**CERTIFICATE
OF DESIGNATION OF**





**RIGHTS
AND PREFERENCES OF**





**SERIES
D PREFERRED STOCK OF**





**ALLION
HEALTHCARE, INC.**





**(Under
Section 151 of the**





**Delaware
General Corporation Law)**





Allion
Healthcare, Inc., a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), hereby certifies that the following
resolution was adopted by the Board of Directors of the
Corporation:




**RESOLVED** , that
pursuant to the authority expressly granted to and vested in the Board of
Directors of the Corporation (the "Board of Directors") by the provisions of the
Amended and Restated Certificate of Incorporation (the "Certificate of
Incorporation"), there is hereby created, out of the 20,000,000 shares of
Preferred Stock, par value $.001 per share, of the Corporation authorized in the
Certificate of Incorporation (the "Preferred Stock"), a series of Preferred
Stock consisting of Two Million Five Hundred Thousand (2,500,000) shares, which
series shall have the following designation, powers, preferences and relative,
participating, optional or other rights, and the following qualifications,
limitations and restrictions (in addition to any powers, preferences and
relative, participating, optional or other rights, and the following
qualifications, limitations and restrictions, set forth in the Certificate of
Incorporation):




1. Designation,
Number of Shares . Two
Million Five Hundred Thousand (2,500,000) shares of Preferred Stock shall be
designated the "Series D Preferred Stock" (the "Series D Preferred
Stock").




2. Ranking . All of
the preferential amounts to be paid to the holders of the Series D Preferred
Stock as provided in this Certificate of Designation shall be paid or set apart
for payment (i) on a pari
passu basis
with the Series A Preferred Stock, par value $.001 per share of the Corporation
(the "Series A Preferred Stock"), the Series B Preferred Stock, par value $.001
per share of the Corporation (the "Series B Preferred Stock") and the Series C
Preferred Stock, par value $.001 per share of the Corporation (the "Series C
Preferred Stock") (ii) before the payment or setting apart for payment of any
amount for, or the distribution of any property of the Corporation to, the
holders of any class or series of Common Stock (as defined below) or other class
or series of capital stock of the Corporation other than the Series A Preferred
Stock, Series B Preferred Stock, and Series C Preferred Stock whether now or
hereafter authorized, ranking junior as to liquidation rights to the Series D
Preferred Stock.




3. Dividends . In the
event any dividends are declared with respect to the common stock, par value
$.001 per share, of the Corporation (the "Common Stock"), or upon the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock or any class
or Series of Preferred Stock which is designated for pari
passu dividend
treatment, the holders of the Series D Preferred Stock as of the record date
established by the Board of Directors for such dividend shall be











entitled
to receive as dividends (the "Dividends") an amount (whether in the form of
cash, securities or other property) equal to the amount (and in the form) of the
dividends that such holder would have received had the Series C Preferred Stock
been converted into Common Stock as of the date immediately prior to the record
date of such dividend, or, in the case of dividends on Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock or other pari
passu series
or class of Preferred Stock, an amount per share equal to any dividends declared
thereon, in each case such Dividends to be payable on the payment date of the
dividend established by the Board of Directors (the "Dividend Payment Date").
The record date for any such Dividends shall be the record date for the
applicable dividend, and any such Dividends shall be payable to the persons in
whose name the Series D Preferred Stock is registered at the close of business
on the applicable record date.




4. Liquidation
Dissolution or Winding Up. The
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and
Series D Preferred Stock respective liquidation preferences shall rank pari
passu in
connection with any liquidation, dissolution or winding up of the Corporation.
In the event of any liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, before any distribution may be made with
respect to the Common Stock or any other series of capital stock of the
Corporation ranking junior as to liquidation rights to the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, or Series D Preferred
Stock the holders of each share of (i) Series A Preferred Stock shall be
entitled to be paid out of the assets of the Corporation available for
distribution to holders of the Corporation's capital stock of all classes,
whether such assets are capital, surplus or capital earnings, on a pari
passu basis
with the shares of Series B Preferred Stock and Series C Preferred Stock and as
a liquidation preference an amount equal to $4.00 per share on the Series A
Preferred Stock (as adjusted for stock splits, stock dividends and the like)
plus all declared and unpaid dividends thereon, if any, since the date of issue
up to and including the date full payment shall be tendered to the holders of
the Series A Preferred Stock with respect to such liquidation, dissolution or
winding up, (ii) Series B Preferred Stock shall be entitled to be paid out of
the assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes, whether such assets are capital,
surplus or capital earnings, on a pari
passu basis
with the shares of Series A Preferred Stock and Series C Preferred Stock and as
a liquidation preference an amount equal to $6.00 per share on the Series B
Preferred Stock (as adjusted for stock splits, stock dividends and the like)
plus all declared and unpaid dividends thereon, if any, since the date of issue
up to and including the date full payment shall be tendered to the holders of
the Series B Preferred Stock with respect to such liquidation, dissolution or
winding up, (iii) Series C Preferred Stock shall be entitled to be paid out of
the assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes, whether such assets are capital,
surplus or capital earnings, on a pari
passu basis
with the shares of Series A Preferred Stock and Series B Preferred Stock, and as
a liquidation preference, an amount equal to $10.00 per share on the Series C
Preferred Stock (as adjusted for stock splits, stock dividends and the like)
plus all declared and unpaid dividends thereon, if any, since the date of issue
up to and including the date full payment shall be tendered to the holders of
the Series C Preferred Stock with respect to such liquidation, dissolution or
winding up, and (iv) Series D Preferred Stock shall be entitled to be paid out
of the assets of the Corporation available for distribution to holders of the
Corporation's capital stock of all classes, whether such assets are capital,
surplus, or capital earnings, on a pari
passu basis
with the shares of the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock and as a liquidation preference an amount equal
to





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$12.00
per share on the Series D Preferred Stock (as adjusted for stock splits, stock
dividends and the like) plus all declared and unpaid dividends thereon, if any,
since the date of issue up to and including the date full payment shall be
tendered to the holders of the Series D Preferred Stock with respect to such
liquidation, dissolution or winding up. If, upon any liquidation, dissolution or
winding up of the Corporation, the amounts payable with respect to the Series A
Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D
Preferred Stock are not paid in full, the holders of the Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock shall share ratably in any distribution of assets in proportion to the
full respective preferential amounts to which they are otherwise entitled to
receive.





After
payment in full of the respective liquidation preferences for the Series A
Preferred Stock, Series B Preferred Stock, the Series C Preferred Stock and
Series D Preferred Stock, in each case as set forth in the preceding paragraph,
the assets of the Corporation legally available for distribution to its
stockholders, if any, shall be distributed ratably to the holders of the Common
Stock of the Corporation, Series C Preferred Stock and Series D Preferred Stock
on an as-if-converted to Common Stock basis, and the holders of Series A
Preferred Stock and Series B Preferred Stock shall be entitled to no further
participation in the distribution of assets of the Corporation with respect to
the shares of Series A Preferred Stock and Series B Preferred Stock held
thereby.





5. Conversion . The
holders of the Series D Preferred Stock shall have the following conversion
rights:





(a) Voluntary
Conversion . Each
holder of shares of Series D Preferred Stock may elect at any time to convert
the shares of Series D Preferred Stock then held by such holder into a number of
shares of Common Stock computed by multiplying the number of shares of Series D
Preferred Stock to be converted by their applicable Conversion Value (as defined
below) and dividing the result by the applicable conversion price for the Series
D Preferred Stock (the "Series D Conversion Price") then in effect. The
"Conversion Value" of the Series D Preferred Stock shall be $6.00 per share. The
Series D Conversion Price shall initially be $6.00 per share and shall be
subject to adjustment as hereinafter provided. The conversion rate for each
share of Series D Preferred Stock shall initially be one-to-one. If a holder of
Series D Preferred Stock elects to convert Series D Preferred Stock at a time
when there are any declared and unpaid dividends or other amounts due on such
shares, such dividends and other amounts shall be paid in full by the
Corporation in connection with such conversion.





(b) Automatic
Conversion . Each
share of Series D Preferred Stock outstanding shall automatically be converted
into the number of shares of Common Stock into which such shares are convertible
as computed according to the formula set forth in Section 5(a) hereof at the
then effective applicable Series D Conversion Price upon the earlier
of:





(i) the
date specified by the holders of at least two-thirds of shares of Series D
Preferred Stock then outstanding, or





-3-





(ii)
immediately prior to the closing of an underwritten public offering of shares of
the Corporation's Common Stock pursuant to an effective registration statement
under the Securities Act of 1933, as amended, in which the price per share is at
least $12.00 per share and which results in gross proceeds to the Corporation of
at least $30,000,000 (a "Qualified Public Offering").





(c) Procedure
for Voluntary Conversion . Upon
election to convert pursuant to Sections 5(a) or 5(b)(i), the relevant holder or
holders of Series D Preferred Stock shall surrender the certificate or
certificates representing the Series D Preferred Stock being converted, duly
assigned or endorsed for transfer to the Corporation (or accompanied by duly
executed stock powers relating thereto), at the principal executive office of
the Corporation or the offices of the transfer agent for the Series D Preferred
Stock or such office or offices in the continental United States of an agent for
conversion, in each case as is from time to time designated by notice to the
holders of the Series D Preferred Stock by the Corporation, or in the event the
certificate or certificates are lost, stolen or missing, shall deliver an
affidavit or agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection therewith (an "Affidavit
of Loss") with respect to such certificates. The issuance by the Corporation of
Common Stock upon a conversion of Series D Preferred Stock upon election to
convert pursuant to Sections 5(a) or 5(b)(i) hereof shall be effective as of the
surrender of the certificate or certificates for the Series D Preferred Stock to
be converted, duly assigned or endorsed for transfer to the Corporation (or
accompanied by duly executed stock powers relating thereto), or as of the
delivery of an Affidavit of Loss. Upon surrender of a certificate representing
Series D Preferred Stock for conversion, or delivery of an Affidavit of Loss,
the Corporation shall issue and send by hand delivery, by courier or by first
class mail (postage prepaid) to the holder thereof or to such holder's designee,
at the address designated by such holder, certificates for the number of shares
of Common Stock to which such holder shall be entitled upon conversion plus a
cash payment in the amount of any declared but unpaid dividends payable in
respect of the shares of Series D Preferred Stock which are converted.
Notwithstanding the foregoing, in the event of an automatic conversion pursuant
to Section 5(b)(i) the outstanding shares of such applicable Series D Preferred
Stock shall be converted automatically without any further action by the holders
of such shares and whether or not the certificates representing such shares are
surrendered to the Corporation or its transfer agent and all rights with respect
to such applicable Series D Preferred Stock shall terminate, except any of the
rights of the holders thereof upon surrender of their certificate or
certificates therefor or delivery of an Affidavit of Loss thereof to receive
certificates for the number of shares of Common Stock into which such shares of
Series D Preferred Stock has been converted plus all declared but unpaid
dividends payable in respect of the shares of Series D Preferred Stock which are
converted. The issuance of certificates for Common Stock upon conversion of
Series D Preferred Stock will be made without charge to the holders of such
shares for any issuance tax in respect thereof or other costs incurred by the
Corporation in connection with such conversion and the related issuance of such
stock.





(d) Procedure
for Automatic Conversion on Qualified Public Offering . As of,
and in all cases subject to, the closing of a Qualified Public Offering (the
"Automatic Conversion Date"), all outstanding shares of Series D Preferred Stock
shall be converted





-4-


automatically
into shares of Common Stock as set forth in Section 5(b)(ii) hereof and without
any further action by the holders of such shares and whether or not the
certificates representing such shares of Series D Preferred Stock are
surrendered to the Corporation or its transfer agent. On the Automatic
Conversion Date, all rights with respect to the Series D Preferred Stock so
converted shall terminate, except any of the rights of the holders thereof upon
surrender of their certificate or certificates therefor or delivery of an
Affidavit of Loss thereof to receive certificates for the number of shares of
Common Stock into which such Series D Preferred Stock has been converted plus
all declared but unpaid dividends payable in respect of the Shares of Series D
Preferred Stock which are converted. If so required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by a
written instrument or instruments of transfer, in form satisfactory to the
Corporation, duly executed by the registered holder or by his, her or its
attorney duly authorized in writing. Upon surrender of such certificates or
Affidavit of Loss the Corporation shall issue and deliver to such holder,
promptly at such office and in its name as shown on such surrendered certificate
or certificates, a certificate or certificates for the number of shares of
Common Stock into which the shares of the Series D Preferred Stock surrendered
are convertible on the Automatic Conversion Date and shall pay all declared but
unpaid dividends payable in respect of the shares of Series D Preferred Stock
which are converted. The issuance of certificates for Common Stock upon
conversion of Series D Preferred Stock will be made without charge to the
holders of such shares for any issuance tax in respect thereof or other costs
incurred by the Corporation in connection with such conversion and the related
issuance of such stock.





(e) Fractional
Shares . The
Corporation shall not be obligated to deliver to holders of Series D Preferred
Stock any fractional share of Common Stock issuable upon any conversion of such
Series D Preferred Stock, but in lieu thereof may make a cash payment in respect
thereof in any manner permitted by law.





(f) Reservation
of Common Stock . The
Corporation shall at all times reserve and keep available out of its authorized
and unissued Common Stock, solely for issuance upon the conversion of Series D
Preferred Stock as herein provided, free from any preemptive rights or other
obligations, such number of shares of Common Stock as shall from time to time be
issuable upon the conversion of all the Series D Preferred Stock then
outstanding provided that the shares of Common Stock so reserved shall not be
reduced or affected in any manner whatsoever so long as any shares of Series D
Preferred Stock are outstanding. The Corporation shall prepare and shall use its
best efforts to obtain and keep in force such governmental or regulatory permits
or other authorizations as may be required by law, and shall comply with all
requirements as to registration, qualification or listing of the Common Stock,
in order to enable the Corporation lawfully to issue and deliver to each holder
of record of Series D Preferred Stock such number of shares of its Common Stock
as shall from time to time be sufficient to effect the conversion of all Series
D Preferred Stock then outstanding and convertible into shares of Common
Stock.





-5-





(g) Adjustments
to Series D Conversion Price . The
Series D Conversion Price in effect from time to time shall be subject to
adjustment as follows:





(i) Stock
Dividends, Subdivisions and Combinations . Upon
the issuance of additional shares of Common Stock as a dividend or other
distribution on outstanding Common Stock, the subdivision of outstanding shares
of Common Stock into a greater number of shares of Common Stock, or the
combination of outstanding shares of Common Stock into a smaller number of
shares of the Common Stock, the applicable Series D Conversion Prices shall,
simultaneously with the happening of such dividend, subdivision or split be
adjusted by multiplying the then effective Series D Conversion Price by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the number of shares of Common Stock outstanding immediately after such
event. An adjustment made pursuant to this Section 5(g)(i) shall be given
effect, upon payment of such a dividend or distribution, as of the record date
for the determination of stockholders entitled to receive such dividend or
distribution (on a retroactive basis) and in the case of a subdivision or
combination shall become effective immediately as of the effective date
thereof.





(ii) Adjustment
Upon Certain Qualified Public Offerings. In the
event that the Company shall issue shares of its Common Stock in a Qualified
Public Offering in which the issue price is less than $12.00 per share for each
share of Common Stock and such Qualified Public Offering is completed on or
prior to March 31, 2005 (the "Initial Period"), then the Conversion Price shall
be automatically adjusted to an amount equal to 50% of the issue price per share
of the Common Stock under such Qualified Public Offering. In the event that the
Company shall issue shares of its Common Stock in a Qualified Public Offering in
which the issue price is less than $14.00 per share of the Common Stock and such
Qualified Public Offering is completed after the Initial Period, then the
Conversion Price shall be automatically adjusted to an amount equal to 42.9% of
the issue price per share of the Common Stock under such Qualified Public
Offering.





(iii) Ratchet . In the
event the Company shall issue shares of its Common Stock, or securities
convertible into shares of Common Stock (excluding in each case shares issued
(i) in any of the transactions described in Subsection (g)(i) above, (ii) upon
exercise of options granted to the Company's employees, directors, consultants
or officers under a plan or plans adopted by the Company's Board of Directors,
if such shares would otherwise be included in this Subsection (g), (iii) upon
conversion of shares or exercise of options and warrants outstanding as of the
date hereof, or (iv) to shareholders of any Company which merges into the
Company in proportion to their stock holdings of such Company immediately prior
to such merger, upon such merger), for consideration per share less than the
then applicable Conversion Price (the "Offering Price"), the Conversion Price
shall be adjusted immediately thereafter so that it shall equal such Offering
Price. Such adjustment shall be made successively whenever such an issuance is
made.





-6-





(h) Other
Adjustments . In the
event the Corporation shall make or issue, or fix a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation other than shares of
Common Stock, then and in each such event lawful and adequate provision shall be
made so that the holders of Series D Preferred Stock shall receive upon
conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the number of securities of the Corporation which they
would have received had their Series D Preferred Stock been converted into
Common Stock on the date of such event and had they thereafter, during the
period from the date of such event to and including the date of conversion
retained such securities receivable by them as aforesaid during such period,
giving application to all adjustments called for during such period under this
Section 5 as applied to such distributed securities. If the Common Stock
issuable upon the conversion of the Series D Preferred Stock shall be changed
into the same or different number of shares of any class or classes of stock,
whether by reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend provided for above, or a reorganization,
merger, consolidation or sale of assets provided for elsewhere in this Section
5(h)), then and in each such event the holder of each share of Series D
Preferred Stock shall have the right thereafter to convert such share into the
kind and amount of shares of stock and other securities and property receivable
upon such reorganization, reclassification or other change, by holders of the
number of shares of Common Stock into which such shares of Series D Preferred
Stock might have been converted immediately prior to such reorganization,
reclassification or change, all subject to further adjustment as provided
herein.





(i) Mergers
and Other Reorganizations . If at
any time or from time to time there shall be a capital reorganization of the
Common Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for in Section 5(g) hereof) or a merger or
consolidation of the Corporation with or into another corporation or the
acquisition of the Corporation or the sale of all or substantially all of the
Corporation's properties and assets to any other person, then, as a part of and
as a condition to the effectiveness of such reorganization, merger,
consolidation, acquisition or sale, lawful and adequate provision shall be made
so that the holders of the Series D Preferred Stock shall thereafter be entitled
to receive upon conversion of the Series D Preferred Stock, to receive the
number of shares of stock or other securities or property of the Corporation or
of the successor corporation resulting from such recapitalization, merger,
consolidation or sale, which a holder of Common Stock would have been entitled
to receive on such capital reorganization, merger, consolidation or sale. In any
such case, appropriate provisions shall be made with respect to the rights of
the holders of the Series D Preferred Stock after the reorganization, merger,
consolidation, acquisition or sale such that the provisions of this Section 5
(including without limitation provisions for adjustment of the Series D
Conversion Price and the number of shares of Common Stock into which the holders
of Series D Preferred Stock are entitled to purchase the Series D Preferred
Stock) shall thereafter be applicable, as nearly as can be, with respect to any
shares of stock, securities or assets to be deliverable thereafter upon the
conversion of the Series D Preferred Stock.







-7-





(j) No
Impairment . The
Corporation will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all times in good faith
assist in the carrying out of all of the provisions of this Section 5 and in the
taking of all such action as may be necessary or appropriate in order to protect
the rights of the holders of the Series D Preferred Stock against
impairment.





(k) Notices
of Adjustments . In each
case of an adjustment or readjustment of the then applicable Series D Conversion
Price, the Corporation will furnish each holder of Series D Preferred Stock with
a certificate, prepared by the chief financial officer of the Corporation,
showing such adjustment or readjustment, and stating in detail the facts upon
which such adjustment or readjustment is based.





6. Voting
Rights . Except
as otherwise required by law, each holder of Series D Preferred Stock shall be
entitled to vote on all matters and each such holder shall be entitled to that
number of votes equal to the largest number of whole shares of Common Stock into
which such holder's shares of Series D Preferred Stock could be converted
pursuant to the provisions of Section 5 hereof, at the record date for the
determination of stockholders entitled to vote on such matter or, if no such
record date is established, at the date such vote is taken or any written
consent of stockholders is solicited. Except as required by law, the holders of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Common Stock shall vote together as a single class
on all matters; provided, that an affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series D Preferred Stock voting as a
separate class, shall be necessary to alter the rights and preferences of the
Series D Preferred Stock, or to issue any security with rights senior to those
of the holders of the Series D Preferred Stock.





7. No
Reissuance of Series D Preferred Stock . No
share or shares of the Series D Preferred Stock acquired by the Corporation by
reason of redemption, purchase, conversion or otherwise shall be reissued, and
all such shares shall be canceled, retired and eliminated from the shares which
the Corporation shall be authorized to issue. The Corporation may from time to
time take such appropriate corporate action as may be necessary to reduce the
authorized number of shares of the Series D Preferred Stock
accordingly.





8. Notices
of Record Date . In the
event (i) the Corporation establishes a record date to determine the holders of
any class of securities who are entitled to receive any dividend or other
distribution or (ii) there occurs any capital reorganization of the Corporation,
any reclassification or recapitalization of the capital stock of the
Corporation, any merger or consolidation of the Corporation, any acquisition of
the Corporation, any transfer of all or substantially all of the assets of the
Corporation to any other Corporation entity or person, any sale of a majority of
the voting securities of the Corporation in one or a series of related
transactions or any voluntary or involuntary dissolution, liquidation or winding
up of the Corporation, the Corporation shall mail to each holder of Series D
Preferred Stock at least twenty (20) days prior to the record date specified
therein, a notice specifying (a) the date of such record date for the purpose of
such dividend or distribution and a description of such dividend or
distribution, (b) the date on which







-8-





any such
reorganization, reclassification, transfer, consolidation, merger, acquisition,
sale, dissolution, liquidation or winding up is expected to become effective,
and (c) the time, if any, that is to be fixed, as to when the holders of record
of Common Stock (or other securities) shall be entitled to exchange their shares
of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger, acquisition, sale, dissolution, liquidation or winding up.





9. Preemptive
Rights . Subject
to the terms and conditions specified in this Section 9, each time the
Corporation proposes to offer any shares of, or securities convertible into, or
exchangeable or exercisable for, any shares of its Common Stock, the Corporation
shall make an offering of such securities to the holders of shares of Series D
Preferred Stock in accordance with the following provisions:





(a) The
Corporation shall deliver a notice ("Notice") to holders of shares of Series D
Preferred Stock stating (i) its bona fide intention to offer such securities,
(ii) the number of such securities to be offered, and (iii) the price and terms,
if any, upon which it proposes to offer such securities.





(b) By
written notification received by the Corporation, within thirty (30) calendar
days after giving of Notice, each holder of shares of the Series D Preferred may
elect to purchase, at the price and on the terms specified in the Notice, up to
that portion of such securities which equals the ratio of the number of shares
of Common Stock issued and held (as a result of any conversion of Shares to
Common Stock), or issuable upon conversion of the Shares then held, by such
holder of shares of Series D Preferred Stock, over the total number of shares of
Common Stock of the Corporation then outstanding.





(c) If
all securities referred to in the Notice which holders of shares of Series D
Preferred Stock are entitled to obtain pursuant to subsection 9(b) are not
elected to be purchased as provided in subsection 9(b) hereof, the Corporation
may, during the one hundred eighty (180) day period following the expiration of
the thirty (30) day period provided in subsection 9(b) hereof, offer the
remaining unsubscribed portion of such securities to any person or persons at a
price not less than, and upon terms no more favorable to the offeree than those
specified in the Notice. If the Corporation does not enter into an agreement for
the sale of such securities within such period, or if such agreement is not
consummated within ninety (90) days of the execution thereof, the right provided
hereunder shall be deemed to be revived and such securities shall not be offered
unless first reoffered to the holders of shares of Series D Preferred Stock in
accordance herewith.





(d) The
preemptive right in this Section 9 shall not be applicable to:





(i)
shares of Common Stock issuable or issued to employees, advisors, consultants or
outside directors of the Corporation directly or pursuant to a stock option plan
or restricted stock plan approved by the Board of Directors of the
Corporation;





(ii)
Common Stock issued or issuable upon exercise of warrants to purchase shares of
Common Stock outstanding on the date hereof,




-9-





(iii)
Common Stock issued or issuable upon conversion of shares of any series of
Preferred Stock which has been authorized as of the date hereof, including the
Series D Preferred Stock;





(iv)
Common Stock issued or issuable in connection with a merger or consolidation, if
as a result of which, the holders of the Corporation's outstanding securities
immediately prior to the consummation of such transaction hold voting securities
in excess of fifty percent (50%) of the voting power of the surviving or
resulting entity; or of the Corporation's securities; and





(v)
Common Stock issued in any initial public offering.





10. Information
Rights . The
holders of shares of Series D Preferred Stock shall have the right to obtain
information from the Corporation in the same manner and to the same extent as
the holders of shares of Common Stock are entitled under the Certificate of
Incorporation, the Corporation's Bylaws or applicable law.





* * * * *













IN
WITNESS WHEREOF, the undersigned has executed this Certificate of Designation
this 16th day of April, 2004.






Michael P. MoranPresident and Chief Executive
      Officer