CERTIFICATE OF DESIGNATION,
                          OF THE RIGHTS AND PREFERENCES
                                       OF
              SERIES B CONVERTIBLE NON REDEEMABLE PREFERRED SHARES
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PURSUANT TO SECTION 78.195 OF THE GENERAL CORPORATION LAW OF THE STATE OF NEVADA

      Essential Reality, Inc. a corporation organized and existing under the
laws of the State of Nevada (the "Company"), hereby certifies that the following
resolutions were adopted by the Board of Directors of the Company pursuant to
the authority of the Board of Directors.

      RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Company (the "Board of Directors" or the "Board") in
accordance with the provisions of its Articles of Incorporation and Bylaws, each
as amended through the date hereof, the Board of Directors hereby amends Article
Fourth of the Amended and Restated Articles of Incorporation of the Company (the
"Articles") to authorize a series of Series B Convertible Non Redeemable
Preferred Shares, $.001 par value per share (the "Preferred Stock"), and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, privileges, powers and restrictions thereof as follows:

I. CERTAIN DEFINITIONS

      For purposes of this amendment, capitalized terms are defined in this
amendment or shall have the following meanings:

      "Common Stock" means the common stock of the Company.

      "Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or political subdivision
thereof) or other entity of any kind.

II. DESIGNATION AND AMOUNT

      The designation of this series, which consists of 1,995,599 of Preferred
Stock, is the Series B Convertible Non Redeemable Preferred Stock (the "Series B
Preferred Stock") and the par value shall be $.001 per share.

III. CONVERSION

      (a) The Series B Preferred Stock shall be automatically converted into
shares of Common Stock upon the effectiveness of a certificate of amendment to
the Articles duly filed with the Secretary of State of Nevada authorizing a
sufficient number of shares of Common Stock of the Company to enable the
conversion of all shares of Preferred Stock of the Company then outstanding (the
"Conversion Date"). Any conversion under this Section III (a) shall entitle
Holder to receive 700 shares of Common Stock for each share of Series B
Preferred Stock (subject to appropriate adjustment in the event of any stock
dividend, stock split, combination or other similar recapitalization affecting
such shares). Upon the entire conversion of the Series B Preferred Stock, the
Series B Preferred Stock shall be returned to the Company for cancellation. No
shares of the Company's Series A 6% Convertible Non Redeemable Preferred Stock,
$.001 par value per share (the "Series A Preferred Stock") shall convert into
Common Stock prior to the conversion of the Company's Series B Preferred Stock;
provided, however, that both Series A Preferred Stock and Series B Preferred
Stock can convert into Common Stock simultaneously.


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      (b) Upon the Conversion Date, all outstanding Series B Preferred Stock
shall immediately convert into the right to receive Common Stock. Within ten
(10) business days of the Conversion Date, the Company shall provide notice to
the holders of the Series B Preferred Stock that such conversion has occurred.
Promptly following the receipt of such notice from the Company that the Series B
Preferred Stock has been converted into Common Stock, the holders of the Series
B Preferred Stock shall surrender the certificate or certificates for such
shares of Series B Preferred Stock at the office of the Company's transfer agent
(or at the principal office of the Company if the Company serves as its own
transfer agent). If required by the Company, certificates surrendered for
conversion shall be endorsed or accompanied by a written instrument or
instruments of transfer, in form satisfactory to the Company, duly executed by
the registered holder of his, her or its attorney duly authorized in writing.
The Company shall, as soon as practicable after the Conversion Date, and in all
events within ten (10) business days of receipt of the certificate or
certificates surrendered for conversion, issue and deliver at such office to
such holder, a certificate or certificates for the number of shares of Common
Stock to which such holder shall be entitled; provided however, that the Company
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon conversion of any Series B Preferred Stock until the Series
B Preferred Stock is either delivered for conversion to the Company or any
transfer agent for the Series B Preferred Stock or Common Stock, or the Holder
notifies the Company that such Series B Preferred Stock has been lost, stolen or
destroyed and provides an agreement reasonably acceptable to the Company to
indemnify the Company from any loss incurred by it in connection therewith. No
fractional shares of Common Stock shall be issuable upon a conversion hereunder
and the number of shares to be issued shall be rounded up to the nearest whole
share. If a fractional share interest arises upon any conversion hereunder, the
Company shall eliminate such fractional share interest by causing to be issued
to Holder an additional full share of Common Stock. The Company covenants that
all shares of Common Stock that shall be so issuable shall, upon issue, be duly
and validly authorized, issued and fully paid and nonassessable.

      (c) In case of any reclassification of the common stock, any consolidation
or merger of the Company with or into another Person, the sale or transfer of
all or substantially all of the assets of the Company or any compulsory share
exchange pursuant to which the Common Stock is converted into other securities,
cash or property, then each holder of Series B Preferred Stock then outstanding
shall have the right thereafter to convert such Series B Preferred Stock only
into the shares of stock and other securities and property receivable upon or
deemed to be held by holders of common stock of the Company following such
reclassification, consolidation, merger, sale, transfer or share exchange
(except in the event the property is cash, then the Holder shall have the right
to convert the Series B Preferred Stock and receive cash in the same manner as
other stockholders), and the Holder shall be entitled upon such event to receive
such amount of securities or property as the shares of the Common Stock into


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which such Series B Preferred Stock could have been converted immediately prior
to such reclassification, consolidation, merger, sale, transfer or share
exchange would have been entitled. The terms of any such consolidation, merger,
sale, transfer or share exchange shall include such terms so as to continue to
give to the holder the right to receive the securities or property set forth in
this Section III (c) upon any conversion following such consolidation, merger,
sale, transfer or share exchange. This provision shall similarly apply to
successive reclassifications, consolidations, mergers, sales, transfers or share
exchanges.

      (d) The Company covenants that it will authorize, reserve and keep
available, such number of shares of Common Stock as shall be issuable upon the
conversion of all outstanding shares of Series B Preferred Stock free from
preemptive rights or any other actual contingent purchase rights of persons
other than the Holders of Series B Preferred Stock,

      (e) The issuance of certificates for shares of Common Stock on conversion
of Series B Preferred Stock shall be made without charge to the Holder for any
documentary stamp or similar taxes that may be payable in respect of the issue
or delivery of such certificate, provided that the Company shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issuance and delivery of any such certificate upon conversion in a name other
than that of the Holder and the Company shall not be required to issue or
deliver such certificates unless or until the person or persons requesting the
issuance thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.

IV. RANK

      The Series B Preferred Stock shall, as to redemptions, and the
distribution of assets upon liquidation, dissolution or winding up of the
Company, rank (i) prior to the Company's Common Stock; (ii) prior to any class
or series of capital stock of the Company hereafter created that, by its terms,
ranks junior to the Series B Preferred Stock ("Junior Securities"); (iii) junior
to any class or series of capital stock of the Company hereafter created (with
the consent of the holders of a majority of the outstanding Series B Preferred
Stock) which by its terms ranks senior to the Series B Preferred Stock ("Senior
Securities"); and (iv) pari passu with the Series A Preferred Stock and any
other series of preferred stock of the Company hereafter created (with the
consent of the holders of a majority of the outstanding Series B Preferred
Stock) which by its terms ranks on a parity ("Pari Passu Securities") with the
Series B Preferred Stock. The foregoing notwithstanding so long as any Series B
Preferred Stock is outstanding without the consent of 66 2/3% of the holders of
the outstanding Series B Preferred Stock (voting as a separate class), the
Company shall not authorize any senior securities, pari passu securities or
junior securities other than Common Stock.


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V. LIQUIDATION PREFERENCE

      (a) In the event of any voluntary or involuntary liquidation, dissolution,
Change of Control or winding up of the Company, the holders of shares of Series
B Preferred Stock then outstanding shall be entitled to be paid out of the
assets of the Company available for distribution to its shareholders, after and
subject to the payment in full of all amounts required to be distributed to the
holders of any class or series of stock of the Company ranking on liquidation
prior and in preference to the Series B Preferred Stock, but before any payment
shall be made to the holders of Common Stock or any other Junior Shares, an
amount equal to $3.56 per share of Series B Preferred Stock (subject to
appropriate adjustment in the event of any stock dividend, stock split,
combination or other similar recapitalization affecting such shares). If upon
any such liquidation, dissolution, Change of Control or winding up of the
Company the remaining assets of the Company available for distribution to its
shareholders shall be insufficient to pay the holders of shares of Series B
Preferred Stock the full amount to which they shall be entitled, the holders of
shares of Series B Preferred Stock and any other class or series of stock
ranking on liquidation on a parity with the Series B Preferred Stock shall share
ratably in any distribution of the remaining assets and funds of the Company in
proportion to the respective amounts which would otherwise be payable in respect
of the shares held by them upon such distribution if all amounts payable on or
with respect to such shares were paid in full. The Common Stock shall constitute
Junior Shares hereunder. For the purposes of hereof, "Change of Control" shall
mean (i) the sale, transfer or other conveyance of all or substantially all of
the assets of the Company or (ii) the merger or consolidation of the Company
with or into any other entity whereafter the stockholders of the Company
immediately prior to such merger or consolidation, fail to own fifty percent
(50%) or more of the voting power of the surviving entity. The forgoing
notwithstanding, Change of Control shall not include any transaction of the
Company with AllianceCorner Distributors, Inc., or its successors or
shareholders.

      (b) After the payment of all preferential amounts required to be paid to
the holders of the Series B Preferred Stock and any other class or series of
stock of the Company ranking on liquidation on a parity with the Series B
Preferred Stock, upon the dissolution, liquidation or winding up of the Company,
the Series B Preferred Stock shall participate (on an as-converted to Common
Stock basis) with the holders of shares of Common Stock then outstanding in the
remaining assets and funds of the Company available for distribution to its
shareholders after the payment of any preferential amount otherwise payable on
any capital stock of the Company.

VI. VOTING RIGHTS

      Except as otherwise required by law or as otherwise set forth herein, the
holders of the Series B Preferred Stock shall be entitled to vote on all matters
on which holders of Common Stock are entitled to vote, including, without
limitation, the election of directors. Each holder of Series B Preferred Stock
shall be entitled to one vote per share of Common Stock into which the Series B
Preferred Stock held by it is convertible at the record date for determination
of the holders of Series B Preferred Stock entitled to vote, or if no such
record date is established, at the date such vote is taken or any written
consent of holders of Series B Preferred is solicited.

VIII. NO IMPAIRMENT

      The Company will not, by amendment of its Certificate of Incorporation or
Bylaws or through any reorganization, 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 Company but will at all times in good faith assist
in the carrying out of all the provisions of the Series B Preferred Stock 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 the Series B Preferred Stock
against impairment.


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IX. AMENDMENT

      No amendment to this Certificate of Designation of the Rights and
Preferences of Series B Convertible Non Redeemable Preferred Shares or the
Company's Certificate of Incorporation changing or inconsistent with the terms
hereof shall be permitted without the consent of 66 2/3% of the holders of the
outstanding Series B Preferred Stock (voting as a separate class) so long as
there is any Series B Preferred Stock outstanding.


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      IN WITNESS WHEREOF, Essential Reality, Inc. has caused this Certificate to
be signed by Humbert B.Powell, III, its Chairman of the Board, and attested by
Brian Jedwab, General Counsel, this ___ day of June, 2004.


                                                ESSENTIAL REALITY, INC.,
                                                a Nevada corporation

                                                By:___________________________
                                                Name: Humbert Powell
                                                Title: Chairman of the Board
[Corporate Seal]
ATTEST:

By:______________________
     Brian Jedwab


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