Document:

CERTIFICATE OF DESIGNATIONS OF
                      SERIES C CONVERTIBLE PREFERRED STOCK,
                           PAR VALUE $0.001 PER SHARE

Pursuant to Section 78.1955 of the Nevada Revised Statutes

IT IS HEREBY CERTIFIED that:

      1. The name of the company (hereinafter called the "CORPORATION") is The
Project Group, Inc., a corporation organized and now existing under the Nevada
Revised Statutes.

      2. The Articles of Incorporation of the Corporation (the "ARTICLES OF
INCORPORATION") authorizes the issuance of Five Million (5,000,000) shares of
preferred stock, par value $0.001 per share (the "PREFERRED STOCK"), and
expressly vests in the Board of Directors of the Corporation the authority to
issue any or all of said shares by resolution or resolutions and to establish
the designation and number of shares to be issued.

      3. The Board of Directors of the Corporation, pursuant to the authority
expressly vested in it as aforesaid, and pursuant to the provisions of Section
78.1955 of the Nevada Revised Statutes, has adopted the resolution set forth
below to create a series of Preferred Stock. Pursuant to Section 78.1955, the
approval of the Corporation's shareholders was not required.

      RESOLVED, THAT Six Thousand Six Hundred (6,600) shares (the "SERIES C
SHARES") of the Five Million (5,000,000) shares of Preferred Stock of the
Corporation which are authorized shares as of the date of this certificate shall
hereby be designated Series C Convertible Preferred Stock, par value $0.001 per
share (the "CERTIFICATE"), and shall possess the rights and preferences set
forth below:

1.    DIVIDENDS.

      The holders of the Series C Shares shall be entitled, when and if declared
by the board of directors of the corporation (the "BOARD OF DIRECTORS"), to cash
dividends and distributions out of funds of the corporation legally available
for that purpose (collectively, "Distributions") PRO RATA and PARI PASSU with
the holders of the Corporation's common stock, par value $0.001 per share (the
"COMMON STOCK") such that, the Distributions payable on each issued and
outstanding Series C Share shall be equal to the amount paid on each issued and
outstanding share of the Common Stock, and all Distributions shall be declared,
paid and set aside ratably on the foregoing basis among the holders of the
Series C Shares and the holders of the Common Stock in proportion to the issued
and outstanding Series C Shares and the Common Stock held by them; provided
however that Distributions shall be issued to the Series C Share holders on an
as if converted basis of the Series C Shares to Common Stock.

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2.    VOTING.

      (a) On all matters submitted for a vote of the shareholders of the
Corporation, the holders of the Series C Shares shall each be entitled to vote
the number of votes equal to the number of shares of the Common Stock into which
such shares are to be converted pursuant to Section 4 of this Certificate.

      (b) The affirmative vote of the holders of a majority of the issued and
outstanding Preferred Stock voting as a separate class, shall be required to
change the powers, preferences or special rights of the Series C Shares in
relation to the shares of the Common Stock.

3.    LIQUIDATION.

      (a) Upon the occurrence of a Liquidating Event (as defined below in
Section 3(c) of this Certificate), whether voluntary or involuntary, the holders
of the Preferred Stock and the Common Stock of all classes shall be entitled to
receive, PRO RATA and PARI PASSU out of the assets of the Corporation available
for distribution to its stockholders or from the net proceeds from a sale,
lease, exchange or other disposition of the assets of the Corporation (in any
such case, the "PROCEEDS"), as applicable, as follows: the entire assets and
funds of the Corporation legally available for distribution shall be distributed
ratably among the holders of the Preferred Stock and the Common Stock such that,
the Proceeds distributed on account of each issued and outstanding share of the
Preferred Stock shall be equal to the amount distributed on account of each
issued and outstanding share of the Common Stock in proportion to the issued and
outstanding shares of the Preferred Stock and the Common Stock held by them.

      (b) VALUATION. If any asset distributed to holders of the Corporation's
Common Stock upon the occurrence of any Liquidating Event consists of property
other than cash or securities, the value of such distribution shall be deemed to
be the fair market value thereof at the time of such distribution, as determined
in good faith by the Board of Directors.

      (c) LIQUIDATING EVENT. Any of the following shall be considered a
"LIQUIDATING EVENT" and shall entitle the holders of the Preferred Stock and the
Common Stock to receive promptly, in cash, securities or other property, those
amounts specified in Section 3(a) of this Certificate and valued as provided in
Section 3(b) of this Certificate:

            (i) any liquidation, dissolution or winding up of the Corporation;
or

            (ii) any sale, lease, exchange or other disposition of all or
substantially all the Corporation's assets.

4. CONVERSION OF SHARES OF THE PREFERRED STOCK. Series C Shares shall convert
into shares of the Common Stock on the basis set forth in, and subject to the
limitations of, this Section 4 of this Certificate:

      (a) Conversion Date. The Series C preferred shares shall not be converted
at any time prior to second anniversary of the date of issuance of such Series C
preferred shares (the "CONVERSION DATE").

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      (b) Subject to and in compliance with the provisions of this Section 4,
each one (1) Series C Share shall be converted into a number of fully paid and
nonassessable shares of the Common Stock so that the aggregate number of Series
C preferred shares shall, when converted, equal 9.0% of the total number of
shares of the Corporation's Common Stock outstanding on the conversion date (the
"PREFERRED RATIO RATIO"), on a pro rata basis.

      (c) SUBDIVISION OR COMBINATION OF THE COMMON STOCK. If the Corporation at
any time or from time to time shall declare or pay any dividend on the shares of
the Common Stock payable in shares of the Common Stock or in any right to
acquire shares of the Common Stock, or shall effect a subdivision of the
outstanding shares of the Common Stock into a greater number of shares of the
shares of any class of the Common Stock (by stock split, reclassification or
otherwise), or if the outstanding shares of the Common Stock shall be combined
or consolidated, by reclassification or otherwise, into a lesser number of
shares of the Common Stock, then the Preferred Conversion Ratio in effect
immediately prior to such event shall, concurrently with the effectiveness of
such event, be proportionately decreased or increased, as appropriate, such that
each Series C Share is converted into those shares of the Common Stock that
represent the economic equivalent of the shares of the Common Stock into which
each Series C Share was convertible immediately prior to such dividend,
subdivision, combination or reclassification.

5.    CONVERSION PROCEDURE.

      In order for any holder of Series C Preferred Stock to convert the same
into shares of Common Stock, such holder shall execute the Conversion Election
on the reverse side of the certificate evidencing the Series C Preferred Stock
being converted and delivering such certificate to the Corporation at its
principal office, setting forth in the Conversion Election the name or names in
which the certificate or certificates for shares of Common Stock are to be
issued. The Conversion Election shall be deemed to be effective upon receipt by
the Corporation. If the Conversion Election is received by the Corporation after
3:00 p.m. Eastern Time on any day, it shall be deemed to be received the next
following business day. The Corporation shall, as soon as practicable, but not
later than five business days after the date of receipt of the Conversion
Election, issue and deliver to the location designated by such holder, the
certificate or certificates for the number of shares of Common Stock to which
such holder shall be entitled as a result of such conversion. The person or
persons entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder or holders of
such shares of Common Stock as of the effective date of such conversion. The
Corporation shall deliver to the converting holder:

            (a) a certificate or certificates representing the number of shares
      of the Common Stock issuable by reason of such conversion consistent with
      Section 4 of this Certificate; and

            (b) if a holder has requested conversion, a certificate representing
      any Series C Shares which were represented by the certificate or
      certificates delivered to the Corporation in connection with such
      conversion but which have not converted.

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The issuance of certificates for shares of the Common Stock upon conversion of
Series C Shares pursuant to the foregoing clause shall be made without charge to
the holders of such Series C Shares for any issuance tax in respect thereof (so
long as such certificates are issued in the name of the record holder of such
Series C Shares) or other cost incurred by the Corporation in connection with
such conversion and the related issuance of shares of the Common Stock. Upon
conversion of each Series C Share, the Corporation shall take all such actions
as are necessary in order to ensure that the shares of the Common Stock issuable
with respect to such conversion shall be validly issued, fully paid and
nonassessable, free and clear of all taxes (other than any taxes relating to any
dividends paid with respect thereto), liens, charges and encumbrances with
respect to the issuance thereof.

6. RESERVATION OF COMMON STOCK. The Corporation shall, at all times when Series
C Shares shall be outstanding, reserve and keep available out of its authorized
but unissued stock, for the purpose of effecting the conversion of Series C
Shares, such number of its duly authorized shares of the Common Stock as shall
from time to time be sufficient to effect the conversion of all outstanding
Series C Shares.

      IN WITNESS WHEREOF, the undersigned has executed this Certificate of
Designations and Preferences as the act and deed of the corporation referenced
above.

                                       -----------------------------------------
                                       Name:  John Winchester
                                       Title: Vice President

                                       4CONVERSION RIGHTS AGREEMENT

      CONVERSION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of the 30th day
of June 2004, between MARK BEATTY, an individual residing in Houston, Texas
("BEATTY"), and THOR SCHUELER, an individual residing in Houston, Texas
("SCHUELER")(Beatty and Schueler being herein referred to collectively as the
"DOLPHIN SHAREHOLDERS"), and THE PROJECT GROUP, INC., a corporation organized
under the laws of the State of Nevada (the "COMPANY").

                              W I T N E S S E T H :

      WHEREAS, pursuant to the Stock Purchase Agreement, dated June 30, 2004
(the "PURCHASE AGREEMENT"), between the Company and the Dolphin Shareholders,
the Company purchased from the Dolphin Shareholders 100% of the issued and
outstanding stock of Dolphin Knowledge, Inc. (the "PURCHASE TRANSACTION") in
exchange consideration consisting of cash and 6,600,000 shares of common stock
of the Company (the "STOCK CONSIDERATION SHARES");

      WHEREAS, certain founding shareholders (the "FOUNDERS") of the Company
have a right to convert their existing shares of common stock into shares of
Series A Preferred Stock (the "SERIES A PREFERRED SHARES") of the Company with
the holders of Series A Preferred Shares having a right to convert the Series A
Preferred Shares into a fixed percentage of the outstanding common stock of the
Company over a specified period of time;

      WHEREAS, as a condition of the Purchase Transaction, and as provided in
the Purchase Agreement, the Dolphin Shareholders are required to be granted
rights substantially identical to the rights of the Founders to convert their
shares of common stock into Series A Preferred Shares whereby the Dolphin
Shareholders will have a right to convert the Stock Consideration Shares into
shares of preferred stock, to be designated "Series C Preferred Stock" (the
"SERIES C PREFERRED SHARES"), which are, in turn, convertible into shares of
common stock of the Company representing, in the aggregate, nine percent (9%) of
the common stock of the Company following conversion; such right to convert into
Series C Preferred Shares to be exercisable only after a conversion by the
Founders of shares of common stock into Series A Preferred Shares; and

      WHEREAS, it is a condition precedent to the Dolphin Shareholders'
willingness to consummate the transactions contemplated by the Purchase
Agreement shall have executed and delivered this Agreement;

      NOW, THEREFORE, in consideration of the foregoing and the representations,
warranties, covenants, and agreements set forth herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
hereby covenant and agree as follows:

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      Section 1. Certain Defined Terms. Capitalized terms used and not otherwise
defined in the body hereof are used herein as defined in the Purchase Agreement.

      Section 2. Series C Preferred Shares. On or before the date hereof, the
Company's Board of Directors shall have adopted a resolution designating the
terms, rights and preferences of the Series C Preferred Shares in the form
attached hereto as Exhibit A. As soon as practicable after the date hereof, but
not later than five (5) days after the date hereof, the Company shall make any
such filings, and take any such further actions, as may be required to create
and establish the Series C Preferred Shares in accordance with Nevada law.

      Section 3. Right to Convert Stock Consideration Shares into Series C
Preferred Shares.

      (a) Commencing on the date of the first conversion of shares of common
stock of the Founders into Series A Preferred Shares (the "CONVERSION TRIGGER
DATE") and ending ninety (90) days after receipt of a Founder's Conversion
Notice (as defined below)(the "CONVERSION TERM"), the Dolphin Shareholders will
have the right to convert the Stock Consideration Shares into an aggregate of
6,600 Series C Preferred Shares (a "Conversion"). In the event that less than
all of the Stock Consideration Shares are converted into Series C Preferred
Shares, the number of Series C Preferred Shares issuable upon such Conversion
shall be reduced pro rata.

      (b) In order to facilitate the rights of the Dolphin Shareholders
hereunder, the Company shall provide prompt written notice (a "FOUNDER'S
CONVERSION NOTICE") to the Dolphin Shareholders of any conversion by a Founder
of shares of common stock into Series A Preferred Shares.

      (c) In order to exercise the Conversion right granted hereunder, the
converting Dolphin Shareholder(s) shall give written notice (a "DOLPHIN
SHAREHOLDER CONVERSION NOTICE") to the Company of his intent to convert the
Stock Consideration Shares into Series C Preferred Shares. The Dolphin
Shareholder Conversion Notice shall specify the number of Stock Consideration
Shares to be converted and shall be accompanied by the stock certificate
evidencing the Stock Consideration Shares to be converted, duly endorsed or
accompanied by a duly endorsed stock power. Upon receipt of a proper Dolphin
Shareholder Conversion Notice, the Company shall promptly cause certificates
evidencing the Series C Preferred Shares issuable to be issued and delivered to
the converting Dolphin Shareholder. A converting Dolphin Shareholder shall be
deemed to be a rightful holder of the Series C Preferred Shares issuable upon
conversion, and the Stock Consideration Shares so converted shall be deemed
canceled, at such time as the Dolphin Shareholder shall have delivered a proper
Dolphin Shareholder Conversion Notice without respect to the date on which
certificates are issued and delivered evidencing the Series C Preferred Shares.

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      (d) For purposes hereof, the Stock Consideration Shares shall be deemed to
consist of any combination of 6,600,000 shares of common stock of the Company
held by the Dolphin Shareholders, regardless of whether or not the shares in
question were the shares issued pursuant to the Purchase Transaction.

      (e) Each Dolphin Shareholder may assign is rights hereunder, in part or in
whole, in connection with a sale of the Stock Consideration Shares provided that
(i) no such assignment will be effective unless and until the applicable Dolphin
Shareholder shall have notified the Company, in writing, of such assignment
identifying the assignee and the number of Stock Consideration Shares assigned
as to which the assigned right applies and acknowledging that the assigning
Dolphin Shareholder's rights hereunder will be diminished accordingly, and (ii)
such assignee agrees in writing to be bound by the terms of this Agreement.

      Section 4. Miscellaneous. The terms and provisions set forth in Article IX
of the Purchase Agreement are incorporated in this Agreement by reference and
made a part hereof mutatis mutandis.

                                          "COMPANY"

                                          THE PROJECT GROUP, INC.

                                          By:
                                             -----------------------------------
                                          Name: John Winchester
                                          Title:      Vice President

                                          "DOLPHIN SHAREHOLDERS"

                                          --------------------------------------
                                          Mark Beatty

                                          --------------------------------------
                                          Thor Schueler

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