Document:

Exhibit
10.8

 

AMENDED AND RESTATED

 

CERTIFICATE
OF INCORPORATION

 

OF

 

TXOK
ACQUISITION, INC.

 

TXOK Acquisition, Inc., a corporation organized
and existing under the laws of the State of Delaware (the “Corporation”), hereby
certifies as follows:

 

A.            The
name of the Corporation is TXOK Acquisition, Inc.

 

B.            The
Corporation originally filed its Certificate of Incorporation (the “Certificate of Incorporation”)
under the name EXCO Acquisition OK, Inc.,
on September 16, 2005 with the Secretary of State of the State
of Delaware and filed a Certificate of Correction correcting its name to “TXOK
Acquisition, Inc.” on September 19, 2005.

 

C.            This
Amended and Restated Certificate of Incorporation (the “Restated Certificate”)
was duly adopted by the Corporation’s sole director and sole stockholder in
accordance with the applicable provisions of Sections 228, 242 and 245 of the
Delaware General Corporation Law (the “DGCL”).

 

D.            This
Restated Certificate restates, integrates and amends the provisions of the
Certificate of Incorporation, as heretofore amended.

 

E.             The
text of the Certificate of Incorporation, as heretofore amended or
supplemented, is hereby amended and restated in its entirety to read as
follows:

 

ARTICLE I

 

NAME

 

The
name of the corporation is TXOK Acquisition, Inc. (the “Corporation”).

 

ARTICLE II

 

ADDRESS

 

The address of the registered office of the
Corporation in the State of Delaware is The Corporation Trust Center, 1209
Orange Street, Wilmington, New Castle County, Delaware 19801.  The name of the registered agent at such
registered office is The Corporation Trust Company.

 

 

ARTICLE III

 

PURPOSE

 

The purpose for which the Corporation is organized
is to engage in any lawful act or activity for which a corporation may be
organized under the General Corporation Law of the State of Delaware.

 

ARTICLE IV

 

CAPITAL
STOCK

 

A.            The
total number of shares of capital stock that the Corporation will have
authority to issue is 600,000, of which 400,000 shares are designated as “Common
Stock” with a par value of $0.001 per share and 200,000 shares are designated
as “Preferred Stock” with a par value of $0.001 per share.

 

Authority is hereby expressly vested in the
Corporation’s Board of Directors (the “Board
of Directors”) to establish one or more series of unissued shares of
Preferred Stock from time to time by adoption of a resolution or resolutions
setting forth the designation of the series and fixing and determining the
designations, preferences, limitations, and relative rights, including voting
rights, of the shares of any such series to the same extent that such
designations, preferences, limitations, and relative rights could be stated if
fully set forth in this Restated Certificate.

 

The Board of Directors may increase or
decrease the number of shares within each established series of the Preferred
Stock; provided, however, that the Board of Directors may not
decrease the number of shares within a series to less than the number of shares
within such series that are then issued.

 

Each share of the Preferred Stock within an
individual series shall be identical in all respects with the other shares of
such series, except as to the date, if any, from which dividends thereon shall
accumulate and other details which because of the passage of time are required
to be made in order for the substantive rights of the holders of the shares of
such series to be identical.

 

The capital stock of the Corporation shall be
divided into the series set forth in the following sections, with the powers,
preferences and rights and the qualifications, limitations and restrictions set
forth in the following sections.

 

The following definitions shall apply to this
Article Four:

 

“Liquidation”
shall mean a liquidation, dissolution or winding up, whether voluntary or
involuntary, of the Corporation or its affairs. 
A Liquidation of the Corporation shall be deemed to be occasioned by, or
to include, (A) the acquisition of the Corporation by another entity by
means of any transaction or series of related transactions (including, without
limitation, any

 

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reorganization, merger or consolidation but excluding any merger
effected solely for the purpose of changing the domicile of the Corporation), (B) a
sale or other disposition of all or substantially all of the assets of the
Corporation, (C) other than as consented to by a majority of the holders
of each of the Series A Preferred Stock, the Class A Common Stock and
the Class B Common Stock, any transaction or series of related
transactions in which the Corporation’s stockholders of record as constituted
immediately prior to such acquisition or sale will, immediately after such
acquisition or sale (by virtue of securities issued as consideration for the
Corporation’s acquisition or sale or otherwise) hold less than 50% of the
voting power of the surviving or acquiring entity, or (D) other than as
contemplated herein, the conversion, exchange or substitution of any shares of
Common Stock into any other property or securities (each of the events in clauses
(A) through (D), a “Sale Transaction”).

 

B.            Common Stock.

 

(1)           The Common Stock shall be divided
into the following series:

 

(a)           350,000
shares will be designated as Class A Common Stock; and

 

(b)           50,000
shares will be designated as Class B Common Stock.

 

(2)           Powers
and Rights of the Class A Common Stock and the Class B Common Stock.  Except as otherwise expressly provided in
this Certificate of Incorporation, all issued and outstanding shares of Class A
Common Stock and Class B Common Stock shall be identical and shall entitle
the holders thereof to the same rights and privileges.

 

(a)           Voting Rights and Powers.  Subject to the rights and preferences of any
additional class of Common Stock and of the Preferred Stock set forth in this Article Four
and in any resolution or resolutions providing for the issuance of additional
stock as set forth in this Article Four, the holders of the outstanding
shares of Class A Common Stock and Class B Common Stock shall vote
together as a single class, and every such holder shall be entitled to cast
thereon one vote in person or by proxy for each share of Class A or Class B
Common Stock standing in the name of such holders.

 

(b)           Dividends.  Subject to the rights and preferences of any
additional class of Common Stock and of the Preferred Stock set forth in this Article Four
and in any resolution or resolutions providing for the issuance of additional
stock as set forth in this Article Four, the holders of Class A
Common Stock and Class B Common Stock shall be entitled to receive ratably
such dividends as may from time to time be declared by the Board of Directors
out of funds legally available therefore based on the number of shares of Class A
or Class B Common Stock standing in the name of such holders.

 

(c)           Redemption.  The Class A and Class B Common
Stock are not redeemable.

 

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(d)           Distribution of Assets Upon
Liquidation.

 

(i)            In the event of a Liquidation, after
there shall have been paid or set aside for the holders of all shares of any
additional class of Common Stock and of the Preferred Stock then outstanding,
if any, the full preferential amounts to which they are entitled under this Article Four
or the resolutions, as the case may be, authorizing the issuance of such
additional class(es) of Common Stock or such Preferred Stock, the holders of
the Class A Common Stock shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Corporation to the
holders of the Class B Common Stock by reason of their ownership thereof,
an amount per share equal to $1,000.

 

(ii)           If upon the occurrence of a
Liquidation, the assets and funds of the Corporation legally available for
distribution to stockholders by reason of their ownership of the stock of the
Corporation shall be insufficient to permit the payment to the holders of Class A
Common Stock of the full amount set forth in paragraph (i) above, then the
entire remaining assets and funds of the Corporation legally available for
distribution shall be distributed ratably among the holders of Class A
Common Stock based on the number of shares of Class A Common Stock held by
such holders.

 

(iii)          In the event of a Liquidation, after
there shall have been paid or set aside for the holders of all shares of any
additional class of Common Stock and of the Preferred Stock then outstanding,
including the Class A Common Stock, if any, the full preferential amounts
to which they are entitled under this Article Four or the resolutions, as
the case may be, authorizing the issuance of such additional class(es) of
Common Stock or such Preferred Stock, the holders of the Class B Common
Stock shall be entitled to receive, prior and in preference to any distribution
of any of the assets of the Corporation to the holders of any capital stock of
the Company that is junior to the Class B Common Stock by reason of their
ownership thereof, an amount per share equal to $1,000.

 

(iv)          If upon the occurrence of a
Liquidation, the assets and funds of the Corporation legally available for
distribution to stockholders by reason of their ownership of the stock of the
Corporation shall be insufficient to permit the payment to the holders of Class B
Common Stock of the full amount set forth in paragraph (iii) above, then
the entire remaining assets and funds of the Corporation legally available for
distribution shall be distributed ratably among the holders of Class B
Common Stock based on the number of shares of Class B Common Stock held by
such holders.

 

(v)           In the event of any Liquidation,
after payment in full of the liquidation preference set forth in paragraph (iii) above,
the entire remaining assets and funds of the Corporation legally available for
distribution to stockholders shall be distributed ratably among the holders of
Preferred Stock and the holders of Common Stock in proportion to the number of
shares of Common Stock held by them or issuable to them upon conversion of
their respective shares of Preferred Stock.

 

(e)           Notice.  Written notice of a Liquidation stating a
payment or payments and the place where such payment or payments shall be
payable, shall be delivered in

 

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person, mailed by certified mail, return receipt requested, mailed by
overnight mail or sent by telecopier, not less than ten (10) days prior to
the earliest payment date stated therein, to the holders of record of shares of
Class A and Class B Common Stock, such notice to be addressed to each
such holder at its address as shown by the records of the Corporation.

 

(3)           Previously
Issued Common Stock.  The
filing of the Amended and Restated Certificate of Incorporation on September 26,
2005 shall not cancel or otherwise terminate the Corporation’s Common Stock in
existence immediately prior to such filing; provided, however,
that the previously issued Common Stock shall be reclassified as Class B
Common Stock at a rate of one (1) share of Class B Common Stock per
1,000 shares of previously issued Common Stock, and that the preferences,
limitations and relative rights of such previously issued Common Stock are
amended by such filing to be the preferences, limitations and relative rights
of Class B Common Stock contained herein.

 

C.            15%
Series A Convertible Preferred Stock.

 

(1)           Definitions.  For purposes of this Section, the following
definitions shall apply:

 

“Business
Day” shall mean any day other than a Saturday or a Sunday, a day on
which banking institutions in New York, New York are authorized or required by
law or executive order to remain closed, or a day on which the corporate trust
office of the transfer agent is closed for business.

 

“Conversion Price”
shall have the meaning set forth in Section 4(C)(6)(b) below.

 

“Convertible
Securities” shall mean stock or other securities convertible into or
exchangeable for shares of Common Stock.

 

“Fully
Diluted Common Stock of the Corporation” shall mean that number of shares of Common Stock which is
equal to the sum, without duplication, of (i) the number of shares of Class A
Common Stock and Class B Common Stock outstanding as of the Conversion Date, (ii) the number of shares
of Common Stock issuable upon exercise of any outstanding warrants or options
and (iii) the number of shares of Common Stock issuable upon conversion of
any outstanding Convertible Securities, including, without limitation, the
shares of Class A Common Stock into which the Series A Preferred
Stock is convertible pursuant to Section 4(C)(6).

 

“Issue
Date” shall mean the date that shares of Series A Preferred
Stock are first issued by the Corporation.

 

“Junior
Securities” shall mean any capital stock of the Corporation other
than the Series A Preferred Stock, any Parity Securities or any Senior
Securities.

 

 “Parity Securities” shall mean any class or
series of capital stock of the Corporation authorized after the Issue Date
which is entitled to receive assets upon Liquidation on a parity with the Series A
Preferred Stock.

 

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“Permitted
Transfer” shall mean:

 

(a)           a
Transfer of shares by any stockholder who is a natural person to such
stockholder’s spouse, children, grandchildren, parents or siblings or a trust
for the benefit of any of them;

 

(b)           a
Transfer of shares by any stockholder who is a natural person to a corporation,
partnership, limited liability company, or other entity controlled by such
stockholder;

 

(c)           a
bona fide pledge of shares by a stockholder to a bank, financial institution or
other lender;

 

(d)           a
Transfer of shares between any stockholder who is a natural person and such stockholder’s
guardian or conservator;

 

(e)           a
Transfer of shares from any stockholder which is a partnership to its partners,
provided such Transfer is reasonably acceptable to the Corporation; or

 

(f)            a
Transfer of shares from any stockholder which is a corporation or partnership
to any affiliate of such stockholder, provided such Transfer is reasonably
acceptable to the Company.

 

“Person”
shall mean an individual, partnership, corporation, limited liability company,
incorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof.

 

“Senior
Securities” shall mean any class or series of capital stock of the
Corporation authorized after the Issue Date ranking senior to the Series A
Preferred Stock in respect of the right to participate in any distribution upon
Liquidation.

 

“Series A
Preferred Stock” shall mean the 15% Series A Convertible
Preferred Stock of the Corporation.

 

“Stated
Value” shall mean $1,000.00 per share.

 

“Transfer”
shall mean (a) when used as a verb, to transfer, sell, assign, pledge,
hypothecate, give, create a security interest in or lien on, place in trust (voting or otherwise), or in
any other way encumber or dispose of, directly or indirectly and whether or not
by operation of law or for value, any shares of Series A Preferred Stock;
and (b) when used as a noun, the direct or indirect transfer, sale,
assignment, pledge, hypothecation or gift of, creation of a security interest
in or lien on, placement in trust (voting or otherwise) of, or other encumbrance
or disposal of any shares of Series A Preferred Stock, whether or not by
operation of law or for value.

 

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(2)           Designation
and Amount.  The shares of this
series of Preferred Stock shall be designated as “15% Series A Convertible Preferred Stock” and the
authorized number of shares constituting such series shall be 150,000.

 

(3)           Ranking.  For the purposes of determining whether any
dividend will be paid, and whether there will be any distribution of assets
upon Liquidation, the Series A Preferred Stock will rank:

 

(a)           junior
to all of the Corporation’s existing and future indebtedness and other
obligations and to the Senior Securities;

 

(b)           on
parity with the Parity Securities; and

 

(c)           senior
to the Junior Securities.

 

(4)           Dividends.

 

(a)           General. 
The holders of shares of Series A Preferred Stock shall be entitled
to receive dividends at a rate of 15% of the Stated Value per annum (the “Dividend Rate”),
which dividends shall be fully cumulative and paid when, as and if declared, on
the date set by the Board of Directors, or if any such date is not a Business
Day, the Business Day next following such day (each such date, a “Dividend Payment Date”),
to holders of record as they appear on the stock record books of the
Corporation on the fifteenth day prior to the relevant Dividend Payment
Date.  Dividends shall be paid only when,
as and if declared by the Board of Directors out of funds at the time legally
available for the payment of dividends. 
Dividends shall begin to accumulate on outstanding shares of Series A
Preferred Stock from the Issue Date and shall be deemed to accumulate from day
to day, whether or not declared, until paid. 
Dividends shall accumulate on the basis of a 360-day year consisting of
twelve 30-day months (four 90-day quarters) and the actual number of days
elapsed in the period for which the dividend is payable.  Notwithstanding any of the foregoing, the
Board of Directors may only declare a dividend to be paid immediately prior to,
and in connection with, a Liquidation pursuant to Section 4(C)(5) or
a redemption pursuant to Section 4(C)(9).

 

(b)           Method of Payment.  Dividends paid on the shares of Series A
Preferred Stock in an amount less than the total amount of such dividends at the
time accumulated and payable on all outstanding shares of Series A
Preferred Stock shall be allocated pro rata on a share-by-share basis among all
such shares then outstanding.  Dividends
that are declared and paid in an amount less than the full amount of dividends
accumulated on the Series A Preferred Stock shall be applied first to the
earliest dividend which has not theretofore been paid.  All cash payments of dividends on the shares
of Series A Preferred Stock shall be made in such coin or currency of the
United States of America as at the time of payment is legal tender for payment
of public and private debts.

 

(c)           Restrictions on Dividends.  So long as any shares of the Series A
Preferred Stock are outstanding, the Board of Directors shall not declare, and
the Corporation shall not pay or set apart for payment, any dividend or other
payments on any Junior Securities

 

7

 

or Parity Securities or make
any payment on account of, or set apart for payment, money for a sinking or
other similar fund for, the repurchase, redemption or other retirement of, any
Junior Securities or Parity Securities or any warrants, rights or options
exercisable for or convertible into any Junior Securities or Parity Securities (other
than the repurchase, redemption or other retirement of debentures or other debt
securities that are convertible or exchangeable into any Junior Securities or
Parity Securities), or make any distribution in respect of the Junior
Securities or Parity Securities, either directly or indirectly, whether in
cash, obligations or shares of the Corporation or other property (other than
distributions or dividends in Junior Securities or Parity Securities to the
holders of the Junior Securities or Parity Securities, respectively, or any
payment of cash to settle fractional shares that might otherwise be issuable
upon Junior Securities or Parity Securities in respect of stock dividends,
stock splits and the like), and shall not permit any corporation or other entity
directly or indirectly controlled by the Corporation to purchase or redeem any
Junior Securities or Parity Securities or any warrants, rights, calls or
options exercisable for or convertible into any Junior Securities or Parity
Securities (other than the repurchase, redemption or other retirement of
debentures or other debt securities that are convertible or exchangeable into
any Junior Securities or Parity Securities or the repurchase, redemption or
other retirement of Junior Securities or Parity Securities in exchange for
Junior Securities or Parity Securities, respectively) unless prior to or
concurrently with such declaration, payment, setting apart for payment,
repurchase, redemption or other retirement or distribution, as the case may be,
all accumulated and unpaid dividends on shares of the Series A Preferred
Stock shall have been paid, except that when dividends are not paid in full as
aforesaid upon the shares of Series A Preferred Stock, all dividends
declared on the Series A Preferred Stock and any series of Parity
Securities shall be declared and paid pro rata so that the amount of dividends
so declared and paid on Series A Preferred Stock and such series of Parity
Securities shall in all cases bear to each other the same ratio that
accumulated dividends (including interest accrued on or additional dividends
accumulated in respect of such accumulated dividends) on the shares of Series A
Preferred Stock and such Parity Securities bear to each other.

 

(5)           Liquidation Preference.

 

(a)           General. 
(i)  In the event of any Liquidation, each holder of shares of Series A
Preferred Stock then outstanding shall be entitled, subject to the rights of
any Senior Security and all of the Corporation’s existing and future
indebtedness, but prior and in preference to any distribution of any of the
assets or funds of the Corporation to any Junior Security, to receive out of
the assets of the Corporation available for distribution to its stockholders,
whether such assets are capital or surplus of any nature, an amount for each
share of Series A Preferred Stock held by such holder equal to the sum of
(x) the unpaid dividends, if any, accumulated or deemed to have accumulated on
such share of Series A Preferred Stock to the date of final distribution
to such holder, whether or not such dividends are declared, plus (y) the Stated
Value of such share of Series A Preferred Stock.

 

(ii)           If
upon the occurrence of a Liquidation, the assets and funds of the Corporation
legally available for distribution to stockholders by reason of their ownership
of the stock of the Corporation shall be insufficient to permit the payment to
the holders of Series A Preferred Stock of the full amount set forth in
paragraph (i) above, then the entire remaining assets and funds of the
Corporation legally available for distribution to stockholders shall be

 

8

 

distributed ratably among the
holders of Series A Preferred Stock based upon the aggregate amount to
which each holder of Series A Preferred Stock would otherwise be entitled
pursuant to paragraph (i) above.

 

(iii)          In
the event of any Liquidation, after payment in full of the liquidation
preference set forth in paragraph (i) above and after the payment in full
of the liquidation preferences to the holders of the Class A Common Stock
and the Class B Common Stock set forth in Section 4(B)(2)(d)(i) and
(iii), the entire remaining assets and funds of the Corporation legally
available for distribution to stockholders shall be distributed ratably among
the holders of Preferred Stock and the holders of Common Stock in proportion to
the number of shares of Common Stock held by them or issuable to them upon
conversion of their respective shares of Preferred Stock.

 

(b)           Parity Securities.  All the assets of the Corporation available
for distribution to stockholders after the liquidation preferences of any
Senior Securities shall be distributed ratably (in proportion to the full
distributable amounts to which holders of Series A Preferred Stock and
Parity Securities, if any, are respectively entitled upon such Liquidation)
among the holders of the then-outstanding shares of Series A Preferred
Stock and Parity Securities, if any, when such assets are not sufficient to pay
in full the aggregate amounts payable thereon.

 

(c)           Notice.  Written notice of a Liquidation stating a
payment or payments and the place where such payment or payments shall be
payable, shall be delivered in person, mailed by certified mail, return receipt
requested, mailed by overnight mail or sent by telecopier, not less than ten (10) days
prior to the earliest payment date stated therein, to the holders of record of
shares of Series A Preferred Stock, such notice to be addressed to each
such holder at its address as shown by the records of the Corporation.

 

(6)           Conversion
Rights.  The holders of the Series A
Preferred Stock will have the following rights with respect to the conversion
of the Series A Preferred Stock into shares of the Class A Common
Stock:

 

(a)           Conversion.  If, at 5:00 p.m., New York time, on the
first anniversary of the Issue Date (the “Conversion Date”), EXCO Resources, Inc.
has not consummated an underwritten initial public offering of its common stock
and redeemed all outstanding Series A Preferred Stock, then effective as
of the Conversion Date, each outstanding share of Series A Preferred Stock
(including all unpaid dividends, if any, accumulated or deemed to have
accumulated on such share of Preferred Stock to the Conversion Date, whether or
not such dividends are declared) shall be automatically converted (the “Conversion”) into that number of
fully-paid and nonassessable shares of Class A Common Stock equal to (i) 0.9
multiplied by the Fully Diluted Common Stock of the Corporation, divided by (ii) the
number of shares of Series A Preferred Stock outstanding immediately prior
to the Conversion.  For the
avoidance of doubt, all of the shares of Series A Preferred Stock
outstanding immediately prior to the Conversion will convert into, in the
aggregate, shares of Class A Common Stock representing 90% of the Fully
Diluted Common Stock of the Corporation immediately after the Conversion. 
Such Conversion shall occur without any further action by the holders of
shares of

 

9

 

Series A Preferred Stock
and whether or not the certificates representing shares of Series A
Preferred Stock are surrendered to the Corporation or its transfer agent;
provided, however, that the Corporation will not be obligated to issue
certificates evidencing the shares of Class A Common Stock issuable upon
such conversion unless and until the certificates evidencing such shares of Series A
Preferred Stock are either delivered to the Corporation or its transfer agent
as provided in Section 4(C)(6)(c) below or the holder notifies the
Corporation or the transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates.

 

(b)           Conversion Price.  Subject to the other provisions of this Section 4(C)(6) and
Section 4(C)(7), the “Conversion Price”
shall initially be $1,000, the purchase price per share paid for the Series A
Preferred Stock; provided, however,
that the Conversion Price for the Series A Preferred Stock shall be
subject to adjustment as set forth in Section 4(C)(7).

 

(c)           Mechanics of Conversion.  Each holder of Series A Preferred Stock
who is obligated to convert the same into shares of Class A Common Stock
pursuant to this Section 4(C)(6) will surrender the certificate or
certificates therefor, duly endorsed, at the principal office of the
Corporation or any transfer agent for the Series A Preferred Stock, or the
holder will notify the Corporation or the transfer agent that such certificates
have been lost, stolen or destroyed and execute an agreement satisfactory to
the Corporation to indemnify the Corporation from any loss incurred by it in
connection with such certificates, and will give written notice to the
Corporation at such office that such holder is obligated to convert the
same.  Such notice will state the number
of shares of Series A Preferred Stock being converted and will specify the
name or names (with address or addresses) in which a certificate or
certificates evidencing shares of Class A Common Stock are to be
issued.  Thereupon, the Corporation will
promptly issue and deliver at such office to such holder a certificate or
certificates for the number of shares of Class A Common Stock which equals
the number of shares of Class A Common Stock to which such holder is
entitled under the then-effective Conversion Rate, together with a cash
adjustment in respect of any fraction of a share of Class A Common Stock
as provided in Section 4(C)(6)(e). 
Such conversion will be deemed to have been made at the close of
business on the Conversion Date, and the Person entitled to receive the shares
of Class A Common Stock issuable upon such conversion will be treated for
all purposes as the record holder of such shares of Class A Common Stock
on such date.

 

(d)           Reservation of Stock Issuable Upon Conversion.  The Corporation will at all times reserve and
keep available out of its authorized but unissued shares of Class A Common
Stock, solely for the purpose of effecting the conversion of the shares of the Series A
Preferred Stock, such number of its shares of Class A Common Stock as will
from time to time be sufficient to effect the conversion of all outstanding
shares of Series A Preferred Stock. 
If at any time the number of authorized but unissued shares of Class A
Common Stock is not sufficient to effect the conversion of all then outstanding
shares of Series A Preferred Stock, the Corporation shall take, and the
holders of Series A Preferred Stock, Class A Common Stock and Class B
Common Stock shall consent to, such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of Class A
Common Stock to such number of shares as will be sufficient for such purpose.

 

10

 

(e)           Fractional Shares.  No fractional shares of Class A Common
Stock shall be issued upon conversion of Series A Preferred Stock.  If more than one share of Series A
Preferred Stock shall be surrendered for conversion at any one time by the same
holder, the number of full shares of Class A Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Series A Preferred Stock so surrendered.  In lieu of any fractional share of Class A
Common Stock to which such holder would otherwise be entitled, the Corporation
shall pay cash equal to the product of such fraction multiplied by $1,000.00.

 

(7)           Antidilution
Provisions.

 

The Conversion Price shall be subject to
adjustment from time to time as set forth in this Section 4(C)(7).

 

(a)           Adjustment.  If the Corporation:

 

(i)            subdivides
its outstanding shares of Common Stock into a greater number of shares;

 

(ii)           combines
its outstanding shares of Common Stock into a smaller number of shares;

 

(iii)          pays
a dividend or makes a distribution on its shares of Common Stock, in shares of
its Common Stock;

 

(iv)          pays
a dividend or makes a distribution on its shares of Common Stock, in shares of
its capital stock other than Common Stock; or

 

(v)           issues
by reclassification of its Common Stock (whether pursuant to a merger or
consolidation or otherwise) any other shares of the Corporation;

 

then the Conversion Price in effect immediately
before such action shall be adjusted so that each holder of Series A
Preferred Stock thereafter converted may receive the number and kind of shares
of capital stock of the Corporation which he or she would have owned
immediately following such action if his or her shares of Series A Preferred
Stock had been converted immediately before the record date (or, if no record
date, the effective date) for such action.

 

The adjustment shall become effective immediately
after the record date in the case of a dividend or distribution and immediately
after the effective date in the case of a subdivision, combination or
reclassification.

 

(b)           Issuance of Additional Shares of Common Stock.  If at any time the Corporation shall issue or
sell any shares of Common Stock in a subsequent issuance for a consideration
per share that is less than the Conversion Price per share in effect
immediately

 

11

 

prior to such issuance or sale
(“Additional Shares of Common Stock”),
then, forthwith upon such issuance or sale, the Conversion Price shall be
reduced, as of the opening of business on the date of such issue or sale, to a
price determined by multiplying that Conversion Price by a fraction:

 

(i)            the
numerator of which shall be (A) the number of shares of Common Stock
outstanding at the close of business on the day next preceding the date of such
issue or sale, plus (B) the number of shares of Common Stock which the
aggregate consideration received (or by the express provisions hereof deemed to
have been received) by the Corporation for the total number of Additional
Shares of Common Stock so issued would purchase at such Conversion Price, and

 

(ii)           the
denominator of which shall be the number of shares of Common Stock outstanding
at the close of business on the date of such issue after giving effect to such
issue of Additional Shares of Common Stock.

 

For the purpose of the calculation described in this Section 4(C)(7)(b),
the number of shares of Common Stock outstanding shall include (i) the
number of shares of Common Stock into which the then outstanding shares of Series A
Preferred Stock could be fully converted on the day next preceding the issue or
sale of Additional Shares of Common Stock, assuming the such date was the
Conversion Date, and (ii) the number of shares of Common Stock which could
be obtained through the conversion of all Convertible Securities which are
convertible on the day next preceding the issue or sale of Additional Shares of
Common Stock, assuming such date were the Conversion Date.

 

(c)           Issuances of Stock Purchase Rights and Convertible
Securities.

 

 (i)           In the event that the Corporation
shall at any time issue, sell or grant any stock purchase rights to any Person
in a subsequent issuance, then, for the purpose of Section 4(C)(7)(b) above,
the Corporation shall be deemed to have issued at that time a number of shares
of Common Stock equal to the maximum number of shares of Common Stock that are
or may become issuable upon exercise of such stock purchase rights (or upon
exercise of any Convertible Securities issuable upon exercise of such stock
purchase rights) for a consideration per share equal to (i) the aggregate
consideration per share (determined in accordance with the provisions of Section 4(C)(7)(d) hereof)
received by the Corporation in connection with the issuance, sale or grant of
such stock purchase rights plus (ii) the minimum amount of such
consideration per share receivable by the Corporation in connection with the
exercise of such stock purchase rights (and the exercise of any Convertible
Securities issuable upon exercise of such stock purchase rights).

 

(ii)           In
the event that the Corporation shall at any time issue or sell any Convertible
Securities to any Person in a subsequent issuance, then, for the purposes of Section 4(C)(7)(b) above,
the Corporation shall be deemed to have issued at that time a number of shares
of Common Stock equal to the maximum number of shares of Common Stock that are
or may become issuable upon the exercise of the conversion or exchange rights
associated with such Convertible Securities for a consideration per share equal
to (A) the aggregate consideration per share (determined in accordance
with the provisions of Section 4(C)(7)(b) hereof) received

 

12

 

by the Corporation in
connection with the issuance or sale of such Convertible Securities plus (B) the
minimum amount of such consideration per share receivable by the Corporation in
connection with the exercise of such conversion or exchange rights.

 

(iii)          If,
at any time after any adjustment of the Conversion Price shall have been made
hereunder as the result of any issuance, sale or grant of any stock purchase
rights or Convertible Securities, the maximum number of shares issuable upon
exercise of such stock purchase rights or of the rights of conversion or
exchange associated with such Convertible Securities shall increase, or the
minimum amount of consideration per share receivable in connection with such
exercise shall decrease, whether by operation of any antidilution rights
pertaining to such stock purchase rights or Convertible Securities, by
agreement of the parties or otherwise, the Conversion Price then in effect
shall first be readjusted to eliminate the effects of the original issuance,
sale or grant of such stock purchase rights or Convertible Securities on such
Conversion Price and then readjusted as if such stock purchase rights or
Convertible Securities had been issued on the effective date of such increase
in number of shares or decrease in consideration, but only if the effect of
such two-step readjustment is to reduce the Conversion Price below the
Conversion Price in effect immediately prior to such increase or decrease.

 

(iv)          If,
at any time after any adjustment of the Conversion Price shall have been made
hereunder as the result of any issuance, sale or grant of any stock purchase
rights or Convertible Securities, any of such stock purchase rights or the
rights of conversion or exchange associated with such Convertible Securities
shall expire by their terms or any of such stock purchase rights or Convertible
Securities shall be repurchased by the Corporation for a consideration per
underlying share of Common Stock not exceeding the amount of such consideration
received by the Corporation in connection with the issuance, sale or grant of
such stock purchase rights or Convertible Securities, the Conversion Price then
in effect shall forthwith be increased to the Conversion Price that would have
been in effect if such expiring stock purchase rights or rights of conversion
or exchange or such repurchased stock purchase rights or Convertible Securities
had never been issued. Similarly, if at any time after any such adjustment of
the Conversion Price shall have been made pursuant to Section 4(C)(7)(b) (A) any
additional consideration is received or becomes receivable by the Corporation
in connection with the issuance or exercise of such stock purchase rights or
Convertible Securities or (B) there is a reduction in the conversion ratio
applicable to such Convertible Securities so that fewer shares of Common Stock
will be issuable upon the conversion or exchange thereof or there is a decrease
in the number of shares of Common Stock issuable upon exercise of such stock
purchase rights, the Conversion Price then in effect shall be forthwith
readjusted to the Conversion Price that would have been in effect had such
changes taken place at the time that such stock purchase rights or Convertible
Securities were initially issued, granted or sold. In no event shall any
readjustment under this Section 4(C)(7)(c)(iv) affect the validity of
any shares of Common Stock issued upon the conversion of the Series A
Preferred Stock prior to such readjustment, nor shall any such readjustment
have the effect of increasing the Conversion Price above the Conversion Price
that would have been in effect if the related stock purchase rights or
Convertible Securities had never been issued.

 

(d)           Determination of Consideration.  For purposes of Section 4(C)(7)(b) and
Section 4(C)(7)(c) hereof, the consideration received and/or
receivable by the

 

13

 

Corporation in connection with
the issuance, sale, grant or exercise of Additional Shares of Common Stock,
stock purchase rights or Convertible Securities, irrespective of the accounting
treatment of such consideration, shall be valued as follows:

 

(i)            Cash Payment. In the case of cash, the net
amount received by the Corporation after deduction of any accrued interest or
dividends, but including any underwriting commissions or concessions paid or
allowed by the Corporation.

 

(ii)           Securities or Other Services or Property.  In the case of securities or other services
or property, the fair market value thereof as of the date immediately preceding
such issuance, sale, grant or exercise as determined in good faith by the Board
of Directors.

 

(iii)          Allocation Related to Common Stock.  In the event shares of Common Stock are
issued or sold together with other securities or other assets of the
Corporation for a consideration which covers both, the consideration received
(computed as provided in (i) and (ii) above) shall be allocable to
such shares of Common Stock as determined in good faith by the Board of
Directors.

 

(iv)          Allocation Related to Stock Purchase Rights and
Convertible Securities.  In
case any stock purchase rights or Convertible Securities shall be issued or sold together with other securities or other
assets of the Corporation, together comprising one integral transaction in
which no specific consideration is allocated to the stock purchase rights or
Convertible Securities, the consideration allocable to such stock purchase
rights or Convertible Securities shall be determined in good faith by the Board
of Directors.

 

(v)           Dividends in Securities.  In case the Corporation shall declare a
dividend or make any other distribution upon any stock of the Corporation
payable in either case in Common Stock or Convertible Securities in which the Series A
Preferred Stock does not participate, such Common Stock or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.

 

(vi)          Merger, Consolidation or Sale of Assets.  In case any shares of Common Stock, stock
purchase rights or Convertible Securities shall be issued in connection with
any merger or consolidation in which the Corporation is the surviving
corporation, the amount of consideration therefor shall be deemed to be the
fair market value of such portion of the assets and business of the
non-surviving corporation attributable to such Common Stock, stock purchase
rights or Convertible Securities, as is determined in good faith by the Board
of Directors.

 

(vii)         Challenge to Good Faith Determination. Whenever
the Board of Directors shall be required to make a determination in good faith
of the fair market value of any item under this Section 4(C)(7), such
determination may be challenged in good faith by any holder of Series A
Preferred Stock, and any dispute shall be resolved by an investment banking or
appraisal firm of recognized regional or national standing selected by the
Corporation

 

14

 

and acceptable to the majority
of the Class A Preferred Stock holders and whose decision shall be binding
on the Corporation and all holders of Series A Preferred Stock. The fees
and expenses of such firm shall be paid by the Corporation.

 

(e)           Other Dilutive Events. In case any event
shall occur as to which the other provisions of this Section 4(C)(7) are
not strictly applicable but as to which the failure to make any adjustment
would not fairly protect the conversion rights of the holders of Series A
Preferred Stock in accordance with the essential intent and principles hereof
(including, without limitation, the issuance of securities other than Common
Stock which have the right to participate in distributions to the holders of
Common Stock, the granting of “phantom stock” rights or “stock appreciation
rights” or the repurchase of outstanding shares of Common Stock, Convertible
Securities or stock purchase rights for a purchase price exceeding the fair
market value thereof), then, in each such case, the majority of the Class A
Preferred Stock holders may select an independent investment banking firm of
regionally or nationally recognized standing and reasonably acceptable to the
Corporation to make a determination as to the adjustment, if any, required to
be made on a basis consistent with the essential intent and principles
established herein as a result of such event in order to preserve the
conversion rights of the holders of Series A Preferred Stock. If the
investment bank selected by the majority of the Class A Preferred Stock
holders  is not reasonably acceptable to the
Corporation, and the Corporation and the majority of the Class A Preferred
Stock holders  cannot agree on a mutually
acceptable investment bank, then the Corporation and the majority of the Class A
Preferred Stock holders  shall each
choose one such investment bank and the respective chosen firms shall jointly
select a third investment bank, which shall make the determination. The
Corporation shall pay the costs and fees of each such investment bank
(including any such investment bank selected by the majority of the Class A
Preferred Stock holders ), and the decision of the investment bank making such
determination shall be final and binding on the Corporation and all holders of Series A
Preferred Stock. Promptly after receipt of the opinion of such investment bank
as to any such required adjustments, the Corporation shall take any actions
necessary to implement same.

 

(f)            Other Provisions Applicable to Adjustments Under this
Section.  The following
provisions shall be applicable to the adjustments provided for pursuant to this
Section 4(C)(7):

 

(i)            When Adjustments To Be Made.  The adjustments required by this Section 4(C)(7) shall
be made whenever and as often as any specified event requiring such an
adjustment shall occur. For the purpose of any such adjustment, any specified
event shall be deemed to have occurred at the close of business on the date of
its occurrence.

 

(ii)           When Adjustment Not Required.  If the Corporation shall take a record of the
holders of its Common Stock for the purpose of entitling them to receive a
dividend or distribution to which the provisions of Section 4(C)(7)(a) would
apply, but shall, thereafter and before the distribution to stockholders
thereof, legally abandon its plan to pay or deliver such dividend or
distribution, then thereafter no adjustment shall be required by reason of the
taking of such record and any such adjustment previously made in respect
thereof shall be rescinded and annulled.

 

15

 

(iii)          Notice of Adjustments.  Whenever the Conversion Price shall be
adjusted pursuant to this Section 4(C)(7), the Corporation shall forthwith
prepare a certificate to be executed by the chief financial officer of the
Corporation setting forth, in reasonable detail, the event requiring the
adjustment and the method by which such adjustment was calculated. The
Corporation shall promptly cause a signed copy of such certificate to be
delivered to each holder of Series A Preferred Stock at each holder’s last
address as it appears upon the stock transfer books of the Corporation.

 

(iv)          Independent Application. Except as
otherwise provided herein, all provisions of this Section 4(C)(7) are
intended to operate independently of one another (but without duplication). If
an event occurs that requires the application of more than one subparagraph,
all applicable subparagraphs shall be given independent effect without
duplication.

 

(g)           Notices. 
All notices and other communications required by the provisions of this Section 4(C)(7) shall
be in writing and shall be deemed to have been duly given if delivered
personally, mailed by certified mail (return receipt requested) or sent by
overnight delivery service, telegram or facsimile transmission to each holder
of record at the address of such holder appearing on the books of the
Corporation.  Notice so given shall, in
the case of notice so given by mail, be deemed to be given and received on the
fourth calendar day after posting, in the case of overnight delivery service,
on the date of actual delivery and, in the case of notice so given by telegram,
facsimile transmission, or personal delivery, on the date of actual
transmission or, as the case may be, personal delivery.

 

(8)           Voting Rights.

 

(a)           General Voting Rights.  So
long as any shares of the Series A Preferred Stock are outstanding, (i) each
share of Series A Preferred Stock shall entitle the holder thereof to vote
on all matters voted on by holders of Common Stock; and (ii) the shares of
Series A Preferred Stock shall vote together with shares of Common Stock
as a single class.  Each share of Series A
Preferred Stock will entitle the holder to the number of votes per share equal
to the full number of shares of Class A Common Stock into which each share
of Series A Preferred Stock would have been converted had the Series A
Preferred Stock been converted to Class A Common Stock pursuant to Section 4(C)(6) prior
to the record date for such vote.

 

(b)           Super-Majority Class Voting.  The affirmative vote of the holders of at
least two-thirds of the then-issued and outstanding shares of Series A
Preferred Stock shall be required in order for the Corporation to: (i) authorize,
create or issue, or reclassify any authorized stock of the Corporation into, or
increase the authorized amount of, any Senior Securities or Parity Securities; (ii) declare
or pay any dividends on, or make any distributions with respect to, any shares
of any equity security of any kind of the Corporation, other than the Series A
Preferred Stock; (iii) authorize any Liquidation or Sale Transaction; (iv) authorize
any increase or decrease in the aggregate number of authorized shares of Series A
Preferred Stock or Class A Common Stock; (v) authorize any adverse
change to the rights, preferences and privileges of the Series A Preferred
Stock or Class A Common Stock; (vi) authorize an increase or decrease
in the size of the Board of Directors; (vii) authorize any change in the
Corporation’s

 

16

 

line of business; or (viii) authorize
the issuance of any shares of Class A Common Stock other than to the
holders of Series A Preferred Stock upon conversion.  Such vote shall be taken in accordance with
the procedures specified in Section 4(C)(8)(d) below.

 

Notwithstanding the foregoing, the
Corporation may effect, without the consent of the Series A Preferred
Stock, any of the foregoing in connection with any transaction pursuant to
which all outstanding shares of the Series A Preferred Stock will be fully
redeemed in accordance with the provisions of Section 4(C)(9).

 

(c)           Voting for the Election of Directors.  (i)  Except as otherwise determined and
effective upon the initial issuance of the Series A Preferred Stock, the
Board of Directors shall be comprised of three (3) directors.  As long as a majority of the shares of Series A
Preferred Stock originally issued remains outstanding, the holders of
outstanding Series A Preferred Stock, voting separately as a class, shall
be entitled to elect, by the affirmative vote or approval of a majority
thereof, two (2) members of the Board of Directors of the Corporation.

 

(ii)           In
the case of any vacancy (other than a vacancy caused by removal) in the office
of a director occurring among the directors elected by the holders of the Series A
Preferred Stock pursuant to paragraph (i) above, the remaining director so
elected by the Series A Preferred Stock (or, if there are no such
directors remaining, the holders of a majority of the shares of Series A
Preferred Stock, by the affirmative vote of a majority thereof) may elect a
successor or successors to hold office for the unexpired term of the director
or directors whose place or places shall be vacant.  Any director who shall have been elected by
the holders of the Series A Preferred Stock pursuant to paragraph (i) above,
or by any directors so elected as provided in the immediately preceding
sentence hereof may be removed during the aforesaid term of office, either with
or without cause, by, and only by, the affirmative vote of the holders of Series A
Preferred Stock.

 

(d)           Exercise of Voting Rights.  The foregoing rights of holders of Series A
Preferred Stock to take any actions as provided in this Section 4(C)(7) may
be exercised at any special meeting of the holders of shares of Series A
Preferred Stock or of the stockholders of the Corporation called as herein
provided or as provided in the Bylaws of the Corporation, at any annual meeting
of stockholders held for the purpose of electing directors, and in any written
consent of stockholders pursuant to Section 228 of the DGCL.

 

(e)           Interference with Voting Rights.  The Corporation shall not enter into any
agreement or issue any security that prohibits, conflicts or is inconsistent
with, or would be breached by, the Corporation’s performance of its obligations
hereunder.

 

(f)            Notices of Record Date.  In the event of (A) any taking by the
Corporation of record of the holders of any class of securities for the purpose
of determining the holders thereof who are entitled to receive any dividend or
other distribution, or (B) any capital reorganization of the Corporation,
any reclassification or recapitalization of the capital stock of the
Corporation, any merger or consolidation of the Corporation with or into any
other corporation, or any transfer of all or substantially all of the assets of
the Corporation to any other Person or any voluntary or involuntary
dissolution, liquidation or winding up of the Corporation,

 

17

 

the Corporation shall mail to
each holder of Series A Preferred Stock at least fifteen (15) days prior
to the record date specified therein, a notice specifying (x) the date on which
any such record is to be taken for the purpose of such dividend or distribution
and a description of such dividend or distribution, (y) the date on which any
such reorganization, reclassification, transfer, consolidation, merger,
dissolution, liquidation or winding up is expected to become effective, and (z)
the date, if any, that is to be fixed, as to when the holders of record of Class A
Common Stock (or other securities) shall be entitled to exchange their shares
of Class A Common Stock (or other securities) for securities or other
property deliverable upon such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding up.

 

(9)           Redemption Rights.

 

(a)           Redemption.  On a date that is within five Business Days following the consummation of an
underwritten initial public offering of the common stock of EXCO Resources, Inc.
(or its parent company or successor) with aggregate net proceeds sufficient to
fully redeem all outstanding shares of the Series A Preferred Stock (the “IPO” and such date, the “Redemption Date”), the Corporation shall be
obligated to redeem, and the holders of Series A Preferred Stock shall be
obligated to sell to the Corporation, all outstanding shares of Series A
Preferred Stock for the aggregate “Redemption Price,”
which shall be comprised of the following: (i) an amount in cash equal to
the sum of (A) the unpaid dividends, if any, accumulated or deemed to have
accumulated on all outstanding shares of Series A Preferred Stock as of
the Redemption Date, whether or not such dividends are declared, plus (B) the
Stated Value of all outstanding shares of Series A Preferred Stock (such
sum, the “Cash Redemption Amount”) and (ii) at
the option of the holders of a majority of the Series A Preferred Stock
(which decision shall be applicable to all shares of Series A Preferred
Stock), either (x) the Additional Shares of EXCO (defined below), (y) the Make
Whole Amount (defined below) in cash or (z) any combination of shares of common
stock of EXCO Resources, Inc. (or its parent company or successor) and
cash such that the value of such shares (based on the FMV of EXCO Shares) and
cash equals the Make Whole Amount.  The
following terms shall have the meanings set forth below:

 

“Additional Shares of EXCO”
shall mean a number of shares of common stock of EXCO Resources, Inc. (or
its parent company or successor) equal to the quotient of (i) the Make
Whole Amount, divided by (ii) the FMV of EXCO Shares.

 

The “Make Whole Amount”
shall be an amount equal to the difference of (i) the Stated Value plus a
23% annualized rate of return on the Stated Value as of the Redemption Date,
minus (ii) the Cash Redemption Amount.

 

The “FMV of EXCO Shares”
shall be equal to the lower of (i) $12.00 (as adjusted for stock splits,
stock dividends, recapitalizations and similar events) and (ii) the per
share price to the public for the common stock of EXCO Resources, Inc. (or
its parent company or successor) offered by the IPO.

 

(b)           Mechanics of Redemption.  Payment of the Redemption Price for Series A
Preferred Stock to each holder is conditioned upon (i) surrender by the Series A

 

18

 

Preferred Stock holder who is
entitled to payment of the certificate or certificates therefor, duly endorsed,
at the principal office of the Corporation or any transfer agent for the Series A
Preferred Stock, or notification by the holder (to the Corporation or the
transfer agent) that such certificates have been lost, stolen or destroyed and
execution of an agreement satisfactory to the Corporation to indemnify the
Corporation from any loss incurred by it in connection with such certificates
and (ii) notice specifying the name or names (with address or addresses)
in which a certificate or certificates evidencing shares of common stock of
EXCO Resources, Inc. are to be issued. 
Payment of the Redemption Price for the Series A Preferred Stock
will be made promptly following the later of five (5) Business Days
following the Redemption Date and satisfaction of the conditions set forth in
this Section 4(C)(9)(b).

 

(c)           Effect of Redemption.  If the Corporation or its transfer agent
holds money or securities sufficient to pay the Redemption Price of all the
issued and outstanding Series A Preferred Stock on the Business Day
following the Redemption Date in accordance with the terms of this Section 4(C)(9),
then, immediately after the Redemption Date, the Series A Preferred Stock
will cease to be outstanding, whether or not every holder of Series A
Preferred Stock has complied with all of the conditions set forth in this Section 4(C)(9).  At such time, all rights of a holder as a
holder of Series A Preferred Stock shall terminate, other than the right
to receive the Redemption Price upon delivery of the certificates representing
the Series A Preferred Stock.

 

(10)         Preemptive Rights.

 

(a)           Notwithstanding
anything to the contrary contained in this Certificate of Incorporation, after
the Issue Date, the Corporation shall not issue or sell any capital stock
(other then the issuance of up to 20,000 shares of Class B Common Stock to
EXCO Holdings II, Inc. or its successors or affiliates) (such capital stock, the “Newly Issued Securities”)
unless prior to the issuance or sale of such Newly Issued Securities, each
holder of Series A Preferred Stock shall have first been given the
opportunity to purchase, on the same terms and conditions on which such Newly
Issued Securities are proposed to be sold by the Corporation, that portion of
such Newly Issued Securities that is equal to the quotient obtained by dividing
(A) the number of outstanding shares of Series A Preferred Stock held
by such holder by (B) the
aggregate number of outstanding shares of Series A Preferred Stock (such
holder’s “Proportionate
Share”).

 

(b)           At
least thirty (30) days prior to the issuance or sale by the Corporation of
any Newly Issued Securities, the Corporation shall provide written notice thereof
(the “Preemptive
Notice”) to each holder of Series A Preferred Stock stating (i) the
name and address of the Person to whom the Corporation proposes to issue or
sell such Newly Issued Securities, (ii) the price, number and other terms
of such Newly Issued Securities, (iii) such holder’s Proportionate Share
of such Newly Issued Securities and (iv) the period of time during which
such holder may elect to purchase such holder’s Proportionate Share of such
Newly Issued Securities, which period shall extend for at least thirty
(30) days following the receipt by such holder of the Preemptive Notice
(the “Preemptive
Acceptance Period”).

 

19

 

(c)           Each
holder of Series A Preferred Stock shall have the right to irrevocably
elect to purchase such holder’s Proportionate Share of any Newly Issued
Securities by providing written notice of such election to the Corporation
prior to the expiration of the Preemptive Acceptance Period (each, a “Participating Holder”).  If after the expiration of the Preemptive
Acceptance Period one or more holders of Series A Preferred Stock shall
not have elected to purchase its Proportionate Share of such Newly Issued
Securities (each, a “Non-Participating
Holder”), then each Participating Holder shall be entitled to
exercise an additional right to purchase, on a pro rata basis, such Newly
Issued Securities not previously purchased.

 

(d)           After
the conclusion of the Preemptive Acceptance Period, any Newly Issued Securities
that are not purchased by the holders of Series A Preferred Stock in
accordance with the provisions of this Section 4(C)(10) may be sold
by the Corporation, within a period of two (2) months after the expiration
of such Preemptive Acceptance Period, to any other Person at such prices and
upon such other terms and conditions that are no less favorable to the
Corporation than those set forth in the Preemptive Notice.

 

(11)         Transfer
of Shares.  No holder of
shares of Series A Preferred Stock may Transfer all or any part of the
shares of Series A Preferred Stock owned by such holder, other than a
Transfer of shares which is (i) a Permitted Transfer or (ii) a
Transfer by such holder that is
approved in advance by the Board of Directors and represents not less than five
percent (5%) of the then outstanding shares of Series A Preferred Stock. Any shares of Series A Preferred Stock
Transferred pursuant to this Section 4(C)(11) shall remain subject to the
Transfer restrictions of this Section 4(C)(11).  Any Transfer in violation of this Section 4(C)(11)
shall be null and void.

 

(12)         Exclusion
of Other Rights.  Except as may
otherwise be required by law, the shares of Series A Preferred Stock shall
not have any preferences or relative, participating, option or other special
rights, other than those specifically set forth in this Section 4(C).

 

(13)         Reissuance.  Shares of the Series A Preferred Stock
acquired by the Corporation by conversion or otherwise will be deemed
authorized but unissued shares of Preferred Stock that is undesignated as to
series and may be redesignated and reissued as part of any series of Preferred
Stock.

 

(14)         Identical
Rights.  Each share of the Series A
Preferred Stock shall have the same relative rights and preferences as, and
shall be identical in all respects with, all other shares of the Series A
Preferred Stock.

 

(15)         Reports.  So long as any shares of the Series A
Preferred Stock are outstanding, the Corporation will furnish to holders of the
then outstanding shares of Series A Preferred Stock audited annual financial reports, unaudited
monthly and quarterly financial reports, annual budget and business plans, and
board packages.

 

(16)         Notices.  Any notice referred to herein shall be in
writing and, unless first-class mail shall be specifically permitted for such
notices under the terms hereof, shall be delivered personally, by telecopier,
or by registered or certified mail, postage prepaid, and shall be deemed to
have been given upon personal delivery thereof, upon transmittal of such notice
by

 

20

 

telecopy (with confirmation of
receipt by telecopy or telex) or seventy-two (72) hours after transmittal by
registered or certified mail, postage prepaid, addressed as follows:

 

(a)           if to the Corporation:

 

TXOK Acquisition, Inc.

Attention:
Chief Financial Officer

12377 Merit
Drive, Suite 1700

Dallas, Texas
75251

 

(b)           if
to a holder of the Series A Preferred Stock, to such holder at the address
of such holder as listed in the stock record books of the Corporation (which
may include the records of any transfer agent for the Series A Preferred
Stock); or

 

(c)           to
such other address as the Corporation or such holder, as the case may be, shall
have designated by notice given in accordance with the foregoing.

 

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

 

D.            Except
as otherwise provided herein, no stockholder of the Corporation shall, by
reason of being a stockholder, have any preemptive right to acquire additional,
unissued or treasury shares of the Corporation, or securities convertible into
or carrying a right to subscribe to or to acquire any shares of any class of
the Corporation now or hereafter authorized.

 

E.             The
holders of Common Stock shall be entitled to one vote per share on all matters
to be voted on by the stockholders.  No
stockholder shall have the right to cumulate votes at any election of directors
of the Corporation.

 

ARTICLE V

 

CORPORATE
MATTERS

 

The affairs of the Corporation shall be managed by a
Board of Directors.  The number of
directors of the Corporation shall be from time to time fixed by, or altered in
the manner provided in, the Bylaws of the Corporation.

 

Elections of directors need not be by written ballot
unless the Bylaws of the Corporation shall so provide.

 

Meetings of stockholders may be held within or
without the State of Delaware, as the Bylaws may provide.  The books of the Corporation may be kept (subject
to any provision contained in the statutes) outside the State of Delaware at
such place or places as may be designated from time to time by the Board of
Directors or in the Bylaws of the Corporation.

 

21

 

ARTICLE VI

 

AMENDMENTS

 

In furtherance and not in limitation of the powers
conferred upon the Board of Directors by law, the Board of Directors shall have
the power to adopt, amend, and repeal, from time to time, the Bylaws of the
Corporation.

 

ARTICLE VII

 

DURATION OF
EXISTENCE

 

The Corporation will have a perpetual existence.

 

ARTICLE VIII

 

RIGHT TO
AMEND

 

The Corporation reserves the right to amend, alter,
change, or repeal any provision contained in this Amended and Restate
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.

 

ARTICLE IX

 

LIABILITY
OF DIRECTORS

 

The liability of the directors of the Corporation to
the Corporation or its stockholders for monetary damages for acts or omissions
occurring in their capacity as directors shall be limited to the fullest extent
permitted by the laws of the State of Delaware and any other applicable law, as
such laws now exist and to such greater extent as they may provide in the
future.

 

Any repeal or modification of this Certificate shall
operate prospectively only and shall not adversely affect the rights existing
at the time of such repeal or modification of any of the aforementioned persons.

 

ARTICLE X

 

INDEMNIFICATION
AND INSURANCE

 

The Corporation shall indemnify and advance expenses
to and may provide indemnity insurance for each person who is or was a director
or officer of the Corporation in every capacity in which such person serves for
which the Corporation may or is required to indemnify or advance expenses to
such person, for amounts incurred by such person in connection with any action,
suit, or proceeding to which such person was, is or may be a party by reason of
such

 

22

 

person’s position with the Corporation or
service on behalf of the Corporation, when and to the fullest extent permitted
or required by the laws of the State of Delaware and any other applicable law,
as such laws now exist and to such greater extent as they may provide in the
future.

 

Any repeal or modification of this Certificate shall
operate prospectively only and shall not adversely affect the rights existing
at the time of such repeal or modification of any of the aforementioned
persons.

 

* * * * *

 

23

 

IN WITNESS WHEREOF, the Corporation has caused this
Amended and Restated Certificate of Incorporation to be signed by its Chief
Executive Officer on September 26, 2005.

 

 

	
   

  	
  /s/ Douglas H. Miller

  	
   

  
	
   

  	
  Douglas H. Miller

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  

 

24THIS WARRANT  AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  THIS WARRANT
AND THE  COMMON  SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR  SALE,  PLEDGED  OR  HYPOTHECATED  IN  THE  ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT  AS TO  THIS WARRANT, OR THE COMMON SHARES ISSUABLE UPON
EXERCISE OF THIS WARRANT, UNDER SAID ACT OR ANY APPLICABLE STATE SECURITIES LAW
OR  AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ON THE GO HEALTHCARE, INC.
THAT  SUCH REGISTRATION  IS  NOT  REQUIRED.

               Right to Purchase ____________ shares of Common Stock of
                          ON THE GO HEALTHCARE INC.
                   (subject to adjustment as provided herein)

                                   Series "D"

                          COMMON STOCK PURCHASE WARRANT

                         Issue Date: ________________

ON THE GO HEALTHCARE, INC., a corporation organized under the laws of the State
Of Delaware (the "Company"), hereby  certifies that, for value received,  _____
 _______ or his assigns (the "Holder"), is entitled, subject to  the terms set
forth below,to exercise this Warrant at any time two years after the Issue Date
set forth above,  up  to  _______  fully  paid and  nonassessable shares of the
common stock of  the Company (the "Common Stock"), $0.0001 par value per share,
at a purchase price equivalent  to  $0.40  per share of common stock ("Purchase
Price").  The number  and  character  of  such shares of  Common  Stock and the
Purchase Price are subject to  adjustment as provided herein.  The  Company may
reduce the Purchase Price  without the  consent  of  the  Holder.  The  Company
may,  in  its sole discretion, extend  the  Expiration  Date.

As used herein the following terms, unless the context otherwise requires, have
the  following  respective  meanings:

(a)      The  term  "Company"  shall  include  ON THE GO HEALTHCARE, INC. and
         Any Corporation which  shall  succeed   or  assume  the  obligations
         of  ON THE GO HEALTHCARE, INC. hereunder.

(b)      The  term  "Common  Stock"  includes  (a) the Company's Common Stock,
         $0.0001  par value per share, and (b) any other securities into which
         or  for which any of the securities described in (a) may be converted
         or  exchanged pursuant to a plan of recapitalization, reorganization,
         merger,  sale  of  assets  or  otherwise.

(c)      The  term  "Other  Securities" refers to any stock (other than Common
         Stock)  and  other  securities  of  the  Company  or any other person
        (corporate  or otherwise) which the holder of the Warrant at any time
         shall  be  entitled  to  receive,  or  shall  have  received,  on the
         exercise  of  the Warrant, in lieu of or in addition to Common Stock,
         or  which  at any time shall be issuable or shall have been issued in
         exchange  for  or  in replacement of Common Stock or Other Securities
         pursuant  to  Section  3  or  otherwise.

<PAGE>

1.  Exercise  of  Warrant.

1.1. Number  of  Shares  Issuable upon Exercise.  From and after the Issue Date
     through  and  including  the  Expiration  Date, the Holder hereof shall be
     entitled  to receive, upon exercise of this Warrant in whole in accordance
     with  the  terms  of  this  Section,  subject  to  adjustment  pursuant to
     Section  3.

1.2  Limitations  on Conversion.  This Warrant can not be exercised so that the
     Holder  will  own  more  than  4.99%  of  the Company's Common Stock.  The
     Holder  may  exercise  this Warrant in part in compliance with Section 1.4
     below  in order to comply with this requirement.  Additionally, the Holder
     may  not  purchase  more than 9.99% of the Company's stock within a thirty
     day  period.

1.3. Full  Exercise.  This  Warrant  may  be  exercised  in  full by the Holder
     hereof  by  delivery  of  an  original  or  facsimile  copy of the Form of
     Election  to  Purchase  attached as Exhibit A hereto duly executed by such
     Holder  and  surrender  of  the  original Warrant within seven (7) days of
     exercise,  to  the  Company  at  its  principal office or at the office of
     its  Warrant  Agent  (as  provided  hereinafter),  accompanied by payment,
     in  cash,  wire  transfer  or  by certified or official bank check payable
     to  the  order  of  the Company, in the amount obtained by multiplying the
     number  of  shares  of  Common  Stock  for  which  this  Warrant  is  then
     exercisable  by  the  Purchase  Price.

1.4. Partial  Exercise.  This  Warrant  may  be  exercised in part (but not for
     a  fractional share) by surrender of this Warrant in the manner and at the
     place  provided  in  subsection  1.2 except that the amount payable by the
     Holder  on  such  partial  exercise  shall  be  the  amount  obtained  by
     multiplying  (a)  the  number  of  whole shares of Common Stock designated
     by  the  Holder  in  the  Subscription Form by (b) the Purchase Price.  On
     any  such  partial  exercise,  the Company, at its expense, will forthwith
     issue  and deliver to or upon the order of the Holder hereof a new Warrant
     of  like  tenor,  in the name of the Holder hereof or as such Holder (upon
     payment  by  such  Holder  of  any applicable transfer taxes) may request,
     the  whole  number  of  shares  of Common Stock for which such Warrant may
     still  be  exercised.

1.5. Fair  Market  Value.  Fair Market Value of a share of Common Stock as of a
     particular  date  (the  "Determination  Date")  shall  mean:

(a)      If  the  Company's  Common  Stock  is  traded  on  the New York Stock
         Exchange,  the  American Stock Exchange or any other national exchange
         or  is  quoted on the National Association of Securities Dealers, Inc.
         Automated  Quotation  ("NASDAQ"), National Market System or the NASDAQ
         SmallCap  Market,  then  the closing or last sale price, respectively,
         reported  for  the  last  business  day  immediately  preceding  the
         Determination  Date;

(b)      If  the  Company's  Common  Stock is not traded on the New York Stock
         Exchange,  the  American Stock Exchange or any other national exchange
         and  is  not quoted on the NASDAQ National Market System or the NASDAQ
         SmallCap  Market,  but  is traded in the Over-the-Counter market, then
         the  average  of  the closing bid and ask prices reported for the last
         business  day  immediately  preceding  the  Determination  Date;

<PAGE>

(c)      Except  as  provided  in  clause  (d)  below, if the Company's Common
         Stock  is  not  publicly  traded,  then as the Holder and the Company
         agree,  or  in  the  absence  of such an agreement, by arbitration in
         accordance  with  the rules then standing of the American Arbitration
         Association,  before a single arbitrator to be chosen from a panel of
         persons  qualified by education and training to pass on the matter to
         be  decided;  or

(d)      If  the  Determination Date is the date of a liquidation, dissolution
         or  winding  up, or any event deemed to be a liquidation, dissolution
         or  winding up pursuant to the Company's charter, then all amounts to
         be  payable  per share to holders of the Common Stock pursuant to the
         charter  in the event of such liquidation, dissolution or winding up,
         plus  all  other  amounts  to  be payable per share in respect of the
         Common  Stock  in  liquidation  under  the  charter, assuming for the
         purposes  of  this  clause (d) that all of the shares of Common Stock
         then  issuable  upon  exercise of all of the Warrants are outstanding
         at  the  Determination  Date.

1.6. Trustee  for  Warrant  Holders.  In the event that a bank or trust company
     shall  have  been  appointed  as  trustee  for  the Holder of the Warrants
     pursuant  to Subsection 2.2, such bank or trust company shall have all the
     powers  and duties of a warrant agent (as hereinafter described) and shall
     accept,  in  its own name for the account of the Company or such successor
     person  as  may  be entitled thereto, all amounts otherwise payable to the
     Company  or  such  successor,  as  the  case  may  be, on exercise of this
     Warrant  pursuant  to  this  Section  1.

1.7  Delivery  of Stock Certificates, etc. on Exercise. The Company agrees that
     the  shares  of Common Stock purchased upon exercise of this Warrant shall
     be  deemed  to  be issued to the Holder hereof as the record owner of such
     shares  as  of  the  close  of  business on the date on which this Warrant
     shall  have  been  surrendered  and  payment  made  for  such  shares  as
     aforesaid.  As  soon  as practicable after the exercise of this Warrant in
     full  or  in  part, and in any event within seven (7) days thereafter, the
     company  will  cause  to  be  issued  in  the name of and delivered to the
     Holder  hereof,  or  as  such  Holder  (upon payment by such Holder of any
     applicable  transfer  taxes)  may  direct  in  compliance  with applicable
     securities  laws,  a  certificate  or  certificates for the number of duly
     and  validly  issued,  fully paid and nonassessable shares of Common Stock
     (or  Other  Securities)  to  which  such  Holder shall be entitled on such
     exercise,  plus,  in  lieu  of  any  fractional share to which such Holder
     would  otherwise  be  entitled,  cash equal to such fraction multiplied by
     the  then  Fair  Market  Value of one full share of Common Stock, together
     with  any  other  stock  or other securities and property (including cash,
     where  applicable)  to  which  such  Holder is entitled upon such exercise
     pursuant  to  Section  1  or  otherwise.

2.   Adjustment  for  Reorganization,  Consolidation,  Merger,  etc.

2.1. Reorganization,  Consolidation,  Merger,  etc.  In  case  at  any  time or
     from  time  to  time,  the  Company  shall  (a)  effect  a reorganization,
     (b)  consolidate  with  or  merge  into  any  other person or (c) transfer
     all  or  substantially all of its properties or assets to any other person
     under  any  plan  or  arrangement  contemplating  the  dissolution  of the
     Company,  then,  in  each  such  case,  as a condition to the consummation
     of  such  a  transaction,  proper  and adequate provision shall be made by
     the  Company  whereby  the  Holder of this Warrant, on the exercise hereof
     as  provided  in  Section  1,  at  any time after the consummation of such
     reorganization,  consolidation  or  merger  or  the effective date of such
     dissolution,  as  the  case  may  be, shall receive, in lieu of the Common
     Stock  (or  Other  Securities)  issuable  on  such  exercise prior to such
     consummation  or  such  effective  date,  the  stock  and other securities
     and  property  to  which  such  Holder  would have been entitled upon such
     consummation  or  in  connection  with  such  dissolution, as the case may
     be,  if  such  Holder  had  so  exercised  this Warrant, immediately prior
     thereto,  all  subject  to  further  adjustment  thereafter as provided in
     Section  3.

<PAGE>

2.2. Dissolution.  In  the  event  of  any dissolution of the Company following
     the  transfer  of  all  or  substantially all of its properties or assets,
     the  Company,  prior  to  such  dissolution,  shall at its expense deliver
     or  cause  to  be  delivered  the  stock and other securities and property
     receivable  by  the  Holder  of  the  Warrants after the effective date of
     such  dissolution  pursuant  to  this Section 2 to a bank or trust company
     (a  "Trustee"),  as  trustee  for  the  Holder  of  the  Warrants.

2.3. Continuation  of  Terms.  Upon  any  reorganization, consolidation, merger
     or  transfer  (and  any  dissolution  following  any transfer) referred to
     in  this  Section  2, this Warrant shall continue in full force and effect
     and  the  terms  hereof  shall  be  applicable to the Other Securities and
     property  receivable  on  the  exercise  of  this  Warrant  after  the
     consummation  of  such  reorganization,  consolidation  or  merger  or the
     effective  date  of  dissolution  following any such transfer, as the case
     may  be,  and  shall  be  binding upon the issuer of any Other Securities,
     including,  in  the  case  of  any such transfer, the person acquiring all
     or  substantially  all  of  the  properties  or assets of the Company.  In
     the  event  this  Warrant  does  not  continue  in  full  force and effect
     after  the  consummation  of  the transaction described in this Section 2,
     then  only  in  such  event  will  the  Company's  securities and property
     (including  cash,  where  applicable)  receivable  by  the  Holder  of the
     Warrants  be  delivered  to  the  Trustee  as contemplated by Section 2.2.

3.   Extraordinary  Events  Regarding  Common  Stock.  In  the  event  that the
     Company  shall  (a)  issue  additional  shares  of  the  Common Stock as a
     dividend  or other distribution on outstanding Common Stock, (b) subdivide
     its  outstanding  shares  of  Common Stock, or (c) combine its outstanding
     shares  of  the Common Stock into a smaller number of shares of the Common
     Stock,  then, in each such event, the Purchase Price shall, simultaneously
     with  the  happening  of  such  event, be adjusted by multiplying the then
     Purchase  Price  by a fraction, the numerator of which shall be the number
     of  shares  of  Common  Stock  outstanding immediately prior to such event
     and  the  denominator  of  which  shall  be the number of shares of Common
     Stock  outstanding  immediately  after  such  event,  and  the  product so
     obtained  shall  thereafter  be  the  Purchase  Price  then in effect. The
     Purchase  Price,  as  so  adjusted, shall be readjusted in the same manner
     upon  the  happening  of  any  successive event or events described herein
     in  this  Section  3. The number of shares of Common Stock that the Holder
     of  this  Warrant  shall thereafter, on the exercise hereof as provided in
     Section  1,  be  entitled  to  receive  shall  be  adjusted  to  a  number
     determined  by  multiplying  the  number  of  shares  of Common Stock that
     would  otherwise  (but  for  the provisions of this Section 3) be issuable
     on  such exercise by a fraction of which (a) the numerator is the Purchase
     Price  that  would otherwise (but for the provisions of this Section 3) be
     in  effect, and (b) the denominator is the Purchase Price in effect on the
     date  of  such  exercise.

4.   Reservation  of  Stock,  etc.  Issuable  on Exercise of Warrant; Financial
     Statements.   The  Company  will  at all times reserve and keep available,
     solely  for  issuance  and  delivery  on the exercise of the Warrants, all
     shares  of  Common  Stock (or Other Securities) from time to time issuable
     on  the  exercise  of  the  Warrant.

<PAGE>

5.   Assignment;  Exchange  of  Warrant.  Subject to compliance with applicable
     securities  laws,  this  Warrant,  and the rights evidenced hereby, may be
     transferred  by  any  registered  holder  hereof  (a "Transferor"). On the
     surrender  for exchange of this Warrant, with the Transferor's endorsement
     attached  hereto  (the "Transferor Endorsement Form") and together with an
     opinion  of  counsel  reasonably  satisfactory  to  the  Company  that the
     transfer  of this Warrant will be in compliance with applicable securities
     laws,  the  Company,  twice,  only,  but with payment by the Transferor of
     any  applicable  transfer taxes, will issue and deliver to or on the order
     of  the Transferor thereof a new Warrant or Warrants of like tenor, in the
     name  of  the  Transferor  and/or  the  transferee(s)  specified  in  such
     Transferor  Endorsement  Form  (each  a  "Transferee"),  calling  in  the
     aggregate  on  the  face  or  faces  thereof  for  the number of shares of
     Common  Stock  called  for  on  the  face  or  faces  of  the  Warrant  so
     surrendered  by  the  Transferor.

6.   Replacement  of  Warrant.  On  receipt of evidence reasonably satisfactory
     to  the  Company  of  the  loss,  theft, destruction or mutilation of this
     Warrant  and,  in  the case of any such loss, theft or destruction of this
     Warrant,  on  delivery  of  an  indemnity agreement or security reasonably
     satisfactory  in  form  and  amount  to the Company or, in the case of any
     such  mutilation,  on  surrender  and  cancellation  of  this Warrant, the
     Company  at  the  Holder's  expense, twice only, will execute and deliver,
     in  lieu  thereof,  a  new  Warrant  of  like  tenor.

7.   Registration Rights.  The Company has not granted any registration  rights
     in connection   with  this   warrant.  Upon  exercise of the warrant,  the
     Holder will receive  unregistered  shares  of  common  stock.

8.   Warrant  Agent.  The  Company  may, by written notice to the Holder of the
     Warrant,  appoint  an agent (a "Warrant Agent") for the purpose of issuing
     Common  Stock  (or  Other  Securities)  on  the  exercise  of this Warrant
     pursuant  to  Section  1,  exchanging  this Warrant pursuant to Section 5,
     and  replacing  this  Warrant  pursuant  to  Section  6,  or  any  of  the
     foregoing,  and  thereafter  any  such  issuance, exchange or replacement,
     as  the  case  may be, shall be made at such office by such Warrant Agent.

9.   Transfer  on  the  Company's  Books.  Until this Warrant is transferred on
     the  books  of  the  Company,  the Company may treat the registered holder
     hereof  as  the  absolute  owner  hereof for all purposes, notwithstanding
     any  notice  to  the  contrary.

10.  Notices.  All  notices,  demands, requests, consents, approvals, and other
     communications  required  or  permitted hereunder shall be in writing and,
     unless  otherwise  specified  herein,  shall  be  (i)  personally  served,
     (ii)  deposited  in  the  mail,  registered  or  certified, return receipt
     requested,  postage  prepaid,  (iii)  delivered  by  reputable air courier
     service  with  charges  prepaid,  or  (iv)  transmitted  by hand delivery,
     telegram,  or  facsimile,  addressed  as  set forth below or to such other
     address  as  such  party  shall  have  specified  most recently by written
     notice.  Any  notice  or  other  communication  required  or  permitted to
     be  given  hereunder  shall  be deemed effective (a) upon hand delivery or
     delivery  by  facsimile,  with  accurate  confirmation  generated  by  the
     transmitting  facsimile machine, at the address or number designated below
     (if  delivered  on  a business day during normal business hours where such
     notice  is  to  be  received),  or  the  first business day following such
     delivery  (if  delivered  other  than  on  a  business  day  during normal
     business  hours  where such notice is to be received) or (b) on the second
     business  day  following  the  date of mailing by express courier service,
     fully  prepaid,  addressed to such address, or upon actual receipt of such
     mailing,  whichever  shall  first  occur.  The  addresses  for  such
     communications  shall  be:

<PAGE>

        (i)  if  to  the  Company  to:

            ON THE GO HEALTHCARE, INC.
            85 Corstate Ave., Unit #1
            Concord, Ontario, Canada L4K 4Y2
            Phone:  (905)  760-2987
            Fax:  (905)  660-5738

          with  a  copy  to:

            Amy  Trombly
            Trombly  Business  Law
            1320  Centre  Street,  Suite  202
            Newton,  Massachusetts  02459
            Phone:  (617)  243-0060
            Fax:  (617)  243-0066

       (ii)  if to  the  Holder,  to  the  address and fax number listed on the
            first  paragraph  of  this  Warrant.

11. Miscellaneous.  This  Warrant  and  any term hereof may be changed, waived,
    discharged  or  terminated  only  by an instrument in writing signed by the
    party  against  which  enforcement  of  such  change,  waiver, discharge or
    termination  is  sought.  This  Warrant  shall be construed and enforced in
    accordance  with  and  governed  by  the  laws  of  Delaware.  Any  dispute
    relating  to  this  Warrant  shall be adjudicated in the State of Delaware.
    The  headings  in  this  Warrant  are  for  purposes of reference only, and
    shall  not  limit  or  otherwise  affect  any  of  the  terms  hereof.  The
    invalidity  or  unenforceability  of  any  provision hereof shall in no way
    affect  the  validity  or  enforceability  of  any  other  provision.

    IN  WITNESS  WHEREOF,  the  Company  has  executed  this  Warrant as of the
    date  first  written  above.

     ON THE GO HEALTHCARE, INC.

     By:  /s/Stuart Turk
     --------------------
     Name:   Stuart Turk
     Title:  Chief Executive Officer

Witness:

<PAGE>

                                    EXHIBIT A

                          FORM OF ELECTION TO PURCHASE

    (To be executed by the Holder to exercise the right to purchase shares of
                    Common Stock under the foregoing Warrant)

To:  ON THE GO HEALTHCARE, INC.:

In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase ________ shares of Common
Stock ("Common Stock"), of ON THE GO HEALTHCARE, INC., and, through electronic
funds transfer,  wire  _______________  in  cash,  which  sum represents the
aggregate Exercise  Price (as  defined in the Warrant) for the number of shares
of Common Stock to which this  Form  of Election to Purchase relates, together
with any applicable  taxes  payable  by  the  undersigned  pursuant  to  the
Warrant.

The  undersigned  requests  that  certificates  for  the shares of Common Stock
issuable  upon  this  exercise  be  issued  in  the  name  of:

___________________________

 (please  print  name  and  address)

---------------------------------------
---------------------------------------
Social  Security  or  Tax  Identification  number

If the number of shares of Common Stock issuable upon this exercise shall not
be all of the shares of Common Stock which the undersigned is entitled to
purchase in accordance with the enclosed Warrant, the undersigned requests that
a New Warrant  (as defined in the Warrant) evidencing the right to purchase the
shares of Common Stock not issuable pursuant to the exercise evidenced hereby
be issued in  the  name  of  and  delivered  to:

_______________________________________________________________________________
(Please  print  name  and  address)

Dated:                         Name  of  Holder:

(By:)
(Name:)
(Title:)
(Signature  must conform  in all respects to name of holder as specified on the
face  of  the  Warrant)

<PAGE>

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