Document:

ex101.htm

    Exhibit 10.1

    
 

    EMPLOYMENT
      AGREEMENT

    

    This
      employment agreement (this
      "Agreement"), dated as of January 1, 2008 (the "Effective Date"), is made by
      and
      between Fortress Financial Group, Inc., a Wyoming corporation (the "Company"),
      and Alan Santini (the "Executive") (each, a "Party" and together, the
      "Parties").

    

    WHEREAS,
      the Executive is to be
      employed as Chief Executive Officer of the Company; and

    

    WHEREAS,
      the Parties wish to establish the terms of the Executive's employment by the
      Company;

    

    NOW,
      THEREFORE, in consideration of the
      foregoing, of the mutual promises contained herein and of other good and
      valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, the Parties, intending to be legally bound, hereby agree as
      follows:

    

    1.  POSITION/DUTIES.

    

    (a)  During
      the Employment Term (as defined in Section 2 below), the Executive shall serve
      as a Chief Executive Officer of the Company. In this capacity the Executive
      shall have such duties, authorities and responsibilities commensurate with
      the
      duties, authorities and responsibilities of persons in similar capacities in
      similarly sized companies and such other reasonable duties and responsibilities
      as the Board of Directors of the Company (the "Board") shall
      designate.  The Executive shall report directly to the Chief Executive
      Officer.  The Executive shall obey the lawful directions of the Board,
      the Company's Chief Executive Officer and any other senior executive of the
      Company to whom the Executive reports and shall use his diligent efforts to
      promote the interests of the Company and to maintain and promote the reputation
      thereof.

    

    (b)  During
      the Employment Term, the Executive shall use his best efforts to perform his
      duties under this Agreement and shall devote all of his business time, energy
      and skill in the performance of his duties with the Company.  The
      Executive shall not during the Employment Term (except as a representative
      of
      the Company or with consent in writing of the Board) be directly or indirectly
      engaged or concerned in any other business activity.  Notwithstanding
      the foregoing provisions, the Executive is not prohibited from (1) participating
      in charitable, civic, educational, professional or community affairs or serving
      on the board of directors or advisory committees of non-profit entities, and
      (2)
      managing his and his family's personal investments, in each case,
providedthat such activities in the aggregate do not materially
      interfere with his duties hereunder.

     

    
      
         

      

      
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    2.  EMPLOYMENT
      TERM.  Except for earlier termination as provided in Section
      6, the Executive's employment under this Agreement shall be for a five-year
      term commencing on the Effective Date and ending on January 1, 2013 (the
      "Employment Term").

    

    3.  BASE
      SALARY.  The Company agrees to pay to the Executive a base
      salary at an annual rate of not less than $120,000, payable in accordance with
      the regular payroll practices of the Company. The Executive's Base Salary shall
      be subject to annual review by the Board (or a committee
      thereof).  The base salary as determined herein from time to time
      shall constitute "Base Salary" for purposes of this Agreement.

    

    4.  BONUS.  With
      respect to each full fiscal year during the Employment Term, the Executive
      shall
      be eligible to earn an annual bonus (the "Annual Bonus") in such amount, if
      any,
      as determined in the sole discretion of the Board of up to 100% of the
      Executive's Base Salary. In addition, the Executive shall be eligible to
      participate in the Company's bonus and other incentive compensation plans and
      programs (if any) for the Company's senior executives at a level commensurate
      with his position and may be entitled to bonus payments in addition to the
      amount set forth hereinabove.

    

    5.  EMPLOYEE
      BENEFITS.

    

    (a)  Benefit
      Plans.  The Executive shall be eligible to participate in any
      employee benefit plan of the Company, including, but not limited to, equity,
      pension, thrift, profit sharing, medical coverage, education, or other
      retirement or welfare benefits that the Company has adopted or may adopt,
      maintain or contribute to for the benefit of its senior executives, at a level
      commensurate with his positions, subject to satisfying the applicable
      eligibility requirements. The Company may at any time or from time to time
      amend, modify, suspend or terminate any employee benefit plan, program or
      arrangement for any reason in its sole discretion.

    

    (b)  Vacation.  The
      Executive shall be entitled to an annual paid vacation in accordance with the
      Company's policy applicable to senior executives from time to time in effect,
      but in no event less than two weeks per calendar year (as prorated for partial
      years), which vacation may be taken at such times as the Executive elects with
      due regard to the needs of the Company.  The carry-over of vacation
      days shall be in accordance with the Company's policy applicable to senior
      executives from time to time in effect.

    

    (c)  Business
      and Entertainment Expenses.  Upon presentation of appropriate
      documentation, the Executive shall be reimbursed for all reasonable and
      necessary business and entertainment expenses incurred in connection with the
      performance of his duties hereunder, all in accordance with the Company's
      expense reimbursement policy applicable to senior executives from time to time
      in effect.

    

    (d)       Signing
      Bonus.   Upon execution of this Agreement, the Executive
      shall be awarded a one time bonus, valued at $500,000 to be settled through
      the
      issuance of 1,500,000,000 restricted common shares of Fortress Financial Group,
      Inc.

     

    
      
         

      

      
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    6.  TERMINATION.  The
      Executive's employment and the Employment Term shall terminate on the first
      of
      the following to occur:

    

    (a)  Disability.  On
      the thirtieth (30th) day following
      written notice by the Company to the Executive of termination due to Disability.
      For purposes of this Agreement, "Disability" shall mean a
      determination  by the Company in accordance with applicable law that
      due to a physical or mental injury, infirmity or incapacity, the Executive
      is
      unable to perform the essential functions of his job with or without
      accommodation for 180 days (whether or not consecutive) during any 12-month
      period.

    

    (b)  Death.  Automatically
      on the date of death of the Executive.

    

    (c)  Cause.  Immediately
      upon written notice by the Company to the Executive of a termination for Cause.
      "Cause" shall mean, as determined by the Board (or its designee) (1) conduct
      by
      the Executive in connection with his employment duties or responsibilities
      that
      is fraudulent, unlawful or grossly negligent; (2) the willful misconduct of
      the
      Executive; (3) the willful and continued failure of the Executive to perform
      the
      Executive's duties with the Company (other than any such failure resulting
      from
      incapacity due to physical or mental illness); (4) the commission by the
      Executive of any felony (or the equivalent under the law of the People's
      Republic of China) (other than traffic-related offenses) or any crime involving
      moral turpitude; (5) violation of any material policy of the Company or any
      material provision of the Company's code of conduct, employee handbook or
      similar documents; or (6) any material breach by the Executive of any provision
      of this Agreement or any other written agreement entered into by the Executive
      with the Company.

    

    (d)  Without
      Cause.  On the thirtieth (30th) day following written notice
      by the Company to the Executive of an involuntary termination without Cause,
      other than for death or Disability.

    

    (e)  Good
      Reason.  On the sixtieth (60th)
      day following
      written notice by the Executive to the Company of a termination for Good Reason.
      "Good Reason" shall mean, without the express written consent of the Executive,
      the occurrence of any the following events unless such events are cured (if
      curable) by the Company within fifteen days following receipt of written
      notification by the Executive to the Company that he intends to terminate his
      employment hereunder for one of the reasons set forth below: any material
      reduction or diminution (except temporarily during any period of incapacity
      due
      to physical or mental illness) in the Executive's title, authorities, duties
      or
      responsibilities or reporting requirements with the Company.

    

    7.  CONSEQUENCES
      OF TERMINATION.

    

    (a)  Disability.  Upon
      termination of the Employment Term because of the Executive's Disability, the
      Company shall pay or provide to the Executive (1) any unpaid Base Salary and
      any
      accrued vacation through the date of termination; (2) any unpaid Annual Bonus
      accrued with respect to the fiscal year ending on or preceding the date of
      termination; (3) reimbursement for any unreimbursed expenses properly incurred
      through the date of termination; and (4) all other payments or benefits to
      which
      the Executive may be entitled under the terms of any applicable employee benefit
      plan, program or arrangement (collectively, "Accrued Benefits").

     

    
      
         

      

      
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    (b)  Death.  Upon
      the termination of the Employment Term because of the Executive's death, the
      Executive's estate shall be entitled to any Accrued Benefits.

    

    (c)  Termination
      for Cause. Upon the termination of the Employment Term by the Company
      for Cause or by either party in connection with a failure to renew this
      Agreement, the Company shall pay to the Executive any Accrued
      Benefits.

    

    (d)  Termination
      without Cause or for Good Reason.  Upon the termination of
      the Employment Term by the Company without Cause or by the Executive with Good
      Reason, the Company shall pay or provide to the Executive (1) the Accrued
      Benefits, and (2) subject to the Executive's execution (and non-revocation)
      of a
      general release of claims against the Company and its affiliates in a form
      reasonably requested by the Company, (A) continued payment of his Base Salary
      for two (2) months after termination, payable in accordance with the regular
      payroll practices of the Company, but off the payroll; and (B) payment of the
      Executive's cost of continued medical coverage for two (2) months after
      termination (subject to the Executive's co-payment of the costs in the same
      proportion as such costs were shared immediately prior to the date of
      termination).1  Payments provided under
      this Section 7(d) shall be in lieu of any termination or severance payments
      or
      benefits for which the Executive may be eligible under any of the plans,
      policies or programs of the Company.

    

    8.  NO
      ASSIGNMENT.  This Agreement is personal to each of the
      Parties.  Except as provided below, no Party may assign or delegate
      any rights or obligations hereunder without first obtaining the written consent
      of the other Party hereto; provided, however, that the Company may
      assign this Agreement to any successor (whether direct or indirect, by purchase,
      merger, consolidation or otherwise) to all or substantially all of the business
      or assets of the Company.

    

    9.  NOTICES.
      For the purpose of this Agreement, notices and all other communications provided
      for in this Agreement shall be in writing and shall be deemed to have been
      duly
      given (1) on the date of delivery if delivered by hand, (2) on the date of
      transmission, if delivered by confirmed facsimile, (3) on the first business
      day
      following the date of deposit if delivered by guaranteed overnight delivery
      service, or (4) on the fourth business day following the date delivered or
      mailed by United States registered or certified mail, return receipt requested,
      postage prepaid, addressed as follows:

    

    If
      to the Executive:

    

    P.O.
      Box CR-56766

    Suite
      789

    Nassau,
      Bahamas

    

    If
      to the Company:

    

    

    With
      a copy to:

    

    Anslow
&
Jaclin,
      LLP

    195
      Route 9 South, Suite
      204

    Manalapan,
      New Jersey,
      07726

    Attention:
      Gregg Jaclin,
      Esq.

    Facsimile:
      (732) 577-1188

    

    or
      to
      such other address as either Party may have furnished to the other in writing
      in
      accordance herewith, except that notices of change of address shall be effective
      only upon receipt.

     

    10.  PROTECTION
      OF THE COMPANY'S BUSINESS.

    

    (a)  Confidentiality.  The
      Executive acknowledges that during the course of his employment by the Company
      (prior to and during the Employment Term) he has and will occupy a position
      of
      trust and confidence. The Executive shall hold in a fiduciary capacity for
      the
      benefit of the Company and shall not disclose to others or use, whether directly
      or indirectly, any Confidential Information regarding the Company, except (i)
      as
      in good faith deemed necessary by the Executive to perform his duties hereunder,
      (ii) to enforce any rights or defend any claims hereunder or under any other
      agreement to which the Executive is a party, providedthat such
      disclosure is relevant to the enforcement of such rights or defense of such
      claims and is only disclosed in the formal proceedings related thereto, (iii)
      when required to do so by a court of law, by any governmental agency having
      supervisory authority over the business of the Company or by any administrative
      or legislative body (including a committee thereof) with jurisdiction to order
      him to divulge, disclose or make accessible such information,
providedthat the Executive shall give prompt written notice to the
      Company of such requirement, disclose no more information than is so required,
      and cooperate with any attempts by the Company to obtain a protective order
      or
      similar treatment, (iv) as to such Confidential Information that shall have
      become public or known in the Company's industry other than by the Executive's
      unauthorized disclosure, or (v) to the Executive's spouse, attorney and/or
      his
      personal tax and financial advisors as reasonably necessary or appropriate
      to
      advance the Executive's tax, financial and other personal planning (each an
      "Exempt Person"), provided, however, that any disclosure or
      use of Confidential Information by an Exempt Person shall be deemed to be a
      breach of this Section 10(a) by the Executive.  The Executive shall
      take all reasonable steps to safeguard the Confidential Information and to
      protect it against disclosure, misuse, espionage, loss and theft.  The
      Executive understands and agrees that the Executive shall acquire no rights
      to
      any such Confidential Information. "Confidential Information" shall mean
      information about the Company, its subsidiaries and affiliates, and their
      respective clients and customers that is not disclosed by the Company and that
      was learned by the Executive in the course of his employment by the Company,
      including, but not limited to, any proprietary knowledge, trade secrets, data
      and databases, formulae, sales, financial, marketing, training and technical
      information, client, customer, supplier and vendor lists, competitive
      strategies, computer programs and all papers, resumes, and records (including
      computer records) of the documents containing such Confidential
      Information.

     

    
      
         

      

      
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    (b)  Non-Competition.  During
      the Employment Term and for the one-year period following the termination of
      the
      Executive's employment for any reason (the "Restricted Period"), the Executive
      shall not, directly or indirectly, without the prior written consent of the
      Company, provide employment (including self-employment), directorship,
      consultative or other services to any business, individual, partner, firm,
      corporation, or other entity that competes with any business conducted by the
      Company or any of its subsidiaries or affiliates on the date of the Executive's
      termination of employment or within one year of the Executive's termination
      of
      employment in the geographic locations where the Company and its subsidiaries
      or
      affiliates engage or propose to engage in such business (the "Business").
      Nothing herein shall prevent the Executive from having a passive ownership
      interest of not more than 2% of the outstanding securities of any entity engaged
      in the Business whose securities are traded on a national securities
      exchange.

    

    (c)  Non-Solicitation
      of Employees.  The Executive recognizes that he possesses and
      will possess confidential information about other employees of the Company
      and
      its subsidiaries and affiliates relating to their education, experience, skills,
      abilities, compensation and benefits, and inter-personal relationships with
      customers of the Company and its subsidiaries and affiliates. The Executive
      recognizes that the information he possesses and will possess about these other
      employees is not generally known, is of substantial value to the Company and
      its
      subsidiaries and affiliates in developing their business and in securing and
      retaining customers, and has been and will be acquired by him because of his
      business position with the Company. The Executive agrees that, during the
      Restricted Period, he will not, directly or indirectly, (i) solicit or
      recruit any employee of the Company or any of its subsidiaries or affiliates
      (a
      "Current Employee") or any person who was an employee of the Company or any
      of
      its subsidiaries or affiliates during the twelve (12) month period immediately
      prior to the date the Executive's employment terminates (a "Former Employee")
      for the purpose of being employed by him or any other entity, or (ii) hire
      any
      Current Employee or Former Employee.

    

    (d)  Non-Solicitation
      of Customers.  The Executive agrees that, during the
      Restricted Period, he will not, directly or indirectly, solicit or attempt
      to
      solicit (i) any party who is a customer or client of the Company or its
      subsidiaries, who was a customer or client of the Company or its subsidiaries
      at
      any time during the twelve (12) month period immediately prior to the date
      the
      Executive's employment terminates or who is a prospective customer or client
      that has been identified and targeted by the Company or its subsidiaries for
      the
      purpose of marketing, selling or providing to any such party any services or
      products offered by or available from the Company or its subsidiaries, or (ii)
      any supplier or vendor to the Company or any subsidiary to terminate, reduce
      or
      alter negatively its relationship with the Company or any subsidiary or in
      any
      manner interfere with any agreement or contract between the Company or any
      subsidiary and such supplier or vendor.

     

    
      
         

      

      
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    (e)  Property.  The
      Executive acknowledges that all originals and copies of materials, records
      and
      documents generated by him or coming into his possession during his employment
      by the Company or its subsidiaries are the sole property of the Company and
      its
      subsidiaries ("Company Property").  During the Employment Term, and at
      all times thereafter, the Executive shall not remove, or cause to be removed,
      from the premises of the Company or its subsidiaries, copies of any record,
      file, memorandum, document, computer related information or equipment, or any
      other item relating to the business of the Company or its subsidiaries, except
      in furtherance of his duties under this Agreement.  When the
      Executive's employment with the Company terminates, or upon request of the
      Company at any time, the Executive shall promptly deliver to the Company all
      copies of Company Property in his possession or control.

    

    (f)  Non-Disparagement.  Executive
      shall not, and shall not induce others to, Disparage the Company or its
      subsidiaries or affiliates or their past and present officers, directors,
      employees or products. "Disparage" shall mean making comments or statements
      to
      the press, the Company's or its subsidiaries' or affiliates' employees or any
      individual or entity with whom the Company or its subsidiaries or affiliates
      has
      a business relationship which would adversely affect in any manner (1) the
      business of the Company or its subsidiaries or affiliates (including any
      products or business plans or prospects), or (2) the business reputation of
      the
      Company or its subsidiaries or affiliates, or any of their products, or their
      past or present officers, directors or employees.

    

    (g)  Cooperation.  Subject
      to the Executive's other reasonable business commitments, following the
      Employment Term, the Executive shall be available to cooperate with the Company
      and its outside counsel and provide information with regard to any past,
      present, or future legal matters which relate to or arise out of the business
      the Executive conducted on behalf of the Company and its subsidiaries and
      affiliates, and, upon presentation of appropriate documentation, the Company
      shall compensate the Executive for any out-of-pocket expenses reasonably
      incurred by the Executive in connection therewith.

    

    (h)  Equitable
      Relief and Other Remedies.  The Executive acknowledges and
      agrees that the Company's remedies at law for a breach or threatened breach
      of
      any of the provisions of this Section 10 would be inadequate and, in recognition
      of this fact, the Executive agrees that, in the event of such a breach or
      threatened or attempted breach, in addition to any remedies at law, the Company,
      without posting any bond, shall be entitled to obtain equitable relief in the
      form of specific performance, a temporary restraining order, a temporary or
      permanent injunction or any other equitable remedy which may then be available.
      In addition, without limiting the Company's remedies for any breach of any
      restriction on the Executive set forth in this Section 10, except as required
      by
      law, the Executive shall not be entitled to any payments set forth in Section
      7(d) hereof if the Executive has breached the covenants applicable to the
      Executive contained in this Section 10, the Executive will immediately return
      to
      the Company any such payments previously received under Section 7(d) upon such
      a
      breach, and, in the event of such breach, the Company will have no obligation
      to
      pay any of the amounts that remain payable by the Company under Section
      7(d).

     

    
      
         

      

      
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    (i)  Reformation.  If
      it is determined by a court of competent jurisdiction in any state that any
      restriction in this Section 10 is excessive in duration or scope or is
      unreasonable or unenforceable under the laws of that state, it is the intention
      of the parties that such restriction may be modified or amended by the court
      to
      render it enforceable to the maximum extent permitted by the law of that
      state.  The Executive acknowledges that the restrictive covenants
      contained in this Section 10 are a condition of this Agreement and are
      reasonable and valid in temporal scope and in all other respects.

    

    (j)  Survival
      of Provisions.  The obligations contained in this Section 10
      shall survive in accordance with their terms the termination or expiration
      of
      the Executive's employment with the Company and shall be fully enforceable
      thereafter.

    

    11.  INDEMNIFICATION.  The
      Executive shall be indemnified to the extent permitted by the Company's
      organizational documents and to the extent required by law.

    

    12.  SECTION
      HEADINGS AND INTERPRETATION. The section headings used in this
      Agreement are included solely for convenience and shall not affect, or be used
      in connection with, the interpretation of this Agreement. Expressions of
      inclusion used in this agreement are to be understood as being without
      limitation.

    

    13.  SEVERABILITY.  The
      provisions of this Agreement shall be deemed severable and the invalidity of
      unenforceability of any provision shall not affect the validity or
      enforceability of the other provisions hereof.

    

    14.  COUNTERPARTS.  This
      Agreement may be executed in several counterparts, each of which shall be deemed
      to be an original but all of which together will constitute one and the same
      Agreement.

    

    15.  GOVERNING
      LAW AND VENUE.  The validity, interpretation, construction
      and performance of this Agreement shall be governed by the laws of the State
      of
      New York without regard to its conflicts of law principles. The Parties agree
      irrevocably to submit to the exclusive jurisdiction of the federal courts or,
      if
      no federal jurisdiction exists, the state courts, located in the City of New
      York, Borough of Manhattan, for the purposes of any suit, action or other
      proceeding brought by any Party arising out of any breach of any of the
      provisions of this Agreement and hereby waive, and agree not to assert by way
      of
      motion, as a defense or otherwise, in any such suit, action, or proceeding,
      any
      claim that it is not personally subject to the jurisdiction of the above-named
      courts, that the suit, action or proceeding is brought in an inconvenient forum,
      that the venue of the suit, action or proceeding is improper, or that the
      provisions of this Agreement may not be enforced in or by such
      courts.  IN ADDITION, THE PARTIES AGREE TO WAIVE A TRIAL BY
      JURY.

     

    
      
         

      

      
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    16.  ENTIRE
      AGREEMENT. This Agreement contains the entire agreement between the
      Parties with respect to the subject matter hereof and supersedes all prior
      agreements, written or oral, with respect thereto. No agreements or
      representations, oral or otherwise, express or implied, with respect to the
      subject matter hereof have been made by either party which are not expressly
      set
      forth in this Agreement.

    

    17.  WAIVER
      AND AMENDMENT.  No provision of this Agreement may be
      modified, amended, waived or discharged unless such waiver, modification,
      amendment or discharge is agreed to in writing and signed by the Executive
      and
      such officer or director as may be designated by the Board. No waiver by either
      Party at any time of any breach by the other Party hereto of, or compliance
      with, any condition or provision of this Agreement to be performed by such
      other
      Party shall be deemed a waiver or similar or dissimilar provisions or conditions
      at the same or at any prior or subsequent time.

    

    18.  WITHHOLDING.
      The Company may withhold from any and all amounts payable under this Agreement
      such federal, state, local and foreign taxes as may be required to be withheld
      pursuant to any applicable law or regulation.

    

    19.  AUTHORITY
      AND NON-CONTRAVENTION.  The Executive represents and warrants
      to the Company that he has the legal right to enter into this Agreement and
      to
      perform all of the obligations on his part to be performed hereunder in
      accordance with its terms and that he is not a party to any agreement or
      understanding, written or oral, which could prevent him form entering into
      this
      Agreement or performing all of his obligations hereunder.

    

    20.  COUNTERPARTS.  This
      Agreement may be executed in counterparts, each of which shall be deemed an
      original but all of which shall constitute one and the same
      instrument.

    

    

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      1
        NOTE: typically the
        period for severance payments corresponds to the length of the noncompete
        and
        nonsolicitation period.

    

    
      
         

      

      
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    IN
      WITNESS WHEREOF,
      the Parties have executed this Agreement as of the date first written
      above.

     

     

    
 

    FORTRESS
      FINANCIAL GROUP,
      INC.

    

    _________________________________

    By:

    Title:

    

    EXECUTIVE

    

    ____________________________________

    Alan
      Santini

     

     

     

     

     

    9isc_8k-ex401.htm

    
      

    

     

    Exhibit 4.1

     

    

       

      CERTIFICATE
        OF DESIGNATION OF

      RIGHTS,
        PREFERENCES, PRIVILEGES AND RESTRICTIONS OF

      SERIES
        A PREFERRED STOCK OF

      INTERNATIONAL
        STEM CELL CORPORATION

      

      

      The
        Board
        of Directors of International Stem Cell Corporation (the “Company”) hereby
        provides for the issuance of a series of preferred stock of the Company and
        does
        hereby fix and determine the rights, preferences, privileges, restrictions
        and
        other matters related to said series of preferred stock as follows:

      

      Section
        1                      
Designation and
        Amount.  The shares of such series shall be designated as
“Series A Preferred Stock” and the number of shares constituting such series
        shall be Five Million (5,000,000).

       

      Section
        2                      
Dividends.  The
        Series A Preferred Stock shall not be entitled to receive any dividends
        whatsoever, except as follows: If the Company declares and pays any dividends
        on
        the Common Stock (other than a dividend payable in shares of Common Stock),
        then, in that event, holders of shares of Series A Preferred Stock shall
        be
        entitled to share in such dividends on a pro rata basis, as if their shares
        had
        been converted into shares of Common Stock pursuant to Section 5(a) below
        (“Common Share Equivalents”) immediately prior to the record date for
        determining the shareholders of the Company eligible to receive such
        dividends.

       

      Section
        3                      
Liquidation
        Preference.

       

      (a)                 
        Preference.  In
        the event of any liquidation, dissolution or winding up of the Company, either
        voluntary or involuntary, subject to the rights of any holders of any debt
        of
        the Company, the holders of Series A Preferred Stock shall be entitled to
        receive, prior and in preference to any distribution of any of the assets
        of the
        Company to the holders of Common Stock by reason of their ownership thereof,
        an
        amount per share equal to the sum of (i) One Dollar ($1.00) for each outstanding
        share of Series A Preferred Stock (the “Original Series A Issue Price”) (subject
        to adjustment of such fixed dollar amount for any stock splits, stock dividends,
        combinations, recapitalizations or the like) plus (ii) one percent (1%) of
        the
        Original Series A Issue Price for every full two (2) calendar months from
        January 1, 2008 to the date of such liquidation, dissolution or winding up
        of
        the Company.  If, upon the occurrence of such event, the assets and
        funds thus distributed among the holders of the Series A Preferred Stock
        shall
        be insufficient to permit the payment to such holders of the full aforesaid
        preferential amounts, then, subject to the rights of any debt holders of
        the
        Company and the rights of any other series of Preferred Stock that may from
        time
        to time come into existence, the entire assets and funds of the Company legally
        available for distribution shall be distributed ratably among the holders
        of the
        Series A Preferred Stock in proportion to the amount of such stock owned
        by each
        such holder.

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      (b)           
        Remaining
        Assets.  Upon completion of the distribution required by
        subsection (a) of this Section 3 and any other distribution that may be
        required with respect to any other series of Preferred Stock that may from
        time
        to time come in to existence, holders of the Series A Preferred Stock shall
        not
        participate in any distribution of such remaining assets.

       

      (c)           
        Mergers and
        Consolidations.  A merger or consolidation of the Company with
        any other corporation shall not be deemed a liquidation, dissolution or winding
        up of the Company within the meaning of this Section 3.

      

      (d)           
        Sale or Other
        Transfer
        of All or Substantially All Assets. For purposes of this Section 3, a
        liquidation, dissolution or winding up of the Company shall be deemed to
        include
        a sale, lease, transfer or other disposition of all or substantially all
        of the
        assets of the Company, other than to a wholly-owned subsidiary of the
        Company.

      

      Section
        4                 Redemption.  The
        Series A Preferred Stock shall not be entitled to any rights of redemption
        whatsoever.

       

      Section
        5                 Conversion.  The
        holders of the Series A Preferred Stock shall have conversion rights as follows
        (the “Conversion Rights”):

       

      (a)           
        Right to
        Convert.  Subject to Sections 5(b) and 5(c), each share of
        Series A Preferred Stock shall be convertible, at the option of the holder
        thereof, at any time after the date of issuance of such share, at the office
        of
        the Company or any transfer agent for such stock, into such number of fully
        paid
        and nonassessable shares of Common Stock (“Shares”) as is determined by dividing
        the Original Series A Issue Price by the Conversion Rate (defined below)
        applicable to such share, determined as hereafter provided, in effect on
        the
        date the certificate is surrendered for conversion.  The initial
        Conversion Rate per share for shares of Series A Preferred Stock shall be
        Ninety-Five Cents ($0.95) and shall thereafter be subject to adjustment as
        set
        forth in Section 6 below (the “Conversion Rate”).

       

      (b)           
        Minimum
        Conversion.  A holder of Series A Preferred Stock may not
        convert, at any time, less ten thousand shares of Series A Preferred Stock
        or
        all shares of Series A Preferred Stock then owned by such holder, whichever
        amount is less.

       

      (c)           
        Mechanics of
        Conversion.  Before any holder of shares of Series A Preferred
        Stock shall be entitled to convert the same into Shares, such holder shall
        surrender the certificate or certificates therefor, duly endorsed, at the
        office
        of the Company or of any transfer agent for the Series A Preferred Stock
        and
        shall give written notice to the Company at its principal corporate office,
        of
        the election to convert the same and shall state therein the number of shares
        of
        Series A Preferred Stock to be converted and the name or names in which the
        certificate or certificates for Shares are to be issued.  The Company
        shall, as soon as practicable thereafter, issue and deliver at such office
        to
        such holder of the Series A Preferred Stock, or to the nominee or nominees
        of
        such holder, a certificate or certificates for the number of fully paid and
        nonassessable shares of Common Stock to which such holder shall be entitled
        as
        aforesaid together with a cash adjustment in respect of any fraction of a
        share
        to which the holder shall be entitled as provided in Section 5(d), and, if
        less
        than the entire number of shares of Series A Preferred Stock represented
        by the
        certificate or certificates surrendered is to be converted, a new certificate
        for the number of shares of Series A Preferred Stock not so
        converted.  For purposes of a conversion pursuant to Section 5(a),
        such conversion shall be deemed to have been made immediately prior to the
        close
        of business on the date of such surrender of the shares of the Series A
        Preferred Stock to be converted, and 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 such date.

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      

       

      (d)           
        No Fractional
        Shares. No fractional shares of Common Stock or scrip representing
        fractional shares of Common Stock shall be issued upon any conversion of
        any
        shares of Series A Preferred Stock.  All Shares (including fractions
        thereof) issuable upon conversion of more than one share of Series A Preferred
        Stock by a holder thereof shall be aggregated for purposes of determining
        whether the conversion would result in the issuance of any fractional
        share.  If, after the aforementioned aggregation, the conversion would
        result in the issuance of any fractional share, the Company shall, in lieu
        of
        issuing any fractional share, pay cash equal to the product of such fraction
        multiplied by the fair market value per share (as determined in good faith
        by
        the Board of Directors) of the Common Stock on the date of
        conversion.

       

      (e)           
        Automatic
        Conversion.  At any time (following the date on which shares of
        Series A Preferred Stock are first issued) that there are less than a total
        of
        two hundred thousand (200,000) shares of Series A Preferred Stock outstanding,
        then each remaining share of Series A Preferred Stock shall automatically
        be
        converted into such number of fully and nonassessable shares of Common Stock
        as
        is determined by dividing the Original Series A Issue Price by the then
        applicable Conversion Rate.  The Company will not be required to issue
        the certificate(s) for the shares of Common Stock issued on conversion until
        the
        certificates for the shares of Series A Preferred Stock so converted are
        surrendered at the office of the Company.

       

      Section
        6                 Adjustments. The
        Shares into which a share of Series A Preferred Stock is convertible and
        the
        Conversion Rate shall be subject to adjustment as follows:

       

      (a)  In
        case the Company shall (i) pay a dividend in shares of Common Stock or make
        a
        distribution to all holders of shares of Common Stock in shares of Common
        Stock,
        (ii) subdivide its outstanding shares of Common Stock, (iii) combine its
        outstanding shares of Common Stock into a smaller number of shares of Common
        Stock or (iv) issue by reclassification of its shares of Common Stock other
        securities of the Company, the number of Shares issuable upon exercise of
        each
        share of Series A Preferred Stock immediately prior thereto shall be adjusted
        so
        that the Holder of each share of Series A Preferred Stock shall be entitled
        to
        receive the kind and number of Shares or other securities of the Company
        which
        he would have owned or would have been entitled to receive after the happening
        of any of the events described above, had such share of Series A Preferred
        Stock
        been converted immediately prior to the happening of such event or any record
        date with respect thereto.  An adjustment made pursuant to this
        paragraph (a) shall become effective immediately after the effective date
        of
        such event retroactive to the record date, if any, for such
        event.

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      

      (b)           
        In case the Company shall issue rights, options or warrants to all holders
        of
        its shares of Common Stock, without any charge to such holders, entitling
        them
        to subscribe for or purchase shares of Common Stock at a price per share
        which
        is lower on the date of issuance thereof than the then current market price
        per
        share of Common Stock (as defined in paragraph (f) below), the number of
        Shares
        thereafter issuable upon the conversion of each share of Series A Preferred
        Stock shall be determined by multiplying the number of Shares theretofore
        issuable upon conversion of each share of Series A Preferred Stock by a
        fraction, of which the numerator shall be the number of shares of Common
        Stock
        outstanding on the date of issuance of such rights, options or warrants plus
        the
        number of additional shares of Common Stock offered for subscription or
        purchase, and of which the denominator shall be the number of shares of Common
        Stock outstanding on the date of issuance of such rights, options or warrants
        plus the number of shares which the aggregate offering price of the total
        number
        of shares of Common Stock so offered would purchase at the such then current
        market price per share of Common Stock. Such adjustment shall become effective
        immediately after the date such rights, options or warrants are issued,
        retroactive to the record date for the determination of stockholders entitled
        to
        receive such rights, options or warrants.

      

      (c)           
        In case the Company shall distribute to all holders of its shares of Common
        Stock evidence of its indebtedness or assets (excluding regular and ordinary
        cash dividends) or rights, options or warrants or convertible securities
        containing the right to subscribe for or purchase shares of Common Stock
        (excluding those referred to in paragraph (b) above), then in each case the
        Conversion Rate shall be adjusted to a price determined by multiplying the
        Conversion Rate in effect immediately prior to such distribution by a fraction,
        of which the numerator shall be the then current market price per share of
        Common Stock (as defined in paragraph (f) below) on the date of such
        distribution, less the then fair value (as determined in good faith by the
        Board
        of Directors of the Company) of the portion of the assets or evidence of
        indebtedness so distributed or of such rights, options, warrants or convertible
        securities applicable to one share of Common Stock, and of which the denominator
        shall be such then current market price per share of Common Stock. Such
        adjustment shall be made whenever any such distribution is made, and shall
        become effective on the date of distribution retroactive to the record date
        for
        the determination of stockholders entitled to receive such
        distribution.

      

      (d)           
        No adjustment in the number of Shares issuable hereunder shall be required
        unless such adjustment would require an increase or decrease of at least
        one
        percent (1%) in the number of Shares issuable upon the conversion of all
        Series
        A Preferred Stock then outstanding; provided, however, that any adjustments
        which by reason of this paragraph (d) are not required to be made shall be
        carried forward and taken into account in any subsequent
        adjustment.

      

      (e)           
        Whenever the number of Shares issuable upon the conversion of each share
        of
        Series A Preferred Stock is adjusted, as herein provided, the Conversion
        Rate
        per share of Series A Preferred Stock payable upon conversion of each share
        of
        Series A Preferred Stock shall be adjusted (to the nearest cent) by multiplying
        such Conversion Rate immediately prior to such adjustment by a fraction,
        of
        which the numerator shall be the number of Shares issuable upon the conversion
        of each share of Series A Preferred Stock immediately prior to such adjustment,
        and of which the denominator shall be the number of Shares so issuable
        immediately thereafter.

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      

      (f)           
        If the Company shall issue, after the date upon which any shares of Series
        A
        Preferred Stock were first issued (the “Issue Date”), (i) not less than two
        hundred fifty thousand (250,000) shares of Common Stock for a purchase price
        per
        share less than the Conversion Rate in effect immediately prior to such issuance
        (other than pursuant to the exercise or conversion or options, warrants or
        rights outstanding as of the Issue Date), or (ii) options, warrants or rights
        to
        purchase shares of Common Stock, or convertible securities convertible into
        or
        exchangeable for shares of Common Stock (such options, warrants, rights and
        convertible securities are hereinafter referred to collectively as “Common Stock
        Rights”), which Common Stock Rights are exercisable for or convertible into not
        less than two hundred fifty thousand (250,000) shares of Common Stock at
        an
        exercise price or conversion rate per share that is less than the Conversion
        Rate in effect immediately prior to such issuance, then, in either such event,
        the Conversion Rate shall automatically be adjusted to equal the purchase
        price
        of such shares or the exercise price or conversion rate of the Common Stock
        Rights, as applicable.

       

      (g)           
        Whenever the number of Shares issuable upon the conversion of each share
        of
        Series A Preferred Stock or the Conversion Rate is adjusted, as herein provided,
        the Company shall promptly mail by first class mail, postage prepaid, to
        each
        Holder, notice of such adjustment or adjustments setting forth the number
        of
        Shares issuable upon the conversion of each share of Series A Preferred Stock
        and the Conversion Rate after such adjustment, a brief statement of the facts
        requiring such adjustment, and the computation by which such adjustment was
        made.

      

      (h)           
        For the purpose of this Section 6, the term “shares of Common Stock” shall mean
        (i) the class of stock designated as the Common Stock of the Company as of
        the
        Issue Date, or (ii) any other class of stock resulting from successive changes
        or reclassifications of such shares consisting solely of changes in par value,
        or from par value to no par value, or from no par value to par
        value.  In the event that at any time, as a result of an adjustment
        made pursuant to paragraph (a) above, the Holders shall become entitled to
        purchase any shares of the Company other than shares of Common Stock, thereafter
        the number of such other shares so issuable upon conversion of each share
        of
        Series A Preferred Stock and the Conversion Rate of such shares shall be
        subject
        to adjustment from time to time in a manner and on terms as nearly equivalent
        as
        practicable to the provisions relating to the Shares contained in paragraphs
        (a)
        through (f), inclusive, above, and the provisions of Section 7 relating to
        the
        Shares shall apply.

      

      (i)           
        Upon the expiration of any rights, options, warrants or conversion privileges,
        if any thereof shall not have been exercised, the Conversion Rate and the
        number
        of shares of Common Stock issuable upon the conversion of a share of Series
        A
        Preferred Stock shall, upon such expiration, be readjusted and shall thereafter
        be such as it would have been had it been originally adjusted (or had the
        original adjustment not been required, as the case may be) on the basis of
        (A)
        the only shares of Common Stock so issued were the shares of Common Stock,
        if
        any, actually issued or sold upon the conversion of such rights, options,
        warrants or conversion rights and (B) such shares of Common Stock, if any,
        were
        issued or sold for the consideration actually received by the Company upon
        such
        conversion plus the consideration, if any, actually received by the Company
        for
        the issuance, sale or grant of all such rights, options, warrants or conversion
        rights whether or not exercised, provided, further, that no such readjustment
        shall have the effect of increasing the Conversion Rate by an amount in excess
        of the amount of the adjustment initially made in respect of the issuance,
        sale
        or grant of such rights, options, warrants or conversion rights.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      

      (j)           
        In case of any consolidation of the Company with or merger of the Company
        into
        another corporation or in case of any sale or conveyance to another entity
        of
        the property of the Company as an entirety or substantially as an entirety,
        the
        Company or such successor or purchasing entity, as the case may be, shall
        be
        obligated to issue to a Holder, upon conversion thereof, the same consideration
        as such Holder would have owned or would have been entitled to receive after
        the
        happening of such consolidation, merger, sale or conveyance had such Series
        A
        Preferred Stock been converted immediately prior to such action. If the action
        involves two or more transactions involving different consideration to holders
        of Common Stock, each Holder may elect which consideration to receive pursuant
        to this paragraph (j).

      

      Section
        7                 Payment of
        Taxes.  The issuance of a stock certificate or certificates on
        conversion of the Series A Preferred Stock shall be made without charge to
        the
        converting Holder for any tax in respect of the issue thereof.  The
        Holder shall be required to pay any tax which may be payable in respect of
        any
        transfer involved in the issuance and delivery of stock in any name other
        than
        that of the Holder.

       

      Section
        8                 Reservation of
        Shares;
        Shares to be Fully Paid.  The Company shall reserve for
        issuance out of its authorized but unissued shares of Common Stock, sufficient
        shares to provide for the conversion of the Series A Preferred Stock from
        time
        to time as shares of Series A Preferred Stock are presented for
        conversion.  All shares of Common Stock which may be issued upon
        conversion of the Series A Preferred Stock will, upon issue, be fully paid
        and
        nonassessable and free from all taxes, liens and charges with respect to
        the
        issue thereof.

       

      Section
        9                 Voting Rights. The
        holders of Series A Preferred Stock shall have no voting rights or powers
        except
        as provided in this Section 9.

       

      (a)             Except
        as to matters specified in Section 9(b) below, each holder of Preferred Stock
        shall be entitled to vote on each matter on which holders of shares of Common
        Stock are entitled to vote. For such purposes, each share of Series A Preferred
        Stock shall represent as many votes as the number of shares of Common Stock
        into
        which it is then convertible. Except as otherwise expressly provided in this
        Section 9 or as required by law, the holders of shares of Series A Preferred
        Stock and the Common Stock shall vote together as a single class on all matters
        submitted to a vote of stockholders.

       

      (b)           
        Each share of Series A Preferred Stock shall be entitled to one vote on any
        matter relating to an adverse change in the rights of the Series A Preferred
        Stock or the rights of the Holders of the Series A Preferred Stock and on
        any
        matter as to which the approval of the holders of the Series A Preferred
        Stock
        as a class is required by law. Holders of Series A Preferred Stock shall
        vote
        separately as a class on any such matter. The approval of Holders of more
        than a
        majority of the then outstanding shares of Series A Preferred Stock shall
        be
        required for any amendment to the rights of the Series A Preferred Stock,
        including a material adverse change in the rights of the Series A Preferred
        Stock or the rights of the Holders of the Series A Preferred Stock.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      

       

      IN
        WITNESS WHEREOF, the Company has caused this Certificate to be executed by
        Jeffrey Janus, its President, on this 15 day of January, 2007.

       

       

      

      
        	 	 /s/
                Jeffrey
                Janus               
                01-15-08 

      

      
Attest:

      

      /s/
        Ray
        Wood                   

       

       

       

       

       

       

      7

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