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                                                                     Exhibit 4.1

            CERTIFICATE OF DESIGNATION, PREFERENCES AND OTHER RIGHTS

                                     OF THE

                            SERIES A PREFERRED STOCK,

                          SERIES B PREFERRED STOCK, AND

                            SERIES C PREFERRED STOCK

                                       OF

                               USA BROADBAND, INC.

                         Pursuant to Section 151 of the

                        Delaware General Corporation Law



         USA Broadband, Inc., a corporation organized and existing under the
Delaware General Corporation Law (the "Corporation"), hereby certifies that,
pursuant to the authority conferred upon the Board of Directors of the
Corporation (the "Board of Directors") by the Certificate of Incorporation of
the Corporation (the "Certificate of Incorporation"), and in accordance with
Section 151(g) of the Delaware General Corporation Law, the Board of Directors
on the 28th day of June, 2001 duly adopted the following resolutions, which
resolutions remain in full force and effect as of the date hereof:

         WHEREAS, the Board of Directors of the Corporation is authorized, by
the Certificate of Incorporation, to establish one or more series of Preferred
Stock and determine the designation of such series, the number of shares
constituting such series, and the rights, preferences, privileges,
qualifications, limitations and restrictions relating to the shares of such
series, all to the extent permitted by the Delaware General Corporation Law; and

         WHEREAS, the Board of Directors desires to exercise its authority as
aforesaid to establish three series of such Preferred Stock and to determine the
designation of each such series, the number of shares constituting each such
series, and the terms of the shares constituting each such series.

         NOW, THEREFORE, BE IT RESOLVED: That the Board of Directors deems it
advisable to adopt, and hereby adopts, the following Certificate of Designation,
Preferences and Other Rights of the Series A Preferred Stock, Series B Preferred
Stock, and Series C Preferred Stock of the Corporation.


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                  I.     SERIES A PREFERRED STOCK

       1.     DESIGNATION. Seven million (7,000,000) shares of Preferred Stock,
$0.001 par value per share, are designated as "Series A Preferred Stock." The
rights, powers, preferences, privileges, qualifications, limitations and
restrictions granted to and imposed on the Series A Preferred Stock are set
forth below.

       2.     DIVIDEND PROVISIONS. The holders of shares of Series A Preferred
Stock shall be entitled to receive dividends out of any assets legally available
therefor, prior and in preference to any declaration or payment of any dividend
(payable other than in Common Stock or other securities and rights convertible
into or entitling the holder thereof to receive, directly or indirectly,
additional shares of Common Stock of the Corporation) on the Common Stock or any
other class of Preferred Stock of the Corporation, at the rate of $0.12 per
share for each share of Series A Preferred Stock (adjusted to reflect subsequent
stock dividends, stock splits or recapitalizations) per annum, payable quarterly
when, as and if declared by the Board of Directors. Such dividends shall be
cumulative from the date of issuance of the shares to which they relate and
shall be payable, at the election of the Board of Directors, either in cash or
in shares of Series A Preferred Stock, at a rate of one share per $1.50 of
dividends.

       3.     LIQUIDATION PREFERENCE.

       (a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of Series A Preferred
Stock shall be entitled to receive, prior and in preference to any distribution
of any of the assets of the Corporation to the holders of Common Stock or any
other series of Preferred Stock of the Corporation, by reason of their ownership
thereof, an amount per share equal to $1.50 for each outstanding share of Series
A Preferred Stock (as adjusted for stock splits, stock dividends and
recapitalizations) (the "Original Series A Issue Price") plus an amount equal to
accrued or declared but unpaid dividends thereon. If, upon the occurrence of
such an event, the assets and property available for distribution among the
holders of the Series A Preferred Stock shall be insufficient to permit the
payment to such holders of the full preferential amount to which they are
entitled as referenced above, then all of the assets and property of the
Corporation legally available for distribution shall be distributed ratably
among the holders of the Series A Preferred Stock in proportion to the aggregate
preferential amounts owed such holders upon a liquidation, dissolution or
winding up of the Corporation.

       (b) After the distributions described in subsection (a) above have been
paid in full, and after the payment of the preferential amounts payable to the
holders of Series B Preferred Stock and Series C Preferred Stock as set forth
below, the remaining assets of the Corporation available for distribution to
stockholders shall be distributed among the holders of Series A Preferred Stock
and Common Stock pro rata based on the number of shares of Common Stock held by
each (assuming conversion of all such Series A Preferred Stock).


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       (c) For purposes of this Section I.3, (i) any acquisition of the
Corporation by means of merger (other than the Reincorporation Merger, as
defined in Section I.4(d)(ii) below) or other form of corporate reorganization
in which the stockholders of the Corporation do not own a majority of the
outstanding shares of the surviving corporation or (ii) a sale of all or
substantially all of the assets of the Corporation shall be treated as a
liquidation, dissolution or winding up of the Corporation and shall entitle the
holders of Series A Preferred Stock and Common Stock to receive at the closing
cash, securities or other property as specified in Sections I.3(a) and I.3(b)
above.

       (d) Any securities to be delivered to the holders of the Series A
Preferred Stock and/or Common Stock pursuant to Section I.3(c) above shall be
valued as follows:

              (i) Securities not subject to investment letter or other similar
       restrictions on free marketability:

                     (A) If traded on a national securities exchange or the
              Nasdaq Stock Market, the value shall be deemed to be the average
              of the closing prices of the securities on such exchange over the
              30-day period ending three (3) days prior to the closing;

                     (B) If actively traded over-the-counter, the value shall be
              deemed to be the average of the closing bid prices over the 30-day
              period ending three (3) days prior to the closing; and

                     (C) If there is no active public market, the value shall be
              the fair market value thereof, as determined in good faith by the
              Board of Directors of the Corporation.

              (ii) The method of valuation of securities subject to investment
       letter or other restrictions on free marketability shall be to make an
       appropriate discount from the market value determined as above in (i)(A),
       (B) or (C) to reflect the approximate fair market value thereof, as
       determined in good faith by the Board of Directors of the Corporation.

       (e) In the event the requirements of Section I.3(c) are not complied
with, the Corporation shall forthwith either:

              (i) cause such closing to be postponed until such time as the
       requirements of Section I.3(c) have been complied with, or

              (ii) cancel such transaction, in which event the rights,
       preferences, privileges and restrictions of the holders of Series A
       Preferred Stock shall revert to and be the same as such rights,
       preferences, privileges and restrictions existing immediately prior to
       the date of the first notice referred to in Section I.3(f) hereof.

       (f) The Corporation shall give each holder of record of Series A
Preferred Stock written notice of such a Section I.3(c) transaction not later
than ten (10) days prior to

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the stockholders' meeting called to approve such transaction, or ten (10) days
prior to the closing of such transaction, whichever is earlier, and shall also
notify such holders in writing of the final approval of such transaction. The
first of such notices shall describe the material terms and conditions of the
impending transaction, and the Corporation shall thereafter give such holders
prompt notice of any material changes. The transaction shall in no event take
place sooner than ten (10) days after the Corporation has given the first notice
provided for herein or sooner than ten (10) days after the Corporation has given
notice of any material changes provided for herein; provided, however, that such
periods may be shortened upon the written consent of the holders of a majority
of the Series A Preferred Stock then outstanding.

       4.     CONVERSION. The holders of the Series A Preferred Stock shall have
conversion rights as follows (the "Series A Conversion Rights").

       (a) RIGHT TO CONVERT. Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation or any transfer agent
for the Series A Preferred Stock, into such number of fully paid and
nonassessable shares of Common Stock as is determined by dividing $1.50 by the
conversion price of the Series A Preferred Stock (the "Series A Conversion
Price") as in effect on the date the certificate representing the shares to be
converted is surrendered for conversion (the resulting fraction is referred to
herein as the "Series A Conversion Rate"). The initial Series A Conversion Price
shall be $1.50. The Series A Conversion Price shall be subject to adjustment as
set forth below.

       (b) AUTOMATIC CONVERSION. Each share of Series A Preferred Stock shall
automatically be converted into shares of Common Stock at the Series A
Conversion Rate then in effect immediately upon the consummation of the
Corporation's sale of its Common Stock in a bona fide, firm commitment
underwriting pursuant to a registration statement on Form S-1 under the
Securities Act of 1933, as amended, which results in aggregate gross cash
proceeds to the Corporation in excess of $15,000,000 and the public offering
price of which is not less than $10.00 per share (adjusted to reflect subsequent
stock dividends, stock splits or recapitalization).

       (c) MECHANICS OF CONVERSION. Before any holder of Series A Preferred
Stock shall be entitled to convert the same into shares of Common Stock, such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or of any transfer agent for such series of
Preferred Stock, and shall give written notice to the Corporation at its
principal corporate office, of the election to convert the same and shall state
therein the name or names in which the certificate or certificates for shares of
Common Stock are to be issued, provided, however, that in the event of an
automatic conversion pursuant to section I.4(b) above, the outstanding shares of
Series A Preferred Stock shall be converted automatically without any further
action by the holders of such shares and whether or not the certificates
representing such shares are surrendered to the Corporation or its transfer
agent; and provided further, that the Corporation shall not be obligated to
issue certificates evidencing the shares of Common Stock issuable upon such
automatic conversion unless either the


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certificates evidencing such shares having been converted are delivered to the
Corporation or its transfer agent as provided above, or a holder notifies the
Corporation or its transfer agent that such certificates have been lost, stolen
or destroyed and executes an agreement satisfactory to the Corporation to
indemnify the Corporation from any loss incurred by it in connection with such
certificates. The Corporation shall, as soon as practicable after delivery of
the surrendered certificates as referenced above, issue and deliver at such
office to such holder of Series A Preferred Stock, or to the nominee or nominees
of such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled as aforesaid. Such conversion shall
be deemed to have been made immediately prior to the close of business on the
date of such surrender of the shares of Series A Preferred Stock to be
converted, 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 as of such date. If the
conversion is in connection with an underwritten offer of securities registered
pursuant to the Securities Act of 1933, as amended, the conversion will be
conditioned upon the closing with the underwriter of the sale of securities
pursuant to such offering, unless otherwise designated in writing by the holders
of such Series A Preferred Stock, in which event the person(s) entitled to
receive the Common Stock issuable upon such conversion of the Series A Preferred
Stock shall not be deemed to have converted such Preferred Stock until
immediately prior to the closing of such sale of securities.

       (d) ADJUSTMENTS TO SERIES A CONVERSION PRICE.

              (i) ADJUSTMENTS FOR FUTURE ISSUANCES OF SHARES AT LOWER PRICE

                     (A) If the Corporation, at any time or from time to time
              after the date of the first issuance of Series A Preferred Stock
              (the "Series A Initial Purchase Date"), shall issue any Additional
              Stock (as defined below) without consideration or for a
              consideration per share less than the Series A Conversion Price in
              effect immediately prior to the issuance of such Additional Stock,
              such Series A Conversion Price shall forthwith be adjusted to a
              price determined by multiplying such Series A Conversion Price by
              a fraction, the numerator of which shall be the number of shares
              of Common Stock outstanding immediately prior to such issuance
              plus the number of shares of Common Stock which the aggregate
              consideration received by the Corporation for the total number of
              shares of Additional Stock so issued would purchase at such Series
              A Conversion Price, and the denominator of which shall be the
              number of shares of Common Stock outstanding immediately prior to
              such issuance plus the number of such shares of Additional Stock
              so issued; provided that for the purposes of this subsection, all
              shares of Common Stock issuable upon conversion of outstanding
              Preferred Stock shall be deemed to be outstanding, and immediately
              after any Additional Stock is deemed issued, such Additional Stock
              shall be deemed to be outstanding.

                     (B) No adjustment of the Series A Conversion Price shall be


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              made in an amount less than one cent per share, provided that any
              adjustments which are not required to be made by reason of this
              sentence shall be carried forward and shall be either taken into
              account in any subsequent adjustment made prior to three years
              from the date of the event giving rise to the adjustment being
              carried forward, or shall be made at the end of three years from
              the date of the event giving rise to the adjustment being carried
              forward. Except to the limited extent provided for in subsections
              I.4(d)(i)(E)(3) and I.4(d)(i)(E)(4) below, no adjustment of the
              Series A Conversion Price pursuant to this subsection I.4(d)(i)
              shall have the effect of increasing the Series A Conversion Price
              above the Conversion Price in effect immediately prior to such
              adjustment.

                     (C) In the case of the issuance of Common Stock for cash,
              the consideration shall be deemed to be the amount of cash paid
              therefor before deducting any reasonable discounts, commissions or
              other expenses allowed, paid or incurred by the Corporation for
              any underwriting or otherwise in connection with the issuance and
              sale thereof.

                     (D) In the case of the issuance of the Common Stock for a
              consideration in whole or in part other than cash, the
              consideration other than cash shall be deemed to be the fair value
              thereof as determined by the Board of Directors irrespective of
              any accounting treatment.

                     (E) In the case of the issuance, whether before, on or
              after the Series A Initial Purchase Date, of options to purchase
              or rights to subscribe for Common Stock, securities by their terms
              convertible into or exchangeable for Common Stock or options to
              purchase or rights to subscribe for such convertible or
              exchangeable securities (which are not excluded from the
              definition of Additional Stock), the following provisions shall
              apply:

                            (1) The aggregate maximum number of shares of Common
                     Stock deliverable upon exercise of such options to purchase
                     or rights to subscribe for Common Stock shall be deemed to
                     have been issued at the time such options or rights were
                     issued and for a consideration equal to the consideration
                     (determined in the manner provided in subsections
                     I.4(d)(i)(C) and I.4(d)(i)(D) above), if any, received by
                     the Corporation upon the issuance of such options or rights
                     plus the minimum purchase price provided in such options or
                     rights for the Common Stock covered thereby.

                            (2) The aggregate maximum number of shares of Common
                     Stock deliverable upon conversion of or in exchange for any
                     such convertible or exchangeable securities or upon the


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                     exercise of options to purchase or rights to subscribe for
                     such convertible or exchangeable securities and subsequent
                     conversion or exchange thereof shall be deemed to have been
                     issued at the time such securities were issued or such
                     options or rights were issued and for a consideration equal
                     to the consideration, if any, received by the Corporation
                     for any such securities and related options or rights
                     (excluding any cash received on account of accrued interest
                     or accrued dividends), plus the additional consideration,
                     if any, to be received by the Corporation upon the
                     conversion or exchange of such securities or the exercise
                     of any related options or rights (the consideration in each
                     case to be determined in the manner provided in subsections
                     I.4(d)(i)(C) and I.4(d)(i)(D) above).

                            (3) In the event of any change in the number of
                     shares of Common Stock deliverable or any increase in the
                     consideration payable to the Corporation upon exercise of
                     such options or rights or upon conversion of or in exchange
                     for such convertible or exchangeable securities, including,
                     but not limited to, a change resulting from the
                     anti-dilution provisions thereof, the Series A Conversion
                     Price obtained with respect to the adjustment which was
                     made upon the issuance of such options, rights or
                     securities, and any subsequent adjustments based thereon,
                     shall be recomputed to reflect such change, but no further
                     adjustment shall be made for the actual issuance of Common
                     Stock or any payment of such consideration upon the
                     exercise of any such options or rights or the conversion or
                     exchange of such securities.

                            (4) Upon the expiration of any such options or
                     rights, the termination of any such rights to convert or
                     exchange or the expiration of any options or rights related
                     to such convertible or exchangeable securities, the Series
                     A Conversion Price obtained with respect to the adjustment
                     which was made upon the issuance of such options, rights or
                     securities or options or rights related to such securities,
                     and any subsequent adjustments based thereon, shall be
                     recomputed to reflect the issuance of only the number of
                     shares of Common Stock actually issued upon the exercise of
                     such options or rights, upon the conversion or exchange of
                     such securities or upon the exercise of the options or
                     rights related to such securities. Upon the expiration of
                     any such options or rights, the termination of any such
                     rights to convert or exchange or the expiration of any
                     options or rights related to such convertible or
                     exchangeable securities, only the number of shares of
                     Common Stock actually issued upon the exercise of such
                     options or rights, upon the conversion or exchange of such
                     securities or upon the exercise of the options or rights
                     related to such securities shall continue to be deemed to
                     be issued.


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                            (5) All Common Stock deemed issued pursuant to this
                     subsection I.4(d)(i)(E) shall be considered issued only at
                     the time of its deemed issuance and any actual issuance of
                     such stock shall not be an actual issuance or a deemed
                     issuance of the Corporation's Common Stock under the
                     provisions of this Section I.4.

              (ii) "Additional Stock" shall mean any shares of Common Stock
       issued (or deemed to have been issued pursuant to subsection
       I.4(d)(i)(E)) by the Corporation on or after the Series A Initial
       Purchase Date other than shares of Common Stock issued or issuable

                     (A) pursuant to (i) the terms of the Agreement and Plan of
              Reorganization dated effective as of March 1, 2001 (the
              "Reorganization Agreement"), entered into by and among Optika
              Investment Company, Inc. ("Optika"), Cable Concepts, Inc. and
              various other parties, (ii) the merger of Optika with and into
              this Corporation (the "Reincorporation Merger"), or (iii) a
              transaction described in subsection I.4(d)(iii) below,

                     (B) up to 6,400,000 shares of Common Stock (as adjusted for
              stock splits, stock dividends and recapitalizations) to officers,
              directors, employees and consultants of the Corporation directly
              or pursuant to benefit plans approved by the stockholders and
              directors of the Corporation,

                     (C) in connection with capital equipment leases, commercial
              debt financing, technology acquisitions and other comparable
              transactions approved by the Board of Directors,

                     (D) upon conversion of the Series A Preferred Stock or in
              exchange for any shares of Series C Preferred Stock,

                     (E) issued to satisfy any obligation to pay any dividend or
              distribution on or with respect to the Series A, Series B or
              Series C Preferred Stock, or

                     (F) any transaction for which adjustment of the Series A
              Conversion Price is made in accordance with Section I.4(d)(iii)
              below).

              (iii) In the event the Corporation should at any time or from time
       to time after the Series A Initial Purchase Date fix a record date for
       the effectuation of a split or subdivision of the outstanding shares of
       Common Stock or the determination of holders of Common Stock entitled to
       receive a dividend or other distribution payable in additional shares of
       Common Stock or other securities or rights convertible into, or entitling
       the holder thereof to receive directly or indirectly, additional shares
       of Common Stock (hereinafter referred to as "Common Stock Equivalents")
       without payment of any consideration by such holder for the additional
       shares of Common Stock or the Common Stock


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       Equivalents (including the additional shares of Common Stock issuable
       upon conversion or exercise thereof), then, as of such record date (or
       the date of such dividend distribution, split or subdivision if no record
       date is fixed), the Series A Conversion Price shall be appropriately
       decreased so that the number of shares of Common Stock issuable on
       conversion of each share of Series A Preferred Stock shall be increased
       in proportion to such increase of outstanding shares determined in
       accordance with subsection I.4(d)(i)(E).

              (iv) If the number of shares of Common Stock outstanding at any
       time after the Series A Initial Purchase Date is decreased by a
       combination of the outstanding shares of Common Stock, then, following
       the record date of such combination, the Series A Conversion Price shall
       be appropriately increased so that the number of shares of Common Stock
       issuable on conversion of each share of Series A Preferred Stock shall be
       decreased in proportion to such decrease in outstanding shares.

       (e) OTHER DISTRIBUTIONS. In the event the Corporation shall declare a
distribution payable in securities of other persons, evidences of indebtedness
issued by the Corporation or other persons, assets (excluding cash dividends) or
options or rights not referred to in subsection I.4(d)(iii), then, in each such
case for the purpose of this subsection I.4(e), the holders of Series A
Preferred Stock shall be entitled to a proportionate share of any such
distribution as though they were the holders of the number of shares of Common
Stock of the Corporation into which their shares of Series A Preferred Stock are
convertible as of the record date fixed for the determination of the holders of
Common Stock of the Corporation entitled to receive such distribution.

       (f) RECAPITALIZATIONS. If at any time or from time to time there shall be
a recapitalization of the Common Stock (other than a subdivision, combination or
merger or sale of assets transaction provided for elsewhere in Section I.3 or
this Section I.4) provision shall be made so that the holders of each share of
Series A Preferred Stock shall thereafter be entitled to receive upon conversion
of such share of Series A Preferred Stock the number of shares of stock or other
securities or property of the Company or otherwise, to which a holder of Common
Stock deliverable upon conversion would have been entitled on such
recapitalization. In any such case, appropriate adjustment shall be made in the
application of the provisions of this Section I.4 with respect to the rights of
the holders of each share of Series A Preferred Stock after the recapitalization
to the end that the provisions of this Section I.4 (including adjustment of the
Series A Conversion Price then in effect and the number of shares purchasable
upon conversion of shares of Series A Preferred Stock) shall be applicable after
that event as nearly equivalent as may be practicable.

       (g) NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue 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 I.4 and in the taking of all


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such action as may be necessary or appropriate in order to protect the Series A
Conversion Rights against impairment.

       (h) NO FRACTIONAL SHARES AND CERTIFICATE AS TO ADJUSTMENTS.

              (i) No fractional shares shall be issued upon conversion of the
       Series A Preferred Stock and the number of shares of Common Stock to be
       issued shall be rounded to the nearest whole share. Whether or not
       fractional shares are issuable upon such conversion shall be determined
       on the basis of the total number of shares of Series A Preferred Stock
       the holder is at the time converting into Common Stock and the number of
       shares of Common Stock issuable upon such aggregate conversion.

              (ii) Upon the occurrence of each adjustment or readjustment of any
       Series A Conversion Price pursuant to this Section 4, the Corporation, at
       its expense, shall promptly compute such adjustment or readjustment in
       accordance with the terms hereof and prepare and furnish to each holder
       of such Series A Preferred Stock a certificate setting forth such
       adjustment or readjustment and showing in detail the facts upon which
       such adjustment or readjustment is based. The Corporation shall, upon the
       written request at any time of any holder of Series A Preferred Stock
       furnish or cause to be furnished to such holder a like certificate
       setting forth (A) such adjustment and readjustment, (B) the Series A
       Conversion Price at the time in effect, and (C) the number of shares of
       Common Stock and the amount, if any, of other property which at the time
       would be received upon the conversion of a share of such Series A
       Preferred Stock.

       (i) NOTICES OF RECORD DATE. In the event of any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend) or other distribution, any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right, the Corporation shall
mail to each holder of Series A Preferred Stock, at least 20 days prior to the
date specified therein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend, distribution or right, and the
amount and character of such dividend, distribution or right.

       (j) RESERVATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation shall
at all times reserve and keep available out of its authorized but unissued
shares of Common Stock solely for the purpose of effecting the conversion of the
shares of Series A Preferred Stock such number of its shares of Common Stock as
shall from time to time be sufficient to effect the conversion of all
outstanding shares of Series A Preferred Stock; and if at any time the number of
authorized but unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding shares of Series A Preferred Stock, in
addition to such other remedies as shall be available to the holder of such
Series A Preferred Stock, the Corporation will take such corporate action as
may, in the opinion of its counsel, be necessary to increase its authorized but


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unissued shares of Common Stock to such number of shares as shall be sufficient
for such purposes.

       (k) NOTICES. Any notice required by the provisions of this Section I.4 to
be given to the holders of shares of Series A Preferred Stock shall be deemed
given if deposited in the United States mail, postage prepaid, and addressed to
each holder of record at his address appearing on the books of the Corporation.

       5.     REDEMPTION RIGHTS.

       (a) REDEMPTION AT ELECTION OF CORPORATION. On or at any time after the
seventh (7th) anniversary of the Series A Initial Purchase Date, the Corporation
may redeem all or a portion of the then outstanding shares of Series A Preferred
Stock at the Original Series A Issue Price plus accumulated and declared and
unpaid dividends (the "Series A Redemption Price"). In the event the Corporation
determines to redeem a portion of the outstanding shares of Series A Preferred
Stock, the Corporation shall effect such redemption pro rata according to the
number of shares held by each holder thereof.

       (b) NOTICE FOR CORPORATION INITIATED REDEMPTION. With respect to a
redemption of Series A Preferred Stock initiated by the Corporation, at least 30
days' previous written notice by certified or registered mail, postage prepaid,
shall be given to the holders of record of the Preferred Stock to be redeemed,
such notice to be addressed to each such stockholder at the address of such
holder given to the Corporation for the purpose of notice, or if no such address
appears or is so given, at the place where the principal office of the
Corporation is located. Such notice shall state the date of the intended
redemption (the "Series A Redemption Date"), the Series A Redemption Price, the
then current Series A Conversion Rate and the date of termination of the right
to convert (which date shall not be earlier than thirty (30) days and not later
than sixty (60) days after the above written notice by mail has been given) and
shall call upon such holder to surrender to the Corporation on said date at the
place designated in the notice such holder's certificate or certificates
representing the shares to be redeemed. On or after the Series A Redemption Date
stated in such notice, the holder of each share of Series A Preferred Stock
called for redemption shall surrender the certificate evidencing such shares to
the Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Series A Redemption Price for the shares of
Series A Preferred Stock surrendered. If less than all the shares represented by
any such surrendered certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares. If such notice of redemption shall have been
duly given, and if on the Series A Redemption Date funds necessary for the
redemption shall be available therefor, then, as to any certificates evidencing
any Series A Preferred Stock so called for redemption and not surrendered, all
rights of the holders of such shares so called for redemption and not
surrendered shall cease with respect to such shares, except only the right of
the holders to receive the Series A Redemption Price for such shares of Series A
Preferred Stock which they hold, without interest, upon surrender of their
certificates therefor.


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       (c) TRUST FUND. On or prior to any Series A Redemption Date, the
Corporation shall deposit, with any bank or trust company in the United States,
as a trust fund, a sum sufficient to redeem, on the Series A Redemption Date
thereof, the shares called for redemption, with irrevocable instructions and
authority to the bank or trust company to give the notice of redemption thereof
(or to complete the giving of such notice if theretofore commenced) and to pay,
on or after the Series A Redemption Date or prior hereto, the Series A
Redemption Price of the shares to their respective holders upon the surrender of
their share certificates, then from and after the date of the deposit (although
prior to the Series A Redemption Date), the shares so called shall be redeemed.
The deposit shall constitute full payment of the shares to their holders and
from and after the date of the deposit the shares shall no longer be
outstanding, and the holders thereof shall cease to be stockholders with respect
to such shares, and shall have no rights with respect thereto except the right
to notice pursuant to paragraph (b) above and to receive from the bank or trust
company payment of the Series A Redemption Price for the Series A Preferred
Stock which they hold, without interest, upon the surrender of their
certificates therefor and the right to convert said shares as provided herein at
any time up to but not after the close of business on the fifth day prior to the
Series A Redemption Date of such shares (which date will not be earlier than
thirty (30) days after the written notice of redemption has been mailed to
holders of record of the Series A Preferred Stock called for redemption). Any
monies so deposited on account of the Series A Redemption Price of Series A
Preferred Stock converted subsequent to the making of such deposit shall be
repaid to the Corporation forthwith upon the conversion of such Series A
Preferred Stock. Any interest accrued on any funds so deposited shall be the
property of, and paid to, the Corporation. If the holders of Series A Preferred
Stock so called for redemption shall not, at the end of six (6) years from the
Series A Redemption Date thereof, have claimed any funds so deposited, such bank
or trust company shall thereupon pay over to the Corporation such unclaimed
funds, and such bank or trust company shall thereafter be relieved of all
responsibility in respect thereof to such holders and such holders shall look
only to the Corporation for payment of the Series A Redemption Price for the
Series A Preferred Stock which they hold.

       6.     VOTING RIGHTS. So long as fifty percent (50%) of the shares of
Series A Preferred Stock ever issued remain outstanding, the holders thereof
shall be entitled to elect two (2) members of the Board of Directors, voting
together as a separate class. Additionally, the holder of each share of Series A
Preferred Stock shall have the right to one vote for each share of Common Stock
into which such Series A Preferred Stock could then be converted (with any
fractional share determined on an aggregate conversion basis being rounded to
the nearest whole share), and with respect to such vote, such holder shall have
full voting rights and powers equal to the voting rights and powers of the
holders of Common Stock, and shall be entitled, notwithstanding any provision
hereof, to notice of any stockholders' meeting in accordance with the Bylaws of
the Corporation, and shall be entitled to vote, together with holders of Common
Stock, with respect to any question upon which holders of Common Stock have the
right to vote.


                                       12
<PAGE>

       7.     PROTECTIVE PROVISIONS. So long as at least fifty percent (50%) of
the shares of Series A Preferred Stock (as adjusted for stock splits, stock
dividends or recapitalizations) ever issued are outstanding and have not been
converted into Common Stock, the Corporation shall not, without first obtaining
the approval (by vote or written consent, as provided by law) of the holders of
at least a majority of the then outstanding shares of Series A Preferred Stock,
voting together as one class except where otherwise required by law:

       (a) amend or repeal any provision of the Corporation's Certificate of
Incorporation or Bylaws if such action would alter or change the designations,
preferences and relative, participating, optional and other special rights, or
the restrictions provided for the benefit of the Series A Preferred Stock;

       (b) authorize a merger (other than the Reincorporation Merger), sale of
all or substantially all the assets, consolidation, recapitalization or
reorganization of the Corporation;

       (c) authorize or issue shares of any class of stock having a preference
over, or being on a parity with, the Series A Preferred Stock with respect to
dividends or assets (it being understood that such restriction shall not apply
to the issuance of Series B Preferred Stock and Series C Preferred Stock
issuable in connection with the transactions described in the Reorganization
Agreement);

       (d) pay or declare any dividend on shares of Common Stock if
preferential, accumulated, or declared dividends on Series A Preferred Stock
remain unpaid, except dividends solely in Common Stock;

       (e) repurchase or otherwise acquire any of its own shares other than
pursuant to the Certificate of Incorporation, in accordance with the redemption
provisions set forth herein, or as contemplated by the Reorganization Agreement
or Reincorporation Merger, or the repurchase of up to 3,000,000 shares from
former employees or consultants of the Corporation, at cost, upon the
termination of their relationships with the Corporation; or

       (f) change the uses or priorities designated for the Available Proceeds
from any Triggering Equity Transactions, as defined in Section II.5(b) below.

       8.     STATUS OF CONVERTED OR REDEEMED SHARES. In the event any shares of
Series A Preferred Stock shall be converted pursuant to Section I.4 hereof or
redeemed pursuant to Section I.5 hereof, the shares so converted or redeemed
shall be canceled and shall not be issuable by the Corporation, and the
Certificate of Incorporation of the Corporation shall be appropriately amended
to effect the corresponding reduction in the number of shares of Series A
Preferred Stock the Corporation is authorized to issue.

                  II.     SERIES B PREFERRED STOCK

       1.     DESIGNATION. Two million six hundred twenty-five thousand
(2,625,000) shares of Preferred Stock, $0.001 par value per share, are
designated as "Series B


                                       13
<PAGE>

Preferred Stock." The rights, powers, preferences, privileges, qualifications,
limitations and restrictions granted to and imposed on the Series B Preferred
Stock are set forth below.

       2.     DIVIDEND PROVISIONS.

       (a) The holders of Series B Preferred Stock shall not be entitled to any
dividends, and no such rights will accrue, prior to July 9, 2003 (the
"Non-Redemption Dividend Date").

       (b) If redemption of all shares of Series B Preferred Stock does not
occur on or before the Non-Redemption Dividend Date, as provided in Section II.5
below, then effective as of the Non-Redemption Dividend Date, the holders of
shares of Series B Preferred Stock shall be entitled to receive dividends, out
of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend on the Common Stock or Series C Preferred
Stock of the Corporation (other than a dividend to the holders of Common Stock
payable in Common Stock or other securities and rights convertible into or
entitling the holder thereof to receive, directly or indirectly, additional
shares of Common Stock of the Corporation), but subordinate to the payment of
any preferential dividend payable on the Series A Preferred Stock as set forth
in Section I.2 above, at the rate of $0.14 per share (with such rate subject to
adjustment for stock splits, consolidations and the like) for each share of
Series B Preferred Stock per annum (commencing from the Non-Redemption Dividend
Rate), payable when, as and if declared by the Board of Directors. Such
dividends shall be cumulative and shall be payable in cash.

       No dividends shall be declared or paid or set apart for payment on the
Series C Preferred Stock or any class or series of Common Stock unless all
outstanding shares of Series B Preferred Stock have been redeemed as provided in
Section II.5 below.

       3.     LIQUIDATION PREFERENCE.

       (a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of Series B Preferred
Stock shall be entitled to receive, after distribution to holders of Series A
Preferred Stock of the preferential amount to which they are entitled as
provided in Section I.3(a) above, but prior and in preference to any
distribution of any of the assets of the Corporation to the holders of Series C
Preferred Stock or Common Stock of the Corporation, by reason of their ownership
thereof, an amount per share equal to $1.00 for each outstanding share of Series
B Preferred Stock (as adjusted for stock splits, stock dividends and
recapitalizations) plus an amount equal to any accrued or declared but unpaid
dividends thereon (the "Series B Liquidation Preference Amount"). If, upon the
occurrence of such an event, and after satisfaction of the preferential
liquidation payments to the holders of Series A Preferred Stock, the assets and
property available for distribution among the holders of the Series B Preferred
Stock shall be insufficient to permit the payment to such holders of the full
preferential amount to which they are entitled as referenced above, then the
assets and property of the Corporation legally available for


                                       14
<PAGE>

distribution shall be distributed ratably among the holders of the Series B
Preferred Stock in proportion to the aggregate preferential amounts owed such
holders upon a liquidation, dissolution or winding up of the Corporation.

       (b) For purposes of this Section II.3, (i) any acquisition of the
Corporation by means of merger (other than the Reincorporation Merger) or other
form of corporate reorganization in which the stockholders of the Corporation do
not own a majority of the outstanding shares of the surviving corporation or
(ii) a sale of all or substantially all of the assets of the Corporation shall
be treated as a liquidation, dissolution or winding up of the Corporation and
shall entitle the holders of Series B Preferred Stock to receive at the closing
cash, securities or other property as specified in Section II.3(a) above.

       (c) Any securities to be delivered to the holders of the Series B
Preferred Stock and/or Common Stock pursuant to Section II.3(b) above shall be
valued as follows:

              (i) Securities not subject to investment letter or other similar
       restrictions on free marketability:

                     (A) If traded on a national securities exchange or the
              Nasdaq Stock Market, the value shall be deemed to be the average
              of the closing prices of the securities on such exchange over the
              30-day period ending three (3) days prior to the closing;

                     (B) If actively traded over-the-counter, the value shall be
              deemed to be the average of the closing bid prices over the 30-day
              period ending three (3) days prior to the closing; and

                     (C) If there is no active public market, the value shall be
              the fair market value thereof, as determined in good faith by the
              Board of Directors of the Corporation.

              (ii) The method of valuation of securities subject to investment
       letter or other restrictions on free marketability shall be to make an
       appropriate discount from the market value determined as above in (i)(A),
       (B) or (C) to reflect the approximate fair market value thereof, as
       determined in good faith by the Board of Directors of the Corporation.

       (d) In the event the requirements of Section II.3(b) are not complied
with, the Corporation shall forthwith either:

              (i) cause such closing to be postponed until such time as the
       requirements of Section II.3(b) have been complied with, or

              (ii) cancel such transaction, in which event the rights,
       preferences, privileges and restrictions of the holders of Series B
       Preferred Stock shall revert to and be the same as such rights,
       preferences, privileges and restrictions


                                       15
<PAGE>

       existing immediately prior to the date of the first notice referred to in
       Section II.3(e) hereof.

       (e) The Corporation shall give each holder of record of Series B
Preferred Stock written notice of such a Section II.3(b) transaction not later
than ten (10) days prior to the stockholders' meeting called to approve such
transaction, or ten (10) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction, and the Corporation
shall thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than ten (10) days after the
Corporation has given the first notice provided for herein or sooner than ten
(10) days after the Corporation has given notice of any material changes
provided for herein; provided, however, that such periods may be shortened upon
the written consent of the holders of a majority of the Series B Preferred Stock
then outstanding.

       4.     CONVERSION. The holders of Series B Preferred Stock shall have no
conversion rights.

       5.     REDEMPTION RIGHTS.

       (a) OPTIONAL REDEMPTION AT ELECTION OF THE CORPORATION. At any time and
from time to time the Corporation may redeem all or a portion of the then
outstanding shares of Series B Preferred Stock at the prices determined as set
forth below, plus the amount of all accrued or declared but unpaid dividends
(the "Series B Redemption Price").

                  If Redeemed During                      Optional
                      the Period                      Redemption Price
         ------------------------------------   -------------------------------

         July 9, 2001 ending January 8,                      80% of Series B
                    2002                        Liquidation Preference Amount

         January 9, 2002 ending July 8,                      90% of Series B
                    2002                        Liquidation Preference Amount

         July 9, 2002 ending January 8,                     100% of Series B
                    2003                        Liquidation Preference Amount

                After January 8, 2003                       110% of Series B
                                                Liquidation Preference Amount


The Corporation will not redeem any outstanding shares of Series C Preferred
Stock pursuant to Section III.5 below until all shares of Series B Preferred
Stock have been redeemed as provided herein. All redemptions of shares of Series
B Preferred Stock shall be made on a pro-rata basis from all of the holders
thereof, in accordance with the


                                       16
<PAGE>

number of shares of Series B Preferred Stock held by each.

       (b) MANDATORY REDEMPTION. As set forth in the Reorganization Agreement,
during the three year period commencing from the Effective Date (as defined in
the Reorganization Agreement), the Corporation shall utilize ten percent (10%)
of the net proceeds received from any future sales or grants of equity
(excluding the Corporation's offering and sale of up to $7,000,000 of its Series
A Preferred Stock before August 31, 2001, equity issued to employees,
consultants, directors, officers, or in connection with any acquisition or other
business combination) (such sales or grants of equity, other than such excluded
transactions, are referred to herein as the "Triggering Equity Transactions") as
follows: (i) first towards payment of the outstanding principal and accrued but
unpaid interest outstanding under the promissory note issued to BroadbandNOW, in
the form of Exhibit C to the Reorganization Agreement (the "Note") until all
obligations arising under the Note have been paid, (ii) then for redemption of
the outstanding shares of Series B Preferred Stock, as provided in this Section
II.5, until all such shares have been redeemed, and (iii) finally for redemption
of the Series C Preferred Stock, until all such shares have been redeemed, as
provided in Section III.5 below. The proceeds of any Triggering Equity
Transactions available for use for each of the purposes indicated above are
referred to herein as the "Available Proceeds." The Corporation shall, after
payment of the Note and before redemption of any shares of Series C Preferred
Stock, promptly apply all Available Proceeds, to the extent lawfully available
for such purpose, to the redemption of outstanding shares of Series B Preferred
Stock, until all such shares have been redeemed. Such redemptions are to take
place pursuant to the procedures set forth in paragraph II.5(c) below within 45
days of the Corporation's receipt of such Available Proceeds. Any such
redemption shall be at the applicable Series B Redemption Price.

       (c) NOTICE FOR REDEMPTION. With respect to any redemption of Series B
Preferred Stock initiated by the Corporation, at least 10 business days'
previous written notice by certified or registered mail, postage prepaid, shall
be given to the holders of record of the Series B Preferred Stock to be
redeemed, such notice to be addressed to each such stockholder at the address of
such holder given to the Corporation for the purpose of notice, or if no such
address appears or is so given, at the place where the principal office of the
Corporation is located. Such notice shall state the date of the intended
redemption (the "Series B Redemption Date") and the applicable Series B
Redemption Price and shall call upon such holder to surrender to the Corporation
on said date at the place designated in the notice such holder's certificate or
certificates representing the shares to be redeemed. On or after the Series B
Redemption Date stated in such notice, the holder of each share of Series B
Preferred Stock called for redemption shall surrender the certificate evidencing
such shares to the Corporation at the place designated in such notice and shall
thereupon be entitled to receive payment of the Series B Redemption Price for
the Series B Preferred Stock called for redemption and surrendered. If less than
all the shares represented by any such surrendered certificate are redeemed, a
new certificate shall be issued representing the unredeemed shares. If such
notice of redemption shall have been duly given, and if on the Series B
Redemption Date funds necessary for the redemption shall be available therefor,
then, as to any certificates evidencing any Series B Preferred Stock so called
for redemption


                                       17
<PAGE>

and not surrendered, all rights of the holders of such shares so called for
redemption and not surrendered shall cease with respect to such shares, except
only the right of the holders to receive the Series B Redemption Price for such
shares of Series B Preferred Stock which they hold, without interest, upon
surrender of their certificates therefor.

       (d) TRUST FUND. On or prior to any Series B Redemption Date, the
Corporation shall deposit, with any bank or trust company in the United States,
as a trust fund, a sum sufficient to redeem, on the Series B Redemption Date
thereof, the shares called for redemption, with irrevocable instructions and
authority to the bank or trust company to give the notice of redemption thereof
(or to complete the giving of such notice if theretofore commenced) and to pay,
on or after the Series B Redemption Date or prior hereto, the Series B
Redemption Price of the shares to their respective holders upon the surrender of
their share certificates, then from and after the date of the deposit (although
prior to the Series B Redemption Date), the shares so called shall be redeemed.
The deposit shall constitute full payment of the shares to their holders and
from and after the date of the deposit the shares shall no longer be
outstanding, and the holders thereof shall cease to be stockholders with respect
to such shares, and shall have no rights with respect thereto except the right
to notice pursuant to paragraph (b) above and to receive from the bank or trust
company payment of the Series B Redemption Price for the Series B Preferred
Stock called for redemption which they hold, without interest, upon the
surrender of their certificates therefor. Any monies so deposited on account of
the Series B Redemption Price of Series B Preferred Stock reacquired by the
Corporation subsequent to the making of such deposit shall be repaid to the
Corporation forthwith upon the reacquisition of such Series B Preferred Stock.
Any interest accrued on any funds so deposited shall be the property of, and
paid to, the Corporation. If the holders of Series B Preferred Stock so called
for redemption shall not, at the end of six (6) years from the Series B
Redemption Date thereof, have claimed any funds so deposited, such bank or trust
company shall thereupon pay over to the Corporation such unclaimed funds, and
such bank or trust company shall thereafter be relieved of all responsibility in
respect thereof to such holders and such holders shall look only to the
Corporation for payment of the Series B Redemption Price for the Series B
Preferred Stock which they hold.

       6.     VOTING RIGHTS. Except as otherwise provided herein or by
applicable law, the Series B Preferred Stock shall be non-voting.

       7.     PROTECTIVE PROVISIONS.

       (a) REQUIRED CONSENTS. So long as any shares of Series B Preferred Stock
are outstanding, the Corporation shall not, without first obtaining the approval
(by vote or written consent, as provided by law) of the holders of at least
two-thirds (2/3) of the then outstanding shares of Series B Preferred Stock,
voting together as one class except where otherwise required by law:

              (i) amend or repeal any provision of the Corporation's Certificate
of Incorporation or Bylaws if such action would alter or change the
designations, preferences and relative, participating, optional and other
special rights, or the restrictions provided for the benefit of the Series B
Preferred Stock, provided that


                                       18
<PAGE>

approval of the Series B Preferred Stockholders shall not be required for the
issuance of any stock senior to or on parity with the Series B Preferred Stock;

              (ii) pay or declare any dividend on shares of Series C Preferred
Stock or Common Stock;

              (iii) repurchase or otherwise acquire any of its own shares other
than pursuant to the Certificate of Incorporation, in accordance with the
redemption provisions set forth herein, as contemplated by the Reorganization
Agreement, or from current or former employees or consultants of the
Corporation, in connection with the termination of their relationship with the
Corporation; or

              (iv) change the uses or priorities designated for the Available
Proceeds from any Triggering Equity Transactions, as defined in Section II.5(b)
above.

       (b) NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue 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 II and in the taking of all such action as
may be necessary or appropriate in order to protect the rights and preferences
of the Series B Preferred Stock against impairment. The issuance of stock senior
to or on parity with the Series B Preferred Stock shall not be deemed an
impairment under this Section.

       8.     STATUS OF REDEEMED SHARES. In the event any shares of Series B
Preferred Stock shall be redeemed pursuant to Section II.5 hereof, the shares so
redeemed shall be canceled and shall not be issuable by the Corporation, and the
Certificate of Incorporation of the Corporation shall be appropriately amended
to effect the corresponding reduction in the number of shares of Series B
Preferred Stock the Corporation is authorized to issue.

                  III.   SERIES C PREFERRED STOCK

       1.     DESIGNATION. Seven million eight hundred seventy-five thousand
(7,875,000) shares of Preferred Stock, $0.001 par value per share, are
designated as "Series C Preferred Stock." The rights, powers, preferences,
privileges, qualifications, limitations and restrictions granted to and imposed
on the Series C Preferred Stock are set forth below.

       2.     DIVIDEND PROVISIONS.

       (a) The holders of Series C Preferred Stock shall not be entitled to any
dividends, and no such rights will accrue, prior to the Non-Redemption Dividend
Date.


                                       19
<PAGE>

       (b) If redemption of all shares of Series C Preferred Stock does not
occur on or before the Non-Redemption Dividend Date, as provided in Section
III.5 below, then effective as of the Non-Redemption Dividend Date, the holders
of shares of Series C Preferred Stock shall be entitled to receive dividends,
out of any assets legally available therefor, prior and in preference to any
declaration or payment of any dividend on the Common Stock of the Corporation
(other than a dividend payable in Common Stock or other securities and rights
convertible into or entitling the holder thereof to receive, directly or
indirectly, additional shares of Common Stock of the Corporation), but
subordinate to the payment of any preferential dividend payable on the Series A
Preferred Stock as set forth in Section I.2 above or on the Series B Preferred
Stock, as set forth in Section II.2 above, with such dividend payable to the
holders of Series C Preferred Stock at the rate of $0.14 per share (with such
rate subject to adjustment for stock splits, consolidations and the like) for
each share of Series C Preferred Stock per annum (commencing from the
Non-Redemption Dividend Rate), payable when, as and if declared by the Board of
Directors. Such dividends shall be cumulative and shall be payable in cash.

       (c) No dividends shall be declared or paid or set apart for payment on
any class or series of Common Stock unless all outstanding shares of Series C
Preferred Stock have been redeemed as provided in Section III.5 below.

       3.     LIQUIDATION PREFERENCE.


       (a) In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of Series C Preferred
Stock shall be entitled to receive, after distribution to holders of Series A
Preferred Stock and Series B Preferred Stock of the preferential amounts to
which they are entitled as provided in Sections I.3(a) and II.3(a) above, but
prior and in preference to any distribution of any of the assets of the
Corporation to the holders of Common Stock, by reason of their ownership
thereof, an amount per share equal to $1.00 for each outstanding share of Series
C Preferred Stock (as adjusted for stock splits, stock dividends and
recapitalizations) plus an amount equal to any accrued or declared but unpaid
dividends thereon (the "Series C Liquidation Preference Amount"). If, upon the
occurrence of such an event, and after the payment of preferential amounts
payable to the holders of Series A Preferred Stock and Series B Preferred Stock,
the assets and property available for distribution among the holders of the
Series C Preferred Stock shall be insufficient to permit the payment to such
holders of the full preferential amount to which they are entitled, then the
assets and property of the Corporation legally available for distribution shall
be distributed ratably among the holders of the Series C Preferred Stock in
proportion to the aggregate preferential amounts owed such holders upon a
liquidation, dissolution or winding up of the Corporation.

       (b) For purposes of this Section III.3, (i) any acquisition of the
Corporation by means of merger (other than the Reincorporation Merger) or other
form of corporate reorganization in which the stockholders of the Corporation do
not own a majority of the outstanding shares of the surviving corporation or
(ii) a sale of all or substantially all


                                       20
<PAGE>

of the assets of the Corporation shall be treated as a liquidation, dissolution
or winding up of the Corporation and shall entitle the holders of Series C
Preferred Stock to receive at the closing cash, securities or other property as
specified in Section III.3(a) above.

       (c) Any securities to be delivered to the holders of the Series C
Preferred Stock and/or Common Stock pursuant to Section III.3(b) above shall be
valued as follows:

              (i) Securities not subject to investment letter or other similar
       restrictions on free marketability:

                     (A) If traded on a national securities exchange or the
              Nasdaq Stock Market, the value shall be deemed to be the average
              of the closing prices of the securities on such exchange over the
              30-day period ending three (3) days prior to the closing;

                     (B) If actively traded over-the-counter, the value shall be
              deemed to be the average of the closing bid prices over the 30-day
              period ending three (3) days prior to the closing; and

                     (C) If there is no active public market, the value shall be
              the fair market value thereof, as determined in good faith by the
              Board of Directors of the Corporation.

              (ii) The method of valuation of securities subject to investment
       letter or other restrictions on free marketability shall be to make an
       appropriate discount from the market value determined as above in (i)(A),
       (B) or (C) to reflect the approximate fair market value thereof, as
       determined in good faith by the Board of Directors of the Corporation.

       (d) In the event the requirements of Section III.3(b) are not complied
with, the Corporation shall forthwith either:

              (i) cause such closing to be postponed until such time as the
       requirements of Section III.3(b) have been complied with, or

              (ii) cancel such transaction, in which event the rights,
       preferences, privileges and restrictions of the holders of Series C
       Preferred Stock shall revert to and be the same as such rights,
       preferences, privileges and restrictions existing immediately prior to
       the date of the first notice referred to in Section III.3(e) hereof.

       (e) The Corporation shall give each holder of record of Series C
Preferred Stock written notice of such a Section III.3(b) transaction not later
than ten (10) days prior to the stockholders' meeting called to approve such
transaction, or ten (10) days prior to the closing of such transaction,
whichever is earlier, and shall also notify such holders in writing of the final
approval of such transaction. The first of such notices shall describe the
material terms and conditions of the impending transaction, and the Corporation
shall thereafter give such holders prompt notice of any material changes.


                                       21
<PAGE>

The transaction shall in no event take place sooner than ten (10) days after the
Corporation has given the first notice provided for herein or sooner than ten
(10) days after the Corporation has given notice of any material changes
provided for herein; provided, however, that such periods may be shortened upon
the written consent of the holders of a majority of the Series C Preferred Stock
then outstanding.

       4.     CONVERSION. The holders of Series C Preferred Stock shall have no
conversion rights. The original purchasers of shares of Series C Preferred Stock
shall have certain rights to exchange a portion of such shares for shares of the
Corporation's Common Stock, as set forth in the Reorganization Agreement.

       5.     REDEMPTION RIGHTS.

       (a) OPTIONAL REDEMPTION AT ELECTION OF THE CORPORATION. At any time and
from time to time the Corporation may redeem all or a portion of the then
outstanding shares of Series C Preferred Stock at the prices determined as set
forth below, plus the amount of all accrued or declared but unpaid dividends
(the "Series C Redemption Price").

                  If Redeemed During                      Optional
                      the Period                      Redemption Price
         -----------------------------------    ------------------------------

         July 9, 2001 ending January 8,                80% of Series C
                   2002                          Liquidation Preference Amount

         January 9, 2002 ending July 8,                90% of Series C
                   2002                          Liquidation Preference Amount

         July 9, 2002 ending January 8,               100% of Series C
                   2003                          Liquidation Preference Amount

                After January 8, 2003                 110% of Series C
        `                                        Liquidation Preference Amount


The Corporation will not redeem any outstanding shares of Series C Preferred
Stock pursuant to this Section III.5 until all shares of Series B Preferred
Stock have been redeemed as provided in Section II.5 above. All redemptions of
shares of Series C Preferred Stock shall be made on a pro-rata basis from all of
the holders thereof, in accordance with the number of shares of Series C
Preferred Stock held by each.

       (b) MANDATORY REDEMPTION. The Corporation shall, after payment of the
Note and the redemption of all outstanding shares of Series B Preferred Stock,
promptly apply all Available Proceeds, to the extent lawfully available for such
purpose, to the redemption of outstanding shares of Series C Preferred Stock,
until all such shares have been redeemed. Such redemptions are to take place
pursuant to the procedures set forth in paragraph III.5(c) below within 45 days
of the Corporation's receipt of such Available Proceeds. Any such redemption
shall be at the applicable Series C


                                       22
<PAGE>

Redemption Price.

       (c) NOTICE FOR REDEMPTION. With respect to any redemption of Series C
Preferred Stock initiated by the Corporation, at least 30 days' previous written
notice by certified or registered mail, postage prepaid, shall be given to the
holders of record of the Series C Preferred Stock to be redeemed, such notice to
be addressed to each such stockholder at the address of such holder given to the
Corporation for the purpose of notice, or if no such address appears or is so
given, at the place where the principal office of the Corporation is located.
Such notice shall state the date of the intended redemption (the "Series C
Redemption Date"), the applicable Series C Redemption Price, any rights the
stockholder may have to exchange any shares of Series C Preferred Stock for
Common Stock as provided in the Reorganization Agreement and the date of
termination of such exchange right. The exchange right as described in Section
3.3 of the Reorganization Agreement will terminate on the date specified in such
notice (which date shall not be earlier than thirty (30) days and not later than
sixty (60) days after the above written notice by mail has been given) and shall
call upon such holder to surrender to the Corporation on said date at the place
designated in the notice such holder's certificate or certificates representing
the shares to be redeemed. On or after the Series C Redemption Date stated in
such notice, the holder of each share of Series C Preferred Stock called for
redemption shall surrender the certificate evidencing such shares to the
Corporation at the place designated in such notice and shall thereupon be
entitled to receive payment of the Series C Redemption Price for the Series C
Preferred Stock called for redemption and surrendered. If less than all the
shares represented by any such surrendered certificate are redeemed, a new
certificate shall be issued representing the unredeemed shares. If such notice
of redemption shall have been duly given, and if on the Series C Redemption Date
funds necessary for the redemption shall be available therefor, then, as to any
certificates evidencing any Series C Preferred Stock so called for redemption
and not surrendered, all rights of the holders of such shares so called for
redemption and not surrendered shall cease with respect to such shares, except
only the right of the holders to receive the Series C Redemption Price for such
shares of Series C Preferred Stock which they hold, without interest, upon
surrender of their certificates therefor.

       (d) TRUST FUND. On or prior to any Series C Redemption Date, the
Corporation shall deposit, with any bank or trust company in the United States,
as a trust fund, a sum sufficient to redeem, on the Series C Redemption Date
thereof, the shares called for redemption, with irrevocable instructions and
authority to the bank or trust company to give the notice of redemption thereof
(or to complete the giving of such notice if theretofore commenced) and to pay,
on or after the Series C Redemption Date or prior hereto, the Series C
Redemption Price of the shares to their respective holders upon the surrender of
their share certificates, then from and after the date of the deposit (although
prior to the Series C Redemption Date), the shares so called shall be redeemed.
The deposit shall constitute full payment of the shares to their holders and
from and after the date of the deposit the shares shall no longer be
outstanding, and the holders thereof shall cease to be stockholders with respect
to such shares, and shall have no rights with respect thereto except the right
to notice pursuant to paragraph (b) above and to receive from the bank or trust
company payment of the Series C Redemption Price for the


                                       23
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Series C Preferred Stock called for redemption which they hold, without
interest, upon the surrender of their certificates therefor, and to exercise any
exchange right as set forth in the Reorganization Agreement at any time up to
but not after the close of business on the fifth day prior to the Series C
Redemption Date of such shares (which date will not be earlier than thirty (30)
days after the written notice of redemption has been mailed to holder of record
of the Series C Preferred Stock called for redemption). Any monies so deposited
on account of the Series C Redemption Price of Series C Preferred Stock
exchanged subsequent to the making of such deposit shall be repaid to the
Corporation forthwith upon the exchange of such Series C Preferred Stock. Any
interest accrued on any funds so deposited shall be the property of, and paid
to, the Corporation. If the holders of Series C Preferred Stock so called for
redemption shall not, at the end of six (6) years from the Series C Redemption
Date thereof, have claimed any funds so deposited, such bank or trust company
shall thereupon pay over to the Corporation such unclaimed funds, and such bank
or trust company shall thereafter be relieved of all responsibility in respect
thereof to such holders and such holders shall look only to the Corporation for
payment of the Series C Redemption Price for the Series C Preferred Stock which
they hold.

       6.     VOTING RIGHTS. Except as otherwise provided herein or by
applicable law, the Series C Preferred Stock shall be non-voting.

       7.     PROTECTIVE PROVISIONS. So long as any shares of Series C Preferred
Stock are issued and outstanding, the Corporation shall not, without first
obtaining the approval (by vote or written consent, as provided by law) of the
holders of at least fifty-one percent (51%) of the then outstanding shares of
Series C Preferred Stock, voting together as one class except where otherwise
required by law:

              (a) amend or repeal any provision of the Corporation's Certificate
       of Incorporation or Bylaws if such action would alter or change the
       designations, preferences and relative, participating, optional and other
       special rights, or the restrictions provided for the benefit of the
       Series C Preferred Stock, provided that approval of the Series C
       Preferred Stockholders shall not be required for the issuance of any
       stock senior to or on parity with the Series C Preferred Stock;

              (b) repurchase or otherwise acquire any of its own shares other
       than pursuant to the Certificate of Incorporation, in accordance with the
       redemption provisions set forth herein, as contemplated by the
       Reorganization Agreement, or from current or former employees or
       consultants of the Corporation, in connection with the termination of
       their relationship with the Corporation; or

              (c) change the uses or priorities designated for the Available
       Proceeds from any Triggering Equity Transactions, as defined in Section
       II.5(b) above.

       8.     NO IMPAIRMENT. The Corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue 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


                                       24
<PAGE>

hereunder by the Corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section III and in the taking of all
such action as may be necessary or appropriate in order to protect the rights
and preferences of the Series C Preferred Stock against impairment. The issuance
of stock senior to or on parity with the Series C Preferred Stock shall not be
deemed an impairment under this Section.

       9.     STATUS OF REDEEMED SHARES. In the event any shares of Series C
Preferred Stock shall be redeemed pursuant to Section III.5 hereof, the shares
so redeemed shall be canceled and shall not be issuable by the Corporation, and
the Certificate of Incorporation of the Corporation shall be appropriately
amended to effect the corresponding reduction in the number of shares of Series
C Preferred Stock the Corporation is authorized to issue.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]


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         IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designation, Preferences and Other Rights to be executed by a duly authorized
officer on the 6th day of July, 2001.


                            USA BROADBAND, INC.


                            By:           /s/ Edward P. Mooney
                                  ----------------------------------------------

                            Title:       EXECUTIVE VICE PRESIDENT AND DIRECTOR
                                  ----------------------------------------------