EXHIBIT 4.11


                         CERTIFICATE OF THE DESIGNATION,
                   PREFERENCES, RIGHTS AND LIMITATIONS OF THE
                           SERIES P PREFERRED STOCK OF
                                HEALTHWATCH, INC.


         HealthWatch, Inc., hereinafter called the "Corporation", a corporation
organized and existing under the Minnesota Business Corporation Act does hereby
certify that, pursuant to authority conferred upon the Board of Directors by the
Articles of Incorporation, as amended, of the Corporation, said Board of
Directors at a meeting duly called and held on August 27, 1998, and at which a
quorum was at all times present, duly adopted a Resolution providing for the
issuance of a series of 400,000 shares of Series P Preferred Stock, which
Resolution is as follows:

         "RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of this Corporation in accordance with the
provisions of its Articles of Incorporation, as amended, a series of Preferred
Stock of the Corporation be and it hereby is given the distinctive designation
of "Series P Preferred Stock" (hereinafter referred to as the "Series P
Preferred Stock"), said Series to consist of Four Hundred Thousand (400,000)
shares of the stated value of Ten Dollars ($10.00) per share ("Stated Value").
The preferences and relative, participating, optional or other special rights,
and the qualifications, limitations or restrictions thereof shall be as follows:

         1.       Dividends

         (a)      Subject to the following, the holders of shares of Series P
                  Preferred Stock shall be entitled to receive dividends at the
                  rate of 12% (as adjusted for any stock dividends, combinations
                  or splits with respect to such shares) per annum from the date
                  of issuance to January 31, 1999, payable out of funds legally
                  available therefor; provided, however, that such dividends
                  shall not be paid and the dividends on the Series P Preferred
                  Stock shall terminate and cease to accrue in the event that
                  the Series P Preferred Stock shall become convertible into
                  shares of the Corporation's Common Stock in accordance with
                  Section 4 hereof on or before January 31, 1999. In the event
                  that the Series P Preferred Stock has not become convertible
                  into shares of the Corporation's Common Stock in accordance
                  with Section 4 hereof prior to February 1, 1999, the dividends
                  accrued to that date shall be due and owing and the holders of
                  shares of Series P Preferred Stock shall be entitled to
                  receive dividends at the rate of 18% (as adjusted for any
                  stock dividends, combinations or splits with respect to such
                  shares) per annum from February 1, 1999 to August 1, 1999, or,
                  if earlier, the date upon which such shares shall become
                  convertible into shares of the Corporation's Common Stock,
                  payable out of funds legally available therefor. In the event
                  that the Series P Preferred Stock has not become convertible
                  into shares of the Corporation's Common Stock prior to

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                  August 1, 1999, the dividends accrued to that date shall be
                  due and owing and the holder of shares of Series P Preferred
                  Stock shall be entitled to receive dividends at the rate of
                  24% (as adjusted for any stock dividends, combinations or
                  splits with respect to such shares) per annum from August 1,
                  1999 until such date as the Series P Preferred Stock shall
                  become convertible into shares of the Corporation's Common
                  Stock, payable out of funds legally available therefor. Such
                  dividends shall commence upon issuance and shall be payable in
                  preference to any dividend to any shares of Common Stock, and
                  shall be cumulative. Dividends earned after February 1, 1999
                  shall be paid semi-annually on June 30 and December 31,
                  commencing June 30, 1999, and in every case shall be paid to
                  holders of record as of the close of business five business
                  days before the dividend payment date. Dividends shall be paid
                  in cash or, at the option of the holders of the shares of
                  Series P Preferred Stock, in shares of the Corporation's
                  Common Stock, the value of such stock for the purpose of any
                  such payment to be equal to the average five-day closing bid
                  price for the Common Stock for the five-day period immediately
                  preceding the record date for such payment.

         (b)      No dividends (other than those payable solely in the Common
                  Stock of the Corporation) shall be paid on any shares of
                  Common Stock of the Corporation during any fiscal year of the
                  Corporation until dividends, combinations or splits with
                  respect to such shares) on the Series P Preferred Stock shall
                  have been paid or declared and set apart during that fiscal
                  year and any prior year in which dividends accumulated but
                  remain unpaid. Following any such payment or declaration, the
                  holders of any shares of Common Stock shall be entitled to
                  receive dividends, payable out of funds legally available
                  therefor, when, as and if declared by the Board of Directors.

         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 to
purchase any such securities or evidences of indebtedness, then, in each such
case the holders of the Series P Preferred Stock shall be entitled to a
proportionate share of any such distribution as though the holders of the Series
P Preferred Stock were the holders of the number of shares of Common Stock of
the Corporation into which their shares of Series P Preferred Stock were then
convertible as of the record date (assuming for this provision that there was no
limitation on the right of conversion of the Series P Preferred Stock) fixed for
the determination of the holders of Common Stock of the Corporation entitled to
receive such distribution.


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         2.       Liquidation Preference

         (a)      In the event of any liquidation, dissolution or winding up of
                  the Corporation, whether voluntary or involuntary, the holders
                  of the Series P Preferred Stock shall be entitled to receive,
                  prior and in preference to any distribution of any of the
                  assets or surplus funds of the Corporation to the holders of
                  shares of Common Stock by reason of their ownership thereof,
                  the amount of $10.00 per share (as adjusted for any stock
                  dividends, combinations or splits with respect to such
                  shares), plus all accrued or declared but unpaid dividends on
                  such shares for each share of Series P Preferred Stock then
                  held by them. If upon the occurrence of such event, the assets
                  and funds thus distributed among the holders of the Series P
                  Preferred Stock shall be insufficient to permit the payment to
                  such holders of the full aforesaid preferential amount, then
                  the entire assets and funds of the Corporation legally
                  available for distribution shall be distributed ratably among
                  the holders of the Series P Preferred Stock and holders of any
                  other shares of Preferred Stock of the Corporation in
                  proportion to the preferential amount each such holder is
                  otherwise entitled to receive.

         (b)      After payment to the holders of the Series P Preferred Stock
                  of the amounts set forth in Section 2(a) above, and the
                  payment to the holders of any other series of Preferred Stock
                  of the Corporation of any liquidation preferences for such
                  additional series of Preferred Stock, the entire remaining
                  assets and funds of the Corporation legally available for
                  distribution, if any, shall be distributed among the holders
                  of the Common Stock in proportion to the shares of Common
                  Stock then held by them.

         (c)      Whenever the distribution provided for in this Section 2 shall
                  be payable in securities or property other than cash, the
                  value of such distribution shall be the fair market value of
                  such securities or other property as determined in good faith
                  by the Board of Directors.

         3.       Voting Rights

         Unless and except to the extent otherwise required by law, the holders
of the Series P Preferred Stock shall have no voting power; provided that if any
dividends on the Series P Preferred Stock declared by the Board of Directors in
accordance with Section 1 hereof have not been paid for a period of one year or
more, the holders of Series P Preferred Stock shall, until such dividends have
been paid, be entitled, with the holders of the Common Stock, voting as a class,
to vote or act by written consent for the election of directors, with the number
of votes per share of Series P Preferred Stock in such election to be equal to
ten shares of Common Stock (as adjusted for any stock dividends, combinations or
splits with respect to such shares). Unless and except to the extent otherwise
required by law, the holders of the Series P Preferred Stock shall have no right
to vote as a class with respect to any matter. Should the Series P Preferred
Stock be


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entitled to vote on any matter pursuant to a requirement of law, each holder of
such stock shall be entitled to one vote in respect to each share of such stock
held of record in respect to such matter, unless some other vote is required by
law.

         4.       Conversion of Series P Preferred Stock into Common Stock

         (a)      Subject to the following conversion rights being approved by
                  the holders of a majority of a quorum of the shares of the
                  Corporation's Common Stock and the provisions of this Section
                  4, the holder of record of any share or shares of Series P
                  Preferred Stock and the Corporation shall have the right, at
                  his or its option, as the case may be, at any time after
                  issuance, to convert or to cause the conversion of each said
                  share or shares of Series P Preferred Stock into ten (10) (as
                  adjusted for any stock dividends, combinations or splits with
                  respect to such shares) fully-paid and non-assessable shares
                  of Common Stock, $.01 par value (herein referred to as "Common
                  Stock), of the Corporation. The Corporation shall not be
                  required to issue fractional shares in connection with the
                  conversion of any of the Series P Preferred Stock and shall,
                  in lieu thereof, pay to the holder requesting conversion, an
                  amount equal to the value (determined by the Corporation's
                  Board of Directors) of such fractional share.

         (b)      Any holder of a share or shares of Series P Preferred Stock
                  desiring to convert such Series P Preferred Stock into Common
                  Stock, shall surrender the certificate or certificates
                  representing the share or shares of Series P Preferred Stock
                  so to be converted, duly endorsed (if required by the
                  Corporation) to the Corporation or in blank, at the office of
                  any Transfer Agent for the Series P Preferred Stock (or such
                  other place as may be designated by the Corporation), and
                  shall give written notice to the Corporation at said office
                  that he elects to convert the same as provided above, and
                  setting forth the name or names (with the address or
                  addresses) in which the shares of Common Stock are to be
                  issued.

         (c)      Conversion of Series P Preferred Stock shall be subject to the
                  following additional terms and provisions:

                  (1)      As promptly as practicable after the surrender for
                           conversion of any Series P Preferred Stock , the
                           Corporation shall deliver or cause to be delivered at
                           the principal office of the Transfer Agent for the
                           Series P Preferred Stock (or such other place as may
                           be designated by the Corporation), to or upon the
                           written order of the holder of such Series P
                           Preferred Stock , certificates representing the
                           shares of Common Stock issuable upon such conversion
                           issued in such name or names as such holder may
                           direct. Shares of the Series P Preferred Stock shall
                           be deemed to have been converted as of the close of
                           business on the date of the surrender of the Series P


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                           Preferred Stock for conversion, as provided above,
                           and the rights of the holders of such Series P
                           Preferred Stock shall cease at such time, and the
                           person or persons in whose name or names the
                           certificates for such shares are to be issued shall
                           be treated for all purposes as having become the
                           record holder or holders of such Common Stock at such
                           time; provided, however, that any such surrender on
                           any date when the stock transfer books of the
                           Corporation shall be closed shall constitute the
                           person or persons in whose name or names the
                           certificate for such shares are to be issued as the
                           record holder or holders thereof for all purposes at
                           the close of business on the next succeeding day on
                           which such stock transfer books are open.

                  (2)      The Corporation shall pay all dividends accrued on
                           the shares of Series P Preferred Stock surrendered
                           for conversion, such payment to be made in cash or at
                           the option of the Corporation, in shares of the
                           Corporation's Common Stock, the value of such stock
                           to be determined as set forth in Section 1(a) hereof.

                  (3)      The Corporation shall at all times reserve and keep
                           available solely for the purpose of issuance upon
                           conversion of Series P Preferred Stock , as herein
                           provided, such number of shares of Common Stock as
                           shall be issuable upon the conversion of all
                           outstanding Series P Preferred Stock.

                  (4)      Prior to March 31, 2000, the holders of Series P
                           Preferred Stock shall not be entitled to convert nor
                           shall the Corporation have the right to require
                           conversion of the Series P Preferred Stock held by
                           such holders to the extent that such conversion would
                           result in such holders beneficially owning (as
                           determined in accordance with Section 13(d) of the
                           Securities Exchange Act of 1934 and the Rules
                           thereunder) in the aggregate in excess of forty-five
                           percent (45%) of the then issued and outstanding
                           shares of the Corporation's Common Stock.

         (d)      The issuance of certificates for shares of Common Stock upon
                  conversion of the Series P Preferred Stock shall be made
                  without charge for any tax in respect of such issuance.
                  However, if any certificate is to be issued in a name other
                  than that of the holder of record of the Series P Preferred
                  Stock so converted, the person or persons requesting the
                  issuance thereof shall pay to the Corporation the amount of
                  any tax which may be payable in respect of any transfer
                  involved in such issuance, or shall establish to the
                  satisfaction of the Corporation that such tax has been paid or
                  is not due and payable.


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         5.       General

         (a)      In the event that the Corporation shall at any time prior to
                  conversion either (a) subdivide the outstanding shares of
                  Common Stock into a greater number of shares, (b) combine the
                  outstanding shares of Common Stock into a smaller number of
                  shares, (c) change the outstanding shares of Common Stock into
                  the same or a given number of shares of any other class or
                  classes of stock, (d) declare on or in respect of the Common
                  Stock a dividend payable in shares or other securities of the
                  Corporation, then the holders of the Series P Preferred Stock
                  shall be entitled to receive the same number of shares or
                  other securities of the Corporation, or shall be entitled to
                  subscribe for and purchase at the same price that the shares
                  or securities are offered to holders of Common Stock, the
                  number of such shares or the amount of such securities as will
                  represent the same proportion of the outstanding Common Stock
                  prior to such increase or decrease as they would have been
                  entitled to receive or subscribe for, as the case may be, had
                  they been holders of the number of shares of Common Stock into
                  which their shares of Series P Preferred Stock were
                  convertible on the record date (assuming for the purposes of
                  this provision that there was no limitation on the right of
                  conversion of the Series P Preferred Stock) for any such
                  dividend or subscription. The Board of Directors shall
                  determine what adjustments shall be made in the Stated Value
                  in order to appropriately reflect and account for any such
                  change.

         (b)      In the event the Corporation at any time while any of the
                  shares of Series P Preferred Stock are outstanding shall be
                  consolidated with or merged into any other corporation or
                  corporations, or shall sell or lease all or substantially all
                  of its property and business as an entirety, lawful provision
                  shall be made as part of the terms of such consolidation,
                  merger, sale, or lease so that the holder of any shares of
                  Series P Preferred Stock may thereafter receive in lieu of
                  such shares of Common Stock otherwise issuable to him upon
                  conversion of his shares of Series P Preferred Stock (assuming
                  for the purpose of this provision that there was no limitation
                  on the right of conversion of the Series P Preferred Stock),
                  but at the conversion rate which would otherwise be in effect
                  at the time of conversion as hereinbefore provided, the same
                  kind and amount of securities or assets as may be issuable,
                  distributable, or payable upon such consolidation, merger,
                  sale, or lease, with respect to shares of Common Stock of the
                  Corporation. The Board of Directors shall determine what
                  adjustments shall be made in the Stated Value in order to
                  appropriately reflect and account for any such change.

         (c)      Nothing herein shall be deemed to require the Corporation in
                  the event of any such subdivision, combination,
                  reclassification, recapitalization, consolidation, merger or
                  sale of assets, or liquidation, dissolution or


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                  winding up, to issue or distribute fractional interests in
                  shares of capital stock or any other security of the
                  Corporation or another issuer, and the Corporation may make
                  such arrangements as the Board of Directors of the Corporation
                  shall approve with respect to any such event for settlement in
                  lieu of issuance of a fractional interest in a share of
                  capital stock or other security of the Corporation or another
                  issuer to any holder of the Series P Preferred Stock.

         (d)      The shares of Series P Preferred Stock shall not be subject to
                  the operation of a purchase, retirement or sinking fund.

         (e)      The issuance of additional shares of Series P Preferred Stock
                  shall not be subject to any restrictions as to issuance, nor
                  shall the holders of the Series P Preferred Stock be entitled
                  to any restriction with respect to the issuance of shares of
                  any other series of the Corporation's Common Stock or
                  Preferred Stock, or as to the powers, preferences or rights of
                  any such other series; provided that no series of additional
                  shares of Preferred Stock shall have any liquidation or other
                  similar rights in preference to the Series P Preferred Stock."


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         IN WITNESS WHEREOF, I have hereunto subscribed my hand this 30th day of
September, 1998.

                                           HealthWatch, Inc.



                                           By /s/ Paul Harrison
                                              ----------------------------------
                                                         Paul Harrison
                                              Chairman of the Board of Directors