Exhibit
4.1

     


    CERTIFICATE
OF DESIGNATION OF

    RIGHTS,
PREFERENCES AND LIMITATIONS OF

    SERIES
A 6% CUMULATIVE CONVERTIBLE PREFERRED STOCK OF

    RXBIDS

     

    RxBids, a
corporation organized and existing under the laws of Nevada (the “Corporation”), DOES
HEREBY CERTIFY:

     

    Pursuant
to authority expressly granted to and vested in the Board of Directors of the
Corporation (the “Board of Directors”)
by the Corporation’s Amended and Restated Articles of Incorporation, dated
November 11, 2010 (as may be amended from time to time, the “Articles of
Incorporation”), the Board of Directors adopted resolutions on January
26, 2011 (i) designating a series of the Corporation’s previously authorized
preferred stock, par value $0.01 per share (the “Preferred Stock”),
and (ii) providing for the designations, preferences and relative,
participating, optional or other rights, and the qualifications, limitations or
restrictions thereof, of 1,500,000 shares of Preferred Stock, as
follows:

    


    RESOLVED, that pursuant to the
authority vested in the Board of Directors by the Articles of Incorporation, a
series of Preferred Stock be, and it hereby is, created out of the authorized
but unissued shares of Preferred Stock, such series to be designated Series A 6%
Cumulative Convertible Preferred Stock (the “Series A Stock”), to
consist of 1,500,000 authorized shares, par value $0.01 per share, which shall
have the following preferences, powers, designations and other special
rights:

    


    SERIES
A 6% CUMULATIVE CONVERTIBLE PREFERRED STOCK

     

    A.           Designation and
Amount.  One Million Five Hundred Thousand (1,500,000) shares
of the authorized shares of Preferred Stock are hereby designated “Series A 6% Cumulative
Convertible Preferred Stock” with a par value $0.01 per share.  Such number of shares may from time
to time be decreased (but not below the number of shares of Series A Stock then
outstanding) by the Board of Directors by a certificate executed, acknowledged
and filed with the Secretary of State of the State of Nevada setting forth a
statement that a specified decrease therein has been authorized and directed by
a resolution duly adopted by the Board of Directors.  In case the
number of authorized shares of the Series A Stock shall be so decreased, the
number of shares so specified in the certificate shall resume the status of
authorized but unissued shares of Preferred Stock, undesignated as to
series.  Shares of Series A Stock that are redeemed, purchased,
converted or otherwise acquired by the Corporation shall be cancelled and shall
revert to authorized but unissued shares of Preferred Stock, undesignated as to
series.

     

    B.           Rights, Preferences,
Privileges and Restrictions of Series A Stock.  The rights,
preferences, privileges and restrictions granted to and imposed on the
Series A Stock are as follows:
 

    
      
         


      

      
         


        
          

        

      

      
         


      

    

     

    1.           Dividend
Provisions.

     

    1.1.           Commencing
on the date on which the Corporation’s private placement of the Series A Stock,
as described in that certain Executive Summary/Risk Factor Booklet of the
Corporation and related Subscription Agreement of the Corporation (the “Subscription
Agreement”), is consummated (such date, the “Purchase Date”), the
holders of shares of Series A Stock shall be entitled to receive a
cumulative dividend which shall accrue at a rate per annum (computed on the
basis of a 365-day year for the actual number of days elapsed) of six percent
(6%) of the Original Issue Price (as defined below); provided, however, that
dividends shall not be compounded and shall stop accruing as of the Conversion
Time (as defined below) or as of the effective date of redemption of the Series
A Stock pursuant to Section B.3.  Dividends under this Section B.1.1.
shall be payable upon the earliest to occur: (i) in the event of a Liquidation
Event or Deemed Liquidation Event (each as defined below), (ii) in the event the
Series A Stock is converted pursuant to Sections B.4. or B.5. below, (iii)
in the event of the Series A Stock is redeemed pursuant to Section B.3. below,
or (iv) nine months following the Purchase Date, and thereafter quarterly in
arrears.  Dividends hereunder may be paid in cash or in shares of
common stock of the Corporation, par value $0.01 per share (“Common Stock”) as
determined by the Board of Directors of the Corporation, in its sole and
absolute discretion.  If paid in Common Stock, the unpaid dividends
accrued on the Series A Stock shall be convertible into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing the
amount of the accrued and unpaid dividend by the Conversion Price at the time in
effect.

     

    The initial “Conversion Price” per
share for shares of Series A Stock shall be the Original Issue Price;
provided, however, such Conversion Price and the rate at which shares of
Series A Stock may be converted into shares of Common Stock, shall be
subject to adjustment as provided in this certificate of
designation.

     

    The “Original Issue Price”
shall mean $0.25 per share of Series A Stock, subject to appropriate adjustment
in the event of any stock dividend, stock split, combination or other similar
recapitalization with respect to the Series A Stock.

     

    1.2.           The
repurchase, redemption or other acquisition or retirement for value of any
shares of capital stock of the Corporation deemed to occur upon the exercise or
exchange of stock options, warrants or other similar rights to the extent such
shares of capital stock represent a portion of the exercise or exchange price of
those stock options, warrants or similar rights, and the repurchase, redemption
or other acquisition or retirement of shares of capital stock made in lieu of
withholding taxes resulting from the exercise or exchange of stock options,
warrants or other similar rights, shall not constitute a dividend for purposes
of this Section B.1.

     

    2.           Liquidation
Preference.

     

    2.1.           Payments to Holders of
Series A Stock.  In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation (each, a
“Liquidation
Event”) or a Deemed Liquidation Event (as defined Section B.2.3), the
holders of shares of Series A 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 Common Stock by
reason of their ownership thereof, an amount per share equal to the Original
Issue Price, plus any accrued and unpaid dividends thereon (the amount payable
pursuant to this sentence is hereinafter referred to as the “Series A Liquidation
Amount”).  If upon any such Liquidation Event or 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 A Stock the full amount to which they shall be entitled under this
Section B.2.1., the holders of shares of Series A 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
of Series A Stock held by them upon such distribution if all amounts payable on
or with respect to such shares were paid in full.

     

    2.2.           Remaining Payments to
Holders of Common Stock and Series A Stock.  In the event of
any Liquidation Event, after the payment of the Series A Liquidation Amount to
the holders of shares of Series A Stock, the remaining assets of the
Corporation available for distribution to its stockholders shall be distributed
among the holders of Common Stock and any other class of Preferred Stock, pro
rata based on the number of shares of Common Stock deemed held by each such
holders, as applicable, in accordance with their respective terms, but subject
to the rights of holders of securities senior to the Common
Stock.
 

    
      
         


      

      
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    2.3.        Deemed Liquidation
Events.

     

    (a)           Definition.  Each
of the following events shall be considered a “Deemed Liquidation
Event”:

     

    (i)           a
merger or consolidation in which the Corporation is a constituent party; except
any such merger or consolidation 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 fifty percent (50%), 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 company immediately
following such merger or consolidation, the parent company of such surviving or
resulting corporation (provided, that, for the purpose
of this Section B.2.3.(a)(i), all shares of Common Stock issuable upon exercise
of options, warrants or similar rights outstanding immediately prior to such
merger or consolidation or upon conversion of the Series A Stock
outstanding immediately prior to such merger or consolidation shall be deemed to
be outstanding immediately prior to such merger or consolidation and, if
applicable, converted or exchanged in such merger or consolidation on the same
terms as the actual outstanding shares of Common Stock are converted or
exchanged);

     

    (ii)           the
sale, lease, transfer or other disposition by the Corporation, in a single
transaction or series of related transactions, of all or substantially all the
assets of the Corporation, except where such sale, lease, transfer or other
disposition is to a wholly-owned subsidiary of the Corporation, and/or except
for security interests which the Corporation may grant to lender(s) providing
financings for the Corporation.

     

    2.4.         Effecting a Deemed
Liquidation Event.  The Corporation shall send a written notice
to each holder of Series A Stock no later than the 90th day after the
Deemed Liquidation Event advising such holders of their right to receive payment
pursuant to Section B.2.1.  The holders of at least a majority of the
then outstanding shares of Series A Stock may elect to waive the rights of
the Series A Stock to receive any payment pursuant to Section B.2.1 upon
receiving notice of a Deemed Liquidation Event.

     

    2.5.         Amount Deemed Paid or
Distributed.  The amount deemed paid or distributed to the
holders of Series A Stock upon any Liquidation Event or Deemed Liquidation Event
shall be the cash or the value of the property, rights or securities paid or
distributed to such holders by the Corporation or the acquiring person, firm or
other entity.  The value of such property, rights or securities shall
be conclusively determined in good faith by the Board of Directors of the
Corporation.

     

    3.           Redemption.  The
Corporation may, upon fifteen (15) days notice to the holders of the Series A
Stock, redeem all or a portion of the Series A Stock at a price per share of one
times the Original Issue Price.  If the Corporation elects to redeem
less than all the shares of Series A Stock, the Corporation shall redeem a pro
rata portion of each holder’s shares of Series A
Stock.  Redemption shall be made in cash.

     

    4.           Optional
Conversion.  The holders of Series A Stock shall have
conversion rights as follows (the “Conversion
Rights”):
 

    
      
         


      

      
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    4.1.        Right to
Convert.

     

    (a)           Conversion
Ratio.  Each share of Series A Stock and the unpaid
dividends accrued thereon shall be convertible, at the option of the holder
thereof at any time after the date of issuance of such share, in each case at
the office of the Corporation or any transfer agent for the Series A
Stock.  In such event, the number of fully paid and nonassessable
shares of Common Stock to be issued upon conversion shall equal the Original
Issue Price subject to adjustment, as described in Section B.4.4 (the “Conversion
Price”).

     

    (b)           Termination of Conversion
Rights.  In the event of a Liquidation Event 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 A
Stock.

     

    4.2.        Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon conversion of the Series A Stock.  In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall,
as determined by the Board of Directors of the Corporation, either (i) pay cash
equal to such fraction multiplied by the fair market value of a share of Common
Stock, or (ii) round up such fractional share to the nearest whole
number.

     

    4.3.        Mechanics of
Conversion.

     

    (a)           Notice of
Conversion.  In order for a holder of Series A Stock to
voluntarily convert shares of Series A Stock into shares of Common Stock,
such holder shall surrender the certificate or certificates for such shares of
Series A 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 A 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 A Stock represented by such certificate or
certificates.  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 reasonably required by the
Corporation, certificates surrendered for conversion shall be endorsed or
accompanied by a written instrument or instruments of transfer, in form
reasonably 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 conversion date set forth in the notice to be provided
pursuant to this Section B.4.3. 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, (i) issue and deliver to such holder of Series A 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 and a certificate for the number (if any) of the shares of
Series A Stock represented by the surrendered certificate that were not
converted into Common Stock, (ii) pay in cash, if applicable, such amount as
provided in Section B.4.2 in lieu of any fraction of a share of Common Stock
otherwise issuable upon such conversion, and (iii) pay dividends that such
holder is entitled to pursuant to Section B.1.1.
 

    
      
         


      

      
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    (b)          Reservation of
Shares.  The Corporation shall at all times when the
Series A 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 A 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 A 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 A 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 Articles of Incorporation.  Before taking any action
which would cause an adjustment reducing the Conversion Price below the then par
value of the shares of Common Stock issuable upon conversion of the
Series A 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 Conversion Price.

     

    (c)          Effect of
Conversion.  All shares of Series A 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 (i) shares of Common Stock in exchange therefor, (ii) payment
in lieu of any fraction of a share otherwise issuable upon such conversion as
provided in Section B.4.2., and (iii) payment of any dividends that such holder
is entitled to pursuant to Section B.1.1.

     

    (d)          No Further
Adjustment.  Upon any such conversion, no adjustment to the
Conversion Price shall be made for any accrued and unpaid or declared but unpaid
dividends on the Series A Stock surrendered for conversion or on the Common
Stock delivered upon conversion.

     

    (e)          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 A Stock pursuant to this Section
B.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 A 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 Conversion
Price of Series A Stock for Certain Diluting Issues.

     

    (a)          Special
Definitions.  For purposes of this Section B.4.4. the
following definitions shall apply:

     

    (i)          “Options” shall mean
rights, options or warrants to subscribe for, purchase or otherwise acquire
either Common Stock or Convertible Securities (as defined below).

     

    (ii)         “Convertible
Securities” shall mean any evidence of indebtedness, shares or other
securities directly or indirectly convertible into or exchangeable for Common
Stock.

     

    (iii)        “Additional Shares of Common
Stock” shall mean all Common Stock issued by the Corporation after the
Purchase Date, so long as any share of Series A Stock is outstanding, other than
the following issuances of shares of Common Stock and/or Options and Convertible
Securities (collectively, “Exempted
Securities”):

     

    (A)           Series
A Stock and shares of Common Stock, Options or Convertible Securities issued
upon conversion of or as a dividend or distribution on the Series A Stock
or any Convertible Securities issued pursuant to the Subscription
Agreement;
 

    
      
         


      

      
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    (B)         Shares
of a to-be-designated Series B Convertible Stock which shall rank senior to the
Series A Stock;

     

    (C)         shares
of Common Stock, Options or Convertible Securities issued to officers, directors
or employees of, or consultants, advisors or agents to the Corporation or any of
its subsidiaries pursuant to stock agreements, purchase plans, benefit plans,
employee incentive programs, stock options or warrants, the granting of which to
such persons were approved by the disinterested members of the Board of
Directors of the Corporation;

     

    (D)         shares
of Common Stock or Convertible Securities issued upon the exercise of Options or
shares of Common Stock issued upon the conversion or exchange of Convertible
Securities, in each case provided such issuance is pursuant to the terms of such
Option or Convertible Security;

     

    (E)          shares
of Common Stock, Options or Convertible Securities issued as all or part of the
consideration for the acquisition (whether by merger, consolidation, acquisition
or otherwise) by the Corporation of stock, business, or assets of any other
entity or person (including, without limitation, Xsovt, LLC);

     

    (F)          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;

     

    (G)          shares
of Common Stock, Options or Convertible Securities issued to suppliers or third
party service providers in connection with the provision of goods or
services;

     

    (H)          shares
of Common Stock, Options or Convertible Securities issued pursuant to licensing,
partnerships joint venture and other strategic business transactions, (the
primary purpose of which is not to raise equity capital); and

     

    (I)          
 shares of Common Stock issued pursuant to any Options or Convertible
Securities issued or to be issued as of the date hereof, including Class C and
Class D warrants of the Company to purchase Common Stock.

     

    (b)         No Adjustment of Conversion
Price.  No adjustment in the 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 A 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.

     

    (c)         Deemed Issue of Additional
Shares of Common Stock.

     

    (i)           If
the Corporation at any time or from time to time after the Purchase Date shall
issue any Options or Convertible Securities (excluding Exempted Securities or
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, without duplication,
shall be deemed to be Additional Shares of Common Stock (unless the Common Stock
issuable pursuant to such Options or Convertible Securities qualifies as
Exempted Securities) issued as of the time of such issue or, in case such a
record date shall have been fixed, as of the close of business on such record
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    (ii)           If
the terms of any Option or Convertible Security, the issuance of which resulted
in an adjustment to the Conversion Price pursuant to the terms of Section
B.4.4.(d), 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 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
Conversion Price as would have been 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 subclause (ii) shall have the effect of increasing the Conversion Price to
an amount which exceeds the Conversion Price in effect immediately prior to the
original adjustment made as a result of the issuance of such Option or
Convertible Security.

     

    (iii)           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 Conversion Price pursuant to the
terms of Section B.4.4.(d) (either because the consideration per share
(determined pursuant to Section B.4.4.(e)) of the Additional Shares of Common
Stock subject thereto was equal to or greater than the Conversion Price then in
effect, or because such Option or Convertible Security was issued before the
Purchase Date), are revised after the Purchase 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 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 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 Section
B.4.4.(c)(i)) shall be deemed to have been issued effective upon such increase
or decrease becoming effective.

     

    (iv)           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 Conversion Price pursuant to the terms of Section B.4.4.(d), the Conversion
Price shall be readjusted to such Conversion Price as would have obtained had
such Option or Convertible Security (or portion thereof) never been
issued.

     

    (v)           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 Conversion Price provided for in this Section B.4.4.(c) 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 (ii) and (iii) of this Section B.4.4.(c)).  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 Conversion Price that would result under the
terms of this Section B.4.4.(c) 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 Conversion Price
that such issuance or amendment took place at the time such calculation can
first be made.
 

    
      
         


      

      
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    (d)         Adjustment of Series A
Stock Conversion Prices Upon Issuance of Additional Shares of Common
Stock.  In the event the Corporation shall at any time after
the Purchase Date issue Additional Shares of Common Stock (including Additional
Shares of Common Stock deemed to be issued pursuant to Section B.4.4.(c) but
excluding Exempted Securities), without consideration or for a consideration per
share less than the Conversion Price in effect immediately prior to such issue,
then the Conversion Price shall be reduced, concurrently with such issue, to a
price (calculated to the nearest cent) determined in accordance with the
following formula:

     

    EP2 = EP1
x (A + B) / (A + C)

     

    For
purposes of the foregoing formula, the following definitions shall
apply:

     

    “EP2” shall mean the Exercise
Price in effect immediately after such Diluting Issuance of Additional Shares of
Common Stock;

     

    “EP1” shall mean the Exercise
Price in effect immediately prior to such Diluting Issuance of Additional Shares
of Common Stock;

     

    “A” shall mean the number of
shares of Common Stock outstanding and deemed outstanding immediately prior to
such Diluting Issuance of Additional Shares of Common Stock;

     

    “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 such current market price (determined by
dividing the aggregate consideration received or receivable by the Corporation
in respect of such issue by such current market price); and

     

    “C” shall mean the number of
such Additional Shares of Common Stock issued in such transaction.

     

    (e)     
    Determination of
Consideration.  For purposes of this Section B.4.4., the
consideration received by the Corporation for the issue of any Additional Shares
of Common Stock shall be computed as follows:

     

    (i)      
   Cash
and Property.  Such consideration shall:

     

    (A)           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;

     

    (B)           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; and
 

    
      
         


      

      
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    (C)           insofar
as it consists of cash and property other than cash, be the proportion of such
consideration so received for the shares of Additional Shares of Common Stock,
computed as provided in clauses (A) and (B) above, as determined in good faith
by the Board of Directors of the Corporation.

     

    (ii)         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 B.4.4.(c), relating to Options and Convertible
Securities, shall be determined by dividing:

     

    (A)           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

     

    (B)           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.

     

    4.5.         Adjustment for Stock Splits
and Combinations.

     

    (a)           If
the Corporation shall at any time or from time to time after the Purchase Date
effect a subdivision, combination or similar event (“Split Event”) of the
outstanding Common Stock, the number of shares of Common Stock issuable upon
conversion of the Series A Stock and the Conversion Price in effect immediately
before the Split Event shall be proportionately adjusted so that the shares of
Common Stock issuable will adjust in proportion to such increase or decrease in
the shares of Common Stock outstanding following the Split Event, and the
Conversion Price shall adjust so that the aggregate Conversion Price shall be
the same as if a conversion of the Series A Stock was effected immediately prior
to the Split Event.  Any adjustment under this subsection shall become
effective at the close of business on the date the subdivision or combination
becomes effective.

     

    (b)           Notwithstanding
anything to the contrary herein, the Conversion Price and the number of shares
of Common Stock issuable upon conversion of the Series A Stock, shall remain
unchanged in connection with the first reverse stock split of the Company’s
issued and outstanding Common Stock which is to occur promptly following the
closing of the Transactions (as such term is defined in the Subscription
Agreement) (the “Stock
Split”), it being acknowledged that the Series A Stock shall be
interpreted in every respect as if the Stock Split occurred prior to the
issuance of the Series A Stock.

     

    4.6.         Adjustment for Certain
Dividends and Distributions.  In the event the Corporation at
any time or from time to time after the Purchase 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 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 Conversion
Price then in effect by a fraction:
 

    
      
         


      

      
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    (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 Conversion Price shall be recomputed accordingly as of the close
of business on such record date and thereafter the 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 A 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 A 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 Purchase 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 B.1. do not apply to such dividend or distribution, then and in each
such event the holders of Series A 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 A Stock had been converted into Common Stock
on the date of such event.

     

    4.8.         Adjustment for Merger or
Reorganization, etc.  If there shall occur any reorganization,
recapitalization, reclassification, consolidation or merger involving the
Corporation in which the Common Stock (but not the Series A Stock) is
converted into or exchanged for securities, cash or other property (other than a
transaction covered by Sections B.2.3., B.4.4., B.4.5., B.4.6. or B.4.7.), then,
following any such reorganization, recapitalization, reclassification,
consolidation or merger, each share of Series A 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 A 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) shall be made in the application of the provisions
in this Section B.4. with respect to the rights and interests thereafter of the
holders of the Series A Stock, to the end that the provisions set forth in
this Section B.4. (including provisions with respect to changes in and other
adjustments of the 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 A
Stock.
 

    
      
         


      

      
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    4.9.         Certificate as to
Adjustments.  Upon the occurrence of each adjustment or
readjustment of the Conversion Price pursuant to this Section B.4., the
Corporation at its expense shall, as promptly as reasonably practicable but in
any event not later than 20 days thereafter, compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series A Stock a certificate setting forth such adjustment or readjustment
(including the kind and amount of securities, cash or other property into which
the Series A 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 A Stock (but in any event not later than 20
days thereafter), furnish or cause to be furnished to such holder a certificate
setting forth (i) the 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 A
Stock.

     

    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 A 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 or any reclassification of the
Common Stock of the Corporation; or

     

    (c)           of
any Liquidation Event or any Deemed Liquidation Event,

     

    then, and
in each such case, the Corporation will send or cause to be sent to the holders
of the Series A 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 A 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 A Stock and the Common Stock.  Such notice shall be
sent at least 20 days prior to the record date or effective date for the event
specified in such notice.

     

    4.11.       Retirement of Series A
Stock.  No share or shares of Series A Stock acquired by the
Corporation by reason of purchase, conversion, redemption or otherwise shall be
reissued as Series A Stock, and all such shares of Series A Stock shall be
cancelled, retired and eliminated from the shares of Series A Stock, as
applicable, which the Corporation shall be authorized to issue.  Any
such shares of Series A Stock acquired by the Corporation shall have the status
of authorized and unissued shares of Preferred Stock and may be redesignated and
reissued in any series other than as Series A Stock.

     

    5.      
    Mandatory
Conversion.

     

    5.1.         Trigger
Event.  Upon (a) closing of any offering of securities by the
Corporation which generates gross proceeds to the Corporation of at least
$3,000,000, or (b) upon the written consent of holders of 50% of the outstanding
shares of the Series A Stock.  The shares of Series A Stock subject to
this Section B.5.1 shall automatically and without any further action required
convert at the then applicable Conversion Price.
 

    
      
         


      

      
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    5.2.         Procedural
Requirements.  All holders of record of shares of Series A
Stock shall be sent written notice 20 days prior to the occurrence of any of the
transactions set forth in Section B.5.1. and the place designated for mandatory
conversion of all such shares of Series A Stock pursuant to this Section
B.5.  Upon receipt of such notice, each holder of shares of
Series A Stock 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.  If reasonably required by the Corporation,
certificates surrendered for conversion shall be endorsed or accompanied by
written instrument or instruments of transfer, in form reasonably satisfactory
to the Corporation, duly executed by the registered holder or by his, her or its
attorney duly authorized in writing.  All rights with respect to the
Series A Stock converted pursuant to Section B.5.1., including the
rights, if any, to receive notices and vote (other than as a holder of Common
Stock), will terminate automatically upon the occurrence of any of the
transactions set forth in Section B.5.1. (notwithstanding the failure of the
holder or holders thereof to surrender the certificates at or prior to such time
or the failure by the Corporation to provide the notice specified by this
Section B.5.2.), 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 next sentence of
this Section B.5.2.  The date of the occurrence of any of the
transactions set forth in Section B.5.1. shall also be deemed as the Conversion
Time.  As soon as practicable after any of the transactions set forth
in Section B.5.1. and the surrender of the certificate or certificates (or lost
certificate affidavit and agreement) for Series A Stock, 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, if applicable, as provided in Section B.4.2. in lieu of any fraction
of a share of Common Stock otherwise issuable upon such conversion, and the
payment of any dividends that such holder is entitled to pursuant to Section
B.1.1.

     

    6.         Voting
Rights.  On any matter presented to the stockholders of the
Corporation for their action or consideration at any meeting of stockholders of
the Corporation (or by written consent of stockholders in lieu of meeting), each
holder of outstanding shares of Series A Stock shall be entitled to cast
the number of votes equal to the number of whole shares of Common Stock into
which shares of Series A Stock (excluding any dividends thereon) held by
such holder are convertible as of the record date for determining stockholders
entitled to vote on such matter together with holders of the Common Stock and
not as a separate class.  Except as provided by law, pursuant to
Section B.7. or by the other provisions of the Articles of Incorporation,
holders of Series A Stock shall vote together with the holders of Common
Stock as a single class.

     

    7.         Protective
Provisions.  At any time when at least fifty percent (50%) of
shares of Series A Stock issued on the Purchase Date are outstanding, the
Corporation shall not, either directly or indirectly by amendment, merger,
consolidation or otherwise, do any of the following without (in addition to any
other vote required by law or the Articles of Incorporation) the written consent
or affirmative vote of the holders of at least a majority of the outstanding
shares of Series A Stock then outstanding (the “Required Series A
Owners”), given in writing or by vote at a meeting, consenting or voting
(as the case may be) separately as a class:

     

    (a)           liquidate,
dissolve or wind-up the affairs of the Corporation; or affect any Deemed
Liquidation Event;

     

    (b)           amend,
alter, or repeal any provision of the Articles of Incorporation or Bylaws of the
Corporation in a manner adverse to the Series A Preferred;
or
 

    
      
         


      

      
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    (c)           increase
or authorize the increase of the number of authorized shares of Series A
Stock.

     

    8.           Waiver.  Any
of the rights, powers, preferences and other terms of the Series A Stock
set forth herein may be waived on behalf of all holders of Series A Stock
by the affirmative written consent or vote of the holders of at least a majority
of the shares of Series A Stock then outstanding.

     

    IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Designation to be executed by its duly authorized
officer this 26th day of January, 2011.

    


    
      
        
          
            	
                     

                  	RXBIDS
	 
      	 
      	 
      
	 
      	
                    By:

                  	
                    /s/
      Avi Koschitzki

                  
	 
      	 
      	
                    Name:  Avi
      Koschitzki

                  
	 
      	 
      	
                    Title:  President
      and Chief Executive
Officer

                  


          

        

      

    

     

    
      
         


      

      
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