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EXHIBIT 3.1(c)

                    CERTIFICATE OF DESIGNATION, PREFERENCES,
                             RIGHTS, AND LIMITATIONS

                                       OF

               SERIES B 8% CONVERTIBLE REDEEMABLE PREFERRED STOCK

                                       OF

                               CLAIMSNET.COM INC.

         Pursuant to Section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), CLAIMSNET.COM INC., a Delaware corporation (the
"Corporation"), does hereby certify that:

         FIRST: The Corporation was incorporated in the State of Delaware on
September 11, 1997, and the authorized number of shares of Preferred Stock, par
value $.001 per share, of the Corporation is 4,000,000, none of which is
outstanding prior to the filing hereof; and

         SECOND: Pursuant to authority conferred upon the Board of Directors by
the Certificate of Incorporation of the Corporation and by the provisions of
Sections 141 and 151 et seq of the DGCL, the Board of Directors, at a meeting
duly called pursuant to notice duly given, adopted the following resolutions
authorizing the issuance of an aggregate of 25,000 shares of Series B Preferred
Stock (as defined below), which resolutions are still in full force and effect
and are not in conflict with any provisions of the Certificate of Incorporation
or By-Laws of the Corporation:

                  WHEREAS, the Board of Directors of the Corporation is
         authorized, within the limitations and restrictions stated in the
         Certificate of Incorporation, to fix by resolution or resolutions the
         designation of each series of preferred stock and the powers,
         preferences, and relative participating, optional, voting, or other
         special rights, and the qualifications, limitations, or restrictions
         thereof; and

                  WHEREAS, it is the desire of the Board of Directors of the
         Corporation, pursuant to its authority as aforesaid, to fix the terms
         of one series of preferred stock.

                  NOW, THEREFORE, BE IT RESOLVED, that pursuant to authority
         vested in the Board of Directors of the Corporation by Section 151 of
         the DGCL, and in accordance with the provisions of the Certificate of
         Incorporation of the Corporation, one series of preferred stock, par
         value $.001 per share, of the Corporation be and hereby is created and
         provided for with the terms, designation, relative rights, preferences,
         and limitations as follows:

1.       DEFINITIONS.

         ASSET PURCHASE AGREEMENT. dated as of March 20, 2000, among the
Corporation, HealthExchange.com, Inc., a Delaware corporation, and VHX Company,
a Nevada corporation.

         COMMON STOCK. Common stock, par value $.001 per share, of the
Corporation.

         FINAL APPROVAL DATE. March 31, 2001.

         ISSUANCE DATE. With respect to any shares of Series B Preferred Stock,
the date of the issuance of such shares of Series B Preferred Stock by the
Corporation.

         LIQUIDATION. The event of any voluntary or involuntary liquidation,
dissolution, or winding up of the Corporation.

         LIQUIDATION PRICE. With respect to any share of Series B Preferred
Stock, the amount equal to the sum of (i) the Stated Value per share and (ii)

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accrued, but unpaid, cumulative dividends, if any, on such share of Series B
Preferred Stock from the date immediately following the Final Approval Date to,
but excluding, the date of the Liquidation.

         PERFORMANCE MILESTONE. The existence of 1,000,000 lives covered by the
business operations attributable to the assets acquired by the Corporation from
VHX Company, a Nevada corporation pursuant to the Asset Purchase Agreement.

         REDEMPTION DATE. As defined in Section 5 hereof.

         REDEMPTION PRICE. For each share of Series B Preferred Stock, the
product of (A) the amount equal to the average closing sale price of the Common
Stock on the principal market on which the Common Stock trades during the ten
trading day period terminating on the date immediately prior to the date of
satisfaction of the Performance Milestone and (B) 100. Notwithstanding the
foregoing, (A) that in the event that that the Redemption Price determined as
provided in the immediately preceding sentence is less than $1,400, the
Redemption Price shall be deemed to be $1,400 and (B) that in the event that
that the Redemption Price determined as provided in the immediately preceding
sentence is greater than $1,500, the Redemption Price shall be deemed to be
$1,500, and (C) notwithstanding anything herein to the contrary, in the event
that the Performance Milestone has not been satisfied on or before the Final
Approval Date, the Redemption Price shall be $0.001 per share.

         REORGANIZATION. As defined in Section 7(c) hereof.

         SECURITIES ACT. Securities Act of 1933, as amended.

         SERIES B PREFERRED STOCK. The Series B 8% Convertible Redeemable
Preferred Stock, par value $.001 per share.

         STATED VALUE.  $_______ per share of Series B Preferred Stock.

         STOCKHOLDER APPROVAL. Approval by the stockholders of the Corporation
of the conversion of the share of Series B Preferred Stock into shares of Common
Stock pursuant to Section 8.10 hereof of the Asset Purchase Agreement.

         TRAILING AVERAGE CLOSING PRICE. The average closing sale price of the
Common Stock on the principal market on which the Common Stock trades during the
ten trading day period terminating on the date provided herein. Notwithstanding
the foregoing, (A) that in the event that that the Trailing Average Closing
Price determined as provided in the immediately preceding sentence is less than
$14.00, the Trailing Average Closing Price shall be deemed to be $14.00 and (B)
that in the event that that the Trailing Average Closing Price determined as
provided in the immediately preceding sentence is greater than $15.00, the
Trailing Average Closing Price shall be deemed to be $15.00.

2.       DESIGNATION AND NUMBER OF SHARES. The series of preferred stock
established hereby shall consist of ________ shares and shall be designated
"Series B 8% Convertible Redeemable Preferred Stock, par value $.001 per share".

3.       DIVIDENDS. Subject to the next sentence of this Section 3, no dividends
shall accrue on the Series B Preferred Stock through the Final Approval Date.
Commencing immediately following the Final Approval Date, in the event that the
Performance Milestone shall be satisfied on or prior to March 31, 2001,
dividends shall accrue on the Series B Preferred Stock at the rate of 8% per
annum, shall be cumulative, and shall be payable as and when declared by the
Board of Directors in its sole and absolute discretion, provided, however, that
such dividends shall, in all events, be prior in right of payment to any
dividends payable on the Common Stock.

8.       VOTING. Each share of the Series B Preferred Stock shall be entitled
to one vote and shall vote together with the Common Stock as one class, except
as otherwise required by the law of the State of Delaware.

9.       MANDATORY REDEMPTION. In the event that the Stockholder Approval is not
received on or prior to the Final Approval Date or the Performance Milestone is

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not satisfied on or prior to the Final Approval Date, subject to Sections 6 and
7 hereof, the shares of Series B Preferred Stock shall be redeemed by the
Corporation out of the capital surplus or net profits of the Corporation legally
available thereof as set forth below at a redemption price per share equal to
the Redemption Price. Upon the redemption thereof in accordance with this
Section 5, the shares of Series B Preferred Stock shall become authorized, but
unissued, shares of capital stock of the Corporation. On each of July 1, 2001,
October 1, 2001, January 1, 2002, April 1, 2002, July 1, 2002, October 1, 2002,
January 1, 2003, April 1, 2003, July 1, 2003, October 1, 2003, and January 1,
2004, the Corporation shall redeem, pro rata from the holders thereof, 8.3333%
of the outstanding shares of Series B Preferred Stock, and on April 1, 2004
shall redeem the remainder of the outstanding Series B Preferred Stock. Each of
such dates is hereinafter referred to as a "Redemption Date." Notwithstanding
the foregoing, commencing on the date immediately following the Final Approval
Date, the Corporation shall be entitled to redeem the shares of Series B
Preferred Stock prior to the required Redemption Date pro rata without premium
or penalty, and such additional shares of Series B Preferred Stock so redeemed
shall be applied to the shares of Series B Preferred Stock required to be
redeemed on the Redemption Dates furthest from such date.

10.      LIQUIDATION RIGHTS. In the event of any Liquidation prior to the
conversion, if any, of the Series B Preferred Stock, or the redemption if any,
thereof, pursuant to the terms hereof, before any payment or distribution of
assets of the Corporation shall be made to, or set apart for, the holders of the
Common Stock or any other capital stock of the Corporation not ranking prior to,
or on a parity with, the Series B Preferred Stock in respect of rights upon a
Liquidation, the holders of the Series B Preferred Stock shall first be entitled
to receive payment out of such assets of the Corporation of an amount of cash
per share of Common Stock equal to the Liquidation Price. If the assets of the
Corporation are insufficient to permit full payment to the holders of the Series
B Preferred Stock as herein provided, such assets shall be distributed ratably
among the holders of the outstanding Series B Preferred Stock.

11.      MANDATORY CONVERSION. (a) Subject to Section 6 and paragraph (c) of
this Section 7, in the event that Stockholder Approval is received on or prior
to the Final Approval Date and the Performance Milestone is satisfied on or
prior to the Final Approval Date, each share of Series B Preferred Stock shall,
on the date immediately following the date of the last to occur of the
Stockholder Approval and the satisfaction of the Performance Milestone,
immediately and automatically, and without any further action on the part of the
holders thereof, be converted into, and exchanged for the number of shares of
Common Stock equal to the quotient of (i) the sum of the Stated Value per share
of Series B Preferred Stock and the cumulative accrued, but unpaid, dividends
thereon and (ii) the Trailing Average Closing Price as of the date of the last
to occur of the Stockholder Approval and the satisfaction of the Performance
Milestone.

                   (b) Upon such conversion,  all amounts otherwise payable with
respect to the Series B Preferred Stock shall be deemed paid in full by the
issuance of such shares of Common Stock. Upon the conversion thereof in
accordance with this Section 7, the shares of Series B Preferred Stock shall be
canceled and shall become authorized, but unissued, shares of capital stock of
the Corporation.

                   (c) In case of any capital reorganization, or the
consolidation or merger of the Corporation with or into another corporation
(other than a merger or consolidation in which the Corporation is the continuing
corporation and which does not result in any reclassification of the outstanding
shares of Common Stock or the conversion of such outstanding shares of Common
Stock into shares of other stock or other securities or property), or in the
case of any sale, lease, or conveyance to another corporation of the property
and assets of any nature of the Corporation as an entirety or substantially as
an entirety (such actions being hereinafter collectively referred to as
"Reorganizations"), there shall thereafter be deliverable upon conversion of
each share of Series B Preferred Stock (in lieu of the number of shares of
Common Stock theretofore deliverable) the number of shares of stock or other
securities or property to which a holder of the respective number of shares of
Common Stock which would theretofore have been deliverable upon the conversion
of such share of Series B Preferred Stock would have been entitled upon such
Reorganization if such share of Series B Preferred Stock had been converted
immediately prior to such Reorganization. In case of any Reorganization,
appropriate adjustment, as determined in good faith by the Board of Directors of
the Corporation, shall be made in the application of the provisions herein set
forth with respect to the rights and interests of the holders of the Series B
Preferred Stock so that the provisions set forth herein shall thereafter be
applicable, as nearly as possible, in relation to any shares or other property
thereafter deliverable upon conversion of the Series B Preferred Stock. Any such
adjustment shall be made by, and set forth in, a resolution of the Board of
Directors of the Corporation, or any successor thereto, and shall for all
purposes hereof conclusively be deemed to be an appropriate adjustment. The
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Corporation shall not effect any such Reorganization unless, upon or prior to
the consummation thereof, the successor corporation, or if the Corporation shall
be the surviving corporation in any such Reorganization and is not the issuer of
the shares of stock or other securities or property to be delivered to holders
of shares of the capital stock of the Corporation outstanding at the effective
time thereof, then such issuer, shall assume by written instrument the
obligation to deliver to the holders of the Series B Preferred Stock such shares
of stock, securities, cash, or other property as such holders shall be entitled
to purchase in accordance with the foregoing provisions.

                   (d) In case of any reclassification or change of the shares
of Common Stock or other securities issuable upon conversion of the Series B
Preferred Stock (other than a change in par value or from a specified par value
to no par value, or as a result of a subdivision or combination, but including
any change in the shares into two or more classes or series of shares), or in
case of any consolidation or merger of another corporation into the Corporation
in which the Corporation is the continuing corporation and in which there is a
reclassification or change (including a change to the right to receive cash or
other property) of the shares of Common Stock or other securities issuable upon
conversion of the Series B Preferred Stock (other than a change in par value, or
from no par value to a specified par value, or as a result of a subdivision or
combination, but including any change in the shares into two or more classes or
series of shares), each share of Series B Preferred Stock shall thereafter be
convertible into solely the kind and amount of shares of stock and other
securities, property, cash, or any combination thereof receivable upon such
reclassification, change, consolidation, or merger by a holder of the number of
shares of Common Stock for which such share of Series B Preferred Stock might
have been exercised immediately prior to such reclassification, change,
consolidation, or merger. Thereafter, appropriate provision shall be made for
adjustments which shall be as nearly equivalent as practicable to the
adjustments in this Section 7.

                   (e) The provisions of paragraphs (d) and (e) of this Section
7 shall similarly apply to successive reclassifications and changes of shares of
Common Stock and to successive consolidations, mergers, sales, leases, or
conveyances.

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8.       MISCELLANEOUS.

                   (a) CLOSING OF TRANSFER BOOKS. To facilitate the payment of
any dividend with respect to the Series B Preferred Stock or any Liquidation,
the Board of Directors of the Corporation is authorized, but not required, to
set a record date not earlier than 60 days and not later than 10 days prior to
the date of the distribution, in the case of a dividend or a Liquidation, as the
case may be.

                   (b) NOTICES. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested or by Federal Express, Express Mail, or
similar overnight delivery or courier service or delivered (in-person or by
telecopy, telex, or similar telecommunications equipment) against receipt to the
party to whom it is to be given, in the case of the holders of the Series B
Preferred Stock, at the address of each such holder set forth in the stock
transfer ledger of the Corporation, or, in the case of the Corporation, at 12801
N. Central Expressway, Suite 1515, Dallas, Texas, 75243. Any notice or other
communication given by certified mail shall be deemed given at the time of
certification thereof. Any notice given by other means permitted by this
paragraph 8(a) shall be deemed given at the time of receipt thereof.

         IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
executed by the President and attested by its Secretary this____ day of March,
2000.

                                  CLAIMSNET.COM

                                  BY: ______________________________
                                      NAME:
                                      TITLE: PRESIDENT
ATTEST:

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