EXHIBIT 3.4


                           CERTIFICATE OF DESIGNATION
                                       OF
                            SERIES B PREFERRED STOCK
                                       OF
                             MOTO GUZZI CORPORATION

             Pursuant to Section 151 of the General Corporation Law
                            of the State of Delaware

     The undersigned, authorized signatories of Moto Guzzi Corporation, a
corporation  organized and existing under the laws of the State of Delaware (the
"Corporation"),  do hereby certify that pursuant to authority conferred upon the
Board of Directors by the Certificate of  Incorporation  of the Corporation (the
"Certificate  of  Incorporation")  under the  provisions  of Section  151 of the
General  Corporation  Law of the State of  Delaware,  the  Corporation  has duly
adopted the following resolution creating a series of one hundred sixty thousand
(160,000)  shares of Preferred  Stock, par value $0.01 per share, and designated
as Series B Preferred Stock, as follows:

     RESOLVED,  that pursuant to the authority  vested in the Board of Directors
of the  Corporation  in accordance  with the  provisions of the  Certificate  of
Incorporation,  one hundred sixty thousand (160,000) of the authorized shares of
Preferred Stock are hereby  designated as Series B Preferred  Stock. The powers,
preferences and rights, and the qualifications, limitations and restrictions, of
the Series B Preferred Stock are as follows:

     1. Rank.

       (a) The Series B Preferred  Stock shall,  with respect to dividend rights
and rights upon the  liquidation,  dissolution or winding up of the Corporation,
rank  senior to all  classes and series of the  Corporation's  now or  hereafter
issued Common Stock and,  except as provided in the following  proviso,  to each
other  class or  series of  capital  stock now or  hereafter  created  or issued
(collectively,  together  with the  Common  Stock,  "Series  B  Junior  Stock");
provided,  however,  that,  subject to Section 12 hereof, the Board of Directors
may  authorize  a class or series  of  preferred  stock on a parity  in  powers,
preferences and rights to the Series B Preferred Stock (collectively,  "Series B
Parity  Stock")  or senior in  powers,  preferences  and  rights to the Series B
Preferred  Stock, if approved by the affirmative  vote or consent of the holders
of a majority of the outstanding shares of Series B Preferred Stock, voting as a
separate  class.  As used herein,  the term "Common Stock" shall mean the Common
Stock,  $0.01 par value per share,  of the Corporation as the same exists at the
date hereof or as such stock may be constituted  from time to time,  except that
for the  purpose of  subsections  7(a),  7(b),  7(c) and 7(d)  hereof,  the term
"Common  Stock"  shall also mean and  include  stock of the  Corporation  of any
class,  whether  now or  hereafter  authorized,  which  shall  have the right to
participate in the distribution of either dividends or assets of the Corporation
upon  liquidation,  dissolution  or winding  up,  without  limit as to amount or
percentage.

     2. Dividends.

       (a) The holders of shares of Series B  Preferred  Stock shall be entitled
to receive, out of funds of the Corporation therefor,  cumulative dividends at a
rate of seven percent (7%) of the Liquidation Value (as hereinafter defined) per
share per annum,  payable in equal quarterly  installments on March 31, June 30,
September 30 and December 31 in each year,  commencing March 31, 2000. Dividends
on the Series B Preferred  Stock may be paid, at the option of the  Corporation,
in cash or by the issuance of additional shares of Series B Preferred Stock with
an  aggregate  Liquidation  Value  equal to the amount of such  dividends.  Such
dividends  shall be cumulative  from the date of original issue of each share of
Series B Preferred Stock,  whether or not there shall be funds legally available
for the payment of dividends on any quarterly  payment date. If the  corporation
shall make any dividend  payment in both cash and by the issuance of  additional
shares of Series B  Preferred  Stock,  both the cash and the  additional  shares
shall be distributed  pro rata to the holders of Series B Preferred  Stock.  Any
partial  dividend  payment  made  on the  Series  B  Preferred  Stock  shall  be
distributed pro rata to the holders thereof.

       (b) The  Corporation  covenants  that so long as any  shares  of Series B
Preferred Stock are outstanding,  unless all accrued  dividends on all shares of
Series B Preferred Stock for all past quarterly dividend periods shall have been
paid in full,  no dividends  shall be paid or declared and set aside for payment
or other  distribution  made upon the Common Stock or any other capital stock of
the Corporation, nor shall any shares of the Common Stock or shares of any other
capital stock of the  Corporation be redeemed,  retired,  purchased or otherwise
acquired for  consideration  (or any payment made to or available  for a sinking
fund for the redemption of any such shares) by the Corporation or any subsidiary
of the Corporation;  provided,  however, that the Corporation may acquire shares
of Common  Stock  solely in exchange  for the issuance of other shares of Common
Stock.

     3. Liquidation Preference. (a) In the event of any liquidation, dissolution
or winding up of the Corporation,  whether voluntary or involuntary,  no payment
or  distribution  of assets  shall be made to or set apart  for the  holders  of
Series B Junior Stock  unless the holders of shares of Series B Preferred  Stock
shall have  received,  out of assets  legally  available  therefor,  one hundred
dollars  ($100.00)  per  share of Series B  Preferred  Stock  (the  "Liquidation
Value") plus an amount of cash equal to the dividends accrued and unpaid thereon
to the date of final distribution to the holders of Series B Preferred Stock. If
upon any such  distribution  of assets in liquidation or dissolution or upon the
winding  up of  the  affairs  of the  Corporation  the  amount  which  would  be
distributed to the holder of the outstanding  shares of Series B Preferred Stock
would be less than this amount, then such lesser amount shall be distributed pro
rata to the holders of then  outstanding  shares of Series B Preferred Stock and
to the  holders  of then  outstanding  shares of Series B Parity  Stock,  and no
distribution  shall be made to the holders of Series B Junior Stock. None of the
consolidation or the merger of the  Corporation,  or the sale, lease or transfer
by the  Corporation  of all or any part of its  assets for cash,  securities  or
other property shall be deemed to be a liquidation, dissolution or winding up of
the Corporation  for purposes of this Section 3 (unless in connection  therewith
the liquidation of the Corporation is specifically approved).

       (b) The  holder  of any  shares  of  Series B  Preferred  Stock  shall be
entitled to receive  payment owed for such shares as a result of a  liquidation,
dissolution  or winding  up of the  Corporation  under this  Section 3 only upon
causing to be delivered to the Corporation (i) the  certificate(s)  representing
such  shares  of  Series  B  Preferred  Stock  and (ii)  transfer  instrument(s)
reasonably  satisfactory  to the  Corporation  and  sufficient  to transfer such
shares  of  Series B  Preferred  Stock to the  Corporation  free of any  adverse
interest.

     4. Voting  Rights.  In addition to the voting rights  provided in Section 1
hereof,  the holders of shares of Series B Preferred Stock shall not be entitled
to any voting  rights  except as  described  below or as  otherwise  required by
applicable  law. The  Corporation  shall not,  without the  affirmative  vote or
consent of the holders of a majority of outstanding shares of Series B Preferred
Stock,  voting as a separate  class,  (i) enter into any  agreement or issue any
other equity security or debt  instrument  which would impair the ability of the
Corporation to perform its  obligations to the holders of the Series B Preferred
Stock or (ii) incur any indebtedness whatsoever,  except for (a) indebtedness in
existence on the date of the Subscription Agreement pursuant to which the Series
B  Preferred  Stock is issued,  (b)  indebtedness  in  exchange  for, or the net
proceeds  of which  are  used to  refund,  refinance  or  replace,  indebtedness
described  in clause (a) above,  and (c) bank  lines of credit  utilized  by the
Corporation to finance its day-to-day operations.

     5. Mandatory Redemption.  On December 28, 2001 (the "Redemption Date"), the
Corporation  shall  redeem all of the shares of Series B Preferred  Stock for an
aggregate purchase price per share (the "Redemption  Price"),  in cash, equal to
the Liquidation  Value plus an amount of cash equal to the dividends accrued and
unpaid  thereon to the  Redemption  Date. At any time on or after the Redemption
Date,  a holder of  shares of Series B  Preferred  Stock  shall be  entitled  to
receive the Redemption Price for each share of Series B Preferred Stock owned by
such  holder  upon  actual  delivery  to the  Corporation  of  the  certificates
representing such shares.

     6. Conversion.

       (a) Right of Conversion.  The shares of Series B Preferred  Stock may, at
the option of the holder,  at any time and from time to time, be converted  into
that  number of fully  paid and  non-assessable  shares  of Common  Stock of the
Corporation (calculated as to each conversion to the nearest 1/100th of a share)
obtained  by  dividing  (i) the  aggregate  Liquidation  Value  of the  Series B
Preferred  Stock to be converted by (ii) the  Conversion  Price (as  hereinafter
defined) in effect at such time.

       (b) Manner of Exercise of Conversion Privilege.  The conversion of shares
of Series B Preferred Stock shall be exercised by the surrender by the holder of
the  certificates  representing  the shares being  converted  accompanied by the
funds,  if any,  required by subsection  6(e) and a written notice of conversion
signed by such holder or its duly authorized  agent, at the principal  office of
the  Corporation  (or such  other  office or agency  of the  Corporation  as the
Corporation  may  designate  by notice in  writing  to the  holders  of Series B
Preferred  Stock) at any time during its usual business  hours,  and stating the
name or names in which such holder wishes the  certificates  for Common Stock to
be  received  upon  conversion  to be  issued  and the  address  to  which  such
certificates  shall be  delivered.  In case such notice shall  specify a name or
names other than that of the holder, such notice shall be accompanied by payment
of any and all transfer taxes payable upon the issuance of the Common Stock upon
conversion  and all  instruments of transfer  appropriately  completed to permit
such issuance.

         As soon as practicable  after such surrender by a record holder of such
certificates  and the receipt by the Corporation of such notice,  instruments of
transfer  and funds,  if any,  as  aforesaid,  the  Corporation  shall issue and
deliver  at such  address  as is  specified  by such  holder  a  certificate  or
certificates  for the number of full shares of Common  Stock  issuable  upon the
conversion  of such shares of Series B Preferred  Stock in  accordance  with the
provisions  of this  Section 6 and a check or cash in respect of any  fractional
interest in a share of Common Stock arising upon such  conversion as provided in
subsection 6(c). The conversion of shares hereunder shall be effective,  subject
to the terms of this Section 6, as of the close of business on the date on which
such shares of Series B Preferred  Stock  shall have been  surrendered  and such
notice (and any  applicable  instruments  of transfer  and any  required  taxes)
received by the Corporation as aforesaid,  and the person or persons entitled to
receive  the shares  issuable  upon such  conversion  shall be  treated  for all
purposes as the record  holder or holders of such shares on such date,  and such
conversion shall be at the Conversion Price in effect at such time on such date;
provided,  however, that if the stock transfer books of the Corporation shall be
closed on that date,  such person or persons shall be deemed to have become such
holder or holders of record at the close of business on the next  succeeding day
on which such stock transfer books are open, but such conversion shall be at the
Conversion  Price in  effect  on the date  upon  which  such  shares of Series B
Preferred  Stock shall have been  surrendered  and such  notice  received by the
Corporation.

       (c) Cash Payments in Lieu of Fractional  Shares.  No fractional shares of
Common  Stock or scrip  shall be issued  upon  conversion  of shares of Series B
Preferred  Stock.  If more than one share of Series B  Preferred  Stock shall be
surrendered  for  conversion  at any one time by the same holder,  the number of
full shares of Common Stock issuable upon  conversion  thereof shall be computed
on the basis of the aggregate  number of shares of such Series B Preferred Stock
so  surrendered.  Instead of any  fractional  shares of Common Stock which would
otherwise be issuable upon conversion of any shares of Series B Preferred Stock,
the  Corporation  shall pay a cash  adjustment  in  respect  of such  fractional
interest in an amount  equal to the then Current  Market  Price (as  hereinafter
defined) of a share of Common  Stock  multiplied  by such  fractional  interest.
Fractional  interests  shall not be  entitled to  dividends,  and the holders of
fractional  interests shall not be entitled to any rights as stockholders of the
Corporation in respect of such fractional interest.

       (d) Reservation of Shares of Common Stock.  The Corporation  shall at all
times reserve and keep  available,  out of its authorized and unissued shares of
Common Stock,  solely for the purpose of issue upon the  conversion of shares of
Series B  Preferred  Stock as herein  provided,  such number of shares of Common
Stock as shall then be issuable  upon the  conversion  of the shares of Series B
Preferred  Stock.  The  Corporation  covenants  that all shares of Common  Stock
issuable upon any conversion  described herein shall,  when issued,  be duly and
validly issued,  fully paid,  non-assessable,  free of all liens and charges and
not subject to any  preemptive  rights.  The  Corporation  covenants that if any
shares of Common Stock to be provided for the purposes of  conversion  of shares
of Series B Preferred Stock hereunder  require  registration with or approval of
any governmental authority under any Federal or state law before such shares may
be validly issued upon  conversion,  the  Corporation  will in good faith and as
expeditiously as possible endeavor to secure such  registration or approval,  as
the case  may be.  The  Corporation  further  covenants  that if at any time the
Common  Stock  shall be  listed  on the New York  Stock  Exchange  or any  other
national  securities  exchange  or  quoted  on  the  Nasdaq  Stock  Market,  the
Corporation will exert its best efforts, so long as the Common Stock shall be so
listed on such exchange,  to the extent permitted by the rules of such exchange,
to list  and  keep  listed  all  shares  of  Common  Stock  issuable  hereunder.
Additionally,  the Corporation  will take any corporate  action that may, in the
option of its counsel,  be necessary in order that the  Corporation  may validly
and legally  issue fully paid and  nonassessable  shares of Common  Stock at the
Conversion Price as so adjusted.

       (e) Transfer Taxes,  etc. The issuance of any shares or other  securities
upon conversion of Series B Preferred Stock, and the delivery of certificates or
other instruments  representing  such shares or other securities,  shall be made
without  charge to the  holder  for any tax or other  charge in  respect of such
issuance.  The Corporation shall not, however,  be required to pay any tax which
may be payable in respect of any transfer  involved in the issue and delivery of
any  certificate  in a name  other  than  that of the  holder  of the  Series  B
Preferred  Stock being  converted and the  Corporation  shall not be required to
issue or  deliver  any such  certificate  unless and until the person or persons
requesting  the issue 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.

     7. Conversion Price. The "Conversion  Price" shall mean and be five dollars
($5.00)  per share of Series B  Preferred  Stock,  as  -----------------  may be
adjusted from time to time by the Corporation as follows:

       (a) Dividends, Subdivisions,  Combinations and Reclassifications.  In the
event  that the  Corporation  shall (i)  declare a dividend  on the  outstanding
Common  Stock  payable  in  shares  of its  Common  Stock,  (ii)  subdivide  the
outstanding  Common  Stock,  (iii) combine the  outstanding  Common Stock into a
smaller number of shares,  or (iv) issue by  reclassification  any shares of its
capital stock then, in each case, the Conversion  Price in effect at the time of
the record date for such dividend or of the effective  date of such  subdivision
or combination, shall be proportionately adjusted so that the holder of Series B
Preferred Stock after such time shall be entitled to receive upon conversion the
aggregate number and kind of shares for such consideration which, if such Series
B  Preferred  Stock  had been  converted  immediately  prior to such time at the
then-current Conversion Price, he would have owned upon such conversion and been
entitled to receive by virtue of such  dividend,  subdivision,  or  combination.
Such adjustment shall be made successively whenever any event listed above shall
occur.

       (b) Issuance to Stockholders of Rights, Options or Warrants Below Current
Market Price. In the event that the Corporation shall issue or fix a record date
for the issuance to all holders of Common Stock of rights,  options, or warrants
to subscribe for or purchase  Common Stock (or  securities  convertible  into or
exchangeable  for Common  Stock) at a price per share (or having a conversion or
exchange price per share, if a security  convertible  into or  exchangeable  for
Common  Stock) less than the Current  Market  Price per share of Common Stock on
such record date,  then, in each case, the Conversion Price shall be adjusted by
multiplying the Conversion Price in effect immediately prior to such record date
by a fraction,  the  numerator  of which shall be the number of shares of Common
Stock  outstanding on such record date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common Stock
so to be offered (or the aggregate  initial  conversion or exchange price of the
convertible or exchangeable  securities so to be offered) would purchase at such
Current Market Price and the  denominator of which shall be the number of shares
of Common Stock  outstanding  on such record date plus the number of  additional
shares of Common Stock to be offered for subscription or purchase (or into which
the  convertible  or  exchangeable  securities  so to be offered  are  initially
convertible or exchangeable);  provided,  however, that no such adjustment shall
be made which results in an increase in the Conversion  Price.  Such  adjustment
shall become  effective at the close of business on such record date;  provided,
however,  that,  to the  extent  the  shares  of  Common  Stock  (or  securities
convertible  into or exchangeable for shares of Common Stock) are not delivered,
the  Conversion  Price shall be readjusted  after the expiration of such rights,
options,  or  warrants  (but  only with  respect  to  Series B  Preferred  Stock
converted after such  expiration) to the Conversion Price which would then be in
effect had the adjustments  made upon the issuance of such rights,  options,  or
warrants  been made upon the basis of  delivery  of only the number of shares of
Common  Stock (or  securities  convertible  into or  exchangeable  for shares of
Common Stock) actually issued.  In case any subscription  price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such  consideration  shall be as  determined  in good  faith by the  Board of
Directors of the Corporation,  whose  determination  shall be conclusive  absent
manifest  error.  Shares of Common Stock owned by or held for the account of the
Corporation or any majority-owned subsidiary shall not be deemed outstanding for
the purpose of any such computation.

       (c) Issuance to Stockholders of Evidence of Indebtedness, Cash or Assets.
In the event that the  Corporation  shall  distribute  to all  holders of Common
Stock  (including  any  such  distribution  made  to  the  stockholders  of  the
Corporation  in  connection  with  a  consolidation   or  merger  in  which  the
Corporation is the continuing  corporation) evidences of its indebtedness,  cash
or assets (other than  distributions  and dividends  payable in shares of Common
Stock),  or rights,  options,  or warrants to subscribe  for or purchase  Common
Stock, or securities  convertible  into or changeable for shares of Common Stock
(excluding  those with  respect to the  issuance of which an  adjustment  of the
Conversion Price is provided pursuant to subsection 6(a) hereof),  then, in each
case, the Conversion Price shall be adjusted by multiplying the Conversion Price
in  effect  immediately  prior  to the  record  date  for the  determination  of
stockholders entitled to receive such distribution by a fraction,  the numerator
of which shall be the  Current  Market  Price per share of Common  Stock on such
record  date,  less the fair market  value (as  determined  in good faith by the
Board of Directors of the Corporation,  whose  determination shall be conclusive
absent manifest error) of the portion of the evidences of indebtedness or assets
so to be distributed,  or of such rights, options, or warrants or convertible or
exchangeable  securities,  or the amount of such cash,  applicable to one share,
and the  denominator  of which shall be such  Current  Market Price per share of
Common Stock. Such adjustment shall become effective at the close of business on
such record date.

       (d)  Issuance  of  Rights,  Options  or  Warrants.  In the event that the
Corporation shall issue shares of Common Stock or rights,  options,  or warrants
to subscribe for or purchase  Common Stock,  or securities  convertible  into or
exchangeable for Common Stock (excluding shares, rights,  options,  warrants, or
convertible  or  exchangeable  securities  issued or issuable  (i) in any of the
transactions  with respect to which an  adjustment  of the  Conversion  Price is
provided  pursuant  to  subsections  7(a),  7(b) or 7(c)  above,  (ii)  upon any
issuance of securities  upon  conversion  of Series B Preferred  Stock and (iii)
upon   conversion  or  exercise  of  the  options,   warrants  or  other  rights
outstanding,  and  in  accordance  with  their  terms,  as of  the  date  of the
Subscription Agreement pursuant to which the Series B Preferred Stock is issued)
at a price per share (determined, in the case of such rights, options, warrants,
or  convertible  or  exchangeable  securities,  by dividing (x) the total amount
received or  receivable  by the  Corporation  in  consideration  of the sale and
issuance of such rights,  options,  warrants,  or  convertible  or  exchangeable
securities,  plus the minimum aggregate consideration payable to the Corporation
upon exercise,  conversion,  or exchange  thereof,  by (y) the maximum number of
shares covered by such rights, options, warrants, or convertible or exchangeable
securities)  lower than the Current  Market Price per share of Common Stock,  in
effect  immediately  prior to such issuance,  then the Conversion Price shall be
reduced on the date of such issuance to a price (calculated to the nearest cent)
determined by multiplying the Conversion  Price in effect  immediately  prior to
such issuance by a fraction, (1) the numerator of which shall be an amount equal
to the sum of (A) the number of shares of Common Stock  outstanding  immediately
prior  to  such  issuance  plus  (B)  the  quotient  obtained  by  dividing  the
consideration  received by the  Corporation  upon such  issuance by such Current
Market  Price,  and (2) the  denominator  of which shall be the total  number of
shares of Common Stock outstanding  immediately  after such issuance;  provided,
however,  that no such adjustment  shall be made which results in an increase in
the Conversion Price. For the purposes of such  adjustments,  the maximum number
of  shares  which  the  holders  of  any  such  rights,  options,  warrants,  or
convertible or exchangeable  securities shall be entitled to initially subscribe
for or purchase or convert or exchange such  securities  into shall be deemed to
be issued and outstanding as of the date of such issuance, and the consideration
received by the  Corporation  therefor  shall be deemed to be the  consideration
received by the Corporation for such rights,  options,  warrants, or convertible
or exchangeable securities, plus the minimum aggregate consideration or premiums
stated  in such  rights,  options,  warrants,  or  convertible  or  exchangeable
securities to be paid for the shares covered thereby.  No further  adjustment of
the Conversion  Price shall be made as a result of the actual issuance of shares
of  Common  Stock  on  exercise  of such  rights,  options,  or  warrants  or on
conversion or exchange of such  convertible or exchangeable  securities.  On the
expiration  or the  termination  of such rights,  options,  or warrants,  or the
termination of such right to convert or exchange,  the Conversion Price shall be
readjusted (but only with respect to Series B Preferred Stock if converted after
such  expiration or  termination)  to such  Conversion  Price as would have been
obtained had the  adjustments  made upon the  issuance of such rights,  options,
warrants, or convertible or exchangeable  securities been made upon the basis of
the  delivery of only the number of shares of Common  Stock  actually  delivered
upon the exercise of such rights, options, or warrants or upon the conversion or
exchange  of any such  securities;  and on any change of the number of shares of
Common  Stock  deliverable  upon the exercise of any such  rights,  options,  or
warrants  or  conversion  or  exchange  of  such   convertible  or  exchangeable
securities or any change in the  consideration to be received by the Corporation
upon such exercise,  conversion, or exchange,  including,  without limitation, a
change resulting from the antidilution provisions thereof. In the event that the
Corporation  shall issue  shares of Common  Stock or any such  rights,  options,
warrants,  or  convertible  or  exchangeable   securities  for  a  consideration
consisting,  in whole or in part, of property other than cash or its equivalent,
then the "price per share" and the  "consideration  received by the Corporation"
for  purposes  of the  first  sentence  of  this  subsection  7(d)  shall  be as
determined  in good faith by the Board of  Directors of the  Corporation,  whose
determination  shall be conclusive absent manifest error. Shares of Common Stock
owned  by or held  for the  account  of the  Corporation  or any  majority-owned
subsidiary  shall  not be  deemed  outstanding  for  the  purpose  of  any  such
computation.

       (e) Event of  Default.  Upon the  occurrence  of an Event of Default  (as
hereinafter defined),  the Conversion Price shall be reduced on the date of such
Event of Default to a price equal to the greater of (i) forty  percent  (40%) of
the  Conversion  Price in  effect  immediately  prior to such  date and (ii) the
lowest price permissible by law as of the date of such Event of Default.

       (f)  Definition of Current Market Price.  The "Current  Market Price" per
share of Common Stock shall mean, as of any relevant  date, the closing price on
the principal  United States Stock Exchange  (including the Nasdaq Stock Market)
on which the Common  Stock is then  listed,  or, if the Common Stock is not then
listed on a stock  exchange  but is quoted on the  Nasdaq  Bulletin  Board,  the
lowest price quoted thereon on such date.

       (g)  Adjustments   Applicable  to  All  Series  B  Preferred  Stock.  The
adjustments provided for in this Section 7 shall be applicable to the Conversion
Price of all Series B Preferred Stock, including, without limitation, all Series
B Preferred  Stock then  outstanding  and all Series B Preferred  Stock not then
outstanding, but reserved for issuance upon exercise of warrants or otherwise.

       (h)  Carry-Forward  of De  Minimis  Adjustments.  No  adjustment  in  the
Conversion  Price  shall be  required  if such  adjustment  is less  than  $.05;
provided,  however,  that any adjustments  which by reason of this Section 7 are
not  required to be made shall be carried  forward and taken into account in any
subsequent  adjustment.  All calculations  under this Section 7 shall be made to
the nearest cent or to the nearest  one-thousandth  of a share,  as the case may
be.

       (i)  Deferral of  Adjustment.  In any case in which this  Section 7 shall
require that an adjustment  in the  Conversion  Price be made  effective as of a
record date for a specified event, the Corporation may elect to defer, until the
occurrence of such event,  issuing to the holder, if the holder converted Series
B Preferred  Stock after such record date,  the shares of Common Stock,  if any,
issuable upon such conversion over and above the shares of Common Stock, if any,
issuable  upon such  conversion on the basis of the  Conversion  Price in effect
prior to such adjustment;  provided, however, that the Corporation shall deliver
to the holder a due bill or other appropriate instrument evidencing the holder's
right to  receive  such  additional  shares  upon the  occurrence  of the  event
requiring such adjustment.

       (j) Notice of  Adjustments.  Whenever there shall be an adjustment to the
Conversion  Price as provided in this Section 7, the Corporation  shall promptly
cause written notice thereof to be sent by certified mail,  postage prepaid,  to
the  registered  holders of Series B  Preferred  Stock,  which  notice  shall be
accompanied by an officer's certificate setting forth the Conversion Price after
such  adjustment and setting forth a brief statement of the facts requiring such
adjustment and the computation  thereof,  which officer's  certificate  shall be
conclusive  evidence of the correctness of any such  adjustment  absent manifest
error.

       (k) Adjustment of Conversion Price of Other Securities. In the event that
at any time, as a result of an adjustment made pursuant to subsection  7(a), the
holder  of any share of  Series B  Preferred  Stock  hereafter  surrendered  for
conversion shall become entitled to receive any shares of the Corporation  other
than  shares of Common  Stock,  thereafter  the  Conversion  Price of such other
shares so receivable  upon  conversion of any share of Series B Preferred  Stock
shall be  subject  to  adjustment  from time to time in a manner and on terms as
nearly  equivalent as practicable to the provisions with respect to Common Stock
contained in this Section.

       (l) Temporary  Decrease in Conversion Price. The Corporation from time to
time may decrease the  Conversion  Price by any amount for any period of time if
the  period is at least  twenty  (20) days and if the  decrease  is  irrevocable
during  the  period.  Whenever  the  Conversion  Price  is  so  decreased,   the
Corporation  shall  mail to  holders  of record of shares of Series B  Preferred
Stock a notice of the  decrease at least  fifteen  (15) days before the date the
decreased  Conversion  Price  takes  effect,  and such  notice  shall  state the
decreased Conversion Price and the period it will be in effect.

       (m) Valid and Legal Issuance.  Before taking any action which would cause
an adjustment reducing the Conversion Price below the then par value, if any, of
the shares of Common Stock deliverable upon conversion of the shares of Series B
Preferred  Stock,  the Corporation  will take any corporate action which may, in
the opinion of its  counsel,  be  necessary  in order that the  Corporation  may
validly and legally issue fully paid and  non-assessable  shares of Common Stock
at such adjusted Conversion Price.

     8. Reclassification, Consolidation or Merger or Sale of Assets.

       (a) In the  event of any  reclassification  or  change  of the  shares of
Common Stock  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),  or in the  event  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 (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), the holder shall have the right thereafter to receive upon
conversion of the Series B Preferred  Stock 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  into  which  such  Series B
Preferred   Stock  might  have  been   converted   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 Section 7 and this Section 8.

       (b) The  above  provisions  of this  Section 8 shall  similarly  apply to
successive  reclassifications  and  changes  of shares  of  Common  Stock and to
successive consolidations, mergers, sales, leases, or conveyances.

     9. Events of Default.  Notwithstanding  anything to the contrary  contained
herein,  if one or more of the following  events  (each,  an "Event of Default")
shall occur with respect to any holder of the Series B Preferred Stock:

       (a) the Corporation  shall fail to make any dividend payment in full when
due on the Series B Preferred  Stock  pursuant to Section 2 hereof or shall fail
to issue shares of Common Stock upon  conversion of the Series B Preferred Stock
pursuant to Section 6 hereof; or

       (b) the Corporation shall fail to redeem the shares of Series B Preferred
Stock on the Redemption Date; or

       (c) there shall be a Change of Control (as hereinafter defined); or

       (d)  any  registration  statement,   preliminary  prospectus,   or  final
prospectus  (as  from  time  amended  and  supplemented),  or any  amendment  or
supplement thereto, any quarterly report on Form 10-Q, any annual report on Form
10-K, or any other document filed by the Corporation with the Commission  (each,
a "Commission Report") shall (i) contain an untrue statement of material fact or
(ii) omit to state a material fact required to be stated therein or necessary to
make the statements  therein not  misleading,  unless such statement or omission
was made in reliance upon and in conformity with written  information  furnished
to the Corporation  with respect to the holder of Series B Preferred stock by or
on behalf of such person expressly for inclusion in any such Commission  Report;
or

       (e) the Corporation or any of its subsidiaries shall default on any other
outstanding  obligations of the Corporation in an aggregate  amount greater than
$250,000; or

       (f) the Corporation  shall fail to perform or observe any other covenant,
representation,  warranty, condition, agreement or obligation of the Corporation
contained  in  this  Certificate  or  contained  in the  Subscription  Agreement
pursuant to which the Series B Preferred Stock is issued, and such failure shall
continue uncured for a period of thirty (30) days; or

       (g) the Corporation or any of its subsidiaries:

              (i)  voluntarily  commences  any  proceeding or files any petition
              seeking  relief  under  Title 11 of the United  States Code or any
              other   Federal,   state  or   foreign   bankruptcy,   insolvency,
              liquidation or similar law (collectively, "Bankruptcy Law"); or

              (ii) consents to an order for relief  against it in an involuntary
              case; or

              (iii)  applies for or consents to the  appointment  of a custodian
              for it or for all or substantially all of its property; or

              (iv) makes a general  assignment for the benefit of its creditors;
              or

              (v) generally is not paying its debts as they become due; or

       (h) a court of competent  jurisdiction  enters an order or decree under a
Bankruptcy Law that:

              (i)  is  for  relief  against  the   Corporation  or  any  of  its
              subsidiaries in an involuntary case; or

              (ii) appoints a receiver,  trustee,  custodian or similar official
              for  the  Corporation  or any of its  subsidiaries  or for  all or
              substantially all of the property of the Corporation or any of its
              subsidiaries; or

              (iii)orders  the  liquidation  of  the  Corporation  or any of its
              subsidiaries,  and the order or  decree  remains  unstayed  and in
              effect for sixty(60) consecutive days,

then, or at any time thereafter,  and in each and every case,  unless such Event
of Default  shall have been waived in writing by the holder  (which waiver shall
not be deemed to be a waiver of any subsequent default):

       (A) dividends  payable on the shares of Series B Preferred Stock shall be
payable  at a rate  equal to the  lower of (i) ten  percent  (10%) per share per
annum or (ii) the highest rate  permissible  by law as of the date of such Event
of Default; and

       (B) the Conversion  Price shall be reduced as provided in subsection 7(e)
hereof; and

       (C) all of the holders of Series B Preferred  Stock shall be entitled to,
voting as a separate class,  appoint the majority of the members of the Board of
Directors of the Corporation; and

       (D) the Corporation  shall redeem all of the shares of Series B Preferred
Stock on the same terms as set forth in Section 5 hereof.

The Corporation  shall promptly  provide the holders of Series B Preferred Stock
with written  notice of any Event of Default,  but in no event later than twenty
(20) days from the occurrence thereof.

     For purposes hereof, the term "Change of Control" shall mean the occurrence
of any of the following:  (1) any "person" as defined in Section  3(a)(9) of the
Exchange  Act,  and as used in  Sections  13(d) and 14(d)  thereof,  including a
"group" as  defined  in Section  13(d) of the  Exchange  Act but  excluding  the
Corporation  and any  subsidiary  and any  employee  benefit  plan  sponsored or
maintained by the  Corporation or any subsidiary  (including any trustee of such
plan acting as trustee), directly or indirectly,  becomes the "beneficial owner"
(as  defined  in  Rule  13d-3  under  the  Exchange  Act) of  securities  of the
Corporation  representing  at least forty percent  (40%) of the combined  voting
power of the Corporation's then outstanding securities;  (2) the stockholders of
the   Corporation   approve  a  merger,   consolidation,   recapitalization   or
reorganization of the Corporation,  or the consummation of any such transactions
if stockholder  approval is not obtained,  other than any such transaction which
would  result  in at  least  sixty  percent  (60%)  of the  total  voting  power
represented by the voting  securities of the Corporation or the surviving entity
outstanding  immediately prior to such transaction being  beneficially  owned by
persons who together  beneficially  owned at least eighty  percent  (80%) of the
combined  voting  power  of  the  securities  of  the  Corporation   outstanding
immediately prior to such transaction, provided that for purposes of this clause
(2), such  continuity of ownership (and  preservation  of relative voting power)
shall be deemed to be satisfied if the failure to meet such sixty  percent (60%)
threshold is due solely to the  acquisition of voting  securities by an employee
benefit plan of the Corporation or such surviving  entity;  (3) the stockholders
of the Corporation approve a plan of complete  liquidation of the Corporation or
an  agreement  for  the  sale  or  disposition  by  the  Corporation  of  all or
substantially  all of the  its  assets  (or any  transaction  having  a  similar
effect);  or (4) during any period of two consecutive years,  individuals who at
the  beginning  of  such  period  constitute  the  Board  of  Directors  of  the
Corporation, together with any new director (other than a director designated by
a person who has entered  into an  agreement  with the  Corporation  to effect a
transaction  described  in clause  (1),  (2),  or (3) of this  paragraph)  whose
election  by  the  Board  of  Directors  or  nomination   for  election  by  the
Corporation's  stockholders  was approved by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors at the beginning
of the period or whose  election of  nomination  for election was  previously so
approved, cease for any reason to constitute a majority of the Board.

     10. Registration Rights.

       (a) Demand Registration.  In the event that the Corporation shall receive
from the holder or holders of at least  fifty-one  percent (51%) of the Series B
Preferred  Stock  (the   "Initiating   Holders")  a  written  request  that  the
Corporation  effect a  registration  under  the  Securities  Act of  Registrable
Securities (as hereinafter  defined),  the Corporation  shall: (i) promptly give
written notice of the proposed registration,  qualification or compliance to all
of the other holders; (ii) as soon as practicable, use its best efforts to cause
to be  declared  effective a  registration  statement  sufficient  to permit the
public offering and resale,  through the facilities of all securities  exchanges
and the  over-the-counter  markets  on which the  Corporation's  securities  are
traded,  of the  Registrable  Securities  specified  in  such  request  and  the
Registrable  Securities  of any holder or holder  joining in such request as are
specified in a written request  received by the  Corporation  within twenty (20)
days after receipt by the holders of written  notice from the  Corporation;  and
(iii) use its best efforts to cause the Registrable  Securities so registered to
be  registered  or qualified  for sale under the  securities or blue sky laws of
such jurisdictions as the holder of the Registrable  Securities included in such
registration  statement may  reasonably  request.  As used herein,  "Registrable
Securities" shall mean the Common Stock issuable upon conversion of the Series B
Preferred  Stock,  if any,  which has not been  previously  sold  pursuant  to a
registration  statement or Rule 144 under the Securities Act of 1933, as amended
(the  "Act").  Notwithstanding  the  foregoing,  the  Corporation  shall  not be
obligated  to take any  action  to effect  any  registration,  qualification  or
compliance pursuant to this subsection 10(a):

       (A) in any  particular  jurisdiction  in which the  Corporation  would be
required to qualify to do business and in which it is not otherwise  required to
qualify to do business;

       (B) in any  particular  jurisdiction  in which the  Corporation  would be
required  to  execute a general  consent  to  service  of  process,  unless  the
Corporation is already subject to service in such jurisdiction and except as may
be required by the Securities Act;

       (C) within  three (3) months  following  a  registration  effected by the
Corporation pursuant to subsection 10(b) hereof; or

       (D) after  the  Corporation  has  effected  three (3) such  registrations
pursuant to this subsection 10(a), and such  registrations have been declared or
ordered effective.

     In the event  that a request  for  registration  is made  pursuant  to this
subsection  10(a) but the  Corporation is not obligated to effect such requested
registration  by virtue of the  foregoing  clauses (A) through (C), such request
shall  not be  deemed  to be a demand  for  registration  for  purposes  of this
subsection.  Subject to the foregoing  clauses (A) through (D), the  Corporation
shall  prepare  and  file a  registration  statement  covering  the  Registrable
Securities so requested to be registered as soon as practicable after receipt of
a written request or requests from the Initiating  Holders;  provided,  however,
that if the  Corporation  shall furnish to the Initiating  Holders a certificate
signed by the Chairman of the Board of the Corporation stating that, in the good
faith  judgment  of the  Board  of  Directors  of the  Corporation,  it would be
materially  detrimental  to  the  Corporation  and  its  stockholders  for  such
Registration  Statement to be filed and it is  therefore  essential to defer the
filing of such Registration  Statement,  the Corporation shall have the right to
defer such filing sixty (60) days after receipt of the request of the Initiating
Holders  (provided that the Corporation shall not utilize the right set forth in
this sentence more than once in any 12-month period).

       (b) Piggy-Back  Registration.  If the Corporation at any time proposes to
file a registration  statement with respect to any class of equity securities of
the Corporation,  whether for its own account (other than in connection with the
registration statement contemplated by subsection 10(a) hereof or a registration
statement on Form S-8 or any successor or substantially similar form) or for the
account of a holder of securities of the  Corporation  pursuant to  registration
rights granted by the Corporation, other than for the registration of securities
for sale on a  continuous  or  delayed  basis  pursuant  to Rule  415,  then the
Corporation  shall: (i) promptly give to each holder of Series B Preferred Stock
written  notice  thereof at least ten (10) days before the  anticipated  initial
filing date of any such registration  statement,  and such notice shall offer to
all holders of Series B Preferred  Stock the  opportunity  to have any or all of
the Registrable  Securities held by such holders  included in such  registration
statement;  and (ii)  include in such  registration  statement  (and any related
qualification under blue sky laws or other compliance),  and in any underwriting
involved therein, all the Registrable  Securities specified in a written request
or requests to be included  therein,  made within twenty (20) days after receipt
of such  written  notice from the  Corporation,  by any  holder.  Each holder of
Series B Preferred  Stock shall be entitled to have its  Registrable  Securities
included in an unlimited  number of  registrations  pursuant to this  subsection
10(b).

       (c)  Registration  on Form S-3. In the event that the  Corporation  shall
receive from the Initiating  Holders a written request that the Corporation file
a  registration  statement on Form S-3 (or any successor form to Form S-3) for a
public offering of shares of the Registrable Securities,  and the Corporation is
a registrant entitled to use Form S-3 to register the Registrable Securities for
such an  offering,  the  Corporation  shall use its best  efforts  to cause such
Registrable  Securities  to be  registered  for the offering on such form and to
cause such Registrable  Securities to be qualified in such  jurisdictions as the
holder  or  holders  may  reasonable  request.  The  Corporation  shall  use its
reasonable  best efforts to make itself eligible to use Form S-3 and to maintain
such  eligibility  for  so  long  as the  Series  B  Preferred  Stock  shall  be
outstanding.  A request  for  registration  on Form S-3 (or any  successor  form
thereto) in compliance with this subsection  10(c) shall not count as one of the
three (3)  registration  statements  contemplated  by  subsection  10(a) hereof.
Notwithstanding  the foregoing,  the Corporation  shall not be obligated to take
any action to effect any registration,  qualification or compliance  pursuant to
this subsection 10(c):

       (A) in any  particular  jurisdiction  in which the  Corporation  would be
required to qualify to do business and in which it is not otherwise  required to
qualify to do business;

       (B) in any  particular  jurisdiction  in which the  Corporation  would be
required  to  execute a general  consent  to  service  of  process,  unless  the
Corporation is already subject to service in such jurisdiction and except as may
be required by the Securities Act;

       (C) within  three (3) months  following  a  registration  effected by the
Corporation pursuant to subsection 10(b) hereof; or

       (D) after  the  Corporation  has  effected  three (3) such  registrations
pursuant to this subsection 10(c), and such  registrations have been declared or
ordered effective.

     Subject to the  foregoing  clauses (A) through (D), the  Corporation  shall
prepare and file a registration statement covering the Registrable Securities so
requested to be  registered  as soon as  practicable  after receipt of a written
request or requests from the Initiating Holders; provided,  however, that if the
Corporation shall furnish to the Initiating  Holders a certificate signed by the
Chairman  of the  Board of the  Corporation  stating  that,  in the  good  faith
judgment of the Board of Directors of the  Corporation,  it would be  materially
detrimental  to the  Corporation  and its  stockholders  for  such  Registration
Statement to be filed and it is therefore  essential to defer the filing of such
Registration  Statement,  the  Corporation  shall  have the right to defer  such
filing sixty (60) days after  receipt of the request of the  Initiating  Holders
(provided  that the  Corporation  shall not  utilize the right set forth in this
sentence more than once in any 12-month period).

       (d) Obligation to Maintain  Effectiveness.  The Corporation shall use its
best efforts to keep effective any  registration or  qualification  contemplated
hereunder  and  shall  from time to time  amend or  supplement  each  applicable
registration statement,  preliminary prospectus, final prospectus,  application,
document,  and  communication  for such  period of time as shall be  required to
permit the holder of the Registrable Securities included therein to complete the
offer and sale of the Registrable  Securities  covered thereby.  The Corporation
shall in no event be required to keep any such  registration or qualification in
effect  for a period  in  excess  of six (6)  months  from the date on which the
holder is first free to sell such Registrable Securities taking into account any
lock-up agreed to by the Holder; provided,  however, that, if the Corporation is
required to keep any such  registration or  qualification in effect with respect
to securities  other than the  Registrable  Securities  beyond such period,  the
Corporation  shall  keep  such  registration  or  qualification  in effect as it
relates  to the  Registrable  Securities  for so long as  such  registration  or
qualification  remains  or is  required  to remain in effect in  respect of such
other securities. The Corporation shall in no event be required to keep any such
registration or  qualification  in effect for a period beyond the earlier of the
date  that all the  Registrable  Securities  have  been  sold  pursuant  to such
registration  statement and the date the holders  thereof  receive an opinion of
counsel to the Corporation that they may sell such Registrable  Securities under
Rule 144 under the Act.

       (e) Provision of Registration  Statement.  In the event of a registration
pursuant to the provisions of this Section 10, the Corporation  shall furnish to
the holder of the Registrable Securities included therein such reasonable number
of copies of the  registration  statement and of each  amendment and  supplement
thereto (in each case, including all exhibits), such reasonable number of copies
of each prospectus contained in such registration  statement and each supplement
or amendment thereto (including each preliminary prospectus), all of which shall
conform to the requirements of the Act and the rules and regulations thereunder,
and such other documents,  as the holder of the Registrable  Securities included
therein may reasonably  request to facilitate the disposition of the Registrable
Securities included in such registration.

       (f) Opinion of Counsel.  In the event of a  registration  pursuant to the
provisions  of this  Section 10, the  Corporation  shall  furnish the holders of
Registrable   Securities  included  therein  with  an  opinion  of  its  counsel
(reasonably  acceptable to such holders) to the effect that (i) the registration
statement  has  become  effective  under  the Act and no  order  suspending  the
effectiveness of the registration statement, preventing or suspending the use of
the registration statement, any preliminary prospectus, any final prospectus, or
any amendment or supplement  thereto has been issued,  nor to the best knowledge
of such counsel has the  Commission  or any  securities or blue sky authority of
any  jurisdiction  instituted or threatened  to institute any  proceedings  with
respect to such an order, (ii) each document,  if any, incorporated by reference
in the  registration  statement and the prospectus  included therein (except for
financial  statements  and  related  schedules,  as to which such  counsel  need
express no opinion)  complied as to form when filed with the  Commission  in all
material  respects  with the  Securities  Exchange Act of 1934,  as amended (the
"Exchange Act"), and the rules and regulations of the Commission thereunder, and
(iii) the  registration  statement and the prospectus  included  therein and any
supplements or amendments  thereto (except for financial  statements and related
schedules,  as to which such counsel need express no opinion)  comply as to form
in all  material  respects  with the Act and the  rules and  regulations  of the
Commission  thereunder.  In  addition,  such  counsel  shall  state  that it has
participated  in  conferences  with  officers and other  representatives  of the
Corporation, and representatives of independent accountants for the Corporation,
at  which   conferences   such   counsel  made   inquiries  of  such   officers,
representatives  and accountants,  and discussed the contents of the preliminary
prospectus,  the registration statement, the prospectus and related matters and,
although such counsel is not passing and does not assume any  responsibility for
the  accuracy,  completeness  or  fairness,  the  statements  contained  in  the
preliminary  prospectus,  the registration statement and the prospectus,  on the
basis of the  foregoing,  no facts have come to the  attention  of such  counsel
which lead it to believe that either the registration statement or any amendment
thereto, at the time such registration  statement or amendment became effective,
or the  preliminary  prospectus  or  prospectus  or amendment or any  supplement
thereto,  as of the date of such opinion,  contained  any untrue  statement of a
material fact or omitted to state a material fact required to be stated  therein
or necessary to make the statements  therein not misleading (it being understood
that such  counsel  need  express  no  opinion  with  respect  to the  financial
statements and schedules and other  financial and  statistical  data included in
the preliminary  prospectus,  the registration  statement,  or prospectus).  The
Corporation  shall also  furnish to the  holders of the  Registrable  Securities
included  in  such  registration  statement  a  cold  comfort  letter  from  the
independent  certified  public  accountants of the Corporation in customary form
and substance.

       (g) Indemnity and Contribution.  In the event of a registration  pursuant
to the  provision  of this  Section  10, the  Corporation  and the holder of the
Registrable  Securities  included  therein  shall  enter into a  cross-indemnity
agreement  and a  contribution  agreement,  each in  customary  form,  with each
underwriter,  if any, and, if requested,  enter into an  underwriting  agreement
containing conventional representations, warranties, allocation of expenses, and
customary closing conditions, including, without limitation, opinions of counsel
and  accountants'  cold comfort  letters,  with any underwriter who acquires any
Registrable Securities.

       (h) Rule 144  Requirements.  The  Corporation  agrees that, from the date
hereof  and  until  all  the  Registrable  Securities  have  been  sold  under a
registration  statement  or  pursuant  to Rule 144 under the Act,  it shall keep
current in filing all reports,  statements  and other  materials  required to be
filed with the  Commission to permit  holders of the  Registrable  Securities to
sell such securities under Rule 144.

       (i) No Grants of Senior Rights.  Until such time as the Corporation shall
have fully  performed  its  obligation  under this Section 10, except for rights
granted prior to the date hereof or rights of holders of Registrable Securities,
the  Corporation  will not  grant  to any  persons  the  right  to  request  the
Corporation  to register any securities of the  Corporation  without the written
consent  of the  holders  of  the  Registrable  Securities,  provided  that  the
Corporation may grant such registration  rights to other persons so long as such
rights  are pari  passu or  subordinate  to the  rights  of the  holders  of the
Registrable Securities.

       (j)  Indemnification by Corporation.  Subject to the conditions set forth
below,  the  Corporation  agrees to  indemnify  and hold  harmless the holder of
Registrable  Securities included in any registration,  its officers,  directors,
partners,  employees, agents, and counsel, and each person, if any, who controls
any such person  within the meaning of Section 15 of the Act or Section 20(a) of
the Exchange Act, from and against any and all loss,  liability,  charge, claim,
damage,  and expense  whatsoever (which shall include,  for all purposes of this
Section  10,  without  limitation,  reasonable  attorneys'  fees and any and all
expense whatsoever  incurred in investigating,  preparing,  or defending against
any litigation,  commenced or threatened,  or any claim whatsoever,  and any and
all  amounts  paid in  settlement  of any  claim  or  litigation),  as and  when
incurred,  arising out of,  based  upon,  or in  connection  with (i) any untrue
statement or alleged  untrue  statement of a material fact  contained (A) in any
registration  statement,  preliminary  prospectus,  or final prospectus (as from
time to time amended and supplemented),  or any amendment or supplement thereto,
relating  to  the  sale  of any of  the  Registrable  Securities,  or (B) in any
application or other document or communication  (in this Section 10 collectively
called an  "application")  executed by or on behalf of the  Corporation or based
upon written  information  furnished by or on behalf of the Corporation filed in
any  jurisdiction  in  order  to  register  or  qualify  any of the  Registrable
Securities  under the  securities  or blue sky laws  thereof  or filed  with the
Commission or any securities  exchange;  or any omission or alleged  omission to
state a material  fact  required to be stated  therein or  necessary to make the
statements therein not misleading, unless such statement or omission was made in
reliance  upon and in  conformity  with  written  information  furnished  to the
Corporation with respect to the holder of Registrable Securities included in any
registration statement by or on behalf of such person expressly for inclusion in
any registration statement,  preliminary prospectus, or final prospectus, or any
amendment or supplement thereto,  or in any application,  as the case may be, or
(ii) any breach of any representation,  warranty,  covenant, or agreement of the
Corporation  contained in this Certificate of Designation or in the Subscription
Agreement  pursuant  to which  the  Series B  Preferred  Stock  is  issued.  The
foregoing  agreement  to  indemnify  shall be in addition to any  liability  the
Corporation may otherwise have,  including  liabilities arising pursuant to this
Certificate of Designation.

     If any  action is brought  against  the  holder of  Registrable  Securities
included  in any  registration  statement  or any  of its  officers,  directors,
partners,  employees,  agents,  or counsel,  or any controlling  persons of such
person (an  "indemnified  party") in  respect of which  indemnity  may be sought
against the  Corporation  pursuant to this Section,  such  indemnified  party or
parties shall promptly  notify the  Corporation in writing of the institution of
such action (but the failure so to notify shall not relieve the Corporation from
any liability under this subsection 10(j) unless the Corporation shall have been
materially  prejudiced  by such failure,  and shall not relieve the  Corporation
from any  liability  other  than  pursuant  to this  subsection  10(j))  and the
Corporation  shall  promptly  assume the defense of such action,  including  the
employment of counsel  (which counsel shall be reasonably  satisfactory  to such
indemnified party or parties) and payment of expenses. Such indemnified party or
parties  shall  have the right to employ  its or their own  counsel  in any such
case,  but the fees and expenses of such counsel shall be at the expense of such
indemnified  party or parties  unless the  employment of such counsel shall have
been  authorized in writing by the Corporation in connection with the defense of
such  action or the  Corporation  shall  not have  employed  counsel  reasonably
satisfactory to such indemnified  party or parties to have charge of the defense
of such  action or such  indemnified  party or  parties  shall  have  reasonably
concluded that there may be one or more legal  defenses  available to it or them
or to other indemnified  parties which are different from or additional to those
available  to the  Corporation,  in any of which  events such fees and  expenses
shall be borne by the Corporation  and the Corporation  shall not have the right
to direct  the  defense  of such  action on behalf of the  indemnified  party or
parties.  Anything  in this  Section  10 to the  contrary  notwithstanding,  the
Corporation  shall not be liable for any  settlement of any such claim or action
effected without its written consent,  which shall not be unreasonably withheld.
The Corporation  agrees promptly to notify the holder of Registrable  Securities
of the commencement of any litigation or proceedings  against the Corporation or
any of its officers or directors in connection  with the sale of any Registrable
Securities or any preliminary prospectus, prospectus, registration statement, or
amendment or supplement thereto, or any application  relating to any sale of any
Registrable Securities.

       (k)  Indemnification  by  Holder.  The holder of  Registrable  Securities
agrees to indemnify  and hold  harmless the  Corporation,  each  director of the
Corporation,  each  officer  of  the  Corporation  who  shall  have  signed  any
registration  statement covering Registrable Securities held by the holder, each
other person, if any, who controls the Corporation within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, and its or their  respective
counsel,  to the same extent as the foregoing  indemnity from the Corporation to
the  holder  in  subsection  10(j),  but only  with  respect  to  statements  or
omissions, if any, made in any registration  statement,  preliminary prospectus,
or final  prospectus  (as from time to time  amended and  supplemented),  or any
amendment or supplement thereto, or in any application,  in reliance upon and in
conformity with written information furnished to the Corporation with respect to
the  holder of  Registrable  Securities  by or on behalf of the  holder  thereof
expressly  for  inclusion  in  any  such  registration  statement,   preliminary
prospectus,  or final prospectus,  or any amendment or supplement thereto, or in
any application,  as the case may be. If any action shall be brought against the
Corporation  or any other person so indemnified  based on any such  registration
statement,  preliminary  prospectus,  or final  prospectus,  or any amendment or
supplement thereto, or in any application, and in respect of which indemnity may
be sought against the holder pursuant to this subsection 10(k), the holder shall
have the rights and duties given to the  Corporation,  and the  Corporation  and
each other person so  indemnified  shall have the rights and duties given to the
indemnified parties, by the provisions of subsection 10(j).

       (l) Contribution.  To provide for just and equitable contribution, if (i)
an indemnified  party makes a claim for  indemnification  pursuant to subsection
10(j) or 10(k) (subject to the  limitations  thereof) but it is found in a final
judicial determination, not subject to further appeal, that such indemnification
may not be enforced in such case,  even though this  Certificate  of Designation
expressly provides for  indemnification in such case, or (ii) any indemnified or
indemnifying  party  seeks  contribution  under  the Act,  the  Exchange  Act or
otherwise,  then the  Corporation  (including for this purpose any  contribution
made by or on behalf of any  director  of the  Corporation,  any  officer of the
Corporation who signed any such registration  statement,  any controlling person
of the Corporation, and its or their respective counsel), as one entity, and the
holder  of the  Registrable  Securities  included  in such  registration  in the
aggregate  (including  for this purpose any  contribution  by or on behalf of an
indemnified  party),  as a  second  entity,  shall  contribute  to  the  losses,
liabilities,  claims,  damages, and expenses whatsoever to which any of them may
be  subject  on the  basis  of  relevant  equitable  considerations  such as the
relative fault of the  Corporation  and the holder in connection  with the facts
which resulted in such losses,  liabilities,  claims, damages, and expenses. The
relative fault, in the case of an untrue  statement,  alleged untrue  statement,
omission,  or alleged  omission,  shall be  determined  by, among other  things,
whether such statement, alleged statement, omission, or alleged omission relates
to information  supplied by the  Corporation or by the holder,  and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such statement,  alleged statement,  omission, or alleged omission.  The
Corporation  and the holder agree that it would be unjust and inequitable if the
respective  obligations of the Corporation and the holder for contribution  were
determined  by pro  rata  or per  capita  allocation  of the  aggregate  losses,
liabilities,  claims,  damages,  and expenses  (even if the holder and the other
indemnified parties were treated as one entity for such purpose) or by any other
method of allocation that does not reflect the equitable considerations referred
to in this subsection 10(l). No person guilty of a fraudulent  misrepresentation
(within  the  meaning  of  subsection  11(f) of the Act)  shall be  entitled  to
contribution   from  any   person   who  is  not   guilty  of  such   fraudulent
representation.  For purposes of this subsection 10(l), each person, if any, who
controls the holder within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and each officer,  director,  partner,  employee, agent, and
counsel  of the  holder  or  control  person  shall  have  the  same  rights  to
contribution  as the  holder or  control  person and each  person,  if any,  who
controls the Corporation  within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, each officer of the Corporation who shall have signed
any such registration  statement,  each director of the Corporation,  and its or
their  respective  counsel  shall have the same  rights to  contribution  as the
Corporation,  subject in each case to the provisions of this  subsection  10(l).
Anything in this  subsection  10(l) to the  contrary  notwithstanding,  no party
shall be liable for contribution  with respect to the settlement of any claim or
action effected without its written  consent.  This subsection 10(l) is intended
to  supersede  any right to  contribution  under the Act,  the  Exchange  Act or
otherwise.

     11. Preemptive  Rights. The Series B Preferred Stock is not entitled to any
preemptive  or  subscription   rights  in  respect  of  any  securities  of  the
Corporation.

     12. Issuance of Additional Series B Preferred Stock.  Other than the shares
of Series B Preferred Stock (i) issued on the date of the Subscription Agreement
pursuant to which the Series B Preferred Stock is issued or (ii)  distributed to
the holders of Series B Preferred  Stock pursuant to the provisions of Section 2
hereof,  the  Corporation  may not at any time  issue any  additional  shares of
Series B Preferred Stock.

     13. Status of Acquired Shares.  Shares of Series B Preferred Stock redeemed
by the  Corporation,  received  upon  conversion  or  otherwise  acquired by the
Corporation  will be restored to the status of authorized and unissued shares of
Preferred Stock, without designation as to series, and may thereafter be issued,
but not as shares of Series B Preferred Stock.

     14. Replacement  Certificates.  Upon receipt by the Corporation of evidence
reasonably  satisfactory to it of the loss, theft,  destruction or mutilation of
any certificate  representing  shares of Series B Preferred  Stock,  and, in the
case of  loss,  theft  or  destruction,  of  indemnity  or  security  reasonably
satisfactory  to it, and  reimbursement  to the  Corporation  of all  reasonable
expenses  incidental  thereto,  and  upon  surrender  and  cancellation  of such
certificate,  if mutilated,  the Corporation will make and deliver a replacement
certificate  of like tenor.  Further,  if the holder  exercises  the  conversion
rights granted  hereunder in part but not in whole, the Corporation  agrees that
it will deliver to the holder a replacement  certificate  which will entitle the
holder thereof to convert such  certificate  into the number of shares of Common
Stock  that  remain as yet  unconverted  on the terms and  conditions  set forth
herein.

     15. Notice of Certain Corporate Actions.  In the event that the Corporation
shall at any time  propose to: (a) pay any stock  dividend to the holders of its
Common  Stock or to make any other  distribution  to the  holders  of its Common
Stock; (b) offer to the holders of its Common Stock rights,  warrants or options
to subscribe for or to purchase any additional  shares of Common Stock or shares
of stock of any class or any other securities, rights or options; (c) effect any
reclassification or change of its outstanding shares of Common Stock; (d) effect
any  consolidation,  merger or sale,  transfer  or other  disposition  of all or
substantially all of the assets of the Corporation;  (e) effect the liquidation,
dissolution or winding-up of the Corporation; or (f) take any other action which
would cause an adjustment to the Conversion Price,  then, in each such case, the
Corporation  shall give  written  notice  thereof,  by certified  mail,  postage
prepaid, to the holder of Series B Preferred Stock at the holder's address as it
shall appear in the stock ledger of the Corporation, mailed at least twenty (20)
days prior to (i) the date as of which the holders of record of shares of Common
Stock to be  entitled  to  receive  any  such  dividend,  distribution,  rights,
warrants,  or other securities are to be determined,  (ii) the date on which any
such   reclassification,   change  of   outstanding   shares  of  Common  Stock,
consolidation,   merger,  sale,  lease,  conveyance  of  property,  liquidation,
dissolution,  or winding-up is expected to become effective,  and the date as of
which it is expected  that  holders of record of shares of Common Stock shall be
entitled to exchange  their shares for  securities  or other  property,  if any,
deliverable   upon  such   reclassification,   change  of  outstanding   shares,
consolidation,   merger,  sale,  lease,  conveyance  of  property,  liquidation,
dissolution,  or winding-up,  or (iii) the date of such other action which would
require an adjustment to the Conversion Price.

     16.  Severability of Provisions.  Whenever possible,  each provision hereof
shall be interpreted  in a manner as to be effective and valid under  applicable
law, but if any  provision  hereof is held to be  prohibited by or invalid under
applicable law, such provision  shall be ineffective  only to the extent of such
prohibition or invalidity, without invalidating or otherwise adversely affecting
the remaining  provisions  hereof. If a court of competent  jurisdiction  should
determine  that a provision  hereof would be valid or enforceable if a period of
time were  extended or shortened or a particular  percentage  were  increased or
decreased,  then such court may make such change as shall be necessary to render
the provision in question effective and valid under applicable law.

     17. Choice of Law, Etc. This Certificate shall be governed by and construed
under  the laws of the  State of New  York,  without  regard  to  principles  of
conflicts  of  law  or  choice  of  law  thereof.  The  Corporation  hereby  (i)
irrevocably  submits to the jurisdiction of the United States District Court for
the Southern District of New York and the courts of the State of New York in the
Borough of Manhattan for the purposes of any suit, action or proceeding  arising
out of or relating to this Certificate and (ii) waives, and agrees not to assert
in any such suit, action or proceeding, any claim that is not personally subject
to the  jurisdiction  of such  court,  that the suit,  action or  proceeding  is
brought  in an  inconvenient  forum,  or that the venue of the  suit,  action or
proceeding is improper.  The Corporation consents to process being served in any
such suit,  action or proceeding by mailing a copy thereof to the Corporation at
its principal  office (or such other office or agency of the  Corporation as the
Corporation  may  designate  by notice in  writing  to the  holders  of Series B
Preferred  Stock)  and  agrees  that  such  service  shall  constitute  good and
sufficient  service of process and notice  thereof.  Nothing in this  Section 17
shall affect or limit any right to serve  process in any other manner  permitted
by law.




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     IN WITNESS  WHEREOF,  the  undersigned  have executed and  subscribed  this
Certificate  of  Designation  and do  affirm  the  foregoing  as true  under the
penalties of perjury this ___ day of ________________, 2000.



                                     ___________________________________________
                                     Name:
                                     Title:


Attest:


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Name:
Title: