Series A

Exhibit 4.1

     

    CHINA
      MEDIAL NETWORKS INTERNATIONAL, INC.

     

    Series
      A Convertible Preferred Stock 

     

    Statement
      of designations, preferences, privileges, and relative, optional, and other
      special rights 

     

    One
      Million Seven Hundred Thousand (1,700,000) shares are hereby designated as
      Series A Convertible Preferred Stock, $0.001 par value per share (the "Series
      A
      Convertible Preferred Stock"). The Series A Convertible Preferred Stock shall
      have the powers, designations, preferences, privileges, and relative, optional,
      and other special rights of the Preferred Stock and the Common Stock,
      respectively:

    


    1. Stated
      Value.
      The
      stated value of each issued share of Series A Convertible Preferred Stock shall
      be deemed to be $1.00 (the "Stated Value"), as the same may be equitably
      adjusted whenever there may occur a stock dividend, stock split, combination,
      reclassification or similar event affecting the Series A Convertible Preferred
      Stock.

    


    2. Dividends.

    


    a. Dividends
      on Series A Convertible Preferred Stock.
      From
      and including the date of issuance of each share of Series A Convertible
      Preferred Stock to the earliest of (1) the payment of the Individual Series
      A
      Liquidation Preference Payment (as defined in Section
      4(a)
      below)
      on each share of Series A Convertible Preferred Stock upon the liquidation,
      dissolution or winding-up of the Corporation, (2) the conversion of the Series
      A
      Convertible Preferred Stock, or (3) redemption of the Series A Preferred Stock
      pursuant to Section
      7
      below,
      the holders of shares of Series A Convertible Preferred Stock shall be entitled
      to receive, prior to and in preference to any declaration or payment of any
      dividend on any other shares of capital stock of the Corporation, a dividend
      for
      each such share at a rate per annum equal to ten percent (10%) of the Stated
      Value (as such term is defined in Section
      1
      above)
      thereof, payable semi-annually by one of the following methods, as selected
      by
      the Corporation, (i) in cash, to the extent funds are legally available therefor
      in accordance with applicable corporate law, or (ii) in-kind, with shares of
      registered Common Stock at a ten percent (10%) discount to the "Market Price"
      (as defined in Section
      9
      below).
      The date on which the Corporation initially issues any share of Series A
      Convertible Preferred Stock shall be deemed its "Date of Issuance" regardless
      of
      the number of times transfer of such share is made on the stock records
      maintained by or for the Corporation and regardless of the number of
      certificates which may be issued to evidence such share.

    


    b. Priority
      of Payment.
      In the
      event that full dividends are not paid to the holders of all outstanding shares
      of Series A Convertible Preferred Stock so entitled to such payment and funds
      available for payment of dividends shall be insufficient to permit payment
      in
      full to holders of all such stock of the full preferential amounts to which
      they
      are then entitled, then the entire amount available for payment of dividends
      shall be distributed, first, ratably among all holders of Series A Convertible
      Preferred Stock in proportion to the full amount to which they would otherwise
      be respectively entitled and, second, only after the holders of Series A
      Convertible Preferred Stock have received the full amount of dividends to which
      they were entitled, ratably among all holders of other Preferred Stock and
      Common Stock in proportion to the full amount to which they would otherwise
      be
      respectively entitled.

    


    3. Voting.

    


    a. Number
      of Votes.
      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 a meeting), each holder of outstanding shares
      of Series A Convertible Preferred Stock shall be entitled to cast the number
      of
      votes for the Series A Convertible Preferred Stock in an amount equal to the
      number of whole shares of Common Stock into which the shares of Series A
      Convertible 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 provisions of Section
      3(b)
      below,
      holders of Series A Convertible Preferred Stock shall vote together with the
      holders of Common Stock, and with the holders of any other series of Preferred
      Stock the terms of which so provide, together as a single class.

    


    b. Senior
      Securities or Financial Instruments.
      At any
      time when a minimum of $1,000,000 of the Stated Value of the shares of Series
      A
      Convertible Preferred Stock are outstanding, except where the vote or written
      consent of the holders of a greater number of shares of the Corporation is
      required by law or by this Amended and Restated Certificate of Incorporation,
      and in addition to any other vote required by law or this Amended and Restated
      Certificate of Incorporation, without the written consent or affirmative vote
      of
      the holders of fifty percent (50%) of the then-outstanding shares of Series
      A
      Convertible Preferred Stock given in writing or by vote at a meeting, consenting
      or voting (as the case may be) as a separate class from the Common Stock, the
      Corporation shall not, either directly or by amendment, merger, consolidation
      or
      otherwise issue any Additional Shares of Common Stock (as defined in
Section
      5(d)
      below)
      unless the same rank junior to the Series A Convertible Preferred Stock with
      respect to the distribution of assets on the liquidation, dissolution or
      winding-up of the Corporation and with respect to the payment of dividends
      and
      redemption rights, if applicable. Notwithstanding the foregoing,
      this
      Section 3(b)
      shall
      not apply to a Qualified Financing or the Reverse Merger (as such terms are
      defined in Section
      9
      below).

    


    c. Other
      Limitations on Corporate Action.
      At any
      time when shares of Series A Convertible Preferred Stock are outstanding, except
      where the vote or written consent of the holders of a greater number of shares
      of the Corporation is required by law or by this Amended and Restated
      Certificate of Incorporation, and in addition to any other vote required by
      law
      or this Amended and Restated Certificate of Incorporation, without the written
      consent or affirmative vote of the holders of no-less than 50% of the
      outstanding Stated Value of the Series A Convertible Preferred Stock consenting
      or voting (as the case may be) as a separate class from the Common Stock, the
      Corporation shall not, either directly or by amendment, merger, consolidation
      or
      otherwise:

    


    	(i)  	
            liquidate,
              dissolve, or wind-up the business and affairs of the Corporation, effect
              any Deemed Liquidation Event, or consent to any of the
              foregoing;

          


     

    	(ii)  	
            effectuate
              any merger, reorganization, or recapitalization of the Corporation,
              including such transactions with a Subsidiary (as defined in Section
              9
              below) or related entity, or enter into any agreement to do any of
              the
              foregoing, other than in connection with the Reverse
              Merger;

          


     

    	(iii)  	
            so
              long as at least 1,000,000 shares of Series A Convertible Preferred
              Stock
              are outstanding, purchase or redeem or pay or declare any dividend
              or make
              any distribution on, any shares of stock other than the Series A
              Convertible Preferred Stock as expressly authorized herein, or permit
              any
              Subsidiary to take any such action, except for (A) securities repurchased
              from former employees, officers, directors, consultants, or other persons
              who performed services for the Corporation or any subsidiary in connection
              with the cessation of such employment or service or (B) securities
              repurchased upon the exercise of the Corporation's right of first refusal
              to purchase such securities, each as approved by the Board of Directors;
              

          


     

    	(iv)  	
            effectuate
              any reclassification or recapitalization of the outstanding capital
              stock
              of the Corporation, including any subdivision, consolidation, or
              conversion of any outstanding capital stock;
              or

          


     

    	(v)  	
            alter
              or change the voting or other powers, preferences, or other rights,
              privileges, or restrictions of the Series A Convertible Preferred Stock
              contained herein (by merger, consolidation, or
              otherwise).

          


     

    


    4. Liquidation,
      Dissolution, or Winding-Up; Certain Mergers, Consolidations and Asset
      Sales.

    


    a. Payments
      to Holders of Series A Convertible Preferred Stock.
      Upon
      any liquidation, dissolution or winding-up of the Corporation, whether voluntary
      or involuntary, the holders of the shares of Series A Convertible Preferred
      Stock shall be paid, before any payment shall be paid to the holders of Common
      Stock, or any other stock ranking on liquidation junior to the Series A
      Convertible Preferred Stock (the "Junior Stock"), an amount for each share
      of
      Series A Convertible Preferred Stock held by such holder equal to the sum of
      (1)
      the Stated Value thereof and (2) an amount equal to dividends accrued but unpaid
      thereon, computed to the date payment thereof is made available (such applicable
      amount payable with respect to a share of Series A Convertible Preferred Stock
      sometimes being referred to as the "Individual Series A Preferred Liquidation
      Preference Payment" and with respect to all shares of Series A Convertible
      Preferred Stock in the aggregate sometimes being referred to as the "Aggregate
      Series A Liquidation Preference Payment"). If, upon such liquidation,
      dissolution or winding-up of the Corporation, whether voluntary or involuntary,
      the assets to be distributed among the holders of shares of Series A Convertible
      Preferred Stock shall be insufficient to permit payment to the holders of Series
      A Convertible Preferred Stock of an aggregate amount equal to the Aggregate
      Series A Liquidation Preference Payment, then the entire assets of the
      Corporation to be so distributed shall be distributed ratably among the holders
      of Series A Convertible Preferred Stock (based on the Individual Series A
      Preferred Liquidation Preference Payments due to the respective holders of
      Series A Convertible Preferred Stock). 

    


    b. Payments
      to Holders of Junior Stock.
      After
      the payment of all preferential amounts required to be paid to the holders
      of
      the Series A Convertible Preferred Stock and any other class or series of stock
      of the Corporation ranking on liquidation senior to or on a parity with the
      Series A Convertible Preferred Stock, the holders of shares of Junior Stock
      then
      outstanding shall be entitled to receive the remaining assets of the Corporation
      available for distribution to its stockholders as otherwise set forth in this
      Amended and Restated Certificate of Incorporation.

    


    c. Deemed
      Liquidation Events.

    


    (i) The
      following events shall be deemed to be a liquidation of the Corporation for
      purposes of this Section
      4
      (a
      "Deemed Liquidation Event"), unless the holders of a majority of the shares
      of
      Series A Convertible Preferred Stock elect otherwise by written notice given
      to
      the Corporation at least five (5) days prior to the effective date of any such
      event:

    


    (A) a
      merger
      or consolidation (other than the Reverse Merger) in which 

    


    (I) the
      Corporation is a constituent party, or 

    


    (II) a
      Subsidiary is a constituent party and the Corporation issues shares of its
      capital stock pursuant to such merger or consolidation,

    


    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
      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 (provided
      that,
      for the
      purpose of this Section
      4(c)(i),
      all
      shares of Common Stock issuable upon exercise of options outstanding immediately
      prior to such merger or consolidation, or upon conversion of convertible
      securities 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); or

    


    (B) the
      sale,
      lease, transfer, or other disposition, in a single transaction or series of
      related transactions, by the Corporation or any Subsidiary of all or
      substantially all of the assets of the Corporation and its Subsidiaries, taken
      as a whole, except where such sale, lease, transfer, or other disposition is
      to
      a wholly-owned Subsidiary.

    


    (ii) The
      Corporation shall not have the power to effect any transaction constituting
      a
      Deemed Liquidation Event pursuant to Section
      4(c)(i)(A)(I)
      above
      unless the agreement or plan of merger or consolidation provides that the
      consideration payable to the stockholders of the Corporation shall be allocated
      among the holders of capital stock of the Corporation in accordance with
Sections
      4(a) and 4(b)
      above.

    


    (iii) In
      the
      event of a Deemed Liquidation Event pursuant to Section
      4(c)(i)(A)(II) or (B)
      above,
      if the Corporation does not effect a dissolution of the Corporation under the
      DGCL within sixty (60) days after such Deemed Liquidation Event, then (A) the
      Corporation shall deliver a written notice to each holder of Series A
      Convertible Preferred Stock no later than the 60th day after the Deemed
      Liquidation Event advising such holders of their right (and the requirements
      to
      be met to secure such right) pursuant to the terms of the following clause
      (B)
      to
      require the redemption of such shares of Series A Convertible Preferred Stock,
      and (B) if the holders of at least a majority of the then-outstanding shares
      of
      Series A Convertible Preferred Stock so request in a written instrument
      delivered to the Corporation not later than seventy-five (75) days after such
      Deemed Liquidation Event, the Corporation shall use the consideration received
      by the Corporation for such Deemed Liquidation Event (net of any retained
      liabilities associated with the assets sold or technology licensed, as
      determined in good faith by the Board of Directors)(the "Net Proceeds") to
      redeem, to the extent legally available therefor, on the 90th day after such
      Deemed Liquidation Event (the "Liquidation Redemption Date"), all outstanding
      shares of Series A Convertible Preferred Stock at a price per share equal to
      the
      Series A Liquidation Amount. In the event of a redemption pursuant to the
      preceding sentence, if the Net Proceeds are not sufficient to redeem all
      outstanding shares of Series A Convertible Preferred Stock, or if the Proceeds
      are not sufficient to redeem all outstanding shares of Series A Convertible
      Preferred Stock, or if the Corporation does not have sufficient funds lawfully
      available to effect such redemption, the Corporation shall redeem a pro rata
      portion of each holder's shares of Series A Convertible Preferred Stock to
      the
      fullest extent of such Net Proceeds or such lawfully available funds, as the
      case may be, and, where such redemption is limited by the amount of lawfully
      available funds, the Corporation shall redeem the remaining shares to have
      been
      redeemed as soon as practicable after the Corporation has funds legally
      available therefor. The provisions of Section
      7(b) through 7(e)
      below
      shall apply, with such necessary changes in the details thereof as are
      necessitated by the context, to the redemption of the Series A Convertible
      Preferred Shares pursuant to this Section
      4(c)(iii).
      Prior
      to the distribution or redemption provided for in this Section
      4(c)(iii),
      the
      Corporation shall not expend or dissipate the consideration received for such
      Deemed Liquidation Event, except to discharge expenses incurred in the ordinary
      course of business.

    


    (iv) The
      amount deemed paid or distributed to the holders of capital stock of the
      Corporation upon any such merger, consolidation, sale, transfer, exclusive
      license, other disposition or redemption 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 determined in good faith by the Board
      of
      Directors.

    


    5. Optional
      Conversion.
      The
      holders of Series A Convertible Preferred Shares shall have the conversion
      rights as follows (the "Conversion Rights").

    


    (a) Right
      to Convert.
      Each
      share of Series A Convertible Preferred Stock shall be convertible, at the
      option of the holder thereof, at any time after the "Conversion Date" (as
      defined in Section
      9
      below),
      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 (1) the sum of (i) the Stated Value per share and (ii)
      all dividends accrued and unpaid on each such share to the date such share
      is
      converted, whether or not declared, and all other dividends declared and unpaid
      on each such share through the date of actual conversion, by (2) the Series
      A
      Conversion Price in effect at the time of conversion. The "Series A Conversion
      Price" shall be the lesser of: (i) Seventy Five Cents ($.75); or (ii) a forty
      percent (40%) discount to the Market Price for the first ten (10) Trading Days
      after the earlier of the Common Stock being reported on a principal securities
      exchange or on Nasdaq, or the Common Stock being reported on the OTCBB (as
      defined in Section
      9
      below),
      or the National Quotation Bureau, Incorporated, or any other successor
      organization (the tenth day after listing or reporting, as applicable,
      hereinafter being referred to as the "Listing Date"). The Series A Conversion
      Price, and the rate at which shares of Series A Convertible Preferred Stock
      may
      be converted into shares of Common Stock, shall be subject to adjustment as
      provided below.

    


    Notwithstanding
      anything to the contrary herein, if, upon payment of a dividend under
Section
      2
      above,
      the taking of a vote under Section
      3
      above,
      payment of a liquidation preference payment under Section
      4
      above, a
      conversion or an anti-dilution event under this Section
      5,
      or a
      redemption under Section
      7
      below
      (each, a "Payment Event"), a Listing Date has not occurred, then, solely for
      purposes of determining a holder's dividend rights under Section
      2
      above,
      voting rights under Section
      3
      above,
      Preferred Liquidation Preference Payments under Section
      4
      above,
      conversion rights under this Section
      5
      and
Section
      6
      below,
      and redemption under Section
      7
      below,
      the Series A Conversion Price shall be deemed to be Seventy Five Cents ($.75)
      (subject to adjustment under Section
      5(d)
      below).

    


    (b) Fractional
      Shares.
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      A Convertible 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, or round-up to the next
      whole number of shares, at the Corporation's option. 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 A Convertible 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.

    


    (c) Mechanics
      of Conversion.
      

     

    (i) For
      a
      holder of Series A Convertible Preferred Stock to voluntarily convert
      shares of Series A Convertible Preferred Stock into shares of Common
      Stock,
      that holder shall surrender the certificate or certificates for such shares
      of
      Series A Convertible Preferred Stock (or, if the 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 Convertible Preferred
      Stock
      (or at the principal office of the Corporation if the Corporation serves as
      its
      own transfer agent), together with written notice that the holder elects to
      convert all or any number of the shares of the Series A Convertible
      Preferred Stock represented by such certificate or certificates and, if
      applicable, any event on which such conversion is contingent. The notice shall
      state the holder's name or the names of the nominees in which the 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 of such certificates (or lost
      certificate affidavit and agreement) and notice (or by the Corporation if the
      Corporation serves as its own transfer agent) 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 that date. The Corporation shall, as soon as practicable after
      the Conversion Time, issue and deliver at such office to the holder of
      Series A Convertible Preferred Stock, or to his, her, or its nominee(s),
      a
      certificate or certificates for the number of shares of Common Stock to which
      the holder(s) shall be entitled, together with cash in lieu of any fraction
      of a
      share.

     

    (ii) The
      Corporation shall at all times while the Series A Convertible Preferred
      Stock is outstanding, reserve and keep available out of its authorized but
      unissued stock, for the purpose of effecting the conversion of the Series A
      Convertible 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 A Convertible 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 A
      Convertible 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 this Amended and Restated Certificate
      of
      Incorporation. 

     

    (iii) All
      shares of Series A Convertible Preferred Stock that 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, including the rights,
      if any, to receive notices, to vote, and to receive payment of any dividends
      accrued or declared but unpaid thereon, 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. Any shares of Series A
      Convertible Preferred Stock so converted shall be retired and cancelled and
      shall not be reissued as shares of such series, and the Corporation (without
      the
      need for stockholder action) may from time to time take such appropriate action
      as may be necessary to reduce the authorized number of shares of Series A
      Convertible Preferred Stock accordingly.

     

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

     

    (v) 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 Convertible Preferred Stock pursuant to this
      Section
      5.
      The
      Corporation shall not, however, be required to pay any tax that 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
      Convertible 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.

     

    (d) Adjustments
      to Series A Conversion Price for Diluting Issues.

     

    (i) Special
      Definitions.
      For
      purposes of this Section 5,
      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
              A Original Issue Date" shall mean the date on which the first share
              of
              Series A Convertible Preferred Stock was
              issued.

          


     

    	(C)  	
            "Convertible
              Securities" shall mean any evidence of indebtedness, shares or other
              securities directly or indirectly convertible into or exchangeable
              for
              Common Stock, but excluding Options.

          


     

    	(D)  	
            "Additional
              Shares of Common Stock" shall mean all shares of Common Stock issued
              (or,
              pursuant to Section 5(d)(iii)
              below, deemed to be issued) by the Corporation after the Series A Original
              Issue Date, other than the following ("Exempted
              Securities"):

          


     

    (I)  shares
      of
      Common Stock issued or deemed issued as a dividend or distribution on
      Series A Convertible Preferred Stock or Series A-1 Warrants or Series
      B-1
      Warrants (both such terms as are defined in Section
      9
      below)
      issued as penalty warrants pursuant to Section 1 of the Interim Agreement,
      of
      even date herewith, by and among the Corporation and the other parties
      thereto;

     

    (II)  shares
      of
      Common Stock issued or issuable by reason of a dividend, stock split, split-up
      or other distribution on shares of Common Stock that is covered by Section
      5(e) or 5(f)
      below;


     

    (III)  shares
      of
      Common Stock issued or deemed issued to employees or directors of, or
      consultants to, the Corporation or any of its Subsidiaries pursuant to a plan,
      agreement, or arrangement approved by the Board of Directors; provided
      that,
      at the
      time of any such issuance, the aggregate of such issuances under this clause
      in
      the then preceding 12 month period shall not exceed 3,000,000 shares of Common
      Stock (subject to equitable adjustment in the event of a stock dividend, stock
      split, combination, reclassification or other similar event affecting the Common
      Stock); provided,
      further that,
      the
      aggregate issuance after the date of this document under this clause shall
      not,
      in any event, exceed 5,580,000 shares of Common Stock (subject to equitable
      adjustment in the event of a stock dividend, stock split, combination,
      reclassification or other similar event affecting the Common Stock) after the
      effective date of this Amended and Restated Certificate of Incorporation of
      OrthoSupply Management, Inc.;

     

    (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 (including the Series A Convertible Preferred
      Stock and the Series A-1 Warrants and the Series B-1 Warrants), in each case,
      provided the issuance is pursuant to the terms of such Option or Convertible
      Security;

     

    (V)  shares
      of
      Common Stock issued or issuable in connection with a bona fide joint venture
      or
      business acquisition of or by the Corporation, whether by merger, consolidation,
      sale of assets, sale or exchange of stock, or otherwise; provided
      that
      any such
      issuance is approved by the Board of Directors, and, at the time of such
      issuance, the aggregate of that issuance and similar issuances in the preceding
      twelve (12) month period shall not exceed ten percent (10%) of the
      then-outstanding Common Stock (assuming full conversion and exercise of all
      convertible and exercisable securities);

     

    (VI)  shares
      of
      Common Stock, Preferred Stock or other securities issued by the Reporting
      Company (as defined in Section
      9
      below)
      in connection with the Reverse Merger (the "Exchanged Securities"), in exchange
      for outstanding shares of Common Stock, Preferred Stock or other securities
      of
      the Corporation (the "Surrendered Securities"), so long as the Exchanged
      Securities have the same rights, designations, and limitations as the
      Surrendered Securities and are in identical amounts; 

     

    (VII)  shares
      of
      Common Stock, Preferred Stock, or other securities issued in connection with
      a
      Qualified Financing (as defined in Section
      9
      below);
      and

     

    (VIII)  shares
      of
      Common Stock issuable to Midtown Partners & Co., LLC as placement agent in
      connection with the transactions consummated by the Corporation on the date
      of
      this Amended and Restated Certificate of Incorporation.

     

    (ii) No
      Adjustment of Series A Conversion Price.
      No
      adjustment in the Series A Conversion Price shall be made as the result of
      the
      issuance of Additional Shares of Common Stock if: (a) the consideration
      per
      share (determined pursuant to Section 5(d)(v)
      below)
      for such Additional Shares of Common Stock issued or deemed to be issued by
      the
      Corporation is equal to or greater than the applicable Series A Conversion
      Price
      in effect immediately prior to the issuance or deemed issuance of such
      Additional Shares of Common Stock, or (b) prior to such issuance or
      deemed
      issuance, the Corporation receives written notice from the holders of at least
      a
      majority of the then-outstanding shares of Series A Convertible 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.

     

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

     

    (A) If
      the
      Corporation at any time or from time to time after the Series A Original Issue
      Date shall issue any Options or Convertible Securities (excluding Options or
      Convertible Securities that, upon exercise, conversion, or exchange thereof,
      would entitle the holder thereof to receive Exempted Securities pursuant to
      Sections
      5(d)(i)(D)(I), (II), (III), (IV), or (V))
      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 such issue or, in
      case such a record date shall have been fixed, as of the close of business
      on
      such record date.

     

    (B) If
      the
      terms of any Option or Convertible Security, the issuance of which resulted
      in
      an adjustment to the Series A Conversion Price pursuant to the terms of
Section
      5(d)(iv)
      below,
      are revised (either automatically pursuant to the provisions contained therein
      or as a result of an amendment to such terms) 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, effective upon such increase
      or decrease becoming effective, the Series A 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 A
      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 adjustment pursuant to this clause (B)
      shall have the effect of increasing the Series A Conversion Price to an amount
      that exceeds the lower of (i) the Series A Conversion Price on the original
      adjustment date, or (ii) the Series A Conversion Price that would have
      resulted from any issuances of Additional Shares of Common Stock between the
      original adjustment date and such readjustment date.

     

    (C) If
      the
      terms of any Option or Convertible Security (excluding Options or Convertible
      Securities that, upon exercise, conversion, or exchange thereof, would entitle
      the holder thereof to receive Exempted Securities pursuant to Sections
      5(d)(i)(D)(I), (II), (III), (IV), or (V)
      above),
      the issuance of which did not result in an adjustment to the Series A Conversion
      Price pursuant to the terms of Section
      5(d)(iv)
      below
      (either because the consideration per share (determined pursuant to Section 5(d)(v)
      below)
      of the Additional Shares of Common Stock subject thereto was equal to or greater
      than the Series A Conversion Price then in effect, or because such Option or
      Convertible Security was issued before the Series A Original Issue Date), are
      revised after the Series A Original Issue Date (either automatically pursuant
      to
      the provisions contained therein or as a result of an amendment to such terms)
      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, and the
      Additional Shares of Common Stock subject thereto (determined in the manner
      provided in Section
      5(d)(iii)(A)
      above)
      shall be deemed to have been issued effective upon such increase or decrease
      becoming effective.

     

    (D) Upon
      the
      expiration or termination of any unexercised Option or unconverted or
      unexchanged Convertible Security that resulted (either upon its original
      issuance or upon a revision of its terms) in an adjustment to the Series A
      Conversion Price pursuant to the terms of Section
      5(d)(iv)
      below,
      the Series A Conversion Price shall be readjusted to such Series A Conversion
      Price as would have obtained had such Option or Convertible Security never
      been
      issued. 

     

    (iv) Adjustment
      of Series A Conversion Price Upon Issuance of Additional Shares of Common
      Stock.
      If the
      Corporation shall at any time after the Series A Original Issue Date issue
      Additional Shares of Common Stock (including Additional Shares of Common Stock
      deemed to be issued pursuant to Section 5(d)(iii)
      above),
      without consideration or for a consideration per share less than the applicable
      Series A Conversion Price in effect immediately prior to such issue, then the
      Series A Conversion Price shall be reduced, concurrently with such issue, to
      a
      price equal to the consideration received per share in connection with the
      issuance of such Additional Shares of Common Stock.

     

    (v) Determination
      of Consideration.
      For
      purposes of this Section 5(d),
      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; and

     

    (III) if
      Additional Shares of Common Stock are issued together with other shares or
      securities or other assets of the Corporation for consideration that covers
      both, be the proportion of such consideration so received, computed as provided
      in clauses (I)
      and (II)
      above,
      as determined in good faith by the Board of Directors.

     

    (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 Section 5(d)(iii)
      above,
      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.

     

    (vi) Multiple
      Closing Dates.
      If 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 A Conversion Price pursuant to
      the
      terms of Section
      5(d)(iv)
      above,
      then, upon the final such issuance, the Series A 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 additional giving effect to any
      adjustments as a result of any subsequent issuances within such
      period).

     

    (e) Adjustment
      for Stock Splits and Combinations.
      If the
      Corporation shall at any time or from time to time after the Series A Original
      Issue Date effect a subdivision of the outstanding Common Stock without a
      comparable subdivision of the Series A Convertible Preferred Stock or combine
      the outstanding shares of Series A Convertible Preferred Stock without a
      comparable combination of the Common Stock, the Series A Conversion Price in
      effect immediately before that subdivision or combination 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
      or
      in proportion to such decrease in the aggregate number of shares of Series
      A
      Convertible Preferred Stock outstanding, as applicable. If the Corporation
      shall
      at any time or from time to time after the Series A Original Issue Date combine
      the outstanding shares of Common Stock without a comparable combination of
      the
      Series A Convertible Preferred Stock or effect a subdivision of the outstanding
      shares of Series A Convertible Preferred Stock without a comparable subdivision
      of the Common Stock, the Series A Conversion Price in effect immediately before
      the combination or subdivision 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 or in proportion to such increase in
      the
      aggregate number of shares of Series A Convertible Preferred Stock outstanding,
      as applicable. Any adjustment under this subsection shall become effective
      at
      the close of business on the date the subdivision or combination becomes
      effective.

     

    (f) Adjustment
      for Certain Dividends and Distributions.
      If the
      Corporation at any time or from time to time after the Series A 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 A 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 A Conversion Price then in effect by a
      fraction:

     

    (1) 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

    


    (2) 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;

    


    provided,
      however,
      that 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
      A
      Conversion Price shall be recomputed accordingly as of the close of business
      on
      such record date and thereafter the Series A Conversion Price shall be adjusted
      pursuant to this subsection as of the time of actual payment of such dividends
      or distributions; and provided
      further,
      however,
      that no
      such adjustment shall be made if the holders of Series A Convertible
      Preferred Stock simultaneously receive (i) 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
      Convertible Preferred Stock had been converted into Common Stock on the date
      of
      such event or (ii) a dividend or other distribution of shares of Series A
      Convertible Preferred Stock that are convertible, as of the date of such event,
      into such number of shares of Common Stock as is equal to the number of
      additional shares of Common Stock being issued with respect to each share of
      Common Stock in such dividend or distribution.

    


    (g) Adjustments
      for Other Dividends and Distributions.
      If the
      Corporation at any time or from time to time after the Series A Original Issue
      Date shall make or issue, or fix a record date for the determination of holders
      of capital stock of the Corporation 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, then, and in each such event, the holders of Series A
      Convertible Preferred Stock shall receive, simultaneously with the distribution
      to the holders of such capital 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 Convertible Preferred Stock had been converted into Common
      Stock
      on the date of such event.

     

    (h) Adjustment
      for Merger or Reorganization, etc.
      Subject
      to the provisions of Section
      4(c)
      above,
      if there shall occur any reorganization, recapitalization, reclassification,
      consolidation or merger involving the Corporation in which the Common Stock
      (but
      not the Series A Convertible Preferred Stock) is converted into or exchanged
      for
      securities, cash, or other property (other than a transaction covered by
Sections
      5(e), (f), or (g)
      above),
      then, following any such reorganization, recapitalization, reclassification,
      consolidation, or merger, each share of Series A Convertible 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 that a holder of the number of shares of Common Stock of the
      Corporation issuable upon conversion of one share of Series A Convertible
      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) shall be made in the
      application of the provisions in this Section 5
      with
      respect to the rights and interests thereafter of the holders of the
      Series A Convertible Preferred Stock, to the end that the provisions
      set
      forth in this Section 5
      (including provisions with respect to changes in and other adjustments of the
      Series A 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 Convertible Preferred
      Stock.

     

    (i) Certificate
      as to Adjustments.
      Upon
      the occurrence of each adjustment or readjustment of the Series A Conversion
      Price pursuant to this Section 5,
      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 A Convertible 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 A Convertible 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 A
      Convertible 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 A Conversion Price then in effect, and
      (ii) the number of shares of Common Stock and the type and amount, if
      any,
      of other securities, cash, or property that then would be received upon the
      conversion of Series A Convertible Preferred Stock.

     

    (j) Notice
      of Record Date.
      In the
      event:

     

    (i) the
      Corporation shall take a record of the holders of its Common Stock (or other
      stock or securities at the time issuable upon conversion of the Series A
      Convertible 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 stock of any class or any other securities, or
      to
      receive any other right; or

     

    (ii) of
      any
      capital reorganization of the Corporation, any reclassification of the Common
      Stock, or any Deemed Liquidation Event; or

     

    (iii) 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 A Convertible 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 stock or securities at the time issuable upon the
      conversion of the Series A Convertible Preferred Stock) shall be entitled to
      exchange their shares of Common Stock (or such other 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 Convertible Preferred Stock and the Common Stock. Such notice
      shall be sent at least ten (10) days prior to the record date or effective
      date
      for the event specified in such notice. Any notice required by the provisions
      hereof to be given to a holder of shares of Series A Convertible Preferred
      Stock
      shall be deemed sent to such holder if deposited in the United States mail,
      postage prepaid, and addressed to such holder at his, her, or its address
      appearing on the books of the Corporation.

    


    6. Conversion
      Cap.
      In no
      event shall any holder be entitled to convert any Preferred Stock to the extent
      that, after such conversion, the sum of the number of shares of Common Stock
      beneficially owned by any holder and its affiliates (other than shares of Common
      Stock which may be deemed beneficially owned through the ownership of the
      unconverted portion of the Preferred Stock or any unexercised right held by
      any
      holder subject to a similar limitation), would result in beneficial ownership
      by
      any holder and its affiliates of more than 4.99% of the outstanding shares
      of
      Common Stock (after taking into account the shares to be issued to the holder
      upon such conversion). For purposes of this Section
      5(d)
      above,
      beneficial ownership shall be determined in accordance with Section 13(d) of
      the
      Securities Exchange Act of 1934, as amended. Nothing herein shall preclude
      the
      holder from disposing of a sufficient number of other shares of Common Stock
      beneficially owned by the holder so as to thereafter permit the continued
      conversion of the Preferred Stock.

    


    7. Redemption. 

    


    a. Optional
      Redemption.
      The
      Corporation shall not at any time have the right at its election to call or
      to
      redeem all or any shares of Series A Convertible Preferred Stock. Upon the
      occurrence of a Change in Control Event (as defined in Section
      9
      below),
      the holders of at least a majority of the then-outstanding shares of Series
      A
      Convertible Preferred Stock, voting together as a single class, may elect,
      at
      anytime within twenty (20) days after the occurrence of the Change in Control
      Event (the "Redemption Period"), to cause the Corporation to redeem all, or
      a
      portion, of the Series A Convertible Preferred Stock by delivering written
      notice to the Corporation (the "Redemption Notice"). The Redemption Notice
      shall
      specify the holders that have elected to have his or its Series A Convertible
      Preferred Stock redeemed and the number of shares that each such holder is
      electing to have redeemed (collectively, the "Redeemed Shares"). The Corporation
      shall provide notice to the holders of the Series A Convertible Preferred Stock,
      or the Preferred Stock Representative, if any, within three (3) days of the
      occurrence of the Change in Control Event. Within twenty (20) days of receipt
      of
      a the Redemption Notice, the Corporation shall redeem the Redeemed Shares using
      funds legally available therefor.

    


    b. Redemption
      Price and Payment.
      The
      Series A Convertible Preferred Stock to be redeemed on the Redemption Date
      shall
      be redeemed by paying for each share cash in an amount equal to (a) the Stated
      Value per share of each such share plus (b) an amount equal to the total amount
      of (i) all dividends accrued and unpaid on each such share to the date such
      share is redeemed, whether or not declared, and (ii) all other dividends
      declared and unpaid on each such share through the date of actual redemption
      (the "Redemption Price"). Such payment shall be made in full on the Redemption
      Date to the holders entitled thereto with respect to their shares being redeemed
      on such date. 

    


    If
      the
      funds of the Corporation legally available for redemption of Series A
      Convertible Preferred Stock on the Redemption Date are insufficient to redeem
      the number of shares of Series A Convertible Preferred Stock required under
      this
Section
      7
      to be
      redeemed on such date, those funds which are legally available will be used
      to
      redeem the shares of Series A Convertible Preferred Stock to be redeemed on
      the
      Redemption Date and the maximum possible number of such shares of Series A
      Convertible Preferred Stock ratably if the funds of the Corporation legally
      available therefor are insufficient to redeem all shares of Series A Convertible
      Preferred Stock. At any time thereafter when additional funds of the Corporation
      become legally available for the redemption of Series A Convertible Preferred
      Stock, such funds will be used, at the end of the next succeeding fiscal
      quarter, to redeem the balance of the shares of Series A Convertible Preferred
      Stock which the Corporation was theretofore obligated to redeem,
      ratably.

    


    c. Redemption
      Notice by the Corporation.
      At
      least twenty (20) but not more than thirty (30) days prior to the Redemption
      Date, written notice (the "Corporation Redemption Notice") shall be given by
      the
      Corporation by mail, postage prepaid, by reputable overnight delivery service,
      or by facsimile transmission, to each holder of record (at the close of business
      on the business day next preceding the day on which the Redemption Notice is
      given) of shares of Series A Convertible Preferred Stock notifying such holder
      of the redemption and specifying the Redemption Price, Redemption Date and
      the
      place where the said Series A Redemption Price shall be payable. 

    


    d. Surrender
      of Certificates.
      On or
      before the applicable Redemption Date, each holder of shares of Series A
      Convertible Preferred Stock to be redeemed on such Redemption Date, unless
      such
      holder has exercised his, her or its right to convert such shares as provided
      in
Section
      5
      above,
      shall surrender the certificate(s) representing such shares to the Corporation,
      in the manner and at the place designated in the Corporation Redemption Notice,
      and thereupon, the Redemption Price for such shares shall be payable to the
      order of the person whose name appears on such certificate(s) as the owner
      thereof, and each surrendered certificate shall be cancelled and retired.


    


    e. Redeemed
      or Otherwise Acquired Shares.
      Any
      shares of Series A Convertible Preferred Stock that are redeemed or otherwise
      acquired by the Corporation or any of its Subsidiaries shall be automatically
      and immediately cancelled 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 A Convertible Preferred Shares
      following redemption.

    


    8. Waiver.
      Any of
      the rights, powers, or preferences of the holders of Series A Convertible
      Preferred Stock set forth herein may be waived by the affirmative consent or
      vote of the holders of at least a majority of the shares of Series A Convertible
      Preferred Stock then outstanding.

    


    9. Definitions.
      As used
      herein, the following terms shall have the following meanings:

    


    a. "Affiliate"
      means with respect to any individual, corporation, partnership, association,
      trust, or any other entity (in each case, a "Person"), any Person that, directly
      or indirectly, Controls, is Controlled by, or is under common Control with
      such
      Person, including without limitation, any general partner, executive officer,
      or
      director of such Person or any holder of ten percent or more of the outstanding
      equity or voting power of such Person.

     

    b. "Change
      in Control Event" shall mean a transaction or a series of related transactions
      which result in a Person and Affiliates of such Person, other than the Founders
      (as defined in that certain Investor Rights Agreement, of even date herewith,
      by
      and among the Corporation and the other parties thereto (the "Investor Rights
      Agreement")), acquiring, in the aggregate, 50.1% or more of the Corporation's
      outstanding voting securities; provided, however, the Reverse Merger shall
      not
      be a Change in Control Event.

    


    c. "Closing
      Price" for any day means: (i) the last reported sales price regular way of
      the
      Common Stock on such day on the principal securities exchange on which the
      Common Stock is then listed or admitted to trading or on Nasdaq, as applicable,
      (ii) if no sale takes place on such day on any such securities exchange or
      system, the average of the closing bid and asked prices, regular way, on such
      day for the Common Stock as officially quoted on any such securities exchange
      or
      system, (iii) if on such day such shares of Common Stock are not then listed
      or
      admitted to trading on any securities exchange or system, the last reported
      sale
      price, regular way, on such day for the Common Stock in the domestic
      over-the-counter market as reported on the Over the Counter Bulletin Board
      (the
      "OTCBB"), or (iv) if no sale takes place on such day, the average of the high
      and low bid price of the Common Stock on such day in the domestic
      over-the-counter market as reported on the OTCBB, (v) if on such day such shares
      of Common Stock are not then listed or admitted to trading on any securities
      exchange or system, the last reported sale price, regular way, on such day
      for
      the Common Stock in the domestic over-the-counter market as reported on the
      by
      the National Quotation Bureau, Incorporated, or any other successor
      organization, or (vi) if no sale takes place on such day, the average of the
      high and low bid price of the Common Stock on such day in the domestic
      over-the-counter market as reported by the National Quotation Bureau,
      Incorporated, or any other successor organization, or (vii) if no bid and asked
      prices are reported for the Common Stock on the OTCBB or by the National
      Quotation Bureau, Incorporated or any other successor organization for such
      day,
      the average of the high and low bid and asked price of any of the market makers
      for the Common Stock as reported on the OTCBB or in the "pink sheets" by the
      Pink Sheets LLC. If at any time such shares of Common Stock are not listed
      on
      any domestic exchange or quoted in the NASDAQ System or the domestic
      over-the-counter market or reported in the "pink sheets," the Closing Price
      shall be the fair market value thereof determined by an independent appraiser
      selected in good faith by the Board of Directors.

    


    d. "Control"
      means the possession, directly or indirectly, of power to direct or cause the
      direction of management or policies (whether through ownership of voting
      securities, by agreement or otherwise).

    


    e. "Conversion
      Date" shall mean either (1) the Effective Date of the Corporation's SB-2
      Registration Statement, or (2) the date that the holder of the Series A
      Convertible Preferred Stock has satisfied the minimum one year holding
      requirements set forth in SEC Rule 144(d).

    


    f. "Effective
      Date" shall mean the date on which the SEC declares effective the Corporation's
      Registration Statement filed pursuant to Section 2.1 of the Investor Rights
      Agreement.

    


    g. "Market
      Price" shall mean the average of the ten (10) Closing Prices of the Common
      Stock
      for the ten (10) Trading Days preceding the date or the dates that the dividend
      is due or a conversion is to occur. Notwithstanding the foregoing, if at the
      time a dividend is paid pursuant to Section
      2(a)
      above
      with registered Common Stock, and the Corporation’s Common Stock is not listed
      on any domestic exchange or quoted in the NASDAQ System or the domestic
      over-the-counter market or reported in the "pink sheets," the Closing Price
      shall be the fair market value thereof determined by an independent appraiser
      selected in good faith by the Board of Directors.

    


    h. "Person"
      shall mean any individual, partnership, firm, corporation, association, trust,
      unincorporated organization or other entity, as well as any syndicate or group
      that would be deemed to be a person under Section 13(d)(3) of the Securities
      Exchange Act of 1934, as amended.

    


    i. "Qualified
      Financing" means any equity offering obtained by the Corporation or the
      Reporting Company after the date of this Amended and Restated Certificate of
      Incorporation, provided,
      however,
      the
      gross aggregate proceeds raised shall be no more than $1,000,000 and a Qualified
      Financing may not occur more than twelve (12) months after the date of this
      Amended and Restated Certificate of Incorporation. As a point of clarification,
      all equity financings after the date of this Amended and Restated Certificate
      of
      Incorporation (other than issuance of Series A Convertible Preferred Stock
      or
      Exempt Securities) shall be aggregated, including offering by the Reporting
      Company after completion of the Reverse Merger, for purposes of determining
      if
      the $1,000,000 cap has been met.

    


    j. "Reporting
      Company" has the meaning set forth in clause k. below.

    


    k. "Reverse
      Merger" means the reverse triangular merger transaction or other similar
      transaction contemplated by the Interim Agreement, of even date herewith, by
      and
      among the Corporation and the other parties thereto, pursuant to which the
      Corporation would become a wholly-owned subsidiary of an asset-less company
      currently reporting under the Securities Exchange Act of 1934, as amended (the
      "Reporting Company"). Upon completion of the Reverse Merger (if any), the
      founders of the Corporation will become the controlling shareholders of the
      Reporting Company, and the holders of Series A Convertible Preferred Stock
      will
      exchange Series A Convertible Preferred Stock and related warrants issued by
      the
      Corporation for Series A Convertible Preferred Stock and Series A-1 Warrants
      and
      Series B-1 Warrants, with identical rights, preferences, and designations,
      issued by the Reporting Company.

    


    l. "SEC"
      means the United States Securities and Exchange Commission.

     

    m. "SEC
      Rule
      144" means Rule 144 promulgated by the SEC under the Securities
      Act.

     

    n. "Securities
      Act" means the Securities Act of 1933, as amended, and the rules and regulations
      promulgated thereunder.

     

    o. "Series
      A-1 Warrants" means warrants for the purchase of the Common Stock having the
      same terms, conditions, and exercise price as the Series A-1 Warrants originally
      issued to the Series A Investors (as defined in the Investor Rights
      Agreement).

    


    p. "Series
      B-1 Warrants" means warrants for the purchase of the Common Stock having the
      same terms, conditions, and exercise price as the Series B-1 Warrants originally
      issued to the Series A Investors.

    


    q. "Subsidiary"
      shall mean any corporation, association, partnership, limited liability company
      or other business entity of which more than fifty percent (50%) of the total
      voting power is, at the time, owned or controlled, directly or indirectly,
      by
      the Corporation or one or more of the other Subsidiaries of the Corporation
      or a
      combination thereof.

    


    r. "Trading
      Day" means a day on which the securities exchange, association, or quotation
      system on which shares of Common Stock are listed for trading shall be open
      for
      business or, if the shares of Common Stock shall not be listed on such exchange,
      association, or quotation system for such day, a day with respect to which
      trades in the United States domestic over-the-counter market shall be
      reported.