EXHIBIT 3

              CERTIFICATE OF DESIGNATION OF PREFERENCES AND RIGHTS
               OF SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
                                       OF
                                  U-SHIP, INC.

         U-Ship, Inc., a corporation organized and existing under the laws of
the State of Utah (the "Corporation"), hereby certifies (the "Certificate") as
follows:

         1. The name of the corporation is U-Ship, Inc. (the "Corporation").

         2. That pursuant to authority vested in it by the provisions of its
Articles of Incorporation, as amended, of the Corporation, the Board of
Directors of said Corporation by action in writing by the Board of Directors
taken pursuant to Section 16-10a-602 of the Utah Business Corporation Act
("UBCA"), at which meeting a quorum of directors was present and acting
throughout, and by action of the Committee thereof taken on March 23, 1998, did
adopt, without shareholder action because shareholder action was not required
pursuant to the Company's Articles of Incorporation, the following resolution
authorizing the creation and issuance of a series of preferred stock designated
as Series A Cumulative Convertible Preferred Stock:

         RESOLVED, that the Corporation hereby designates 4,500,000 shares of
its authorized but unissued preferred shares, $0.004 par value, as Series A
Cumulative Convertible Preferred Stock, which shall have the following
designations, preferences, rights, qualifications, limitations and restrictions
in addition to those set forth in the Articles of Incorporation, as amended, of
the Corporation:


         1. Designation, Number of Shares, Stated Value.

         Four Million Five Hundred Thousand (4,500,000) shares of preferred
stock shall be designated Series A Cumulative Convertible Preferred Stock
(hereinafter sometimes referred to as the "Preferred Stock" or as this
"Series"). Shares of this Series shall have a stated value of $0.60 per share.


         2. Voting Privileges.

         (a) General. Each holder of Preferred Stock shall have that number of
votes on all matters submitted to the stockholders that is equal to the number
of shares of Common Stock into which such holder's shares of Preferred Stock are
then convertible, as hereinafter provided. Each holder of Common Stock shall
have one vote on all matters submitted to the stockholders for each share of
Common Stock standing in the name of such holder on the books of the
Corporation. Except as otherwise provided herein, and except as otherwise
required by agreement or law, the shares of capital stock of the Corporation
shall vote as a single class on all matters submitted to the stockholders.

         (b) Additional Class Votes by Preferred Stock. Without the affirmative
vote or written consent of the holders (acting together as a class) of a
majority of the shares of Preferred Stock at the time outstanding, the
Corporation shall not:

         (1)      authorize or issue any additional shares of Preferred Stock,
                  or any shares of stock having priority over Preferred Stock or
                  ranking on a parity therewith as to the payment or
                  distribution of assets upon the liquidation or dissolution,
                  voluntary or involuntary, of the

<PAGE>


                  Corporation, or the payment of dividends; or

         (2)      amend the Articles of Incorporation or this Certificate of the
                  Corporation so as to alter any existing provision relating to
                  Preferred Stock or the holders thereof or waive any of the
                  rights granted to the holders of the Preferred Stock by the
                  Articles of Incorporation of the Corporation or herein; or

         (3)      sell, lease or otherwise dispose of all or substantially all
                  of the assets of the Corporation or of any subsidiary of the
                  Corporation, nor shall the Corporation consolidate with or
                  merge into any other corporation or entity, or permit any
                  other corporation or entity to consolidate or merge into the
                  Corporation.

         (c) No Cumulative Voting. No holder of shares of capital stock of the
Corporation shall have any cumulative voting rights.

         3. Dividends.

         (a) General. The holders of shares of Preferred Shares shall be
entitled to receive cumulative cash dividends, when and as declared by the Board
of Directors out of funds legally available therefor, at a rate of $0.030 per
share per annum and no more, before any dividend or distribution in cash or
other property (other than dividends payable in stock ranking junior to the
Preferred Stock as to dividends and upon liquidation, dissolution or winding-up)
on any class or series of stock of the Corporation ranking junior to the
Preferred Stock as to dividends or on liquidation, dissolution or winding-up
shall be declared and paid or set apart for payment.

         (b) Payment. Dividends on the Preferred Stock shall be payable, when
and as declared by the Board of Directors, on May 1 of each year, commencing May
1, 1999.

         (c) Dividends Cumulative. Dividends on the Preferred Stock shall be
cumulative and accrue from and after the date of original issuance thereof,
whether or not declared by the Board of Directors. Accrued dividends shall not
bear interest.

         4. Other Terms of the Preferred Stock.


         (a) Liquidation Preference. In the event of an involuntary or voluntary
liquidation or dissolution of the Corporation at any time, the holders of shares
of Preferred Stock shall be entitled to receive out of the assets of the
Corporation an amount equal to the greater of (i) $.60 per share (appropriately
adjusted to reflect stock splits, stock dividends, reorganizations,
consolidations and similar changes hereafter effected), plus dividends unpaid
and accumulated or accrued thereon, if any; or (ii) the amount per share of
Common Stock which the holder of Preferred Stock would have received upon such
event had the Preferred Stock been converted into shares of Common Stock
(appropriately adjusted to reflect stock splits, stock dividends,
reorganizations, consolidations and similar changes hereinafter effected). In
the event of either an involuntary or a voluntary liquidation or dissolution of
the Corporation payment shall be made to the holders of shares of Preferred
Stock in the amounts herein fixed before any payment shall be made or any assets
distributed to the holders of the Common Stock or any other class of shares of
the Corporation ranking junior to the Preferred Stock with respect to payment
upon dissolution or liquidation of the Corporation. If upon any liquidation or
dissolution of the Corporation, the assets available for distribution shall be
insufficient to pay the holders of all outstanding shares of Preferred Stock the
full amounts to which they respectively shall be entitled, the holders of such
shares shall share pro rata in any such distribution.

<PAGE>


         (b) Conversion Right. At the option of the holders thereof, beginning
November 1, 1998, the shares of Preferred Stock, together with all accrued but
unpaid dividends thereon (the "Dividends") shall be convertible, at the office
of the Corporation (or at such other office or offices, if any, as the Board of
Directors may designate), into fully paid and nonassessable shares (calculated
as to each conversion to the nearest 1/100th of a share) of Common Stock of the
Corporation, at the conversion price, determined as hereinafter provided, in
effect at the time of conversion, each share of Preferred Stock being deemed to
have a value of $.60 for the purpose of such conversion. The price at which
shares of Common Stock shall be delivered upon conversion of the Preferred Stock
and Dividends (herein called the "Conversion Price") shall be initially $.60 per
share of Common Stock (i.e., at an initial conversion rate of one share of
Common Stock for each share of Preferred Stock), provided, however, that such
initial Conversion Price shall be subject to adjustment from time to time in
certain instances as hereinafter provided. The following provisions shall govern
such right of conversion (where appropriate, references to the Preferred Stock
shall also refer to the conversion of Dividends thereon):

         (1)      Manner of Conversion. In order to convert shares of Preferred
                  Stock into shares of Common Stock of the Corporation, the
                  holder thereof shall surrender at any office hereinabove
                  mentioned the certificate or certificates therefor, duly
                  endorsed to the Corporation or in blank, and give written
                  notice to the Corporation at such office that such holder
                  elects to convert such shares. Shares of Preferred Stock shall
                  be deemed to have been converted immediately prior to the
                  close of business on the day of the surrender of such shares
                  for conversion as herein provided, and the person entitled to
                  receive the shares of Common Stock of the Corporation issuable
                  upon such conversion shall be treated for all purposes as the
                  record holder of such shares of Common Stock at such time. As
                  promptly as practicable on or after the conversion date, the
                  Corporation shall issue and deliver or cause to be issued and
                  delivered at such office a certificate or certificates for the
                  number of shares of Common Stock of the Corporation issuable
                  upon such conversion.

                  Upon conversion of the Preferred Stock, accrued, unpaid
                  dividends shall be paid in additional shares of Common Stock.
                  Such additional shares of Common Stock shall be paid in full
                  shares only with a cash payment (based upon an assumed value
                  of $0.60 per share, subject to adjustment as provided in
                  Section 4(b)(3)(iii)) equal to the Current Market Value of any
                  fractional share.

         (2)      Adjustment of Conversion Price; General. The Conversion Price
                  shall be subject to adjustment from time to time as
                  hereinafter provided. Upon each adjustment of the Conversion
                  Price each holder of shares of Preferred Stock shall
                  thereafter be entitled to receive the number of shares of
                  Common Stock of the Corporation obtained by multiplying the
                  Conversion Price in effect immediately prior to such
                  adjustment by the number of shares issuable pursuant to
                  conversion immediately prior to such adjustment and dividing
                  the product thereof by the Conversion Price resulting from
                  such adjustment.

         (3)      Manner of Adjustment to Conversion Price Adjustment. The
                  Conversion Price shall be subject to adjustment from time to
                  time as follows:

                  (i) COMMON STOCK ISSUED AT LESS THAN THE CONVERSION PRICE. If
the Corporation shall issue any Common Stock other than Excluded Stock (as
hereinafter defined) without consideration or for a consideration per share less
than the Conversion Price in effect immediately prior to such issuance, the
Conversion Price in effect immediately prior to each such issuance shall
immediately (except as provided below) be reduced to the price determined by
dividing (1) an amount equal to the sum of (A) the number of shares of Common
Stock outstanding immediately prior to such issuance multiplied by the
Conversion Price

<PAGE>


in effect immediately prior to such issuance and (B) the consideration, if any,
received by the Corporation upon such issuance, by (2) the total number of
shares of Common Stock outstanding immediately after such issuance.

<PAGE>


         For the purposes of any adjustment of the Conversion Price pursuant to
clause (i), the following provisions shall be applicable:

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

         (B) CONSIDERATION OTHER THAN CASH. In the case of the issuance of
Common Stock (otherwise than upon the conversion of shares of capital stock or
other securities of the Corporation) for a consideration in whole or in part
other than cash, including securities acquired in exchange therefor (other than
securities by their terms so exchangeable), the consideration other than cash
shall be deemed to be the fair value thereof as determined by the Board of
Directors, irrespective of any accounting treatment; PROVIDED that such fair
value as determined by the Board of Directors shall not exceed the aggregate
Current Market Price (as defined below) of the shares of Common Stock being
issued as of the date the Board of Directors authorizes the issuance of such
shares.

         (C) OPTIONS AND CONVERTIBLE SECURITIES. In the case of the issuance of
(i) options, warrants or other rights to purchase or acquire Common Stock
(whether or not at the time exercisable), (ii) securities by their terms
convertible into or exchangeable for Common Stock (whether or not at the time so
convertible or exchangeable) or options, warrants or rights to purchase such
convertible or exchangeable securities (whether or not at the time exercisable):

             (1) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options, warrants or other rights to purchase
or acquire Common Stock shall be deemed to have been issued at the time such
options, warrants or rights were issued and for a consideration equal to the
consideration (determined in the manner provided in subclauses (A) and (B)
above), if any, received by the Corporation upon the issuance of such options,
warrants or rights plus the minimum purchase price provided in such options,
warrants or rights for the Common Stock covered thereby;

             (2) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such convertible or
exchangeable securities, or upon the exercise of options, warrants or other
rights to purchase or acquire such convertible or exchangeable securities and
the subsequent conversion or exchange thereof, shall be deemed to have been
issued at the time such securities were issued or such options, warrants or
rights were issued and for a consideration equal to the consideration, if any,
received by the Corporation for any such securities and related options,
warrants or rights (excluding any cash received on account of accrued interest
or accrued dividends), plus the additional consideration (determined in the
manner provided in subclauses (A) and (B) above, if any, to be received by the
Corporation upon the conversion or exchange of such securities, or upon the
exercise of any related options, warrants or rights to purchase or acquire such
convertible or exchangeable securities and the subsequent conversion or exchange
thereof;

             (3) on any change in the number of shares of Common Stock
deliverable upon exercise of any such options, warrants or rights or conversion
or exchange of such convertible or exchangeable securities or any change in the
consideration to be received by the Corporation upon such exercise, conversion
or exchange, including, but not limited to, a change resulting from the
anti-dilution provisions thereof, the Conversion Price as then in effect shall
forthwith be readjusted to such Conversion Price as would have been obtained had
an adjustment been made upon the issuance of such

<PAGE>


options, warrants or rights not exercised prior to such change or of such
convertible or exchangeable securities not converted or exchanged prior to such
change, upon the basis of such change;

             (4) on the expiration or cancellation of any such options, warrants
or rights, or the termination of the right to convert or exchange such
convertible or exchangeable securities, if the Conversion Price shall have been
adjusted upon the issuance thereof, the Conversion Price shall forthwith be
readjusted to such Conversion Price as would have been obtained had an
adjustment been made upon the issuance of such options, warrants, rights or such
convertible or exchangeable securities on the basis of the issuance of only the
number of shares of Common Stock actually issued upon the exercise of such
options, warrants or rights, or upon the conversion or exchange of such
convertible or exchangeable securities; and

             (5) if the Conversion Price shall have been adjusted upon the
issuance of any such options, warrants, rights or convertible or exchangeable
securities, no further adjustment of the Conversion Price shall be made for the
actual issuance of Common Stock upon the exercise, conversion or exchange
thereof; PROVIDED, HOWEVER, that no increase in the Conversion Price shall be
made pursuant to subclauses (1) or (2) of this subclause (C).

         (ii) EXCLUDED STOCK. "Excluded Stock" shall mean (A) shares of Common
Stock issued or reserved for issuance by the Corporation at any time as a stock
dividend payable in shares of Common Stock, or upon any subdivision or split-up
of the outstanding shares of Common Stock or Preferred Stock, or upon conversion
of shares of Preferred Stock and (B) any shares of Common Stock to be issued to
employees, consultants and advisors of the Corporation together with any such
shares that are repurchased by the Corporation and reissued to any such
employee, consultant or advisor, whether issued directly or pursuant to any
stock option plan; and (C) shares of Common Stock issued pursuant to outstanding
warrants, including warrants issued in connection with the issuance of the
Preferred Stock. All shares of Excluded Stock, which the Corporation has
reserved for issuance, shall be deemed to be outstanding for all purposes of
computations under subparagraph 4(b)(3)(i).

         (iii) STOCK DIVIDENDS, SUBDIVISIONS, RECLASSIFICATIONS OR COMBINATIONS.
If the Corporation shall (i) declare a dividend or make a distribution on its
Common Stock in shares of its Common Stock, (ii) subdivide or reclassify the
outstanding shares of Common Stock into a greater number of shares, or (iii)
combine or reclassify the outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect at the time of the record date for such
dividend or distribution or the effective date of such subdivision, combination
or reclassification shall be proportionately adjusted so that the holder of any
shares of Preferred Stock surrendered for conversion after such date shall be
entitled to receive the number of shares of Common Stock which he would have
owned or been entitled to receive had such Preferred Stock been converted
immediately prior to such date. Successive adjustments in the Conversion Price
shall be made whenever any event specified above shall occur.

         (iv) OTHER DISTRIBUTIONS. In case the Corporation shall fix a record
date for the making of a distribution to all holders of shares of its Common
Stock (i) of shares of any class other than its Common Stock or (ii) of evidence
of indebtedness of the Corporation or any subsidiary or (iii) of assets
(excluding cash dividends or distributions, and dividends or distributions
referred to in subparagraph 4(b)(3)(iii) above), or (iv) of rights or warrants
(excluding those referred to in subparagraph 4(b)(3)(i)(c) above), in each such
case the Conversion Price in effect immediately prior thereto shall be reduced
immediately thereafter to the price determined by dividing (1) an amount equal
to the difference resulting from (A) the number of shares of Common Stock
outstanding on such record date multiplied by the Conversion Price per share on
such record date, less (B) the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive) of said shares or evidences
of indebtedness or assets or rights or warrants to be so distributed, by (2) the
number of shares of Common Stock outstanding on such

<PAGE>


record date. Such adjustment shall be made successively whenever such a record
date is fixed. In the event that such distribution is not so made the Conversion
Price then in effect shall be readjusted, effective as of the date when the
Board of Directors determines not to distribute such shares, evidences of
indebtedness, assets, rights or warrants, as the case may be, to the Conversion
Price which would then be in effect if such record date had not been fixed.

         (v) CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE. In case of any
consolidation with or merger of the Corporation with or into another
corporation, or in case of any sale, lease or conveyance to another corporation
of the assets of the Corporation as an entirety or substantially as an entirety,
each share of Preferred Stock shall after the date of such consolidation,
merger, sale, lease or conveyance be convertible into the number of shares of
stock or other securities or property (including cash) to which the Common Stock
issuable (at the time of such consolidation, merger, sale, lease or conveyance)
upon conversion of such share of Preferred Stock would have been entitled upon
such consolidation, merger, sale, lease or conveyance; and in any such case, if
necessary, the provisions set forth herein with respect to the rights and
interests thereafter of the holders of the shares of Preferred Stock shall be
appropriately adjusted so as to be applicable, as nearly as may reasonably be,
to any shares of stock or other securities or property thereafter deliverable on
the conversion of the shares of Preferred Stock.

         (vi) ROUNDING OF CALCULATIONS; MINIMUM ADJUSTMENT. All calculations
under this subparagraph (b) shall be made to the nearest cent or to the nearest
one-hundredth (1/100th) of a share, as the case may be. Any provision of this
paragraph 4 to the contrary notwithstanding, no adjustment in the Conversion
Price shall be made if the amount of such adjustment would be less than $0.01,
but any such amount shall be carried forward and an adjustment with respect
thereto shall be made at the time of and together with any subsequent adjustment
which, together with such amount and any other amount or amounts so carried
forward, shall aggregate $0.01 or more.

         (vii) TIMING OF ISSUANCE OF ADDITIONAL COMMON STOCK UPON CERTAIN
ADJUSTMENTS. In any case in which the provisions of this subparagraph (b) shall
require that an adjustment shall become effective immediately after a record
date for an event, the Corporation may defer until the occurrence of such event
(A) issuing to the holder of any share of Preferred Stock converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the shares of Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such holder
any amount of cash in lieu of a fractional share of Common Stock pursuant to
subparagraph (b)(4) of this paragraph 4; PROVIDED that the Corporation upon
request shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares, and such cash,
upon the occurrence of the event requiring such adjustment.

         (viii) CURRENT MARKET PRICE. The Current Market Price at any date shall
mean, in the event the Common Stock is publicly traded, the average of the daily
closing prices per share of Common Stock for 20 consecutive trading days ending
no more than 10 business days before such date (as adjusted for any stock
dividend, split, combination or reclassification that took effect during such 30
business day period). The closing price for each day shall be the last reported
sale price regular way or, in case no such reported sale takes place on such
day, the average of the last closing bid and asked

<PAGE>


prices regular way, in either case on the principal national securities exchange
on which the Common Stock is listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, the closing sale price
for such day reported by Nasdaq, if the Common Stock is traded over-the-counter
and quoted in the Nasdaq SmallCap Market, or if the Common Stock is so traded,
but not so quoted, the average of the closing reported bid and asked prices of
the Common Stock as reported by Nasdaq or any comparable system or, if the
Common Stock is not listed on Nasdaq or any comparable system, the average of
the closing bid and asked prices as furnished by two members of the National
Association of Securities Dealers, Inc. selected from time to time by the
Corporation for that purpose. If the Common Stock is not traded in such manner
that the quotations referred to above are available for the period required
hereunder, Current Market Price per share of Common Stock shall be deemed to be
the fair value as determined by the Board of Directors, irrespective of any
accounting treatment.

         (ix) STATEMENT REGARDING ADJUSTMENTS. Whenever the Conversion Price
shall be adjusted as provided in subparagraph 4(b), the Corporation shall
forthwith file, at the office of any transfer agent for the Preferred Stock and
at the principal office of the Corporation, a statement showing in detail the
facts requiring such adjustment and the Conversion Price that shall be in effect
after such adjustment, and the Corporation shall, upon request of a holder of
Preferred Stock, also cause a copy of such statement to be sent by mail, first
class postage prepaid, to such holder at such holder's address appearing on the
Corporation's records. Each such statement shall be signed by the Corporation's
chief financial officer. Where appropriate, such copy may be given in advance
and may be included, as part of a notice required to be mailed under the
provision of subparagraph (b)(4).

         (4) Notice of Certain Events. In case at any time:

                  (i)      the Corporation shall declare any cash dividend on
                           its Common Stock at a rate in excess of the rate of
                           the last cash dividend theretofore paid;

                  (ii)     the Corporation shall pay any dividend payable in
                           stock upon its Common Stock or make any distribution
                           (other than regular cash dividends) to the holders of
                           its Common Stock;

                  (iii)    the Corporation shall offer for subscription pro rata
                           to the holders of its Common Stock any additional
                           shares of stock of any class or other rights;

                  (iv)     there shall be any capital reorganization, or
                           reclassification of the capital stock of the
                           Corporation, or consolidation or merger of the
                           Corporation with, or sale of all or substantially all
                           of its assets to, another corporation; or

                  (v)      there shall be a voluntary or involuntary
                           dissolution, liquidation or winding up of the
                           Corporation;

                  then, in any one or more of said cases, the Corporation shall
                  give written notice, by first-class mail, postage prepaid,
                  addressed to the registered holders of Preferred Stock at the
                  addresses of such holders as shown on the books of the
                  Corporation, of the date on which (a) the books of the
                  Corporation shall close or a record shall be taken for such
                  dividend, distribution or subscription rights, or (b) such
                  reorganization, reclassification, consolidation, merger, sale,
                  dissolution, liquidation or winding up shall take place, as
                  the case may be. Such notice shall also specify the date as of
                  which the holders of Common Stock of record shall participate
                  in such dividend, distribution or subscription rights, or
                  shall be entitled to exchange their Common Stock for
                  securities or other property deliverable upon such
                  reorganization, reclassification, consolidation, merger, sale,
                  dissolution, liquidation, or winding up, as the case may be.
                  Such written notice shall be given at least 20 days prior to

<PAGE>


                  the action in question and not less than 20 days prior to the
                  record date or the date on which the Corporation's transfer
                  books are closed in respect thereto.

         (5)      Board Adjustment. If any event occurs as to which in the
                  opinion of the Board of Directors of the Corporation the other
                  provisions of this paragraph ( b) are not strictly applicable
                  or if strictly applicable would not fairly protect the rights
                  of the holders of Preferred Stock in accordance with the
                  essential intent and principles of such provisions, then the
                  Board of Directors shall make an adjustment in the application
                  of such provisions, in accordance with such essential intent
                  and principles, so as to protect such rights as aforesaid.

         (6)      Common Stock Defined. As used in this paragraph ( b) the term
                  "Common Stock" shall mean and include the Corporation's
                  presently authorized Common Stock and shall also include any
                  capital stock of any class of the Corporation hereafter
                  authorized which shall not be limited to a fixed sum or
                  percentage in respect of the rights of the holders thereof to
                  participate in dividends or in the distribution of assets upon
                  the voluntary or involuntary liquidation, dissolution or
                  winding up of the Corporation; provided that the shares
                  receivable pursuant to conversion of shares of Preferred Stock
                  shall include shares designated as Common Stock of the
                  Corporation as of the date of issuance of such shares of
                  Preferred Stock, or, in case of any reclassification of the
                  outstanding shares thereof, the stock, securities or assets
                  provided for in subparagraph (4) above.

         (7)      No Fractional Shares. No fractional shares of Common Stock
                  shall be issued upon conversion, but, instead of any fraction
                  of a share which would otherwise be issuable, the Corporation
                  shall pay a cash adjustment in respect of such fraction in an
                  amount equal to the same fraction of the Current Market Price
                  per share of Common Stock as of the close of business on the
                  day of conversion.

         (c) Mandatory Conversion. The Preferred Stock together with accrued
unpaid Dividends shall automatically be converted into shares of Common Stock of
the Corporation, without any act by the Corporation or the holders of the
Preferred Stock, (i) concurrently with the closing of a public offering by the
Corporation of shares of Common Stock of the Corporation registered under the
Securities Act of 1933, as amended, in which (1) the aggregate public offering
price of the securities sold for cash by the Corporation in the offering is at
least $ 3,000,000, or such lower amount as may be approved by the holders of at
least a majority of the shares of Preferred Stock then outstanding, and (2) the
offering is underwritten on a firm commitment basis by an underwriter, or a
group of underwriters represented by an underwriter or underwriters, unless this
requirement is waived by the holders of at least a majority of the shares of
Preferred Stock then outstanding (in which case such offering may be a
"best-efforts" or company-sponsored offering), and (3) the public offering price
per share of Common Stock is at least $ 2.00, or such lower amount as may be
approved by the holders of at least a majority of the shares of Preferred Stock
then outstanding. As used herein, the term "closing" shall mean the delivery by
the Corporation to the underwriters or purchasers of the shares offered of
certificates representing the shares of Common Stock of the Corporation offered
to the public against delivery to the Corporation of payment therefor. The term
"firm commitment basis" with respect to the underwriting of such public offering
shall mean a commitment pursuant to a written underwriting agreement under which
the nature of the underwriters' commitment is such that all securities will be
purchased by such underwriters if any securities are purchased by such
underwriters.; (ii) upon written notice of the Company at such time as the
Current Market Price of the Corporation's Common Stock in the over-the-counter
market is at least

<PAGE>


$2.00 per share (as adjusted from time to time to reflect stock splits, stock
dividends, recapitalizations, combinations or the like) for at least twenty (20)
trading days; or (iii) upon the merger or consolidation of the Corporation into
or with another corporation, or upon the merger or consolidation of any other
corporation into or with the Corporation or a plan of exchange between the
Corporation and any other corporation (in which consolidation or merger or plan
of exchange (x) the Corporation is not the surviving corporation, or (y) the
stockholders of the Corporation existing prior to such event will not, upon the
closing of such event, maintain voting control of the surviving Corporation).

         Each holder of a share of Preferred Stock so converted shall be
entitled to receive the full number of shares of Common Stock into which such
share of Preferred Stock held by such holder could be converted (i) in the event
of a public offering above-described, if such holder had exercised its
conversion right at the time of closing of such public offering, or (ii) in the
event of a merger or exchange or consolidation above-described, if such holder
had exercised its conversion right at the time of closing of such event without
regard to the provisions of subparagraphs 4(b)(3)(i) through 4(b)(3)(ix) hereof.
Upon such conversion, each holder of a share of Preferred Stock shall
immediately surrender such share in exchange for appropriate stock certificates
representing a share or shares of Common Stock of the Corporation

IN WITNESS WHEREOF, this Certificate of Designation of Series A Preferred Stock
is hereby executed on behalf of the Corporation by Bruce H. Senske, this 20th
day of April, 1998.


U-SHIP, INC.


By
      Bruce H. Senske, Chief Executive Officer



STATE OF MINNESOTA    )
                      ) ss.
COUNTY OF HENNEPIN    )


The foregoing instrument, the Certificate of Designation of Preferences and
Rights of Series A Cumulative Convertible Preferred Stock of U-Ship, Inc., was
acknowledged before me this 20th day of April, 1998, by such individual known to
me to be the person whose name is subscribed in the foregoing instrument.



Notary Public