Document:

[EXHIBIT 4.2]

               INTERNATIONAL IMAGING SYSTEMS, INC.

                   CERTIFICATE OF DESIGNATIONS

INTERNATIONAL IMAGING SYSTEMS, INC., a Delaware corporation  (the
"Corporation"), does hereby certify that:

FIRST:  That  pursuant  the  Certificate  of  Amendment  of   the
Certificate of Incorporation duly filed on October 4,  2003  (the
"Certificate"),  Article  FOURTH of the  Certificate  states  the
Corporation  is  authorized to issue up to  1,000,000  shares  of
preferred  stock in one or more series as may be determined  from
time to time by the Board of Directors, each of such series to be
distinctly designated.

SECOND: That pursuant to the authority so vested in the Board  of
Directors by the Certificate, the Board of Directors by Unanimous
Consent  of Directors effective as of September 20, 2006 approved
and adopted the following resolutions:

RESOLVED,   that  the  number  of  shares  of  preferred   stock,
designated  as  Series  A Stock, shall be  1,000,000  ("Series  A
Stock"), all of which the Corporation may issue;

RESOLVED, that the rights and preferences of the Series  A  Stock
set  forth  in Exhibit A attached hereto are hereby approved  and
such Exhibit A shall be filed with the Secretary of State of  the
State of Delaware.

THIRD:  That the said resolutions of the Board of Directors,  and
authorization thereby of issuance of shares of the Series A Stock
and  the  determination  of the rights and  preferences  of  such
preferred stock were duly made by the Board of Directors pursuant
to  authority as aforesaid and in accordance with Section 151  of
the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has made, under its corporate
seal  and  the  hands of its authorized officers,  the  foregoing
certificate,  and the said President and Secretary have  hereunto
set  their  hands  and  caused the corporate  seal  of  the  said
corporation  to be hereunto affixed this 22nd day  of  September,
2006.

                         INTERNATIONAL IMAGING SYSTEMS, INC

                         a Delaware Corporation

                         By: /s/John Vogel
                            --------------------------------
                            John Vogel
                            President and Chief Executive Officer

                         ATTEST:

                         By:/s/Robert Scherne
                            -------------------------------
                            Robert Scherne, Secretary

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                            Exhibit A
                           -----------

The  following  is  a  statement of the  voting  powers  and  the
designations,  preferences, and other  special  rights,  and  the
qualifications, limitations, or restrictions, in respect  of  the
Corporation's  Series A Convertible Preferred Stock,  $0.001  par
value per share ("Series A Stock").

                 A. Terms of the Series A Stock.

1.   Designation  and  Number.  A  series  of  preferred   stock,
designated  the  "Series  A Stock", is  hereby  established.  The
number of authorized shares of Series A Stock shall be 1,000,000.

2.  Maturity. The Series A Stock has no stated maturity and  will
not be subject to any sinking fund or mandatory redemption.

3. Rank. The Series A Stock will, with respect to dividend rights
and  rights upon liquidation, dissolution or winding  up  of  the
Corporation, rank (a) prior or senior to the Common Stock  issued
by  the Corporation; (b) prior or senior to all classes or series
of  preferred stock issued by the Corporation, the terms of which
specifically provide that such shares rank junior to the Series A
Stock with respect to dividend rights or rights upon liquidation,
dissolution  or winding up of the Corporation, (c)  on  a  parity
with all classes or series of shares of preferred stock issued by
the  Corporation,  the terms of which specifically  provide  that
such shares rank on a parity with the Series A Stock with respect
to  dividend  rights or rights upon liquidation,  dissolution  or
winding  up  of  the Corporation (the "Parity  Shares")  and  (d)
junior   to   all  existing  and  future  indebtedness   of   the
Corporation.

4. Dividends.

(a)  Holders of Series A Stock shall be entitled to receive, when
and  as  authorized by the Board of Directors of the Corporation,
or  a  duly  authorized committee thereof, and  declared  by  the
Corporation out of funds of the Corporation legally available for
payment,  preferential cumulative cash dividends at the  rate  of
10%  per  annum of the Liquidation Preference (as defined  below)
per  share  (equivalent to a fixed annual  amount  of  $1.00  per
share).  Such  dividends shall be cumulative  from  the  date  of
original issue and shall be payable in arrears on the last day of
each  month  (or, if not a Business Day (as defined  below),  the
next succeeding Business Day, each a "Dividend Payment Date") for
the  period  ending on such Dividend Payment Date, commencing  on
the date of issue. "Business Day" shall mean any day other than a
Saturday,  Sunday or other day on which commercial banks  in  the
City  of New York are authorized or required to close. The  first
possible dividend will be paid on November 30, 2006 with  respect
to  the  period  beginning on the date of  issue  and  ending  on
November 30, 2006. Any dividend payable on the Series A Stock for
any  partial  dividend period will be computed on  the  basis  of
twelve  30-day  months  and a 360-day  year.  Dividends  will  be
payable  in  arrears to holders of record as they appear  on  the
share records of the Corporation at the close of business on  the
applicable  record  date, which shall be the  first  day  of  the
calendar month in which the Dividend Payment Date occurs or  such
other   date  designated  by  the  Board  of  Directors  of   the
Corporation for the payment of dividends that is not more than 30
nor  less than 10 days prior to such Dividend Payment Date (each,
a "Dividend Record Date").

(b)  No  dividends on Series A Stock shall be authorized  by  the
Board of Directors of the Corporation or declared or paid or  set
apart  for  payment by the Corporation at such time as the  terms
and provisions of any agreement of the Corporation, including any
agreement   relating   to   its  indebtedness,   prohibits   such
declaration,  payment or setting apart for  payment  or  provides
that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or  if  such
declaration or payment shall be restricted or prohibited by law.

(c)  Notwithstanding the foregoing, dividends  on  the  Series  A
Stock  will  accrue whether or not the Corporation has  earnings,
whether  or not there are funds legally available for the payment
of such dividends, whether or not such dividends are declared and
whether  or  not  such  dividends are  prohibited  by  agreement.
Accrued  but  unpaid  dividends  on  the  Series  A  Stock   will
accumulate  and  earn  additional dividends  at  10%,  compounded
monthly.  Except as set forth in the next sentence, no  dividends
will  be  declared or paid or set apart for payment on any  other
class or series of preferred sock ranking, as to dividends, on  a
parity  with  or  junior  to the Series A  Stock  (other  than  a
dividend  payable  in  capital stock of the  Corporation  ranking
junior to the Series A Convertible Stock as to dividends and upon
liquidation) for any period unless full cumulative dividends have
been or contemporaneously are declared and paid or declared and a
sum  sufficient  for the payment thereof is set  apart  for  such
payment  on the Series A Stock for all past dividend periods  and
the then current dividend period. When dividends are not paid  in
full  (or  a sum sufficient for such full payment is not  so  set
apart) upon the Series A Stock and the shares of any other  class
or  series of preferred stock ranking on a parity as to dividends
with the Series A stock, all dividends declared upon the Series A
Stock and any other class or series of preferred stock ranking on
a  parity  as  to  dividends with the Series  A  Stock  shall  be
declared  pro  rata so that the amount of dividends declared  per
share  of  Series  A  Stock and such other  class  or  series  of
preferred stock, shall in all cases bear to each other  the  same
ratio that accrued dividends per share on the Series A Stock  and
such  other class or series of preferred stock (which  shall  not
include  any  accrual  in respect of unpaid dividends  for  prior
dividend  periods  if  such  preferred  stock  does  not  have  a
cumulative dividend) bear to each other.

<PAGE>

(d)  Except  as provided in the immediately preceding  paragraph,
unless full cumulative dividends on the Series A Stock have  been
or  contemporaneously are declared and paid or declared and a sum
sufficient  for the payment thereof is set apart for payment  for
all  past dividend periods and the then current dividend  period,
no  dividends (other than a dividend payable in capital stock  of
the  Corporation  ranking junior to the  Series  A  Stock  as  to
dividends and upon liquidation) shall be declared or paid or  set
aside for payment nor shall any other distribution be declared or
made  upon  the  Common Stock, or any other class  or  series  of
capital stock of the Corporation ranking junior to or on a parity
with the Series A Stock as to dividends or upon liquidation,  nor
shall the Common Stock, or any other class or series of capital

stock  of  the Corporation ranking junior to or on a parity  with
the  Series  A  Stock  as  to dividends or  upon  liquidation  be
redeemed,  purchased or otherwise acquired for any  consideration
(or  any  moneys be paid to or made available for a sinking  fund
for the redemption of any such shares) by the Corporation (except
by  conversion into or exchange for any other class or series  of
capital  stock of the Corporation ranking junior to the Series  A
Stock  as to dividends). Holders of Series A Stock shall  not  be
entitled  to  any dividend, whether payable in cash, property  or
stock,  in  excess of full cumulative dividends on the  Series  A
Stock  as provided above. Any dividend payment made on the Series
A  Stock shall first be credited against the earliest accrued but
unpaid  dividend  due with respect to such shares  which  remains
payable.

5. Liquidation Preference.

(a) Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation, the holders of  the
Series  A Stock are entitled to be paid out of the assets of  the
Corporation   legally   available   for   distribution   to   its
shareholders  a liquidation preference of $10.00 per  share  (the
"Liquidation Preference") in cash or property at its fair  market
value as determined by the Board of Directors of the Corporation,
plus  an amount equal to any accrued and unpaid dividends to  the
date of payment, but without interest, before any distribution of
assets  is made to holders of the Corporation's Common  Stock  or
any  other  class  or series of capital stock of the  Corporation
that ranks junior to the Series A Stock as to liquidation rights.
The  Corporation  will promptly provide to  the  holders  of  the
Series  A Stock written notice of any event triggering the  right
to receive such Liquidation Preference. After payment of the full
amount of the Liquidation Preference, plus any accrued and unpaid
dividends to which they are entitled, the holders of the Series A
Stock  will have no right or claim to any of the remaining assets
of   the   Corporation.  The  consolidation  or  merger  of   the
Corporation with or into any other corporation, trust  or  entity
or  of  any other corporation, trust or entity with or  into  the
Corporation,   the   sale,  lease  or  conveyance   of   all   or
substantially all of the property or business of the  Corporation
or  a statutory share exchange, shall not be deemed to constitute
a  liquidation,  dissolution or winding up  of  the  Corporation,
unless   a  liquidation,  dissolution  or  winding  up   of   the
Corporation  is effected in connection with, or as a  step  in  a
series of transactions by which, a consolidation or merger of the
Corporation  is  effected. In determining whether a  distribution
(other  than  upon  voluntary  or  involuntary  liquidation)   by
dividend,  redemption or other acquisition of shares  of  capital
stock of the Corporation or otherwise is permitted under Delaware
law, no effect shall be given to amounts that would be needed, if
the  Corporation  were  to  be  dissolved  at  the  time  of  the
distribution,   to   satisfy   the   preferential   rights   upon
distribution  of  holders  of shares  of  capital  stock  of  the
Corporation  whose  preferential  rights  upon  distribution  are
superior to those receiving the distribution.

(b)  If  upon any liquidation, dissolution or winding up  of  the
Corporation, the assets of the Corporation, or proceeds  thereof,
distributable  among  the  holders of Series  A  Stock  shall  be
insufficient  to  pay  in  full the above described  preferential
amount  and liquidating payments on any other class or series  of
Parity  Shares, then such assets, or the proceeds thereof,  shall
be  distributed among the holders of Series A Stock and any  such
other  Parity  Shares  ratably in  the  same  proportion  as  the
respective amounts that would be payable on such Series  A  Stock
and  any  such other Parity Shares if all amounts payable thereon
were paid in full.

(c)  Upon  any  liquidation, dissolution or  winding  up  of  the
Corporation, after payment shall have been made in  full  to  the
holders  of Series A Stock and any Parity Shares, the holders  of
Common  Stock  shall be entitled to receive any  and  all  assets
remaining  to  be  paid or distributed, and the  holders  of  the
Series  A  Stock and any Parity Shares shall not be  entitled  to
share therein.

6. Redemption.

(a) The Corporation may, at its option, upon not less than 30 nor
more  than 60 days written notice, redeem the Series A Stock,  in
whole or in part, at any time or from time to time, for cash at a
redemption price equal to 110% of the purchase price paid by  the
original  purchaser, i.e. $0.605 per share, plus, in  each  case,
all  accrued and unpaid dividends thereon to the date  fixed  for
redemption (the "Redemption Date"), without interest. No Series A
Stock  may  be redeemed except with assets legally available  for
the payment of the redemption price. Holders of Series A Stock to
be  redeemed  shall surrender such Series A Stock  at  the  place
designated in such notice and shall be entitled to the redemption
price  and  any  accrued and unpaid dividends payable  upon  such
redemption  following such surrender. If notice of redemption  of
any  of  the  Series  A Stock has been given  and  if  the  funds
necessary  for such redemption have been set aside, separate  and
apart  from other funds, by the Corporation in trust for the  pro
rata  benefit of the holders of any Series A Stock so called  for
redemption,  then  from and after the Redemption  Date  dividends
will  cease to accrue on such Series A Stock, such Series A Stock
shall  no  longer  be deemed outstanding and all  rights  of  the
holders  of  such  shares will terminate,  except  the  right  to
receive the redemption price. If less than all of the outstanding
Series  A  Stock  is to be redeemed, the Series  A  Stock  to  be

<PAGE>

redeemed  shall  be  selected pro  rata  (as  nearly  as  may  be
practicable without creating fractional shares) or by  any  other
equitable method determined by the Corporation.

(b) Unless full cumulative dividends on all unconverted Series  A
Stock shall have been or contemporaneously are declared and  paid
or  declared  and  a sum sufficient for the payment  thereof  set
apart  for  payment for all past dividend periods  and  the  then
current  dividend  period, no Series A Stock  shall  be  redeemed
unless  all  then  outstanding Series A Stock  is  simultaneously
redeemed  and  the  Corporation shall not purchase  or  otherwise
acquire,  directly or indirectly, any Series A Stock  (except  by
exchange  for any other class or series of capital stock  of  the
Corporation ranking junior to the Series A Stock as to  dividends
and  upon  liquidation); provided, however,  that  the  foregoing
shall  not prevent the purchase or acquisition of Series A  Stock
pursuant  to a purchase or exchange offer made on the same  terms
to  holders  of  all outstanding Series A Stock. So  long  as  no
dividends  are in arrears, the Corporation shall be  entitled  at
any  time and from time to time to repurchase any Series A  Stock
in  open-market  transactions duly authorized  by  the  Board  of
Directors  of  the  Corporation and effected in  compliance  with
applicable laws.

(c) Notice of redemption of the Series A Stock shall be given  to
Series  A Stockholders by pre-paid certified mail, return receipt
requested,  not less than 30 nor more than 60 days prior  to  the
Redemption Date, addressed to each holder of record of the Series
A  Stock  to  be redeemed at such holder's address  as  the  same
appears  on  the share records of the Corporation. No failure  to
give  such notice or any defect therein or in the mailing thereof
shall  affect the validity of the proceedings for the  redemption
of  any Series A Stock except as to the holder to whom notice was
defective  or  not  given.  Each  notice  shall  state:  (i)  the
Redemption Date; (ii) the redemption price; (iii) the  number  of
shares  of Series A Stock to be redeemed; and (iv) the  place  or
places  where the Series A Stock is to be surrendered for payment
of the redemption price.

(d)  Immediately prior to any redemption of Series A  Stock,  the
Corporation  shall  pay,  in  cash, any  accumulated  and  unpaid
dividends  through the Redemption Date, unless a Redemption  Date
falls after a Dividend Record Date and prior to the corresponding
Dividend  Payment  Date, in which case each holder  of  Series  A
Stock at the close of business on such Dividend Record Date shall
be  entitled  to  the  dividend payable on  such  shares  on  the
corresponding   Dividend   Payment   Date   notwithstanding   the
redemption of such shares before such Dividend Payment Date.

(e)  The  Series A Stock has no stated maturity and will  not  be
subject to any sinking fund or mandatory redemption provisions.

(f)  Subject  to applicable law and the limitation  on  purchases
when  dividends  on  the  Series A  Stock  are  in  arrears,  the
Corporation may, at any time and from time to time, purchase  any
Series  A  Stock  in  the open market, by tender  or  by  private
agreement.

(g)  All Series A Stock redeemed, purchased or otherwise acquired
by  the Corporation in any manner whatsoever shall be retired and
reclassified as authorized but unissued preferred stock,  without
designation as to class or series, and may thereafter be reissued
as  any class or series of preferred stock in accordance with the
applicable provisions of this Certificate of Designations.

7. Voting Rights.

(a)  Holders  of  the  Series A Stock will not  have  any  voting
rights, except as set forth below.

(b)  Whenever dividends on any Series A Stock shall be in arrears
for  one  day more than two consecutive fiscal quarters or  three
fiscal quarters, whether or not consecutive, in any twelve  month
period  or  any  other  default in the  terms  of  the  Series  A
Preferred  Stock (a "Preferred Default"), the number of directors
then constituting the Board of Directors of the Corporation shall
increase by two (if not already increased by reason of a  similar
arrearage  with  respect to any Parity Preferred (as  hereinafter
defined)).  The holders of such Series A Stock (voting separately
as  a  class with all other classes or series of preferred  stock
ranking  on  a parity with the Series A Stock as to dividends  or
upon  liquidation  and upon which like voting  rights  have  been
conferred  and  are  exercisable ("Parity  Preferred"))  will  be
entitled  to  vote separately as a class, in order  to  fill  the
vacancies  thereby created, for the election of a  total  of  two
additional  directors  of the Corporation (the  "Preferred  Stock
Directors") at a special meeting called by the holders of  record
of at least 20% of the Series A Stock or the holders of record of
at  least  20%  of any series of Parity Preferred so  in  arrears
(unless  such  request is received less than 90 days  before  the
date  fixed  for  the  next  annual or  special  meeting  of  the
shareholders) or at the next annual meeting of shareholders,  and
at  each  subsequent annual meeting at which  a  Preferred  Stock
Director  is  to be elected until up to twelve months  after  all
dividends accumulated on such Series A Stock and Parity Preferred
for  the  past  dividend periods and the dividend  for  the  then
current  dividend period shall have been fully paid  or  declared
and  a  sum  sufficient  for the payment thereof  set  aside  for
payment. At least one of the Preferred Stock Directors shall meet
"independence" standards mandated by the American Stock  Exchange
(the  "AMEX"), or such other exchange or inter-dealer market upon
which the Series A Stock is traded. In the event the directors of
the Corporation are divided into classes, each such vacancy shall
be apportioned among the classes of directors to prevent stacking
in  any  one class and to ensure that the number of directors  in
each of the classes of directors are as equal as possible. Within
twelve  months after all accumulated dividends and  the  dividend
for  the then current dividend period on the Series A Stock shall
have  been paid in full or declared and set aside for payment  in
full,  the  holders thereof shall be divested  of  the  foregoing
voting  rights  (subject to revesting in the event  of  each  and
every  Preferred Default) and, if all accumulated  dividends  and
the  dividend for the then current dividend period have been paid
in  full  or set aside for payment in full on the Series A  Stock
and  all series of Parity Preferred upon which like voting rights

<PAGE>

have  been  conferred and are exercisable, the term of office  of
each  Preferred Stock Director so elected shall terminate  within
twelve  months  thereafter  and  the  number  of  directors  then
constituting  the  Board of Directors of  the  Corporation  shall
decrease accordingly. Any Preferred Stock Director may be removed
at  any  time with or without cause by, and shall not be  removed
otherwise  than  by  the  vote of, the holders  of  record  of  a
majority  of  the outstanding Series A Stock when they  have  the
voting rights described above (voting separately as a class  with
all series of Parity Preferred upon which like voting rights have
been  conferred  and  are exercisable). So long  as  a  Preferred
Default  shall continue, any vacancy in the office of a Preferred
Stock  Director may be filled by written consent of the Preferred
Stock Director remaining in office, or if none remains in office,
by  a  vote  of  the  holders of record  of  a  majority  of  the
outstanding  shares of Series A Stock when they have  the  voting
rights  described above (voting separately as a  class  with  all
series  of  Parity Preferred upon which like voting  rights  have
been   conferred  and  are  exercisable).  The  Preferred   Stock
Directors shall each be entitled to one vote per director on  any
matter.

(c)  So  long as any shares of Series A Stock remain outstanding,
the Corporation will not, without the affirmative vote or consent
of  the holders of Series A Stock entitled to cast at least  two-
thirds  of  the votes entitled to be cast by the holders  of  the
Series A Stock, given in person or by proxy, either in writing or
at a meeting (voting separately as a class):

(i)  amend,  alter or repeal the provisions of the  Corporation's
Certificate  of  Incorporation  or Certificate  of  Designations,
whether by merger, consolidation or otherwise (an "Event"), so as
to   materially  and  adversely  affect  any  right,  preference,
privilege  or voting power of the Series A Stock or  the  holders
thereof; or

(ii)  authorize, create or issue, or increase the  authorized  or
issued  amount of, any class or series of capital stock or rights
to  subscribe to or acquire any class or series of capital  stock
or  any  class  or series of capital stock convertible  into  any
class or series of capital stock, in each case ranking senior  to
the  Series A Stock with respect to payment of dividends  or  the
distribution of assets upon liquidation, dissolution  or  winding
up,  or  reclassify  any shares of capital stock  into  any  such
shares;

provided,  however, that with respect to the  occurrence  of  any
Event  set  forth above, so long as the Series A  Stock  (or  any
equivalent  class  or  series of stock or shares  issued  by  the
surviving  corporation, trust or other entity in  any  merger  or
consolidation  to which the Corporation became a  party)  remains
outstanding  with  the  terms thereof materially  unchanged,  the
occurrence  of  any such Event shall not be deemed to  materially
and  adversely  affect  such rights, preferences,  privileges  or
voting  power  of  holders of the Series A Stock;  and  provided,
further,  that  (i) any increase in the amount of the  authorized
preferred stock or the creation or issuance of any other class or
series of preferred stock, (ii) any increase in the amount of the
authorized  shares  of such series, in each  case  ranking  on  a
parity  with  or  junior to the Series A Stock  with  respect  to
payment   of  dividends  or  the  distribution  of  assets   upon
liquidation,  dissolution or winding up or (iii)  any  merger  or
consolidation  in  which the Corporation  is  not  the  surviving
entity  if,  as  a  result of the merger  or  consolidation,  the
holders  of  Series  A Stock receive cash in the  amount  of  the
Liquidation  Preference in exchange for each of their  shares  of
Series  A  Stock, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers.

(d)  So  long as any shares of Series A Stock remain outstanding,
the Corporation will not, without the affirmative vote or consent
of  the holders of Series A Stock entitled to cast a majority  of
the  votes  entitled to be cast by the holders of  the  Series  A
Stock,  given in person or by proxy, either in writing  or  at  a
meeting  (voting  separately  as a class)  authorize,  create  or
issue, or increase the authorized or issued amount of, any  class
or  series  of  Parity Preferred or rights  to  subscribe  to  or
acquire  any class or series of Parity Preferred or any class  or
series  of capital stock convertible into any class or series  of
Parity Preferred, or reclassify any shares of capital stock  into
any such shares.

(e)  With  respect to the exercise of the above described  voting
rights,  each  share of Series A Stock shall have  one  vote  per
share,  except  that when any other class or  series  of  capital
stock shall have the right to vote with the Series A Stock  as  a
single  class,  then the Series A Stock and such other  class  or
series  of  capital stock shall each have one vote per $10.00  of
liquidation preference.

(f)  The  foregoing voting provisions will not apply  if,  at  or
prior  to  the time when the act with respect to which such  vote
would  otherwise  be required shall be effected, all  outstanding
Series  A Stock shall have been redeemed or called for redemption
upon proper notice and sufficient funds shall have been deposited
in trust to effect such redemption.

(g)  Except as expressly stated herein, the Series A Stock  shall
not  have any relative, participating, optional or other  special
voting  rights and powers, and the consent of the holders thereof
shall  not  be  required for the taking of any corporate  action,
including  but  not  limited  to,  any  merger  or  consolidation
involving  the Corporation or a sale of all or substantially  all
of the assets of the Corporation, irrespective of the effect that
such  merger,  consolidation or sale may have  upon  the  rights,
preferences or voting power of the holders of the Series A Stock.

8. Conversion.

<PAGE>

(a)  Subject to and upon compliance with the provisions  of  this
subsection 8, a holder of Series A Stock shall have the right, at
the  holder's option, at any time to convert each such share into
one  hundred (100) authorized but previously unissued  shares  of
Common  Stock (the "Conversion Ratio") by delivering such  shares
to  be converted, such delivery to be made in the manner provided
in  paragraph  (b) of this subsection 8; provided, however,  that
the  right  to convert shares called for redemption  pursuant  to
subsection  6 of this Section A shall terminate at the  close  of
business on the Business Day prior to the Redemption Date, unless
the  Corporation shall default in making payment of  any  amounts
payable  upon such redemption under subsection 6 of this  Section
A.

(b)  The  conversion rights of the holders of the Series A  Stock
are  subject  to  cancellation by the  Corporation  on  or  after
September  30,  2008  if, (i) for at least 20  Trading  Days  (as
defined below) within any period of 30 consecutive Trading  Days,
including the last Trading Day of the period, the Current  Market
Price  (as  defined below) of the Common Stock of the Corporation
exceeds $1.00 and (ii) the Common Stock is then traded on the New
York  Stock Exchange, the Nasdaq National Market or the  AMEX  (a
"Conversion Cancellation Event"). Following the occurrence  of  a
Conversion  Cancellation  Event,  the  Corporation  may,  at  its
option, provide notice to the respective holders of record of the
Series  A  Stock at their respective addresses as they appear  on
the  share  transfer records of the Corporation, via first  class
mail,  specifying a date upon which each such holder's conversion
rights  will  be  deemed  cancelled (a  "Conversion  Cancellation
Notice").  The  cancellation  date specified  in  the  Conversion
Cancellation Notice will be more than 30 days, but less  than  60
days,  after  the Conversion Cancellation Notice is  mailed.  The
right  to  convert  Series  A  Stock  for  which  any  Conversion
Cancellation Notice has been issued will terminate at  the  close
of  business  on the Business Day prior to the cancellation  date
specified  in  the Conversion Cancellation Notice. "Trading  Day"
shall mean any day on which the securities in question are traded
on the AMEX, or if such securities are not listed or admitted for
trading  on  the  AMEX,  on  the  principal  national  securities
exchange on which such securities are listed or admitted,  or  if
not  listed  or  admitted for trading on any national  securities
exchange,  on  the Nasdaq National Market, or if such  securities
are  not  quoted on the Nasdaq National Market, in the applicable
securities  market in which the securities are  traded.  "Current
Market Price" of the Common Stock of the Corporation for any  day
shall  mean the last reported sales price 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, in either case as reported  on
the  AMEX  or,  if  such security is not listed or  admitted  for
trading  on  the  AMEX,  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 the 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 and asked prices on  such
day  as  furnished  by any AMEX member firm  regularly  making  a
market  in  such  security and selected for such purpose  by  the
Board of Directors of the Corporation or, if such security is not
so  listed  or quoted, as determined in good faith  at  the  sole
discretion  of  the Board of Directors of the Corporation,  which
determination shall be final, conclusive and binding.

(c)  In order to exercise the conversion right, the holder of the
Series  A  Stock  to be converted shall deliver  the  certificate
evidencing  such  shares,  duly  endorsed  or  assigned  to   the
Corporation or in blank, to the office of the transfer  agent  of
the Corporation, accompanied by written notice to the Corporation
that the holder thereof elects to convert such shares of Series A
Stock.  Unless the shares issuable on conversion are to be issued
in  the  same name as the name in which such shares of  Series  A
Stock 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  agent  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).

(d)  Holders of Series A Stock exercising their conversion rights
will  not  be  entitled  to, nor will  the  Conversion  Ratio  be
adjusted  for, any accumulated and unpaid dividends,  whether  or
not  in arrears, or for dividends on the Common Stock issued upon
conversion. Holders of Series A Stock at the close of business on
a  Dividend Record Date will be entitled to receive the  dividend
payable on such shares on the corresponding Dividend Payment Date
notwithstanding  the  conversion of such  shares  following  such
Dividend  Record  Date and prior to such Dividend  Payment  Date.
However,  Series  A Stock surrendered for conversion  during  the
period between the close of business on any Dividend Record  Date
and  ending  with  the opening of business on  the  corresponding
Dividend Payment Date (except shares converted after the issuance
of  a  notice  of  redemption with respect to a  Redemption  Date
during such period or coinciding with such Dividend Payment Date,
which  will be entitled to such dividend on the Dividend  Payment
Date)  must be accompanied by payment of an amount equal  to  the
dividend payable on such shares on such Dividend Payment Date.  A
holder of Series A Stock on a Dividend Record Date who (or  whose
transferee)  tenders any such shares for conversion  into  Common
Stock  on  such Dividend Payment Date will receive  the  dividend
payable  by the Corporation on such Series A Stock on such  date,
and  the converting holder need not include payment of the amount
of such dividend upon surrender of Series A Stock for conversion.

(e)   As   promptly  as  practicable  after  the   surrender   of
certificates  for  Series A Stock as aforesaid,  the  Corporation
shall  issue and shall deliver at such office to such holder,  or
on  his  written  order, a certificate or  certificates  for  the
number  of  full  shares  of  Common  Stock  issuable  upon   the
conversion  of  such shares in accordance with the provisions  of
this  subsection 8, and any fractional interest in respect  of  a
share  of  Common  Stock arising upon such  conversion  shall  be
settled  as provided in paragraph (f) of this subsection 8.  Each
conversion  shall  be  deemed to have been  effected  immediately
prior  to  the  close  of  business on  the  date  on  which  the
certificates  for Series A Stock shall have been surrendered  and
such notice (and if applicable, payment of an amount equal to the

<PAGE>

dividend  payable on such shares as described above) received  by
the  Corporation as aforesaid, and the person or persons in whose
name  or  names any certificate or certificates for Common  Stock
shall  be issuable upon such conversion shall be deemed  to  have
become  the holder or holders of record of the shares represented
thereby  at such time on such date, and such conversion shall  be
at  the Conversion Ratio in effect at such time and on such date,
unless  the  share  transfer books of the  Corporation  shall  be
closed on that date, in which event such person or persons  shall
be  deemed to have become such holder or holders of record at the
opening  of  business on the next succeeding day  on  which  such
share  transfer books are open, but such conversion shall  be  at
the  Conversion  Ratio  in  effect on  the  date  on  which  such
certificates  for Series A Stock have been surrendered  and  such
notice received by the Corporation.

(f)  No  fractional  shares  or scrip representing  fractions  of
Common  Stock  shall be issued upon conversion of  the  Series  A
Stock.  Instead of any fractional interest in a share  of  Common
Stock that would otherwise be deliverable upon the conversion  of
a  share  of  Series A Stock, the Corporation shall  pay  to  the
holder  of  such share an amount in cash based upon  the  Current
Market  Price  of  Common  Stock on the Trading  Day  immediately
preceding  the  date of conversion. If more  than  one  share  of
Series A Stock shall be surrendered for conversion at 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  Stock  so
surrendered.

(g)  Conversion  Ratio shall be adjusted from  time  to  time  as
follows:

(i)  If the Corporation shall (A) make a payment of dividends  or
distributions to holders of any class or series of capital  stock
of the Corporation in Common Stock, (B) subdivide its outstanding
Common  Stock  into a greater number of shares, (C)  combine  its
outstanding Common Stock into a smaller number of shares  or  (D)
issue  any  shares  of capital stock by reclassification  of  its
Common Stock, the Conversion Ratio shall be adjusted so that  the
holder   of  any  Series  A  Stock  thereafter  surrendered   for
conversion shall be entitled to receive the number of  shares  of
Common  Stock  that  such holder would have owned  or  have  been
entitled  to  receive after the happening of any  of  the  events
described above had such 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  paragraph
(g)(i)  shall become effective immediately after the  opening  of
business  on  the day next following the record date  (except  as
provided in paragraph (k) of this subsection 8) in the case of  a
distribution  and  shall become effective immediately  after  the
opening of business on the day next following the effective  date
in  the  case  of a subdivision, combination or reclassification.
Such adjustment(s) shall be made successively whenever any of the
events listed above shall occur.

(ii)  If  the Corporation shall issue rights, options or warrants
to  all  holders  of Common Stock entitling them  (for  a  period
expiring  within  45 days after the record date  fixed  for  such
issuance)   to  subscribe  for  or  purchase  Common  Stock   (or
securities convertible into or exchangeable for Common Stock)  at
a  price  per  share less than the Fair Market Value (as  defined
below)  per  share  of Common Stock on the record  date  for  the
determination  of shareholders entitled to receive  such  rights,
options  or warrants, then the Conversion Ratio shall be adjusted
to  equal  the price determined by multiplying (A) the Conversion
Ratio  in effect immediately prior to the opening of business  on
the   Business  Day  next  following  the  date  fixed  for  such
determination by (B) a fraction, the numerator of which shall  be
the  sum  of (I) the number of shares of Common Stock outstanding
on the close of business on the date fixed for such determination
and  (II)  the  number of shares of Common Stock  that  could  be
purchased at the Current Market Price on the date fixed for  such
determination with the aggregate proceeds to the Corporation from
the  exercise  of  such  rights, options  or  warrants,  and  the
denominator of which shall be the sum of (x) the number of shares
of  Common Stock outstanding on the close of business on the date
fixed  for  such determination and (y) the number  of  additional
shares  of  Common  Stock offered, for subscription  or  purchase
pursuant  to  such rights, options or warrants.  Such  adjustment
shall  be made successively whenever any such rights, options  or
warrants are issued, and shall become effective immediately after
the opening of business on the day next following the record date
for  any  such  rights,  options or warrants  issued  (except  as
provided  in  paragraph (k) of this subsection 8). In determining
whether  any rights, options or warrants entitle the  holders  of
Common  Stock to subscribe for or purchase Common Stock  at  less
than the Fair Market Value, there shall be taken into account any
consideration received by the Corporation upon issuance and  upon
exercise of such rights, options or warrants, the value  of  such
consideration, if other than cash, to be determined by the  Chief
Executive Officer of the Corporation or the Board of Directors of
the  Corporation  whose decision shall be final,  conclusive  and
binding.  Any  adjustment(s)  made  pursuant  to  this  paragraph
(d)(ii)  shall become effective immediately after the opening  of
business  on  the Business Day next following such  record  date.
Such adjustment(s) shall be made successively whenever any of the
events  listed above shall occur. "Fair Market Value" shall  mean
the  number obtained, for the 30 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 any issuance or distribution
requiring  such  computation, by dividing  (a)  the  sum  of  the
products for all sales of Common Stock during such 30 Trading Day
period  of  (i)  the sales prices per share of  Common  Stock  as
reported   on  the  consolidated  transaction  reporting   system
contemplated  by Rule 11Aa3-1 of the Securities Exchange  Act  of
1934, as amended, times (ii) the number of shares of Common Stock
sold  at such prices by (b) the total number of shares of  Common
Stock sold during such 30 Trading Day period. The term "ex date",
when used with respect to any issuance or distribution, means the
first  day  on  which the Common Stock trades  the  regular  way,
without  the  right to receive such issuance or distribution,  on
the  exchange  or  in the market, as the case  may  be,  used  to
determine   that   day's   Current  Market   Price.   Appropriate
adjustments shall be made during any 30 Trading Day period in the
event  of  any  subdivision or combination of  shares  of  Common
Stock,  whether by stock split, stock dividend, recapitalization,
reverse  stock  split or otherwise, which occurs during  such  30
Trading Day period.

<PAGE>

(iii)  If the Corporation shall distribute to all holders of  its
Common  Stock  any  shares of capital stock  of  the  Corporation
(other  than  Common  Stock) or evidence of its  indebtedness  or
assets  (including  securities, but excluding cash  distributions
paid out of the total equity applicable to Common Stock, less the
amount of stated capital attributable to Common Stock, determined
on  the basis of the most recent annual or quarterly consolidated
cost  basis  and  current  value basis and  consolidated  balance
sheets  of  the  Corporation  and its  consolidated  subsidiaries
available at the time of the declaration of the distribution)  or
rights  or  warrants  to subscribe for or  purchase  any  of  its
securities  (excluding those rights and warrants  issued  to  all
holders  of  Common  Stock entitling them for a  period  expiring
within  45  days after the record date referred to  in  paragraph
(g)(ii) of this subsection 8 to subscribe for or purchase  Common
Stock,  which rights and warrants are referred to in and  treated
under  paragraph  (g)(ii)  of this  subsection  8)  (any  of  the
foregoing being hereinafter in this paragraph (g)(iii) called the
"Securities"),  then in each case the Conversion Ratio  shall  be
adjusted  so  that  it  shall  equal  the  price  determined   by
multiplying (A) the Conversion Ratio in effect immediately  prior
to  the close of business on the date fixed for the determination
of  shareholders entitled to receive such distribution by  (B)  a
fraction,  the  numerator of which shall be  the  Current  Market
Price  per share of Common Stock on the record date described  in
the  immediately  following paragraph less the then  Fair  Market
Value  of  the shares of capital stock or assets or evidences  of
indebtedness  so  distributed  or  of  such  rights  or  warrants
applicable  to one share of Common Stock, and the denominator  of
which shall be the Current Market Price per share of Common Stock
on  the  record  date  described  in  the  immediately  following
paragraph.

Such adjustment shall become effective immediately at the opening
of  business  on  the  Business Day  next  following  (except  as
provided  in paragraph (k) of this subsection 8) the record  date
for  the  determination of shareholders entitled to receive  such
distribution.  For the purposes of this paragraph  (g)(iii),  the
distribution of a Security which is distributed not only  to  the
holders   of  the  Common  Stock  on  the  date  fixed  for   the
determination  of shareholders entitled to such  distribution  of
such  Security, but also is distributed with each share of Common
Stock  delivered to a person converting a share of Series A Stock
after such determination date, shall not require an adjustment of
the   Conversion  Ratio  pursuant  to  this  paragraph  (g)(iii);
provided that on the date, if any, on which a person converting a
share  of  Series A Stock would no longer be entitled to  receive
such  Security  with a share of Common Stock  (other  than  as  a
result of the termination of all such Securities), a distribution
of  such  Securities shall be deemed to have  occurred,  and  the
Conversion Ratio shall be adjusted as provided in this  paragraph
(g)(iii) (and such day shall be deemed to be "the date fixed  for
the  determination of the shareholders entitled to  receive  such
distribution" and "the record date" within the meaning of the two
preceding   sentences).   Such  adjustment(s)   shall   be   made
successively whenever any of the events listed above shall occur.

(iv)  No  adjustment in the Conversion Ratio  shall  be  required
unless  such  adjustment would require a cumulative  increase  or
decrease  of  at least 1% in such price; provided, however,  that
any  adjustments that by reason of this paragraph (g)(iv) are not
required  to  be  made shall be carried forward  and  taken  into
account  in  any subsequent adjustment until made; and  provided,
further,  that  any  adjustment shall be  required  and  made  in
accordance  with the provisions of this subsection 8 (other  than
this  paragraph  (g)(iv)) not later than  such  time  as  may  be
required  in  order  to  preserve  the  tax-free  nature   of   a
distribution to the holders of Common Stock. Notwithstanding  any
other provisions of this subsection 8, the Corporation shall  not
be  required to make any adjustment to the Conversion  Ratio  (A)
upon  the  issuance of any Common Stock or options or  rights  to
purchase Common Stock pursuant to any present or future employee,
director  or consultant incentive or benefit plan or  program  of
the Corporation or any of its subsidiaries; (B) upon the issuance
of  any  Common  Stock  pursuant to any present  or  future  plan
providing  for the reinvestment of dividends or interest  payable
on shares of capital stock or indebtedness of the Corporation and
the  investment  of additional optional amounts in  Common  Stock
under  any plan; (C) upon a change in the par value of the Common
Stock  of  the  Corporation; or (D) for  accumulated  and  unpaid
dividends  on  shares  of capital stock of the  Corporation.  All
calculations under this subsection 8 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.

(h)  If  the  Corporation  shall be a party  to  any  transaction
(including without limitation a merger, consolidation,  statutory
share exchange, tender offer for all or substantially all of  the
Common   Stock,  sale  of  all  or  substantially  all   of   the
Corporation's assets or recapitalization of the Common Stock  and
excluding  any transaction as to which paragraph (g)(i)  of  this
subsection  8  applies (each of the foregoing being  referred  to
herein  as  a "Transaction"), in each case as a result  of  which
Common Stock shall be converted into the right to receive shares,
stock,  securities  or  other property  (including  cash  or  any
combination thereof), each share of Series A Stock which  is  not
converted into the right to receive shares, stock, securities  or
other   property  in  connection  with  such  Transaction   shall
thereafter  be  convertible into the kind and amount  of  shares,
stock,  securities and other property receivable (including  cash
or  any  combination  thereof)  upon  the  consummation  of  such
Transaction by a holder of that number of shares of Common  Stock
or  fraction thereof into which one share of Series A  Stock  was
convertible immediately prior to such Transaction, assuming  such
holder  of  Common  Stock  (i) is not a  person  with  which  the
Corporation consolidated or into 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 election, if any, as to the kind or
amount  of  such stock, securities and other property  (including
cash)  receivable upon consummation of such Transaction  (each  a
"Non-Electing  Share") (provided that if the kind  or  amount  of
shares,  stock,  securities and other property  (including  cash)
receivable  upon consummation of such Transaction  by  each  Non-
Electing Share is not the same for each Non-Electing Share,  then
the  kind  and  amount  of shares, stock,  securities  and  other
property  (including cash) receivable upon consummation  of  such
Transaction for each Non-Electing Share shall be deemed to be the

<PAGE>

kind and amount so receivable per share by a plurality of the Non-
Electing  Shares). The Corporation shall not be a  party  to  any
Transaction  unless the terms of such Transaction are  consistent
with  the  provisions of this paragraph (h),  and  it  shall  not
consent  or agree to the occurrence of any Transaction until  the
Corporation  has entered into an agreement with the successor  or
purchasing  entity, as the case may be, for the  benefit  of  the
holders  of the Series A Stock, that will require such  successor
or  purchasing entity, as the case may be, to make  provision  in
its certificate or articles of incorporation or other constituent
documents  to  the end that the provisions of this paragraph  (h)
shall thereafter correspondingly be made applicable as nearly  as
may  reasonably be, in relation to any shares of stock  or  other
securities or property thereafter deliverable upon conversion  of
the  Series A Stock. The provisions of this paragraph  (h)  shall
similarly apply to successive Transactions.

(i) If:

(i)  the  Corporation shall declare a distribution on the  Common
Stock  other  than in cash out of the total equity applicable  to
Common  Stock, less the amount of stated capital attributable  to
Common  Stock, determined on the basis of the most recent  annual
or  quarterly consolidated cost basis and current value basis and
consolidated   balance  sheets  of  the   Corporation   and   its
consolidated   subsidiaries  available  at  the   time   of   the
declaration of the distribution; or

(ii)  the Corporation shall authorize the granting to the holders
of  the  Common Stock 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 reclassifications of the Common  Stock
(other than an event to which paragraph (g)(i) of this subsection
8   applied)  or  any  consolidation  or  merger  to  which   the
Corporation is a party and for which approval of any shareholders
of  the  Corporation is required, or a statutory  share  exchange
involving  the  conversion  or  exchange  of  Common  Stock  into
securities  or  other  property, or a self tender  offer  by  the
Corporation  for  all  or substantially all  of  its  outstanding
Common Stock, or the sale or transfer of all or substantially all
of  the  assets  of the Corporation as an entity  and  for  which
approval of any shareholder 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  of
the  Corporation and shall cause to be mailed to the  holders  of
the  Series  A  Stock at their addresses as shown  on  the  share
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 record date as of which the  holders  of
Common  Stock  of  record to be entitled to such distribution  or
grant  of  rights  or  warrants are to be  determined,  provided,
however, that no such notification need be made in respect  of  a
record  date  for  a distribution or grant of rights  unless  the
corresponding  adjustment in the Conversion  Ratio  would  be  an
increase  or  decrease of at least 1%, 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 Stock of record shall be entitled
to  exchange their Common Stock 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 subsection 8 of this Section A.

(j) Whenever the Conversion Ratio is adjusted as herein provided,
the  Corporation shall promptly file with the transfer  agent  of
the  Corporation  an  officer's  certificate  setting  forth  the
Conversion Ratio 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 Ratio, setting forth  the  adjusted
Conversion  Ratio and the effective date on which such adjustment
becomes  effective and shall mail such notice of such  adjustment
of  the Conversion Ratio to the holder of each share of Series  A
Stock at such holder's last address as shown on the share records
of  the Corporation. No adjustment in the Conversion Ratio  shall
be made by the Company unless such reduced Conversion Ratio shall
be in effect for a period of at least 10 business days.

(k)  In  any case in which paragraph (g) of subsection 8 provides
that  an  adjustment  shall become effective  on  the  date  next
following the record date for an event, the Corporation may defer
until  the occurrence of such event (I) issuing to the holder  of
any  Series  A Stock converted after such record date and  before
the occurrence of such event the additional Common Stock issuable
upon such conversion by reason of the adjustment required by such
event  over  and  above  the  Common  Stock  issuable  upon  such
conversion  before  giving  effect to such  adjustment  and  (II)
fractionalizing any Series A Stock and/or paying to  such  holder
any  amount of cash in lieu of any fraction pursuant to paragraph
(f) of this subsection 8.

(l)  There shall be no adjustment of the Conversion Ratio 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 subsection 8.  If  any
action  or transaction would require adjustment of the Conversion
Ratio  pursuant to more than one paragraph of this subsection  8,
only  one adjustment shall be made, and such adjustment shall  be
the amount of adjustment that has the highest absolute value.

<PAGE>

(m) If the Corporation shall take any action affecting the Common
Stock, other than an action described in this subsection 8,  that
in the opinion of the Board of Directors of the Corporation would
materially  and  adversely affect the conversion  rights  of  the
holders  of  the  Series A Stock, the Conversion  Ratio  for  the
Series  A Stock may be adjusted, to the extent permitted by  law,
in  such  manner,  if  any, and at such time,  as  the  Board  of
Directors  of  the  Corporation,  in  its  sole  discretion,  may
determine to be equitable under the circumstances.

(n)  The  Corporation covenants that it will at all times reserve
and  keep  available, free from preemptive  rights,  out  of  the
aggregate  of its authorized but unissued Common Stock,  for  the
purpose  of effecting conversion of the Series A Stock, the  full
number  of shares of Common Stock deliverable upon the conversion
of  all outstanding Series A Stock not theretofore converted. For
purposes  of this paragraph (n), the number of shares  of  Common
Stock  that  shall  be  deliverable upon the  conversion  of  all
outstanding Series A Stock shall be computed as if at the time of
computation  all such outstanding shares were held  by  a  single
holder but exceeding outstanding shares held by holders who  have
agreed   to  waive  conversion  rights  of  their  shares   until
sufficient authorized, previously unissued shares of common Stock
shall be available.

The Corporation shall use its reasonable best efforts to list the
Common  Stock  required to be delivered upon  conversion  of  the
Series  A  Stock,  prior  to such delivery,  upon  each  national
securities  exchange, if any, upon which the  outstanding  Common
Stock is listed at the time of such delivery.

(o)  The  Corporation will pay any and all documentary  stamp  or
similar  issue or transfer taxes payable in respect of the  issue
or  delivery  of Common Stock or other securities or property  on
conversion  of  the  Series  A Stock 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 Common Stock or other  securities  or
property in a name other than that of the holder of the Series  A
Stock  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  has  established,  to  the  reasonable  satisfaction  of  the
Corporation, that such tax has been paid.

In  addition to the foregoing adjustments, the Corporation  shall
be  entitled to make such reductions in the Conversion Ratio,  in
addition  to  those  required herein, as  it  in  its  discretion
considers  to be advisable in order that any share distributions,
subdivisions  of  shares,  reclassification  or  combination   of
shares,  distribution  of rights, options, warrants  to  purchase
shares  or  securities, or a distribution of other assets  (other
than  cash distributions) will not be taxable or, if that is  not
possible, to diminish any income taxes that are otherwise payable
because of such event.

9.  Certificate of Incorporation and Bylaws. The  rights  of  all
holders of the Series A Stock and the terms of the Series A Stock
are   subject   to   the  provisions  of  this   Certificate   of
Designations, the Certificate of Incorporation and the Bylaws  of
the Corporation.

B. Exclusion of Other Rights. Except as may otherwise be required
by  law,  the  Series A Stock shall not have any  voting  powers,
preferences or relative, participating, optional or other special
rights,   other  than  those  specifically  set  forth  in   this
Certificate of Designations (as such may be amended from time  to
time) and in the Corporation's Certificate of Incorporation.  The
Series A Stock shall have no preemptive or subscription rights.

C.   Headings  of  Subdivisions.  The  headings  of  the  various
subdivisions  hereof are for convenience of  reference  only  and
shall  not  affect  the interpretation of any of  the  provisions
hereof.

D.  Severability of Provisions. If any voting powers, preferences
or  relative, participating, optional and other special rights of
the Series A Stock or qualifications, limitations or restrictions
thereof  set forth in this Certificate of Designations  (as  such
may  be  amended  from  time to time)  is  invalid,  unlawful  or
incapable  of  being enforced by reason of any  rule  of  law  or
public policy, all other voting powers, preferences and relative,
participating,  optional and other special  rights  of  Series  A
Stock  and  qualifications, limitations and restrictions  thereof
set  forth  in this Certificate of Designations (as  so  amended)
which  can  be  given  effect without the  invalid,  unlawful  or
unenforceable   voting   powers,   preferences    or    relative,
participating, optional or other special rights of Series A Stock
or  qualifications, limitations and restrictions thereof shall be
given  such  effect.  None of the voting powers,  preferences  or
relative participating, optional or other special rights  of  the
Series  A  Stock  or qualifications, limitations or  restrictions
thereof herein set forth shall be deemed dependent upon any other
such  voting  powers,  preferences  or  relative,  participating,
optional   or  other  special  right  of  Series   A   Stock   or
qualifications,  limitations or restrictions  thereof  unless  so
expressed herein.

<PAGE>[STANDARD FORM OF RESTRICTED STOCK AWARD AGREEMENT]

                BE AEROSPACE, INC. 2005 LONG-TERM INCENTIVE PLAN
                        RESTRICTED STOCK AWARD AGREEMENT

         THIS AWARD AGREEMENT (the "Award Agreement") is made effective as of
______________ (the "Date of Grant") between BE Aerospace, Inc., a Delaware
corporation (the "Company"), and _________________ (the "Participant").
Capitalized terms not otherwise defined herein shall have the same meanings as
in the BE Aerospace, Inc. 2005 Long-Term Incentive Plan (the "Plan").

         WHEREAS, the Company desires to grant the Restricted Stock provided for
herein to the Participant pursuant to the Plan and the terms and conditions set
forth herein;

         NOW THEREFORE, in consideration of the mutual covenants hereinafter set
forth, the parties agree as follows:

         1. Grant of the Award. Subject to the provisions of this Award
Agreement and the Plan, the Company hereby grants to the Participant, an
aggregate of ________________ shares of restricted stock (the "Restricted
Stock"), subject to adjustment as set forth in the Plan.

         2. Incorporation of Plan. The Participant acknowledges receipt of the
Plan, a copy of which is attached hereto and represents that he is familiar with
its terms and provisions. This Award Agreement and the Restricted Stock shall be
subject to the Plan, the terms of which are incorporated herein by reference,
and in the event of any conflict or inconsistency between the Plan and this
Award Agreement, the Plan shall govern.

         3. Vesting Schedule. Unless previously vested or canceled in accordance
with the provisions of the Plan or this Award Agreement, the shares of
Restricted Stock shall vest and shall no longer be subject to cancellation
pursuant to Section 4 or the transfer restrictions set forth in Section 7 as
follows: fifty percent (50%) will vest on the second anniversary of the Date of
Grant and twenty-five percent (25%) will vest on each of the third and fourth
anniversaries of the Date of Grant.

         4. Termination of Employment. In the event of the Participant's
termination of employment with the Company prior to the vesting of all shares of
Restricted Stock hereunder for any reason other than death or Disability, all
unvested shares of Restricted Stock shall be cancelled immediately without
consideration as of the date of such termination.

         5. Death or Disability. If, prior to the vesting of all shares of
Restricted Stock hereunder, the Participant's employment with the Company
terminates due to death or Disability, all of the unvested shares of Restricted
Stock shall vest immediately and shall no longer be subject to cancellation
pursuant to Section 4 or the transfer restrictions set forth in Section 7.

<PAGE>

         6. Change in Control. Upon a Change in Control prior to the vesting of
all shares of Restricted Stock hereunder, all of the unvested shares of
Restricted Stock shall vest immediately and shall no longer be subject to
cancellation pursuant to Section 4 or the transfer restrictions set forth in
Section 7.

         7. Nontransferability of Restricted Stock. Unless otherwise determined
by the Committee, the Restricted Stock may not be transferred, pledged,
alienated, assigned or otherwise attorned other than by last will and testament
or by the laws of descent and distribution or pursuant to a domestic relations
order, as the case may be; provided, however, that the Committee may, subject to
such terms and conditions as it shall specify, permit the transfer of Restricted
Stock for no consideration to a Permitted Transferee. Any shares of Restricted
Stock transferred to a Permitted Transferee shall be further transferable only
by last will and testament or the laws of descent and distribution or, for no
consideration, to another Permitted Transferee of the Participant.

         8. Rights as a Stockholder. The Participant shall have, with respect to
the Restricted Stock, all the rights of a stockholder of the Company, including,
if applicable, the right to vote the Restricted Stock and to receive any
dividends or other distributions, subject to the restrictions set forth in the
Plan and this Award Agreement.

         9. Dividends and Distributions. Any cash, Common Stock or other
securities of the Company or other consideration received by the Participant as
a result of a distribution to holders of Restricted Stock or as a dividend on
the Restricted Stock shall be subject to the same restrictions as the Restricted
Stock, and all references to Restricted Stock hereunder shall be deemed to
include such cash, Common Stock or other securities or consideration.

         10. Legend on Certificates. The Committee may cause a legend or legends
to be put on certificates representing the Common Stock underlying the
Restricted Stock to make appropriate reference to such restrictions as the
Committee may deem advisable under the Plan or as may be required by the rules,
regulations, and other requirements of the Securities and Exchange Commission,
any exchange that lists the Common Stock, and any applicable federal or state
laws.

         11. Conditions to Delivery of Common Stock Certificates. The Company
shall not be required to deliver any certificate or certificates for shares of
Common Stock pursuant to this Agreement prior to fulfillment of all of the
following conditions:

         (a) The obtaining of any approval or other clearance from any state or
federal governmental agency which the Committee determines to be necessary or
advisable; and

         (b) The lapse of such reasonable period of time as the Committee may
from time to time establish for reasons of administrative convenience.

         12. Physical Custody. The Restricted Stock may be issued in certificate
form or electronically in "book entry". The Secretary of the Company or such
other representative as the Committee may appoint shall retain physical custody
of each certificate representing Restricted Stock until all of the restrictions
imposed under this Award Agreement with respect to the shares evidenced by such
certificate expire or are removed. In no event shall the Participant

                                       2

<PAGE>

retain physical custody of any certificates representing unvested Restricted
Stock assigned to Participant.

         13. No Entitlements.

         (a) No Right to Continued Employment. This award is not an employment
agreement, and nothing in this Award Agreement or the Plan shall (i) alter the
Participant's status as an "at-will" employee of the Company, (ii) be construed
as guaranteeing the Participant's employment by the Company or as giving the
Participant any right to continue in the employ of the Company during any period
(including without limitation the period between the Date of Grant and the
applicable vesting date in accordance with Section 3) or (iii) be construed as
giving the Participant any right to be reemployed by the Company following any
termination of Employment.

         (b) No Right to Future Awards. This award of Restricted Stock and all
other equity-based awards under the Plan are discretionary. This award does not
confer on the Participant any right or entitlement to receive another award of
Restricted Stock or any other equity-based award at any time in the future or in
respect of any future period.

         (c) No Effect on Future Employment Compensation. The Company has made
this award of Restricted Stock to the Participant in its sole discretion. This
award does not confer on the Participant any right or entitlement to receive
compensation in any specific amount for any future fiscal year, and does not
diminish in any way the Company's discretion to determine the amount, if any, of
the Participant's compensation. In addition, this award of Restricted Stock is
not part of the Participant's base salary or wages and will not be taken into
account in determining any other employment-related rights the Participant may
have, such as rights to pension or severance pay.

         14. Taxes and Withholding. No later than the date as of which an amount
with respect to the Restricted Stock first becomes includable in the gross
income of the Participant for applicable income tax purposes, the Participant
shall pay to the Company or make arrangements satisfactory to the Committee
regarding payment of any federal, state or local taxes of any kind required by
law to be withheld with respect to such amount. Unless otherwise determined by
the Committee, in accordance with rules and procedures established by the
Committee, the minimum required withholding obligations may be settled in Common
Stock, including Common Stock that is part of the award that gives rise to the
withholding requirement. The obligations of the Company to deliver the
certificates for shares of Common Stock under this Award Agreement shall be
conditional upon such payment or arrangements and the Company shall, to the
extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the Participant.

         15. Section 83(b) Election. If, within 30 days of the Date of Grant,
the Participant makes an election under Section 83(b) of the Code, or any
successor section thereto, to be taxed with respect to all or any portion of the
Restricted Stock as of the date of transfer of the Restricted Stock rather than
as of the date or dates upon which the Participant would otherwise be taxable
under Section 83(a) of the Code, the Participant shall deliver a copy of such

                                       3

<PAGE>

election to the Company immediately after filing such election with the Internal
Revenue Service.

         16. Securities Laws. In connection with the grant or vesting of the
Restricted Stock the Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this Award
Agreement.

         17. Miscellaneous Provisions.

         (a) Notices. Any notice necessary under this Award Agreement shall be
addressed to the Company in care of its Secretary at the principal executive
office of the Company and to the Participant at the address appearing in the
records of the Company for the Participant or to either party at such other
address as either party hereto may hereafter designate in writing to the other.
Any such notice shall be deemed effective upon receipt thereof by the addressee.

         (b) Headings. The headings of sections and subsections are included
solely for convenience of reference and shall not affect the meaning of the
provisions of this Award Agreement.

         (c) Counterparts. This Award Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

         (d) Entire Agreement. This Award Agreement and the Plan constitute the
entire agreement between the parties hereto with regard to the subject matter
hereof. They supersede all other agreements, representations or understandings
(whether oral or written and whether express or implied) that relate to the
subject matter hereof.

         (e) Amendments. The Board or the Committee shall have the power to
alter, amend, modify or terminate the Plan or this Award Agreement at any time;
provided, however, that no such termination, amendment or modification may
adversely affect, in any material respect, the Participant's rights under this
Award Agreement without the Participant's consent. Notwithstanding the
foregoing, the Company shall have broad authority to amend this Award Agreement
without the consent of the Participant to the extent it deems necessary or
desirable (i) to comply with or take into account changes in or interpretations
of, applicable tax laws, securities laws, employment laws, accounting rules and
other applicable laws, rules and regulations, (ii) to ensure that the Restricted
Stock is not subject to interest and penalties under Section 409A of the Code,
(iii) to take into account unusual or nonrecurring events or market conditions,
or (iv) to take into account significant acquisitions or dispositions of assets
or other property by the Company. Any amendment, modification or termination
shall, upon adoption, become and be binding on all persons affected thereby
without requirement for consent or other action with respect thereto by any such
person. The Committee shall give written notice to the Participant of any such
amendment, modification or termination as promptly as practicable after the
adoption thereof. The foregoing shall not restrict the ability of the
Participant and the

                                       4

<PAGE>

Company by mutual consent to alter or amend the terms of the Restricted Stock in
any manner that is consistent with the Plan and approved by the Committee.

         (f) Successor. Except as otherwise provided herein, this Award
Agreement shall be binding upon and shall inure to the benefit of any successor
or successors of the Company, and to any Permitted Transferee pursuant to
Section 7.

         (g) Choice of Law. Except as to matters of federal law, this Award
Agreement and all actions taken thereunder shall be governed by and construed in
accordance with the laws of the State of Delaware (other than its conflict of
law rules).

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

                                     BE AEROSPACE, INC.

                                     By:
                                          ------------------------------------
                                          Name: Amin Khoury
                                          Title:   Chairman of the Board

<PAGE>

                          ELECTION UNDER SECTION 83(b)
                      OF THE INTERNAL REVENUE CODE OF 1986

                  The undersigned taxpayer hereby elects, pursuant to Section
83(b) of the Internal Revenue Code of 1986, as amended, to include in gross
income for 2006 the amount of any compensation taxable in connection with the
taxpayer's receipt of the property described below:

                  1. The name, address, taxpayer identification number and
taxable year of the undersigned are:

         TAXPAYER'S NAME:
                                            ------------------------------------

         SPOUSE'S NAME:
                                            ------------------------------------

         TAXPAYER'S SOCIAL SECURITY NO.:
                                            ------------------------------------

         SPOUSE'S SOCIAL SECURITY NO.:
                                            ------------------------------------

         TAXABLE YEAR:
                                            ------------------------------------

         ADDRESS:
                                            ------------------------------------

                                            ------------------------------------

         2. The property which is the subject of this election is    shares of
Common Stock of BE Aerospace, Inc.

         3. The property was transferred to the undersigned on

         4. The property is subject to the following restrictions: The shares of
Common Stock are subject to cancellation if unvested as of the date of
termination of service other than for death or disability and are
nontransferable until vested.

         5. The fair market value of the property at the time of transfer
(determined without regard to any restriction other than a restriction which by
its terms will never lapse) is: $    per share x ________ shares = $ _________.

         6. The undersigned paid $    per share x ________ shares for the
property transferred or a total of $

         The undersigned has submitted a copy of this statement to the person
for whom the services were performed in connection with the undersigned's
receipt of the above-described property. The undersigned taxpayer is the person
performing the services in connection with the transfer of said property.

         The undersigned will file this election with the Internal Revenue
Service office to which he files his annual income tax return not later than 30
days after the date of transfer of the property. A copy of the election also
will be furnished to the person for whom the services were

                                       6

<PAGE>

performed.  Additionally, the undersigned will include a copy of the election
with his income tax return for the taxable year in which the property is
transferred. The undersigned understands that this election will also be
effective as an election under ___________ law.

Dated:
        -------------------------         --------------------------------------

                                                          Taxpayer

The undersigned spouse of taxpayer joins in this election.

Dated:
        -------------------------         --------------------------------------

                                                    Spouse of Taxpayer

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