of all
        or any part of its assets shall be deemed to be a liquidation, dissolution
        or
        winding-up of the Corporation for the purposes of this Section 4.

      


      5. Redemption;
        Conversion into Parent’s Common Stock.

      


      (a) Subject
        to the Subordination Agreement and the further provisions of this Section
        5, the
        Corporation shall have the right at any time commencing after the issuance
        of
        the Series A Preferred Stock to redeem any outstanding Series A Preferred
        Stock,
        in cash, by paying the holder of such shares according to the following
        schedule:

      


      
        
          
          

        

        
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      (i) From
        the
        original issuance date until the one year anniversary of the original issuance
        date: 105% of the then current Stated Value of the Series A Preferred Stock
        to
        be redeemed plus any accrued and unpaid dividends that have accumulated on
        such
        Series A Preferred Stock;

      


      (ii) From
        the
        one year anniversary of the original issuance date until the two year
        anniversary of the original issuance date: 110% of the then current Stated
        Value
        of the Series A Preferred Stock to be redeemed plus any accrued and unpaid
        dividends that have accumulated on such Series A Preferred Stock;

      


      (iii) From
        the
        two year anniversary of the original issuance date until the three year
        anniversary of the original issuance date: 115% of the then current Stated
        Value
        of the Series A Preferred Stock to be redeemed plus any accrued and unpaid
        dividends that have accumulated on such Series A Preferred Stock.

      


      (iv) Notwithstanding
        anything else contained herein, the Corporation shall redeem all outstanding
        shares of Series A Preferred Stock by paying the holder of such shares the
        then
        current Stated Value of the Series A Preferred Stock plus any accrued and
        unpaid
        dividends that have accumulated on such Series A Preferred Stock, on the
        third
        anniversary of the original issuance date of the shares of Series A Preferred
        Stock (the “Final Redemption Date”). The Stated Value of Tranche D shall be
        adjusted as per Section 1 above prior to the redemption of that
        Tranche.

      


      (v) Notwithstanding
        the foregoing, after the first year after the original issue date of the
        Series
        A Preferred Stock, the Corporation may not redeem any Tranche of Series A
        Preferred Stock prior to the Stated Value of that Tranche being determined
        in
        accordance with Section 1 above without the prior consent of the Holder of
        the
        Series A Preferred Stock to be redeemed.

      


      (b) Subject
        to the further provisions of this Section 5, each holder of shares of Series
        A
        Preferred Stock shall have the right at any time during the period from the
        original issuance date of the Series A Preferred Stock to such holder until
        the
        Final Redemption Date to convert such shares into fully paid and non-assessable
        shares of the Parent’s Common Stock at the Conversion Price. The number of
        shares of the Parent’s Common Stock issuable upon conversion of each share of
        Series A Preferred Stock shall equal (i) the sum of (A) the then current
        Stated
        Value per share and (B), accrued and unpaid dividends on such share, divided
        by
        (ii) $1.50 (the “Conversion Price”). Notwithstanding the foregoing, the Holders
        of Series A Preferred Stock shall only be permitted to convert Tranche B
        during
        the second year after the original issuance date of the Series A Preferred
        Stock, Tranche C during the third year after the original issuance date of
        the
        Series A Preferred Stock and Tranche D upon the Final Redemption Date. In
        the
        event the Holders do not convert the full Tranche in any year, such unconverted
        shares may be converted in any of the following years.

      


      (c) A
        Holder
        of Series A Preferred Stock desiring to convert any of such shares shall
        give
        notice of its decision to convert the shares into the Parent’s Common Stock by
        delivering, along with their certificate(s) representing the shares of Series
        A
        Preferred Stock to be converted, an executed and completed notice of conversion
        in the form of Exhibit A hereto (“Notice of Conversion”) to the Parent, the
        Corporation or the Parent’s transfer agent. Each date on which any Notice of
        Conversion is delivered or telecopied to the Parent in accordance with the
        provisions hereof shall be deemed a Conversion Date (the “Conversion Date”). The
        Parent or the Corporation will cause the transfer agent to deliver certificates
        representing the shares of the Parent’s Common Stock issuable upon conversion of
        the Series A Preferred Stock (and a certificate representing the balance
        of the
        Series A Preferred Stock not so converted, if requested by the Holders) to
        the
        Holders at their registered address. The Parent shall be obligated to deliver
        to
        the respective Holder, simultaneously with the aforedescribed Parent’s Common
        Stock, at the election of the Holders, additional shares of the Parent’s Common
        Stock representing the conversion, at the Conversion Price, of dividends
        accrued
        on the Series A Preferred Stock being converted.

      


      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      (d) If
        the
        Parent shall have filed a registration statement with the Securities and
        Exchange Commission covering shares of the Parent’s Common Stock issuable to the
        Holders upon the conversion of Series A Preferred Stock, and such registration
        statement shall have been declared effective and remains effective, then
        the
        Corporation shall have the following conversion rights and
        obligations:

      


      (i) if
        the
        average closing price of the Parent’s Common Stock on the principal market where
        it is traded is at least $4.50 for a period of at least twenty (20) consecutive
        trading days, and the average daily volume during such period is at least
        50,000
        shares per day, then the Corporation may, in its sole discretion (after 4:00pm
        on the 20th trading day), provide the Holder with written notice (a “Mandatory
        Conversion Notice”) requiring the conversion of any or all of the then
        outstanding shares of Series A Preferred Stock, on the fifth (5th) trading
        day
        following the date of the Mandatory Conversion Notice (the “Mandatory Conversion
        Date”). On the Mandatory Conversion Date, the Corporation shall convert such
        shares of Series A Preferred Stock according to the formula in Section 5(b)
        and
        shall deliver to each Holder certificates evidencing the shares of Parent’s
        Common Stock issued in satisfaction of the Series A Preferred Stock being
        converted. Other than pursuant to this Section 5(d), the Corporation and
        the
        Parent shall have no right to force conversion of the Series A Preferred
        Stock.

      


      (e) The
        Parent shall not be required, in connection with any conversion of Series
        A
        Preferred Stock to issue a fraction of a share of its Common Stock and shall
        instead deliver a stock certificate representing the next whole
        number.

      


      (f) The
        Conversion Price and number and kind of shares or other securities to be
        issued
        upon conversion is subject to adjustment from time to time upon the occurrence
        of certain events, as follows:

      


      (i) Stock
        Splits, Combinations and Dividends.
        If the
        shares of the Parent’s Common Stock are subdivided or combined into a greater or
        smaller number of shares of the Parent’s Common Stock, or if a dividend is paid
        on the Parent’s Common Stock in shares of the Parent’s Common Stock, the
        Conversion Price, as the case may be, shall be proportionately reduced in
        case
        of subdivision of shares or stock dividend or proportionately increased in
        the
        case of combination of shares, in each such case by the ratio which the total
        number of shares of the Parent’s Common Stock outstanding immediately after such
        event bears to the total number of shares of the Parent’s Common Stock
        outstanding immediately prior to such event.

      


      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      (ii) Reclassification,
        etc.
        If the
        Parent, at any time, shall, by reclassification or otherwise, change, or
        permit
        to be changed, the Parent’s Common Stock into the same or a different number of
        securities of any class or classes, the Series A Preferred Stock shall
        thereafter be convertible into the number of such securities and kind of
        securities as would have been issuable as the result of such reclassification
        or
        other change with respect to the Parent’s Common Stock as if conversion of the
        Series A Preferred Stock into Parent Common Stock had occurred immediately
        prior
        to such reclassification or other change. 

      


      (g) In
        the
        case of any consolidation or merger of the Corporation with or into any other
        corporation (other than a merger in which the Corporation is the surviving
        or
        continuing corporation which does not result in any reclassification,
        conversion, or change of the outstanding shares of Common Stock and which
        does
        not result in a change in voting power of greater than 50%) then, as part
        of
        such consolidation or merger, lawful provision shall be made so that holders
        of
        Series A Preferred Stock shall thereafter have the right to receive the kind
        and
        amount of consideration receivable upon such consolidation or merger by a
        holder
        of the number of shares of the Parent’s Common Stock into which such shares of
        Series A Preferred Stock would have been convertible by the Holder immediately
        prior to such consolidation or merger. 

      


      (h) In
        case
        of any sale or conveyance to any third party person or entity of all or
        substantially all of the assets the Corporation in connection with which
        consideration shall be issuable, distributable, payable, or deliverable for
        outstanding shares of Parent Common Stock, then lawful provision shall be
        made
        so that the holders of Series A Preferred Stock shall thereafter have the
        right
        to receive the kind and amount of consideration that shall be issuable,
        distributable, payable, or deliverable upon such sale or conveyance by a
        holder
        of the number of shares of the Parent’s Common Stock into which such shares of
        Series A Preferred Stock would have been convertible by the Holder immediately
        prior to such sale or conveyance.

      


      (i) So
        long
        as any shares of Series A Preferred Stock shall remain outstanding and the
        Holders thereof shall have the right to convert the same in accordance with
        provisions of this Section 5, the Parent shall at all times reserve from
        the
        authorized but unissued shares of its Parent Common Stock a sufficient number
        of
        shares to provide for such conversions.

      


      (j) The
        Parent or the Corporation, as the case may be, shall pay the amount of any
        and
        all issue taxes (but not income taxes) which may be imposed in respect of
        any
        issue or delivery of stock upon the conversion of any shares of Series A
        Preferred Stock, but all transfer taxes and income taxes that may be payable
        in
        respect of any change of ownership of Series A Preferred Stock or any rights
        represented thereby or of stock receivable upon conversion thereof shall
        be paid
        by the person or persons surrendering such stock for conversion.

      


      
        
          
          

        

        
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      6. Sale
        of Shares Below Conversion Price.

      


      (a) If
        at any
        time or from time to time after the original issuance date, the Parent or
        the
        Corporation issues or sells Additional Shares of Parent Common Stock (as
        defined
        below) for an Effective Price (as defined below) less than the then current
        Conversion Price, then and in each such case, the then current Conversion
        Price
        shall be reduced, as of the opening of business on the date of such issue
        or
        sale, to a Conversion Price determined by multiplying the then current
        Conversion Price by a fraction:

      


      (i) the
        numerator of which shall be (A) the number of shares of Parent Common Stock
        deemed outstanding (as defined below) immediately prior to such issue or
        sale
        plus (B) the number of shares of Parent Common Stock which the Aggregate
        Consideration received (as defined below) by the Parent or the Corporation
        for
        the total number of Additional Shares of Parent Common Stock so issued would
        purchase at the then current Conversion Price; and 

      


      (ii) the
        denominator of which shall be (A) the number of shares of Parent Common Stock
        deemed outstanding (as defined below) immediately prior to such issue or
        sale
        plus (B) the total number of Additional Shares of Parent Common Stock so
        issued.

      


      For
        the
        purposes of the preceding sentence, the number of shares of Parent Common
        Stock
        deemed to be outstanding as of a given date shall be the sum of (A) the number
        of shares of Parent Common Stock actually outstanding, (B) the number of
        shares
        of Parent Common Stock into which the then outstanding shares of Convertible
        Securities could be converted if fully converted on the day immediately
        preceding the given date, and (C) the number of shares of Parent Common Stock
        which could be obtained through the exercise or conversion of all other rights,
        options and convertible securities outstanding on the day immediately preceding
        the given date. 

      


      (b) No
        adjustment shall be made to the Conversion Price in an amount less than one
        cent
        per share. Any adjustment otherwise required by this Section 6 that is not
        required to be made due to the preceding sentence shall be included in any
        subsequent adjustment to the Conversion Price.

      


      (c) For
        the
        purpose of making any adjustment required under this Section 6, the aggregate
        consideration received by the Parent or the Corporation for any issue or
        sale of
        securities (the “Aggregate Consideration”) shall: (A) to the extent it consists
        of cash, be computed at the net amount of cash received by the Parent or
        the
        Corporation after deduction of any underwriting or similar commissions,
        compensation or concessions paid or allowed by the Parent or Corporation
        in
        connection with such issue or sale but without deduction of any other expenses
        payable by the Parent or Corporation, (B) to the extent it consists of property
        other than cash, be computed at the fair value of that property as determined
        in
        good faith by the Parent’s Board of Directors and (C) if Additional Shares of
        Parent Common Stock, Convertible Securities (as defined below) or rights
        or
        options to purchase either Additional Shares of Parent Common Stock or
        Convertible Securities are issued or sold together with other stock or
        securities or other assets of the Parent or the Corporation for a consideration
        which covers both, be computed as the portion of the consideration so received
        that may be reasonably determined in good faith by the Parent Board of Directors
        to be allocable to such Additional Shares of Parent Common Stock, Convertible
        Securities or rights or options.

      


      
        
          
          

        

        
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      (d) For
        the
        purpose of the adjustment required under this Section 6, if the Parent or
        Corporation issues or sells (x) stock or other securities convertible into,
        Additional Shares of Parent Common Stock (such convertible stock or securities
        being herein referred to as “Convertible Securities”) or (y) rights or options
        for the purchase of Additional Shares of Parent Common Stock or Convertible
        Securities and if the price of such Additional Shares of Parent Common Stock
        is
        less than the applicable Conversion Price, in each case the Parent shall
        be
        deemed to have issued at the time of the issuance of such rights or options
        or
        Convertible Securities the maximum number of Additional Shares of Parent
        Common
        Stock issuable upon exercise or conversion thereof and to have received as
        consideration for the issuance of such shares an amount equal to the total
        amount of the consideration, if any, received by the Parent or Corporation
        for
        the issuance of such rights or options or Convertible Securities
        plus:

      


      (i) in
        the
        case of such rights or options, the minimum amounts of consideration, if
        any,
        payable to the Parent or Corporation upon the exercise of such rights or
        options; and

      


      (ii) in
        the
        case of Convertible Securities, the minimum amounts of consideration, if
        any,
        payable to the Parent or Corporation upon the conversion thereof (other than
        by
        cancellation of liabilities or obligations evidenced by such Convertible
        Securities); provided that if the minimum amounts of such consideration cannot
        be ascertained, but are a function of antidilution or similar protective
        clauses, the Parent or Corporation shall be deemed to have received the minimum
        amounts of consideration without reference to such clauses.

      


      (iii) if
        the
        minimum amount of consideration payable to the Parent or Corporation upon
        the
        exercise or conversion of rights, options or Convertible Securities is reduced
        over time or on the occurrence or non-occurrence of specified events other
        than
        by reason of antidilution adjustments, the Effective Price shall be recalculated
        using the figure to which such minimum amount of consideration is reduced;
        provided further, that if the minimum amount of consideration payable to
        the
        Parent or Corporation upon the exercise or conversion of such rights, options
        or
        Convertible Securities is subsequently increased, the Effective Price shall
        be
        again recalculated using the increased minimum amount of consideration payable
        to the Parent or Corporation upon the exercise or conversion of such rights,
        options or Convertible Securities. 

      


      (iv) If
        any
        such rights or options or the conversion privilege represented by any such
        Convertible Securities shall expire without having been exercised, the
        applicable Conversion Price as adjusted upon the issuance of such rights,
        options or Convertible Securities shall be readjusted to the Conversion Price
        which would have been in effect had an adjustment been made on the basis
        that
        the only Additional Shares of Parent Common Stock so issued were the Additional
        Shares of Parent Common Stock, if any, actually issued or sold on the exercise
        of such rights or options or rights of conversion of such Convertible
        Securities, and such Additional Shares of Parent Common Stock, if any, were
        issued or sold for the consideration actually received by the Parent or
        Corporation upon such exercise, plus the consideration, if any, actually
        received by the Parent or Corporation for the granting of all such rights
        or
        options, whether or not exercised, plus the consideration received for issuing
        or selling the Convertible Securities actually converted, plus the
        consideration, if any, actually received by the Parent or Corporation (other
        than by cancellation of liabilities or obligations evidenced by such Convertible
        Securities) on the conversion of such Convertible Securities.

      


      
        
          
          

        

        
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      (e) For
        the
        purpose of making any adjustment to the Conversion Price of the Preferred
        Stock
        required under this Section 6, “Additional Shares of Parent Common Stock” shall
        mean all shares of Parent Common Stock issued by the Parent and all shares
        of
        Parent Common Stock issuable upon conversion of Convertible Securities issued
        by
        the Parent or the Corporation or deemed to be issued pursuant to this Section
        6
        (including shares of Parent Common Stock subsequently reacquired or retired
        by
        the Parent or the Corporation), other than:

      


      (i) shares
        of
        Parent Common Stock issued upon conversion of the Series A Preferred Stock;
        

      


      (ii) shares
        of
        Parent Common Stock and/or options, warrants or other Parent Common Stock
        purchase rights and the Parent Common Stock issued pursuant to such options,
        warrants or other rights (as adjusted for any stock dividends, combinations,
        splits, recapitalizations and the like after the filing date hereof) after
        the
        original issuance date to employees, officers or directors of, or consultants
        or
        advisors to the Parent or Corporation or any subsidiary pursuant to stock
        purchase or stock option plans or other arrangements that are approved by
        the
        Parent Board of Directors;

      


      (iii) shares
        of
        Parent Common Stock issued pursuant to the exercise of options, warrants
        or
        convertible securities outstanding as of the original issuance
        date;

      


      (iv) shares
        of
        Parent Common Stock and/or options, warrants or other Parent Common Stock
        purchase rights, and the Parent Common Stock issued pursuant to such options,
        warrants or other rights issued for consideration other than cash pursuant
        to a
        merger, consolidation, acquisition, strategic alliance or similar business
        combination approved by the Parent Board of Directors; 

      


      (v) shares
        of
        Parent Common Stock or Preferred Stock issued pursuant to any equipment loan
        or
        leasing arrangement, real property leasing arrangement or debt financing
        from a
        bank or similar financial institution approved by the Parent Board of Directors;
        

      


      (vi) shares
        of
        Parent Common Stock or Preferred Stock issued to third-party service providers
        in exchange for or as partial consideration for services rendered to the
        Parent
        or the Corporation;

      


      (vii) shares
        of
        Parent Common Stock issued to any charitable organization described in Section
        170(c) of the Internal Revenue Code, provided that such donation has been
        approved by the Parent Board of Directors; 

      


      (viii) any
        equity securities issued in connection with strategic transactions involving
        the
        Parent or Corporation and other entities, including (i) joint ventures,
        manufacturing, marketing or distribution arrangements or (ii) technology
        transfer or development arrangements; provided that the issuance of shares
        therein has been approved by the Parent Board of Directors; and

      


      (ix) any
        equity securities issued or issuable to Cornell Capital or an entity or entities
        designated by it pursuant to a financing arranged in connection with the
        performance of the Corporation’s and Parent’s obligations under the Purchase
        Agreement.

      


      References
        to Parent Common Stock in the subsections of this Section 6(e) above shall
        mean
        all shares of Parent Common Stock issued by the Company or deemed to be issued
        pursuant to this Section 6. The “Effective Price” of Additional Shares of Parent
        Common Stock shall mean the quotient determined by dividing the total number
        of
        Additional Shares of Parent Common Stock issued or sold, or deemed to have
        been
        issued or sold by the Parent or Corporation under this Section 6, into the
        Aggregate Consideration received, or deemed to have been received by the
        Parent
        or Corporation for such issue under this Section 6, for such Additional Shares
        of Parent Common Stock.

      


      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      7. Voting
        Rights.
        The
        shares of Series A Preferred Stock shall not have voting rights, except as
        required by law.

      


      8. Events
        of Default.
        Upon
        the occurrence and continuance of an Event of Default (as defined below),
        but
        subject to the Subordination Agreement, the Holder shall, ten (10) days after
        giving written notice to the Corporation (the “Default Notice Period”), have the
        option to require the Corporation to redeem the Series A Preferred Stock
        held by
        the Holder by the immediate payment to the Holder by the Corporation of a
        sum of
        money equal to the then current Stated Value, plus accrued and unpaid dividends
        (the “Default Payment”). If, with respect to any Event of Default, the
        Corporation cures the Event of Default within the Default Notice Period,
        the
        Event of Default will be deemed to no longer exist and any rights and remedies
        of the Holder pertaining to such Event of Default will be of no further force
        or
        effect. 

      


      The
        occurrence of any of the following events set forth in Sections 8(a) through
        8(d) is an “Event of Default”:

      


      (a) Failure
        to Make Payment.
        The
        Corporation fails to make any payment required to be paid pursuant to the
        terms
        hereofand such failure continues for a period of ten (10) business days
        following the date upon which each payment was due. 

      


      (b) Breach
        of Covenant.
        The
        Parent or the Corporation breaches any covenant or other term or condition
        of
        this Certificate of Designations or the Purchase Agreement in any material
        respect and which could have a Material Adverse Effect, and such breach,
        if
        subject to cure, continues for a period of twenty (20) days after the occurrence
        thereof.

      


      (c) Receiver
        or Trustee.
        The
        Parent or the Corporation shall make an assignment for the benefit of creditors,
        or apply for or consent to the appointment of a receiver or trustee for it
        or
        for a substantial part of its property or business; or such a receiver or
        trustee shall otherwise be appointed.

      


      (d) Bankruptcy.
        Bankruptcy, insolvency, reorganization or liquidation proceedings or other
        proceedings or relief under any bankruptcy law or any law for the relief
        of
        debtors shall be instituted by or against the Parent or the
        Corporation.

      


      9. Status
        of Redeemed Stock.
        In case
        any shares of Series A Preferred Stock shall be redeemed or otherwise
        repurchased or reacquired, the shares so redeemed or reacquired shall resume
        the
        status of authorized but unissued shares of Preferred Stock and shall no
        longer
        be designated as Series A Preferred Stock.

      


      In
        witness whereof, the Corporation has caused this Certificate of Designations
        to
        be executed on this 12th
        day of
        August, 2005.

    

     

    
      
        
          	 	 	 
	 	OBLIO
                  TELECOM, INC.
	 
 	 
 	 
 
	Date: 	By:  	/s/ Daniel
                  Guimond
	 	
                  
Daniel
                  Guimond
	 	Chief Financial
                  Officer and Secretary


        



      


      
        
          
             

          

          
          

        

        
          10

          
            

          

        

        
          
          

        

      


      EXHIBIT
        A

      NOTICE
        OF CONVERSION

      


      (TO
        BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT THE SERIES A
        CONVERTIBLE PREFERRED STOCK OF OBLIO TELECOM, INC.

      


      The
        undersigned hereby irrevocably elects to convert ______________ shares of
        Series
        A Convertible Preferred Stock of Oblio Telecom, Inc. and $_____________ of
        the
        dividend due, into shares of Parent’s Common Stock according to the conditions
        hereof, as of the date written below.

      


      Date
        of
        Conversion: ___________________________________________________________________________________________________________________________

      


      Applicable
        Conversion Price Per
        Share:_____________________________________________________________________________________________________________

      


      Number
        of
        Parent’s Common Shares Issuable Upon This
        Conversion:______________________________________________________________________________________

      


      Signature:___________________________________________________________________________________________________________________________________

      


      Print
        Name:__________________________________________________________________________________________________________________________________


       

      Address:____________________________________________________________________________________________________________________________________

      


      


      Deliveries
        Pursuant to this Notice of Conversion Should Be Made
        to:______________________________________________________________________________________