Exhibit
        3.1
  **AMENDED
        AND RESTATED**
 
 **CERTIFICATE
        OF INCORPORATION**
 
 **OF**
 
 **ALTEON
        INC.**
 
 The
        undersigned, for the purpose of amending and restating the Restated Certificate
        of Alteon Inc. filed December 7, 1990, as amended, hereby certifies as
        follows:
  1.  The
        name
        of the Corporation is ALTEON INC. (the “ **Corporation** ”).
        The
        Certificate of Incorporation of the Corporation was filed with the Secretary
        of
        State of Delaware on October 22, 1986 under the name Geritech Inc. A Restated
        Certificate of Incorporation was filed with the Secretary of State of the
        State
        of Delaware on December 7, 1990. A Certificate of Amendment, changing the
        Corporation’s name from Geritech Inc. to Alteon Inc. was filed with the
        Secretary of State of the State of Delaware on August 29, 1991. Thereafter
        the
        Restated Certificate of Incorporation, as amended, was further amended by
        the
        following documents filed with the Secretary of State of the State of Delaware
        (a) a Certificate of Retirement filed June 14, 1993; (b) a Certificate of
        Designation filed August 3, 1995; (c) a Certificate of Designation filed
        April
        23, 1997; (d) two Certificates of Designation filed December 11, 1997; (e)
        a
        Certificate of Retirement filed February 10, 1998; (f) a Certificate of
        Amendment filed May 8, 1998; (g) a Certificate of Designation filed May 8,
        1998;
        (h) a Certificate of Retirement filed September 16, 1999; (i) a Certificate
        of
        Amendment filed September 16, 1999; (j) a Certificate of Retirement filed
        November 21, 2000; (k) a Certificate of Amendment filed June 7, 2001; (l)
        a
        Certificate of Amendment filed June 2, 2004; (m) a Certificate of Amendment
        filed September 17, 2004; (n) a Certificate of Designation filed October
        6,
        2004; (o) a Certificate of Designation filed July 27, 2005; (p) a Certificate
        of
        Amendment filed October 24, 2005; (q) a Certificate of Amendment filed July
        20,
        2006; and (r) a Certificate of Amendment filed July 20, 2006.
  2.  The
        Restated Certificate of Incorporation of the Corporation filed on December
        7,
        1990, as amended, is hereby further amended, among other provisions, to amend
        Article FIRST to reflect a change of the name of the Corporation and to amend
        Article FOURTH by substituting in lieu of said Article FOURTH a new Article
        FOURTH as set forth in the Restated Certificate of Incorporation set forth
        below.
  3.  This
        Amended and Restated Certificate of Incorporation has been duly adopted in
        accordance with the provisions of Sections 141, 228, 242 and 245 of the General
        Corporation Law of the State of Delaware.
  4.  The
        text
        of the Restated Certificate of Incorporation of the Corporation, as amended
        and
        restated herein, shall read in its entirety as follows:
  1
 
 **RESTATED**
 **CERTIFICATE
        OF INCORPORATION**
 **OF**
 **SYNVISTA
        THERAPEUTICS, INC.**
 (Originally
        incorporated on October 22, 1986
 under
        the
        name Geritech, Inc. and formerly known as Alteon Inc.)
  FIRST:
        The name of the corporation is Synvista Therapeutics, Inc. (the “ **Corporation** ”).
 
 SECOND:
        The name and address of the Corporation’s registered agent in the State of
        Delaware is The Corporation Trust Company, Corporation Trust Center, 1209
        Orange
        Street, City of Wilmington, County of New Castle.
 
 THIRD:
        The purpose of the Corporation is to engage in any lawful act or activity
        or
        carry on any business for which corporations may be organized under the Delaware
        General Corporation Law or any successor statute.
 
 FOURTH:
 
 A.  Designation
        and Number of Shares.
 
 The
        total
        number of shares of all classes of stock which the Corporation shall have
        the
        authority to issue is 315,000,000 shares, consisting of 300,000,000 shares
        of
        common stock, par value $0.01 per share (the “ **Common
        Stock** ”)
        and
        15,000,000 shares of Preferred Stock, par value $0.01 per share (the
“ **Preferred
        Stock** ”).
 
 The
        number of authorized shares of Common Stock or Preferred Stock may be increased
        or decreased (but not below the number of shares thereof then outstanding)
        by
        the affirmative vote of the holders of a majority of the voting power of
        all of
        the then-outstanding shares of capital stock of the Corporation entitled
        to vote
        thereon, without a vote of the holders of the Preferred Stock, or of any
        series
        thereof, unless a vote of any such holders is required pursuant to the terms
        of
        any Preferred Stock designation.
 
 Upon
        the
        effectiveness of this Restated Certificate of Incorporation, every fifty
        (50)
        issued and outstanding shares of Common Stock of the Corporation shall be
        changed and reclassified into one (1) share of Common Stock, which shares
        shall
        be fully paid and nonassessable shares of Common Stock of the Corporation;
        provided, however, that in lieu of fractional interests in shares of Common
        Stock to which any stockholder would otherwise be entitled pursuant hereto
        (taking into account all shares of Common Stock owned by such stockholder),
        such
        stockholder shall be entitled to receive a cash payment equal to the fair
        value
        of one share of Common Stock multiplied by such fraction. The par value of
        the
        Common Stock shall remain $0.01 per share. All certificates representing
        shares
        of Common Stock outstanding immediately prior to the filing of this Amended
        and
        Restated Certificate of Incorporation shall immediately after the filing
        of this
        Amended and Restated Certificate of Incorporation represent instead the number
        of shares of Common Stock as provided above. Notwithstanding the foregoing,
        any
        holder of Common Stock may (but shall not be required to) surrender his,
        her or
        its stock certificate or certificates to the Corporation, and upon such
        surrender the Corporation will issue a certificate for the correct number
        of
        shares of Common Stock to which the holder is entitled under the provisions
        of
        this Restated Certificate of Amendment. Shares of Common Stock that were
        outstanding prior to the filing of this Amended and Restated Certificate
        of
        Incorporation, and that are not outstanding after and as a result of the
        filing
        of this Amended and Restated Certificate of Incorporation, shall resume the
        status of authorized but unissued shares of Common Stock.
 
 2
 
 B.  Common
        Stock.
 
 The
        holders of the Common Stock are entitled to one vote for each share held; provided , however ,
        that,
        except as otherwise required by law, holders of Common Stock shall not be
        entitled to vote on any amendment to this Restated Certificate of Incorporation
        (including any certificate of designation relating to Preferred Stock) that
        relates solely to the terms of one or more outstanding series of Preferred
        Stock
        if the holders of such affected series are entitled, either separately or
        together as a class with the holders of one or more other such series, to
        vote
        thereon by law or pursuant to this Restated Certificate of Incorporation
        (including any certificate of designation relating to Preferred
        Stock).
 
 C.  Preferred
        Stock
 
 **Undesignated
        Preferred Stock** .
 
 1.  2,100,000
        shares of Preferred Stock may be issued in one or more series at such time
        or
        times and for such consideration as the Board of Directors may determine.
 
 2.  Authority
        is hereby expressly granted to the Board of Directors to fix from time to
        time,
        by resolution or resolutions providing for the establishment and/or issuance
        of
        any series of Preferred Stock, the designation and number of the shares of
        such
        series and the powers, preferences and rights of such series, and the
        qualifications, limitations or restrictions thereof, to the fullest extent
        such
        authority may be conferred upon the Board of Directors under the Delaware
        General Corporation Law.
 
 **Series
        A Preferred Stock**
 
 1.  Designation
        and Number of Shares .
        The
        shares of such series shall be designated as “ **Series
        A Preferred Stock** ”
(the
        “ **Series
        A Preferred Stock** ”),
        par
        value $0.01 per share. The number of shares initially constituting the Series
        A
        Preferred Stock shall be 400,000; provided, however, that, if more than a
        total
        of 400,000 shares of Series A Preferred Stock shall be issuable upon the
        exercise of Rights (the “ **Rights** ”)
        issued
        pursuant to the Stockholders Rights Agreement dated as of July 27, 1995,
        between
        the Corporation and Registrar and Transfer Company, as Rights Agent, as amended
        by the Amended and Restated Stockholder Rights Agreement dated as of July
        27,
        2005, as amended, between the Corporation and American Stock Transfer &
Trust Company, as Rights Agent (the “ **Rights
        Agreement** ”),
        the
        Board of Directors of the Corporation, pursuant to Section 151(g) of the
        General
        Corporation Law of the State of Delaware, shall direct by resolution or
        resolutions that a certificate be properly executed, acknowledged, filed
        and
        recorded, in accordance with the provisions of Section 103 thereof, providing
        for the total number of shares of Series A Preferred Stock authorized to
        be
        issued to be increased (to the extent that the Certificate of Incorporation
        then
        permits) to the largest number of whole shares (rounded up to the nearest
        whole
        number) issuable upon exercise of such Rights.
 
 3
  2.  Dividends
        or Distributions .
 
 2.1  Subject
        to the prior and superior rights of the holders of shares of any other series
        of
        Preferred Stock or other class of capital stock of the Corporation ranking
        prior
        and superior to the shares of Series A Preferred Stock with respect to
        dividends, the holders of shares of the Series A Preferred Stock shall be
        entitled to receive, when, as and if declared by the Board of Directors,
        out of
        the assets of the Corporation legally available therefor, (1) quarterly
        dividends payable in cash on the last day of each fiscal quarter in each
        year,
        or such other dates as the Board of Directors of the Corporation shall approve
        (each such date being referred to herein as a “ **Quarterly
        Dividend Payment Date** ”),
        commencing on the first Quarterly Dividend Payment Date after the first issuance
        of a share or a fraction of a share of Series A Preferred Stock, in the amount
        of $.01 per whole share (rounded to the nearest cent) less the amount of
        all
        cash dividends declared on the Series A Preferred Stock pursuant to the
        following clause (2) since the immediately preceding Quarterly Dividend Payment
        Date or, with respect to the first Quarterly Dividend Payment Date, since
        the
        first issuance of any share or fraction of a share of Series A Preferred
        Stock
        (the total of which shall not, in any event, be less than zero) and (2)
        dividends payable in cash on the payment date for each cash dividend declared
        on
        the Common Stock in an amount per whole share (rounded to the nearest cent)
        equal to the Formula Number (as hereinafter defined) then in effect times
        the
        cash dividends then to be paid on each share of Common Stock. In addition,
        if
        the Corporation shall pay any dividend or make any distribution on the Common
        Stock payable in assets, securities or other forms of noncash consideration
        (other than dividends or distributions solely in shares of Common Stock),
        then,
        in each such case, the Corporation shall simultaneously pay or make on each
        outstanding whole share of Series A Preferred Stock a dividend or distribution
        in like kind equal to the Formula Number then in effect times such dividend
        or
        distribution on each share of the Common Stock. As used herein, the
“ **Formula
        Number** ”
shall
        be 1,000; provided, however, that, if at any time after July 20, 1995, the
        Corporation shall (i) declare or pay any dividend on the Common Stock payable
        in
        shares of Common Stock or make any distribution on the Common Stock in share
        of
        Common Stock, (ii) subdivide (by a stock split or otherwise) the outstanding
        shares of Common Stock into a larger number of shares of Common Stock or
        (iii)
        combine (by a reverse stock split or otherwise) the outstanding shares of
        Common
        Stock, into a smaller number of shares of Common Stock, then in each such
        event
        the Formula Number shall be adjusted to a number determined by multiplying
        the
        Formula Number in effect immediately prior to such event by a fraction, the
        numerator of which is the number of shares of Common Stock that are outstanding
        immediately after such event and the denominator of which is the number of
        shares of Common Stock that are outstanding immediately prior to such event
        (and
        rounding the result to the nearest whole number); and provided further, that,
        if
        at any time after July 20, 1995, the Corporation shall issue any shares of
        its
        capital stock in a merger, reclassification, or change of the outstanding
        shares
        of Common Stock, then in each such event the Formula Number shall be
        appropriately adjusted to reflect such merger, reclassification or change
        so
        that each share of Preferred Stock continues to be the economic equivalent
        of a
        Formula Number of shares of Common Stock prior to such merger, reclassification
        or change.
 
 4
  2.2  The
        Corporation shall declare a dividend or distribution on any outstanding Series
        A
        Preferred Stock as provided in Section
        2.1 immediately prior to or at the same time it declares a dividend or distribution
        on the Common Stock (other than a dividend or distribution solely in shares
        of
        Common Stock); provided, however, that, in the event no dividend or distribution
        (other than a dividend or distribution in shares of Common Stock) shall have
        been declared on the Common Stock during the period between any Quarterly
        Dividend Payment Date and the next subsequent Quarterly Dividend Payment
        Date, a
        dividend of $.01 per share on the Series A Preferred Stock shall nevertheless
        be
        payable on such subsequent Quarterly Dividend Payment Date. The Board of
        Directors may fix a record date for the determination of holders of shares
        of
        Series A Preferred Stock entitled to receive a dividend or distribution declared
        thereon, which record date shall be the same as the record date for a
        corresponding dividend or distribution on the Common Stock.
  2.3   Dividends
        shall begin to accrue and be cumulative on any outstanding shares of Series
        A
        Preferred Stock from and after the Quarterly Dividend Payment Date next
        preceding the date of original issue of such shares of Series A Preferred
        Stock;
        provided, however, that dividends on such shares which are originally issued
        after the record date for the determination of holders of shares of Series
        A
        Preferred Stock entitled to receive a quarterly dividend and on or prior
        to the
        next succeeding Quarterly Dividend Payment Date shall begin to accrue and
        be
        cumulative from and after such Quarterly Dividend Payment Date. Notwithstanding
        the foregoing, dividends on shares of Series A Preferred Stock which are
        originally issued prior to the record date for the determination of holders
        of
        shares of Series A Preferred Stock entitled to receive a quarterly dividend
        on
        the first Quarterly Dividend Payment Date shall be calculated as if cumulative
        from and after the last day of the fiscal quarter next preceding the date
        of
        original issuance of such shares. Accrued but unpaid dividends shall not
        bear
        interest. Dividends paid on the shares of Series A Preferred Stock in an
        amount
        less than the total amount of such dividends at the time accrued and payable
        on
        such shares shall be allocated pro rata on a share-by-share basis among all
        such
        shares at the time outstanding.
 
 2.4   So
        long
        as any shares of the Series A Preferred Stock are outstanding, no dividends
        or
        other distributions shall be declared, paid or distributed, or set aside
        for
        payment or distribution, on the Common Stock unless, in each case, the dividend
        required by this Section 2 to be declared on the Series A Preferred Stock
        shall
        have been declared.
  2.5   The
        holders of the shares of Series A Preferred Stock shall not be entitled to
        receive any dividends or other distribution except as provided
        herein.
  3.  Voting
        Rights .
        The
        holders of shares of Series A Preferred Stock shall have the following voting
        rights:
  3.1   Each
        holder of Series A Preferred Stock shall be entitled to a number of votes
        equal
        to the Formula Number then in effect, for each share of Series A Preferred
        Stock
        held of record on each matter on which holders of the Common Stock or
        stockholders generally are entitled to vote, multiplied by the maximum number
        of
        votes per share which any holder of the Common Stock or stockholders generally
        then have with respect to such matter (assuming any holding period or other
        requirement to vote a greater number of shares is satisfied).
  5
  3.2   Except
        as
        otherwise provided herein or by applicable law, the holders of shares of
        Series
        A Preferred Stock and the holders of shares of Common Stock shall vote together
        as one class for the election of directors of the Corporation and on all
        other
        matters submitted to a vote of stockholders of the Corporation.
  3.3   If,
        at
        the time of any annual meeting of stockholders for the election of directors,
        the equivalent of six quarterly dividends (whether or not consecutive) payable
        on any share or shares of Series A Preferred Stock are in default, the number
        of
        directors constituting the Board of Directors of the Corporation shall be
        increased by two. In addition to voting together with the holders of Common
        Stock for the election of other directors of the Corporation, the holders
        of
        record of the Series A Preferred Stock, voting separately as a class to the
        exclusion of the holders of Common Stock, shall be entitled at said meeting
        of
        stockholders (and at each subsequent annual meeting of stockholders), unless
        all
        dividends in arrears have been paid or declared and set apart for payment
        prior
        thereto, to vote for the election of two directors of the Corporation, the
        holders of any Series A Preferred Stock being entitled to cast a number of
        votes
        per share of Series A Preferred Stock equal to the Formula Number. Until
        the
        default in payments of all dividends which permitted the election of said
        directors shall cease to exist, any director who shall have been so elected
        pursuant to the next preceding sentence may be removed at any time, either
        with
        or without cause, only by the affirmative vote of the holders of the shares
        of
        Series A Preferred Stock at the time entitled to cast a majority of the votes
        entitled to be cast for the election of any such director at a special meeting
        of such holders called for that purpose, and any vacancy thereby created
        may be
        filled by the vote of such holders. If and when such default shall cease
        to
        exist, the holders of the Series A Preferred Stock shall be divested of the
        foregoing special voting rights, subject to revesting in the event of each
        and
        every subsequent like default in payments of dividends. Upon the termination
        of
        the foregoing special voting rights, the terms of office of all persons who
        may
        have been elected directors pursuant to said special voting rights shall
        forthwith terminate, and the number of directors constituting the Board of
        Director shall be reduced by two. The voting rights granted by this Section
        3.3
        shall be in addition to any other voting rights granted to the holders of
        the
        Series A Preferred Stock in this Section 3.
 
 3.4   Except
        as
        provided herein, in Section
        11 or by
        applicable law, holders of Series A Preferred Stock shall have no special
        voting
        rights and their consent shall not be required (except to the extent they
        are
        entitled to vote with holders of Common Stock as set forth herein) for
        authorizing or taking any corporate action.
  4.  Certain
        Restrictions .
 
 4.1  Whenever
        quarterly dividends or other dividends or distributions payable on the Series
        A
        Preferred Stock as provided in Section
        2 are in
        arrears, thereafter and until all accrued and unpaid dividends and
        distributions, whether or not declared, on shares of Series A Preferred Stock
        outstanding shall have been paid in full, the Corporation shall not
  6
  4.1.1  declare
        or pay dividends on, make any other distributions on, or redeem or purchase
        or
        otherwise acquire for consideration any shares of stock ranking junior (either
        as to dividends or upon liquidation, dissolution or winding up) to the Series
        A
        Preferred Stock;
  4.1.2  declare
        or pay dividends on, or make any other distributions on any shares of stock
        ranking on a parity (either as to dividends or upon liquidation, dissolution
        or
        winding up) with the Series A Preferred Stock, except dividends paid ratably
        on
        the Series A Preferred Stock and all such parity stock on which dividends
        are
        payable or in arrears in proportion to the total amounts to which the holders
        of
        all such shares are then entitled;
  4.1.3  redeem
        or
        purchase or otherwise acquire for consideration shares of any stock ranking
        on a
        parity (either as to dividends or upon liquidation, dissolution or winding
        up)
        with the Series A Preferred Stock; provided that the Corporation may at any
        time
        redeem, purchase or otherwise acquire shares of any such parity stock in
        exchange for shares of any stock of the Corporation ranking junior (either
        as to
        dividends or upon dissolution, liquidation or winding up) to the Series A
        Preferred Stock; or
  4.1.4  purchase
        or otherwise acquire for consideration any shares of Series A Preferred Stock,
        or any shares of stock ranking on a parity with the Series A Preferred Stock,
        except in accordance with a purchase offer made in writing or by publication
        (as
        determined by the Board of Directors) to all holders of such shares upon
        such
        terms as the Board of Directors, after consideration of the respective annual
        dividend rates and other relative rights and preferences of the respective
        series and classes, shall determine in good faith will result in fair and
        equitable treatment among the respective series or classes.
  4.2   The
        Corporation shall not permit any subsidiary of the Corporation to purchase
        or
        otherwise acquire for consideration any shares of stock of the Corporation
        unless the Corporation could, under Section
        4.1 ,
        purchase or otherwise acquire such shares at such time and in such
        manner.
  5.  Liquidation
        Rights .
        Upon
        the liquidation, dissolution or winding up of the Corporation, whether voluntary
        or involuntary, no distribution shall be made (1) to the holders of shares
        of
        stock ranking junior (either as to dividends or upon liquidation, dissolution
        or
        winding up) to the Series A Preferred Stock unless, prior thereto, the holders
        of shares of Series A Preferred Stock shall have received an amount equal
        to the
        accrued and unpaid dividends and distributions thereon, whether or not declared,
        to the date of such payment, plus an amount equal to the greater of (x) $.01
        per
        whole share or (y) an aggregate amount per share equal to the Formula Number
        then in effect times the aggregate amount to be distributed per share to
        holders
        of Common Stock or (2) to the holders of stock ranking on a parity (either
        as to
        dividends or upon liquidation, dissolution or winding up) with the Series
        A
        Preferred Stock, except distributions made ratably on the Series A Preferred
        Stock and all other such parity stock in proportion to the total amounts
        to
        which the holders of all such shares are entitled upon such liquidation,
        dissolution or winding up.
  7
  6.  Consolidation,
        Merger, etc .
        In case
        the Corporation shall enter into any consolidation, merger, combination or
        other
        transaction in which the shares of Common Stock are exchanged for or changed
        into other stock or securities, cash or any other property, then in any such
        case the then outstanding shares of Series A Preferred Stock shall at the
        same
        time be similarly exchanged or changed into an amount per share equal to
        the
        Formula Number then in effect times the aggregate amount of stock, securities,
        cash or any other property (payable in kind), as the case may be, into which
        or
        for which each share of Common Stock is exchanged or changed. In the event
        both
        this Section 6 and Section 2 appear to apply to a transaction, this Section
        6
        will control.
  7.  No
        Redemption; No Sinking Fund .
  7.1   The
        shares of Series A Preferred Stock shall not be subject to redemption by
        the
        Corporation or at the option of any holder of Series A Preferred Stock except
        as
        set forth in the Certificate of Incorporation of the Corporation; provided,
        however, that the Corporation may purchase or otherwise acquire outstanding
        shares of Series A Preferred Stock in the open market or by offer to any
        holder
        or holders of shares of Series A Preferred Stock.
  7.2   The
        shares of Series A Preferred Stock shall not be subject to or entitled to
        the
        operation of a retirement or sinking fund.
  8.  Ranking .
        The
        Series A Preferred Stock shall rank junior to all other series of Preferred
        Stock of the Corporation, unless the Board of Directors shall specifically
        determine otherwise in fixing the powers, preferences and relative,
        participating, optional and other special rights of the shares of such series
        and the qualifications, limitations and restrictions thereof.
  9.  Fractional
        Shares .
        The
        Series A Preferred Stock shall be issuable upon exercise of the Rights issued
        pursuant to the Rights Agreement in whole shares or in any fraction of a
        share
        that is one one-thousandth (1/1,000ths) of a share of any integral multiple
        of
        such fraction which shall entitle the holder, in proportion to such holder’s
        fractional shares, to receive dividends, exercise voting rights, participate
        in
        distributions and to have the benefit of all other rights of holders of Series
        A
        Preferred Stock. In lieu of fractional shares, the Corporation, prior to
        the
        first issuance of a share or a fraction of a share of Series A Preferred
        Stock,
        may elect (1) to make a cash payment as provided in the Rights Agreement
        for
        fractions of a share other than one one-thousandth (1/1,000th) of a share
        or any
        integral multiple thereof or (2) to issue depository receipts evidencing
        such
        authorized fraction of a share of Series A Preferred Stock pursuant to an
        appropriate agreement between the Corporation and a depository selected by
        the
        Corporation; provided that such agreement shall provide that the holders
        of such
        depository receipts shall have all the rights, privileges and preferences
        to
        which they are entitled as holders of the Series A Preferred Stock.
  10.  Reacquired
        Shares .
        Any
        shares of Series A Preferred Stock purchased or otherwise acquired by the
        Corporation in any manner whatsoever shall be retired and canceled promptly
        after the acquisition thereof. All such shares shall upon their cancellation
        become authorized but unissued shares of Preferred Stock, without designation
        as
        to series until such shares are once more designated as part of a particular
        series by the Board of Directors pursuant to the provisions of Article Fourth
        of
        the Certificate of Incorporation.
  8
  11.  Amendment .
        None of
        the powers, preferences and relative, participating, optional and other special
        rights of the Series A Preferred Stock as provided herein or in the Certificate
        of Incorporation shall be amended in any manner which would alter or change
        the
        powers, preferences, rights or privileges of the holders of Series A Preferred
        Stock so as to affect them adversely without the affirmative vote of the
        holders
        of at least 66-2/3% of the outstanding shares of Series A Preferred Stock,
        voting as a separate class; provided, however, that no such amendment approved
        by the holders of at least 66-2/3% of the outstanding shares of Series A
        Preferred Stock shall be deemed to apply to the powers, preferences, rights
        or
        privileges of any holder of shares of Series A Preferred Stock originally
        issued
        upon exercise of the Rights after
 the
        time
        of such approval without the approval of such holder.
  **Series
        B Preferred Stock** ****
 
 12,500,000
        shares of the authorized and unissued Preferred Stock of the Corporation
        are
        hereby designated “ **Series
        B Preferred Stock** ”
with
        the following rights, preferences, powers, privileges and restrictions,
        qualifications and limitations. Unless otherwise indicated, references to
        “Sections” or “Subsections” in this Part C of this Article Fourth refer to
        sections and subsections of this subpart of Part C of this subpart of Article
        Fourth.
  1.
              Dividends.
 
 1.1 The
        holders of shares of Series B Preferred Stock, in preference to the holders
        of
        any other stock of the Corporation ranking junior to the Series B Preferred
        Stock including, without limitation, Common Stock and Series A Preferred
        Stock
        (collectively, the “ **Junior
        Stock** ”),
        shall
        be entitled to receive cumulative dividends, out of funds legally available
        therefor, at the annual rate of eight percent (8%) of the Series B Original
        Issue Price (as defined below) for each share of Series B Preferred Stock.
        Dividends on shares of Series B Preferred Stock shall, at the option of the
        holders of a majority of the outstanding Series B Preferred Stock, be payable
        in
        cash or in shares of Preferred Stock, regardless of whether declared by the
        Board of Directors, and for a period of five (5) years from the Series B
        Original Issue Date (as defined below). For purposes of this Certificate
        of
        Incorporation, the term “ **Series
        B Original Issue Price** ”
shall
        mean $2.50 per share of Series B Preferred Stock (subject to appropriate
        adjustment in the event of any stock dividend, stock split, combination or
        other
        similar recapitalization with respect to the Series B Preferred
        Stock).
 
 1.2 The
        Corporation shall not declare or pay any dividends on any shares of Junior
        Stock
        unless all dividends accrued pursuant to Section
        1.1 above
        have been paid with respect to all outstanding shares of Series B Preferred
        Stock. Subject to Section
        3.2(g) , if
        the
        Board of Directors of the Corporation thereafter shall declare a dividend
        payable upon the then outstanding shares of the Common Stock (other than
        a
        dividend payable entirely in shares of the Common Stock of the Corporation),
        then the Board of Directors shall declare at the same time a dividend upon
        the
        then outstanding shares of the Series B Preferred Stock payable at the same
        time
        as the dividend is paid on the Common Stock, in an amount equal to the amount
        of
        dividends per share of Series B Preferred Stock as would have been payable
        on
        the number of shares of Common Stock which each share of Series B Preferred
        Stock held by each holder thereof would have received if such Series B Preferred
        Stock had been converted to Common Stock pursuant to the provisions of Section
        4 hereof
        as
        of the record date for the determination of holders of Common Stock entitled
        to
        receive such dividends. In the event the Board of Directors of the Corporation
        shall declare a dividend payable upon any class or series of Junior Stock
        of the
        Corporation other than Common Stock, the Board of Directors shall declare
        at the
        same time a dividend upon the then outstanding shares of Series B Preferred
        Stock, payable at the same time as such dividend on such other class or series
        of Junior Stock in an amount equal to (i) in the case of any series or class
        convertible into Common Stock, a dividend per share of Series B Preferred
        Stock
        as would equal the dividend payable on such other class or series determined
        as
        if all such shares of such class or series had been converted to Common Stock
        and all shares of Series B Preferred Stock have been converted to Common
        Stock
        on the record date for the determination of holders entitled to receive such
        dividend or (ii) if such class or series of capital stock is not convertible
        into Common Stock, at a rate per share of Series B Preferred Stock determined
        by
        dividing the amount of the dividend payable on each share of such class or
        series of capital stock by the original issuance price of such class or series
        of capital stock and multiplying such fraction by the Series B Original Issue
        Price.
 
 9
  1.3 Participation
        Rights .
        If,
        after dividends in the full preferential amounts specified in Section
        1.1 for the
        Series B Preferred Stock have been paid or declared and set apart, the Board
        of
        Directors shall declare an additional dividend or dividends out of the funds
        legally available therefore, then such additional dividend or dividends shall
        be
        declared pro rata on the Common Stock and the Series B Preferred Stock on
        a pari  passu basis
        according to the number of shares of Common Stock held by such holders, where
        each holder of shares of Series B Preferred Stock is to be treated for this
        purpose as holding the greatest whole number of shares of Common Stock then
        issuable upon conversion of all shares of Series B Preferred Stock held by
        such
        holder pursuant Section
        4 hereof.
 
 2.
              Liquidation,
                  Dissolution or Winding Up; Certain Mergers, Consolidations and
                  Asset
                  Sales.
 
 2.1 Preferential
        Payments to Holders of Series B Preferred Stock .
        In the
        event of any voluntary or involuntary liquidation, dissolution or winding
        up of
        the Corporation or any Deemed Liquidation Event (as defined below), the holders
        of shares of Series B Preferred Stock then outstanding shall be entitled
        to be
        paid out of the assets of the Corporation available for distribution to its
        stockholders before any payment shall be made to the holders of Junior Stock
        by
        reason of their ownership thereof, an amount per share equal to the Series
        B Original Issue Price, plus all dividends accrued, but unpaid pursuant to
        Section 1.1 above, including dividends with respect to any partial year at
        the
        appropriate pro rata rate consistent with Section 1.1 above, and any other
        dividends declared but unpaid thereon. If upon any such liquidation, dissolution
        or winding up of the Corporation or any Deemed Liquidation Event, the assets
        of
        the Corporation available for distribution to its stockholders shall be
        insufficient to pay the holders of shares of Series B Preferred Stock the
        full
        amount to which they shall be entitled under this Subsection
        2.1 ,
        the
        holders of shares of Series B Preferred Stock shall share ratably in any
        distribution of the assets available for distribution in proportion to the
        respective amounts which would otherwise be payable in respect of the shares
        held by them upon such distribution if all amounts payable on or with respect
        to
        such shares were paid in full.
 
 10
  2.2 Distribution
        of Remaining Assets .
        In the
        event of any voluntary or involuntary liquidation, dissolution or winding
        up of
        the Corporation or any Deemed Liquidation Event, after the payment of all
        preferential amounts required to be paid to the holders of shares of Series
        B
        Preferred Stock, the remaining assets of the Corporation available for
        distribution to its stockholders shall be distributed among the holders of
        the
        shares of Common Stock, pro rata based on the number of shares held by each
        such
        holder, provided, however, that the holders of Series B Preferred Stock shall
        be
        entitled to receive upon such dissolution, liquidation or winding up of the
        Corporation the greater of (i) any amount such holder would receive pursuant
        to Subsection
        2.1 hereof
        and (ii) the amount such holder would have received if such holder had converted
        his, her or its shares of Series B Preferred Stock into Common Stock immediately
        prior to such dissolution, liquidation or winding up of the Corporation.
        The
        aggregate amount which a holder of a share of Series B Preferred Stock is
        entitled to receive under Subsections
        2.1 or 2.2 is
        hereinafter referred to as the “ **Series
        B Liquidation Amount** .”
 
 2.3 Deemed
        Liquidation Events .
 
 2.3.1  Definition .
        Each of
        the following events shall be considered a “ **Deemed
        Liquidation Event** ”
unless
        the holders of at least a majority of the outstanding shares of Series B
        Preferred Stock elect otherwise by written notice sent to the Corporation
        at
        least five (5) days prior to the effective date of any such event:
 
 (a)  a
        merger
        or consolidation in which
  (i)
              the
                  Corporation is a constituent party, or
  (ii)
              a
                  subsidiary of the Corporation is a constituent party,
  except
        any such merger or consolidation involving the Corporation or a subsidiary
        in
        which the shares of capital stock of the Corporation outstanding immediately
        prior to such merger or consolidation continue to represent, or are converted
        into or exchanged for shares of capital stock that represent, immediately
        following such merger or consolidation, at least a majority, by voting power,
        of
        the capital stock of (1) the surviving or resulting corporation or (2) if
        the
        surviving or resulting corporation is a wholly owned subsidiary of another
        corporation immediately following such merger or consolidation, the parent
        corporation of such surviving or resulting corporation; or
 
 (b)  the
        sale,
        lease, license, transfer or other disposition, in a single transaction or
        series
        of related transactions, by the Corporation or any subsidiary of the Corporation
        of all or substantially all the assets of the Corporation and its subsidiaries
        taken as a whole, or the sale or disposition (whether by merger or otherwise)
        of
        one or more subsidiaries of the Corporation if substantially all of the assets
        of the Corporation and its subsidiaries taken as a whole are held by such
        subsidiary or subsidiaries, except where such sale, lease, license, transfer
        or
        other disposition is to a wholly owned subsidiary of the
        Corporation.
  11
 
 2.3.2  Amount
        Deemed Paid or Distributed .
        If the
        amount deemed paid or distributed under this Subsection
        2.3 is made
        in property other than in cash, the value of such distribution shall be the
        fair
        market value of such property, determined as follows:
 
 (i)  if
        traded
        on a securities exchange, the value shall be deemed to be the average of
        the
        closing prices of the securities on such exchange or market over the ten
        (10)
        day period ending one (1) day prior to the distribution;
  (ii)  if
        actively traded over-the-counter, the value shall be deemed to be the average
        of
        the closing bid prices over the ten (10) day period ending one (1) day prior
        to
        the distribution; or
  (iii)  if
        there
        is no active public market, the value shall be the fair market value thereof,
        as
        determined in good faith by the Board of Directors of the Corporation after
        reasonable consultation with the holders of at least a majority of the then
        outstanding shares of Series B Preferred Stock (the “ **Requisite
        Holders** ”).
        In
        the event that the Requisite Holders disagree with the fair market value
        as
        determined by the Board of Directors, the Requisite Holders shall select
        an
        appraiser that is reasonably acceptable to the Corporation who is experienced
        in
        such matters to determine the fair market value for purposes of this Subsection
        2.3.2(iii) ;
        and
        such appraiser’s determination shall be binding upon the Corporation and the
        holders of Series B Preferred Stock.
  3.
              Voting.
 
 3.1 General .
        On any
        matter presented to the stockholders of the Corporation for their action
        or
        consideration at any meeting of stockholders of the Corporation, each holder
        of
        outstanding shares of Series B Preferred Stock shall be entitled to cast
        the
        number of votes equal to one-half of the number of whole shares of Common
        Stock
        into which the shares of Series B Preferred Stock held by such holder are
        convertible as of the record date for determining stockholders entitled to
        vote
        on such matter. Except as provided by law or by the other provisions of the
        Certificate of Incorporation, holders of Series B Preferred Stock shall vote
        together with the holders of Common Stock as a single class. From and after
        the
        conversion of any share of Series B Preferred Stock into Common Stock, such
        resulting share or shares of Common Stock shall have the full voting rights
        applicable to the Common Stock generally.
 
 3.2 Series
        B Preferred Stock Protective Provisions .
        At any
        time when any shares of Series B Preferred Stock issued pursuant to that
        certain
        Series B Preferred Stock and Warrant Purchase Agreement dated as of April
        5,
        2007 among this Corporation and the purchasers named therein (the “ **Series
        B Purchase Agreement** ”),
        including upon exercise of warrants, are outstanding, the Corporation shall
        not,
        without first obtaining the approval (by vote or written consent, as provided
        by
        law) of the holders of at least a majority of the shares of the Series B
        Preferred Stock held by Significant Holders (defined below), if
        any:
 
 a)  authorize
        or incur any Indebtedness (as defined below) in excess of
        $2,000,000;
  12
  b)  issue
        or
        sell any convertible debt, preferred stock (convertible or otherwise) or
        any
        other equity or equity-linked security at a price that values the Corporation’s
        Common Stock at a price less than the Series B Original Issue Price (as adjusted
        for all subsequent stock splits, stock dividends, consolidations,
        recapitalizations and reorganizations), other than any equity or equity linked
        security that is issued pursuant to any transaction or transactions approved
        under Subsection
        3.2(k) hereof;
  c)  increase
        or decrease the authorized number of shares of capital stock of the
        Corporation;
  d)  create
        or
        issue any new class or series of shares having rights, preferences or privileges
        senior to the Common Stock, or create or issue any other new equity or
        equity-linked securities, including convertible debt;
  e)  issue
        any
        shares of Series A Preferred Stock other than pursuant to the terms of that
        certain Amended and Restated Stockholders’ Rights Agreement, dated as of July
        25, 2005, as amended, between the Company and American Stock Transfer &
Trust Company;
  f)  amend,
        alter, or repeal any provision of this Restated Certificate of Incorporation
        or
        the Amended and Restated Bylaws of the Corporation (including any filing
        of a
        certificate of designation), that alters or changes the voting powers,
        preferences, or other special rights or privileges, or restrictions of the
        Series B Preferred Stock
  g)  pay
        or
        declare any dividends or make other distributions upon its shares of capital
        stock;
  h)  purchase,
        redeem or otherwise acquire any of the Corporation’s equity securities
        (including warrants, options and other rights to acquire equity securities)
        other than the repurchase of equity securities pursuant to existing agreements
        disclosed to the Purchasers in writing prior to the date of this Amended
        and
        Restated Certificate of Incorporation specifically referencing this Subsection
        3.2(h) ;
  i)  issue
        any
        equity or equity-linked securities to any employee other than pursuant to
        the
        Corporation’s Approved Stock Plans (as defined below), or increase the shares of
        Common Stock or other securities reserved for issuance as incentive awards
        to
        the Corporation’s management and other employees, directors and consultants
        pursuant to the Approved Stock Plans or any other any equity incentive plan
        or
        similar arrangement;
  j)  liquidate,
        dissolve or wind-up;
  k)  merge
        or
        consolidate with another corporation in which the holders of the Corporation’s
        voting equity securities immediately prior to the transaction would own 50%
        or
        less of the voting securities of the surviving corporation or engage in any
        other Deemed Liquidation Event;
  13
  l)  sell,
        license or dispose of any material assets of the Corporation, including
        intellectual property or other rights to the Corporation’s development stage,
        pre-clinical and/or diagnostic assets, including, without limitation, pursuant
        to any license, development, commercialization, distribution, marketing,
        co-marketing, collaboration, partnering or other agreement, other than licenses
        of immaterial technology in the ordinary course of business on commercially
        reasonable terms and consistent with past practices;
  m)  change
        the authorized number of directors of the Corporation;
  n)  amend
        or
        waive any material provision of this Amended and Restated Certificate of
        Incorporation or the Corporation’s By-Laws;
  o)  materially
        change the nature of the Corporation’s business from that engaged in on the
        Series B Original Issue Date (as defined below);
  p)  intentionally
        take any action which is reasonably likely to result in (i) the Common Stock
        of
        the Corporation no longer being approved for quotation on the American Stock
        Exchange or the Nasdaq Stock Market or (ii) the Common Stock of the Corporation
        ceasing to be registered pursuant to Section 12 of the Securities Exchange
        Act
        of 1934, as amended; or
  q)  agree,
        consent or acquiesce to any amendment, supplement or other modification to,
        or
        termination of, any of its material agreements, including, without limitation
        any Material License Agreement (as defined below) or any other agreement
        filed
        with the Securities and Exchange Commission pursuant to Item 601 of Regulation
        S-K;
  For
        the
        purposes hereof:
  ***“*** **Significant
        Holder** ***”*** shall
        mean any beneficial holder or holder of record of at least that number of
        shares
        of Series B Preferred Stock as is equal to $4,000,000 divided by the Series
        B
        Original Issue Price (as defined below) (as adjusted for stock splits, stock
        dividends, reverse stock splits or the like). All shares of Series B Preferred
        Stock held or acquired by affiliated entities or persons shall be aggregated
        together for the purpose of determining the status of a holder as a Significant
        Holder.
  “ **Indebtedness** ”
shall
        mean (a) any liabilities for borrowed money or amounts owed (other than trade
        accounts payable incurred in the ordinary course of business), (b) all
        guaranties, endorsements and other contingent obligations in respect of
        Indebtedness of others, whether or not the same are or should be reflected
        in
        the Corporation’s balance sheet (or the notes thereto), except guaranties by
        endorsement of negotiable instruments for deposit or collection or similar
        transactions in the ordinary course of business; and (c) the present value
        of
        any lease payments due under leases required to be capitalized in accordance
        with GAAP;
  “ **Approved
        Stock Plan** ”
shall
        mean any employee benefit plan which has been approved by the Board of Directors
        and stockholders of the Corporation, pursuant to which the Corporation’s
        securities may be issued to any employee, officer or director for services
        provided to the Corporation; and
  14
  “ **Material
        License Agreement** ”
shall
        mean (i) Exclusive License Agreement dated as of September 28, 2004 by and
        between Oxis International, a Delaware corporation, and HaptoGuard, as amended
        on March 22, 2005, as further amended on July 19, 2006, and as further amended
        on April 2, 2007; and (ii) License and Research Agreement dated as of July
        12,
        2004 by and between BIO-RAP Technologies, Ltd., an Israeli corporation, on
        its
        own behalf and on behalf of the Rappaport Family Institute for Research in
        the
        Medical Sciences, and HaptoGaurd, as amended on April 1, 2007.
  
 4.
              Optional
                  Conversion.
 
 The
        holders of the Series B Preferred Stock shall have conversion rights as follows
        (the “ **Conversion
        Rights** ”):
 
 4.1 Right
        to Convert .
 
 4.1.1  Conversion
        Ratio .
        Each
        share of Series B Preferred Stock, plus, prior to the fifth anniversary of
        the
        Series B Original Issue Date, all accrued and unpaid dividends, shall be
        convertible, at the option of the holder thereof, at any time and from time
        to
        time, and without the payment of additional consideration by the holder thereof,
        into such number of fully paid and nonassessable shares of Common Stock as
        is
        determined by dividing the Series B Original Issue Price by the Series B
        Conversion Price (as defined below) in effect at the time of conversion.
        The
“ **Series
        B Conversion Price** ”
shall
        initially be equal to $2.50. Such initial Series B Conversion Price, and
        the
        rate at which shares of Series B Preferred Stock may be converted into shares
        of
        Common Stock, shall be subject to adjustment as provided below.
 
 4.1.2  Termination
        of Conversion Rights .
        In the
        event of a notice of redemption of any shares of Series B Preferred Stock
        pursuant to Section 6 ,
        the
        Conversion Rights of the shares designated for redemption shall terminate
        at the
        close of business on the last full day preceding the date fixed for redemption,
        unless the redemption price is not fully paid on such redemption date, in
        which
        case the Conversion Rights for such shares shall continue until such price
        is
        paid in full. In the event of a liquidation, dissolution or winding up of
        the
        Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate
        at the close of business on the last full day preceding the date fixed for
        the
        payment of any such amounts distributable on such event to the holders of
        Series
        B Preferred Stock.
 
 4.2 Fractional
        Shares .
        No
        fractional shares of Common Stock shall be issued upon conversion of the
        Series
        B Preferred Stock. In lieu of any fractional shares to which the holder would
        otherwise be entitled, the Corporation shall pay cash equal to such fraction
        multiplied by the fair market value of a share of Common Stock as determined
        in
        good faith by the Board of Directors of the Corporation. In the event that
        the
        Requisite Holders disagree with the fair market value as determined by the
        Board
        of Directors, the Requisite Holders shall select an appraiser that is reasonably
        acceptable to the Corporation who is experienced in such matters to determine
        the fair market value for purposes of this Section
        4.2 ;
        and
        such appraiser’s determination shall be binding upon the Corporation and the
        holders of Series B Preferred Stock. Whether or not fractional shares would
        be
        issuable upon such conversion shall be determined on the basis of the total
        number of shares of Series B Preferred Stock the holder is at the time
        converting into Common Stock and the aggregate number of shares of Common
        Stock
        issuable upon such conversion.
 
 15
  4.3 Mechanics
        of Conversion .
 
 4.3.1  Notice
        of Conversion .
        In
        order for a holder of Series B Preferred Stock to voluntarily convert shares
        of
        Series B Preferred Stock into shares of Common Stock, such holder shall
        surrender the certificate or certificates for such shares of Series B Preferred
        Stock (or, if such registered holder alleges that such certificate has been
        lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably
        acceptable to the Corporation to indemnify the Corporation against any claim
        that may be made against the Corporation on account of the alleged loss,
        theft
        or destruction of such certificate), at the office of the transfer agent
        for the
        Series B Preferred Stock (or at the principal office of the Corporation if
        the
        Corporation serves as its own transfer agent), together with written notice
        that
        such holder elects to convert all or any number of the shares of the Series
        B
        Preferred Stock represented by such certificate or certificates and, if
        applicable, any event on which such conversion is contingent. Such notice
        shall
        state such holder’s name or the names of the nominees in which such holder
        wishes the certificate or certificates for shares of Common Stock to be issued.
        If 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
        his, her or its attorney duly authorized in writing. The close of business
        on
        the date of receipt by the transfer agent (or by the Corporation if the
        Corporation serves as its own transfer agent) of such certificates (or lost
        certificate affidavit and agreement) and notice shall be the time of conversion
        (the “ **Conversion
        Time** ”),
        and
        the shares of Common Stock issuable upon conversion of the shares represented
        by
        such certificate shall be deemed to be outstanding of record as of such date.
        The Corporation shall, as soon as practicable after the Conversion Time,
        issue
        and deliver to such holder of Series B Preferred Stock, or to his, her or
        its
        nominees, a certificate or certificates for the number of full shares of
        Common
        Stock issuable upon such conversion in accordance with the provisions hereof,
        a
        certificate for the number (if any) of the shares of Series B Preferred Stock
        represented by the surrendered certificate that were not converted into Common
        Stock, and cash as provided in Subsection
        4.2 in lieu
        of any fraction of a share of Common Stock otherwise issuable upon such
        conversion and payment of any declared but unpaid dividends on the shares
        of
        Series B Preferred Stock converted.
 
 4.3.2  Reservation
        of Shares .
        The
        Corporation shall at all times when the Series B Preferred Stock shall be
        outstanding, reserve and keep available out of its authorized but unissued
        capital stock, for the purpose of effecting the conversion of the Series
        B
        Preferred Stock, such number of its duly authorized shares of Common Stock
        as
        shall from time to time be sufficient to effect the conversion of all
        outstanding Series B Preferred Stock; and if at any time the number of
        authorized but unissued shares of Common Stock shall not be sufficient to
        effect
        the conversion of all then outstanding shares of the Series B Preferred Stock,
        the Corporation shall take such corporate action as may be necessary to increase
        its authorized but unissued shares of Common Stock to such number of shares
        as
        shall be sufficient for such purposes, including, without limitation, engaging
        in best efforts to obtain the requisite stockholder approval of any necessary
        amendment to the Certificate of Incorporation. Before taking any action which
        would cause an adjustment reducing the Series B Conversion Price below the
        then
        par value of the shares of Common Stock issuable upon conversion of the Series
        B
        Preferred Stock, the Corporation will take any corporate action which may,
        in
        the opinion of its counsel, be necessary in order that the Corporation may
        validly and legally issue fully paid and nonassessable shares of Common Stock
        at
        such adjusted Series B Conversion Price.
 
 16
  4.3.3  Effect
        of Conversion .
        All
        shares of Series B Preferred Stock which shall have been surrendered for
        conversion as herein provided shall no longer be deemed to be outstanding
        and
        all rights with respect to such shares shall immediately cease and terminate
        at
        the Conversion Time, except only the right of the holders thereof to receive
        shares of Common Stock in exchange therefor and to receive payment of any
        dividends declared but unpaid thereon. Any shares of Series B Preferred Stock
        so
        converted shall be retired and cancelled and may not be reissued as shares
        of
        such series, and the Corporation may thereafter take such appropriate action
        (without the need for stockholder action) as may be necessary to reduce the
        authorized number of shares of Series B Preferred Stock accordingly.
 
 4.3.4  No
        Further Adjustment .
        Upon
        any such conversion, no adjustment to the Series B Conversion Price shall
        be
        made for any declared but unpaid dividends on the Series B Preferred Stock
        surrendered for conversion or on the Common Stock delivered upon
        conversion.
 
 4.3.5  Taxes .
        The
        Corporation shall pay any and all issue and other similar taxes
 that
        may
        be payable in respect of any issuance or delivery of shares of Common Stock
        upon
        conversion of shares of Series B Preferred Stock pursuant to this Section 4 .
        The
        Corporation shall not, however, be required to pay any tax which may be payable
        in respect of any transfer involved in the issuance and delivery of shares
        of
        Common Stock in a name other than that in which the shares of Series B Preferred
        Stock so converted were registered, and no such issuance or delivery shall
        be
        made unless and until the person or entity requesting such issuance has paid
        to
        the Corporation the amount of any such tax or has established, to the
        satisfaction of the Corporation, that such tax has been paid.
 
 4.4 Adjustments
        to Series B Conversion Price for Diluting Issues .
 
 4.4.1 Special
        Definitions .
        For
        purposes of this Article Fourth, the following definitions shall
        apply:
 a)  “ **Option** ”
shall
        mean rights, options or warrants to subscribe for, purchase or otherwise
        acquire
        Common Stock or Convertible Securities.
  b)  “ **Series
        B Original Issue Date** ”
shall
        mean the date on which the first share of Series B Preferred Stock was
        issued.
  c)  “ **Convertible
        Securities** ”
shall
        mean any evidences of indebtedness, shares or other securities directly or
        indirectly convertible into or exchangeable for Common Stock, but excluding
        Options.
  17
  d)  “ **Additional
        Shares of Common Stock** ”
shall
        mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3 below,
        deemed to be issued) by the Corporation after the Series B Original Issue
        Date,
        other than the following shares of Common Stock, and shares of Common Stock
        deemed issued pursuant to the following Options and Convertible Securities
        (collectively “ **Exempted
        Securities** ”):
  i.
              shares
                  of Common Stock, Options or Convertible Securities issued as a
                  dividend or
                  distribution on Series B Preferred
                  Stock;
  ii.
              shares
                  of Common Stock, Options or Convertible Securities issued by reason
                  of a
                  dividend, stock split, split-up or other distribution on shares
                  of Common
                  Stock that is covered bySubsection
                  4.5, 4.6,4.7or4.8below;
  iii.
              shares
                  of Common Stock or Options issued to employees or directors of,
                  or
                  consultants or advisors to, the Corporation or any of its subsidiaries
                  pursuant to an Approved Stock Plan;
  iv.
              shares
                  of Common Stock or Convertible Securities actually issued upon
                  the
                  exercise of Options or shares of Common Stock actually issued upon
                  the
                  conversion or exchange of Convertible Securities issued pursuant
                  toSubsections
                  4.4.1(i),
                  (ii),
                  (iii)
                  and(v);
                  or
  v.
              shares
                  of Common Stock, Options or Convertible Securities issued to banks,
                  equipment lessors or other financial institutions, or to real property
                  lessors, pursuant to a debt financing, equipment leasing or real
                  property
                  leasing transaction approved by the Board of Directors of the
                  Corporation.
  4.4.2 No
        Adjustment of Series B Conversion Price .
        No
        adjustment in the Series B Conversion Price shall be made as the result of
        the
        issuance or deemed issuance of Additional Shares of Common Stock if the
        Corporation receives written notice from the holders of at least a majority
        of
        the then outstanding shares of Series B Preferred Stock agreeing that no
        such
        adjustment shall be made as the result of the issuance or deemed issuance
        of
        such Additional Shares of Common Stock.
 
 4.4.3 Deemed
        Issue of Additional Shares of Common Stock .
 
 a)  If
        the
        Corporation at any time or from time to time after the Series B Original
        Issue
        Date shall issue any Options or Convertible Securities (excluding Options
        or
        Convertible Securities which are themselves Exempted Securities) or shall
        fix a
        record date for the determination of holders of any class of securities entitled
        to receive any such Options or Convertible Securities, then the maximum number
        of shares of Common Stock (as set forth in the instrument relating thereto,
        assuming the satisfaction of any conditions to exercisability, convertibility
        or
        exchangeability but without regard to any provision contained therein for
        a
        subsequent adjustment of such number) issuable upon the exercise of such
        Options
        or, in the case of Convertible Securities and Options therefor, the conversion
        or exchange of such Convertible Securities, shall be deemed to be Additional
        Shares of Common Stock issued as of the time of the issuance of such Options
        or
        Convertible Securities or, in case such a record date shall have been fixed,
        as
        of the close of business on such record date.
  18
  b)  If
        the
        terms of any Option or Convertible Security, the issuance of which resulted
        in
        an adjustment to the Series B Conversion Price pursuant to the terms of Subsection
        4.4.4 below,
        are revised as a result of an amendment to such terms or any other adjustment
        pursuant to the provisions of such Option or Convertible Security (but excluding
        automatic adjustments to such terms pursuant to anti-dilution or similar
        provisions of such Option or Convertible Security) to provide for either
        (1) any
        increase or decrease in the number of shares of Common Stock issuable upon
        the
        exercise, conversion and/or exchange of any such Option or Convertible Security
        or (2) any increase or decrease in the consideration payable to the Corporation
        upon such exercise, conversion and/or exchange, then, effective upon such
        increase or decrease becoming effective, the Series B Conversion Price computed
        upon the original issue of such Option or Convertible Security (or upon the
        occurrence of a record date with respect thereto) shall be readjusted to
        such
        Series B Conversion Price as would have obtained had such revised terms been
        in
        effect upon the original date of issuance of such Option or Convertible
        Security. Notwithstanding the foregoing, no readjustment pursuant to this
        clause (b) shall have the effect of increasing the Series B Conversion
        Price to an amount which exceeds the lower of (i) the Series B Conversion
        Price in effect immediately prior to the original adjustment made as a result
        of
        the issuance of such Option or Convertible Security, or (ii) the Series B
        Conversion Price that would have resulted from any issuances of Additional
        Shares of Common Stock (other than deemed issuances of Additional Shares
        of
        Common Stock as a result of the issuance of such Option or Convertible Security)
        between the original adjustment date and such readjustment date.
  c)  If
        the
        terms of any Option or Convertible Security (excluding Options or Convertible
        Securities which are themselves Exempted Securities), the issuance of which
        did
        not result in an adjustment to the Series B Conversion Price pursuant to
        the
        terms of Subsection
        4.4.4 below
        (either because the consideration per share (determined pursuant to Subsection 4.4.5 hereof)
        of the Additional Shares of Common Stock subject thereto was equal to or
        greater
        than the Series B Conversion Price then in effect, or because such Option
        or
        Convertible Security was issued before the Series B Original Issue Date),
        are
        revised after the Series B Original Issue Date as a result of an amendment
        to
        such terms or any other adjustment pursuant to the provisions of such Option
        or
        Convertible Security (but excluding automatic adjustments to such terms pursuant
        to anti-dilution or similar provisions of such Option or Convertible Security)
        to provide for either (1) any increase or decrease in the number of shares
        of
        Common Stock issuable upon the exercise, conversion or exchange of any such
        Option or Convertible Security or (2) any increase or decrease in the
        consideration payable to the Corporation upon such exercise, conversion or
        exchange, then such Option or Convertible Security, as so amended or adjusted,
        and the Additional Shares of Common Stock subject thereto (determined in
        the
        manner provided in Subsection
        4.4.3(a) above)
        shall be deemed to have been issued effective upon such increase or decrease
        becoming effective.
  19
  d)  Upon
        the
        expiration or termination of any unexercised Option or unconverted or
        unexchanged Convertible Security (or portion thereof) which resulted (either
        upon its original issuance or upon a revision of its terms) in an adjustment
        to
        the Series B Conversion Price pursuant to the terms of Subsection
        4.4.4 below,
        the Series B Conversion Price shall be readjusted to such Series B Conversion
        Price as would have obtained had such Option or Convertible Security (or
        portion
        thereof) never been issued.
  e)  If
        the
        number of shares of Common Stock issuable upon the exercise, conversion and/or
        exchange of any Option or Convertible Security, or the consideration payable
        to
        the Corporation upon such exercise, conversion and/or exchange, is calculable
        at
        the time such Option or Convertible Security is issued or amended but is
        subject
        to adjustment based upon subsequent events, any adjustment to the Series
        B
        Conversion Price provided for in this Subsection
        4.4.3 shall be
        effected at the time of such issuance or amendment based on such number of
        shares or amount of consideration without regard to any provisions for
        subsequent adjustments (and any subsequent adjustments shall be treated as
        provided in clauses (b) and (c) of this Subsection
        4.4.3 ).
        If the
        number of shares of Common Stock issuable upon the exercise, conversion and/or
        exchange of any Option or Convertible Security, or the consideration payable
        to
        the Corporation upon such exercise, conversion and/or exchange, cannot be
        calculated at all at the time such Option or Convertible Security is issued
        or
        amended, any adjustment to the Series B Conversion Price that would result
        under
        the terms of this Subsection
        4.4.3 at the
        time of such issuance or amendment shall instead be effected at the time
        such
        number of shares and/or amount of consideration is first calculable (even
        if
        subject to subsequent adjustments), assuming for purposes of calculating
        such
        adjustment to the Series B Conversion Price that such issuance or amendment
        took
        place at the time such calculation can first be made.
  4.4.4 Adjustment
        of Series B Conversion Price Upon Issuance of Additional Shares of Common
        Stock .
        In the
        event the Corporation shall at any time after the Series B Original Issue
        Date
        issue Additional Shares of Common Stock (including Additional Shares of Common
        Stock deemed to be issued pursuant to Subsection 4.4.3 ),
        without consideration or for a consideration per share less than the Series
        B
        Conversion Price in effect immediately prior to such issue, then the Series
        B
        Conversion Price shall be reduced, concurrently with such issue, to a price
        (calculated to the nearest one-hundredth of a cent) determined in accordance
        with the following formula:
  CP 2 =
        CP 1 * (A +
        B)  ̧ (A +
        C).
  For
        purposes of the foregoing formula, the following definitions shall apply:
 
 a)  “ **CP** **2** ”
shall
        mean the Series B Conversion Price in effect immediately after such issue
        of
        Additional Shares of Common Stock
  b)  “ **CP** **1** ”
shall
        mean the Series B Conversion Price in effect immediately prior to such issue
        of
        Additional Shares of Common Stock;
  c)  “ **A** ”
shall
        mean the number of shares of Common Stock outstanding immediately prior to
        such
        issue of Additional Shares of Common Stock (including for this purpose as
        outstanding all shares of Common Stock issuable upon conversion of the
        outstanding shares of Series B Preferred Stock but otherwise excluding all
        shares of Common Stock subject to repurchase by the Corporation at cost or
        issuable upon exercise or conversion of Options or Convertible
        Securities);
  20
  d)  “ **B** ”
shall
        mean the number of shares of Common Stock that would have been issued if
        such
        Additional Shares of Common Stock had been issued at a price per share equal
        to
        CP 1 (determined by dividing the aggregate consideration received by the Corporation
        in respect of such issue by CP 1 );
        and
  e)  “ **C** ”
shall
        mean the number of such Additional Shares of Common Stock issued in such
        transaction.
  4.4.5 Determination
        of Consideration .
        For
        purposes of this Subsection 4.4 ,
        the
        consideration received by the Corporation for the issue of any Additional
        Shares
        of Common Stock shall be computed as follows:
 
 a)
              Cash
                  and Property:
                  Such consideration shall:
  i.
              insofar
                  as it consists of cash, be computed at the aggregate amount of
                  cash
                  received by the Corporation, excluding amounts paid or payable
                  for accrued
                  interest;
  ii.
              insofar
                  as it consists of property other than cash, be computed at the
                  fair market
                  value thereof at the time of such issue, as determined in good
                  faith by
                  the Board of Directors of the Corporation. In the event that the
                  Requisite
                  Holders disagree with the fair market value as determined by the
                  Board of
                  Directors, the Requisite Holders shall select an appraiser that
                  is
                  reasonably acceptable to the Corporation who is experienced in
                  such
                  matters to determine the fair market value for purposes of thisSection
                  4.4.5;
                  and such appraiser’s determination shall be binding upon the Corporation
                  and the holders of Series B Preferred
                  Stock;
  iii.
              in
                  the event Additional Shares of Common Stock are issued together
                  with other
                  shares or securities or other assets of the Corporation for consideration
                  which covers both, be the proportion of such consideration so received,
                  computed as provided inclauses (i)and(ii)above, as determined in good faith by the Board of Directors of
                  the
                  Corporation. In the event that the Requisite Holders disagree with
                  the
                  fair market value as determined by the Board of Directors, the
                  Requisite
                  Holders shall select an appraiser that is reasonably acceptable
                  to the
                  Corporation who is experienced in such matters to determine the
                  fair
                  market value for purposes of thisSection
                  4.4.5;
                  and such appraiser’s determination shall be binding upon the Corporation
                  and the holders of Series B Preferred
                  Stock.
  21
  b)  Options
        and Convertible Securities .
        The
        consideration per share received by the Corporation for Additional Shares
        of
        Common Stock deemed to have been issued pursuant to Subsection 4.4.3 ,
        relating to Options and Convertible Securities, shall be determined by
        dividing:
  i.
              the
                  total amount, if any, received or receivable by the Corporation
                  as
                  consideration for the issue of such Options or Convertible Securities,
                  plus the minimum aggregate amount of additional consideration (as
                  set
                  forth in the instruments relating thereto, without regard to any
                  provision
                  contained therein for a subsequent adjustment of such consideration)
                  payable to the Corporation upon the exercise of such Options or
                  the
                  conversion or exchange of such Convertible Securities, or in the
                  case of
                  Options for Convertible Securities, the exercise of such Options
                  for
                  Convertible Securities and the conversion or exchange of such Convertible
                  Securities, by
  ii.
              the
                  maximum number of shares of Common Stock (as set forth in the instruments
                  relating thereto, without regard to any provision contained therein
                  for a
                  subsequent adjustment of such number) issuable upon the exercise
                  of such
                  Options or the conversion or exchange of such Convertible Securities,
                  or
                  in the case of Options for Convertible Securities, the exercise
                  of such
                  Options for Convertible Securities and the conversion or exchange
                  of such
                  Convertible Securities.
  4.4.6 Multiple
        Closing Dates .
        In the
        event the Corporation shall issue on more than one date Additional Shares
        of
        Common Stock that are a part of one transaction or a series of related
        transactions and that would result in an adjustment to the Series B Conversion
        Price pursuant to the terms of Subsection
        4.4.4 above
        then, upon the final such issuance, the Series B Conversion Price shall be
        readjusted to give effect to all such issuances as if they occurred on the
        date
        of the first such issuance (and without giving effect to any additional
        adjustments as a result of any such subsequent issuances within such
        period).
 
 22
  4.5 Adjustment
        for Stock Splits and Combinations .
        If the
        Corporation shall at any time or from time to time after the Series B Original
        Issue Date effect a subdivision of the outstanding Common Stock, the Series
        B
        Conversion Price in effect immediately before that subdivision shall be
        proportionately decreased so that the number of shares of Common Stock issuable
        on conversion of each share of such series shall be increased in proportion
        to
        such increase in the aggregate number of shares of Common Stock outstanding.
        If
        the Corporation shall at any time or from time to time after the Series B
        Original Issue Date combine the outstanding shares of Common Stock, the Series
        B
        Conversion Price in effect immediately before the combination shall be
        proportionately increased so that the number of shares of Common Stock issuable
        on conversion of each share of such series shall be decreased in proportion
        to
        such decrease in the aggregate number of shares of Common Stock outstanding.
        Any
        adjustment under this subsection shall become effective at the close of business
        on the date the subdivision or combination becomes effective.
 
 4.6 Adjustment
        for Certain Dividends and Distributions .
        In the
        event the Corporation at any time or from time to time after the Series B
        Original Issue Date 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 on the Common Stock in additional shares of Common
        Stock, then and in each such event the Series B Conversion Price in effect
        immediately before such event shall be decreased as of the time of such issuance
        or, in the event such a record date shall have been fixed, as of the close
        of
        business on such record date, by multiplying the Series B Conversion Price
        then
        in effect by a fraction:
 
 i.
              the
                  numerator of which shall be the total number of shares of Common
                  Stock
                  issued and outstanding immediately prior to the time of such issuance
                  or
                  the close of business on such record date,
                  and
  ii.
              the
                  denominator of which shall be the total number of shares of Common
                  Stock
                  issued and outstanding immediately prior to the time of such issuance
                  or
                  the close of business on such record date plus the number of shares
                  of
                  Common Stock issuable in payment of such dividend or
                  distribution.
  Notwithstanding
        the foregoing, (a) if such record date shall have been fixed and such dividend
        is not fully paid or if such distribution is not fully made on the date fixed
        therefor, the Series B Conversion Price shall be recomputed accordingly as
        of
        the close of business on such record date and thereafter the Series B Conversion
        Price shall be adjusted pursuant to this subsection as of the time of actual
        payment of such dividends or distributions; and (b) that no such adjustment
        shall be made if the holders of Series B Preferred Stock simultaneously receive
        a dividend or other distribution of shares of Common Stock in a number equal
        to
        the number of shares of Common Stock as they would have received if all
        outstanding shares of Series B Preferred Stock had been converted into Common
        Stock on the date of such event.
 
 4.7 Adjustments
        for Other Dividends and Distributions .
        In the
        event the Corporation at any time or from time to time after the Series B
        Original Issue Date 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 a
        distribution of shares of Common Stock in respect of outstanding shares of
        Common Stock) or in other property and the provisions of Section
        1 do not
        apply to such dividend or distribution, then and in each such event the holders
        of Series B Preferred Stock shall receive, simultaneously with the distribution
        to the holders of Common Stock, a dividend or other distribution of such
        securities or other property in an amount equal to the amount of such securities
        or other property as they would have received if all outstanding shares of
        Series B Preferred Stock had been converted into Common Stock on the date
        of
        such event.
 
 23
  4.8 Adjustment
        for Merger or Reorganization, etc .
        Subject
        to the provisions of Subsection
        2.3 ,
        if
        there shall occur any reorganization, recapitalization, reclassification,
        consolidation or merger involving the Corporation in which the Common Stock
        (but
        not the Series B Preferred Stock) is converted into or exchanged for securities,
        cash or other property (other than a transaction covered by Subsections
        4.4 , 4.6 or 4.7 ),
        then,
        following any such reorganization, recapitalization, reclassification,
        consolidation or merger, each share of Series B Preferred Stock shall thereafter
        be convertible in lieu of the Common Stock into which it was convertible
        prior
        to such event into the kind and amount of securities, cash or other property
        which a holder of the number of shares of Common Stock of the Corporation
        issuable upon conversion of one share of Series B Preferred Stock immediately
        prior to such reorganization, recapitalization, reclassification, consolidation
        or merger would have been entitled to receive pursuant to such transaction;
        and,
        in such case, appropriate adjustment (as determined in good faith by the
        Board
        of Directors of the Corporation **,** and
        in
        the event that the Requisite Holders disagree with the determination of the
        Board of Directors, the Requisite Holders shall select an appraiser that
        is
        reasonably acceptable to the Corporation who is experienced in such matters
        to
        make the determination for purposes of this Section
        4.8; and such
        appraiser’s determination shall be binding upon the Corporation and the holders
        of Series B Preferred Stock) shall be made in the application of the provisions
        in this Section 4 with
        respect to the rights and interests thereafter of the holders of the Series
        B
        Preferred Stock, to the end that the provisions set forth in this Section 4 (including provisions with respect to changes in and other adjustments of
        the
        Series B Conversion Price) shall thereafter be applicable, as nearly as
        reasonably may be, in relation to any securities or other property thereafter
        deliverable upon the conversion of the Series B Preferred Stock.
 
 4.9 Certificate
        as to Adjustments .
        Upon
        the occurrence of each adjustment or readjustment of the Series B Conversion
        Price pursuant to this Section 4 ,
        the
        Corporation at its expense shall, as promptly as reasonably practicable but
        in
        any event not later than ten (10) days thereafter, compute such adjustment
        or
        readjustment in accordance with the terms hereof and furnish to each holder
        of
        Series B Preferred Stock a certificate setting forth such adjustment or
        readjustment (including the kind and amount of securities, cash or other
        property into which the Series B Preferred Stock is convertible) and showing
        in
        detail the facts upon which such adjustment or readjustment is based. The
        Corporation shall, as promptly as reasonably practicable after the written
        request at any time of any holder of Series B Preferred Stock (but in any
        event
        not later than ten (10) days thereafter), furnish or cause to be furnished
        to
        such holder a certificate setting forth (i) the Series B Conversion Price
        then in effect, and (ii) the number of shares of Common Stock and the
        amount, if any, of other securities, cash or property which then would be
        received upon the conversion of Series B Preferred Stock.
 
 24
  4.10 Notice
        of Record Date .
        In the
        event:
 
 a)  the
        Corporation shall take a record of the holders of its Common Stock (or other
        capital stock or securities at the time issuable upon conversion of the Series
        B
        Preferred Stock) for the purpose of entitling or enabling them to receive
        any
        dividend or other distribution, or to receive any right to subscribe for
        or
        purchase any shares of capital stock of any class or any other securities,
        or to
        receive any other security; or
  b)  of
        any
        capital reorganization of the Corporation, any reclassification of the Common
        Stock of the Corporation, or any Deemed Liquidation Event; or
  c)  of
        the
        voluntary or involuntary dissolution, liquidation or winding-up of the
        Corporation,
  then,
        and
        in each such case, the Corporation will send or cause to be sent to the holders
        of the Series B Preferred Stock a notice specifying, as the case may be,
        (i) the
        record date for such dividend, distribution or right, and the amount and
        character of such dividend, distribution or right, or (ii) the effective
        date on
        which such reorganization, reclassification, consolidation, merger, transfer,
        dissolution, liquidation or winding-up is proposed to take place, and the
        time,
        if any is to be fixed, as of which the holders of record of Common Stock
        (or
        such other capital stock or securities at the time issuable upon the conversion
        of the Series B Preferred Stock) shall be entitled to exchange their shares
        of
        Common Stock (or such other capital stock or securities) for securities or
        other
        property deliverable upon such reorganization, reclassification, consolidation,
        merger, transfer, dissolution, liquidation or winding-up, and the amount
        per
        share and character of such exchange applicable to the Series B Preferred
        Stock
        and the Common Stock. Such notice shall be sent at least twenty (20) days
        prior
        to the record date or effective date for the event specified in such notice.
 
 5.
              Mandatory
                  Conversion.
 
 5.1 Trigger
        Event .
        At such
        time when (A) (i) the thirty (30) day prior trailing average Closing Price
        of
        the Common Stock for the entire six-months preceding such time is equal to
        at
        least the Series B Original Issue Price, and (ii) one and one half (1.5)
        years
        have elapsed after the Corporation has had declared effective by the Securities
        and Exchange Commission and continuously maintained for such one and one
        half
        (1.5) year period the effectiveness of a shelf registration statement providing
        for the resale of all of the Common Stock underlying the Series B Preferred
        Stock and those certain warrants issued in connection with the Series B
        Preferred Stock under the Series B Purchase Agreement, an equivalent of
        $7,500,000 (measured as of the Series B Original Issue Date) of the Series
        B
        Preferred Stock shall (a) automatically be converted into shares of Common
        Stock, at the then effective Series B Conversion Price, as may be adjusted
        pursuant to Section 4 above, and (b) such shares may not be reissued by the
        Corporation, or (B) (i) the thirty (30) day prior trailing average Closing
        Price
        of the Common Stock for the entire six (6)-months preceding such time is
        equal
        to at least two (2)-times the Series B Original Issue Price, and (ii) one
        and
        one half (1.5) years have elapsed after the Corporation has had declared
        effective by the Securities and Exchange Commission and continuously maintained
        for such one and one half (1.5) year period the effectiveness of a shelf
        registration statement providing for the resale of all of the Common Stock
        underlying the Series B Preferred Stock and those certain warrants issued
        in
        connection with the Series B Preferred Stock, the remainder of the outstanding
        Series B Preferred Stock shall (a) automatically be converted into shares
        of
        Common Stock, at the then effective Series B Conversion Price, as may be
        adjusted pursuant to Section 4 above, and (b) such shares may not be
        reissued by the Corporation (the occurrence of the events specified in these Sections
        5.1(A) and (B) is
        referred to herein as the “ **Mandatory
        Conversion Time** ”).
 
 25
  For
        purposes of this Section
        5 the
        following terms are defined as follows:
 
 “ **Closing
        Price** ”
means
        on any particular date (a) the last reported closing price per share of
        Common Stock on such date on the Trading Market (as reported by Bloomberg
        L.P.
        at 4:15 PM (New York time)), or (b) if there is no such price on such date,
        then
        the closing price on the Trading Market on the date nearest preceding such
        date
        (as reported by Bloomberg L.P. at 4:15 PM (New York time)), or (c) if the
        OTC
        Bulletin Board is not a Trading Market, the volume weighted average price
        of the
        Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
        Board or (d)  if the Common Stock is not then listed or quoted on the
        Trading Market or the OTC Bulletin Board and if prices for the Common Stock
        are
        then reported in the “pink sheets” published by Pink Sheets LLC (or a similar
        organization or agency succeeding to its functions of reporting prices),
        the
        most recent price per share of the Common Stock so reported, or (e) if the
        shares of Common Stock are not then publicly traded the fair market value
        of a
        share of Common Stock as determined by an appraiser selected in good faith
        by
        the Purchasers of a majority in interest of the Series B Preferred Stock
        then
        outstanding.
  “ **Trading
        Market** ”
means
        the following markets or exchanges on which the Common Stock is listed or
        quoted
        for trading on the date in question: the Nasdaq Capital Market, the American
        Stock Exchange, the New York Stock Exchange, or the Nasdaq Global
        Market.
  5.2 Procedural
        Requirements .
        All
        holders of record of shares of Series B Preferred Stock subject to conversion
        shall be sent written notice of the Mandatory Conversion Time and the place
        designated for mandatory conversion of all such shares of Series B Preferred
        Stock pursuant to this Section 5 .
        Such
        notice need not be sent in advance of the occurrence of the Mandatory Conversion
        Time. Upon receipt of such notice, each holder of shares of Series B Preferred
        Stock subject to conversion shall surrender his, her or its certificate or
        certificates for all such shares (or, if such holder alleges that such
        certificate has been lost, stolen or destroyed, a lost certificate affidavit
        and
        agreement reasonably acceptable to the Corporation to indemnify the Corporation
        against any claim that may be made against the Corporation on account of
        the
        alleged loss, theft or destruction of such certificate) to the Corporation
        at
        the place designated in such notice, and shall thereafter receive certificates
        for the number of shares of Common Stock to which such holder is entitled
        pursuant to this Section 5 .
        At the
        Mandatory Conversion Time, all outstanding shares of Series B Preferred Stock
        subject to conversion shall be deemed to have been converted into shares
        of
        Common Stock, which shall be deemed to be outstanding of record, and all
        rights
        with respect to the Series B Preferred Stock so converted, including the
        rights,
        if any, to receive notices and vote (other than as a holder of Common Stock),
        will terminate, except only the rights of the holders thereof, upon surrender
        of
        their certificate or certificates (or lost certificate affidavit and agreement)
        therefor, to receive the items provided for in the last sentence of this Subsection
        5.2 .
        If so
        required by the Corporation, certificates surrendered for conversion shall
        be
        endorsed or accompanied by 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. As soon as practicable
        after the Mandatory Conversion Time and the surrender of the certificate
        or
        certificates (or lost certificate affidavit and agreement) for Series B
        Preferred Stock subject to conversion, the Corporation shall issue and deliver
        to such holder, or to his, her or its nominees, a certificate or certificates
        for the number of full shares of Common Stock issuable on such conversion
        in
        accordance with the provisions hereof, together with cash as provided in Subsection 4.2 in lieu
        of any fraction of a share of Common Stock otherwise issuable upon such
        conversion and the payment of any declared but unpaid dividends on the shares
        of
        Series B Preferred Stock converted.
 
 26
  5.3 Effect
        of Mandatory Conversion .
        All
        shares of Series B Preferred Stock subject to conversion shall, from and
        after
        the Mandatory Conversion Time, no longer be deemed to be outstanding and,
        notwithstanding the failure of the holder or holders thereof to surrender
        the
        certificates for such shares on or prior to such time, all rights with respect
        to such shares shall immediately cease and terminate at the Mandatory Conversion
        Time, except only the right of the holders thereof to receive shares of Common
        Stock in exchange therefor and to receive payment of any dividends declared
        but
        unpaid thereon. Such converted Series B Preferred Stock shall be retired
        and
        cancelled and may not be reissued as shares of such series, and the Corporation
        may thereafter take such appropriate action (without the need for stockholder
        action) as may be necessary to reduce the authorized number of shares of
        Series
        B Preferred Stock accordingly.
 
 6.  Redeemed
        or Otherwise Acquired Shares .
        Any
        shares of Series B Preferred Stock which are redeemed or otherwise acquired
        by
        the Corporation or any of its subsidiaries shall be automatically and
        immediately cancelled and retired and shall not be reissued, sold or
        transferred. Neither the Corporation nor any of its subsidiaries may exercise
        any voting or other rights granted to the holders of Series B Preferred Stock
        following redemption.
 
 7.  Waiver .
        Any of
        the rights, powers, preferences and other terms of the Series B Preferred
        Stock
        set forth herein may be waived on behalf of all holders of Series B Preferred
        Stock by the affirmative written consent or vote of the holders of at least
        a
        majority of the shares of Series B Preferred Stock then
        outstanding.
 
 8.  Notices .
        Any
        notice required or permitted by the provisions of this Article Fourth to
        be
        given to a holder of shares of Series B Preferred Stock shall be mailed,
        postage
        prepaid, to the post office address last shown on the records of the
        Corporation, or given by electronic communication in compliance with the
        provisions of the General Corporation Law, and shall be deemed sent upon
        such
        mailing or electronic transmission.
 
 27
 
 FIFTH:
        The following provisions are inserted for the management of the business
        and the
        conduct of the affairs of the Corporation, and for further definition,
        limitation and regulation of the powers of the Corporation and of its directors
        and stockholders:
 
 A.  The
        business and affairs of the Corporation shall be managed by or under the
        direction of the Board of Directors. In addition to the powers and authority
        expressly conferred upon them by statute or by this Restated Certificate
        of
        Incorporation or the Bylaws of the Corporation as in effect from time to
        time,
        the directors are hereby empowered to exercise all such powers and do all
        such
        acts and things as may be exercised or done by the Corporation.
 
 B.  The
        directors of the Corporation need not be elected by written ballot unless
        the
        Bylaws so provide.
 
 C.  Subject
        to the rights of the holders of any series of Preferred Stock then outstanding,
        any action required or permitted to be taken by the stockholders of the
        Corporation may be effected only at a duly called annual or special meeting
        of
        stockholders of the Corporation and not by written consent.
 
 D.  Special
        meetings of the stockholders may only be called by the Board of Directors
        acting
        pursuant to a resolution adopted by a majority of the Whole Board. For the
        purposes of this Restated Certificate of Incorporation, the term “Whole Board”
shall mean the total number of authorized directors whether or not there
        exist
        any vacancies in previously authorized directorships.
 
 SIXTH:
 
 A.  Subject
        to the rights of the holders of shares of any series of Preferred Stock then
        outstanding to elect additional directors under specified circumstances,
        the
        number of directors shall be fixed from time to time exclusively by the Board
        of
        Directors pursuant to a resolution adopted by a majority of the Whole
        Board.
 
 B.  The
        directors, other than those who may be elected by the holders of shares of
        any
        series of Preferred Stock under specified circumstances, shall be divided
        into
        three classes, with the term of office of the first class to expire at the
        first
        annual meeting of stockholders following the initial classification of
        directors, the term of office of the second class to expire at the second
        annual
        meeting of stockholders following the initial classification of directors,
        and
        the term of office of the third class to expire at the third annual meeting
        of
        stockholders following the initial classification of directors. At each annual
        meeting of stockholders, directors elected to succeed those directors whose
        terms expire, other than directors elected by the holders of any series of
        Preferred Stock under specified circumstances, shall be elected for a term
        of
        office to expire at the third succeeding annual meeting of stockholders after
        their election and until their successors are duly elected and
        qualified.
 
 C.  Subject
        to the rights of the holders of any series of Preferred Stock then outstanding,
        newly created directorships resulting from any increase in the authorized
        number
        of directors or any vacancies in the Board of Directors resulting from death,
        resignation, retirement, disqualification, removal from office or other cause
        shall, unless otherwise required by law or by resolution of the Board of
        Directors, be filled only by a majority vote of the directors then in office
        even though less than a quorum, or by a sole remaining director, and not
        by
        stockholders, and
        directors so chosen shall serve for a term expiring at the annual meeting
        of
        stockholders at which the term of office of the class to which they have
        been
        chosen expires or until such director’s successor shall have been duly elected
        and qualified. No decrease in the authorized number of directors shall shorten
        the term of any incumbent director.
 
 28
 
 D.  Advance
        notice of stockholder nominations for the election of directors and of business
        to be brought by stockholders before any meeting of the stockholders of the
        Corporation shall be given in the manner provided in the Bylaws of the
        Corporation.
 
 E.  Subject
        to the rights of the holders of any series of Preferred Stock then outstanding,
        any director, or the entire Board of Directors, may be removed from office
        at
        any time only for cause and only by the affirmative vote of the holders of
        at
        least eighty percent (80%) of the voting power of all of the then-outstanding
        shares of capital stock of the Corporation entitled to vote at an election
        of
        the directors, voting together as a single class.
 
 SEVENTH:
        The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws
        of the Corporation. Any adoption, amendment or repeal of the Bylaws of the
        Corporation by the Board of Directors shall require the approval of a majority
        of the Whole Board. The stockholders shall also have power to adopt, amend
        or
        repeal the Bylaws of the Corporation; provided, that in addition to any vote
        of
        the holders of any class or series of stock of the Corporation required by
        law
        or by this Restated Certificate of Incorporation, the affirmative vote of
        the
        holders of at least eighty (80%) of the voting power of all of the then
        outstanding shares of the capital stock of the Corporation entitled to vote
        generally in the election of directors, voting together as a single class,
        shall
        be required for the stockholders to adopt, amend or repeal any provision
        of the
        Bylaws of the Corporation.
 
 EIGHTH:
 
 A. Each
        person who was or is made a party or is threatened to be made a party to
        or is
        otherwise involved (including, without limitation, as a witness) in any action,
        suit or proceeding, whether civil, criminal, administrative or investigative,
        by
        reason of the fact that he is or was a director or an officer of the Corporation
        or is or was serving at the request of the Corporation as a director, officer,
        or trustee of another corporation, or of a partnership, joint venture, trust
        or
        other enterprise, including service with respect to an employee benefit plan
        (hereinafter an “ **Indemnitee** ”),
        whether the basis of such proceeding is alleged action in an official capacity
        as a director, officer or trustee or in any other capacity while serving
        as a
        director, officer or trustee, shall be indemnified and held harmless by the
        Corporation to the fullest extent permitted by the Delaware General Corporation
        Law, as the same exists or may hereafter be amended (but, in the case of
        any
        such amendment, only to the extent that such amendment permits the Corporation
        to provide broader indemnification rights than such law permitted the
        Corporation to provide prior to such amendment), against all expense, liability
        and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or
        penalties and amounts paid in settlement) reasonably incurred or suffered
        by
        such Indemnitee in connection therewith; provided, however, that, except
        as
        provided in Paragraph C of this Article EIGHTH with respect to proceedings
        to
        enforce rights to indemnification or as otherwise required by law, the
        Corporation shall not be required to indemnify or advance expenses to any
        such
        Indemnitee in connection with a proceeding (or part thereof) initiated by
        such
        Indemnitee unless such proceeding (or part thereof) was authorized by the
        Board
        of Directors of the Corporation.
  29
 
 B.  In
        addition to the right to indemnification conferred in Paragraph A of this
        Article EIGHTH, an Indemnitee shall also have the right to be paid by the
        Corporation the expenses (including attorney’s fees) incurred in defending any
        such proceeding in advance of its final disposition; provided, however, that,
        if
        the Delaware General Corporation Law requires, an advancement of expenses
        incurred by an Indemnitee in his capacity as a director or officer (and not
        in
        any other capacity in which service was or is rendered by such Indemnitee,
        including, without limitation, service to an employee benefit plan) shall
        be
        made only upon delivery to the Corporation of an undertaking, by or on behalf
        of
        such Indemnitee, to repay all amounts so advanced if it shall ultimately be
        determined by final judicial decision from which there is no further right
        to
        appeal that such Indemnitee is not entitled to be indemnified for such expenses
        under this Paragraph B or otherwise.
 
 C.  If
        a
        claim under Paragraph A or B of this Article EIGHTH is not paid in full by
        the
        Corporation within sixty (60) days after a written claim has been received
        by
        the Corporation, except in the case of a claim for an advancement of expenses,
        in which case the applicable period shall be twenty (20) days, the Indemnitee
        may at any time thereafter bring suit against the Corporation to recover
        the
        unpaid amount of the claim. If successful in whole or in part in any such
        suit,
        or in a suit brought by the Corporation to recover an advancement of expenses
        pursuant to the terms of an undertaking, the Indemnitee shall also be entitled
        to be paid the expenses of prosecuting or defending such suit. In (i) any
        suit
        brought by the Indemnitee to enforce a right to indemnification hereunder
        (but
        not in a suit brought by the Indemnitee to enforce a right to an advancement
        of
        expenses) it shall be a defense that, and (ii) in any suit brought by the
        Corporation to recover an advancement of expenses pursuant to the terms of
        an
        undertaking, the Corporation shall be entitled to recover such expenses upon
        a
        final adjudication that, the Indemnitee has not met any applicable standard
        for
        indemnification set forth in the Delaware General Corporation Law. Neither
        the
        failure of the Corporation (including its directors who are not parties to
        such
        action, a committee of such directors, independent legal counsel, or its
        stockholders) to have made a determination prior to the commencement of such
        suit that indemnification of the Indemnitee is proper in the circumstances
        because the Indemnitee has met the applicable standard of conduct set forth
        in
        the Delaware General Corporation Law, nor an actual determination by the
        Corporation (including its directors who are not parties to such action,
        a
        committee of such directors, independent legal counsel, or its stockholders)
        that the Indemnitee has not met such applicable standard of conduct, shall
        create a presumption that the Indemnitee has not met the applicable standard
        of
        conduct or, in the case of such a suit brought by the Indemnitee, be a defense
        to such suit. In any suit brought by the Indemnitee to enforce a right to
        indemnification or to an advancement of expenses hereunder, or brought by
        the
        Corporation to recover an advancement of expenses pursuant to the terms of
        an
        undertaking, the burden of proving that the Indemnitee is not entitled to
        be
        indemnified, or to such advancement of expenses, under this Article EIGHTH
        or
        otherwise shall be on the Corporation.
  30
  D.  The
        rights to indemnification and to the advancement of expenses conferred in
        this
        Article EIGHTH shall not be exclusive of any other right which any person
        may
        have or hereafter acquire under any statute, the Corporation’s Certificate of
        Incorporation as amended from time to time, the Corporation’s Bylaws, any
        agreement, any vote of stockholders or disinterested directors or
        otherwise.
 
 E.  The
        Corporation may maintain insurance, at its expense, to protect itself and
        any
        director, officer, employee or agent of the Corporation or another corporation,
        partnership, joint venture, trust or other enterprise against any expense,
        liability or loss, whether or not the Corporation would have the power to
        indemnify such person against such expense, liability or loss under the Delaware
        General Corporation Law.
 
 F.  The
        Corporation may, to the extent authorized from time to time by the Board
        of
        Directors, grant rights to indemnification and to the advancement of expenses
        to
        any employee or agent of the Corporation to the fullest extent of the provisions
        of this Article EIGHTH with respect to the indemnification and advancement
        of
        expenses of directors and officers of the Corporation.
 
 G.  The
        rights conferred upon Indemnitees in this Article EIGHTH shall be contract
        rights and such rights shall continue as to an Indemnitee who has ceased
        to be a
        director, officer, employee or agent and shall inure to the benefit of the
        Indemnitee’s heirs, executors and administrators. Any amendment, alteration or
        repeal of this Article EIGHTH that adversely affects any right of an Indemnitee
        or its successors shall be prospective only and shall not limit or eliminate
        any
        such right with respect to any proceeding involving any occurrence or alleged
        occurrence of any action or omission to act that took place prior to any
        such
        amendment, alteration or repeal.
 
 NINTH:
        No
        director shall be personally liable to the Corporation or its stockholders
        for
        any monetary damages for breaches of fiduciary duty as a director; provided
        that
        this provision shall not eliminate or limit the liability of a director,
        to the
        extent that such liability is imposed by applicable law, (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 which involve intentional misconduct
        or a
        knowing violation of law; (iii) under Section 174 or successor provisions
        of the
        Delaware General Corporation Law; or (iv) for any transaction from which
        the
        director derived an improper personal benefit. No amendment to or repeal
        of this
        provision shall apply to or have any effect on the liability or alleged
        liability of any director for or with respect to any acts or omissions of
        such
        director occurring prior to such amendment or repeal. If the Delaware General
        Corporation Law is amended 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 Delaware General Corporation Law, as so amended. All references
        in this Article NINTH to a director shall also be deemed to refer to any
        such
        director acting in his or her capacity as a Continuing Director (as defined
        in
        Article ELEVENTH).
 
 TENTH:
        The Corporation reserves the right to amend or repeal any provision contained
        in
        this Restated Certificate of Incorporation in the manner prescribed by the
        Delaware General Corporation Law and all rights conferred upon stockholders
        are
        granted subject to this reservation; provided that in addition to the vote
        of
        the holders of any class or series of stock of the Corporation required by
        law
        or by this Restated Certificate of Incorporation, the affirmative vote of
        the
        holders of shares of voting stock of the Corporation representing at least
        eighty (80%) of the voting power of all of the then outstanding shares of
        the
        capital stock of the Corporation entitled to vote generally in the election
        of
        directors, voting together as a single class, shall be required to amend,
        alter
        or repeal, or adopt any provision inconsistent with, Articles FIFTH, SIXTH,
        SEVENTH, EIGHTH, NINTH, this Article TENTH and Article ELEVENTH of this Restated
        Certificate of Incorporation.
  31
  ELEVENTH:
        The Board of Directors is expressly authorized to cause the Corporation to
        issue
        rights pursuant to Section 157 of the Delaware General Corporation Law and,
        in
        that connection, to enter into any agreements necessary or convenient for
        such
        issuance, and to enter into other agreements necessary and convenient to
        the
        conduct of the business of the Corporation. Any such agreement may include
        provisions limiting, in certain circumstances, the ability of the Board of
        Directors of the Corporation to redeem the securities issued pursuant thereto
        or
        to take other action thereunder or in connection therewith unless there is
        a
        specified number or percentage of Continuing Directors then in office. Pursuant
        to Section 141(a) of the Delaware General Corporation Law, the Continuing
        Directors shall have the power and authority to make all decisions and
        determinations, and exercise or perform such other acts, that any such agreement
        provides that such Continuing Directors shall make, exercise or perform.
        For
        purposes of this Article ELEVENTH and any such agreement, the term,
“ **Continuing
        Directors** ,”
shall
        mean (1) those directors who were members of the Board of Directors of the
        Corporation at the time the Corporation entered into such agreement and any
        director who subsequently becomes a member of the Board of Directors, if
        such
        director’s nomination for election to the Board of Directors is recommended or
        approved by the majority vote of the Continuing Directors then in office
        or (2)
        such members of the Board of Directors designated in, or in the manner provided
        in, such agreement as Continuing Directors.
 
 
 *[remainder
        left intentionally blank]*
  32
 
 IN
        WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates
        and
        integrates and further amends the provisions of the Restated Certificate
        of
        Incorporation of this Corporation, and which has been duly adopted in accordance
        with Sections 242 and 245 of the Delaware General Corporation Law, has been
        executed by its duly authorized President and Chief Executive Officer this
        23 rd day of
        July, 2007.
 ALTEON
                  INC.By:
              /s/
                Noah
                BerkowitzNoah
                Berkowitz,Its
                  President and Chief Executive
                  Officer




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