EXHIBIT 10.41
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              (PAGE NUMBERS REFER TO PAPER DOCUMENT ONLY)

                               EXHIBIT B

      CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A
                  PREFERRED STOCK OF TRU RETAIL, INC.

     I, Theodore R. Upland, the President of TRU Retail, Inc., a
corporation organized and existing under the General Corporation Law
of the State of California (the "Corporation"), in accordance with the
provisions of section 202(e) thereof, DO HEREBY CERTIFY:

     Pursuant to the authority vested in the Board of Directors of
the Corporation in accordance with the provisions of its Articles of
Incorporation a series of Preferred Stock of the Corporation (the
"Series A Preferred") hereby is created and the powers, preferences
and relative, participating, optional and other special rights, and
the qualifications, limitations or restrictions, of such Series A
Preferred are as follows:

     SECTION 1. PREFERRED STOCK.   Eleven thousand (11,000) shares
of the Corporation's preferred stock are hereby designated as Series A
Preferred (par value per share $1,000) each with the rights,
preferences and privileges specified herein.  No additional shares of
the Corporation's preferred stock may be designated as Series A
Preferred so long as any of the 11,000 shares hereby designated remain
outstanding.

     SECTION 2.  DIVIDEND RIGHTS.

     (a)  Dividends.  The holders of Series A Preferred shall be
entitled to receive, prior to and in preference to the common stock of
the Corporation (the "Common Stock") and any class or series of
capital stock of the Corporation other than the Series A Preferred
(the Common Stock, and any other class or series of capital stock of
the Corporation now authorized or issued or authorized or issued after
the date hereof, with the exception of the Series A Preferred, being
referred to as "Junior Securities") out of any funds legally available
therefor, with respect to each share of Series A Preferred, a
cumulative, compounding, cash dividend at the rate per annum (based on
a 365-day year) of Nine Percent (9%) of the par value, which dividends
shall accrue from the date of issuance of such share of Series A
Preferred, whether or not declared by the Board of Directors, and
shall be paid annually, on the 15th day after the end of the
Corporation's first twenty-eight (28) day accounting period ending in
January of each year, or if such 15th day is a banking holiday, on
the next succeeding day on which banks in the state of California
are open.

     (b)  Additional Dividends.  No dividend may be declared
on shares of Junior Securities so long as any shares of Series A
Preferred are outstanding.

     SECTION 3.  LIQUIDATION PREDEREJCE.

     (a)  Preferential Distribution.  In the event of any liquidation,
dissolution or winding up of the Corporation, either voluntary or
involuntary:

          (i)    Preference Amount.

                 (1) The holders of Series A Preferred shall be
          entitled to receive, prior to and in preference to any
          distribution of any of the assets or surplus funds of the
          Corporation to the holders of Junior Securities by reason of
          their ownership thereof, and after the payment of all
          Corporation debt (including under any loan agreement), an
          amount equal to the par value for each share of Series A
          Preferred.

                 (2) In addition, the holders of Series A Preferred
          shall be entitled to receive an amount equal to all accrued
          but unpaid dividends on shares of Series A Preferred.  With
          respect to each share of Series A Preferred, the sum of the
          par value and the amount of such accrued but unpaid
          dividends on such shares shall constitute the "Preferred
          Preference Amount."

                 (3) In the event the assets and funds of the
          Corporation to be distributed among the holders of Series A
          Preferred are insufficient to permit the payment to each
          such holder of its full Preferred Preference Amount, then
          the entire remaining assets and funds of the Corporation
          legally available for distribution to the Series A Preferred
          shall be distributed ratably among the holders of the Series
          A Preferred.

          (ii)   Remaining Distribution.  After payment has been made
     to the holders of the Series A Preferred of the full Preferred
     Preference Amount, then all assets of the Corporation shall be
     distributed pro rata among all holders of Common Stock.

     (b)  Inclusion of Certain Transactions.  For purposes of this
Section 3 unless the holders of a majority of the outstanding shares
of Series A Preferred elect not to treat it as such, (by giving the
Corporation written notice of such election by the later of (i) the
date which is ten (10) days prior to the date of the shareholders
meeting called to approve the merger, consolidation or sale or, if the
merger, consolidation or sale is approved by the shareholders of the
Corporation by written consent, on or before the date any holder of
Series A Preferred signs and delivers such written consent and (ii)
the date which is ten (10) days after the date on which holders of the
Series A Preferred receive written notice from the Corporation of the
merger, consolidation or sale and such holders' rights under this
Section 3), a liquidation, dissolution or winding up of the
Corporation shall be deemed to include the Corporation's sale, lease,
exchange or transfer of all or substantially all of its assets, the
acquisition of the Corporation by another entity by means of merger
or consolidation resulting in the exchange of the outstanding shares
of this Corporation for securities or consideration issued, or caused
to be issued, by the acquiring corporation or its subsidiary or a
transaction or series of related transactions in which a majority of
the shares of Common Stock outstanding is transferred other than to
the Corporation and other than by reason of death.

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     SECTION 4.  CONVERSION.  The holders of Series A Preferred
shall have the conversion rights (the "Conversion Rights") as set
forth in this Section 4. Shares of Series A Preferred shall be
convertible, at the option of the holder thereof, into such number of
fully paid and nonassessable shares of Common Stock as is determined
in accordance with the terms of Section 4(c) below, in the event of
the occurrence of a Conversion Event (as that term is defined in
Section 4(a) below)

     (a)  Conversion Events. The occurrence of any one of the
following shall constitute a "Conversion Event": (i) the effectiveness
of a firm-commitment, underwritten public offering of the Corporation,
(ii) the Corporation's sale, lease, exchange or transfer of all or
substantially all of its assets, (iii) the merger of the Corporation
or any other corporate reorganization in which the Corporation is not
the continuing or surviving entity of such merger or reorganization or
(iv) a transaction or series of related transactions in which a
majority of the shares of Common Stock outstanding is transferred
other than to the Corporation.

     (b)  Exercise of Conversion Rights.

          (i)    Notice.  The Corporation shall give each holder of
     record of Series A Preferred written notice of any Conversion
     Event not later than twenty (20) days prior to the shareholders'
     meeting called to approve such Conversion Event or twenty (20)
     days prior to the closing of such Conversion Event, whichever is
     earlier, and shall also notify such holders in writing of the
     final approval of such Conversion Event.  The first of such
     notices shall describe the material terms and conditions of the
     contemplated transaction. The Corporation shall thereafter give
     such holders prompt notice of any material changes in the terms
     of such Conversion Event.  The Conversion Event shall in
     no event take place sooner than twenty (20) days after the
     mailing by the Corporation of the first notice provided for in
     this Section 4(b)(i) or sooner than ten (10) days after the
     mailing by the Corporation of any notice of material changes
     provided for in this Section 4(b)(i); provided, however, that
     such periods may be shortened or waived upon the written
     consent of the holders of a majority of the then outstanding
     shares of Series A Preferred.

          (ii)   Mechanics of Conversion.  Before any holder
     of Series A Preferred shall be entitled to convert the same into
     full shares of Common Stock, such holder shall surrender the
     certificate or certificates representing those shares of Series
     A Preferred to be converted (the "Converted Preferred"), duly
     endorsed, at the office of the Corporation, and shall give
     written notice to the Corporation at such office that such holder
     elects to convert the same.  The Corporation shall, as soon as
     practicable thereafter, issue and deliver at such office to such
     holder of Series A Preferred, or to the nominee of such holder, a
     certificate or certificates for the number of shares of Common
     Stock to which such holder is entitled and a check payable to
     such holder in the amount of any accrued but unpaid dividends on
     the Converted Preferred.  Such conversion shall be deemed to have
     been made immediately prior to the close of business on the date
     of such surrender of the Converted Preferred, and the person or
     persons entitled to receive 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.  If the conversion is in connection with an underwritten
     offering of securities registered pursuant to the 1933 Act,
     then the conversion may, at

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     the option of any holder tendering Converted Preferred for
     conversion, be conditioned upon the closing with the underwriter
     of the sale of securities pursuant to such offering, in which
     event the person(s) entitled to receive the Common Stock issuable
     upon such conversion of the Series A Preferred shall not be
     deemed to have converted such Series A Preferred until
     immediately prior to the closing of such sale of securities
     in connection with such offering.

     (c)  Conversion Ratio.

          (i)    Special Definitions.  For purposes of this Section
     4(c), the following  definitions shall apply:

                 (1) "Options" shall mean rights, options or
          warrants to subscribe for, purchase or otherwise acquire
          either Common Stock or Convertible Securities.

                 (2) "Original Issue Date" shall mean the date on
           which a share of Series A Preferred was first issued.

                 (3) "Convertible Securities" shall mean any
           evidence of indebtedness, shares (other than Junior
           Securities) or other securities convertible into or
           exchangeable for Common Stock.

                 (4) "Additional Shares of Common Stock" shall mean
           all shares of Common Stock issued (or, pursuant to Section
           4(c) (iii) below, deemed to be issued) by the Corporation
           after the Original Issuance Date, other than:

                     (A) shares of Common Stock issued or issuable
                 upon conversion of Series A Preferred;

                     (B) shares of Common Stock issued or issuable
                 as a dividend or distribution on Series A Preferred
                 or Common Stock;

                     (C) shares of Common Stock issued or
                 issuable by way of dividend or other distribution on
                 shares of Common Stock excluded from the definition
                 of Additional Shares of Common Stock by this Section
                 4(c)(i)(4).

          (ii)   Calculation of Conversion Ratio. The aggregate of
     the Converted Preferred tendered for conversion pursuant to the
     terms set forth in this Section 4 shall be converted into a
     number of shares of Common Stock of the Corporation equal to
     the product of:

                 (x) the total number of shares of Common Stock
          outstanding on the date of the Conversion Event on a
          fully-diluted basis after giving effect to all Options,
          Convertible Securities and Additional Shares of
          Common Stock outstanding upon such date, which total shall
          exclude shares of Common Stock issuable by the Corporation
          to its employees pursuant an stock option or similar stock
          benefit plan or plans maintained by the Corporation, up to
          an aggregate

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          number of shares of Common Stock not to exceed fifteen
          percent (15%) of the total number of shares of Common Stock
          outstanding as of the Original Issue Date for the first
          share of Series A Preferred that is issued, and other shares
          of Common Stock issued pursuant to, or issuable upon, the
          unanimous consent of the Board of Directors of the
          Corporation,

                 MULTIPLIED BY

                 (y) the fraction created by dividing:

                     (1) the sum of (A) the Preferred Preference
          Amount applicable to the Converted Preferred plus (B) the
          difference between $2,000,000 and one-third (1/3) of the
          aggregate of the dividends on the Series A Preferred paid by
          the Corporation to the holders and accrued but not paid by
          the Corporation to the holders since the Original Issue
          Date,

                 BY


                     (2) Eighteen Million Eleven Thousand Dollars
          ($18,011,000).

          (iii)  Deemed Issuance of Additional Shares of Common
     Stock - Issuance of Options and Convertible Securities. If the
     Corporation, at any time or from time to time after the Original
     Issue Date, issues any Options or Convertible Securities or fixes
     a record date for the determination of holders of any class of
     securities 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 for a subsequent adjustment of such number)
     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 issuance or, if such a record date has been
     fixed, as of the close of business on such record date

          (iv)   Adjustments for Subdivisions, Stock Dividends and
     Combinations of Common Stock. If the Corporation at any time (A)
     subdivides the outstanding Common Stock or (B) issues a stock
     dividend on its outstanding Common Stock, the number of shares of
     Common Stock issuable upon conversion of the Series A Preferred
     immediately prior to such subdivision or the issuance of such
     stock dividend shall be proportionately increased by the same
     ratio as the subdivision or dividend.  If the Corporation at any
     time combines its outstanding Common Stock, the number of
     shares of Common Stock issuable upon conversion of the Series
     A Preferred immediately prior to such combination shall be
     proportionately decreased by the same ratio as the combination.
     All such adjustments described herein shall be effective at
     the close of business on the date of such subdivision, stock
     dividend or combination, as the case may be.

          (v)    Other Adjustments. In case of any capital
     reorganization (other than in connection with a merger or other
     reorganization in which the Corporation is not the continuing or
     surviving entity) or any reclassification of the Common Stock,
     the Series A
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     Preferred shall thereafter be convertible into that number of
     shares of stock or other securities or property to which a holder
     of the number of shares of Common Stock deliverable upon
     conversion of the Series A Preferred immediately prior to such
     reorganization or recapitalization would have been entitled upon
     such reorganization or reclassification.  In any such case,
     appropriate adjustment (as determined by the Corporation's Board
     of Directors) shall be made in the application of the provisions
     herein set forth with respect to the rights and interests
     thereafter of the holders of Series A Preferred, such that the
     provisions set forth herein shall thereafter be applicable, as
     nearly as reasonably may be, in relation to any share of stock or
     other property thereafter deliverable upon the conversion.

          (vi)   Reservation of Shares.  The Corporation shall at
     all times reserve and keep available out of its authorized and
     unissued shares of the Common Stock, solely for the purpose of
     effecting the conversion of shares of Series A Preferred, such
     number of shares of Common Stock as shall, from time to time,
     be sufficient to effect the conversion of all then outstanding
     shares of Series A Preferred, 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 A Preferred, the Corporation shall take such
     corporate action as may be necessary to increase its
     authorized shares of Common Stock to such number of shares as
     shall be sufficient for such purpose.

          (vii)  Converted Shares.  Any shares of Series A Preferred
     converted by the holder thereof shall be retired and canceled and
     shall not be reissued as such by the Corporation.

          (viii) Calculations.  All calculations made pursuant to
     this Certificate of Designation, including, without limitation,
     this Section 4, shall be rounded to the nearest one millionth of
     a share.

     (d)  No Impairment.  The Corporation will not, by amendment of
its Articles of Incorporation or through any reorganization, transfer
of assets, consolidation, merger, dissolution, issuance or sale of
securities or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms to be observed or
performed hereunder by the Corporation but will at all times in good
faith assist in the carrying out of all the provisions of this Section
4 and in the taking of all actions that may be necessary or
appropriate to protect the Conversion Rights of the holders of the
Series A Preferred against impairment.

     (e)  Notices.

          (i)    Events Triggering Notices.  In addition to as set
     forth in Section 4(b)(i) above, the following events shall cause
     the Corporation to issue notices in accordance with the
     provisions of Section 4(e)(ii) below:

                 (1) a declaration by the Corporation of any dividend
         or distribution upon shares of its Common Stock, whether in
         cash, property, stock or other

                                                                 6

         securities, whether or not a regular cash dividend and
         whether or not out of earnings or earned surplus;

                 (2) a pro rata offering by the Corporation to the
          holders of any class or series of its stock to subscribe for
          any additional shares of stock of any class or series or
          other rights; or

                 (3) any reclassification or recapitalization by
          the Corporation of its outstanding Common Stock involving a
          change in the Common Stock.

          (ii)   Types of Notices.  In connection with each event
     described in this Section 4, the Corporation shall send the
     following notices: (A) at least twenty (20) days prior to the
     date on which a record is to be taken for the dividend,
     distribution or subscription rights referred to in Sections
     4(e)(i)(1) and 4(e)(i)(2) above or the date for determining
     rights to vote  and (B) with regard to the matters referred to
     in Section 4(e)(i)(3) above, the Corporation shall send a notice
     to each holder of Series A Preferred setting forth the record or
     voting date and the nature of the action

          (iii)  Delivery of Notices.  Each such written notice
     shall be given pursuant to the provisions of Section 11 hereof.

     (f)  Payment of Dividends.  Immediately prior to the conversion
of any shares of Series A Preferred into shares of Common Stock
pursuant to the provisions of this Section 4, the Board of Directors
of the Corporation shall declare as payable any accrued but unpaid
dividends as of the date of such conversion.

     SECTION 5.  REDEMPTION.

     (a)   Annual Redemption of Preferred.  Beginning any time after
November of 2002, the holders of shares of Series A Preferred may on
or before January 1 of each calendar year, tender to the Corporation
for redemption up to, but not greater than, that number of shares of
Series A Preferred, the aggregate Preferred Preference Amount of
which does not exceed the Corporation's excess cash flow realized from
the immediately preceding fiscal year.  For purposes of the preceding
sentence, "excess cash flow" shall mean the excess of (i) the net
income of the Corporation for such fiscal year, plus amortization
and depreciation expenses incurred by the Corporation for such fiscal
year, over (ii) the sum of capital expenses of the Corporation and
incurred by the Corporation during such fiscal year and dividends paid
by the Corporation to holders of Series A Preferred shares during such
fiscal year. Upon receipt of any such tender, the Corporation shall,
to the extent it may lawfully do so, redeem all shares of such Series
A Preferred so tendered by paying cash therefor in an amount per share
equal to the Preferred Preference Amount, on or before the 15th day
after the end of the Corporation's first twenty-eight (28) day
accounting period ending in January of such year, or if such 15th day
is a banking holiday, on the next succeeding day on which banks in the
state of California are open.





     (b)  Mandatory Redemption of Series A Preferred. On or before
January 31, 2012, the Corporation shall, to the extent it lawfully may
do so, redeem all then outstanding Series A

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Preferred by paying in cash therefor an amount per share equal to
the Preferred Preference Amount as of the date of the redemption.

     (c)  Delay of Redemption.

          (i)    If, pursuant to Section 5(a), the Corporation is
     required to redeem a portion or all of the Series A Preferred
     and, as of the required redemption date, the Corporation may not
     lawfully redeem all of the Series A Preferred required to be
     redeemed, or the Board of Directors determines, in good faith,
     that the Corporation does not have enough liquidity to do so, the
     date of such mandatory redemption set forth in Section 5(a) shall
     be extended up to one-hundred eighty (180) days, so long as
     during this period the Corporation shall use commercially
     reasonable efforts to obtain financing to enable the Corporation
     to meet its redemption obligations pursuant to Section 5(a), then
     it shall redeem such shares on a pro-rata basis among the holders
     of Series A Preferred, in proportion to the full respective
     redemption amounts to which they are entitled hereunder to the
     extent possible and shall redeem the balance of such shares, each
     at the Preferred Preference Amount together with any accrued
     interest thereon as provided below as soon as the Corporation is
     not prohibited from redeeming some or all of such shares.

          (ii)   After the date on which the Corporation shall
     become obligated to redeem the Preferred Stock under this Section
     5 and until the Preferred Preference Amount shall have been paid
     in respect of all shares of Series A Preferred to be redeemed or
     acquired: (a) no dividend whatsoever shall be paid or declared,
     and no distribution shall be made on any Junior Securities of the
     Corporation, and (b) no shares of Junior Securities shall be
     purchased, redeemed or acquired by the Corporation and no monies
     shall be paid into or set aside or made available for a sinking
     fund for the purchase, redemption or acquisition thereof.

     (d)  Early Redemption by Corporation.  The  Corporation, without
penalty, may at any time in its absolute discretion redeem any
share(s) of outstanding Series A Preferred of any holder by paying
such holder cash in an amount equal to the Preferred Preference
Amount as of the redemption date; provided that, the Corporation
shall give each holder of Series A Preferred whose shares it chooses
to so redeem at least ten (10) days prior written notice thereof.
Further, the Corporation's obligations to redeem Series A Preferred
pursuant to Section 5(a) shall be reduced on a cumulative
dollar-for-dollar basis with respect to all amounts paid by it to
redeem Series A Preferred pursuant to this Section 5(d).


     SECTION 6.  CESSATION OF RIGHTS.  From and after the redemption
of shares of Series A Preferred, all dividends, if any, on such
shares of Series A Preferred shall cease to accrue, all rights of the
holders of such shares as holders of Series A Preferred shall cease
with respect to such shares, and such shares shall not thereafter be
transferred on the books of this Corporation or be deemed to be
outstanding for any purpose whatsoever.

     SECTION 7.  COVENANTS.  So long as any shares of Series A
Preferred are outstanding, the Corporation shall (i) deliver to
holders of Series A Preferred, no less often than annually
financial statements of the Corporation, audited by the
Corporation's accountants, and quarterly

                                                                 8

financial statements of the Corporation prepared internally, (ii)
deliver to holders of Series A Preferred all default notices received
by the Corporation from any lender, and (iii) provide each holder of
Series A Preferred, upon reasonable request for the same, access to
inspect the financial records maintained by the Corporation. So
long as any shares of Series A Preferred are outstanding, the
Corporation shall not, without the unanimous approval of the
Board of Directors of the Corporation, (i)increase above the
amounts permitted by the Employment Agreement between the Corporation
and Theodore R. Upland III in effect as of the Original Issue Date of
the first shares of Series A Preferred issued, the compensation,
benefits or distributions to Theodore R. Upland III, (ii) make
capital expenditures in any fiscal year to the extent that the annual
average of all capital expenditures made by the Corporation
from July 22, 2001 through and including the end of such fiscal
year exceeds $1,500,000.  Further, and in addition to any other rights
provided by law, so long as any shares of Series A Preferred are
outstanding, the Corporation shall not, without first obtaining the
affirmative vote or written consent of the holders of at least
two-thirds of such outstanding Series A Preferred, take any of the
following actions:

     (1)  alter, change, or amend the preferences or rights of any
          series of the Series A Preferred;

     (2)  authorize, convert and/or issue any new shares of equity
          securities (including the creation of any new shares of
          preferred stock or the conversion of any shares of common
          stock into shares of preferred stock) other than an
          aggregate number of shares of Common Stock issuable to
          employees of the Corporation pursuant to a stock option or
          similar stock benefit plan maintained by the Corporation not
          to exceed 15% of the number of shares of Common Stock
          outstanding on the initial Original Issue Date;

     (3)  make investments in, loans or advances to, or guarantees of
          the obligations of, any persons or entities (including
          establishing any subsidiaries) outside the ordinary course
          of business of the Corporation;

     (4)  incur indebtedness in excess of $6,400,000 (other than
          purchase money obligations or trade debt in the ordinary
          course of business);

     (5)  enter into any transaction with any insider or related party
          other than the holder of the Series A Preferred;

     (6)  repurchase or redeem any Junior Securities

     (7)  create (by recapitalization or otherwise) any new class or
          series of shares or equity that have interests, rights,
          preferences or privileges senior to the Series A Preferred;

     (8)  amend or waive any rights or provisions of the Corporation's
          Bylaws or Articles of Incorporation in a manner adverse to
          the interests of the holders of Series A Preferred;

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     (9)  take any action materially adverse to the interests of the
          holders of Series A Preferred;

     (10) directly or indirectly redeem, purchase or otherwise
          acquire, or permit its subsidiaries, if any, to redeem,
          purchase or otherwise acquire, any capital stock or other
          equity securities (other than shares of Series A Preferred)
          of the Corporation or its subsidiaries, if any, (including,
          without limitation, warrants, options and other rights to
          acquire such capital stock or other equity securities), or
          directly or indirectly redeem, purchase or make any payments
          with respect to any stock appreciation rights, phantom stock
          plans or similar rights or plans, except for redemption of
          the Series A Preferred pursuant to the terms hereof.

     SECTION 8.  INTENTIONALLY OMITTED.

     SECTION 9.  VOTING RIGHTS.

     (a)  Except as set forth in subsections (b) and (c) of this
Section 9, holders of shares of Series A Preferred shall have no
voting rights as a shareholder of the Corporation.

     (b)  Until such time as (i) the aggregate of the Preferred
Preference Amounts received by holders with respect to their
redemption of shares of Series A Preferred is greater than or equal to
ninety percent (90%) of the Preferred Preference Amount of all of the
shares of Series A Preferred issued and (ii) CPI Corp. and its
affiliates have been released from all guaranties of any holder to
guarantee the obligations of the Corporation or any of its affiliates
under any of its location leases, the holders of the Series A
Preferred, voting separately as a class to the exclusion of the
holders of Common Stock and any other class of Securities of the
Corporation, shall be entitled, at any annual or special meeting of
shareholders of the Corporation called for the purpose of electing
directors (and at each subsequent annual or special meeting of
shareholders of the Corporation), or in any written consent executed
in lieu of such meeting of shareholders, to vote for the election of
one (1) director of the Corporation (the "Preferred Director").  The
Preferred Director shall be elected to the Board of Directors
of the Corporation as elected by the holders of a majority of the
Series A Preferred.  In the event of the death, resignation, or
removal of the Preferred Director, his or her successor shall
be nominated and elected by the holders of the Series A Preferred
entitled to nominate and elect such director in the manner set forth
above.

     (c)  In the event of a breach by the Corporation of any of
its obligations or covenants herein, and continuing until such time as
any such breach shall be cured by the Corporation, the holders of the
Series A Preferred, voting separately as a class to the exclusion of
the holders of Common Stock and any other class of Securities of the
Corporation, shall have voting rights and powers equal to the voting
rights and powers of holders of Common Stock.

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     SECTION 10.  EVENTS OF NONCOMPLIANCE.

     (a)  Definition.  An "Event of Noncompliance" shall have
occurred if:

          (i)    the Corporation fails to make any redemption
     payment with respect to the Series A Preferred which it is
     required to make hereunder, whether or not such payment is
     legally permissive or is prohibited by any agreement to which the
     Corporation is subject, except to the extent and for the period
     permitted under Section 5(c);

          (ii)   the Corporation breaches or otherwise fails to
     perform or observe any other covenant or agreement set forth
     herein;

          (iii)  the Corporation makes an assignment for the
     benefit of creditors or admits in writing its inability to pay
     its debts generally as they become due; or an order, judgment or
     decree is entered adjudicating the Corporation bankrupt or
     insolvent, or any order for relief with respect to the
     Corporation is entered under the federal bankruptcy code; or the
     Corporation petitions or applies to any tribunal for the
     appointment of a custodian, trustee, receiver or liquidator of
     the Corporation or of any substantial part of the assets of the
     Corporation, or commences any proceeding relating to the
     Corporation under any bankruptcy, reorganization, arrangement,
     insolvency, readjustment of debt, dissolution or liquidation law
     of any jurisdiction; or any such petition or application is
     filed, or any such proceeding is commenced, against the
     Corporation and either (a) the Corporation by any act
     indicates its approval thereof, consent thereto or acquiescence
     therein or (b) such petition, application or proceeding is not
     dismissed within sixty (60) days; or

          (iv)   the Corporation shall have a final judgment against
     it in the amount of $50,000 or more and such judgment remains
     outstanding for a period of sixty (60) days or more.

     (b)  Consequences of Events of Noncompliance.

          (i)    If an Event of Noncompliance of the type described
     in Sections 10(a)(i) or (iii) has occurred and is continuing or
     an Event of Noncompliance of the type described in Section
     10(a)(ii) has occurred and is continuing for a period of thirty
     (90) days, then:

                 (A) The holder or holders of a majority of the
                 Series A Preferred, in each case then outstanding,
                 may elect (by written notice delivered to the
                 Corporation) that the dividend rate on the Series
                 A Preferred increase immediately to twelve percent
                 (12%) the Original Issue Price per annum.  Any
                 increase in the dividend rate resulting from the
                 operation of this subparagraph shall terminate as of
                 the close of business on the date on which no Event
                 of Noncompliance exists and the dividend rate shall
                 return to the dividend rate otherwise payable
                 hereunder, subject to any subsequent increase
                 pursuant to this paragraph.

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                 (B) The holder or holders of a majority of the
                 Series A Preferred then outstanding may demand (by
                 written notice delivered to the Corporation)
                 immediate redemption of all or a part of the Series A
                 Preferred then outstanding at a price per share
                 equal to the Preferred Preference Amount.  The
                 Corporation shall redeem in cash such Series
                 A Preferred within fifteen (15) days after receipt
                 of the initial demand for redemption.

          (ii)   Notwithstanding the terms of Section 10(b)(i)(B)
     above, if an Event of Noncompliance of the type described in
     Section 10(a)(iii) has occurred, all of the shares of Series A
     Preferred then outstanding shall be subject to immediate
     redemption by the Corporation (without any action on the part of
     the holders of the Shares) at a price per share equal to the
     Preferred Preference Amount thereof.  The Corporation shall
     immediately redeem all shares in cash upon the occurrence of such
     Event of Noncompliance in accordance with the provisions of
     Section 5 hereof.

          (iii)  If any Event of Noncompliance exists, each holder
     of Series A Preferred shall also have any other rights which such
     holder is entitled to under any contract or agreement at any time
     and any other rights which such holder may have pursuant to
     applicable law.

     SECTION 11.  NOTICES.  Each written notice provided for herein
shall be given by first class mail, postage prepaid, addressed to each
holder that is to be provided notice pursuant to the applicable
provision hereof and such notice shall be sent to the address for each
such holder as shown on the books of the Corporation.  Each notice so
given shall be deemed to have been delivered on the third day on which
first class mail is delivered after the posting of such notice.







































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IN WITNESS WHEREOF, I have executed and subscribed this Certificate
and do affirm and acknowledge the foregoing as true as of the
_____ day of July, 2001.

                                   TRU RETAIL, INC.



                                   By: /s/ Theodore R. Upland, III
                                       ---------------------------
                                       Name:  Theodore R. Upland, III
                                       Title:_____________________

ATTEST:


______________________ , Secretary



COUNTY OF CALIFORNIA)
                            )  SS.
STATE OF ______________     )


     On this _____ day of July, 2001, before me,________________,
Notary Public in and for the State of California, personally appeared
__________________, President, and _____________________, Secretary,
of TRU Retail, Inc., a California corporation, known to me to be the
persons who executed the foregoing Certificate of Designation and
acknowledged to me that they executed the same pursuant to authority
given by the Board of Directors of such corporation, and as the free
and voluntary act and deed of such corporation, for the uses and
purposes therein set forth.



                                  ------------------------------------
                                  Notary Public

My commission expires:

______________________









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