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                                                                     EXHIBIT 4.1

                           CERTIFICATE OF DESIGNATION
                                       OF
                             RIGHTS AND PREFERENCES
                                       OF
                      SERIES B CONVERTIBLE PREFERRED STOCK
                                       OF
                             XBOX TECHNOLOGIES, INC.

         The undersigned Interim Chief Financial Officer of XBOX Technologies,
Inc., a corporation organized and existing under the General Corporation Law of
the State of Delaware (the "CORPORATION"), in accordance with the provisions of
Section 151 thereof, does hereby certify that, pursuant to the authority
conferred upon the Board of Directors of the Corporation (the "BOARD") by the
Certificate of Incorporation of the Corporation, the Board on June 26, 2001,
adopted the following resolution creating a series of Three Million Two Hundred
Thousand (3,200,000) shares of the Corporation's undesignated preferred stock,
par value $.10 per share, to be designated as Series B Convertible Preferred
Stock:

         RESOLVED, that pursuant to the authority granted to and vested in this
Board of Directors in accordance with the Certificate of Incorporation of the
Corporation, a new series of preferred stock is hereby created, and that the
designation and amount thereof and the relative rights and preferences of the
shares of such series, are as follows:

1.       SHARES AND CLASSES AUTHORIZED. Three Million Two Hundred (3,200,000)
         shares of the Corporation's undesignated preferred stock, par value
         $.10 per share, that are authorized by Article V of the Corporation's
         Certificate of Incorporation are designated as Series B Convertible
         Preferred Stock (the "SERIES B PREFERRED STOCK").

2.       DEFINITIONS

         2.1      AGREEMENT means the Agreement and Plan of Merger dated as of
                  July 5, 2001, by and among the Corporation, You Acquisition,
                  Inc., a Delaware corporation, and YOUPowered, Inc., a Delaware
                  corporation.

         2.2      BASE PRICE means $0.1797, as adjusted pursuant to Section
                  7.5(d).

         2.3      BOARD has the meaning set forth in the Recitals.

         2.4      CHANGE OF CONTROL has the meaning set forth in Section 3.3.

         2.5      COMMON STOCK means the Corporation's common stock, par value
                  $.10 per share.

         2.6      CONVERSION NOTICE has the meaning set forth in Section 8.2.

         2.7      CONVERSION PRICE has the meaning set forth in Section 7.1.

         2.8      DETERMINATION DATE means the date which is eighteen (18)
                  months from the Effective Date.



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         2.9      DETERMINATION DATE PRICE means the weighted average trading
                  price of the Common Stock for the thirty (30) Trading Days
                  immediately preceding, and including, the Determination Date
                  calculated as follows:

                  (a)      On each such Trading Day where more than 1,000 shares
                           of Common Stock are reported as traded (on a national
                           or foreign securities exchange, the Nasdaq National
                           Market, the Nasdaq SmallCap Market, OTC Bulletin
                           Board, National Quotation Bureau, Inc. or other
                           comparable service), the number of shares included in
                           each trade reported on such day shall be multiplied
                           by the reported sales price associated with such
                           trade;

                  (b)      On each such Trading Day where there are less than
                           1,001 shares of Common Stock reported as traded, the
                           closing list price (if the Common Stock is listed,
                           admitted to unlisted trading privileges or reported
                           on any foreign or national securities exchange or the
                           Nasdaq National Market) or the mean between the
                           closing bid and ask prices (if the Common Stock is
                           not so listed, admitted or reported but is reported
                           by the Nasdaq SmallCap Market, OTC Bulleting Board or
                           the National Quotation Bureau, Inc.) shall be
                           multiplied by 1,000 or if there are no trades
                           reported and the Common Stock is not so listed,
                           admitted or reported, $.10 (appropriately adjusted
                           for stock splits, stock dividends or other
                           recapitalizations effecting the Common Stock)
                           multiplied by 1,000;

                  (c)      The aggregate of the products described in (A) and
                           (B) shall be divided by the sum of (i) the total
                           number of traded shares that were included in the
                           calculations described in (A) and (ii) the number of
                           Trading Days described in (B) multiplied by 1,000.

         2.10     DIVIDEND RATE shall mean eight percent (8.0%) per annum of the
                  Redemption Price in effect at the time such dividends are
                  paid.

         2.11     EFFECTIVE DATE has the meaning set forth in the Agreement.

         2.12     ELECTION FORM means the form to be sent to holders of Series B
                  Preferred Stock following the Mandatory Conversion Date on
                  which such holders may elect to receive cash in lieu of shares
                  of Common Stock to be issued upon conversion of the Series B
                  Preferred Stock as described in Section 8.

         2.13     EXCHANGE ACT means the Securities Exchange Act of 1934, as
                  amended.

         2.14     LIQUIDATION PRICE means, for each share of Series B Preferred
                  Stock, the sum of (i) $0.8985 (subject to appropriate
                  adjustments for stock splits and other combinations in the
                  same manner as set forth in Sections 6.5 and 6.6) plus (ii)
                  all accrued and unpaid dividends on shares of the Series B
                  Preferred Stock, whether or not declared, to and including the
                  date full payment shall be tendered to the holders of the
                  Series B Preferred Stock.


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         2.15     MANDATORY CONVERSION DATE means the date on which the
                  Conversion Notice is mailed to holders of outstanding shares
                  of Series B Preferred Stock pursuant to the provisions of
                  Section 8.2.

         2.16     MERGER means the merger of You Acquisition Inc. with and into
                  YOUpowered, Inc. pursuant to the Agreement.

         2.17     REDEMPTION DATE means the date that is three years from the
                  Effective Date.

         2.18     REDEMPTION AMOUNT means, on any date for each share of Series
                  B Preferred Stock, the sum of (i) the Redemption Price then in
                  effect and (ii) all accrued and unpaid dividends on shares of
                  the Series B Preferred Stock, whether or not declared, to and
                  including the Redemption Date.

         2.19     REDEMPTION NOTICE has the meaning set forth in Section 6.2.

         2.20     REDEMPTION PRICE means $0.8985, as such amount may be adjusted
                  from time to time in accordance with Sections 6.5 and 6.6.

         2.21     REVENUE means the revenue of the Corporation, on a
                  consolidated basis, calculated in accordance with U.S.
                  generally accepted accounting principles applied on a basis
                  consistent with past practice.

         2.22     SERIES A PREFERRED STOCK has the meaning set forth in Section
                  3.1.

         2.23     SERIES B PREFERRED STOCK" has the meaning set forth in the
                  Section 1.

         2.24     TRADING DAYS means days on which Nasdaq National Market is
                  open for trading.

         2.25     TRADING PRICE means, with respect to the Common Stock, as of a
                  particular date

                  (a)      the closing price of the Common Stock if the Common
                           Stock is listed, admitted to unlisted trading
                           privileges or reported on any foreign or national
                           securities exchange or on the Nasdaq National Market
                           or an equivalent foreign market on which sale prices
                           are reported;

                  (b)      if the Common Stock is not so listed, admitted to
                           unlisted trading privileges or reported, the mean
                           between the closing bid and ask prices as reported by
                           the Nasdaq SmallCap Market, OTC Bulletin Board or the
                           National Quotation Bureau, Inc. or other comparable
                           service; or

                  (c)      if the Common Stock is not so listed or reported,
                           $.10 (appropriately adjusted for stock splits, stock
                           dividends or other recapitalizations effecting the
                           Common Stock).



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3.       VOTING RIGHTS.

         3.1      GENERAL. At all meetings of the stockholders of the
                  Corporation and in the case of any actions of stockholders in
                  lieu of a meeting, each holder of Series B Preferred Stock
                  shall have that number of votes on all matters submitted to
                  the stockholders that is equal to the number of whole shares
                  of Common Stock into which such holder's shares of Series B
                  Preferred Stock are then convertible, as provided in Section
                  7, at the record date for the determination of the
                  stockholders entitled to vote on such matters or, if no such
                  record date is established, at the date such vote is taken or
                  any written consent of such stockholders is effected. Except
                  as may be otherwise provided in this Certificate or by
                  agreement, the holders of the Common Stock, the holders of
                  shares of the Corporation's Series A Convertible Preferred
                  Stock (the "SERIES A PREFERRED STOCK") and the holders of the
                  Series B Preferred Stock shall vote together as a single class
                  on all actions to be taken by the stockholders of the
                  Corporation.

         3.2      QUORUM. For purposes of determining a quorum in accordance
                  with the Company's bylaws, shares of Series A Preferred Stock
                  and Series B Preferred Stock shall be counted on an as-if
                  converted to Common Stock basis including fractional shares.

         3.3      CLASS VOTES BY SERIES B PREFERRED STOCK. For so long as at
                  least fifty percent (50%) of the aggregate number of shares of
                  Series B Preferred Stock issued in connection with the Merger
                  remain outstanding, the Corporation shall not, without the
                  affirmative vote of at least two-thirds of the then
                  outstanding shares of Series B Preferred Stock (voting as a
                  separate class), with each share of Series B Preferred Stock
                  entitled to one vote in each instance:

                  (a)      take any action that constitutes or results in
                           amendment or waiver of any provision of the
                           Corporation's Certificate of Incorporation or Bylaws,
                           (except for an amendment to effect (i) a change to
                           the par value of shares of the Corporation's capital
                           stock, including such changes to the Series B
                           Preferred Stock or (ii) a change of the name of the
                           Corporation) if such amendment or waiver in any way
                           affects, alters or changes any existing rights,
                           preferences, privileges or provisions relating to the
                           Series B Preferred Stock or the holders thereof;

                  (b)      authorize or issue any new class of additional shares
                           of capital stock having (or any security or other
                           instrument convertible into or exchangeable for
                           shares of capital stock of the Corporation having)
                           priority over the Series B Preferred Stock with
                           respect to the rights and preferences set forth in
                           Sections 4, 5 and 6 hereof; or

                  (c)      prior to the eighteen month anniversary of the
                           Effective Date, (i) sell, transfer, lease, license on
                           an exclusive basis or otherwise dispose of all or any
                           substantial part of the assets of the Corporation
                           other than the assets relating to its FullMetrics
                           operations or the Corporation's rights to the name
                           "XBOX"; (ii) consolidate with or merge into any other
                           corporation or entity, or permit any other
                           corporation or entity to consolidate or merge into



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                           the Corporation or any subsidiary of the Corporation
                           unless immediately following the effective date of
                           such merger or consolidation the securities of the
                           surviving company representing 50 percent or more of
                           the combined voting power of the surviving
                           corporation's then outstanding securities ordinarily
                           having the right to vote at elections of directors
                           are held by the stockholders of the Corporation
                           immediately prior to such effective date or by the
                           Corporation, except that any subsidiary of the
                           Corporation may merge into another subsidiary or into
                           the Corporation; (iii) enter into a plan of exchange
                           with any other corporation or entity; (iv) engage in
                           a liquidation, dissolution or similar transaction or
                           (v) enter into an agreement with respect to a tender
                           or exchange offer, as defined pursuant to the
                           Exchange Act, that, if consummated, would result in
                           any person beneficially owning fifty percent of the
                           aggregate voting power of all classes of capital
                           stock of the Corporation (each of the foregoing
                           events is referred to as a "CHANGE IN CONTROL").

4.       DIVIDENDS.

         4.1      PREFERRED STOCK DIVIDEND PREFERENCE. The holders of each share
                  of Series B Preferred Stock then outstanding shall be entitled
                  to receive cumulative dividends, out of any funds and assets
                  of the Corporation legally available therefor, prior and in
                  preference to any declaration or payment of any dividend
                  (other than a dividend payable in shares of Common Stock)
                  payable on Common Stock or Series A Preferred Stock of the
                  Corporation at the Dividend Rate. Notwithstanding the
                  foregoing, such cumulative dividends shall be payable only if,
                  as and when declared by the Board.

         4.2      NON-CASH DIVIDENDS. Whenever a dividend provided for in this
                  Section 4 shall be payable in property other than cash, the
                  value of such dividend shall be deemed to be the fair market
                  value of such property as determined in good faith by the
                  Board.

         4.3      PAYMENTS ON CONVERSION. All accrued but unpaid dividends, if
                  any, with respect to any Series B Preferred Stock shares shall
                  be cancelled upon conversion in accordance with Section 7.

5.       LIQUIDATION RIGHTS.

         5.1      PREFERENCE OF SERIES B PREFERRED STOCK.

                  (a)      In the event of any liquidation, dissolution or
                           winding up of the Corporation, whether voluntary or
                           involuntary, the holders of the Series B Preferred
                           Stock then outstanding shall be entitled to be paid
                           out of the assets of the Corporation available for
                           distribution to its stockholders, whether such assets
                           are capital, surplus, or earnings, before any payment
                           or declaration and setting apart for payment of any



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                           amount shall be made in respect of the Common Stock
                           or Series A Preferred Stock, an amount equal to the
                           Liquidation Price for each share of Series B
                           Preferred Stock held. If, upon any liquidation,
                           dissolution, or winding up of the Corporation,
                           whether voluntary or involuntary, the assets to be
                           distributed to the holders of the Series B Preferred
                           Stock shall be insufficient to permit the payment to
                           such stockholders of the full preferential amounts
                           aforesaid, then all of the assets of the Corporation
                           shall be distributed ratably to the holders of the
                           Series B Preferred Stock on the basis of the full
                           liquidation preference payable with respect to such
                           Series B Preferred Stock if such liquidation
                           preference was paid in full.

                  (b)      In the event of a Change of Control, holders of
                           shares of Series B Preferred Stock may elect to treat
                           such transaction as a liquidation or dissolution for
                           purposes of determining amounts to be received by
                           holders of Series B Preferred Stock and the priority
                           of such receipt.

         5.2      REMAINING ASSETS. If the assets of the Corporation available
                  for distribution to the Corporation's stockholders exceed the
                  aggregate amount payable to the holders of the Series B
                  Preferred Stock pursuant to Section 5.1 hereof, then after the
                  payments required by Section 5.1 shall have been made or
                  irrevocably set apart, such assets shall be distributed
                  equally, on a per share basis, among the holders of the Common
                  Stock and Series A Preferred Stock, with shares of Series A
                  Preferred Stock participating on an as-if converted to Common
                  Stock basis including fractional shares.

         5.3      NOTICE. Written notice of such liquidation, dissolution or
                  winding up, stating a payment date and the place where said
                  payments shall be made, shall be given by mail, postage
                  prepaid, or by telex, facsimile or courier service to non-U.S.
                  residents, not less than ten (10) days prior to the payment
                  date stated therein, to the holders of record of Series B
                  Preferred Stock, such notice to be addressed to each such
                  holder at its address as shown by the records of the
                  Corporation.

         5.4      DETERMINATION OF CONSIDERATION. To the extent any distribution
                  pursuant to Sections 5.1 or 5.2 consists of property other
                  than cash, the value thereof shall, for purposes of Sections
                  5.1 or 5.2, be the fair value at the time of such
                  distributions as determined in good faith by the Board.

         5.5      CONVERSION PRIOR TO LIQUIDATING DISTRIBUTIONS. Upon a
                  liquidation, dissolution or winding up of the Corporation, any
                  holder of the Series B Preferred Stock may, at his, her or its
                  option, convert all or a portion of his, her or its Series B
                  Preferred Stock shares into shares of Common Stock and thereby
                  receive distributions with the holders of the Common Stock in
                  lieu of the Liquidation Price applicable to such shares.



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6.       REDEMPTION RIGHTS.

         6.1      SCHEDULED REDEMPTION. To the extent the Corporation shall have
                  funds legally available for such payments, the Corporation
                  shall offer to redeem all of the outstanding shares of Series
                  B Preferred Stock on the Redemption Date for a cash amount per
                  share equal to the Redemption Amount. Any holder of shares of
                  Series B Preferred Stock must accept such offer. If the
                  Corporation shall fail to discharge all or any part of any
                  scheduled redemption obligation pursuant to this Section 6.1
                  because of insufficient funds or because of state law
                  restrictions on such redemption, the entire amount legally
                  available for the payment of such obligation shall be used to
                  offer to and redeem the shares of the holders of the Series B
                  Preferred Stock ratably in proportion to the full number of
                  shares which they would otherwise be entitled to have
                  redeemed, and the balance of such redemption obligation shall
                  be deferred and shall be discharged in one or more
                  installments as soon as the Corporation shall have funds
                  legally available to permit such redemption, at which time the
                  Board shall promptly fix a date for such redemption and so
                  notify the holders of such shares in writing.

         6.2      REDEMPTION NOTICE. The Corporation shall, not less than ten
                  (10) days prior to the Redemption Date, mail written notice
                  (the "REDEMPTION NOTICE") to each holder of shares of record
                  of Series B Preferred Stock to be redeemed, at such holder's
                  post office address last shown on the records of the
                  Corporation. The Redemption Notice shall state:

                  (a)      the number of shares of Series B Preferred Stock held
                           such holder;

                  (b)      the Redemption Amount; and

                  (c)      the time, place and manner in which the holder must
                           surrender to the Corporation the certificate or
                           certificates representing the shares of Series B
                           Preferred Stock to be redeemed.

         6.3      SURRENDER OF STOCK. As soon as practicable after receipt of
                  the Redemption Notice, each holder of Series B Preferred Stock
                  shall surrender the certificate or certificates representing
                  such shares to the Corporation, in the manner and at the place
                  designated in the Redemption Notice, and thereupon the
                  Redemption Amount for such shares shall be payable to the
                  order of the person whose name appears on such certificate or
                  certificates as the owner thereof, and each surrendered
                  certificate shall be canceled and retired. Within ten (10)
                  business days after receipt of the certificate or certificates
                  being redeemed, the Corporation will send to the holder
                  thereof an amount in cash equal to the number of shares being
                  redeemed by such holder multiplied by the amount equal to the
                  Redemption Amount in effect as of the close of business on the
                  Redemption Date.

         6.4      TERMINATION OF RIGHTS. If the Redemption Notice is duly given,
                  and the aggregate Redemption Amount for all shares being
                  redeemed is made available for payment, then notwithstanding
                  that the certificates evidencing any of the shares of Series B
                  Preferred Stock that have not been surrendered, all rights
                  with respect to such shares shall forthwith after the



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                  Redemption Date cease and terminate, except only the right of
                  the holders to receive the Redemption Amount without interest
                  upon surrender of their certificates therefor; provided,
                  however, that if the Corporation is notified by a holder of
                  Series B Preferred Stock within thirty (30) calendar days
                  after the Redemption Date that such holder wishes to convert
                  his, her or its shares of Series B Preferred Stock to Common
                  Stock in lieu of receiving the Redemption Amount, such shares
                  will be converted into the number of shares of Common Stock as
                  is determined in accordance with the provisions of Section
                  7.1.

         6.5      ADJUSTMENT FOR STOCK SPLITS AND COMBINATIONS. If the
                  Corporation at any time or from time to time after the
                  Effective Date effects a subdivision of the outstanding shares
                  of such Series B Preferred Stock, the Redemption Price for the
                  Series B Preferred Stock then in effect immediately before the
                  subdivision shall be proportionately decreased, and
                  conversely, if the Corporation at any time or from time to
                  time after the Effective Date combines the outstanding shares
                  of such Series B Preferred Stock into a smaller number of
                  shares, the Redemption Price then in effect immediately before
                  the combination shall be proportionately increased. Any
                  adjustment under this Section 6.5 shall become effective at
                  the close of business on the date the subdivision or
                  combination becomes effective.

         6.6      ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. If the
                  Corporation at any time or from time to time after the
                  Effective Date makes or issues or fixes a record date for the
                  determination of holders of shares of the Series B Preferred
                  Stock entitled to receive a dividend or other distribution
                  payable in additional shares of such Series B Preferred Stock,
                  then and in each such event the Redemption Price then in
                  effect shall be decreased as of the time of such issuances or,
                  in the event such record date is fixed, as of the close of
                  business on such record date, by multiplying the Redemption
                  Price then in effect by the quotient of (A) the total number
                  of shares of Series B Preferred Stock issued and outstanding
                  immediately prior to the time of such issuance or the close of
                  business on such record date, divided by (B) the total number
                  of shares of the Series B Preferred Stock issued and
                  outstanding immediately prior to the time of such issuance or
                  the close of business on such record date plus the number of
                  shares of Series B Preferred Stock issuable in payment of such
                  dividend or distribution; provided, however, that if such
                  record date is fixed and such dividend is not fully paid or if
                  such distribution is not fully made on the date fixed
                  therefor, the Redemption Price shall be recomputed accordingly
                  as of the close of business on such record date and thereafter
                  the Redemption Price for the Series B Preferred Stock shall be
                  adjusted pursuant to this Section 6.6 as of the time of actual
                  payment of such dividends or distributions.

7.       OPTIONAL CONVERSION. The holders of the Series B Preferred Stock shall
         have the following conversion rights:

         7.1      OPTIONAL CONVERSION OF THE SERIES B PREFERRED STOCK. At any
                  time after the Effective Date and prior to the earlier of the
                  Redemption Date and the Mandatory Conversion Date, the Series
                  B Preferred Stock shall be convertible, without the payment of
                  any additional consideration by the holder thereof and at the
                  option of the holder thereof, at the office of the Corporation
                  or any transfer agent for the Common Stock, into such number



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                  of fully paid and nonassessable shares of Common Stock as is
                  determined by dividing the Conversion Price in effect at the
                  time of conversion by $.1797, then multiplying such quotient
                  by each share of Series B Preferred Stock to be converted. The
                  Conversion Price at which shares of Common Stock shall be
                  deliverable upon conversion without the payment of any
                  additional consideration by the holder thereof (the
                  "CONVERSION PRICE") shall at the Effective Time be equal to
                  $.8985 (such initial Conversion Price results in each shares
                  of Series A Preferred Stock being initially convertible into 5
                  shares of Common Stock). Such initial Conversion Price shall
                  be subject to adjustment, as hereinafter provided.

         7.2      FRACTIONAL SHARES. No fractional shares of Common Stock shall
                  be issued upon conversion of the Series B Preferred Stock. In
                  lieu of any fractional share to which any holder would
                  otherwise be entitled upon conversion of the Series B
                  Preferred Stock owned by such holder, the Corporation shall,
                  at its option, pay cash equal to such fraction multiplied by
                  the then effective Conversion Price or round the shares Common
                  Stock to be issued upon conversion up to the nearest whole
                  share.

         7.3      MECHANICS OF OPTIONAL CONVERSION. Before any holder of Series
                  B Preferred Stock shall be entitled to convert the same into
                  full shares of Common Stock, such holder shall surrender the
                  certificate or certificates therefor, endorsed or accompanied
                  by a written instrument or instruments of transfer, in form
                  satisfactory to the Corporation, duly executed by the
                  registered holder or by such holder's attorney duly authorized
                  in writing, at the office of the Corporation or of any
                  transfer agent for the Common Stock, and shall give written
                  notice to the Corporation at such office that such holder
                  elects to convert the same and shall state therein such
                  holder's name or the name of the nominees in which such holder
                  wishes the certificate or certificates for shares of Common
                  Stock to be issued. The Corporation shall, as soon as
                  practicable thereafter, cause its transfer agent to issue and
                  deliver at such office to such holder of Series B Preferred
                  Stock, or to such holder's nominee or nominees, a certificate
                  or certificates for the number of shares of Common Stock to
                  which such holder shall be entitled as aforesaid, together
                  with cash, if any, in lieu of any fraction of a share of
                  Common Stock. 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 B Preferred Stock to be
                  converted, and the person or persons entitled to receive the
                  shares of Common Stock issuable upon conversion shall be
                  treated for all purposes as the record holder or holders of
                  such shares of Common Stock on such date. From and after such
                  date, all rights of the holder with respect to the Series B
                  Preferred Stock so converted shall terminate, except only the
                  right of such holder, upon the surrender of his, her or its
                  certificate or certificates therefor, to receive certificates
                  for the number of shares of Common Stock issuable upon
                  conversion thereof and cash for fractional shares.


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         7.4      CERTAIN ADJUSTMENTS TO CONVERSION PRICE FOR STOCK SPLITS,
                  DIVIDENDS, MERGERS, REORGANIZATIONS, ETC.

                  (a)      In the event the outstanding shares of Common Stock
                           shall, after the Effective Date be further subdivided
                           (split), or combined (reverse split), by
                           reclassification or otherwise, or in the event of any
                           dividend or other distribution payable on the Common
                           Stock in shares of Common Stock, the applicable
                           Conversion Price in effect immediately prior to such
                           subdivision, combination, dividend or other
                           distribution shall, concurrently with the
                           effectiveness of such subdivision, combination,
                           dividend or other distribution, be proportionately
                           adjusted on the basis that the holders of Series B
                           Preferred Stock will receive upon conversion, after
                           each such event, a number of shares of Common Stock
                           equal to the number that the holder would hold
                           immediately after such event if the holder had
                           converted all Series B Preferred Stock to shares of
                           Common Stock immediately prior to each such event.

                  (b)      In the event of a reclassification, reorganization or
                           exchange (other than described in Section 7.4.a.
                           above) or any consolidation or merger of the
                           Corporation with another Corporation (other than a
                           merger, acquisition or other reorganization which
                           results in a Change of Control which shall have the
                           effect described in Section 8.6), each share of
                           Series B Preferred Stock shall thereafter be
                           convertible into the 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 B Preferred Stock would have
                           been entitled upon such reclassification,
                           reorganization, exchange, consolidation, merger or
                           conveyance had the conversion occurred immediately
                           prior to the event; and, in any such case,
                           appropriate adjustment (as determined in good faith
                           by the Board) shall be made in the application of the
                           provisions herein set forth with respect to the
                           rights and interests thereafter of the holders of the
                           Series B Preferred Stock, to the end that the
                           provisions set forth herein (including provisions
                           with respect to changes in and other adjustments of
                           the applicable Conversion Price) shall thereafter be
                           applicable, as nearly as reasonably may be, in
                           relation to any shares of stock or other property
                           thereafter deliverable upon the conversion of the
                           Series B Preferred Stock.

         7.5      DETERMINATION DATE ADJUSTMENT. If, at the close of business on
                  the Determination Date, the Determination Date Price is less
                  than the Base Price then in effect:

                  (a)      The Conversion Price shall be adjusted by multiplying
                           the Conversion Price then in effect by the quotient
                           of (A) the Base Price then in effect divided by (B)
                           the Determination Date Price. The adjustment to the
                           Conversion Price described in this Section 7.5 shall
                           be effective as of 12:01 a.m. on the day immediately
                           following the Determination Date.



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                  (b)      The Corporation will cause to be issued to holders
                           who converted shares of Series B Preferred Stock into
                           Common Stock prior to the Determination Date an
                           additional number of shares of Common Stock (rounded
                           up to the nearest whole share) equal to the number of
                           shares of Common Stock that were issued in connection
                           with such conversion (as such number is
                           proportionately adjusted for stock splits, reverse
                           stock splits, recapitalizations and other similar
                           events occurring subsequent to such conversion)
                           multiplied by the amount equal to (A) the quotient of
                           (i) the Base Price in effect at the close of business
                           on the Determination Date divided by (ii) the
                           Determination Date Price minus (B) one (1).
                           Certificates representing the shares, if any, of
                           Common Stock to be issued pursuant to this Section
                           7.5(b) will be mailed to the record holder of the
                           Series B Preferred Stock that was converted within
                           fifteen (15) business days following the
                           Determination Date.

                  (c)      If the Determination Date Price is equal to or
                           greater than the Base Price in effect as of the close
                           of business on the Determination Date, then no
                           adjustment will be made to the Conversion Price and
                           no additional shares of Common Stock will be issued
                           pursuant to this Section 7.5.

                  (d)      The Base Price may be adjusted from time to time as
                           follows:

                           (i)      If the Corporation at any time or from time
                                    to time after the Effective Date effects a
                                    subdivision of the outstanding shares of
                                    Common Stock, the Base Price then in effect
                                    immediately before the subdivision shall be
                                    proportionately decreased, and conversely,
                                    if the Corporation at any time or from time
                                    to time after the Effective Date combines
                                    the outstanding shares of the Common Stock
                                    into a smaller number of shares, the Base
                                    Price then in effect immediately before the
                                    combination shall be proportionately
                                    increased. Any adjustment under this
                                    subsection (i) shall become effective at the
                                    close of business on the date the
                                    subdivision or combination becomes
                                    effective.

                           (ii)     If the Corporation at any time or from time
                                    to time after the Effective Date makes or
                                    issues a dividend or other distribution
                                    payable in additional shares of Common
                                    Stock, then and in each such event the Base
                                    Price then in effect shall be decreased as
                                    of the time of such issuances by multiplying
                                    the Base Price then in effect by the
                                    quotient of (A) the total number of shares
                                    of Common Stock issued and outstanding
                                    immediately prior to the time of such
                                    issuance or the close of business on such
                                    record date, divided by (B) the total number
                                    of shares of Common Stock issued and
                                    outstanding immediately prior to the time of
                                    such issuance or the close of business on
                                    such record date plus the number of shares
                                    of Common Stock issuable in payment of such
                                    dividend or distribution.



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         7.6      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 which is the same as cash dividends paid in previous
                  quarters) or other distribution, any capital reorganization of
                  the Corporation, any reclassification or recapitalization of
                  the Corporation's capital stock, any consolidation or merger
                  with or into another Corporation, any transfer of all or
                  substantially all of the assets of the Corporation or any
                  dissolution, liquidation or winding up of the Corporation, the
                  Corporation shall mail to each holder of Series B Preferred
                  Stock at least ten (10) days prior to the date specified for
                  the taking of a record, a notice specifying the date on which
                  any such record is to be taken for the purpose of such
                  dividend or distribution.

8.       MANDATORY CONVERSION

         8.1      EVENTS TRIGGERING MANDATORY CONVERSION. At any time following
                  the Conversion Trigger Date, the Corporation may, subject to
                  the Corporation's ability to comply with Section 8.4, require
                  all holders of shares of Series B Preferred Stock to convert
                  such shares into the number of shares of Common Stock as is
                  determined by dividing the Conversion Price in effect on the
                  Mandatory Conversion Date by $.1797, then multiplying such
                  quotient by each share of Series B Preferred Stock held by
                  such holder to be converted. The "CONVERSION TRIGGER DATE" is
                  the earliest of (i) the first date on which both of the
                  following have occurred on or prior to such date (a) for
                  thirty consecutive Trading Days, the Trading Price has equaled
                  or exceeded one hundred fifty percent (150%) of the Base Price
                  and (b) the Corporation's Revenue has increased at least
                  twenty-five percent (25%) per quarter over the immediately
                  preceding quarter in any three consecutive quarters, the first
                  of which ends on or after ending May 31, 2001 and only
                  commencing once Revenue of the Corporation for any given
                  quarter equals or exceeds $1,500,000 (based on U.S. generally
                  accepted accounting principles consistent with past
                  practices), (ii) the first date on or after August 31, 2002
                  which ends a twelve month period in which the Corporation's
                  Revenue for such period has increased at least fifty percent
                  (50%) over the immediately preceding twelve month period or
                  (iii) a Change of Control.

         8.2      MECHANICS FOR MANDATORY CONVERSION. The Corporation may effect
                  a mandatory conversion pursuant to a Conversion Trigger Date
                  described in clauses (i) and (ii) of Section 8.1 by mailing a
                  written notice ("CONVERSION NOTICE"), postage prepaid, to each
                  holder of shares of record of Series B Preferred Stock to be
                  converted, at such holder's post office address last shown on
                  the records of the Corporation at any time after the
                  Conversion Trigger Date; provided, however, that the
                  Corporation may not send a Conversion Notice on a day on which
                  the Trading Price as of the close of business on the day
                  immediately preceding such date is less than one hundred fifty
                  percent (150%) of the Base Price then in effect. The
                  Conversion Notice shall be accompanied by the Election Form
                  and shall state:



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                  (a)      the provision in this Certificate of Designation
                           pursuant to which the Series B Preferred Stock are
                           being converted;

                  (b)      the number of shares of Series B Preferred Stock held
                           such holder;

                  (c)      the number of shares of Common Stock into which such
                           Series B Preferred Stock are to be converted;

                  (d)      the Redemption Amount on the Mandatory Conversion
                           Date; and

                  (e)      the time, place and manner in which the holder must
                           surrender to the Corporation the certificate or
                           certificates representing the shares of Series B
                           Preferred Stock to be converted.

         8.3      SURRENDER OF STOCK. As soon as practicable after receipt of a
                  Conversion Notice, each holder of Series B Preferred Stock
                  shall surrender the certificate or certificates therefor,
                  endorsed or accompanied by a written instrument or instruments
                  of transfer, in form satisfactory to the Corporation, duly
                  executed by the registered holder or by such holder's attorney
                  duly authorized in writing, at the place specified in the
                  Conversion Notice and shall indicate such holder's name or the
                  name of the nominees in which such holder wishes the
                  certificate or certificates for shares of Common Stock to be
                  issued. The Corporation shall, as soon as practicable
                  thereafter, cause its transfer agent to issue and deliver to
                  such holder of Series B Preferred Stock, or to such holder's
                  nominee or nominees, a certificate or certificates for the
                  number of shares of Common Stock to which such holder shall be
                  entitled as aforesaid. In lieu of any fractional share to
                  which any holder would otherwise be entitled to receive upon
                  conversion, the Corporation shall, at its option, pay cash
                  equal to such fraction multiplied by the Conversion Price in
                  effect on the Mandatory Conversion Date or round the shares
                  Common Stock to be issued upon conversion up to the nearest
                  whole share.

         8.4      ELECTION TO RECEIVE CASH. Notwithstanding the provisions of
                  Sections 8.1 or 8.3, in the event of a mandatory conversion
                  effected pursuant to a Conversion Trigger Date described in
                  clauses (i) and (ii) of Section 8.1, if a holder of shares of
                  Series B Preferred Stock shall have elected on the Election
                  Form to receive cash in lieu Common Stock and have delivered
                  such Election Form to the Corporation along with the
                  certificate or certificates representing the shares of Series
                  B Preferred Stock for which such election is made, the
                  Corporation shall pay to such holder the Redemption Amount in
                  effect as of the close of business on the Mandatory Conversion
                  Date (with dividends accrued through the Mandatory Conversion
                  Date rather than the Redemption Date) multiplied by the number
                  of shares of Series B Preferred Stock for which such election
                  was made. Such payment shall be paid to the holder or the
                  holder's nominee as specified in the Election Form.

         8.5      TERMINATION OF RIGHTS. If the Conversion Notice is duly given
                  following a mandatory conversion effected pursuant to a
                  Conversion Trigger Date described in clauses (i) and (ii) of
                  Section 8.1 and a sufficient number of shares of Common Stock
                  are reserved for issuance upon conversion of all outstanding



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<PAGE>   14

                  shares of Series B Preferred Stock, then notwithstanding that
                  the certificates evidencing any of the shares of Series B
                  Preferred Stock have not been surrendered, all rights with
                  respect to such shares shall forthwith after the close of
                  business on the Mandatory Conversion Date cease and terminate,
                  except only the right of the holders to promptly receive
                  shares of Common Stock (or cash) upon surrender of their
                  certificates therefor. If, on the other hand, the holders of
                  Series B Preferred Stock redeeming his, her or its shares of
                  Series B Preferred Stock surrender such shares and shares of
                  Common Stock issuable upon conversion therefor (or cash) are
                  not forthcoming, such holders of Series B Preferred Stock
                  shall retain all of the rights of a holder of Series B
                  Preferred Stock until such shares are issued (or cash paid).

         8.6      CHANGE OF CONTROL MANDATORY CONVERSION. The Corporation may
                  effect a mandatory conversion pursuant to a Conversion Trigger
                  Date described in clause (iii) of Section 8.1 by mailing at
                  least ten (10) days prior to the consummation of a transaction
                  which results in a Change of Control a notice to all holders
                  of outstanding shares of Series B Preferred Stock describing
                  such contemplated transaction. Any of such holders may, at any
                  time prior to the consummation of transaction, notify the
                  Corporation in writing of its irrevocable election to receive
                  an amount in cash equal to the Redemption Amount in effect as
                  of the close of business on the date of the consummation of
                  the transaction resulting in the Change of Control (with
                  dividends accrued through such date rather than the Redemption
                  Date) multiplied by the number of shares of Series B Preferred
                  Stock held by the holder making such election, provided,
                  however, that such election will be contingent and effective
                  upon the consummation of the transaction that results in the
                  Change of Control. Each outstanding share of Series B
                  Preferred Stock for which no such notification has been
                  received by the Corporation prior to the consummation of the
                  transaction resulting in a Change of Control shall, contingent
                  and effective upon the consummation of such transaction and
                  without further action by the Corporation or the holders
                  thereof, automatically convert into the number shares of
                  Common Stock equal to the Conversion Price in effect at the
                  time of such consummation divided by $.1797.

9.       STATUS OF PREFERRED STOCK UPON RETIREMENT. Shares of Series B Preferred
         Stock which are acquired or redeemed by the Corporation or converted
         pursuant to Section 7 or 8 shall be retired pursuant to Delaware
         General Corporation Law Section 243, or any successor provision, and
         returned to the status of authorized but unissued shares of the
         Corporation's undesignated preferred stock.

10.      COMMON STOCK RESERVED. The Corporation shall reserve and keep available
         out of its authorized but unissued Common Stock such number of shares
         of Common Stock as shall from time to time be sufficient to effect
         conversion of the Series B Preferred Stock.

11.      WAIVER. Except as prohibited by Delaware or other applicable law or by
         the Corporation's certificate of incorporation, any of the rights of



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<PAGE>   15

         the holders of Series B Preferred Stock set forth herein may be waived
         by the affirmative vote of the holders of two-thirds or more of Series
         B Preferred Stock then outstanding.




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