CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS OF
                      SERIES D CONVERTIBLE PREFERRED STOCK
                                       OF
                          PENTHOUSE INTERNATIONAL, INC.
                              a Florida corporation

         The undersigned, Claude Bertrin and Stephen A. Weiss, certify that:

1. They are the duly acting Executive Vice President and an Assistant Secretary,
respectively, of PENTHOUSE INTERNATIONAL, INC., a corporation organized and
existing under the Corporation Code of the State of Florida (the "CORPORATION").

2. Pursuant to authority conferred upon the Board of Directors by the Articles
of Incorporation of the Corporation, and pursuant to the provisions of Section
607.0602 of the Florida Statutes, said Board of Directors, pursuant to a meeting
held March 18, 2004, adopted a resolution establishing the rights, preferences,
privileges and restrictions of, and the number of shares comprising, the
Corporation's Series D Convertible Preferred Stock, which resolution is as
follows:

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

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

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

         (b) AUTHORIZED SHARES. The number of authorized shares constituting the
Series D Preferred Stock shall be four million (4,000,0000 shares of such
series.

         (c) DIVIDENDS. Subject to the prior rights of holders of all classes of
stock at the time outstanding having prior rights as to dividends, the holder of
the Series D Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors, out of any assets of the Corporation legally
available therefor, such dividends as may be declared from time to time by the
Board of Directors.

         (d) LIQUIDATION PREFERENCE.

             (i) PREFERENCE UPON LIQUIDATION, DISSOLUTION OR WINDING UP. In the
event of any dissolution or winding up of the Corporation, whether voluntary or
involuntary, holders of each outstanding share of Series D Preferred Stock shall
be entitled to be paid first out of the assets of the Corporation available for
distribution to shareholders, whether such assets are capital, surplus or
earnings, an amount equal to $1.00 (the "SERIES D PURCHASE PRICE") per share

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of Series D Preferred Stock held (as adjusted for any stock splits, stock
dividends or recapitalizations of the Series D Preferred Stock) and any declared
but unpaid dividends on such share, (A) after all payments shall be made to the
holders of any outstanding shares of Series C preferred stock, $0.0025 par value
per share and $10.00 liquidation value per share (the "SERIES C PREFERRED
STOCK), (B) pari passu and contemporaneous with any payments that are required
to be made to the holders of any outstanding shares of Series A preferred stock,
$0.0025 par value per share and $1,000.00 liquidation value per share (the
"SERIES A PREFERRED STOCK) and Series B preferred stock, $0.0025 par value per
share and $1,000.00 liquidation value per share (the "SERIES B PREFERRED STOCK),
and (C) before any payment shall be made to the holders of the Common Stock, or
any other stock of the Corporation ranking junior to the Series D Preferred
Stock with regard to any distribution of assets upon liquidation, dissolution or
winding up of the Corporation in accordance with clause (v) of this paragraph
(d). The holders of the Series D Preferred Stock shall be entitled to share
ratably, in accordance with the respective preferential amounts payable on such
stock, in any distribution which is not sufficient to pay in full the aggregate
of the amounts payable thereon. If, upon any liquidation, dissolution or winding
up of the Corporation, after priority payments made in respect of the Series C
Preferred Stock and partial pari passu payments made in respect of the Series A
Preferred Stock and/or Series B Preferred Stock, the remaining assets to be
distributed to the holders of the Series D Preferred Stock shall be insufficient
to permit payment to such holders of the Series D Preferred Stock of the full
preferential amounts aforesaid, then all of the remaining assets of the
Corporation available for distribution to shareholders shall be distributed to
the holders of outstanding shares of the Series A Preferred Stock, Series B
Preferred Stock and Series D Preferred Stock, on a pro-rata basis. Each holder
of the Series D Preferred Stock shall be entitled to receive that portion of the
assets available for distribution as the number of outstanding shares of Series
D Preferred Stock held by such holder bears to the total number of shares of
Series D Preferred Stock. Such payment shall constitute payment in full to the
holders of the Series D Preferred Stock upon the liquidation, dissolution or
winding up of the Corporation. After such payment shall have been made in full,
or funds necessary for such payment shall have been set aside by the Corporation
in trust for the account of the holders of Series D Preferred Stock, so as to be
available for such payment, such holders of Series D Preferred Stock shall be
entitled to no further participation in the distribution of the assets of the
Corporation.

             (ii) CONSOLIDATION, MERGER AND OTHER CORPORATE EVENTS. A
consolidation or merger of the Corporation (except into or with a subsidiary
corporation or a corporation otherwise affiliated with The Vector Molina
Investment Trust or any other affiliate of Dr. Luis Enrique Molina G.) or a
sale, lease, mortgage, pledge, exchange, transfer or other disposition of all or
substantially all of the assets of the Corporation or any reclassification of
the stock of the Corporation (other than a change in par value or from no par to
par, or from par to no par or as the result of an event described in subsections
(iv) through (vii) of paragraph (f)), shall be regarded as a liquidation,
dissolution or winding up of the affairs of the Corporation within the meaning
of this paragraph (d). In no event shall the issuance of new classes of stock,
whether senior, junior or on a parity with the Series D Preferred Stock, be
deemed a "reclassification" under or otherwise limited by the terms hereof.

             (iii) DISTRIBUTION OF CASH AND OTHER ASSETS. In the event of a
liquidation, dissolution or winding up of the Corporation resulting in the
availability of assets other than cash for distribution to the holders of the
Series D Preferred Stock, the holders of the Series D

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Preferred Stock shall be entitled to a distribution of cash and/or assets equal
to the value of the liquidation preference stated in subsection (i) of this
paragraph (d), which valuation shall be made solely by the Board of Directors,
and provided that such Board of Directors was acting in good faith, shall be
conclusive.

             (iv) DISTRIBUTION TO JUNIOR SECURITY HOLDERS. After the payment or
distribution to the holders of the Series D Preferred Stock of the full
preferential amounts aforesaid, the holders of the Common Stock then
outstanding, or any other stock of the Corporation ranking as to assets upon
liquidation, dissolution or winding up of the Corporation junior to the Series D
Preferred Stock, shall be entitled to receive ratably all of the remaining
assets of the Corporation.

             (v) PREFERENCE; PRIORITY. References to a stock that is "SENIOR"
to, on a "PARITY" with or "JUNIOR" to other stock as to liquidation shall refer,
respectively, to rights of priority of one series or class of stock over another
in the distribution of assets on any liquidation, dissolution or winding up of
the Corporation. The Series D Preferred Stock shall be senior to the Common
Stock of the Corporation, senior to any subsequent series of Preferred Stock
issued by the Corporation, junior to the Corporation's Series C Preferred Stock
and pari passu with the Corporation's outstanding Series A Preferred Stock and
any shares of Series B Preferred Stock issued subsequent to the date hereof.

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

         (f) CONVERSION RIGHTS. The holders of Series D Preferred Stock will
have the following conversion rights:

             (i) RIGHT TO CONVERT. Subject to and in compliance with the
provisions of this paragraph (f), any issued and outstanding shares of Series D
Preferred Stock may, at the option of the holder, be converted at any time or
from time to time into fully paid and nonassessable shares of Common Stock at
the conversion rate in effect at the time of conversion, determined as provided
herein; PROVIDED, that a holder of Series D Preferred Stock may at any given
time convert only up to that number of shares of Series D Preferred Stock so
that, upon conversion, the aggregate beneficial ownership of the Corporation's
Common Stock (calculated pursuant to Rule 13d-3 of the Securities Exchange Act
of 1934, as amended) of such holder and all persons affiliated with such holder
is not more than 9.99% of the Corporation's Common Stock then outstanding.

             (ii) MECHANICS OF CONVERSION. Before any holder of Series D
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for the
Common Stock, and shall give written notice to the Corporation at such office
that he elects to convert the same and shall state therein the number of shares
of Series D Preferred Stock being converted. Thereupon, the Corporation shall
promptly issue and deliver at such office to such holder of Series D Preferred
Stock a certificate or certificates for the number of shares of Common Stock to
which he shall be entitled. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Series D Preferred Stock to be converted, and the person or persons
entitled to receive

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the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date.

             (iii) CONVERSION PRICE. The number of shares of Common Stock into
which one share of Series D Preferred Stock shall be convertible shall be
determined by dividing the Series D Purchase Price by the then existing
Conversion Price, as defined below. The "CONVERSION PRICE" shall equal $0.11,
subject to adjustment as set forth below in this paragraph (f).

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

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

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

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

             (iv) ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
securities of the Corporation other than shares of Common Stock, then and in
each such event provision shall be made so that the holders of such Series D
Preferred Stock shall receive upon conversion thereof in addition to the number
of shares of Common Stock receivable thereupon, the amount of securities of the
Corporation that

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they would have received had their Series D Preferred Stock been converted into
Common Stock on the date of such event and had thereafter, during the period
from the date of such event to and including the conversion date, retained such
securities receivable by them as aforesaid during such period giving application
to all adjustments called for during such period under this paragraph (f) with
respect to the rights of the holders of the Series D Preferred Stock.

             (vii) ADJUSTMENTS TO CONVERSION PRICE FOR CERTAIN DILUTING ISSUES.

                 (A) SPECIAL DEFINITIONS. For purposes of this paragraph
         (f)(vii), the following definitions apply:

                                (i) "OPTIONS" shall mean rights, options, or
             warrants to subscribe for, purchase or otherwise acquire either
             Common Stock or Convertible Securities (defined below).

                                (ii) "CONVERTIBLE SECURITIES" shall mean any
             evidences of indebtedness, shares (other than Common Stock and
             Series D Preferred Stock) or other securities convertible into or
             exchangeable for Common Stock.

                                (iii) "ADDITIONAL SHARES OF COMMON STOCK" shall
             mean all shares of Common Stock issued (or, pursuant to paragraph
             (f)(vii)(C), deemed to be issued) by the Corporation after the
             Original Issue Date; provided, that "Additional Shares of Common
             Stock" shall NOT mean or include any shares of Common Stock issued
             or issuable:

                                       1. upon conversion of shares of Series D
                                Preferred Stock;

                                       2. to officers, directors or employees
                                of, or consultants to, the Corporation pursuant
                                to stock option or stock purchase plans or
                                agreements on terms approved by the Board of
                                Directors, but not exceeding, at any one time,
                                more than five (5%) percent of the fully-diluted
                                shares of Common Stock then issued and
                                outstanding (net of any repurchases of such
                                shares), subject to adjustment for all
                                subdivisions and combinations;

                                       3. in connection with any acquisition,
                                joint venture or similar combination, as full or
                                partial consideration for the assets, securities
                                or properties of any other person, firm or
                                corporation, whether by purchase, exchange,
                                merger, consolidation or like combination;

                                       4. as a dividend or distribution on
                                Series D Preferred Stock; or

                                       5. for which adjustment of the Conversion
                                Price is made pursuant to paragraphs
                                (f)(iv)-(vi).

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                 (B) NO ADJUSTMENT OF CONVERSION PRICE. Any provision herein to
         the contrary notwithstanding, no adjustment in the Conversion Price
         shall be made in respect of the issuance of Additional Shares of Common
         Stock unless the consideration per share (determined pursuant to
         paragraph (f)(vii)(E) hereof) for an Additional Share of Common Stock
         issued or deemed to be issued by the Corporation is less than the
         Conversion Price in effect on the date of, and immediately prior to
         such issue.

                 (C) DEEMED ISSUE OF ADDITIONAL SHARES OF COMMON STOCK. In the
         event the Corporation at any time or from time to time after the
         Original Issue Date shall issue any Options or Convertible Securities
         or shall fix a record date for the determination of holders of any
         class of securities then entitled to receive any such Options or
         Convertible Securities, then the maximum number of shares (as set forth
         in the instrument relating thereto without regard to any provisions
         contained therein designed to protect against dilution) of Common Stock
         issuable upon the exercise of such Options or, in the case of
         Convertible Securities and Options therefor, the conversion or exchange
         of such Convertible Securities, shall be deemed to be Additional Shares
         of Common Stock issued as of the time of such issue or, in case such a
         record date shall have been fixed, as of the close of business on such
         record date, provided further that in any such case in which Additional
         Shares of Common Stock are deemed to be issued:

                                (i) no further adjustments in the Conversion
             Price shall be made upon the subsequent issue of Convertible
             Securities or shares of Common Stock upon the exercise of such
             Options or conversion or exchange of such Convertible Securities;

                                (ii) if such Options or Convertible Securities
             by their terms provide, with the passage of time or otherwise, for
             any increase in the consideration payable to the Corporation, or
             decrease in the number of shares of Common Stock issuable, upon the
             exercise, conversion or exchange thereof, the Conversion Price
             computed upon the original issue thereof (or upon the occurrence of
             a record date with respect thereto), and any subsequent adjustments
             based thereon, shall, upon any such increase or decrease becoming
             effective, be recomputed to reflect such increase or decrease
             insofar as it affects such Options or the rights of conversion or
             exchange under such Convertible Securities (provided, however, that
             no such adjustment of the Conversion Price shall effect Common
             Stock previously issued upon conversion of the Series D Preferred
             Stock);

                                (iii) Upon the expiration of any such Options or
             rights, the termination of any such rights to convert or exchange,
             or the expiration of any rights related to such Convertible
             Securities, the Conversion Price, to the extent in any way affected
             by or computed using such Options or Convertible Securities (unless
             such Options or Convertible Securities were merely deemed to be
             included in the numerator and denominator for purposes of
             determining the number of shares of Common Stock outstanding for
             purposes of (f)(vii)(D)), shall be recomputed to reflect the
             issuance of only the number of shares of Common Stock (and
             Convertible Securities that remain in effect) actually issued upon
             the exercise of such Options or rights related to such Convertible
             Securities.

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                                (iv) no readjustment pursuant to clause (ii) or
             (iii) above shall have the effect of increasing the Conversion
             Price to an amount which exceeds the lower of (a) the Conversion
             Price on the original adjustment date, or (b) the Conversion Price
             that would have resulted from any issuance of Additional Shares of
             Common Stock between the original adjustment date and such
             readjustment date.

                 (D) ADJUSTMENT OF CONVERSION PRICE UPON ISSUANCE OF ADDITIONAL
             SHARES OF COMMON STOCK. In the event this Corporation, at any time
             after the Original Issue Date shall issue Additional Shares of
             Common Stock (including Additional Shares of Common Stock deemed to
             be issued pursuant to (f)(vii)(C)) without consideration or for a
             consideration per share less than the Conversion Price in effect on
             the date of and immediately prior to such issue, then and in such
             event, the Conversion Price shall be reduced, concurrently with
             such issue, to a price (calculated to the nearest cent) determined
             by multiplying the Conversion Price by a fraction, the numerator of
             which shall be the number of shares of Common Stock outstanding
             immediately prior to such issue plus the number of shares of Common
             Stock which the aggregate consideration received by the Corporation
             for the total number of Additional Shares of Common Stock so issued
             would purchase at the Conversion Price in effect immediately prior
             to such issuance, and the denominator of which shall be the number
             of shares of Common Stock outstanding immediately prior to such
             issue plus the number of such Additional Shares of Common Stock so
             issued. For the purpose of the above calculation, the number of
             shares of Common Stock outstanding immediately prior to such issue
             shall be calculated on a fully diluted basis, as if all shares of
             Series D Preferred Stock and all Convertible Securities had been
             fully converted into shares of Common Stock and any outstanding
             warrants, options or other rights for the purchase of shares of
             stock or convertible securities had been fully exercised (and the
             resulting securities fully converted into shares of Common Stock,
             if so convertible) as of such date.

                 (E) DETERMINATION OF CONSIDERATION. For purposes of this
             paragraph (f)(vii), the consideration received by the Corporation
             for the issue of any Additional Shares of Common Stock shall be
             computed as follows:

                                (i) CASH AND PROPERTY: Such consideration shall:

                                       1. insofar as it consists of cash, be
                                computed at the aggregate amount of cash
                                received by the Corporation excluding amounts
                                paid or payable for accrued interest or accrued
                                dividends;

                                       2. insofar as it consists of property
                                other than cash, be computed at the fair value
                                thereof at the time of such issue, as determined
                                in good faith by the Board of Directors; and

                                       3. in the event Additional Shares of
                                Common Stock are issued together with other
                                shares or securities or other assets of the
                                Corporation for consideration which

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                                covers both, be the proportion of such
                                consideration so received, computed as provided
                                in clauses (1) and (2) above, as determined in
                                good faith by the Board of Directors.

                                (ii) OPTIONS AND CONVERTIBLE SECURITIES. The
             consideration per share received by the Corporation for Additional
             Shares of Common Stock deemed to have been issued pursuant to
             paragraph (f)(vii), relating to Options and Convertible Securities
             shall be determined by dividing

                                       1. the total amount, if any, received or
                                receivable by the Corporation as consideration
                                for the issue of such Options or Convertible
                                Securities, plus the minimum aggregate amount of
                                additional consideration (as set forth in the
                                instruments relating thereto, without regard to
                                any provision contained therein designed to
                                protect against dilution) payable to the
                                Corporation upon the exercise of such Options or
                                the conversion or exchange of such Convertible
                                Securities, or in the case of Options for
                                Convertible Securities, the exercise of such
                                Options for Convertible Securities and the
                                conversion or exchange of such Convertible
                                Securities by

                                       2. the maximum number of shares of Common
                                Stock (as set forth in the instruments relating
                                thereto, without regard to any provision
                                contained therein designed to protect against
                                the dilution) issuable upon the exercise of such
                                Options or conversion or exchange of such
                                Convertible Securities.

             (viii) ADJUSTMENT FOR RECLASSIFICATION EXCHANGE OR SUBSTITUTION. If
the Common Stock issuable upon the conversion of the Series D Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for above, or a reorganization, merger, consolidation or sale of assets
provided for elsewhere in this paragraph (f)), then and in each such event the
holder of each share of Series D Preferred Stock shall have the right thereafter
to convert such share into the kind and amount of shares of stock and other
securities and property receivable upon such reorganization, reclassification or
other change, by holders of the number of shares of Common Stock into which such
shares of Series D Preferred Stock might have been converted immediately prior
to such reorganization, reclassification, or change, all subject to further
adjustment as provided herein.

             (ix) REORGANIZATION, MERGERS, CONSOLIDATIONS OR SALES OF ASSETS. If
at any time or from time to time there shall be a capital reorganization of the
Common Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for elsewhere in this paragraph (f)) or a merger or
consolidation of the Corporation with or into another corporation, or the sale
of all or substantially all of the Corporation's properties and assets to any
other

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person, then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the holders of the Series D Preferred Stock
shall thereafter be entitled to receive upon conversion of such Series D
Preferred Stock, the number of shares of stock or other securities or property
of the Corporation or of the successor corporation resulting from such merger or
consolidation or sale, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such capital reorganization, merger,
consolidation or sale. In any such case, appropriate adjustment shall be made in
the application of the provisions of this paragraph (f) with respect to the
rights of the holders of the Series D Preferred Stock after the reorganization,
merger, consolidation or sale to the end that the provisions of this paragraph
(f) (including adjustment of the Conversion Price then in effect and the number
of shares purchasable upon conversion of the Series D Preferred Stock) shall be
applicable after that event as nearly equivalent as may be practicable.

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

             (xi) NOTICES OF RECORD DATE. In the event of (A) any taking by the
Corporation of a record of the holders of any class or series of securities for
the purpose of determining the holders thereof who are entitled to receive any
dividend or other distribution or (B) any reclassification or recapitalization
of the capital stock of the Corporation, any merger or consolidation of the
Corporation or any transfer of all or substantially all of the assets of the
Corporation to any other corporation, entity or person, or any voluntary or
involuntary dissolution, liquidation or winding up of the Corporation, the
Corporation shall mail to each holder of Series D Preferred Stock at least 10
days prior to the record date specified therein, a notice specifying (1) the
date on which any such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution, (2) the date on
which any such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up is expected to become effective
and (3) the time, if any is to be fixed, as to when the holders of record of
Common Stock (or other securities) shall be entitled to exchange their shares,
of Common Stock (or other securities) for securities or other property
deliverable upon such reorganization, reclassification, transfer, consolidation,
merger, dissolution, liquidation or winding up.

             (xii) FRACTIONAL SHARES. No fractional shares of Common Stock shall
be issued upon conversion of the Series D Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to the product of such fraction multiplied by
the fair market value of one share of the Corporation's Common Stock on the date
of conversion, as determined in good faith by the Board of Directors.

             (xiii) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the
conversion of the shares of the Series D Preferred Stock,

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<PAGE>

such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding shares of Series D
Preferred Stock, and if at any time the number of authorized but unissued shares
of Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of Series D Preferred Stock, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose.

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

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

             (xvi) NO DILUTION OR IMPAIRMENT. The Corporation shall not amend
its Articles of Incorporation or participate in any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, for the purpose of avoiding or seeking to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, without the approval of a majority of the then
outstanding Series D Preferred Stock.

         (g) NO REISSUANCE OF PREFERRED STOCK. Any shares of Series D Preferred
Stock acquired by the Corporation by reason of purchase, conversion or otherwise
shall be canceled, retired and eliminated from the shares of Series D Preferred
Stock that the Corporation shall be authorized to issue. All such shares shall
upon their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth in the Articles of
Incorporation or in any certificate of Determination creating a series of
Preferred Stock or any similar stock or as otherwise required by law.

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

3. The number of authorized shares of Preferred Stock of the Corporation is
20,000,000, and the number of shares of Series D Stock, none of which has been
issued, is 4,000,000.

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         Each of the undersigned declares under penalty of perjury that the
matters set out in the foregoing Certificate are true of his own knowledge.
Executed at _______, __________, on this ___ day of March, 2004.


                                               _________________________________
                                               Name:    Claude Bertrin
                                               Title:   Executive Vice President



                                               _________________________________
                                               Name:    ______________________
                                               Title:   ______________________

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