Exhibit
4.1


CERTIFICATE
OF DESIGNATION

SERIES “A” CONVERTIBLE PREFERRED STOCK

PLATINUM RESEARCH ORGANIZATION, INC.


The undersigned Chief
Executive Officer of Platinum Research Organization, Inc., a corporation
currently organized and existing under the General Corporation Law of
the State of Delaware (the “DGCL”), does
hereby certify that:


FIRST: The name
of the corporation is Platinum Research Organization, Inc. (the “Corporation”).


SECOND: The
Board of Directors has approved the alteration of the share capital of the
Corporation to create preferred stock with a par value $0.001 per share (“Preferred Stock”) and has approved the adoption of the
Certificate of the Designation, Powers, Preferences and Rights of the Series “A”
Cumulative Convertible Preferred Shares (the “Certificate
of Designation”) of the Corporation and authorized the Certificate
of Designation to be filed with the State of Delaware on redomestication of the
Corporation, subject to stockholder approval.


THIRD: On April
12, 2007, at a Special Meeting of the Stockholders of the Corporation, the
holders of the Common Stock will be asked to approve the alteration of the
share capital of the Corporation which will include the creation of Preferred
Shares and the redomestication of the Company from Nevada to Delaware.


NOW, THEREFORE, BE IT RESOLVED
that the rights and restrictions attached to the Class “A” Preferred Shares are
as follows::


Section 1. Number of Shares and
Designation. This series of Preferred Shares shall be
designated as shares of Series A Cumulative Mandatory Convertible Preferred
Stock (liquidation preference $0.90 per share), par value $0.001 per share (the
“Series “A” Preferred Shares”). The
number Series “A” Preferred Shares authorized shall be 5,000,000.


Section 2. Definitions.
For purposes of the Series “A” Preferred Shares, the following terms shall have
the meanings indicated:


“Board of
Directors” shall mean the Board of Directors of the Corporation or
any committee authorized by such Board of Directors to perform any of its responsibilities
with respect to the Series “A” Preferred Shares.


“Business Day”
shall mean any day other than a Saturday, Sunday or a day on which state or
federally chartered banking institutions in New York, New York are not required
to be open.


“Change of
Control Transaction” means the occurrence after the date hereof of
any of (i) an acquisition after the date hereof by an individual or legal
entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Securities Exchange Act of 1934) of effective control
(whether through legal or beneficial ownership of capital stock of the
Corporation, by contract or otherwise) of in excess of 33% of the voting
securities of the Corporation and a replacement of the majority of the Board of
Directors as comprised according to the terms and conditions of the
Contribution Agreement, or (ii) the Corporation merges into or consolidates
with any other Person, or any Person merges into or consolidates with the
Corporation and, after giving effect to such transaction, the stockholders of
the Corporation immediately prior to such transaction own less than 50% of the
aggregate voting power of the Corporation or the successor entity of such
transaction, or (iii) the Corporation sells or transfers its assets, as an entirety
or substantially as an entirety, to another Person and the stockholders of the
Corporation immediately prior to such transaction own less than 50% of the
aggregate voting power of the acquiring entity immediately after the
transaction, (iv) a replacement at one time or within a one year period of more
than one-half of the members of the Corporation’s board of directors which is
not approved by a majority of those individuals who are members of the board of
directors on the date hereof (or by those individuals who are serving as
members of the board of directors on any date whose nomination to the board of
directors was approved by a majority of the members of the board of directors
who are members on the date hereof), or (v) the 



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execution by the Corporation
of an agreement to which the Corporation is a party or by which it is bound,
providing for any of the events set forth above in (i) or (iv).


“Common
Shares” shall mean the shares of Common Stock of the Corporation,
par value $0.001 per share.


“Common Share
Equivalents” means any securities of the Corporation or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Shares, including without limitation, any debt, preferred stock, rights,
options, warrants or other instrument that is at any time convertible into or
exchangeable for, or otherwise entitles the holder thereof to receive, Common
Shares.


“Constituent
Person” shall have the meaning set forth in Section 7(f) hereof.


“Conversion
Price” shall mean the conversion price per Common Share for which
the Series “A” Preferred Shares are convertible, as such Conversion Price may
be adjusted pursuant to Section 7 hereof. The initial conversion price shall be
$0.18 per Common Share (equivalent to a conversion rate of five (5) Common
Shares for each Series “A” Preferred Share).


“Current
Market Price” of publicly traded Common Shares or any other class of
shares of beneficial interest or other security of the Corporation or any other
issuer for any day shall mean the last reported sales price, regular way, on
such day, or, if no sale takes place on such day, the average of the reported
closing bid and asked prices on such day, regular way, in either case as
reported on the principal national securities exchange on which such security
is listed or admitted for trading or, if not listed or admitted for trading on
any national securities exchange, on the NASDAQ National Market or, if such
security is not quoted on such NASDAQ National Market, the average of the
closing bid and asked prices on such day in the over-the-counter market as
reported by NASDAQ or, if bid and asked prices for such security on such day
shall not have been reported through NASDAQ, the average of the bid prices of
all market makers for such security as reported in the “pink sheets” by the
National Quotation Bureau, Inc., in each case for such date or, if such date
was not a Trading Day for such security, on the next preceding date which was a
Trading Day. If the Current Market Price cannot be calculated for such security
as of either of such dates on any of the foregoing bases, the Current Market
Price of such security on such date shall be the fair market value as
reasonably determined by an investment banking firm selected by the Corporation
and reasonably acceptable to the holders of a majority of the Series “A”
Preferred Shares, with the costs of such appraisal to be borne by the
Corporation.


“Discount
Dividend Payment” shall have the meaning set forth in Section 7(b)
hereof.


“Dividend
Default” shall have the meaning set forth in Section 12 hereof.


“Dividend
Payment Date” shall mean the 15th calendar day of January, April,
July and October, in each year, commencing on April 15, 2007; provided,
however, that if any Dividend Payment Date falls on any day other than a
Business Day, the dividend payment due on such Dividend Payment Date shall be
paid on the first Business Day immediately following such Dividend Payment
Date.


“Dividend
Payment Record Date” shall have the meaning set forth in paragraph
(a) of Section 3 hereof.


“Dividend
Periods” shall mean quarterly dividend periods commencing on January
15, April 15, July 15 and October 15 of each year and ending on and including
the day preceding the first day of the next succeeding Dividend Period (other
than the initial Dividend Period, which shall commence on the Issue Date and
end on and include October 14, 2011).


“Fair Market
Value” shall mean the average of the daily Current Market Prices per
Common Share during the twenty (20) consecutive Trading Days selected by the
Corporation commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and the day before the “ex” date
with respect to the issuance or distribution requiring such computation. The
term “ex date,” when used with respect to any issuance or distribution, means
the first day on which the Common Shares trade regular way, without the right
to receive such issuance or distribution, on the exchange or in the market,



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as the case may be, used
to determine that day’s Current Market Price.


“Issue Date”
with respect to the Series “A” Preferred Shares shall mean the first date on
which any of the Series “A” Preferred Shares are issued and sold.


“Junior
Shares” shall mean the Common Shares and any other class or series
of shares of capital stock of the Corporation constituting junior stock within
the meaning set forth in Section 10(c) hereof.


“Liquidation
Event” means the actual liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary or a deemed liquidation event
as a result of a merger, consolidation, reorganization, business combination or
other change in control transaction involving the Corporation.


“Liquidation
Preference” shall have the meaning set forth in Section 4(a) hereof.


“Mandatory
Conversion Date” shall have the meaning set forth in Section 8(a)
hereof.


“Maturity
Date” shall have the meaning set forth in Section 9(a) hereof.


“Non-Electing
Share” shall have the meaning set forth in Section 7(f) hereof.


“Parity
Shares” shall be deemed to include all shares created now or in the
future on a parity with the Series “A” Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
redemption or liquidation prices per share thereof be different from those of
the Series “A” Preferred Shares, if the holders of such class of stock or
series and the Series “A” Preferred Shares shall be entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding
up in proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation preferences, without preference or priority one over
the other.


“Person”
shall mean any individual, firm, partnership, corporation, limited liability
company or other entity, and shall include any successor (by merger or
otherwise) of such entity.


“Securities”
shall have the meaning set forth in Section 7(e) hereof.


“Series “A”
Preferred Shares” shall have the meaning set forth in Section 1
hereof.


“Set apart
for payment” shall be deemed to include, without any action other
than the following, the recording by the Corporation in its accounting ledgers
of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a dividend or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of shares of capital
stock of the Corporation; provided, however, that if any funds for any class or
series of Junior Shares or any class or series of shares of capital stock
ranking on a parity with the Series “A” Preferred Shares as to the payment of
dividends are  placed in a separate
account of the Corporation or delivered to a disbursing, paying or other
similar agent, then “set apart for payment” with respect to the Series “A”
Preferred Shares shall mean placing such funds in a separate account or
delivering such funds to a disbursing, paying or other similar agent.


“Trading Day”
shall mean any day on which the securities in question are traded on a Trading
Market.


“Trading
Market” means the following markets or exchanges on which the Common
Shares are listed or quoted for trading on the date in question: the Nasdaq SmallCap
Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq
National Market or the OTC Bulletin Board.


“Transaction”
shall means the following without limitation a merger, consolidation, statutory
share exchange, self tender offer for all or substantially all Common Shares,
sale of all or substantially all of the Corporation’s assets or
recapitalization of the Common Shares of the Corporation.



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“Transfer
Agent” means Resident Agents of Nevada, 711 S. Carson Street #4,
Carson City, NV89701, or such other agent or agents of the Corporation as may
be designated by the Board of Directors or its designee as the transfer agent
for the Series “A” Preferred Shares.


“Voting
Preferred Shares” shall have the meaning set forth in Section 11
hereof.


“VWAP” means,
for any date, the price determined by the first of the following clauses that
applies: (a) if the Common Stock is then listed or quoted on a Trading Market,
the daily volume weighted average price of the Common Stock for such date (or
the nearest preceding date) on the Trading Market on which the Common Stock is
then listed or quoted as reported by Bloomberg Financial L.P. (based on a
Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b) if the
Common Stock is not then listed or quoted on a Trading Market and if prices for
the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date)
on the OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted
on the OTC Bulletin Board and if prices for the Common Stock are then reported
in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar
organization or agency succeeding to its functions of reporting prices), the
most recent bid price per share of the Common Stock so reported; or (d) in all
other cases, the fair market value of a share of Common Stock as determined by
an independent appraiser selected in good faith by the Purchasers and
reasonably acceptable to the Corporation.


Section 3. Dividends.


(a)          General
Terms.


(i)                       Commencing
on the date of the initial issuance (the “Issue Date”) of
the Series “A” Preferred Shares the holders of record of shares of Series “A”
Preferred Shares shall be entitled to receive, out of any assets at the time
legally available therefore and as declared by the Board of Directors,
dividends at the rate of ten percent (10%) of the stated Liquidation Preference
Amount (as defined in Section 4 hereof) per share per annum (the “Dividend Payment”), subject to Sections 3(a)(ii), 3(a)(iii),
and (7)(b)(iii) below, and as adjusted appropriately for stock splits, stock
dividends and the similar events described in Section 7(g). Such dividends
shall be cumulative from the Issue Date, whether or not in any Dividend Period
or Periods such dividends shall be declared or there shall be funds of the
Corporation legally available for the payment of such dividends, and shall be
payable quarterly, when, as and if authorized and declared by the Board of
Directors, in arrears on Dividend Payment Dates, commencing on the first
Dividend Payment Date after the Issue Date.


(ii)                    Dividends are
cumulative from the most recent Dividend Payment Date to which dividends have
been paid, whether or not in any Dividend Period or Periods such dividends
shall be declared or there shall be funds legally available therefor. Each such
dividend shall be payable in arrears to the holders of record of the Series “A”
Preferred Shares, as they appear on the stock records of the Corporation at the
close of business on the 15th calendar day of December, March, June and
October, each year, commencing on April 15, 2007 (each a “Dividend
Payment Record Date”). Accrued and unpaid dividends for any past
Dividend Periods may be authorized and declared and paid at any time, without
reference to any regular Dividend Payment Date, to holders of record on such
date, not exceeding 45 days preceding the payment date thereof, as may be fixed
by the Board of Directors.


(b)         Reduction
of Dividend Rate on Certain Events.  Notwithstanding the terms and provisions of
Section 3(a) hereof, the dividend rate will be reduced to a: (i) five percent
(5%) dividend on the Corporation publicly announcing having entered into a
commercial agreement(s) which in the sole opinion the of the independent
directors of the Corporation will increase the Corporation’s aggregate net
revenues forty million dollars ($40,000,000) or more over the life of the
contract (the “Material Contract”); and (ii) two
percent (2%) dividend if the Corporation achieves the Material Contract and
records quarterly net revenues of one million dollars ($1,000,000) per quarter
(the “Revenue Threshold”). Any dividend rate
reduction will become effective the following quarter from achieving the Material
Contract or Revenue Threshold and as adjusted appropriately for stock splits,
stock dividends and the similar events described in Section 7(g).



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(c)          Dividend
Payment in Cash or Common Shares. The Corporation may make the
Dividend Payment in cash or in Common Shares, or both; provided, however, that
the Corporation must pay the Dividend Payment in cash if, on the date of such
Dividend Payment becomes payable, a registration statement providing for the
resale of the Common Shares issuable as dividends on the Series “A” Preferred
Shares is not then effective. Subject to the foregoing proviso, if the
Corporation elects to pay any dividend in Common Shares, the number of Common
Shares to be issued to the holder shall be an amount equal to the quotient of
(i) the Dividend Payment divided by (ii) the VWAP. If the Corporation elects to
pay any dividend in Common Shares, the Corporation will give the holders of
record of shares of the Series “A” Preferred Shares ten (10) trading days
notice prior to the date of the applicable Dividend Payment.  In the case of shares of Series “A” Preferred
Shares outstanding for less than a full quarter, dividends shall be pro rated
based on the portion of each quarter during which such shares are outstanding.
Dividends on the Series “A” Preferred Shares shall be cumulative and shall
accrue but are not payable until the Series “A” Preferred Shares are converted,
redeemed or liquidated. Dividends on the Series “A” Preferred Shares are prior
and in preference to any declaration or payment of any distribution (as defined
below) on any outstanding shares of Junior Shares. Such dividends shall accrue
on each share of Series “A” Preferred Shares from day to day whether or not
declared so that if such dividends with respect to any previous dividend period
at the rate provided for herein have not been paid on, or declared and set
apart for, all shares of Series “A” Preferred Shares at the time outstanding,
the deficiency shall be fully paid on, or declared and set apart for, such
shares on a pro rata basis with all other equity securities of the Corporation
ranking on a parity with the Series “A” Preferred Shares as to the payment of
dividends before any distribution shall be paid on, or declared and set apart
for Junior Shares.


(d)         Pro
Rata Calculation. The amount of dividends payable for the
initial Dividend Period, or any other period shorter or longer than a full
Dividend Period, on the Series “A” Preferred Shares shall be computed on the
basis of twelve 30-day months and a 360-day year. Holders of Series “A”
Preferred Shares shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of cumulative dividends, as herein expressly
provided, on the Series “A” Preferred Shares. No interest, or sum of money in lieu
of interest, shall be payable in respect of any dividend payment or payments on
the Series “A” Preferred Shares that may be in arrears. All dividend amounts
set forth in this Section 3 shall be adjusted appropriately for any stock
splits, stock dividends and the similar events described in Section 7(g).


(e)          Seniority.  So long as any Series “A” Preferred Shares
are outstanding, no dividends, except as described in the this section, shall
be authorized and declared or paid or set apart for payment, or other
distribution of cash or other property declared or made directly by the
Corporation or any person acting on behalf of the Corporation, on any series or
class or classes of shares  for any
period nor shall any such shares be redeemed, purchased or otherwise acquired
through a sinking fund or otherwise for any consideration (or any moneys to be
paid to or made available for a sinking fund for the redemption of any shares
of such stock) by the Corporation, directly or indirectly (except by conversion
into or exchange for such shares), nor shall any payment or distribution of
cash or other property be made for the benefit of any holder of Parity Shares,
directly or indirectly, unless full cumulative dividends have been or
contemporaneously are authorized and declared and paid or authorized and
declared and a sum sufficient for the payment thereof set apart for such
payment on the Series “A” Preferred Shares for all Dividend Periods terminating
on or prior to the dividend payment date on such class or series of Parity
Shares. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends authorized and declared
upon Series “A” Preferred Shares and all dividends authorized and declared upon
any other series or class or classes of Parity Shares shall be authorized and
declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Series “A” Preferred Shares and such
Parity Shares.


Section 4. Liquidation Preference.


(a)          Liquidation
Preference.  In the event
of any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, before any payment or distribution of the assets of
the Corporation (whether capital or surplus) shall be made to or set apart for
the holders of Junior Shares, the holders of Series “A” Preferred Shares shall
be entitled to receive Ninety Cents ($0.90) per Series “A” Preferred 



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Share (the “Liquidation Preference”)
plus an amount equal to all dividends (whether or not earned or declared)
accumulated, accrued and unpaid thereon to the date of final distribution to
such holder; but such holders of Series “A” Preferred Shares shall not be
entitled to any further payment. If, upon any such liquidation, dissolution or
winding up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of Series “A” Preferred Shares shall
be insufficient to pay in full the preferential amount aforesaid and
liquidating payments, then such assets, or the proceeds thereof, shall be
distributed among the holders of such Series “A” Preferred Shares ratably in
accordance with the respective amounts that would be payable on such Series “A”
Preferred Shares if all amounts payable thereon were paid in full. For the
purposes of this Section 4, (i) a consolidation or merger of the Corporation
with one or more entities, (ii) a statutory share exchange and (iii) a sale or
transfer of all or substantially all of the Corporation’s assets shall not be
deemed to be a liquidation, dissolution or winding up, voluntary or
involuntary, of the Corporation.


(b)         Remaining
Assets.  After payment
shall have been made in full to the holders of the Series “A” Preferred Shares,
as provided in this Section 4, any series or class or classes of Junior Shares
shall, subject to any respective terms and provisions applying thereto, be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Series “A” Preferred Shares shall not be entitled to share
therein.


Section 5. Reservation of Shares


(a)          Reserved
Amount.  On or prior to
the Issue Date, the Corporation shall reserve 25,000,000 shares of its
authorized but unissued Common Stock for issuance upon conversion of the Series
“A” Preferred Shares (includes any Dividend payable thereon for the first
year), and, thereafter, the number of authorized but unissued Common Shares so
reserved (the “Reserved Amount”) shall at all
times be sufficient to provide for the full conversion of all of the Series “A”
Preferred Share (including any Dividend payable thereon) outstanding at the
then current Conversion Price thereof. The Reserved Amount shall be allocated
among the holders of the Series “A” Preferred Shares.


(b)         Increases
to Reserved Amount.  If
the Reserved Amount for any five consecutive trading days (the last of such
five trading days being the “Authorization Trigger Date”) shall be less than
one hundred percent (100%) of the number of Common Shares issuable upon full
conversion of the then outstanding shares of Series “A” Preferred Share, the
Corporation shall immediately notify the holders of Series “A” Preferred Share
of such occurrence and shall take immediate action (including, if necessary,
seeking stockholder approval to authorize the issuance of additional Common
Shares) to increase the Reserved Amount to one hundred percent (100%) of the
number of Common Shares then issuable upon full conversion (including any
Dividend payable thereon) of all of the outstanding Series “A” Preferred Share
at the then current Conversion Price.  In
the event the Corporation fails to so increase the Reserved Amount within one
hundred twenty (120) days after an Authorization Trigger Date, each holder of
Series “A” Preferred Shares shall thereafter have the option, exercisable in
whole or in part at any time and from time to time, by delivery of a Redemption
Notice to the Corporation, to require the Corporation to redeem for cash, at an
amount per share equal to the Redemption Amount (as set out in Section 9(d) hereof),
a number of the holder’s shares of Series “A” Preferred Share such that, after
giving effect to such redemption, the then unissued portion of such holder’s
Reserved Amount is at least equal to one hundred percent (100%) of the total
number of Common Shares issuable upon conversion (including any Dividend
payable thereon) of such holder’s shares of Series “A” Preferred Share.  If the Corporation fails to redeem any of
such shares within five business days after its receipt of such Redemption
Notice, then such holder shall be entitled to the remedies provided in Section
9.


Section 6. Reclassification of
Converted Shares. All Series “A” Preferred Shares which shall
have been converted pursuant to Section 7 or 8 herein shall automatically be
reclassified as Common Shares. The number of Common Shares issuable upon
conversion shall be determined in accordance with Section 7 and 8,
respectively.


Section 7. Conversion by Holders.  Holders of Series “A” Preferred Shares shall
have the right to convert all or a portion of such shares into Common Shares,
as follows:



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(a)          Right
to Convert.  Subject to
and upon compliance with the provisions of this Section 7, a holder of Series “A”
Preferred Shares shall have the right, at his or her option, to convert such
shares and any accrued but unpaid dividends into the number of fully paid and
non-assessable Common Shares obtained by dividing the aggregate Liquidation
Preference of such Series “A” Preferred Shares by the Conversion Price by
surrendering such Series “A” Preferred Shares to be converted, such surrender
to be made in the manner provided in paragraph (b) of this Section 7.


(b)         Mechanics
to Exercise Conversion Rights.


(i)                       In order to
exercise the conversion right, the holder of each Series “A” Preferred Share to
be converted shall surrender the certificate representing such Series “A”
Preferred Share, duly endorsed or assigned to the Corporation or in blank, at
the office of the Corporation or the office of the Transfer Agent, accompanied
by written notice to the Corporation that the holder thereof elects to convert
such Series “A” Preferred Shares. Unless the Common Shares issuable on
conversion are to be issued in the same name as the name in which such Series “A”
Preferred Shares are registered, each share surrendered for conversion shall be
accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder’s duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).


(ii)                    Holders of
Series “A” Preferred Shares at the close of business on a Dividend Payment
Record Date shall be entitled to receive the dividend payable on such Series “A”
Preferred Shares on the corresponding Dividend Payment Date notwithstanding the
conversion thereof following such Dividend Payment Record Date and prior to
such Dividend Payment Date. However, Series “A” Preferred Shares surrendered
for conversion during the period between the close of business on any Dividend
Payment Record Date and the opening of business on the corresponding Dividend
Payment Date must be accompanied by payment of an amount equal to the dividend
payable on such Series “A” Preferred Shares on such Dividend Payment Date. A
holder of Series “A” Preferred Shares on a Dividend Payment Record Date who (or
whose transferees) tenders any such Series “A” Preferred Shares for conversion
into Common Shares on such Dividend Payment Date will receive the dividend
payable by the Corporation on such Series “A” Preferred Shares on such date,
and the converting holder need not include payment of the amount of such
dividend upon surrender of Series “A” Preferred Shares for conversion.


(iii)                 Except as provided
above, the Corporation shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on converted Series “A” Preferred Shares or for
dividends on the Common Shares issued upon such conversion.


(c)          No
Fractional Shares.  No
fractional shares or scrip representing fractions of Common Shares shall be
issued upon conversion of the Series “A” Preferred Shares. Instead of any
fractional interest in a Common Share that would otherwise be deliverable upon
the conversion of a Series “A” Preferred Share, the Corporation shall pay to
the holder of such Series “A” Preferred Share an amount in cash based upon the
Current Market Price of Common Shares on the Trading Day immediately preceding
the date of conversion. If more than one Series “A” Preferred Share shall be
surrendered for conversion at one time by the same holder, the number of full
Common Shares issuable upon conversion thereof shall be computed on the basis
of the aggregate number of Series “A” Preferred Shares so surrendered.


(d)         Adjustment
to Conversion Price.  The
Conversion Price shall be adjusted under the following circumstances:


(i)                       Subsequent
Equity Sales.  If the Corporation or
any Subsidiary thereof, as applicable, at any time while this Series “A”
Preferred Stock is outstanding, shall offer, sell, grant any option to purchase
or offer, sell or grant any right to reprice its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any Common Share or Common Share Equivalents
entitling any Person to acquire Common Shares, at an effective price per share
less than the then Conversion Price (such lower price, the “Base Conversion Price” and such issuances collectively, a “Dilutive Issuance”), as adjusted hereunder, then the
Conversion Price shall be multiplied by a fraction, of which the denominator 



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shall be the number of shares of the Common Stock
Outstanding on the date of such Dilutive Issuance plus the number of additional
shares of Common Stock offered for subscription or purchase, and of which the
numerator shall be the number of shares of the Common Stock Outstanding on the
date of such Dilutive Issuance plus the number of shares which the aggregate
offering price of the total number of shares so offered (assuming receipt by
the Corporation in full of all consideration payable in connection with such
Dilutive Issuance) would purchase at such Conversion Price. The Corporation
shall notify the Holder in writing, no later than the Business Day following the
issuance of any Common Share or Common Share Equivalents subject to this
section, indicating therein the applicable issuance price, exchange price,
conversion price and other pricing terms (such notice the “Dilutive
Issuance Notice”). For purposes of clarification, whether or not the
Corporation provides a Dilutive Issuance Notice pursuant to this Section 7(d),
upon the occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance the Holder is entitled to receive a number of Conversion Shares based
upon the Base Conversion Price regardless of whether the Holder accurately
refers to the Base Conversion Price in the Notice of Conversion.
Notwithstanding the foregoing or any other provision herein to the contrary, no
adjustment to the Conversion Price will be required as a result of any issuance
by the Corporation of any Common Shares, or Common Share Equivalents (A)
pursuant to any stock option plan, restricted stock plan or other compensatory
plan or arrangement with any officer, director, employee or consultant of the
Corporation or any affiliated entity, (B) pursuant to or in connection with any
agreement or understanding in effect on or before the Issue Date, (C) pursuant
to or in connection with any Transaction or (D) to any vendor, customer or
other person or entity with which the Corporation has or is attempting to
develop a business relationship.


(ii)                    Subsequent
Rights Offerings. If the Corporation, at any time while the Series “A”
Preferred Share is outstanding, shall issue rights, options or warrants to all
holders of Common Share (and not to holders of Series “A” Preferred Shares)
entitling them to subscribe for or purchase Common Shares at a price per share
less than the Conversion Price at the record date mentioned below, then the Conversion
Price shall be multiplied by a fraction, of which the denominator shall be the
number of shares of the Common Stock Outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common Stock
offered for subscription or purchase, and of which the numerator shall be the
number of shares of the Common Stock Outstanding on the date of issuance of
such rights or warrants plus the number of shares which the aggregate offering
price of the total number of shares so offered (assuming receipt by the
Corporation in full of all consideration payable upon exercise of such rights,
options or warrants) would purchase at such Conversion Price. Such adjustment
shall be made whenever such rights or warrants are issued, and shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights, options or warrants.


(iii)                 Calculations.  No adjustment in the Conversion Price shall
be required unless such adjustment would require a cumulative increase or
decrease of at least $0.05 in such price; provided, however, that any
adjustments that by reason of this subparagraph (iv) are not required to be
made shall be carried forward and taken into account in any subsequent adjustment
until made. Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of the Conversion
Price for the issuance of any Common Shares pursuant to any plan providing for
the reinvestment of dividends or interest payable on securities of the
Corporation and the investment of additional optional amounts in Common Shares
under such plan. All calculations under this Section 7 shall be made to the
nearest cent (with $.005 being rounded upward) or to the nearest one-tenth of a
share (with .05 of a share being rounded upward), as the case may be. Anything
in this paragraph (e) to the contrary notwithstanding, the Corporation shall be
entitled, to the extent permitted by law, to make such reductions in the Conversion
Price, in addition to those required by this paragraph (e), as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivision of shares, reclassification or combination of shares, distribution
of rights, options or warrants to purchase stock or securities, or a
distribution of other assets (other than cash dividends) hereafter made by the
Corporation to its stockholders shall not be taxable or, if that is not
possible, to diminish any income taxes that are otherwise payable because of
such event.



 8
 









(f)            Pro
Rata Distribution.   If
the Corporation shall distribute to holders of its Common Shares any shares of
capital stock of the Corporation or of any subsidiary (other than Common
Shares) or evidence of its indebtedness or assets (excluding cash dividends or
distributions paid out of current or accumulated earnings) or rights, options
or warrants to subscribe for or purchase any of its securities (excluding
rights, options and warrants to subscribe for or purchase Common Shares, which
rights, options and warrants are referred to in and governed by subparagraph
(e)(iii) above) (any of the foregoing being hereinafter in this subparagraph
(f) called the “Securities”), then in each such case the Conversion Price shall
be adjusted by multiplying such Conversion Price in effect immediately prior to
the record date fixed for determination of stockholders entitled to receive
such distribution by a fraction of which the denominator shall be the VWAP
determined as of the record date mentioned above, and of which the numerator
shall be such VWAP on such record date less the then fair market value at such
record date of the portion of such assets or evidence of indebtedness so
distributed applicable to one outstanding share of the Common Shares as
determined by the Board of Directors in good faith. In either case the
adjustments shall be described in a statement provided to the holder of Class “A”
Preferred Shares of the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common
Stock. Such adjustment shall be made whenever any such distribution is made and
shall become effective immediately after the record date mentioned above.


(g)         Stock
Dividends and Stock Splits. 
If the Corporation shall after the Issue Date (A) pay a dividend or make
a distribution payable in Common Shares on any class of shares of capital stock
of the Corporation (excluding any Discounted Dividend Payment payable on the
Series “A” Preferred Shares pursuant to Section 7 hereof), (B) subdivide its
outstanding Common Shares into a greater number of shares, (C) combine its
outstanding Common Shares into a smaller number of shares or (D) issue any
shares of capital stock by reclassification of its Common Shares, the
Conversion Price in effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
dividend or distribution or at the opening of business on the day following the
day on which such subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the holder of any
Series “A” Preferred Share thereafter surrendered for conversion shall be
entitled to receive the number of Common Shares that such holder would have
owned or have been entitled to receive after the happening of any of the events
described above had such Series “A” Preferred Shares been converted immediately
prior to the record date in the case of a dividend or distribution or the
effective date in the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this subparagraph (g) shall become effective
immediately upon the opening of business on the day next following the record
date in the case of a dividend or distribution and shall become effective
immediately upon the opening of business on the day next following the
effective date in the case of a subdivision, combination or reclassification.


(h)         Fundamental
Transaction.   If the
Corporation shall be a party to any transaction (including without limitation a
merger, consolidation, statutory share exchange, self tender offer for all or
substantially all Common Shares, sale of all or substantially all of the
Corporation’s assets or recapitalization of the Common Shares and excluding any
transaction as to which subparagraph (d)(i) of this Section 7 applies) (each of
the foregoing being referred to herein as a “Fundamental
Transaction”), in each case as a result of which Common Shares shall
be converted into the right to receive stock, securities or other property
(including cash or any combination thereof), each Series “A” Preferred Share
that is not converted into the right to receive stock, securities or other
property in connection with such Fundamental Transaction shall thereafter be
convertible into the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivable upon the
consummation of such Fundamental Transaction by a holder of that number of
Common Shares into which one Series “A” Preferred Share was convertible
immediately prior to such Transaction, assuming such holder of Common Shares
(i) is not a Person with which the Corporation consolidated into or which the
Corporation merged or which merged into the Corporation or to which such sale
or transfer was made, as the case may be (a “Constituent
Person”), or an affiliate of a Constituent Person and (ii) failed to
exercise his or her rights of the election, if any, as to the kind or amount of
stock, securities and other property (including cash or any combination
thereof) receivable upon such Fundamental Transaction (provided that if the
kind or amount of stock, securities and other property (including cash or any
combination thereof) receivable upon such Fundamental Transaction is not the 



 9
 









same for each Common Share of the Corporation held
immediately prior to such Fundamental Transaction by other than a Constituent
Person or an affiliate thereof and in respect of which such rights of election
shall not have been exercised (“Non-Electing Share”),
then for the purpose of this subparagraph (g) the kind and amount of stock,
securities and other property (including cash or any combination thereof)
receivable upon such Fundamental Transaction by each Non-Electing Share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the Non-Electing Shares). The provisions of this subparagraph (h) shall
similarly apply to successive Fundamental Transactions.


(i)             Notice
Requirement.  If:


(i)                       the
Corporation shall declare a dividend (or any other distribution) on the Common
Shares (other than in cash out of current or retained earnings); or


(ii)                    the
Corporation shall authorize the granting to the holders of the Common Shares of
rights or warrants to subscribe for or purchase any shares of any class or any
other rights or warrants; or


(iii)                 there shall be
any reclassification of the Common Shares (other than an event to which
subparagraph (d) (ii) of this Section 7 applies) or any consolidation or merger
to which the Corporation is a party and for which approval of any stockholders
of the Corporation is required, or a statutory share exchange involving the
conversion or exchange of Common Shares into securities or other property, or a
self tender offer by the Corporation for all or substantially all of its
outstanding Common Shares, or the sale or transfer of all or substantially all
of the assets of the Corporation as an entirety and for which approval of any
stockholders of the Corporation is required; or


(iv)                there shall occur
the voluntary or involuntary liquidation, dissolution or winding up of the
Corporation,


then the Corporation shall cause to be filed with the Transfer Agent
and shall cause to be mailed to the holders of the Series “A” Preferred Shares
at their addresses as shown on the stock records of the Corporation, as
promptly as possible, but at least 15 days prior to the applicable date
hereinafter specified, a notice stating (A) the date on which a record is to be
taken for the purpose of such dividend, distribution or rights or warrants, or,
if a record is not to be taken, the date as of which the holders of Common
Shares of record to be entitled to such dividend, distribution or rights or
warrants are to be determined or (B) the date on which such reclassification,
consolidation, merger, statutory share exchange, sale, transfer, liquidation,
dissolution or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Shares of record shall be entitled
to exchange their Common Shares for securities or other property, if any,
deliverable upon such reclassification, consolidation, merger, statutory share
exchange, sale, transfer, liquidation, dissolution or winding up. Failure to
give or receive such notice or any defect therein shall not affect the legality
or validity of the proceedings described in this Section 7.


(j)             Notification
of Transfer Agent. 
Whenever the Conversion Price is adjusted as herein provided, the Corporation
shall promptly file with the Transfer Agent an officer’s certificate setting
forth the Conversion Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment, which certificate shall be
conclusive evidence of the correctness of such adjustment absent manifest
error. Promptly after delivery of such certificate, the Corporation shall
prepare a notice of such adjustment of the Conversion Price setting forth the
adjusted Conversion Price and the effective date of such adjustment becomes
effective and shall mail such notice of such adjustment of the Conversion Price
to the holders of each Series “A” Preferred Share at such holder’s last address
as shown on the stock records of the Corporation.


(k)          Timing
of Adjustment.  In any
case in which paragraph (d) of this Section 7 provides that an adjustment shall
become effective on the day next following the record date for an event, the
Corporation may defer until the occurrence of such event (A) issuing to the
holder of any Series “A” Preferred Share converted after such record date and
before the occurrence of such event the additional Common Shares issuable upon
such conversion by reason of the adjustment required by such event over and
above the Common Shares issuable upon such conversion before giving effect to
such adjustment and (B) paying to such holder any amount of cash in lieu of any
fraction pursuant to 



 10
 









paragraph (c) of this
Section 7.


(l)             Exceptions
to Adjustment.  There
shall be no adjustment of the Conversion Price in case of the issuance of any
shares of capital stock of the Corporation in a reorganization, acquisition or
other similar transaction except as specifically set forth in this Section 7.
If any action or transaction would require adjustment of the Conversion Price
pursuant to more than one paragraph of this Section 7, only one adjustment
shall be made, and such adjustment shall be the amount of adjustment that has
the highest absolute value.


(m)       Board
Discretion.  If the
Corporation shall take any action affecting the Common Shares, other than
action described in this Section 7, that in the opinion of the Board of
Directors would materially adversely affect the conversion rights of the
holders of the Series “A” Preferred Shares, the Conversion Price for the Series
“A” Preferred Shares may be adjusted, to the extent permitted by law, in such
manner, if any, and at such time, as the Board of Directors, in its sole
discretion, may determine to be equitable in the circumstances.


(n)         Adjustment
to Share Reservation.  The
Corporation covenants that it will reserve and keep available, free from
preemptive rights, out of the aggregate of its authorized but unissued Common
Shares, for the purpose of issuance upon conversion of the Series “A” Preferred
Shares, that number of Common Shares required by any such increase in the
Conversion Price. For purposes of this paragraph (n), such number of Common
Shares shall be computed as if at the time of computation all such Series “A”
Preferred Shares were held by a single holder. The Corporation further
covenants that any Common Shares issued upon conversion of the Series “A”
Preferred Shares shall be validly issued, fully paid and non-assessable. Before
taking any action that would cause an adjustment reducing the Conversion Price
below the then-par value of the Common Shares deliverable upon conversion of
the Series “A” Preferred Shares, the Corporation shall take any corporate
action that, in the opinion of its counsel, may be necessary in order that the
Corporation may validly and legally issue fully paid and non-assessable Common
Shares at such adjusted Conversion Price. The Corporation shall use its
commercially reasonable best efforts to list the Common Shares required to be
delivered upon conversion of the Series “A” Preferred Shares or payable as a
dividend on the Series “A” Preferred Shares, prior to such delivery, upon each
national securities exchange or automated quotation market, if any, upon which
the outstanding Common Shares are listed or quoted at the time of such
delivery.  Prior to the delivery of any
securities that the Corporation shall be obligated to deliver upon conversion
of, or the payment of a dividend on, the Series “A” Preferred Shares, the
Corporation shall use its commercially reasonable best efforts to comply with
all federal and state laws and regulations thereunder requiring the
registration of such securities with, or any approval of or consent to the
delivery thereof, by any governmental authority.


(o)         Transfer
Taxes.  The Corporation shall
pay any and all documentary stamp or similar issue or transfer taxes payable in
respect of the issue or delivery of Common Shares or other securities or
property on conversion of the Series “A” Preferred Shares pursuant hereto;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issue or
delivery of any Common Shares or other securities or property in a name other
than that of the holder of the Series “A” Preferred Shares to be converted, and
no such issue or delivery shall be made unless and until the person requesting
such issue or delivery has paid to the Corporation the amount of any such tax
or established, to the reasonable satisfaction of the Corporation, that such
tax has been paid.


Section 8. Mandatory Conversion
at Option of the Corporation.


(a)          Forced
Conversion.  On and after
the “Mandatory Conversion Date” (as defined
below) the Corporation shall have the option to cause the conversion of the
Series “A” Preferred Shares, in whole or from time to time in part, into Common
Shares. Any such conversion shall be subject to and effected in accordance with
the provisions of Section 7 hereof (excluding Section 7(b)(iii)), to the extent
applicable. “Mandatory Conversion Date” shall
mean the last day of any period of twenty (20) consecutive Trading Days ending
on or after the date the underlying shares are registered for resale with the
Securities and Exchange Commission, in which the volume weighted average of the
daily 



 11
 









Current Market Price per Common Share equals or
exceeds 200% of the Conversion Price (as adjusted appropriately for stock
splits, stock dividends and the similar events described in Section 7(g)). Any
such determination shall be made by the Corporation and shall be evidenced by
an officer’s certificate setting forth the data supporting such determination,
which certificate shall be conclusive evidence of such determination absent
manifest error and filed with the Transfer Agent. If the Corporation exercises
its right to cause the conversion of Series “A” Preferred Shares in whole or
from time to time in part, it shall furnish notice thereof to the Transfer
Agent and shall mail such notice to the holders of each outstanding Series “A”
Preferred Share being converted at such holder’s last address as shown on the
stock records of the Corporation, together with a determination as to the
number of Series “A” Preferred Shares to be converted and the Conversion Price
with respect thereto; provided that to the extent the Corporation elects to
cause less than all outstanding shares of Series “A” Preferred Shares to
convert pursuant to this Section, the Corporation shall require holders to
convert ratably based on their then-current holdings of the Series “A” Preferred
Shares.


(b)         Termination
of Dividend Rights. 
Notwithstanding anything to the contrary herein, the right of any Series
“A” Preferred Shareholder to exercise any right of conversion pursuant to
Section 7 hereof shall terminate upon the exercise by the Corporation of its
conversion right in respect of such shares pursuant to Section 8(a). Notice of
conversion having been mailed as aforesaid, from and after the date of such
notice (unless the Corporation shall fail to convert the Series “A” Preferred
Shares in accordance with this Section 8), (i) except as expressly provided in
Section 7 hereof, dividends on the Series “A” Preferred Shares so called for
conversion shall cease to accrue, (ii) all rights of the holders of Series “A”
Preferred Shares shall cease (except the right to receive the Common Shares
issuable upon conversion and any dividends on the Series “A” Preferred Shares
as provided in Section 7 hereof (excluding Section 7(b) (iii)) and (iii) such
Series “A” Preferred Shares shall no longer be deemed to be outstanding.


Section 9. Mandatory Redemption.


(a)          Holder
Redemption Events.  A “Redemption
Event” means any one or more of the following events (whatever the reason and
whether it shall be voluntary or involuntary or effected by operation of law or
pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):


(i)                       the “Maturity
Date” of the Series “A” Preferred Shares having occurred, being five years from
the Issue Date;


(ii)                    the failure of
the Registration Statement to be declared effective by the Securities and
Exchange Commission on or prior to the 180th day after the Issue Date;
provided, that if the Corporation has responded to all Commission comment
letters on such registration statement within 10 days of receipt, then no
Triggering Event shall be deemed to have occurred;


(iii)                 the Corporation
shall fail to have available a sufficient number of authorized and unreserved
shares of Common Share to issue to such Holder upon a conversion hereunder;


(iv)                the Corporation
provides written notice (or otherwise indicates) to any holder of Series “A”
Preferred Shares, or states by way of public announcement distributed via a
press release, at any time, of its intention not to issue, or otherwise refuses
to issue, Common Shares to any holder of Series “A” Preferred Shares upon
conversion in accordance with the terms of this Certificate of Designation;


(v)                   the Corporation
or any subsidiary of the Corporation shall make an assignment for the benefit
of creditors, or apply for or consent to the appointment of a receiver or
trustee for it or for a substantial part of its property or business, or such a
receiver or trustee shall otherwise be appointed;


(vi)                bankruptcy,
insolvency, reorganization or liquidation proceedings or other proceedings for
the relief of debtors shall be instituted by or against the Corporation or any
subsidiary of the Corporation and if instituted against the Corporation or any
subsidiary of the Corporation by a third party, shall not be dismissed within
seventy-five (75) days of their initiation;


(vii)             the Corporation shall
redeem more than a de minimis number of Junior Shares;


(viii)          a Change of Control
Transaction; or



 12
 









(ix)                  the Common
Shares shall fail to be listed or quoted for trading on a Trading Market for
more than five (5) Trading Days, which need not be consecutive Trading Days.


(b)         Redemption
Notice.  Upon the
occurrence of any such Redemption Event other than clause 9(a)(i) (i.e., upon
Maturity Date, in which case clause 9(c) shall apply), each holder of shares of
Series “A” Preferred Shares shall thereafter have the option, exercisable in
whole or in part at any time and from time to time by delivery of a written
notice to such effect (a “Redemption Notice”)
to the Corporation while such Redemption Event continues, to require the
Corporation to purchase for cash any or all of the then outstanding shares of
Series “A” Preferred Shares held by such holder for an amount per share equal
to the Redemption Amount (as defined in subsection 9(d) below) in effect at the
time of the redemption hereunder.  For the avoidance of doubt, the
occurrence of any event described in clauses (iii), (iv), (vii), and (viii)
above shall immediately constitute a Redemption Event and there shall be no
cure period.  Upon the Corporation’s receipt of any Redemption Notice
hereunder (other than during the five trading day period following the
Corporation’s delivery of a Redemption Announcement (as defined below) to all
of the holders in response to the Corporation’s initial receipt of a Redemption
Notice from a holder of Series “A” Preferred Shares), the Corporation shall
immediately (and in any event within one business day following such receipt)
deliver a written notice (a “Redemption Announcement”)
to all holders of Series “A” Preferred Shares stating the date upon which the
Corporation received such Redemption Notice and the amount of Series “A”
Preferred Shares covered thereby.  The Corporation shall not redeem any
shares Series “A” Preferred Shares during the five trading day period following
the delivery of a required Redemption Announcement hereunder.  At any time
and from time to time during such five trading day period, each holder of
Series “A” Preferred Shares may request (either orally or in writing)
information from the Corporation with respect to the instant redemption
(including, but not limited to, the aggregate number of shares of Series “A”
Preferred Shares covered by Redemption Notices received by the Corporation) and
the Corporation shall furnish (either orally or in writing) as soon as
practicable such requested information to such requesting holder.


(c)          Mandatory
Redemption. On the Maturity Date, the Corporation shall redeem
all outstanding shares of Series “A” Preferred Shares, to the extent it has
funds legally available therefore, at the redemption price of 120% of the
Liquidation Preference thereof, plus an amount equal to the dividends unpaid
thereon, if any, whether or not declared, to the redemption date.


(d)         Redemption
Amount.  The “Redemption Amount” with respect to a share of Series “A”
Preferred Shares (other than upon the Maturity Date) means an amount equal to
the greater of:


	
   

  	
  (i)

  	
  V

  	
   

  	
  x

  	
   

  	
  M

  	
  =

  	
   Redemption Amount

  
	
   

  	
   

  	
  C P

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Or: 

  	
  (ii)

  	
  V

  	
   

  	
  x

  	
   

  	
  R

  	
   =

  	
   Redemption Amount

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 


where:


“V” means the Liquidated Preference plus
all accrued but unpaid dividends thereon through the date of payment of the
Redemption Amount;


“CP” means the Conversion Price in effect
as of the date of the Redemption Notice;


“M” means the highest VWAP of Common
Shares during the period beginning on the date on which the Corporation
receives the Redemption Notice and ending on the date immediately preceding the
date of payment of the Redemption Amount; and


“R” means 120%


(e)          Redemption
Defaults.  If the
Corporation fails to pay any holder the Redemption Amount with respect to any
share of  Series “A” Preferred Shares
within five business days after its receipt of a Redemption Notice, then the
holder of Series “A” Preferred Shares entitled to redemption shall be entitled
to interest on the price payable upon Redemption at a per annum rate equal to
the lower of eighteen percent (18%) and the highest interest rate permitted by
applicable law from the date on which the 



 13
 









Corporation receives the Redemption Notice until the
date of payment of the Redemption Amount hereunder.  In the event the Corporation is not able to
redeem all of the shares of Series “A” Preferred Shares subject to Redemption
Notices delivered prior to the date upon which such redemption is to be
effected, the Corporation shall redeem shares of Series “A” Preferred Shares
from each holder pro rata, based on the total number of shares of Series “A”
Preferred Shares outstanding at the time of redemption included by such holder
in all Redemption Notices delivered prior to the date upon which such
redemption is to be effected relative to the total number of shares of Series “A”
Preferred Shares outstanding at the time of redemption included in all of the
Redemption Notices delivered prior to the date upon which such redemption is to
be effected.


Section 10. Permissible
Distributions. In determining whether a distribution (other
than upon liquidation, dissolution or winding up), whether by dividend, or upon
redemption or other acquisition of shares or otherwise, is permitted under
Delaware law, amounts that would be needed, if the Corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of holders of shares of any class or series of capital stock
whose preferential rights upon dissolution are superior or prior to those
receiving the distribution shall not be added to the Corporation’s total
liabilities.


Section 11. Ranking.
All other class or series of shares of capital stock of the Corporation shall
be deemed to rank junior to the Series “A” Preferred Shares, as to the payment
of dividends and on the distribution of assets upon liquidation, dissolution or
winding up, as the case may be.  The
Series “A” Preferred Shares shall rank in preference and priority to the
holders of shares of such stock or series, and such stock or series shall not
in either case rank prior to the Series “A” Preferred Shares.


Section 12. Voting.
The holders of Series “A” Preferred Shares shall have the following voting
rights:


(a)          Subject to the provision
for adjustment hereinafter set forth, each Series “A” Preferred Share shall
entitle the holder thereof to one vote on an “as-converted” basis assuming
conversion of the Series “A” Preferred Shares into Common Stock on all matters
submitted to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Issue 
Date (i) declare any dividend on outstanding shares of Common Share
payable in Common Shares, (ii) subdivide outstanding Common Shares or (iii)
combine the outstanding Common Shares into a smaller number of shares, then in
each such case the number of votes per share to which holders of Series “A” Preferred
Shares were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which shall be the
number of Common Shares outstanding immediately after such event and the
denominator of which shall be the number of Common Shares that were outstanding
immediately prior to such event.


(b)         Except as otherwise
provided herein or by law, the holders of Series “A” Preferred Shares and the
holders of Common Shares shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation, with the holders of the
Series “A” Preferred Shares voting on an “as-converted” basis assuming
conversion of the Series “A” Preferred Shares into Common Stock.


(c)          The holders of Series “A”
Preferred Shares, voting separately as a class, shall have the right to elect
two Directors.   The number of Directors
shall not be increased or decreased beyond seven except as approved by a vote
of the holders of Series “A” Preferred Stock as herein provided.


(d)         So long as any shares of
Series “A” Preferred Share are outstanding, the Corporation shall not, without
the affirmative vote of the holders of the 
Series “A” Preferred Share then outstanding:


(i)                       increase or
decrease the authorized number of shares of common or preferred stock of the
Corporation;


(ii)                    alter or
change the rights, preferences or privileges of the Series “A” Preferred
Shares, or increase the authorized number of shares of Series “A” Preferred
Shares;


(iii)                 alter or change
the rights, preferences or privileges of any capital stock of the Corporation
so as to affect adversely the Series “A” Preferred Shares;


(iv)                create or issue
any securities senior to or Pari Passu to
the Series “A” Preferred Shares;



 14
 









(v)                   create (by
reclassification or otherwise) any new class or series of shares of the
Corporation;


(vi)                redeem any shares
of common stock or preferred stock (other than pursuant to stock incentive
agreements with service providers giving the Corporation the right to
repurchase shares upon the termination of services);


(vii)             enter into any
transaction which results in any merger, other corporate reorganization, sale
of control, or any transaction in which all or substantially all of the assets
of the Corporation are to be sold;


(viii)          amend or waive any
provision of the Corporation’s constating documents (Certificate of
Incorporation, Articles, or Bylaws);


(ix)                  increase or
decrease the authorized size of the Corporation’s board of directors;


(x)                     redeem,
repurchase or otherwise acquire, or declare or pay any cash dividend or
distribution on, any Junior Shares. Notwithstanding the foregoing, the
Corporation shall, without the prior approval of the holders of the Series “A”
Preferred Shares, be entitled to repurchase Junior Shares from employees of the
Corporation in connection with employee compensation plans approved by the
Corporation’s Board of Directors;;


(xi)                  take any action
that results in borrowing in excess of the amount raised by the Corporation
from the issuance of the Series “A” Preferred Shares without consent of the
holders of the Series “A” Preferred Shares, which consent shall not be
unreasonably withheld;


(xii)               increase the par
value of the Common Shares;


(xiii)            take any action that
results in the creation of any lien or encumbrance on the assets of the
Corporation (other than in favor of the holders of Series “A” Preferred
Shares);


(xiv)           change the Corporation’s
principal line of business;


(xv)              acquire directly or
indirectly any other business or material assets, or


(xvi)           sublicense or transfer
any intellectual property of the Corporation without consent of the holder of
the Series “A” Preferred Shares, which consent shall not be unreasonably
withheld.


(e)          To the extent that the
vote of the holders of the Series “A” Preferred Shares, voting separately as a
class or series, as applicable, is permitted or required to authorize a given
action of the Corporation, the affirmative vote or consent of the holders of at
least a majority of the then outstanding shares of the Series “A” Preferred Shares
represented at a duly held meeting at which a quorum is present or by written
consent of the Majority Holders (except as otherwise may be required under the
DGCL) shall constitute the approval of such action by the class or series.


(f)            If in connection with
any Liquidation Event, the holders of the Series “A” Preferred Shares are
entitled to vote to approve such Liquidation Event as a class, then the holders
of such Series “A” Preferred Shares shall agree to vote their shares in favor
of the Liquidation Event, conditioned on the receipt by all holders of Series “A”
Preferred Shares of their respective Liquidation Preference, in full.


(g)         Notwithstanding any other
provision of this Section 12, in the event that it is determined by Nasdaq or
any other securities regulator (after full process, including any appeal
process available to the Corporation) that the voting provisions set forth in
this Section 12 violate or conflict with Rule 4351 of the National Association
of Securities Dealers, Inc. (“NASD”), or any
successor or similar rule, or the rules or regulations of any other securities
exchange on which the Common Shares are then listed or traded, then the manner
of voting and/or number of votes to which each share of Series “A” Preferred
Share is entitled shall be modified and/or reduced to the extent required to
comply with such rule.


(h)         Except as set forth
herein, holders of Series “A” Preferred Shares shall have no special voting
rights and their consents shall not be required (except to the extent they are
entitled to vote with holders of Common Shares as set forth herein) for taking
any corporate action.


Section 13. Record Holders.
The Corporation and the Transfer Agent may deem and treat the record holder of
any Series “A” Preferred Shares as the true and lawful owner thereof for all
purposes, and neither the Corporation nor the Transfer Agent shall be affected
by any notice to the contrary.


Section 14. No Preemptive Rights.
Except as may otherwise be required by law, the Series “A” Preferred Shares
shall not have any powers, preferences and relative participating, optional or
other special rights, other than those specifically and expressly set forth in
this Certificate of Designation and in the 




 15
 









Corporation’s Certificate
of Incorporation, as amended. The Series “A” Preferred Shares shall have no
preemptive or subscription rights.


Section 15. Miscellaneous.


(a)          Notices.
Any and all notices or other communications or deliveries to be provided by the
Holder hereunder, including, without limitation, any Notice of Conversion,
shall be in writing and delivered personally, by facsimile, sent by a
nationally recognized overnight courier service, addressed to the Transfer
Agent with a copy to the Corporation to the attention of the Chief Executive
Officer at its principal executive offices or such other address or facsimile
number as the Corporation may specify for such purposes by notice to the
holders of Series “A” Preferred Shares delivered in accordance with this
Section. Any and all notices or other communications or deliveries to be
provided by the Corporation hereunder shall be in writing and delivered
personally, by facsimile, sent by a nationally recognized overnight courier
service addressed to each holder of Series “A” Preferred Shares at the facsimile
telephone number or address of such holder appearing on the books of the
Corporation, or if no such facsimile telephone number or address appears, at
the principal place of business of the holder of Series “A” Preferred Shares.
Any notice or other communication or deliveries hereunder shall be deemed given
and effective on the earliest of (i) the date of transmission, if such notice
or communication is delivered via facsimile at the facsimile telephone number
specified in this Section prior to 5:30 p.m. (New York City time), (ii) the
date after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified in this
Section later than 5:30 p.m. (New York City time) on any date and earlier than
11:59 p.m. (New York City time) on such date, (iii) the second Business Day
following the date of mailing, if sent by nationally recognized overnight
courier service, or (iv) upon actual receipt by the party to whom such notice
is required to be given.


(b)         No
Pre-emptive Rights.  The holders of the Class “A” Preferred
Shares are not entitled to a right of first refusal to subscribe for, purchase
or receive any part of any issue of shares, bonds, debentures or other
securities of the Corporation now or in the future.


(c)          Absolute
Obligation. Except as expressly provided herein, no provision of
this Certificate of Designation shall alter or impair the obligation of the
Corporation, which is absolute and unconditional, to pay the liquidated damages
(if any) on, the shares of Series “A” Preferred Share at the time, place, and
rate, and in the coin or currency, herein prescribed.


(d)         Lost or
Mutilated Series “A” Preferred Share Certificate. If a holder’s
Series “A” Preferred Share certificate shall be mutilated, lost, stolen or
destroyed, the Corporation shall execute and deliver, in exchange and
substitution for and upon cancellation of a mutilated certificate, or in lieu
of or in substitution for a lost, stolen or destroyed certificate, a new
certificate for the shares of Series “A” Preferred Share so mutilated, lost,
stolen or destroyed but only upon receipt of evidence of such loss, theft or
destruction of such certificate, and of the ownership hereof, and indemnity, if
requested, all reasonably satisfactory to the Corporation.


(e)          Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Certificate of Designation shall be
governed by and construed and enforced in accordance with the internal laws of
the State of Delaware, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
any of the Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, employees or agents)
shall be commenced in the state and federal courts sitting in the City of New
York, Borough of Manhattan (the “New York Courts”).
Each party hereto hereby irrevocably submits to the exclusive jurisdiction of
the New York Courts for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, 



 16
 









action or proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for notices to it under this Certificate
of Designation and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Certificate of Designation
or the transactions contemplated hereby. If either party shall commence an
action or proceeding to enforce any provisions of this Certificate of
Designation, then the prevailing party in such action or proceeding shall be
reimbursed by the other party for its attorneys fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.


(f)            Waiver.
Any waiver by the Corporation or the holder of Series “A” Preferred Shares of a
breach of any provision of this Certificate of Designation shall not operate as
or be construed to be a waiver of any other breach of such provision or of any
breach of any other provision of this Certificate of Designation. The failure
of the Corporation or the holder of Series “A” Preferred Shares to insist upon
strict adherence to any term of this Certificate of Designation on one or more
occasions shall not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Certificate of Designation. Any waiver must be in writing.


(g)         Severability.
If any provision of this Certificate of Designation is invalid, illegal or
unenforceable, the balance of this Certificate of Designation shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances. If
it shall be found that any interest or other amount deemed interest due
hereunder violates applicable laws governing usury, the applicable rate of
interest due hereunder shall automatically be lowered to equal the maximum
permitted rate of interest.


(h)         Next
Business Day. Whenever any payment or other obligation hereunder
shall be due on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day.


(i)             Headings.
The headings contained herein are for convenience only, do not constitute a
part of this Certificate of Designation and shall not be deemed to limit or
affect any of the provisions hereof.


IN WITNESS WHEREOF,
Platinum Research Organization, Inc. caused this certificate to be signed by
its Chief Executive Officer this 12th day of April, 2007.


PLATINUM RESEARCH
ORGANIZATION, INC.


	
  Per:

  	
  /s/ Cecilia
  Pineda

  	
   

  
	
   

  	
  Cecelia Pineda

  
	
   

  	
  Chief Executive Officer

  




 17
 









ANNEX A


NOTICE OF
ELECTION TO CONVERT


(To be Executed by the
Registered Holder in order to Convert Shares of Series “A” Preferred Stock)


The undersigned hereby
elects to convert the number of shares of Series “A” Convertible Preferred
Stock indicated below, into shares of common stock, par value $0.001 per share
(the “Common Stock”), of Platinum Research Organization, Inc. (the “Corporation”), according to the conditions hereof, as of the
date written below. If shares are to be issued in the name of a person other
than undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates and opinions as
reasonably requested by the Corporation in accordance therewith. No fee will be
charged to the Holder for any conversion, except for such transfer taxes, if
any.


Conversion calculations:


Date to Effect
Conversion: 


Number of shares of
Preferred Stock owned prior to Conversion:


Number of shares of
Preferred Stock to be Converted:


Stated Value of shares of
Preferred Stock to be Converted:


Number of shares of
Common Stock to be Issued: 


Applicable Conversion
Price:


Number of shares of
Preferred Stock subsequent to Conversion:


	
  HOLDER:

  	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
  Title: 

  	
   

  	
   

  
						



 



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