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                                                                    EXHIBIT 4.10


         CERTIFICATE OF DESIGNATION, PREFERENCE AND RIGHTS OF SERIES A
           CONVERTIBLE PREFERRED STOCK OF EDGE TECHNOLOGY GROUP, INC.

         (A) Classes of Stock. The Corporation is authorized to issue two
             ----------------
classes of stock to be designated, respectively, "Common Stock" and "Preferred
                                                  ------------       ---------
Stock." The total number of shares which the Corporation is authorized to issue
-----
is one hundred and five million (105,000,000) shares, one hundred million
(100,000,000) shares of which shall be Common Stock and five million (5,000,000)
shares of which shall be Preferred Stock, which may be issued from time to time
in one or more series which such rights, privileges, preferences, and
restrictions as shall be stated and expressed in this Certificate of Designation
or in any amendment thereto, or in a resolution duly adopted by the Board of
Directors of the Corporation.

         (B) Rights, Preferences and Restrictions of Series A Convertible
             ------------------------------------------------------------
Preferred Stock. The first series of Preferred Stock shall be designated "Series
---------------                                                           ------
A Convertible Preferred Stock" and shall consist of Fifteen Thousand (15,000)
-----------------------------
shares, $0.01 par value per share, issued at a price of one thousand dollars
($1,000) per share (the "Issuance Price"). The rights, preferences, privileges,
and restrictions granted to and imposed on the Series A Convertible Preferred
Stock are as set forth below:

                      SERIES A CONVERTIBLE PREFERRED STOCK

         1. Cumulative Dividend Provisions. The holders of shares of Series A
            ------------------------------
Convertible Preferred Stock shall be entitled to receive cumulative 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 of the Corporation, at the rate of eight
percent (8%) per share (as adjusted for stock splits, stock dividends,
reclassification and the like) per annum on each outstanding share of Series A
Convertible Preferred Stock, payable quarterly as declared by the Board of
Directors in accordance with applicable law, and such dividends shall be
cumulative.

         2.       Liquidation.
                  -----------

(a) Preference. In the event of any liquidation, dissolution or winding up of
the Corporation, either voluntary or involuntary, the holders of the Series A
Convertible 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 by reason of their ownership thereof, an amount per
share equal to the Issuance Price (as adjusted for stock splits, stock
dividends, reclassification of the Series A Convertible Preferred Stock and the
like) for each share of Series A Convertible Preferred Stock then held by them,
plus accrued but unpaid dividends (the "Liquidation Preference"). If, upon the
                                        ----------------------
occurrence of such event, the assets and funds thus distributed among the
holders of the Series A Convertible Preferred Stock shall be insufficient to
permit the payment to such holders of the full aforesaid preferential amounts,
the entire assets and funds of the Corporation legally available for
distribution shall be distributed ratably among the holders of the Series A
Convertible Preferred Stock in proportion to the preferential amount each such
holder is otherwise entitled to receive.

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          (b)     Remaining Assets.  Upon the completion of the distribution
                  ----------------
required by Section 2(a) above, if assets remain in the Corporation, the holders
of the Common Stock of the Corporation shall receive all of the remaining assets
of the Corporation.

          (c)     Certain Acquisitions.
                  --------------------

                  (i)     Deemed Liquidation.  For purposes of this Section 2, a
                          liquidation, dissolution or winding up of the
                          Corporation shall be deemed to occur if the
                          Corporation shall sell, convey, or otherwise dispose
                          of all or substantially all of its property or
                          business or merge into or consolidate with any other
                          corporation (other than a wholly-owned subsidiary
                          corporation) or effect any other transaction or series
                          of related transactions in which more than fifty
                          percent (50%) of the voting power of the Corporation
                          will not, immediately after such acquisition or
                          transaction be held by the Corporation's stockholders
                          of record as constituted immediately prior to such
                          acquisition or transaction, provided that this Section
                          2(c)(i) shall not           --------
                          apply to a merger effected exclusively for the purpose
                          of changing the domicile of the Corporation.

                  (ii)    Valuation of Consideration. In the event of a deemed
                          liquidation as described in Section 2(c)(i) above, if
                          the consideration received by the Corporation is other
                          than cash, its value will be deemed its fair market
                          value. Any securities shall be valued as follows:

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

                                  (1)     If traded on a 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
                                  thirty-day period ending three (3) days prior
                                  to the closing;

                                  (2)     If actively traded over-the-counter,
                                  the value shall be deemed to be the average of
                                  the closing bid or sale prices (whichever is
                                  applicable) over the thirty-day period ending
                                  three (3) days prior to the closing; and

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

                          (B)     The method of valuation of securities subject
                          to investment letter or other on free marketability
                          (other than restrictions arising solely by virtue of
                          a stockholder's status as


                                      -2-

<PAGE>

                    an affiliate or former affiliate) shall be to make an
                    appropriate discount from the market value determined as
                    above in Section 2(c)(ii)(A) to reflect the approximate fair
                    market value thereof, as determined in good faith by the
                    Corporation.

        (iii) Notice of Transaction. The Corporation shall give each holder of
              record of Series A Convertible Preferred Stock written notice of a
              deemed liquidation transaction as described in Section 2(c)(i)
              above (a "Notice of Liquidation Event") 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 provisions of this
              Section 2, 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 Series
              A Convertible Preferred Stock that are entitled to such notice
              rights or similar notice rights and that represent at least
              two-thirds (2/3) of the voting power of all then outstanding
              shares of such Series A Convertible Preferred Stock.

         (iv) Effect of Noncompliance. In the event the requirements of this
              Section 2(c) are not complied with, the Corporation shall
              forthwith either cause the closing of the transaction to be
              postponed until such requirements have been complied with, or
              cancel such transaction, in which event the rights, preferences
              and privileges of the holders of the Series A Convertible
              Preferred Stock shall revert to and be the same as such rights,
              preferences and privileges existing immediately prior to the date
              of the Notice of Liquidation Event.

          (v) Conversion. Upon receipt of a Notice of Liquidation Event, each
              holder of Series A Convertible Preferred Stock shall have the
              right to elect to convert any or all of such holder's shares of
              Series A Convertible Preferred Stock as provided for in Section 4
              below in lieu of receiving the Liquidation Preference the holder
              is otherwise entitled to receive. The right to convert the shares
              of Series A Convertible Preferred provided for in this Section
              2(c)(v) may be exercised irrespective of the prohibition on
              conversion prior to the first anniversary of the Issuance Date
              provided for in Section 4, below.

3. Voting Rights.
   -------------

                                      -3-


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         (a) General Voting Rights. The holder of each share of Series A
             ---------------------
Convertible Preferred Stock shall have the right to one
vote for each share of Common Stock into which such Preferred Stock could then
be converted, 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 the holders of Common Stock, with
respect to any question upon which holders of Common Stock have the right to
vote. Fractional vote shall not, however, be permitted and any fractional voting
rights available on an as-converted basis (after aggregating all shares into
which shares of Series A Convertible Preferred Stock held by each holder could
be converted) shall be rounded to the nearest whole number (with one-half being
rounded upward). Accordingly, the holders of shares of Series A Convertible
Preferred Stock shall not be entitled to vote on any matter as a class except as
expressly set forth in this instrument.

         (b) Voting for Election of Directors. So long as Series A
             --------------------------------
Convertible Preferred Stock with a Liquidation
Preference in the aggregate of at least $2,000,000 remains outstanding, the
holders of Series A Convertible Preferred Stock shall, separately as a class, be
entitled by majority vote of such holders to elect one (1) individual to serve
as a Director of the Corporation (with such holders, by majority vote, having
the right to remove and replace, with or without cause, such individual by
written notice to the Corporation).

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

         (a) Right to Convert. Subject to Section 4(c), each share of Series A
             ----------------
Convertible Preferred Stock shall be convertible, at the option
of the holder thereof, at any time after the first anniversary of the date the
first shares of Series A Convertible Preferred Stock have been issued (the
"Issuance Date"), at the office of the Corporation or any transfer agent for
such stock, into that number of fully paid and nonassessable shares of Common
Stock as is determined by dividing the Liquidation Preference by the Conversion
Price applicable to such shares, determined as hereafter provided, in effect on
the date the certificate is surrendered for conversion. The initial Conversion
Price per share of Series A Convertible Preferred Stock shall be seventy-five
cents ($0.75). Such initial Conversion Price shall be subject to adjustment as
set forth in Section 4(d).

         (b) Automatic Conversion. Each share of Series A Convertible Preferred
             --------------------
Stock shall automatically be converted into shares of Common Stock at the
Conversion Price at the time in effect for such share immediately upon the date
specified by written consent or agreement of the holders of two-thirds (2/3) of
the voting power of the then outstanding shares of Series A Convertible
Preferred Stock.

         (c) Mechanics of Conversion. Before any holder of Series A Convertible
             -----------------------
Preferred Stock shall be entitled to convert the same into shares of Common
Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or of any transfer agent for Series A
Convertible Preferred Stock, and shall give written notice to the Corporation at
its principal corporate office, of the election to convert the same and shall


                                       -4-

<PAGE>

state therein the name or names in which the certificate or certificates for
shares of Common Stock are to be issued. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series A Convertible 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 Convertible 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.

         (d) Conversion Price Adjustments for Certain Issuances, Splits and
             --------------------------------------------------------------
Combinations. The Conversion Price of the Series A Convertible Preferred Stock
------------
shall be subject to adjustment from time to time as follows:


            (i) Stock Splits and Dividends. In the event the Corporation should
         at any time or from time to time after the Issuance 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 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 Conversion Price of the
         Series A Convertible Preferred Stock shall be appropriately decreased
         so that the number of shares of Common Stock issuable on conversion of
         each share of such series shall be increased in proportion to such
         increase of the aggregate of shares of Common Stock outstanding and
         those issuable with respect to such Common Stock Equivalents with the
         number of shares issuable with respect to Common Stock Equivalents
         determined from time to time as provided in Section 4(d)(iii) below.

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

            (iii) The following provisions shall apply for purposes of this
         Section 4(d):


                                       -5-



<PAGE>

               (A) The aggregate maximum number of shares of Common Stock
          deliverable upon conversion or exercise of Common Stock Equivalents
          (assuming the satisfaction of any conditions to convertibility or
          exercisability, including, without limitation, the passage of time,
          but without taking into account potential antidilution adjustments)
          shall be deemed to have been issued at the time such Common Stock
          Equivalents were issued.

               (B) In the event of any change in the number of shares of Common
          Stock deliverable or in the consideration payable to the Corporation
          upon conversion or exercise of such Common Stock Equivalents
          including, but not limited to, a change resulting from the
          antidilution provisions thereof, the Conversion Price of the Series A
          Convertible Preferred Stock, to the extent in any way affected by or
          computed using such Common Stock Equivalents, 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.

               (C) Upon the termination or expiration of the convertibility or
          exercisability of any such Common Stock Equivalents, the Conversion
          Price of the Series A Convertible Preferred Stock, to the extent in
          any way affected by or computed using such Common Stock Equivalents,
          shall be recomputed to reflect the issuance of only the number of
          shares of Common Stock (and Common Stock Equivalents which remain
          convertible or exercisable) actually issued upon the conversion or
          exercise of such Common Stock Equivalents.

     (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 Section 4(d)(i), then, in each such case
for the purpose of this Section 4(e), the holders of Series A Convertible
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 Convertible
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 this Section 4
or Section 2) provision shall be made so that the holders of the Series A
Convertible Preferred Stock shall thereafter be entitled to receive upon
conversion of such Series A Convertible Preferred Stock the number of shares of
stock or other securities or property of the Corporation or otherwise, to which
a holder of Common Stock deliverable upon conversion would have been entitled on
such recapitalization.


                                       -6-

<PAGE>

In any such case, appropriate adjustment shall be made in the application of
the provisions of this Section 4 with respect to the rights of the holders of
such Series A Convertible Preferred Stock after the recapitalization to the end
that the provisions of this Section 4 (including adjustment of the Conversion
Price then in effect and the number of shares purchasable upon conversion of
such Series A Convertible Preferred Stock) shall be applicable after that event
and be as nearly equivalent as practicable.

     (g) Conversion Price Adjustments; Below Conversion Price Issuances. In case
         --------------------------------------------------------------
at any time the Corporation issues any shares of Common Stock or debt or equity
securities convertible into or exchangeable or exercisable for shares of Common
Stock (hereinafter "Derivative Securities and the number of shares so issued, or
issuable upon conversion or exercise of such Derivative Securities, as
applicable, being referred to as "Additional Shares of Common Stock") for
consideration less than the Conversion Price then in effect at the date of
issuance of such shares of Common Stock or such Derivative Securities, in each
such case the Conversion Price shall, concurrently with such issuance, be
adjusted by multiplying the Conversion Price immediately prior to such event by
a fraction: (i) the numerator of which shall be the number of shares of Common
Stock calculated on a fully diluted basis giving effect to all derivative
securities outstanding immediately prior to the issuance of such Additional
Shares of Common Stock plus the number of shares of Common Stock that the
aggregate consideration received by the Corporation for the total number of such
Additional Shares of Common Stock so issued would purchase at the then current
Conversion Price and (ii) the denominator of which shall be the number of shares
of Common Stock calculated on a fully diluted basis giving effect to all
derivative securities outstanding immediately prior to the issuance of
Additional Shares of Common Stock plus the number of such Additional Shares of
Common Stock so issued or sold. Notwithstanding the foregoing, no adjustment to
the Conversion Price shall be made under the terms of this Section 4(g) for the
following issuances:

         (i)  any issuance of Additional Shares to employees, officers,
              contractors, consultants and directors pursuant to option grants,
              employment or consulting agreements or similar agreements pursuant
              to terms and conditions approved by the Board of Directors;

         (ii) any issuance of a warrant or warrants representing less than one
              percent 1% of the issued and outstanding Common Stock of the
              Corporation issued to lenders, financing sources or bona fide
              vendors of the corporation; or

         (iii) any issuance of Additional Shares as consideration of the
              acquisition by the Corporation of a target company, whether by
              merger, stock purchase, or a purchase of all or substantially all
              of the assets of such acquisition target.

     (h) Conversion Price Adjustment Rules for Below Conversion Price Issuances.
         ----------------------------------------------------------------------
The following terms and procedures shall be applicable to adjustments to the
Conversion Price made pursuant to this Section 4:

CERTIFICATE OF DESIGNATION.doc      -7-



<PAGE>

     (i) no adjustment in the applicable Conversion Price shall be required
unless such adjustment would result in a change of at least 1% in the applicable
Conversion Price then in effect, provided, however, that any adjustments which,
but for the provisions of this clause would otherwise have been required to be
made, shall be carried forward and taken into account in any subsequent
adjustment;

     (ii) if any event occurs of the type contemplated by the adjustment
provisions of this Paragraph 4 but not expressly provided for by such
provisions, the Corporation will give notice of such event as provided herein,
and the Corporation's board of directors will make an appropriate adjustment in
the Conversion Price so that the rights of the holders of the applicable
Security shall not be diminished by such event; and

     (a) (iii) if a dispute shall at any time arise with respect to any
adjustment of the applicable Conversion Price, such dispute shall be
conclusively determined by the auditors of the Corporation or, if they are
unable or unwilling to act, by a firm of independent public accountants selected
by the Directors and any such determination shall be binding upon the
Corporation and the holders of the Series A Convertible Preferred Stock.

     (i) No Impairment. The Corporation will not, by amendment of its
         --------------
Certificate of Incorporation (except in accordance with Section 5 hereof and
applicable law) 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 4 and in the taking of all such action as may be necessary or
appropriate in order to protect the Conversion Rights of the holders of Series A
Convertible Preferred Stock against impairment.

     (j) No Fractional Shares and Certificate as to Adjustments.
         ------------------------------------------------------

            (i)   No fractional shares shall be issued upon the conversion of
                  any share or shares of the Series A Convertible Preferred
                  Stock, and the number of shares of Common Stock to be issued
                  shall be rounded to the nearest whole share. The number of
                  shares issuable upon such conversion shall be determined on
                  the basis of the total number of shares of Series A
                  Convertible 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 the
                  Conversion Price of Series A Convertible Preferred Stock
                  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 Convertible 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 Convertible
                  Preferred Stock, furnish

CERTIFICATE OF DESIGNATION.doc      -8-

<PAGE>

         or cause to be furnished to such holder a like certificate setting
         forth (A) such adjustment and readjustment, (B) the Conversion Price
         for the Series A Convertible Preferred Stock 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 the Series A Convertible Preferred Stock.

         (k)  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 Convertible
              Preferred Stock, at least ten (10) 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.

         (l)  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 the Series A
              Convertible 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 Convertible
              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
              Convertible Preferred Stock, in addition to such other remedies as
              shall be available to the holder of such Series A Convertible
              Preferred Stock, the Corporation will take such corporate action
              as may, in the opinion of its counsel, be necessary to increase
              its authorized but unissued shares of Common Stock to such number
              of shares as shall be sufficient for such purposes, including,
              without limitation, engaging in best efforts to obtain the
              requisite stockholder approval of any necessary amendment to this
              Certificate of Incorporation.

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

    5.        Protective Provisions. So long as Series A Convertible Preferred
              ---------------------
              Stock with a Liquidation Preference in the aggregate of at least
              $2,000,000 remains 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 voting power of the then outstanding shares of Series A
              Convertible Preferred Stock, voting together as a class:

         (a)  amend or repeal any provisions of the Corporation's Certificate of
              Incorporation or Bylaws that would adversely affect the rights,
              preferences, or privileges of the Series A Convertible Preferred
              Stock (the issuance of an equity or derivative security which does
              not have a preference as to dividends or assets, whether in
              liquidation or otherwise, superior to

CERTIFICATE OF DESIGNATION.doc      -9-

<PAGE>

the Series A Convertible Preferred Stock would not be deemed to adversely
affect the rights, preferences, or privileges of the Series A Convertible
Preferred Stock; or

         (b)  redeem, purchase or otherwise acquire (or pay into or set funds
              aside for a sinking fund for such purpose) any share or shares of
              Common Stock; provided, however, that this restriction shall not
                            --------  -------
              apply to the repurchase of shares of Common Stock from employees,
              officers, directors, consultants or other persons performing
              services for the Corporation or any subsidiary pursuant to
              agreements under which the Corporation has the option to
              repurchase such shares at cost upon the occurrence of certain
              events, such as the termination of employment, or through the
              exercise of any right of first refusal.

         (c)  In the event holders of at least two-thirds (2/3) of the then
              outstanding shares of Series A Convertible Preferred Stock agree
              to allow the Corporation to alter or change the rights,
              preferences or privileges of the shares of Series A Convertible
              Preferred Stock, pursuant to subsection (a) above, so as to
              adversely affect the Series A Convertible Preferred Stock, then
              the Corporation will deliver notice of such approved change to the
              holders of the Series A Convertible Preferred Stock that did not
              agree to such alteration or change (the "Dissenting Holders") and
              Dissenting Holders shall have the right for a period of ten (10)
              days to either (i) convert into Common Stock any and all shares of
              then held Series A Convertible Preferred Stock pursuant to the
              terms of this Certificate of Designation as in effect prior to
              such alteration or change, or (ii) continue to hold their shares
              of Series A Convertible Preferred Stock upon such amended terms
              following such amendment.

    6.        No Redemption. The Corporation shall have no right to redeem the
              -------------
              Series A Convertible Preferred Stock and the holders of Series A
              Convertible Preferred Stock shall have no right to require the
              Corporation to redeem such shares.

    7.        Status of Converted Stock. In the event any shares of Series A
              -------------------------
              Convertible Preferred Stock shall be converted pursuant to Section
              4 hereof, the shares so converted shall be cancelled and shall not
              be issuable by the Corporation. The Certificate of Incorporation
              of the Corporation shall be appropriately amended to effect the
              corresponding reduction in the Corporation's authorized capital
              stock.

    8.        Effect of a Qualified Future Financing.
              --------------------------------------

         (a)  Any transaction or series of transactions that the Corporation
              enters into whereby the Corporation raises capital through the
              issuance of additional Preferred Stock or a convertible debt
              instrument (each a "Financing Transaction"), until such time as
              the proceeds from all Financing Transactions entered into from the
              time of the filing of this Certificate of Designation, including
              the proceeds from all issuances of the Series A Convertible
              Preferred Stock, equals or exceeds, in the aggregate, fifteen
              million dollars ($15,000,000) shall be referred to hereafter as a
              "Qualified Future Financing."

         (b)  Any provision included in the terms of a Qualified Future
              Financing that grants rights to the holders of the instruments
              issued in connection with such Qualified Future Financing that are
              in addition to or superior to those granted to the holders of the
              Series A

CERTIFICATE OF DESIGNATION.doc      -10-

<PAGE>

Convertible Preferred Stock, as evidenced by this Certificate of Designation or
any subsequent amendment hereto, shall be referred to as a "Superior Right;"
provided, however, that any terms which provide for a conversion price that is,
whether expressly stated or calculated as a result of a formula, greater than or
equal to the Conversion Price then in place for the Series A Convertible
Preferred stock shall not be deemed to be a Superior Right.

         (c) Upon the consummation of any Qualified Future Financing which
contains a Superior Right, the terms and conditions of such Superior Right shall
be automatically incorporated into the rights contained herein and shall
supersede any provisions contained herein relating to such Superior Right that
conflict with the exercise or application of such Superior Right, and the
Corporation shall provide written notice thereof to all holders of record of the
Series A Convertible Preferred Stock; provided, however, that the holders of
                                      --------  -------
two-thirds of the then outstanding Series A Convertible Preferred Stock may
waive the incorporation of any such Superior Right by providing written notice
of such waiver to the Corporation.

         (d) The provisions of this Section 8 will terminate as such time the
proceeds from all Financing Transactions entered into from the time of the
filing of this Certificate of Designation, including the proceeds from all
issuances of the Series A Convertible Preferred Stock, equals or exceeds, in the
aggregate, fifteen million dollars ($15,000,000) (the "Superior Right
Termination Date").

         9.      Closing of Books. The Corporation will at no time close its
                 ----------------
transfer books against the transfer of any Series A Convertible Preferred Stock
or of any shares of Common Stock issued or issuable upon the conversion of any
shares of Series A Convertible Preferred Stock in any manner which interferes
with the timely conversion of such Series A Convertible Preferred Stock, except
as may otherwise be required to comply with applicable securities laws.

         (a) 10. Loss, Theft, Destruction of Preferred Stock. Upon receipt of
                 -------------------------------------------
evidence satisfactory to the Corporation of the loss, theft, destruction or
mutilation of certificates representing shares of Series A Convertible Preferred
Stock and, in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation (which shall not include
the posting of any bond), or, in the case of any such mutilation, upon surrender
and cancellation of the Series A Convertible Preferred Stock certificate, the
Corporation shall make, issue and deliver, in lieu of such lost, stolen,
destroyed or mutilated certificates for Series A Convertible Preferred Stock,
new certificates for Series A Convertible Preferred Stock of like tenor.



certificate of designation.doc
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