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Exhibit 4.1  

 
 

CERTIFICATE OF DESIGNATION
  OF THE RIGHTS, PREFERENCES, PRIVILEGES
  AND RESTRICTIONS, WHICH HAVE NOT BEEN SET
  FORTH IN THE CERTIFICATE OF INCORPORATION
  OR IN ANY AMENDMENT THERETO,
  OF THE
  SERIES
A CONVERTIBLE PREFERRED STOCK
  OF
  SPEEDEMISSIONS, INC.    
    

        (Pursuant to Section 607.0602 of the Florida Business Corporation Act) The undersigned, Richard A. Parlontieri, does hereby certify that: 

        A.    He
is the duly elected and acting President of Speedemissions, Inc., a Florida Corporation (the "Corporation"). 

        B.    Pursuant
to the Unanimous Written Consent of the Board of Directors of the Corporation dated January 21, 2004 and the Unanimous Written Consent of the Board of
Directors of the Corporation and the consent of the Series A Convertible Preferred Stock shareholders dated effective October 14, 2005, the Board of Directors duly adopted the following
resolutions: 

        WHEREAS,
the Certificate of Incorporation of the Corporation authorizes a class of stock designated as Preferred Stock, with a par value of $0.001 per share (the "Preferred Class"),
comprising Five Million (5,000,000) shares and provides that the Board of Directors of the Corporation may fix the terms, including any dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of any redemption, redemption, redemption price or prices, and liquidation preferences, if any, of the Preferred Class; 

        WHEREAS,
the Board of Directors believes it in the best interests of the Corporation to create a series of preferred stock consisting of 6,000 shares and designated as the
"Series A Convertible Preferred Stock" having certain rights, preferences, privileges, restrictions and other matters relating to the Series A Convertible Preferred Stock. 

        NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby fix and determine the rights, preferences, privileges, restrictions and other matters relating to the
Series A Convertible Preferred Stock as follows: 

        1.    Definitions.    For purposes of this Certificate of Designation, the following definitions shall apply: 

         1.1  "Board"
shall mean the Board of Directors of the Corporation. 

         1.2  "Change
in Control" shall mean a Change in Control as defined in the Securities Purchase Agreement. 

         1.3  "Corporation"
shall mean Speedemissions, Inc., a Florida Corporation. 

         1.4  "Common
Stock" shall mean the Common Stock, $0.001 par value per share, of the Corporation. 

         1.5  "Common
Stock Dividend" shall mean a stock dividend declared and paid on the Common Stock that is payable in shares of Common Stock. 

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         1.6  "Distribution"
shall mean the transfer of cash or property by the Corporation to one or more of its stockholders without consideration, whether by dividend or otherwise
(except a dividend in shares of Corporation's stock). 

         1.7  "Event
of Default" shall mean an Event of Default as defined in the Securities Purchase Agreement. 

         1.8  "Market
Price" shall mean the volume weighted average sales price as reported by Bloomberg, L.P. for the three (3) consecutive trading day immediately prior to
the determination date. 

         1.9  "Original
Issue Date" shall mean the date on which the first share of Series A Convertible Preferred Stock is issued by the Corporation. 

       1.10  "Original
Issue Price" shall mean $1,000.00 per share for the Series A Convertible Preferred Stock. 

       1.11  "Qualified
Future Financing" shall mean any transaction or series of transactions that the Corporation enters into whereby the Corporation raises capital through the
issuance of additional preferred stock or a convertible debt instrument (each a "Financing Transaction"), until such time as the proceeds from all Financing Transactions entered into from the time of
the filing of this Certificate of Designation, including proceeds from all issuances of the Series A Convertible Preferred Stock, equals or exceeds, in the aggregate, Seven Million Five Hundred
Thousand Dollars ($7,500,000). 

       1.12  "Securities
Purchase Agreement" shall mean that certain Subscription and Securities Purchase Agreement dated as of January 21, 2004 by and between the
Corporation and GCA Strategic Investment Fund. 

       1.13  "Series A
Convertible Preferred Stock" shall mean the Series A Convertible Preferred Stock, $0.001 par value per share, of the Corporation. 

       1.14  "Subsidiary"
shall mean any corporation or limited liability Corporation of which at least fifty percent (50%) of the outstanding voting stock or membership interests,
as the case may be, is at the time owned directly or indirectly by the Corporation or by one or more of such subsidiary corporations. 

        2.    Dividend Rights.    

        2.1   In-Kind
Dividends.    Each calendar quarter, beginning with the end of the first full quarter following the Original Issue Date and continuing
every quarter thereafter, the holders of the then outstanding Series A Convertible Preferred Stock shall be entitled to receive, not later than thirty (30) days following the end of the
applicable quarter, dividends in an amount equal to seven percent (7%) of the Original Issue Price per annum. Dividends on the Series A Convertible Preferred Stock shall be paid, at the
discretion of the Company, in either (i) additional shares of Series A Convertible Preferred Stock based on the Original Issue Price, or (ii) Common Stock based on the Market
Price. Dividends on the Series A Convertible Preferred Stock shall be cumulative, so that if dividends required to be paid on said shares for any quarterly period shall not have been paid, the
amount of the deficiency shall be paid in full, without interest, together with any dividends due for the current quarterly period, before any distribution of any kind shall be paid to the holders of
the Common Stock. No dividends (other than a Common Stock Dividend) shall be paid, and no Distribution shall be made, with respect to the Common Stock unless dividends in such amount shall have been
paid or declared and set apart for payment to the holders of the Series A Convertible Preferred Stock simultaneously. 

        2.2   Participation
Rights.    Other than as set forth in Section 2.1, dividends shall be declared pro rata on the Common Stock and the Series A
Convertible 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 A Convertible Preferred Stock is to be treated for this purpose as holding the same number of common shares as such holder owns of Series A Convertible Preferred Stock. 

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        2.3   Other
Non-Cash Dividends.    Other than as set forth herein, whenever a dividend or Distribution provided for in this Section 2 shall be
payable in property other than cash (other than a Common Stock Dividend), the value of such dividend or Distribution shall be deemed to be the fair market value of such property as determined in good
faith by the Board. 

        2.4   Dividends
provided for in this Section 2 will no longer accrue after October 14, 2005. 

        3.    Liquidation Rights.    In the event of any liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, the funds and assets of the Company that may be legally distributed to the Company's shareholders (the "Available Funds and Assets") shall be distributed to shareholders in
the following manner: 

         3.1  Series A
Convertible Preferred Stock.    The holders of each share of Series A Convertible Preferred Stock then outstanding shall be entitled to
be paid, out of the Available Funds and Assets, and prior and in preference to any payment or distribution (or any setting apart of any payment or distribution) of any Available Funds and Assets on
any shares of Common Stock or subsequent series of preferred stock, an amount per share equal to the Original Issue Price of the Series A Convertible Preferred Stock plus all accrued but unpaid
dividends on the Series A Convertible Preferred Stock. If upon any liquidation, dissolution or winding up of the Company, the Available Funds and Assets shall be insufficient to permit the
payment to holders of the Series A Convertible Preferred Stock of their full preferential amount as described in this subsection, then all of the remaining Available Funds and Assets shall be
distributed among the holders of the then outstanding Series A Convertible Preferred Stock pro rata, according to the number of outstanding shares of Series A Convertible Preferred Stock
held by each holder thereof. 

         3.2  Merger
or Sale of Assets.    A reorganization or any other consolidation or merger of the Company with or into any other corporation, or any other sale of all
or substantially all of the assets of the Company, shall not be deemed to be a liquidation, dissolution or winding up of the Company within the meaning of this Section 3, and the
Series A Convertible Preferred Stock shall be entitled only to (i) the right provided in any agreement or plan governing the reorganization or other consolidation, merger or sale of
assets transaction, (ii) the rights contained in the Florida Business Corporation Act and (iii) the rights contained in other Sections hereof. 

         3.3  Non-Cash
Consideration.    If any assets of the Company distributed to shareholders in connection with any liquidation, dissolution or winding up
of the Company are other than cash, then the value of such assets shall be their fair market value as determined by the Board, except that any securities to be distributed to shareholders in a
liquidation, dissolution or winding up of the Company shall be valued as follows: 

        (a)   The
method of valuation of securities not subject to investment letter or other similar restrictions on free marketability shall be as follows: 

	(i)
	if
the securities are then traded on a national securities exchange or the Nasdaq National Market (or a similar national quotation system), then the value shall be
deemed to be the average of the closing prices of the securities on such exchange or system over the ten (10) day period ending three (3) days prior to the distribution; and,

	(ii)
	if
actively traded over-the-counter, then the value shall be deemed to be the average of the closing bid prices over the ten (10) day
period ending three (3) days prior to the distribution; and

	(iii)
	if
there is no active public market, then the value shall be the fair market value thereof, as determined mutually in good faith by (i) the Board of Directors
of the Company and (ii) the holders of the Series A Convertible Preferred Stock acting as a group. In the event the Company and the holders cannot mutually agree upon a value, then the
value 

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shall
be determined by a mutually acceptable third party licensed business valuation expert paid for equally by both parties. 

        (b)   The
method of valuation of securities subject to investment letter or other restrictions on free marketability shall be to make an appropriate discount from the market
value determined as above in subparagraphs (a)(i), (ii) or (iii) of this subsection to reflect the approximate fair market value thereof. 

        4.    Conversion Rights.    

         4.1  Conversion
of Preferred Stock.    Each share of Series A Convertible Preferred Stock shall be convertible, at the option of the holder thereof, at any
time after the issuance of such share, into 833.33 fully paid and nonassessable shares of Common Stock of the Corporation. 

         4.2  Procedures
for Exercise of Conversion Rights.    The holders of any shares of Series A Convertible Preferred Stock may exercise their conversion rights
as to all such shares or any part thereof, subject to the limitation set forth in Section 4.3, by delivering to the Corporation during regular business hours, at the office of any transfer
agent of the Corporation for the Series A Convertible Preferred Stock, or at the principal office of the Corporation or at such other place as may be designated by the Corporation, the
certificate or certificates for the shares to be converted, duly endorsed for transfer to the Corporation (if required by the Corporation), accompanied by written notice stating that the holder elects
to convert such shares. Conversion shall be deemed to have been effected on the date when such delivery is made, and such date is referred to herein as the "Conversion Date." As promptly as
practicable after the Conversion Date, the Corporation shall issue and deliver to or upon the written order of such holder, at such office or other place designated by the Corporation, a certificate
or certificates for the number of full shares of Common Stock to which such holder is entitled and a check for cash with respect to any fractional interest in a share of Common Stock as provided in
section 4.3 below. The holder shall be deemed to have become a shareholder of record on the Conversion Date. Upon conversion of only a portion of the number of shares of Series A
Convertible Preferred Stock represented by a certificate surrendered for conversion, the Corporation shall issue and deliver to or upon the written order of the holder of the certificate so
surrendered for conversion, at the expense of the Corporation, a new certificate covering the number of shares of Series A Convertible Preferred Stock representing the unconverted portion of
the certificate so surrendered. 

         4.3  No
Fractional Shares.    No fractional shares of Common Stock or scrip shall be issued upon conversion of shares of Series A Convertible Preferred
Stock. If more than one share of Series A Convertible Preferred Stock shall be surrendered for conversion at any one time by the same holder, the number of full shares of Common Stock issuable
upon conversion thereof shall be computed on the basis of the aggregate number of shares of Series A Convertible Preferred Stock so surrendered. Instead of any fractional shares of Common
Stock, which would otherwise be issuable upon conversion of any shares of Series A Convertible Preferred Stock, the Corporation shall pay a cash adjustment in respect of such fractional
interest equal to the fair market value of such fractional interest as determined by the Corporation's Board of Directors. 

         4.4  Payment
of Taxes for Conversions.    The Corporation shall pay any and all issue and other taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion pursuant hereto of Series A Convertible Preferred Stock. The Corporation shall not, however, be required to pay any tax which may be payable in respect of
any transfer involved in the issue and delivery of shares of Common Stock in a name other than that in which the shares of Series A Convertible Preferred Stock so converted were registered, and
no such issue or delivery shall be made unless and until the person requesting such issue 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. 

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         4.5  Reservation
of Common Stock.    The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the
purpose of effecting the conversion of the Series A Convertible Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion of all shares of all series of
preferred stock from time to time outstanding. 

         4.6  Registration
or Listing of Shares of Common Stock.    If any shares of Common Stock to be reserved for the purpose of conversion of shares of Series A
Convertible Preferred Stock require registration or listing with, or approval of, any governmental authority, stock exchange or other regulatory body under any federal or state law or regulation or
otherwise, before such shares may be validly issued or delivered upon conversion, the Corporation will in good faith and as expeditiously as possible endeavor to secure such registration, listing or
approval, as the case may be. 

         4.7  Status
of Common Stock Issued Upon Conversion.    All shares of Common Stock which may be issued upon conversion of the shares of Series A Convertible
Preferred Stock will upon issuance by the Corporation be validly issued, fully paid and nonassessable and free from all taxes, liens and charges with respect to the issuance thereof. 

         4.8  Status
of Converted Preferred Stock.    In case any shares of Series A Convertible Preferred Stock shall be converted pursuant to this Section 4,
the shares so converted shall be canceled and shall not be issuable by the Corporation. 

        5.    Adjustment of Conversion Price.    

         5.1  General
Provisions.    In case, at any time after the date hereof, of any capital reorganization, or any reclassification of the stock of the corporation
(other than a change in par value or as a result of a stock dividend or subdivision, split-up or combination of shares), or the consolidation or merger of the corporation with or into
another person (other than a consolidation or merger in which the corporation is the continuing entity and which does not result in any change in the Common Stock), or of the sale or other disposition
of all or substantially all the properties and assets of the corporation as an entirety to any other person, the shares of Series A Convertible Preferred Stock shall, after such reorganization,
reclassification, consolidation, merger, sale or other disposition, be convertible into the kind and number of shares of stock or other securities or property of the corporation or of the entity
resulting from such consolidation or surviving such merger or to which such properties and assets shall have been sold or otherwise disposed to which such holder would have been entitled if
immediately prior to such reorganization, reclassification, consolidation, merger, sale or other disposition it had converted its shares of Series A Convertible Preferred Stock into Common
Stock. The provisions of this section 5(a) shall similarly apply to successive reorganizations, reclassifications, consolidations, mergers, sales or other dispositions. 

         5.2  No
Impairment.    The corporation will not, through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or
any other voluntary action, including amending this Certificate of Designation, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the
corporation, but will at all times in good faith assist in the carrying out of all the provisions of this section 5 and in the taking of all such action as may be necessary or appropriate in
order to protect the conversion rights of the holders of Series A Convertible Preferred Stock against impairment. This provision shall not restrict the corporation from amending its Articles of
Incorporation in accordance with the Florida Business Corporation Act and the terms hereof. 

        6.    Redemption.    

         6.1  Voluntary
Redemption.    For so long as no Event of Default shall have occurred and is continuing, the Corporation may, at its option, redeem, in whole or in
part, the Series A Convertible 

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Preferred
Stock following at least ten (10) business days prior written notice to the holders of the Series A Convertible Preferred Stock (the "Redemption Date"). 

         6.2  Mandatory
Redemption.    Upon the occurrence of 

	(i)
	a
Change in Control;

	(ii)
	a
transfer of all or substantially all of the assets of the Corporation in a single transaction or series of related transactions;

	(iii)
	a
consolidation, merger or amalgamation of the Corporation with or into another entity in which the Corporation is not the surviving entity (other than a merger which
is effected solely to change the jurisdiction of incorporation of the Corporation and results in a reclassification, conversion or exchange of outstanding shares of Common Stock solely into shares of
Common Stock);

	(iv)
	the
failure of the Corporation to maintain for a period of sixty (60) consecutive days, out of its authorized but unissued Common Stock, sufficient shares of
Common Stock to effect the conversion of all of the Series A Convertible Preferred Stock; and

	(v)
	Intentionally
deleted by amendment. 

        then,
in each case, the Corporation shall, within thirty (30) days of receipt of the request of at least fifty-one percent (51%) of the holders of the Series A
Convertible Preferred Stock, redeem the Series A Convertible Preferred Stock. 

         6.3  Intentionally
deleted by amendment. 

         6.4  Redemption
Price.    For purposes of this Section 6, the redemption price of the Series A Convertible Preferred Stock shall be equal to the
greater of (i) the Original Issue Price, plus all cumulative accrued and unpaid dividends, or (ii) the number of shares of Common Stock into which the redeemed shares may be converted
times the Market Price. 

         6.5  Redemption
Procedures. 

        (a)   Any
permitted redemption of the Series A Convertible Preferred Stock pursuant to Sections 6.1, 6.2, or 6.3 above shall be deemed to be effective and consummated
(for purposes of determining the Redemption Price and the time at which the holders shall thereafter not be entitled to deliver a Notice of Conversion for the Preferred Shares) as follows: 

	(i)
	A
redemption pursuant to Section 6.1, the Redemption Date specified therein;

	(ii)
	A
redemption pursuant to Section 6.2(i), (ii), (iii), or (iv), the date of consummation of the applicable event;

	(iii)
	Intentionally
deleted by amendment. 

        (b)   On
the effective date of a redemption of the Series A Convertible Preferred Stock as specified above, the Corporation shall deliver by wire transfer of funds the
redemption price to the holders of the Series A Convertible Preferred Stock subject to redemption. Should a holder not receive payment of any amounts due on redemption of its Series A
Convertible Preferred Stock by reason of the Corporation's failure to make payment at the times prescribed above for any reason, the Corporation shall pay to the applicable holder on demand
(x) interest on the sums not paid when due at an annual rate equal to the maximum lawful rate compounded at the end of each thirty (30) days, until the applicable holder is paid in full
and (y) all costs of collection, including, but not limited to, reasonable attorneys' fees and costs, whether or not suit or other formal proceedings are instituted. 

        (c)   The
Corporation shall select the Series A Convertible Preferred Stock to be redeemed in any redemption in which not all of the Series A Convertible
Preferred Stock are to be redeemed so that 

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the
ratio of the Series A Convertible Preferred Stock of each holder selected for redemption to the total Series A Convertible Preferred Stock owned by that holder shall be the same as
the ratio of all such Series A Convertible Preferred Stock selected for redemption bears to the total of all then outstanding Series A Convertible Preferred Stock. Should any
Series A Convertible Preferred Stock required to be redeemed under the terms hereof not be redeemed solely by reason of limitations imposed by law, the applicable Series A Convertible
Preferred Stock shall be redeemed on the earliest possible dates thereafter to the maximum extent permitted by law. 

        (d)   Any
Notice of Conversion delivered by a holder (including delivery via facsimile) to the Corporation prior to the effective date of a voluntary redemption pursuant to
Section 6.1 or a mandatory redemption pursuant to Section 6.2 shall be honored by the Corporation and the conversion of the Series A Convertible Preferred Stock shall be deemed
effected on the Conversion Date. In addition, between the effective date of a voluntary redemption pursuant to Section 6.1 or a mandatory redemption pursuant to Section 6.2 above and the
date the Corporation is required to deliver the redemption proceeds in full to the applicable holder(s), the holder may deliver a Notice of Conversion to the Corporation. Such notice will be
(x) of no force or effect if the Corporation timely pays the redemption proceeds to holder when due or (y) honored on or as of the date of the Notice of Conversion if the Corporation
fails to timely pay the redemption proceeds to holder when due. Additionally, in the event the Corporation fails to make full payment of the redemption price of the Series A Convertible
Preferred Stock being redeemed by the tenth (10) business day following the notice of redemption, then the Corporation waives its right to redeem any of the remaining then outstanding
Series A Convertible Preferred Stock, unless such redemption is approved by the holder. 

        7.    Notices.    Any notices required by the provisions of this Certificate of Designation to be given to the holders
of shares of Series A Convertible Redeemable Preferred Stock shall be deemed given if given in accordance with the Securities Purchase Agreement. 

        8.    Voting Provisions.    Each share of Series A Convertible Preferred Stock shall be entitled to the number
of votes to which the holders thereof would be entitled if they converted their shares of Series A Convertible Preferred Stock at the time of voting in accordance with Section 4 hereof. 

        9.     Intentionally
deleted by amendment. 

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CERTIFICATE OF DESIGNATION OF THE RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS, WHICH HAVE NOT BEEN SET FORTH IN THE CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE SERIES A CONVERTIBLE
PREFERRED STOCK OF SPEEDEMISSIONS, INC.QuickLinks
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Exhibit 4.2  

 
 

CERTIFICATE OF DESIGNATION
  OF THE RIGHTS, PREFERENCES, PRIVILEGES
  AND RESTRICTIONS, WHICH HAVE NOT BEEN SET
  FORTH IN THE CERTIFICATE OF INCORPORATION
  OR IN ANY AMENDMENT THERETO, OF THE
  SERIES B
CONVERTIBLE PREFERRED STOCK
  OF SPEEDEMISSIONS, INC.    
    

        (Pursuant to Section 607.0602 of the Florida Business Corporation Act) The undersigned, Richard A. Parlontieri, does hereby certify that: 

        1.     He
is the President and Secretary of Speedemissions, Inc., a Florida corporation (the "Corporation"). 

        Series B2.    Pursuant to the Unanimous Written Consent of the Board of Directors of the Corporation dated June 30, 2005
and the Unanimous Written Consent of the Board of Directors of the Corporation and the consent of the Series B Convertible Preferred Stock shareholders dated August 4, 2005, the Board of
Directors duly adopted the following resolutions: 

        WHEREAS,
the Certificate of Incorporation of the Corporation authorizes a class of stock designated as Preferred Stock, with a par value of $0.001 per share (the "Preferred Class"),
comprising Five Million (5,000,000) shares and provides that the Board of Directors of the Corporation may fix the terms, including any dividend rights, dividend rates, conversion rights, voting
rights, rights and terms of any redemption, redemption, redemption price or prices, and liquidation preferences, if any, of the Preferred Class; 

        WHEREAS,
the Board of Directors has previously designated a class of stock as the Series A Convertible Preferred Stock, consisting of 3,500 shares, and there are no other classes
or series of Preferred Stock designated; 

        WHEREAS,
the Board of Directors believes it in the best interests of the Corporation to create a series of preferred stock consisting of Three Million (3,000,000) shares and designated
as the "Series B Preferred Stock" having certain rights, preferences, privileges, restrictions and other matters relating to the Series B Preferred Stock. 

        NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby fix and determine the rights, preferences, privileges, restrictions and other matters relating to the
Series B Preferred Stock as follows: 

TERMS OF PREFERRED STOCK  

        Section 1.    Definitions.    Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement (as defined below) shall have the meanings given such terms in the Purchase Agreement. For the purposes hereof, the following terms shall have the following meanings: 

        "Bankruptcy Event" means any of the following events: (a) the Corporation or any Significant Subsidiary (as such term is defined in
Rule 1.02(s) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Corporation or any Significant Subsidiary thereof; (b) there is commenced against the Corporation or
any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement; (c) the Corporation or any Significant Subsidiary thereof is
adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or 

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proceeding
is entered; (d) the Corporation or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not
discharged or stayed within 60 days; (e) the Corporation or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors; (f) the Corporation or any
Significant Subsidiary thereof calls a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or (g) the Corporation or any Significant
Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing. 

        "Closing Date" means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties
thereto, and all conditions precedent to (i) the Investor's obligations to pay the Subscription Amount and (ii) the Corporation's obligations to deliver the Series B Preferred
Stock and Warrants have been satisfied or waived, including the satisfaction of all provisions of the Escrow Agreement entered into pursuant to the terms of the Purchase Agreement. 

        "Commission"
means the Securities and Exchange Commission. 

        "Common
Stock" means the Corporation's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed. 

        "Common
Stock Equivalents" means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, 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 Stock. 

        "Conversion Date" shall have the meaning set forth in Section 6(a). 

        "Conversion Ratio" shall have the meaning set forth in Section 6(a). 

        "Conversion Value" shall have the meaning set forth in Section 6(a). 

        "Conversion Shares" means, collectively, the shares of Common Stock into which the shares of Series B Preferred Stock are
convertible in accordance with the terms hereof. 

        "Conversion Shares Registration Statement" means a registration statement that meets the requirements of the Registration Rights Agreement
and registers the resale of all Conversion Shares by the Holder, who shall be named as a "selling stockholder" thereunder, all as provided in the Registration Rights Agreement. 

        "Dilutive Issuance" shall have the meaning set forth in Section 7(b) hereof. 

        "Effective Date" means the date that the Conversion Shares Registration Statement is declared effective by the Commission. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Exempt Issuance" means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the
Corporation pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Corporation or a majority of the members of a
committee of non-employee directors established for such purpose, (b) securities upon the exercise of or conversion of any securities issued hereunder, and of any convertible
securities, options or warrants issued and outstanding on the date of this Certificate of Designations, provided that such securities have not been amended since the date of this Certificate of
Designations to increase the number of such securities, and (c) securities issued 

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pursuant
to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic
with the business of the Corporation and in which the Corporation receives benefits in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing
securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. 

        "Fundamental Transaction" shall have the meaning set forth in Section 7(f)(iii) hereof. 

        "Holder" shall have the meaning given such term in Section 2 hereof. 

        "Junior Securities" means the Common Stock and all other equity or equity equivalent securities of the Corporation other than those
securities that are explicitly senior in rights or liquidation preference to the Series B Preferred Stock (such as the Series A Convertible Preferred Stock). 

        "Original Issue Date" shall mean the date of the first issuance of any shares of the Series B Preferred Stock regardless of the
number of transfers of any particular shares of Series B Preferred Stock and regardless of the number of certificates which may be issued to evidence such Series B Preferred Stock. 

        "Person" means a corporation, an association, a partnership, a limited liability company, a business association, an individual, a
government or political subdivision thereof or a governmental agency. 

        "Purchase Agreement" means the Preferred Stock Purchase Agreement, dated as of June 30, 2005, to which the Corporation and the
original Holders are parties, as amended, modified or supplemented from time to time in accordance with its terms, a copy of which is on file at the principal offices of the Corporation. 

        "Registration Rights Agreement" means the Registration Rights Agreement, dated as of the Closing Date, to which the Corporation and the
original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms. 

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

        "Series B Preferred Stock" shall have the meaning set forth in Section 2. 

        "Subscription Amount" shall mean the Six Million Four Hundred and Twenty Thousand Dollars ($6,420,000) to be paid for the Preferred Stock
purchased pursuant to the Purchase Agreement, in United States Dollars and in immediately available funds. 

        "Subsidiary" shall mean a corporation, limited liability company, partnership, joint venture or other business entity of which the
Corporation owns beneficially or of record more than 19% of the equity interest. 

        "Trading Day" means a day on which the Common Stock is traded on a Trading Market. 

        "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 SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board. 

        "Transaction Documents" shall have the meaning set forth in the Purchase Agreement. 

        "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 

3

 

weighted
average price of the Common Stock for such date (or the nearest preceding date) on the primary 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. EST to 4:02 p.m. Eastern Time) using the VAP function; (b) if the Common Stock is not then listed or quoted on the Trading
Market and if prices for the Common Stock are then reported in the "Pink Sheets" published by the National Quotation Bureau Incorporated (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 (c) in all other cases, the fair market value of a share of Common Stock as determined by
a nationally recognized-independent appraiser selected in good faith by Purchasers holding a majority of the principal amount of Series B Preferred Stock then outstanding. 

        Section 2.    Designation, Amount and Par Value.    The series of preferred stock shall be designated as the
Corporation's Series B Convertible Preferred Stock (the "Series B Preferred Stock" or "Preferred Stock") and the number of shares so
designated shall be (which shall not be subject to increase without the consent of all of the holders of the Series B Preferred Stock (each a
"Holder" and collectively, the "Holders")). Each share of Series B Preferred Stock shall have a
par value of $0.001 per share. Capitalized terms not otherwise defined herein shall have the meaning given such terms in Section 1 hereof. 

        Section 3.    Dividends and Other Distributions.    No dividends shall be payable with respect to the
Series B Preferred Stock. No dividends shall be payable with respect to the Common Stock while the Series B Preferred Stock is outstanding. 

        Section 4.    Voting Rights.    The Series B Preferred Stock shall have no voting rights. However, so
long as any shares of Series B Preferred Stock are outstanding, the Corporation shall not, without the affirmative approval of the Holders of the shares of the Series B Preferred Stock
then outstanding, (a) alter or change adversely the powers, preferences or rights given to the Series B Preferred Stock or alter or amend this Certificate of Designation,
(b) authorize or create any class of stock ranking as to dividends or distribution of assets upon a Liquidation (as defined in Section 5) senior to or otherwise  pari passu with the
Series B Preferred Stock, or any of preferred stock possessing greater voting rights or the right to convert at a more
favorable price than the Series B Preferred Stock, (c) amend its certificate or articles of incorporation or other charter documents in breach of any of the provisions hereof,
(d) increase the authorized number of shares of Series B Preferred Stock, or (e) enter into any agreement with respect to the foregoing. 

        Section 5.    Liquidation.    Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary (a "Liquidation"), the Holders shall be entitled to receive out of the assets of the Corporation, whether such assets
are capital or surplus, for each share of Series B Preferred Stock an amount equal to $2.568 (the "Liquidation Value") before any distribution or
payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the
Holders shall be distributed among the Holders ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. At the election
of a Holder made by written notice delivered to the Corporation prior to the effective date of the subject transaction, as to the shares of Series B Preferred Stock held by such Holder, a
Fundamental Transaction or Change of Control Transaction shall not be treated as a Liquidation. 

        Section 6.    Conversion.    

        a)    Conversions at Option of Holder.    Each share of Series B Preferred Stock shall be initially convertible
(subject to the limitations set forth in Section 6(c)), into Seventy Five and Six Tenths (75.6) shares of Common Stock (as adjusted as provided below, the "Conversion
Ratio") at the option of the Holders, at any time and from time to time from and after the Original Issue Date. Holders shall effect conversions by providing the Corporation
with the form of conversion notice 

4

 

attached
hereto as Annex A (a "Notice of Conversion") as fully and originally executed by the Holder,
together with the delivery by the Holder to the Corporation of the stock certificate(s) representing the number of shares of Series B Preferred Stock so converted, with such stock certificates
being duly endorsed in full for transfer to the Corporation or with an applicable stock power duly executed by the Holder in the manner and form as deemed reasonable by the transfer agent of the
Common Stock. Each Notice of Conversion shall specify the number of shares of Series B Preferred Stock to be converted, the number of shares of Series B Preferred Stock owned prior to
the conversion at issue, the number of shares of Series B Preferred Stock owned subsequent to the conversion at issue, the stock certificate number and the shares of Series B Preferred
Stock represented thereby which are accompanying the Notice of Conversion, and the date on which such conversion is to be effected, which date may not be prior to the date the Holder delivers such
Notice of Conversion and the applicable stock certificates to the Corporation by overnight delivery service (the "Conversion Date"). If no Conversion
Date is specified in a Notice of Conversion, the Conversion Date shall be the Trading Day immediately following the date that such Notice of Conversion and applicable stock certificates are received
by the Corporation. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. Shares of Series B Preferred Stock
converted into Common Stock in accordance with the terms hereof shall be canceled and may not be reissued. The initial value of the Series B Preferred Stock on the Conversion Date shall be
equal to $2.646 per share (as adjusted pursuant to Section 7 or otherwise as provided herein, the "Conversion Value"). If the initial Conversion
Value is adjusted pursuant to Section 7 or as otherwise provided herein, the Conversion Ratio shall likewise be adjusted and the new Conversion Ratio shall equal the Liquidation Value divided
by the new Conversion Value. Thereafter, subject to any further adjustments in the Conversion Value, each share of Series B Preferred Stock shall be convertible into that number of shares of
Common Stock equal to the new Conversion Ratio. 

        b)    Beneficial Ownership Limitation.    Except as provided in Section 6(a) above, the Corporation shall not
effect any conversion of the Series B Preferred Stock, and the Holder shall not have the right to convert any portion of the Series B Preferred Stock to the extent that after giving
effect to such conversion, the Holder (together with the Holder's affiliates), as set forth on the applicable Notice of Conversion, would beneficially own in excess of 4.9% of the number of shares of
the Common Stock outstanding immediately after giving effect to such conversion. For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon conversion of the Series B Preferred Stock with respect to which the determination of such sentence is being made,
but shall exclude the number of shares of Common Stock which would be issuable upon (A) conversion of the remaining, nonconverted shares of Series B Preferred Stock beneficially owned by
the Holder or any of its affiliates, so long as such shares of Series B Preferred Stock are not convertible within sixty (60) days from the date of such determination, and
(B) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Corporation (including the Warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained herein beneficially owned by the Holder or any of its affiliates, so long as such other securities of the Corporation are not exercisable nor convertible within
sixty (60) days from the date of such determination. For purposes of this Section 6(c), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange
Act. For purposes of this Section 6(c), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as reflected in
the most recent of the following: (A) the Corporation's most recent quarterly reports, Form 10-Q, Form 10-QSB, Annual Reports,
Form 10-K, or Form 10-KSB, as the case may be, as filed with the Commission under the Exchange Act (B) a more recent public announcement by the Corporation
or (C) any other written notice by the Corporation or the Corporation's transfer agent setting 

5

 

forth
the number of shares of Common Stock outstanding. Upon the written or oral request of the Holder, the Corporation shall within two (2) Trading Days confirm orally and in writing to the
Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of
securities of the Corporation, including the Series B Preferred Stock, by the Holder or its affiliates since the date as of which such number of outstanding shares of Common Stock was publicly
reported by the Corporation. 

        c)    Mechanics of Conversion    

          (i)  Delivery of Certificate Upon Conversion.    Except as otherwise set forth herein, not later than five
(5) Trading Days after each Conversion Date (the "Share Delivery Date"), the Corporation shall deliver to the Holder (A) a certificate or
certificates which, after the Effective Date, shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the number of shares of
Common Stock being acquired upon the conversion of shares of Series B Preferred Stock, and (B) a bank check in the amount of accrued and unpaid dividends (if the Corporation has elected
or is required to pay accrued dividends in cash). After the Effective Date, the Corporation shall, upon request of the Holder, deliver any certificate or certificates required to be delivered by the
Corporation under this Section electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. If in the case of
any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after the Conversion Date, the Holder shall be entitled
to elect by written notice to the Corporation at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Corporation shall
immediately return the certificates representing the shares of Series B Preferred Stock tendered for conversion. 

            i.  Obligation Absolute; Partial Liquidated Damages.    The Corporation's obligations to issue and deliver the
Conversion Shares upon conversion of Series B Preferred Stock in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Corporation or any violation or alleged violation of law by the Holder or any
other person, and irrespective of any other circumstance which might otherwise limit such obligation of the Corporation to the Holder in connection with the issuance of such Conversion Shares. In the
event a Holder shall elect to convert any or all of its Series B Preferred Stock, the Corporation may not refuse conversion based on any claim that such Holder or any one associated or
affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless, an injunction from a court, on notice, restraining and or enjoining conversion of all or
part of this Series B Preferred Stock shall have been sought and obtained and the Corporation posts a surety bond for the benefit of the Holder in the amount of 150% of the Conversion Value of
Series B Preferred Stock outstanding, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the dispute and the proceeds of
which shall be payable to such Holder to the extent it obtains judgment. In the absence of an injunction precluding the same, the Corporation shall issue Conversion Shares or, if applicable, cash,
upon a properly noticed conversion. If the Corporation fails to deliver to the Holder such certificate or certificates pursuant to Section 6(d)(i) within four (4) Trading Days of
the Share Delivery Date applicable to such conversion, the 

6

 

Corporation
shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $5,000 of Conversion Value of Series B Preferred Stock being converted, $50 per Trading Day
(increasing to $100 per Trading Day after five (5) Trading Days and increasing to $200 per Trading Day eight (8) Trading Days after such damages begin to accrue) for each Trading Day
after the Share Delivery Date until such certificates are delivered. Nothing herein shall limit a Holder's right to pursue actual damages for the Corporation's failure to deliver certificates
representing shares of Common Stock upon conversion within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief. 

           ii.  Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion.    If the
Corporation fails to deliver to the Holder such certificate or certificates pursuant to Section 6(d)(i) by a Share Delivery Date, and if after such Share Delivery Date the Holder
purchases (in an open market transaction or otherwise) Common Stock to deliver in satisfaction of a sale by such Holder of the Conversion Shares which the Holder was entitled to receive upon the
conversion relating to such Share Delivery Date (a "Buy-In"), then the Corporation shall pay in cash to the Holder the amount by which
(x) the Holder's total purchase price (including brokerage commissions, if any) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares
of Common Stock that such Holder was entitled to receive from the conversion at issue multiplied by (2) the price at which the sell order giving rise to such purchase obligation was executed.
For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of shares of Series B Preferred
Stock with respect to which the aggregate sale price giving rise to such purchase obligation is $10,000, under clause (A) of the immediately preceding sentence the Corporation shall be required
to pay the Holder $1,000. The Holder shall provide the Corporation written notice indicating the amounts payable to the Holder in respect of the Buy-In, together with applicable
confirmations and other evidence reasonably requested by the Corporation. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation's failure to timely deliver certificates representing shares of Common Stock
upon conversion of the shares of Series B Preferred Stock as required pursuant to the terms hereof. 

          iii.  Reservation of Shares Issuable Upon Conversion.    The Corporation covenants that, after it files an
amendment to its articles of incorporation increasing its authorized common stock, it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for
the purpose of issuance upon conversion of the Series B Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other
than the Holders, not less than such number of shares of the Common Stock as shall (subject to any additional requirements of the Corporation as to reservation of such shares set forth in the Purchase
Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of all outstanding shares of Series B Preferred Stock. The Corporation
covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable and, if the Conversion Shares Registration
Statement is then effective under the Securities Act, registered for public sale in accordance with such Conversion Shares Registration Statement. 

7

 

          iv.  Fractional Shares.    Upon a conversion hereunder, the Corporation shall not be required to issue stock
certificates representing fractions of shares of the Common Stock. 

           v.  Transfer Taxes.    The issuance of certificates for shares of the Common Stock on conversion of the
Series B Preferred Stock shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such
certificate, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon
conversion in a name other than that of the Holder of such shares of Series B Preferred Stock so converted and the Corporation shall not be required to issue or deliver such certificates unless
or until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax
has been paid. 

        Section 7.    Certain Adjustments.    

        a)    Stock Dividends and Stock Splits.    If the Corporation, at any time while the Series B Preferred Stock
is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation pursuant to this Series A Series B Preferred Stock),
(B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Corporation, then the Conversion Value shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common
Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such
dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification. 

        b)    Subsequent Equity Sales.    Neither the Corporation nor any Subsidiary, as applicable, at any time while
Series B 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 Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective
price per share less than the then Conversion Value ("Dilutive Issuance"), as adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by
operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection
with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Conversion Value, such issuance shall be deemed to have occurred for less than
the Conversion Value). 

        c)    Subsequent Rights Offerings.    The Corporation, at any time while the Series B Preferred Stock is
outstanding, shall not issue rights, options or warrants to holders of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Conversion
Value. 

        d)    Pro Rata Distributions.    If the Corporation, at any time while Series B Preferred Stock is outstanding,
shall distribute to all holders of Common Stock (and not to Holders) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then in each 

8

 

such
case the Conversion Value shall be determined by multiplying such Conversion Value 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 Stock as determined by the Board of
Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holders 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. 

        e)    Calculations.    All calculations under this Section 7 shall be made to the nearest cent or the nearest
1/100th of a share, as the case may be. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Corporation, and the
description of any such shares of Common Stock shall be considered on issue or sale of Common Stock. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and
outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) actually issued and outstanding. 

        f)    Notice to Holders.    

            i.  Adjustment to Conversion Price.    Whenever the Conversion Value is adjusted pursuant to any of this
Section 7, the Corporation shall promptly mail to each Holder a notice setting forth the Conversion Value after such adjustment and setting forth a brief statement of the facts requiring such
adjustment. If the Corporation issues a variable rate security, despite the prohibition thereon in the Purchase Agreement, the Corporation shall be deemed to have issued Common Stock or Common Stock
Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised in the case of a Variable Rate Transaction (as defined in the Purchase
Agreement), or the lowest possible adjustment price in the case of an MFN Transaction (as defined in the Purchase Agreement). 

           ii.  Notice of Other Events.    If (A) the Corporation shall declare a dividend (or any other distribution)
on the Common Stock; (B) the Corporation shall declare redemption of the Common Stock; (C) the Corporation shall authorize the granting to all holders of the Common Stock rights or
warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Corporation shall be required in connection with any
reclassification of the Common Stock, or any Fundamental Transaction, (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of
the Corporation; then in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of the Series B Preferred Stock, and shall cause to
be mailed to the Holders at their last addresses as they shall appear upon the stock books of the Corporation, at least 30 calendar days prior to the applicable record or effective date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the
date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common
Stock for securities, cash or other property deliverable upon such reclassification or Fundamental Transaction; provided, that the failure to mail such
notice or 

9

 

any
defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. 

          iii.  Exempt Issuance.    Notwithstanding the foregoing, no adjustment will be made under this Section 7 in
respect of an Exempt Issuance. 

          iv.  Fundamental Transaction.    If, at any time while this Series B Preferred Stock is outstanding,
(A) the Corporation effects any merger or consolidation of the Corporation with or into another Person, (B) the Corporation effects any sale of all or substantially all of its assets in
one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are
permitted to tender or exchange their shares for other securities, cash or property, or (D) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange
pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental
Transaction"), then upon any subsequent conversion of this Series B Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of
such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the "Alternate
Consideration"). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based
on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate
Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this
Series B Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such
Fundamental Transaction shall file a new Certificate of Designations with the same terms and conditions and issue to the Holder new preferred stock consistent with the foregoing provisions and
evidencing the Holder's right to convert such preferred stock into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions of this paragraph (f) (iv) and insuring that this Series B Preferred Stock (or any such replacement
security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. 

        Section 8.    Miscellaneous.    

        a)    Notices.    Any and all notices or other communications or deliveries to be provided by the Holders 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
Corporation, at the address provided in the Purchase Agreement, or such other address or facsimile number as the Corporation may specify for such purposes by notice to the Holders 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 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. Any notice or other communication or deliveries hereunder shall 

10

 

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 5:00 p.m. local 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 5:00 p.m. local time on any date and earlier than 11:59 p.m. local 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)    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 B Preferred Stock at the time,
place, and rate, and in the coin or currency, herein prescribed. 

        c)    Lost or Mutilated Preferred Stock Certificate.    If a Holder's Series B Preferred Stock 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 B Preferred Stock 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 thereof, and indemnity, if requested, all reasonably satisfactory to the Corporation. 

        d)    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. 

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

        RESOLVED, FURTHER, that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of
the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing
resolution and the provisions of the Business Corporation Act of the State of Florida. 

11

 
ANNEX A  

NOTICE
OF CONVERSION 

(To
be Executed by the Registered Holder in order to Convert Shares of SERIES B Preferred Stock) 

The
undersigned hereby elects to convert the number of shares of Series B Convertible Preferred Stock indicated below, into shares of common stock, par value $0.001 per share (the
"Common Stock"), of Speedemissions, Inc., a Florida corporation (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 Common Stock owned prior to Conversion: ________________________ 

Number
of shares of Series B Preferred Stock to be Converted: ______________________ 

Value
of shares of Series B Preferred Stock to be Converted: _______________________ 

Number
of shares of Common Stock to be Issued: ________________________ 

Certificate
Number of Series B Preferred Stock attached hereto: ____________________ 

Number
of Shares of Series B Preferred Stock represented by attached certificate: ________________________ 

Number
of shares of Series B Preferred Stock subsequent to Conversion: _____________ 

	 	 	Barron Partners LP
	

 	
 	

By:	
 	

/s/  ANDREW BARRON WORDEN      
 Name: Andrew Barron Worden

Title: General Partner

12

QuickLinks

CERTIFICATE OF DESIGNATION OF THE RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS, WHICH HAVE NOT BEEN SET FORTH IN THE CERTIFICATE OF INCORPORATION OR IN ANY AMENDMENT THERETO, OF THE SERIES B CONVERTIBLE
PREFERRED STOCK OF SPEEDEMISSIONS, INC.

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