INVISA INC (Form: 8-K, Received: 01/13/2009 12:03:12)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 7, 2009

INVISA, INC.

(Exact name of registrant as specified in its charter)

Nevada	000-50081	65-1005398
(State or other jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

290 Cocoanut Street Suite 1A

Sarasota, Florida 34226

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code (941) 870-3950

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

3.02 Unregistered Sales of Equity Securities

Pursuant to agreements entered into in October 2008 with MAG Capital, LLC, Mercator Momentum Fund and Mercator Momentum Fund III (collectively the “Parties”) and as authorized by the Board of Directors on December 23, 2008, the Company issued on January 7, 2009 an aggregate of 6,628 shares of Series C Preferred Stock to the Parties in consideration for: (i) the repayment of $53,065 in principal and interest due under promissory notes previously issued by the Company and the redemption of 4,785 shares of Series A Preferred Stock and 1,000 shares of Series B Preferred Stock together with related accrued dividends held by the Parties. The securities were issued to an aggregate of three accredited investors pursuant to Rule 506. The securities are restricted as to transfer.

The shares of Series C Preferred Stock have the preferences and rights as set forth in the Certificate of Designation of Preferences and Rights attached as an Exhibit hereto. In summary the Series C Preferred Stock can be converted at any time into common stock at $0.12 per share subject to adjustment for certain events of recapitalization. The Series C Preferred Stock has a $100 per share liquidation preference in the event of liquidation, winding up or dissolution. The Series C Preferred stock participates, without preference, in dividends if and when declared. Except as otherwise provided by law, the Series C Preferred Stock does not have voting rights.

9.01 Financial Statements & Exhibits

Exhibits

10.64	October agreements with MAG entities
10.65	Designation of Rights of Series C

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	INVISA, INC.

Date: January 12, 2009	By:	/s/ Edmund C. King
		Edmund C. King
		Chief Financial Officer

Exhibit 10.64

NOTE AND SHARE EXCHANGE AGREEMENT

BY AND AMONG

MAG CAPITAL, LLC

MERCATOR MOMENTUM FUND

MERCATOR MOMENTUM FUND III,

MONARCH POINTE FUND, LTD.

ASSET MANAGERS INTERNATIONAL

AND

INVISA, INC.

DATED AS OF

THIS NOTE AND SHARE EXCHANGE AGREEMENT (the " Agreement ") is entered into, by and among Invisa, Inc., a Nevada corporation (the " Company "), MAG Capital, LLC, Mercator Momentum Fund, Mercator Momentum Fund III, Monarch Pointe Fund, Ltd., and Asset Managers International (collectively, the " Stockholders ").

RECITALS

WHEREAS, as of the date hereof, the Stockholders own of record and beneficially an aggregate of (i) 14,500 shares of the Series A Convertible Preferred Stock, par value $ 100 per share, of the Company (the " Series A Shares "), (ii) 10,000 shares of Series B Convertible Preferred Stock, par value $ 100 per share, of the Company (“ Series B Shares ”) and (iii) $128,337.00 principal amount of Notes of the Company ( the “Notes”; the Series A Shares, Series B Shares and the Notes being collectively referred to as the “MAG Holdings ”); and

WHEREAS, the Company and the Stockholders believe it is in the best interest of the Company and each Stockholder to affect an exchange of the MAG Holdings for shares of Series C Convertible Preferred Stock, $100 par value, of the Company (the " Series C Preferred Stock ").

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises hereinafter set forth, and intending to be legally bound thereby, the parties hereto agree as follows:

1. Definitions.

The following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

" Entity " shall mean any corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, cooperative, foundation, society, political party, union, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization or entity.

" Governmental Body " shall mean any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction; (b) federal, state, local, municipal or foreign government (including any agency, department, bureau, division, or other administrative body thereof); or (c) governmental or quasi-governmental authority of any nature.

" Person " shall mean any individual, Entity or Governmental Body.

" Proceeding " shall mean any action, suit, litigation, arbitration, or investigation (including any civil, criminal or administrative) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Body or any arbitrator or arbitration panel.

2. Exchange.

2.1 Authorization of Shares. On or prior to the Closing (as defined below), the Company shall have authorized the issuance of the Series C Preferred Stock in the amounts and to the Stockholders identified on Exhibit A attached hereto (the " Allocation "). The Series C Preferred Stock shall have the rights, preferences, privileges and restrictions set forth in the Certificate of Designation attached hereto as Exhibit B (the Certificate of Designation ").

2.2 Exchange . Subject to the terms and conditions set forth in this Agreement, effective at the Closing, each Stockholder will transfer and convey to the Company the MAG Holdings held by such Shareholder. In consideration of the transfer and conveyance of MAG Holdings referred to in the immediately preceding sentence, at the Closing (i) the Company shall issue and deliver to each Stockholder and each Stockholder shall accept and receive from the Company, the whole number of fully paid and non-assessable shares of Series C Preferred Stock set forth opposite such Stockholders name in Exhibit A hereto.

3. Closing and Delivery.

3.1 Closing. The closing of the Exchange (the " Closing ") shall take place, at the offices of the Company on such date and at such time as the parties hereto shall agree (the " Closing Date ").

3.2 Delivery. Subject to the terms and conditions hereof, the Company will deliver the shares of Series C Preferred Stock at the Closing, in each case in the amounts and to the Stockholders as set forth on Exhibit A hereto, by delivery of a certificate or certificates evidencing the shares of the Series C Preferred Stock, free and clear of all liens, claims, and encumbrances (collectively, an " Encumbrance "), and each Stockholder will deliver the MAG Holdings to be delivered by such Stockholder at the Closing, in each case in the amounts and by the Stockholders as set forth on Exhibit A hereto, by delivery of the certificate or certificates representing the shares of Series A Stock or Series B Stock, as the case may be, and/or the original executed Notes to be exchanged for the shares of Series C Preferred Stock at the Closing, free and clear of all Encumbrances.

4. Representations and Warranties of the Stockholders.

Each Stockholder hereby, severally and not jointly, represents and warrants to the Company as follows:

4.1 Requisite Power; Authorization; Binding Obligations. Such Stockholder has all requisite power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement. All action on such Stockholder's part necessary for the authorization, execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the performance of all obligations of such Stockholder hereunder has been or will be taken prior to the Closing. This Agreement, when executed and delivered, will be valid and binding obligations of such Stockholder enforceable against it in accordance with their terms, except as limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights, and (b) general principles of equity that restrict the availability of equitable remedies.

4.2 Investment Representations. Such Stockholder understands that neither the shares of the Series C Preferred Stock, nor the Common Stock to which it is convertible into, have been registered under the Securities Act of 1933, as amended (the "Securities Act"). Such Stockholder also understands that the shares of Series C Preferred Stock are being offered pursuant to an exemption from registration contained in the Securities Act based in part upon such Stockholder's following representations and warranties:

(a) Stockholder Bears Economic Risk. Such Stockholder has substantial experience in evaluating and investing in private placement transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests. Such Stockholder understands that it must bear the economic risk of this investment indefinitely unless the shares of Series C Preferred Stock are registered pursuant to the Securities Act, or an exemption from registration is available. Such Stockholder understands that the Company has no present intention of registering the shares of Series C Preferred Stock or any shares of its Common Stock to which it converts. Such Stockholder also understands that there is no assurance that any exemption from registration under the Securities Act will be available and that, even if available, such exemption may not allow such Stockholder to transfer all or any portion of the shares of Series C Preferred Stock under the circumstances, in the amounts or at the times such Stockholder might propose.

(b) Acquisition for Own Account. Such Stockholder is acquiring the shares of Series C Preferred Stock for its own account for investment only, and not with a view towards their distribution.

(c) Each Stockholder Can Protect Its Interest. Such Stockholder represents that by reason of its, or of its management's, business or financial experience, such Stockholder has the capacity to protect its own interests in connection with the transactions contemplated in this Agreement. Further, such Stockholder is aware of no publication of any advertisement in connection with the transactions contemplated in this Agreement.

(d) Accredited or Regulation S Eligible Investor. Such Stockholder is an "accredited investor" within the meaning of Regulation D under the Securities Act, or is not a "U.S. Person" within the meaning of Regulation S under the Securities Act.

(e) Company Information. Such Stockholder has had an opportunity to discuss the Company's business, management and financial affairs with directors, officers and management of the Company and has had the opportunity to review the Company's operations and facilities and public filings. Such Stockholder has also had the opportunity to ask questions of and receive answers from the Company and its management regarding the terms and conditions of this investment.

4. 3 Ownership of Shares of Common Stock. Such Stockholder represents that the MAG Holdings held by such Stockholder as set forth on Exhibit A hereto are owned of record and beneficially by such Stockholder, free and clear of any Encumbrances, and such Stockholder has the full and unrestricted right, power and authority to transfer such holdings to the Company.

5. Representations and Warranties of the Company.

The Company hereby represents and warrants to each Stockholder as of the date of this Agreement and the Closing Date as follows:

5.1 Requisite Power; Authorization; Binding Obligations. The Company has all requisite power and authority to execute and deliver this Agreement and to carry out the provisions of this Agreement. All corporate action on the part of the Company, its officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement, the consummation of the transactions contemplated hereby, and the performance of all obligations of the Company hereunder has been or will be taken prior to the Closing. This Agreement, when executed and delivered, will be valid and binding obligations of the Company enforceable against it in accordance with their terms, except as limited by (a) applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement of creditors' rights, and (b) general principles of equity that restrict the availability of equitable remedies.

5.2 Valid Issuance. When issued at the Closing in accordance with the provisions of this Agreement and the Certificate of Designation, the shares of Series C Preferred Stock will be duly authorized, validly issued, fully paid and non-assessable, will be delivered free and clear of any Encumbrances, and will have the rights, preferences, privileges and restrictions set forth in the Certificate of Designation; provided, however, that such shares of Series C Preferred Stock may be subject to restrictions on transfer under state or federal securities laws or as otherwise required by such laws at the time a transfer is proposed.

6. Conditions to Closing.

6.1 Conditions to Obligation of Each Stockholder. Each Stockholder's obligation to accept the issuance of the shares of Series C Preferred Stock and to deliver the MAG Holdings at the Closing is subject to the satisfaction, at or prior to the Closing Date, of the following conditions:

(a) Performance of Obligations. The Company shall have performed all obligations and conditions herein required to be performed or observed by it on or prior to the Closing Date.

(b) Representations and Warranties True. The representations and warranties made by the Company in Section 5 hereof shall be true and correct in all material respects as of the Closing Date with the same force and effect as if they had been made on and as of the Closing Date.

6.2 Conditions to Obligations of the Company. The Company's obligation to issue and deliver the shares of Series C Preferred Stock for the MAG Holdings at the Closing is subject to the satisfaction, at or prior to the Closing Date, of the following conditions:

(a) Performance of Obligations. Each Stockholder shall have performed all obligations and conditions herein required to be performed or complied with by it on or prior to the Closing Date.

(b) Representations and Warranties True. The representations and warranties made by each Stockholder in Section 4 hereof shall be true and correct in all material respects as of the Closing Date with the same force and effect as if they had been made on and as of the Closing Date.

7. Miscellaneous.

7.1 Governing Law. This Agreement shall be construed in accordance with, and governed in all respects by, the internal laws of the State of Nevada (without giving effect to principles of conflicts of laws).

7.2 Survival. The representations, warranties, covenants and agreements made herein shall survive any investigation made by any Stockholder and the closing of the transactions contemplated hereby. All statements as to factual matters contained in any certificate or other instrument delivered by or on behalf of the Company pursuant hereto in connection with the transactions contemplated hereby shall be deemed to be representations and warranties by the Company hereunder solely as of the date of such certificate or instrument.

7.3 Successors and Assigns; Assignment. Each and all of the covenants, terms, provisions, and agreements contained in this Agreement shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Agreement, their respective successors and assigns. Neither the Company nor any Stockholder may assign their respective rights or obligations under this Agreement (by operation of law or otherwise) to any Person without the prior written consent of the parties.

7.4 Entire Agreement. This Agreement and the exhibits hereto, and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement between the parties with regard to the subjects hereof, and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.

7.5 Severability. In the event that any provision of this Agreement, or the application of any such provision to any Person or set of circumstances, shall be determined to be invalid, unlawful, void or unenforceable to any extent, the remainder of this Agreement, and the application of such provision to entities or circumstances other than those as to which it is determined to be invalid, unlawful, void or unenforceable, shall not be impaired or otherwise affected and shall continue to be valid and enforceable to the fullest extent permitted by law.

7.6 Amendment. This Agreement may not be amended, modified, altered or supplemented without the written consent of the Company and each Stockholder.

7.7 Waiver.

(a) No failure on the part of any Person to exercise any power, right, privilege or remedy under this Agreement, and no delay on the part of any Person in exercising any power, right, privilege or remedy under this Agreement, shall operate as a waiver of such power, right, privilege or remedy; and no single or partial exercise of any such power, right, privilege or remedy shall preclude any other or further exercise thereof or of any other power, right, privilege or remedy.

(b) No Person shall be deemed to have waived any claim arising out of this Agreement, or any power, right, privilege or remedy under this Agreement, unless the waiver of such claim, power, right, privilege or remedy is expressly set forth in a written instrument duly executed and delivered on behalf of such Person; and any such waiver shall not be applicable or have any effect except in the specific instance in which it is given.

7.8 Notices. All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery to the party to be notified; (b) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient, if not, then on the next business day; (c) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one business day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All communications shall be sent to the addresses set forth below:

If to the Company:

If to Stockholders:

7.9 Remedies Cumulative; Specific Performance. The rights and remedies of the parties hereto shall be cumulative (and not alternative). The parties hereto agree that: (a) in the event of any breach or threatened breach by any party of any covenant, obligation or other provision set forth in this Agreement, the other parties shall be entitled (in addition to any other remedy that may be available to it) to (i) a decree or order of specific performance or mandamus to enforce the observance and performance of such covenant, obligation or other provision, and (ii) an injunction restraining such breach or threatened breach; and (b) such other parties shall not be required to provide any bond or other security in connection with any such decree, order or injunction or in connection with any related action or Proceeding.

7.10 Further Assurances.

Each party hereto shall execute and/or cause to be delivered to each other party hereto such instruments and other documents, and shall take such other actions, as such other party may reasonably request (prior to, at or after the Closing) for the purpose of carrying out or evidencing any of the transactions contemplated hereby.

7.1 1 Construction; Interpretation. For purposes of this Agreement, whenever the context requires: the singular number shall include the plural, and vice versa; the masculine gender shall include the feminine and neuter genders; the feminine gender shall include the masculine and neuter genders; and the neuter gender shall include the masculine and feminine genders.

(b) The parties hereto agree that any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the construction or interpretation of this Agreement.

(d) As used in this Agreement, the words "include" and "including," and variations thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed by the words "without limitation."

(e) Except as otherwise indicated, all references in this Agreement to " Sections " and " Exhibits " are intended to refer to Sections of this Agreement and Exhibits to this Agreement.

7.1 2 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the first paragraph hereof.

MAG Capital, LLC		Mercator Momentum Fund

/s/ David Firestone		/s/ David Firestone
Name: David Firestone		Name: David Firestone
Title: Managing Partner		Title: Managing Partner



Mercator Momentum Fund III		Monarch Pointe Fund, LTD

/s/ David Firestone		(Not Executed)
Name: David Firestone		Name:
Title: Managing Partner		Title:



Asset Managers International		Invisa, Inc.

(Not Executed)		/s/ Edmund C. King
Name:		Name: Edmund C. King
Title:		Title: Acting President

EXHIBIT A

RECAPITALIZATION ALLOCATION

STOCKHOLDER	HOLDINGS TO BE EXCHANGED	SERIES C PREFERRED STOCK TO BE ISSUED AT CLOSING
MAG CAPITAL LLC	$ 34,895.00 NOTES $ 5,971 Accrued and Unpaid Interest*	409 SERIES C PREFERRED STOCK
MERCATOR MOMENTUM FUND	4,785 SERIES A PREFERRED STOCK	4,785 SERIES C PREFERRED STOCK
MERCATOR MOMENTUM FUND III	1,000 SERIES B PREFERRED STOCK $25,125 Accrued and Unpaid Dividends+ $ 8,868 NOTES $ 1,548 Accrued and Unpaid Interest*	1,355 SERIES C PREFERRED STOCK
MONARCH POINTE FUND, LTD.	9,715 SERIES A PREFERRED STOCK 2,000 SERIES B PREFERRED STOCK $50,250 Accrued and Unpaid Dividends+ $85,074 NOTES $14,596Accrued and Unpaid Interest*	13,214. SERIES C PREFERRED STOCK
ASSET MANAGERS INTERNATIONAL	7000 SERIES B PREFERRED STOCK $175,875 and Unpaid Dividend+	8,759 SERIES C PREFERRED STOCK
TOTAL	14,500 Series A Preferred Stock 10,000 Series B Preferred Stock $251,250 Accrued unpaid dividends+ $128,837 Notes $22,115. Accrued and Unpaid Interest*	Aggregate of 28,522 Shares of Series C Preferred Stock

* As of June 30, 2008 + As of July 31, 2008

E XHIBIT B

FORM OF

CERTIFICATE OF DESIGNATION

SERIES C CONVERTIBLE PREFERRED STOCK

Exhibit 10.65

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS
OF
SERIES C CONVERTIBLE PREFERRED STOCK
OF
INVISA, INC.
a Nevada corporation

The undersigned, Edmund C. King, certifies that:

1. He is the duly acting President of Invisa, Inc., a corporation organized and existing under the Corporation Code of the State of Nevada (the "CORPORATION").

2. Pursuant to authority conferred upon the Board of Directors by the Certificate of Incorporation of the Corporation, and pursuant to the provisions of the Corporations Code of the State of Nevada, said Board of Directors, pursuant to a meeting held on December 22, 2008, adopted a resolution establishing the rights, preferences, privileges and restrictions of, and the number of shares comprising, the Corporation's Series C Convertible Preferred Stock, which resolution is as follows:

RESOLVED, that a series of Preferred Stock in the Corporation, having the rights, preferences, privileges and restrictions, and the number of shares constituting such series and the designation of such series, set forth below be, and it hereby is, authorized by the Board of Directors of the Corporation pursuant to authority given by the Corporation's Certificate of Incorporation.

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines , the number of shares constituting, and the rights, preferences, privileges and restrictions relating to, a new series of Preferred Stock as follows:

(a) Determination. The series of Preferred Stock is hereby designated Series C Convertible Preferred Stock (the "SERIES C PREFERRED STOCK").

(b) Authorized Shares. The number of authorized shares constituting the Series C Preferred Stock shall be Fifty Thousand (50,000)shares of such series.

(c) Dividends. The holder of the Series C Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends as may be declared from time to time by the Board of Directors. Nothing herein shall obligate or require the Board of Directors to declare a dividend for the Series C Preferred Stock.

(d) Liquidation Preference.

(1) Preference upon Liquidation, Dissolution or Winding Up. In the event of any dissolution or winding up of the Corporation, whether voluntary or involuntary, holders of each outstanding share of Series C Preferred stock shall be entitled to be paid first out of the assets of the Corporation available for distribution to shareholders, whether such assets are capital, surplus or earnings, an amount equal to $100.00 (the "SERIES C PURCHASE PRICE") per share of Series C Preferred Stock held (as adjusted for any stock splits, stock

dividends or recapitalizations of the Series C Preferred Stock) and any declared but unpaid dividends on such share, before any payment shall be made to the holders of the Common Stock, or any other stock of the Corporation ranking junior to the Series C Preferred Stock with regard to any distribution of assets upon liquidation, dissolution or winding up of the Corporation. The holders of the Series C Preferred Stock shall be entitled to share ratably, in accordance with the respective preferential amounts payable on such stock, in any distribution which is not sufficient to pay in full the aggregate of the amounts payable thereon. If, upon any liquidation, dissolution or winding up of the Corporation, the assets to be distributed to the holders of the Series C Preferred Stock shall be insufficient to permit payment to such shareholders of the full preferential amounts aforesaid, then all of the assets of the Corporation available for distribution to shareholders shall be distributed to the holders of Series C Preferred Stock. Each holder of the Series C Preferred Stock shall be entitled to receive that portion of the assets available for distribution as the number of outstanding shares of Series C Preferred Stock held by such holder bears to the total number of shares of series C Preferred Stock. Such payment constitute payment in full to the holders of the Series C Preferred Stock upon the liquidation, dissolution or winding up of the Corporation. After such payment shall have been made in full, or funds necessary for such payment shall have been set aside by the Corporation in trust for the account of the holders of Series C Preferred Stock, so as to be available for such payment, such holders of Series C Preferred Stock shall be entitled to no further participation in the distribution of the assets of the Corporation.

(ii) Consolidation, Merger and Other Corporate Events. A consolidation or merger of the Corporation (except into or with a subsidiary or affiliated corporation) or a sale. lease, mortgage, pledge, exchange, transfer or other disposition of all or substantially all of the assets of the Corporation or any reclassification of the stock of the Corporation (other than a change in par value or from no par to par, or from par to no par or as the result of an event described in subsection (iv), (v), (vi) or (viii) of paragraph (f)), shall be regarded as a liquidation, dissolution or winding up of the affairs of the Corporation within the meaning of this paragraph (d), provided, however, in the case of a merger, if (a) the Corporation is the surviving entity. (b) the Corporation's shareholders hold a majority of the shares of the surviving entity, and (c) the Corporation's directors hold a majority of the seats on the board of directors of the surviving entity, then such merger shall not be regarded as a liquidation, dissolution or winding up within the meaning of this paragraph (d). In no event shall the issuance of new classes of stock, whether senior, junior or on a parity with the Series C Preferred Stock, or any stock splits, be deemed a "reclassification" under or otherwise limited by the terms hereof.

(iii) Distribution of Cash and Other Assets. In the event of a liquidation, dissolution or winding up of the Corporation resulting in the availability of assets other than cash for distribution to the holders of the Series C Preferred Stock, the holders of Series C Preferred Stock shall be entitled to a distribution of cash and/or assets equal liquidation preference stated in subsection (i) of this paragraph (d), which valuation shall be made solely by the Board of Directors, and provided that such Board of Directors was acting in good faith, shall be conclusive.

(iv) Distribution to Junior Security Holders. After the payment or distribution to the holders of the Series C Preferred Stock of the full preferential amounts aforesaid, the holders of Series C Preferred Stock shall have no further rights in respect at such Series C Stock which shall become null and void, and the holders of the Common Stock then outstanding, or any other stock of the Corporation ranking as to assets upon liquidation, dissolution or winding up of the Corporation junior to the Series C Preferred stock, shall be entitled to receive ratably all of the remaining assets of the Corporation.

(v) Preference; Priority. References to a stock that is "SEN1OR" to, on a "PARITY" with or "JUNIOR" to other stock as to liquidation shall refer, respectively, to rights of priority of one series or class stock over another in the distribution of assets on any liquidation, dissolution or winding up of the Corporation. The Series C Preferred Stock shall be senior to the Common Stock of the Corporation and senior to any subsequent series of Preferred Stock issued by the Corporation.

(e) Voting Rights. Except as otherwise required by law, the holder of shares of Series C Preferred Stock shall not have the right to vote on matters that come before the shareholders.

(f) Conversion Rights. The holders of Series C Preferred Stock will have the following conversion rights:

(i) Right to Convert. Subject to and in compliance with the provisions of this paragraph (f), any issued and outstanding series of Series C Preferred Stock shall automatically be converted by the Corporation, at any time or from time to time into fully paid and non-assessable shares of Common Stock at the conversion rate in effect at the time of conversion, determined as provided herein; provided that a holder of Series C Preferred Stock may at any given time be required to convert up to that numbrer of shares of Series C Preferred Stock so that, upon conversion, the aggregate beneficial ownership of the Corporation's Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended) of such holder and all persons affiliated with such holder is not more than 9.99% of the Corporation's Common Stock then outstanding (the "Conversion Threshold").

(ii) Mechanics of Conversion. Upon the determination by the Corporation that any holder has fallen below the Conversion Threshold, the Corporation may automatically convert such number of shares of the Series C Preferred Stock which may equal, but shall not exceed the Conversion Threshold, by the conversion of such number of Series C Preferred Stock, that equals such number of Common Stock as such holder shall be entitled. Upon notification of an automatic conversion hereunder by the Corporation to a holder, each holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for the Common Stock, and the Corporation shall give written notice to the transfer agent to convert the same and shall state therin the number of shares of Series C Preferred Stock being converted. Thereupon, the Corporation shall promptly issue and deliver at such office to such holder of Series C Preferred Stock a certificate or certificates for the number of shares of Common Stock to which he shall be entitled, not to exceed the Conversion Threshold and, if applicable, a certificate or certificates for the number of shares Series C Preferred Stock existing immediately after an automatic conversion Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of Series C Preferred Stock to be converted, and the person or persons entitled to receive the shares of common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on such date.

(iii) Conversion Price. The number of shares into which one share of Series C Preferred Stock shall be convertible shall be determined by dividing the Series C Purchase Price by $0.12 (hereinafter, the "Conversion Price")

(iv) Adjustment for Stock Splits and Combinations. If the Corporation shall at any time, or from time to time after the date shares of the Series C Preferred Stock are first issued (the "ORIGINAL ISSUE DATE"), effect a subdivision of the outstanding Common Stock, the Conversion Price in effect immediately prior thereto shall be proportionately decreased, and conversely, if the Corporation shall at any time or from time to time after the Original Issue Date combine the outstanding shares of Common Stock, the Conversion Price then in effect immediately before the combination shall be proportionately increased. Any adjustment under this paragraph (f)(iv) shall become effective at the close of business on the date the subdivision or combination becomes effective.

(v) Adjustment for Certain Dividends and Distributions. In the event the Corporation at any time, or from time to time after the Original Issue Date, shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in additional shares of Common Stock, then and in each such event the Conversion Price then in effect shall be decreased as of the time of such issuance or, in the event such a record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion Price then in effect by a fraction:

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

(B) the denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of such dividend or distribution; provided, however, if such record date shall have been fixed and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Price shall be recomputed accordingly as of the close of business on such record date and thereafter, the Conversion Price shall be adjusted pursuant to this paragraph (f)(v) as of the time of actual payment of such dividends or distributions.

(vi) Adjustments for Other Dividends and Distributions. In the event the Corporation at any time or from time to time after the Original Issue Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation other than shares of Common Stock, then and in each such event provision shall be made so that the holders of such Series C Preferred Stock shall receive upon conversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation that they would have received had their Series C Preferred Stock been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities receivable by them as aforesaid during such period giving application to all adjustments called for during such period under this paragraph (f) with respect to the rights of the holders of the Series C Preferred Stock.

(vii) Adjustment for Reclassification Exchange or Substitution. If the Common Stock issuable upon the conversion of the Series C Preferred Stock shall be changed into the same or a different number of shares of any class or classes of stock, whether by capital reorganization, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided

for above, or a reorganization, merger, consolidation or sale of assets provided for elsewhere in this paragraph (f)), then and in each such event the holder of each share of Series C Preferred Stock shall have the right thereafter to convert such share into the kind and amount of shares of stock and other securities and property receivable upon such reorganization, reclassification or other change, by holders of the number of shares of Common Stock into which such shares of Series C Preferred Stock might have been converted immediately prior to such reorganization, reclassification, or change, all subject to further adjustment as provided herein.

(viii) Reorganization, Mergers, Consolidations or Sales of Assets. If at any time or from time to time there shall be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this paragraph (f) or a merger or consolidation of the Corporation with or into another corporation, or the sale of all or substantially all of tide Corporation's properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the holders of the Series C Preferred Stock shall thereafter be entitled to receive upon conversion of such Series C Preferred Stock, the number of shares of stock or other securities or property of the Corporation or of the successor corporation resulting from such merger or consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled on such capital reorganization, merger, consolidation or sale. In any such case, appropriate adjustment shall be made in the application of the provisions of this paragraph (f) with respect to the rights of the holders of the Series C Preferred Stock after the reorganization, merger, consolidation or sale to the and that the provisions of this paragraph
(f) (including adjustment of the Conversion Price then in effect and the number of shares purchasable upon conversion of the Series C Preferred Stock) shall be applicable after that event as nearly equivalent as may be practicable.

(ix) Sale of Common Stock or Securities Convertible Into Common Stock. In the event the Corporation sells or issues Common Stock or other securities convertible into or exercisable for Common Stock at a per share price, exercise price or conversion price lower than the Conversion Price then in effect (other than in connection with an acquisition of the securities, assets or business of another company, licensing, partnership, technology transfer, marketing alliance, joint ventures or employee, director, officer, or consultant issuances or stock options), the Conversion Price shall be subject to weighted average anti-dilution adjustments.

(x) Certificate of Adjustment. In each case of an adjustment or readjustment of the Conversion Price or the securities issuable upon conversion of the Series C Preferred Stock, the Corporation shall compute such adjustment or readjustment in accordance herewith and the Corporation's Chief Financial Officer shall prepare and sign a certificate showing such adjustment or readjustment, and shall mail such certificate by first class mail, postage prepaid, to each registered holder of the Series C Preferred Stock at the holder's address as shown in the Corporation's books. The certificate shall set forth such adjustment or readjustment, showing in detail the facts upon which such adjustment or readjustment is based.

(xi) Notices of Record Date. In the event of (A) any taking by the Corporation of a record of the holders of any class or series of securities for the purpose of determining the holders thereof who are entitled to receive any dividend or other distribution or (B) any reclassification or recapitalization of the capital stock of the Corporation, any merger or consolidation of the

Corporation or any transfer of all or substantially all of the assets of the Corporation to any other Corporation, entity or person, or any voluntary or involuntary dissolution, liquidation or winding up of the Corporation, the Corporation shall mail to each holder of Series C Preferred Stock at least 10 days prior to the record date specified therein, a notice specifying (1) 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, (2) the date on which any such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up is expected to become effective and (3) the time, if any is to be fixed, as to when the holders of record of Common Stock (or other securities) shall be entitled to exchange their shares, of Common Stock (or other securities) for securities or other Property deliverable upon such reorganization, reclassification, transfer, consolidation, merger, dissolution, liquidation or winding up.

(xii) Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series C Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Corporation shall round the sharps up to the nearest whole number.

(xiii) Reservation of Stock Issuable Upon Conversion. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of effecting the conversion of the shares of the Series C Preferred Stock, up to Forty One Million, Six Hundred Fifty Thousand (41,670,000) shares of Common Stock, but in no event less than the aggregate number of authorized but unissued shares sufficient to effect the conversion of all then outstanding shares of Series C Preferred Stock and if at any time the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Series C Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose.

(xiv) Notices. Any notice required by the provisions of this paragraph
(f) to be given to the holders of shares of Series C Preferred Stock shall be deemed given (A) if deposited in the United States mail, postage prepaid, or (B) if given by any other reliable or generally accepted means (including by facsimile or by a nationally recognized overnight courier service), in each case addressed to each holder of record at his address (or facsimile number) appearing on the books of the Corporation.

(xv) Payment of Taxes. The Corporation will pay all transfer taxes and other governmental charges that may be imposed in respect of the issue or delivery of shares of Common Stock upon conversion of shares of Series C Preferred Stock.

(g) No Re-issuance of Preferred Stock. Any shares of Series C Preferred Stock acquired by the Corporation by reason of purchase, conversion or otherwise shall be canceled, retired and eliminated from the shares of Series C Preferred Stock that the Corporation shall be authorized to issue. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock and may be reissued as part of a new series of Preferred Stock subject to the

conditions and restrictions on issuance set forth in the Articles of Incorporation or in any certificate of designation creating a series of Preferred Stock or any similar stock or as otherwise required by law.

(h) Severability. If any right, preference or limitation of the Series C Preferred Stock set forth herein is invalid, unlawful or incapable of being enforced by reason of any rule, law or public policy, all other rights, preferences and limitations set forth herein that can be given effect without the invalid, unlawful or unenforceable right, preference or limitation shall nevertheless remain in full force and effect, and no right, preference or limitation herein shall be deemed dependent upon any other such right, preference or limitation unless so expressed herein.

3. The number of authorized shares of Preferred Stock of the Corporation is 5,000,000 and the number of shares of Series C Preferred Stock, none of which has been issued, is 50,000.

The undersigned declares under penalty of perjury that the matters set out in the foregoing Certificate are true of his own knowledge. Executed at Sarasota, Florida on this 22 day of December, 2008.

/s/ Edmund C. King
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Print Name: Edmund C. King
Title: President and Chief Executive Officer