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                                                                   EXHIBIT 10.46

                          CERTIFICATE OF DESIGNATIONS,

                            PREFERENCES AND RIGHTS OF

                    SERIES B EXCHANGEABLE PREFERRED STOCK OF

                     DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.

                             PURSUANT TO SECTION 151

                     OF THE DELAWARE GENERAL CORPORATION LAW



            The undersigned, being the Chief Executive Officer and the Secretary
of Dental/Medical Diagnostic Systems, Inc., a corporation organized and existing
under and by virtue of the laws of the State of Delaware (hereinafter the
"Corporation"), DO HEREBY CERTIFY:

        FIRST: That pursuant to authority expressly granted and vested in the
Board of Directors of said Corporation by the provisions of the Corporation's
Certificate of Incorporation, said Board of Directors adopted the following
resolution on February 29, 2000 determining the designations, preferences and
rights of its Series B Exchangeable Preferred Stock:

        RESOLVED: That pursuant to the authority vested in the Board of
Directors of the Corporation by the Corporation's Certificate of Incorporation,
as amended and restated (the "Certificate of Incorporation"), a series of
Preferred Stock of the Corporation be, and it hereby is, created out of the
authorized but unissued shares of the capital stock of the Corporation, such
series to be designated Series B Exchangeable Preferred Stock (the "Series B
Exchangeable Preferred Stock"), to consist of 2,750 shares, par value $0.01 per
share, of which the preferences and relative and other rights, and the
qualifications, limitations or restrictions thereof, shall be as set forth in
the Certificate of Designations annexed hereto:

        1. NUMBER OF SHARES OF SERIES B EXCHANGEABLE PREFERRED STOCK. Of the
998,000 shares of authorized but unissued Preferred Stock, $0.01 par value
("Preferred Stock") of the Corporation, two thousand seven hundred fifty (2,750)
shares shall be designated and known as Series B Exchangeable Preferred Stock,
par value $0.01 per share ("Series B Exchangeable Preferred Stock").

        2. VOTING.

            (a) Unless required by law, no holder of any shares of Series B
Exchangeable Preferred Stock shall be entitled to vote at any meeting of
stockholders of the Corporation (or any written actions of stockholders in lieu
of meetings) with respect to any matters presented to the stockholders of the
Corporation for their action or consideration. Notwithstanding the foregoing,
the Corporation shall provide each holder of record of Series B Exchangeable
Preferred Stock with


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timely notice of every meeting of stockholders of the Corporation and shall
provide each holder with copies of all proxy materials distributed in connection
therewith.

            (b) So long as shares of Series B Exchangeable Preferred Stock are
outstanding, the Corporation shall not, without first obtaining the approval (by
vote or written consent, as provided by the Delaware General Corporation Law) of
the holders of at least 75% in interest of the then outstanding shares of Series
B Exchangeable Preferred Stock sold to the original purchasers thereof pursuant
to the Exchangeable Preferred Stock and Warrant Purchase Agreement referred to
in Section 13 hereof:

                (i) alter or change the rights, preferences or privileges of the
Series B Exchangeable Preferred Stock;

                (ii) create any new class or series of capital stock having a
preference over the Series B Exchangeable Preferred Stock as to distribution of
assets upon liquidation, dissolution or winding up of the Corporation ("Senior
Securities") or alter or change the rights, preferences or privileges of any
Senior Securities so as to affect adversely the Series B Exchangeable Preferred
Stock;

                (iii) increase the authorized number of shares of Series B
Exchangeable Preferred Stock; or

                (iv) do any act or thing not authorized or contemplated by this
Certificate of Designations which would result in taxation of the holders of
shares of the Series B Exchangeable Preferred Stock under Section 305 of the
Internal Revenue Code of 1986, as amended (or any comparable provision of the
Internal Revenue Code as hereafter from time to time amended).

            In the event such holders of at least 75% in interest of the then
outstanding shares of Series B Exchangeable Preferred Stock agree to allow the
Corporation to alter or change the rights, preferences or privileges of the
shares of Series B Exchangeable Preferred Stock, pursuant to subsection (b)
above, so as to affect the Series B Exchangeable Preferred Stock, then the
Corporation will deliver notice of such approved change to the holders of the
Series B Exchangeable Preferred Stock that did not agree to such alteration or
change (the "Dissenting Holders") and Dissenting Holders shall have the right,
but not the obligation, for a period of thirty (30) days to exchange any and all
shares of then held Series B Exchangeable Preferred Stock pursuant to the terms
of this Certificate of Designation as in effect prior to such alteration or
change.

        3. DIVIDENDS.

            The holders of shares of Series B Exchangeable Preferred Stock shall
be entitled to receive, before any cash dividend shall be declared and paid upon
or set aside for the Common Stock in any fiscal year of the Corporation, out of
funds legally available for that purpose, cumulative dividends payable in cash
or in registered shares of Common Stock (at the sole election of the
Corporation) in an amount per share of Series B Exchangeable Preferred Stock
outstanding for such fiscal year equal to Thirty Dollars ($30.00). Such
dividends shall accrue daily and be payable quarterly on March 31, June 30,
September 30 and December 31 of each year. In the event that the

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Corporation shall elect to pay any such dividend payment in the form of Common
Stock, such Common Stock shall be valued at the Market Price on the dividend
payment date, as defined in Section 5 below.

        4. LIQUIDATION. (a) If the Corporation shall commence a voluntary case
under the Federal bankruptcy laws or any other applicable Federal or State
bankruptcy, insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under any law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of the Corporation or of any substantial part of its property, or make
an assignment for the benefit of its creditors, or admit in writing its
inability to pay its debts generally as they become due, or if a decree or order
for relief in respect of the Corporation shall be entered by a court having
jurisdiction in the premises in an involuntary case under the Federal bankruptcy
laws or any other applicable Federal or State bankruptcy, insolvency or similar
law resulting in the appointment of a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or other similar official) of the Corporation or of any
substantial part of its property, or ordering the winding up or liquidation of
its affairs, and any such decree or order shall be unstayed and in effect for a
period of ninety (90) consecutive days and, on account of any such event, the
Corporation shall liquidate, dissolve or wind up, or if the Corporation shall
otherwise liquidate, dissolve or wind up (each such event being considered a
"Liquidating Event"), no distribution shall be made to the holders of any shares
of capital stock of the Corporation other than Senior Securities upon
liquidation, dissolution or winding up unless prior thereto, the holders of
shares of Series B Exchangeable Preferred Stock shall have received the
Liquidation Preference (as defined in Section 4(c)) with respect to each share.
If upon the occurrence of a Liquidation Event, the assets and funds available
for distribution among the holders of the Series B Exchangeable Preferred Stock
and holders of securities ranking pari passu as to preference upon liquidation
with the Series B Exchangeable Preferred Stock shall be insufficient to permit
the payment to such holders of the preferential amounts payable thereon, then
the entire assets and funds of the Corporation legally available for
distribution to the Series B Exchangeable Preferred Stock and such pari passu
securities shall be distributed ratably among such shares in proportion to the
ratio that that Liquidation Preference payable on each such share bears to the
aggregate Liquidation Preference payable on all such shares.

            (b) At the option of each holder, the sale, conveyance of
disposition of all or substantially all of the assets of the Corporation, the
effectuation by the Corporation of a transaction or series or related
transactions in which more than 50% of the voting power of the Corporation is
disposed of, or the consolidation, merger or other business combination of the
Corporation with or into any other person or persons when the Corporation is not
the survivor shall be deemed to be a liquidation, dissolution or winding up of
the Corporation pursuant to which the Corporation shall be required to
distribute, upon consummation of and as a condition to such transaction an
amount equal to the Liquidation Preference with respect to each outstanding
share of Series B Exchangeable Preferred Stock held by such holder in accordance
with and subject to the terms of this Section 4.

            (c) The Series B Exchangeable Preferred Stock shall rank pari passu
with the Series A Exchangeable Preferred Stock with respect to priority of
dividends and preference upon liquidation.

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            (d) The Liquidation Preference shall be the Stated Value of $1,000
per share of Series B Exchangeable Preferred Stock plus all accrued but unpaid
dividends.

        5. OPTIONAL EXCHANGE. The holders of shares of Series B Exchangeable
Preferred Stock shall have the following exchange rights:

            (a) RIGHT TO EXCHANGE; EXCHANGE PRICE. Subject to the terms,
conditions, and restrictions of this Section 5, the holder of any shares of
Series B Exchangeable Preferred Stock shall have the right to exchange each such
share of Series B Exchangeable Preferred Stock (except that upon any liquidation
of the Corporation, the right of exchange shall terminate at the close of
business on the business day fixed for payment of the amount distributable on
the Series B Exchangeable Preferred Stock) for an amount of shares of Common
Stock equal to the Stated Value of such share or shares of Series B Exchangeable
Preferred Stock divided by the lower of (i) the average of the closing bid
prices of the Common Stock during the five (5) Trading Day period immediately
prior to the Original Issuance Date (the "Set Price") and (ii) one hundred
percent (100%) of the Market Price on the date of exchange (the "Exchange Date")
to determine the exchange price (the "Exchange Price"). However, in no event
shall the Exchange Price be greater than the Set Price (the "Maximum Exchange
Price"). In addition, if the Exchange Price on any Exchange Date is less than
Six Dollars ($6.00) (adjusted for any splits, reverse splits or dividends in the
form of shares of Common Stock after the Original Issuance Date), then the
Corporation shall have the option, upon at least three (3) Trading Days' prior
written notice to all holders of its intention to do so, to pay the holder in
cash in an amount equal to (i) the average of the closing bid and asked prices
on the Principal Market on the Exchange Date multiplied by (ii) the number of
shares of Common Stock which would otherwise be issuable to the holder upon such
exchange. If notice of the Corporation's election to pay the holder in cash is
not received by the holder prior to three(3) Trading Days before the receipt by
the Corporation of an Exchange Notice, the Corporation shall issue to the holder
shares of Common Stock unless otherwise agreed to by the holder. Unless the
Corporation shall have obtained the approval of its voting stockholders to such
issuance in accordance with the rules of the Principal Market, the Corporation
shall not issue shares of Common Stock upon exchange of any shares of Series B
Exchangeable Preferred Stock if such issuance of Common Stock, when added to the
number of shares of Common Stock previously issued by the Corporation upon
exchange of shares of the Series B Exchangeable Preferred Stock or upon exercise
of the Warrants issued in connection with the issuance of the Series B
Exchangeable Preferred Stock, would exceed 19.9% of the number of shares of the
Corporation's Common Stock which were issued and outstanding on the Original
Issuance Date; and, in such event, or if the Corporation does not have
registered shares of Common Stock available with which to honor Exchanges, the
Corporation shall honor such exchange request in cash in accordance with the
previous sentence, irrespective of the Exchange Price, and the holder shall be a
creditor of the Corporation in respect of such sum. The right to exchange shares
of Series B Exchangeable Preferred Stock shall be pro-rated among the original
purchasers of such shares or their respective subsequent transferees, if any, in
order to comply with the aforesaid overall limitation. Any exchange which is
paid in cash shall be paid within three (3) Trading Days of the Exchange Date,
or else the late delivery payments set forth in Section 5(d)(ii) hereof shall
apply to such late payment, and, upon demand of the holder in such event of late
delivery, the holder may require the Corporation to deliver the shares otherwise
issuable upon such exchange.

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            (b) EXCHANGE DATE. (i) The holder of any shares of Series B
Exchangeable Preferred Stock may exchange such shares immediately after the date
upon which such shares of Series B Preferred Stock were originally issued (the
"Original Issuance Date"); provided, that the Corporation shall have the right,
on no more than three (3) occasions during the life the Series B Exchangeable
Preferred Stock, by at least two (2) Trading Days' prior written notice to the
holders, to refuse to honor any Exchange Notice delivered during any specified
seven (7) calendar day period.

                (ii) In no event shall a holder be permitted to exchange any
shares of Series B Exchangeable Preferred Stock in excess of the number of such
shares upon the exchange of which, (x) the number of shares of Common Stock
owned by such holder (other than shares of Common Stock issuable upon exchange
of shares of Series B Exchangeable Preferred Stock) plus (y) the number of
shares of Common Stock issuable upon such exchange of such shares of Series B
Exchangeable Preferred Stock, would be equal to or exceed 9.9% of the number of
shares of Common Stock then issued and outstanding, including shares issuable
upon exchange of the Series B Exchangeable Preferred Stock held by such holder
after application of this Section 5(b)(ii). As used herein, beneficial ownership
shall be determined in accordance with Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder. To the extent
that the limitation contained in this Section 5(b)(ii) applies, the
determination of whether shares of Series B Exchangeable Preferred Stock are
exchangeable (in relation to other securities owned by holder) and of which
shares of Series B Exchangeable Preferred Stock are exchangeable shall be in the
sole discretion of such holder, and the submission of shares of Series B
Exchangeable Preferred Stock for exchange shall be deemed to be such holder's
determination of whether such shares of Series B Exchangeable Preferred Stock
are exchangeable (in relation to other securities owned by such holder) and of
which shares of Series B Exchangeable Preferred Stock are exchangeable, in each
case subject to such aggregate percentage limitation, and the Corporation shall
have no obligation to verify or confirm the accuracy of such determination, and
shall have no liability to holder with respect thereto. Nothing contained herein
shall be deemed to restrict the right of a holder to exchange such shares of
Series B Exchangeable Preferred Stock at such time as such exchange will not
violate the provisions of this paragraph. The provisions of this Section
5(b)(ii) may be waived by a holder of Series B Exchangeable Preferred Stock as
to itself (and solely as to itself) upon (A) not less than 75 days' prior notice
to the Corporation, and the provisions of this Section 5(b)(ii) shall continue
to apply until such 75th day (or such later date as may be specified in such
notice of waiver) or (B) not less than three (3) days' prior notice to the
Corporation if and only if the Corporation shall have breached or defaulted upon
one or more of its obligations to the holder pursuant to this Certificate of
Designation. No exchange in violation of this paragraph but otherwise in
accordance with this Certificate of Designation shall affect the status of the
Common Stock issued upon such exchange as validly issued, fully-paid and
nonassessable.

            (c) NOTICE OF EXCHANGE. The right of exchange shall be exercised by
the holder thereof by giving written notice (the "Exchange Notice") to the
Corporation, by facsimile or by registered mail or overnight delivery service,
with a copy by facsimile to the Corporation's then transfer agent for its Common
Stock, as designated by the Corporation from time to time, that the holder
elects to exchange a specified number of shares of Series B Exchangeable
Preferred Stock representing a specified Stated Value thereof for Common Stock
and, if such exchange will result in the exchange of all of such holder's shares
of Series B Exchangeable Preferred Stock, by surrender of a certificate or
certificates for the shares so to be Exchanged to the Corporation at its
principal office (or such other office or agency of the Corporation as the
Corporation may designate by notice in writing to the holders of the Series B
Exchangeable Preferred Stock) at any time during its usual business hours on the
date set forth in the Exchange Notice, together with a statement of the name or

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names (with address) in which the certificate or certificates for shares of
Common Stock shall be issued. The Exchange Notice shall include therein the
Stated Value of shares of Series B Exchangeable Preferred Stock to be Exchanged,
and a calculation, if applicable, (i) of the Market Price, (ii) the Exchange
Price, and (iii) the number of shares of Common Stock to be issued in connection
with such Exchange.

            (d) ISSUANCE OF CERTIFICATES; TIME EXCHANGE EFFECTED. (i) Promptly,
but in no event more than three Trading Days, after the receipt of the Exchange
Notice referred to in Section 5(c) and surrender of the certificate or
certificates for the share or shares of Series B Exchangeable Preferred Stock to
be exchanged (if required), the Corporation shall issue and deliver, or cause to
be issued and delivered, to the holder, registered in such name or names as such
holder may direct, a certificate or certificates for the number of whole shares
of Common Stock for which such shares of Series B Exchangeable Preferred Stock
are exchanged. To the extent permitted by law, such exchange shall be deemed to
have been effected on the date on which such Exchange Notice shall have been
received by the Corporation and at the time specified stated in such Exchange
Notice, which must be during the calendar day of such notice, and at such time
the rights of the holder of such share or shares of Series B Exchangeable
Preferred Stock shall cease, and the person or persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such exchange shall be deemed to have become the holder or holders of
record of the shares represented thereby. Issuance of shares of Common Stock
issuable upon exchange which are requested to be registered in a name other than
that of the registered holder shall be subject to compliance with all applicable
federal and state securities laws. In the event that the Corporation elects to
pay cash in lieu of issuing Common Stock in accordance with Section 5(a) hereof,
such cash payment shall be made on or before the third business day after
receipt of an Exchange Notice.

                (ii) The Corporation cannot refuse to effect the exchange of the
Series B Exchangeable Preferred Stock into Common Shares or otherwise dishonor
or reject any Exchange Notice delivered in accordance with this Section 5 based
upon any claim that a holder or any person associated or affiliate with such
holder has been engaged in any violation of law or for any other reason, unless
an injunction from a court or regulatory body, on notice, restraining or
enjoining the exchange of all or some of such shares of Series B Exchangeable
Preferred Stock shall have issued and the Corporation shall have posted a surety
bond for the benefit of the holder or holder so affected in the amount of the
difference between the Exchange Price and the closing ask price on the Trading
Day preceding the date of the attempted exchange, multiplied by the number of
shares of Common Stock which would have been issuable upon such exchange, which
bond shall remain in effect until the completion of the arbitration or
litigation of the dispute and the proceeds of which shall be payable to the
affected holder or holders in the event its obtains a favorable judgment. If any
third party who is not and has never been an Affiliate (as defined in Rule 405
under the Securities Act of 1933, as amended) of the holder obtains a judgment
or any injunctive relief from any court or public or governmental authority
which denies, enjoins, limits, modifies, delays or disputes the right of the
holder hereof to effect the exchange of the Series B Exchangeable Preferred
Stock into Common Shares, then the holder shall also have the right, by written
notice to the Corporation, to require the Corporation to promptly redeem the
Series B Exchangeable Preferred Stock for cash at a redemption price equal to
one hundred twenty five percent (125%) of the Stated Value thereof (the
"Mandatory Purchase Amount"). Under any of the circumstances set forth above,
the Corporation shall be responsible for the payment of all costs and expenses
of the holder, including reasonable legal fees

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and expenses, as and when incurred in disputing any such action or pursuing its
rights hereunder (in addition to any other rights of the holder). In the absence
of an injunction precluding the same, the Corporation shall issue shares upon a
properly noticed exchange.

                (iii) The holder shall be entitled to exercise its exchange
privilege notwithstanding the commencement of any case under 11 U.S.C. Section
101 et seq. (the "Bankruptcy Code"). In the event the Corporation is a debtor
under the Bankruptcy Code, the Corporation hereby waives to the fullest extent
permitted any rights to relief it may have under 11 U.S.C. Section 362 in
respect of the holder's exchange privilege. The Corporation hereby waives to the
fullest extent permitted any rights to relief it may have under 11 U.S.C.
Section 362 in respect of the exchange of the Series B Exchangeable Preferred
Stock. The Corporation agrees, without cost or expense to the holder, to take or
consent to any and all action necessary to effectuate relief under 11 U.S.C.
Section 362.

            (e) FRACTIONAL SHARES. No fractional shares shall be issued upon
exchange of Series B Exchangeable Preferred Stock for Common Stock. All
fractional shares shall be payable in cash at the closing price per share on the
business day prior to the day such payment is accrued. All exchanges pursuant to
Section 5 or Section 6 hereof by any holder shall be aggregated so that in no
event shall any single holder receive a cash payment in lieu of fractional
shares pursuant to this subsection for a fraction greater than or equal to one
(1).

            (f) REORGANIZATION OR RECLASSIFICATION. If any capital
reorganization or reclassification of the capital stock of the Corporation shall
be effected in such a way that holders of Common Stock shall be entitled to
receive stock, securities or assets with respect to or in exchange for Common
Stock, or, in the case of any consolidation, merger or mandatory share exchange
of the Corporation into any other company, then, as a condition of such
reorganization, reclassification or exchange, lawful and adequate provisions
shall be made whereby each holder of a share or shares of Series B Exchangeable
Preferred Stock shall thereupon have the right to receive, upon the basis and
upon the terms and conditions specified herein and in lieu of the shares of
Common Stock immediately theretofore receivable upon the exchange of such share
or shares of Series B Exchangeable Preferred Stock, such shares of stock,
securities or assets as may be issued or payable with respect to or in exchange
for a number of outstanding shares of such Common Stock equal to the number of
shares of such Common Stock immediately theretofore receivable upon such
exchange had such reorganization, reclassification or exchange not taken place,
and in any such case appropriate provisions shall be made with respect to the
rights and interests of such holder to the end that the provisions hereof
(including without limitation provisions for adjustments of the exchange rights)
shall thereafter be applicable, as nearly as may be, in relation to any shares
of stock, securities or assets thereafter deliverable upon the exercise of such
exchange rights.

            (g) ADJUSTMENTS FOR SPLITS, COMBINATIONS, ETC. The Set Price and the
number of shares of Common Stock into which the Series B Exchangeable Preferred
Stock shall be Exchangeable shall be adjusted for stock splits, stock dividends,
combinations or other similar events. No adjustment to the Exchange Price will
be made for dividends (other than stock dividends), if any, paid on the Common
Stock or for securities issued pursuant to exercise for fair value of options,
warrants or restricted stock.

        6. MANDATORY EXCHANGE.

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            (a) MANDATORY EXCHANGE DATE. If (i) on or after the third year
anniversary of the Original Issuance Date of any share of Series B Exchangeable
Preferred Stock, or (ii) the average of the closing bid prices for the
Corporation's Common Stock on the Principal Market for five (5) consecutive
Trading Days ending on the Trading Day prior to the date of a Mandatory Exchange
Notice (as defined below) is at least Ten Dollars ($10.00) per share (adjusted
for any splits or reverse splits) and the average daily trading volume on the
Principal Market for the thirty (30) Trading Days ending on the Trading Day
prior to the date provided for herein is at least 50,000 shares (such date as
selected by the Corporation being the "Mandatory Exchange Date"), there remain
issued and outstanding any shares of Series B Exchangeable Preferred Stock and a
registration statement permitting the resale by the holder of the Common Stock
issuable upon such exchange is then effective and remains effective through the
Mandatory Exchange Date, then the Corporation shall be entitled to require all
(but not less than all) holders of shares of Series B Exchangeable Preferred
Stock then outstanding to exchange their shares of Series B Exchangeable
Preferred Stock for shares of Common Stock at the then effective Exchange Price
pursuant to Section 5(a). The Corporation shall provide at least three (3)
Trading Days' written notice (the "Mandatory Exchange Notice") to the holders of
shares of Series B Exchangeable Preferred Stock of such mandatory exchange. The
Mandatory Exchange Notice shall include (i) the Stated Value of the shares of
Series B Exchangeable Preferred Stock to be exchanged, (ii) the Exchange Price
(which for purposes of this subsection 6(a), shall be the lesser of (A) the Set
Price and (B) the Market Price on the Mandatory Exchange Date), and (iii) the
number of shares of the Corporation's Common Stock to be issued upon such
mandatory exchange at the then applicable Exchange Price. If on or after the
third year anniversary of the Original Issuance Date of any shares of Series B
Exchangeable Preferred Stock remain outstanding, in lieu of a Mandatory
Exchange, the Corporation may buy-out the shares of Series B Exchangeable
Preferred Stock by means of such Mandatory Exchange Notice. The amount of cash
to be paid in the event of a buy-out shall equal the average of the closing bid
and asked prices of the Common Stock on the business day prior to the Mandatory
Exchange Date times the number of shares which would have been issued upon a
voluntary Exchange, but in no event shall such buy-out yield the holder a total
return on its investment of less than forty percent (40%). Notwithstanding the
foregoing, in no event shall the Corporation exchange that portion of the Series
B Exchangeable Preferred Stock to the extent that the issuance of Common Stock
upon the exchange of such Series B Exchangeable Preferred Stock, when combined
with shares of Common Stock received upon other exchanges of Series B
Exchangeable Preferred Stock by such holder and any other holders of Series B
Exchangeable Preferred Stock or upon exercise of the Stock Purchase Warrants
referred to in Section 5(a), would exceed 19.9% of the Common Stock outstanding
on the Original Issuance Date (unless stockholder approval has been obtained as
described in Section 5(a)), or as to any individual holder, make such holder the
beneficial owner of 9.9% or more of the Corporation's then-outstanding Common
Stock.

            (b) SURRENDER OF CERTIFICATES. On or before the Mandatory Exchange
Date, each holder of shares of Series B Exchangeable Preferred Stock shall
surrender his or its certificate or certificates for all such shares to the
Corporation at the place designated in such Mandatory Exchange Notice (or an
affidavit of lost certificate in form and content reasonably satisfactory to the
Corporation), and shall thereafter receive certificates for the number of shares
of Common Stock to which such holder is entitled or, in the event of a buy-out
by the Corporation, the amount of cash such holder is entitled within three
Trading Days. On the Mandatory Exchange Date, all rights with

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respect to the Series B Exchangeable Preferred Stock so exchanged, including the
rights, if any, to receive notices and vote, will terminate, provided that the
Corporation either (i) delivers the shares of Common Stock to be delivered upon
such Exchange within five (5) Trading Days of the Mandatory Exchange Date or
(ii) in the event of a buy-out in lieu of a Mandatory Exchange, delivers the
buy-out price within five (5) Trading Days of the Mandatory Exchange Date, and
otherwise such Mandatory Exchange shall be void and the Corporation shall not
thereafter have any further right to require a Mandatory Exchange. All
certificates evidencing shares of Series B Exchangeable Preferred Stock that are
required to be surrendered for Exchange in accordance with the provisions
hereof, from and after the Mandatory Exchange Date, shall be deemed to have been
retired and cancelled, notwithstanding the failure of the holder or holders
thereof to surrender such certificates on or prior to such date. The Corporation
may thereafter take such appropriate action as may be necessary to reduce the
authorized Series B Exchangeable Preferred Stock accordingly.

        7. NOTICES. In case at any time:

            (a) the Corporation shall declare any dividend upon its Common Stock
payable in cash or stock or make any other pro rata distribution to the holders
of its Common Stock; or

            (b) the Corporation shall offer for subscription pro rata to the
holders of its Common Stock any additional shares of stock of any class or other
rights; or

            (c) there shall be any capital reorganization or reclassification of
the capital stock of the Corporation, or a consolidation or merger of the
Corporation with or into, or a sale of all or substantially all its assets to,
another entity or entities; or

            (d) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Corporation;

then, in any one or more of said cases, the Corporation shall give, by first
class mail, postage prepaid, or by telex or facsimile or by recognized overnight
delivery service to non-U.S. residents, addressed to each holder of any shares
of Series B Exchangeable Preferred Stock at the address of such holder as shown
on the books of the Corporation, (i) at least twenty (20) Trading Days' prior
written notice of the date on which the books of the Corporation shall close or
a record shall be taken for such dividend, distribution or subscription rights
or for determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least
twenty (20) Trading Days' prior written notice of the date when the same shall
take place. Such notice in accordance with the foregoing clause (i) shall also
specify, in the case of any such dividend, distribution or subscription rights,
the date on which the holders of Common Stock shall be entitled thereto and (ii)
shall also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reorganization, reclassification, consolidation, merger,
sale, dissolution, liquidation or winding up, as the case may be.

        8. STOCK TO BE RESERVED. The Corporation, upon the effective date of
this Certificate of Designations, has a sufficient number of shares of Common
Stock available to reserve for issuance

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upon the exchange of all outstanding shares of Series B Exchangeable Preferred
Stock. The Corporation will at all times reserve and keep available out of its
authorized Common Stock, solely for the purpose of issuance upon the exchange of
Series B Exchangeable Preferred Stock as herein provided, such number of shares
of Common Stock as shall then be issuable upon the exchange of all outstanding
shares of Series B Exchangeable Preferred. The Corporation covenants that all
shares of Common Stock which shall be so issued shall be duly and validly
issued, fully paid and non-assessable. The Corporation will take all such action
as may be so taken without violation of any applicable law or regulation, or of
any requirement of any national securities exchange upon which the Common Stock
may be listed to have a sufficient number of authorized but unissued shares of
Common Stock to issue upon exchange of the Series B Exchangeable Preferred
Stock. The Corporation will not take any action which results in any adjustment
of the exchange rights if the total number of shares of Common Stock issued and
issuable after such action upon exchange of the Series B Exchangeable Preferred
Stock would exceed the total number of shares of Common Stock then authorized by
the Corporation's Certificate of Incorporation.

        9. NO REISSUANCE OF SERIES B EXCHANGEABLE PREFERRED STOCK. Shares of
Series B Exchangeable Preferred Stock which are exchanged for shares of Common
Stock as provided herein shall not be reissued.

        10. ISSUE TAX. The issuance of certificates for shares of Common Stock
upon exchange of Series B Exchangeable Preferred Stock shall be made without
charge to the holder for any United States issuance tax in respect thereof,
provided that the Corporation shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and delivery of any
certificate in a name other than that of the holder of the Series B Exchangeable
Preferred Stock which is being exchanged.

        11. CLOSING OF BOOKS. The Corporation will at no time close its transfer
books against the transfer of any Series B Exchangeable Preferred Stock or of
any shares of Common Stock issued or issuable upon the exchange of any shares of
Series B Exchangeable Preferred Stock in any manner which interferes with the
timely exchange of such Series B Exchangeable Preferred Stock, except as may
otherwise be required to comply with applicable securities laws.

        12. DEFINITIONS. As used in this Certificate of Designations, the term
"Common Stock" shall mean and include the Corporation's authorized Common Stock,
$0.01 par value per share, as constituted on the date of filing of these terms
of the Series B Exchangeable Preferred Stock, and shall also include any capital
stock of any class of the Corporation thereafter authorized which shall neither
be limited to a fixed sum or percentage of par value in respect of the rights of
the holders thereof to participate in dividends nor entitled to a preference in
the distribution of assets upon the voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; provided that the shares of Common
Stock receivable upon exchange of shares of Series B Exchangeable Preferred
Stock shall include only shares designated as Common Stock of the Corporation on
the date of filing of this instrument, or in case of any reorganization,
reclassification, or stock split of the outstanding shares thereof, the stock,
securities or assets provided for in Subparagraph 5(f) and (g). Any capitalized
terms used in this Certificate of Designations but not defined herein shall have
the meanings set forth in that certain Exchangeable Preferred Stock and Warrant
Purchase Agreement dated as of February 24, 2000 among the Corporation and the
other persons signatory thereto, a

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copy of which will be provided to any stockholder of the Corporation upon
request to the Secretary of the Corporation, without charge.

        13. LOSS, THEFT, DESTRUCTION OF PREFERRED STOCK. Upon receipt of
evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of certificates representing shares of Series B Exchangeable
Preferred Stock and, in the case of any such loss, theft or destruction, upon
receipt of indemnity or security reasonably satisfactory to the Corporation, or,
in the case of any such mutilation, upon surrender and cancellation of the
Series B Exchangeable Preferred Stock certificate, the Corporation shall make,
issue and deliver, in lieu of such lost, stolen, destroyed or mutilated
certificates for Series B Exchangeable Preferred Stock, new certificates for
Series B Exchangeable Preferred Stock of like tenor. The Series B Exchangeable
Preferred Stock shall be held and owned upon the express condition that the
provisions of this Section 14 are exclusive with respect to the replacement of
mutilated, destroyed, lost or stolen shares of Series B Preferred Stock and
shall preclude any and all other rights and remedies notwithstanding any law or
statue existing or hereafter enacted to the contrary with respect to the
replacement of negotiable instruments or other securities without the surrender
thereof.

        14. WHO DEEMED ABSOLUTE OWNER. The Corporation may deem the person in
whose name the Series B Exchangeable Preferred Stock shall be registered upon
the registry books of the Corporation to be, and may treat it as, the absolute
owner of the Series B Exchangeable Preferred Stock for the purpose of exchange
of the Series B Exchangeable Preferred Stock and for all other purposes, and the
Corporation shall not be affected by any notice to the contrary. All such
payments and such exchange shall be valid and effectual to satisfy and discharge
the liability upon the Series B Exchangeable Preferred Stock to the extent of
the sum or sums so paid or the exchange so made.

        15. REGISTER. The Corporation shall maintain a transfer agent, which may
be the transfer agent for the Common Stock, for the registration of the Series B
Exchangeable Preferred Stock. Upon any transfer of the Series B Exchangeable
Preferred Stock in accordance with the provisions hereof, the Corporation shall
register or cause the transfer agent to register such transfer on the Series B
Exchangeable Preferred Stock register.

        16. WITHHOLDING. To the extent required by applicable law, the
Corporation may withhold amounts for or on account of any taxes imposed or
levied by or on behalf of any taxing authority in the United States having
jurisdiction over the Corporation from any payments made pursuant to the Series
B Exchangeable Preferred Stock.

        17. HEADINGS. The headings of the Sections of this Certificate of
Designations are inserted for convenience only and do not constitute a part of
this Certificate of Designations.

        IN WITNESS WHEREOF, Robert H. Gurevitch, President and Chief Executive
Officer of the Corporation, under penalties of perjury, does hereby declare and
certify that this is the act and

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deed of the Corporation and the facts stated herein are true and accordingly has
signed this Certificate of Designations as of this __ day of February, 2000.


                                         DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.


                                         By:  /s/ Robert S. Gurevitch
                                              ----------------------------------
                                              Robert S. Gurevitch, President and
                                              Chief Executive Officer
Attest:

      [signature illegible]
--------------------------------------
                      , Secretary




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