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                                                                     EXHIBIT 4.4

                         TARRAGON REALTY INVESTORS, INC.

              CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RELATIVE
             PARTICIPATING OR OPTIONAL OR OTHER SPECIAL RIGHTS, AND
             QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF OF
                                  SPECIAL STOCK
                     BY RESOLUTION OF THE BOARD OF DIRECTORS


         We, William S. Friedman, President, and Kathryn Mansfield, Secretary of
TARRAGON REALTY INVESTORS, INC., a corporation organized and existing under the
Business Corporation Law of the State of Nevada, in accordance with the
provisions of Section 78.195 of the Nevada Revised Statutes thereof, DO HEREBY
CERTIFY:

                  THAT, pursuant to the authority conferred upon the Board of
         Directors by the Articles of Incorporation of TARRAGON REALTY
         INVESTORS, INC. (the "Corporation"), and pursuant to the provisions of
         NRS 78.1955 (which section provides that no stockholder action is
         required in order to effectuate this designation), said Board of
         Directors by unanimous written consent dated February 25, 2000, adopted
         certain recitals and resolutions providing for the designations,
         preferences and relative participating, optional or other special
         rights and qualifications, limitations or restrictions thereof, of a
         series of Special Stock of the Corporation, specifically the 10%
         Cumulative Preferred Stock, which recitals and resolutions are as
         follows:

                  WHEREAS, Article Fourth of the Articles of Incorporation of
         the Corporation authorizes the Corporation to issue not more than
         10,000,000 shares of Special Stock, $.01 par value per share (the
         "Special Stock") and 20,000,000 shares of Common Stock, $0.01 par value
         per share (the "Common Stock"), which Special Stock may be issued from
         time to time in one or more series and shall be designated as the Board
         of Directors may determine to have such voting powers, preferences,
         limitations and relative rights with respect to the shares of each
         series of the class of Special Stock of the Corporation as expressly
         provided in a resolution or resolutions providing for the issuance of
         such series adopted by the Board of Directors which is vested with the
         authority in respect thereof; and

                  WHEREAS, no shares of such Special Stock have been previously
         designated hereof; and

                  WHEREAS, the Board of Directors now desires to amend the
         Articles of Incorporation to designate one series of the Special Stock.

                  NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority
         granted to the Board of Directors by Article Fourth of the Articles of
         Incorporation, as amended, the Board of Directors hereby further amends
         the Articles of Incorporation to provide for the issuance of one single
         series of Special Stock consisting of the number of shares in such
         series as set forth below and, subject to the provisions of Article
         Fourth of the Articles of Incorporation, as amended, of the
         Corporation, hereby fixes and determines with respect to such series
         the following designations, preferences and relative participating,
         optional or other special rights, if any, and qualifications,
         limitations or restrictions thereof:



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                  1. DESIGNATION. The distinctive designation of such series
         shall be the 10% Cumulative Preferred Stock and each share of the 10%
         Cumulative Preferred Stock shall have a par value of $0.01 per share
         and a preference on liquidation under paragraph 6 below of up to $12
         per share. The 10% Cumulative Preferred Stock is sometimes referred to
         herein as the "Preferred Stock."

                  2. NUMBER OF SHARES. The number of shares which shall
         constitute the 10% Cumulative Preferred Stock shall be such number as
         may actually be issued by the Corporation, not to exceed a maximum of
         2,500,000 shares, which number may be decreased (but not below the
         number then outstanding), from time to time by the Board of Directors,
         subject to the provisions hereof.

                  3. DIVIDENDS AND DIVIDEND RATE. Holders of record on the
         fifteenth day of each March, June, September and December of each year
         of shares of the 10% Cumulative Preferred Stock shall be entitled to
         receive dividends, when and as declared by the Board of Directors of
         the Corporation and to the extent permitted under the Nevada General
         Corporation Law, payable quarterly on each March 31, June 30, September
         30 and December 31 of each year, beginning on September 15, 2000 (each
         a "Dividend Reference Date" and, collectively, the "Dividend Reference
         Dates"), in preference to and with priority over dividends upon all
         "Junior Securities" (as defined in paragraph 6 below). Except as
         otherwise provided herein, dividends on each share of 10% Cumulative
         Preferred Stock will accrue (but not compound) cumulatively on a daily
         basis at the rate per share of ten percent (10%) per annum ($0.30 per
         calendar quarter) from and including the date of issuance to and
         including the date on which the "Redemption Price" (as defined in
         paragraph 4 below) of such share is paid, whether or not such dividends
         have been declared and whether or not there are profits, surplus or
         other funds of the Corporation legally available for the payment of
         such dividends. For purposes of this paragraph 3, the date on which the
         Corporation initially issues any share is its date of issuance,
         regardless of the number of times transfer of such share is made on the
         stock records maintained by or for the Corporation and regardless of
         the number of certificates that may be issued to evidence such share
         (whether by reason of transfer of such share or for any other reason).
         Notwithstanding any other requirement of this paragraph unless the
         holder of the 10% Cumulative Preferred Stock requests of the
         Corporation payment of dividends in a form other than cash, any and all
         quarterly dividends on the 10% Cumulative Preferred Stock shall be
         satisfied by payment of cash. So long as any shares of 10% Cumulative
         Preferred Stock are outstanding, the Corporation will not declare or
         pay any dividends on Junior Securities (other than dividends in respect
         of Common Stock payable in shares of Common Stock) or make, directly or
         indirectly, any other distribution of any sort in respect of Junior
         Securities, or any payment on account of the purchase or other
         acquisition of the Junior Securities, unless on the date of such
         declaration in the case of a dividend, or on such date of distribution
         or payment, in the case of such distribution or other payment (a) all
         dividends on the 10% Cumulative Preferred Stock for all past
         quarter-yearly dividend periods have been paid in full and the full
         dividends for the then current quarter-yearly period shall have been
         paid or declared in a sum sufficient for the payment thereof set apart,
         and (b) after giving effect to such payment of dividends, other
         distributions, purchase or redemption, the aggregate capital of the
         Corporation applicable to all capital stock of the Corporation then
         outstanding, plus the earned and capital surplus of the Corporation
         shall exceed the aggregate amount payable on involuntary dissolution,
         liquidation or winding up of the Corporation on all shares of the 10%
         Cumulative Preferred Stock and all stock ranking prior to or on a
         parity with the 10% Cumulative Preferred Stock as to dividends or
         assets outstanding after the payment of such dividends, other
         distributions, purchase or redemption. Dividends shall not be paid or
         declared and set apart for payment on any series of Special Stock for
         any dividend period (including the 10% Cumulative Preferred Stock)
         unless dividends have been or are, contemporaneously, paid and declared
         and set apart for payment on



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         all outstanding series of Special Stock entitled thereto for all
         dividend periods terminating on the same or earlier date. If at any
         time the Corporation pays less than the total amount of dividends then
         accrued with respect to the 10% Cumulative Preferred Stock, such
         payment will be distributed ratably among the then holders of 10%
         Cumulative Preferred Stock so that an amount equal is paid with respect
         to each outstanding share.

                  4. REDEMPTION. The Corporation may, at any time after issuance
         thereof and after June 30, 2003 and from time to time thereafter, at
         the election of the Board of Directors of the Corporation redeem any or
         all of the 10% Cumulative Preferred Stock then outstanding by written
         notice given not less than twenty (20) nor more than sixty (60) days
         before the date fixed for redemption (the "Redemption Date"). If
         mailed, such notice shall be deemed to be delivered when deposited in
         the United States Mail, postage prepaid, addressed to the holder of
         shares of 10% Cumulative Preferred Stock at his address as it appears
         on the stock transfer records of the Corporation. Such notice shall set
         forth (a) the shares to be so redeemed, (b) the date fixed for
         redemption, (c) the applicable Redemption Price, and (d) the place at
         which the holder(s) may obtain payment of the applicable Redemption
         Price upon surrender of the share certificate(s). If less than all
         shares of 10% Cumulative Preferred Stock at any time outstanding shall
         be called for redemption, such shares shall be redeemed pro rata by lot
         drawn or other manner deemed fair in the sole discretion of the Board
         of Directors to redeem one or more such shares without redeeming all
         such shares of 10% Cumulative Preferred Stock. If such notice of
         redemption shall have been so mailed, on or before the Redemption Date,
         the Corporation may provide for payment of a sum sufficient to redeem
         the applicable number of shares of 10% Cumulative Preferred Stock
         called for redemption either (i) by setting aside the sum required to
         be paid as the Redemption Price by the Corporation, separate and apart
         from its other funds, in trust for the account of the holder(s) of the
         shares of 10% Cumulative Preferred Stock to be redeemed or (ii) by
         depositing such sum in a bank or trust company (either located in the
         state where the principal executive office of the Corporation is
         maintained, such bank or trust company having a combined surplus of at
         least $10,000,000 according to its latest statement of condition, or
         such other bank or trust company as may be permitted by the Articles of
         Incorporation, as amended, or by law) as a trust fund, with irrevocable
         instructions and authority to the bank or trust company to give or
         complete the notice of redemption and to pay, on or after the
         Redemption Date, the applicable Redemption Price on surrender of
         certificates evidencing the share(s) of 10% Cumulative Preferred Stock
         so called for redemption and, in either event, from and after the
         Redemption Date (A) the share(s) of 10% Cumulative Preferred Stock
         deemed to be redeemed, (B) such setting aside or deposit shall be
         deemed to constitute full payment for such share(s), (C) such share(s)
         so redeemed shall no longer be deemed to be outstanding, (D) the
         holder(s) thereof shall cease to be a stockholder of the Corporation
         with respect to such share(s), and (E) such holder(s) shall have no
         rights with respect thereto except the right to receive their
         proportionate share of the funds set aside pursuant hereto or deposited
         upon surrender of their respective certificates. Any interest on the
         funds so deposited shall be paid to the Corporation. Any and all such
         redemption deposits shall be irrevocable except to the following
         extent: any funds so deposited which shall not be required for the
         redemption of any shares of 10% Cumulative Preferred Stock because of
         any prior sale or purchase by the Corporation other than through the
         redemption process, subsequent to the date of deposit but prior to the
         Redemption Date, shall be repaid to the Corporation forthwith and any
         balance of the funds so deposited and unclaimed by the holder(s) of any
         shares of 10% Cumulative Preferred Stock entitled thereto at the
         expiration of one calendar year from the Redemption Date shall be
         repaid to the Corporation upon its request or demand therefor and after
         any such repayment the holder(s) of the share(s) so called for
         redemption shall look only to the Corporation for payment of the
         Redemption Price thereof. In addition to the redemption under this
         paragraph 4, the Corporation may redeem or repurchase shares of the 10%
         Cumulative Preferred Stock (i) from any holder(s) thereof who consents
         in writing to such redemption (ii)


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         pursuant to any offer by the Corporation to purchase or acquire
         share(s) from holders of less than a specified number of share(s) or
         "round lots" (i.e., an "odd lot" or "99 or less" offer) and/or (iii)
         open market or negotiated purchases, and in each of clauses (i), (ii)
         and/or (iii), the provisions of this paragraph 4 will not apply to any
         such consented redemption or purchase by the Corporation. All shares of
         10% Cumulative Preferred Stock redeemed may either be held in the
         treasury subject to reissuance or shall be canceled and retired and no
         shares shall be issued in place thereof, but such shares shall be
         restored to the status of authorized but unissued shares of Special
         Stock. The "Redemption Price" (herein so called) shall be an amount
         equal to (i) the "Liquidation Value" (as defined in paragraph 6 below)
         of $12 per share, plus (ii) the amount of all accrued but unpaid
         dividends thereon to the Redemption Date, which shall include all
         cumulative dividends in arrears and also the proportionate part of the
         dividend accrued since the last Dividend Reference Date preceding the
         Redemption Date and whether or not earned or declared, but without
         interest, plus (iii) the following amount per share during the periods
         set forth below:

<TABLE>
<CAPTION>
                IF REDEMPTION OCCURS DURING THE
                TWELVE MONTH PERIOD                    ADDITIONAL PREMIUM
                ENDING JUNE 30 OF                      PER SHARE
<S>                                                    <C>
                2004                                   $0.50
                2005                                   $0.40
                2006                                   $0.30
                2007                                   $0.20
                2008                                   $0.10
</TABLE>

         provided that from and after July 1, 2008 there shall be no premium as
         a part of the Redemption Price.

                  5. SINKING FUND. The Corporation shall not be required to
         maintain any so-called "Sinking Fund" for the retirement on any basis
         of the 10% Cumulative Preferred Stock.

                  6. RIGHTS ON LIQUIDATION. In the event of any liquidation,
         dissolution or winding-up of the Corporation, and after paying and
         providing for the payment of all creditors of the Corporation, the
         holders of shares of the 10% Cumulative Preferred Stock then
         outstanding shall be entitled, before any distribution or payment is
         made upon any "Junior Securities" (defined to be and mean the Common
         Stock and any other equity security of any kind which the Corporation
         at any time has issued, issues or is authorized to issue if the 10%
         Cumulative Preferred Stock has priority over such securities as to
         dividends or upon liquidation), to receive a liquidation preference in
         an amount in cash equal to the aggregate Liquidation Value of all
         shares of 10% Cumulative Preferred Stock then outstanding, whether any
         such liquidation, dissolution or winding up is voluntary or involuntary
         and the holders of the 10% Cumulative Preferred Stock shall not be
         entitled to any other or further distributions of assets. The term
         "Liquidation Value" shall be and mean, as of any particular date, an
         amount per share of 10% Cumulative Preferred Stock equal to the
         Redemption Price if such share were so redeemed in accordance with the
         provisions of paragraph 5 above, but in no event shall exceed $12 per
         share, plus any accrued and unpaid cumulative dividends. If, upon any
         dissolution, liquidation or winding-up of the affairs of the
         Corporation, the net assets available for distribution shall be
         insufficient to permit payment to the holders of all outstanding shares
         of all series of Special Stock of the amounts to which they
         respectively shall be entitled, then the assets of the Corporation to
         be distributed to such holders will be distributed ratably among them
         based upon the amounts payable on the shares of each


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         such series of Special Stock in the event of voluntary or involuntary
         dissolution, liquidation or winding-up, as the case may be, in
         proportion to the full preferential amounts, together with any and all
         arrearages to which they are respectively entitled. Upon any such
         liquidation, dissolution or winding-up of the Corporation, after the
         holders of Special Stock have been paid in full the amounts to which
         they are entitled, the remaining assets of the Corporation may be
         distributed to the holders of Junior Securities, including Common
         Stock, of the Corporation. The Corporation will mail written notice of
         such liquidation, dissolution or winding-up, not less than twenty (20)
         nor more than fifty (50) days prior to the payment date stated therein
         to each record holder of 10% Cumulative Preferred Stock. Neither the
         consolidation nor merger of the Corporation into or with any other
         corporation or corporations, nor the sale or transfer by the
         Corporation of all or any part of its assets, nor a reduction of the
         capital stock of the Corporation, nor the purchase or redemption by the
         Corporation of any shares of its Special Stock or Common Stock or any
         other class of its stock will be deemed to be a liquidation,
         dissolution or winding-up of the Corporation within the meaning of this
         paragraph 6.

                  7. RANKING. The 10% Cumulative Preferred Stock shall rank on a
         parity as to dividends and upon liquidation, dissolution or winding up
         with all other shares of Special Stock issued by the Corporation;
         provided, however, that the Corporation shall not issue any shares of
         Special Stock of any series which are superior to the 10% Cumulative
         Preferred Stock as to dividends or rights upon liquidation, dissolution
         or winding up of the Corporation as long as any shares of the 10%
         Cumulative Preferred Stock are issued and outstanding, without the
         prior written consent of the holders of a majority of such shares of
         10% Cumulative Preferred Stock then outstanding voting separately as a
         class.

                  8. VOTING RIGHTS. The holders of the shares of 10% Cumulative
         Preferred Stock shall only have the voting rights specifically required
         by law under the Nevada General Corporation Law, and shall have the
         following additional voting rights subject to and after compliance with
         any applicable laws and rules or actual requirements of any exchange
         upon which any securities of the Corporation are listed:

                  (a) Except as may otherwise be specifically required by law
                  under the Nevada General Corporation Law, the holders of the
                  shares of 10% Cumulative Preferred Stock shall not have the
                  right to vote such stock, directly or indirectly, at any
                  meeting of the stockholders of the Corporation and such shares
                  of stock shall not be counted in determining the total number
                  of outstanding shares to constitute a quorum at any meeting of
                  stockholders.

                  (b) In the event that, under any circumstance, the holders of
                  the 10% Cumulative Preferred Stock are required by law to vote
                  upon any matter, the approval of such series shall be deemed
                  to have been obtained upon the affirmative vote of the holders
                  of only a majority of the shares of the 10% Cumulative
                  Preferred Stock then outstanding.

                  (c) Except as set forth herein, or as otherwise provided by
                  the Articles of Incorporation, as amended, or by law, holders
                  of the 10% Cumulative Preferred Stock shall have no special
                  voting rights and their consent shall not be required for the
                  taking of any corporate action.

                  9. NO CONVERSION RIGHTS. The 10% Cumulative Preferred Stock
         may not be converted into any other securities of the Corporation.

                  10. LIMITED RIGHT TO ELECT DIRECTOR. If and when, at any time,
         six consecutive quarterly dividends, in whole or in part, on the 10%
         Cumulative Preferred Stock shall be in


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         arrears, then the holders of the shares of 10% Cumulative Preferred
         Stock, voting separately as a class, shall be entitled, at any annual
         meeting of stockholders or special meeting held in place thereof, or at
         a special meeting of the holders of the shares of the 10% Cumulative
         Preferred Stock called as hereinafter provided, to elect one (1)
         director and, except as otherwise provided in the Articles of
         Incorporation, as amended, the holders of shares of Common Stock and
         any other class of stock of the Corporation, to the extent it shall
         have the right to vote, shall be entitled to elect all remaining
         members of the Board of Directors, but the holders of Common Stock and
         any other class of stock of the Corporation shall not be entitled to
         vote in the election of the director of the Corporation so to be
         elected by the holders of shares of 10% Cumulative Preferred Stock.
         Such right of the holders of shares of 10% Cumulative Preferred Stock
         to elect one (1) director may be exercised until dividends in default
         on the outstanding shares of 10% Cumulative Preferred Stock have been
         paid in full or funds sufficient therefor set aside, and when so paid
         or provided for, then the right of the holders of shares of 10%
         Cumulative Preferred Stock to elect such director shall cease, but
         subject always to the same provisions for the vesting of such voting
         rights in the case of any such future dividend default or defaults. At
         any time after such voting power shall have vested in the holders of
         the outstanding shares of 10% Cumulative Preferred Stock, the Secretary
         of the Corporation may, and upon the written request of holders of
         record of 25% or more of the shares of 10% Cumulative Preferred Stock
         then outstanding addressed to him at the principal office of the
         Corporation shall, call a special meeting of the holders of shares of
         10% Cumulative Preferred Stock for the election of the director to be
         elected by them as herein provided, to be held within sixty (60) days
         after delivery of such request and at the place and upon the notice
         provided by law and in the Bylaws for the holding of meetings of
         stockholders; provided, however, that the Secretary shall not be
         required to call such special meeting in the case of any such request
         received less than 120 days before the date fixed for the next ensuing
         annual meeting of stockholders. No such special meeting and no
         adjournment thereof shall be held on a date less than 30 days before
         the annual meeting of stockholders or special meeting held in place
         thereof next succeeding the time when the holders of the 10% Cumulative
         Preferred Stock become entitled to elect one (1) director as above
         provided. If at any annual or special meeting or any adjournment
         thereof the holders of at least a majority of the shares of 10%
         Cumulative Preferred Stock then outstanding shall be present or
         represented by proxy then, by vote of the holders of at least a
         majority of the shares of 10% Cumulative Preferred Stock present or so
         represented at such meeting, the authorized number of directors of the
         Corporation shall be increased by one (1) and the holders of shares of
         10% Cumulative Preferred Stock shall be entitled to elect the
         additional director so provided for. The director so elected shall
         serve until the next annual meeting or until his successor shall be
         elected and shall qualify; provided, however, that whenever the holders
         of shares of 10% Cumulative Preferred Stock shall be divested of voting
         power as above provided, the term of office of the person elected as
         director by the holders of shares of 10% Cumulative Preferred Stock as
         a class shall forthwith terminate and the number of the Board of
         Directors shall be reduced accordingly.

                  If, during any interval between any special meeting of the
         holders of shares of 10% Cumulative Preferred Stock for the election of
         one (1) director to be elected by them as provided in the preceding
         paragraph and the next ensuing annual meeting of stockholders, or
         between annual meeting of stockholders for the election of directors,
         and while the holders of shares of 10% Cumulative Preferred Stock shall
         be entitled to elect one (1) director, the director so elected by the
         holders of shares of 10% Cumulative Preferred Stock shall resign or
         die, a majority of the directors then in office though less than a
         quorum shall designate the successor to fill the vacancy thereby
         created; provided, however, that if a successor shall not be designated
         to fill the vacancy created by the resignation or death of the director
         elected by the holders of shares


<PAGE>   7

         of 10% Cumulative Preferred Stock as herein above provided, within
         forty (40) days after the creation of such vacancy the Secretary of the
         Corporation shall call a special meeting of the holders of shares of
         10% Cumulative Preferred Stock and such vacancy shall be filled at such
         special meeting as herein above provided. Any director elected by the
         holders of the shares of 10% Cumulative Preferred Stock or designated
         to fill a vacancy may be removed from office only by the vote of the
         holders of a majority of the outstanding shares of 10% Cumulative
         Preferred Stock at a special meeting of the holders of shares of 10%
         Cumulative Preferred Stock called for the purpose of removing such
         director. Upon the written request of holders of 25% or more of the
         shares of 10% Cumulative Preferred Stock then outstanding addressed to
         him at the principal office of the Corporation, the Secretary shall,
         within ten (10) calendar days after delivery to him of such request,
         call a special meeting of the holders of shares of 10% Cumulative
         Preferred Stock for such purpose to be held within sixty (60) days
         after delivery of such request; provided, however, that the Secretary
         shall not be required to call a special meeting in the case of any
         request received less than 120 calendar days before the date fixed for
         the next ensuing annual meeting of stockholders. The holders of shares
         of 10% Cumulative Preferred Stock voting separately as a class shall be
         entitled to fill any vacancy created by the removal of the director at
         any meeting at which such removal shall have been approved or if such
         vacancy is not so filled, it may be filled as provided above.

                  11. REACQUIRED SHARES. Any shares of 10% Cumulative Preferred
         Stock purchased or otherwise acquired by the Corporation in any manner
         whatsoever may be retired and canceled promptly after the acquisition
         thereof. All such shares shall, upon cancellation, become authorized
         but unissued shares of Special Stock and may be re-issued as part of a
         new series of Special Stock subject to the conditions and restrictions
         on issuance set forth in the Articles of Incorporation, as amended, or
         as otherwise required by law.

         IN WITNESS WHEREOF, said TARRAGON REALTY INVESTORS, INC. has caused its
corporate seal to be hereunto affixed and this certificate to be signed by
William S. Friedman, its President and Kathryn Mansfield, its Secretary as of
the ________ day of ____________, 2000.

                                        TARRAGON REALTY INVESTORS, INC.


                                        By:
                                             ----------------------------------
                                             Name: William S. Friedman
                                             President


                                        By:
                                             ----------------------------------
                                             Kathryn Mansfield
                                             Secretary

THE STATE OF TEXAS                  )
                                    )
COUNTY OF DALLAS                    )

         On _____________, 2000 personally appeared before me a Notary Public,
William S. Friedman, President of TARRAGON REALTY INVESTORS, INC., and Kathryn
Mansfield, Secretary of TARRAGON REALTY INVESTORS, INC., who acknowledged that
they executed the above instrument.


                                        ------------------------------
                                        Notary Public, State of Texas

                                        My Commission expires:

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