AIMS WORLDWIDE, INC. SERIES B PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

Warrant Agreement

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AIMS WORLDWIDE, INC | FG Investment Holdings, LLC

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Title: AIMS WORLDWIDE, INC. SERIES B PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
Governing Law: New York Date: 7/10/2008
Law Firm: Finnegan Henderson

Exhibit 10

AIMS WORLDWIDE, INC.

SERIES B PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

July 8 ^th , 2008

AIMS WORLDWIDE, INC.

SERIES B PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

This Series B Preferred Stock and Warrant Purchase Agreement (the “Agreement”) is made as of July 8 ^th , 2008 by and between AIMS Worldwide, Inc., a Nevada corporation (the “Company”) and FG Investment Holdings, LLC, a Delaware limited liability company (“Purchaser”).

The parties hereby agree as follows:

Purchase and Sale of Preferred Stock.

1.1

Sale and Issuance of Series B Preferred Stock and Warrants.

(a) The Company has, or before the Initial Closing (as defined in Section 2) will have, duly authorized the sale and issuance, pursuant to the terms of this Agreement, of up to 5,000,000 shares of Series B Convertible Preferred Stock, $.001 par value per share (the "Series B Preferred"), having the rights, privileges, preferences and restrictions set forth in the Amendment to Certificate of Designations of Preferences, Rights and Limitations of Preferred Stock attached hereto as Exhibit A (the "Series B Preferred Stock Designation"). The Company has, or before the Closing will have, adopted and filed the Series B Preferred Stock Designation with the Secretary of State of the State of Nevada.

(b) Subject to the terms and conditions of this Agreement, Purchaser agrees to purchase at the Initial Closing (as hereinafter defined) and the Company agrees to sell and issue to Purchaser at the Initial Closing 93,750 shares of Series B Convertible Preferred Stock at a purchase price of $1.60 per share (the “Series B Per Share Price) or One Hundred and Fifty Thousand and 00/100 dollars ($150,000), together with a warrant in the form attached hereto as Exhibit B to purchase 6,000,000 shares of Common Stock at a price per share of Common Stock of $0.352, subject to adjustment as set forth in the warrant (the “B-1 Warrant”), (the “Initial Closing”) (Disclosure Schedule 1.1(b)). The shares of Series B Convertible Preferred Stock and the warrant(s) issued to the Purchaser pursuant to this Agreement at the Initial Closing, and each subsequent Closing, shall be hereinafter referred to as the “Stock” and the “Warrants,” respectively, and the shares of Common Stock issuable upon exercise of the Warrants shall be hereinafter referred to as the “Warrant Stock.” The Stock, the Warrants, the Warrant Stock, and the Common Stock issuable upon conversion of the Stock shall be hereinafter referred to as the “Securities.”

1.2

Closing; Delivery.

(a) The Initial Closing shall take place at the offices of Gregory & Plotkin, LLC, 1331 17 ^th Street, Suite 1060, Denver, CO 80202, at 10:00 a.m., on or before July 8 ^th , 2008, or at such other time and place as the Company and the Purchaser mutually agree upon, orally or in writing.

(b) Second Closing. Upon achievement of the Second Tranche Milestone, as defined below, (the “Second Closing”), Purchaser shall purchase and the Company shall issue and sell 1,406,250 shares of Series B Convertible Preferred Stock to Purchasers for a purchase price of $1.60 per share or Two Million Two Hundred Fifty Thousand and 00/100 ($2,250,000.00) in total (the “Second Tranche Shares”) together with a warrant in the form attached hereto as Exhibit C to purchase 21,875,000 shares of Common Stock with an exercise price of $0.50 per share subject to adjustment as set forth in the warrant (the “B-2 Warrant”). The Company shall promptly notify Purchaser in writing upon either (i) its achievement of the Second Tranche Milestone (“Achievement Notice”), or (ii) its failure, on or before September 30, 2008 (or such earlier or later date as the parties shall mutually agree), to achieve the Second Tranche Milestone (“Failure Notice”). Upon receipt of a Failure Notice, Purchaser shall have 30 days within which to notify the Company whether Purchaser elects to consummate the Second Tranche investment notwithstanding the failure to meet one or both of the conditions imposed by the Second Tranche Milestone (the “Waiver Notice”). The Second Closing shall occur within ten (10) Business Days of the Achievement Notice or the Waiver Notice, as the case may be. As used herein, the term “Second Tranche Milestone” shall mean satisfaction of all the following conditions as determined in the sole discretion of the Purchaser: i) the Initial Closing has been fully consummated; and ii) the trading price of the Company’s common stock (based on a prior 15 day VWAP of the closing bid price) must be equal to or greater than $1.00.

(c) Third Closing. Upon achievement of the Third Tranche Milestone, as defined below, (the “Third Closing”), Purchaser shall purchase and the Company shall issue and sell 1,312,500 convertible shares of Series B Convertible Preferred Shares to Purchaser for a purchase price of $1.60 per share or Two Million One Hundred Thousand and 00/100 ($2,100,000.00) in total) (the “Third Tranche Shares”). The Company shall promptly notify Purchaser in writing upon either (i) its achievement of the Third Tranche Milestone (“Third Tranche Achievement Notice”); or (ii) its failure, on or before December 31, 2010 to achieve the Third Tranche Milestone (“Third Tranche Failure Notice”). Upon receipt of a Third Tranche Failure Notice, Purchaser shall have 30 days within which to notify the Company whether Purchaser shall consummate the Third Tranche investment notwithstanding the failure to meet one or more of the conditions imposed by the Third Tranche Milestone (the “Third Tranche Waiver Notice”). The Third Closing shall occur within ten (10) Business Days of the Third Tranche Achievement Notice or the Third Tranche Waiver Notice, as the case may be. As used herein, the term “Third Tranche Milestone” shall mean satisfaction of all the following conditions as determined in the sole discretion of the Purchaser: (i) both the Initial Closing and the Second Closing have been fully consummated, (ii) the trading price of the Company’s common stock (based on a prior 15 day VWAP of the closing bid price) must be equal to or greater than $1.00, and (iii) the Company’s Consolidated EBITDA shall equal or exceed $500,000 for the two most recent consecutive calendar quarters ending prior to the date of the Third Closing (the “Testing Period”), and shall be projected by the Company to equal or exceed $750,000 per calendar quarter (which projections shall be inclusive of any Person acquired by the Company during the Testing Period, or any Person to be acquired by the Company with proceeds from the Third Closing on or shortly after the Third Closing). The Company shall pay a fee to the Purchaser in the amount of Four Hundred Fifty Thousand and 00/100 Dollars ($450,000.00) simultaneously with the consummation of the Third Closing (the “Third Closing Fee”).

(d) At each closing, the Company shall deliver to Purchaser: (i) a certificate representing the Stock being purchased thereby against payment of the purchase price therefor by wire transfer to a bank account designated by the Company, and (ii) if called for under the terms set forth above, a Warrant. The obligations of the Purchaser to purchase the Securities at each closing subsequent to the Initial Closing, is subject to fulfillment, or the waiver in writing by Purchaser, of the following conditions, on or before the date of such subsequent closing (the “Subsequent Closing Date”):

(i)

The representations and warranties contained in Section 2 of this Agreement shall be true in all material respects as of the Subsequent Closing Date with the same effect as though such representations and warranties had been made on and as of that date.

(ii)

The Company shall have in all material respects performed and complied with all agreements and conditions contained in this Agreement and the Transaction Agreements required to be performed or complied with by the Company prior to or at such Subsequent Closing Date;

(iii)

At the request of the Purchaser, the Company shall have delivered to the Purchaser copies of the documents specified in Sections 4.3 and 4.7, updated to such Subsequent Closing Date; and

(iv)

With respect to the Third Closing, the Company shall have paid the Third Closing Fee.

1.3

Defined Terms Used in this Agreement. In addition to the terms defined above, the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.

“ Business Day ” means any day other than a Saturday, Sunday or other day on which the national or state banks located in the State of Colorado or the State of Virginia are authorized to be closed.

“ Closing” means the Initial Closing, the Second Closing, or the Third Closing, as the context may require.

“Common Stock " means the Corporation's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.

“ Code ” means the Internal Revenue Code of 1986, as amended.

“ Consolidated EBITDA ” of any Person for any period, means Consolidated Net Income of such Person and its Subsidiaries for such period plus , without duplication and to the extent reflected as a charge in the statement of such Consolidated Net Income for such period, the sum of (a) income tax expense, (b) Consolidated Interest Expense of such Person and its Subsidiaries, amortization or write-off of debt discount and debt issuance costs and commissions, discounts and other fees and charges associated with Indebtedness, (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary, unusual or non-recurring expenses or losses, prepayment fees paid to existing lenders, and minus , to the extent included in the statement of such Consolidated Net Income for such period, the sum of (a) interest income (except to the extent deducted in determining Consolidated Interest Expense), (b) any extraordinary, unusual or non-recurring income or gains (including, whether or not otherwise includable as a separate item in the statement of such Consolidated Net Income for such period, gains on the sales of assets) and (c) any other non-cash income, all as determined on a consolidated basis; provided , that for purposes of calculating Consolidated EBITDA of the Company and its Subsidiaries for any period, (i) the Consolidated EBITDA of any Person acquired by the Company or its Subsidiaries during such period shall be excluded on a pro forma basis for such period (assuming the consummation of such acquisition and the incurrence or assumption of any Indebtedness in connection therewith occurred on the first day of such period) if the consolidated balance sheet of such acquired Person and its consolidated Subsidiaries as at the end of the period preceding the acquisition of such Person and the related consolidated statements of income and stockholders’ equity and of cash flows for the period in respect of which Consolidated EBITDA is to be calculated (x) have been previously provided to the Purchaser and the Warrant Holder (if different) and (y) either (1) have been reported on without a qualification arising out of the scope of the audit by independent certified public accountants of nationally recognized standing or (2) have been found acceptable by the Purchaser and the Warrant Holder (if different) and (ii) the Consolidated EBITDA of any Person Disposed of by the Company or its Subsidiaries during such period shall be excluded for such period (assuming the consummation of such Disposition and the repayment of any Indebtedness in connection therewith occurred on the first day of such period).

“ Registration Rights Agreement ” means the Registration Rights Agreement between the Company and the Purchaser, dated as of the date of the Closing, in the form of Exhibit D attached hereto.

“ Knowledge ” or “ to the Company’s Knowledge of ” means the actual knowledge after reasonable investigation of the following officers: B. Joseph Vincent, Gerald Garcia, and Patrick Summers.

“ Material Adverse Effect ” means a material adverse effect on the business, assets (including intangible assets), liabilities, condition (financial or otherwise), property, prospects or results of operation of the Company.

“ Preferred Stock ” has the meaning given thereto in the Series B Preferred Stock Designation .

“ Purchaser ” has the meaning set forth in the preamble to this Agreement.

“ Securities Act ” means the Securities Act of 1933, as amended.

“ Trading Day ” means a day on which the Common Stock is traded on a Trading Market.

“ Trading Market ” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

“ Transaction Agreements ” means this Agreement, the Warrants, the Series B Preferred Stock Designation, and the Registration Rights Agreement.

“ VWAP ” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the primary Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using the VAP function; (b) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by a nationally recognized-independent appraiser selected in good faith by Purchasers holding a majority of the principal amount of Preferred Stock then outstanding.

Representations and Warranties of the Company. The Company hereby represents and warrants to Purchaser that, except as set forth on the Schedule of Exceptions, which exceptions shall be deemed to be representations and warranties as if made hereunder, the following representations are true and complete as of the date of the Closing, except as otherwise indicated.

2.1

Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as presently conducted or proposed to be conducted (Disclosure Schedule 2.1). The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure so to qualify would have a Material Adverse Effect.

2.2

Capitalization. The authorized capital of the Company consists, or will consist, immediately prior to the Closing, of the following (also represented herein by Disclosure Schedule 2.2):

(a) The Company has reserved 18,077,050 shares of Common Stock for issuance upon exercise of certain common stock purchase warrants and options issued by the Company pursuant to convertible note and warrant purchase agreements (the “Convertible Note Agreements”). The rights, privileges and preferences of the Preferred Stock are as stated in the Certificate of Designation. In addition, the Company has reserved 9,983,651 shares for distribution via its private placement memorandum and has reserved 1,156,576 shares of common stock for fulfillment of other agreements.

(b) 200,000,000 shares of Common Stock, 47,791,621 shares of which are issued and outstanding immediately prior to the Initial Closing, and 20,000,000 shares of Preferred Stock, 4,912,500 shares of which are issued and currently in escrow, and 2,187,500 are issued and outstanding immediately prior to the Initial Closing. All of the outstanding shares of Common Stock have been duly authorized, are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws.

(c) The Company has reserved 2,000,000 shares of Common Stock for issuance to officers, directors, employees and consultants of the Company for 2008 staff grants and options, to be proposed to the Board of Directors. Of such reserved shares of Common Stock, no options to purchase shares have been granted and are currently outstanding and 20,000,000 shares of Common Stock remain available for issuance to officers, directors, employees and consultants pursuant Board approval.

(d) Except for (i) the conversion privileges of the Preferred Stock, (ii) the outstanding options issued pursuant to the Stock Plan, and (iii) those matters disclosed in Schedule 2.2, and (iv) except as set forth in the Registration Rights Agreement (as defined below), there are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first refusal or similar rights) or agreements, orally or in writing, for the purchase or acquisition from the Company of any shares of its capital stock or any securities convertible into or exchangeable for shares of Common Stock or Series B Preferred Stock. None of the Company’s stock purchase agreements or stock option documents contains a provision for acceleration of vesting (or lapse of a repurchase right) or other changes in the vesting provisions or other terms of such agreement upon the occurrence of any event or combination of events. The Company has never adjusted or amended the exercise price of any stock options previously awarded, whether through amendment, cancellation, replacement grant, repricing, or any other means.

(f) Section 2.2(f) of the Disclosure Schedule (“Schedule 2: Disclosure”) sets forth the capitalization of the Company immediately following the Closing including the number of shares of the following: (i) issued and outstanding Common Stock, including, with respect to restricted Common Stock, vesting schedule and repurchase price; (ii) issued stock options, including vesting schedule and exercise price; (iii) stock options not yet issued but reserved for issuance; (iv) each series of Preferred Stock; and (v) warrant or stock purchase rights, if any.

2.3

Subsidiaries. Except as set forth in Disclosure Schedule 2.3, The Company does not currently own or control, directly or indirectly, any interest in any other corporation, partnership, trust, joint venture, limited liability company, association or other business entity. The Company is not a participant in any joint venture, partnership or similar arrangement.

2.4

Authorization. All corporate action on the part of the Company, its officers, directors and holders of capital stock necessary for the authorization, execution and delivery of this Agreement and the other Transaction Agreements, the performance of all obligations of the Company hereunder and thereunder and the authorization, issuance and delivery of the Securities has been taken or will be taken prior to the Closing (Disclosure Schedule 2.4), and the Transaction Agreements, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their respective terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable remedies, or (iii) to the extent the indemnification provisions contained in the Registration Rights Agreement, may be limited by applicable federal or state securities laws.

2.5

Valid Issuance of Securities. The Stock and Warrants when issued, sold and delivered in accordance with the terms hereof for the consideration expressed herein, will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement, applicable state and federal securities laws and liens or encumbrances created by or imposed by Purchaser. Based in part upon the representations of the Purchasers in Section 3 of this Agreement and subject to the provisions of Section 2.6 below, the Stock and Warrants will be issued in compliance with all applicable federal and state securities laws. The Warrant Stock has been duly and validly reserved for issuance, and upon issuance in accordance with the terms of the Warrant will be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement, the Registration Rights Agreement, and applicable federal and state securities laws and will be issued in compliance with all applicable federal and state securities laws. The Common Stock issuable upon conversion of the Stock has been duly and validly reserved for issuance, and upon issuance in accordance with the terms of the Series B Preferred Stock Designation , shall be duly and validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under this Agreement and the Registration Rights Agreement, applicable federal and state securities laws and liens or encumbrances created by or imposed by Purchaser. Based in part upon the representations of the Purchaser in Section 3 of this Agreement, and subject to Section 2.6 below, the Common Stock and Warrants issuable upon conversion of the Stock will be issued in compliance with all applicable federal and state securities laws.

2.6

Governmental Consents and Filings. Assuming the accuracy of the representations made by the Purchaser in Section 3 of this Agreement, no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Agreement, other applicable state securities laws and Regulation D of the Securities Act, which have been made or will be made in a timely manner.

2.7

Litigation. Other than as described on Disclosure Schedule 2.7, there is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or, to the Company’s knowledge, currently threatened against the Company that questions the validity of the Transaction Agreements or the right of the Company to enter into them, or to consummate the transactions contemplated hereby or thereby, or that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect, or any change in the current equity ownership of the Company, nor is the Company aware that there is any basis for the foregoing. Except as set forth in Schedule 2.7(a), neither the Company nor, to the Company’s knowledge, any of its officers or directors, is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality. Except as set forth in Schedule 2.7(b), there is no action, suit, proceeding or investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their use in connection with the Company’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers.

2.8

Intellectual Property. The Company owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information and proprietary rights and processes necessary for its business without, to the Company’s knowledge, any conflict with, or infringement of, the rights of others. There are no outstanding options, licenses, or agreements of any kind relating to the foregoing, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other person or entity. The Company has not received any communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, trade names, copyrights, trade secrets or other proprietary rights or processes of any other person or entity. To the Company’s knowledge, none of its employees is obligated under any contract (including licenses, covenants or commitments of any nature) or other agreement, or subject to any judgment, decree or order of any court or administrative agency, that would interfere with the use of such employee’s best efforts to promote the interest of the Company or that would conflict with the Company’s business. Neither the execution or delivery of this Agreement, nor the carrying on of the Company’s business by the employees of the Company, nor the conduct of the Company’s business as proposed, will, to the Company’s knowledge, conflict with or result in a breach of the terms, conditions, or provisions of, or constitute a default under, any contract, covenant or instrument under which any such employee is now obligated. To the Company’s knowledge, it will not be necessary to use any inventions of any of its employees or consultants (or persons it currently intends to hire) made prior to their employment by the Company. Each employee and consultant has assigned to the Company all intellectual property rights he or she owns that are related to the Company’s business as now conducted and as presently proposed to be conducted. Disclosure Schedule 2.8 of the Disclosure Schedule lists all registered Company patents and trademarks. The Company has not embedded any open source, copyright or community source code in any of its products generally available or in development, including but not limited to any libraries or code licensed under any general public license, lesser general public license or similar license arrangement.

2.9

Compliance with Other Instruments. The Company is not in violation or default of any provisions of its Articles of Incorporation, as amended, or Bylaws, or of any instrument, judgment, order, writ, or decree, or under any note, indenture, mortgage, lease, agreement, contract or purchase order to which it is a party or by which it is bound or, to its knowledge , of any provision of federal or state statute, rule or regulation applicable to the Company, the violation of which would have a Material Adverse Effect. The execution, delivery and performance of the Transaction Agreements and the consummation of the transactions contemplated hereby or thereby will not result in any such violation or be in conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument, judgment, order, writ, decree or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

2.10

Agreements; Actions.

(a) Other than (i) standard employee benefits generally made available to all employees, (ii) standard director and officer indemnification agreements approved by the Board of Directors, and (iii) the purchase of shares of the Company’s capital stock and the issuance of options to purchase shares of the Company’s Common Stock, in each instance, approved by the Board of Directors, there are no agreements, understandings or proposed transactions between the Company and any of its officers, directors, affiliates, or any affiliate thereof.

(b) Except for the Transaction Agreements and disclosures in the Company’s filings with the Federal Securities and Exchange Commission (the “SEC”), there are no agreements, understandings, instruments, contracts or proposed transactions to which the Company is a party or by which it is bound that involve (i) obligations (contingent or otherwise) of, or payments to, the Company in excess of $10,000, (ii) the license of any patent, copyright, trade secret or other proprietary right to or from the Company, or (iii) the grant of rights to manufacture, produce, assemble, license, market, or sell its products to any other person or affect the Company’s exclusive right to develop, manufacture, assemble, distribute, market or sell its products.

(c) Except as set forth in the Company’s filings with the SEC, the Company has not (i) declared or paid any dividends, or authorized or made any distribution upon or with respect to any class or series of its capital stock, (ii) incurred any indebtedness for money borrowed or incurred any other liabilities individually in excess of $10,000 or in excess of $25,000 in the aggregate, (iii) made any loans or advances to any person, other than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of any of its assets or rights, other than the sale of its inventory in the ordinary course of business.

(d) For the purposes of subsections (b) and (c) above, all indebtedness, liabilities, agreements, understandings, instruments, contracts and proposed transactions involving the same person or entity (including persons or entities the Company has reason to believe are affiliated with that person or entity) shall be aggregated for the purposes of meeting the individual minimum dollar amounts of each such subsection.

(e) The Company has not engaged in the past three months in any discussion with any representative of any corporation, partnership, trust, joint venture, limited liability company, association or other entity, or any individual, regarding (i) a sale of all or substantially all of the Company’s assets, (ii) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction, or (iii) the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company.

2.11

Disclosure. The Company and the Purchaser have engaged in a due diligence process, and in connection with that process the Company has made available to the Purchaser all the information reasonably available to the Company that the Purchaser has requested for deciding whether to acquire the Securities and all information that the Company believes is reasonably necessary to enable the Purchaser to make such a decision, including certain of the Company’s projections describing its proposed business (collectively, the “Business Plan”). No representation or warranty of the Company contained in this Agreement and the exhibits attached hereto, any certificate furnished or to be furnished to Purchaser at the Closing, or the Business Plan contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. To the extent the Business Plan was prepared by management of the Company, the Business Plan and the financial and other projections contained in the Business Plan were prepared in good faith; however, the Company does not warrant that it will achieve such projections.

2.12

No Conflict of Interest. Except as set forth in the Company’s filings with the SEC , the Company is not indebted, directly or indirectly, to any of its officers or directors or to their respective spouses or children, in any amount whatsoever other than in connection with expenses or advances of expenses incurred in the ordinary course of business or relocation expenses of employees. None of the Company’s officers or directors, or any members of their immediate families, are, directly or indirectly, indebted to the Company (other than in connection with purchases of the Company’s stock) or, to the Company’s knowledge, have any direct or indirect ownership interest in any firm or corporation with which the Company is affiliated or with which the Company has a business relationship, or any firm or corporation which competes with the Company except that officers, directors and/or holders of capital stock of the Company may own stock in (but not exceeding two percent of the outstanding capital stock of) any publicly traded company that may compete with the Company. None of the Company’s officers or directors or, to the Company’s knowledge, any members of their immediate families are, directly or indirectly, interested in any material contract with the Company. The Company is not a guarantor or indemnitor of any indebtedness of any other person, firm or corporation.

2.13

Rights of Registration and Voting Rights. Except as provided in the Registration Rights Agreement, and in section 2.2(d) above, the Company is not under any obligation to register under the Securities Act any of its currently outstanding securities or any securities issuable upon exercise or conversion of its currently outstanding securities. To the Company’s knowledge, no holder of capital stock of the Company has entered into any agreements with respect to the voting of capital shares of the Company.

2.14

Title to Property and Assets. Except as set forth in its filings with the SEC, the Company owns its property and assets free and clear of all mortgages, deeds of trust, liens, loans and encumbrances, except for statutory liens for the payment of current taxes that are not yet delinquent and encumbrances and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets. With respect to the property and assets it leases, the Company is in compliance with such leases and, to its knowledge, holds a valid leasehold interest free of any liens, claims or encumbrances other than to the lessors of such property or assets.

2.15

Financial Statements. The Company has made available to each Purchaser its unaudited financial statements (including balance sheet, income statement and statement of cash flows) as of March 31, 2008 (Disclosure Schedule 2.15) and for the fiscal year ended December 31, 2007 (collectively, the “Financial Statements”). The Financial Statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis throughout the periods indicated. The Financial Statements fairly present in all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject to normal year-end audit adjustments. Except as set forth in the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business subsequent to March 31, 2008 and (ii) obligations under contracts and commitments incurred in the ordinary course of business and not required under generally accepted accounting principles to be reflected in the Financial Statements, which, in both cases, individually or in the aggregate would not have a Material Adverse Effect. The Company maintains and will continue to maintain a standard system of accounting established and administered in accordance with generally accepted accounting principles.

2.16

Changes. Since March 31, 2008, there has not been:

(a) any change in the assets, liabilities, financial condition or operating results of the Company from that reflected in the Financial Statements, except changes in the ordinary course of business that have not caused, in the aggregate, a Material Adverse Effect;

(b) any damage, destruction or loss, whether or not covered by insurance, that would have a Material Adverse Effect;

(d) any satisfaction or discharge of any lien, claim, or encumbrance or payment of any obligation by the Company, except in the ordinary course of business and the satisfaction or discharge of which would not have a Material Adverse Effect;

(e) any material change to a material contract or agreement by which the Company or any of its assets is bound or subject;

(f) any material change in any compensation arrangement or agreement with any employee, officer, director or holder of capital stock;

(g) any sale, assignment or transfer of any patents, trademarks, copyrights, trade secrets or other intangible assets of the Company;

(h) any resignation or termination of employment of any officer or key employee of the Company; and the Company, is not aware of any impending resignation or termination of employment of any such officer or key employee;

(i) any mortgage, pledge, transfer of a security interest in, or lien, created by the Company, with respect to any of its material properties or assets, except liens for taxes not yet due or payable and liens that arise in the ordinary course of business and do not materially impair the Company’s ownership or use of such property or assets;

(j) any loans or guarantees made by the Company to or for the benefit of its employees, officers or directors, or any members of their immediate families, other than travel advances and other advances made in the ordinary course of its business;

(k) any declaration, setting aside or payment or other distribution in respect to any of the Company’s capital stock, or any direct or indirect redemption, purchase, or other acquisition of any of such stock by the Company;

(l) to the Company’s knowledge, any other event or condition of any character, other than events affecting the economy or the Company’s industry generally, that could reasonably be expected to result in a Material Adverse Effect;

(m) receipt of notice that there has been a loss of, or material order cancellation by, any major customer of the Company; or

(n) any arrangement or commitment by the Company to do any of the things described in this Section 2.16.

2.17

Employee Matters.

(a) As of the date hereof, the Company employs four (4) full-time employees and no part-time employees and engages one (1) consultant(s) or independent contractor(s). None of the Company’s employees, officer, consultants or independent contractors is entitled to any bonus, commission, severance pay, or deferred compensation, and the Company has no policy, practice, plan, or program of paying severance pay or any form of severance compensation in connection with the termination of employment services.

(b) The Company is not delinquent in payments to any of its employees, consultants, or independent contractors for any wages, salaries, commissions, bonuses, or other direct compensation for any service performed for it to the date hereof or amounts required to be reimbursed to such employees, consultants, or independent contractors. The Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment, including those related to wages, hours, worker classification, and collective bargaining. The Company has withheld and paid to the appropriate governmental entity or is holding for payment not yet due to such governmental entity all amounts required to be withheld from employees of the Company and is not liable for any arrears of wages, taxes, penalties, or other sums for failure to comply with any of the foregoing.

(c) To the Company’s knowledge, no officer or key employee intends to terminate employment with the Company or is otherwise likely to become unavailable to continue as an officer or key employee, nor does the Company have a present intention to terminate the employment of any of the foregoing. The employment of each employee of the Company is terminable at the will of the Company. Each former key employee whose employment was terminated by the Company has entered into an agreement with the Company providing for the full release of any claims against the Company or any related party arising out of such employment.

(d) The Company has not made any representations regarding equity incentives to any officer, employees, director or consultant that are inconsistent with the share amounts and terms set forth in the minutes of meetings of the Company’s board of directors.

(e) Section 2.17(e) of the Disclosure Schedule (Disclosure Schedule 2.17(e)) sets forth all employee benefit plans maintained, established or sponsored by the Company, or in or to which the Company participates or contributes, which is subject to the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). The Company has made all required contributions and has no liability to any such employee benefit plan, other than liability for health plan continuation coverage described in Part 6 of Title I(B) of ERISA, and has complied with all applicable laws for any such employee benefit plan.

2.18

Tax Returns and Payments. The Company has filed all tax returns and reports as required by law. These returns and reports are true and correct in all material respects. The Company has paid all taxes and other assessments due.

2.19

Insurance. The Company has in full force and effect fire and casualty insurance policies, with extended coverage, sufficient in amount (subject to reasonable deductibles) to allow it to replace any of its properties that might be damaged or destroyed, and directors and officers liability coverage with a policy limit as stated on the policy summary attached as Disclosure Schedule 2.19.

2.20

Labor Agreements and Actions. The Company is not bound by or subject to (and none of its assets or properties is bound by or subject to) any written or oral, express or implied, contract, commitment or arrangement with any labor union, and no labor union has requested or, to the Company’s knowledge, has sought to represent any of the employees, representatives or agents of the Company. No strike or other labor dispute involving the Company is currently pending, or to the Company’s knowledge threatened, which could have a Material Adverse Effect, nor is the Company aware of any labor organization activity involving its employees. The employment of each officer and employee of the Company is terminable at the will of the Company. To its knowledge, the Company has complied in all material respects with all applicable state and federal equal employment opportunity laws and with other laws related to employment.

2.21

Permits. The Company and each of its subsidiaries has all franchises, permits, licenses and any similar authority necessary for the conduct of its business, the lack of which could have a Material Adverse Effect. The Company is not in default in any material respect under any of such franchises, permits, licenses or other similar authority.

2.22

Corporate Documents. The Articles of Incorporation, as amended, and Bylaws of the Company are in the form provided to counsel for the Purchaser. The copy of the minute books of the Company provided to the Purchaser’s counsel contains minutes of all meetings of directors and holders of capital stock and all actions by written consent without a meeting by the directors and holders of capital stock since the date of incorporation and reflects all actions by the directors (and any committee of directors) and holders of capital stock with respect to all transactions referred to in such minutes accurately in all material respects.

Representations and Warranties of the Purchaser. Purchaser hereby represents and warrant to the Company that:

3.1

Authorization. The Purchaser has full power and authority to enter into this Agreement and each of the Transaction Agreements. This Agreement, and each of the

Transaction Agreements, when executed and delivered by the Purchaser, will constitute valid and legally binding obligations of the Purchaser, enforceable in accordance with their terms, except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general application affecting enforcement of creditors’ rights generally, and as limited by laws relating to the availability of a specific performance, injunctive relief, or other equitable remedies, or (b) to the extent the indemnification provisions contained in the Registration Rights Agreement may be limited by applicable federal or state securities laws.

3.2

Purchase Entirely for Own Account. This Agreement is made with the Purchaser in reliance upon the Purchaser’s representation to the Company, which by the Purchaser’s execution of this Agreement, the Purchaser hereby confirms, that the Securities to be acquired by the Purchaser will be acquired for investment for the Purchaser’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that the Purchaser has no present intention of selling, granting any participation in, or otherwise distributing the same. By executing this Agreement, the Purchaser further represents that the Purchaser does not presently have any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities. The Purchaser has been formed for the specific purpose of acquiring the Securities.

3.3

Disclosure of Information. The Purchaser has had an opportunity to discuss the Company’s business, management, financial affairs and the terms and conditions of the offering of the Securities with the Company’s management and has had an opportunity to review the Company’s facilities.

3.4

Experience. Purchaser has carefully reviewed the representations concerning the Company contained in this Agreement, has read the Business Plan and has made detailed inquiry concerning the Company, its business, management, financial affairs and its personnel; the officers of the Company have made available to such Purchaser any and all written information which it has requested and have answered to Purchaser's satisfaction all inquiries made by Purchaser; and Purchaser has sufficient knowledge and experience in finance and business that it is capable of evaluating the risks and merits of its investment in the Company and Purchaser is able financially to bear the risks thereof.

3.5

Risk Factors. Purchaser understands that Purchaser’s investment in the Securities involves a high degree of risk. Purchaser understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities. Purchaser warrant that Purchaser, and each of its members, is able to bear the complete loss of Purchaser’s investment in the Securities.

3.6

Accredited Investor. The Purchaser, and each of its members, is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.

3.7

No General Solicitation. Neither the Purchaser, nor any of its officers, employees, agents, directors, holders of capital stock or partners has engaged the services of a broker, investment banker or finder to contact any potential investor nor has the Purchaser or any of the Purchaser’s officers, employees, agents, directors, holders of capital stock or partners, agreed to pay any commission, fee or other remuneration to any third party to solicit or contact any potential investor. Neither the Purchaser, nor any of its officers, directors, employees, agents, holders of capital stock or partners has (a) engaged in any general solicitation, or (b) published any advertisement in connection with the offer and sale of the Stock.

Conditions of the Purchasers’ Obligations at Closing. The obligations of Purchaser to the Company under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

4.1

Representations and Warranties. The representations and warranties of the Company contained in Section 2 shall be true and correct in all material respects on and as of the Closing with the same effect as though such representations and warranties had been made on and as of the date of the Closing.

4.2

Performance. The Company shall have performed and complied with all covenants, agreements, obligations and conditions contained in this Agreement that are required to be performed or complied with by it on or before the Closing.

4.3

Compliance Certificate. The President of the Company shall deliver to the Purchasers at the Closing a certificate certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.

4.4

Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Stock and Warrants pursuant to this Agreement shall be obtained and effective as of the Closing.

4.5

Board of Directors. As of the Closing, the Board shall be comprised of not more than seven directors, one of whom shall be appointed by a majority vote of the Series B Preferred shares. The Company shall reimburse all reasonable expenses (including travel and lodging) incurred by the Preferred Directors in attending meetings of the Board of Directors or committees thereof.

4.6

Registration Rights Agreement. The Company and the Purchaser shall have executed and delivered the Registration Rights Agreement in substantially the form attached as Exhibit D.

4.7

Secretary’s Certificate. The Secretary of the Company shall deliver to the Purchaser at the Closing a certificate (Disclosure Schedule 4.7) certifying (i) the Series B Preferred Stock Designation (Exhibit A), (ii) the Bylaws of the Company (Disclosure Schedule 4.7ii), and (iii) resolutions of the Board of Directors of the Company approving the execution, delivery and implementation of this Agreement, the Transaction Agreements and the transactions contemplated hereby and thereby (Disclosure Schedule 4.7iii).

4.8

Proceedings and Documents. All corporate and other proceedings in connection with the transactions contemplated at the Closing and all documents incident thereto shall be reasonably satisfactory in form and substance to Purchaser, and Purchaser (or its counsel) shall have received all such counterpart original and certified or other copies of such documents as reasonably requested. Such documents may include good standing certificates.

Conditions of the Company’s Obligations at Closing. The obligations of the Company to Purchaser under this Agreement are subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

5.1

Representations and Warranties. The representations and warranties of Purchaser contained in Section 3 shall be true and correct in all material respects on and as of the Initial Closing and each Subsequent Closing with the same effect as though such representations and warranties had been made on and as of each Subsequent Closing.

5.2

Performance. All covenants, agreements and conditions contained in this Agreement to be performed by the Purchaser on or prior to the Initial Closing shall have been performed or complied with in all material respects.

5.3

Qualifications. All authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state that are required in connection with the lawful issuance and sale of the Stock and the Warrants pursuant to this Agreement shall be obtained and effective as of the Closing.

Miscellaneous .

6.1

Survival of Warranties. Unless otherwise set forth in this Agreement, the warranties, representations and covenants of the Company and the Purchaser contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement and the Initial and each Subsequent Closing and shall in no way be affected by any investigation or knowledge of the subject matter thereof made by or on behalf of the Purchaser or the Company.

6.2

Transfer; Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

6.3

Governing Law. This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.

6.4

Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

6.5

Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

6.6

Notices. Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by fax (upon customary confirmation of receipt), or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, addressed to the party to be notified at such party’s address as set forth on the signature page, or as subsequently modified by written notice, and (a) if to the Company, with a copy to Gerald Garcia, Jr., President and CEO, 10400 Eaton Place, Suite 403, Fairfax, VA 22030 or (b) if to the Purchaser, with a copy to James P. Gregory, Gregory & Plotkin, LLC, 1331 17 ^th Street, Suite 1060, Denver, CO 80202.

6.7

Finder’s Fee. Each party represents that it neither is nor will be obligated for any finder’s fee or commission in connection with this transaction. Each Purchaser agrees to indemnify and to hold harmless the Company from any liability for any commission or compensation in the nature of a finder’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which each Purchaser or any of its officers, employees, or representatives is responsible. The Company agrees to indemnify and hold harmless each Purchaser from any liability for any commission or compensation in the nature of a finder’s or broker’s fee arising out of this transaction (and the costs and expenses of defending against such liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

6.8

Attorney’s Fees. If any action at law or in equity (including arbitration) is necessary to enforce or interpret the terms of any of the Agreements, the prevailing party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

6.9

Amendments and Waivers. Any term of this Agreement may be amended or waived only with the written consent of the Parties hereto.

6.10

Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

6.11

Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

6.12

Entire Agreement. This Agreement, and the documents referred to herein constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled.

[ Signature Pages Follow ]

The parties have executed this Series B Preferred Stock and Warrant Purchase Agreement as of the date first written above.

THE COMPANY:

AIMS WORLDWIDE, INC.

By: /s/ Gerald Garcia, Jr.

(Signature)

Name: Gerald Garcia, Jr.

Title: President

Address:

10400 Eaton Place

Suite 203

Fairfax, VA

22030

Fax:

(703) 621 3865, x 2256

The parties have executed this Series B Preferred Stock and Warrant Purchase Agreement as of the date first written above.

PURCHASER:

FG Investment Holdings, LLC

By: /s/ James P Gregory

(Signature)

Name:

James P. Gregory

Title:

Managing Member

Address:

1331 17 ^th Street

Suite 1060

Denver, CO

80202

Fax:

(303) 292 9121

EXHIBITS

Exhibit A

- Series B Preferred Stock Designation, Officer's Certificate, Waiver of Conflict of Interest, and Initial Preferred Stock Certificate

Exhibit B

- Form of Common Stock Purchase Warrant B-1

Exhibit C

- Form of Common Stock Purchase Warrant B-2

Exhibit D

- Form of Registration Rights Agreement

SCHEDULES AND DISCLOSURES

Schedule 1

- Exceptions to Representations and Warranties

Disclosure Schedules

EXHIBIT A

Series B Preferred Stock Designation

AIMS WORLDWIDE, INC.

CERTIFICATE OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

SERIES B PREFERRED STOCK

The undersigned, Gerald Garcia, Jr. and B. Joseph Vincent, do hereby certify that:

1. They are the President and Secretary, respectively, of AIMS WORLDWIDE, INC., a Nevada corporation (the “ Corporation ”).

2. The Corporation is authorized to issue 20,000,000 shares of preferred stock, 7,500,000 of which have been previously designated Series A Preferred Stock and such Series A Preferred Stock cannot be subordinated in preference to any other Series of stock unless approved by the holders of the Series A Preferred Stock or such Series A Preferred Stock is cancelled, retired, or revoked.

3. The following resolutions were duly adopted by the Board of Directors:

WHEREAS, the Certificate of Incorporation of the Corporation, as amended, provides for a class of its authorized stock known as preferred stock, comprised of 20,000,000 shares, $0.001 par value per share, issuable from time to time in one or more series;

WHEREAS, the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights, rights and terms of redemption and liquidation preferences of any wholly unissued series of preferred stock and the number of shares constituting any Series and the designation thereof, of any of them;

WHEREAS, it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid, to fix the rights, preferences, restrictions and other matters relating to a series of the preferred stock, establish the Certificate of Designation for the Series B Preferred Stock, the corporation has the authority to issue, as follows:

NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of preferred stock for cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions and other matters relating to the Series B Preferred Stock as follows:

SERIES B PREFERRED STOCK DESIGNATION

Section 1 .

Definitions . Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement (as defined below) shall have the meanings given such terms in the Purchase Agreement. For the purposes hereof, the following terms shall have the following meanings:

“ Commission ” means the Securities and Exchange Commission.

“ Common Stock " means the Corporation's common stock, par value $0.001 per share, and stock of any other class into which such shares may hereafter have been reclassified or changed.

“ Common Stock Equivalents ” means any securities of the Corporation or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“ Conversion Date ” shall have the meaning set forth in Section 6(a).

“ Conversion Ratio ” shall have the meaning set forth in Section 6(a).

“ Conversion Value ” shall have the meaning set forth in Section 6(a).

“ Conversion Shares ” means, collectively, the shares of Common Stock into which the shares of Preferred Stock are convertible in accordance with the terms hereof.

“ Conversion Shares Registration Statement ” means a registration statement that meets the requirements of the Registration Rights Agreement and registers the resale of all Conversion Shares by the Holder, who shall be named as a “selling stockholder” thereunder, all as provided in the Registration Rights Agreement.

“ Dilutive Issuance ” shall have the meaning set forth in Section 7(b) hereof.

“ Effective Date ” means the date that the Conversion Shares Registration Statement is declared effective by the Commission.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

“ Exempt Issuance ” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Corporation pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Corporation or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise of or conversion of any securities issued hereunder, and of any convertible securities, options or warrants issued and outstanding on the date of this Certificate of Designations, provided that such securities have not been amended since the date of this Certificate of Designations to increase the number of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Corporation and in which the Corporation receives benefits in addition to the investment of funds, but shall not include a transaction in which the Corporation is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

“ Fundamental Transaction ” shall have the meaning set forth in Section 7(f)(iii) hereof.

“ Holder ” shall have the meaning given such term in Section 2 hereof.

“ Junior Securities ” means the Common Stock and all other equity or equity equivalent securities of the Corporation other than those securities that are explicitly senior in rights or liquidation preference to the Preferred Stock.

“ Original Issue Date ” shall mean the date of the first issuance of any shares of the Preferred Stock regardless of the number of transfers of any particular shares of Preferred Stock and regardless of the number of certificates which may be issued to evidence such Preferred Stock.

“ Person ” means a corporation, an association, a partnership, a limited liability company, a business association, an individual, a government or political subdivision thereof or a governmental agency.

“ Preferred Stock ” shall have the meaning set forth in Section 2.

“ Purchase Agreement ” means the Preferred Stock Purchase Agreement, dated as July 8, 2008, to which the Corporation and the original Holders are parties, as amended, modified or supplemented from time to time in accordance with its terms, a copy of which is on file at the principal offices of the Corporation.

“ Registration Rights Agreement ” means the Registration Rights Agreement, dated as of the Closing Date, to which the Corporation and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms.

“ Securities Act ” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

“ Senior Securities ” means the authorized Series A Preferred Stock of the Company.

“ Subsidiary ” shall mean a corporation, limited liability company, partnership, joint venture or other business entity of which the Corporation owns beneficially or of record more than 19% of the equity interest.

“ Trading Day ” means a day on which the Common Stock is traded on a Trading Market.

“ Trading Market ” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

“ Transaction Agreements ” shall have the meaning set forth in the Purchase Agreement.

“ VWAP ” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the primary Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. EST to 4:02 p.m. Eastern Time) using the VAP function; (b) if the Common Stock is not then listed or quoted on the Trading Market and if prices for the Common Stock are then reported in the “Pink Sheets” published by the National Quotation Bureau Incorporated (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (c) in all other cases, the fair market value of a share of Common Stock as determined by a nationally recognized-independent appraiser selected in good faith by Purchasers holding a majority of the principal amount of Preferred Stock then outstanding.

Section 2 . Designation, Amount and Par Value . The series of preferred stock shall be designated as the Corporation’s Series B Preferred Stock (the “ Preferred Stock ”) and the number of shares so designated shall be 5,000,000 which shall not be subject to increase without the consent of all of the holders of the Preferred Stock (each a “ Holder ” and collectively, the “ Holders ”). Each share of Preferred Stock shall have a par value of $0.001 per share. Capitalized terms not otherwise defined herein shall have the meaning given such terms in Section 1 hereof.

Section 3 .

Dividends and Other Distributions . No dividends shall be payable with respect to the Preferred Stock. No dividends shall be payable with respect to the Common Stock while the Preferred Stock is outstanding. The Common Stock shall not be redeemed while the Preferred Stock is outstanding.

Section 4 .

Voting Rights and Holder Approvals . The Preferred Stock shall have voting rights equal in all aspects to the number of shares of shares of Common Stock represented by such Preferred Stock on an as converted basis and shall be entitled to vote on any and all matters brought to a vote of shareholders of Common Stock and all matters brought to a vote of shareholders of Preferred Stock. Furthermore, so long as any shares of Preferred Stock are outstanding:

a) The Corporation shall not, without the affirmative approval of the Holders of the shares of the Preferred Stock then outstanding, (A) alter or change adversely the powers, preferences or rights given to the Preferred Stock or alter or amend this Certificate of Designation, (B) authorize or create any class of stock ranking as to dividends or distribution of assets upon a Liquidation (as defined in Section 5) senior to or otherwise pari passu with the Preferred Stock, or any stock possessing greater voting rights or the right to convert at a more favorable price than the Preferred Stock, (C) amend its certificate or articles of incorporation or other charter documents in breach of any of the provisions hereof, (D) increase the authorized number of shares of Preferred Stock, or (E) enter into any agreement with respect to the foregoing;

The Corporation shall (A) cause the appointment of a director to the Board of Directors as approved by a majority of the Holders of the shares of Preferred Stock, (B) maintain, commencing 60 days from the date hereof, a Board of Directors with a majority of the Directors being Independent Directors, (C) maintain, a Board of Directors’ Audit Committee and a Board of Directors’ Compensation Committee with the majority of members being Independent Directors, (D) be managed by and under the direction of its Board of Directors which may exercise all lawful powers of the Corporation, including but not limited to, the election of officers and agents for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the Board of Directors, and (E) not convene a Board of Directors meeting or Board of Directors Committee meeting without a quorum of Directors being comprised of a majority of Independent Directors; and

The Corporation shall not, without the affirmative approval of the Holders of the shares of the Preferred Stock then outstanding, (A) enter into any agreement with, or distribute any assets or equity to, Company Stockholders, with the exception of such distributions made in accordance with the Purchase Agreement or participation in the Company’s Option Plan; (B) delist the Corporation’s Common Stock from a Trading Market; or (C) purchase, or enter into any option to purchase, any equity or convertible debt instrument of the Corporation.

Section 5 .

Liquidation . Upon any liquidation, dissolution or winding-up of the Corporation, whether voluntary or involuntary (a “ Liquidation ”), the Holders shall be entitled to receive out of the assets of the Corporation, whether such assets are capital or surplus, for each share of Preferred Stock an amount equal to 32 cents ($0.32), (the “ Liquidation Value ”) before any distribution or payment shall be made to the holders of any Junior Securities, and if the assets of the Corporation shall be insufficient to pay in full such amounts, then the entire assets to be distributed to the Holders shall be distributed among the Holders ratably in accordance with the respective amounts that would be payable on such shares if all amounts payable thereon were paid in full. A Fundamental Transaction or Change of Control Transaction shall not be treated as a Liquidation. The Corporation shall mail written notice of any such Liquidation, not less than 70 days prior to the payment date stated therein, to each record Holder.

Section 6 .

Conversion .

Conversions at Option of Holder . Each share of Preferred Stock shall be initially convertible (subject to the limitations set forth in Section 6(b)), into five (5) shares of Common Stock (as adjusted as provided below, the “ Conversion Ratio ”) at the option of the Holders, at any time and from time to time from and after the Original Issue Date. Holders shall effect conversions by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “ Notice of Conversion ”) as fully and originally executed by the Holder, together with the delivery by the Holder to the Corporation of the stock certificate(s) representing the number of shares of Preferred Stock so converted, with such stock certificates being duly endorsed in full for transfer to the Corporation or with an applicable stock power duly executed by the Holder in the manner and form as deemed reasonable by the transfer agent of the Common Stock. Each Notice of Conversion shall specify the number of shares of Preferred Stock to be converted, the number of shares of Preferred Stock owned prior to the conversion at issue, the number of shares of Preferred Stock owned subsequent to the conversion at issue, the stock certificate number and the shares of Preferred Stock represented thereby which are accompanying the Notice of Conversion, and the date on which such conversion is to be effected, which date may not be prior to the date the Holder delivers such Notice of Conversion and the applicable stock certificates to the Corporation by overnight delivery service (the “ Conversion Date ”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the Trading Day immediately following the date that such Notice of Conversion and applicable stock certificates are received by the Corporation. The calculations and entries set forth in the Notice of Conversion shall control in the absence of manifest or mathematical error. Shares of Preferred Stock converted into Common Stock in accordance with the terms hereof shall be canceled and may not be reissued. The initial value of the Preferred Stock, on an as converted to Common Stock basis (calculated utilizing the Conversion Ratio), on the Conversion Date shall be equal to $0.32, per share (as adjusted pursuant to Section 7 or otherwise as provided herein, the “ Conversion Value ”). If the initial Conversion Value is adjusted pursuant to Section 7 or as otherwise provided herein, the Conversion Ratio shall likewise be adjusted and the new Conversion Ratio shall equal the Liquidation Value divided by the new Conversion Value. Thereafter, subject to any further adjustments in the Conversion Value, each share of Preferred Stock shall be convertible into that number of shares of Common Stock equal to the new Conversion Ratio.

Reserved.

Mechanics of Conversion

(i)

Delivery of Certificate Upon Conversion . Except as otherwise set forth herein, not later than three Trading Days after each Conversion Date (the “ Share Delivery Date ”), the Corporation shall deliver to the Holder (A) as applicable either (1) prior to the Effective Date, a certificate or certificates with 144 restrictions representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock or 2 days after the Effective Date, a certificate or certificates which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of shares of Preferred Stock, and (B) a bank check in the amount of accrued and unpaid dividends (if the Corporation has elected or is required to pay accrued dividends in cash). After the Effective Date, the Corporation shall, upon request of the Holder, deliver any certificate or certificates required to be delivered by the Corporation under this Section electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions. If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after the Conversion Date, the Holder shall be entitled to elect by written notice to the Corporation at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Corporation shall immediately return the certificates representing the shares of Preferred Stock tendered for conversion.

Reservation of Shares Issuable Upon Conversion . The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of the Preferred Stock, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holders, not less than such number of shares of the Common Stock as shall (subject to any additional requirements of the Corporation as to reservation of such shares set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 7) upon the conversion of all outstanding shares of Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable and, if the Conversion Shares Registration Statement is then effective under the Securities Act, registered for public sale in accordance with such Conversion Shares Registration Statement.

ii.

Fractional Shares . Upon a conversion hereunder, the Corporation shall not be required to issue stock certificates representing fractions of shares of the Common Stock.

iii.

Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of the Preferred Stock shall be made without charge to the Holders thereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Corporation shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of such shares of Preferred Stock so converted and the Corporation shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.

Section 7 .

Certain Adjustments .

Stock Dividends and Stock Splits . If the Corporation, at any time while the Preferred Stock is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation pursuant to this Preferred Stock), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Corporation, then the Conversion Value shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

Subsequent Equity Sales . Neither the Corporation nor any Subsidiary, as applicable, at any time while Preferred Stock is outstanding, without the express written consent of the Preferred Holders, shall offer, sell, grant any option to purchase or offer, sell or grant any right to reprice its securities, or otherwise dispose of or issue (or announce any offer, sale, grant or any option to purchase or other disposition) any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share less than the then Conversion Value (“ Dilutive Issuance ”), as adjusted hereunder (if the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which is issued in connection with such issuance, be entitled to receive shares of Common Stock at an effective price per share which is less than the Conversion Value, such issuance shall be deemed to have occurred for less than the Conversion Value).

Subsequent Rights Offerings . The Corporation, at any time while the Preferred Stock is outstanding, shall not issue rights, options or warrants to holders of Common Stock entitling them to subscribe for or purchase shares of Common Stock at a price per share less than the Conversion Value.

Pro Rata Distributions . If the Corporation, at any time while Preferred Stock is outstanding, shall distribute to all holders of Common Stock (and not to Holders) evidences of its indebtedness or assets or rights or warrants to subscribe for or purchase any security, then in each such case the Conversion Value shall be determined by multiplying such Conversion Value in effect immediately prior to the record date fixed for determination of stockholders entitled to receive such distribution by a fraction of which the denominator shall be the VWAP determined as of the record date mentioned above, and of which the numerator shall be such VWAP on such record date less the then fair market value at such record date of the portion of such assets or evidence of indebtedness so distributed applicable to one outstanding share of the Common Stock as determined by the Board of Directors in good faith. In either case the adjustments shall be described in a statement provided to the Holders of the portion of assets or evidences of indebtedness so distributed or such subscription rights applicable to one share of Common Stock. Such adjustment shall be made whenever any such distribution is made and shall become effective immediately after the record date mentioned above.

Calculations . All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Corporation, and the description of any such shares of Common Stock shall be considered on issue or sale of Common Stock. For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) actually issued and outstanding.

Notice to Holders .

Adjustment to Conversion Price . Whenever the Conversion Value is adjusted pursuant to any of this Section 7, the Corporation shall promptly mail to each Holder a notice setting forth the Conversion Value after such adjustment and setting forth a brief statement of the facts requiring such adjustment. If the Corporation issues a variable rate security, despite the prohibition thereon in the Purchase Agreement, the Corporation shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion or exercise price at which such securities may be converted or exercised in the case of a Variable Rate Transaction (as defined in the Purchase Agreement), or the lowest possible adjustment price in the case of an MFN Transaction (as defined in the Purchase Agreement).

Notice to Allow Conversion by Holder . If (A) the Corporation shall declare a dividend (or any other distribution) on the Common Stock; (B) the Corporation shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Corporation shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval of any stockholders of the Corporation shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Corporation is a party, any sale or transfer of all or substantially all of the assets of the Corporation, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Corporation shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Corporation; then in each case, the Corporation shall cause to be filed at each office or agency maintained for the purpose of conversion of the Preferred Stock, and shall cause to be mailed to the Holders at their last addresses as they shall appear upon the stock books of the Corporation, at least 70 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided , that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. Any and all Conversion Shares issued or issuable upon conversion shall be entitled to share in such transaction notwithstanding the record date of such transaction so long as the Holders of the Preferred Stock elect to convert their shares of Preferred Stock into Conversion Shares prior to the expiration of such 70-day notice period.

ii.

Exempt Issuance . Notwithstanding the foregoing, no adjustment will be made under this Section 7 in respect of an Exempt Issuance.

iii.

Fundamental Transaction . If, at any time while this Preferred Stock is outstanding, (A) the Corporation effects any merger or consolidation of the Corporation with or into another Person, (B) the Corporation effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Corporation or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Corporation effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a “ Fundamental Transaction ”), then upon any subsequent conversion of this Preferred Stock, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of Common Stock (the “ Alternate Consideration ”). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Corporation shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Preferred Stock following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Corporation or surviving entity in such Fundamental Transaction shall file a new Certificate of Designations with the same terms and conditions and issue to the Holder new preferred stock consistent with the foregoing provisions and evidencing the Holder’s right to convert such preferred stock into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (f)(iii) and insuring that this Preferred Stock (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.

Section 8 .

Miscellaneous .

Notices . Any and all notices or other communications or deliveries to be provided by the Holders hereunder, including, without limitation, any Notice of Conversion, shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service, addressed to the Corporation, at the address provided in the Purchase Agreement. Any and all notices or other communications or deliveries to be provided by the Corporation hereunder shall be in writing and delivered personally, by facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section prior to 5:30 p.m. (New York City time), (ii) the date after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number specified in this Section later than 5:30 p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City time) on such date, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

Lost or Mutilated Preferred Stock Certificate . If a Holder’s Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Preferred Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership thereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

Next Business Day . Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

Headings . The headings contained herein are for convenience only, do not constitute a part of this Certificate of Designations and shall not be deemed to limit or affect any of the provisions hereof.

RESOLVED, FURTHER , that the Chairman, the president or any vice-president, and the secretary or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Certificate of Designation of Preferences, Rights and Limitations in accordance with the foregoing resolution and the provisions of Nevada law.

IN WITNESS WHEREOF, the undersigned have executed this Certificate this 7th day of July 2008.

/s/ Gerald Garcia, Jr.

Name: Gerald Garcia, Jr.

Title: President

B. Joseph Vincent

Name: B. Joseph Vincent

Title: Secretary

ANNEX A

NOTICE OF CONVERSION

(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES OF SERIES B PREFERRED STOCK)

The undersigned hereby elects to convert the number of shares of Series B Preferred Stock indicated below, into shares of common stock, par value $0.001 per share (the " Common Stock "), of AIMS WORLDWIDE, INC., a Nevada corporation (the " Corporation "), according to the conditions hereof, as of the date written below. If shares are to be issued in the name of a person other than undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Corporation in accordance therewith. No fee will be charged to the Holder for any conversion, except for such transfer taxes, if any.

Conversion calculations:

Date to Effect Conversion: _____________________________________________

Number of shares of Common Stock owned prior to Conversion: _______________

Number of shares of Preferred Stock to be Converted: ________________________

Value of shares of Preferred Stock to be Converted: ____________________

Number of shares of Common Stock to be Issued: ___________________________

Certificate Number of Preferred Stock attached hereto:________________________

Number of Shares of Preferred Stock represented by attached certificate:__________

Number of shares of Preferred Stock subsequent to Conversion: ________________

[HOLDER]

By:__________________________________

Name: