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                                                                     Exhibit 4.B


                   CERTIFICATE OF DESIGNATIONS, PREFERENCES
              AND RIGHTS OF SERIES A CONVERTIBLE PREFERRED STOCK
                                       OF
                                   ZILA, INC.


      Zila, Inc. (the "COMPANY"), a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify that,
pursuant to authority conferred upon the Board of Directors of the Company by
the Certificate of Incorporation, as amended, of the Company, and pursuant to
Section 151 of the General Corporation Law of the State of Delaware, the Board
of Directors of the Company at a meeting duly held, adopted resolutions (i)
authorizing a series of the Company's previously authorized preferred stock, par
value $.001 per share, and (ii) providing for the designations, preferences and
relative, participating, optional or other rights, and the qualifications,
limitations or restrictions thereof, of Thirty Thousand (30,000) shares of
Series A Redeemable Convertible Preferred Stock of the Company, as follows:
      RESOLVED, that the Company is authorized to issue 30,000 shares of Series
A Redeemable Convertible Preferred Stock (the "PREFERRED SHARES"), par value
$.001 per share, which shall have the following powers, designations,
preferences and other special rights:

      (1)   Dividends.  The Preferred Shares shall not bear any dividends.
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      (2) Holder's Conversion of Preferred Shares. A holder of Preferred Shares
shall have the right, at such holder's option, to convert the Preferred Shares
into shares of the Company's common stock, $.001 par value per share (the
"COMMON STOCK"), on the following terms and conditions:

            (a) Conversion Right. Subject to the provisions of Sections 2(i) and
2(l) below, at any time or times on or after the date of the initial issuance of
any of the Preferred Shares (the "ISSUANCE DATE"), any holder of Preferred
Shares shall be entitled to convert any whole number of Preferred Shares into
fully paid and nonassessable shares (rounded to the nearest whole share in
accordance with Section 2(i) below) of Common Stock, at the Conversion Rate (as
defined below); provided, however, that in no event shall any holder be entitled
to convert Preferred Shares in excess of that number of Preferred Shares which,
upon giving effect to such conversion, would cause the aggregate number of
shares of Common Stock beneficially owned by the holder and its affiliates to
exceed 4.99% of the outstanding shares of the Common Stock following such
conversion. For purposes of the foregoing proviso, the aggregate number of
shares of Common Stock beneficially owned by the holder and its affiliates shall
include the number of shares of Common Stock issuable upon conversion of the
Preferred Shares with respect to which the determination of such proviso is
being made, but shall exclude the number of shares of Common Stock which would
be issuable upon (i) conversion of the remaining, nonconverted Preferred Shares
beneficially owned by the holder and its affiliates and (ii) exercise or
conversion of the unexercised or unconverted portion of any other securities of
the Company (including, without limitation, any warrants) subject to a
limitation on conversion or exercise analogous to the limitation contained
herein beneficially owned by the holder and its affiliates. Except as set forth
in the preceding sentence, for purposes of this paragraph, beneficial ownership
shall be calculated in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended. The holder may waive the foregoing limitations by
written notice to the Company upon not less than 61 days prior notice (with such
waiver taking effect only upon the expiration of such 61 day notice period).

            (b) Conversion Rate. The number of shares of Common Stock issuable
upon conversion of each of the Preferred Shares pursuant to Sections (2)(a) and
2(i) shall be determined according to the following formula (the "CONVERSION
RATE"):

                       1,000          + Repricing Shares (if applicable)
                  Conversion Price

            (c)   Repricing. The number of Repricing Shares to be included in
the Conversion Rate is as follows:


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                  (i) First Repricing Period. If the First Repricing Price is
less than 116% of the Conversion Price, and if a holder gives notice to the
Company as provided in paragraph (vii) below of the number of its Preferred
Shares (subject to the limitation in Section 2(l)) it elects to convert subject
to the First Repricing Event, then the number of Repricing Shares per converted
Preferred Share for the First Repricing Period shall be as determined according
to the following formula (the "FIRST REPRICING FORMULA"):

      [(1.16 x Conversion Price) - First Repricing Price] x    1,000
                        First Repricing Price               Conversion Price

                  (ii) Second Repricing Period. If the Second Repricing Price is
less than 117.5% of the Conversion Price, and if a holder gives notice to the
Company as provided in paragraph (vii) below of the number of its Preferred
Shares (subject to the limitation in Section 2(l)) it elects to convert subject
to the Second Repricing Event, then the number of Repricing Shares per converted
Preferred Share for the Second Repricing Period shall be as determined according
to the following formula (the "SECOND REPRICING FORMULA"):

      [(1.175 x Conversion Price) - Second Repricing Price] x   1,000
                        Second Repricing Price                Conversion Price

                  (iii) Third Repricing Period. If the Third Repricing Price is
less than 119% of the Conversion Price, and if a holder gives notice to the
Company as provided in paragraph (vii) below of the number of its Preferred
Shares (subject to the limitation in Section 2(l)) it elects to convert subject
to the Third Repricing Event, then the number of Repricing Shares per converted
Preferred Share for the Third Repricing Period shall be as determined according
to the following formula (the "THIRD REPRICING FORMULA"):

      [(1.19 x Conversion Price) - Third Repricing Price] x    1,000
                        Third Repricing Price              Conversion Price

                  (iv) Fourth Repricing Period. If the Fourth Repricing Price is
less than 120.5% of the Conversion Price, and if a holder gives notice to the
Company as provided in paragraph (vii) below of the number of its Preferred
Shares (subject to the limitation in Section 2(l)) it elects to convert subject
to the Fourth Repricing Event, then the number of Repricing Shares per converted
Preferred Share for the Fourth Repricing Period shall be as determined according
to the following formula (the "FOURTH REPRICING FORMULA"):



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      [(1.205 x Conversion Price) - Fourth Repricing Price] x    1,000
                        Fourth Repricing Price                Conversion Price

                  (v) Fifth Repricing Period. If the Fifth Repricing Price is
less than 122% of the Conversion Price, and if a holder gives notice to the
Company as provided in paragraph (vii) below of the number of its Preferred
Shares (subject to the limitation in Section 2(l)) it elects to convert subject
to the Fifth Repricing Event, then the number of Repricing Shares per converted
Preferred Share for the Fifth Repricing Period shall be as determined by the
following formula (the "FIFTH REPRICING FORMULA"):

      [(1.22 x Conversion Price) - Fifth Repricing Price] x    1,000
                        Fifth Repricing Price               Conversion Price

                  (vi) Optional Repricing Period. During the Optional Repricing
Period, if the Optional Repricing Price is less than 122% of the Conversion
Price, and if a holder gives the Company notice as provided in paragraph (vii)
below, then the number of Repricing Shares per converted Preferred Share for
such conversion shall be as determined by the following formula (the "OPTIONAL
REPRICING FORMULA"):

      [(1.22 x Conversion Price) - Optional Repricing Price] x   1,000
                        Optional Repricing Price               Conversion Price

                  (vii) Notices. A holder may give the Company notice of its
election to convert Preferred Shares subject to repricing at the principal
corporate office of the Company during the period commencing on the first day of
the applicable Initial Repricing Period and ending at midnight, New York time,
on the fourth day of the Initial Repricing Period. During the Optional Repricing
Period a holder may give such notice at any time. Such notices, together with
all notices provided for in Section 2(c) or elsewhere in this Certificate of
Designations, shall be given by facsimile transmission or courier delivery. Any
such notice shall be deemed received (i) in the case of facsimile transmission,
on the date and at the time indicated by the transmitting machine that the
facsimile has been received, and (ii) in the case of courier delivery, on the
date and at the time that (a) the delivery receipt is signed, (b) such delivery
is refused or (c) the courier otherwise reports that it is unable to make such
delivery.

                  (viii) Election to Pay Repricing Shares in Cash. The Company
may, at its election, pay the holders cash in lieu of delivering the Repricing
Shares upon a conversion subject to repricing in the manner described in this
paragraph. If the Company elects to pay the holders cash in lieu of Repricing
Shares as set forth below, 



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such cash shall be paid simultaneously with the delivery to the holders of the
certificates representing the Common Stock issuable upon conversion as provided
in Section 2(a).

                        (A)  First Five Repricing Periods.  With respect to
the Initial Repricing Periods, the Company may, on or prior to the Trading Day
next preceding the commencement of the applicable Determination Period, give the
Buyers a notice that it elects to pay for any Repricing Shares in cash in lieu
of Common Stock in the event that any holder should convert subject to a
Repricing Event during that Repricing Period. The cash payment in lieu of each
Repricing Share shall be in an amount equal to the applicable Repricing Price.
Unless otherwise agreed to by the Company and the applicable holder, if the
Company fails to give such notice by the date specified above, payment with
respect to the Repricing Shares shall be in Common Stock.

                        (B)  Optional Repricing Period.  With respect to the
Optional Repricing Period, when and if any holder delivers to the Company a
conversion notice, the Company may, by 5:00 p.m. Mountain Time of the Trading
Day next following receipt of such notice, notify such holder in writing that it
elects to pay for the Repricing Shares related to such conversion notice in cash
in lieu of Common Stock. If the Company fails to deliver such notice to such
holder, the Company shall deliver the Repricing Shares in Common Stock and not
in cash. At the written request of a holder, the Company shall advise such
holder in writing, by 5:00 p.m. Mountain Time of the Trading Day next following
receipt of the holder's request, as to whether, during the next succeeding
six-Trading Day period, if the holder were to convert Preferred Shares subject
to repricing during said period, the Company would elect to pay for the
Repricing Shares in cash in lieu of Common Stock. Failure of the Company to
respond to the holder by 5:00 p.m. Mountain Time of the Trading Day next
following receipt of the holder's request shall be deemed an election to pay for
the Repricing Shares in Common Stock, and the Company shall be bound by such
election during that six-Trading Day period. Unless otherwise agreed to by the
Company and the applicable holder, if the Company makes a valid election to pay
for Repricing Shares in cash in lieu of Common Stock during the Optional
Repricing Period, the Company must deliver cash in lieu of Repricing Shares and
the cash payment in lieu of each Repricing Share shall be an amount equal to the
Closing Bid Price of the Repricing Share on the date of the conversion notice.

            (d)   Definitions:

            For purposes of this Certificate of Designations, the following
terms shall have the following meanings:

            "APPLICABLE PRICE" is defined in Section 2(f)(i).



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            "APPLICABLE REPRICING PERIOD" is defined in Section 2(l).

            "APPROVED STOCK PLAN" is defined in Section 2(f)(i)(D)(I).

            "AVERAGE MARKET PRICE" means, with respect to any security for any
period, that price which shall be computed as the arithmetic average of the
Closing Bid Prices for such security for each Trading Date in such period.

            "CLOSING BID PRICE" means, for any security as of any date, the last
closing bid price for such security on The Nasdaq National Market, or, if The
Nasdaq National Market is not the principal trading market for such security,
the last closing bid price of such security on the principal securities exchange
or trading market where such security is listed or traded as reported by
Bloomberg, or if the foregoing do not apply, the last closing bid price of such
security in the over-the-counter market on the electronic bulletin board for
such security as reported by Bloomberg, or, if no closing bid price is reported
for such security by Bloomberg, the last closing trade price of such security as
reported by Bloomberg, or, if no last closing trade price is reported for such
security by Bloomberg, the average of the bid prices of any market makers for
such security as reported in the "pink sheets" by the National Quotation Bureau,
Inc. If the Closing Bid Price cannot be calculated for such security on such
date on any of the foregoing bases, the Closing Bid Price of such security on
such date shall be the fair market value as mutually determined by the Company
and the holders of Preferred Shares. If the Company and the holders of Preferred
Shares are unable to agree upon the fair market value of the Common Stock, then
such dispute shall be resolved pursuant to Section 2(h)(iii) below with the term
"Closing Bid Price" being substituted for the term "Market Price." (All such
determinations to be appropriately adjusted for any stock dividend, stock, split
or other similar transaction during such period).

            "COMMON STOCK" is defined in Section 2.

            "COMMON STOCK DEEMED OUTSTANDING" is defined in Section
2(f)(i)(D)(II).

            "COMPANY" is defined in the recital hereto.

            "CONVERSION DATE" is defined in Section 2(h)(i).

            "CONVERSION NOTICE" is defined in Section 2(h)(i).



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            "CONVERSION PRICE" means the Closing Bid Price of the Common Stock
on the date immediately preceding the Issuance Date, subject to adjustment as
provided herein.

            "CONVERSION RATE" is defined in Section 2(b).

            "CONVERSION RESTRICTION ELECTION NOTICE" is defined in Section
2(m).

            "CONVERSION RESTRICTION NOTICE" is defined in Section 2(m).

            "CONVERSION RESTRICTIONS" is defined in Section 2(m).

            "CONVERSION SHARES" means shares of Common Stock received upon a
conversion of Preferred Shares, including, without limitation, Repricing Shares.

            "CONVERTIBLE SECURITIES" is defined in Section 2(f)(i)(A).

            "EXCHANGE CAP" is defined in Section 11.

            "FIFTH DETERMINATION PERIOD" means the period commencing four
Trading Days prior to the Fifth Target Date and concluding five Trading Days
after the Fifth Target Date.

            "FIFTH REPRICING EVENT" means the Fifth Repricing Price being less
than 122% of the Conversion Price.

            "FIFTH REPRICING FORMULA" is defined in Section 2(c)(v).

            "FIFTH REPRICING PERIOD" means the period commencing 241 days
following the Issuance Date and concluding 270 days following the Issuance Date.

            "FIFTH REPRICING PRICE" means the average Closing Bid Price of
the Common Stock during the Fifth Determination Period.

            "FIFTH TARGET DATE" means the day 240 days following the Issuance
Date or, if such day is not a Trading Day, the next succeeding Trading Day.

            "FIRST DETERMINATION PERIOD" means the period commencing four
Trading Days prior to the First Target Date and concluding five Trading Days
after the First Target Date.



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            "FIRST REPRICING EVENT" means the First Repricing Price being less
than 116% of the Conversion Price.

            "FIRST REPRICING FORMULA" is defined in Section 2(c)(i).

            "FIRST REPRICING PERIOD" means the period commencing 120 days
following the Issuance Date and concluding 150 days following the Issuance Date.

            "FIRST REPRICING PRICE" means the average Closing Bid Price of
the Common Stock during the First Determination Period.

            "FIRST TARGET DATE" means the day 120 days following the Issuance
Date or, if such day is not a Trading Day, the next succeeding Trading Day.

            "FOURTH DETERMINATION PERIOD" means the period commencing four
Trading Days prior to the Fourth Target Date and concluding five Trading Days
after the Fourth Target Date.

            "FOURTH REPRICING EVENT" means the Fourth Repricing Price being less
than 120.5% of the Conversion Price.

            "FOURTH REPRICING FORMULA" is defined in Section 2(c)(iv).

            "FOURTH REPRICING PERIOD" means the period commencing 211 days
following the Issuance Date and concluding 240 days following the Issuance Date.

            "FOURTH REPRICING PRICE" means the average Closing Bid Price of
the Common Stock during the Fourth Determination Period.

            "FOURTH TARGET DATE" means the day 210 days following the Issuance
Date or, if such day is not a Trading Day, the next succeeding Trading Day.

            "INABILITY TO FULLY CONVERT NOTICE" is defined in Section 4(b).

            "INITIAL REPRICING LIMITATION" is defined in Section 2(l).

            "INITIAL REPRICING PERIOD" means the First Repricing Period, the
Second Repricing Period, the Third Repricing Period, the Fourth Repricing
Period or the Fifth Repricing Period, as applicable.



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            "ISSUANCE DATE" is defined in Section 2(a).

            "LIQUIDATION VALUE" means (i) prior to and during the First
Repricing Period, $1,160; (ii) during the Second Repricing Period, $1,175; (iii)
during the Third Repricing Period, $1,190; (iv) during the Fourth Repricing
Period, $1,205; and (v) during the Fifth Repricing Period and the Optional
Repricing Period, $1,220.

            "MAJOR TRANSACTION" is defined in Section 3(c).

            "MAJOR TRANSACTION REDEMPTION PRICE" is defined in Section 3(a).

            "MANDATORY CONVERSION DATE" is defined in Section 2(i).

            "MANDATORY REDEMPTION" is defined in Section 4(a)(i).

            "MANDATORY REDEMPTION PRICE" is defined in Section 4(a)(i).

            "MARKET PRICE" means the average Closing Bid Price of the Common
Stock for the five Trading Days immediately preceding the date of determination.

            "MATERIAL ADVERSE CHANGE" means any change, event, result or
happening involving, directly or indirectly, the Company or any of its
subsidiaries resulting in a material adverse effect on the business, prospects,
financial condition or results of operations of the Company and its
subsidiaries, taken as a whole, including, without limitation, an event
constituting a Major Transaction (as defined in the Securities Purchase
Agreement) or a Triggering Event shall have occurred, or a breach by the Company
of any of its obligations under the Transaction Documents (as defined in the
Purchase Agreement).

            "NOTICE IN RESPONSE TO INABILITY TO CONVERT" is defined in
Section 4(b).

            "NOTICE OF MAJOR TRANSACTION" is defined in Section 3(e).

            "NOTICE OF REDEMPTION AT OPTION OF BUYER UPON MAJOR TRANSACTION"
is defined in Section 3(e).

            "NOTICE OF REDEMPTION AT OPTION OF BUYER UPON TRIGGERING EVENT"
is defined in Section 3(f).



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            "NOTICE OF TRIGGERING EVENT" is defined in Section 3(f).

            "OPTIONAL 5 DAY PERIOD" means the five Trading Days immediately
preceding notice from a holder to the Company of repricing during the Optional
Repricing Period.

            "OPTIONAL REPRICING FORMULA" is defined in Section 2(c)(vi).

            "OPTIONAL REPRICING LIMITATION" is defined in Section 2(l).

            "OPTIONAL REPRICING PERIOD" means the period commencing 271 days
following the Issuance Date.

            "OPTIONAL REPRICING PRICE" means the average Closing Bid Price of
the Common Stock during the Optional 5 Day Period.

            "OPTIONS" is defined in Section 2(f)(i)(A).

            "ORGANIC CHANGE" is defined in Section 2(f)(iii).

            "OTHER SECURITIES" means (i) those warrants of the Company issued
prior to, and outstanding on, the date of issuance of the Warrants (as defined
in the Securities Purchase Agreement), (ii) the Preferred Shares, and (iii)
additional shares of Common Stock issued pursuant to that certain Private Equity
Line of Credit Agreement dated as of April 30, 1997, between Deere Park Capital
Management and the Company.

            "PARI PASSU SHARES" is defined in Section 8.

            "PERSON" is defined in Section 2(f)(iii).

            "PREFERRED FUNDS" is defined in Section 8.

            "PREFERRED SHARES" is defined in the resolution clause hereto.

            "PREFERRED STOCK CERTIFICATES" is defined in Section 2(h)(i).

            "PURCHASE RIGHTS" is defined in Section 2(g).

            "REDEMPTION PRICE" is defined in Section 3(b).




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            "REGISTRATION STATEMENT" is defined in Section 2(e).

            "REGISTRATION RIGHTS AGREEMENT" is defined in Section 2(e).

            "REPRICING EVENT" means a First Repricing Event, a Second Repricing
Event, a Third Repricing Event, a Fourth Repricing Event, a Fifth Repricing
Event or a repricing during the Optional Repricing Period.

            "REPRICING FORMULA" means the First Repricing Formula, the Second
Repricing Formula, the Third Repricing Formula, the Fourth Repricing Formula,
the Fifth Repricing Formula or the Optional Repricing Formula, as applicable.

            "REPRICING PRICE" means the First Repricing Price, the Second
Repricing Price, the Third Repricing Price, the Fourth Repricing Price or the
Fifth Repricing Price, as applicable.

            "REPRICING SHARES" means the number of shares of Common Stock
determined pursuant to the First Repricing Formula, the Second Repricing
Formula, the Third Repricing Formula, the Fourth Repricing Formula, the Fifth
Repricing Formula or the Optional Repricing Formula, as applicable.

            "SCHEDULED EFFECTIVE DATE" is defined in Section 2(e).

            "SCHEDULED FILING DATE" is defined in Section 2(e).

            "SEC" is defined in Section 2(e).

            "SECOND DETERMINATION PERIOD" means the period commencing four
Trading Days prior to the Second Target Date and concluding five Trading Days
after the Second Target Date.

            "SECOND REPRICING EVENT" means the Second Repricing Price being less
than 117.5% of the Conversion Price.

            "SECOND REPRICING FORMULA" is defined in Section 2(c)(ii).

            "SECOND REPRICING PERIOD" means the period commencing 151 days
following the Issuance Date and concluding 180 days following the Issuance Date.



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            "SECOND REPRICING PRICE" means the average Closing Bid Price of
the Common Stock during the Second Determination Period.

            "SECOND TARGET DATE" means the day 150 days following the Issuance
Date or, if such day is not a Trading Day, the next succeeding Trading Day.

            "SECURITIES PURCHASE AGREEMENT" is defined in Section 2(h)(v).

            "THIRD DETERMINATION PERIOD" means the period commencing four
Trading Days prior to the Third Target Date and concluding five Trading Days
after the Third Target Date.

            "THIRD REPRICING EVENT" means the Third Repricing Price being less
than 119% of the Conversion Price.

            "THIRD REPRICING FORMULA" is defined in Section 2(c)(iii).

            "THIRD REPRICING PERIOD" means the period commencing 181 days
following the Issuance Date and concluding 210 days following the Issuance Date.

            "THIRD REPRICING PRICE" means the average Closing Bid Price of
the Common Stock during the Third Determination Period.

            "THIRD TARGET DATE" means the day 180 days following the Issuance
Date or, if such day is not a Trading Day, the next succeeding Trading Day.

            "TRADING DAY" means any day during which the Nasdaq National Market,
the Nasdaq Small-Cap Market, the American Stock Exchange or the New York Stock
Exchange, whichever is at the time the principal trading exchange or market for
the Common Stock, is open for business.

            "TRANSFER AGENT" is defined in Section 2(h)(i).

            "TRIGGERING EVENT" is defined in Section 3(d).

            "TRIGGERING EVENT REDEMPTION PRICE" is defined in Section 3(b).

            "VALUATION EVENT" is defined in Section 2(f)(i)(E)(I).

            "VOID OPTIONAL REDEMPTION NOTICE" is defined in Section 3(g).



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            "VOID OPTIONAL REDEMPTION OPTION" is defined in Section 3(g).

            (e) Effect of Failure to Obtain and Maintain Effectiveness of
Registration Statement. If the registration statement (the "REGISTRATION
STATEMENT") covering the resale of the shares of Common Stock issuable upon
conversion or exercise of the Preferred Shares and the Warrants (as defined in
the Securities Purchase Agreement), respectively, and required to be filed by
the Company pursuant to the Registration Rights Agreement between the Company
and the Buyers referred to therein (the "REGISTRATION RIGHTS AGREEMENT") is not
(i) filed within 90 days of the first Issuance Date of any Preferred Shares (the
"SCHEDULED FILING DATE"), (ii) declared effective by the United States
Securities and Exchange Commission (the "SEC") on or before 120 days after the
first Issuance Date for any Preferred Shares (the "SCHEDULED EFFECTIVE DATE"),
or (iii) if after the Registration Statement has been declared effective by the
SEC, sales cannot be made pursuant to the Registration Statement (whether
because of a failure to keep the Registration Statement effective, to disclose
such information as is necessary for sales to be made pursuant to the
Registration Statement, to register sufficient shares of Common Stock or
otherwise), then, as partial relief for the damages to any holder by reason of
any such delay in or reduction of its ability to sell the underlying shares of
Common Stock (which remedy shall not be exclusive of any other remedies
available at law or in equity), the Company shall pay to the Buyers a 2% per
month penalty, in the manner described in Section 2(c) of the Registration
Rights Agreement, which is incorporated herein by this reference.

            (f) Adjustment to Conversion Price -- Dilution and Other Events. In
order to prevent dilution of the rights granted under this Certificate of
Designations, the Conversion Price will be subject to adjustment from time to
time as provided in this Section 2(f).

                  (i) Adjustment of Conversion Price upon Issuance of Common
Stock. If and whenever on or after the date of issuance of the Preferred Shares,
the Company issues or sells, or is deemed to have issued or sold, any shares of
Common Stock (other than shares of Common Stock deemed to have been issued by
the Company in connection with an Approved Stock Plan or Other Securities) for a
consideration per share less than the Average Market Price of the Common Stock
for the ten (10) consecutive Trading Days immediately preceding the date of such
issuance or sale (the "APPLICABLE PRICE"), then immediately after such issue or
sale, the Conversion Price shall be reduced to an amount equal to the product of
(x) the Conversion Price in effect immediately prior to such issue or sale and
(y) the quotient determined by dividing (1) the sum of (I) the product of the
Applicable Price and the number of shares of Common 




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Stock Deemed Outstanding (as defined below) immediately prior to such issue or
sale, and (II) the consideration, if any, received by the Company upon such
issue or sale, by (2) the product of (I) the Applicable Price and (II) the
number of shares of Common Stock Deemed Outstanding immediately after such issue
or sale. For purposes of determining the adjusted Conversion Price under this
Section 2(d)(i), the following shall be applicable:

                        (A) Issuance of Options. If the Company in any manner
      grants any rights or options to subscribe for or to purchase Common Stock
      (other than pursuant to an Approved Stock Plan or upon conversion of the
      Preferred Shares) or any stock or other securities convertible into or
      exchangeable for Common Stock (such rights or options being herein called
      "OPTIONS" and such convertible or exchangeable stock or securities being
      herein called "CONVERTIBLE SECURITIES") and the price per share for which
      Common Stock is issuable upon the exercise of such Options or upon
      conversion or exchange of such Convertible Securities is less than the
      Applicable Price, then the total maximum number of shares of Common Stock
      issuable upon the exercise of such Options or upon conversion or exchange
      of the total maximum amount of such Convertible Securities issuable upon
      the exercise of such Options shall be deemed to be outstanding and to have
      been issued and sold by the Company for such price per share. For purposes
      of this Section 2(f)(i)(A), the "price per share for which Common Stock is
      issuable upon exercise of such Options or upon conversion or exchange of
      such Convertible Securities" is determined by dividing (I) the total
      amount, if any, received or receivable by the Company as consideration for
      the granting of such Options, plus the minimum aggregate amount of
      additional consideration payable to the Company upon the exercise of all
      such Options, plus in the case of such Options which relate to Convertible
      Securities, the minimum aggregate amount of additional consideration, if
      any, payable to the Company upon the issuance or sale of such Convertible
      Securities and the conversion or exchange thereof, by (II) the total
      maximum number of shares of Common Stock issuable upon exercise of such
      Options or upon the conversion or exchange of all such Convertible
      Securities issuable upon the exercise of such Options. No adjustment of
      the Conversion Price shall be made upon the actual issuance of such Common
      Stock or of such Convertible Securities upon the exercise of such Options
      or upon the actual issuance of such Common Stock upon conversion or
      exchange of such Convertible Securities.

                        (B) Issuance of Convertible Securities. If the Company
      in any manner issues or sells any Convertible Securities and the price per
      share for which Common Stock is issuable upon such conversion or exchange
      is less than the Applicable Price, then the maximum number of shares of
      Common Stock 




                                      -14-
<PAGE>   15
      issuable upon conversion or exchange of such Convertible Securities shall
      be deemed to be outstanding and to have been issued and sold by the
      Company for such price per share. For the purposes of this Section
      2(f)(i)(B), the "price per share for which Common Stock is issuable upon
      such conversion or exchange" is determined by dividing (I) the total
      amount received or receivable by the Company as consideration for the
      issue or sale of such Convertible Securities, plus the minimum aggregate
      amount of additional consideration, if any, payable to the Company upon
      the conversion or exchange thereof, by (II) the total maximum number of
      shares of Common Stock issuable upon the conversion or exchange of all
      such Convertible Securities. No adjustment of the Conversion Price shall
      be made upon the actual issue of such Common Stock upon conversion or
      exchange of such Convertible Securities, and if any such issue or sale of
      such Convertible Securities is made upon exercise of any Options for which
      adjustment of the Conversion Price had been or are to be made pursuant to
      other provisions of this Section 2(f)(i), no further adjustment of the
      Conversion Price shall be made by reason of such issue or sale.

                        (C) Change in Option Price or Rate of Conversion. If the
      purchase price provided for in any Options, the additional consideration,
      if any, payable upon the issue, conversion or exchange of any Convertible
      Securities, or the rate at which any Convertible Securities are
      convertible into or exchangeable for Common Stock change at any time, the
      Conversion Price in effect at the time of such change shall be readjusted
      to the Conversion Price which would have been in effect at such time had
      such Options or Convertible Securities still outstanding provided for such
      changed purchase price, additional consideration or changed conversion
      rate, as the case may be, at the time initially granted, issued or sold;
      provided that no adjustment shall be made if such adjustment would result
      in an increase of the Conversion Price then in effect.

                        (D) Certain Definitions. For purposes of determining the
      adjusted Conversion Price under this Section 2(f)(i), the following terms
      have meanings set forth below:

                              (I)   "APPROVED STOCK PLAN" shall mean any
      employee benefit plan of the Company providing for the grant or exercise
      of any stock or options of the Company, now existing or to be implemented
      in the future, so long as the issuance of such stock or options is
      approved by a majority of the non-employee members of the Board of
      Directors of the Company or a majority of the members of a committee of
      non-employee directors established for such purpose.



                                      -15-
<PAGE>   16
                              (II)  "COMMON STOCK DEEMED OUTSTANDING" means,
      at any given time, the number of shares of Common Stock actually
      outstanding at such time, plus the number of shares of Common Stock deemed
      to be outstanding pursuant to Sections 2(f)(i)(A) and 2(f)(i)(B) hereof
      regardless of whether the Options or Convertible Securities are actually
      exercisable at such time, but excluding any shares of Common Stock
      issuable upon conversion of the Preferred Shares.

                        (E) Effect on Conversion Price of Certain Events. For
      purposes of determining the adjusted Conversion Price under this Section
      2(f)(i), the following shall be applicable:

                              (I)   Calculation of Consideration Received.
      If any Common Stock, Options or Convertible Securities are issued or sold
      or deemed to have been issued or sold for cash, the consideration received
      therefor will be deemed to be the net amount received by the Company
      therefor. In case any Common Stock, Options or Convertible Securities are
      issued or sold for a consideration other than cash, the amount of the
      consideration other than cash received by the Company will be the fair
      value of such consideration, except where such consideration consists of
      securities, in which case the amount of consideration received by the
      Company will be the Average Market Price of such securities for the twenty
      (20) consecutive trading days immediately preceding the date of receipt.
      In case any Common Stock, Options or Convertible Securities are issued to
      the owners of the non-surviving entity in connection with any merger in
      which the Company is the surviving entity the amount of consideration
      therefor will be deemed to be the fair value of such portion of the net
      assets and business of the non-surviving entity as is attributable to such
      Common Stock, Options or Convertible Securities, as the case may be. The
      fair value of any consideration other than cash or securities will be
      determined jointly by the Company and the holders of a majority of the
      Preferred Shares then outstanding. If such parties are unable to reach
      agreement within ten (10) days after the occurrence of an event requiring
      valuation (the "VALUATION EVENT"), the fair value of such consideration
      will be determined within forty-eight (48) hours of the tenth (10th) day
      following the Valuation Event by an independent, reputable appraiser
      selected by the Company. The determination of such appraiser shall be
      deemed binding upon all parties absent manifest error.

                              (II)  Integrated Transactions.  In case any
      Option is issued in connection with the issue or sale of other securities
      of the Company, together comprising one integrated transaction in which no
      specific consideration 



                                      -16-
<PAGE>   17
      is allocated to such Options by the parties thereto, the Options will be
      deemed to have been issued for a consideration of $.01.

                              (III) Treasury Shares.  The number of shares of
      Common Stock outstanding at any given time does not include shares owned
      or held by or for the account of the Company, and the disposition of any
      shares so owned or held will be considered an issue or sale of Common
      Stock.

                              (IV)  Record Date.  If the Company takes a
      record of the holders of Common Stock for the purpose of entitling them
      (1) to receive a dividend or other distribution payable in Common Stock,
      Options or in Convertible Securities or (2) to subscribe for or purchase
      Common Stock, Options or Convertible Securities, then such record date
      will be deemed to be the date of the issue or sale of the shares of Common
      Stock deemed to have been issued or sold upon the declaration of such
      dividend or the making of such other distribution or the date of the
      granting of such right of subscription or purchase, as the case may be.

                  (ii) Adjustment of Conversion Price upon Subdivision or
Combination of Common Stock. If the Company at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company at any time combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination will be proportionately increased.

                  (iii) Reorganization, Reclassification, Consolidation, Merger
or Sale. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to another
Person (as defined below) or other transaction which is effected in such a way
that holders of Common Stock are entitled to receive (either directly or upon
subsequent liquidation) stock, securities or assets with respect to or in
exchange for Common Stock is referred to herein as an "ORGANIC CHANGE." Prior to
the consummation of any Organic Change, the Company will make appropriate
provision (in form and substance satisfactory to the holders of a majority of
the Preferred Shares then outstanding) to insure that each of the holders of the
Preferred Shares will thereafter have the right to acquire and receive in lieu
of or addition to (as the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable upon the conversion of such holder's
Preferred Shares, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for 




                                      -17-
<PAGE>   18
the number of shares of Common Stock (including, without limitation, Repricing
Shares) which would have been issuable upon conversion of such holder's
Preferred Shares had such Organic Change not taken place (without taking into
account any limitations or restrictions on the timing or amount of conversions),
and in any such case, appropriate provisions shall be made with respect to the
rights and interests of the holder to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion
Price and of the number of shares of Common Stock issuable upon conversion of
Preferred Shares) shall, if relevant, thereafter be applicable, as nearly as may
be practicable in relation to any shares of stock or securities thereafter
deliverable upon the conversion thereof. In any such case, the Company will make
appropriate provision (in form and substance satisfactory to the holders of a
majority of the Preferred Shares then outstanding) with respect to such holders'
rights and interests to insure that the provisions of this Section 2(f) and
Section 2(g) below will thereafter be applicable to the Preferred Shares
(including, in the case of any such consolidation, merger or sale in which the
successor entity or purchasing entity is other than the Company, an immediate
adjustment of the Conversion Price to the value for the Common Stock reflected
by the terms of such consolidation, merger or sale, if the value so reflected is
less than the Conversion Price in effect immediately prior to such
consolidation, merger or sale). The Company will not effect any such
consolidation, merger or sale, unless prior to the consummation thereof, the
successor entity (if other than the Company) resulting from consolidation or
merger or the entity purchasing such assets assumes, by written instrument (in
form and substance satisfactory to the holders of a majority of the Preferred
Shares then outstanding), the obligation to deliver to each holder of Preferred
Shares such shares of stock, securities or assets as, in accordance with the
foregoing provisions, such holder may be entitled to acquire. "PERSON" shall
mean an individual, a limited liability company, a partnership, a joint venture,
a corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.

                  (iv) Certain Events. If any event occurs of the type
contemplated by the provisions of this Section 2(f) but not expressly provided
for by such provisions (including, without limitation, the granting of stock
appreciation rights, phantom stock rights or other rights with equity features),
then the Company's Board of Directors will make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of the Preferred
Shares; provided that no such adjustment will increase the Conversion Price as
otherwise determined pursuant to this Section 2(f).

                  (v)   Notices.

                        (A) Immediately upon any adjustment of the Conversion
      Price, the Company will give written notice thereof by facsimile and
      courier to 



                                      -18-
<PAGE>   19
      each holder of Preferred Shares, setting forth in reasonable detail and
      certifying the calculation of such adjustment.

                        (B) The Company will give written notice to each holder
      of Preferred Shares at least twenty (20) days prior to the date on which
      the Company closes its books or takes a record (I) with respect to any
      dividend or distribution upon the Common Stock, (II) with respect to any
      pro rata subscription offer to holders of Common Stock or (III) for
      determining rights to vote with respect to any Organic Change, dissolution
      or liquidation; provided that in no event shall such notice be provided to
      such holder prior to such information being made known to the public.

                        (C) The Company will also give written notice to each
      holder of Preferred Shares at least twenty (20) days prior to the date on
      which any Organic Change, dissolution or liquidation will take place;
      provided that in no event shall such notice be provided to such holder
      prior to such information being made known to the public.

            (g) Purchase Rights. In addition to any adjustments of the
Conversion Price pursuant to Section 2(f) above, if at any time the Company
grants, issues or sells any Options, Convertible Securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the "PURCHASE RIGHTS"), then the holders
of Preferred Shares will be entitled to acquire, upon the terms applicable to
such Purchase Rights, the aggregate Purchase Rights which such holder could have
acquired if such holder had held the number of shares of Common Stock acquirable
upon complete conversion of the Preferred Shares (without taking into account
any limitations or restrictions on the timing or amount of conversions)
immediately before the date on which a record is taken for the grant, issuance
or sale of such Purchase Rights, or, if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights.

            (h) Mechanics of Conversion. Subject to the Company's inability to
fully satisfy its obligations under a Conversion Notice (as defined below) as
provided for in Section 4 below:

                  (i) Holder's Delivery Requirements. To convert Preferred
      Shares into full shares of Common Stock on any date (the "CONVERSION
      DATE"), the holder thereof shall (A) transmit by facsimile (or otherwise
      deliver), for receipt on or prior to 11:59 p.m., Mountain Time on such
      date, a copy of a fully executed notice of conversion in the form attached
      hereto as Exhibit I (the "CONVERSION 




                                      -19-
<PAGE>   20
      NOTICE"), to the Company or its designated transfer agent (the "TRANSFER
      AGENT"), and (B) surrender to a common carrier for delivery to the Company
      or the Transfer Agent as soon as practicable following such date, the
      original certificates representing the Preferred Shares being converted
      (or an indemnification undertaking with respect to such shares in the case
      of their loss, theft or destruction) (the "PREFERRED STOCK CERTIFICATES")
      and the originally executed Conversion Notice.

                  (ii) Company's Response. Upon receipt by the Company of a
      facsimile copy of a Conversion Notice, the Company shall immediately send,
      via facsimile, a confirmation of receipt of such Conversion Notice to such
      holder, which confirmation shall state whether such notice is fully
      completed and, if incomplete, shall specify the reason for the deficiency.
      If the confirmation of the Company does not state that the Conversion
      Notice is incomplete, then the Conversion Notice shall be deemed to be
      fully completed. If the confirmation of the Company does state that the
      Conversion Notice is incomplete, the holder shall have one (1) Trading Day
      to correct the Conversion Notice and still retain the original Conversion
      Date for pricing purposes. If such holder fails to correct the Conversion
      Notice within one (1) Trading Day of receiving a Company confirmation
      identifying an incomplete Conversion Notice, such holder may refile its
      Conversion Notice under Section 2(h)(i) above. Upon receipt by the Company
      or the Transfer Agent of the Preferred Stock Certificates to be converted
      pursuant to a Conversion Notice, together with the originally executed
      Conversion Notice, the Company or the Transfer Agent (as applicable)
      shall, on the next business day following the date of receipt (or the
      second business day following the date of receipt if received after 11:00
      a.m. Mountain Time, (I) issue and surrender to a common carrier for
      overnight delivery to the address as specified in the Conversion Notice, a
      certificate, registered in the name of the holder or its designee, for the
      number of shares of Common Stock to which the holder shall be entitled, or
      (II) credit such aggregate number of shares of Common Stock to which the
      holder shall be entitled to the holder's or its designee's balance account
      with The Depository Trust Company. If the number of Preferred Shares
      represented by the Preferred Stock Certificate(s) submitted for conversion
      is greater than the number of Preferred Shares being converted, then the
      Company or Transfer Agent, as the case may be, shall, as soon as
      practicable and in no event later than two business days after receipt of
      the Preferred Stock Certificate(s) and at its own expense, issue and
      deliver to the holder a new Preferred Stock Certificate representing the
      number of Preferred Shares not converted.

                  (iii) Dispute Resolution. In the case of a dispute as to the
      determination of the Repricing Shares or the arithmetic calculation of the



                                      -20-
<PAGE>   21
      Conversion Rate, the Company shall promptly issue to the holder the number
      of shares of Common Stock that is not disputed and shall submit the
      disputed determinations or arithmetic calculations to the holder via
      facsimile as soon as possible, but in no event later than two (2) business
      days after receipt of such holder's Conversion Notice. If such holder and
      the Company are unable to agree upon the determination of the Repricing
      Shares or arithmetic calculation of the Conversion Rate within one (1)
      business day of such disputed determination or arithmetic calculation
      being submitted to the holder, then the Company shall within one (1)
      business day submit via facsimile (A) the disputed determination of the
      Repricing Shares to an independent, reputable investment bank or (B) the
      disputed arithmetic calculation of the Conversion Rate to its independent,
      outside accountant. The Company shall cause the investment bank or the
      accountant, as the case may be, to perform the determinations or
      calculations and notify the Company and the holder of the results no later
      than forty-eight (48) hours from the time it receives the disputed
      determinations or calculations. Such investment bank's or accountant's
      determination or calculation, as the case may be, shall be binding upon
      all parties absent manifest error. Any holder may, at its option, prior to
      submitting a conversion notice with respect to any of its Preferred
      Shares, request a written confirmation from the Company that such holder's
      calculation of the number of Repricing Shares and arithmetic calculation
      of the Conversion Rate is correct. If the Company disputes the holder's
      calculation, then the Company and the holder shall follow the dispute
      resolution procedures set forth above. If the Company agrees with the
      holders' calculation, then the Company shall deliver a written notice of
      such concurrence to the holder within 24 hours of its receipt of the
      holder's request.

                  (iv) Record Holder. The person or persons entitled to receive
      the shares of Common Stock issuable upon a conversion of Preferred Shares
      shall be treated for all purposes as the record holder or holders of such
      shares of Common Stock on the Conversion Date.

                  (v) Company's Failure to Timely Convert. If within three (3)
      business days of the Company's or the Transfer Agent's receipt of the
      Preferred Stock Certificates to be converted and the originally executed,
      fully completed Conversion Notice the Company shall fail to issue a
      certificate to a holder or credit the holder's balance account with The
      Depository Trust Company for the number of shares of Common Stock to which
      such holder is entitled upon such holder's conversion of Preferred Shares
      or to issue a new Preferred Stock Certificate representing the number of
      Preferred Shares to which such holder is entitled pursuant to Section
      2(h)(ii), in addition to all other available remedies which such holder
      may pursue hereunder and under the Securities Purchase Agreement 




                                      -21-
<PAGE>   22
      between the Company and the initial holders of the Preferred Shares (the
      "SECURITIES PURCHASE AGREEMENT") (including indemnification pursuant to
      Section 8 thereof), the Company shall pay additional damages to such
      holder on each date after such third (3rd) business day that such
      conversion is not timely effected in an amount equal to 1.0% of the
      product of (A) the sum of the number of shares of Common Stock not issued
      to the holder on a timely basis pursuant to Section 2(h)(ii) and to which
      such holder is entitled and, in the event the Company has failed to
      deliver a Preferred Stock Certificate to the holder on a timely basis
      pursuant to Section 2(h)(ii), the greatest number of shares of Common
      Stock issuable upon conversion of the Preferred Shares represented by such
      Preferred Stock Certificate (without regard to any limitations on
      conversion set forth herein, including, without limitation, the Exchange
      Cap and the limitations contained in Sections 2(a) and 2(l) hereof) on any
      day during the period from the time the holder delivered its conversion
      notice to the Company to the time the Company properly delivers such
      Preferred Stock Certificate to the holder, and (B) the highest Closing Bid
      Price of the Common Stock from the time the holder delivered its
      conversion notice to the Company to the time the Company properly delivers
      such shares of Common Stock or such Preferred Stock Certificate, as
      applicable, to the holder. Such additional damages shall continue until
      the Company converts the Preferred Shares or redeems the Preferred Shares
      pursuant to Section 3.

            (i) Mandatory Conversion. If any Preferred Shares remain outstanding
on the Mandatory Conversion Date (as defined below), then all such Preferred
Shares shall be converted as of such date in accordance with Section 2(b) with
Repricing Shares calculated at the Optional Repricing Formula as if the holders
of such Preferred Shares had given the Conversion Notice on the Mandatory
Conversion Date. All holders of Preferred Shares shall thereupon surrender all
Preferred Stock Certificates, duly endorsed for cancellation, to the Company or
the Transfer Agent and on the Mandatory Conversion Date all Preferred Shares,
whether or not the Preferred Stock Certificates therefor are surrendered, shall
be cancelled and deemed null and void provided that the Company has complied
with its obligations under this Section 2(i). "MANDATORY CONVERSION DATE" means
the date which is three years after the applicable Issuance Date. The
limitations in the proviso to Section 2(a) and in Section 2(l) shall not apply
to any conversion on a Mandatory Conversion Date.

            (j) Fractional Shares. The Company shall not issue any fraction of a
share of Common Stock upon any conversion. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one Preferred Share by
a holder thereof shall be aggregated for purposes of determining whether the
conversion would result in the issuance of a fraction of a share of Common
Stock. If, after the aforementioned aggregation, the issuance would result in
the issuance of a fraction of a 



                                      -22-
<PAGE>   23
share of Common Stock, the Company shall round such fraction of a share of
Common Stock up or down to the nearest whole share.

            (k) Taxes. The Company shall pay any and all taxes which may be
imposed upon it with respect to the issuance and delivery of Common Stock upon
the conversion of the Preferred Shares.

            (l)   Conversion and Selling Restrictions.

                  (I) Without the prior consent of the Company, a holder of
      Preferred Shares shall not be entitled to convert, (x) during any one of
      the Initial Repricing Periods, an aggregate number of Preferred Shares in
      excess of 20% of the number of such holder's originally purchased
      Preferred Shares (the "INITIAL REPRICING LIMITATION") or (y) during any
      calendar month in the Optional Repricing Period, an aggregate number of
      Preferred Shares in excess of 33% of the number of such holder's
      originally purchased Preferred Shares (the "OPTIONAL REPRICING
      LIMITATION"); provided, however, that the foregoing restriction shall not
      apply:

                        (A)   with respect to a conversion pursuant to
      Section 2(i);

                        (B)   if there shall have occurred a Material Adverse
      Change; or

                        (C) to any conversion made on a date on which the Market
            Price is equal to or greater than 120% of the Conversion Price;
            provided that the exception in this paragraph (C) shall apply only
            to Preferred Shares that could have been converted in a prior
            Repricing Period but were not.

                  (II) Without the prior consent of the Company, during any one
      of the Initial Repricing Periods (such period being referred to as the
      "APPLICABLE REPRICING PERIOD"), a holder of Preferred Shares shall not be
      entitled to sell Conversion Shares in excess of the greater of:

                        (A)   the highest number of Conversion Shares
            received in any prior Repricing Period; or

                        (B) the maximum number of Conversion Shares that such
            holder could receive in the Applicable Repricing Period;




                                      -23-
<PAGE>   24
      provided, however, that the restrictions contained in this paragraph (II)
      shall not apply to any sale made on a date on which the Market Price is
      equal to or greater than 120% of the Conversion Price.

            (m) Adjustment of Conversion Restrictions upon Issuance of
Convertible Securities. If within six months following the Issuance Date, the
Company in any manner issues or sells Convertible Securities that are
convertible into Common Stock and are subject to restrictions on the amount of
shares that can be converted (the restriction on conversions being herein
referred to as, the "CONVERSION RESTRICTIONS") and such Conversion Restriction
is not formulated with using the same time periods and percentages used in
Section 2(l), the Company shall provide written notice thereof via facsimile and
overnight courier to each holder of the Preferred Shares ("CONVERSION
RESTRICTION NOTICE") on the date of issuance of such Convertible Securities. If
the holders of Preferred Shares representing all of the Preferred Shares then
outstanding which remain subject to the restrictions in Section 2(l) provide
written notice via facsimile and overnight courier (the "CONVERSION RESTRICTION
ELECTION NOTICE") to the Company within five (5) business days of receiving a
Conversion Restriction Notice that such holders desire to replace the conversion
restrictions set forth in Section 2(l) then in effect with the Conversion
Restriction described in such Conversion Restriction Notice, then Section 2(l)
shall automatically be deemed to be amended so as to incorporate the provisions
set forth in the Conversion Restriction Notice.

      (3)   Redemption at Option of Holders.

            (a) Redemption Option Upon Major Transaction. In addition to all
other rights of the holders of Preferred Shares contained herein, simultaneous
with or following the occurrence of a Major Transaction (as defined below), each
holder of Preferred Shares shall have the right, at such holder's option, to
require the Company to redeem all or a portion of such holder's Preferred Shares
at a price per Preferred Share equal to the greater of (i) the Liquidation Value
and (ii) the product of (A) the Conversion Rate (including the Repricing Shares
applicable to that Repricing Period) at such time and (B) the Closing Bid Price
on the date of the public announcement of such Major Transaction or the next
date on which the exchange or market on which the Common Stock is traded is open
if such public announcement is made (X) after 12:00 p.m., Mountain Time, on such
date or (Y) on a date on which the exchange or market on which the Common Stock
is traded is closed ("MAJOR TRANSACTION REDEMPTION PRICE"), plus all accrued
penalties hereunder.

            (b) Redemption Option Upon Triggering Event. In addition to all
other rights of the holders of Preferred Shares contained herein, after a
Triggering Event (as defined below), each holder of Preferred Shares shall have
the right, at such holder's 




                                      -24-
<PAGE>   25
option, to require the Company to redeem all or a portion of such holder's
Preferred Shares at a price per Preferred Share equal to the greater of (i) the
Liquidation Value and (ii) the product of (A) the Conversion Rate (including the
Repricing Shares applicable to that Repricing Period) at such time and (B) the
Closing Bid Price calculated as of the date immediately preceding such
Triggering Event on which the exchange or market on which the Common Stock is
traded is open ("TRIGGERING EVENT REDEMPTION PRICE" and, collectively with
"MAJOR TRANSACTION REDEMPTION PRICE," the "REDEMPTION PRICE"), plus all accrued
penalties hereunder.

            (c)   "Major Transaction".  A "MAJOR TRANSACTION" shall be deemed
to have occurred at such time as any of the following events:

                  (i) the consolidation, merger or other business combination of
the Company with or into another Person (other than pursuant to a migratory
merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company);

                  (ii)  the sale or transfer of all or substantially all of
the Company's assets; or

                  (iii) a purchase, tender or exchange offer made to and
accepted by the holders of more than 25% of the outstanding shares of Common
Stock.

            (d)   "Triggering Event".  A "TRIGGERING EVENT" shall be deemed
to have occurred at such time as any of the following events:

                  (i) the failure of the Registration Statement to be declared
effective by the SEC on or prior to the date that is 180 days after the Initial
Issuance Date;

                  (ii) while the Registration Statement is required to be
maintained effective pursuant to the terms of the Registration Rights Agreement,
the effectiveness of the Registration Statement lapses for any reason
(including, without limitation, the issuance of a stop order) or is unavailable
to the holder of the Preferred Shares for sale of the Registrable Securities (as
defined in the Registration Rights Agreement) in accordance with the terms of
the Registration Rights Agreement, and such lapse or unavailability continues
for a period of ten consecutive trading days, provided that the cause of such
lapse or unavailability is not due to factors solely within the control of such
holder of Preferred Shares;



                                      -25-
<PAGE>   26
                  (iii) the failure of the Common Stock to be listed on the
Nasdaq National Market, The Nasdaq SmallCap Market, The New York Stock
Exchange, Inc. or The American Stock Exchange, Inc. for a period of seven
consecutive days (provided that such failure shall not constitute a
Triggering Event if the Company delists the Common Stock at the election of
the holders of Preferred Shares pursuant to Section 3(g) below);

                  (iv) the Company's notice to any holder of Preferred Shares,
including by way of public announcement, at any time, of its intention not to
comply with proper requests for conversion of any Preferred Shares into shares
of Common Stock, including due to any of the reasons set forth in Section 4(a)
below; or

                  (v) the continuance of the Company's failure to timely convert
Preferred Shares into Common Stock as described in Section 2(h)(v), for a period
of 10 consecutive days.

            (e) Mechanics of Redemption at Option of Buyer Upon Major
Transaction. No later than 20 days prior to the consummation of a Major
Transaction, but not prior to the public announcement of such Major Transaction,
the Company shall deliver written notice thereof via facsimile and overnight
courier ("NOTICE OF MAJOR TRANSACTION") to each holder of Preferred Shares. At
any time after the public announcement of such Major Transaction, any holder of
Preferred Shares then outstanding may require the Company to redeem all of the
holder's Preferred Shares then outstanding by delivering written notice thereof
via facsimile and overnight courier ("NOTICE OF REDEMPTION AT OPTION OF BUYER
UPON MAJOR TRANSACTION") to the Company, which Notice of Redemption at Option of
Buyer Upon Major Transaction shall indicate (i) the number of Preferred Shares
subject to such redemption and (ii) the applicable Major Transaction Redemption
Price, as calculated pursuant to Section 3(a) above.

            (f) Mechanics of Redemption at Option of Buyer Upon Triggering
Event. Within one (1) day after the occurrence of a Triggering Event, the
Company shall deliver written notice thereof via facsimile and overnight courier
("NOTICE OF TRIGGERING EVENT") to each holder of Preferred Shares. At any time
after a Triggering Event, any holder of Preferred Shares then outstanding may
require the Company to redeem all of the holder's Preferred Shares by delivering
written notice thereof via facsimile and overnight courier ("NOTICE OF
REDEMPTION AT OPTION OF BUYER UPON TRIGGERING EVENT") to the Company, which
Notice of Redemption at Option of Buyer Upon Triggering Event shall indicate (i)
the number of Preferred Shares subject to such redemption and (ii) the
applicable Triggering Event Redemption Price, as calculated pursuant to Section
3(b) above.




                                      -26-
<PAGE>   27
            (g) Payment of Redemption Price. Upon the Company's receipt of a
Notice(s) of Redemption at Option of Buyer Upon Major Transaction or a Notice(s)
of Redemption at Option of Buyer Upon Triggering Event, as the case may be, from
any holder of Preferred Shares then outstanding, the Company shall immediately
notify each holder by facsimile of the Company's receipt of such notices of
redemption, so as to enable the other holders, if they so desire, to submit
their own Notice(s) of Redemption at Option of Buyer Upon Major Transaction or
Notice(s) of Redemption at Option of Buyer Upon Triggering Event, as applicable.
If any other holders submit such notice(s) within two Trading Days of their
receipt of the Company's notice described in the preceding sentence, the Company
shall redeem those holders' Preferred Shares at the same time and on the same
terms as the originally notifying holder. All such holders who have submitted
the applicable Notice of Redemption shall thereafter promptly send their
Preferred Stock Certificates to be redeemed to the Company or its Transfer
Agent. The Company shall deliver the applicable Redemption Price (including
accrued penalties) to such holder within five days after the Company's receipt
of the requisite notices required to effect a redemption; provided, however,
that the Major Transaction Redemption Price must be delivered to such holder
prior to, or simultaneously with, the occurrence of a Major Transaction;
provided further that a holder's Preferred Stock Certificates shall have been so
delivered to the Company or its Transfer Agent; provided further that if the
Company is unable to redeem all of the Preferred Shares, the Company shall
redeem an amount from such holder of Preferred Shares equal to such holder's
pro-rata amount (based on the number of Preferred Shares held by such holder
relative to the number of Preferred Shares outstanding) of all Preferred Shares
being redeemed. The Company hereby covenants and agrees that a Major Transaction
shall not be consummated until the Company redeems all of the Preferred Shares
submitted for redemption pursuant to a Major Transaction. If the Company shall
fail to redeem all of the Preferred Shares submitted for redemption pursuant to
a Triggering Event (other than pursuant to a dispute as to the arithmetic
calculation of the Triggering Event Redemption Price), in addition to any remedy
such holder of Preferred Shares may have under this Certificate of Designations
and the Securities Purchase Agreement, the Triggering Event Redemption Price
payable in respect of such unredeemed Preferred Shares shall bear interest at
the rate of 2.0% per month (prorated for partial months) until paid in full.
Commencing five (5) Trading Days after the Company has failed to pay any unpaid
applicable Redemption Price in full to each holder as required by this Section,
any holder of Preferred Shares then outstanding, including shares of Preferred
Shares submitted for redemption pursuant to this Section 3 and for which the
applicable Redemption Price has not been paid, shall have the option (the "VOID
OPTIONAL REDEMPTION OPTION") to, in lieu of redemption, require the Company to
promptly return to each holder all of the Preferred Shares that were submitted
for redemption by such holder under this Section 3 and for which the applicable
Redemption Price has not been paid, by sending written notice thereof to the



                                      -27-
<PAGE>   28
Company via facsimile (the "VOID OPTIONAL REDEMPTION NOTICE"). Upon the
Company's receipt of such Void Optional Redemption Notice(s) and prior to
payment of the full applicable Redemption Price to each holder, (i) the
Notice(s) of Redemption at Option of Buyer Upon Triggering Event or the
Notice(s) of Redemption at Option of Buyer Upon Major Transaction, as the case
may be, shall be null and void with respect to those Preferred Shares submitted
for redemption and for which the applicable Redemption Price has not been paid,
(ii) the Company shall immediately return any Preferred Shares submitted to the
Company by each holder for redemption under this Section 3(g) and for which the
applicable Redemption Price has not been paid, and (iii) the Conversion Price of
such returned Preferred Shares shall be adjusted to the lesser of (A) the
Conversion Price as in effect on the date on which the Void Optional Redemption
Notice(s) is delivered to the Company and (B) the lowest Closing Bid Price
during the period beginning on the date on which the Notice(s) of Redemption of
Option of Buyer Upon Major Transaction or the Notice(s) of Redemption at Option
of Buyer Upon Triggering Event, as the case may be, is delivered to the Company
and ending on the date on which the Void Optional Redemption Notice(s) is
delivered to the Company; provided that no adjustment shall be made if such
adjustment would result in an increase of the Conversion Price then in effect.
The Company shall also deliver to each holder all accrued penalties hereunder.
In addition, if a redemption voided pursuant to this Section 3(g) was caused by
a Triggering Event involving the Company's inability to issue Conversion Shares
because of the Exchange Cap (as defined in Section 11), and if so directed by
the holders of all Preferred Shares then outstanding, including shares of
Preferred Shares submitted for redemption pursuant to this Section 3 with
respect to which the applicable Redemption Price has not been paid, the Company
shall immediately delist the Common Stock from such exchange and have the Common
Stock, at such holders' option, listed on The Nasdaq SmallCap Market or traded
on the electronic bulletin board or the "pink sheets." Notwithstanding the
foregoing, in the event of a dispute as to the determination of the Closing Bid
Price or the arithmetic calculation of the Redemption Price, such dispute shall
be resolved pursuant to Section 2(h)(iii) above with the term "Redemption Price"
being substituted for the term "Conversion Rate." Payments provided for in this
Section 3 shall have priority over payments to other stockholders in connection
with a Major Transaction.




                                      -28-
<PAGE>   29
      (4)   Inability to Fully Convert.

            (a) Holder's Option if Company Cannot Fully Convert. If, upon the
Company's receipt of a Conversion Notice or upon the Mandatory Conversion Date,
the Company cannot issue shares of Common Stock registered for resale under the
Registration Statement for any reason, including, without limitation, because
the Company (x) does not have a sufficient number of shares of Common Stock
authorized and available, (y) is otherwise prohibited by applicable law or by
the rules or regulations of any stock exchange, interdealer quotation system or
other self-regulatory organization with jurisdiction over the Company or its
Securities, including without limitation the Exchange Cap, from issuing all of
the Common Stock which is to be issued to a holder of Preferred Shares pursuant
to a Conversion Notice or (z) fails to have a sufficient number of shares of
Common Stock registered for resale under the Registration Statement, then the
Company shall issue as many shares of Common Stock as it is able to issue in
accordance with such holder's Conversion Notice and pursuant to Section 2(h)
above and, with respect to the unconverted Preferred Shares, the holder, solely
at such holder's option, can elect to:

                  (i) require the Company to redeem from such holder those
Preferred Shares for which the Company is unable to issue Common Stock in
accordance with such holder's Conversion Notice ("MANDATORY REDEMPTION") at a
price per Preferred Share (the "MANDATORY REDEMPTION PRICE") equal to the
Triggering Event Redemption Price as of such Conversion Date, including accrued
penalties (for this purpose treating the date on which (x), (y) or (z) in
Section 4(a) above occurs as the date of a Triggering Event);

                  (ii) if the Company's inability to fully convert Preferred
Shares is pursuant to Section 4(a)(z) above, require the Company to issue
restricted shares of Common Stock in accordance with such holder's Conversion
Notice and pursuant to Section 2(h) above;

                  (iii) void its Conversion Notice and retain or have returned,
as the case may be, the nonconverted Preferred Shares that were to be converted
pursuant to such holder's Conversion Notice (subject to the same adjustment to
the Conversion Price as applies under the Void Optional Redemption Option in
Section 3(g)); or

                  (iv) if the Company's inability to fully convert Preferred
Shares is pursuant to the Exchange Cap described in Section 4(a)(y) above,
require the Company to issue shares of Common Stock in accordance with such
holder's Conversion Notice and pursuant to Section 2(h) above at a Conversion
Price equal to the average Closing Bid 



                                      -29-
<PAGE>   30
Price of the Common Stock for the five consecutive trading days preceding such
holder's Notice in Response to Inability to Convert (as defined below).

            (b) Mechanics of Fulfilling Holder's Election. The Company shall
immediately send via facsimile to a holder of Preferred Shares, upon receipt of
a facsimile copy of a Conversion Notice from such holder which cannot be fully
satisfied as described in Section 4(a) above, a notice of the Company's
inability to fully satisfy such holder's Conversion Notice (the "INABILITY TO
FULLY CONVERT NOTICE"). Such Inability to Fully Convert Notice shall indicate
(i) the reason why the Company is unable to fully satisfy such holder's
Conversion Notice, (ii) the number of Preferred Shares which cannot be converted
and (iii) the applicable Mandatory Redemption Price. Such holder must within
fifteen (15) business days of receipt of such Inability to Fully Convert Notice
deliver written notice via facsimile to the Company ("NOTICE IN RESPONSE TO
INABILITY TO CONVERT") of its election pursuant to Section 4(a) above.

            (c) Payment of Redemption Price. If such holder shall elect to have
its shares redeemed pursuant to Section 4(a)(i) above, the Company shall pay the
Mandatory Redemption Price in cash to such holder within five (5) days of the
Company's receipt of the holder's Notice in Response to Inability to Convert. If
the Company shall fail to pay the applicable Mandatory Redemption Price to such
holder on a timely basis as described in this Section 4(c) (other than pursuant
to a dispute as to the determination of the arithmetic calculation of the
Redemption Price), in addition to any remedy such holder of Preferred Shares may
have under this Certificate of Designations and the Securities Purchase
Agreement, such unpaid amount shall bear interest at the rate of 2% per month
(prorated for partial months) until paid in full. Until the full Mandatory
Redemption Price is paid in full to such holder, such holder may void the
Mandatory Redemption with respect to those Preferred Shares for which the full
Mandatory Redemption Price has not been paid and receive back such Preferred
Shares (subject to the same adjustment to the Conversion Price as applies under
the Void Optional Redemption Option in Section 3(g)). Notwithstanding the
foregoing, if the Company fails to pay the applicable Mandatory Redemption Price
within such five (5) days time period due to a dispute as to the determination
of the arithmetic calculation of the Redemption Rate, such dispute shall be
resolved pursuant to Section 2(h)(iii) above with the term "Redemption Price"
being substituted for the term "Conversion Rate."

            (d) Pro-rata Conversion and Redemption. In the event the Company
receives a Conversion Notice from more than one holder of Preferred Shares on
the same day and the Company can convert and redeem some, but not all, of the
Preferred Shares pursuant to this Section 4, the Company shall convert and
redeem from each holder of Preferred Shares electing to have Preferred Shares
converted and redeemed at such time an amount equal to such holder's pro-rata
amount (based on the number of Preferred 



                                      -30-
<PAGE>   31
Shares held by such holder relative to the number of Preferred Shares
outstanding) of all Preferred Shares being converted and redeemed at such time.

      (5) Reissuance of Certificates. In the event of a conversion or redemption
pursuant to this Certificate of Designations of less than all of the Preferred
Shares represented by a particular Preferred Stock Certificate, the Company
shall promptly cause to be issued and delivered to the holder of such Preferred
Shares a preferred stock certificate representing the remaining Preferred Shares
which have not been so converted or redeemed.

      (6) Reservation of Shares. The Company shall, so long as any of the
Preferred Shares are outstanding, reserve and keep available out of its
authorized and unissued Common Stock, solely for the purpose of effecting the
conversion of the Preferred Shares, such number of shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all of the
Preferred Shares then outstanding; provided that the number of shares of Common
Stock so reserved shall at no time be less than 150% of the number of shares of
Common Stock for which the Preferred Shares are at any time convertible. The
number of shares so reserved shall be allocated among the holders pro rata based
on the number of Preferred Shares purchased by such holder pursuant to the
Securities Purchase Agreement compared to the original total number of Preferred
Shares purchased by all holders pursuant to the Securities Purchase Agreement.
Any increase in the number of shares so reserved shall be allocated among the
holders pro rata based on the outstanding number of a holder's Preferred Shares
at the time of such increase compared to the outstanding number of all Preferred
Shares at the time of such increase.

      (7) Voting Rights. Holders of Preferred Shares shall have no voting
rights, except as required by law, including but not limited to the General
Corporation Law of the State of Delaware, and as expressly provided in this
Certificate of Designations.

      (8) Liquidation, Dissolution, Winding-Up. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company, the holders
of the Preferred Shares shall be entitled to receive in cash out of the assets
of the Company, whether from capital or from earnings available for distribution
to its stockholders (the "PREFERRED FUNDS"), before any amount shall be paid to
the holders of any of the capital stock of the Company of any class junior in
rank to the Preferred Shares in respect of the preferences as to the
distributions and payments on the liquidation, dissolution and winding up of the
Company, an amount per Preferred Share equal to the Liquidation Value; provided
that, if the Preferred Funds are insufficient to pay the full amount due to the
holders of Preferred Shares and holders of shares of other classes or series of
preferred stock of the Company that are of equal rank with the Preferred Shares
as to payments of Preferred Funds (the "PARI PASSU SHARES"), then each holder of
Preferred 




                                      -31-
<PAGE>   32
Shares and Pari Passu Shares shall receive a percentage of the Preferred Funds
equal to the full amount of Preferred Funds payable to such holder as a
liquidation preference, in accordance with their respective Certificate of
Designations, Preferences and Rights, as a percentage of the full amount of
Preferred Funds payable to all holders of Preferred Shares and Pari Passu
Shares. The purchase or redemption by the Company of stock of any class, in any
manner permitted by law, shall not, for the purposes hereof, be regarded as a
liquidation, dissolution or winding up of the Company. Neither the consolidation
or merger of the Company with or into any other Person, nor the sale or transfer
by the Company of less than substantially all of its assets, shall, for the
purposes hereof, be deemed to be a liquidation, dissolution or winding up of the
Company. No holder of Preferred Shares shall be entitled to receive any amounts
with respect thereto upon any liquidation, dissolution or winding up of the
Company other than the amounts provided for herein.

      (9) Preferred Rank. All shares of Common Stock shall be of junior rank to
all Preferred Shares in respect to the preferences as to distributions and
payments upon the liquidation, dissolution and winding up of the Company. The
rights of the shares of Common Stock shall be subject to the preferences and
relative rights of the Preferred Shares. Without the prior express written
consent of the holders of all of the then outstanding Preferred Shares, the
Company shall not hereafter authorize or issue additional or other capital stock
that is of senior or equal rank to the Preferred Shares in respect of the
preferences as to distributions and payments upon the liquidation, dissolution
and winding up of the Company. Without the prior express written consent of the
holders of all of the then outstanding Preferred Shares, the Company shall not
hereafter authorize or make any amendment to the Company's Certificate of
Incorporation or bylaws, or file any resolution of the board of directors of the
Company with the Delaware Secretary of State containing any provisions, which
would adversely affect or otherwise impair the rights or relative priority of
the holders of the Preferred Shares relative to the holders of the Common Stock
or the holders of any other class of capital stock. In the event of the merger
or consolidation of the Company with or into another corporation, the Preferred
Shares shall maintain their relative powers, designations and preferences
provided for herein and no merger shall result inconsistent therewith.

      (10) Restriction on Redemption and Cash Dividends with respect to Other
Capital Stock. Until all of the Preferred Shares have been converted or redeemed
as provided herein, the Company shall not, directly or indirectly, redeem, or
declare or pay any cash dividend or distribution on, its Common Stock without
the prior express written consent of the holders of all of the then outstanding
Preferred Shares.



                                      -32-
<PAGE>   33
      (11) Limitation on Number of Conversion Shares. The Company shall not be
obligated to issue, in the aggregate, more than 19.99% of outstanding shares of
Common Stock (such amount to be proportionately and equitably adjusted from time
to time in the event of stock splits, stock dividends, combinations, reverse
stock splits, reclassification, capital reorganizations and similar events
relating to the Common Stock) (the "EXCHANGE CAP") upon conversion of the
Preferred Shares, if issuance of a larger number of shares of Common Stock would
constitute a breach of the Company's obligations under the rules or regulations
of The Nasdaq Stock Market, Inc. or any other principal securities exchange or
market upon which the Common Stock is or becomes traded. The Exchange Cap shall
be allocated among the holders pro rata based on the number of Preferred Shares
purchased by such holder pursuant to the Securities Purchase Agreement compared
to the original total number of Preferred Shares purchased by all holders
pursuant to the Securities Purchase Agreement. Any increase in the Exchange Cap
shall be allocated among the holders pro rata based on the outstanding number of
a holder's Preferred Shares at the time of such increase compared to the
outstanding number of all Preferred Shares at the time of such increase.

      (12) Vote to Change the Terms of Preferred Shares. The affirmative vote at
a meeting duly called for such purpose or the written consent without a meeting,
of the holders of all of the then outstanding Preferred Shares, shall be
required for any change to this Certificate of Designations or the Company's
Certificate of Incorporation which would amend, alter, change or repeal any of
the powers, designations, preferences and rights of the Preferred Shares.

      (13) Lost or Stolen Certificates. Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Preferred Stock Certificates representing the Preferred Shares, and, in the case
of loss, theft or destruction, of any indemnification undertaking by the holder
to the Company and, in the case of mutilation, upon surrender and cancellation
of the Preferred Stock Certificate(s), the Company shall execute and deliver new
preferred stock certificate(s) of like tenor and date; provided, however, the
Company shall not be obligated to re-issue preferred stock certificates if the
holder contemporaneously requests the Company to convert such Preferred Shares
into Common Stock.



                                      -33-
<PAGE>   34
      IN WITNESS WHEREOF, the Company has caused this Certificate of
Designations to be signed by Joseph Hines, its President, as of the 17th day of
October, 1997.

                                   ZILA, INC.


                                    By: /s/ Joseph Hines
                                       -----------------------
                                    Name: Joseph Hines
                                    Its:  President



                                      -33-
<PAGE>   35

                                    EXHIBIT I

                                   ZILA, INC.

                                CONVERSION NOTICE

Reference is made to the Certificate of Designations, Preferences and Rights of
Series C Redeemable Convertible Preferred Stock (the "CERTIFICATE OF
DESIGNATIONS"). In accordance with and pursuant to the Certificate of
Designations, the undersigned hereby elects to convert the number of shares of
Series A Redeemable Convertible Preferred Stock, par value $.001 per share (the
"PREFERRED SHARES"), of Zila, Inc., a Delaware corporation (the "COMPANY"),
indicated below into shares of Common Stock, par value $.001 per share (the
"COMMON STOCK"), of the Company, by tendering the stock certificate(s)
representing the share(s) of Preferred Shares specified below as of the date
specified below.

      Date of Conversion:
                         ----------------------------------------------------
      Number of Preferred Shares to be converted:
                                                 ----------------------------
      Stock certificate no(s). of Preferred Shares to be converted:
                                                                   ----------
Please confirm the following information:

      Conversion Price:
                        -----------------------------------------------------
      Applicable Repricing Price:
                                 --------------------------------------------
      Number of Repricing Shares:
                                  -------------------------------------------
      Total number of shares of Common Stock to be issued:
                                                          -------------------
Please issue the Common Stock into which the Preferred Shares are being
converted and, if applicable, any check drawn on an account of the Company in
the following name and to the following address:

      Issue to:
               -----------------------------------------------------

               -----------------------------------------------------

               -----------------------------------------------------

               -----------------------------------------------------
<PAGE>   36
      Facsimile Number:
                        ------------------------------------------
      Authorization:
                     ---------------------------------------------
                              By:
                                  --------------------------------
                              Title:
 
                                     -----------------------------
      Dated:
                                     -----------------------------
      Account Number:
        (if electronic book entry transfer):

                                             ---------------------

      Transaction Code Number
      (if electronic book entry transfer):
                                           -----------------------------------