Document:

THIRD

REPLACEMENT

RENEWAL AND EXTENSION

PROMISSORY NOTE

 

 

	
            $2,782,900.59
 	
            Oklahoma City, Oklahoma
 

	
             
 	
            February 14, 2005
 

 

 

For value received, the undersigned, The Beard Company, an Oklahoma corporation (the “Maker”), agrees to all of the terms of this Promissory Note (this “Note”) and promises to pay to the order of William M. Beard and Lu Beard as Trustees of the William M. Beard and Lu Beard 1988 Charitable Unitrust (individually and collectively called the “Holder”), at Enterprise Plaza, Suite 320, 5600 N. May, Oklahoma City, Oklahoma 73112, or at such other place as may be designated in writing by the Holder of this Note, the principal sum of Two Million Seven Hundred Eighty-Two Thousand Nine Hundred and 59/100ths Dollars ($2,782,900.59) plus all interest accruing thereon.  This Note will be payable as follows:

 

Prior to Default the unpaid principal balance of this Note will bear interest at the rate of ten percent (10%) (the “Applicable Rate”).  Interest will commence to accrue on the unpaid principal balance of this Note on the date hereof and thereafter until this Note is paid in full.  Interest will be computed for the actual number of days elapsed at a per diem charge based on a year consisting of three hundred sixty (360) days.  All payments will be applied first to any accrued interest on this Note and the remainder to the principal balance of the Note.  The outstanding principal balance plus unpaid accrued interest are due and payable on April 1, 2009.

 

Except as otherwise defined herein, all terms defined in the Restated and Amended Letter Loan Agreement dated June 13, 2007, between the Maker and the Holder (the “Loan Agreement”) will have the same meanings as therein, and the Holder recognizes that it is subject to all of the provisions set forth in the third paragraph of the Amendment to Restated and Amended Letter Loan Agreement dated June 25, 2004 (the “6/25/04 Amendment”).  Both principal and interest owing pursuant to the terms of this Note are payable in the lawful currency of the United States of America and in immediately available funds.  All payments made on this Note will be applied to this Note when received by the Holder hereof in collected funds.  Any sum not paid when due will bear interest at the rate equal to the Applicable Rate plus five percent (5.0%) and will be paid at the time of, and as a
condition precedent to, the curing of any Event of Default.  During the existence of any Event of Default, the Holder of this Note may apply payments received on any amount due hereunder or under the terms of any instrument hereafter evidencing or securing said indebtedness as the Holder may determine.

 

/s/HMJ

Page 1 of 3 Pages

 

The Maker agrees that if, and as often as, this Note is placed in the hands of an attorney for collection or to defend or enforce any of the Holder’s rights hereunder, the Maker will pay to 

 

 

the Holder all reasonable attorney’s fees and all expenses incurred by the Holder in connection therewith.

 

THIS NOTE IS GIVEN BY THE MAKER AND ACCEPTED BY THE HOLDER PURSUANT TO A LENDING TRANSACTION CONTRACTED, CONSUMMATED, AND TO BE PERFORMED IN OKLAHOMA CITY, OKLAHOMA COUNTY, OKLAHOMA, AND THIS NOTE SHALL BE CONSTRUED ACCORDING TO THE LAWS OF THE STATE OF OKLAHOMA. In the event of any Event of Default, the Holder may request, and the Maker agrees to furnish to the Holder, agreeable collateral and such security agreements as the Maker may reasonably require to secure the indebtedness.

 

This Note is issued subject to the terms of the Loan Agreement and the 6/25/04 Amendment (collectively, the “Loan Agreements”).  On the breach of any provision of this Note, or any provision of the Loan Agreements at the option of the Holder, the entire unpaid indebtedness evidenced by this Note will become due, payable and collectible then or thereafter as the Holder may elect, regardless of the date of maturity of this Note.  Notice of the exercise of such option is hereby expressly waived.  Failure by the Holder to exercise such option will not constitute a waiver of the right to exercise the same in the event of any subsequent default.

The failure of the Holder to exercise any of the remedies or options set forth in this Note, or in any instrument securing payment hereof, upon the occurrence of one or more Events of Default, shall not constitute a waiver of the right to exercise the same or any other remedy at any subsequent time in respect to the same or any other Event of Default.  The acceptance by the Holder of any payment which is less than the total of all amounts due and payable at the time of such payment shall not constitute a waiver of the right to exercise any of the foregoing remedies or options at that time or any subsequent time, or nullify any prior exercise of such remedy or option, without the express consent of the Holder.

Time is of the essence of each obligation of the Maker hereunder.

The makers, endorsers, sureties, guarantors and all other persons who may become liable for all or any part of this obligation severally waive presentment for payment, protest, demand and notice of nonpayment.  Said parties consent to any extension of time (whether one or more) of payment hereof, the modification (whether one or more) of payment hereof, release or substitution of all or part of the security for the payment hereof or release of any party liable for payment of this obligation.  Any such extension or release may be made without notice to any such party and without discharging such party’s liability hereunder.

The Maker has the right to prepay this Note in whole or in part at any time and from time to time without premium or penalty, but with accrued interest to the date of the prepayment on the amount prepaid.

 

/s/HMJ

Page 2 of 3 Pages

 

The Maker waives presentment for payment, protest and notice of nonpayment.

 

IN WITNESS WHEREOF, the Maker has executed this instrument effective on the date 

first above written.

 

 

 

	
            ATTEST:
 	
            THE BEARD COMPANY
 

 

	
             
 	
            /s/ Hue Green
 	
            /s/ Herb Mee, Jr.
 

	
             
 	
            Hue Green, Secretary
 	
            Herb Mee, Jr., President
 

 

/s/ HMJ

Page 3 of 3 PagesEXHIBIT 4.1

      CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND
                           PREFERENCES
                             OF THE
              SERIES A CONVERTIBLE PREFERRED STOCK
                               OF

                         DENTALSERV.COM

     The   undersigned,   the   Chief   Executive   Officer    of
Dentalserv.com,   a  Nevada  corporation  (the   "Company"),   in
accordance  with  the provisions of the Nevada General  Corporate
Law,   does  hereby  certify  that,  pursuant  to  the  authority
conferred  upon  the  Board  of  Directors  by  the  Articles  of
Incorporation of the Company, the following resolution creating a
series  of  preferred stock, designated as Series  A  Convertible
Preferred Stock, was duly adopted on August 17, 2007, as follows:

     RESOLVED,  that pursuant to the authority expressly  granted
to  and  vested  in  the Board of Directors  of  the  Company  by
provisions  of the Articles of Incorporation of the Company  (the
"Articles of Incorporation"), there hereby is created out of  the
shares  of  the  Company's preferred stock, par value  $0.01  per
share, of the Company authorized in Article IV of the Articles of
Incorporation  (the  "Preferred Stock"), a  series  of  Preferred
Stock of the Company, to be named "Series A Convertible Preferred
Stock,"  consisting of 6,668,230 shares, which series shall  have
the  following designations, powers, preferences and relative and
other   special   rights   and   the  following   qualifications,
limitations and restrictions:

     Designation and Rank.  The designation of such series of the
     --------------------
Preferred  Stock  shall  be the Series  A  Convertible  Preferred
Stock,  par  value  $0.01  per share  (the  "Series  A  Preferred
Stock").   The  maximum number of shares of  Series  A  Preferred
Stock  is  6,668,230 shares.  The Series A Preferred Stock  shall
rank  senior to the Company's common stock, par value  $0.01  per
share  (the "Common Stock"), and to all other classes and  series
of  equity securities of the Company which by their terms do  not
rank  senior  to  the Series A Preferred Stock ("Junior  Stock").
The  Series  A Preferred Stock shall be subordinate to  and  rank
junior  to  all  indebtedness of the  Company  now  or  hereafter
outstanding.

     Dividends.
     ----------
          Payment  of Dividends.  Commencing on the date  of  the
          ----------------------
initial  issuance (the "Issuance Date") of the Series A Preferred
Stock,  the  holders  of record of shares of Series  A  Preferred
Stock shall be entitled to receive, out of any assets at the time
legally  available  therefor and as  declared  by  the  Board  of
Directors, cash dividends at the rate of five percent (5%) of the
stated  Liquidation Preference Amount (as defined  in  Section  4
hereof)  per  share  per annum (the "Dividend Payment"),  and  no
more,   payable  on  the  date  of  payment  of  the  Liquidation
Preference  Amount  to the holders of Series A  Preferred  Stock,
pursuant  to  Section 4 hereof, in the event  of  a  dissolution,
liquidation or winding up of the Company.  In the case of  shares
of  Series  A  Preferred Stock outstanding for less than  a  full
year,  dividends shall be pro rated based on the portion of  each
year during which such shares are outstanding.  Dividends on  the
Series A Preferred Stock shall be cumulative, shall accrue and be
payable in the event of a dissolution, liquidation or winding  up
of  the  Company pursuant to Section 4 hereof.  Dividends on  the

<PAGE>

Series  A  Preferred  Stock are prior and in  preference  to  any
declaration or payment of any distribution (as defined below)  on
any  outstanding  shares of Junior Stock.  Such  dividends  shall
accrue on each share of Series A Preferred Stock from day to  day
whether or not earned or declared so that if such dividends  with
respect to any previous dividend period at the rate provided  for
herein have not been paid on, or declared and set apart for,  all
shares  of Series A Preferred Stock at the time outstanding,  the
deficiency shall be fully paid on, or declared and set apart for,
such  shares on a pro rata basis with all other equity securities
of  the  Company ranking pari passu with the Series  A  Preferred
Stock  as  to  the  payment of dividends before any  distribution
shall be paid on, or declared and set apart for Junior Stock.

          So  long as any shares of Series A Preferred Stock  are
outstanding, the Company shall not declare, pay or set apart  for
payment any dividend or make any distribution on any Junior Stock
(other  than  dividends  or distributions payable  in  additional
shares  of Junior Stock), unless at the time of such dividend  or
distribution the Company shall have paid all accrued  and  unpaid
dividends on the outstanding shares of Series A Preferred Stock,

          In  the event of (i) a mandatory redemption pursuant to
Section  9 hereof or (ii) a redemption upon the occurrence  of  a
Major  Transaction  (as  defined in Section  8(c)  hereof)  or  a
`triggering  Event  (as  defined in  Section  8(d)  hereof),  all
accrued  and  unpaid dividends on the Series  A  Preferred  Stock
shall be payable on the date of such redemption.  In the event of
a  conversion  pursuant to Section 5(a) hereof, all  accrued  and
unpaid  dividends on the Series A Preferred Stock being converted
shall  be  payable on the Conversion Date (as defined in  Section
5(b)(i) hereof).

          For  purposes  hereof,  unless  the  context  otherwise
requires,  "distribution" shall mean  the  transfer  of  cash  or
property  without consideration, whether by way  of  dividend  or
otherwise, payable other than in shares of Common Stock or  other
equity  securities of the Company, or the purchase or  redemption
of  shares  of the Company (other than redemptions set  forth  in
Section  8 below or repurchases of Common Stock held by employees
or   consultants  of  the  Company  upon  termination  of   their
employment or services pursuant to agreements providing for  such
repurchase  or  upon  the cashless exercise of  options  held  by
employees or consultants) for cash or property.

     Voting Rights.
     -------------
          Class  Voting  Rights.   So  long  as  the  shares   of
          ---------------------
Preferred  Stock  outstanding shall equal at  least  two  hundred
thousand   (200,000),  the  Company  shall   not,   without   the
affirmative  vote or consent of the holders of at least  seventy-
five  percent (75%) of the shares of the Series A Preferred Stock
outstanding at the time, given in person or by proxy,  either  in
writing  or  at a meeting, in which the holders of the  Series  A
Preferred  Stock  vote  separately as  a  class:  (i)  authorize,
create, issue or increase the authorized or issued amount of  any
class  or  series of stock ranking pari passu or  senior  to  the
Series  A  Preferred Stock, with respect to the  distribution  of
assets  on  liquidation, dissolution or winding up;  (ii)  amend,
alter  or repeal the provisions of the Series A Preferred  Stock,
whether by merger, consolidation or otherwise, so as to adversely
affect  any right, preference, privilege or voting power  of  the
Series  A  Preferred Stock; provided, however, that any  creation
                            -----------------
and  issuance  of  another series of Junior Stock  shall  not  be
deemed  to  adversely affect such rights, preferences, privileges
or  voting powers; (iii) repurchase, redeem or pay dividends  on,

                                  2
<PAGE>

shares  of  Common  Stock or any other shares  of  the  Company's
Junior Stock (other than de minimus repurchases from employees of
the   Company  in  certain  circumstances,  and  any  contractual
redemption  obligations  existing  as  of  the  date  hereof   as
disclosed in the Company's public filings with the Securities and
Exchange Commission); (iv) amend the Articles of Incorporation or
By-Laws  of the Company so as to affect materially and  adversely
any right, preference, privilege or voting power of the Series  A
Preferred  Stock;  provided,  however,  that  any  creation   and
                   -------------------
issuance of another series of Junior Stock shall not be deemed to
adversely  affect such rights, preferences, privileges or  voting
powers; (v) effect any distribution with respect to Junior  Stock
other  than  as  permitted hereby; (vi) reclassify the  Company's
outstanding  securities  in  a way  that  adversely  affects  the
rights, preferences, privileges or voting powers of the Preferred
Stock;  (vii)  voluntarily  file for  bankruptcy,  liquidate  the
Company's  assets or make an assignment for the  benefit  of  the
Company's  creditors; or (viii) no longer  are  involved  in  the
business of commercializing medical devices,

          General   Voting  Rights.   Except  with   respect   to
          ------------------------
transactions  upon which the Series A Preferred  Stock  shall  be
entitled  to vote separately as a class pursuant to Section  3(a)
above  and except as otherwise required by Nevada law, the Series
A  Preferred Stock shall have no voting rights.  The Common Stock
into  which  the  Series A Preferred Stock is convertible  shall,
upon issuance, have all of the same voting rights as other issued
and  outstanding  Common Stock of the Company, and  none  of  the
rights of the Preferred Stock.

     Liquidation Preference.
     ----------------------

          In the event of the liquidation, dissolution or winding
up   of  the  affairs  of  the  Company,  whether  voluntary   or
involuntary,  the holders of shares of Series A  Preferred  Stock
that  are  outstanding shall be entitled to receive, out  of  the
assets   of  the  Company  available  for  distribution  to   its
stockholders,   an  amount  equal  to  $1.81   per   share   (the
"Liquidation Preference Amount") of the Series A Preferred  Stock
plus  any accrued and unpaid Dividend Payments, to be paid as  an
accreting  liquidation preference, before any  payment  shall  be
made or any assets distributed to the holders of the Common Stock
or  any other Junior Stock.  If the assets of the Company are not
sufficient to pay in full the Liquidation Preference Amount  plus
any  accrued  and  unpaid dividends payable  to  the  holders  of
outstanding shares of the Series A Preferred Stock and any series
of  Preferred  Stock  or any other class of  stock  ranking  pari
passu,  as  to rights on liquidation, dissolution or winding  up,
with  the Series A Preferred Stock, then all of said assets  will
be  distributed among the holders of the Series A Preferred Stock
and the other classes of stock ranking pari passu with the Series
A  Preferred  Stock,  if  any, ratably  in  accordance  with  the
respective  amounts that would be payable on such shares  if  all
amounts  payable  thereon  were paid in  full.   The  liquidation
payment  with  respect to each outstanding  fractional  share  of
Series   A   Preferred  Stock  shall  be  equal  to   a   ratably
proportionate amount of the liquidation payment with  respect  to
each outstanding share of Series A Preferred Stock.  All payments
for  which this Section 4(a) provides shall be in cash,  property
(valued  at its fair market value as determined by an independent
appraiser  reasonably acceptable to the holders of a majority  of
the Series A Preferred Stock) or a combination thereof; provided,
however,  that no cash shall be paid to holders of  Junior  Stock
unless  each  holder  of  the  outstanding  shares  of  Series  A
Preferred  Stock  has  been  paid in cash  the  full  Liquidation
Preference Amount plus any accrued and unpaid dividends to  which

                                  3
<PAGE>

such holder is entitled as provided herein.  After payment of the
full  Liquidation Preference Amount plus any accrued  and  unpaid
dividends  to  which  each holder is entitled,  such  holders  of
shares  of Series A Preferred Stock will not be entitled  to  any
further  participation as such in any distribution of the  assets
of the Company.

          A  consolidation or merger of the Company with or  into
any  other  corporation or corporations, or  a  sale  of  all  or
substantially  all  of  the  assets  of  the  Company,   or   the
effectuation by the Company of a transaction or series of related
transactions in which more than 50% of the voting shares  of  the
Company is disposed of or conveyed, shall not be deemed to  be  a
liquidation,  dissolution, or winding up within  the  meaning  of
this  Section 4.  In the event of the merger or consolidation  of
the  Company  with  or  into another corporation,  the  Series  A
Preferred  Stock shall maintain its relative powers, designations
and  preferences provided for herein and no merger  shall  result
which  is inconsistent therewith unless otherwise approved by  at
least  seventy-five percent (75%) of the then outstanding  shares
of  Series A Preferred Stock; provided, however, that the  number
of outstanding shares of Preferred Stock must be greater than two
hundred thousand (200,000) for the voting rights set out in  this
Section to apply..

          Written   notice   of  any  voluntary  or   involuntary
liquidation,  dissolution or winding up of  the  affairs  of  the
Company,  stating  a  payment  date  and  the  place  where   the
distributable amounts shall be payable, shall be given  by  mail,
postage prepaid, no less than forty-five (45) days prior  to  the
payment  date  stated therein, to the holders of  record  of  the
Series  A  Preferred Stock at their respective addresses  as  the
same shall appear on the books of the Company.

     Conversion.   The holder of Series A Preferred  Stock  shall
     ----------
have the following conversion rights (the "Conversion Rights"):

          Right to Convert.  At any time on or after the Issuance
          ----------------
Date,  the holder of any such shares of Series A Preferred  Stock
may,  at  such  holder's option, subject to the  limitations  set
forth in Section 7 herein, elect to convert (a "Conversion")  all
or  any portion of the shares of Series A Preferred Stock held by
such  person  (provided that the minimum amount  of  such  shares
converted shall be two hundred thousand (200,000)) into a  number
of  fully paid and nonassessable shares of Common Stock equal  to
the  quotient  of (i) the Liquidation Preference  Amount  of  the
shares  of Series A Preferred Stock being converted by  (ii)  the
Conversion  Price  (as defined in Section  5(d)  below)  then  in
effect  as  of  the date of the delivery by such  holder  of  its
notice  of  election to convert.  In the event  of  a  notice  of
redemption of any shares of Series A Preferred Stock pursuant  to
Section  8 hereof, the Conversion Rights of the shares designated
for  redemption shall terminate at the close of business  on  the
last full day preceding the date fixed for redemption, unless the
redemption  price is not paid on such redemption date,  in  which
case  the Conversion Rights for such shares shall continue  until
such  price  is  paid in full.  In the event  of  a  liquidation,
dissolution  or winding up of the Company, the Conversion  Rights
shall  terminate at the close of business on the  last  full  day
preceding  the  date fixed for the payment of  any  such  amounts
distributable on such event to the holders of Series A  Preferred
Stock.   In  the  event  of  such a  redemption  or  liquidation,
dissolution  or  winding up, the Company shall  provide  to  each
holder  of  shares  of Series A Preferred Stock  notice  of  such
redemption  or  liquidation, dissolution  or  winding  up,  which
notice shall (i) be sent at least fifteen (15) days prior to  the
termination of the Conversion Rights (or, if the Company  obtains
lesser  notice  thereof, then as promptly as possible  after  the
date  that  it  has obtained notice thereof) and (ii)  state  the
amount per share of Series A Preferred Stock that will be paid or
distributed  on  such redemption or liquidation,  dissolution  or
winding up, as the case may be.

                                  4
<PAGE>

          Mechanics  of Conversion.  The Conversion of  Series  A
          ------------------------
Preferred Stock shall be conducted in the following manner:

               Holder's Delivery Requirements.  To convert Series
               ------------------------------
A  Preferred Stock into full shares of Common Stock on  any  date
(the "Conversion Date"), the holder thereof shall (A) transmit by
facsimile (or otherwise deliver), for receipt on or prior to 5:00
p.m.,  New  York  time on such date, a copy of a  fully  executed
notice  of  conversion in the form attached hereto as  Exhibit  I
(the  "Conversion  Notice"), to the Company  at  (817  Winchester
Road,  Suite  200,  Lexington, Kentucky 40505), Attention:  Chief
Executive Officer, and (B) deliver via overnight delivery service
to  the  Company as soon as practicable following such Conversion
Date  the original certificates representing the shares of Series
A   Preferred   Stock  being  converted  (or  an  indemnification
undertaking  with  respect to such shares in the  case  of  their
loss,  theft or destruction) (the "Preferred Stock Certificates")
and the originally executed Conversion Notice.

               Company's  Response.  Upon receipt by the  Company
               -------------------
of  a  facsimile copy of a Conversion Notice, the  Company  shall
immediately  send, via facsimile, a confirmation  of  receipt  of
such  Conversion  Notice to such holder.   Upon  receipt  by  the
Company of a copy of the fully executed Conversion Notice and any
original  certificates  representing  the  shares  of  Series   A
Preferred  Stock being converted, the Company or  its  designated
transfer  agent  (the  "Transfer Agent"), as  applicable,  shall,
within  three (3) business days following the date of receipt  by
the  Company  of  the fully executed Conversion  Notice  and  any
original  certificates  representing  the  shares  of  Series   A
Preferred  Stock  being  converted,  issue  and  deliver  to  the
Depository Trust Company, ("DTC") account on the Holder's  behalf
via  the  Deposit Withdrawal Agent Commission System ("DWAC")  as
specified  in the Conversion Notice, or via physical  certificate
if  so specified in the Conversion Notice, registered in the name
of the holder or its designee, for the number of shares of Common
Stock to which the holder shall be entitled.  Notwithstanding the
foregoing  to  the  contrary, the Company or its  Transfer  Agent
shall  only be obligated to issue and deliver the shares  to  the
DTC,  on  a  holder's behalf via DWAC if a registration statement
providing  for the resale of the shares of Common Stock  issuable
upon  conversion of the Series A Preferred Stock is effective  or
such shares are otherwise eligible for legend removal, and if the
Transfer  Agent  is  a participant in the DWAC  system.   If  the
shares  of Common Stock to be received pursuant to the Conversion
Notice  are  not  registered  or otherwise  eligible  for  legend
removal, the Transfer Agent shall issue a physical certificate in
the   name  of  the  holder  representing  such  shares  with   a
restrictive legend as set forth in the Purchase Agreement  and  a
notation  that such shares are deemed owned by the holder  as  of
the  Issuance  Date  for  purposes of  determining  the  holder's
holding  period under Rule 144 of the Securities Act of 1933,  as
amended.   If the number of shares of Preferred Stock represented
by the Preferred Stock Certificate(s) submitted for conversion is
greater  than  the number of shares of Series A  Preferred  Stock
being  converted, then the Company shall, as soon as  practicable
and  in no event later than three (3) business days after receipt
of  the  Preferred  Stock Certificate(s)  and  at  the  Company's
expense,  issue  and deliver to the holder a new Preferred  Stock
Certificate  representing  the  number  of  shares  of  Series  A
Preferred Stock not converted.

               Dispute  Resolution.  In the case of a dispute  as
               -------------------
to  the  arithmetic calculation of the number of shares of Common
Stock  to be issued upon conversion, the Company shall cause  its
Transfer  Agent  to promptly issue to the holder  the  number  of
shares of Common Stock that is not disputed and shall submit  the
arithmetic  calculations to the holder via facsimile as  soon  as

                                  5
<PAGE>

possible, but in no event later than two (2) business days  after
receipt  of such holder's Conversion Notice.  If such holder  and
the  Company  are unable to agree upon the arithmetic calculation
of  the  number of shares of Common Stock to be issued upon  such
conversion   within  one  (1)  business  day  of  such   disputed
arithmetic  calculation being submitted to the holder,  then  the
Company  shall  within one (1) business day submit via  facsimile
the  disputed arithmetic calculation of the number of  shares  of
Common  Stock to be issued upon such conversion to the  Company's
independent,  outside accountant.  The Company  shall  cause  the
accountant to perform the calculations and notify the Company and
the  holder  of the results no later than seventy-two (72)  hours
from  the  time  it  receives  the disputed  calculations.   Such
accountant's calculation shall be binding upon all parties absent
manifest  error.  The reasonable expenses of such  accountant  in
making  such determination shall be paid by the Company,  in  the
event the holder's calculation was correct, or by the holder,  in
the  event  the Company's calculation was correct, or equally  by
the  Company  and  the  holder  in the  event  that  neither  the
Company's or the holder's calculation was correct.  The period of
time  in  which the Company is required to effect conversions  or
redemptions under this Certificate of Designation shall be tolled
with  respect  to  the subject conversion or  redemption  pending
resolution of any dispute by the Company made in good  faith  and
in accordance with this Section 5(b)(iii).

               Record Holder.  The person or persons entitled  to
               -------------
receive the shares of Common Stock issuable upon a conversion  of
the Series A Preferred Stock shall be treated for all purposes as
the  record holder or holders of such shares of Common  Stock  on
the Conversion Date.

               Company's  Failure to Timely Convert.   If  within
               ------------------------------------
seven  (7) business days of the Company's receipt of an  executed
copy  of  the  Conversion  Notice  (so  long  as  the  applicable
Preferred  Stock Certificates and original Conversion Notice  are
received  by  the Company on or before such third  business  day)
(the "Delivery Date") the Transfer Agent shall fail to issue  and
deliver to a holder the number of shares of Common Stock to which
such  holder  is  entitled upon such holder's conversion  of  the
Series  A  Preferred  Stock or to issue  a  new  Preferred  Stock
Certificate  representing  the  number  of  shares  of  Series  A
Preferred  Stock  to  which such holder is entitled  pursuant  to
Section  5(b)(ii) (a "Conversion Failure"), in  addition  to  all
other  available remedies which such holder may pursue  hereunder
and  under  the  Series  A Convertible Preferred  Stock  Purchase
Agreement  (the "Purchase Agreement") among the Company  and  the
initial  holders  of  the  Series A  Preferred  Stock  (including
indemnification pursuant to Section 6 thereof), the Company shall
pay  additional damages to such holder on each business day after
such  seventh  (7th)  business day that such  conversion  is  not
timely effected in an amount equal to 0.5% of the product of  (A)
the number of shares of Common Stock not issued to the holder  on
a  timely  basis pursuant to Section 5(b)(ii) and to  which  such
holder  is  entitled and, in the event the Company has failed  to
deliver  a Preferred Stock Certificate to the holder on a  timely
basis  pursuant  to  Section 5(b)(ii), the number  of  shares  of
Common  Stock issuable upon conversion of the shares of Series  A
Preferred  Stock represented by such Preferred Stock Certificate,
as  of the last possible date which the Company could have issued
such Preferred Stock Certificate to such holder without violating
Section 5(b)(ii) and (B) the Closing Bid Price (as defined below)
of  the  Common Stock on the last possible date which the Company
could  have  issued  such Common Stock and such  Preferred  Stock
Certificate, as the case may be, to such holder without violating
Section  5(b)(ii).   If the Company fails to pay  the  additional
damages  set  forth in this Section 5(b)(v) within  fifteen  (15)
business days of the date incurred, then such payment shall  bear

                                  6
<PAGE>

interest  at  the rate of 2.0% per month (pro rated  for  partial
months)  until  such payments are made.  The  term  "Closing  Bid
Price"  shall  mean, for any security as of any  date,  the  last
closing  bid price of such security on the OTC Bulletin Board  or
other  quotation  venue  or  principal  exchange  on  which  such
security  is traded as reported by Bloomberg, or, if  no  closing
bid  price is reported for such security by Bloomberg,  the  last
closing  trade  price of such security as reported by  Bloomberg,
or,  if no last closing trade price is reported for such security
by  Bloomberg, the average of the bid prices of any market makers
for  such  security as reported by the Pink Sheets LLC.   If  the
Closing Bid Price cannot be calculated for such security on  such
date on any of the foregoing bases, the Closing Bid Price of such
security  on such date shall be the fair market value as mutually
determined  by the Company and the holders of a majority  of  the
outstanding shares of Series A Preferred Stock.

               Buy-In  Rights.  In addition to any  other  rights
               --------------
available  to  the holders of Series A Preferred  Stock,  if  the
Company  fails  to cause its Transfer Agent to  transmit  to  the
holder  a certificate or certificates representing the shares  of
Common  Stock issuable upon conversion of the Series A  Preferred
Stock on or before the Delivery Date, and if after such date  the
holder  is required by its broker to purchase (in an open  market
transaction  or otherwise) shares of Common Stock to  deliver  in
satisfaction  of  a sale by the holder of the  shares  of  Common
Stock  issuable upon conversion of Series A Preferred Stock which
the  holder anticipated receiving upon such conversion  (a  "Buy-
In"),  then  the Company shall (1) pay in cash to the holder  the
amount  by which (x) the holder's total purchase price (including
brokerage commissions, if any) for the shares of Common Stock  so
purchased exceeds (y) the amount obtained by multiplying (A)  the
number  of  shares  of Common Stock issuable upon  conversion  of
Series A Preferred Stock that the Company was required to deliver
to  the  holder in connection with the conversion at issue  times
(B)  the  price  at  which the sell order  giving  rise  to  such
purchase  obligation was executed, and (2) at the option  of  the
holder,  either reinstate the shares of Series A Preferred  Stock
and  equivalent number of shares of Common Stock for  which  such
conversion was not honored or deliver to the holder the number of
shares  of  Common  Stock that would have  been  issued  had  the
Company   timely  complied  with  its  conversion  and   delivery
obligations  hereunder.   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
Common  Stock  with an aggregate sale price giving rise  to  such
purchase  obligation  of  $10,000,  under  clause  (1)   of   the
immediately  preceding sentence the Company shall be required  to
pay  to  the holder $1,000.  The holder shall provide the Company
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  Company.   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 Company's failure to timely  deliver
certificates representing shares of Common Stock upon  conversion
of the Series A Preferred Stock as required pursuant to the teams
hereof.

          Intentionally omitted.
          ---------------------

          Conversion Price.
          ----------------

               The  term "Conversion Price" shall mean $1.81  per
share on a 1 to 1 basis, subject to adjustment under Section 5(e)
hereof.   Notwithstanding any adjustment hereunder,  at  no  time

                                  7
<PAGE>

shall the Conversion Price be greater than $1.81 per share except
if it is adjusted pursuant to Section 5(e)(i).

               Notwithstanding the foregoing to the contrary,  if
during  any period (a "Black-out Period"), a holder of  Series  A
                       ----------------
Preferred  Stock  is unable to trade any Common Stock  issued  or
issuable  upon  conversion  of  the  Series  A  Preferred   Stock
immediately  due  to  the postponement  of  filing  or  delay  or
suspension  of  effectiveness of the  Registration  Statement  or
because the Company has otherwise informed such holder of  Series
A  Preferred Stock that an existing prospectus cannot be used  at
that  time in the sale or transfer of such Common Stock (provided
that  such  postponement,  delay, suspension  or  fact  that  the
prospectus cannot be used is not due to factors solely within the
control of the holder of Series A Preferred Stock or due  to  the
Company  exercising  its  rights  under  Section  3(n)   of   the
Registration  Rights  Agreement  (as  defined  in  the   Purchase
Agreement)  or  the  deadline  for  the  effectiveness   of   the
Registration  Statement  has  not passed  as  set  forth  in  the
Registration Rights Agreement, such holder of Series A  Preferred
Stock  shall  have  the  option but not  the  obligation  on  any
Conversion  Date  within  ten  (10) trading  days  following  the
expiration of the Black-out Period of using the Conversion  Price
applicable  on  such  Conversion Date  or  any  Conversion  Price
selected  by such holder of Series A Preferred Stock  that  would
have been applicable had such Conversion Date been at any earlier
time  during the Black-out Period or within the ten (10)  trading
days thereafter.

          Adjustments of Conversion Price.
          -------------------------------
               Adjustments for Stock Splits and Combinations.  If
               ---------------------------------------------
the  Company  shall at any time or from time to  time  after  the
Issuance  Date,  effect a stock split of the  outstanding  Common
Stock,  the  Conversion Price shall be proportionately decreased.
If  the Company shall at any time or from time to time after  the
Issuance  Date, combine the outstanding shares of  Common  Stock,
the  Conversion  Price shall be proportionately  increased.   Any
adjustments under this Section 5(e)(i) shall be effective at  the
close  of  business  on the date the stock split  or  combination
becomes effective.

               Adjustments    for    Certain    Dividends     and
               --------------------------------------------------
Distributions.  If the Company shall at any time or from time  to
-------------
time  after the Issuance Date, make or issue or set a record date
for  the  determination of holders of Common  Stock  entitled  to
receive  a  dividend or other distribution payable in  shares  of
Common Stock, then, and in each event, the Conversion Price shall
be  decreased  as of the time of such issuance or, in  the  event
such  record  date  shall have been fixed, as  of  the  close  of
business on such record date, by multiplying the Conversion Price
then in effect by a fraction:

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

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

                                  8
<PAGE>

               Adjustment  for Other Dividends and Distributions.
               -------------------------------------------------
If  the Company shall at any time or from time to time after  the
Issuance  Date,  make  or issue or set  a  record  date  for  the
determination of holders of Common Stock entitled  to  receive  a
dividend  or  other  distribution payable in  securities  of  the
Company  other  than shares of Common Stock, then,  and  in  each
event, an appropriate revision to the applicable Conversion Price
shall be made and provision shall be made (by adjustments of  the
Conversion  Price or otherwise) so that the holders of  Series  A
Preferred  Stock  shall  receive  upon  conversions  thereof,  in
addition  to  the  number  of shares of Common  Stock  receivable
thereon, the number of securities of the Company which they would
have  received had their Series A Preferred Stock been  converted
into  Common  Stock on the date of such event and had thereafter,
during  the  period from the date of such event to and  including
the  Conversion Date, retained such securities (together with any
distributions   payable  thereon  during  such  period),   giving
application  to  all  adjustments called for during  such  period
under  this Section 5(e)(iii) with respect to the rights  of  the
holders of the Series A Preferred Stock; provided, however,  that
                                         -----------------
if  such  record date shall have been fixed and such dividend  is
not  fully paid or if such distribution is not fully made on  the
date  fixed  therefor,  the Conversion Price  shall  be  adjusted
pursuant  to this paragraph as of the time of actual  payment  of
such  dividends or distributions, and provided further,  however,
                                      ----------------
that no such adjustment shall be made if the holders of Series  A
Preferred  Stock simultaneously receive (i) a dividend  or  other
distribution of shares of Common Stock in a number equal  to  the
number  of shares of Common Stock as they would have received  if
all  outstanding  shares  of Series A Preferred  Stock  had  been
converted into Common Stock on the date of such event or  (ii)  a
dividend  or  other distribution of shares of Series A  Preferred
Stock  which are convertible, as of the date of such event,  into
such  number of shares of Common Stock as is equal to the  number
of additional shares of Common Stock being issued with respect to
each share of Common Stock in such dividend or distribution,

               Adjustments  for  Reclassification,  Exchange   or
               --------------------------------------------------
Substitution.   If the Common Stock issuable upon  conversion  of
------------
the  Series  A Preferred Stock at any time or from time  to  time
after the Issuance Date shall be changed to the same or different
number  of  shares of any class or classes of stock,  whether  by
reclassification, exchange, substitution or otherwise (other than
by  way  of  a  stock  split or combination of  shares  or  stock
dividends provided for in Sections 5(e)(i), (ii) and (iii), or  a
reorganization, merger, consolidation, or sale of assets provided
for  in Section 5(e)(v)), then, and in each event, an appropriate
revision  to  the Conversion Price shall be made  and  provisions
shall  be  made  (by  adjustments  of  the  Conversion  Price  or
otherwise) so that the holder of each share of Series A Preferred
Stock  shall have the right thereafter to convert such  share  of
Series  A  Preferred Stock into the kind and amount of shares  of
stock  and  other  securities receivable  upon  reclassification,
exchange, substitution or other change, by holders of the  number
of  shares  of  Common Stock into which such share  of  Series  A
Preferred  Stock might have been converted immediately  prior  to
such  reclassification, exchange, substitution or  other  change,
all subject to further adjustment as provided herein.

               Adjustments     for    Reorganization,     Merger,
               --------------------------------------------------
Consolidation or Sales of Assets.  If at any time or from time to
--------------------------------
time   after  the  Issuance  Date  there  shall  be   a   capital
reorganization of the Company (other than by way of a stock split
or  combination  of  shares or stock dividends  or  distributions
provided   for  in  Section  5(e)(i),  (ii)  and  (iii),   or   a
reclassification, exchange or substitution of shares provided for
in Section 5(e)(iv)), or a merger or consolidation of the Company
with or into another corporation where the holders of outstanding
voting  securities prior to such merger or consolidation  do  not
own  over 50% of the outstanding voting securities of the  merged

                                  9
<PAGE>

or   consolidated  entity,  immediately  after  such  merger   or
consolidation,  or the sale of all or substantially  all  of  the
Company's  properties or assets to any other person (an  "Organic
Change"),  then  as a part of such Organic Change an  appropriate
revision  to the Conversion Price shall be made if necessary  and
provision  shall  be  made if necessary (by  adjustments  of  the
Conversion  Price or otherwise) so that the holder of each  share
of  Series  A Preferred Stock shall have the right thereafter  to
convert such share of Series A Preferred Stock into the kind  and
amount of shares of stock and other securities or property of the
Company  or  any  successor corporation  resulting  from  Organic
Change.   Notwithstanding  the foregoing,  the  prohibitions  set
forth above regarding an Organic Change shall not pertain to  the
issuance  of Common Stock in connection with any future strategic
acquisitions which are approved in writing by the holders  of  at
least  seventy-five percent (75%) of the then outstanding  shares
of  the  Series  A Preferred Stock, provided that the  shares  of
Series  A  Preferred Stock then outstanding equal  at  least  two
hundred  thousand  (200,000),  and provided  further  that,  such
approval  will not to be unreasonably withheld (each a "Permitted
Future  Transaction").   In any such case appropriate  adjustment
shall  be  made  in  the application of the  provisions  of  this
Section 5(e)(v) with respect to the rights of the holders of  the
Series A Preferred Stock after the Organic Change to the end that
the  provisions of this Section 5(e)(v) (including any adjustment
in  the  Conversion Price then in effect and the number of shares
of  stock or other securities deliverable upon conversion of  the
Series A Preferred Stock) shall be applied after that event in as
nearly an equivalent manner as may be practicable.

               Adjustments for Issuance of Additional  Shares  of
               --------------------------------------------------
Common Stock.
-------------

          (A)  For a period of twelve (12) months after the
Issuance Date (the "Price Protection Period"), in the event the
Company shall issue or sell any additional shares of Common Stock
(otherwise than as provided in the foregoing subsections (i)
through (v) of this Section 5(e) or pursuant to Common Stock
Equivalents (hereafter defined) granted or issued prior to the
Issuance Date) (the "Additional Shares of Common Stock"), at a
price per share ("New Price") less than the Conversion Price then
in effect ("Down Round"), or without consideration, the
Conversion Price shall be reduced concurrently with such issue to
the New Price.  After the Price Protection Period, the Conversion
Price shall be reset to the Conversion Price in effect
immediately prior to the Down Round, and thereafter, for so long
as the Series A Preferred Stock has not been converted into
Common Stock, but only for a period of twelve (12) months, the
Conversion Price then in effect upon each issuance of a Down
Round shall be adjusted to that price (rounded to the nearest
cent) determined by multiplying the Conversion Price by a
fraction:

                    the  numerator of which shall be equal to the
sum  of  (A)  the  number of shares of Common  Stock  outstanding
immediately  prior to the issuance of such Additional  Shares  of
Common  Stock  plus  (B)  the number of shares  of  Common  Stock
               ----
(rounded   to  the  nearest  whole  share)  which  the  aggregate
consideration for the total number of such Additional  Shares  of
Common Stock so issued would purchase at a price per share  equal
to the then Conversion Price, and

                    the  denominator of which shall be  equal  to
the  number  of  shares  of Common Stock outstanding  immediately
after  the  issuance of such Additional Shares of  Common  Stock.
This Section and the adjustments described herein shall not apply

                                  10
<PAGE>

to  (i)  the  issuance  of Common Stock pursuant  to  the  agency
agreement  between  SGPF, LLC and Medpro  Safety  Products,  Inc.
("Medpro"),  in  connection with the contemplated merger  between
the  Company  and Medpro (the "Merger"), (ii) a Permitted  Future
Transaction,  (iii) the issuance of warrants for up to  3,000,000
shares  of  Common  Stock of the Company in  connection  with  an
employee  stock  option  program (an "ESOP")  to  be  established
concurrent   with  the  effectiveness  of  this  Certificate   of
Designations,   1,500,000  of  the  ESOP  warrants   (the   "ESOP
Warrants"),  to be issued to the management Medpro in  connection
with the Merger, and the remaining 1,500,000 ESOP Warrants to  be
issued  to  future  management of the  Company,  or  (iv)  68,036
warrants  to  be  issued  to  Chrystal  Research  (the  "Chrystal
Research Warrants").

No  adjustment of the number of shares of Common Stock  shall  be
made under paragraph (A) of Section 5(e)(vi) upon the issuance of
any  Additional Shares of Common Stock which are issued  pursuant
to the exercise of any warrants or other subscription or purchase
rights  or pursuant to the exercise of any conversion or exchange
rights in any Common Stock Equivalents (as defined below); if any
such adjustment shall previously have been made upon the issuance
of  such  warrants or other rights or upon the issuance  of  such
Common Stock Equivalents (or upon the issuance of any warrant  or
other rights therefore) pursuant to Section 5(e)(vii).

               Issuance   of   Common  Stock  Equivalents.    The
               ------------------------------------------
provisions  of  this Section 5(e)(vii) shall  apply  if  (a)  the
Company,  at  any time after the Issuance Date, shall  issue  any
securities  convertible  into or exchangeable  for,  directly  or
indirectly, Common Stock ("Convertible Securities"),  other  than
the  Series  A Preferred Stock, or (b) any rights or warrants  or
options   to  purchase  any  such  Common  Stock  or  Convertible
Securities  (collectively, the "Common Stock Equivalents")  shall
be  issued  or sold.  If the price per share for which Additional
Shares  of  Common  Stock may be issuable pursuant  to  any  such
Common  Stock  Equivalent  shall  be  less  than  the  applicable
Conversion  Price then in effect, or if, after any such  issuance
of  Common  Stock  Equivalents, the price  per  share  for  which
Additional  Shares of Common Stock may be issuable thereafter  is
amended  or adjusted, and such price as so amended shall be  less
than  the  applicable Conversion Price in effect at the  time  of
such  amendment  or  adjustment, then the  applicable  Conversion
Price  upon each such issuance or amendment shall be adjusted  as
provided in the first sentence of subsection (vi) of this Section
5(e).   No adjustment shall be made to the Conversion Price  upon
the issuance of Common Stock pursuant to the exercise, conversion
or   exchange  of  any  Convertible  Security  or  Common   Stock
Equivalent where an adjustment to the Conversion Price  was  made
as  a  result  of  the  issuance or purchase of  any  Convertible
Security or Common Stock Equivalent.  For avoidance of doubt, the
foregoing shall not apply to the ESOP Warrants.

               Consideration  for Stock.  In case any  shares  of
               ------------------------
Common  Stock or Convertible Securities other than the  Series  A
Preferred Stock, or any rights or warrants or options to purchase
any  such Common Stock or Convertible Securities, shall be issued
or sold:

                    in    connection   with   any    merger    or
consolidation  in which the Company is the surviving  corporation
(other  than any consolidation or merger in which the  previously
outstanding  shares  of  Common Stock of  the  Company  shall  be
changed  to  or  exchanged for the stock or other  securities  of
another corporation), the amount of consideration therefore shall
be, deemed to be the fair value, as determined reasonably and  in
good  faith  by  the Board of Directors of the Company,  of  such

                                  11
<PAGE>

portion   of   the  assets  and  business  of  the   nonsurviving
corporation  as  such Board may determine to be  attributable  to
such  shares of Common Stock, Convertible Securities,  rights  or
warrants or options, as the case may be; or

                    in  the  event of any consolidation or merger
of  the  Company  in  which  the Company  is  not  the  surviving
corporation  or  in  which the previously outstanding  shares  of
Common  Stock  of the Company shall be changed into or  exchanged
for  the stock or other securities of another corporation, or  in
the  event of any sale of all or substantially all of the  assets
of  the Company for stock or other securities of any corporation,
the Company shall be deemed to have issued a number of shares  of
its Common Stock for stock or securities or other property of the
other  corporation computed on the basis of the  actual  exchange
ratio  on  which  the  transaction  was  predicated,  and  for  a
consideration equal to the fair market value on the date of  such
transaction of all such stock or securities or other property  of
the  other  corporation.   If  any such  calculation  results  in
adjustment of the applicable Conversion Price, or the  number  of
shares  of Common Stock issuable upon conversion of the Series  A
Preferred  Stock, the determination of the applicable  Conversion
Price  or  the  number  of shares of Common Stock  issuable  upon
conversion of the Series A Preferred Stock immediately  prior  to
such  merger,  consolidation or sale, shall be made after  giving
effect to such adjustment of the number of shares of Common Stock
issuable upon conversion of the Series A Preferred Stock.  In the
event   any  consideration  received  by  the  Company  for   any
securities consists of property other than cash, the fair  market
value  thereof at the time of issuance or as otherwise applicable
shall be as determined in good faith by the Board of Directors of
the  Company.   In  the event Common Stock is issued  with  other
shares  or  securities  or  other  assets  of  the  Company   for
consideration  which covers both, the consideration  computed  as
provided  in  this Section (5)(e)(viii) shall be allocated  among
such  securities and assets as determined in good  faith  by  the
Board of Directors of the Company.

               Record  Date.   In  case the  Company  shall  take
               ------------
record  of the holders of its Common Stock or any other Preferred
Stock  for  the  purpose of entitling them to  subscribe  for  or
purchase Common Stock or Convertible Securities, then the date of
the  issue or sale of the shares of Common Stock shall be  deemed
to be such record date.

               Certain Issues Excepted.  Anything in Section 5(e)
               -----------------------
or  otherwise  in this Agreement to the contrary notwithstanding,
the  Company shall not be required to make any adjustment to  the
Conversion Price upon (i) securities issued (other than for cash)
in  connection with a merger, acquisition, or consolidation, (ii)
securities  issued  pursuant to the  conversion  or  exercise  of
convertible or exercisable securities issued or outstanding on or
prior to the date of the Purchase Agreement or issued pursuant to
the  Purchase  Agreement (so long as the conversion  or  exercise
price  in  such  securities are not amended to lower  such  price
and/or  adversely affect the holders), (iii) Common Stock  issued
or  the  issuance or grants of options to purchase  Common  Stock
pursuant  to  the Issuer's stock option plans and employee  stock
purchase  plans  outstanding as they exist on  the  date  of  the
purchase  Agreement, (iv) any warrants issued  to  the  placement
agent and its designees for the transactions contemplated by  the
Purchase Agreement, (v) ESOP Warrants, (vi) the Chrystal Research
Warrants, (vii) the issuance of Common Stock pursuant to Medpro's
agency  agreement  with SGPF, Inc, or (viii) issuance  of  Common
Stock issued in connection with a Permitted Future Transaction.

                                  12
<PAGE>

          No  Impairment.  The Company shall not, by amendment of
          --------------
its  Articles  of  Incorporation or through  any  reorganization,
transfer of assets, consolidation, merger, dissolution, issue  or
sale  of securities or any other voluntary action, avoid or  seek
to  avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, 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 the Series A Preferred  Stock
against impairment.  In the event a holder shall elect to convert
any  shares  of Series A Preferred Stock as provided herein,  the
Company  cannot  refuse conversion based on any claim  that  such
holder  or any one associated or affiliated with such holder  has
been  engaged in any violation of law, unless (i) an  order  from
the   Securities   and  Exchange  Commission   prohibiting   such
conversion  or  (ii)  an  injunction from  a  court,  on  notice,
restraining and/or adjoining conversion of all or of said  shares
of  Series  A  Preferred Stock shall have  been  issued  and  the
Company posts a surety bond for the benefit of such holder in  an
amount equal to 120% of the Liquidation Preference Amount of  the
Series  A  Preferred  Stock such holder has elected  to  convert,
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 in the event it obtains judgment
in its favor.

          Certificates  as  to Adjustments.  Upon  occurrence  of
          --------------------------------
each adjustment of readjustment of the Conversion Price or number
of  shares of Common Stock issuable upon conversion of the Series
A  Preferred Stock pursuant to this Section 5, the Company at its
expense shall promptly compute such adjustment or readjustment in
accordance  with the terms hereof and furnish to each  holder  of
such  Series A Preferred Stock a certificate setting  forth  such
adjustment  and  readjustment, showing in detail the  facts  upon
which  such  adjustment or readjustment is  based.   The  Company
shall, upon written request of the holder of such affected Series
A  Preferred Stock, at any time, furnish or cause to be furnished
to  such holder a like certificate setting forth such adjustments
and  readjustments, the Conversion Price in effect at  the  time,
and  the number of shares of Common Stock and the amount, if any,
of  other  securities  or property which at  the  time  would  be
received  upon  the  conversion of  a  share  of  such  Series  A
Preferred  Stock.   Notwithstanding the  foregoing,  the  Company
shall  not  be  obligated  to deliver a certificate  unless  such
certificate would reflect an increase or decrease of at least one
percent of such adjusted amount.

          Issue  Taxes.  The Company shall pay any and all  issue
          ------------
and  other taxes, excluding federal, state or local income taxes,
that may be payable in respect of any issue or delivery of shares
of  Common  Stock on conversion of shares of Series  A  Preferred
Stock  pursuant hereto; provided, however, that the Company shall
                        -----------------
not  be  obligated to pay any transfer taxes resulting  from  any
transfer  requested  by any holder in connection  with  any  such
conversion.

          Notices.    All   notices   and  other   communications
          -------
hereunder  shall  be  in writing and shall  be  deemed  given  if
delivered  personally or by facsimile or three (3) business  days
following  being mailed by certified or registered mail,  postage
prepaid,  return-receipt requested, addressed to  the  holder  of
record at its address appearing on the books of the Company.  The
Company  will  give  written notice to each holder  of  Series  A
Preferred  Stock at least twenty (20) days prior to the  date  on
which  the  Company closes its books or takes a record  (I)  with
respect  to  any dividend or distribution upon the Common  Stock,
(II)  with respect to any pro rata subscription offer to  holders
of  Common  Stock or (III) for determining rights  to  vote  with

                                  13
<PAGE>

respect  to  any  Organic  Change,  dissolution,  liquidation  or
winding-up and in no event shall such notice be provided to  such
holder  prior to such information being made known to the public.
The  Company  will  also give written notice to  each  holder  of
Series  A Preferred Stock at least twenty (20) days prior to  the
date  on  which  any Organic Change, dissolution, liquidation  or
winding-up will take place and in no event shall such  notice  be
provided  to  such  holder prior to such information  being  made
known to the public.

          Fractional  Shares.   No fractional  shares  of  Common
          ------------------
Stock  shall be issued upon conversion of the Series A  Preferred
Stock.   In  lieu  of any fractional shares to which  the  holder
would  otherwise be entitled, the Company shall round the  number
of  shares  to be issued upon conversion up to the nearest  whole
number of shares.

          Reservation  of  Common Stock.  The Company  shall,  so
          -----------------------------
long  as  any shares of Series A Preferred Stock are outstanding,
reserve  and  keep available out of its authorized  and  unissued
Common  Stock, solely for the purpose of effecting the conversion
of  the Series A Preferred Stock, such number of shares of Common
Stock  that  are not issued or reserved for issuance  as  of  the
Issuance  Date;  provided, however, upon the Company  filing  the
                 -----------------
Charter  Amendment  (as defined in the Purchase  Agreement),  the
Company  shall  take all action necessary to at  all  times  have
authorized,  and  reserved for the purpose of issuance,  free  of
preemptive  rights  and  other  similar  contractual  rights   of
stockholders,  a number of shares of Common Stock  equal  to  one
hundred  fifty percent (150%) of the number of shares  of  Common
Stock  as  shall from time to time be sufficient  to  effect  the
conversion of all of the shares of Series A Preferred Stock  then
outstanding.   The  initial  number of  shares  of  Common  Stock
reserved for conversions of the Series A Preferred Stock and  any
increase  in the number of shares so reserved shall be  allocated
pro  rata among the holders of the Series A Preferred Stock based
on  the number of shares of Series A Preferred Stock held by each
holder  of  record  at  the  time of issuance  of  the  Series  A
Preferred Stock or increase in the number of reserved shares,  as
the  case  may be.  In the event a holder shall sell or otherwise
transfer any of such holder's shares of Series A Preferred Stock;
each  transferee  shall be allocated a pro rata  portion  of  the
number  of  reserved  shares of Common Stock  reserved  for  such
transferor.

          Retirement of Series A Preferred Stock.  Conversion  of
          --------------------------------------
Series A Preferred Stock shall be deemed to have been effected on
the  Conversion Date.  Upon conversion of only a portion  of  the
number  of  shares of Series A Preferred Stock represented  by  a
certificate  surrendered for conversion, the Company shall  issue
and  deliver to such holder at the expense of the Company, a  new
certificate  covering the number of shares of Series A  Preferred
Stock representing the unconverted portion of the certificate  so
surrendered as required by Section 5(b)(ii.).

          Regulatory  Compliance.  If any shares of Common  Stock
          ----------------------
to  be  reserved  for  the  purpose of  conversion  of  Series  A
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 Company shall, at its sole cost and expense,  in
good  faith and as expeditiously as possible, endeavor to  secure
such registration, listing or approval, as the case may be.

                                  14
<PAGE>

     No  Preemptive  Rights.   Except as provided  in  Section  5
     ----------------------
hereof  and in the Purchase Agreement, no holder of the Series  A
Preferred  Stock  shall be entitled to rights to  subscribe  for,
purchase  or receive any part of any new or additional shares  of
any class, whether now or hereinafter authorized, or of bonds  or
debentures,  or other evidences of indebtedness convertible  into
or  exchangeable  for shares of any class, but all  such  new  or
additional shares of any class, or any bond, debentures or  other
evidences  of  indebtedness convertible into or exchangeable  for
shares,  may be issued and disposed of by the Board of  Directors
on such terns and for such consideration (to the extent permitted
by  law), and to such person or persons as the Board of Directors
in their absolute discretion may deem advisable.

     Conversion  Restriction.  Notwithstanding  anything  to  the
     -----------------------
contrary   set  forth  in  Section  5  of  this  Certificate   of
Designation,  at  no  time may a holder of  shares  of  Series  A
Preferred Stock convert shares of the Series A Preferred Stock if
the  number  of shares of Common Stock to be issued  pursuant  to
such  conversion would cause the number of shares of Common Stock
owned by such holder at such time to exceed, when aggregated with
all  other  shares of Common Stock owned by such holder  at  such
time, the number of shares of Common Stock which would result  in
such holder beneficially owning (as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended,
and  the  rules thereunder) in excess of 9.9% of the then  issued
and  outstanding shares of Common Stock outstanding at such time;
provided, however, that upon a holder of Series A Preferred Stock
-----------------
providing  the Company with sixty-one (61) days notice  (pursuant
to  Section  5(i) hereof) (the "Waiver Notice") that such  holder
would  like to waive Section 7 of this Certificate of Designation
with  regard  to any or all shares of Common Stock issuable  upon
conversion  of Series A Preferred Stock, this Section 7(a)  shall
be of no force or effect with regard to those shares of Series  A
Preferred Stock referenced in the Waiver Notice.

     Redemption.
     ----------

          Redemption Option Upon Major Transaction.  In  addition
          ----------------------------------------
to  all  other rights of the holders of Series A Preferred  Stock
contained  herein, simultaneous with the occurrence  of  a  Major
Transaction (as defined below), each holder of Series A Preferred
Stock  shall have the right, at such holder's option, to  require
the Company to redeem all or a portion of such holder's shares of
Series  A  Preferred  Stock at a price  per  share  of  Series  A
Preferred  Stock  equal  to one hundred  percent  (100%)  of  the
Liquidation  Preference  Amount,  plus  any  accrued  but  unpaid
dividends  (the  "Major Transaction Redemption Price");  provided
that  the  Company shall have the sole option to  pay  the  Major
Transaction  Redemption Price in cash or shares of Common  Stock.
If  the  Company  elects to pay the Major Transaction  Redemption
Price  in  shares of Common Stock, the price per share  shall  be
based  upon  the  Conversion Price then  in  effect  on  the  day
preceding  the  date of delivery of the Notice of  Redemption  at
Option of Buyer Upon Major Transaction (as hereafter defined) and
the  holder  of  such shares of Common Stock  shall  have  demand
registration rights with respect to such shares.

          Redemption  Option Upon Triggering Event.  In  addition
          ----------------------------------------
to  all  other rights of the holders of Series A Preferred  Stock
contained  herein, after a Triggering Event (as  defined  below),
each holder of Series A Preferred Stock shall have the right,  at
such holder's option., to require the Company to redeem all or  a
portion of such holder's shares of Series A Preferred Stock at  a
price  per share of Series A Preferred Stock equal to one hundred
twenty percent (120%) of the Liquidation Preference Amount,  plus

                                  15
<PAGE>

any  accrued  but  unpaid  dividends and liquidated  damages  the
"Triggering Event Redemption price" and, collectively  with  the
"Major  Transaction  Redemption Price," the "Redemption  Price");
provided that with respect to the Triggering Events described  in
--------
clauses  (i), (ii), (iii) and (vii) of Section 8(d), the  Company
shall have the sole option to pay the Triggering Event Redemption
Price  in cash or shares of Common Stock.; and provided, further,
                                               -----------------
that  with  respect to the Triggering Event described in  clauses
(iv), (v), (vi) and (viii) of Section 8(d), the Company shall pay
the  Triggering Event Redemption Price in cash.  If  the  Company
elects to pay the Triggering Event Redemption Price in shares  of
Common Stock in accordance with this Section 8(b), the price  per
share shall be based upon the Conversion Price then in effect  on
the  day  preceding  the  date  of  delivery  of  the  Notice  of
Redemption  at  Option  of Buyer Upon Triggering  Event  and  the
holder   of  such  shares  of  Common  Stock  shall  have  demand
registration rights with respect to such shares.

          "Major  Transaction".  A "Major Transaction"  shall  be
          -------------------
deemed  to  have  occurred at such time as any of  the  following
events occur:

               the   consolidation,  merger  or  other   business
combination  of  the Company with or into another  Person  (other
than  (A) pursuant to a migratory merger effected solely for  the
purpose  of  changing  the jurisdiction of incorporation  of  the
Company,   (B)  a  Permitted  Future  Transaction,   or   (C)   a
consolidation,  merger  or other business  combination  in  which
holders  of the Company's voting power immediately prior  to  the
transaction  continue after the transaction to hold, directly  or
indirectly, the voting power of the surviving entity or  entities
necessary  to  elect a majority of the members of  the  board  of
directors  (or  their equivalent if other than a corporation)  of
such entity or entities).

               the  sale  or  transfer of more than  50%  of  the
Company's  assets other than inventory in the ordinary course  of
business in one or a related series of transactions; or

               closing  of  a purchase, tender or exchange  offer
made  to  the  holders of more than fifty percent  (50%)  of  the
outstanding  shares  of  Common Stock in which  more  than  fifty
percent  (50%)  of  the outstanding shares of Common  Stock  were
tendered and accepted.

          "Triggering  Event".   A "Triggering  Event"  shall  be
          -------------------
deemed  to  have  occurred at such time as any of the  following,
events:

               so  long as any shares of Series A Preferred Stock
are outstanding, the effectiveness of the Registration Statement,
after it becomes effective, (i) lapses for any reason (including,
without limitation, the issuance of a stop order) and such  lapse
continues for a period of twenty (20) consecutive trading,  days,
or  (ii)  is unavailable to the holder of the Series A  Preferred
Stock  for sale of the shares of Common Stock, and such lapse  or
unavailability continues for a period of twenty (20)  consecutive
trading  days,  and the shares of Common Stock  into  which  such
holder's Series A Preferred Stock can be converted cannot be sold
in  the  public securities market pursuant to Rule 144(k)  ("Rule
144(k)")  under the Securities Act of 1933, as amended,  provided
                                                         --------
that  the  cause of such lapse or unavailability is  not  due  to
factors  solely  within the control of such holder  of  Series  A
Preferred Stock.

                                  16
<PAGE>

               the  suspension  from listing or trading,  without
subsequent  listing on any one of or the failure  of  the  Common
Stock to be listed or traded on at least one of, the OTC Bulletin
Board, the Nasdaq National Market, the Nasdaq Global Market,  the
New  York  Stock  Exchange, Inc. or the American Stock  Exchange,
Inc., for a period of five (5) consecutive trading days;

               the  Company's notice to any holder  of  Series  A
Preferred Stock, including by way of public announcement, at  any
time,  of  its  inability to comply (including  for  any  of  the
reasons  described in Section 9) or its intention not  to  comply
with  proper  requests for conversion of any Series  A  Preferred
Stock into shares of Common stock; or

               the  Company's failure to comply with a Conversion
Notice  tendered  in  accordance  with  the  provisions  of  this
Certificate  of  Designation within fifteen  (15)  business  days
after the receipt by the Company of the Conversion Notice and the
Preferred  Stock  Certificates;  provided,  however,  that   this
Triggering  Event  is only a Triggering Event as  to  the  entity
tendering the Conversion Notice the Company failed to comply with
and  the  other  provisions  in this  Section  8  shall  only  be
effective upon this Triggering Event, as to this one entity; or

               the Company deregisters its shares of Common Stock
and  as  a  result  such shares of Common  Stock  are  no  longer
publicly traded; or

               the   Company   consummates  a   "going   private"
transaction  and  as  a  result the Common  Stock  is  no  longer
registered  under  Sections  12(b) or  12(g)  of  the  Securities
Exchange Act of 1934, as amended; or

               the Company breaches any representation, warranty,
covenant  or  other term or condition of the Purchase  agreement,
this Certificate of Designation or any other agreement, document,
certificate or other instrument delivered in connection with  the
transactions contemplated thereby or hereby, except to the extent
that  such  breach would not have a Material Adverse  Effect  (as
defined in the Purchase Agreement) and except, in the case  of  a
breach  of  a  covenant which is curable,  only  if  such  breach
continues for a period of a least ten (10) business days.

          Mechanics  of Redemption at Option of Buyer Upon  Major
          -------------------------------------------------------
Transaction.  No sooner than thirty (30) days nor later than  ten
-----------
(10)  days prior to the consummation of a Major Transaction,  but
not  prior  to the public announcement of such Major Transaction,
the  Company  shall deliver written notice thereof via  facsimile
and  overnight  courier ("Notice of Major Transaction")  to  each
holder of Series a Preferred Stock.  At any time after receipt of
a Notice of Major Transaction (or, in the event a Notice of Major
Transaction is not delivered at least ten (10) days  prior  to  a
Major  Transaction, at any time within ten (10) days prior  to  a
Major  Transaction), any holder of Series A Preferred Stock  then
outstanding   may  require  the  Company  to  redeem,   effective
immediately  prior to the consummation of such Major Transaction,
all of the holder's Series A Preferred Stock then outstanding  by
delivering  written  notice thereof via facsimile  and  overnight
courier  ("Notice  of Redemption at Option of  Buyer  Upon  Major
Transaction")  to  the  Company, which Notice  of  Redemption  at
Option  of  Buyer Upon Major Transaction shall indicate  (i)  the
number of shares of Series A Preferred Stock that such holder  is

                                  17
<PAGE>

electing  to  redeem  and (ii) the applicable  Major  Transaction
Redemption Price, as calculated pursuant to Section 8(a) above.

          Mechanics  of  Redemption  at  Option  of  Buyer   Upon
          -------------------------------------------------------
Triggering  Event.   Within  five (5)  business  days  after  the
-----------------
Company  obtains  knowledge  of the occurrence  of  a  Triggering
Event,  the  Company  shall deliver written  notice  thereof  via
facsimile and overnight courier ("Notice of Triggering Event") to
each  holder of Series A Preferred Stock except in the case of  a
Triggering Event under Section 8(d) (iv).  At any time after  the
earlier of a holder's receipt of a Notice of Triggering Event and
such  holder becoming aware of a Triggering Event, any holder  of
Series A Preferred Stock then outstanding may require the Company
to  redeem  all  of  the Series A Preferred Stock  by  delivering
written  notice  thereof  via  facsimile  and  overnight  courier
("Notice of Redemption at Option of Buyer Upon Triggering Event")
to  the  Company, which Notice of Redemption at Option  of  Buyer
Upon Triggering Event shall indicate (i) the number of shares  of
Series  A Preferred Stock that such holder is electing to  redeem
and  (ii)  the applicable Triggering Event Redemption  Price,  as
calculated pursuant to Section 8(b) above.

          Payment   of  Redemption  Price.   Upon  the  Company's
          -------------------------------
receipt  of  a  Notice(s) of Redemption at Option of  Buyer  Upon
Triggering Event or a Notice(s) of Redemption at Option of  Buyer
Upon  Major  Transaction from any holder of  Series  A  Preferred
Stock, the Company shall immediately notify such holder of Series
A  Preferred Stock by facsimile of the Company's receipt of  such
Notice(s) of Redemption at Option of Buyer Upon Triggering  Event
or  Notice(s)  of  Redemption  at  Option  of  Buyer  Upon  Major
Transaction  and each holder which has sent such a  notice  shall
promptly  submit  to  the Company such holder's  Preferred  Stock
Certificates  which  such holder has elected  to  have  redeemed.
Other  than  with  respect to the Triggering Event  described  in
clause  (iv)  of Section 8(d), the Company shall  have  the  sole
option  to  pay the Redemption Price in cash or shares of  Common
Stock in accordance with Sections 8(a) and (b) and Section  9  of
this  Certificate of Designation.  The Company shall deliver  the
applicable  Major Transaction Redemption Price immediately  prior
to  the  consummation of the Major Transaction, provided  that  a
                                                --------
holder's  Preferred  Stock  Certificates  shall  have   been   so
delivered to the Company; provided further that if the Company is
                          ----------------
unable  to  redeem  all  of the Series A Preferred  Stock  to  be
redeemed, the Company shall redeem an amount from each holder  of
Series  A  Preferred Stock being redeemed equal to such  holder's
pro-rata  amount  (based on the number  of  shares  of  Series  A
Preferred  Stock held by such holder relative to  the  number  of
shares  of Series A Preferred Stock outstanding) of all Series  A
Preferred  Stock being redeemed.  If the Company  shall  fail  to
redeem  all  of  the  Series  A  Preferred  Stock  submitted  for
redemption (other than pursuant to a dispute as to the arithmetic
calculation of the Redemption Price), in addition to  any  remedy
such  holder  of  Series A Preferred Stock may  have  under  this
Certificate  of  Designation  and  the  Purchase  Agreement,  the
applicable Redemption Price payable in respect of such unredeemed
Series A Preferred Stock shall bear interest at the rate of  1.0%
per  month  (prorated  for partial months) until  paid  in  full.
Until the Company pays such unpaid applicable Redemption Price in
full  to a holder of shares of Series A Preferred Stock submitted
for  redemption,  such holder shall have the  option  (the  "Void
Optional  Redemption Option") to, in lieu of redemption,  require
the  Company  to  promptly return to such holder(s)  all  of  the
shares  of  Series  A  Preferred Stock that  were  submitted  for
redemption by such holder(s) under this Section 8 and  for  which
the  applicable  Redemption Price has not been paid,  by  sending
written  notice thereof to the Company via facsimile  (the  "Void
Optional Redemption Notice").  Upon the Company's receipt of such
Void  Optional Redemption Notice(s) and prior to payment  of  the

                                  18
<PAGE>

full  applicable  Redemption  Price  to  such  holder,  (i)   the
Notice(s) of Redemption at Option of buyer Upon Major Transaction
or  Notice(s)  of  Redemption at Option of Buyer Upon  Triggering
Event  (as  applicable) shall be null and void  with  respect  to
those shares of Series A Preferred Stock submitted for redemption
and  for which the applicable Redemption Price has not been  paid
and  (ii)  the  Company shall immediately  return  any  Series  A
Preferred  Stock  submitted to the Company  by  each  holder  for
redemption  under this Section 8(d) and for which the  applicable
Redemption  Price has not been paid; provided that no  adjustment
                                     --------
shall  be made if such adjustment would result in an increase  of
the  Conversion Price then in effect.  A holder's delivery  of  a
Void  Optional  Redemption  Notice and  exercise  of  its  rights
following  such notice shall not effect the Company's obligations
to make any payments which have accrued prior to the date of such
notice  other than interest payments.  Payments provided  for  in
this   Section  8  shall  have  priority  to  payments  to  other
stockholders in connection with a Major Transaction.

          Demand  Registration Rights.  If the  Redemption  Price
          ---------------------------
upon  the occurrence of a Major Transaction or a Triggering Event
is  paid in shares of Common Stock and such shares have not  been
previously  registered  on  a registration  statement  under  the
Securities Act, a holder of Series A Preferred Stock may  make  a
written  request  for  registration  under  the  Securities   Act
pursuant  to  this  Section 8(h) of all of its shares  of  Common
Stock  issued  upon  such Major Transaction or Triggering  Event.
The Company shall use its reasonable best efforts to cause to  be
filed  and  declared effective as soon as reasonably  practicable
(but in no event later than the one hundred and twentieth (120th)
day after such holder's request is made) a registration statement
under  the Securities Act, providing for the sale of all  of  the
shares  of  Common  Stock issued upon such Major  Transaction  or
Triggering Event by such holder.  The Company agrees to  use  its
reasonable  best efforts to keep any such registration  statement
continuously effective for resale of the Common Stock for so long
as  such  holder shall request, but in no event shall the Company
be  required  to maintain the effectiveness of such  registration
statement  later  than the date that the shares of  Common  Stock
issued  upon  such Major Transaction or Triggering Event  may  be
offered for resale to the public pursuant to Rule 144(k).

     Inability to Fully Convert.
     --------------------------
          Holder's  Option if Company Cannot Fully Convert.   If,
          ------------------------------------------------
upon  the  Company's receipt of a Conversion Notice, the  Company
cannot  issue shares of Common Stock registered for resale  under
the  Registration Statement (and such Registration  Statement  is
required to be in effect per the terms of the Registration Rights
Agreement) for any reason, including, without limitation, because
the  Company (w) does not have a sufficient number of  shares  of
Common   Stock   authorized  and  available,  (x)  is   otherwise
prohibited  by  applicable law or by the rules or regulations  of
any  stock exchange, interdealer quotation system or other  self-
regulatory organization with jurisdiction over the Company or its
securities from issuing all of the Common Stock which  is  to  be
issued  to  a  holder of Series A Preferred Stock pursuant  to  a
Conversion Notice or (y) subsequent to the effective date of  the
Registration  Statement, fails to have  a  sufficient  number  of
shares   of   Common  Stock  registered  for  resale  under   the
Registration  Statement, then the Company  shall  issue  as  many
shares of Common Stock as it is able to issue in accordance  with
such  holder's Conversion Notice and pursuant to Section 5(b)(ii)
above  and,  with respect to the unconverted Series  A  Preferred
Stock,  the  holder, solely at such holder's option,  can  elect,
within  five (5) business days after receipt of notice  from  the
Company thereof to:

                                  19
<PAGE>

               require  the  Company to redeem from  such  holder
those Series A Preferred Stock for which the Company is unable to
issue  Common  Stock in accordance with such holder's  Conversion
Notice ("Mandatory Redemption") at a price per share equal to the
Major  Transaction  Redemption Price as of such  Conversion  Date
(the  "Mandatory  Redemption Price"); provided that  the  Company
shall  have the sole option to pay the Mandatory Redemption Price
in  cash or, subject to Section 7 hereof, shares of Common Stock;
or

               if the Company's inability to fully convert Series
A  Preferred Stock is pursuant to Section 9(a)(y) above,  require
the  Company  to  issue  restricted shares  of  Common  Stock  in
accordance  with such holder's Conversion Notice and pursuant  to
Section 5(b)(ii) above; or

               void  its  Conversion Notice and  retain  or  have
returned,  as  the case may be the shares of Series  A  Preferred
Stock  that  were  to  be  converted pursuant  to  such  holder's
Conversion   Notice  (provided  that  a  holder's   voiding   its
Conversion  Notice shall not effect the Company's obligations  to
make  any payments which have accrued prior to the date  of  such
notice); or

               exercise  its  Buy-In rights pursuant  to  and  in
accordance  with  the  terms and provisions of  Section  5(b)(vi)
hereof.

          Mechanics of Fulfilling Holder's Election.  The Company
          -----------------------------------------
shall  promptly  send  via facsimile or overnight  courier  to  a
holder  of Series A Preferred Stock, upon receipt of an  original
or  facsimile copy of a Conversion Notice from such holder  which
cannot  be fully satisfied as described in Section 9(a) above,  a
notice  of the Company's inability to fully satisfy such holder's
Conversion  Notice  (the  "Inability to Fully  Convert  Notice").
Such  Inability  to Fully Convert Notice shall indicate  (i)  the
reason  why the Company is unable to fully satisfy such  holder's
Conversion  Notice, (ii) the number of Series A  Preferred  Stock
which  cannot  be  converted and (iii) the  applicable  Mandatory
Redemption  Price, Such holder shall notify the  Company  of  its
election  pursuant  to Section 9(a) above by  delivering  written
notice  via  facsimile  to the Company ("Notice  in  Response  to
Inability to Convert").

          Payment  of  Redemption Price.  If  such  holder  shall
          -----------------------------
elect  to  have  its shares redeemed pursuant to Section  9(a)(i)
above,  the Company shall pay the Mandatory Redemption  Price  to
such  holder within thirty (30) days of the Company's receipt  of
the holder's Notice in Response to Inability to Convert, provided
                                                         --------
that  prior  to the Company's receipt of the holder's  Notice  in
Response to Inability to Convert the Company has not delivered  a
notice to such holder stating, to the satisfaction of the holder,
that the event or condition resulting in the Mandatory Redemption
has  been cured and all Conversion Shares issuable to such holder
can  and  will be delivered to the holder in accordance with  the
terms  of  Section 2(g).  If the Company shall fail  to  pay  the
applicable Mandatory Redemption Price to such holder on a  timely
basis as described in this Section 9(c) (other than pursuant to a
dispute as to the determination of the arithmetic calculation  of
the  Redemption Price), in addition to any remedy such holder  of
Series  A  Preferred  Stock may have under  this  Certificate  of
Designation and the Purchase Agreement, such unpaid amount  shall
bear interest at the rate of 2.0% per month (prorated for partial
months)  until paid in full.  Until the full Mandatory Redemption
Price  is  paid in full to such holder, such holder may (i)  void
the Mandatory Redemption with respect to those Series A Preferred
Stock for which the full Mandatory Redemption Price has not  been

                                  20
<PAGE>

paid,  (ii) receive back such Series A Preferred Stock, and (iii)
require  that  the  Conversion Price of such  returned  Series  A
Preferred  Stock be adjusted to the lesser of (A) the  Conversion
Price  and  (B)  the lowest Closing Bid Price during  the  period
beginning  on  the Conversion Date and ending  on  the  date  the
holder voided the Mandatory Redemption.

          Pro-rata  Conversion and Redemption.  In the event  the
          -----------------------------------
Company receives a Conversion Notice from more than one holder of
Series  A  Preferred Stock on the same day and  the  Company  can
convert  and redeem some, but not all, of the Series A  Preferred
Stock  pursuant to this Section 9, the Company shall convert  and
redeem  from each holder of Series A Preferred Stock electing  to
have Series A Preferred Stock converted and redeemed at such time
an  amount equal to such holder's pro-rata amount (based  on  the
number  shares  of Series A Preferred Stock held by  such  holder
relative  to  the  number  shares of  Series  A  Preferred  Stock
outstanding)  of  all  shares of Series A Preferred  Stock  being
converted and redeemed at such time.

     Vote  to Change the Terms of or Issue Preferred Stock.   The
     -----------------------------------------------------
affirmative vote at a meeting duly called for such purpose or the
written  consent without a meeting, of the holders  of  not  less
than seventy-five percent (75%) of the then outstanding shares of
Series  A Preferred Stock; provided, however, that this provision
is no longer effective once shares of Preferred Stock outstanding
shall equal less than two hundred thousand (200,000) (in addition
to  any  other corporate approvals then required to  effect  such
action), shall be required (a) for any change to this Certificate
of  Designation or the Company's Articles of Incorporation  which
would   amend,  alter,  change  or  repeal  any  of  the  powers,
designations,  preferences and rights of the Series  A  Preferred
Stock  or  (b) for the issuance of shares of Series  A  Preferred
Stock other than pursuant to the Purchase Agreement.

     Lost or Stolen Certificates.  Upon receipt by the Company of
     ---------------------------
evidence  satisfactory  to  the  Company  of  the  loss,   theft,
destruction  or  mutilation of any Preferred  Stock  Certificates
representing the shares of Series A Preferred Stock, and, in  the
case  of  loss,  theft  or  destruction, of  any  indemnification
undertaking  by  the  holder to the Company  that  is  reasonably
acceptable  to  the Company and, in the case of mutilation;  upon
surrender and cancellation of the Preferred Stock Certificate(s),
the  Company  shall  execute  and  deliver  new  preferred  stock
certificate(s)  of like tenor and date, provided,  however,  that
the  Company  shall not be obligated to re-issue Preferred  Stock
Certificates if the holder contemporaneously requests the Company
to  convert  such shares of Series A Preferred Stock into  Common
Stock.

     Remedies, Characterizations, Other Obligations, Breaches and
     ------------------------------------------------------------
Injunctive Relief.  The remedies provided in this Certificate  of
-----------------
Designation  shall  be cumulative and in addition  to  all  other
remedies available under this Certificate of Designation, at  law
or  in  equity (including a decree of specific performance and/or
other  injunctive relief).  No remedy contained herein  shall  be
deemed a waiver of compliance with the provisions giving rise  to
such  remedy and nothing herein shall limit a holder's  right  to
pursue  actual damages for any failure by the Company  to  comply
with  the terms of this Certificate of Designation.  Amounts  set
forth or provided for herein with respect to payments, conversion
and  the  like (and the computation thereof) shall be the amounts
to  be  received by the holder thereof and shall not,  except  as
expressly provided herein, be subject to any other obligation  of
the   Company   (or  the  performance  thereof).    The   Company
acknowledges  that  a  breach by it of its obligations  hereunder
will  cause  irreparable  harm to the holders  of  the  Series  A

                                  21
<PAGE>

Preferred  Stock and that the remedy at law for any  such  breach
may  be  inadequate.  The Company therefore agrees that,  in  the
event of any such breach or threatened breach, the holders of the
Series  A Preferred Stock shall be entitled, in addition  to  all
other  available  remedies,  to  an  injunction  restraining  any
breach,  without  the  necessity of  showing  economic  loss  and
without any bond or other security being required.

     Specific Shall Not Limit General; Construction.  No specific
     ----------------------------------------------
provision  contained  in this Certificate  of  Designation  shall
limit  or  modify  any more general provision  contained  herein.
This  Certificate of Designation shall be deemed  to  be  jointly
drafted by the Company and all initial purchasers of the Series A
Preferred Stock and shall not he construed against any person  as
the drafter hereof.

     Failure  or Indulgence Not Waiver.  No failure or  delay  on
     ---------------------------------
the  part of a holder of Series A Preferred Stock in the exercise
of  any  power, right or privilege hereunder shall operate  as  a
waiver  thereof, nor shall any single or partial exercise of  any
such power, right or privilege preclude other or further exercise
thereof or of any other right, power or privilege.

                                  22
<PAGE>

     IN   WITNESS  WHEREOF,  the  undersigned  has  executed  and
subscribed this Certificate and does affirm the foregoing as true
this 17th day of August, 2007.

                              DENTALSERV.COM

                              By: /S/Lawrence Chimerine
                              -----------------------------------
                              Name: Dr. Lawrence Chimerine
                              Title: President and Chief
                              Executive Officer

                                  23
<PAGE>

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