Exhibit
      10.2

    


    


    FORM
      OF AMENDED AND RESTATED

    


    CERTIFICATE
      OF INCORPORATION

    


    OF

    


    ALTEON
      INC.

    


     The
      undersigned, for the purpose of amending and restating the Restated Certificate
      of Alteon Inc. filed December 7, 1990, as amended, hereby certifies as
      follows:

     

    1. The
      name
      of the Corporation is ALTEON INC. (the “Corporation”).
      The
      Certificate of Incorporation of the Corporation was filed with the Secretary
      of
      State of Delaware on October 22, 1986 under the name Geritech Inc. A Restated
      Certificate of Incorporation was filed with the Secretary of State of the State
      of Delaware on December 7, 1990. A Certificate of Amendment, changing the
      Corporation’s name from Geritech Inc. to Alteon Inc. was filed with the
      Secretary of State of the State of Delaware on August 29, 1991. Thereafter
      the
      Restated Certificate of Incorporation, as amended, was further amended by the
      following documents filed with the Secretary of State of the State of Delaware
      (a) a Certificate of Retirement filed June 14, 1993; (b) a Certificate of
      Designation filed August 3, 1995; (c) a Certificate of Designation filed April
      23, 1997; (d) two Certificates of Designation filed December 11, 1997; (e)
      a
      Certificate of Retirement filed February 10, 1998; (f) a Certificate of
      Amendment filed May 8, 1998; (g) a Certificate of Designation filed May 8,
      1998;
      (h) a Certificate of Retirement filed September 16, 1999; (i) a Certificate
      of
      Amendment filed September 16, 1999; (j) a Certificate of Retirement filed
      November 21, 2000; (k) a Certificate of Amendment filed June 7, 2001; (l) a
      Certificate of Amendment filed June 2, 2004; (m) a Certificate of Amendment
      filed September 17, 2004; (n) a Certificate of Designation filed October 6,
      2004; (o) a Certificate of Designation filed July 27, 2005; (p) a Certificate
      of
      Amendment filed October 24, 2005; (q) a Certificate of Amendment filed July
      20,
      2006; and (r) a Certificate of Amendment filed July 20, 2006.

     

    2. The
      Restated Certificate of Incorporation of the Corporation filed on December
      7,
      1990, as amended, is hereby further amended, among other provisions, to amend
      Article FIRST to reflect a change of the name of the Corporation and to amend
      Article FOURTH by substituting in lieu of said Article FOURTH a new Article
      FOURTH as set forth in the Restated Certificate of Incorporation set forth
      below.

     

    3. This
      Amended and Restated Certificate of Incorporation has been duly adopted
      in
      accordance with the provisions of Sections 141, 228, 242 and 245 of the General
      Corporation Law of the State of Delaware.

     

    4. The
      text
      of the Restated Certificate of Incorporation of the Corporation, as amended
      and
      restated herein, shall read in its entirety as follows:

     

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    


    RESTATED

    CERTIFICATE
      OF INCORPORATION

    OF

    [__________]
      INC.

    (Originally
      incorporated on October 22, 1986 

    under
      the
      name Geritech, Inc. and formerly known as Alteon Inc.)

    


    


    


    FIRST:
      The name of the corporation is [________] Inc. (the “Corporation”).

    


    SECOND:
      The name and address of the Corporation’s registered agent in the State of
      Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange
      Street, City of Wilmington, County of New Castle.

    


    THIRD:
      The purpose of the Corporation is to engage in any lawful act or activity or
      carry on any business for which corporations may be organized under the Delaware
      General Corporation Law or any successor statute.

    


    FOURTH:

    


    A. Designation
      and Number of Shares.

    


    The
      total
      number of shares of all classes of stock which the Corporation shall have the
      authority to issue is [___________] shares, consisting of [____________] shares
      of common stock, par value $0.01 per share (the “Common
      Stock”)
      and
      [________] shares of Preferred Stock, par value $0.01 per share (the
“Preferred
      Stock”).

    


    The
      number of authorized shares of Common Stock or Preferred Stock may be increased
      or decreased (but not below the number of shares thereof then outstanding)
      by
      the affirmative vote of the holders of a majority of the voting power of all
      of
      the then-outstanding shares of capital stock of the Corporation entitled to
      vote
      thereon, without a vote of the holders of the Preferred Stock, or of any series
      thereof, unless a vote of any such holders is required pursuant to the terms
      of
      any Preferred Stock designation.

    


    Upon
      the
      effectiveness of this Restated Certificate of Incorporation, every [____] issued
      and outstanding shares of Common Stock of the Corporation shall be changed
      and
      reclassified into one (1) share of Common Stock, which shares shall be fully
      paid and nonassessable shares of Common Stock of the Corporation; provided,
      however, that in lieu of fractional interests in shares of Common Stock to
      which
      any stockholder would otherwise be entitled pursuant hereto (taking into account
      all shares of Common Stock owned by such stockholder), such stockholder shall
      be
      entitled to receive a cash payment equal to the fair value of one share of
      Common Stock multiplied by such fraction. The par value of the Common Stock
      shall remain $0.01 per share. All certificates representing shares of Common
      Stock outstanding immediately prior to the filing of this Amended and Restated
      Certificate of Incorporation shall immediately after the filing of this Amended
      and Restated Certificate of Incorporation represent instead the number of shares
      of Common Stock as provided above. Notwithstanding the foregoing, any holder
      of
      Common Stock may (but shall not be required to) surrender his, her or its stock
      certificate or certificates to the Corporation, and upon such surrender the
      Corporation will issue a certificate for the correct number of shares of Common
      Stock to which the holder is entitled under the provisions of this Restated
      Certificate of Amendment. Shares of Common Stock that were outstanding prior
      to
      the filing of this Amended and Restated Certificate of Incorporation, and that
      are not outstanding after and as a result of the filing of this Amended and
      Restated Certificate of Incorporation, shall resume the status of authorized
      but
      unissued shares of Common Stock.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    B. Common
      Stock.

    


    The
      holders of the Common Stock are entitled to one vote for each share held;
provided,
      however,
      that,
      except as otherwise required by law, holders of Common Stock shall not be
      entitled to vote on any amendment to this Restated Certificate of Incorporation
      (including any certificate of designation relating to Preferred Stock) that
      relates solely to the terms of one or more outstanding series of Preferred
      Stock
      if the holders of such affected series are entitled, either separately or
      together as a class with the holders of one or more other such series, to vote
      thereon by law or pursuant to this Restated Certificate of Incorporation
      (including any certificate of designation relating to Preferred
      Stock).

    


    C. Preferred
      Stock

    


    Undesignated
      Preferred Stock.
      

    


    1. [_______]
      shares of Preferred Stock may be issued in one or more series at such time
      or
      times and for such consideration as the Board of Directors may determine.


    


    2. Authority
      is hereby expressly granted to the Board of Directors to fix from time to time,
      by resolution or resolutions providing for the establishment and/or issuance
      of
      any series of Preferred Stock, the designation and number of the shares of
      such
      series and the powers, preferences and rights of such series, and the
      qualifications, limitations or restrictions thereof, to the fullest extent
      such
      authority may be conferred upon the Board of Directors under the Delaware
      General Corporation Law.

    


    Series
      A Preferred Stock 

    


    1.  Designation
      and Number of Shares.
      The
      shares of such series shall be designated as “Series
      A Preferred Stock”
(the
      “Series
      A Preferred Stock”),
      par
      value $0.01 per share. The number of shares initially constituting the Series
      A
      Preferred Stock shall be 400,000; provided, however, that, if more than a total
      of 400,000 shares of Series A Preferred Stock shall be issuable upon the
      exercise of Rights (the “Rights”)
      issued
      pursuant to the Stockholders Rights Agreement dated as of July 27, 1995, between
      the Corporation and Registrar and Transfer Company, as Rights Agent, as amended
      by the Amended and Restated Stockholder Rights Agreement dated as of July 27,
      2005, as amended, between the Corporation and American Stock Transfer &
Trust Company, as Rights Agent (the “Rights
      Agreement”),
      the
      Board of Directors of the Corporation, pursuant to Section 151(g) of the General
      Corporation Law of the State of Delaware, shall direct by resolution or
      resolutions that a certificate be properly executed, acknowledged, filed and
      recorded, in accordance with the provisions of Section 103 thereof, providing
      for the total number of shares of Series A Preferred Stock authorized to be
      issued to be increased (to the extent that the Certificate of Incorporation
      then
      permits) to the largest number of whole shares (rounded up to the nearest whole
      number) issuable upon exercise of such Rights.

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    2.  Dividends
      or Distributions.
      

    


    2.1  Subject
      to the prior and superior rights of the holders of shares of any other series
      of
      Preferred Stock or other class of capital stock of the Corporation ranking
      prior
      and superior to the shares of Series A Preferred Stock with respect to
      dividends, the holders of shares of the Series A Preferred Stock shall be
      entitled to receive, when, as and if declared by the Board of Directors, out
      of
      the assets of the Corporation legally available therefor, (1) quarterly
      dividends payable in cash on the last day of each fiscal quarter in each year,
      or such other dates as the Board of Directors of the Corporation shall approve
      (each such date being referred to herein as a “Quarterly
      Dividend Payment Date”),
      commencing on the first Quarterly Dividend Payment Date after the first issuance
      of a share or a fraction of a share of Series A Preferred Stock, in the amount
      of $.01 per whole share (rounded to the nearest cent) less the amount of all
      cash dividends declared on the Series A Preferred Stock pursuant to the
      following clause (2) since the immediately preceding Quarterly Dividend Payment
      Date or, with respect to the first Quarterly Dividend Payment Date, since the
      first issuance of any share or fraction of a share of Series A Preferred Stock
      (the total of which shall not, in any event, be less than zero) and (2)
      dividends payable in cash on the payment date for each cash dividend declared
      on
      the Common Stock in an amount per whole share (rounded to the nearest cent)
      equal to the Formula Number (as hereinafter defined) then in effect times the
      cash dividends then to be paid on each share of Common Stock. In addition,
      if
      the Corporation shall pay any dividend or make any distribution on the Common
      Stock payable in assets, securities or other forms of noncash consideration
      (other than dividends or distributions solely in shares of Common Stock), then,
      in each such case, the Corporation shall simultaneously pay or make on each
      outstanding whole share of Series A Preferred Stock a dividend or distribution
      in like kind equal to the Formula Number then in effect times such dividend
      or
      distribution on each share of the Common Stock. As used herein, the
“Formula
      Number”
shall
      be 1,000; provided, however, that, if at any time after July 20, 1995, the
      Corporation shall (i) declare or pay any dividend on the Common Stock payable
      in
      shares of Common Stock or make any distribution on the Common Stock in share
      of
      Common Stock, (ii) subdivide (by a stock split or otherwise) the outstanding
      shares of Common Stock into a larger number of shares of Common Stock or (iii)
      combine (by a reverse stock split or otherwise) the outstanding shares of Common
      Stock, into a smaller number of shares of Common Stock, then in each such event
      the Formula Number shall be adjusted to a number determined by multiplying
      the
      Formula Number in effect immediately prior to such event by a fraction, the
      numerator of which is the number of shares of Common Stock that are outstanding
      immediately after such event and the denominator of which is the number of
      shares of Common Stock that are outstanding immediately prior to such event
      (and
      rounding the result to the nearest whole number); and provided further, that,
      if
      at any time after July 20, 1995, the Corporation shall issue any shares of
      its
      capital stock in a merger, reclassification, or change of the outstanding shares
      of Common Stock, then in each such event the Formula Number shall be
      appropriately adjusted to reflect such merger, reclassification or change so
      that each share of Preferred Stock continues to be the economic equivalent
      of a
      Formula Number of shares of Common Stock prior to such merger, reclassification
      or change.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    2.2  The
      Corporation shall declare a dividend or distribution on any outstanding Series
      A
      Preferred Stock as provided in Section
      2.1
      immediately prior to or at the same time it declares a dividend or distribution
      on the Common Stock (other than a dividend or distribution solely in shares
      of
      Common Stock); provided, however, that, in the event no dividend or distribution
      (other than a dividend or distribution in shares of Common Stock) shall have
      been declared on the Common Stock during the period between any Quarterly
      Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date,
      a
      dividend of $.01 per share on the Series A Preferred Stock shall nevertheless
      be
      payable on such subsequent Quarterly Dividend Payment Date. The Board of
      Directors may fix a record date for the determination of holders of shares
      of
      Series A Preferred Stock entitled to receive a dividend or distribution declared
      thereon, which record date shall be the same as the record date for a
      corresponding dividend or distribution on the Common Stock.

     

    2.3  Dividends
      shall begin to accrue and be cumulative on any outstanding shares of Series
      A
      Preferred Stock from and after the Quarterly Dividend Payment Date next
      preceding the date of original issue of such shares of Series A Preferred Stock;
      provided, however, that dividends on such shares which are originally issued
      after the record date for the determination of holders of shares of Series
      A
      Preferred Stock entitled to receive a quarterly dividend and on or prior to
      the
      next succeeding Quarterly Dividend Payment Date shall begin to accrue and be
      cumulative from and after such Quarterly Dividend Payment Date. Notwithstanding
      the foregoing, dividends on shares of Series A Preferred Stock which are
      originally issued prior to the record date for the determination of holders
      of
      shares of Series A Preferred Stock entitled to receive a quarterly dividend
      on
      the first Quarterly Dividend Payment Date shall be calculated as if cumulative
      from and after the last day of the fiscal quarter next preceding the date of
      original issuance of such shares. Accrued but unpaid dividends shall not bear
      interest. Dividends paid on the shares of Series A Preferred Stock in an amount
      less than the total amount of such dividends at the time accrued and payable
      on
      such shares shall be allocated pro rata on a share-by-share basis among all
      such
      shares at the time outstanding.

    


    2.4  So
      long
      as any shares of the Series A Preferred Stock are outstanding, no dividends
      or
      other distributions shall be declared, paid or distributed, or set aside for
      payment or distribution, on the Common Stock unless, in each case, the dividend
      required by this Section 2 to be declared on the Series A Preferred Stock shall
      have been declared.

     

    2.5  The
      holders of the shares of Series A Preferred Stock shall not be entitled to
      receive any dividends or other distribution except as provided
      herein.

     

    3.  Voting
      Rights.
      The
      holders of shares of Series A Preferred Stock shall have the following voting
      rights:

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    3.1  Each
      holder of Series A Preferred Stock shall be entitled to a number of votes equal
      to the Formula Number then in effect, for each share of Series A Preferred
      Stock
      held of record on each matter on which holders of the Common Stock or
      stockholders generally are entitled to vote, multiplied by the maximum number
      of
      votes per share which any holder of the Common Stock or stockholders generally
      then have with respect to such matter (assuming any holding period or other
      requirement to vote a greater number of shares is satisfied).

     

    3.2  Except
      as
      otherwise provided herein or by applicable law, the holders of shares of Series
      A Preferred Stock and the holders of shares of Common Stock shall vote together
      as one class for the election of directors of the Corporation and on all other
      matters submitted to a vote of stockholders of the Corporation.

     

    3.3  If,
      at
      the time of any annual meeting of stockholders for the election of directors,
      the equivalent of six quarterly dividends (whether or not consecutive) payable
      on any share or shares of Series A Preferred Stock are in default, the number
      of
      directors constituting the Board of Directors of the Corporation shall be
      increased by two. In addition to voting together with the holders of Common
      Stock for the election of other directors of the Corporation, the holders of
      record of the Series A Preferred Stock, voting separately as a class to the
      exclusion of the holders of Common Stock, shall be entitled at said meeting
      of
      stockholders (and at each subsequent annual meeting of stockholders), unless
      all
      dividends in arrears have been paid or declared and set apart for payment prior
      thereto, to vote for the election of two directors of the Corporation, the
      holders of any Series A Preferred Stock being entitled to cast a number of
      votes
      per share of Series A Preferred Stock equal to the Formula Number. Until the
      default in payments of all dividends which permitted the election of said
      directors shall cease to exist, any director who shall have been so elected
      pursuant to the next preceding sentence may be removed at any time, either
      with
      or without cause, only by the affirmative vote of the holders of the shares
      of
      Series A Preferred Stock at the time entitled to cast a majority of the votes
      entitled to be cast for the election of any such director at a special meeting
      of such holders called for that purpose, and any vacancy thereby created may
      be
      filled by the vote of such holders. If and when such default shall cease to
      exist, the holders of the Series A Preferred Stock shall be divested of the
      foregoing special voting rights, subject to revesting in the event of each
      and
      every subsequent like default in payments of dividends. Upon the termination
      of
      the foregoing special voting rights, the terms of office of all persons who
      may
      have been elected directors pursuant to said special voting rights shall
      forthwith terminate, and the number of directors constituting the Board of
      Director shall be reduced by two. The voting rights granted by this Section
      3.3
      shall be in addition to any other voting rights granted to the holders of the
      Series A Preferred Stock in this Section 3.

    


    3.4  Except
      as
      provided herein, in Section
      11
      or by
      applicable law, holders of Series A Preferred Stock shall have no special voting
      rights and their consent shall not be required (except to the extent they are
      entitled to vote with holders of Common Stock as set forth herein) for
      authorizing or taking any corporate action.

     

    4.  Certain
      Restrictions.

    


    4.1  Whenever
      quarterly dividends or other dividends or distributions payable on the Series
      A
      Preferred Stock as provided in Section
      2
      are in
      arrears, thereafter and until all accrued and unpaid dividends and
      distributions, whether or not declared, on shares of Series A Preferred Stock
      outstanding shall have been paid in full, the Corporation shall not


     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4.1.1  declare
      or pay dividends on, make any other distributions on, or redeem or purchase
      or
      otherwise acquire for consideration any shares of stock ranking junior (either
      as to dividends or upon liquidation, dissolution or winding up) to the Series
      A
      Preferred Stock;

     

    4.1.2  declare
      or pay dividends on, or make any other distributions on any shares of stock
      ranking on a parity (either as to dividends or upon liquidation, dissolution
      or
      winding up) with the Series A Preferred Stock, except dividends paid ratably
      on
      the Series A Preferred Stock and all such parity stock on which dividends are
      payable or in arrears in proportion to the total amounts to which the holders
      of
      all such shares are then entitled;

     

    4.1.3  redeem
      or
      purchase or otherwise acquire for consideration shares of any stock ranking
      on a
      parity (either as to dividends or upon liquidation, dissolution or winding
      up)
      with the Series A Preferred Stock; provided that the Corporation may at any
      time
      redeem, purchase or otherwise acquire shares of any such parity stock in
      exchange for shares of any stock of the Corporation ranking junior (either
      as to
      dividends or upon dissolution, liquidation or winding up) to the Series A
      Preferred Stock; or

     

    4.1.4  purchase
      or otherwise acquire for consideration any shares of Series A Preferred Stock,
      or any shares of stock ranking on a parity with the Series A Preferred Stock,
      except in accordance with a purchase offer made in writing or by publication
      (as
      determined by the Board of Directors) to all holders of such shares upon such
      terms as the Board of Directors, after consideration of the respective annual
      dividend rates and other relative rights and preferences of the respective
      series and classes, shall determine in good faith will result in fair and
      equitable treatment among the respective series or classes.

     

    4.2  The
      Corporation shall not permit any subsidiary of the Corporation to purchase
      or
      otherwise acquire for consideration any shares of stock of the Corporation
      unless the Corporation could, under Section
      4.1,
      purchase or otherwise acquire such shares at such time and in such
      manner.

     

    5.  Liquidation
      Rights.
      Upon
      the liquidation, dissolution or winding up of the Corporation, whether voluntary
      or involuntary, no distribution shall be made (1) to the holders of shares
      of
      stock ranking junior (either as to dividends or upon liquidation, dissolution
      or
      winding up) to the Series A Preferred Stock unless, prior thereto, the holders
      of shares of Series A Preferred Stock shall have received an amount equal to
      the
      accrued and unpaid dividends and distributions thereon, whether or not declared,
      to the date of such payment, plus an amount equal to the greater of (x) $.01
      per
      whole share or (y) an aggregate amount per share equal to the Formula Number
      then in effect times the aggregate amount to be distributed per share to holders
      of Common Stock or (2) to the holders of stock ranking on a parity (either
      as to
      dividends or upon liquidation, dissolution or winding up) with the Series A
      Preferred Stock, except distributions made ratably on the Series A Preferred
      Stock and all other such parity stock in proportion to the total amounts to
      which the holders of all such shares are entitled upon such liquidation,
      dissolution or winding up.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    6.  Consolidation,
      Merger, etc.
      In case
      the Corporation shall enter into any consolidation, merger, combination or
      other
      transaction in which the shares of Common Stock are exchanged for or changed
      into other stock or securities, cash or any other property, then in any such
      case the then outstanding shares of Series A Preferred Stock shall at the same
      time be similarly exchanged or changed into an amount per share equal to the
      Formula Number then in effect times the aggregate amount of stock, securities,
      cash or any other property (payable in kind), as the case may be, into which
      or
      for which each share of Common Stock is exchanged or changed. In the event
      both
      this Section 6 and Section 2 appear to apply to a transaction, this Section
      6
      will control.

     

    7.  No
      Redemption; No Sinking Fund.

     

    7.1  The
      shares of Series A Preferred Stock shall not be subject to redemption by the
      Corporation or at the option of any holder of Series A Preferred Stock except
      as
      set forth in the Certificate of Incorporation of the Corporation; provided,
      however, that the Corporation may purchase or otherwise acquire outstanding
      shares of Series A Preferred Stock in the open market or by offer to any holder
      or holders of shares of Series A Preferred Stock.

     

    7.2  The
      shares of Series A Preferred Stock shall not be subject to or entitled to the
      operation of a retirement or sinking fund.

     

    8.  Ranking.
      The
      Series A Preferred Stock shall rank junior to all other series of Preferred
      Stock of the Corporation, unless the Board of Directors shall specifically
      determine otherwise in fixing the powers, preferences and relative,
      participating, optional and other special rights of the shares of such series
      and the qualifications, limitations and restrictions thereof.

     

    9.  Fractional
      Shares.
      The
      Series A Preferred Stock shall be issuable upon exercise of the Rights issued
      pursuant to the Rights Agreement in whole shares or in any fraction of a share
      that is one one-thousandth (1/1,000ths) of a share of any integral multiple
      of
      such fraction which shall entitle the holder, in proportion to such holder’s
      fractional shares, to receive dividends, exercise voting rights, participate
      in
      distributions and to have the benefit of all other rights of holders of Series
      A
      Preferred Stock. In lieu of fractional shares, the Corporation, prior to the
      first issuance of a share or a fraction of a share of Series A Preferred Stock,
      may elect (1) to make a cash payment as provided in the Rights Agreement for
      fractions of a share other than one one-thousandth (1/1,000th) of a share or
      any
      integral multiple thereof or (2) to issue depository receipts evidencing such
      authorized fraction of a share of Series A Preferred Stock pursuant to an
      appropriate agreement between the Corporation and a depository selected by
      the
      Corporation; provided that such agreement shall provide that the holders of
      such
      depository receipts shall have all the rights, privileges and preferences to
      which they are entitled as holders of the Series A Preferred Stock.

     

    10.  Reacquired
      Shares.
      Any
      shares of Series A Preferred Stock purchased or otherwise acquired by the
      Corporation in any manner whatsoever shall be retired and canceled promptly
      after the acquisition thereof. All such shares shall upon their cancellation
      become authorized but unissued shares of Preferred Stock, without designation
      as
      to series until such shares are once more designated as part of a particular
      series by the Board of Directors pursuant to the provisions of Article Fourth
      of
      the Certificate of Incorporation.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    11.  Amendment.
      None of
      the powers, preferences and relative, participating, optional and other special
      rights of the Series A Preferred Stock as provided herein or in the Certificate
      of Incorporation shall be amended in any manner which would alter or change
      the
      powers, preferences, rights or privileges of the holders of Series A Preferred
      Stock so as to affect them adversely without the affirmative vote of the holders
      of at least 66-2/3% of the outstanding shares of Series A Preferred Stock,
      voting as a separate class; provided, however, that no such amendment approved
      by the holders of at least 66-2/3% of the outstanding shares of Series A
      Preferred Stock shall be deemed to apply to the powers, preferences, rights
      or
      privileges of any holder of shares of Series A Preferred Stock originally issued
      upon exercise of the Rights after

    the
      time
      of such approval without the approval of such holder.

    


     

    Series
      B Preferred Stock 

     

    


    [___________]
      shares of the authorized and unissued Preferred Stock of the Corporation are
      hereby designated “Series
      B Preferred Stock”
with
      the following rights, preferences, powers, privileges and restrictions,
      qualifications and limitations. Unless otherwise indicated, references to
“Sections” or “Subsections” in this Part C of this Article Fourth refer to
      sections and subsections of this subpart of Part C of this subpart of Article
      Fourth.

     

    
      	1.  	
              Dividends.

            


    

    


    1.1  The
      holders of shares of Series B Preferred Stock, in preference to the holders
      of
      any other stock of the Corporation ranking junior to the Series B Preferred
      Stock including, without limitation, Common Stock and Series A Preferred Stock
      (collectively, the “Junior
      Stock”),
      shall
      be entitled to receive cumulative dividends, out of funds legally available
      therefor, at the annual rate of eight percent (8%) of the Series B Original
      Issue Price (as defined below) for each share of Series B Preferred Stock.
      Dividends on shares of Series B Preferred Stock shall, at the option of the
      holders of a majority of the outstanding Series B Preferred Stock, be payable
      in
      cash or in shares of Preferred Stock, regardless of whether declared by the
      Board of Directors, and for a period of five (5) years from the Series B
      Original Issue Date (as defined below). For purposes of this Certificate of
      Incorporation, the term “Series
      B Original Issue Price”
shall
      mean $[______] per share of Series B Preferred Stock (subject to appropriate
      adjustment in the event of any stock dividend, stock split, combination or
      other
      similar recapitalization with respect to the Series B Preferred
      Stock).

    


    1.2  The
      Corporation shall not declare or pay any dividends on any shares of Junior
      Stock
      unless all dividends accrued pursuant to Section
      1.1
      above
      have been paid with respect to all outstanding shares of Series B Preferred
      Stock. Subject to Section
      3.2(g),
      if
      the
      Board of Directors of the Corporation thereafter shall declare a dividend
      payable upon the then outstanding shares of the Common Stock (other than a
      dividend payable entirely in shares of the Common Stock of the Corporation),
      then the Board of Directors shall declare at the same time a dividend upon
      the
      then outstanding shares of the Series B Preferred Stock payable at the same
      time
      as the dividend is paid on the Common Stock, in an amount equal to the amount
      of
      dividends per share of Series B Preferred Stock as would have been payable
      on
      the number of shares of Common Stock which each share of Series B Preferred
      Stock held by each holder thereof would have received if such Series B Preferred
      Stock had been converted to Common Stock pursuant to the provisions of
Section
      4 hereof
      as
      of the record date for the determination of holders of Common Stock entitled
      to
      receive such dividends. In the event the Board of Directors of the Corporation
      shall declare a dividend payable upon any class or series of Junior Stock of
      the
      Corporation other than Common Stock, the Board of Directors shall declare at
      the
      same time a dividend upon the then outstanding shares of Series B Preferred
      Stock, payable at the same time as such dividend on such other class or series
      of Junior Stock in an amount equal to (i) in the case of any series or class
      convertible into Common Stock, a dividend per share of Series B Preferred Stock
      as would equal the dividend payable on such other class or series determined
      as
      if all such shares of such class or series had been converted to Common Stock
      and all shares of Series B Preferred Stock have been converted to Common Stock
      on the record date for the determination of holders entitled to receive such
      dividend or (ii) if such class or series of capital stock is not convertible
      into Common Stock, at a rate per share of Series B Preferred Stock determined
      by
      dividing the amount of the dividend payable on each share of such class or
      series of capital stock by the original issuance price of such class or series
      of capital stock and multiplying such fraction by the Series B Original Issue
      Price.

    


    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    1.3  Participation
      Rights.
      If,
      after dividends in the full preferential amounts specified in Section
      1.1
      for the
      Series B Preferred Stock have been paid or declared and set apart, the Board
      of
      Directors shall declare an additional dividend or dividends out of the funds
      legally available therefore, then such additional dividend or dividends shall
      be
      declared pro rata on the Common Stock and the Series B Preferred Stock on a
      pari passu
      basis
      according to the number of shares of Common Stock held by such holders, where
      each holder of shares of Series B Preferred Stock is to be treated for this
      purpose as holding the greatest whole number of shares of Common Stock then
      issuable upon conversion of all shares of Series B Preferred Stock held by
      such
      holder pursuant Section
      4
      hereof.

    


    
      	2.  	
              Liquidation,
                Dissolution or Winding Up; Certain Mergers, Consolidations and Asset
                Sales.

            


    

    


    2.1  Preferential
      Payments to Holders of Series B Preferred Stock.
      In the
      event of any voluntary or involuntary liquidation, dissolution or winding up
      of
      the Corporation or any Deemed Liquidation Event (as defined below), the holders
      of shares of Series B Preferred Stock then outstanding shall be entitled to
      be
      paid out of the assets of the Corporation available for distribution to its
      stockholders before any payment shall be made to the holders of Junior Stock
      by
      reason of their ownership thereof, an amount per share equal to the Series
      B Original Issue Price, plus all dividends accrued, but unpaid pursuant to
      Section 1.1 above, including dividends with respect to any partial year at
      the
      appropriate pro rata rate consistent with Section 1.1 above, and any other
      dividends declared but unpaid thereon. If upon any such liquidation, dissolution
      or winding up of the Corporation or any Deemed Liquidation Event, the assets
      of
      the Corporation available for distribution to its stockholders shall be
      insufficient to pay the holders of shares of Series B Preferred Stock the full
      amount to which they shall be entitled under this Subsection
      2.1,
      the
      holders of shares of Series B Preferred Stock shall share ratably in any
      distribution of the assets available for distribution in proportion to the
      respective amounts which would otherwise be payable in respect of the shares
      held by them upon such distribution if all amounts payable on or with respect
      to
      such shares were paid in full.

    


    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    2.2  Distribution
      of Remaining Assets.
      In the
      event of any voluntary or involuntary liquidation, dissolution or winding up
      of
      the Corporation or any Deemed Liquidation Event, after the payment of all
      preferential amounts required to be paid to the holders of shares of Series
      B
      Preferred Stock, the remaining assets of the Corporation available for
      distribution to its stockholders shall be distributed among the holders of
      the
      shares of Common Stock, pro rata based on the number of shares held by each
      such
      holder, provided, however, that the holders of Series B Preferred Stock shall
      be
      entitled to receive upon such dissolution, liquidation or winding up of the
      Corporation the greater of (i) any amount such holder would receive pursuant
      to
Subsection
      2.1
      hereof
      and (ii) the amount such holder would have received if such holder had converted
      his, her or its shares of Series B Preferred Stock into Common Stock immediately
      prior to such dissolution, liquidation or winding up of the Corporation. The
      aggregate amount which a holder of a share of Series B Preferred Stock is
      entitled to receive under Subsections
      2.1
      or
2.2
      is
      hereinafter referred to as the “Series
      B Liquidation Amount.”

    


    2.3  Deemed
      Liquidation Events.

    


    2.3.1  Definition.
      Each of
      the following events shall be considered a “Deemed
      Liquidation Event”
unless
      the holders of at least a majority of the outstanding shares of Series B
      Preferred Stock elect otherwise by written notice sent to the Corporation at
      least five (5) days prior to the effective date of any such event:

    


    (a) a
      merger
      or consolidation in which 

     

    
      	 	
              (i)

            	
              
              

            


    

     

    
      	 	
              (ii)

            	
              a
                subsidiary of the Corporation is a constituent party,
                

            


    

     

    except
      any such merger or consolidation involving the Corporation or a subsidiary
      in
      which the shares of capital stock of the Corporation outstanding immediately
      prior to such merger or consolidation continue to represent, or are converted
      into or exchanged for shares of capital stock that represent, immediately
      following such merger or consolidation, at least a majority, by voting power,
      of
      the capital stock of (1) the surviving or resulting corporation or (2) if the
      surviving or resulting corporation is a wholly owned subsidiary of another
      corporation immediately following such merger or consolidation, the parent
      corporation of such surviving or resulting corporation; or 

    


    (b) the
      sale,
      lease, license, transfer or other disposition, in a single transaction or series
      of related transactions, by the Corporation or any subsidiary of the Corporation
      of all or substantially all the assets of the Corporation and its subsidiaries
      taken as a whole, or the sale or disposition (whether by merger or otherwise)
      of
      one or more subsidiaries of the Corporation if substantially all of the assets
      of the Corporation and its subsidiaries taken as a whole are held by such
      subsidiary or subsidiaries, except where such sale, lease, license, transfer
      or
      other disposition is to a wholly owned subsidiary of the
      Corporation.

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    


    2.3.2  Amount
      Deemed Paid or Distributed.
      If the
      amount deemed paid or distributed under this Subsection
      2.3
      is made
      in property other than in cash, the value of such distribution shall be the
      fair
      market value of such property, determined as follows:

    


    (i) if
      traded
      on a securities exchange, the value shall be deemed to be the average of the
      closing prices of the securities on such exchange or market over the ten (10)
      day period ending one (1) day prior to the distribution;

     

    (ii) if
      actively traded over-the-counter, the value shall be deemed to be the average
      of
      the closing bid prices over the ten (10) day period ending one (1) day prior
      to
      the distribution; or

     

    (iii) if
      there
      is no active public market, the value shall be the fair market value thereof,
      as
      determined in good faith by the Board of Directors of the Corporation after
      reasonable consultation with the holders of at least a majority of the then
      outstanding shares of Series B Preferred Stock (the “Requisite
      Holders”).
      In
      the event that the Requisite Holders disagree with the fair market value as
      determined by the Board of Directors, the Requisite Holders shall select an
      appraiser that is reasonably acceptable to the Corporation who is experienced
      in
      such matters to determine the fair market value for purposes of this
Subsection
      2.3.2(iii);
      and
      such appraiser’s determination shall be binding upon the Corporation and the
      holders of Series B Preferred Stock.

     

    


    
      	3.  	
              Voting.

            


    

    


    3.1  General.
      On any
      matter presented to the stockholders of the Corporation for their action or
      consideration at any meeting of stockholders of the Corporation, each holder
      of
      outstanding shares of Series B Preferred Stock shall be entitled to cast the
      number of votes equal to one-half of the number of whole shares of Common Stock
      into which the shares of Series B Preferred Stock held by such holder are
      convertible as of the record date for determining stockholders entitled to
      vote
      on such matter. Except as provided by law or by the other provisions of the
      Certificate of Incorporation, holders of Series B Preferred Stock shall vote
      together with the holders of Common Stock as a single class. From and after
      the
      conversion of any share of Series B Preferred Stock into Common Stock, such
      resulting share or shares of Common Stock shall have the full voting rights
      applicable to the Common Stock generally.

    


    3.2  Series
      B Preferred Stock Protective Provisions.
      At any
      time when any shares of Series B Preferred Stock issued pursuant to that certain
      Series B Preferred Stock and Warrant Purchase Agreement dated as of April 5,
      2007 among this Corporation and the purchasers named therein (the “Series
      B Purchase Agreement”),
      including upon exercise of warrants, are outstanding, the Corporation shall
      not,
      without first obtaining the approval (by vote or written consent, as provided
      by
      law) of the holders of at least a majority of the shares of the Series B
      Preferred Stock held by Significant Holders (defined below), if
      any:

    


    a)  authorize
      or incur any Indebtedness (as defined below) in excess of
      $2,000,000;

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    b)  issue
      or
      sell any convertible debt, preferred stock (convertible or otherwise) or any
      other equity or equity-linked security at a price that values the Corporation’s
      Common Stock at a price less than the Series B Original Issue Price (as adjusted
      for all subsequent stock splits, stock dividends, consolidations,
      recapitalizations and reorganizations), other than any equity or equity linked
      security that is issued pursuant to any transaction or transactions approved
      under Subsection
      3.2(k)
      hereof;

     

    c)  increase
      or decrease the authorized number of shares of capital stock of the
      Corporation;

     

    d)  create
      or
      issue any new class or series of shares having rights, preferences or privileges
      senior to the Common Stock, or create or issue any other new equity or
      equity-linked securities, including convertible debt;

     

    e)  issue
      any
      shares of Series A Preferred Stock other than pursuant to the terms of that
      certain Amended and Restated Stockholders’ Rights Agreement, dated as of July
      25, 2005, as amended, between the Company and American Stock Transfer &
Trust Company;

     

    f)  amend,
      alter, or repeal any provision of this Restated Certificate of Incorporation
      or
      the Amended and Restated Bylaws of the Corporation (including any filing of
      a
      certificate of designation), that alters or changes the voting powers,
      preferences, or other special rights or privileges, or restrictions of the
      Series B Preferred Stock

     

    g)  pay
      or
      declare any dividends or make other distributions upon its shares of capital
      stock;

     

    h)  purchase,
      redeem or otherwise acquire any of the Corporation’s equity securities
      (including warrants, options and other rights to acquire equity securities)
      other than the repurchase of equity securities pursuant to existing agreements
      disclosed to the Purchasers in writing prior to the date of this Amended and
      Restated Certificate of Incorporation specifically referencing this Subsection
      3.2(h);

     

    i)  issue
      any
      equity or equity-linked securities to any employee other than pursuant to the
      Corporation’s Approved Stock Plans (as defined below), or increase the shares of
      Common Stock or other securities reserved for issuance as incentive awards
      to
      the Corporation’s management and other employees, directors and consultants
      pursuant to the Approved Stock Plans or any other any equity incentive plan
      or
      similar arrangement;

     

    j)  liquidate,
      dissolve or wind-up;

     

    k)  merge
      or
      consolidate with another corporation in which the holders of the Corporation’s
      voting equity securities immediately prior to the transaction would own 50%
      or
      less of the voting securities of the surviving corporation or engage in any
      other Deemed Liquidation Event;

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    l)  sell,
      license or dispose of any material assets of the Corporation, including
      intellectual property or other rights to the Corporation’s development stage,
      pre-clinical and/or diagnostic assets, including, without limitation, pursuant
      to any license, development, commercialization, distribution, marketing,
      co-marketing, collaboration, partnering or other agreement, other than licenses
      of immaterial technology in the ordinary course of business on commercially
      reasonable terms and consistent with past practices; 

     

    m)  change
      the authorized number of directors of the Corporation;

     

    n)  amend
      or
      waive any material provision of this Amended and Restated Certificate of
      Incorporation or the Corporation’s By-Laws;

     

    o)  materially
      change the nature of the Corporation’s business from that engaged in on the
      Series B Original Issue Date (as defined below); 

     

    p)  intentionally
      take any action which is reasonably likely to result in (i) the Common Stock
      of
      the Corporation no longer being approved for quotation on the American Stock
      Exchange or the Nasdaq Stock Market or (ii) the Common Stock of the Corporation
      ceasing to be registered pursuant to Section 12 of the Securities Exchange
      Act
      of 1934, as amended; or

     

    q)  agree,
      consent or acquiesce to any amendment, supplement or other modification to,
      or
      termination of, any of its material agreements, including, without limitation
      any Material License Agreement (as defined below) or any other agreement filed
      with the Securities and Exchange Commission pursuant to Item 601 of Regulation
      S-K;

     

    For
      the
      purposes hereof:

     

    “Significant
      Holder” shall
      mean any beneficial holder or holder of record of at least that number of shares
      of Series B Preferred Stock as is equal to $4,000,000 divided by the Series
      B
      Original Issue Price (as defined below) (as adjusted for stock splits, stock
      dividends, reverse stock splits or the like). All shares of Series B Preferred
      Stock held or acquired by affiliated entities or persons shall be aggregated
      together for the purpose of determining the status of a holder as a Significant
      Holder.

     

    “Indebtedness”
shall
      mean (a) any liabilities for borrowed money or amounts owed (other than trade
      accounts payable incurred in the ordinary course of business), (b) all
      guaranties, endorsements and other contingent obligations in respect of
      Indebtedness of others, whether or not the same are or should be reflected
      in
      the Corporation’s balance sheet (or the notes thereto), except guaranties by
      endorsement of negotiable instruments for deposit or collection or similar
      transactions in the ordinary course of business; and (c) the present value
      of
      any lease payments due under leases required to be capitalized in accordance
      with GAAP;

     

    “Approved
      Stock Plan”
shall
      mean any employee benefit plan which has been approved by the Board of Directors
      and stockholders of the Corporation, pursuant to which the Corporation’s
      securities may be issued to any employee, officer or director for services
      provided to the Corporation; and

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    “Material
      License Agreement”
shall
      mean (i) Exclusive License Agreement dated as of September 28, 2004 by and
      between Oxis International, a Delaware corporation, and HaptoGuard, as amended
      on March 22, 2005, as further amended on July 19, 2006, and as further amended
      on April 2, 2007; and (ii) License and Research Agreement dated as of July
      12,
      2004 by and between BIO-RAP Technologies, Ltd., an Israeli corporation, on
      its
      own behalf and on behalf of the Rappaport Family Institute for Research in
      the
      Medical Sciences, and HaptoGaurd, as amended on April 1, 2007. 

     

    


    
      	4.  	
              Optional
                Conversion. 

            


    

    


    The
      holders of the Series B Preferred Stock shall have conversion rights as follows
      (the “Conversion
      Rights”):

    


    4.1  Right
      to Convert.
      

    


    4.1.1  Conversion
      Ratio.
      Each
      share of Series B Preferred Stock, plus, prior to the fifth anniversary of
      the
      Series B Original Issue Date, all accrued and unpaid dividends, shall be
      convertible, at the option of the holder thereof, at any time and from time
      to
      time, and without the payment of additional consideration by the holder thereof,
      into such number of fully paid and nonassessable shares of Common Stock as
      is
      determined by dividing the Series B Original Issue Price by the Series B
      Conversion Price (as defined below) in effect at the time of conversion. The
      “Series
      B Conversion Price”
shall
      initially be equal to $[_______]. Such initial Series B Conversion Price, and
      the rate at which shares of Series B Preferred Stock may be converted into
      shares of Common Stock, shall be subject to adjustment as provided
      below.

    


    4.1.2  Termination
      of Conversion Rights.
      In the
      event of a notice of redemption of any shares of Series B Preferred Stock
      pursuant to Section 6,
      the
      Conversion Rights of the shares designated for redemption shall terminate at
      the
      close of business on the last full day preceding the date fixed for redemption,
      unless the redemption price is not fully paid on such redemption date, in which
      case the Conversion Rights for such shares shall continue until such price
      is
      paid in full. In the event of a liquidation, dissolution or winding up of the
      Corporation or a Deemed Liquidation Event, the Conversion Rights shall terminate
      at the close of business on the last full day preceding the date fixed for
      the
      payment of any such amounts distributable on such event to the holders of Series
      B Preferred Stock.

    


    4.2  Fractional
      Shares.
      No
      fractional shares of Common Stock shall be issued upon conversion of the Series
      B Preferred Stock. In lieu of any fractional shares to which the holder would
      otherwise be entitled, the Corporation shall pay cash equal to such fraction
      multiplied by the fair market value of a share of Common Stock as determined
      in
      good faith by the Board of Directors of the Corporation. In the event that
      the
      Requisite Holders disagree with the fair market value as determined by the
      Board
      of Directors, the Requisite Holders shall select an appraiser that is reasonably
      acceptable to the Corporation who is experienced in such matters to determine
      the fair market value for purposes of this Section
      4.2;
      and
      such appraiser’s determination shall be binding upon the Corporation and the
      holders of Series B Preferred Stock. Whether or not fractional shares would
      be
      issuable upon such conversion shall be determined on the basis of the total
      number of shares of Series B Preferred Stock the holder is at the time
      converting into Common Stock and the aggregate number of shares of Common Stock
      issuable upon such conversion.

    


    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    4.3  Mechanics
      of Conversion.

    


    4.3.1  Notice
      of Conversion.
      In
      order for a holder of Series B Preferred Stock to voluntarily convert shares
      of
      Series B Preferred Stock into shares of Common Stock, such holder shall
      surrender the certificate or certificates for such shares of Series B Preferred
      Stock (or, if such registered holder alleges that such certificate has been
      lost, stolen or destroyed, a lost certificate affidavit and agreement reasonably
      acceptable to the Corporation to indemnify the Corporation against any claim
      that may be made against the Corporation on account of the alleged loss, theft
      or destruction of such certificate), at the office of the transfer agent for
      the
      Series B Preferred Stock (or at the principal office of the Corporation if
      the
      Corporation serves as its own transfer agent), together with written notice
      that
      such holder elects to convert all or any number of the shares of the Series
      B
      Preferred Stock represented by such certificate or certificates and, if
      applicable, any event on which such conversion is contingent. Such notice shall
      state such holder’s name or the names of the nominees in which such holder
      wishes the certificate or certificates for shares of Common Stock to be issued.
      If required by the Corporation, certificates surrendered for conversion shall
      be
      endorsed or accompanied by a written instrument or instruments of transfer,
      in
      form satisfactory to the Corporation, duly executed by the registered holder
      or
      his, her or its attorney duly authorized in writing. The close of business
      on
      the date of receipt by the transfer agent (or by the Corporation if the
      Corporation serves as its own transfer agent) of such certificates (or lost
      certificate affidavit and agreement) and notice shall be the time of conversion
      (the “Conversion
      Time”),
      and
      the shares of Common Stock issuable upon conversion of the shares represented
      by
      such certificate shall be deemed to be outstanding of record as of such date.
      The Corporation shall, as soon as practicable after the Conversion Time, issue
      and deliver to such holder of Series B Preferred Stock, or to his, her or its
      nominees, a certificate or certificates for the number of full shares of Common
      Stock issuable upon such conversion in accordance with the provisions hereof,
      a
      certificate for the number (if any) of the shares of Series B Preferred Stock
      represented by the surrendered certificate that were not converted into Common
      Stock, and cash as provided in Subsection
      4.2
      in lieu
      of any fraction of a share of Common Stock otherwise issuable upon such
      conversion and payment of any declared but unpaid dividends on the shares of
      Series B Preferred Stock converted.

    


    4.3.2  Reservation
      of Shares.
      The
      Corporation shall at all times when the Series B Preferred Stock shall be
      outstanding, reserve and keep available out of its authorized but unissued
      capital stock, for the purpose of effecting the conversion of the Series B
      Preferred Stock, such number of its duly authorized shares of Common Stock
      as
      shall from time to time be sufficient to effect the conversion of all
      outstanding Series B Preferred Stock; and if at any time the number of
      authorized but unissued shares of Common Stock shall not be sufficient to effect
      the conversion of all then outstanding shares of the Series B Preferred Stock,
      the Corporation shall take such corporate action as may be necessary to increase
      its authorized but unissued shares of Common Stock to such number of shares
      as
      shall be sufficient for such purposes, including, without limitation, engaging
      in best efforts to obtain the requisite stockholder approval of any necessary
      amendment to the Certificate of Incorporation. Before taking any action which
      would cause an adjustment reducing the Series B Conversion Price below the
      then
      par value of the shares of Common Stock issuable upon conversion of the Series
      B
      Preferred Stock, the Corporation will take any corporate action which may,
      in
      the opinion of its counsel, be necessary in order that the Corporation may
      validly and legally issue fully paid and nonassessable shares of Common Stock
      at
      such adjusted Series B Conversion Price.

    


    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    4.3.3  Effect
      of Conversion.
      All
      shares of Series B Preferred Stock which shall have been surrendered for
      conversion as herein provided shall no longer be deemed to be outstanding and
      all rights with respect to such shares shall immediately cease and terminate
      at
      the Conversion Time, except only the right of the holders thereof to receive
      shares of Common Stock in exchange therefor and to receive payment of any
      dividends declared but unpaid thereon. Any shares of Series B Preferred Stock
      so
      converted shall be retired and cancelled and may not be reissued as shares
      of
      such series, and the Corporation may thereafter take such appropriate action
      (without the need for stockholder action) as may be necessary to reduce the
      authorized number of shares of Series B Preferred Stock accordingly.


    


    4.3.4  No
      Further Adjustment.
      Upon
      any such conversion, no adjustment to the Series B Conversion Price shall be
      made for any declared but unpaid dividends on the Series B Preferred Stock
      surrendered for conversion or on the Common Stock delivered upon
      conversion.

    


    4.3.5  Taxes.
      The
      Corporation shall pay any and all issue and other similar taxes 

    that
      may
      be payable in respect of any issuance or delivery of shares of Common Stock
      upon
      conversion of shares of Series B Preferred Stock pursuant to this Section 4.
      The
      Corporation shall not, however, be required to pay any tax which may be payable
      in respect of any transfer involved in the issuance and delivery of shares
      of
      Common Stock in a name other than that in which the shares of Series B Preferred
      Stock so converted were registered, and no such issuance or delivery shall
      be
      made unless and until the person or entity requesting such issuance has paid
      to
      the Corporation the amount of any such tax or has established, to the
      satisfaction of the Corporation, that such tax has been paid.

    


    4.4  Adjustments
      to Series B Conversion Price for Diluting Issues.

    


    4.4.1  Special
      Definitions.
      For
      purposes of this Article Fourth, the following definitions shall
      apply:

    a)  “Option”
shall
      mean rights, options or warrants to subscribe for, purchase or otherwise acquire
      Common Stock or Convertible Securities.

     

    b)  “Series
      B Original Issue Date”
shall
      mean the date on which the first share of Series B Preferred Stock was
      issued.

     

    c)  “Convertible
      Securities”
shall
      mean any evidences of indebtedness, shares or other securities directly or
      indirectly convertible into or exchangeable for Common Stock, but excluding
      Options.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    d)  “Additional
      Shares of Common Stock”
shall
      mean all shares of Common Stock issued (or, pursuant to Subsection 4.4.3
      below,
      deemed to be issued) by the Corporation after the Series B Original Issue Date,
      other than the following shares of Common Stock, and shares of Common Stock
      deemed issued pursuant to the following Options and Convertible Securities
      (collectively “Exempted
      Securities”):

     

    
      	i.  	
              shares
                of Common Stock, Options or Convertible Securities issued as a dividend
                or
                distribution on Series B Preferred
                Stock;

            


    

     

    
      	ii.  	
              shares
                of Common Stock, Options or Convertible Securities issued by reason
                of a
                dividend, stock split, split-up or other distribution on shares of
                Common
                Stock that is covered by Subsection
                4.5, 4.6,
                4.7
                or
                4.8
                below; 

            


    

     

    
      	iii.  	
              shares
                of Common Stock or Options issued to employees or directors of, or
                consultants or advisors to, the Corporation or any of its subsidiaries
                pursuant to an Approved Stock Plan;

            


    

     

    
      	iv.  	
              shares
                of Common Stock or Convertible Securities actually issued upon the
                exercise of Options or shares of Common Stock actually issued upon
                the
                conversion or exchange of Convertible Securities issued pursuant
                to
                Subsections
                4.4.1(i),
                (ii),
                (iii)
                and (v);
                or

            


    

     

    
      	v.  	
              shares
                of Common Stock, Options or Convertible Securities issued to banks,
                equipment lessors or other financial institutions, or to real property
                lessors, pursuant to a debt financing, equipment leasing or real
                property
                leasing transaction approved by the Board of Directors of the
                Corporation.

            


    

     

    4.4.2  No
      Adjustment of Series B Conversion Price.
      No
      adjustment in the Series B Conversion Price shall be made as the result of
      the
      issuance or deemed issuance of Additional Shares of Common Stock if the
      Corporation receives written notice from the holders of at least a majority
      of
      the then outstanding shares of Series B Preferred Stock agreeing that no such
      adjustment shall be made as the result of the issuance or deemed issuance of
      such Additional Shares of Common Stock.

    


    4.4.3  Deemed
      Issue of Additional Shares of Common Stock.
      

    


    a)  If
      the
      Corporation at any time or from time to time after the Series B Original Issue
      Date shall issue any Options or Convertible Securities (excluding Options or
      Convertible Securities which are themselves Exempted Securities) or shall fix
      a
      record date for the determination of holders of any class of securities entitled
      to receive any such Options or Convertible Securities, then the maximum number
      of shares of Common Stock (as set forth in the instrument relating thereto,
      assuming the satisfaction of any conditions to exercisability, convertibility
      or
      exchangeability but without regard to any provision contained therein for a
      subsequent adjustment of such number) issuable upon the exercise of such Options
      or, in the case of Convertible Securities and Options therefor, the conversion
      or exchange of such Convertible Securities, shall be deemed to be Additional
      Shares of Common Stock issued as of the time of the issuance of such Options
      or
      Convertible Securities or, in case such a record date shall have been fixed,
      as
      of the close of business on such record date.

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    b)  If
      the
      terms of any Option or Convertible Security, the issuance of which resulted
      in
      an adjustment to the Series B Conversion Price pursuant to the terms of
Subsection
      4.4.4
      below,
      are revised as a result of an amendment to such terms or any other adjustment
      pursuant to the provisions of such Option or Convertible Security (but excluding
      automatic adjustments to such terms pursuant to anti-dilution or similar
      provisions of such Option or Convertible Security) to provide for either (1)
      any
      increase or decrease in the number of shares of Common Stock issuable upon
      the
      exercise, conversion and/or exchange of any such Option or Convertible Security
      or (2) any increase or decrease in the consideration payable to the Corporation
      upon such exercise, conversion and/or exchange, then, effective upon such
      increase or decrease becoming effective, the Series B Conversion Price computed
      upon the original issue of such Option or Convertible Security (or upon the
      occurrence of a record date with respect thereto) shall be readjusted to such
      Series B Conversion Price as would have obtained had such revised terms been
      in
      effect upon the original date of issuance of such Option or Convertible
      Security. Notwithstanding the foregoing, no readjustment pursuant to this
      clause (b) shall have the effect of increasing the Series B Conversion
      Price to an amount which exceeds the lower of (i) the Series B Conversion
      Price in effect immediately prior to the original adjustment made as a result
      of
      the issuance of such Option or Convertible Security, or (ii) the Series B
      Conversion Price that would have resulted from any issuances of Additional
      Shares of Common Stock (other than deemed issuances of Additional Shares of
      Common Stock as a result of the issuance of such Option or Convertible Security)
      between the original adjustment date and such readjustment date.

     

    c)  If
      the
      terms of any Option or Convertible Security (excluding Options or Convertible
      Securities which are themselves Exempted Securities), the issuance of which
      did
      not result in an adjustment to the Series B Conversion Price pursuant to the
      terms of Subsection
      4.4.4
      below
      (either because the consideration per share (determined pursuant to Subsection 4.4.5
      hereof)
      of the Additional Shares of Common Stock subject thereto was equal to or greater
      than the Series B Conversion Price then in effect, or because such Option or
      Convertible Security was issued before the Series B Original Issue Date), are
      revised after the Series B Original Issue Date as a result of an amendment
      to
      such terms or any other adjustment pursuant to the provisions of such Option
      or
      Convertible Security (but excluding automatic adjustments to such terms pursuant
      to anti-dilution or similar provisions of such Option or Convertible Security)
      to provide for either (1) any increase or decrease in the number of shares
      of
      Common Stock issuable upon the exercise, conversion or exchange of any such
      Option or Convertible Security or (2) any increase or decrease in the
      consideration payable to the Corporation upon such exercise, conversion or
      exchange, then such Option or Convertible Security, as so amended or adjusted,
      and the Additional Shares of Common Stock subject thereto (determined in the
      manner provided in Subsection
      4.4.3(a)
      above)
      shall be deemed to have been issued effective upon such increase or decrease
      becoming effective.

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    d)  Upon
      the
      expiration or termination of any unexercised Option or unconverted or
      unexchanged Convertible Security (or portion thereof) which resulted (either
      upon its original issuance or upon a revision of its terms) in an adjustment
      to
      the Series B Conversion Price pursuant to the terms of Subsection
      4.4.4
      below,
      the Series B Conversion Price shall be readjusted to such Series B Conversion
      Price as would have obtained had such Option or Convertible Security (or portion
      thereof) never been issued. 

     

    e)  If
      the
      number of shares of Common Stock issuable upon the exercise, conversion and/or
      exchange of any Option or Convertible Security, or the consideration payable
      to
      the Corporation upon such exercise, conversion and/or exchange, is calculable
      at
      the time such Option or Convertible Security is issued or amended but is subject
      to adjustment based upon subsequent events, any adjustment to the Series B
      Conversion Price provided for in this Subsection
      4.4.3
      shall be
      effected at the time of such issuance or amendment based on such number of
      shares or amount of consideration without regard to any provisions for
      subsequent adjustments (and any subsequent adjustments shall be treated as
      provided in clauses (b) and (c) of this Subsection
      4.4.3).
      If the
      number of shares of Common Stock issuable upon the exercise, conversion and/or
      exchange of any Option or Convertible Security, or the consideration payable
      to
      the Corporation upon such exercise, conversion and/or exchange, cannot be
      calculated at all at the time such Option or Convertible Security is issued
      or
      amended, any adjustment to the Series B Conversion Price that would result
      under
      the terms of this Subsection
      4.4.3
      at the
      time of such issuance or amendment shall instead be effected at the time such
      number of shares and/or amount of consideration is first calculable (even if
      subject to subsequent adjustments), assuming for purposes of calculating such
      adjustment to the Series B Conversion Price that such issuance or amendment
      took
      place at the time such calculation can first be made. 

     

    4.4.4  Adjustment
      of Series B Conversion Price Upon Issuance of Additional Shares of Common
      Stock.
      In the
      event the Corporation shall at any time after the Series B Original Issue Date
      issue Additional Shares of Common Stock (including Additional Shares of Common
      Stock deemed to be issued pursuant to Subsection 4.4.3),
      without consideration or for a consideration per share less than the Series
      B
      Conversion Price in effect immediately prior to such issue, then the Series
      B
      Conversion Price shall be reduced, concurrently with such issue, to a price
      (calculated to the nearest one-hundredth of a cent) determined in accordance
      with the following formula:

    CP2
      =
      CP1
      * (A +
      B)  ̧
      (A +
      C).

    


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


    


    a)  “CP2”
shall
      mean the Series B Conversion Price in effect immediately after such issue of
      Additional Shares of Common Stock

     

    b)  “CP1”
shall
      mean the Series B Conversion Price in effect immediately prior to such issue
      of
      Additional Shares of Common Stock; 

     

    c)  “A”
shall
      mean the number of shares of Common Stock outstanding immediately prior to
      such
      issue of Additional Shares of Common Stock (including for this purpose as
      outstanding all shares of Common Stock issuable upon conversion of the
      outstanding shares of Series B Preferred Stock but otherwise excluding all
      shares of Common Stock subject to repurchase by the Corporation at cost or
      issuable upon exercise or conversion of Options or Convertible
      Securities);

     

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    d)  “B”
shall
      mean the number of shares of Common Stock that would have been issued if such
      Additional Shares of Common Stock had been issued at a price per share equal
      to
      CP1
      (determined by dividing the aggregate consideration received by the Corporation
      in respect of such issue by CP1);
      and

     

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

     

    4.4.5  Determination
      of Consideration.
      For
      purposes of this Subsection 4.4,
      the
      consideration received by the Corporation for the issue of any Additional Shares
      of Common Stock shall be computed as follows:

    


    
      	a)  	
              Cash
                and Property:
                Such consideration shall:

            


    

     

    
      	i.  	
              insofar
                as it consists of cash, be computed at the aggregate amount of cash
                received by the Corporation, excluding amounts paid or payable for
                accrued
                interest;

            


    

     

    
      	ii.  	
              insofar
                as it consists of property other than cash, be computed at the fair
                market
                value thereof at the time of such issue, as determined in good faith
                by
                the Board of Directors of the Corporation. In the event that the
                Requisite
                Holders disagree with the fair market value as determined by the
                Board of
                Directors, the Requisite Holders shall select an appraiser that is
                reasonably acceptable to the Corporation who is experienced in such
                matters to determine the fair market value for purposes of this
                Section
                4.4.5;
                and such appraiser’s determination shall be binding upon the Corporation
                and the holders of Series B Preferred
                Stock;

            


    

     

    
      	iii.  	
              in
                the event Additional Shares of Common Stock are issued together with
                other
                shares or securities or other assets of the Corporation for consideration
                which covers both, be the proportion of such consideration so received,
                computed as provided in clauses (i)
                and (ii)
                above, as determined in good faith by the Board of Directors of the
                Corporation. In the event that the Requisite Holders disagree with
                the
                fair market value as determined by the Board of Directors, the Requisite
                Holders shall select an appraiser that is reasonably acceptable to
                the
                Corporation who is experienced in such matters to determine the fair
                market value for purposes of this Section
                4.4.5;
                and such appraiser’s determination shall be binding upon the Corporation
                and the holders of Series B Preferred
                Stock.

            


    

     

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    b)  Options
      and Convertible Securities.
      The
      consideration per share received by the Corporation for Additional Shares of
      Common Stock deemed to have been issued pursuant to Subsection 4.4.3,
      relating to Options and Convertible Securities, shall be determined by
      dividing:

     

    
      	i.  	
              the
                total amount, if any, received or receivable by the Corporation as
                consideration for the issue of such Options or Convertible Securities,
                plus the minimum aggregate amount of additional consideration (as
                set
                forth in the instruments relating thereto, without regard to any
                provision
                contained therein for a subsequent adjustment of such consideration)
                payable to the Corporation upon the exercise of such Options or the
                conversion or exchange of such Convertible Securities, or in the
                case of
                Options for Convertible Securities, the exercise of such Options
                for
                Convertible Securities and the conversion or exchange of such Convertible
                Securities, by

            


    

     

    
      	ii.  	
              the
                maximum number of shares of Common Stock (as set forth in the instruments
                relating thereto, without regard to any provision contained therein
                for a
                subsequent adjustment of such number) issuable upon the exercise
                of such
                Options or the conversion or exchange of such Convertible Securities,
                or
                in the case of Options for Convertible Securities, the exercise of
                such
                Options for Convertible Securities and the conversion or exchange
                of such
                Convertible Securities.

            


    

     

    4.4.6  Multiple
      Closing Dates.
      In the
      event the Corporation shall issue on more than one date Additional Shares of
      Common Stock that are a part of one transaction or a series of related
      transactions and that would result in an adjustment to the Series B Conversion
      Price pursuant to the terms of Subsection
      4.4.4
      above
      then, upon the final such issuance, the Series B Conversion Price shall be
      readjusted to give effect to all such issuances as if they occurred on the
      date
      of the first such issuance (and without giving effect to any additional
      adjustments as a result of any such subsequent issuances within such
      period).

    


    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    4.5  Adjustment
      for Stock Splits and Combinations.
      If the
      Corporation shall at any time or from time to time after the Series B Original
      Issue Date effect a subdivision of the outstanding Common Stock, the Series
      B
      Conversion Price in effect immediately before that subdivision shall be
      proportionately decreased so that the number of shares of Common Stock issuable
      on conversion of each share of such series shall be increased in proportion
      to
      such increase in the aggregate number of shares of Common Stock outstanding.
      If
      the Corporation shall at any time or from time to time after the Series B
      Original Issue Date combine the outstanding shares of Common Stock, the Series
      B
      Conversion Price in effect immediately before the combination shall be
      proportionately increased so that the number of shares of Common Stock issuable
      on conversion of each share of such series shall be decreased in proportion
      to
      such decrease in the aggregate number of shares of Common Stock outstanding.
      Any
      adjustment under this subsection shall become effective at the close of business
      on the date the subdivision or combination becomes effective.

    


    4.6  Adjustment
      for Certain Dividends and Distributions.
      In the
      event the Corporation at any time or from time to time after the Series B
      Original Issue Date shall make or issue, or fix a record date for the
      determination of holders of Common Stock entitled to receive, a dividend or
      other distribution payable on the Common Stock in additional shares of Common
      Stock, then and in each such event the Series B Conversion Price in effect
      immediately before such event shall be decreased as of the time of such issuance
      or, in the event such a record date shall have been fixed, as of the close
      of
      business on such record date, by multiplying the Series B Conversion Price
      then
      in effect by a fraction:

    


    
      	i.  	
              the
                numerator of which shall be the total number of shares of Common
                Stock
                issued and outstanding immediately prior to the time of such issuance
                or
                the close of business on such record date,
                and

            


    

     

    
      	ii.  	
              the
                denominator of which shall be the total number of shares of Common
                Stock
                issued and outstanding immediately prior to the time of such issuance
                or
                the close of business on such record date plus the number of shares
                of
                Common Stock issuable in payment of such dividend or
                distribution.

            


    

     

    Notwithstanding
      the foregoing, (a) if such record date shall have been fixed and such dividend
      is not fully paid or if such distribution is not fully made on the date fixed
      therefor, the Series B Conversion Price shall be recomputed accordingly as
      of
      the close of business on such record date and thereafter the Series B Conversion
      Price shall be adjusted pursuant to this subsection as of the time of actual
      payment of such dividends or distributions; and (b) that no such adjustment
      shall be made if the holders of Series B Preferred Stock simultaneously receive
      a dividend or other distribution of shares of Common Stock in a number equal
      to
      the number of shares of Common Stock as they would have received if all
      outstanding shares of Series B Preferred Stock had been converted into Common
      Stock on the date of such event.

    


    4.7  Adjustments
      for Other Dividends and Distributions.
      In the
      event the Corporation at any time or from time to time after the Series B
      Original Issue Date shall make or issue, or fix a record date for the
      determination of holders of Common Stock entitled to receive, a dividend or
      other distribution payable in securities of the Corporation (other than a
      distribution of shares of Common Stock in respect of outstanding shares of
      Common Stock) or in other property and the provisions of Section
      1
      do not
      apply to such dividend or distribution, then and in each such event the holders
      of Series B Preferred Stock shall receive, simultaneously with the distribution
      to the holders of Common Stock, a dividend or other distribution of such
      securities or other property in an amount equal to the amount of such securities
      or other property as they would have received if all outstanding shares of
      Series B Preferred Stock had been converted into Common Stock on the date of
      such event.

    


    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    4.8  Adjustment
      for Merger or Reorganization, etc.
      Subject
      to the provisions of Subsection
      2.3,
      if
      there shall occur any reorganization, recapitalization, reclassification,
      consolidation or merger involving the Corporation in which the Common Stock
      (but
      not the Series B Preferred Stock) is converted into or exchanged for securities,
      cash or other property (other than a transaction covered by Subsections
      4.4,
      4.6
      or
4.7),
      then,
      following any such reorganization, recapitalization, reclassification,
      consolidation or merger, each share of Series B Preferred Stock shall thereafter
      be convertible in lieu of the Common Stock into which it was convertible prior
      to such event into the kind and amount of securities, cash or other property
      which a holder of the number of shares of Common Stock of the Corporation
      issuable upon conversion of one share of Series B Preferred Stock immediately
      prior to such reorganization, recapitalization, reclassification, consolidation
      or merger would have been entitled to receive pursuant to such transaction;
      and,
      in such case, appropriate adjustment (as determined in good faith by the Board
      of Directors of the Corporation,
      and
      in
      the event that the Requisite Holders disagree with the determination of the
      Board of Directors, the Requisite Holders shall select an appraiser that is
      reasonably acceptable to the Corporation who is experienced in such matters
      to
      make the determination for purposes of this Section
      4.8;
      and such
      appraiser’s determination shall be binding upon the Corporation and the holders
      of Series B Preferred Stock) shall be made in the application of the provisions
      in this Section 4
      with
      respect to the rights and interests thereafter of the holders of the Series
      B
      Preferred Stock, to the end that the provisions set forth in this Section 4
      (including provisions with respect to changes in and other adjustments of the
      Series B Conversion Price) shall thereafter be applicable, as nearly as
      reasonably may be, in relation to any securities or other property thereafter
      deliverable upon the conversion of the Series B Preferred Stock.

    


    4.9  Certificate
      as to Adjustments.
      Upon
      the occurrence of each adjustment or readjustment of the Series B Conversion
      Price pursuant to this Section 4,
      the
      Corporation at its expense shall, as promptly as reasonably practicable but
      in
      any event not later than ten (10) days thereafter, compute such adjustment
      or
      readjustment in accordance with the terms hereof and furnish to each holder
      of
      Series B Preferred Stock a certificate setting forth such adjustment or
      readjustment (including the kind and amount of securities, cash or other
      property into which the Series B Preferred Stock is convertible) and showing
      in
      detail the facts upon which such adjustment or readjustment is based. The
      Corporation shall, as promptly as reasonably practicable after the written
      request at any time of any holder of Series B Preferred Stock (but in any event
      not later than ten (10) days thereafter), furnish or cause to be furnished
      to
      such holder a certificate setting forth (i) the Series B Conversion Price
      then in effect, and (ii) the number of shares of Common Stock and the
      amount, if any, of other securities, cash or property which then would be
      received upon the conversion of Series B Preferred Stock.

    


    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    4.10  Notice
      of Record Date.
      In the
      event:

    


    a)  the
      Corporation shall take a record of the holders of its Common Stock (or other
      capital stock or securities at the time issuable upon conversion of the Series
      B
      Preferred Stock) for the purpose of entitling or enabling them to receive any
      dividend or other distribution, or to receive any right to subscribe for or
      purchase any shares of capital stock of any class or any other securities,
      or to
      receive any other security; or

     

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

     

    c)  of
      the
      voluntary or involuntary dissolution, liquidation or winding-up of the
      Corporation,

     

    then,
      and
      in each such case, the Corporation will send or cause to be sent to the holders
      of the Series B Preferred Stock a notice specifying, as the case may be, (i)
      the
      record date for such dividend, distribution or right, and the amount and
      character of such dividend, distribution or right, or (ii) the effective date
      on
      which such reorganization, reclassification, consolidation, merger, transfer,
      dissolution, liquidation or winding-up is proposed to take place, and the time,
      if any is to be fixed, as of which the holders of record of Common Stock (or
      such other capital stock or securities at the time issuable upon the conversion
      of the Series B Preferred Stock) shall be entitled to exchange their shares
      of
      Common Stock (or such other capital stock or securities) for securities or
      other
      property deliverable upon such reorganization, reclassification, consolidation,
      merger, transfer, dissolution, liquidation or winding-up, and the amount per
      share and character of such exchange applicable to the Series B Preferred Stock
      and the Common Stock. Such notice shall be sent at least twenty (20) days prior
      to the record date or effective date for the event specified in such notice.
      

    


    
      	5.  	
              Mandatory
                Conversion.

            


    

    


    5.1  Trigger
      Event.
      At such
      time when (A) (i) the thirty (30) day prior trailing average Closing Price
      of
      the Common Stock for the entire six-months preceding such time is equal to
      at
      least the Series B Original Issue Price, and (ii) one and one half (1.5) years
      have elapsed after the Corporation has had declared effective by the Securities
      and Exchange Commission and continuously maintained for such one and one half
      (1.5) year period the effectiveness of a shelf registration statement providing
      for the resale of all of the Common Stock underlying the Series B Preferred
      Stock and those certain warrants issued in connection with the Series B
      Preferred Stock under the Series B Purchase Agreement, an equivalent of
      $7,500,000 (measured as of the Series B Original Issue Date) of the Series
      B
      Preferred Stock shall (a) automatically be converted into shares of Common
      Stock, at the then effective Series B Conversion Price, as may be adjusted
      pursuant to Section 4 above, and (b) such shares may not be reissued by the
      Corporation, or (B) (i) the thirty (30) day prior trailing average Closing
      Price
      of the Common Stock for the entire six (6)-months preceding such time is equal
      to at least two (2)-times the Series B Original Issue Price, and (ii) one and
      one half (1.5) years have elapsed after the Corporation has had declared
      effective by the Securities and Exchange Commission and continuously maintained
      for such one and one half (1.5) year period the effectiveness of a shelf
      registration statement providing for the resale of all of the Common Stock
      underlying the Series B Preferred Stock and those certain warrants issued in
      connection with the Series B Preferred Stock, the remainder of the outstanding
      Series B Preferred Stock shall (a) automatically be converted into shares of
      Common Stock, at the then effective Series B Conversion Price, as may be
      adjusted pursuant to Section 4 above, and (b) such shares may not be
      reissued by the Corporation (the occurrence of the events specified in these
      Sections
      5.1(A) and (B)
      is
      referred to herein as the “Mandatory
      Conversion Time”).

    


    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    For
      purposes of this Section
      5
      the
      following terms are defined as follows: 

    


    “Closing
      Price”
means
      on any particular date (a) the last reported closing price per share of
      Common Stock on such date on the Trading Market (as reported by Bloomberg L.P.
      at 4:15 PM (New York time)), or (b) if there is no such price on such date,
      then
      the closing price on the Trading Market on the date nearest preceding such
      date
      (as reported by Bloomberg L.P. at 4:15 PM (New York time)), or (c) if the OTC
      Bulletin Board is not a Trading Market, the volume weighted average price of
      the
      Common Stock for such date (or the nearest preceding date) on the OTC Bulletin
      Board or (d)  if the Common Stock is not then listed or quoted on the
      Trading Market or the OTC Bulletin Board and if prices for the Common Stock
      are
      then reported in the “pink sheets” published by Pink Sheets LLC (or a similar
      organization or agency succeeding to its functions of reporting prices), the
      most recent price per share of the Common Stock so reported, or (e) if the
      shares of Common Stock are not then publicly traded the fair market value of
      a
      share of Common Stock as determined by an appraiser selected in good faith
      by
      the Purchasers of a majority in interest of the Series B Preferred Stock then
      outstanding.

     

    “Trading
      Market”
means
      the following markets or exchanges on which the Common Stock is listed or quoted
      for trading on the date in question: the Nasdaq Capital Market, the American
      Stock Exchange, the New York Stock Exchange, or the Nasdaq Global
      Market.

     

    


    5.2  Procedural
      Requirements.
      All
      holders of record of shares of Series B Preferred Stock subject to conversion
      shall be sent written notice of the Mandatory Conversion Time and the place
      designated for mandatory conversion of all such shares of Series B Preferred
      Stock pursuant to this Section 5.
      Such
      notice need not be sent in advance of the occurrence of the Mandatory Conversion
      Time. Upon receipt of such notice, each holder of shares of Series B Preferred
      Stock subject to conversion shall surrender his, her or its certificate or
      certificates for all such shares (or, if such holder alleges that such
      certificate has been lost, stolen or destroyed, a lost certificate affidavit
      and
      agreement reasonably acceptable to the Corporation to indemnify the Corporation
      against any claim that may be made against the Corporation on account of the
      alleged loss, theft or destruction of such certificate) to the Corporation
      at
      the place designated in such notice, and shall thereafter receive certificates
      for the number of shares of Common Stock to which such holder is entitled
      pursuant to this Section 5.
      At the
      Mandatory Conversion Time, all outstanding shares of Series B Preferred Stock
      subject to conversion shall be deemed to have been converted into shares of
      Common Stock, which shall be deemed to be outstanding of record, and all rights
      with respect to the Series B Preferred Stock so converted, including the rights,
      if any, to receive notices and vote (other than as a holder of Common Stock),
      will terminate, except only the rights of the holders thereof, upon surrender
      of
      their certificate or certificates (or lost certificate affidavit and agreement)
      therefor, to receive the items provided for in the last sentence of this
Subsection
      5.2.
      If so
      required by the Corporation, certificates surrendered for conversion shall
      be
      endorsed or accompanied by written instrument or instruments of transfer, in
      form satisfactory to the Corporation, duly executed by the registered holder
      or
      by his, her or its attorney duly authorized in writing. As soon as practicable
      after the Mandatory Conversion Time and the surrender of the certificate or
      certificates (or lost certificate affidavit and agreement) for Series B
      Preferred Stock subject to conversion, the Corporation shall issue and deliver
      to such holder, or to his, her or its nominees, a certificate or certificates
      for the number of full shares of Common Stock issuable on such conversion in
      accordance with the provisions hereof, together with cash as provided in
Subsection 4.2
      in lieu
      of any fraction of a share of Common Stock otherwise issuable upon such
      conversion and the payment of any declared but unpaid dividends on the shares
      of
      Series B Preferred Stock converted.

    


    
      
         

      

      
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    5.3  Effect
      of Mandatory Conversion.
      All
      shares of Series B Preferred Stock subject to conversion shall, from and after
      the Mandatory Conversion Time, no longer be deemed to be outstanding and,
      notwithstanding the failure of the holder or holders thereof to surrender the
      certificates for such shares on or prior to such time, all rights with respect
      to such shares shall immediately cease and terminate at the Mandatory Conversion
      Time, except only the right of the holders thereof to receive shares of Common
      Stock in exchange therefor and to receive payment of any dividends declared
      but
      unpaid thereon. Such converted Series B Preferred Stock shall be retired and
      cancelled and may not be reissued as shares of such series, and the Corporation
      may thereafter take such appropriate action (without the need for stockholder
      action) as may be necessary to reduce the authorized number of shares of Series
      B Preferred Stock accordingly.

    


    6.  Redeemed
      or Otherwise Acquired Shares.
      Any
      shares of Series B Preferred Stock which are redeemed or otherwise acquired
      by
      the Corporation or any of its subsidiaries shall be automatically and
      immediately cancelled and retired and shall not be reissued, sold or
      transferred. Neither the Corporation nor any of its subsidiaries may exercise
      any voting or other rights granted to the holders of Series B Preferred Stock
      following redemption.

    


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

    


    8.  Notices.
      Any
      notice required or permitted by the provisions of this Article Fourth to be
      given to a holder of shares of Series B Preferred Stock shall be mailed, postage
      prepaid, to the post office address last shown on the records of the
      Corporation, or given by electronic communication in compliance with the
      provisions of the General Corporation Law, and shall be deemed sent upon such
      mailing or electronic transmission.

    


    
      
         

      

      
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    FIFTH:
      The following provisions are inserted for the management of the business and
      the
      conduct of the affairs of the Corporation, and for further definition,
      limitation and regulation of the powers of the Corporation and of its directors
      and stockholders:

    


    A. The
      business and affairs of the Corporation shall be managed by or under the
      direction of the Board of Directors. In addition to the powers and authority
      expressly conferred upon them by statute or by this Restated Certificate of
      Incorporation or the Bylaws of the Corporation as in effect from time to time,
      the directors are hereby empowered to exercise all such powers and do all such
      acts and things as may be exercised or done by the Corporation.

    


    B. The
      directors of the Corporation need not be elected by written ballot unless the
      Bylaws so provide.

    


    C. Subject
      to the rights of the holders of any series of Preferred Stock then outstanding,
      any action required or permitted to be taken by the stockholders of the
      Corporation may be effected only at a duly called annual or special meeting
      of
      stockholders of the Corporation and not by written consent. 

    


    D. Special
      meetings of the stockholders may only be called by the Board of Directors acting
      pursuant to a resolution adopted by a majority of the Whole Board. For the
      purposes of this Restated Certificate of Incorporation, the term “Whole Board”
shall mean the total number of authorized directors whether or not there exist
      any vacancies in previously authorized directorships.

    


    SIXTH:

    


    A. Subject
      to the rights of the holders of shares of any series of Preferred Stock then
      outstanding to elect additional directors under specified circumstances, the
      number of directors shall be fixed from time to time exclusively by the Board
      of
      Directors pursuant to a resolution adopted by a majority of the Whole
      Board.

    


    B. The
      directors, other than those who may be elected by the holders of shares of
      any
      series of Preferred Stock under specified circumstances, shall be divided into
      three classes, with the term of office of the first class to expire at the
      first
      annual meeting of stockholders following the initial classification of
      directors, the term of office of the second class to expire at the second annual
      meeting of stockholders following the initial classification of directors,
      and
      the term of office of the third class to expire at the third annual meeting
      of
      stockholders following the initial classification of directors. At each annual
      meeting of stockholders, directors elected to succeed those directors whose
      terms expire, other than directors elected by the holders of any series of
      Preferred Stock under specified circumstances, shall be elected for a term
      of
      office to expire at the third succeeding annual meeting of stockholders after
      their election and until their successors are duly elected and
      qualified.

    


    C. Subject
      to the rights of the holders of any series of Preferred Stock then outstanding,
      newly created directorships resulting from any increase in the authorized number
      of directors or any vacancies in the Board of Directors resulting from death,
      resignation, retirement, disqualification, removal from office or other cause
      shall, unless otherwise required by law or by resolution of the Board of
      Directors, be filled only by a majority vote of the directors then in office
      even though less than a quorum, or by a sole remaining director, and not by
      stockholders, and
      directors so chosen shall serve for a term expiring at the annual meeting of
      stockholders at which the term of office of the class to which they have been
      chosen expires or until such director’s successor shall have been duly elected
      and qualified. No decrease in the authorized number of directors shall shorten
      the term of any incumbent director.

    


    
      
         

      

      
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    D. Advance
      notice of stockholder nominations for the election of directors and of business
      to be brought by stockholders before any meeting of the stockholders of the
      Corporation shall be given in the manner provided in the Bylaws of the
      Corporation.

    


    E. Subject
      to the rights of the holders of any series of Preferred Stock then outstanding,
      any director, or the entire Board of Directors, may be removed from office
      at
      any time only for cause and only by the affirmative vote of the holders of
      at
      least eighty percent (80%) of the voting power of all of the then-outstanding
      shares of capital stock of the Corporation entitled to vote at an election
      of
      the directors, voting together as a single class. 

    


    SEVENTH:
      The Board of Directors is expressly empowered to adopt, amend or repeal Bylaws
      of the Corporation. Any adoption, amendment or repeal of the Bylaws of the
      Corporation by the Board of Directors shall require the approval of a majority
      of the Whole Board. The stockholders shall also have power to adopt, amend
      or
      repeal the Bylaws of the Corporation; provided, that in addition to any vote
      of
      the holders of any class or series of stock of the Corporation required by
      law
      or by this Restated Certificate of Incorporation, the affirmative vote of the
      holders of at least eighty (80%) of the voting power of all of the then
      outstanding shares of the capital stock of the Corporation entitled to vote
      generally in the election of directors, voting together as a single class,
      shall
      be required for the stockholders to adopt, amend or repeal any provision of
      the
      Bylaws of the Corporation.

    


    EIGHTH:
      

    


    A.
      Each
      person who was or is made a party or is threatened to be made a party to or
      is
      otherwise involved (including, without limitation, as a witness) in any action,
      suit or proceeding, whether civil, criminal, administrative or investigative,
      by
      reason of the fact that he is or was a director or an officer of the Corporation
      or is or was serving at the request of the Corporation as a director, officer,
      or trustee of another corporation, or of a partnership, joint venture, trust
      or
      other enterprise, including service with respect to an employee benefit plan
      (hereinafter an “Indemnitee”),
      whether the basis of such proceeding is alleged action in an official capacity
      as a director, officer or trustee or in any other capacity while serving as
      a
      director, officer or trustee, shall be indemnified and held harmless by the
      Corporation to the fullest extent permitted by the Delaware General Corporation
      Law, as the same exists or may hereafter be amended (but, in the case of any
      such amendment, only to the extent that such amendment permits the Corporation
      to provide broader indemnification rights than such law permitted the
      Corporation to provide prior to such amendment), against all expense, liability
      and loss (including attorneys’ fees, judgments, fines, ERISA excise taxes or
      penalties and amounts paid in settlement) reasonably incurred or suffered by
      such Indemnitee in connection therewith; provided, however, that, except as
      provided in Paragraph C of this Article EIGHTH with respect to proceedings
      to
      enforce rights to indemnification or as otherwise required by law, the
      Corporation shall not be required to indemnify or advance expenses to any such
      Indemnitee in connection with a proceeding (or part thereof) initiated by such
      Indemnitee unless such proceeding (or part thereof) was authorized by the Board
      of Directors of the Corporation. 

     

    
      
         

      

      
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    B. In
      addition to the right to indemnification conferred in Paragraph A of this
      Article EIGHTH, an Indemnitee shall also have the right to be paid by the
      Corporation the expenses (including attorney’s fees) incurred in defending any
      such proceeding in advance of its final disposition; provided, however, that,
      if
      the Delaware General Corporation Law requires, an advancement of expenses
      incurred by an Indemnitee in his capacity as a director or officer (and not
      in
      any other capacity in which service was or is rendered by such Indemnitee,
      including, without limitation, service to an employee benefit plan) shall be
      made only upon delivery to the Corporation of an undertaking, by or on behalf
      of
      such Indemnitee, to repay all amounts so advanced if it shall ultimately be
      determined by final judicial decision from which there is no further right
      to
      appeal that such Indemnitee is not entitled to be indemnified for such expenses
      under this Paragraph B or otherwise.

    


    C. If
      a
      claim under Paragraph A or B of this Article EIGHTH is not paid in full by
      the
      Corporation within sixty (60) days after a written claim has been received
      by
      the Corporation, except in the case of a claim for an advancement of expenses,
      in which case the applicable period shall be twenty (20) days, the Indemnitee
      may at any time thereafter bring suit against the Corporation to recover the
      unpaid amount of the claim. If successful in whole or in part in any such suit,
      or in a suit brought by the Corporation to recover an advancement of expenses
      pursuant to the terms of an undertaking, the Indemnitee shall also be entitled
      to be paid the expenses of prosecuting or defending such suit. In (i) any suit
      brought by the Indemnitee to enforce a right to indemnification hereunder (but
      not in a suit brought by the Indemnitee to enforce a right to an advancement
      of
      expenses) it shall be a defense that, and (ii) in any suit brought by the
      Corporation to recover an advancement of expenses pursuant to the terms of
      an
      undertaking, the Corporation shall be entitled to recover such expenses upon
      a
      final adjudication that, the Indemnitee has not met any applicable standard
      for
      indemnification set forth in the Delaware General Corporation Law. Neither
      the
      failure of the Corporation (including its directors who are not parties to
      such
      action, a committee of such directors, independent legal counsel, or its
      stockholders) to have made a determination prior to the commencement of such
      suit that indemnification of the Indemnitee is proper in the circumstances
      because the Indemnitee has met the applicable standard of conduct set forth
      in
      the Delaware General Corporation Law, nor an actual determination by the
      Corporation (including its directors who are not parties to such action, a
      committee of such directors, independent legal counsel, or its stockholders)
      that the Indemnitee has not met such applicable standard of conduct, shall
      create a presumption that the Indemnitee has not met the applicable standard
      of
      conduct or, in the case of such a suit brought by the Indemnitee, be a defense
      to such suit. In any suit brought by the Indemnitee to enforce a right to
      indemnification or to an advancement of expenses hereunder, or brought by the
      Corporation to recover an advancement of expenses pursuant to the terms of
      an
      undertaking, the burden of proving that the Indemnitee is not entitled to be
      indemnified, or to such advancement of expenses, under this Article EIGHTH
      or
      otherwise shall be on the Corporation.

    


    
      
         

      

      
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    D. The
      rights to indemnification and to the advancement of expenses conferred in this
      Article EIGHTH shall not be exclusive of any other right which any person may
      have or hereafter acquire under any statute, the Corporation’s Certificate of
      Incorporation as amended from time to time, the Corporation’s Bylaws, any
      agreement, any vote of stockholders or disinterested directors or
      otherwise.

    


    E. The
      Corporation may maintain insurance, at its expense, to protect itself and any
      director, officer, employee or agent of the Corporation or another corporation,
      partnership, joint venture, trust or other enterprise against any expense,
      liability or loss, whether or not the Corporation would have the power to
      indemnify such person against such expense, liability or loss under the Delaware
      General Corporation Law.

    


    F. The
      Corporation may, to the extent authorized from time to time by the Board of
      Directors, grant rights to indemnification and to the advancement of expenses
      to
      any employee or agent of the Corporation to the fullest extent of the provisions
      of this Article EIGHTH with respect to the indemnification and advancement
      of
      expenses of directors and officers of the Corporation.

    


    G. The
      rights conferred upon Indemnitees in this Article EIGHTH shall be contract
      rights and such rights shall continue as to an Indemnitee who has ceased to
      be a
      director, officer, employee or agent and shall inure to the benefit of the
      Indemnitee’s heirs, executors and administrators. Any amendment, alteration or
      repeal of this Article EIGHTH that adversely affects any right of an Indemnitee
      or its successors shall be prospective only and shall not limit or eliminate
      any
      such right with respect to any proceeding involving any occurrence or alleged
      occurrence of any action or omission to act that took place prior to any such
      amendment, alteration or repeal.

    


    NINTH:
      No
      director shall be personally liable to the Corporation or its stockholders
      for
      any monetary damages for breaches of fiduciary duty as a director; provided
      that
      this provision shall not eliminate or limit the liability of a director, to
      the
      extent that such liability is imposed by applicable law, (i) for any breach
      of
      the director’s duty of loyalty to the Corporation or its stockholders; (ii) for
      acts or omissions not in good faith or which involve intentional misconduct
      or a
      knowing violation of law; (iii) under Section 174 or successor provisions of
      the
      Delaware General Corporation Law; or (iv) for any transaction from which the
      director derived an improper personal benefit. No amendment to or repeal of
      this
      provision shall apply to or have any effect on the liability or alleged
      liability of any director for or with respect to any acts or omissions of such
      director occurring prior to such amendment or repeal. If the Delaware General
      Corporation Law is amended to authorize corporate action further eliminating
      or
      limiting the personal liability of directors, then the liability of a director
      of the Corporation shall be eliminated or limited to the fullest extent
      permitted by the Delaware General Corporation Law, as so amended. All references
      in this Article NINTH to a director shall also be deemed to refer to any such
      director acting in his or her capacity as a Continuing Director (as defined
      in
      Article ELEVENTH).

    


    TENTH:
      The Corporation reserves the right to amend or repeal any provision contained
      in
      this Restated Certificate of Incorporation in the manner prescribed by the
      Delaware General Corporation Law and all rights conferred upon stockholders
      are
      granted subject to this reservation; provided that in addition to the vote
      of
      the holders of any class or series of stock of the Corporation required by
      law
      or by this Restated Certificate of Incorporation, the affirmative vote of the
      holders of shares of voting stock of the Corporation representing at least
      eighty (80%) of the voting power of all of the then outstanding shares of the
      capital stock of the Corporation entitled to vote generally in the election
      of
      directors, voting together as a single class, shall be required to amend, alter
      or repeal, or adopt any provision inconsistent with, Articles FIFTH, SIXTH,
      SEVENTH, EIGHTH, NINTH, this Article TENTH and Article ELEVENTH of this Restated
      Certificate of Incorporation.

    


    
      
         

      

      
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    ELEVENTH:
      The Board of Directors is expressly authorized to cause the Corporation to
      issue
      rights pursuant to Section 157 of the Delaware General Corporation Law and,
      in
      that connection, to enter into any agreements necessary or convenient for such
      issuance, and to enter into other agreements necessary and convenient to the
      conduct of the business of the Corporation. Any such agreement may include
      provisions limiting, in certain circumstances, the ability of the Board of
      Directors of the Corporation to redeem the securities issued pursuant thereto
      or
      to take other action thereunder or in connection therewith unless there is
      a
      specified number or percentage of Continuing Directors then in office. Pursuant
      to Section 141(a) of the Delaware General Corporation Law, the Continuing
      Directors shall have the power and authority to make all decisions and
      determinations, and exercise or perform such other acts, that any such agreement
      provides that such Continuing Directors shall make, exercise or perform. For
      purposes of this Article ELEVENTH and any such agreement, the term,
“Continuing
      Directors,”
shall
      mean (1) those directors who were members of the Board of Directors of the
      Corporation at the time the Corporation entered into such agreement and any
      director who subsequently becomes a member of the Board of Directors, if such
      director’s nomination for election to the Board of Directors is recommended or
      approved by the majority vote of the Continuing Directors then in office or
      (2)
      such members of the Board of Directors designated in, or in the manner provided
      in, such agreement as Continuing Directors.

    


    


    [remainder
      left intentionally blank]


    


    
      
         

      

      
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    IN
      WITNESS WHEREOF, this Restated Certificate of Incorporation, which restates
      and
      integrates and further amends the provisions of the Restated Certificate of
      Incorporation of this Corporation, and which has been duly adopted in accordance
      with Sections 242 and 245 of the Delaware General Corporation Law, has been
      executed by its duly authorized President and Chief Executive Officer this
      ____
      day of __________, 2007.

    


    ALTEON
      INC.

    


    


    


    By:
            

    Noah
      Berkowitz, 

    Its
      President and Chief Executive Officer

    


    


    


    
      
         

      

      
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