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                                     WARRANT

      THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
      LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
      OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN
      EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN
      OPINION OF COUNSEL IN A FORM REASONABLY SATISFACTORY TO THE ISSUER THAT
      REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
      LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT. NOTWITHSTANDING
      THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
      MARGIN ACCOUNT.

                              DELEK RESOURCES, INC.

                        Warrant To Purchase Common Stock

Warrant No.: DLKR-2                         Number of Shares:          4,500,000
                                            Warrant Exercise Price:   $     0.27

Date of Issuance: August 1, 2006                 Expiration Date: August 1, 2011

      Delek Resources, Inc., a Florida corporation (the "Company"), hereby
certifies that, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Cornell Capital Partners, LP (the "Holder"),
the registered holder hereof or its permitted assigns, is entitled, subject to
the terms set forth below, to purchase from the Company upon surrender of this
Warrant, at any time or times on or after the date hereof, but not after 11:59
P.M. Eastern Time on the Expiration Date (as defined herein) Four Million Five
Hundred Thousand (4,500,000) fully paid and nonassessable shares of Common Stock
(as defined herein) of the Company (the "Warrant Shares") at the exercise price
per share provided in Section 1(b) below or as subsequently adjusted; provided,
however, that in no event shall the holder be entitled to exercise this Warrant
for a number of Warrant Shares in excess of that number of Warrant Shares which,
upon giving effect to such exercise, would cause the aggregate number of shares
of Common Stock beneficially owned by the holder and its affiliates to exceed
4.99% of the outstanding shares of the Common Stock following such exercise,
except within sixty (60) days of the Expiration Date (however, such restriction
may be waived by Holder (but only as to itself and not to any other holder) upon
not less than 65 days prior notice to the Company). For purposes of the
foregoing proviso, the aggregate number of shares of Common Stock beneficially
owned by the holder and its affiliates shall include the number of shares of
Common Stock issuable upon exercise of this Warrant with respect to which the
determination of such proviso is being made, but shall exclude shares of Common
Stock which would be issuable upon (i) exercise of the remaining, unexercised
Warrants beneficially owned by the holder and its affiliates and (ii) exercise
or conversion of the unexercised or unconverted portion of any other securities
of the Company beneficially owned by the holder and its affiliates (including,
without limitation, any convertible notes or preferred stock) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein. Except as set forth in the preceding sentence, for purposes of this
paragraph, beneficial ownership shall be calculated in accordance with Section
13(d) of the Securities Exchange Act of 1934, as amended. For purposes of this
Warrant, in determining the number of outstanding shares of Common Stock a
holder may rely on the number of outstanding shares of Common Stock as reflected
in (1) the Company's most recent Form 10-QSB or Form 10-KSB, as the case may be,
(2) a more recent public announcement by the Company or (3) any other notice by
the Company or its transfer agent setting forth the number of shares of Common
Stock outstanding. Upon the written request of any holder, the Company shall
promptly, but in no event later than one (1) Business Day following the receipt
of such notice, confirm in writing to any such holder the number of shares of
Common Stock then outstanding. In any case, the number of outstanding shares of
Common Stock shall be determined after giving effect to the exercise of Warrants
(as defined below) by such holder and its affiliates since the date as of which
such number of outstanding shares of Common Stock was reported.

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<PAGE>

      Section 1.

            (a) This Warrant is one of the warrants issued pursuant to Section
4(g) of the Securities Purchase Agreement ("Securities Purchase Agreement")
dated the date hereof between the Company and the Buyers listed on Schedule I
thereto or issued in exchange or substitution thereafter or replacement thereof.
Each Capitalized term used, and not otherwise defined herein, shall have the
meaning ascribed thereto in the Securities Purchase Agreement.

            (b) Definitions. The following words and terms as used in this
Warrant shall have the following meanings:

                  (i) "Approved Stock Plan" means a stock option plan that has
been approved by the Board of Directors of the Company prior to the date of the
Securities Purchase Agreement, pursuant to which the Company's securities may be
issued only to any employee, officer or director for services provided to the
Company.

                  (ii) "Business Day" means any day other than Saturday, Sunday
or other day on which commercial banks in the City of New York are authorized or
required by law to remain closed.

                  (iii) "Closing Bid Price" means the closing bid price of
Common Stock as quoted on the Principal Market (as reported by Bloomberg
Financial Markets ("Bloomberg") through its "Volume at Price" function).

                  (iv) "Common Stock" means (i) the Company's common stock, no
par value per share, and (ii) any capital stock into which such Common Stock
shall have been changed or any capital stock resulting from a reclassification
of such Common Stock.

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                  (v) "Event of Default" means an event of default under the
Securities Purchase Agreement or the Convertible Debentures issued in connection
therewith.

                  (vi) "Excluded Securities" means, (a) shares issued or deemed
to have been issued by the Company pursuant to an Approved Stock Plan, (b)
shares of Common Stock issued or deemed to be issued by the Company upon the
conversion, exchange or exercise of any right, option, obligation or security
outstanding on the date prior to date of the Securities Purchase Agreement,
provided that the terms of such right, option, obligation or security are not
amended or otherwise modified on or after the date of the Securities Purchase
Agreement, and provided that the conversion price, exchange price, exercise
price or other purchase price is not reduced, adjusted or otherwise modified and
the number of shares of Common Stock issued or issuable is not increased
(whether by operation of, or in accordance with, the relevant governing
documents or otherwise) on or after the date of the Securities Purchase
Agreement, and (c) the shares of Common Stock issued or deemed to be issued by
the Company upon conversion of the Convertible Debentures or exercise of the
Warrants.

                  (vii) "Expiration Date" means August 1, 2011.

                  (viii) "Issuance Date" means the date hereof.

                  (ix) "Options" means any rights, warrants or options to
subscribe for or purchase Common Stock or Convertible Securities.

                  (x) "Person" means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

                  (xi) "Principal Market" means on any of (a) the American Stock
Exchange, (b) New York Stock Exchange, (c) the Nasdaq National Market, (d) the
Nasdaq Capital Market, or (e) the Nasdaq OTC Bulletin Board ("OTCBB")

                  (xii) "Securities Act" means the Securities Act of 1933, as
amended.

                  (xiii) "Warrant" means this Warrant and all Warrants issued in
exchange, transfer or replacement thereof.

                  (xiv) "Warrant Exercise Price" shall be $0.27 or as
subsequently adjusted as provided in Section 8 hereof.

            (c) Other Definitional Provisions.

                  (i) Except as otherwise specified herein, all references
herein (A) to the Company shall be deemed to include the Company's successors
and (B) to any applicable law defined or referred to herein shall be deemed
references to such applicable law as the same may have been or may be amended or
supplemented from time to time.

                  (ii) When used in this Warrant, the words "herein", "hereof",
and "hereunder" and words of similar import, shall refer to this Warrant as a
whole and not to any provision of this Warrant, and the words "Section",
"Schedule", and "Exhibit" shall refer to Sections of, and Schedules and Exhibits
to, this Warrant unless otherwise specified.

                                       3

<PAGE>

                  (iii) Whenever the context so requires, the neuter gender
includes the masculine or feminine, and the singular number includes the plural,
and vice versa.

      Section 2. Exercise of Warrant.

            (a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of the Company, pro
rata as hereinafter provided, at any time on any Business Day on or after the
opening of business on such Business Day, commencing with the first day after
the date hereof, and prior to 11:59 P.M. Eastern Time on the Expiration Date (i)
by delivery of a written notice, in the form of the subscription notice attached
as Exhibit A hereto (the "Exercise Notice"), of such holder's election to
exercise this Warrant, which notice shall specify the number of Warrant Shares
to be purchased, payment to the Company of an amount equal to the Warrant
Exercise Price(s) applicable to the Warrant Shares being purchased, multiplied
by the number of Warrant Shares (at the applicable Warrant Exercise Price) as to
which this Warrant is being exercised (plus any applicable issue or transfer
taxes) (the "Aggregate Exercise Price") in cash or wire transfer of immediately
available funds and the surrender of this Warrant (or an indemnification
undertaking with respect to this Warrant in the case of its loss, theft or
destruction) to a common carrier for overnight delivery to the Company as soon
as practicable following such date ("Cash Basis") or (ii) if at the time of
exercise, the Warrant Shares are not subject to an effective registration
statement or if an Event of Default has occurred, by delivering an Exercise
Notice and in lieu of making payment of the Aggregate Exercise Price in cash or
wire transfer, elect instead to receive upon such exercise the "Net Number" of
shares of Common Stock determined according to the following formula (the
"Cashless Exercise"):

      Net Number = (A x B) - (A x C)
                   -----------------
                           B

                  For purposes of the foregoing formula:

                  A = the total number of Warrant Shares with respect to which
                  this Warrant is then being exercised.

                  B = the Closing Bid Price of the Common Stock on the date of
                  exercise of the Warrant.

                  C = the Warrant Exercise Price then in effect for the
                  applicable Warrant Shares at the time of such exercise.

      In the event of any exercise of the rights represented by this Warrant in
compliance with this Section 2, the Company shall on or before the fifth (5th)
Business Day following the date of receipt of the Exercise Notice, the Aggregate
Exercise Price and this Warrant (or an indemnification undertaking with respect
to this Warrant in the case of its loss, theft or destruction) and the receipt
of the representations of the holder specified in Section 6 hereof, if requested
by the Company (the "Exercise Delivery Documents"), and if the Common Stock is
DTC eligible, credit such aggregate number of shares of Common Stock to which
the holder shall be entitled to the holder's or its designee's balance account
with The Depository Trust Company; provided, however, if the holder who
submitted the Exercise Notice requested physical delivery of any or all of the
Warrant Shares, or, if the Common Stock is not DTC eligible then the Company
shall, on or before the fifth (5th) Business Day following receipt of the
Exercise Delivery Documents, issue and surrender to a common carrier for
overnight delivery to the address specified in the Exercise Notice, a
certificate, registered in the name of the holder, for the number of shares of
Common Stock to which the holder shall be entitled pursuant to such request.
Upon delivery of the Exercise Notice and Aggregate Exercise Price referred to in
clause (i) or (ii) above the holder of this Warrant shall be deemed for all
corporate purposes to have become the holder of record of the Warrant Shares
with respect to which this Warrant has been exercised. In the case of a dispute
as to the determination of the Warrant Exercise Price, the Closing Bid Price or
the arithmetic calculation of the Warrant Shares, the Company shall promptly
issue to the holder the number of Warrant Shares that is not disputed and shall
submit the disputed determinations or arithmetic calculations to the holder via
facsimile within one (1) Business Day of receipt of the holder's Exercise
Notice.

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<PAGE>

            (b) If the holder and the Company are unable to agree upon the
determination of the Warrant Exercise Price or arithmetic calculation of the
Warrant Shares within one (1) day of such disputed determination or arithmetic
calculation being submitted to the holder, then the Company shall immediately
submit via facsimile (i) the disputed determination of the Warrant Exercise
Price or the Closing Bid Price to an independent, reputable investment banking
firm or (ii) the disputed arithmetic calculation of the Warrant Shares to its
independent, outside accountant. The Company shall cause the investment banking
firm or the accountant, as the case may be, to perform the determinations or
calculations and notify the Company and the holder of the results no later than
forty-eight (48) hours from the time it receives the disputed determinations or
calculations. Such investment banking firm's or accountant's determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error.

            (c) Unless the rights represented by this Warrant shall have expired
or shall have been fully exercised, the Company shall, as soon as practicable
and in no event later than five (5) Business Days after any exercise and at its
own expense, issue a new Warrant identical in all respects to this Warrant
exercised except it shall represent rights to purchase the number of Warrant
Shares purchasable immediately prior to such exercise under this Warrant
exercised, less the number of Warrant Shares with respect to which such Warrant
is exercised.

            (d) No fractional Warrant Shares are to be issued upon any pro rata
exercise of this Warrant, but rather the number of Warrant Shares issued upon
such exercise of this Warrant shall be rounded up or down to the nearest whole
number.

            (e) If the Company or its Transfer Agent shall fail for any reason
or for no reason to issue to the holder within ten (10) days of receipt of the
Exercise Delivery Documents, a certificate for the number of Warrant Shares to
which the holder is entitled or to credit the holder's balance account with The
Depository Trust Company for such number of Warrant Shares to which the holder
is entitled upon the holder's exercise of this Warrant, the Company shall, in
addition to any other remedies under this Warrant or otherwise available to such
holder, pay as additional damages in cash to such holder on each day the
issuance of such certificate for Warrant Shares is not timely effected an amount
equal to 0.025% of the product of (A) the sum of the number of Warrant Shares
not issued to the holder on a timely basis and to which the holder is entitled,
and (B) the Closing Bid Price of the Common Stock for the trading day
immediately preceding the last possible date which the Company could have issued
such Common Stock to the holder without violating this Section 2.

                                       5

<PAGE>

            (f) If within ten (10) days after the Company's receipt of the
Exercise Delivery Documents, the Company fails to deliver a new Warrant to the
holder for the number of Warrant Shares to which such holder is entitled
pursuant to Section 2 hereof, then, in addition to any other available remedies
under this Warrant, or otherwise available to such holder, the Company shall pay
as additional damages in cash to such holder on each day after such tenth (10th)
day that such delivery of such new Warrant is not timely effected in an amount
equal to 0.25% of the product of (A) the number of Warrant Shares represented by
the portion of this Warrant which is not being exercised and (B) the Closing Bid
Price of the Common Stock for the trading day immediately preceding the last
possible date which the Company could have issued such Warrant to the holder
without violating this Section 2.

      Section 3. Covenants as to Common Stock. The Company hereby covenants and
agrees as follows:

            (a) This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.

            (b) All Warrant Shares which may be issued upon the exercise of the
rights represented by this Warrant will, upon issuance, be validly issued, fully
paid and nonassessable and free from all taxes, liens and charges with respect
to the issue thereof.

            (c) During the period within which the rights represented by this
Warrant may be exercised, the Company will at all times have authorized and
reserved at least one hundred percent (100%) of the number of shares of Common
Stock needed to provide for the exercise of the rights then represented by this
Warrant and the par value of said shares will at all times be less than or equal
to the applicable Warrant Exercise Price. If at any time the Company does not
have a sufficient number of shares of Common Stock authorized and available,
then the Company shall call and hold a special meeting of its stockholders
within sixty (60) days of that time for the sole purpose of increasing the
number of authorized shares of Common Stock.

            (d) If at any time after the date hereof the Company shall file a
registration statement, the Company shall include the Warrant Shares issuable to
the holder, pursuant to the terms of this Warrant and shall maintain, so long as
any other shares of Common Stock shall be so listed, such listing of all Warrant
Shares from time to time issuable upon the exercise of this Warrant; and the
Company shall so list on each national securities exchange or automated
quotation system, as the case may be, and shall maintain such listing of, any
other shares of capital stock of the Company issuable upon the exercise of this
Warrant if and so long as any shares of the same class shall be listed on such
national securities exchange or automated quotation system.

                                       6

<PAGE>

            (e) The Company will 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 by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. The Company will not increase the par value of any shares of
Common Stock receivable upon the exercise of this Warrant above the Warrant
Exercise Price then in effect, and (ii) will take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and nonassessable shares of Common Stock upon the exercise of this
Warrant.

            (f) This Warrant will be binding upon any entity succeeding to the
Company by merger, consolidation or acquisition of all or substantially all of
the Company's assets.

      Section 4. Taxes. The Company shall pay any and all taxes, except any
applicable withholding, which may be payable with respect to the issuance and
delivery of Warrant Shares upon exercise of this Warrant.

      Section 5. Warrant Holder Not Deemed a Stockholder. Except as otherwise
specifically provided herein, no holder, as such, of this Warrant shall be
entitled to vote or receive dividends or be deemed the holder of shares of
capital stock of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether any reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed as
imposing any liabilities on such holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 5, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.

      Section 6. Representations of Holder. The holder of this Warrant, by the
acceptance hereof, represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment only and not with a view towards, or
for resale in connection with, the public sale or distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided, however, that by making the representations herein,
the holder does not agree to hold this Warrant or any of the Warrant Shares for
any minimum or other specific term and reserves the right to dispose of this
Warrant and the Warrant Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The holder of
this Warrant further represents, by acceptance hereof, that, as of this date,
such holder is an "accredited investor" as such term is defined in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act (an "Accredited Investor"). Upon exercise of this
Warrant the holder shall, if requested by the Company, confirm in writing, in a
form satisfactory to the Company, that the Warrant Shares so purchased are being
acquired solely for the holder's own account and not as a nominee for any other
party, for investment, and not with a view toward distribution or resale and
that such holder is an Accredited Investor. If such holder cannot make such
representations because they would be factually incorrect, it shall be a
condition to such holder's exercise of this Warrant that the Company receive
such other representations as the Company considers reasonably necessary to
assure the Company that the issuance of its securities upon exercise of this
Warrant shall not violate any United States or state securities laws.

                                       7

<PAGE>

      Section 7. Ownership and Transfer.

            (a) The Company shall maintain at its principal executive offices
(or such other office or agency of the Company as it may designate by notice to
the holder hereof), a register for this Warrant, in which the Company shall
record the name and address of the person in whose name this Warrant has been
issued, as well as the name and address of each transferee. The Company may
treat the person in whose name any Warrant is registered on the register as the
owner and holder thereof for all purposes, notwithstanding any notice to the
contrary, but in all events recognizing any transfers made in accordance with
the terms of this Warrant.

      Section 8. Adjustment of Warrant Exercise Price and Number of Shares. The
Warrant Exercise Price and the number of shares of Common Stock issuable upon
exercise of this Warrant shall be adjusted from time to time as follows:

            (a) Adjustment of Warrant Exercise Price and Number of Shares upon
Issuance of Common Stock. If and whenever on or after the Issuance Date of this
Warrant, the Company issues or sells, or is deemed to have issued or sold, any
shares of Common Stock (other than Excluded Securities) for a consideration per
share less than a price (the "Applicable Price") equal to the Warrant Exercise
Price in effect immediately prior to such issuance or sale, then immediately
after such issue or sale the Warrant Exercise Price then in effect shall be
reduced to an amount equal to such consideration per share. Upon each such
adjustment of the Warrant Exercise Price hereunder, the number of Warrant Shares
issuable upon exercise of this Warrant shall be adjusted to the number of shares
determined by multiplying the Warrant Exercise Price in effect immediately prior
to such adjustment by the number of Warrant Shares issuable upon exercise of
this Warrant immediately prior to such adjustment and dividing the product
thereof by the Warrant Exercise Price resulting from such adjustment.

            (b) Effect on Warrant Exercise Price of Certain Events. For purposes
of determining the adjusted Warrant Exercise Price under Section 8(a) above, the
following shall be applicable:

                  (i) Issuance of Options. If after the date hereof, the Company
in any manner grants any Options and the lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Option or upon
conversion or exchange of any convertible securities issuable upon exercise of
any such Option is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the granting or sale of such Option for such price per
share. For purposes of this Section 8(b)(i), the lowest price per share for
which one share of Common Stock is issuable upon exercise of such Options or
upon conversion or exchange of such Convertible Securities shall be equal to the
sum of the lowest amounts of consideration (if any) received or receivable by
the Company with respect to any one share of Common Stock upon the granting or
sale of the Option, upon exercise of the Option or upon conversion or exchange
of any convertible security issuable upon exercise of such Option. No further
adjustment of the Warrant Exercise Price shall be made upon the actual issuance
of such Common Stock or of such convertible securities upon the exercise of such
Options or upon the actual issuance of such Common Stock upon conversion or
exchange of such convertible securities.

                                       8

<PAGE>

                  (ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any convertible securities and the lowest price per share
for which one share of Common Stock is issuable upon the conversion or exchange
thereof is less than the Applicable Price, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at
the time of the issuance or sale of such convertible securities for such price
per share. For the purposes of this Section 8(b)(ii), the lowest price per share
for which one share of Common Stock is issuable upon such conversion or exchange
shall be equal to the sum of the lowest amounts of consideration (if any)
received or receivable by the Company with respect to one share of Common Stock
upon the issuance or sale of the convertible security and upon conversion or
exchange of such convertible security. No further adjustment of the Warrant
Exercise Price shall be made upon the actual issuance of such Common Stock upon
conversion or exchange of such convertible securities, and if any such issue or
sale of such convertible securities is made upon exercise of any Options for
which adjustment of the Warrant Exercise Price had been or are to be made
pursuant to other provisions of this Section 8(b), no further adjustment of the
Warrant Exercise Price shall be made by reason of such issue or sale.

                  (iii) Change in Option Price or Rate of Conversion. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion or exchange of any convertible
securities, or the rate at which any convertible securities are convertible into
or exchangeable for Common Stock changes at any time, the Warrant Exercise Price
in effect at the time of such change shall be adjusted to the Warrant Exercise
Price which would have been in effect at such time had such Options or
convertible securities provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at the time
initially granted, issued or sold and the number of Warrant Shares issuable upon
exercise of this Warrant shall be correspondingly readjusted. For purposes of
this Section 8(b)(iii), if the terms of any Option or convertible security that
was outstanding as of the Issuance Date of this Warrant are changed in the
manner described in the immediately preceding sentence, then such Option or
convertible security and the Common Stock deemed issuable upon exercise,
conversion or exchange thereof shall be deemed to have been issued as of the
date of such change. No adjustment pursuant to this Section 8(b) shall be made
if such adjustment would result in an increase of the Warrant Exercise Price
then in effect.

                  (iv) Calculation of Consideration Received. If any Common
Stock, Options or convertible securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefore will be
deemed to be the net amount received by the Company therefore. If any Common
Stock, Options or convertible securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of consideration
received by the Company will be the market price of such securities on the date
of receipt of such securities. If any Common Stock, Options or convertible
securities are issued to the owners of the non-surviving entity in connection
with any merger in which the Company is the surviving entity, the amount of
consideration therefore will be deemed to be the fair value of such portion of
the net assets and business of the non-surviving entity as is attributable to
such Common Stock, Options or convertible securities, as the case may be. The
fair value of any consideration other than cash or securities will be determined
jointly by the Company and the holders of Warrants representing at least
two-thirds (b) of the Warrant Shares issuable upon exercise of the Warrants then
outstanding. If such parties are unable to reach agreement within ten (10) days
after the occurrence of an event requiring valuation (the "Valuation Event"),
the fair value of such consideration will be determined within five (5) Business
Days after the tenth (10th) day following the Valuation Event by an independent,
reputable appraiser jointly selected by the Company and the holders of Warrants
representing at least two-thirds (b) of the Warrant Shares issuable upon
exercise of the Warrants then outstanding. The determination of such appraiser
shall be final and binding upon all parties and the fees and expenses of such
appraiser shall be borne jointly by the Company and the holders of Warrants.

                                       9

<PAGE>

                  (v) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options will be deemed to
have been issued for a consideration of $.01.

                  (vi) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held
will be considered an issue or sale of Common Stock.

                  (vii) Record Date. If the Company takes a record of the
holders of Common Stock for the purpose of entitling them (1) to receive a
dividend or other distribution payable in Common Stock, Options or in
convertible securities or (2) to subscribe for or purchase Common Stock, Options
or convertible securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.

            (c) Adjustment of Warrant Exercise Price upon Subdivision or
Combination of Common Stock. If the Company at any time after the date of
issuance of this Warrant subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding shares of
Common Stock into a greater number of shares, any Warrant Exercise Price in
effect immediately prior to such subdivision will be proportionately reduced and
the number of shares of Common Stock obtainable upon exercise of this Warrant
will be proportionately increased. If the Company at any time after the date of
issuance of this Warrant combines (by combination, reverse stock split or
otherwise) one or more classes of its outstanding shares of Common Stock into a
smaller number of shares, any Warrant Exercise Price in effect immediately prior
to such combination will be proportionately increased and the number of Warrant
Shares issuable upon exercise of this Warrant will be proportionately decreased.
Any adjustment under this Section 8(c) shall become effective at the close of
business on the date the subdivision or combination becomes effective.

                                       10

<PAGE>

            (d) Distribution of Assets. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a "Distribution"), at any time
after the issuance of this Warrant, then, in each such case:

                  (i) any Warrant Exercise Price in effect immediately prior to
the close of business on the record date fixed for the determination of holders
of Common Stock entitled to receive the Distribution shall be reduced, effective
as of the close of business on such record date, to a price determined by
multiplying such Warrant Exercise Price by a fraction of which (A) the numerator
shall be the Closing Sale Price of the Common Stock on the trading day
immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company's Board of Directors) applicable to one
share of Common Stock, and (B) the denominator shall be the Closing Sale Price
of the Common Stock on the trading day immediately preceding such record date;
and

                  (ii) either (A) the number of Warrant Shares obtainable upon
exercise of this Warrant shall be increased to a number of shares equal to the
number of shares of Common Stock obtainable immediately prior to the close of
business on the record date fixed for the determination of holders of Common
Stock entitled to receive the Distribution multiplied by the reciprocal of the
fraction set forth in the immediately preceding clause (i), or (B) in the event
that the Distribution is of common stock of a company whose common stock is
traded on a national securities exchange or a national automated quotation
system, then the holder of this Warrant shall receive an additional warrant to
purchase Common Stock, the terms of which shall be identical to those of this
Warrant, except that such warrant shall be exercisable into the amount of the
assets that would have been payable to the holder of this Warrant pursuant to
the Distribution had the holder exercised this Warrant immediately prior to such
record date and with an exercise price equal to the amount by which the exercise
price of this Warrant was decreased with respect to the Distribution pursuant to
the terms of the immediately preceding clause (i).

            (e) Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 8 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in the Warrant
Exercise Price and the number of shares of Common Stock obtainable upon exercise
of this Warrant so as to protect the rights of the holders of the Warrants;
provided, except as set forth in section 8(c),that no such adjustment pursuant
to this Section 8(e) will increase the Warrant Exercise Price or decrease the
number of shares of Common Stock obtainable as otherwise determined pursuant to
this Section 8.

                                       11

<PAGE>

            (f) Notices.

                  (i) Immediately upon any adjustment of the Warrant Exercise
Price, the Company will give written notice thereof to the holder of this
Warrant, setting forth in reasonable detail, and certifying, the calculation of
such adjustment.

                  (ii) The Company will give written notice to the holder of
this Warrant at least ten (10) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any Organic Change (as defined below), dissolution or
liquidation, provided that such information shall be made known to the public
prior to or in conjunction with such notice being provided to such holder.

                  (iii) The Company will also give written notice to the holder
of this Warrant at least ten (10) days prior to the date on which any Organic
Change, dissolution or liquidation will take place, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder.

      Section 9. Purchase Rights; Reorganization, Reclassification,
Consolidation, Merger or Sale.

            (a) In addition to any adjustments pursuant to Section 8 above, if
at any time the Company grants, issues or sells any Options, Convertible
Securities or rights to purchase stock, warrants, securities or other property
pro rata to the record holders of any class of Common Stock (the "Purchase
Rights"), then the holder of this Warrant will be entitled to acquire, upon the
terms applicable to such Purchase Rights, the aggregate Purchase Rights which
such holder could have acquired if such holder had held the number of shares of
Common Stock acquirable upon complete exercise of this Warrant immediately
before the date on which a record is taken for the grant, issuance or sale of
such Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the grant, issue or sale
of such Purchase Rights.

            (b) Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or substantially all of the Company's assets
to another Person or other transaction in each case which is effected in such a
way that holders of Common Stock are entitled to receive (either directly or
upon subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "Organic Change." Prior to
the consummation of any (i) sale of all or substantially all of the Company's
assets to an acquiring Person or (ii) other Organic Change following which the
Company is not a surviving entity, the Company will secure from the Person
purchasing such assets or the successor resulting from such Organic Change (in
each case, the "Acquiring Entity") a written agreement (in form and substance
satisfactory to the holders of Warrants representing at least two-thirds (iii)
of the Warrant Shares issuable upon exercise of the Warrants then outstanding)
to deliver to each holder of Warrants in exchange for such Warrants, a security
of the Acquiring Entity evidenced by a written instrument substantially similar
in form and substance to this Warrant and satisfactory to the holders of the
Warrants (including an adjusted warrant exercise price equal to the value for
the Common Stock reflected by the terms of such consolidation, merger or sale,
and exercisable for a corresponding number of shares of Common Stock acquirable
and receivable upon exercise of the Warrants without regard to any limitations
on exercise, if the value so reflected is less than any Applicable Warrant
Exercise Price immediately prior to such consolidation, merger or sale). Prior
to the consummation of any other Organic Change, the Company shall make
appropriate provision (in form and substance satisfactory to the holders of
Warrants representing a majority of the Warrant Shares issuable upon exercise of
the Warrants then outstanding) to insure that each of the holders of the
Warrants will thereafter have the right to acquire and receive in lieu of or in
addition to (as the case may be) the Warrant Shares immediately theretofore
issuable and receivable upon the exercise of such holder's Warrants (without
regard to any limitations on exercise), such shares of stock, securities or
assets that would have been issued or payable in such Organic Change with
respect to or in exchange for the number of Warrant Shares which would have been
issuable and receivable upon the exercise of such holder's Warrant as of the
date of such Organic Change (without taking into account any limitations or
restrictions on the exercisability of this Warrant).

                                       12

<PAGE>

      Section 10. Lost, Stolen, Mutilated or Destroyed Warrant. If this Warrant
is lost, stolen, mutilated or destroyed, the Company shall promptly, on receipt
of an indemnification undertaking (or, in the case of a mutilated Warrant, the
Warrant), issue a new Warrant of like denomination and tenor as this Warrant so
lost, stolen, mutilated or destroyed.

      Section 11. Notice. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Warrant must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of receipt is received by the sending party transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one Business Day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall be:

If to Holder:            Cornell Capital Partners, LP
                         101 Hudson Street - Suite 3700
                         Jersey City, NJ 07302
                         Attention: Mark A. Angelo
                         Telephone: (201) 985-8300
                         Facsimile: (201) 985-8266

With Copy to:            David Gonzalez, Esq.
                         101 Hudson Street - Suite 3700
                         Jersey City, NJ 07302
                         Telephone: (201) 985-8300
                         Facsimile: (201) 985-8266

                                       13

<PAGE>

If to the Company, to:   Delek Resources, Inc.
                         1224 Washington Avenue
                         Miami Beach, FL 33319
                         Attention: Leonard Sternheim
                         Telephone: (305) 531-1174
                         Facsimile: (305) 531-1274

With a copy to:          Kirkpatrick & Lockhart Nicholson Graham, LLP
                         201 South Biscayne Boulevard, Suite 2000
                         Miami, Florida 33131
                         Attention: Clayton E. Parker, Esquire
                         Telephone: (305) 539-3306
                         Facsimile: (305) 358-7095

If to a holder of this Warrant, to it at the address and facsimile number set
forth on Exhibit C hereto, with copies to such holder's representatives as set
forth on Exhibit C, or at such other address and facsimile as shall be delivered
to the Company upon the issuance or transfer of this Warrant. Each party shall
provide five days' prior written notice to the other party of any change in
address or facsimile number. Written confirmation of receipt (A) given by the
recipient of such notice, consent, facsimile, waiver or other communication, (or
(B) provided by a nationally recognized overnight delivery service shall be
rebuttable evidence of personal service, receipt by facsimile or receipt from a
nationally recognized overnight delivery service in accordance with clause (i),
(ii) or (iii) above, respectively.

      Section 12. Date. The date of this Warrant is set forth on page 1 hereof.
This Warrant, in all events, shall be wholly void and of no effect after the
close of business on the Expiration Date, except that notwithstanding any other
provisions hereof, the provisions of Section 8(b) shall continue in full force
and effect after such date as to any Warrant Shares or other securities issued
upon the exercise of this Warrant.

      Section 13. Amendment and Waiver. Except as otherwise provided herein, the
provisions of the Warrants may be amended and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, only if the Company has obtained the written consent of the holders of
Warrants representing at least two-thirds of the Warrant Shares issuable upon
exercise of the Warrants then outstanding; provided that, except for Section
8(d), no such action may increase the Warrant Exercise Price or decrease the
number of shares or class of stock obtainable upon exercise of any Warrant
without the written consent of the holder of such Warrant.

      Section 14. Descriptive Headings; Governing Law. The descriptive headings
of the several sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporate
laws of the State of New Jersey shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Agreement shall
be governed by the internal laws of the State of New Jersey, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New Jersey or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New Jersey. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in Hudson County and the United States District Court for
the District of New Jersey, for the adjudication of any dispute hereunder or in
connection herewith or therewith, or with any transaction contemplated hereby or
discussed herein, and hereby irrevocably waives, and agrees not to assert in any
suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address for such notices to it under
this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.

                                       14

<PAGE>

      Section 15. Waiver of Jury Trial. AS A MATERIAL INDUCEMENT FOR EACH PARTY
HERETO TO ENTER INTO THIS WARRANT, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS WARRANT AND/OR
ANY AND ALL OF THE OTHER DOCUMENTS ASSOCIATED WITH THIS TRANSACTION.

                   REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

                                       15

<PAGE>

      IN WITNESS WHEREOF, the Company has caused this Warrant to be signed as of
the date first set forth above.

                                          DELEK RESOURCES, INC.

                                          By:
                                                 -------------------------------
                                          Name:  Leonard Sternheim
                                          Title: Chief Executive Officer

                                       16

<PAGE>

                              EXHIBIT A TO WARRANT

                                 EXERCISE NOTICE

                                 TO BE EXECUTED
                BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT

                              DELEK RESOURCES, INC.

      The undersigned holder hereby exercises the right to purchase
______________ of the shares of Common Stock ("Warrant Shares") of Delek
Resources, Inc. (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined shall have
the respective meanings set forth in the Warrant.

Specify Method of exercise by check mark:

      1.    Cash Exercise

            (a) Payment of Warrant Exercise Price. The holder shall pay the
            Aggregate Exercise Price of $______________ to the Company in
            accordance with the terms of the Warrant.

            (b) Delivery of Warrant Shares. The Company shall deliver to the
            holder _________ Warrant Shares in accordance with the terms of the
            Warrant.

      2.    Cashless Exercise

            (a) Payment of Warrant Exercise Price. In lieu of making payment of
            the Aggregate Exercise Price, the holder elects to receive upon such
            exercise the Net Number of shares of Common Stock determined in
            accordance with the terms of the Warrant.

            (b) Delivery of Warrant Shares. The Company shall deliver to the
            holder _________ Warrant Shares in accordance with the terms of the
            Warrant.

Date:
       ------------ ---, ------

Name of Registered Holder

By:
    -----------------------------------------
Name:
      ---------------------------------------
Title:
       --------------------------------------

                                       A-1

<PAGE>

                              EXHIBIT B TO WARRANT

                              FORM OF WARRANT POWER

      FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of Delek Resources, Inc. represented by
warrant certificate no. _____, standing in the name of the undersigned on the
books of said corporation. The undersigned does hereby irrevocably constitute
and appoint ______________, attorney to transfer the warrants of said
corporation, with full power of substitution in the premises.

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

                                 By:
                                      ------------------------------------------
                                 Name:
                                       -----------------------------------------
                                 Title:
                                        ----------------------------------------

                                       B-1Exhibit 4.18

        CERTIFICATE OF DESIGNATION OF THE RELATIVE RIGHTS AND PREFERENCES
                                     OF THE
                    SERIES 2006 A CONVERTIBLE PREFERRED STOCK
                                       OF
                        STATSURE DIAGNOSTIC SYSTEMS, INC.

      The undersigned, the Chief Executive Officer of StatSure Diagnostic
Systems, Inc., a Delaware corporation (the "Company"), in accordance with the
provisions of the Delaware Revised Statutes, 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 2006A Convertible Preferred Stock, was
duly adopted on May 31, 2006, 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 $0.001 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 2006 A Convertible Preferred Stock," consisting of Two Thousand Five
Hundred (2,500) shares, which series shall have the following designations,
powers, preferences and relative and other special rights and the following
qualifications, limitations and restrictions:

      1. Designation and Rank. The designation of such series of the Preferred
Stock shall be the Series 2006 A Convertible Preferred Stock, par value $0.001
per share (the "Series 2006 A Preferred Stock"). The maximum number of shares of
Series 2006 A Preferred Stock shall be Two Thousand Five Hundred (2,500) shares.
The Series 2006 A Preferred Stock shall rank senior to the Company's common
stock, par value $0.001 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 2006 A Preferred Stock ("Junior Stock"). The Series 2006 A
Preferred Stock shall be subordinate to and rank junior to all indebtedness of
the Company now or hereafter outstanding.

      2. Dividends.

            (a) Payment of Dividends. Commencing on the date of the initial
issuance (the "Issuance Date") of the Series 2006 A Preferred Stock, the holders
of record of shares of Series 2006 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 eight percent
(8%) of the stated Liquidation Preference Amount (as defined in Section 4
hereof) per share per annum (the "Dividend Payment"), payable quarterly
beginning on the fourth (4th) month after the date first written above (unless
converted by the holder pursuant to Section 5(a) hereof prior to the date the
applicable Dividend Payment is due). The Company may elect, by written notice to

                                        5
<PAGE>

the holder at least 10 days prior to the date the dividend is due, to make
payment in shares of Common Stock instead of cash, in which case the applicable
rate for such payment shall be equal to ten percent (10%) of the stated
Liquidation Preference Amount per share per annum. Any shares of Common Stock
issued as a Dividend Payment shall be valued at the Volume Weighted Average
Price over the ten (10) days previous to payment and shall have piggyback
registration rights. In the case of shares of Series 2006 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 2006 A Preferred Stock shall be cumulative, shall accrue and be payable
quarterly. Dividends on the Series 2006 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 2006 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 2006 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 2006 A Preferred Stock as to the payment of dividends
before any distribution shall be paid on, or declared and set apart for Junior
Stock.

            (b) So long as in excess of 200 shares of Series 2006 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 2006 A
Preferred Stock.

            (c) In the event of a dissolution, liquidation or winding up of the
Company pursuant to Section 4 hereof, all accrued and unpaid dividends on the
Series 2006 A Preferred Stock shall be payable on the date of payment of the
preferential amount to the holders of Series 2006 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 2006 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 2006 A
Preferred Stock being converted shall be payable on the Conversion Date (as
defined in Section 5(b)(i) hereof).

            (d) 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.

                                        6
<PAGE>

      3. Voting Rights.

            (a) Class Voting Rights. So long as in excess of 200 shares are
outstanding, the Series 2006 A Preferred Stock shall have the following class
voting rights (in addition to the voting rights set forth in Section 3(b)
hereof). So long as in excess of 200 shares of the Series 2006 A Preferred Stock
remain outstanding, 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 2006 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
2006 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,
including but not limited to the issuance of any more shares of Preferred Stock,
ranking pari passu or senior to the Series 2006 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 2006 A Preferred Stock,
whether by merger, consolidation or otherwise, so as to adversely affect any
right, preference, privilege or voting power of the Series 2006 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,
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 2006 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; (vii)
voluntarily file for bankruptcy, liquidate the Company's assets or make an
assignment for the benefit of the Company's creditors; or (viii) materially
change the nature of the Company's business.

            (b) General Voting Rights. Except with respect to transactions upon
which the Series 2006 A Preferred Stock shall be entitled to vote separately as
a class pursuant to Section 3(a) above and except as otherwise required by
Delaware law, the Series 2006 A Preferred Stock shall have no voting rights. The
Common Stock into which the Series 2006 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.

      4. Liquidation Preference.

            (a) 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 2006 A Preferred Stock then outstanding shall be entitled to
receive, out of the assets of the Company available for distribution to its
stockholders, an amount equal to $1,000 per share (the "Liquidation Preference
Amount") of the Series 2006 A Preferred Stock plus any accrued and unpaid
dividends 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 2006 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 2006 A Preferred Stock, then all of said assets will
be distributed among the holders of the Series 2006 A Preferred Stock and the
other classes of stock ranking pari passu with the Series 2006 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
2006 A Preferred Stock shall be equal to a ratably proportionate amount of the
liquidation payment with respect to each outstanding share of Series 2006 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 2006
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 2006 A Preferred Stock has been paid in cash the full
Liquidation Preference Amount plus any accrued and unpaid dividends to which
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 2006 A Preferred Stock
will not be entitled to any further participation as such in any distribution of
the assets of the Company.

                                        7
<PAGE>

            (b) 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 2006 A Preferred Stock shall maintain its relative powers, designations
and preferences provided for herein and no merger shall result which is
inconsistent therewith.

            (c) 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 2006 A Preferred
Stock at their respective addresses as the same shall appear on the books of the
Company.

      5. Conversion. The holder of Series 2006 A Preferred Stock shall have the
following conversion rights (the "Conversion Rights"):

            (a) Right to Convert. At any time on or after the Issuance Date, the
holder of any such shares of Series 2006 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 2006 A
Preferred Stock held by such person 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 2006 A Preferred Stock
being converted plus any accrued but unpaid dividends divided 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 2006 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
2006 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 2006 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
2006 A Preferred Stock that will be paid or distributed on such redemption or
liquidation, dissolution or winding up, as the case may be.

                                        8
<PAGE>

            (b) Mechanics of Voluntary Conversion. The Conversion of Series 2006
A Preferred Stock shall be conducted in the following manner:

                  (i) Holder's Delivery Requirements. To convert Series 2006 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 minimum amount of $25,000
in the form attached hereto as Exhibit I (the "Conversion Notice"), to the
Company Attention: Chief Executive Officer at Fax Number (508) 872-2728, and (B)
surrender to a common carrier for delivery to the Company as soon as practicable
following such Conversion Date the original certificates representing the shares
of Series 2006 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.

                  (ii) 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,
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, 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, 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 such conversion is in connection with a sale and the Company and the
Transfer Agent are participating in DTC through the DWAC system. 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 2006 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 2006 A Preferred Stock not converted.

                                        9
<PAGE>

                  (iii) 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
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).

                  (iv) Record Holder. The person or persons entitled to receive
the shares of Common Stock issuable upon a conversion of the Series 2006 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.

                                       10
<PAGE>

                  (v) Company's Failure to Timely Convert. If within five (5)
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 2006 A Preferred Stock or to issue a
new Preferred Stock Certificate representing the number of shares of Series 2006
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 2006 A Convertible Preferred
Stock Purchase Agreement (the "Purchase Agreement") among the Company and the
initial holders of the Series 2006 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 fifth (5th) business day that such
conversion is not timely effected in an amount equal 0.2% of the product of (A)
the sum of 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 2006 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 five (5) business days of the date incurred, then such
payment shall bear 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 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 in the "pink sheets" by the National Quotation Bureau,
Inc. 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 2006 A
Preferred Stock.

                  (vi) Buy-In Rights. In addition to any other rights available
to the holders of Series 2006 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
2006 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 2006 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 2006 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 2006 A Preferred

                                       11
<PAGE>

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 2006 A Preferred Stock as required pursuant
to the terms hereof.

            (c) Mandatory Conversion. (i) Each share of Series 2006 A Preferred
Stock outstanding on the Mandatory Conversion Date shall, automatically and
without any action on the part of the holder thereof, at the Company's sole
discretion, convert 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 2006 A Preferred Stock outstanding on the Mandatory
Conversion Date plus any accrued but unpaid dividends divided by (ii) the
Conversion Price in effect on the Mandatory Conversion Date.

                  (ii) As used herein, "Mandatory Conversion Date" shall be the
twenty first (21st) consecutive trading day in which the Closing Bid Price of
the Common Stock is above $2.50, subject to equitable adjustment of such Closing
Bid Price for any of the events specified in section 5(e)(ii)(iii)(iv) or (v)
inclusive; provided, that, that on the Mandatory Conversion Date, the
Registration Statement is effective and has been effective, without lapse or
suspension of any kind, for a period sixty (60) consecutive calendar days, or
the shares of Common Stock into which the Series 2006 A Preferred Stock can be
converted may be offered for sale to the public pursuant to Rule 144(k) ("Rule
144(k)") under the Securities Act of 1933, as amended. The Mandatory Conversion
Date and the Voluntary Conversion Date collectively are referred to in this
Certificate of Designation as the "Conversion Date."

                  (iii) The term "Closing Bid Price" shall mean, for any
security as of any date, the last closing bid price of such security on the on
the OTC Bulletin Board or another registered national stock exchange on which
the Common Stock is then listed, or if there is no such price on such date, then
the closing bid price on such exchange or quotation system on the date nearest
preceding such date, or (b) if the Common Stock is not listed then on the OTC
Bulletin Board or any registered national stock exchange, the last closing bid
price for a share of Common Stock in the over-the-counter market, as reported by
the OTC Bulletin Board or in the National Quotation Bureau Incorporated or
similar organization or agency succeeding to its functions of reporting prices)
at the close of business on such date, or (c) if the Common Stock is not then
reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated
(or similar organization or agency succeeding to its functions of reporting
prices), then the average of the bid prices of any market makers for such
security as reported in the "pink sheets" by the National Quotation Bureau, Inc.
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 2006 A Preferred
Stock.

                                       12
<PAGE>

                  (iv) On the Mandatory Conversion Date, the outstanding shares
of Series 2006 A Preferred Stock shall be converted automatically without any
further action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Company or its Transfer Agent;
provided, however, that the Company shall not be obligated to issue the shares
of Common Stock issuable upon conversion of any shares of Series A Preferred
Stock unless certificates evidencing such shares of Series 2006 A Preferred
Stock are either delivered to the Company or the holder notifies the Company
that such certificates have been lost, stolen, or destroyed, and executes an
agreement satisfactory to the Company to indemnify the Company from any loss
incurred by it in connection therewith. Upon the occurrence of the automatic
conversion of the Series 2006 A Preferred Stock pursuant to this Section 5, the
holders of the Series 2006 A Preferred Stock shall surrender the certificates
representing the Series 2006 A Preferred Stock for which the Mandatory
Conversion Date has occurred to the Company and the Company shall cause its
Transfer Agent to deliver the shares of Common Stock issuable upon such
conversion (in the same manner set forth in Section 5(b)(ii)) to the holder
within three (3) business days of the holder's delivery of the applicable
Preferred Stock Certificates.

            (d) Conversion Price.

                  (i) The term "Conversion Price" shall mean $0.80, subject to
adjustment under Section 5(e) hereof. Notwithstanding any adjustment hereunder,
at no time shall the Conversion Price be greater than $0.80 per share except if
it is adjusted pursuant to Section 5(e)(ii).

                  (ii) Notwithstanding the foregoing to the contrary, if during
any period (a "Black-out Period"), a holder of Series 2006 A Preferred Stock is
unable to trade any Common Stock issued or issuable upon conversion of the
Series 2006 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 2006 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 2006 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)), such holder of Series 2006 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 2006 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.

                                       13
<PAGE>

            (e) Adjustments of Conversion Price.

                  (i) Adjustments for Certain Specified Events. If

                        (1) the Company does not execute a deal with Chembio
                        Diagnostics, Inc. and Inverness Medical Innovations Inc.
                        on terms substantially similar to those outlined in the
                        appendix to that certain Term Sheet between the Company
                        and Chardan Capital Markets LLC dated May 8, 2006, by
                        midnight July 31st, 2006, or;

                        (2) The Company or Chembio Diagnostics, Inc. does not
                        receive FDA Pre-Market Approval for the manufacture of
                        the StatSure Licensed Test by July 31st, 2006 then

the Conversion Price shall thereafter be adjusted to $0.50 per share.

                  (ii) 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)(ii) shall be effective at the close of business on the date the
stock split or combination becomes effective.

                  (iii) 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:

                    (1) 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

                    (2) 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.

                                       14
<PAGE>

                  (iv) 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 2006 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 2006 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 2006 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 2006 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 2006 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
2006 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.

                  (v) Adjustments for Reclassification, Exchange or
Substitution. If the Common Stock issuable upon conversion of the Series 2006 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)(vi)), 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 2006 A Preferred Stock shall have the
right thereafter to convert such share of Series 2006 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 2006 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.

                                       15
<PAGE>

                  (vi) 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)(v)), 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 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 2006 A Preferred Stock shall have the right
thereafter to convert such share of Series 2006 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. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Section 5(e)(vi) with respect to the rights of the holders of the Series
2006 A Preferred Stock after the Organic Change to the end that the provisions
of this Section 5(e)(vi) (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 2006 A Preferred Stock) shall be applied after that
event in as nearly an equivalent manner as may be practicable.

                  (vii) Adjustments for Issuance of Additional Shares of Common
Stock.

            (A) For a period of three (3) years following the Issuance Date, in
the event the Company, shall, at any time, from time to time, issue or sell any
additional shares of Common Stock (otherwise than as provided in the foregoing
subsections (i) through (vi) 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 less than the
Conversion Price, or without consideration, the Conversion Price then in effect
upon each such issuance shall be adjusted to equal the price per share at which
the Additional Shares of Common Stock are sold;

            (B) For a period of two years following the three-year period
described above in the foregoing subsection (vii)(A), in the event the Company,
shall, at any time, from time to time, issue or sell any additional shares of
Common Stock (otherwise than as provided in the foregoing subsections (i)
through (vi) 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 less than the
Conversion Price, or without consideration, the Conversion Price then in effect
upon each such issuance shall be adjusted to that price (rounded to the nearest
cent) determined by multiplying the Conversion Price by a fraction:

            (1) 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

                                       16
<PAGE>

            (2) 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;

No adjustment of the number of shares of Common Stock shall be made under
paragraph (A) Common Stock issued as payment of dividends on the Series 2006 A
Preferred Stock Common Stock issued as payment of dividends on the Series 2006 A
Preferred Stock of Section 5(e)(vii) 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)(viii).

                  (viii) Issuance of Common Stock Equivalents. For a period of
three (3) years following the Issuance Date and then the following two (2) year
period thereafter, if 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 2006
A Preferred Stock, or any rights or warrants or options to purchase any such
Common Stock or Convertible Securities, shall be issued or sold (collectively,
the "Common Stock Equivalents") and the aggregate of the price per share for
which Additional Shares of Common Stock may be issuable thereafter pursuant to
such Common Stock Equivalent, plus the consideration received by the Company for
issuance of such Common Stock Equivalent divided by the number of shares of
Common Stock issuable pursuant to such Common Stock Equivalent (the "Aggregate
Per Common Share Price") shall be less than the Conversion Price, 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 or adjusted shall cause the Aggregate Per
Common Share Price to be less than Conversion Price in effect at the time of
such amendment or adjustment, then the Conversion Price then in effect shall be
adjusted pursuant to Section (5)(e)(vii) above assuming that all Additional
Shares of Common Stock have been issued pursuant to the Convertible Securities
or Common Stock Equivalents for a purchase price equal to the Aggregate Per
Common Share Price. No adjustment of the Conversion Price shall be made under
this subsection (viii) upon the issuance of any Convertible Security which is
issued pursuant to the exercise of any warrants or other subscription or
purchase rights therefore, if any adjustment shall previously have been made to
the exercise price of such warrants then in effect upon the issuance of such
warrants or other rights pursuant to this subsection (viii). 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.

                                       17
<PAGE>

                  (ix) Consideration for Stock. In case any shares of Common
Stock or Convertible Securities other than the Series 2006 A Preferred Stock, or
any rights or warrants or options to purchase any such Common Stock or
Convertible Securities, shall be issued or sold:

                    (1) 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 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

                    (2) 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 2006
A Preferred Stock, the determination of the applicable Conversion Price or the
number of shares of Common Stock issuable upon conversion of the Series 2006 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 2006 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)(ix) shall be
allocated among such securities and assets as determined in good faith by the
Board of Directors of the Company.

                  (x) 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.

                  (xi) Certain Issues Excepted. Anything herein 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 this Agreement or issued pursuant to this
Agreement (so long as the conversion or exercise price in such securities are
not amended to lower such price and/or adversely affect the Purchasers), (iii)
securities issued in connection with bona fide strategic license agreements or
other partnering arrangements so long as such issuances are not primarily for
the purpose of raising capital (iv) Common Stock issued or the issuance or
grants of options to purchase Common Stock pursuant to the Company's stock
option plans and employee stock purchase plans outstanding as they exist on the
date of this Agreement, (v) Common Stock issued as payment of dividends on the
Series 2006 A Preferred Stock, and (vi) any warrants issued to the placement
agent and its designees for the transactions contemplated by the Purchase
Agreement.

                                       18
<PAGE>

            (f) 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 2006 A Preferred Stock against impairment. In the event a holder shall
elect to convert any shares of Series 2006 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 2006
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 2006 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.

            (g) Certificates as to Adjustments. Upon occurrence of each
adjustment or readjustment of the Conversion Price or number of shares of Common
Stock issuable upon conversion of the Series 2006 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 2006 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 2006 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 2006 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.

                                       19
<PAGE>

            (h) 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 2006 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.

            (i) 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 2006 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 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 2006 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.

            (j) Fractional Shares. No fractional shares of Common Stock shall be
issued upon conversion of the Series 2006 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.

            (k) Reservation of Common Stock. The Company shall, so long as any
shares of Series 2006 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 2006 A Preferred Stock, such
number of shares of Common Stock equal to at least one hundred ten percent
(110%) of the aggregate number of shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all of the Series 2006 A
Preferred Stock then outstanding. The initial number of shares of Common Stock
reserved for conversions of the Series 2006 A Preferred Stock and any increase
in the number of shares so reserved shall be allocated pro rata among the
holders of the Series 2006 A Preferred Stock based on the number of shares of
Series 2006 A Preferred Stock held by each holder of record at the time of
issuance of the Series 2006 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 2006 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. Any shares of Common Stock
reserved and which remain allocated to any person or entity which does not hold
any shares of Series 2006 A Preferred Stock shall be allocated to the remaining
holders of Series 2006 A Preferred Stock, pro rata based on the number of shares
of Series 2006 A Preferred Stock then held by such holder.

                                       20
<PAGE>

            (l) Retirement of Series 2006 A Preferred Stock. Conversion of
Series 2006 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 2006 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 2006 A
Preferred Stock representing the unconverted portion of the certificate so
surrendered as required by Section 5(b)(ii).

            (m) Regulatory Compliance. If any shares of Common Stock to be
reserved for the purpose of conversion of Series 2006 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.

      6. No Preemptive Rights. Except as provided in Section 5 hereof and in the
Purchase Agreement, no holder of the Series 2006 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 terms 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.

      7. 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 2006 A Preferred Stock convert shares of the Series 2006 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 4.99% of the then issued and
outstanding shares of Common Stock outstanding at such time; provided, however,
that upon a holder of Series 2006 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 2006 A Preferred Stock, this Section 7(a) shall be of no
force or effect with regard to those shares of Series 2006 A Preferred Stock
referenced in the Waiver Notice.

                                       21
<PAGE>

      8. Redemption.

            (a) Redemption Option Upon Major Transaction. In addition to all
other rights of the holders of Series 2006 A Preferred Stock contained herein,
simultaneous with the occurrence of a Major Transaction (as defined below), each
holder of Series 2006 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 2006 A Preferred Stock at a price per share of Series 2006 A
Preferred Stock equal to one hundred percent (100%) of the Liquidation
Preference Amount, plus any accrued but unpaid dividends and liquidated damages
(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.

            (b) Redemption Option Upon Triggering Event. In addition to all
other rights of the holders of Series 2006 A Preferred Stock contained herein,
after a Triggering Event (as defined below), each holder of Series 2006 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 2006 A
Preferred Stock at a price per share of Series 2006 A Preferred Stock equal to
one hundred percent (100%) of the Liquidation Preference Amount, plus 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) and (vi) 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.

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

                  (i) 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 or (B) 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).

                                       22
<PAGE>

                  (ii) 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

                  (iii) 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.

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

                  (i) so long as any shares of Series 2006 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
2006 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 2006 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 2006 A Preferred Stock.

                  (ii) the suspension from listing, without subsequent listing
on any one of, or the failure of the Common Stock to be listed on at least one
of, the OTC Bulletin Board, the Nasdaq National Market, the Nasdaq Capital
Market, the New York Stock Exchange, Inc. or the American Stock Exchange, Inc.,
for a period of twenty (20) consecutive trading days;

                  (iii) the Company's notice to any holder of Series 2006 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
2006 A Preferred Stock into shares of Common Stock; or

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

                  (v) 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

                  (vi) 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.

                                       23
<PAGE>

            (e) Mechanics of Redemption at Option of Buyer Upon Major
Transaction. No sooner than fifteen (15) 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 2006 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 2006 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 2006 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 2006 A Preferred Stock that such holder is electing
to redeem and (ii) the applicable Major Transaction Redemption Price, as
calculated pursuant to Section 8(a) above.

            (f) Mechanics of Redemption at Option of Buyer Upon Triggering
Event. Within one (1) business day after the Company obtains knowledge of the
occurrence of a Triggering Event, the Company shall deliver written notice
thereof, which also contains a notice to cure provision via facsimile and
overnight courier ("Notice to Cure) to each holder of Series 2006 A Preferred
Stock. The Company shall then have thirty (30) days to cure such Triggering
Event, unless such Triggering Event cannot be cured within thirty (30) days, but
the Company is actively pursing to cure it (the "Cure Period"). If the
Triggering Event has not been cured by the end of the Cure Period, any holder of
Series 2006 A Preferred Stock then outstanding may require the Company to redeem
all of the Series 2006 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
2006 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.

            (g) 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 2006 A Preferred Stock, the Company shall immediately notify each holder
of Series 2006 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 2006 A Preferred Stock to be redeemed, the Company
shall redeem an amount from each holder of Series 2006 A Preferred Stock being

                                       24
<PAGE>

redeemed equal to such holder's pro-rata amount (based on the number of shares
of Series 2006 A Preferred Stock held by such holder relative to the number of
shares of Series 2006 A Preferred Stock outstanding) of all Series 2006 A
Preferred Stock being redeemed. If the Company shall fail to redeem all of the
Series 2006 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 2006 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 2006 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 2006 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 2006 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 full applicable Redemption Price to such holder, (i) the
Notice(s) of Redemption at Option of Buyer Upon Major Transaction shall be null
and void with respect to those shares of Series 2006 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 2006 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 and (iii) the
Conversion Price of such returned shares of Series 2006 A Preferred Stock shall
be adjusted to the lesser of (A) the Conversion Price and (B) the lowest Closing
Bid Price during the period beginning on the date on which the Notice(s) of
Redemption of Option of Buyer Upon Major Transaction is delivered to the Company
and ending on the date on which the Void Optional Redemption Notice(s) is
delivered to the Company; 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.

            (h) 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 2006 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 ninetieth (90th) 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 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).

                                       25
<PAGE>

      9. Inability to Fully Convert.

            (a) 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 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 2006 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 2006 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:

                  (i) require the Company to redeem from such holder those
Series 2006 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 shares of Common Stock;

                  (ii) if the Company's inability to fully convert Series 2006 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;

                  (iii) void its Conversion Notice and retain or have returned,
as the case may be, the shares of Series 2006 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

                                       26
<PAGE>

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

            (b) Mechanics of Fulfilling Holder's Election. The Company shall
immediately send via facsimile to a holder of Series 2006 A Preferred Stock,
upon receipt of a 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 2006 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").

            (c) 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 9(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 2006 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 2006 A
Preferred Stock for which the full Mandatory Redemption Price has not been paid,
(ii) receive back such Series 2006 A Preferred Stock, and (iii) require that the
Conversion Price of such returned Series 2006 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.

            (d) Pro-rata Conversion and Redemption. In the event the Company
receives a Conversion Notice from more than one holder of Series 2006 A
Preferred Stock on the same day and the Company can convert and redeem some, but
not all, of the Series 2006 A Preferred Stock pursuant to this Section 9, the
Company shall convert and redeem from each holder of Series 2006 A Preferred
Stock electing to have Series 2006 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 2006 A Preferred Stock held by such holder relative to the
number shares of Series 2006 A Preferred Stock outstanding) of all shares of
Series 2006 A Preferred Stock being converted and redeemed at such time.

                                       27
<PAGE>

      10. 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 2006 A Preferred Stock (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 2006 A Preferred Stock or (b)
for the issuance of shares of Series 2006 A Preferred Stock other than pursuant
to the Purchase Agreement.

      11. 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 2006 A Preferred
Stock, and, in the case of loss, theft or destruction, of any indemnification
undertaking by the holder 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, 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 2006 A Preferred Stock into Common
Stock.

      12. 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 2006 A
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 2006 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.

      13. 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 2006 A Preferred Stock and shall not be construed against any person as
the drafter hereof.

      14. Failure or Indulgence Not Waiver. No failure or delay on the part of a
holder of Series 2006 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.

                                       28
<PAGE>

      IN WITNESS WHEREOF, the undersigned has executed and subscribed this
Certificate and does affirm the foregoing as true this ___ day of May 2006.

                                              STATSURE DIAGNOSTIC SYSTEMS, INC.

                                              By: _____________________________
                                                  Name:
                                                  Title:

<PAGE>

                                    EXHIBIT I

                        STATSURE DIAGNOSTIC SYSTEMS, INC.
                                CONVERSION NOTICE

Reference is made to the Certificate of Designation of the Relative Rights and
Preferences of the Series 2006 A Preferred Stock of StatSure Diagnostic Systems,
Inc. (the "Certificate of Designation"). In accordance with and pursuant to the
Certificate of Designation, the undersigned hereby elects to convert the number
of shares of Series 2006 A Preferred Stock, par value $0.001 per share (the
"Preferred Shares"), of StatSure Diagnostic Systems, Inc., a Delaware
corporation (the "Company"), indicated below into shares of Common Stock, par
value $0.001 per share (the "Common Stock"), of the Company, by tendering the
stock certificate(s) representing the share(s) of Preferred Shares specified
below as of the date specified below.

      Date of Conversion:                        _______________________________

      Number of Preferred Shares to be converted:_____

      Stock certificate no(s). of Preferred Shares to be converted:_____

      The Common Stock have been sold pursuant to the Registration Statement:
      YES ____ NO____

Please confirm the following information:

      Conversion Price:                          _______________________________

      Number of shares of Common Stock to be
      issued:                                    _______________________________

Number of shares of Common Stock beneficially owned or deemed beneficially owned
by the Holder on the Date of Conversion: _________________________

Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

      Issue to:                                  _______________________________
                                                 _______________________________

      Facsimile Number:                          _______________________________

      Authorization:                             _______________________________
                                                 By: ___________________________
                                                 Title:_________________________

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